FairPoint Communications 2002 Annual Report Download - page 135

SECTION 4.05 LIMITATION ON LIENS. The Company shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, Incur or suffer to
exist, any Lien (other than Permitted Liens) upon any of its Property (including
Capital Stock of a Restricted Subsidiary), whether owned at the Issue Date or
thereafter acquired, or any interest therein or any income or profits therefrom,
unless (a) if such Lien secures Senior Debt, the Securities are secured on an
equal and ratable basis with such Debt and (b) if such Lien secures any other
Debt, such Lien shall be subordinated to a Lien securing the Securities in the
same Property as that securing such other Debt (and if such Lien secures a
Subordinated Obligation, such Lien shall be subordinated to a Lien securing the
Securities to at least the same extent as such Subordinated Obligation is
subordinated to the Securities).
SECTION 4.06 LIMITATION ON ISSUANCE OR SALE OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES. The Company shall not (a) sell, transfer, convey or otherwise
dispose of any shares of Capital Stock of a Restricted Subsidiary or (b) permit
any Restricted Subsidiary to, directly or indirectly, issue, sell, transfer,
convey or otherwise dispose of any shares of its Capital Stock, other than (i)
directors' qualifying shares, (ii) to the Company or a Wholly Owned Subsidiary,
or (iii) if, immediately after giving effect to such disposition, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary;
PROVIDED, HOWEVER, that, in the case of this clause (iii), such issuance, sale
or disposition is effected in compliance with Section 4.07.
SECTION 4.07 LIMITATION ON ASSET SALES.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate any Asset Sale unless (i) the Company or
such Restricted Subsidiary receives consideration at the time of such Asset Sale
at least equal to the Fair Market Value of the Property subject to such Asset
Sale; (ii) at least 75.0% of the consideration paid to the Company or such
Restricted Subsidiary in connection with such Asset Sale (except for a Permitted
Asset Swap) is in the form of cash or cash equivalents or the assumption by the
purchaser of liabilities of the Company or any Restricted Subsidiary (other than
liabilities that are by their terms subordinated to the Securities) as a result
of which the Company and the Restricted Subsidiaries are no longer obligated
with respect to such liabilities; and (iii) the Company delivers an Officers'
Certificate to the Trustee certifying that such Asset Sale complies with the
foregoing clauses (i) and (ii).
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(b) The Net Available Cash (or any portion thereof) from Asset Sales may be
applied by the Company or a Restricted Subsidiary, to the extent that the
Company or such Restricted Subsidiary elects (or is required by the terms of any
Debt): (a) to Repay Senior Debt of the Company (excluding any Debt owed to an
Affiliate of the Company); or (b) subject to Section 4.04, to reinvest in
Additional Assets (including by means of an Investment in Additional Assets by a
Restricted Subsidiary with Net Available Cash received by the Company or another
Restricted Subsidiary). Pending such application, and subject in all respects to
the procedures set forth below, the Company may, to the extent such use would
not constitute a Repayment, use such Net Available Cash to temporarily reduce
Debt.
(c) Any Net Available Cash from an Asset Sale not applied in accordance
with the preceding paragraph within 270 days from the date of the receipt of
such Net Available Cash or that is not (to the extent not used to temporarily
reduce Debt without reducing related loan commitments) segregated from the
general funds of the Company for investment in identified Additional Assets in
respect of a project that shall have been commenced, and for which binding
contractual commitments have been entered into, prior to the end of such 270-day
period and that shall not have been completed or abandoned shall constitute
"Excess Proceeds"; PROVIDED, HOWEVER, that the amount of any Net Available Cash
that ceases to be so segregated as contemplated above and any Net Available Cash
that is segregated in respect of a project that is abandoned or completed shall
also constitute "Excess Proceeds" at the time any such Net Available Cash ceases