Exhibit 10.6

 

FAIRPOINT LITIGATION TRUST AGREEMENT

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I

ESTABLISHMENT OF THE LITIGATION TRUST

2

 

1.1

Establishment of Litigation Trust and Appointment of Original Trustee

2

 

1.2

Transfer of Assets and Rights to the Litigation Trust

2

 

1.3

Title to Litigation Trust Claims

5

 

1.4

Nature and Purpose of the Litigation Trust

6

 

1.5

Incorporation of Plan

7

 

1.6

Funding Expenses of the Litigation Trust

7

 

1.7

Appointment as Representative

8

 

1.8

Barred Claims; Contribution Claims

8

ARTICLE II

LITIGATION TRUST INTERESTS

9

 

2.1

Allocation of Litigation Trust Interests

9

 

2.2

Interests Beneficial Only

9

 

2.3

Evidence of Beneficial Interests

9

 

2.4

Securities Law Registration

9

 

2.5

No Transfers

10

 

2.6

Access to the Trust Register by the Litigation Trust Beneficiaries

10

 

2.7

Absolute Owners

10

ARTICLE III

THE LITIGATION TRUSTEE

11

 

3.1

Litigation Trust Proceeds

11

 

3.2

Collection of Income

11

 

3.3

Payment of Litigation Trust Expenses

11

 

3.4

Distributions

11

 

3.5

Tenure, Removal, and Replacement of the Litigation Trustee

11

 

3.6

Acceptance of Appointment by Successor Litigation Trustee

13

 

3.7

[Intentionally Omitted]

13

 

3.8

[Intentionally Omitted]

13

 

3.9

[Intentionally Omitted]

13

 

3.10

[Intentionally Omitted]

13

 

3.11

Role of the Litigation Trustee

13

 

3.12

Authority of Litigation Trustee

13

 

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3.13

Limitation of Litigation Trustee’s Authority

15

 

3.14

Books and Records

16

 

3.15

Inquiries into Trustee’s Authority

16

 

3.16

Compliance with Laws

16

 

3.17

Compensation of the Litigation Trustee

16

 

3.18

Reliance by Litigation Trustee

16

 

3.19

Investment and Safekeeping of Litigation Trust Assets

17

 

3.20

Standard of Care; Exculpation

17

ARTICLE IV

[INTENTIONALLY OMITTED]

17

ARTICLE V

TAX MATTERS

18

 

5.1

Federal Income Tax Treatment of the Litigation Trust

18

 

5.2

Allocations of Litigation Trust Taxable Income

19

ARTICLE VI

DISTRIBUTIONS

19

 

6.1

Distributions; Withholding

19

 

6.2

Manner of Payment or Distribution

20

 

6.3

Cash Distributions

20

ARTICLE VII

INDEMNIFICATION

21

 

7.1

Indemnification of Litigation Trustee

21

ARTICLE VIII

NET LITIGATION TRUST RECOVERY

21

 

8.1

No Effect on Mutuality

21

 

8.2

Section 502(h)

22

 

8.3

Net Litigation Trust Recovery

22

ARTICLE IX

REPORTING OBLIGATIONS OF LITIGATION TRUSTEE

22

 

9.1

Reports

22

ARTICLE X

TERM; TERMINATION OF THE LITIGATION TRUST

23

 

10.1

Term; Termination of the Litigation Trust

23

 

10.2

Continuance of Trust for Winding Up

23

ARTICLE XI

AMENDMENT AND WAIVER

23

 

11.1

Amendment and Waiver

23

ARTICLE XII

MISCELLANEOUS PROVISIONS

24

 

12.1

Intention of Parties to Establish the Litigation Trust

24

 

12.2

Litigation Costs

25

 

12.3

Laws as to Construction

25

 

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12.4

Jurisdiction

25

 

12.5

Severability

25

 

12.6

Notices

25

 

12.7

Fiscal Year

27

 

12.8

Construction; Usage

27

 

12.9

Counterparts; Facsimile; PDF

28

 

12.10

Confidentiality

28

 

12.11

Entire Agreement

29

 

12.12

No Bond

29

 

12.13

Effectiveness

29

 

12.14

Investment Company Act

29

 

12.15

Successor and Assigns

29

 

12.16

Particular Words

29

 

12.17

No Execution

29

 

12.18

Irrevocability

30

ARTICLE XIII

LITIGATION TRUST FUNDS OBLIGATIONS

30

 

13.1

Grant of Lien

30

 

13.2

Perfection of Lien

30

 

13.3

Remedies

31

 

13.4

Termination of Lien

31

 

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THIS LITIGATION TRUST AGREEMENT (this “Agreement”), dated as of January 24,
2011, is entered into by and among:

 

1.                                       FairPoint Communications, Inc.
(“FairPoint Communications”);

 

2.                                       FairPoint Communications’ direct and
indirect subsidiaries set forth on Schedule A (and, together with FairPoint
Communications, “FairPoint” or “Reorganized FairPoint”);

 

3.                                       Mark E. Holliday, as trustee (the
“Original Trustee”); and

 

4.                                       the Creditors’ Committee (solely with
respect to Section 1.2 of this Agreement).

 

PRELIMINARY STATEMENT

 

This Agreement is executed in order to establish a litigation trust (the
“Litigation Trust”) in connection with FairPoint’s Third Amended Joint Plan of
Reorganization, dated December 29, 2010, filed in the United States Bankruptcy
Court for the Southern District of New York pursuant to the provisions of
chapter 11 of the Bankruptcy Code (Case No. 09-16335 (BRL)), including any
supplement to such Plan and the exhibits and schedules thereto (as the same may
be amended, modified or supplemented from time to time in accordance with the
terms and provisions thereof, the “Plan”).

 

On the Petition Date, and continuing thereafter, FairPoint filed voluntary
petitions for relief under chapter 11 of the Bankruptcy Code with the Bankruptcy
Court.

 

On January 13, 2011, the Bankruptcy Court entered the Confirmation Order
approving the Plan.

 

The Litigation Trust is created pursuant to, and to effectuate certain
provisions of, the Plan and the Confirmation Order, pursuant to which the
Litigation Trustee will hold the Litigation Trust Claims and the other
Litigation Trust Assets (which Litigation Trust Assets, prior to the transfer to
the Litigation Trust, are held by FairPoint on behalf of the Litigation Trust
Beneficiaries pursuant to the terms of the Plan) as contemplated by the
Confirmation Order.

 

The Litigation Trust is established for the sole purpose of liquidating and
distributing the Litigation Trust Assets pursuant to the Plan and this Agreement
with no objective to continue or engage in the conduct of a trade or business,
except to the extent reasonably necessary to, and consistent with, the
liquidating purpose of the Litigation Trust.

 

The Litigation Trust is established (i) for the benefit of the holders of
Allowed Prepetition Credit Agreement Claims and Allowed FairPoint Communications
Unsecured Claims (individually, a “Litigation Trust Beneficiary” and
collectively, the “Litigation Trust Beneficiaries”) and (ii) to pursue all
Litigation Trust Claims.

 

The Litigation Trustee was duly appointed as a representative of FairPoint’s
Estates pursuant to section 1123(a)(5), (a)(7) and (b)(3)(B) of the Bankruptcy
Code.

 

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The Litigation Trust is intended to qualify as a liquidating trust within the
meaning of Treasury Regulation section 301.7701-4(d).

 

Unless the context otherwise requires, capitalized terms used in this Agreement
and not otherwise defined herein shall have the meanings ascribed to them in the
Plan.  Schedule B to this Agreement sets forth an index of terms that are
defined in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein and in the Plan and the Confirmation Order,
FairPoint, Reorganized FairPoint, the Litigation Trustee, and the Creditors’
Committee, intending to be legally bound, agree as follows:

 

ARTICLE I

 

ESTABLISHMENT OF THE LITIGATION TRUST

 

1.1           Establishment of Litigation Trust and Appointment of Original
Trustee.

 

(a)           Pursuant to the Plan and the Confirmation Order, FairPoint,
Reorganized FairPoint and the Original Trustee hereby establish a trust which
shall be known as the “FairPoint Litigation Trust” on behalf of and for the
benefit of the Litigation Trust Beneficiaries.

 

(b)           The Original Trustee is hereby appointed as trustee of the
Litigation Trust effective as of the Effective Date of the Plan (the “Effective
Date”) and agrees to accept and hold the Litigation Trust Claims, the Litigation
Trust Funds and any other assets acquired by the Litigation Trust on or after
the Effective Date pursuant to this Agreement or the Plan (the “Litigation Trust
Assets”), in trust for the Litigation Trust Beneficiaries subject to the terms
of the Plan, the Confirmation Order and this Agreement.  The Original Trustee
and each successor trustee serving from time to time hereunder (the “Litigation
Trustee”) shall have all the rights, powers and duties set forth herein and
pursuant to applicable law for accomplishing the purposes of the Litigation
Trust.

 

1.2           Transfer of Assets and Rights to the Litigation Trust.

 

(a)           As of the Effective Date, (i) FairPoint or Reorganized FairPoint,
as applicable, hereby irrevocably transfers, assigns and delivers to the
Litigation Trust all of its respective right, title and interest in and to the
Litigation Trust Claims (as defined below), free and clear of any and all Liens,
Claims (other than Claims in the nature of setoff or recoupment), encumbrances
or interests of any kind in such property of any other Person.  The Litigation
Trustee agrees to accept and hold the Litigation Trust Claims in trust for the
Litigation Trust Beneficiaries, subject to the terms of this Agreement.  In no
event shall any part of the Litigation Trust Claims (including Litigation Trust
Proceeds (as defined below)) revert to or be distributed to FairPoint or
Reorganized FairPoint except as provided in Section 8.17(c) of the Plan and as
provided in Sections 1.3(a), 3.3, 6.2, and 13.1 herein.  None of the foregoing
transfers to the Litigation Trust shall constitute a merger or consolidation of
the Estates or any of the respective Litigation Trust

 

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Claims, each of which shall retain its separateness following the transfer for
all purposes relevant to the prosecution thereof.

 

In this Agreement, “Litigation Trust Claims” means all Causes of Action which
may be asserted, by or on behalf of FairPoint or FairPoint’s Estates against
Verizon Communications Inc. (“Verizon”) and its affiliates in respect of matters
arising in connection with that certain Agreement and Plan of Merger (the
“Spinco Merger”), by and between Verizon, Northern New England Spinco, Inc. and
FairPoint Communications; provided, however, that in no event shall such Causes
of Action include:

 

(i)            any Claim or Cause of Action against a Released Party or any
Claim or Cause of Action that is released pursuant to Section 14.2 of the Plan;

 

(ii)           any Claim or Cause of Action held by FairPoint with respect to
the Pension Plan Asset Transfer Amount, as defined in that certain Employee
Matters Agreement (the “EMA”) by and between Verizon, Northern New England
Spinco Inc., and FairPoint Communications dated as of January 15, 2007;

 

(iii)          any Claim or Cause of Action held by FairPoint with respect to
the receipt by Verizon of customer payments in January 2009 and thereafter for
services provided in connection with operations of the Spinco Business (as that
term is defined in that certain Transition Services Agreement, dated January 15,
2007 (“TSA”)), that were to be remitted to FairPoint pursuant to the Cutover
Plan provided for in the TSA;

 

(iv)          any Claim or Cause of Action held by FairPoint for tax benefits
arising out of the operations of Northern New England Spinco Inc. prior to
consummation of the Spinco Merger pursuant to the Tax Sharing Agreement, dated
January 15, 2007, between FairPoint, Verizon, and Northern New England Spinco
Inc;

 

(v)           any Claim or Cause of Action held by FairPoint against RCC
Atlantic, Inc. d/b/a Verizon Wireless (“RCC”) for RCC’s non-payment of E-911 DS1
facility charges for Type 2C facilities/trunking provided by FairPoint in the
States of Maine, New Hampshire and Vermont with respect to all such services
rendered on or prior to the services invoiced through and including December 31,
2009;

 

(vi)          any and all requests for “all information” required to be provided
by Verizon pursuant to Section 12.1(b) of the EMA; and

 

(vii)         any Claim or Cause of Action held by FairPoint with respect to
services performed by FairPoint to Verizon after the Spinco Merger.

 

The Claims and Causes of Action in subparagraphs (ii) — (vii) above are being
pursued by FairPoint and will continue to be pursued by Reorganized FairPoint
after the Effective Date.  To the extent there is factual overlap between such
Claims and Causes of Action and the Litigation Trust Claims, Reorganized
FairPoint and the Litigation Trustee shall coordinate with each other. To the
extent there is overlap of legal theories and analyses between such Claims and
Causes of Action and the Litigation Trust Claims, Reorganized FairPoint and the
Litigation Trustee shall cooperate with each other pursuant to principles of
common interest with respect to privileges.

