$300,000,000 CONSOLIDATED COMMUNICATIONS, INC. 6.50% SENIOR NOTES DUE 2022 REGISTRATION RIGHTS AGREEMENT

$300,000,000

 

CONSOLIDATED COMMUNICATIONS, INC.

 

6.50% SENIOR NOTES DUE 2022

 

 

June 8, 2015

 

Morgan Stanley & Co. LLC

As Representative of the several Initial Purchasers

c/o	Morgan Stanley & Co. LLC 1585 Broadway New York, New York 10036

 

Ladies and Gentlemen:

 

Consolidated Communications, Inc., an Illinois corporation (the “Issuer”), proposes to issue and sell to Morgan Stanley & Co. LLC, Wells Fargo Securities, LLC and Mizuho Securities USA Inc. (collectively, the “Initial Purchasers”), for whom Morgan Stanley & Co. LLC is acting as the representative (the “Representative”), upon the terms set forth in the Purchase Agreement dated June 3, 2015 (the “Purchase Agreement”), $300,000,000 aggregate principal amount of its 6.50% Senior Notes due 2022 (the “Notes”).  The Notes will be issued pursuant to a third supplemental indenture dated as of June 8, 2015 (the “Third Supplemental Indenture”) to that certain indenture, dated as of September 18, 2014 (the “Original Indenture”) (as supplemented by the first supplemental indenture dated as of October 16, 2014, the second supplemental indenture dated as of November 14, 2014 and the Third Supplemental Indenture and as amended, supplemented or otherwise modified from time to time, the “Indenture”), between the Issuer, Wells Fargo Bank, National Association, as trustee (the “Trustee”) and the Guarantors (as defined below) party thereto.  Consolidated Communications Finance II Co., a Delaware corporation (the “Initial Issuer”) previously issued $200,000,000 aggregate principal amount of its 6.50% Senior Notes due 2022 on September 18, 2014 (the “Existing Notes”) and the Issuer, as successor by way of merger to the Initial Issuer, assumed all obligations of the Initial Issuer under the Existing Notes and the Original Indenture pursuant to the First Supplemental Indenture. The Notes constitute “Additional Notes” under the Indenture.  The payment of principal of, premium, if any, and interest on the Notes will be fully and unconditionally guaranteed (the “Guarantees”), jointly and severally, by the following entities (collectively, the “Guarantors”):  (a) the entities listed on Schedule II to the Purchase Agreement, (b) any other entities that are required to guarantee the Issuer’s obligations under the Notes pursuant to the Indenture and (c) their respective successors and assigns, subject to the guarantor release provisions in the Indenture. The Notes and the Guarantees are collectively referred to herein as the “Initial Securities.” Capitalized terms used herein without definition have the respective meanings given to them in the Purchase Agreement.

 

As an inducement to the Initial Purchasers to enter into the Purchase Agreement, the Issuer and the Guarantors agree with the Initial Purchasers, for the benefit of the Initial Purchasers and the holders of the Securities (as defined below) (the “Holders”), as follows:

 

2.  Registered Exchange Offer.  If any Transfer Restricted Securities (as defined in Section 7 hereof) are outstanding as of the 366th calendar day following September 18, 2014, the closing date of the Existing Notes (the “Original Closing Date”), then to the extent not prohibited by applicable law or the policy of the Securities and Exchange Commission (the “Commission”), the Issuer and the Guarantors, at their own cost, shall: (a) prepare and file with the Commission an exchange offer registration statement (the “Exchange Offer Registration Statement”) on an appropriate form under the Securities Act of 1933, as amended (the “Securities Act”), with respect to a proposed offer (the “Registered Exchange Offer”) to the Holders of Transfer Restricted Securities who are not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of debt securities issued under the Indenture, identical in all material respects to the Initial Securities (except with respect to transfer restrictions and liquidated damages provisions) and registered under the Securities Act (the “Exchange Securities”); (b) use their reasonable best efforts to have the Exchange Offer Registration Statement declared effective under the Securities Act and (c) issue on or prior to the 456th day following the Original Closing Date (or, if such date is not a Business Day (as defined below), on the next succeeding Business Day) (the “Consummation Deadline”), Exchange Securities in exchange for all Initial Securities tendered prior thereto in the Registered Exchange Offer.  For purposes of this Agreement, “Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in the Borough of Manhattan, The City of New York, are authorized or obligated by law or executive order to close.

