FairPoint Communications 2004 Annual Report Download - page 309

Permitted Acquisitions) incurred or issued after the first day of the relevant Test Period or Calculation Period (whether incurred to finance a Permitted
Acquisition, to refinance Indebtedness or otherwise) shall be deemed to have been incurred or issued (and the proceeds thereof applied) on the first
day of the respective Test Period or Calculation Period and remain outstanding through the date of determination (and thereafter in the case of
projections pursuant to Section 6.10(a)) and (y) (other than revolving Indebtedness) permanently retired or redeemed after the first day of the relevant
Test Period or Calculation Period shall be deemed to have been retired or redeemed on the first day of the respective Calculation Period and remain
retired through the date of determination (and thereafter in the case of projections pursuant to Section 6.10(a));
(ii) all Indebtedness assumed to be outstanding pursuant to preceding clause (i) shall be deemed to have borne interest at (x) the rate
applicable thereto, in the case of fixed rate indebtedness or (y) the rates which would have been applicable thereto during the respective period when
same was deemed outstanding, in the case of floating rate Indebtedness (although interest expense with respect to any Indebtedness for periods while
same was actually outstanding during the respective period shall be calculated using the actual rates applicable thereto while same was actually
outstanding); and
(iii) in making any determination of Adjusted Consolidated EBITDA on a Pro Forma Basis, pro forma effect shall be given to any
Permitted Acquisition or Significant Asset Sale effected during the respective Calculation Period or Test Period (or thereafter, as provided in Section
6.10, for determinations pursuant to Section 6.10 only) as if same had occurred on the first day of the respective Calculation Period or Test Period,
as the case may be, taking into account, in the case of any Permitted Acquisition, factually supportable and identifiable cost savings and expenses
which would otherwise be accounted for as an adjustment pursuant to Article 11 of Regulation S-X under the Securities Act, as if such cost savings
or expenses were realized on the first day of the respective Test Period or Calculation Period.
“Pro Forma EBITDA Test” shall be satisfied (i) if, after giving effect to (x) any merger, consolidation, conveyance, sale or transfer referred
to in Section 7.02(a), (y) the creation or acquisition of a new Telco or Carrier Services Company pursuant to a Permitted Acquisition the capital stock or other
equity interests of which is or are not to be pledged under the Pledge Agreement or (z) an Investment in a Qualified Subsidiary of the type referred to in clause
(iii) of the definition thereof pursuant to Section 7.06(h), the percentage of Adjusted Consolidated EBITDA for the 12 months last ended at such time
(determined, in the case of the acquisition or creation of a new Telco or Carrier Services Company pursuant to a Permitted Acquisition, on a Pro Forma Basis,
as if such Permitted Acquisition was consummated on the first day of such 12 month period and taking account of the adjustments described in clause (iii) of
the definition of “Pro Forma Basis” for such period) attributable to all Non-Pledged Subsidiaries does not exceed 10% and (ii) for purposes of Section
6.10(a)(viii) and 7.07(b) only, if, after giving effect to the creation or acquisition of any Acquired Person (other than a Telco or a Carrier Services Company) or
business pursuant to a Permitted Acquisition by a Qualified Subsidiary in circumstances where the capital stock or other equity interests of such Acquired
Person are not to be pledged under the Pledge Agreement or the business or assets so acquired pursuant to such Permitted Acquisition are not held by a Person
which is (or will concurrently become) a Pledged
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