 

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To the extent that (a) settling any of the Claims and Causes of Action in
subparagraphs (ii) — (vii) above will have a compromising effect on the
Litigation Trust Claims, or (b) settling the Litigation Trust Claims will have a
compromising effect on any of the Claims and Causes of Action in subparagraphs
(i) — (vii) above, then Reorganized FairPoint and the Litigation Trustee agree
to consult with each other with respect thereto; provided, however, that in the
event Reorganized FairPoint and the Litigation Trustee cannot reach an
agreement, in accordance with Section 12.4 of this Agreement, their dispute
shall be resolved by the Bankruptcy Court.  Reorganized FairPoint and the
Litigation Trustee shall coordinate and work together in good faith to maximize
the value of all Claims.  Notwithstanding anything in this Agreement to the
contrary, the Litigation Trustee shall have the right to challenge and/or seek
to avoid any purported pre-petition release of Verizon (other than any affiliate
that was merged into FairPoint Communications) or any of its affiliates for any
transfer of value or assumption of obligation in connection with the Spin-off by
FairPoint Communications or any of its affiliates to the extent such purported
release relates to or affects the Litigation Trust Claims.

 

(b)           In connection with Litigation Trust Claims, any attorney-client
privilege, work-product privilege, joint interest privilege or other privilege
or immunity (collectively, the “Privileges”) attaching to any documents or
communications (whether written or oral) shall vest in the Litigation Trustee
and his representatives, and Reorganized FairPoint and the Litigation Trustee
are authorized to take all necessary actions to effectuate the transfer of such
privileges and available defenses.  The Litigation Trust’s receipt of the
Privileges associated with the Litigation Trust Claims shall not operate as a
waiver of other privileges possessed or retained by FairPoint or Reorganized
FairPoint.

 

(c)           After the Effective Date, Reorganized FairPoint shall (i) deliver
or cause to be delivered to the Litigation Trust any and all documents
reasonably requested by the Litigation Trustee and related to the Litigation
Trust Claims (including those maintained in electronic format and original
documents; provided that with respect to original documents that are proprietary
to Reorganized FairPoint and that Reorganized FairPoint requires in the
operation of its businesses, Reorganized FairPoint may provide copies in lieu of
originals), whether held by FairPoint or Reorganized FairPoint or the Creditors’
Committee, their respective employees, agents, advisors, attorneys, accountants,
or any other professionals and (ii) provide reasonable access to such employees
of FairPoint or Reorganized FairPoint, their agents, advisors, attorneys,
accountants or any other professionals hired by FairPoint or Reorganized
FairPoint with knowledge of matters relevant to the Litigation Trust Claims. 
Upon the reasonable request of the Litigation Trustee, to the extent permitted
by law, Reorganized FairPoint shall provide the Litigation Trustee with a list
of all documents in connection with the Litigation Trust Claims known to it but
not held by it or any of its employees, agents, advisors, attorneys, accountants
or any other professionals.  Such list shall contain a description of each
document, to the extent feasible and permitted by law, as well as the name of
the Person holding such document.

 

(d)           As promptly as practicable after the Effective Date, Reorganized
FairPoint agrees (i) at the reasonable request of the Litigation Trustee to
execute and/or deliver any instruments, documents, books, and records (including
those maintained in electronic format and original documents as may be needed),
(ii) to take, or cause to be taken, all such further actions as the Litigation
Trustee may reasonably request in order to evidence or

 

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effectuate the transfer of the Litigation Trust Claims and the Privileges to the
Litigation Trustee and the consummation of the transactions contemplated hereby
and by the Plan and to otherwise carry out the intent of the parties hereunder
and under the Plan, and (iii) to cooperate with the Litigation Trustee in the
prosecution of the Litigation Trust Claims to the extent reasonable.
Notwithstanding anything contained herein, without the express written consent
of the Litigation Trustee, no Person or creditor of FairPoint or Reorganized
FairPoint shall be permitted to assert, bring, institute, or commence any Claim
or Cause of Action that is transferred to the Litigation Trust pursuant to the
Plan.

 

(e)                                  The Creditors’ Committee shall be permitted
to share any discovery obtained relating to the Litigation Trust Claims with the
Litigation Trustee without waiver of any Privileges.

 

(f)                                    All rights of the Creditors’ Committee in
connection with the following Rule 2004 examinations, orders, and agreements
related thereto shall vest in the Litigation Trustee and his representatives,
and Reorganized FairPoint and the Litigation Trustee are authorized to take all
necessary actions to effectuate the transfer of such rights and privileges.

 

(i)            The Official Committee of Unsecured Creditors’ Motion Pursuant to
Fed. R. Bankr. P. 2004 For an Order Directing the Expeditious Production of
Certain Documents by Verizon Communications, Inc. [Docket No. 987];

 

(ii)           The Official Committee of Unsecured Creditors’ Motion Pursuant to
Fed. R. Bankr. P. 2004 For An Order Directing The Expeditious Production of
Certain Documents By Merrill Lynch & Co., Inc. [Docket No. 1856];

 

(iii)          Order Granting The Official Committee Of Unsecured Creditors
Motion Pursuant To Fed. R. Bankr. P. 2004 For an Order Directing The Expeditious
Production of Certain Documents by Deutsche Bank AG [Docket No. 1917];

 

(iv)          Order Granting The Official Committee Of Unsecured Creditors
Motion Pursuant To Fed. R. Bankr. P. 2004 For an Order Directing The Expeditious
Production of Certain Documents by Morgan Stanley [Docket No. 1918];

 

(v)           Order Granting The Official Committee Of Unsecured Creditors
Motion Pursuant To Fed. R. Bankr. P. 2004 For an Order Directing The Expeditious
Production of Certain Documents by Houlihan Lokey, Inc. [Docket No. 1919]; and

 

(vi)          Motion to Compel Verizon Communications, Inc. and its Subsidiaries
to Comply with Terms of May 18, 2010 Letter Agreement Relating to Official
Committee of Unsecured Creditors’ Rule 2004 Motion [Docket No. 1920].

 

1.3           Title to Litigation Trust Claims.  The transfer of the Litigation
Trust Assets to the Litigation Trust shall be made, as provided in the Plan and
this Agreement, for the benefit of the Litigation Trust Beneficiaries. In
accordance with the Plan and this Agreement, FairPoint or Reorganized FairPoint,
as applicable, shall transfer, on behalf of the Litigation Trust Beneficiaries,
the Litigation Trust Claims to the Litigation Trust in exchange for the
Litigation Trust Interests for the benefit of the Litigation Trust
Beneficiaries.  Upon the transfer of the Litigation Trust Assets, FairPoint or
Reorganized FairPoint, as the case may be, shall have no interest in or claim to
the Litigation Trust Assets (except to the extent that Reorganized FairPoint is
granted a lien, if any, on the Litigation Trust Assets in respect of the
Litigation Trust Funds) or the Litigation Trust, and the Litigation Trust shall
succeed to all of FairPoint’s and Reorganized FairPoint’s, as the case may be,
right, title and interest in and to the Litigation Trust Assets.  The Litigation
Trustee shall have no authority to bind FairPoint or Reorganized FairPoint in
any manner except with respect to a Litigation Trust Claim.  Notwithstanding the
foregoing, for purposes of section 553 of the Bankruptcy Code, the transfer of
the Litigation Trust Assets to the Litigation Trust shall not affect the
mutuality of obligations which otherwise may have existed prior to the
effectuation of such transfer.  Notwithstanding anything in this Agreement to
the contrary, the transfer of the Litigation Trust Assets to the Litigation
Trust does not diminish, and fully preserves, any defenses a defendant would
have if such Litigation Trust Assets had been retained by FairPoint. To the
extent that any Litigation Trust Assets cannot be transferred to the Litigation
Trust because of a restriction on transferability under applicable
non-bankruptcy law that is not superseded or preempted by section 1123 of the
Bankruptcy Code or any other provision of the Bankruptcy Code, such Litigation
Trust Assets shall be deemed to have been retained by Reorganized FairPoint, and
the Litigation Trustee shall be deemed to have been designated as a
representative of Reorganized FairPoint pursuant to section 1123(b)(3)(B) of the
Bankruptcy Code to enforce and pursue such Litigation Trust Assets on behalf of
Reorganized FairPoint, and all proceeds, income and recoveries on account of any
such Litigation Trust Assets shall be assets of the Litigation Trust and paid
over thereto immediately upon receipt by Reorganized FairPoint, or any other
Person.  Notwithstanding the foregoing, but subject to Sections 1.6, 3.4 and
6.2(b) of this Agreement, all net proceeds, income, and recoveries of or on
account of such Litigation Trust Assets shall be transferred to the Litigation
Trust to be distributed to the Litigation Trust Beneficiaries consistent with
the terms of the Plan and this Agreement.

 

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1.4          Nature and Purpose of the Litigation Trust.

 

(a)           Purpose.  The Litigation Trust is organized and established as a
trust pursuant to which the Litigation Trustee, subject to the terms and
conditions contained herein and in the Plan, is to (i) hold the Litigation Trust
Assets and dispose of the same in accordance with this Agreement and the Plan in
accordance with Treasury Regulation section 301.7701-4(d) and (ii) oversee and
direct the expeditious but orderly liquidation of the Litigation Trust Assets.
 Accordingly, the sole purpose of the Litigation Trust is to liquidate the
Litigation Trust Assets with no objective to continue or engage in the conduct
of a trade or business, except to the extent reasonably necessary to preserve or
enhance the liquidation value of the Litigation Trust Assets, and consistent
with, the liquidating purpose of the Litigation Trust.

 

(b)           Actions of the Litigation Trustee.  Subject to the terms of this
Agreement, the Litigation Trustee shall, in an expeditious but orderly manner,
liquidate and convert to Cash the Litigation Trust Assets, which includes,
without limitation, pursuing recovery on the Litigation Trust Claims, making
timely distributions and not unduly prolonging the duration of the Litigation
Trust. The liquidation of the Litigation Trust Claims may be accomplished either
through the prosecution, compromise and settlement, abandonment or dismissal of
any or all claims, rights or causes of action, or otherwise.  The Litigation
Trustee, except as set forth in Section 3.12 herein, shall have the absolute
right to pursue, settle and compromise or not pursue any and all Litigation
Trust Claims as it determines is in the best interests of the Litigation Trust
Beneficiaries, and consistent with the purposes of the Litigation Trust.  The
Litigation Trustee shall have no liability for the outcome of any such decision
except for any damages caused by gross negligence, bad faith, willful misconduct
or knowing violation of law.

 

(c)           Relationship. This Agreement is intended to create a trust and a
trust relationship and the Litigation Trust is to be governed and construed in
all respects as a trust.  The Litigation Trust is not intended to be, and shall
not be deemed to be or treated as, a general partnership, limited partnership,
joint venture, corporation, joint stock company or association, nor shall the
Litigation Trustee, or the Litigation Trust Beneficiaries, or any of them, for
any purpose be, or be deemed to be or treated in any way whatsoever to be,
liable or responsible hereunder as partners or joint venturers.  The
relationship of the Litigation Trust Beneficiaries, on the one hand, to the
Litigation Trust and the Litigation Trustee, on the other, shall not be deemed a
principal or agency relationship, and their rights shall be limited to those
conferred upon them by this Agreement and the Plan.

 

(d)           No Waiver of Claims.  In accordance with section 1123(d) of the
Bankruptcy Code, the Litigation Trustee may enforce all rights to commence and
pursue, as appropriate, any and all Litigation Trust Claims after the Effective
Date.  No Person may rely on the absence of a specific reference in the Plan to
any Cause of Action against such Person as any indication that the Litigation
Trustee will not pursue any and all available Causes of Action against such
Person.  Unless any Causes of Action against a Person are expressly waived,
relinquished, exculpated, released, compromised, or settled in the Plan or a
Bankruptcy Court order, the Litigation Trustee expressly reserves all Causes of
Action, for later adjudication, and, therefore, no preclusion doctrine,
including the doctrines of res judicata, collateral estoppel, issue preclusion,
claim preclusion, estoppel (judicial, equitable, or otherwise) or laches, shall
apply to such Causes of Action upon, after, or as a consequence of the
Confirmation Order.  Reorganized FairPoint’s objection to the allowance of any
Claims or Equity Interests filed with the Bankruptcy Court with respect to which
they dispute liability, priority, and/or amount (or any objections,

 

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affirmative defenses and/or counterclaims, whether or not litigated to Final
Order) shall not in any way limit the ability or the right of the Litigation
Trustee to assert, commence or prosecute any Cause of Action that is a
Litigation Trust Claim against the holder of such Claim or Equity Interest.
Nothing contained in the Plan, the Confirmation Order or this Agreement shall be
deemed to be a waiver, release, or relinquishment of any Cause of Action, right
of setoff, or other legal or equitable defense which FairPoint had immediately
prior to the Petition Date, against or with respect to any Claim left unimpaired
by the Plan.  The Litigation Trustee shall have, retain, reserve, and be
entitled to assert all such Claims, Causes of Action, rights of setoff, and
other legal or equitable defenses which FairPoint had immediately prior to the
Petition Date fully as if the Chapter 11 Cases had not been commenced or the
Litigation Trust Claims had not been transferred to the Litigation Trust in
accordance with the Plan, the Confirmation Order and this Agreement, and all of
Reorganized FairPoint’s legal and equitable rights respecting any Claim left
unimpaired by the Plan may be asserted after the Confirmation Date to the same
extent as if the Chapter 11 Cases had not been commenced.  Nothing in this
Agreement shall be construed in a manner that is inconsistent with the Plan or
the Confirmation Order.