 

It is the objective of the Registered Exchange Offer to enable each Holder of Transfer Restricted Securities electing to exchange the Initial Securities for Exchange Securities (assuming that such Holder is not an affiliate of the Issuer within the meaning of the Securities Act, acquires the Exchange Securities in the ordinary course of such Holder’s business and has no arrangements with any person to participate in the distribution of the Exchange Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of the several states of the United States.

 

The Issuer acknowledges that, pursuant to current interpretations by the Commission’s staff of Section 5 of the Securities Act, in the absence of an applicable exemption therefrom, (i) each Holder which is a broker-dealer electing to exchange Initial Securities, acquired for its own account as a result of market making activities or other trading activities, for Exchange Securities (an “Exchanging Dealer”), is required to deliver a prospectus containing the information set forth in (a) Annex A hereto on the cover, (b) Annex B hereto in the “Exchange Offer Procedures” section and the “Purpose of the Exchange Offer” section, and (c) Annex C hereto in the “Plan of Distribution” section of such prospectus in connection with a sale of any such Exchange Securities received by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) if an Initial Purchaser elects to sell Securities acquired in exchange for Initial Securities constituting any portion of an unsold allotment, it will be required to deliver a prospectus containing the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in connection with such sale.

The Issuer and the Guarantors shall use their best efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the prospectus contained therein, in order to permit such prospectus to be lawfully delivered by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply with such requirements in order to resell the Exchange Securities; provided, however, that (i) in the case where such prospectus and any amendment or supplement thereto must be delivered by an Exchanging Dealer or the Initial Purchasers, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers and the Initial Purchasers have sold all Exchange Securities held by them (unless such period is extended pursuant to Section 3(j) below) and (ii) the Issuer shall make such prospectus and any amendment or supplement thereto, available to any broker-dealer for use in connection with any resale of any Exchange Securities for a period of not less than 90 days after the consummation of the Registered Exchange Offer.

If, upon consummation of the Registered Exchange Offer, any Initial Purchaser holds Initial Securities acquired by it as part of its initial distribution, the Issuer, simultaneously with the delivery of the Exchange Securities pursuant to the Registered Exchange Offer, shall issue and deliver to such Initial Purchaser upon the written request of such Initial Purchaser, in exchange (the “Private Exchange”) for the Initial Securities held by such Initial Purchaser, a like principal amount of debt securities of the Issuer issued under the Indenture and identical in all material respects to the Initial Securities (the “Private Exchange Securities”).  The Initial Securities, the Exchange Securities and the Private Exchange Securities are herein collectively called the “Securities.”

 

In connection with any Registered Exchange Offer, the Issuer and the Guarantors shall:

 

 

 

As soon as practicable after the close of the Registered Exchange Offer or the Private Exchange, as the case may be, the Issuer shall:

 

 

Interest on each Exchange Security and Private Exchange Security issued pursuant to the Registered Exchange Offer and in the Private Exchange will accrue from the most recent date on which interest has been paid on the Initial Securities surrendered in exchange therefor or, if no interest has been paid on the Initial Securities, from April 1, 2015.

Each Holder participating in the Registered Exchange Offer shall be required to represent to the Issuer that at the time of the consummation of the Registered Exchange Offer (i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business, (ii) such Holder is not engaged in, and does not intend to engage in, and has no arrangements or understanding with any person to participate in the distribution of the Securities or the Exchange Securities within the meaning of the Securities Act, (iii) such Holder is not an “affiliate,” as defined in Rule 405 of the Securities Act, of the Issuer or if it is an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a broker-dealer, that it is not engaged in, and has no arrangements to engage in, and does not intend to engage in, the distribution of the Exchange Securities and (v) if such Holder is a broker-dealer, that it will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities.

