FairPoint Communications 2004 Annual Report Download - page 275

Subordinated Notes Documents; and (x) on and after the execution and delivery thereof, any agreements or instruments relating to any Additional Permitted
Subordinated Debt.
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 Effective Date whether or not in the ordinary course of business, with any of its Affiliates or Unrestricted Subsidiaries 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 Pledge 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) arrangements with
directors, officers and employees not otherwise prohibited by this Agreement, (v) payment of customary legal fees and expenses to Paul, Hastings, Janofsky &
Walker LLP, (vi) Restricted Payments made by the Borrower to the extent permitted by Section 7.09(a), (vii) the Transaction and (viii) the transactions set
forth on Annex VIII hereto.
7.11 Interest Coverage Ratio. The Borrower will not permit the Interest Coverage Ratio for any Test Period ending on the last day of any
fiscal quarter of the Borrower to be less than 3.00:1.00 (or, at any time on and after the issuance of any Permitted Senior Subordinated Notes pursuant to
Section 7.04(j), 2.50:1.00).
7.12 Leverage Ratio. The Borrower will not permit the Leverage Ratio determined as at the end of any fiscal quarter of the Borrower to
exceed 5.25:1.00.
7.13 Limitation On Issuance of Equity Interests . (a) The Borrower will not, and will not permit any of its Subsidiaries to, issue (i) any
Preferred Stock or any options, warrants or rights to purchase Preferred Stock (other than Preferred Stock issued in accordance with Section 7.13(c) or (d)
below) or (ii) any redeemable common equity interests unless, in either case, the issuance thereof is, and all terms thereof are, satisfactory to the Required
Lenders in their sole discretion.
(b) The Borrower will not permit any of its Subsidiaries, directly or indirectly, to issue any shares of such Subsidiary’s capital
stock, securities or other equity interests (or warrants, rights or options to acquire shares or other equity interests), except (i) for replacements of then
outstanding shares of capital stock or other equity interests, (ii) for stock splits, stock dividends and similar issuances which do not decrease the percentage
ownership of the Borrower and its Subsidiaries taken as a whole in any class of the capital stock or other equity interests of such Subsidiary, (iii)
Subsidiaries formed after the Effective Date pursuant to Section 7.07 may issue capital stock or other equity interests in accordance with the requirements of
Section 7.07 and (iv) to qualify directors to the extent required by applicable law.
(c) The Borrower may issue Qualified Preferred Stock (x) in payment of regularly accruing dividends on theretofore outstanding
shares of Qualified Preferred Stock as contemplated by Section 7.09(a)(xiv) and (y) with respect to each other issue of Qualified
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Preferred Stock, so long as the Borrower receives reasonably equivalent consideration therefor (as determined in good faith by the Borrower).
(d) The Borrower may issue Disqualified Preferred Stock, so long as (i) no Default or Event of Default then exists or would result
from the issuance thereof, (ii) 100% of the Net Cash Proceeds therefrom are (x) applied as a mandatory repayment and/or commitment reduction in accordance
with the requirements of Section 3.02(A)(c), 2.03(d) or 2.03(f), as the case may be, (y) used to effect a Permitted Acquisition in accordance with the
requirements of Section 6.10 and/or (z) concurrently used by the Borrower (I) to make a voluntary prepayment of RF Loans pursuant to, and in accordance
with the requirements of, Section 3.01 and/or (II) to redeem and/or refinance Permitted Senior Unsecured Notes and/or Permitted Junior Capital, in each case in
an aggregate principal amount or liquidation preference, as applicable, equal to the aggregate principal amount or liquidation preference, as applicable, of RF
Loans, Permitted Senior Unsecured Notes and/or Permitted Junior Capital, as the case may be, actually incurred or issued by the Borrower to finance a
Permitted Acquisition or Permitted Acquisitions (and pay related accrued interest and dividends thereon, if any) in the 364-day period prior to such issuance of
Disqualified Preferred Stock, (iii) calculations are made by the Borrower demonstrating compliance, on a Pro Forma Basis, with the covenants contained in
Sections 7.11 and 7.12 for the Calculation Period most recently ended prior to the date of such issuance of Disqualified Preferred Stock and (iv) the Borrower
shall have furnished to the Administrative Agent a certificate from an Authorized Officer certifying as to compliance with the requirements of preceding clauses
(i), (ii) and (iii) and containing the calculations required by preceding clause (iii).
7.14 Designated Senior Debt. The Borrower shall not designate any Indebtedness (other than the Obligations) as “Designated Senior Debt”
or “Designated Guarantor Senior Debt” for purposes of any Existing 2008 Subordinated Notes Document, any Existing 2010 Subordinated Notes Document
and, on and after the execution, delivery and/or incurrence thereof, any Permitted Senior Subordinated Notes Document and any agreements or instruments
relating to any Additional Permitted Subordinated Debt or any Permitted Refinancing Indebtedness in respect thereof.
SECTION 8. Events of Default. Upon the occurrence of any of the following specified events (each, an “ Event of Default”):
8.01 Payments. The Borrower shall (i) default in the payment when due of any principal of the Loans or (ii) default, and such default
shall continue for five or more Business Days, in the payment when due of any interest on the Loans or any Fees or any other amounts owing hereunder or
under any other Credit Document; or
8.02 Representations, etc. Any representation, warranty or statement made by any Credit Party herein or in any other Credit Document or
in any statement or certificate delivered or required to be delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of