FairPoint Communications 2002 Annual Report Download - page 265

or other equity interests to the Borrower or to another Subsidiary;
(ii) the repurchase of the Borrower's Series A Preferred Stock
shall be permitted to be effected (x) pursuant to the Refinancing and (y)
with the proceeds of Permitted Subordinated Debt incurred in compliance
with Section 7.04(j) (the "EXCLUDED PREFERRED STOCK REFINANCING PROCEEDS"),
so long as such proceeds are applied to such repurchase on the date of the
Borrower's receipt thereof; and
(iii) the Borrower may redeem or repurchase its stock (or options,
warrants and/or appreciation rights in respect thereof) from shareholders,
officers, employees, consultants and directors (or their estates) upon the
death, permanent disability, retirement or termination of employment of any
such Person or otherwise in accordance with any shareholder agreement,
stock option plan or any employee stock ownership plan, PROVIDED that (x)
no Default or Event of Default is then in existence or would arise
therefrom and (y) the aggregate amount of all cash paid in respect of all
such shares, options, warrants and rights so redeemed or repurchased in any
calendar year, does not exceed $1,000,000.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, create or otherwise cause or suffer to exist (other than as a
result of a requirement of law) any encumbrance or restriction which prohibits
or otherwise restricts (A) the ability of any Subsidiary to (a) pay dividends or
make other distributions or pay any Indebtedness owed to the Borrower or any
Subsidiary, (b) make loans or advances to the Borrower or any Subsidiary, (c)
transfer any of its properties or assets to the Borrower or any Subsidiary or
(B) the ability of any Subsidiary to create, incur, assume or suffer to exist
any Lien upon its property or assets to secure the Obligations, other than
prohibitions or restrictions existing under or by reason of: (i) this Agreement
and the other Credit Documents; (ii) applicable law; (iii) customary
non-assignment provisions entered into in the ordinary course of business and
consistent with past practices; (iv) any restriction or encumbrance with respect
to a Subsidiary imposed pursuant to an agreement which has been entered into for
the sale or disposition of all or substantially all of the capital stock or
assets of such Subsidiary, so long as such sale or disposition is permitted
under this Agreement; (v) Liens permitted under Sections 7.03(d), (m) and/or (n)
and any documents or instruments governing the terms of any Indebtedness or
other obligations secured
by any such Liens, PROVIDED that such prohibitions or restrictions apply only to
the assets subject to such Liens and (vi) any agreement or instrument governing
Permitted Acquired Debt, to the extent such restriction or encumbrance (x) is
not applicable to any Person or the properties or assets of any Person (other
than the Person or the properties or assets of the Person acquired pursuant to
the respective Permitted Acquisition) and (y) was not created (or made more
restrictive) in connection with or in anticipation of the respective Permitted
Acquisition.
7.10 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will
not permit any Subsidiary to, enter into any transaction or series of
transactions after the Restatement Effective Date whether or not in the ordinary
course of business, with any Affiliate other than on terms and conditions
substantially as favorable to the Borrower or such Subsidiary as would be
obtainable by the Borrower or such Subsidiary at the time in a comparable
arm's-length transaction with a Person other than an Affiliate, PROVIDED that
the foregoing restrictions shall not apply to (i) transactions solely among
Credit Parties and their 90%-Owned Subsidiaries, (ii) employment arrangements
entered into in the ordinary course of business with officers of the Borrower
and its Subsidiaries, (iii) customary fees paid to members of the Board of
Directors of the Borrower and of its Subsidiaries, (iv) so long as no Default or
Event of Default exists at the time of such payment or would result therefrom,
(A) advisory fees paid to Kelso and THL (or their Affiliates) during any fiscal
year not to exceed the greater of (x) $1.0 million or (y) 1.5% of Consolidated
EBITDA for such year and (B) the reimbursement of expenses to Kelso and THL (or
their Affiliates) during any fiscal year not to exceed $250,000 in the