 

Notwithstanding any other provisions hereof, the Issuer and the Guarantors will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and any amendment or supplement thereto complies in all material respects with the Securities Act and the rules and regulations thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any amendment or supplement to such prospectus, does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

3.  Shelf Registration.  If any Transfer Restricted Securities are outstanding as of the 366th calendar date after the Original Closing Date and:

(a)           if, because of any change in law or in the applicable interpretations thereof by the staff of the Commission, in the opinion of the Issuer, the Issuer is not permitted to consummate the Registered Exchange Offer;

(b)           for any reason, the Registered Exchange Offer is not consummated on or prior to the Consummation Deadline; or

  

(c)           any beneficial owner of Transfer Restricted Securities notifies the Issuer that:

 

(i)           it is prohibited by law or Commission policy from participating in the Registered Exchange Offer;

 

(ii)           it may not resell the Exchange Securities acquired by it in the Registered Exchange Offer to the public without delivering a prospectus and the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales; or

 

(iii)           it is a broker-dealer and owns Securities acquired directly from the Issuer or an affiliate of the Issuer,

then, the Issuer and the Guarantors shall take the following actions:

 

(A)           The Issuer and the Guarantors shall file with the Commission and thereafter use their reasonable best efforts to cause to be declared effective by the Commission (unless it becomes effective automatically upon filing) on or prior to the 456th day following the Original Closing Date (or, if such date is not a Business Day, on the next succeeding Business Day) (such 456th day being an “Effectiveness Deadline”) a registration statement (the “Shelf Registration Statement” and, together with the Exchange Offer Registration Statement, a “Registration Statement”) on an appropriate form under the Securities Act relating to the offer and sale of the Transfer Restricted Securities by the Holders thereof from time to time in accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule 415 under the Securities Act (hereinafter, the “Shelf Registration”); provided, however, that no Holder (other than an Initial Purchaser) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all the provisions of this Agreement applicable to such Holder.

(B)           The Issuer and the Guarantors shall use their reasonable best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus included therein to be lawfully delivered by the Holders of the relevant Securities for a period of one year (or for such longer period if extended pursuant to Section 4(j) below) from the date of its effectiveness or such shorter period that will terminate when all the Securities covered by the Shelf Registration Statement have been sold pursuant thereto, are no longer outstanding or cease to be Transfer Restricted Securities (such period being the “Shelf Registration Period”).  The Issuer and the Guarantors shall be deemed not to have used their reasonable best efforts to keep the Shelf Registration Statement effective during the requisite period if they voluntarily take any action that would result in Holders of Securities covered thereby not being able to offer and sell such Securities during that period, unless such action is (x) required by applicable law or (y) permitted pursuant to Section 4(j) hereof.

(C)           Notwithstanding any other provisions of this Agreement to the contrary, the Issuer and the Guarantors shall cause (i) the Shelf Registration Statement and the related prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement, amendment or supplement, to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations thereunder; (ii) the Shelf Registration Statement and any amendment thereto, when it becomes effective, not to contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and (iii) any prospectus forming part of any Shelf Registration Statement not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

4.  Registration Procedures.  In connection with any Shelf Registration contemplated by Section 3 hereof and, to the extent applicable, any Registered Exchange Offer contemplated by Section 2 hereof, the following provisions shall apply:

 

 

 

 

5.  Registration Expenses.  The Issuer and the Guarantors shall bear all fees and expenses incurred in connection with the performance of their obligations under Sections 1 through 4 hereof (including the reasonable fees and expenses, if any, of Shearman & Sterling LLP, counsel for the Initial Purchasers, incurred in connection with the Registered Exchange Offer), whether or not the Registered Exchange Offer or a Shelf Registration is filed or becomes effective, and, in the event of a Shelf Registration, shall bear or reimburse the Holders of the Securities covered thereby for the reasonable fees and disbursements of one firm of counsel designated by the Holders of a majority in principal amount of the Initial Securities covered thereby to act as counsel for the Holders of the Initial Securities in connection therewith.  Notwithstanding the foregoing, the Holders of the Initial Securities being registered shall pay all agency or brokerage fees and commissions and underwriting discounts and commissions attributable to the sale of Transfer Restricted Securities and the fees and disbursements of other advisors or experts retained by such holders (severally or jointly) (excluding advisors or other experts retained by the Issuer, as aforesaid).

