Exhibit 10.3
EXECUTION COPY
 
 
GUARANTY AGREEMENT
dated as of December 31, 2007
by and among
CONSOLIDATED COMMUNICATIONS HOLDINGS, INC.,
and certain of its Subsidiaries
as Guarantors,
in favor of
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
 
 

 

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TABLE OF CONTENTS

                              Page   ARTICLE I DEFINED TERMS     1  
 
  SECTION 1.1   Definitions     1  
 
  SECTION 1.2   Other Definitional Provisions     2  
 
                ARTICLE II GUARANTY     2  
 
  SECTION 2.1   Guaranty     2  
 
  SECTION 2.2   Bankruptcy Limitations on Guarantors     2  
 
  SECTION 2.3   Agreements for Contribution     3  
 
  SECTION 2.4   Nature of Guaranty     4  
 
  SECTION 2.5   Waivers     5  
 
  SECTION 2.6   Modification of Loan Documents, etc     6  
 
  SECTION 2.7   Demand by the Administrative Agent     6  
 
  SECTION 2.8   Remedies     7  
 
  SECTION 2.9   Benefits of Guaranty     7  
 
  SECTION 2.10   Termination; Reinstatement     7  
 
  SECTION 2.11   Payments     8  
 
                ARTICLE III REPRESENTATIONS AND WARRANTIES     8  
 
  SECTION 3.1   Organization, etc     8  
 
  SECTION 3.2   Due Authorization; Non-Contravention, etc     8  
 
  SECTION 3.3   Governmental Approval, Regulation, etc     8  
 
  SECTION 3.4   Validity, etc     8  
 
  SECTION 3.5   Litigation     9  
 
  SECTION 3.6   Solvency     9  
 
                ARTICLE IV MISCELLANEOUS     9  
 
  SECTION 4.1   Notices     9  
 
  SECTION 4.2   Amendments in Writing     9  
 
  SECTION 4.3   Expenses; Indemnification; Waiver of Consequential Damages, etc
    9  
 
  SECTION 4.4   Right of Set-off     10  
 
  SECTION 4.5   Governing Law; Jurisdiction; Venue; Service of Process     10  
 
  SECTION 4.6   Waiver of Jury Trial     11  
 
  SECTION 4.7   No Waiver by Course of Conduct, Cumulative Remedies     11  
 
  SECTION 4.8   Successors and Assigns     11  
 
  SECTION 4.9   Survival of Indemnities     11  
 
  SECTION 4.10   Titles and Captions     11  
 
  SECTION 4.11   Severability of Provisions     11  
 
  SECTION 4.12   Counterparts     11  
 
  SECTION 4.13   Integration     12  
 
  SECTION 4.14   Advice of Counsel, No Strict Construction     12  
 
  SECTION 4.15   Acknowledgements     12  
 
  SECTION 4.16   Releases     12  
 
  SECTION 4.17   Additional Guarantors     12  

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     GUARANTY AGREEMENT (as amended, restated, supplemented or otherwise
modified, this “Guaranty” or this “Agreement”), dated as of December 31, 2007,
is made by CONSOLIDATED COMMUNICATIONS HOLDINGS, INC., a Delaware corporation
(“Holdings”), and certain of its Subsidiaries as identified on the signature
pages hereto and any Additional Guarantor (as defined below) who may become
party to this Guaranty (such Subsidiaries and Additional Guarantors,
collectively, with Holdings, the “Guarantors”, each, a “Guarantor”), in favor of
WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent (in such capacity,
the “Administrative Agent”) for the ratable benefit itself and the Guaranteed
Parties (as defined below).
STATEMENT OF PURPOSE
     Reference is hereby made to the Credit Agreement, dated of even date
herewith (as amended, restated, supplemented or otherwise modified, the “Credit
Agreement”), by and among Holdings, each of CONSOLIDATED COMMUNICATIONS, INC.,
an Illinois corporation (the “CCI Borrower”), CONSOLIDATED COMMUNICATIONS
ACQUISITION TEXAS, INC., a Delaware corporation (the “TXU Borrower”), and FORT
PITT ACQUISITION SUB INC., a Pennsylvania corporation (the “Merger Sub”, and
together with the CCI Borrower and the TXU Borrower, the “Borrowers”), the banks
and other financial institutions who are or may become party thereto (the
“Lenders”), the Administrative Agent, CoBank, ACB, as Syndication Agent, General
Electric Capital Corporation, as Co-Documentation Agent, The Royal Bank of
Scotland plc, as Co-Documentation Agent and Wachovia Capital Markets, LLC, as
sole lead arranger and sole bookrunner.
     Pursuant to the terms of the Credit Agreement, the Lenders have agreed to
extend certain credit facilities to the Borrowers upon the terms and subject to
the conditions set forth therein.
     The Borrowers and the Guarantors, though separate legal entities, comprise
one integrated financial enterprise, and the extension of such credit facilities
to the Borrowers will inure, directly or indirectly, to the benefit of the
Guarantors.
     It is a condition precedent to the obligation of the Lenders to extend
those certain credit facilities to the Borrowers under the Credit Agreement that
the Guarantors shall have executed and delivered this Guaranty to the
Administrative Agent, for the ratable benefit of the Guaranteed Parties.
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, and to
induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to extend those certain credit facilities to
the Borrowers thereunder, the Guarantors hereby agree with the Administrative
Agent, for the ratable benefit of the Guaranteed Parties, as follows:
ARTICLE I
DEFINED TERMS
     SECTION 1.1 Definitions. The following terms when used in this Guaranty
shall have the meanings assigned to them below:
     “Additional Guarantor” means each Domestic Subsidiary of any Borrower which
hereafter becomes a Guarantor pursuant to Section 4.17 hereof and Section 5.16
of the Credit Agreement.

