Blog: CONSOLIDATED COMMUNICATIONS HOLDINGS, INC. : Entry into a Material Definitive Agreement, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) –

Item 1.01 Entry into a Material Definitive Agreement

On August 1, 2022, Clio Subsidiary, LLC (“Clio Subsidiary”), a Delaware limited
liability company and indirect, wholly-owned subsidiary of Consolidated
Communications Holdings, Inc., a Delaware corporation (“Consolidated
Communications”), entered into a Partnership Interest Purchase Agreement (the
“Purchase Agreement”) with Cellco Partnership, a Delaware general partnership
doing business as Verizon Wireless (“Verizon”) and the General Partner of the
Partnerships (as defined below), and, solely for the purposes of certain
provisions specified therein, Consolidated Communications Enterprise Services,
Inc. (“Consolidated Communications Enterprise Services”).

The Purchase Agreement provides that, upon the terms and subject to the
conditions set forth therein, Verizon will acquire the entirety of Clio
Subsidiary’s limited partnership interests (each, a “Partnership Interest” and
collectively, the “Partnership Interests”) in Pittsburgh SMSA Limited
Partnership, GTE Mobilnet of Texas RSA #17 Limited Partnership, GTE Mobilnet of
South Texas Limited Partnership, Pennsylvania RSA No. 6(I) Limited Partnership
and Pennsylvania RSA No. 6(II) Limited Partnership (each, a “Partnership” and
collectively, the “Partnerships”) in exchange for an aggregate purchase price of
$490 million in cash, subject to certain potential adjustments.

Under the partnership agreements of the Partnerships, the transfer of each of
the Partnership Interests is subject to a right of first refusal (“ROFR”) in
favor of the other partners of such Partnerships (other than the Pittsburgh SMSA
Limited Partnership, in which the sole limited partners are Clio Subsidiary and
affiliates of Verizon). Additionally, the transfer of the Partnership Interest
in Pennsylvania RSA No. 6(II) Limited Partnership is subject to certain
tag-along rights in favor of another limited partner thereof. The Purchase
Agreement contains customary representations, warranties and covenants given by
Clio Subsidiary and Verizon. The consummation of the purchase of each
Partnership Interest pursuant to the Purchase Agreement is subject to the
satisfaction or waiver of certain customary closing conditions, including
(i) the accuracy of the representations and warranties of the other party,
subject to specified materiality standards; (ii) performance by the other party
in all material respects of its obligations under the Purchase Agreement;
(iii) the absence of any order, injunction, or decree of any court or government
agency restraining or prohibiting the consummation of such purchase; and
(iv) certain matters relating to the ROFRs and tag-along rights referenced
above. The Purchase Agreement also contains termination rights for each of Clio
Subsidiary and Verizon with respect to any Partnership Interest, and
indemnification provisions that would apply following each applicable closing.

The foregoing description of the Purchase Agreement does not purport to be
complete, and is qualified in its entirety by reference to the full text of the
Purchase Agreement, which is filed herewith as Exhibit 2.1 and is incorporated
herein by reference. Such exhibit has been included herein to provide investors
with information regarding the terms of the Purchase Agreement. It is not
intended to provide any other factual information about Consolidated
Communications, Clio Subsidiary, Verizon or any of their respective subsidiaries
or affiliates. The representations, warranties and covenants contained in the
Purchase Agreement were made only for purposes of such Purchase Agreement and as
of specific dates; were made solely for the benefit of the parties to such
Purchase Agreement; may be subject to limitations agreed upon by the parties
thereto, including being qualified by confidential disclosures; may not have
been intended to be statements of fact, but rather, as a method of allocating
contractual risk and governing the contractual rights and relationships between
the parties to such Purchase Agreement; and may be subject to standards of
materiality applicable to the parties that differ from those applicable to
investors. Investors should not rely on the representations, warranties and
covenants or any descriptions thereof as characterizations of the actual state
of facts or condition of Consolidated Communications, Clio Subsidiary, Verizon
or any of their respective subsidiaries or affiliates. Moreover, information
concerning the subject matter of the representations, warranties and covenants
may change after the date of the Purchase Agreement, which subsequent
information may or may not be fully reflected in Consolidated Communications’
public disclosures.