 

1.5          Incorporation of Plan.  The Plan and the Confirmation Order are
each hereby incorporated into this Agreement and made a part hereof by this
reference; provided, however, unless otherwise specified herein, to the extent
that there is conflict between the provisions of this Agreement, the provisions
of the Plan, and/or the Confirmation Order, each such document shall have
controlling effect in the following rank order: (1) the Confirmation Order;
(2) the Plan; and (3) this Agreement.

 

1.6          Funding Expenses of the Litigation Trust.  On the Effective Date,
FairPoint or Reorganized FairPoint, as the case may be, shall transfer the
Initial Litigation Trust Funds to the Litigation Trust to finance the operations
of the Litigation Trust.  If a Cash Payment is made on the Effective Date to the
holders of Allowed Prepetition Credit Agreement Claims under Section 5.4.2(c) of
the Plan, then (i) the Initial Litigation Trust Funds shall be repaid to the
holders of Allowed Prepetition Credit Agreement Claims in accordance with
Section 6.1 hereof before the Litigation Trust Beneficiaries receive any
distributions on account of their Litigation Trust Interests; and (ii) the
Prepetition Credit Agreement Agent shall be granted a security interest in the
Litigation Trust Assets for the benefit of the holders of Allowed Prepetition
Credit Agreement Claims in accordance with Section 13.1 hereof until the Initial
Litigation Trust Funds have been repaid to the holders of Allowed Prepetition
Credit Agreement Claims.  If a Cash Payment is not made on the Effective Date to
holders of Allowed Prepetition Credit Agreement Claims under Section 5.4.2(c) of
the Plan, then (i) the Initial Litigation Trust Funds shall be repaid to
Reorganized FairPoint in accordance with Section 6.2(c) hereof before the
Litigation Trust Beneficiaries receive any distributions on account of their
Litigation Trust Interests; and (ii) Reorganized FairPoint shall be granted a
security interest in the Litigation Trust Assets in accordance with Section 13.1
hereof until the Initial Litigation Trust Funds have been repaid to Reorganized
FairPoint.  After the Effective Date, the Litigation Trustee may request
additional funding (“Additional Funding”) of the Litigation Trust from
Reorganized FairPoint; provided that (i) any such Additional Funding shall be
subject to the approval of the New Board in its sole discretion, (ii) after
giving effect to such Additional Funding, Reorganized FairPoint’s cash on hand
shall not be less than $20,000,000 (after taking into account the cash
distributions to be made pursuant to the Plan) and (iii) no proceeds of any
borrowing under the New Revolver may be used to fund such Additional Funding. 
If Reorganized FairPoint provides Additional Funding

 

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to the Litigation Trust, then (i) the Additional Funding shall be repaid to
Reorganized FairPoint in accordance with Section 6.2(c) hereof before the
Litigation Trust Beneficiaries receive any distributions on account of their
Litigation Trust Interests; and (ii) Reorganized FairPoint shall be granted a
security interest in the Litigation Trust Assets in accordance with Section 13.1
hereof until the Additional Funding has been repaid to Reorganized FairPoint.

 

1.7          Appointment as Representative.  Pursuant to sections
1123(a)(5)(B) and 1123(b)(3) of the Bankruptcy Code, the Plan provides for the
appointment of a Litigation Trustee as the duly appointed representative of
FairPoint with respect to the Litigation Trust Claims, and, as such, the
Litigation Trustee succeeds to all of the rights and powers of a trustee in
bankruptcy with respect to prosecution of the Litigation Trust Claims for the
benefit of the Litigation Trust Beneficiaries in accordance with the terms of
this Agreement, the Plan, and the Confirmation Order.

 

1.8          Barred Claims; Contribution Claims.  It is the intention of the
parties to this Agreement that (i) the liquidation of the Litigation Trust
Assets not cause FairPoint or Reorganized FairPoint (for purposes of this
Section 1.8, the “Protected Parties”), as the case may be, to incur liability
with respect to Litigation Trust Claims in the nature of contribution,
reimbursement or indemnification, however denominated or described, in
connection with, arising out of or in any way related to the Litigation Trust
Claims and (ii) any such claims-over shall be satisfied as provided herein.

 

(a)           Any Person against whom a Litigation Trust Claim has been brought
(a “Litigation Trust Defendant”) shall be permanently barred, enjoined and
restrained from commencing, prosecuting or asserting any Claim for contribution,
reimbursement or indemnification or any Claim related thereto (a “Covered
Claim”) based upon, related to, or arising out of the prosecution of Litigation
Trust Claims against that Litigation Trust Defendant, whether such Covered Claim
is asserted in a court, an arbitration, an administrative agency or forum, or in
any other manner, if the Covered Claim is against FairPoint or Reorganized
FairPoint, or if against a third party would, in turn, give rise to an
Administrative Expense Claim, a Class 5 Legacy Subsidiary Unsecured Claim, a
Class 6 NNE Subsidiary Unsecured Claim, or a Class 8 Convenience Claim under the
Plan against FairPoint or a claim against Reorganized FairPoint; provided,
however, that the Litigation Trust shall reduce and credit against any judgment
it may obtain against the Litigation Trust Defendant the amount of any Covered
Claim which is determined by a court of competent jurisdiction in any action
involving the prosecution of Litigation Trust Claims against that Litigation
Trust Defendant.

 

(b)           No Protected Party shall have any liability to any Person for an
asserted or threatened Covered Claim that would be treated as a Class 7
FairPoint Communications Unsecured Claim under the Plan based upon, relating to,
or arising out of the prosecution of Litigation Trust Claims, and any
distributions to be made on account of a Covered Claim pursuant to the Plan
shall be funded by the Litigation Trust, in the amount(s), from time to time,
that all similarly situated holders of Claims are entitled to receive hereunder.

 

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ARTICLE II

 

LITIGATION TRUST INTERESTS

 

2.1          Allocation of Litigation Trust Interests.  The allocation and
distribution of the Litigation Trust Interests shall be accomplished as set
forth in the Plan and the Confirmation Order.  The aggregate number and face
value of Litigation Trust Interests to be distributed pursuant to the Plan shall
be determined by the Litigation Trustee, consistent with the intent and purposes
of the Plan, subject, however, to the approval of the Bankruptcy Court, upon
notice to the Litigation Trust Beneficiaries.  The Litigation Trust Interests
distributed to the holders of Allowed Prepetition Credit Agreement Claims shall
be referred to herein as the “Class A Interests” and all other Litigation Trust
Interests shall be referred to herein as the “Class B Interests.”

 

2.2          Interests Beneficial Only.  The ownership of a Litigation Trust
Interest shall not entitle any Litigation Trust Beneficiary to any title in the
Litigation Trust Assets as such (which title shall be vested in the Litigation
Trustee) or to any right to call for a partition or division of the Litigation
Trust Assets or to require an accounting.

 

2.3          Evidence of Beneficial Interests.  The Litigation Trust Interests
will not be represented by certificates, securities, receipts or in any other
form or manner whatsoever, except as maintained on the books and records of the
Litigation Trust by the Litigation Trustee or the Registrar.  The death,
incapacity or bankruptcy of any Litigation Trust Beneficiary during the term of
the Litigation Trust shall not (i) operate to terminate the Litigation Trust,
(ii) entitle the representatives or creditors of the deceased party to an
accounting, (iii) entitle the representatives or creditors of the deceased party
to take any action in the Bankruptcy Court or elsewhere for the distribution of
the Litigation Trust Assets or for a partition thereof or (iv) otherwise affect
the rights and obligations of any of the Litigation Trust Beneficiaries
hereunder.

 

2.4          Securities Law Registration.  It is intended that the Litigation
Trust Interests and the entitlements hereunder, if any, of the holders of
Allowed Prepetition Credit Agreement Claims with respect to the Initial
Litigation Trust Funds, shall not constitute “securities.” To the extent the
Litigation Trust Interests or the entitlements of the holders of Allowed
Prepetition Credit Agreement Claims are deemed to be “securities,” the issuance
of Litigation Trust Interests to holders of Allowed Prepetition Credit Agreement
Claims and Allowed FairPoint Communications Unsecured Claims or the issuance to
the holders of Allowed Prepetition Credit Agreement Claims of any entitlements
hereunder or under the Plan (and any redistribution of any of the foregoing
pursuant to the Plan or otherwise) shall be exempt, pursuant to section 1145 of
the Bankruptcy Code, from registration under the Securities Act of 1933, as
amended (the “Securities Act”), and any applicable state and local laws
requiring registration of securities. If the Litigation Trustee determines, with
the advice of counsel, that the Litigation Trust is required to comply with
registration and/or reporting requirements of the Securities Act, the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), the Trust Indenture Act
of 1939, as amended (the “Trust Indenture Act”), or the Investment Company Act
of 1940, as amended (the “Investment Company Act”), then the Litigation Trustee
shall take any and all actions to comply with such registration and reporting
requirements, if any, and file reports with the Securities and Exchange
Commission (the “SEC”) to the extent required by applicable law. 
Notwithstanding the foregoing procedure, nothing herein shall be deemed to
preclude the Litigation Trustee from

 

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amending this Agreement to make such changes as are deemed necessary or
appropriate by the Litigation Trustee, with the advice of counsel, to ensure
that the Litigation Trust is not subject to registration and/or reporting
requirements of the Securities Act, the Exchange Act, the Trust Indenture Act or
the Investment Company Act, except that no amendment to this Agreement may be
made which would not be permitted by Article 11 of this Agreement.

 

2.5          No Transfers.

 

(a)           No transfer, sale assignment, distribution, exchange, pledge,
hypothecation, mortgage or other disposition (a “Transfer”) of a Litigation
Trust Interest or any entitlement hereunder of a holder of a Prepetition Credit
Agreement Claim may be effected or made; provided, however, that, Transfers of
Litigation Trust Interests or entitlements hereunder of a holder of a
Prepetition Credit Agreement Claim and/or under the Plan may be made (i) by
operation of law or by will or the laws of descent and distribution, (ii) if the
Litigation Trustee has received such legal advice or other information that it,
in its sole discretion, deems necessary or appropriate to assure that any such
disposition shall not require the Litigation Trust to comply with the
registration and reporting requirements of the Exchange Act or the Investment
Company Act, or (iii) if the Litigation Trustee has determined to register under
such Acts, as necessary, and/or make periodic reports in order to enable such
disposition to be made. In the event that any such disposition is allowed, the
Litigation Trustee may add such restrictions upon transfer and other terms to
this Agreement as are deemed necessary or appropriate by the Litigation Trustee,
with the advice of counsel, to permit or facilitate such disposition under
applicable securities and other laws.

 

(b)           The Litigation Trustee shall appoint a registrar, which may be the
Litigation Trustee (the “Registrar”), for the purpose of recording ownership of
the Litigation Trust Interests as provided for in this Agreement.  The
Registrar, if other than the Litigation Trustee, may be such other institution
acceptable to the Litigation Trustee.  For its services hereunder, the
Registrar, unless it is the Litigation Trustee, shall be entitled to receive
reasonable compensation from the Litigation Trust as an expense of the
Litigation Trust.

 

(c)           The Litigation Trustee shall cause to be kept at the office of the
Registrar or at such other place or places as shall be designated by them from
time to time, a registry of the Litigation Trust Beneficiaries (the “Trust
Register”) which shall be maintained pursuant to such reasonable regulations as
the Litigation Trustee and the Registrar may prescribe.

 

2.6          Access to the Trust Register by the Litigation Trust
Beneficiaries.  Litigation Trust Beneficiaries and their duly authorized
representatives shall have the right, upon reasonable prior written notice to
the Registrar and the Litigation Trustee and in accordance with the reasonable
regulations prescribed by the Registrar and the Litigation Trustee, to inspect
and, at the sole expense of the Litigation Trust Beneficiaries seeking the same,
make copies of the Trust Register, in each case for a purpose reasonably related
to such holder’s interest in the Litigation Trust.

 

2.7          Absolute Owners.  The Litigation Trustee may deem and treat the
holder of a Litigation Trust Interest of record in the Trust Register as the
absolute owner of such Litigation Trust Interests for the purpose of receiving
distributions and payment thereon or on account thereof

 

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and for all other purposes whatsoever and the Litigation Trustee shall not be
charged with having received notice of any claim or demand to such Litigation
Trust Interests or the interest therein of any other Person.

