Exhibit 10.1

 

AGREEMENT REGARDING AMENDMENTS TO CREDIT AGREEMENT

 

This  AGREEMENT REGARDING AMENDMENTS TO CREDIT AGREEMENT (this “Agreement”) is
made and entered into as of March 2, 2020, by and among OTELCO INC., a Delaware
corporation (the “Borrower”), the guarantors party thereto from time to time
(collectively, the “Guarantors” and, together with the Borrower, the “Loan
Parties”), COBANK, ACB (“CoBank”), in its capacity as administrative agent under
the Credit Agreement (as defined below; CoBank, in such capacity, the
“Administrative Agent”) and the Lenders party thereto from time to time
(collectively, the “Lenders”). Defined terms used but not otherwise defined
herein shall have the meanings when used herein as set forth in the Credit
Agreement.

 

RECITALS

 

WHEREAS, the Borrower, the Guarantors party thereto from time to time, the
Lenders and the Administrative Agent have entered into that certain Credit
Agreement, dated as of November 2, 2017 (as the same has been and may be further
amended, restated, or otherwise modified from time to time, the “Credit
Agreement”); and

 

WHEREAS, the parties have hereby agreed to the following amendments to the
Credit Agreement on the terms and subject to the conditions set forth herein;

 

NOW, THEREFORE, in consideration of the premises set forth herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.                   Amendments to Credit Agreement. Subject to the conditions
set forth below, the Credit Agreement is hereby amended in the following
particulars:

 

a.Section 1.1 of the Credit Agreement is hereby amended in the following
particulars:

 

i.By adding the following definition thereto, in alphabetical order:

 

“Debt Service Coverage Ratio” means the ratio derived by dividing (a)
Consolidated EBITDA by (b) all scheduled principal and interest payments made on
Indebtedness (or scheduled reductions in commitments on lines of credit to the
extent such reductions caused the repayment of principal amounts then
outstanding under such lines) for the then most recently completed four fiscal
quarters.

 

ii.By deleting the definitions “Fixed Charge Coverage Ratio” and “Fixed
Charges.”

 

b.Article VIII of the Credit Agreement is hereby amended in the following
particulars:

 

i.By amending and restating Section 8.1 in its entirety, as follows:

 

8.1                Capital Expenditures and Capital Leases. The Loan Parties
shall not make, or permit their Subsidiaries to make, Capital Expenditures
except Capital Expenditures in the ordinary course of business and in an
aggregate amount for all of the Loan Parties and their Subsidiaries not
exceeding the maximum amount specified below during any specified fiscal year:

 

Fiscal Year Maximum Annual Aggregate Capital expenditures 2020 $10,500,000 2021
and thereafter $10,000,000

 

 

 

  

ii.By amending and restating the table set forth in Section 8.2 in its entirety,
as follows:

 

Period Ratio October 1, 2019 through March 30, 2021 3.50:1.00 April 1, 2021
through December 31, 2021 3.25:1.00 January 1, 2022 and thereafter 3.00:1.00

 

iii.By adding a new Section 8.3 thereto, as follows:

 

8.3.       Minimum Debt Service Coverage Ratio. The Loan Parties shall maintain
at all times, measured at each fiscal quarter end and maintained through the
next measurement date, a Debt Service Coverage Ratio of the Borrower of not less
than 1.75 to 1.0.

 

2.                   Representations and Warranties of the Borrower. The
Borrower represents and warrants to the Administrative Agent and the Lenders
that, as of the Effective Date: (a) the representations and warranties of the
Borrower and its Subsidiaries contained in Article V of the Credit Agreement and
elsewhere in the Credit Agreement and the other Loan Documents are true and
correct in all material respects (unless such representation and/or warranty is
qualified by materiality or Material Adverse Effect, in which case such
representation and/or warranty shall be true and correct in all respects as
written), before and after giving effect to this Agreement, as though made on
and as of the date hereof (except for those representations and warranties that
specifically relate to a prior date, which were true and correct on such prior
date), and as if each reference therein to “this Agreement” or “the Credit
Agreement” (or words of similar import) included reference to this Agreement;
(b) each Loan Party has taken all necessary limited liability company, corporate
and other action to authorize the execution, delivery and performance of this
Agreement and each of the other Loan Documents to which it is a party; (c) this
Agreement is the legally valid and binding obligation of each Loan Party party
hereto, enforceable against such Person in accordance with its terms, and (d) no
event has occurred and is continuing, or would result from the borrowing or the
application of the proceeds contemplated by this Agreement, that constitutes a
Default or an Event of Default.

 

3.                   Conditions to Effectiveness. This Agreement shall be
effective as of December 31, 2019 (the “Effective Date”), subject to the receipt
by the Administrative Agent of (i) this Agreement and all other documents
required by this Agreement in connection with the Borrower’s execution, delivery
and performance of this Agreement, in each case, duly authorized and executed by
the Borrower, in form and substance satisfactory to the Administrative Agent and
(ii) all fees described in that certain Fee Letter, dated as of March 2, 2020,
by and between CoBank and the Borrower.

 

4.                   Reaffirmation of Security Interests. Each of the Borrower
and each Guarantor hereby acknowledges its receipt of a copy of this Agreement
and its review of the terms and conditions hereof and consents to the terms and
conditions of this Agreement and the transactions contemplated thereby. Each of
the Borrower and each Guarantor, as applicable, (a) affirms and confirms its
guarantees, pledges, grants and other undertakings under the Credit Agreement
and the other Loan Documents to which it is a party and (b) agrees that (i) each
Loan Document to which it is a party shall continue to be in full force and
effect and (ii) all guarantees, pledges, grants and other undertakings
thereunder shall continue to be in full force and effect and shall accrue to the
benefit of the Secured Parties.

