FairPoint Communications 2009 Annual Report Download - page 49

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•redeem or prepay certain debt;
•make certain investments;
•engage in specified sales of assets;
•enter into transactions with affiliates;
•enter new lines of business;
•engage in consolidation, mergers and acquisitions; and
•make certain capital expenditures.
These restrictions on our ability to operate our business could seriously harm our business by, among other things, limiting our ability to take
advantage of financing, merger and acquisition and other corporate opportunities.
Various risks, uncertainties and events beyond our control could affect our ability to comply with these covenants and maintain these financial tests
and ratios. Failure to comply with any of the covenants in our existing or future financing arrangements could result in a default under those
arrangements and under other arrangements containing cross-default provisions. In addition, the limitations imposed by any financing arrangements on
our ability to incur additional debt and to take other actions might significantly impair our ability to obtain other financing.
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Our initial public offering in February 2005 resulted in an "ownership change" within the meaning of the U.S. federal income tax laws addressing
NOL carryforwards, alternative minimum tax credits and other similar tax attributes. Moreover, the Merger with Spinco resulted in a further ownership
change for these purposes. As a result of these ownership changes, there are specific limitations on our ability to use these NOL carryforwards and
other tax attributes from periods prior to the initial public offering and the Merger. Although we do not expect that these limitations will materially affect
our U.S. federal and state income tax liability in the near term, it is possible in the future if we were to generate taxable income in excess of the limitation
on usage of NOL carryforwards that these limitations could limit our ability to utilize the carryforwards and, therefore, result in an increase in our U.S.
federal and state income tax payments. In addition, in the future we will be required to pay cash to satisfy our tax liabilities when all of our NOL
carryforwards have been used or have expired. Limitations on our usage of NOL carryforwards, and other factors requiring us to pay cash taxes in the
future, would reduce the funds available to service our debt and pay dividends in the future.
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The market price of our common stock may fluctuate widely as a result of various factors, such as the Chapter 11 Cases, period-to-period
fluctuations in our operating results, the volume of sales of our common stock, our dividend policy, dilution, developments in the communications
industry, the failure of securities analysts to cover our common stock or changes in financial estimates by analysts, competitive factors, regulatory
developments, economic and other external factors, general market conditions and market conditions affecting the stock of communications companies
in particular. Communications companies have in the past experienced extreme volatility in the trading prices and volumes of their securities, which has
often been unrelated to operating performance. High levels of market volatility may have a significant adverse effect on the market price of our common
stock. In addition, in the past, securities class action litigation has often been instituted against companies
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