FairPoint Communications 2009 Annual Report Download - page 14

Table of Contents
the outstanding loans and letters of credit plus unutilized commitments under the DIP Financing (the "Required DIP Lenders") with no fee payable by
the DIP Borrowers in connection with any such extension, (ii) the Effective Date, (iii) the voluntary reduction by the DIP Borrowers to zero of all
commitments to lend under the DIP Credit Agreement or (iv) the date on which the obligations under the DIP Financing are accelerated by the Required
DIP Lenders upon the occurrence and during the continuance of certain events of default.
Other material provisions of the DIP Credit Agreement include the following:
 Interest rates for borrowings under the DIP Credit Agreement are, at the DIP Borrowers' option, at either (i) the
Eurodollar rate plus a margin of 4.5% or (ii) the base rate plus a margin of 3.5%, payable monthly in arrears on the last business day of each month.
Interest accrues from and including the date of any borrowing up to but excluding the date of any repayment thereof and is payable (i) in respect of
each base rate loan, monthly in arrears on the last business day of each month, (ii) in respect of each Eurodollar loan, on the last day of each interest
period applicable thereto (which shall be a period of one month) and (iii) in respect of each such loan, on any prepayment or conversion (on the amount
prepaid or converted), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand. The DIP Credit Agreement provides for
the payment to the Administrative Agent, for the pro rata benefit of the DIP Lenders, of an upfront fee in the aggregate principal amount of $1.5 million,
which upfront fee was payable in two installments: (1) the first installment of $400,000 was due and payable on October 28, 2009, the date on which
the Interim Order was entered by the Bankruptcy Court, and (2) the remainder of the upfront fee was due and payable on the date the Final DIP Order
was entered by the Bankruptcy Court. The DIP Credit Agreement also provides for an unused line fee of 0.50% on the unused revolving commitment,
payable monthly in arrears on the last business day of each month (or on the date of maturity, whether by acceleration or otherwise), and a letter of
credit facing fee of 0.25% per annum calculated daily on the stated amount of all outstanding letters of credit, payable monthly in arrears on the last
business day of each month (or on the date of maturity, whether by acceleration or otherwise), as well as certain other fees.
 Voluntary prepayments of borrowings and optional reductions of the unutilized portion of the commitments are
permitted without premium or penalty (subject to payment of breakage costs in the event Eurodollar loans are prepaid prior to the end of an applicable
interest period).
 Under the DIP Credit Agreement, the DIP Borrowers are required to maintain compliance with certain covenants, including
maintaining minimum EBITDAR (earnings before interest, taxes, depreciation, amortization, restructuring charges and certain other non-cash costs and
charges, as set forth in the DIP Credit Agreement) and not exceeding maximum permitted capital expenditure amounts. The DIP Credit Agreement also
contains customary affirmative and negative covenants and restrictions, including, among others, with respect to investments, additional indebtedness,
liens, changes in the nature of the business, mergers, acquisitions, asset sales and transactions with affiliates. As of December 31, 2009, the DIP
Borrowers are in compliance with all covenants under the DIP Credit Agreement.
 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 the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), the failure of any guaranty or security document supporting the DIP Credit Agreement to be in full
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