Item 7.01. Regulation FD Disclosure

On August 1, 2022, Consolidated Communications issued a press release announcing
Clio Subsidiary’s and Consolidated Communications Enterprise Services’ entry
into the Purchase Agreement. The press release is attached as Exhibit 99.1 to
this Current Report on Form 8-K and is incorporated herein by reference.



In accordance with General Instructions B.2 of Form 8-K, the information in this
Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that section, nor shall such information be deemed incorporated
by reference in any filing under the Securities Act of 1933, as amended, except
as shall be expressly set forth by specific reference in such a filing. The
information set forth herein will not be deemed an admission as to the
materiality of any information required to be disclosed solely to satisfy the
requirements of Regulation FD.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

  No.                               Description of Exhibit

 2.1          Partnership Interest Purchase Agreement, dated as of August 1, 2022,
            by and among Cellco Partnership, Clio Subsidiary, LLC and, solely for
            the purposes of certain provisions specified therein, Consolidated
            Communications Enterprise Services, Inc.†

99.1          Press Release, dated as of August 1, 2022.

104         Cover Page Interactive Data File (embedded within the Inline XBRL

† Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2)

    of Regulation S-K. The Company agrees to furnish supplementally a copy of any
    omitted schedule or exhibit to the SEC upon its request.

                                *      *      *

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this Current Report on Form 8-K are forward-looking
statements and are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
reflect, among other things, our current expectations, plans, strategies, and
anticipated financial results. There are a number of risks, uncertainties, and
conditions that may cause our actual results to differ materially from those
expressed or implied by these forward-looking statements. These risks and
uncertainties include a number of factors related to our business, including the
uncertainties relating to the impact of the novel coronavirus (COVID-19)
pandemic on the Company’s business, results of operations, cash flows, stock
price and employees; the possibility that any of the anticipated benefits of the
strategic investment from Searchlight Capital Partners, L.P. or our refinancing
of outstanding debt, including our senior secured credit facilities, or of the
proposed sales of the limited partnership interests will not be realized; the
ability to meet closing conditions to the proposed sales of the limited
partnership interests on a timely basis or at all; the anticipated use of
proceeds of the strategic investment or the proposed sales of the limited
partnership interests; the outcome of any legal proceedings that may be
instituted against the Company or its directors; economic and financial market
conditions generally and economic conditions in our service areas; various risks
to the price and volatility of our common stock; changes in the valuation of
pension plan assets; the substantial amount of debt and our ability to repay or
refinance it or incur additional debt in the future; our need for a significant
amount of cash to service and repay the debt restrictions contained in our debt
agreements that limit the discretion of management in operating the business;
regulatory changes, including changes to subsidies, rapid development and
introduction of new technologies and intense competition in the
telecommunications industry; risks associated with our possible pursuit of or
failure to consummate acquisitions or dispositions; system failures;
cyber-attacks, information or security breaches or technology failure of ours or
of a third party; 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; new or changing tax laws or regulations; telecommunications carriers
disputing and/or avoiding their obligations to pay network access charges for
use of our 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; risks
associated with discontinuing paying dividends on our common stock; and the
potential for the rights of our series A preferred stock to negatively impact



our cash flow. A detailed discussion of these and other risks and uncertainties
that could cause actual results and events to differ materially from such
forward-looking statements are discussed in more detail in our filings with the
Securities and Exchange Commission (“SEC”), including our reports on Form 10-K
and Form 10-Q. Many of these circumstances are beyond our ability to control or
predict. Moreover, forward-looking statements necessarily involve assumptions on
our part. 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 its subsidiaries to be different from those
expressed or implied in the forward-looking statements. All forward-looking
statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the cautionary statements that appear throughout
this Current Report on Form 8-K. 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, we disclaim any
intention or obligation to update or revise publicly any forward-looking
statements. You should not place undue reliance on forward-looking statements.



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