1062613--3/5/2009--FAIRPOINT_COMMUNICATIONS

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Risks Related to Our Substantial Indebtedness and Common Stock We have substantial indebtedness which could have a negative impact on our financing options and liquidity position and our ability to pay dividends on our common stock in the future, and could prevent us from fulfilling our obligations under our debt obligations, including our credit facility and the notes. We are a holding company and rely on dividends, interest and other payments, advances and transfers of funds from our operating subsidiaries and investments, to meet our debt service and other obligations, and to pay dividends, if any, on our common stock. To operate and expand our business, service our indebtedness and meet our other cash needs, we will require a significant amount of cash, which may not be available to us. We may not generate sufficient funds from operations to repay or refinance our indebtedness at maturity or otherwise, to fund our operations or to pay dividends, if any, on our common stock in the future. Our stockholders may not receive the same level of dividends as historically paid by us or any dividends at all. Our financing arrangements subject us to various restrictions that could limit our operating flexibility, our ability to make payment on our debt and to fund dividends on our common stock. Limitations on our ability to use net operating loss carryforwards, and other factors requiring us to pay cash to satisfy our tax liabilities in future periods, may affect our ability to repay our indebtedness and pay dividends to our stockholders in the future. The price of our common stock may fluctuate substantially, which could negatively affect holders of our common stock. Future sales or the possibility of future sales of a substantial amount of our common stock may depress the price of our common stock. Risks Relating to the Merger The integration of Legacy FairPoint's and Spinco's businesses and the cutover to our new systems may not be successful. We may not realize all of the anticipated cost savings and growth opportunities from the merger. We may be affected by significant restrictions following the merger with respect to certain actions that could jeopardize the tax-free status of the spin-off or the merger. If the spin-off does not constitute a tax-free spin-off under Section 355 of the Internal Revenue Code, or the merger does not constitute a tax-free reorganization under Section 368(a) of the Internal Revenue Code, including as a result of actions taken in connection with the spin-off or the merger or as a result of subsequent acquisitions of stock of Verizon or our stock, then Verizon, us or Verizon stockholders may be responsible for payment of substantial United States federal income taxes. Conditions imposed by state regulatory authorities in connection with their approval of the spin-off and the merger may diminish the anticipated benefits of the merger. Risks Related to Our Business We provide services to customers over access lines, and if we lose access lines, our business, financial condition, results of operations and liquidity may be adversely affected. We provide access services to other communications companies, and if these companies were to become insolvent or experience substantial financial difficulties, our business, financial condition, results of operations and liquidity may be adversely affected. We are subject to competition that may adversely impact our business, financial condition, results of operations and liquidity. We may not be able to successfully integrate new technologies, respond effectively to customer requirements or provide new services. The geographic concentration of our operations in Maine, New Hampshire and Vermont make our business susceptible to local economic and regulatory conditions, and an economic downturn, recession or unfavorable regulatory action in any of those states may adversely affect our business, financial condition, results of operations and liquidity. We outsource a portion of our billing function. If our service provider inadequately performs or experiences a significant degradation or failure with respect to the services it provides or the applicable agreement is terminated, it could have a significant impact on the operation of our business. We face risks associated with acquired businesses and potential acquisitions. A network disruption could cause delays or interruptions of service, which could cause us to lose customers. We depend on third parties for our provision of long distance and bandwidth services. Our success will depend on our ability to attract and retain qualified management and other personnel. We will be exposed to risks relating to evaluations of internal control systems required by Section 404 of the Sarbanes-Oxley Act. Our financial condition and results of operations could be adversely affected if assets held in our Company-sponsored pension plans suffer significant losses in market value. Risks Relating to Our Regulatory Environment We are subject to significant regulations that could change in a manner adverse to us. Regulatory changes in the communications industry could adversely affect our business by facilitating greater competition, reducing potential revenues or raising our costs.

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1062613--3/5/2009--FAIRPOINT_COMMUNICATIONS_INC