 

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     “Applicable Insolvency Laws” means all Applicable Laws governing
bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar
laws (including, without limitation, 11 U.S.C. Sections 544, 547, 548 and 550
and other “avoidance” provisions of Title 11 of the United States Code, as
amended or supplemented).
     “Guaranteed Obligations” has the meaning set forth in Section 2.1.
     “Guaranteed Parties” means (a) the Administrative Agent, (b) the Lenders,
(c) each Secured Hedging Provider, (d) any other holder from time to time of the
Guaranteed Obligations and (e) the successors and permitted assigns of each of
the foregoing.
     “Solvent” means, as to each Guarantor on a particular date, that such
Guarantor (a) has capital sufficient to carry on its business and transactions
and all business and transactions in which it is about to engage and is able to
pay its debts as they mature, (b) has assets having a value, both at fair
valuation and at present fair saleable value, greater than the amount required
to pay its probable liabilities (including contingencies), and (c) does not
believe that it will incur debts or liabilities beyond its ability to pay such
debts or liabilities as they mature, subject in each case to the first sentence
in Section 2.2 hereof.
     SECTION 1.2 Other Definitional Provisions. Capitalized terms used and not
otherwise defined in this Guaranty including the preambles and recitals hereof
shall have the meanings ascribed to them in the Credit Agreement. In the event
of a conflict between capitalized terms defined herein and in the Credit
Agreement, this Guaranty shall control. The words “hereof,” “herein”, “hereto”
and “hereunder” and words of similar import when used in this Guaranty shall
refer to this Guaranty as a whole and not to any particular provision of this
Guaranty, and Section references are to this Guaranty unless otherwise
specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. Where the
context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Guarantor, shall refer to such Guarantor’s Collateral or
the relevant part thereof.
ARTICLE II
GUARANTY
     SECTION 2.1 Guaranty. Each Guarantor hereby, jointly and severally with the
other Guarantors, unconditionally guarantees to the Administrative Agent for the
ratable benefit of the Guaranteed Parties the prompt payment and performance of
all Obligations whether primary or secondary (whether by way of endorsement or
otherwise), whether now existing or hereafter arising, whether or not from time
to time reduced or extinguished (except by payment thereof) or hereafter
increased or incurred, whether enforceable or unenforceable as against the
Borrowers or any other Person, whether or not discharged, stayed or otherwise
affected by any Applicable Insolvency Law or proceeding thereunder, whether
created directly with the Administrative Agent or any other Guaranteed Party or
acquired by the Administrative Agent or any other Guaranteed Party through
assignment or endorsement or otherwise, whether matured or unmatured, whether
joint or several, as and when the same become due and payable (whether at
maturity or earlier, by reason of acceleration, mandatory repayment or
otherwise), in accordance with the terms of any such instruments evidencing any
such obligations, including all renewals, extensions or modifications thereof
(all Obligations, including all of the foregoing being hereafter collectively
referred to as the “Guaranteed Obligations”).
     SECTION 2.2 Bankruptcy Limitations on Guarantors. Notwithstanding anything
to the contrary contained in Section 2.1, it is the intention of each Guarantor
and the Guaranteed Parties that, in

