FairPoint Communications 2002 Annual Report Download - page 249

5.01 COMPANY STATUS. Each of the Borrower and its Subsidiaries (i)
is a duly organized and validly existing Company and is in good standing, in
each case under the laws of the jurisdiction of its organization and has the
Company power and authority to own its property and assets and to transact the
business in which it is engaged and (ii) is duly qualified and is authorized to
do business and, to the extent relevant, is in good standing in all
jurisdictions where it is required to be so qualified and where the failure to
be so qualified, authorized or in good standing is reasonably likely to have a
Material Adverse Effect.
5.02 COMPANY POWER AND AUTHORITY. Each Credit Party has the Company
power and authority to execute, deliver and carry out the terms and provisions
of the Credit Documents to which it is a party and has taken all necessary
action to authorize the execution, delivery and performance of the Credit
Documents to which it is a party. Each Credit Party has duly executed and
delivered each Credit Document to which it is a party and each such Credit
Document constitutes the legal, valid and binding obligation of such Person
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally and general equitable principles
(regardless of whether enforcement is sought in equity or at law).
5.03 NO VIOLATION. Neither the execution, delivery or performance
by any Credit Party of the Credit Documents to which it is a party nor
compliance with the terms and provisions thereof, (i) will contravene any
applicable provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
(after giving effect to the Refinancing) conflict or be inconsistent with or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or (other than pursuant to the Pledge
Agreement) result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of the Borrower or any of
its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust
or other material agreement or instrument to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property or assets are
bound or to which it may be subject or (iii) will violate any provision of the
organizational documents (including by-laws) of the Borrower or any of its
Subsidiaries.
5.04 LITIGATION. There are no actions, suits or proceedings pending
or, to the knowledge of the Borrower, threatened with respect to the Borrower or
any of its Subsidiaries (i) that have had, or that are reasonably likely to
have, a Material Adverse Effect or (ii) that have, or that are reasonably likely
to have had, a material adverse effect on the rights or remedies of the Lenders
or on the ability of the Credit Parties taken as a whole to perform their
obligations under the Credit Documents.
5.05 USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of all A
Term Loans shall be utilized to effect the Refinancing and to pay certain fees
and expenses relating to the Transaction.
(b) The proceeds of RF Loans may be used (x) on the Restatement
Effective Date for the purposes described in Section 5.05(a) and (y) for working
capital and capital expenditure requirements (including to finance Carrier
Services Expenditures) and to finance Permitted Acquisitions; PROVIDED that no
more than $10.0 million of proceeds of RE Loans may be used for the purposes
described in preceding subclause (x).
(c) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System and no part of the proceeds of
any Loan will be used to purchase or carry any Margin Stock or to extend credit
for the purpose of purchasing or carrying any Margin Stock, provided that