 

ARTICLE III

 

THE LITIGATION TRUSTEE

 

3.1          Litigation Trust Proceeds.  Any and all proceeds, income and/or
recoveries obtained on account of or from the Litigation Trust Claims, after
payment of any and all expenses of the Litigation Trust, shall be added to the
Litigation Trust Assets (the “Litigation Trust Proceeds”), held as a part
thereof (and title therein shall be vested in the Litigation Trustee) and dealt
with in accordance with the terms of this Agreement.

 

3.2          Collection of Income.  The Litigation Trustee shall collect all
income earned with respect to the Litigation Trust Assets, which shall thereupon
be added to the Litigation Trust Assets, held as a part thereof (and title
therein shall be vested in the Litigation Trustee) and dealt with in accordance
with the terms of this Agreement.

 

3.3          Payment of Litigation Trust Expenses.  Subject to Section 3.12 of
this Agreement and the obligations of the Litigation Trust (and/or the
Litigation Trustee) under Sections 1.6, 3.4, and 6.2(b) of this Agreement, the
Litigation Trustee shall maintain the Litigation Trust Assets, and expend the
Litigation Trust Funds or the Litigation Trust Proceeds (i) as is reasonably
necessary to meet contingent liabilities and to maintain the value of the
Litigation Trust Assets during liquidation, (ii) to pay reasonable and necessary
expenses (including but not limited to, the reasonable costs and expenses of the
Litigation Trustee (including reasonable fees, costs, and expenses of
professionals retained thereby), any taxes imposed on the Litigation Trust or in
respect of the Litigation Trust Assets or reasonable fees and expenses in
connection with, arising out of, or related to, the Litigation Trust Assets and
litigations associated therewith), (iii) to pay the costs and expenses of the
valuations of the Litigation Trust Assets incurred by the Litigation Trustee in
accordance with Section 5.1(c) of this Agreement, (iv) to pay or reimburse
amounts in accordance with Article 7 hereof and (v) to satisfy other liabilities
incurred or assumed by the Litigation Trust (or to which the Litigation Trust
Assets are otherwise subject) in accordance with the Plan, the Confirmation
Order and this Agreement.

 

3.4          Distributions.  The Litigation Trustee shall make distributions of
Litigation Trust Proceeds in accordance with the provisions of Article 6 of this
Agreement and the Plan.

 

3.5          Tenure, Removal, and Replacement of the Litigation Trustee.

 

(a)           The Litigation Trustee will serve until the earliest of (i) the
completion of all the Litigation Trustee’s duties, responsibilities and
obligations under this Agreement and the Plan, (ii) the Litigation Trustee’s
resignation and the appointment of a successor pursuant to Section 3.5(b) of
this Agreement, (iii) the Litigation Trustee’s removal pursuant to
Section 3.5(c) of this Agreement, (iv) the Litigation Trustee’s death (if
applicable) and (v) the termination of the Litigation Trust in accordance with
this Agreement, the Confirmation Order and the Plan.

 

(b)           The Litigation Trustee may resign by filing a notice with the
Bankruptcy Court (the “Resignation Notice”).  Such resignation will become
effective on the later to occur of:

 

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(i) the day specified in such written notice and (ii) the appointment of a
successor litigation trustee as provided in Section 3.5(d) and the acceptance by
such successor litigation trustee of such appointment in accordance with
Section 3.6 of this Agreement. If a successor litigation trustee is not
appointed or does not accept its appointment within ninety (90) days following
the filing of the Resignation Notice, the Litigation Trustee shall file a motion
with the Bankruptcy Court, upon notice and a hearing, for the appointment of a
successor litigation trustee.

 

(c)           The Litigation Trustee may be removed for any reason by the
affirmative vote of (i) the Disinterested holders of a majority in amount of the
Class A Interests that have been distributed and the Disinterested holders of a
majority in amount of the Class B Interests that have been distributed, by
written consent (which shall include electronic mail) or (ii) the Disinterested
holders of a majority in amount of the Class A Interests that have been
distributed and the Disinterested holders of a majority in amount of the Class B
Interests that have been distributed, in attendance at a meeting of Litigation
Trust Beneficiaries called for the purpose of voting on the removal of the
Litigation Trustee (the alternative actions referred to in clauses (i) and
(ii) of this Section 3.5(c), each an “Interest Action”); provided, however, the
Litigation Trustee’s compensation prior to such Interest Action will be in
accordance with his agreement with the Litigation Trust.  Such removal shall
become effective on the date action is taken by the Litigation Trust
Beneficiaries.  For purposes of this Section 3.5, “Disinterested” means
disinterested with respect to all Claims or Causes of Action that have been or
may be asserted by the Litigation Trust.

 

(d)           In the event of a vacancy in the position of the Litigation
Trustee (whether by removal, resignation, or death, if applicable), the
Disinterested holders of a majority of the Class A Interests and the
Disinterested holders of a majority of the Class B Interests may appoint a
successor litigation trustee by an Interest Action.

 

(e)           Immediately upon the appointment of any successor litigation
trustee, all rights, powers, duties, authority, and privileges of the
predecessor Litigation Trustee hereunder will be vested in and undertaken by the
successor litigation trustee without any further act; and the successor
litigation trustee will not be liable personally for any act or omission of the
predecessor Litigation Trustee.  A successor litigation trustee shall have all
the rights, privileges, powers, and duties of the predecessor Litigation Trustee
under this Agreement, the Confirmation Order and the Plan.

 

(f)            Upon the appointment of a successor litigation trustee, the
predecessor Litigation Trustee (or the duly appointed legal representative of a
deceased Litigation Trustee) shall, if applicable, when requested in writing by
the successor litigation trustee or the Bankruptcy Court, execute and deliver an
instrument or instruments conveying and transferring to such successor
litigation trustee upon the trust herein expressed all the estates, properties,
rights, powers and trusts of such predecessor Litigation Trustee, and shall duly
assign, transfer, and deliver to such successor litigation trustee all property
and money held hereunder, and all other assets, documents, instruments, records
and other writings relating to the Litigation Trust, the Litigation Trust
Assets, the Litigation Trust Proceeds, the Litigation Trust Funds, the
Litigation Trust Interests, and the entitlements of the holders of Allowed
Prepetition Credit Agreement Claims hereunder, then in its possession and held
hereunder, and shall execute and deliver such documents, instruments and other
writings as may be requested by the Bankruptcy Court or a successor litigation
trustee to effect the termination of such predecessor Litigation Trustee’s
capacity under the Litigation Trust, this Agreement and the Plan and otherwise
assist and cooperate, without cost or expense to the predecessor Litigation
Trustee, in effectuating the assumption of its obligations and functions by the
successor litigation trustee.

 

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(g)           The death, resignation or removal of the Litigation Trustee shall
not terminate the Litigation Trust or revoke any existing agency created
pursuant to this Agreement or invalidate any action theretofore taken by the
Litigation Trustee.

 

3.6          Acceptance of Appointment by Successor Litigation Trustee.  Any
successor litigation trustee appointed hereunder shall execute an instrument
accepting such appointment and assuming all of the obligations and duties of the
predecessor Litigation Trustee on the same terms and conditions hereunder and
accepting the terms of this Agreement and agreeing that the provisions of this
Agreement shall be binding upon and inure to the benefit of the successor
trustee and all of its heirs, and legal and personal representatives, successors
and assigns, and thereupon the successor litigation trustee shall, without any
further act, become vested with all the estates, properties, rights, powers,
trusts, and duties of the predecessor Litigation Trustee hereunder with like
effect as if originally named herein.

 

3.7          [Intentionally Omitted].

 

3.8          [Intentionally Omitted].

 

3.9          [Intentionally Omitted].

 

3.10        [Intentionally Omitted].

 

3.11        Role of the Litigation Trustee.  In furtherance of and consistent
with the purpose of the Litigation Trust and the Plan, the Litigation Trustee,
subject to the terms and conditions contained in this Agreement, in the Plan and
in the Confirmation Order, shall have the power to (i) prosecute, compromise and
settle, abandon or dismiss for the benefit of the Litigation Trust all claims,
rights and Causes of Action transferred to the Litigation Trust (whether such
suits are brought in the name of the Litigation Trust, the Litigation Trustee or
otherwise), and (ii) otherwise perform the functions and take the actions
provided for or permitted in the Plan, in the Confirmation Order or in this
Agreement.  In all circumstances, the Litigation Trustee shall act in the best
interests of the Litigation Trust Beneficiaries and in furtherance of the
purpose of the Litigation Trust.

 

3.12        Authority of Litigation Trustee.  Subject only to any limitations
contained herein (including Sections 1.6, 3.4, and 6.2(b) of this Agreement),
the Litigation Trustee is authorized to perform any and all acts necessary or
desirable to accomplish the purposes of the Litigation Trust and is expressly
authorized, to:

 

(a)           hold legal title to any and all rights of the holders of
Litigation Trust Interests in or arising from the Litigation Trust Assets,
including collecting, receiving any and all money and other property belonging
to the Litigation Trust (including any Litigation Trust Proceeds) and the right
to vote any claim or interest relating to a Litigation Trust Claim in a case
under the Bankruptcy Code and receive any distribution thereon;

 

(b)           perform the duties, exercise the powers, and assert the rights of
a trustee under sections 704 and 1106 of the Bankruptcy Code, including
commencing, prosecuting or settling causes of action, enforcing contracts or
asserting claims, defenses, offsets and privileges;

 

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(c)           take possession and control, administer, maintain and dispose of
documents, books and records related to the Litigation Trust Claims other than
original documents, books and records that are proprietary to FairPoint and that
FairPoint requires in the operation of its businesses;

 

(d)           protect and enforce the rights to the Litigation Trust Claims by
any method deemed appropriate including by judicial proceedings or pursuant to
any applicable bankruptcy, insolvency, moratorium or similar law and general
principles of equity;

 

(e)           obtain reasonable insurance coverage with respect to the
liabilities and obligations of the Litigation Trustee under this Agreement (in
the form of an errors and omissions policy or otherwise);

 

(f)            obtain insurance coverage with respect to real and personal
property that may become assets of the Litigation Trust, if any;

 

(g)           subject to the consent of a majority of a Litigation Trust
committee comprised of Bank of America, N.A., Paulson Credit Opportunities
Master Ltd. and a representative appointed by the Creditors’ Committee (the
“Litigation Trust Committee”), retain and pay such counsel and other
professionals, including any professionals previously retained by the
Prepetition Credit Agreement Agent, the Ad Hoc Committee of certain holders of
the 131/8% Senior Notes due April 1, 2018 and 131/8% Senior Notes due April 12,
2018 issued by FairPoint Communications, Inc., the Creditors’ Committee,
FairPoint or Reorganized FairPoint, as the Litigation Trustee shall select to
assist the Litigation Trustee in its duties, on such terms as the Litigation
Trustee deems reasonable and appropriate, without Bankruptcy Court approval; the
Litigation Trustee may commit the Litigation Trust to and shall pay such
counsel, experts, litigation consultants, and other professionals reasonable
compensation for services rendered (including on an hourly, contingency, or
modified contingency basis) and reasonable and documented out-of-pocket expenses
incurred;

 

(h)           subject to the consent of a majority of the Litigation Trust
Committee, retain and pay an accounting firm to perform such reviews and/or
audits of the financial books and records of the Litigation Trust as may be
required by applicable laws (including, if applicable, securities laws) and/or
this Agreement, and to prepare and file any tax returns, informational returns
or periodic and current reports for the Litigation Trust as required by
applicable laws (including, if applicable, securities laws) and/or by this
Agreement; the Litigation Trustee may commit the Litigation Trust to and shall
pay such accounting firm reasonable compensation for services rendered and
reasonable and documented out-of-pocket expenses incurred;

 

(i)            subject to the consent of a majority of the Litigation Trust
Committee, retain, enter into fee arrangements with and pay such third parties
to assist the Litigation Trustee in carrying out its powers, authorities and
duties under this Agreement; the Litigation Trustee may commit the Litigation
Trust to and shall pay all such Persons reasonable compensation for services
rendered and reasonable and documented out-of-pocket expenses incurred, as well
as commit the Litigation Trust to indemnify any such Persons in connection with
the performance of services (provided that such indemnity shall not cover any
losses, costs, damages, expenses or

 

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liabilities that result from the gross negligence, bad faith, willful misconduct
or knowing violation of law by such Persons);

 

(j)            in the exercise of its reasonable discretion, waive any privilege
(including the Privileges) or any defense on behalf of the Litigation Trust or,
with respect to the Litigation Trust Claims;

 

(k)           investigate, analyze, compromise, adjust, arbitrate, mediate, sue
on or defend, pursue; prosecute, abandon, dismiss, exercise rights, powers, and
privileges with respect to, or otherwise deal with and settle, in accordance
with the terms set forth herein, all causes of action in favor of or against the
Litigation Trust; provided, however, that any settlement of a Litigation Trust
Claim shall be subject to approval by the Bankruptcy Court, upon notice to the
Litigation Trust Beneficiaries and Reorganized FairPoint;

 

(l)            solely with respect to Litigation Trust Claims, to avoid and
recover transfers of FairPoint’s or Reorganized FairPoint’s property as provided
for in the Plan as may be permitted by the Bankruptcy Code or applicable state
law;

 

(m)          invest any moneys held as part of the Litigation Trust in
accordance with the terms of Section 3.19 of this Agreement, limited, however,
to such investments that are consistent with the Litigation Trust’s status as a
liquidating trust within the meaning of Treasury Regulation section
301.7701-4(d) and in accordance with Rev. Proc 94-45, 1994-2 C.B. 684;

 

(n)           request any appropriate tax determination with respect to the
Litigation Trust, including a determination pursuant to section 505 of the
Bankruptcy Code;

 

(o)           seek the examination of any Person, subject to the provisions of
Bankruptcy Rule 2004 or any other applicable law or rule;

 

(p)           make distributions in accordance with Article 6 of this Agreement;
and

 

(q)           take or refrain from taking any and all other actions that the
Litigation Trustee reasonably deems necessary or convenient for the
continuation, protection and maximization of the Litigation Trust Claims or to
carry out the purposes hereof.