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any proceeding involving the bankruptcy, reorganization, arrangement, adjustment
of debts, relief of debtors, dissolution or insolvency or any similar proceeding
with respect to any Guarantor or its assets, the amount of such Guarantor’s
obligations with respect to the Guaranteed Obligations shall be equal to, but
not in excess of, the maximum amount thereof not subject to avoidance or
recovery by operation of Applicable Insolvency Laws after giving effect to
Section 2.3(a). To that end, but only in the event and to the extent that after
giving effect to Section 2.3(a) such Guarantor’s obligations with respect to the
Guaranteed Obligations or any payment made pursuant to such Guaranteed
Obligations would, but for the operation of the first sentence of this
Section 2.2, be subject to avoidance or recovery in any such proceeding under
Applicable Insolvency Laws after giving effect to Section 2.3(a), the amount of
such Guarantor’s obligations with respect to the Guaranteed Obligations shall be
limited to the largest amount which, after giving effect thereto, would not,
under Applicable Insolvency Laws, render such Guarantor’s obligations with
respect to the Guaranteed Obligations unenforceable or avoidable or otherwise
subject to recovery under Applicable Insolvency Laws. To the extent any payment
actually made pursuant to the Guaranteed Obligations exceeds the limitation of
the first sentence of this Section 2.2 and is otherwise subject to avoidance and
recovery in any such proceeding under Applicable Insolvency Laws, the amount
subject to avoidance shall in all events be limited to the amount by which such
actual payment exceeds such limitation and the Guaranteed Obligations as limited
by the first sentence of this Section 2.2 shall in all events remain in full
force and effect and be fully enforceable against such Guarantor. The first
sentence of this Section 2.2 is intended solely to preserve the rights of the
Administrative Agent hereunder against such Guarantor in such proceeding to the
maximum extent permitted by Applicable Insolvency Laws and neither such
Guarantor, the Borrowers, any other Guarantor nor any other Person shall have
any right or claim under such sentence that would not otherwise be available
under Applicable Insolvency Laws in such proceeding.
     SECTION 2.3 Agreements for Contribution.
     (a) The Guarantors hereby agree among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor’s Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 2.3(a) shall be
subordinate and subject in right of payment to the Guaranteed Obligations until
such time as the Guaranteed Obligations have been paid in full, and none of the
Guarantors shall exercise any right or remedy under this Section 2.3(a) against
any other Guarantor until such Guaranteed Obligations have been paid in full.
For purposes of this Section 2.3(a), (i) “Excess Payment” shall mean the amount
paid by any Guarantor in excess of its Ratable Share of any Guaranteed
Obligations; (ii) “Ratable Share” shall mean, for any Guarantor in respect of
any payment of Guaranteed Obligations, the ratio (expressed as a percentage) as
of the date of such payment of Guaranteed Obligations of (A) the amount by which
the aggregate present fair salable value of all of its assets and properties
exceeds the amount of all debts and liabilities of such Guarantor (including
probable, contingent, subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of such Guarantor hereunder) to (B) the amount by
which the aggregate present fair salable value of all assets and other
properties of all of the Guarantors exceeds the amount of all of the debts and
liabilities (including probable, contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of the Guarantors
hereunder) of the Guarantors; provided, however, that, for purposes of
calculating the Ratable Shares of the Guarantors in respect of any payment of
Guaranteed Obligations, any Guarantor that became a Guarantor subsequent to the
date of any such payment shall be deemed to have been a Guarantor on the date of
such payment and the financial information for such Guarantor as of the date
such Guarantor became a Guarantor shall be utilized for such Guarantor in
connection with such payment; and (iii) “Contribution Share” shall mean, for any
Guarantor in respect of any Excess Payment made by any other Guarantor, the
ratio (expressed as a percentage) as of the date of such Excess Payment of
(A) the amount by which the aggregate present fair salable value of all of its
assets and properties exceeds the amount of all debts and liabilities of such

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Guarantor (including probable, contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (B) the amount by which the aggregate present fair salable value
of all assets and other properties of the Guarantors other than the maker of
such Excess Payment exceeds the amount of all of the debts and liabilities
(including probable, contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Guarantors) of the Guarantors
other than the maker of such Excess Payment; provided, however, that, for
purposes of calculating the Contribution Shares of the Guarantors in respect of
any Excess Payment, any Guarantor that became a Guarantor subsequent to the date
of any such Excess Payment shall be deemed to have been a Guarantor on the date
of such Excess Payment and the financial information for such Guarantor as of
the date such Guarantor became a Guarantor shall be utilized for such Guarantor
in connection with such Excess Payment. Each of the Guarantors recognizes and
acknowledges that the rights to contribution arising hereunder shall constitute
an asset in favor of the party entitled to such contribution. This
Section 2.3(a) shall not be deemed to affect any right of subrogation,
indemnity, reimbursement or contribution that any Guarantor may have under
Applicable Law against the Borrowers in respect of any payment of Guaranteed
Obligations.
     (b) No Subrogation. Notwithstanding any payment or payments by any of the
Guarantors hereunder, or any set-off or application of funds of any of the
Guarantors by the Administrative Agent or any other Guaranteed Party, or the
receipt of any amounts by the Administrative Agent or any other Guaranteed Party
with respect to any of the Guaranteed Obligations, none of the Guarantors shall
be entitled to be subrogated to any of the rights of the Administrative Agent or
any other Guaranteed Party against the Borrowers or the other Guarantors or
against any collateral security held by the Administrative Agent or any other
Guaranteed Party for the payment of the Guaranteed Obligations nor shall any of
the Guarantors seek any reimbursement from the Borrowers or any of the other
Guarantors in respect of payments made by such Guarantor in connection with the
Guaranteed Obligations, until all amounts owing to the Administrative Agent and
the other Guaranteed Parties on account of the Guaranteed Obligations are paid
in full and the Commitments are terminated. If any amount shall be paid to any
Guarantor on account of such subrogation rights at any time when all of the
Guaranteed Obligations shall not have been paid in full, such amount shall be
held by such Guarantor in trust for the Administrative Agent, segregated from
other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Administrative Agent in the exact form received
by such Guarantor (duly endorsed by such Guarantor to the Administrative Agent,
if required) to be applied against the Guaranteed Obligations, whether matured
or unmatured, in such order as set forth in the Credit Agreement.
     SECTION 2.4 Nature of Guaranty.
     (a) Each Guarantor agrees that this Guaranty is a continuing, unconditional
guaranty of payment and performance and not of collection, and that its
obligations under this Guaranty shall be primary, absolute and unconditional,
irrespective of, and unaffected by:
     (i) the genuineness, validity, regularity, enforceability or any future
amendment of, or change in, the Credit Agreement or any other Loan Document or
any other agreement, document or instrument to which the Borrowers or any
Guarantor is or may become a party;
     (ii) the absence of any action to enforce this Guaranty, the Credit
Agreement or any other Loan Document or the waiver or consent by the
Administrative Agent or any other Guaranteed Party with respect to any of the
provisions of this Guaranty, the Credit Agreement or any other Loan Document;
     (iii) the existence, value or condition of, or failure to perfect its Lien
against, any security for or other guaranty of the Guaranteed Obligations or any
action, or the absence of any