 

6.  Indemnification. (a)  Each of the Issuer and the Guarantors jointly and severally agree to indemnify and hold harmless each Initial Purchaser, each Holder of the Securities, any Participating Broker-Dealer, each underwriter who participates in an offering of Transfer Restricted Securities and each person, if any, who controls such Initial Purchaser, Holder, Participating Broker-Dealer or underwriter within the meaning of the Securities Act or the Exchange Act (each Initial Purchaser, Holder, any Participating Broker-Dealer, underwriter and such controlling persons are referred to collectively as the “Indemnified Parties”) from and against any and all losses, claims, damages or liabilities, joint or several (or actions in respect thereof) caused by any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or in any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or such losses, claims, damages, liabilities or actions caused by any untrue statement or alleged untrue statement of a material fact contained in a prospectus prepared by or on behalf of, used by, or referred to by the Issuer or any Guarantor, including any preliminary prospectus or “issuer free writing prospectus,” as defined in Commission Rule 433 (“Issuer FWP”), relating to a Shelf Registration, or in any amendment or supplement thereto, or caused by the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and shall reimburse, as incurred, the Indemnified Parties for any reasonable and documented legal or other expenses incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided, however, that the Issuer and the Guarantors shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in a Registration Statement or prospectus, including any preliminary prospectus or Issuer FWP relating to a Shelf Registration, or in any amendment or supplement thereto, based upon information relating to such Initial Purchaser, Holder, Participating Broker-Dealer or underwriter and furnished to the Issuer by or on behalf of such Initial Purchaser, Holder, Participating Broker-Dealer or underwriter expressly for inclusion therein; provided further, however, that this indemnity agreement will be in addition to any liability which the Issuer or a Guarantor may otherwise have to such Indemnified Party.

(b)  Each Holder of the Securities, severally and not jointly, will indemnify and hold harmless the Issuer, each Initial Purchaser, each underwriter who participates in an offering of Transfer Restricted Securities and the other selling Holders and each of their respective directors and officers (including each officer of the Issuer who signed the Registration Statement) and each person, if any, who controls the Issuer within the meaning of the Securities Act or the Exchange Act, to the same extent as the foregoing indemnity from the Issuer and the Guarantors to such Holder, but only with reference to information relating to such Holder furnished to the Issuer by such Holder expressly for inclusion in any such Registration Statement or prospectus, including any preliminary prospectus or Issuer FWP relating to a Shelf Registration, or in any amendment or supplement thereto; and, subject to the limitation set forth immediately preceding this clause, shall reimburse, as incurred, the Issuer for any reasonable and documented legal or other expenses incurred by the Issuer or any such controlling person in connection with investigating or defending any loss, claim, damage, liability or action in respect thereof.  This indemnity agreement will be in addition to any liability which such Holder may otherwise have to the Issuer or any of its controlling persons.

 

(c)  Promptly after receipt by an indemnified party under this Section 6 of notice of the commencement of any action or proceeding (including a governmental investigation), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 6, notify the indemnifying party of the commencement thereof in writing; but the failure to so notify the indemnifying party will not, in any event, relieve the indemnifying party from any obligations to any indemnified party under this Section 6 except to the extent that it has been materially prejudiced by such failure (through the forfeiture of substantive rights and defenses) and shall not relieve the indemnifying party from any liability which the indemnifying party may have to an indemnified party other than under this Section 6.  In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof the indemnifying party will not be liable to such indemnified party under this Section 6 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof.  No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action, and does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

 

(d)  To the extent the indemnification provided for in Section 6(a) or 6(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations.  The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer and the Guarantors on the one hand or such Initial Purchaser, Holder, Participating Broker-Dealer or underwriter or such other indemnified party, as the case may be, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding any other provision of this Section 6(d), the Holders of the Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holders from the sale of the Securities pursuant to a Registration Statement exceeds the amount of damages which such Holders would have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11 (f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  For purposes of this paragraph (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls the Issuer within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Issuer.

 

(e)  The agreements contained in this Section 6 shall survive the sale of the Securities pursuant to a Registration Statement and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party.

 

7.  Additional Interest Under Certain Circumstances.  (a)  Additional interest (the “Additional Interest”) with respect to the Initial Securities shall be assessed as follows if any of the following events occur (each such event in clauses (i) through (ii) below being herein called a “Registration Default”):

 

 

(a)

the Issuer and the Guarantors fail to consummate the Registered Exchange Offer on or prior to the 475th calendar day after the Original Closing Date; or

 

(b)

the Issuer and the Guarantors fail to cause the Shelf Registration Statement to be declared effective on or before the 475th calendar day after the Original Closing Date; or

 

 

Each of the foregoing will constitute a Registration Default whatever the reason for any such event and whether it is voluntary or involuntary or is beyond the control of the Issuer or the Guarantors or pursuant to operation of law or as a result of any action or inaction by the Commission.

