Item 2.01. Completion of Acquisition or Disposition of Assets.
On July 3, 2017, Consolidated Communications Holdings, Inc. (the “Company”)
completed its acquisition of FairPoint Communications, Inc., a Delaware corporation (“FairPoint”). Pursuant to an Agreement
and Plan of Merger, dated as of December 3, 2016, by and among the Company, Falcon Merger Sub, Inc., a newly formed Delaware corporation
and wholly-owned subsidiary of the Company (“Merger Sub”), and FairPoint (as amended by the First Amendment to Agreement
and Plan of Merger entered into as of January 20, 2017, the “Merger Agreement”), Merger Sub merged with and into FairPoint
(the “Merger”), with FairPoint as the surviving company.
At the effective time of the Merger, each issued and outstanding share of FairPoint common
stock, par value $0.01 per share, converted into the right to receive 0.7300 shares of common stock of the Company, par value $0.01
per share, constituting an approximate aggregate total of 19,908,348 shares of the Company’s common stock.
No fractional shares of the Company’s common stock will be issued to any FairPoint
stockholder in the Merger. Each FairPoint stockholder who would otherwise have been entitled to receive a fraction of a share of
the Company’s common stock in the Merger will receive cash in an amount equal to the product obtained by multiplying (i) the
fractional share of the Company’s common stock to which such holder would otherwise be entitled (after taking into account
all shares of FairPoint common stock held by such holder immediately prior to the effective time of the Merger) by (ii) $21.47 (which
represents the last reported sale price of the Company’s common stock on the NASDAQ Global Select Market as reported in The
Wall Street Journal) on June 30, 2017, the last complete trading day prior to the date of the effective time of the Merger, less
any applicable taxes required to be withheld.
This description of the Merger is qualified in its entirety by reference to the Merger
Agreement attached as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission
(the “SEC”) on December 5, 2016, as amended by the First Amendment thereto, dated as of January 20, 2017, included
in Annex I to the Company’s Registration Statement on Form S-4/A filed with the SEC on February 24, 2017, each of which is
incorporated herein by reference.
A copy of the press release, dated July 3, 2017, announcing the completion of the Merger
is included as Exhibit 99.1 to this Current Report on Form 8-K and incorporated into this Item 2.01 by reference.
In connection with the Merger, each outstanding warrant to purchase shares of FairPoint
common stock converted into a warrant to acquire shares of the Company’s common stock, upon exercise, on the same terms and
conditions that were applicable to such FairPoint warrant, except that the number of shares of the Company’s common stock
for which each such warrant may be exercisable and the exercise price of each warrant was adjusted to reflect the exchange ratio.
Accordingly, as of the effective time of the Merger, there are approximately 2,615,153 Company warrants outstanding, each eligible
to purchase one share of Company common stock at an exercise price of $66.86 per share. The Company assumed these warrants pursuant
to an Assumption Agreement, dated July 3, 2017, between the Company and Computershare Trust Company N.A. (as successor to The Bank
of New York Mellon), as Warrant Agent, which is attached as Exhibit 4.1 to this Current Report on Form 8-K and incorporated into
this Item 2.01 by reference.
Effective contemporaneously with the Merger, on July 3, 2017, the Company and certain
of its subsidiaries entered into an Amendment No. 3 (“Amendment No. 3”) to the Company’s Third Amended and Restated
Credit Agreement, dated as of October 5, 2016, among the Company, Consolidated Communications, Inc., a wholly-owned subsidiary
of the Company (“CCI”), the lenders party thereto, Wells Fargo Bank, National Association, as Administrative Agent
and other agents party thereto, as previously amended by Amendment No. 1 thereto, dated as of December 14, 2016, and Amendment
No. 2 thereto, dated as of December 21, 2016 (as so amended, the “Credit Agreement”). Pursuant to Amendment No. 3,
the Credit Agreement was amended to increase the permitted amount of outstanding letters of credit from $15.0 million to $20.0
million and to provide that certain existing letters of credit as to which FairPoint is the applicant be deemed to be letters of
credit under the Credit Agreement. In addition, the lenders agreed to waive the requirements under the Credit Agreement that Peoples
Mutual Telephone Company and Peoples Mutual Long Distance Company, subsidiaries of FairPoint, be joined as guarantors, that the
assets of such entities be pledged as collateral as required by the Credit Agreement, and that the equity interests issued by each
of them be pledged as collateral as required by the Credit Agreement. Amendment No. 3 is filed as Exhibit 10.1 to this Current
Report on Form 8-K and incorporated into this Item 2.01 by reference.
As a result of the Merger, under the Credit Agreement, certain of the FairPoint subsidiaries
that the Company acquired in the Merger (the “FairPoint Guarantors”) were required to guarantee certain obligations
under the Credit Agreement and to pledge as collateral, and grant liens on and security interests in, all assets and property,
whether now owned or existing or hereafter acquired or arising, of such FairPoint Guarantors as provided for in or contemplated
by the Credit Agreement. The FairPoint Guarantors became parties to the Collateral Agreement (as defined in the Credit
Agreement) and the Guaranty Agreement (as defined in the Credit Agreement) by executing a Joinder Agreement dated as of July 3,
2017. The Joinder Agreement is filed as Exhibit 4.2 to this Current Report on Form 8-K and incorporated into this Item
2.01 by reference.
In addition, as a result of the FairPoint Guarantors becoming guarantors under the Credit
Agreement, each FairPoint Guarantor was also required to guarantee $500,000,000 aggregate principal amount of 6.50% Senior Notes
due 2022 (the “2022 Notes”) of CCI issued pursuant to that certain indenture dated as of September 18, 2014 (as supplemented,
the “Indenture”), by and among CCI, the Guarantors named therein, and Wells Fargo Bank, National Association, as trustee
(the “Trustee”) by entering into a Fifth Supplemental Indenture with the Trustee, dated as of July 3, 2017. For
a description of the Indenture, see the Current Reports on Form 8-K filed by the Company with the SEC on September 24, 2014, October
22, 2014, November 14, 2014, June 11, 2015 and January 5, 2016, which are incorporated herein by reference. The Fifth Supplemental
Indenture is filed as Exhibit 4.3 to this Current Report on Form 8-K and incorporated into this Item 2.01 by reference.