FairPoint Communications 2005 Annual Report Download - page 152

Amount”), to the Escrow Agent to be held for a period of fifteen (15) months pursuant to the terms and conditions of an Escrow Agreement in substantially the
form of attached Exhibit A; and, (ii) the remainder of the Purchase Price to an account designated by the Shareholders in writing at least one Business Day
prior to the Closing.
1.3 Allocation of Purchase Price. SICC and the Shareholders represent that as part of the bidding process through which Buyer was selected to
enter into this Agreement to purchase the Shares, all bidders were required to analyze and separately state the valuation to be attributed to the ownership by
SICC of a 22.72% limited partnership interest in Illinois RSA 6 and 7 Limited Partnership (“RSA 6 & 7”) and Buyer acknowledges the foregoing procedure
was required of Buyer. Buyer acknowledges that the amounts allocated by Buyer in its sole and arms length discretion for SICC’s interest in RSA 6 & 7 is
[****](1) in cash (the “RSA 6 & 7 Value”). While the interest of SICC in RSA 6 & 7 is not being purchased directly by Buyer hereunder, such interest is
being purchased indirectly through Buyer’s purchase of the Shares, and the parties hereby allocate the RSA 6 & 7 Value to the purchase of such interests.
1.4 Purchase Price Adjustments. The following adjustments shall be made to the Purchase Price.
(a) Purchase Price Adjustment Regarding Rights of First Refusal .
(i) SICC and the Shareholders have advised Buyer they believe that the sale of the Shares in accordance with this Agreement will
trigger a First Refusal Right with regard to SICC’s ownership of its interest in RSA 6 & 7 in accordance with the provisions of the Agreement
Establishing Illinois RSA 6 and 7 Limited Partnership dated October 25, 1989. If SICC’s interest in RSA 6 & 7 is purchased by exercise of this
First Refusal Right in accordance with the provisions of Section 6.19, SICC and the Shareholders expect that SICC will receive gross proceeds equal
to RSA 6 & 7 Value, subject however to SICC’s liability for income taxes with regard to such sale. The parties agree that if this First Refusal Right
is exercised in accordance with the provisions of Section 6.19 and the sale of SICC’s interest in RSA 6 & 7 has closed and the RSA 6 & 7 Value
has been distributed to the Shareholders, the Purchase Price shall be adjusted to be reduced by an amount equal to the sum of ( x) the RSA 6 & 7
Value, plus (y) any federal, state and local tax liability of SICC (on a consolidated basis) resulting from, and solely from such sale (the “RSA 6 & 7
Tax Liability”). The projected amount of the RSA 6 & 7 Tax Liability shall be estimated in writing by SICC’s independent accounting firm within
fifteen (15) days of written request from SICC (and in no event later than 15 business days prior to the Closing), and shall be provided to SICC, the
Shareholders and Buyer for their review and approval. The estimated RSA 6 & 7 Tax Liability shall be subject to review and approval of the Buyer
and dispute resolution in accordance with the procedures applicable to the Initial Working Capital as set forth in Section 1.4(b)(iii), even though
neither the proceeds of any sale of RSA 6 & 7 nor the RSA 6 & 7 Tax Liability shall be included in determining Working Capital.
(1) Material omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the Securities
and Exchange Commission.
2