 

3.13        Limitation of Litigation Trustee’s Authority.

 

(a)           Notwithstanding anything herein to the contrary, the Litigation
Trustee shall not (i) be authorized to engage in any trade or business,
(ii) take such actions inconsistent with the orderly liquidation of Litigation
Trust Assets as are required or contemplated by applicable law, the Plan, the
Confirmation Order, or this Agreement, or (iii) be authorized to engage in any
investments or activities inconsistent with the treatment of the Litigation
Trust as a liquidating trust within the meaning of Treasury Regulation section
301.7701-4(d) and in accordance with Rev. Proc. 94-45, 1994-2 C.B. 684.

 

(b)           The Litigation Trust shall not hold 50% or more of the stock (in
either vote or value) of any Person that is treated as a corporation for federal
income tax purposes, nor be the sole member of a limited liability company, nor
have any interest in a Person that is treated as a

 

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partnership for federal income tax purposes, unless such stock, membership
interest, or partnership interest was obtained involuntarily or as a matter of
practical economic necessity in order to preserve the value of the Litigation
Trust Assets.

 

3.14        Books and Records.

 

(a)           The Litigation Trustee shall maintain books and records relating
to the Litigation Trust Assets and income of the Litigation Trust and the
payment of expenses of, and liabilities of, claims against or assumed by, the
Litigation Trust in such detail and for such period of time as may be necessary
to enable it to make full and proper accounting in respect thereof. Such books
and records shall be maintained on a modified cash or other comprehensive basis
of accounting necessary to facilitate compliance with the tax reporting and
securities law requirements, if any, of the Litigation Trust as well as the
reporting requirements set forth in Article 9 of and elsewhere in this
Agreement.

 

(b)           Litigation Trust Beneficiaries and their duly authorized
representatives shall have the right, upon reasonable prior written notice to
the Litigation Trustee, and in accordance with the reasonable regulations
prescribed by the Litigation Trustee, to inspect and, at the sole expense of
such holder seeking the same, make copies of the books and records relating to
the Litigation Trust on any Business Day and as often as may be reasonably be
desired, in each case for a purpose reasonably related to such holder’s interest
in the Litigation Trust.

 

3.15        Inquiries into Trustee’s Authority.  Except as otherwise set forth
in this Agreement, the Confirmation Order or the Plan, no Person dealing with
the Litigation Trust shall be obligated to inquire into the authority of the
Litigation Trustee in connection with the protection, conservation or
disposition of the Litigation Trust Claims.

 

3.16        Compliance with Laws.  Any and all distributions of Litigation Trust
Assets shall be in compliance with applicable laws, including applicable federal
and state securities laws.

 

3.17        Compensation of the Litigation Trustee.  Notwithstanding anything to
the contrary contained herein, the Litigation Trustee shall be compensated for
its services, and reimbursed for its expenses, in accordance with, and pursuant
to the terms of, a separate agreement to be negotiated prior to the Effective
Date by the Litigation Trust Committee, which agreement shall not be subject to
any third-party notice or approval; provided, however, that after such
compensation arrangement is agreed, it will be filed with the Bankruptcy Court
under seal.

 

3.18        Reliance by Litigation Trustee.  Except as otherwise provided
herein:

 

(a)           the Litigation Trustee may rely, and shall be protected in acting
upon, any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order or other paper or document reasonably believed
by the Litigation Trustee to be genuine and to have been signed or presented by
the proper party or parties; and

 

(b)           Persons dealing with the Litigation Trustee shall look only to the
Litigation Trust Assets to satisfy any liability incurred by the Litigation
Trustee to such Person in carrying out the terms of this Agreement, and the
Litigation Trustee shall not have any personal obligation to satisfy any such
liability except as set forth in Section 1.4(b) of this Agreement.

 

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3.19                           Investment and Safekeeping of Litigation Trust
Assets.  Subject to Sections 1.6, 3.4, and 6.2(b) of this Agreement, the
Litigation Trustee shall invest all Litigation Trust Assets (pending
distribution in accordance with Article 6 of this Agreement) only in Cash and
Government securities as defined in section 2(a)(16) of the Investment Company
Act; provided, however, that (a) the scope of any such permissible investments
shall be further limited to include only those investments that a liquidating
trust, within the meaning of Treasury Regulation section 301.7701-4(d), may be
permitted to hold, pursuant to the Treasury Regulations, or any modification in
the IRS guidelines, whether set forth in IRS rulings, other IRS pronouncements,
or otherwise, (b) the Litigation Trustee may retain any Litigation Trust
Proceeds received that are not Cash only for so long as may be required for the
prompt and orderly liquidation of such assets in Cash, and (c) under no
circumstances, shall the Litigation Trustee segregate the Litigation Trust
Assets on the basis of classification of the Litigation Trust Beneficiaries,
except as necessary to give effect to the security interest and Liens
established in accordance with Article 13 hereof on the Litigation Trust Assets
and proceeds and income thereon to secure the payment of the Initial Litigation
Trust Funds and/or any Additional Funding (including any fees, costs or interest
incurred therewith) to the holders of Allowed Prepetition Credit Agreement
Claims in accordance with Section 6.1 hereof, or Reorganized FairPoint in
accordance with Section 6.2(c), as the case may be.

 

3.20                           Standard of Care; Exculpation.  Neither the
Litigation Trustee nor any of its duly designated agents or representatives or
professionals shall be liable for any act or omission taken or omitted to be
taken by the Litigation Trustee in good faith, other than (i) acts or omissions
resulting from the Litigation Trustee’s or any such agent’s, representative’s or
professional’s gross negligence, bad faith, willful misconduct or knowing
violation of law or (ii) acts or omissions from which the Litigation Trustee or
any such agent, representative or professional derived an improper personal
benefit.  The Litigation Trustee may, in connection with the performance of its
functions, and in its sole and absolute discretion, consult with its attorneys,
accountants, financial advisors and agents, and shall not be liable for any act
taken, omitted to be taken, or suffered to be done in accordance with advice or
opinions rendered by such Persons. Notwithstanding such authority, the
Litigation Trustee shall be under no obligation to consult with its attorneys,
accountants, financial advisors or agents, and its good faith determination not
to do so shall not result in the imposition of liability on the Litigation
Trustee, unless such determination is based on gross negligence, bad faith,
willful misconduct or knowing violation of law.  No amendment, modification or
repeal of this Section 3.20 shall adversely affect any right or protection of
the Litigation Trustee or any of its agents, representatives or professionals
that exists at the time of such amendment, modification or repeal.

 

ARTICLE IV

 

[INTENTIONALLY OMITTED]

 

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ARTICLE V

 

TAX MATTERS

 

5.1                                 Federal Income Tax Treatment of the
Litigation Trust.

 

(a)                                  For all federal income tax purposes, all
parties (including FairPoint, Reorganized FairPoint, the Litigation Trust, the
Litigation Trustee and the Litigation Trust Beneficiaries) shall treat the
transfer of the Litigation Trust Assets to the Litigation Trust for the benefit
of the Litigation Trust Beneficiaries, whether their Claims are Allowed on or
after the Effective Date, as (a) a transfer of the Litigation Trust Assets
directly to those holders of Allowed Claims receiving Litigation Trust Interests
(other than to the extent allocable to Disputed Claims), followed by (b) the
transfer by such Persons to the Litigation Trust of the Litigation Trust Assets
in exchange for beneficial interests in the Litigation Trust (and in respect of
the Litigation Trust Assets allocable to the Disputed Claims Reserve, as a
transfer to the Disputed Claims Reserve by FairPoint or Reorganized FairPoint,
as the case may be). Accordingly, those holders of Allowed Claims receiving
Litigation Trust Interests shall be treated for federal income tax purposes as
the grantors and owners of their respective shares of the Litigation Trust
Assets. The foregoing treatment also shall apply, to the extent permitted by
applicable law, for state and local income tax purposes.

 

(b)                                 Subject to definitive guidance from the IRS
or a court of competent jurisdiction to the contrary (including receipt by the
Litigation Trustee of a private letter ruling if the Litigation Trustee so
requests one, or the receipt of an adverse determination by the IRS, upon audit,
or otherwise if not contested by the Litigation Trustee), the Litigation Trustee
shall (i) file returns for the Litigation Trust as a grantor trust pursuant to
Treasury Regulation section 1.671-4(a) and in accordance with this Article 5 and
Section 11.9(a)(ii) of the Plan and (ii) annually send to each holder of a
Litigation Trust Interest and each holder of an Allowed Prepetition Credit
Agreement Claim a separate statement setting forth such holder’s share of items
of income, gain, loss, deduction, or credit and will instruct all such holders
and parties to report such items on their federal income tax returns.  The
Litigation Trustee also shall file (or cause to be filed) any other statements,
returns or disclosures relating to the Litigation Trust that are required by any
governmental unit.

 

(c)                                  As soon as possible after the Effective
Date, but in no event later than sixty (60) days thereafter, (i) the Litigation
Trustee, in consultation with Reorganized FairPoint, will determine the fair
market value as of the Effective Date of all assets transferred to the
Litigation Trust and (ii) the Litigation Trustee shall apprise, in writing, the
Litigation Trust Beneficiaries of such valuation.  In connection with the
preparation of the valuation contemplated hereby, the Litigation Trustee shall
be entitled to retain such professionals and advisers as the Litigation Trustee
shall determine to be appropriate or necessary, and the Litigation Trustee shall
take such other actions in connection therewith as it determines to be
appropriate or necessary in connection therewith.  The Litigation Trust shall
bear all of the reasonable costs and expenses incurred in connection with
determining such value, including the fees and expenses of any Persons retained
by the Litigation Trustee in connection therewith.

 

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(d)                                 The Litigation Trustee may request an
expedited determination of taxes of the Litigation Trust under section 505(b) of
the Bankruptcy Code for all returns filed for, or on behalf of, the Litigation
Trust for all taxable periods through the dissolution of the Litigation Trust.

 

(e)                                  The Litigation Trustee shall be responsible
for payments, out of the Litigation Trust Assets and Litigation Trust Proceeds,
of any taxes imposed on the Litigation Trust or the Litigation Trust Assets.

 

(f)                                    The Litigation Trustee may require any of
the Litigation Trust Beneficiaries to furnish to the Litigation Trustee its
Employer or Taxpayer Identification Number as assigned by the IRS and the
Litigation Trustee may condition any distribution or payment to any of them upon
receipt of such identification number.

 

5.2                                 Allocations of Litigation Trust Taxable
Income.  Allocations of Litigation Trust taxable income among the Litigation
Trust Beneficiaries shall be determined by reference to the manner in which an
amount of Cash equal to such taxable income would be distributed (without regard
to any restrictions on distributions described in the Plan or herein) if,
immediately prior to such deemed distribution, the Litigation Trust had
distributed all of its other assets (valued at their tax book value) to the
Litigation Trust Beneficiaries, in each case up to the tax book value of the
assets treated as contributed by such holders, adjusted for prior taxable income
and loss and taking into account all prior and concurrent distributions from the
Litigation Trust (including all distributions held in escrow pending the
resolution of Disputed Claims). Similarly, taxable loss of the Litigation Trust
shall be allocated by reference to the manner in which an economic loss would be
borne immediately after a liquidating distribution of the remaining Litigation
Trust Assets. The tax book value of the Litigation Trust Assets for this purpose
shall equal their fair market value on the Effective Date as determined under
Section 5.1(c) above, adjusted in either case in accordance with tax accounting
principles prescribed by the Tax Code, and applicable tax regulations, and other
applicable administrative and judicial authorities and pronouncements.