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action, by the Administrative Agent or any other Guaranteed Party in respect of
such security or guaranty (including, without limitation, the release of any
such security or guaranty); or
     (iv) any other action or circumstances which might otherwise constitute a
legal or equitable discharge or defense of a surety or guarantor;
it being agreed by each Guarantor that, subject to the first sentence of
Section 2.2, its obligations under this Guaranty shall not be discharged until
the final indefeasible payment and performance, in full, of the Guaranteed
Obligations and the termination of the Commitments.
     (b) Each Guarantor represents, warrants and agrees that its obligations
under this Guaranty are not and shall not be subject to any counterclaims,
offsets or defenses of any kind (other than the defense of payment) against the
Administrative Agent, the other Guaranteed Parties or the Borrowers whether now
existing or which may arise in the future.
     (c) Each Guarantor hereby agrees and acknowledges that the Guaranteed
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guaranty, and all dealings between the Borrowers and any of the
Guarantors, on the one hand, and the Administrative Agent and the other
Guaranteed Parties, on the other hand, likewise shall be conclusively presumed
to have been had or consummated in reliance upon this Guaranty.
     SECTION 2.5 Waivers. To the extent permitted by law, each Guarantor
expressly waives all of the following rights and defenses (and agrees not to
take advantage of or assert any such right or defense):
     (a) any rights it may now or in the future have under any statute, or at
law or in equity, or otherwise, to compel the Administrative Agent or any other
Guaranteed Party to proceed in respect of the Guaranteed Obligations against the
Borrowers or any other Person or against any security for or other guaranty of
the payment and performance of the Guaranteed Obligations before proceeding
against, or as a condition to proceeding against, such Guarantor;
     (b) any defense based upon the failure of the Administrative Agent or any
other Guaranteed Party to commence an action in respect of the Guaranteed
Obligations against the Borrowers, such Guarantor, any other guarantor or any
other Person or any security for the payment and performance of the Guaranteed
Obligations;
     (c) any right to insist upon, plead or in any manner whatever claim or take
the benefit or advantage of, any appraisal, valuation, stay, extension,
marshalling of assets or redemption laws, or exemption, whether now or at any
time hereafter in force, which may delay, prevent or otherwise affect the
performance by such Guarantor of its obligations under, or the enforcement by
the Administrative Agent or the other Guaranteed Parties of this Guaranty;
     (d) any right of diligence, presentment, demand, protest and notice (except
as specifically required herein) of whatever kind or nature with respect to any
of the Guaranteed Obligations and waives, to the extent permitted by Applicable
Laws, the benefit of all provisions of law which are or might be in conflict
with the terms of this Guaranty; and
     (e) any and all right to notice of the creation, renewal, extension or
accrual of any of the Guaranteed Obligations and notice of or proof of reliance
by the Administrative Agent or any other Guaranteed Party upon, or acceptance
of, this Guaranty.