 

5.                   Expenses; Indemnity; Damage Waiver. Section 11.3 of the
Credit Agreement is hereby incorporated, mutatis mutandis, by reference as if
such section was set forth in full herein.

 

6.                   Miscellaneous.

 

a.        Counterparts; Integrations; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Delivery
of an executed counterpart of a signature page of this Agreement by facsimile or
in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a
manually executed counterpart of this Agreement.

 

2 

 

 

b.       Definitions. Capitalized terms used, but not defined, in this Agreement
shall have the meaning set forth in the Credit Agreement.

 

c.        Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Loan Parties, the Lender, the Administrative Agent, and
their respective successors and assigns, except that Borrower may not assign or
transfer its rights or obligations hereunder without the prior written consent
of the Administrative Agent.

 

d.       Governing Law. This Agreement shall be governed by and shall be
construed and enforced in accordance with all provisions of the Credit
Agreement, including the governing law provisions thereof.

 

e.        Severability. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.

 

f.        Headings. The headings of this Agreement are for purposes of reference
only and shall not limit or otherwise affect the meaning hereof.

 

g.       Reference to and Effect on the Credit Agreement and the Other Loan
Documents. On and after the Effective Date, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “herein” or words of like import
referring to the Credit Agreement, and each reference in the other Loan
Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like
import referring to the Credit Agreement shall mean and be a reference to the
Credit Agreement as amended by this Agreement. Except as specifically amended by
this Agreement, the Credit Agreement and the other Loan Documents shall remain
in full force and effect and are hereby ratified and confirmed and this
Agreement shall not be considered a novation. The execution, delivery and
performance of this Agreement shall not constitute a waiver of any provision of,
or operate as a waiver of any right, power or remedy of CoBank under, the Credit
Agreement or any of the other Loan Documents. This Agreement shall be deemed to
be a Loan Document as defined in the Credit Agreement and is subject to the
provisions thereof.

 

 

[remainder of page intentionally left blank]

 

 

3

 

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by a duly authorized officer as of the date first above written.

 

  OTELCO INC., as the Borrower                     By: /s/ Curtis L. Garner, Jr.
      Curtis L. Garner, Jr.       Chief Financial Officer and Secretary        
    BLOUNTSVILLE TELEPHONE LLC, as a Guarantor   BRINDLEE MOUNTAIN TELEPHONE
LLC, as a Guarantor   CRC COMMUNICATIONS LLC, as a Guarantor   GRANBY TELEPHONE
LLC, as a Guarantor   I-LAND INTERNET SERVICES LLC, as a Guarantor   MID-MAINE
TELECOM LLC, as a Guarantor   MID-MAINE TELPLUS LLC, as a Guarantor   OTELCO
MID-MISSOURI LLC, as a Guarantor   OTELCO TELECOMMUNICATIONS LLC, as a Guarantor
  OTELCO TELEPHONE LLC, as a Guarantor   PINE TREE TELEPHONE LLC, as a Guarantor
  SACO RIVER TELEPHONE LLC, as a Guarantor   SHOREHAM TELEPHONE LLC, as a
Guarantor   HOPPER TELECOMMUNICATIONS LLC, as a Guarantor                   By:
/s/ Curtis L. Garner, Jr.       Curtis L. Garner, Jr.       Chief Financial
Officer and Secretary          

 

[Agreement Regarding Amendments to Credit Agreement – Otelco Inc.]

 

 

  COBANK, ACB, as a Lender and Administrative Agent                   By: /s/
Kevin Oliver       Kevin Oliver       Managing Director  

 

[Agreement Regarding Amendments to Credit Agreement – Otelco Inc.]

 

 

 

AGFIRST FARM CREDIT BANK, as a Voting  Participant

pursuant to the provisions of Section 11.7

                      By: /s/ Christopher R. Reynolds       Name: Christopher R.
Reynolds       Title: Assistant Vice President  

 

[Agreement Regarding Amendments to Credit Agreement – Otelco Inc.]

 

 

 

AMERICAN AGCREDIT, FLCA, as a Voting Participant

pursuant to the provisions of Section 11.7

                      By: /s/ Daniel K. Hansen       Name: Daniel K. Hansen    
  Title: Vice President  

 

[Agreement Regarding Amendments to Credit Agreement – Otelco Inc.]

 

 

 

FARM CREDIT SERVICES OF AMERICA, FLCA, as a

Voting Participant pursuant to the provisions of Section 11.7

                      By: /s/ Nicholas King       Name: Nicholas King      
Title: Assistant Vice President  

 

[Agreement Regarding Amendments to Credit Agreement – Otelco Inc.]

 

 

 

FARM CREDIT WEST, FLCA, as a Voting Participant

pursuant to the provisions of Section 11.7

                      By: /s/ Robert Stornetta        Name: Robert Stornetta    
  Title: Senior Vice President  

 

[Agreement Regarding Amendments to Credit Agreement – Otelco Inc.]

 

 

 

NORTHWEST FARM CREDIT SERVICES, FLCA, as a

Voting Participant pursuant to the provisions of Section 11.7

                      By: /s/ Jeremy A. Roewe       Name: Jeremy A. Roewe    
Title: V.P.

 

[Agreement Regarding Amendments to Credit Agreement – Otelco Inc.]