FairPoint Communications 2002 Annual Report Download - page 132

constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.03 LIMITATION ON DEBT.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, Incur, directly or indirectly, any Debt unless, after giving effect to the
application of the proceeds thereof, no Default or Event of Default would occur
as a consequence of such Incurrence or be continuing following such Incurrence
and either (i) after giving effect to the Incurrence of such Debt and the
receipt and application of the proceeds thereof, the Leverage Ratio of the
Company and the Restricted Subsidiaries (on a consolidated basis) would not
exceed 6.5 to 1.0 or (ii) such Debt is Permitted Debt, PROVIDED that, in either
case, neither the Company nor any Restricted Subsidiary shall Incur, directly or
indirectly, any Debt (other than any Subordinated Obligation of the Company
Incurred pursuant to clause (i) or (ii) above) unless, after giving effect to
the Incurrence of such Debt and the receipt and application of the proceeds
thereof, the Senior Leverage Ratio of the Company and the Restricted
Subsidiaries (on a consolidated basis) would not exceed 4.0 to 1.0.
(b) Notwithstanding the foregoing, (i) the Company shall not Incur any Debt
pursuant to this Section 4.03 if the proceeds thereof are used, directly or
indirectly, to
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Refinance any Subordinated Obligations unless such Debt shall be subordinated to
the Securities to at least the same extent as such Subordinated Obligations, and
(ii) the Company shall not permit any Restricted Subsidiary to Incur any Debt
pursuant to this Section 4.03 if the proceeds thereof are used, directly or
indirectly, to Refinance any Subordinated Obligations of the Company.
(c) For purposes of determining compliance with this Section 4.03, (i) in
the event that an item of Debt (including Debt issued by the Company to the
lenders that are party to the Credit Facility) meets the criteria of more than
one of the types of Debt described in Section 4.03(a)(i) and in the definition
of "Permitted Debt", the Company, in its sole discretion, will classify such
item of Debt and only be required to include the amount and type of such Debt in
either Section 4.03(a)(i) or in one of the clauses in the definition of
"Permitted Debt" and (ii) an item of Debt (including Debt issued by the Company
to the lenders that are party to the Credit Facility) may be divided and
classified in more than one of the types of Debt described in the definition of
"Permitted Debt" and Section 4.03(a)(i).
SECTION 4.04 LIMITATION ON RESTRICTED PAYMENTS. The Company shall not make,
and shall not permit any Restricted Subsidiary to make, directly or indirectly,
any Restricted Payment if at the time of, and after giving effect to, such
proposed Restricted Payment,
(a) a Default or Event of Default shall have occurred and be continuing or
would result therefrom,
(b) the Company could not Incur at least $1.00 of additional Debt pursuant
to Section 4.03(a)(i) or
(c) the aggregate amount of such Restricted Payment and all other
Restricted Payments declared or made since the Issue Date (the amount of any
Restricted Payment, if made other than in cash, to be based upon Fair Market
Value) would exceed an amount equal to the sum of:
(i) an amount (whether positive or negative) equal to the Company's
EBITDA from the first date of the fiscal quarter in which the Issue Date
occurs to the end of the Company's most recent fiscal quarter ending at
least 45 days prior to the date of such Restricted Payment, taken as a
single accounting period, less the product of 1.7 times the Company's