 

ARTICLE VI

 

DISTRIBUTIONS

 

6.1                                 Distributions; Withholding.  Subject to
Section 8.17 of the Plan and Sections 1.6, 3.3 and 6.2(b) of this Agreement, the
Litigation Trustee shall distribute, in accordance with this Article 6, to the
Litigation Trust Beneficiaries, all net Cash income plus all net Cash proceeds
from the liquidation of Litigation Trust Assets (including as Cash, for this
purpose, all Cash Equivalents); provided, however, that, subject to
Section 6.2(b) of this Agreement, the Litigation Trust may retain and not
distribute to the Litigation Trust Beneficiaries such amounts as determined by
the Litigation Trustee (i) as are reasonably necessary to meet contingent
liabilities of the Litigation Trust during liquidation, (ii) to pay reasonable
and necessary expenses incurred in connection with liquidation and any taxes
imposed on the Litigation Trust or in respect of the Litigation Trust Assets,
and (iii) as are reasonably necessary to establish and maintain a separate
reserve for the Litigation Trust Interests to be distributed to holders of
unliquidated or disputed FairPoint Communications Unsecured Claims.  Reorganized
FairPoint (or, as the case may be, the court-appointed claims agent) shall
provide the Litigation Trustee with such information as may be

 

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reasonably requested by the Litigation Trustee regarding the claims register for
purposes of maintaining and establishing the reserve set forth in clause
(iii) of the preceding sentence.  To the extent that any distributions and/or
payments are required to be made pursuant to this Agreement to repay the Initial
Litigation Trust Funds to the holders of Allowed Prepetition Credit Agreement
Claims, such repayment shall be made to the Prepetition Credit Agreement Agent
for the account and on behalf of the holders of Allowed Prepetition Credit
Agreement Claims, which shall distribute the same to the holders of Allowed
Prepetition Credit Agreement Claims in accordance with the Plan.  All
distributions and/or payments to be made to the holders of Litigation Trust
Interests pursuant to this Agreement shall be made to each holder of Litigation
Trust Interests pro rata based on the amount of Litigation Trust Interests held
by such holder of Litigation Trust Interests compared with the aggregate amount
of the Litigation Trust Interests outstanding, subject, in each case, to the
terms of the Confirmation Order, the Plan and this Agreement. The Litigation
Trustee may withhold from amounts distributable to any Person any and all
amounts, determined in the Litigation Trustee’s reasonable sole discretion, to
be required by any law, regulation, rule, ruling, directive or other
governmental requirement.

 

6.2                                 Manner of Payment or Distribution.

 

(a)                                  Subject to Section 1.6 of this Agreement,
all distributions to be made by the Litigation Trustee to the Litigation Trust
Beneficiaries shall be payable to the holders of Litigation Trust Beneficiaries
of record as of the 20th day prior to the date scheduled for the distribution,
unless such day is not a Business Day, then such day shall be the following
Business Day. If the distribution shall be in Cash, the Litigation Trustee shall
distribute such Cash by wire, check, or such other method as the Litigation
Trustee deems appropriate under the circumstances.

 

(b)                                 To the extent that Reorganized FairPoint
becomes liable for the payment of any Claims arising under section 502(h) of the
Bankruptcy Code on account of recoveries obtained with respect to the Litigation
Trust Claims, the Litigation Trustee will be responsible for making
distributions on account of such Claims pursuant to Section 8.2 of this
Agreement.

 

(c)                                  To the extent that the Litigation Trust is
required to repay the Initial Litigation Trust Funds and/or any Additional
Funding to Reorganized FairPoint, (i) such amounts shall bear simple interest at
a rate per annum equal to the prime lending rate as announced from time to time
by Bank of America, N.A., and (ii) any interest shall be due and payable in
arrears on the date that the Litigation Trust Funds are repaid to Reorganized
FairPoint.

 

6.3                                 Cash Distributions.  No Cash distributions
shall be required to be made to any Litigation Trust Beneficiary in an amount
less than $100.00. Any funds so withheld and not distributed shall be held in
reserve and distributed in subsequent distributions. The foregoing shall not
apply to the final distribution made to the Litigation Trust Beneficiaries.

 

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ARTICLE VII

 

INDEMNIFICATION

 

7.1                                 Indemnification of Litigation Trustee.

 

(a)                                  To the fullest extent permitted by law, the
Litigation Trust, to the extent of its assets legally available for that
purpose, shall indemnify and hold harmless the Litigation Trustee, and each of
its respective directors, members, shareholders, partners, officers, agents,
employees, attorneys and other professionals (collectively, the “Indemnified
Persons”) from and against any and all losses, costs, damages, reasonable and
documented out-of-pocket expenses (including reasonable fees and expenses of
attorneys and other advisors and any court costs incurred by any Indemnified
Person) or liability by reason of anything any Indemnified Person did, does, or
refrains from doing for the business or affairs of the Litigation Trust, except
to the extent that the loss, cost, damage, expense or liability resulted
(x) from the Indemnified Person’s gross negligence, bad faith, willful
misconduct or knowing violation of law or (y) from an act or omission from which
the Indemnified Person derived an improper personal benefit. To the extent
reasonable, the Litigation Trust shall pay in advance or reimburse reasonable
and documented out-of-pocket expenses (including advancing reasonable costs of
defense) incurred by the Indemnified Person who is or is threatened to be named
or made a defendant or a respondent in a proceeding concerning the business and
affairs of the Litigation Trust.  The indemnification provided under this
Section 7.1 shall survive the death, dissolution, resignation or removal, as may
be applicable, of the Litigation Trustee and/or any other Indemnified Person,
and shall inure to the benefit of the Litigation Trustee’s and each other
Indemnified Person’s heirs, successors and assigns.

 

(b)                                 Any Indemnified Person may waive the
benefits of indemnification under this Section 7.1, but only by an instrument in
writing executed by such Indemnified Person.

 

(c)                                  The rights to indemnification under this
Section 7.1 are not exclusive of other rights which any Indemnified Person may
otherwise have at law or in equity, including without limitation common law
rights to indemnification or contribution. Nothing in this Section 7.1 will
affect the rights or obligations of any Person (or the limitations on those
rights or obligations) under this Agreement, or any other agreement or
instrument to which that Person is a party.

 

ARTICLE VIII

 

NET LITIGATION TRUST RECOVERY

 

8.1                                 No Effect on Mutuality.  Notwithstanding
anything contained in this Agreement to the contrary, nothing herein shall
affect the mutuality of obligations, if any, of any holder of any Claim under
section 553 of the Bankruptcy Code.  Notwithstanding anything in this Agreement
to the contrary, the transfer of the Litigation Trust Claims to the Litigation
Trust does not diminish, and fully preserves, any defenses a defendant would
have if such Litigation Trust Claims had been retained by FairPoint.

 

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8.2                                 Section 502(h).  Notwithstanding anything
contained this Agreement to the contrary, in the event that a compromise and
settlement of a Litigation Trust Claim or a Final Order with respect to a
Litigation Trust Claim provides for the allowance of a Claim pursuant to section
502(h) of the Bankruptcy Code against one or more of FairPoint, the
distributions to be made hereunder on account of such Claim pursuant to the Plan
shall be funded by the Litigation Trust, in the amount(s), from time to time,
that all similarly situated holders of Claims are entitled to receive hereunder.

 

8.3                                 Net Litigation Trust Recovery. 
Notwithstanding anything contained in this Agreement to the contrary, in the
event that a defendant in a litigation brought by the Litigation Trustee for and
on behalf of the Litigation Trust (i) is required by a Final Order to make
payment to the Litigation Trust (the “Judgment Amount”) and (ii) is permitted by
a Final Order to assert a right of setoff under sections 553, 555, 556, 559, 560
and 561 of the Bankruptcy Code or applicable non-bankruptcy law against the
Judgment Amount (a “Valid Setoff”), (y) such defendant shall be obligated to pay
only the excess, if any, of the Judgment Amount over the Valid Setoff and
(z) none of the Litigation Trust or the Litigation Trust Beneficiaries shall be
entitled to assert a claim against FairPoint or Reorganized FairPoint with
respect to the Valid Setoff.

 

ARTICLE IX

 

REPORTING OBLIGATIONS OF LITIGATION TRUSTEE

 

9.1                                 Reports.

 

(a)                                  The Litigation Trustee shall cause to be
prepared, (i) not less than annually, financial statements of the Litigation
Trust and (ii) annual income tax reporting of the Litigation Trust.  The
Litigation Trustee shall cause such financial statements and tax reporting to be
delivered to Reorganized FairPoint and the Litigation Trust Committee within ten
(10) Business Days after the end of the relevant report preparation period.

 

(b)                                 The Litigation Trustee shall timely prepare,
file and distribute such statements, reports and submissions as may be necessary
to cause the Litigation Trust and the Litigation Trustee to be in compliance
with all applicable laws (including all quarterly and annual reports shall be
filed with the SEC to the extent required by applicable law or in order to gain
an exemption from compliance with applicable law).

 

(c)                                  Notwithstanding anything in this Agreement
to the contrary, no reporting requirements contained in this Agreement shall be
undertaken by the Litigation Trustee if they would result in a waiver of the
Privileges.

 

(d)                                 Notwithstanding anything in this Agreement
to the contrary, the Litigation Trustee may post any report or notice required
to be provided under this Agreement on a secure website maintained by the
Litigation Trustee (the “Litigation Trust Website”) in lieu of actual delivery
to any Litigation Trust Beneficiary that elects to receive such reports and
notices electronically.

 

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ARTICLE X

 

TERM; TERMINATION OF THE LITIGATION TRUST

 

10.1                           Term; Termination of the Litigation Trust.

 

(a)                                  The Litigation Trust shall commence on the
date hereof and terminate no later than the fifth anniversary of the Effective
Date; provided, however, that, on or prior to the date that is ninety (90) days
prior to such termination, the Bankruptcy Court, upon motion by a party in
interest, may extend the term of the Litigation Trust if it is necessary to the
liquidation of the Litigation Trust Assets. Notwithstanding the foregoing,
multiple extensions can be obtained so long as Bankruptcy Court approval is
obtained not less than ninety (90) days prior to the expiration of each extended
term; provided, however, that in no event shall the term of the Litigation Trust
extend past the tenth anniversary of the Effective Date; provided further that
neither this Agreement nor the continued existence of the Litigation Trust shall
prevent FairPoint from closing the Chapter 11 Cases pursuant to section 350 of
the Bankruptcy Code and obtaining a final decree pursuant to Bankruptcy
Rule 3022.

 

(b)                                 The Litigation Trust may be terminated
earlier than its scheduled termination if (i) the Bankruptcy Court has entered a
Final Order closing all of or the last of the Chapter 11 Cases pursuant to
section 350(a) of the Bankruptcy Code; and (ii) the Litigation Trustee has
administered all Litigation Trust Assets and performed all other duties required
by the Plan, the Confirmation Order, this Agreement and the Litigation Trust.

 

10.2                           Continuance of Trust for Winding Up.  After the
termination of the Litigation Trust and for the purpose of liquidating and
winding up the affairs of the Litigation Trust, the Litigation Trustee shall
continue to act as such until its duties have been fully performed. Prior to the
final distribution of all of the remaining Litigation Trust Assets, the
Litigation Trustee shall be entitled to reserve from such assets any and all
amounts required to provide for its own reasonable costs and expenses, in
accordance with Section 3.17, until such time as the winding up of the
Litigation Trust is completed.  Upon termination of the Litigation Trust, the
Litigation Trustee shall retain for a period of three years the books, records,
lists of the Litigation Trust Beneficiaries, the Trust Register, and other
documents and files that have been delivered to or created by the Litigation
Trustee.  At the Litigation Trustee’s discretion, all of such records and
documents may, but need not, be destroyed at any time after two years from the
completion and winding up of the affairs of the Litigation Trust. Except as
otherwise specifically provided herein, upon the termination of the Litigation
Trust, the Litigation Trustee shall have no further duties or obligations
hereunder.

 

ARTICLE XI

 

AMENDMENT AND WAIVER

 

11.1                           Amendment and Waiver.

 

(a)                                  The Litigation Trustee may amend,
supplement or waive any provision of, this Agreement, without notice to or the
consent of the Litigation Trust Beneficiaries or the approval

 

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of the Bankruptcy Court: (i) to cure any ambiguity, omission, defect or
inconsistency in this Agreement; (ii) to comply with any requirements in
connection with the U.S. Federal income tax status of the Litigation Trust as a
“liquidating trust”; (iii) to comply with any requirements in connection with
maintaining that the Litigation Trust is not subject to registration or
reporting requirements of the Exchange Act, the Trust Indenture Act or the
Investment Company Act; (iv) to make the Litigation Trust a reporting entity
and, in such event, to comply with any requirements in connection with
satisfying the registration or reporting requirements of the Exchange Act, the
Trust Indenture Act or the Investment Company Act; and (v) to evidence and
provide for the acceptance of appointment hereunder by a successor trustee in
accordance with the terms of this Agreement and the Plan; provided, however,
that notice shall be given to the Litigation Trust Beneficiaries and Reorganized
FairPoint promptly after such amendment, supplement or waiver is effective.

 

(b)                                 Any provision of this Agreement that the
Litigation Trustee cannot amend pursuant to Section 11.1(a) of this Agreement
may be amended or waived by the Litigation Trustee, subject to the prior
approval of the holders of a majority of the Class A Interests and the holders
of a majority of the Class B Interests by an Interest Action, with the approval
of the Bankruptcy Court upon notice and an opportunity for a hearing.

