FairPoint Communications 2004 Annual Report Download - page 288

by GAAP), any Disqualified Preferred Stock that is issued and outstanding shall be treated as “Indebtedness”, with an amount equal to the greater of the
liquidation preference or the maximum mandatory fixed repurchase price of any such Disqualified Preferred Stock deemed to be a component of “Consolidated
Debt”.
“Consolidated Interest Expense” shall mean, for any period, the sum of (i) total interest expense (including the portion that is attributable to
Capital Leases in accordance with GAAP) of the Borrower and its Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of the
Borrower and its Subsidiaries (including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and
bankers’ acceptance financing and without duplication net costs and/or net benefits under Interest Rate Agreements, but excluding, however, all non-cash
interest expense to the extent included in total interest expense and the amortization of deferred financing costs) plus (ii) the product of (x) the amount of all cash
Dividend requirements (whether or not declared or paid) on Disqualified Preferred Stock paid, accrued or scheduled to be paid or accrued during such period
multiplied by (y) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective consolidated Federal, state,
local and foreign tax rate of the Borrower as reflected in the audited consolidated financial statements of the Borrower for its most recently completed fiscal
year, which amounts described in this clause (ii) shall be treated as interest expense of the Borrower and its Subsidiaries for purposes of this definition
regardless of the treatment of such amounts under GAAP; provided that, for purposes of any determination of Consolidated Interest Expense for any Test
Period ending on or prior to December 31, 2005 (other than for purposes of the definition of “Available Cash”), Consolidated Interest Expense for such Test
Period shall be Consolidated Interest Expense for that portion of such Test Period occurring on and after the Initial Borrowing Date multiplied by a fraction the
numerator of which is 365 and the denominator of which is the number of days elapsed from the Initial Borrowing Date to the last day of such Test Period (in
each case taken as one accounting period).
“Consolidated Net Income” shall mean, for any period, the net income (or loss) of the Borrower and its Subsidiaries on a consolidated
basis for such period (taken as a single accounting period) determined in conformity with GAAP (after any deduction for minority interests), provided that
there shall be excluded from the calculation thereof (without duplication) (i) the income (or loss) of any Person (other than Subsidiaries of the Borrower) in
which any other Person (other than the Borrower or any of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other
distributions actually paid to the Borrower or any of its Subsidiaries by such Person during such period, (ii) except for determinations expressly required to be
made on a Pro Forma Basis, the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries or that Person’s assets are acquired by the Borrower or any of its Subsidiaries and (iii) the income of
any Subsidiary of the Borrower to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary.
“Consolidated Tangible Assets” shall mean, at any time, the total consolidated assets of the Borrower and its Subsidiaries as same would
be shown on a consolidated balance
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