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     Each Guarantor agrees that any notice or directive given at any time to the
Administrative Agent or any other Guaranteed Party which is inconsistent with
any of the foregoing waivers shall be null and void and may be ignored by the
Administrative Agent or such other Guaranteed Party, and, in addition, may not
be pleaded or introduced as evidence in any litigation relating to this Guaranty
for the reason that such pleading or introduction would be at variance with the
written terms of this Guaranty, unless the Administrative Agent and the
Requisite Lenders have specifically agreed otherwise in writing. The foregoing
waivers are of the essence of the transaction contemplated by the Credit
Agreement and the other Loan Documents and, but for this Guaranty and such
waivers, the Administrative Agent and Lenders would decline to enter into the
Credit Agreement and the other Loan Documents.
     SECTION 2.6 Modification of Loan Documents, etc. Neither the Administrative
Agent nor any other Guaranteed Party shall incur any liability to any Guarantor
as a result of any of the following, and none of the following shall impair or
release this Guaranty or any of the obligations of any Guarantor under this
Guaranty:
     (a) any change or extension of the manner, place or terms of payment of, or
renewal or alteration of all or any portion of, the Guaranteed Obligations;
     (b) any action under or in respect of the Credit Agreement or the other
Loan Documents in the exercise of any remedy, power or privilege contained
therein or available to any of them at law, in equity or otherwise, or waiver or
refraining from exercising any such remedies, powers or privileges;
     (c) any amendment to, or modification of, in any manner whatsoever, the
Loan Documents;
     (d) any extension or waiver of the time for performance by any Guarantor,
any other guarantor, the Borrowers or any other Person of, or compliance with,
any term, covenant or agreement on its part to be performed or observed under a
Loan Document, or waiver of such performance or compliance or consent to a
failure of, or departure from, such performance or compliance;
     (e) the taking and holding of security or collateral for the payment of the
Guaranteed Obligations or the sale, exchange, release, disposal of, or other
dealing with, any property pledged, mortgaged or conveyed, or in which the
Administrative Agent or the other Guaranteed Parties have been granted a Lien,
to secure any Indebtedness of any Guarantor, any other guarantor or the
Borrowers to the Administrative Agent or the other Guaranteed Parties;
     (f) the release of anyone who may be liable in any manner for the payment
of any amounts owed by any Guarantor, any other guarantor or the Borrowers to
the Administrative Agent or any other Guaranteed Party;
     (g) any modification or termination of the terms of any intercreditor or
subordination agreement pursuant to which claims of other creditors of any
Guarantor, any other guarantor or the Borrowers are subordinated to the claims
of the Administrative Agent or any other Guaranteed Party; or
     (h) any application of any sums by whomever paid or however realized to any
Guaranteed Obligations owing by any Guarantor, any other guarantor or the
Borrowers to the Administrative Agent or any other Guaranteed Party in such
manner as the Administrative Agent or any other Guaranteed Party shall determine
in its reasonable discretion.
     SECTION 2.7 Demand by the Administrative Agent. In addition to the terms
set forth in this Article II and in no manner imposing any limitation on such
terms, if all or any portion of the then outstanding Guaranteed Obligations are
declared to be immediately due and payable, then the Guarantors

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shall, upon demand in writing therefor by the Administrative Agent to the
Guarantors, pay all or such portion of the outstanding Guaranteed Obligations
due hereunder then declared due and payable.
     SECTION 2.8 Remedies. Upon the occurrence and during the continuance of any
Event of Default, with the consent of the Requisite Lenders, the Administrative
Agent may, or upon the request of the Requisite Lenders, the Administrative
Agent shall, enforce against the Guarantors their obligations and liabilities
hereunder and exercise such other rights and remedies as may be available to the
Administrative Agent hereunder, under the Credit Agreement or the other Loan
Documents or otherwise.
     SECTION 2.9 Benefits of Guaranty. The provisions of this Guaranty are for
the benefit of the Administrative Agent and the other Guaranteed Parties and
their respective permitted successors, transferees, endorsees and assigns, and
nothing herein contained shall impair, as between the Borrowers, the
Administrative Agent and the other Guaranteed Parties, the obligations of the
Borrowers under the Loan Documents. In the event all or any part of the
Guaranteed Obligations are transferred, endorsed or assigned by the
Administrative Agent or any other Guaranteed Party to any Person or Persons as
permitted under the Credit Agreement, any reference to an “Administrative
Agent”, or “Guaranteed Party” herein shall be deemed to refer equally to such
Person or Persons.
     SECTION 2.10 Termination; Reinstatement.
     (a) Subject to clause (c) below, this Guaranty shall remain in full force
and effect until all the Guaranteed Obligations and all the obligations of the
Guarantors shall have been paid in full and the Commitments terminated.
     (b) No payment made by the Borrowers, any Guarantor, or any other Person
received or collected by the Administrative Agent or any other Guaranteed Party
from the Borrowers, any Guarantor, or any other Person by virtue of any action
or proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Guaranteed Obligations shall
be deemed to modify, reduce, release or otherwise affect the liability of any
Guarantor hereunder which shall, notwithstanding any such payment (other than
any payment made by such Guarantor in respect of the obligations of the
Guarantors or any payment received or collected from such Guarantor in respect
of the obligations of the Guarantors), remain liable for the obligations of the
Guarantors up to the maximum liability of such Guarantor hereunder until the
Guaranteed Obligations and all the obligations of the Guarantors shall have been
paid in full and the Commitments terminated.
     (c) Each Guarantor agrees that, if any payment made by the Borrowers or any
other Person applied to the Guaranteed Obligations is at any time annulled, set
aside, rescinded, invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid, or is repaid in whole or in part
pursuant to a good faith settlement of a pending or threatened claim, or the
proceeds of any Collateral are required to be refunded by the Administrative
Agent or any other Guaranteed Party to the Borrowers, their respective estates,
trustees, receivers or any other Person, including, without limitation, any
Guarantor, under any Applicable Law or equitable cause, then, to the extent of
such payment or repayment, each Guarantor’s liability hereunder (and any Lien or
Collateral securing such liability) shall be and remain in full force and
effect, as fully as if such payment had never been made, and, if prior thereto,
this Guaranty shall have been canceled or surrendered (and if any Lien or
Collateral securing such Guarantor’s liability hereunder shall have been
released or terminated by virtue of such cancellation or surrender), this
Guaranty (and such Lien or Collateral) shall be reinstated in full force and
effect, and such prior cancellation or surrender shall not diminish, release,
discharge, impair or otherwise affect the obligations of such Guarantor in
respect of the amount of such payment (or any Lien or Collateral securing such
obligation).

