Item 1.01. Entry into a Material Definitive Agreement.
As previously reported on a Form 8-K, filed December 5, 2016 (the
“December 5 Form 8-K”), on December 3, 2016, Consolidated Communications Holdings, Inc. (the “Company”),
Falcon Merger Sub, Inc., a newly formed Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”),
and FairPoint Communications, Inc., a Delaware corporation (“FairPoint”), entered into an Agreement and Plan of Merger
(the “Merger Agreement”). The Merger Agreement provides for, among other things, a business combination whereby Merger
Sub will merge with and into FairPoint, with FairPoint as the surviving entity (the “Merger”). As a result of the Merger,
the separate corporate existence of Merger Sub will cease, and FairPoint will continue as the surviving corporation and a wholly
owned subsidiary of the Company.
A copy of the Merger Agreement is attached hereto as Exhibit 2.1
and is incorporated herein by reference. The description of the Merger Agreement contained in the December 5 Form 8-K is qualified
in its entirety by reference to the full text of the Merger Agreement.
The Merger Agreement has been included to provide investors and
security holders with information regarding its terms. It is not intended to provide any other factual or financial information
about the Company, FairPoint, or their respective subsidiaries and affiliates. The representations, warranties and covenants contained
in the Merger Agreement were made only for purposes of that agreement and as of specific dates; were solely for the benefit of
the parties to the Merger Agreement; may be subject to limitations agreed upon by the parties, including being qualified by confidential
disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing
these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those
applicable to investors. Investors should not rely on the representations, warranties and covenants or any description thereof
as characterizations of the actual state of facts or condition of the Company or FairPoint or any of their respective subsidiaries
or affiliates. The Company’s disclosure schedule contains information that has been included in the Company’s prior
public disclosures, as well as non-public information. Moreover, information concerning the subject matter of the representations,
warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully
reflected in public disclosures by the Company and FairPoint. The Merger Agreement should not be read alone, but should instead
be read in conjunction with the other information regarding the companies and the Merger that will be contained in, or incorporated
by reference into, the proxy statement/prospectus that the parties will file in connection with the Merger, as well as in the other
filings that each of the Company and FairPoint make with the SEC.
As previously reported on the December 5 Form 8-K, in connection
with the execution of the Merger Agreement, Consolidated Communications, Inc., a wholly-owned subsidiary of the Company (“CCI”),
entered into a Commitment Letter, dated December 3, 2016 (the “Commitment Letter”), from (i) Morgan Stanley Senior
Funding, Inc., (ii) The Bank of Tokyo-Mitsubishi UFJ, Ltd., MUFG Union Bank, N.A., MUFG Securities Americas Inc. (collectively,
“MUFG”) and/or any other affiliates or subsidiaries as MUFG collectively deems appropriate to provide the services
referred to therein, (iii) TD Securities (USA) LLC, (iv) The Toronto-Dominion Bank, New York Branch, and (v) Mizuho Bank, Ltd.
A copy of the Commitment Letter is attached hereto as Exhibit 10.1
and is incorporated herein by reference. The description of the Commitment Letter contained in the December 5 Form 8-K is qualified
in its entirety by reference to the full text of the Commitment Letter.
