FairPoint Communications 2009 Annual Report Download - page 46

Table of Contents

The DIP Credit Agreement contains a number of covenants which, among other things, limit the incurrence of additional debt, capital expenditures,
capitalized leases, issuance of capital stock, issuance of guarantees, liens, investments, disposition of assets, dividends, certain payments, mergers,
change of business, transactions with affiliates, prepayments of debt, repurchases of stock and redemptions of certain other indebtedness and other
matters customarily restricted in such agreements. Our ability to comply with the covenants, agreements and restrictions contained in the DIP Credit
Agreement may be affected by events beyond our control, including prevailing economic, financial and industry conditions. There can be no assurance
that we will be able to comply with such covenants, agreements or restrictions in the future. Additionally, breach of any of the covenants imposed on us
by the terms of the DIP Credit Agreement could result in a default under the DIP Credit Agreement. In the event of a default, the DIP Lenders could
terminate their commitments to us and could accelerate the repayment of all of our indebtedness under the DIP Credit Agreement, if any. In such case,
we may not have sufficient funds to pay the total amount of accelerated obligations, if any, and our DIP Lenders under the DIP Credit Agreement could
proceed against the collateral securing the DIP Credit Agreement. Any acceleration in the repayment of our outstanding indebtedness, if any, or related
foreclosure could adversely affect our business.

 

Upon our emergence from bankruptcy, we will apply fresh start accounting. As a result, the book value of our long-lived assets and the related
depreciation and amortization schedules, among other things, will change. Following our emergence from bankruptcy, you will not be able to compare
certain information reflecting our results of operations and financial condition to those for historical periods prior to emergence from bankruptcy.
Under Fresh Start Accounting, our calculated enterprise value will be allocated to our assets based on their respective fair values. Any portion not
attributed to specific tangible or identified intangible assets will be an indefinite-lived intangible asset referred to as "reorganization value in excess of
value" and reported as goodwill.
Risks Related to Our Substantial Indebtedness and Common Stock


Effective October 26, 2009, the NYSE suspended trading in our common stock and, effective November 16, 2009, the NYSE completed its
application to the SEC to delist our common stock. Our common stock is now traded on the Pink Sheets under the symbol "FRCMQ." We can provide
no assurance that our common stock will continue to be traded on the Pink Sheets. The trading of our common stock on the Pink Sheets may negatively
impact the trading price of our common stock and the levels of liquidity available to our stockholders.

We had approximately $2,515.4 million of total debt outstanding as of December 31, 2009. In addition, as of December 31, 2009, we had
$18.4 million, net of outstanding letters of credit, available
42