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     SECTION 2.11 Payments. Payments by the Guarantors shall be made to the
Administrative Agent, to be credited and applied to the Guaranteed Obligations
in accordance with Section 7.05 of the Credit Agreement, in immediately
available Dollars to an account designated by the Administrative Agent or at the
Administrative Agent’s Office or at any other address that may be specified in
writing from time to time by the Administrative Agent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
     To induce the Administrative Agent and the Lenders to extend credit under
the Credit Agreement and the other Loan Documents, each Guarantor hereby
represents and warrants that:
     SECTION 3.1 Organization, etc. Such Guarantor (a) is a corporation,
partnership or other form of legal entity, validly organized and existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization, as the case may be, (b) has all requisite corporate or other power
and authority to carry on its business as now conducted, (c) is duly qualified
to do business and is in good standing as a foreign corporation or foreign
partnership (or comparable foreign qualification, if applicable, in the case of
any other form of legal entity), as the case may be, in each jurisdiction where
the nature of its business requires such qualification, except where the failure
to so qualify will not have a Material Adverse Effect and (d) has full power and
authority and holds all requisite material governmental licenses, permits and
other approvals to enter into and perform its obligations under this Agreement
and each other Loan Document to which it is a party and to own or hold under
lease its Property and to conduct its business substantially as currently
conducted by it.
     SECTION 3.2 Due Authorization; Non-Contravention, etc. The execution,
delivery and performance by such Guarantor of this Guaranty are within such
Guarantor’s corporate, partnership or comparable powers, as the case may be,
have been duly authorized by all necessary corporate, partnership or comparable
and, if required, stockholder action, as the case may be, and do not (a)
contravene the Organic Documents of such Guarantor; (b) contravene any material
law, statute, rule or regulation binding on or affecting such Guarantor;
(c) except as set forth on Schedule 3.02(c) of the Credit Agreement, violate or
result in a default or event of default or an acceleration of any rights or
benefits under any material indenture, agreement or other instrument binding
upon such Guarantor; or (d) result in, or require the creation or imposition of,
any Lien on any material asset of such Guarantor, except Liens created under the
Loan Documents.
     SECTION 3.3 Governmental Approval, Regulation, etc. Except as set forth on
Schedule 3.03 of the Credit Agreement, no consent, authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority or
regulatory body or other Person is required for the due execution, delivery or
performance by such Guarantor of this Agreement except such as have been
obtained or made and are in full force and effect and except filings necessary
to perfect Liens under the Security Documents.
     SECTION 3.4 Validity, etc. This Agreement has been duly executed and
delivered by such Guarantor and constitutes, and each other Loan Document to
which such Guarantor is a party will, on the due execution and delivery thereof
and assuming the due execution and delivery of this Agreement by each of the
other parties hereto, constitute, the legal, valid and binding obligation of
such Guarantor enforceable in accordance with its respective terms, subject to
the effect of bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforceability of creditors’ rights generally and to general
principles of equity.

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     SECTION 3.5 Litigation. Except as set forth on Schedule 3.07 to the Credit
Agreement, there is no pending or, to the knowledge of such Guarantor,
threatened litigation, action or proceeding (including, without limitation, any
existing or new litigation relating to the Transactions) affecting such
Guarantor’s operations, properties, businesses, assets or prospects, or the
ability of the parties to consummate the transactions contemplated hereby, which
would have a Material Adverse Effect or which purports to affect the legality,
validity or enforceability of this Guaranty, any other Loan Document or the
transactions contemplated by the Loan Documents.
     SECTION 3.6 Solvency. As of the Closing Date (or such later date upon which
such Guarantor became a party hereto) such Guarantor is Solvent.
ARTICLE IV
MISCELLANEOUS
     SECTION 4.1 Notices. All notices and communications hereunder shall be
given to the addresses and otherwise made in accordance with Section 9.01 of the
Credit Agreement; provided that notices and communications to the Guarantors
shall be directed to the Guarantors, at the address of the Borrower
Representative set forth in Section 9.01 of the Credit Agreement.
     SECTION 4.2 Amendments in Writing. None of the terms or provisions of this
Guaranty may be waived, amended, supplemented or otherwise modified except in
accordance with Section 9.02 of the Credit Agreement.
     SECTION 4.3 Expenses; Indemnification; Waiver of Consequential Damages,
etc.
     (a) Each Guarantor agrees to pay or reimburse each Guaranteed Party and the
Administrative Agent for all its costs and expenses incurred in connection with
enforcing or preserving any rights under this Guaranty and the other Loan
Documents to which such Guarantor is a party, including, without limitation, the
reasonable fees and disbursements of counsel (including the allocated fees and
expenses of in-house counsel) to each Guaranteed Party and of counsel to the
Administrative Agent.
     (b) Each Guarantor agrees to pay, and to save the Administrative Agent and
the other Guaranteed Parties harmless from, any and all liabilities with respect
to, or resulting from any such Guarantor’s delay in paying, any and all stamp,
excise, sales or other taxes which may be payable or determined to be payable in
connection with any of the transactions contemplated by this Guaranty.
     (c) Each Guarantor agrees to pay, and to save the Administrative Agent and
the other Guaranteed Parties harmless from any and all liabilities, obligations,
losses, damages, penalties, costs and expenses in connection with actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Guaranty to the extent the Borrowers would be required to
do so pursuant to Section 9.03 of the Credit Agreement.
     (d) To the fullest extent permitted by Applicable Law, each Guarantor shall
not assert, and hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Guaranty, any other Loan Document or any agreement or instrument
contemplated hereby or the transactions contemplated hereby or thereby. No
Indemnitee referred to in this Section 4.3 shall be liable for any damages
arising from the use by unintended recipients of any information or other
materials distributed by it through telecommunications, electronic or other