Additional Interest shall accrue on the Initial Securities over and above the interest set forth in the title of the Securities from and including the date on which any such Registration Default shall occur.  With respect to the first 90-day period immediately following the occurrence of the first Registration Default, Additional Interest shall be paid in an amount equal to 0.25% per annum (the “Additional Interest Rate”) of the principal amount of the Initial Securities.  The Additional Interest Rate shall increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum Additional Interest Rate for all Registration Defaults of 1.50% per annum of the principal amount of the Initial Securities.

    

(b)           A Registration Default referred to in Section 7(a)(ii) hereof shall be deemed not to have occurred and be continuing in relation to a Shelf Registration Statement or the related prospectus if (i) such Registration Default has occurred solely as a result of (x) the filing of a post-effective amendment to such Shelf Registration Statement to incorporate annual audited financial information with respect to the Issuer where such post-effective amendment is not yet effective and needs to be declared effective to permit Holders to use the related prospectus or (y) other material events, with respect to the Issuer that would need to be described in such Shelf Registration Statement or the related prospectus and (ii) in the case of clause (y), the Issuer is proceeding promptly and in good faith to amend or supplement such Shelf Registration Statement and related prospectus to describe such events; provided, however, that in any case if such Registration Default occurs for a continuous period in excess of 30 days, Additional Interest shall be payable in accordance with the above paragraph from the day such Registration Default occurs until such Registration Default is cured.

(c)           Any amounts of Additional Interest due pursuant to Section 7(a) above will be payable in cash on the regular interest payment dates with respect to the Initial Securities.  The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the Initial Securities, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months), and the denominator of which is 360.

(d)           Following the cure of all Registration Defaults the accrual of Additional Interest on the Initial Securities will cease and the interest rate will revert to the original rate; provided, however, that if, after any such Additional Interest ceases to accrue, a different event specified in clause (i) or (ii) of the definition of Registration Default above occurs, such Additional Interest shall begin to accrue again pursuant to the foregoing provisions.

(e)           “Transfer Restricted Securities” means the Initial Securities; provided, however, that any such Securities shall cease to be Transfer Restricted Securities upon the earliest to occur of: (i) the date on which such Initial Securities have been exchanged by a person other than a broker-dealer for freely transferable Exchange Securities in the Registered Exchange Offer; (ii) following the exchange by a broker-dealer in the Registered Exchange Offer of Initial Securities for Exchange Securities, the date on which such Exchange Securities are sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement; (iii) the date on which such Initial Securities have been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement; or (iv) the date on which such Initial Securities are sold to the public pursuant to Rule 144 under the Securities Act; (v) the date on which such Initial Securities have become Freely Transferable, or (iv) the date on which such Initial Securities shall have ceased to be outstanding.

(f)           “Freely Transferable” shall mean, with respect to any Initial Security, the time at which (i) such Initial Security may be sold to the public pursuant to Rule 144 under the Securities Act by a person that is not an “affiliate” (as defined in Rule 144 under the Securities Act) of the Issuer without regard to any of the conditions specified therein (other than the holding period requirement in paragraph (d) of Rule 144 so long as such holding period requirement is satisfied at such time of determination) and (ii) the restrictive legends relating to the Securities Act on such Initial Security have been removed.

(g)           Additional Interest due to this Section 7 shall be the exclusive monetary remedy available to the Holders and/or Initial Purchasers with respect to any Registration Default.

 

8.  Rules 144 and 144A.  The Issuer shall use its best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Issuer is not required to file such reports, it will, upon the request of any Holder of Initial Securities, make publicly available other information so long as necessary to permit sales of their securities pursuant to Rules 144 and 144A.  The Issuer covenants that it will take such further action as any Holder of Initial Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Initial Securities without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)).  The Issuer will provide a copy of this Agreement to prospective purchasers of Initial Securities identified to the Issuer by the Initial Purchasers upon request.  Upon the request of any Holder of Initial Securities, the Issuer shall deliver to such Holder a written statement as to whether it has complied with such requirements.  Notwithstanding the foregoing, nothing in this Section 8 shall be deemed to require the Issuer to register any of its securities pursuant to the Exchange Act.

 

9.  Underwritten Registrations.  (a)  If any of the Transfer Restricted Securities covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering (“Managing Underwriters”) will be selected by the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities to be included in such offering.

