FairPoint Communications 2009 Annual Report Download - page 108

Table of Contents




 The DIP Credit Agreement contains customary events of default, including, but not limited to, failure to pay principal, interest
or other amounts when due, breach of covenants, failure of any representations to have been true in all material respects when made, cross-defaults to
certain other indebtedness in excess of specific amounts (other than obligations and indebtedness created or incurred prior to the filing of the Chapter 11
Cases), judgment defaults in excess of specified amounts, certain defaults under ERISA, and the failure of any guaranty or security document
supporting the DIP Credit Agreement to be in full force and effect, the occurrence of a change of control and certain matters related to the Interim Order,
the Final DIP Order and other matters related to the Chapter 11 Cases.

The DIP Pledgors entered into the DIP Pledge Agreement with the DIP Collateral Agent, as required under the terms of the DIP Credit
Agreement. Pursuant to the DIP Pledge Agreement, the DIP Pledgors provided to the DIP Collateral Agent for the secured parties identified therein, a
security interest in the Pledge Agreement Collateral.

The DIP Guarantors entered into the DIP Subsidiary Guaranty, as required under the terms of the DIP Credit Agreement. Pursuant to the DIP
Subsidiary Guaranty, the DIP Guarantors agreed to jointly and severally guarantee the full and prompt payment of all fees, obligations, liabilities and
indebtedness of the DIP Borrowers, as borrowers under the DIP Financing. Pursuant to the terms of the DIP Subsidiary Guaranty, the DIP Guarantors
further agreed to subordinate any indebtedness of the DIP Borrowers held by such DIP Guarantor to the indebtedness of the DIP Borrowers held by
the secured parties under the DIP Financing.

The DIP Grantors entered into the DIP Security Agreement, as required under the terms of the DIP Credit Agreement. Pursuant to the DIP
Security Agreement, the DIP Grantors provided to the DIP Collateral Agent for the benefit of the secured parties identified therein, a security interest in
all assets other than the DIP Pledge Agreement Collateral, any causes of action arising under Chapter 5 of the Bankruptcy Code and FCC licenses and
authorizations by state regulatory authorities to the extent that any DIP Grantor is prohibited from granting a lien and security interest therein pursuant to
applicable law.
As a condition to the approval of the Merger and related transactions by state regulatory authorities, the Company has agreed to make capital
expenditures following the completion of the Merger. As a condition to the approval of the transactions by the state regulatory authority in Maine, the
Company agreed that, following the closing of the Merger, the Company will make capital expenditures in Maine during the first three years after the
closing of $48 million in the first year and an average of $48 million in the first two years and an average of $47 million in the first three years. The
Company is also required to expend over a five year period not less than $40 million on equipment and infrastructure to expand the availability of
broadband services in Maine, which is
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