FairPoint Communications 2004 Annual Report Download - page 248

was provided. The projections and pro forma financial information contained in such materials are based on good faith estimates and assumptions believed
by the Borrower to be reasonable at the time made (it being recognized by the Lenders that such projections as to future events are not to be viewed as facts and
that actual results during the period or periods covered by any such projections may differ from the projected results and that such assumptions and estimates
may prove to be inaccurate).
5.10 Financial Condition; Financial Statements. (a) On and as of the Initial Borrowing Date, on a pro forma basis after giving effect to
the Transaction and all Indebtedness incurred, and to be incurred (including, without limitation, the Loans and the application of the proceeds thereof), and
Liens created, and to be created, by each Credit Party in connection therewith, with respect to the Borrower (on a stand-alone basis) and the Borrower and its
Subsidiaries (on a consolidated basis), (x) the fair valuation of all of the tangible and intangible assets of the Borrower (on a stand-alone basis) and the
Borrower and its Subsidiaries (on a consolidated basis) will exceed its or their debts, (y) it has or they have not incurred nor intended to, nor believes or believe
that it or they will, incur debts beyond its or their ability to pay such debts as such debts mature and (z) it or they will not have unreasonably small capital
with which to conduct its or their business. For purposes of this Section 5.10, “ debt” means any liability on a claim, and “ claim” means (i) the right to
payment whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured or unsecured; or (ii) the right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
(b) (i) The audited consolidated statements of financial condition of the Borrower and its Subsidiaries at December 31, 2001,
December 31, 2002 and December 31, 2003 and the related consolidated statements of income and cash flows and changes in shareholders’ equity of the
Borrower and its Subsidiaries for the fiscal years of the Borrower ended on such dates, in each case furnished to the Lenders prior to the Initial Borrowing
Date, present fairly in all material respects the consolidated financial position of the Borrower and its Subsidiaries at the date of said financial statements and
the results for the respective periods covered thereby and (ii) the unaudited statement of financial condition of the Borrower and its Subsidiaries at September
30, 2004 and the related consolidated statement of income and cash flows and change in shareholder’s equity of the Borrower and its Subsidiaries for nine-
month period of the Borrower ended on such date, in each case furnished to the Lenders prior to the Initial Borrowing Date, present fairly in all material
respects the consolidated financial position of the Borrower and its Subsidiaries at the date of said financial statements and the results for the period covered
thereby, subject to normal year-end adjustments. All such financial statements have been prepared in accordance with GAAP and practices consistently
applied except to the extent provided in the notes to said financial statements and subject, in the case of unaudited financial statements, to normal year-end
adjustments (all of which are of a recurring nature and none of which, individually or in the aggregate, would be material) and the absence of footnotes. The
pro forma consolidated balance sheet of the Borrower as at September 30, 2004, a copy of which has been included in the Rule 424(b) Prospectus filed with the
SEC in connection with the IPO, presents a good faith estimate of the consolidated pro forma financial condition of the Borrower (after giving effect to the
Transaction and all Indebtedness incurred or
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