FairPoint Communications 2009 Annual Report Download - page 15

Table of Contents
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.
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The DIP Borrowers and certain of FairPoint Communications' subsidiaries (collectively, the "DIP Pledgors") entered into the DIP Pledge
Agreement with Bank of America N.A., as collateral agent (in such capacity, the "DIP Collateral Agent"), dated as of October 30, 2009 (the "DIP
Pledge Agreement"), 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 100% of the equity interests and promissory notes owned by the
DIP Pledgors and all proceeds arising therefrom, including cash dividends and distributions, subject to certain exceptions and qualifications (the
"Pledge Agreement Collateral").
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Certain of FairPoint Communications' subsidiaries (collectively, the "DIP Guarantors") entered into the DIP Subsidiary Guaranty with the
Administrative Agent, dated as of October 30, 2009 (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.
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The DIP Borrowers and the DIP Guarantors (collectively, the "DIP Grantors") entered into the DIP Security Agreement with the DIP Collateral
Agent, dated as of October 30, 2009 (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.
Reporting Requirements
As a result of the filing of the Chapter 11 Cases, the Company is now required to file various documents with, and provide certain information to,
the Bankruptcy Court, including statements of financial affairs, schedules of assets and liabilities, and monthly operating reports in forms prescribed by
federal bankruptcy law. Such materials have been and will be prepared according to requirements of the Bankruptcy Code. While these materials
accurately provide then-current information required under the Bankruptcy Code, they are nonetheless unaudited, are prepared in a format different from
that used in the Company's consolidated financial statements filed under the securities laws and certain of this financial information may be prepared on
an unconsolidated basis. Accordingly, the Company believes that the substance and format of these materials do not allow meaningful comparison with
its regular publicly-disclosed consolidated financial statements. Moreover, the materials filed with the Bankruptcy Court are not prepared for the
purpose of providing a basis for an investment decision relating to the Company's securities, or for comparison with other financial information filed
with the SEC.
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