 

(c)                                  Notwithstanding paragraphs (a) and
(b) above, if any proposed amendment, supplement or waiver of a provision of
this Agreement will materially and adversely affect the rights of FairPoint or
Reorganized FairPoint under this Agreement, then FairPoint’s or Reorganized
FairPoint’s prior written consent to such amendment, supplement or waiver shall
be required; provided that, the Litigation Trustee may seek an order of the
Bankruptcy Court determining that a proposed amendment, supplement or waiver of
a provision of this Agreement is not material and adverse to FairPoint or
Reorganized FairPoint.

 

(d)                                 Notwithstanding anything contained in this
Section 11.1, no amendment, supplement, or waiver may be made to this Agreement
that (i) would adversely affect the payments and/or distributions to be made
under this Agreement to (or on behalf or for the account of) any Litigation
Trust Beneficiary; or (ii) is inconsistent with the purpose and intention of the
Litigation Trust to liquidate in an expeditious but orderly manner the
Litigation Trust Assets in accordance with Treasury Regulation section
301.7701-4(d).

 

ARTICLE XII

 

MISCELLANEOUS PROVISIONS

 

12.1                           Intention of Parties to Establish the Litigation
Trust.  This Agreement is intended to create a liquidating trust for federal
income tax purposes and, to the extent provided by law, shall be governed and
construed in all respects as such a trust and any ambiguity herein shall be
construed consistent herewith and, if necessary, this Agreement may be amended
in accordance with Section 11.1 to comply with such federal income tax laws,
which amendments may apply retroactively.

 

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12.2                           Litigation Costs.  If, during the term of this
Agreement, any dispute arises among the parties to this Agreement regarding the
provisions of this Agreement or the enforcement thereof, each party shall bear
its own costs and expenses, including attorneys’ fees.

 

12.3                           Laws as to Construction.  This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to whether any conflicts of law would require the application of
the law of another jurisdiction.

 

12.4                           Jurisdiction.  Without limiting any Person’s
right to appeal any order of the Bankruptcy Court or to seek withdrawal of the
reference with regard to any matter, (i) the Bankruptcy Court shall retain
exclusive jurisdiction to enforce the terms of this Agreement and to decide any
claims or disputes which may arise or result from, or be connected with, this
Agreement, any breach or default hereunder, or the transactions contemplated
hereby, and (ii) any and all actions related to the foregoing shall be filed and
maintained only in the Bankruptcy Court, and the parties, including the
Litigation Trust Beneficiaries, hereby consent to and submit to the jurisdiction
and venue of the Bankruptcy Court.

 

12.5                           Severability.  If any provision of this Agreement
or the application thereof to any Person or circumstance shall be finally
determined by a court of competent jurisdiction to be invalid or unenforceable
to any extent, the remainder of this Agreement, or the application of such
provision to Persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and such provision of
this Agreement shall be valid and enforced to the fullest extent permitted by
law.

 

12.6                           Notices.  All notices, requests or other
communications to the parties hereto shall be in writing and shall be
sufficiently given only if (i) delivered in person; (ii) sent by electronic mail
or facsimile communication (as evidenced by a confirmed fax transmission
report); (iii) sent by registered or certified mail, return receipt requested;
(iv) sent by commercial delivery service or courier; or (v) with respect to
notices to any Litigation Trust Beneficiary that has elected to receive notices
electronically, by posting to the Litigation Trust Website.  Until a change of
address is communicated, as provided below, all notices, requests and other
communications shall be sent to the parties at the following addresses or
facsimile numbers:

 

If to the Trustee:

 

Mark E. Holliday

1211 NW Glisan Street, Suite 202

Portland, Oregon 97209

Telephone: (503) 243-5000

Facsimile: (503) 296-5300

 

 

 

If to FairPoint or Reorganized FairPoint:

 

 

FairPoint Communications, Inc.

521 E. Morehead Street, Ste. 250

Charlotte, NC 28202

 

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Telephone: (704) 344-8150

Facsimile: (704) 344-1594

Attn: Susan L. Sowell, Esq.

 

 

 

(with a copy to)

 

 

Paul, Hastings, Janofsky & Walker LLP

75 East 55th Street

New York, New York 10022

Telephone: (212) 318-6000

Facsimile: (212) 319-4090

Attn: Luc A. Despins, Esq.

Attn: James T. Grogan, Esq.

 

-and-

 

Quinn Emanuel Urquhart & Sullivan, LLP

51 Madison Avenue, 22nd Floor

New York, NY 10010

Telephone: (212) 849-7000

Facsimile: (212) 849-7100

Attn: Susheel Kirpalani, Esq.

Attn: Benjamin Finestone, Esq.

 

 

 

If to the Litigation Trust Committee:

 

 

Bank of America, N.A.

Bank of America Plaza

901 Main Street, 66th Floor

Dallas, Texas 75202

Telephone: (214) 209-0928

Facsimile: (972) 728-4449

Attn: Jack Woodiel

Attn: Christopher D. Post

 

- and -

 

Paulson & Co. Inc.

1251 Avenue of the Americas, 50th Floor

New York, NY 10020

Telephone: (212) 599-6622

Attn: Daniel B. Kamensky

 

- and -

 

Jefferies & Company, Inc.

520 Madison Avenue

New York, NY 10022

Telephone: (212) 284-1746

Attn: Richard W. Morgner

 

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If to the Litigation Trust Beneficiaries:

 

To the name and address set forth on the registry maintained by the Trustee or
by posting to the Litigation Trust Website, as applicable.

 

All notices shall be effective and shall be deemed delivered (i) if by personal
delivery, delivery service or courier, on the date of delivery; (ii) if by
electronic mail or facsimile communication, on the date of receipt or confirmed
transmission of the communication; (iii) if by mail, on the date of receipt; and
(iv) if by posting to the Litigation Trust Website, on the day following such
posting. Any Person from time to time may change his, her or its address,
facsimile number, or other information for the purpose of notices to that Person
by giving notice specifying such change to the Litigation Trustee, Reorganized
FairPoint and the Prepetition Credit Agreement Agent.

 

12.7                           Fiscal Year.  The fiscal year of the Litigation
Trust will begin on the first day of the month following the Effective Date and
end on the last day of the month on which the Effective Date occurred of each
calendar year.

 

12.8                           Construction; Usage.

 

(a)                                  Interpretation.  In this Agreement, unless
a clear contrary intention appears:

 

(i)                                     the singular number includes the plural
number and vice versa;

 

(ii)                                  reference to any Person includes such
Person’s successors and assigns but, if applicable, only if such successors and
assigns are not prohibited by this Agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity or individually;

 

(iii)                               reference to any gender includes each other
gender;

 

(iv)                              reference to any agreement, document or
instrument means such agreement, document or instrument as amended or modified
and in effect from time to time in accordance with the terms thereof;

 

(v)                                 reference to any Applicable Law means such
Applicable Law as amended, modified, codified, replaced or reenacted, in whole
or in part, and in effect from time to time, including rules and regulations
promulgated thereunder, and reference to any section or other provision of any
Applicable Law means that provision of such Applicable Law from time to time in
effect and constituting the substantive amendment, modification, codification,
replacement or reenactment of such section or other provision;

 

(vi)                              “hereunder,” “hereof,” “hereto,” and words of
similar import shall be deemed references to this Agreement as a whole and not
to any particular Article, Section or other provision hereof;

 

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(vii)                           reference to Articles, Sections, Schedules or
Exhibits herein shall be deemed to be references to the Articles, Sections,
Schedules and Exhibits to this Agreement unless otherwise specified;

 

(viii)                        “including” means including without limiting the
generality of any description preceding such term; and

 

(ix)                                references to documents, instruments or
agreements shall be deemed to refer as well to all addenda, exhibits, schedules
or amendments thereto.

 

(b)                                 Legal Representation of the Parties.  This
Agreement was negotiated by the parties hereto with the benefit of legal
representation and any rule of construction or interpretation otherwise
requiring this Agreement to be construed or interpreted against any party hereto
shall not apply to any construction or interpretation hereof.

 

(c)                                  Headings.  The headings contained in this
Agreement are for the convenience of reference only, shall not be deemed to be a
part of this Agreement and shall not be referred to in connection with the
construction or interpretation of this Agreement.

 

12.9                           Counterparts; Facsimile; PDF.  This Agreement may
be executed in any number of counterparts, each of which shall be deemed an
original and all of which shall constitute one and the same instrument.  Any
facsimile or portable document format copies hereof or signature hereon shall,
for all purposes, be deemed originals.

 

12.10                     Confidentiality.  The Litigation Trustee and each
successor litigation trustee (each a “Covered Person”) shall, during the period
that they serve in such capacity under this Agreement and following either the
termination of this Agreement or such individual’s removal, incapacity, or
resignation hereunder, hold strictly confidential and not use for personal gain
any material, non-public information of or pertaining to any Entity to which any
of the Litigation Trust Assets relate or of which it has become aware in its
capacity (the “Information”), except to the extent disclosure is required by
applicable law, order, regulation or legal process. In the event that any
Covered Person is requested or required (by oral questions, interrogatories,
requests for information or documents, subpoena, civil investigation, demand or
similar legal process) to disclose any Information, such Covered Person shall
notify Reorganized FairPoint reasonably promptly (unless prohibited by law) so
that Reorganized FairPoint may seek an appropriate protective order or other
appropriate remedy or, in its discretion, waive compliance with the terms of
this Section 12.10 (and if Reorganized FairPoint seeks such an order, the
relevant Covered Person will provide cooperation as Reorganized FairPoint shall
reasonably request). In the event that no such protective order or other remedy
is obtained, or that Reorganized FairPoint waives compliance with the terms of
this Section 12.10 and any Covered Person is nonetheless legally compelled to
disclose the Information, the Covered Person will furnish only that portion of
the Information, which the Covered Person, advised by counsel, is legally
required and will give Reorganized FairPoint written notice (unless prohibited
by law) of the Information to be disclosed and exercise all reasonable efforts
to obtain reliable assurance that confidential treatment will be accorded the
Information.

 

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12.11                     Entire Agreement.  This Agreement (including the
Recitals), the Plan, and the Confirmation Order constitute the entire agreement
by and among the parties hereto and there are no representations, warranties,
covenants or obligations except as set forth herein or therein. This Agreement,
the Plan and the Confirmation Order supersede all prior and contemporaneous
agreements, understandings, negotiations, discussions, written or oral, of the
parties hereto, relating to any transaction contemplated hereunder. Except as
otherwise specifically provided herein, in the Plan or in the Confirmation
Order, nothing in this Agreement is intended or shall be construed to confer
upon or to give any Entity or Person other than the parties hereto and their
respective heirs, administrators, executors, permitted successors, or permitted
assigns any right to remedies under or by reason of this Agreement, except that
(i) the Prepetition Credit Agreement Agent, the holders of Allowed Prepetition
Credit Agreement Claims are intended third party beneficiaries hereof and shall
be entitled to enforce the provisions hereof relating to the Initial Litigation
Trust Funds, the payment of the amount of the Initial Litigation Trust Funds to
the holders of Allowed Prepetition Credit Agreement Claims (and to the
Prepetition Credit Agreement Agent on their behalf) and the provisions of
Article 13 hereof as if they were parties hereto and (ii) the Persons identified
in Article 7 hereof are intended third party beneficiaries of Article 7 hereof
and shall be entitled to enforce the provisions thereof as if they were parties
hereto.

 

12.12                     No Bond.  Notwithstanding any state or federal law to
the contrary, the Litigation Trustee (including any successor trustee) shall be
exempt from giving any bond or other security in any jurisdiction.

 

12.13                     Effectiveness.  This Agreement shall become effective
on the Effective Date.

 

12.14                     Investment Company Act.  This Litigation Trust is
organized as a liquidating entity in the process of liquidation, and therefore
should not be considered, and the Litigation Trust does not and will not hold
itself out as, an “investment company” or an entity “controlled” by an
“investment company” as such terms are defined in the Investment Company Act.

 

12.15                     Successor and Assigns.  This Agreement shall inure to
the benefit of the parties hereto and the intended third party beneficiaries
identified in Section 12.11 hereof (to the extent specified therein), and shall
be binding upon the parties hereto, and each of their respective successors and
assigns to the extent permitted by this Agreement and applicable law.

 

12.16                     Particular Words.  Reference in this Agreement to any
Section or Article is, unless otherwise specified, to that such Section or
Article under this Agreement. The words “hereof,” “herein,” “herein,” and
similar terms shall refer to this Agreement and not to any particular Section or
Article of this Agreement.