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information transmission systems in connection with this Guaranty or the other
Loan Documents or the transactions contemplated hereby or thereby.
     (e) All amounts due under this Section shall be payable promptly after
demand therefor.
     SECTION 4.4 Right of Set-off. If an Event of Default shall have occurred
and be continuing, each Guaranteed Party and its Affiliates is hereby authorized
at any time and from time to time, after obtaining the prior written consent of
the Administrative Agent, to the fullest extent permitted by Applicable Law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Guaranteed Party or
any such Affiliate to or for the credit or the account of such Guarantor against
any and all of the obligations of such Guarantor now or hereafter existing under
this Guaranty or any other Loan Document to such Guaranteed Party, irrespective
of whether or not such Guaranteed Party shall have made any demand under this
Agreement or any other Loan Document and although such obligations of such
Guarantor may be contingent or unmatured or are owed to a branch or office of
such Guaranteed Party different from the branch or office holding such deposit
or obligated on such indebtedness. The rights of each Guaranteed Party and its
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Guaranteed Party or its Affiliates
may have. Each Guaranteed Party agrees to notify such Guarantor and the
Administrative Agent promptly after any such setoff and application; provided
that the failure to give such notice shall not affect the validity of such
setoff and application.
     SECTION 4.5 Governing Law; Jurisdiction; Venue; Service of Process.
     (a) Governing Law. This Guaranty shall be governed by, and construed in
accordance with, the law of the State of New York.
     (b) Submission to Jurisdiction. Each Guarantor irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the courts of the State of New York sitting in New York County
and of the United States District Court of the Southern District of New York,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Guaranty or any other Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State court
or, to the fullest extent permitted by Applicable Law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Guaranty or in any other Loan Document shall affect any right that the
Administrative Agent or any other Guaranteed Party may otherwise have to bring
any action or proceeding relating to this Guaranty or any other Loan Document
against any Guarantor or its properties in the courts of any jurisdiction.
     (c) Waiver of Venue. Each Guarantor irrevocably and unconditionally waives,
to the fullest extent permitted by Applicable Law, any objection that it may now
or hereafter have to the laying of venue of any action or proceeding arising out
of or relating to this Guaranty or any other Loan Document in any court referred
to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by Applicable Law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
     (d) Service of Process. Each party hereto irrevocably consents to service
of process in the manner provided for notices in Section 9.01 of the Credit
Agreement. Nothing in this Guaranty will affect the right of any party hereto to
serve process in any other manner permitted by Applicable Law.

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     SECTION 4.6 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
     SECTION 4.7 No Waiver by Course of Conduct, Cumulative Remedies. Neither
the Administrative Agent nor any other Guaranteed Party shall by any act (except
by a written instrument pursuant to Section 4.2), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising on the part of the Administrative Agent or any other
Guaranteed Party, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent or
any other Guaranteed Party of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the Administrative
Agent or such other Guaranteed Party would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
     SECTION 4.8 Successors and Assigns. This Guaranty shall be binding upon the
successors and assigns of each Guarantor and shall inure to the benefit of each
Guarantor (and shall bind all Persons who become bound as a Guarantor under this
Guaranty), the Administrative Agent and the other Guaranteed Parties and their
successors and assigns; provided that no Guarantor may assign, transfer or
delegate any of its rights or obligations under this Guaranty without the prior
written consent of the Administrative Agent and the Lenders (except as otherwise
provided by the Credit Agreement).
     SECTION 4.9 Survival of Indemnities. Notwithstanding any termination of
this Guaranty, the indemnities to which the Administrative Agent and the other
Guaranteed Parties are entitled under the provisions of Section 4.3 and any
other provision of this Guaranty and the other Loan Documents shall continue in
full force and effect and shall protect the Administrative Agent and the other
Guaranteed Parties against events arising after such termination as well as
before.
     SECTION 4.10 Titles and Captions. Titles and captions of Articles, Sections
and subsections in, and the table of contents of, this Guaranty are for
convenience only, and neither limit nor amplify the provisions of this Guaranty.
     SECTION 4.11 Severability of Provisions. Any provision of this Guaranty or
any other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remainder of such
provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
     SECTION 4.12 Counterparts. This Guaranty may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed

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to be an original, and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to this
Guaranty by facsimile or other electronic transmission shall be effective as
delivery of a manually executed counterpart of this Guaranty.
     SECTION 4.13 Integration. This Guaranty comprises the complete and
integrated agreement of the parties on the subject matter hereof and thereof and
supersedes all prior agreements, written or oral, on such subject matter. In the
event of any conflict between the provisions of this Guaranty and those of any
other Loan Document, the provisions of the Credit Agreement shall control;
provided that any provision of the any other Loan Document which imposes
additional burdens on any Guarantor or further restricts the rights of any
Guarantor or gives the Administrative Agent or other Guaranteed Parties
additional rights shall not be deemed to be in conflict or inconsistent with
this Guaranty and shall be given full force and effect.
     SECTION 4.14 Advice of Counsel, No Strict Construction. Each of the parties
represents to each other party hereto that it has discussed this Guaranty with
its counsel. The parties hereto have participated jointly in the negotiation and
drafting of this Guaranty. In the event an ambiguity or question of intent or
interpretation arises, this Guaranty shall be construed as if drafted jointly by
the parties hereto and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Guaranty.
     SECTION 4.15 Acknowledgements. Each Guarantor hereby acknowledges that:
     (a) neither the Administrative Agent nor any other Guaranteed Party has any
fiduciary relationship with or duty to any Guarantor arising out of or in
connection with this Guaranty or any of the other Loan Documents, and the
relationship between the Guarantors, on the one hand, and the Administrative
Agent and the other Guaranteed Parties, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
     (b) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Guarantors and the Lenders.
     SECTION 4.16 Releases. At such time as the Guaranteed Obligations (other
than Hedging Obligations) shall have been paid in full and the Commitments have
been terminated, this Guaranty and all obligations (other than those expressly
stated to survive such termination) of the Administrative Agent and each
Guarantor hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party.
     SECTION 4.17 Additional Guarantors. Each Subsidiary of a Borrower that is
required to become a party to this Guaranty pursuant to Section 5.16 of the
Credit Agreement shall become a Guarantor for all purposes of this Guaranty upon
execution and delivery by such Subsidiary of a supplement in form and substance
satisfactory to the Administrative Agent.
[Signature Pages to Follow]

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     IN WITNESS WHEREOF, each of the Guarantors has executed and delivered this
Guaranty under seal by their duly authorized officers, all as of the day and
year first above written.

            CONSOLIDATED COMMUNICATIONS HOLDINGS, INC., as Guarantor
      By:   /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer     

[Signature Pages Continue]
[Consolidated Communications Guaranty Agreement]

 

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            CONSOLIDATED COMMUNICATIONS PUBLIC SERVICES, INC., as Guarantor
      By:   /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer        CONSOLIDATED COMMUNICATIONS MARKET
RESPONSE, INC., as Guarantor
      By:   /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer        CONSOLIDATED COMMUNICATIONS OPERATOR
SERVICES, INC., as Guarantor
      By:   /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer        CONSOLIDATED COMMUNICATIONS NETWORK
SERVICES, INC., as Guarantor
      /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer        CONSOLIDATED COMMUNICATIONS MOBILE
SERVICES, INC., as Guarantor
      /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer     

[Signature Pages Continue]
[Consolidated Communications Guaranty Agreement]

 

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            CONSOLIDATED COMMUNICATIONS BUSINESS SYSTEMS, INC., as Guarantor
      By:   /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer        CONSOLIDATED COMMUNICATIONS VENTURES
COMPANY, as Guarantor
      By:   /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer        CONSOLIDATED COMMUNICATIONS SERVICES
COMPANY, as Guarantor
      By:   /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer        CONSOLIDATED COMMUNICATIONS TELECOM
SERVICES OF TEXAS COMPANY, as Guarantor
      By:   /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer        CONSOLIDATED COMMUNICATIONS OF FORT
BEND COMPANY, as Guarantor
      By:   /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer     

[Signature Pages Continue]
[Consolidated Communications Guaranty Agreement]

 

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            CONSOLIDATED COMMUNICATIONS OF TEXAS COMPANY, as Guarantor
      /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer        CONSOLIDATED COMMUNICATIONS TRANSPORT
COMPANY, as Guarantor
      /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer        NORTH PITTSBURGH TELEPHONE COMPANY, as
Guarantor
      By:   /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer        PENN TELECOM, INC., as Guarantor
      By:   /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer        PINNATECH, INC., as Guarantor
      By:   /s/ Steven L. Childers                   Steven L. Childers       
          Chief Financial Officer     

[Signature Pages Continue]
[Consolidated Communications Guaranty Agreement]

 

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            WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent
      By:   /s/ Marc Birenbaum                   Marc Birenbaum       
          Director     

[Consolidated Communications Guaranty Agreement]