FairPoint Communications 2010 Annual Report Download - page 62

Table of Contents
The above summary of the material terms of the Exit Credit Agreement Loans does not purport to be complete and is qualified in its entirety by reference to
the text of (i) the Exit Credit Agreement, (ii) the Pledge Agreement, dated as of the Effective Date, made by the pledgors party thereto in favor of Bank of
America, N.A., as administrative agent, for the benefit of certain secured parties, (iii) the Security Agreement, dated as of the Effective Date, by and among
FairPoint Communications, FairPoint Logistics, our subsidiaries party thereto and Bank of America, N.A., as administrative agent, for the benefit of certain
secured parties and (iv) the Continuing Guaranty Agreement, dated as of the Effective Date, made by and among the guarantors party thereto in favor of Bank
of America, N.A., as administrative agent, for the benefit of certain secured parties.
Our DIP Facility
In connection with the Chapter 11 Cases, the DIP Borrowers, on October 27, 2009, entered into the DIP Credit Agreement with the DIP Lenders and the DIP
Administrative Agent. The DIP Credit Agreement provided for a revolving facility in an aggregate principal amount of up to $75.0 million, of which up to
$30.0 million was also available in the form of one or more letters of credit that may be issued to third parties for our account (the “DIP Financing”). Pursuant
to an Order of the Bankruptcy Court, dated October 28, 2009 (the “Interim Order”), the DIP Borrowers were authorized to enter into and immediately draw
upon the DIP Credit Agreement on an interim basis in an aggregate amount of $20.0 million, pending a final hearing before the Bankruptcy Court. Pursuant to
a final order of the Bankruptcy Court, dated March 11, 2010 (the “Final DIP Order”), the DIP Borrowers were permitted access to the total $75.0 million of
the DIP Financing, subject to the terms and conditions of the DIP Credit Agreement and related orders of the Bankruptcy Court. As of December 31, 2010 and
2009, we had not borrowed any amounts under the DIP Credit Agreement other than letters of credit totaling $18.7 million and $1.6 million, respectively, that
had been issued and were outstanding under the DIP Credit Agreement.
The DIP Financing matured and was repayable in full on the earlier to occur of (i) January 31, 2011, which date could have been extended for up to an
additional two months with the consent of the Required Lenders (as defined in the DIP Credit Agreement) for no additional fee, (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 were accelerated by the non-defaulting DIP Lenders holding a majority of the aggregate principal amount of the outstanding loans and letters
of credit plus unutilized commitments under the DIP Financing upon the occurrence and during the continuance of certain events of default.
On the Effective Date, the DIP Credit Agreement was converted into the new $75.0 million Exit Revolving Facility with a five-year term.
Our Pre-Petition Credit Facility
Our $2,030.0 million Pre-Petition Credit Facility consisted of a non-amortizing revolving facility in an aggregate principal amount of $200.0 million, a
senior secured term loan A facility in an aggregate principal amount of $500.0 million (the “Term Loan A Facility”), a senior secured term loan B facility in the
aggregate principal amount of $1,130.0 million (the “Term Loan B Facility” and, together with the Term Loan A Facility, the “Term Loan”) and a delayed
draw term loan facility in an aggregate principal amount of $200.0 million (the “Delayed Draw Term Loan”). Spinco drew $1,160.0 million under the Term
Loan immediately prior to being spun off by Verizon, and then FairPoint drew $470.0 million under the Term Loan and $5.5 million under the Delayed Draw
Term Loan concurrently with the closing of the Merger.
Subsequent to the Merger, we borrowed the remaining $194.5 million available under the Delayed Draw Term Loan. These funds were used for certain
capital expenditures and other expenses associated with the Merger.
On October 5, 2008, the administrative agent under our Pre-Petition Credit Facility (the “administrative agent”) filed for bankruptcy. The administrative
agent accounted for thirty percent of the loan commitments under the Revolving Credit Facility. On January 21, 2009, we entered into an amendment to our
Pre-Petition Credit Facility (the “Pre-Petition Credit Facility Amendment”) under which, among other things, the administrative agent resigned and was replaced
by a new administrative agent. In addition, the resigning administrative agent’s undrawn commitments under the Revolving Credit Facility, totaling
$30.0 million, were terminated and were thus no longer available to us.
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