FairPoint Communications 2011 Annual Report Download - page 102

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Table of Contents
All pre-petition debt was terminated on the Effective Date.
The approximate aggregate maturities of long-term debt for each of the five years subsequent to December 31, 2011 are as follows (in thousands):



2012 $10,000
2013 10,000
2014 25,000
2015 37,500
2016 917,500
Thereafter —
$1,000,000
Credit Agreement
On the Effective Date, the Borrowers entered into the Credit Agreement Loans. On the Effective Date, the Company paid to the lenders providing the
Revolving Facility an aggregate fee equal to $1.5 million. Interest on the Credit Agreement Loans accrues at an annual rate equal to either (a) LIBOR plus
4.50%, with a minimum LIBOR floor of 2.00% for the Term Loan, or (b) a base rate plus 3.50% per annum, which base rate is equal to the highest of
(x) Bank of America’s prime rate, (y) the federal funds effective rate plus 0.50% and (z) applicable LIBOR (with minimum LIBOR floor of 2.00%) plus
1.00%. In addition, the Company is required to pay a 0.75% per annum commitment fee on the average daily unused portion of the Revolving Facility. The
entire outstanding principal amount of the Credit Agreement Loans is due on the Maturity Date; provided that on the third anniversary of the Effective Date,
the Company must elect (subject to the absence of events of default under the Credit Agreement) to continue the maturity of the Revolving Facility and must
pay a continuation fee of $0.75 million and, on the fourth anniversary of the Effective Date, the Company must elect (subject to the absence of events of
default under the Credit Agreement) to continue the maturity of the Revolving Facility and must pay a second continuation fee of $0.75 million. The Credit
Agreement requires quarterly repayments of principal of the Term Loan after the first anniversary of the Effective Date. In the second and third years following
the Effective Date, such quarterly payments shall each be in an amount equal to $2.5 million; during the fourth year following the Effective Date, such
quarterly payments shall each be in an amount equal to $6.25 million; and for the first three quarters during the fifth year following the Effective Date, such
quarterly payments shall each be in an amount equal to $12.5 million, with all remaining outstanding amounts owed in respect of the Term Loan being due
and payable on the Maturity Date.
The Credit Agreement Loans are guaranteed by all of the Financing Loan Parties. The Credit Agreement Loans as a whole are secured by liens upon
substantially all existing and after-acquired assets of the Financing Loan Parties, with first lien and payment waterfall priority for the Revolving Facility and
second lien priority for the Term Loan.
The Credit Agreement contains customary representations, warranties and affirmative covenants. In addition, the Credit Agreement contains restrictive
covenants that limit, among other things, the ability of the Company to incur indebtedness, create liens, engage in mergers, consolidations and other
fundamental changes, make investments or loans, engage in transactions with affiliates, pay dividends, make capital expenditures and repurchase capital
stock. The Credit Agreement also contains minimum interest coverage and maximum total leverage maintenance covenants, along with a maximum senior
leverage covenant measured upon the incurrence of certain types of debt. The ratios measured in these covenants, which are reported quarterly, periodically
adjust to become more restrictive as set forth in the Credit Agreement. The initial adjustment for each of the three covenants will be reflected in the quarterly
covenant reporting for the third quarter of 2013. The Credit Agreement contains certain events of default, including failure to make payments, breaches of
covenants and representations, cross defaults to other material indebtedness, unpaid and uninsured judgments, changes of control and bankruptcy events of
default. The lenders’ commitments to fund amounts under the Revolving Facility are subject to certain customary conditions. As of December 31, 2011, the
Borrowers were in compliance with all covenants under the Credit Agreement.
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