FairPoint Communications 2010 Annual Report Download - page 101

Table of Contents
Events of Default. The DIP Credit Agreement contained 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 ERISA defaults 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.
DIP Pledge Agreement
The DIP Borrowers and the DIP Pledgors entered into the DIP Pledge Agreement with Bank of America N.A., as the DIP Collateral Agent, as required under
the terms of the DIP Credit Agreement. Pursuant to the DIP Pledge Agreement, the DIP Pledgors provided the DIP Pledge Agreement Collateral to the DIP
Collateral Agent for the secured parties identified therein.
DIP Subsidiary Guaranty
The DIP Guarantors entered into the DIP Subsidiary Guaranty with the Administrative Agent, 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.
DIP Security Agreement
The DIP Grantors entered into the DIP Security Agreement with the DIP Collateral Agent, 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 of December 31, 2010, the Company had not borrowed any amounts under the DIP Credit Agreement, however letters of credit had been issued under
the DIP Credit Agreement for $18.7 million. Accordingly, as of December 31, 2010, the amount available under the DIP Credit Agreement was $56.3 million.
The DIP Credit Agreement was terminated on January 24, 2011 (the “Effective Date”). All letters of credit outstanding under the DIP Credit Agreement were
transferred to the Exit Credit Agreement on the Effective Date.
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On the Effective Date the Exit Borrowers entered into the $1,075.0 million senior secured credit facility with a syndicate of lenders and Bank of America,
N.A., as the administrative agent for the lenders, arranged by Banc of America Securities LLC (the “Exit Credit Agreement”). The Company’s
$1,075.0 million Exit Credit Agreement consists of a non-amortizing revolving facility (the “Exit Revolving Loan”) in an aggregate principal amount of
$75.0 million and a senior secured term loan facility in an aggregate principal amount of $1,000.0 million (the “Term Loan Facility”). The Company drew the
full $1,000.0 million under the Term Loan Facility immediately upon emergence on the Effective Date. The Exit Revolving Loan includes a $30.0 million
sublimit available for the issuance of letters of credit. Letters of credit outstanding under the DIP Credit Agreement on the Effective Date were rolled into the Exit
Revolving Loan. As of the Effective Date, the Company had approximately $1,000.0 million of total debt outstanding. In addition, as of the Effective Date, the
Company had $56.3 million, net of outstanding letters of credit, available for additional borrowing under the Exit Revolving Loan.
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