FairPoint Communications 2011 Annual Report Download - page 22

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Table of Contents

• The deadline for the initial 83% broadband build-out requirement was extended from April 1, 2010 to December 31, 2010. We believe that
we have fulfilled this broadband coverage commitment as of December 31, 2010. An additional interim requirement of 85% was
established with a July 31, 2012 deadline, and the final requirement, with a March 31, 2013 deadline, was reduced from 90% to 87%.
However, if we fail to meet any of these requirements, we shall be further required to achieve 90% by March 31, 2014. We further agreed
that by March 31, 2013, we would achieve 82% for lines in UNE Zone 3. If we meet the 87% requirement by March 31, 2013, we will
contribute $100,000 to the ConnectME Authority on July 1, 2013. We believe we have already met our obligation to achieve an 87%
broadband build-out; however this has been the subject of a PUC proceeding and the decision in this proceeding has been appealed to the
Maine Supreme Court.
• In meeting our broadband build-out requirements beyond 85%, we may resell the broadband service offerings of other non-satellite
providers in order to meet our build-out and/or service requirements, provided that the services meet or exceed all requirements of the ME
2008 Merger Order, the resold services are purchased through and serviced by us, and the MPUC staff approves the provider(s).

• The financial conditions in the ME 2008 Merger Order were replaced by the terms of the Maine Regulatory Settlement, which provided
that such financial conditions were satisfied or were rendered moot by the debt reductions resulting from the Plan.

• Our board of directors is required to consist of a supermajority of newly appointed independent directors and at least one member of the
board of directors must reside in northern New England. We are in compliance with this obligation.
• The board of directors is required to appoint a “regulatory sub-committee” that will monitor compliance with the terms of the ME 2008
Merger Order, as modified by the Maine Regulatory Settlement, and all other regulatory matters involving the States of Vermont, New
Hampshire and Maine. We appointed a regulatory committee on the Effective Date.
• We agreed to seek to have a Chief Information Officer in place by June 30, 2010. We fulfilled this obligation in March of 2010.
• We agreed that any management bonuses and the Success Bonus Plan would be based on a combination of EBITDAR (EBITDA plus
restructuring costs) and service metrics and the weighting for each of these categories would be computed and clearly stated for the
incentive and bonus plans for each individual and for the Company in total, and that we would disclose such metrics to the MPUC and
the Office of the Public Advocate of the State of Maine (the “Maine Public Advocate”). We believe that we are in compliance with this
commitment.

• We were required to reimburse the MPUC and Maine Public Advocate for certain costs and expenses. We fulfilled this obligation in
January 2011.
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