 

(b)           No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person’s Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.

  

10.  Miscellaneous.

(a)           Remedies.  The Issuer and the Guarantors acknowledge and agree that any failure by the Issuer and the Guarantors to comply with their obligations under Section 2 and 3 hereof may result in material irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to specifically enforce the Issuer’s and the Guarantors’ obligations under Sections 2 and 3 hereof.  The Issuer and the Guarantors further agree to waive the defense in any action for specific performance that a remedy at law would be adequate.

 

(b)           No Inconsistent Agreements.  The Issuer will not on or after the date of this Agreement enter into any agreement with respect to its U.S. dollar-denominated debt securities that are substantially similar to the Securities, which agreement is inconsistent with the rights granted to the Holders in this Agreement or enter into any agreement that otherwise conflicts with the provisions hereof.  The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Issuer’s securities under any agreement in effect on the date hereof.

 

(c)           Amendments and Waivers.  The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, except by the Issuer and the written consent of the Holders of a majority in principal amount of the Securities affected by such amendment, modification, supplement, waiver or consents.

 

(d)           Notices.  All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, first-class mail, facsimile transmission, or air courier which guarantees overnight delivery:

 

(1)  if to a Holder of the Securities, at the most current address given by such Holder to the Issuer.

 

(2)  if to the Initial Purchasers;

 

c/o Morgan Stanley & Co. LLC

1585 Broadway

New York, New York 10036

Facsimile:   ###-###-####

Attention:  High Yield New Issue Group

 

with a copy to:

 

Shearman & Sterling LLP

599 Lexington Avenue

New York, New York 10022

Facsimile:   ###-###-####

Attention:  Jason Lehner

 

(3)  if to the Issuer, at its address as follows:

 

Consolidated Communications, Inc.

121 South 17th Street

Mattoon, Illinois 61938

Facsimile:   ###-###-####

Attention:  Steven L. Childers

with a copy to:

 

Schiff Hardin LLP

233 South Wacker Drive, Suite 6600

Chicago, Illinois 60606

Facsimile:   ###-###-####

Attention: Alexander Young

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged by recipient’s facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier guaranteeing next day delivery.  Notices with respect to Global Notes will be deemed given when notice is electronically sent to DTC.

 

(e)  Third Party Beneficiaries.  The Holders shall be third party beneficiaries to the agreements made hereunder between the Issuer and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent they may deem such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder.

 

(f)  Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders.  If any transferee of any Holder shall acquire Transfer Restricted Securities, in any manner, whether by operation of law or otherwise, such Transfer Restricted Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Transfer Restricted Securities such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such person shall be entitled to receive the benefits hereof.  No Initial Purchaser (in their capacity as Initial Purchasers) shall have any liability or obligation to the Issuer with respect to any failure by a Holder to comply with, or any breach by any Holder of, any of the obligations of such Holder under this Agreement.

 

(g)  Counterparts.  This Agreement may be executed in any number of counterparts (including by electronic transmission) and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  The exchange of copies of this Agreement and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Agreement as to the parties hereto and may be used in lieu of the original Agreement for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

(h)  Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

(i)  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

(j)  Severability.  If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

(k)  Securities Held by the Issuer.  Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities is required hereunder, Securities held by the Issuer or its affiliates (other than subsequent Holders of Securities if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

 

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Issuer a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the several Initial Purchasers and the Issuer in accordance with its terms.

[Signature Pages Follow]

  

 

The Issuer will not receive any proceeds from any sale of Exchange Securities by broker-dealers. Exchange Securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Exchange Securities. Any broker-dealer that resells Exchange Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of Exchange Securities and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

 

For a period of 180 days after the Expiration Date, or such shorter period during which participating broker-dealers are required by law to deliver such a prospectus, the Issuer will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Issuer and the Guarantors have agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the Holders of the Securities) other than commissions or   concessions of any brokers or dealers and will indemnify the Holders of the Securities (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act. 

(1)   In addition, the legend required by Item 502(b) of Regulation S-K will appear on the back cover page of the Exchange Offer prospectus. This sentence may be deleted if such delivery requirements do not apply under Rule 174 of the Securities Act.

 

 

 

 

o CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

 

Name:
Address:

 

If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is a broker-dealer that will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.