Safe Harbor
The Securities and Exchange Commission (“SEC”) encourages companies to disclose
forward-looking information so that investors can better understand a company’s future prospects and make informed investment
decisions. Certain statements in this filing are forward-looking statements and are made pursuant to the safe harbor provisions
of the Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, current expectations,
plans, strategies, and anticipated financial results of the Company and FairPoint, both separately and as a combined entity. There
are a number of risks, uncertainties, and conditions that may cause the actual results of the Company and FairPoint, both separately
and as a combined entity, to differ materially from those expressed or implied by these forward-looking statements. These risks
and uncertainties include the timing and ability to complete the proposed acquisition of FairPoint by the Company, the expected
benefits of the integration of the two companies and successful integration of FairPoint’s operations with those of the Company
and realization of the synergies from the integration, as well as a number of factors related to the respective businesses of the
Company and FairPoint, including economic and financial market conditions generally and economic conditions in the Company’s
and FairPoint’s service areas; various risks to stockholders of not receiving dividends and risks to the Company’s
ability to pursue growth opportunities if the Company continues to pay dividends according to the current dividend policy; various
risks to the price and volatility of the Company’s common stock; changes in the valuation of pension plan assets; the substantial
amount of debt and the Company’s ability to repay or refinance it or incur additional debt in the future; the Company’s
need for a significant amount of cash to service and repay the debt and to pay dividends on the common stock; restrictions contained
in the debt agreements that limit the discretion of management in operating the business; legal or regulatory proceedings or other
matters that impact the timing or ability to complete the acquisition as contemplated, regulatory changes, including changes to
subsidies, rapid development and introduction of new technologies and intense competition in the telecommunications industry; risks
associated with the Company’s possible pursuit of acquisitions; system failures; losses of large customers or government
contracts; risks associated with the rights-of-way for the network; disruptions in the relationship with third party vendors; losses
of key management personnel and the inability to attract and retain highly qualified management and personnel in the future; changes
in the extensive governmental legislation and regulations governing telecommunications providers and the provision of telecommunications
services; telecommunications carriers disputing and/or avoiding their obligations to pay network access charges for use of the
Company’s and FairPoint’s network; high costs of regulatory compliance; the competitive impact of legislation and regulatory
changes in the telecommunications industry; liability and compliance costs regarding environmental regulations; the possibility
of disruption from the integration of the two companies making it more difficult to maintain business and operational relationships;
the possibility that the acquisition is not consummated, including, but not limited to, due to the failure to satisfy the closing
conditions; the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected
factors or events; and diversion of management’s attention from ongoing business operations and opportunities. A detailed
discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking
statements are discussed in more detail in the Company’s and FairPoint’s respective filings with the SEC, including
the Annual Report on Form 10-K of the Company for the year ended December 31, 2015, which was filed with the SEC on February 29,
2016, under the heading “Item 1A—Risk Factors,” and the Annual Report on Form 10-K of FairPoint for the year
ended December 31, 2015, which was filed with the SEC on March 2, 2016, under the heading “Item 1A—Risk Factors,”
and in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by each of the Company and FairPoint. Many
of these circumstances are beyond the ability of the Company and FairPoint to control or predict. Moreover, forward-looking statements
necessarily involve assumptions on the part of the Company and FairPoint . These forward-looking statements generally are identified
by the words “believe”, “expect”, “anticipate”, “estimate”, “project”,
“intend”, “plan”, “should”, “may”, “will”, “would”, “will
be”, “will continue” or similar expressions. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results, performance or achievements of the Company and FairPoint, and their
respective subsidiaries, both separately and as a combined entity to be different from those expressed or implied in the forward-looking
statements. All forward-looking statements attributable to us or persons acting on the respective behalf of the Company or FairPoint
are expressly qualified in their entirety by the cautionary statements that appear throughout this filing. Furthermore, forward-looking
statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations
of the SEC, each of the Company and FairPoint disclaim any intention or obligation to update or revise publicly any forward-looking
statements. You should not place undue reliance on forward-looking statements.
Important Merger Information and Additional Information
This communication does not constitute an offer to sell or the solicitation of an offer
to buy any securities or a solicitation of any vote or approval. In connection with the proposed transaction, the Company and FairPoint
will file relevant materials with the SEC. The Company will file a Registration Statement on Form S-4 that includes a joint proxy
statement of the Company and FairPoint and which also constitutes a prospectus of the Company. The Company and FairPoint will mail
the final joint proxy statement/prospectus to their respective stockholders.
Investors are urged to read the joint proxy statement/prospectus
regarding the proposed transaction when it becomes available, because it will contain important information.
The joint proxy
statement/prospectus and other relevant documents that have been or will be filed by the Company and FairPoint with the SEC are
or will be available free of charge at the SEC’s website, www.sec.gov, or by directing a request when such a filing is made
to Consolidated Communications Holdings, Inc., 121 South 17th Street, Mattoon, IL 61938, Attention: Investor Relations or to FairPoint
Communications, Inc., 521 East Morehead Street, Suite 500, Charlotte, North Carolina 28202, Attention: Secretary.
The Company, FairPoint and certain of their respective directors, executive officers
and other members of management and employees may be considered participants in the solicitation of proxies in connection with
the proposed transaction.
Information about the directors and executive officers of the Company is set forth in its definitive
proxy statement, which was filed with the SEC on March 28, 2016. Information about the directors and executive officers of FairPoint
is set forth in its definitive proxy statement, which was filed with the SEC on March 25, 2016.
These documents can be obtained
free of charge from the sources listed above. Investors may obtain additional information regarding the interests of such participants
by reading the joint proxy statement/prospectus the Company and FairPoint will file with the SEC when it becomes available.