FairPoint Communications 2005 Annual Report Download - page 193

Closing Date shall (i) in the case of any Taxes not based upon or related to income or receipts, be deemed to be the amount of such Tax for the entire
Taxable period multiplied by a fraction the numerator of which is the number of days in the Taxable period ending on the Closing Date and the
denominator of which is the number of days in the entire Taxable period, and (ii) in the case of any Tax based upon or related to income or receipts,
be deemed to be the amount which would be payable if the relevant Taxable period ended on the Closing Date. Any tax credits relating to a Straddle
Period shall be applied to the taxable period ending on the Closing Date. Additionally, any overpayments of taxes and tax refunds that are not
included in the Working Capital Adjustment Amount shall first off-set any Taxes that may then be claimed due from the Shareholders under this
Section 7.1, and to the extent no such Taxes are then claimed as due shall be paid to the Shareholders within fifteen (15) days of the receipt thereof.
(ii) Preparation of Tax Returns. The Shareholders shall cause to be prepared, at SICC’s expense and in a manner consistent with past
practices, all Tax Returns of SICC and its Subsidiaries for taxable years or periods ending on or before the Closing Date but which are due to be filed
after the Closing Date (taking into account all applicable extensions of time for filing), and shall cause such Tax Returns to be delivered to the Buyer
for comment and approval, which approval shall not be unreasonably withheld, no later than thirty (30) days prior to the due date for filing any
such Tax Return (taking into account any applicable extensions of time to file). If the Buyer has any comments to the Tax Returns, the Shareholders
will consider any such comments in good faith.
(iii) Filing Tax Returns; Tax Shortfalls. The Buyer shall file all such Tax Returns and pay any Taxes due thereon, but only to the
extent such Taxes are reflected in the calculation of the Initial Working Capital Adjustment Amount or, if completed, the Final Working Capital
Adjustment Amount (otherwise, the Shareholders shall pay such Taxes). To the extent the Shareholders owe the Buyer an amount for Taxes under
this Section 7.1 that was not deducted from the Purchase Price pursuant to Section 1.4 or that is not reflected in the calculation of the Initial Working
Capital Adjustment Amount or, if completed, the Final Working Capital Adjustment Amount (a “Tax Shortfall”), the Buyer shall notify the
Shareholder Representative of the amount of such Tax Shortfall, together with a detailed explanation of the calculation thereof, as soon as practicable
but no later than fifteen (15) days before such obligation is due to be paid. The Shareholders shall cause the amount of such Tax Shortfall to be
transferred by wire transfer to Buyer no later than five (5) days before such payments are due; provided that Shareholders shall remain jointly and
severally liable for the payment of Taxes under this Section 7.1 to the extent that the amount of funds transmitted via such wire transfer is less than
the amount of such Taxes owed.
(e) Tax Proceedings. In case any written claim, demand or deficiency with respect to any Tax is asserted or any action is commenced or written
notice is given by any Taxing authority against SICC or Buyer, in respect to which indemnity may be sought against the Shareholders in accordance with
Section 10.1 of this Agreement, Buyer shall give prompt written notice to the Shareholders. The failure of Buyer to give timely notice hereunder shall not
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