 

12.17                     No Execution.  All funds in the Litigation Trust shall
be deemed in custodia legis until such times as the funds have actually been
paid to or for the benefit of a holder of a Prepetition Credit Agreement Claim
or a holder of a Litigation Trust Interest, and no holder of a Prepetition
Credit Agreement Claim or holder of a Litigation Trust Interest or any other
Person can execute upon, garnish or attach the Litigation Trust Assets in any
manner or compel payment from the Litigation Trust except by an order of the
Bankruptcy Court. Distributions from the Litigation Trust will be governed
solely by the Plan and this Agreement.

 

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12.18                     Irrevocability.  The Litigation Trust is irrevocable
but is subject to amendment and waiver as provided for in this Agreement.

 

ARTICLE XIII

 

LITIGATION TRUST FUNDS OBLIGATIONS

 

13.1                           Grant of Lien.

 

(a)                                  As security for the obligation of the
Litigation Trust (and the Litigation Trustee) to pay the Initial Litigation
Trust Funds (including any fees, costs or interest incurred in connection
therewith, collectively, the “Initial Litigation Trust Funds Obligations”),
subject to Section 13.1(b) herein, the Litigation Trust (and the Litigation
Trustee) hereby grants to either (i) the Prepetition Credit Agreement Agent, for
the benefit of the holders of Allowed Prepetition Credit Agreement Claims (if a
Cash Payment is made on the Effective Date to holders of Allowed Prepetition
Credit Agreement Claims under Section 5.4.2(c) of the Plan) or (ii) Reorganized
FairPoint (if a Cash Payment is not made on the Effective Date to holders of
Allowed Prepetition Credit Agreement Claims under Section 5.4.2(c) of the Plan),
a continuing first priority security interest in and senior lien on, pledge of,
collateral assignment of, and right of setoff against, all of the following
property and assets of the Litigation Trust, whether now owned or existing or
hereafter acquired or arising, regardless of where located (collectively, the
“Litigation Trust Funds Collateral”): (x) all of the Litigation Trust Assets,
(y) any Litigation Trust Proceeds and (z) to the extent not included in the
foregoing, all income and proceeds of any and all of the foregoing.

 

(b)                                 If any Additional Funding is provided to the
Litigation Trust, then as security for the obligation of the Litigation Trust
(and the Litigation Trustee) to pay the Additional Funding (including any fees,
costs or interest incurred in connection therewith, collectively, the
“Additional Funding Obligations”, and together with the Initial Litigation Trust
Funds Obligations, the “Litigation Trust Funds Obligations”), the Litigation
Trustee hereby grants to Reorganized FairPoint, a continuing first priority
security interest in and senior lien on, pledge of, collateral assignment of,
and right of setoff against, the Litigation Trust Funds Collateral; provided,
however, that the liens and security interests, if any, granted in this
Section 13.1(b) shall be senior to any liens and security interests granted
under Section 13.1(a).

 

(c)                                  The parties hereto agree and acknowledge
that the Prepetition Credit Agreement Agent shall be entitled to all of the
rights afforded the “Administrative Agent” under and pursuant to the terms of
the Prepetition Credit Agreement, including the right to withhold from any
Initial Litigation Trust Funds Obligations paid to it hereunder that portion of
the Initial Litigation Trust Funds Obligations constituting fees, indemnities,
expenses and other amounts payable (at the time any such Initial Litigation
Trust Fund Obligations are received by the Prepetition Credit Agreement Agent)
to the Prepetition Credit Agreement Agent in its capacity as such.

 

13.2                           Perfection of Lien.  The Litigation Trust (and
the Litigation Trustee) agrees from time to time, at the expense of the
Litigation Trust, promptly to execute and deliver all further instruments and
documents, and to take all further actions, that may be necessary or desirable,
or

 

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that the Prepetition Credit Agreement Agent or Reorganized FairPoint, as
applicable, may reasonably request, to perfect, protect or more fully evidence
the security interest, Lien, pledge, collateral assignment and right of setoff
granted under Section 13.1 of this Agreement, or to enable the holders of
Allowed Prepetition Credit Agreement Claims or the Prepetition Credit Agreement
Agent or Reorganized FairPoint, as applicable, to exercise and enforce their
respective rights and remedies under this Agreement. The Litigation Trust (and
the Litigation Trustee) authorizes the Prepetition Credit Agreement Agent or
Reorganized FairPoint, as applicable, to file financing or continuation
statements, and amendments thereto and assignments thereof, relating to the
Litigation Trust Funds Collateral.

 

13.3                           Remedies.  Upon the failure of the Litigation
Trust (and/or the Litigation Trustee) to pay the Litigation Trust Funds
Obligations to the holders of Allowed Prepetition Credit Agreement Claims or
Reorganized FairPoint, as applicable, when the same shall be due and payable
hereunder, the Prepetition Credit Agreement Agent or Reorganized FairPoint, as
applicable, in addition to the other rights and remedies which it may have under
this Agreement, may file a motion with the Bankruptcy Court, upon notice and
hearing, to enforce the provisions of this Agreement.

 

13.4                           Termination of Lien.  At the time that the
Litigation Trust Funds Obligations shall have been paid in full to the holders
of Allowed Prepetition Credit Agreement Claims or Reorganized FairPoint, as
applicable, the Litigation Trust Funds Collateral shall be released from the
security interest and Lien created hereby and all obligations with respect
thereto shall terminate, all without delivery of any instrument or performance
of any act by any party, and all rights to the Litigation Trust Funds Collateral
shall, subject to the terms of this Agreement, revert to the Litigation Trust.
The Litigation Trust is hereby authorized to file amendments pursuant to the
Uniform Commercial Code as from time to time in effect in the State of New York
at such time evidencing the termination of the security interest and Lien so
released. At the request of the Litigation Trust following any such termination,
the Prepetition Credit Agreement Agent or Reorganized FairPoint, as applicable,
shall deliver to the Litigation Trust without recourse and without
representation or warranty any Litigation Trust Funds Collateral held by the
Prepetition Credit Agreement Agent or Reorganized FairPoint, as applicable,
hereunder and execute and deliver to the Litigation Trust, at the Litigation
Trust’s expense, such documents as the Litigation Trust shall reasonably request
to evidence such termination.

 

[SIGNATURE PAGE FOLLOWS]

 

31

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IN WITNESS WHEREOF, the parties hereto have either executed and acknowledged
this Agreement, or caused it to be executed and acknowledged on their behalf by
their duly authorized officers all as of the date first above written.

 

 

FAIRPOINT AND REORGANIZED FAIRPOINT:

 

 

 

 

 

FAIRPOINT COMMUNICATIONS, INC.

 

(on behalf of itself and the other debtors and debtors-in-possession)

 

 

 

By:

/s/ Shirley J. Linn

 

Name:

Shirley J. Linn, Esq.

 

Title:

Executive Vice President and General Counsel

 

 

 

 

 

ORIGINAL TRUSTEE:

 

 

 

MARK E. HOLLIDAY

 

 

 

 

 

By:

/s/ Mark E. Holliday

 

Name:

Mark E. Holliday

 

Title:

Litigation Trustee

 

 

 

 

 

CREDITORS’ COMMITTEE: Only with respect to Section 1.2

 

 

 

By: Andrews Kurth LLP,  counsel to the Creditors’ Committee

 

 

 

 

 

By:

/s/ Jonathan I. Levine

 

Name:

Jonathan I. Levine

 

Title:

Partner

 

[Signature Page to Litigation Trust Agreement]

 

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Schedule A

 

Direct and Indirect Subsidiaries of FairPoint Communications, Inc.

 

1. BE Mobile Communications, Incorporated

41. GTC Finance Corporation*

2. Bentleyville Communications Corporation

42. GTC, Inc.

3. Berkshire Cable Corp.

43. Maine Telephone Company

4. Berkshire Cellular, Inc.

44. Marianna and Scenery Hill Telephone Company

5. Berkshire Net, Inc.*

45. Marianna Tel, Inc.

6. Berkshire New York Access, Inc.

46. MJD Services Corp.

7. Berkshire Telephone Corporation

47. MJD Ventures, Inc.

8. Big Sandy Telecom, Inc.

48. Northern New England Telephone Operations LLC

9. Bluestem Telephone Company

49. Northland Telephone Company of Maine, Inc.

10. C & E Communications, Ltd.

50. Odin Telephone Exchange, Inc.

11. Chautauqua & Erie Communications, Inc.

51. Orwell Communications, Inc.

12. Chautauqua and Erie Telephone Corporation

52. Peoples Mutual Long Distance Company

13. China Telephone Company

53. Peoples Mutual Services Company*

14. Chouteau Telephone Company

54. Peoples Mutual Telephone Company

15. Columbine Telecom Company

55. Quality One Technologies, Inc.

16. Comerco, Inc.

56. Ravenswood Communications, Inc.

17. Commtel Communications Inc.*

57. Sidney Telephone Company

18. Community Service Telephone Co.

58. ST Computer Resources, Inc.*

19. C-R Communications, Inc.

59. S T Enterprises, Ltd.

20. C-R Long Distance, Inc.

60. ST Long Distance, Inc.

21. C-R Telephone Company

61. St. Joe Communications, Inc.

22. El Paso Long Distance Company

62. Standish Telephone Company

23. Ellensburg Telephone Company

63. Sunflower Telephone Company, Inc.

24. EllTel Long Distance Corp.

64. Taconic Technology Corp.

25. Enhanced Communications of Northern New England Inc.

65. Taconic TelCom Corp.

26. ExOp of Missouri, Inc.

66. Taconic Telephone Corp.

27. FairPoint Broadband, Inc.

67. Telephone Operating Company of Vermont LLC

28. FairPoint Carrier Services, Inc.

68. Telephone Service Company*

29. FairPoint Communications Missouri, Inc.

69. The Columbus Grove Telephone Company

30. FairPoint Communications Solutions Corp. — New York*

70. The El Paso Telephone Company

31. FairPoint Communications Solutions Corp. — Virginia*

71. The Germantown Independent Telephone Company

32. FairPoint Logistics, Inc.

72. The Orwell Telephone Company

33. FairPoint Vermont, Inc.

73. UI Communications, Inc.*

 

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*              Entity to be dissolved on the Effective Date.

 

[Schedule A to Litigation Trust Agreement]

 

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34. Fremont Broadband, LLC*

74. UI Long Distance, Inc.

35. Fremont Telcom Co.

75. UI Telecom, Inc.*

36. Fretel Communications, LLC

76. Unite Communications Systems, Inc.

37. Germantown Long Distance Company

77. Utilities, Inc.

38. GIT-CELL, Inc.*

78. Yates City Telephone Company*

39. GITCO Sales, Inc.*

79. YCOM Networks, Inc

40. GTC Communications, Inc.

 

 

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*              Entity to be dissolved on the Effective Date.

 

[Schedule A to Litigation Trust Agreement]

 

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Schedule B

 

Index of Defined Terms

 

Term

 

Location

 

 

 

Additional Funding

 

Section 1.6

Additional Funding Obligations

 

Section 13.1(b)

Agreement

 

Introduction

Class A Interests

 

Section 2.1

Class B Interests

 

Section 2.1

Covered Claim

 

Section 1.8(a)

Covered Person

 

Section 12.10

Effective Date

 

Section 1.1(b)

EMA

 

Section 1.2(a)(ii)

Exchange Act

 

Section 2.4

FairPoint

 

Introduction

FairPoint Communications

 

Introduction

FairPoint Litigation Trust

 

Section 1.1(a)

Indemnified Persons

 

Section 7.1(a)

Information

 

Section 12.10

Initial Litigation Trust Fund Obligations

 

Section 13.1(a)

Interest Action

 

Section 3.5(c)

Investment Company Act

 

Section 2.4

Judgment Amount

 

Section 8.3

Litigation Trust

 

Introduction

Litigation Trust Assets

 

Section 1.1(b)

Litigation Trust Beneficiary

 

Introduction

Litigation Trust Claims

 

Section 1.2(a)

Litigation Trust Committee

 

Section 3.12(g)

Litigation Trust Defendant

 

Section 1.8(a)

Litigation Trust Funds Collateral

 

Section 13.1(a)

Litigation Trust Funds Obligations

 

Section 13.1(b)

Litigation Trust Proceeds

 

Section 3.1

Litigation Trust Website

 

Section 9.1(d)

Litigation Trustee

 

Section 1.1(b)

Original Trustee

 

Introduction

Plan

 

Introduction

Privileges

 

Section 1.2(b)

Protected Parties

 

Section 1.8

Registrar

 

Section 2.5(b)

Reorganized FairPoint

 

Introduction

Resignation Notice

 

Section 3.5(b)

RCC

 

Section 1.2(a)(v)

SEC

 

Section 2.4

Securities Act

 

Section 2.4

Spinco Merger

 

Section 1.2(a)

 

[Schedule B to Litigation Trust Agreement]

 

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Transfer

 

Section 2.5(a)

Trust Indenture Act

 

Section 2.4

Trust Register

 

Section 2.5(c)

TSA

 

Section 1.2(a)(iii)

Valid Setoff

 

Section 8.3

Verizon

 

Section 1.2(a)

 

[Schedule B to Litigation Trust Agreement]

 

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