Exhibit 10.1


 


AMENDMENT NO. 1 TO


 


SUBORDINATED LOAN AGREEMENT


 


This Amendment No. 1 to Subordinated Loan Agreement
(this “Amendment”), is dated as of February 17, 2016, by and among OTELCO INC., a Delaware corporation
(the “Company”), and the Subsidiaries of the Company set forth on Appendix I hereto (together with Company,
each a “Borrower” and collectively the “Borrowers”) and NEWSPRING MEZZANINE
CAPITAL III, L.P., a Delaware limited partnership (the “Investor”).


 


WHEREAS, the Borrowers and the Investor have
entered into a Subordinated Loan Agreement, dated as of January 25, 2016 (as amended, restated, supplemented or otherwise modified
from time to time in accordance with its provisions, the “Loan Agreement”).


 


WHEREAS, the parties hereto desire to amend
the Loan Agreement on the terms and subject to the conditions set forth herein; and


 


WHEREAS, the Borrowers has requested, and the
Lenders have agreed, to amend the Loan Agreement to increase the principal amount to be advanced by the Investor to the Borrowers
to Fifteen Million Three Hundred Thousand Dollars ($15,300,000.00); and


 


WHEREAS, pursuant to Section 12.3 of the Loan
Agreement, the amendments requested by the Borrowers must be contained in a written agreement signed by the Borrowers and the Investor.


 


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


 


1.           Definitions.
Capitalized terms used and not defined in this Amendment shall have the respective meanings given them in the Loan Agreement.


 


2.           Amendments
to the Loan Agreement. The Loan Agreement is hereby amended by deleting Appendix II to the Loan Agreement in its entirety and
replacing it with a new Appendix II as set forth on Schedule 1 hereto.


 


3.           Limited
Effect. Except as expressly provided hereby, all of the terms and provisions of the Loan Agreement and the other Loan Documents
are and shall remain in full force and effect and are hereby ratified and confirmed by the Borrowers. The amendments contained
herein shall not be construed as a waiver or amendment of any other provision of the Loan Agreement or the other Loan Documents
or for any purpose except as expressly set forth herein or a consent to any further or future action on the part of the Borrowers
that would require the waiver or consent of the Investor.


 




     


     


    

 


4.           Conditions
Precedent. This Amendment shall become effective upon the date (the “Effective Date”) on which the
Investor shall have received:


 


(a)          This
Amendment, duly executed and delivered by the Borrowers;


 


(b)          Satisfactory
evidence that all corporate and other proceedings that are necessary in connection with this Amendment have been taken to the Investor’s
and its counsel’s satisfaction, and the Investor and such counsel shall have received all such counterpart originals or certified
copies of such documents as the Investor may request.


 


(c)          Favorable
opinions of counsel to Borrowers, in form and substance reasonably satisfactory to the Investor and its counsel, and addressing
such matters in connection with this Amendment as the Investor and its counsel may reasonably request.


 


(d)          Such
other information and documents as may reasonably be required by the Investor and its counsel in connection with this Amendment.


 


5.           Representations
and Warranties. The Borrower hereby represents and warrants to the Investor (before and after giving effect to this Amendment)
that:


 


(a)          Each
Borrower has the corporate/limited liability company (as applicable) power and authority, and the legal right, to execute, deliver
and perform this Amendment and to obtain extensions of credit under the Loan Agreement as amended by this Amendment (the “Amended
Loan Agreement”).


 


(b)          Each
Borrower has taken all necessary corporate and limited liability company action, as applicable, to authorize the execution, delivery
and performance of this Amendment and to authorize the extensions of credit on the terms and conditions of the Amended Loan Agreement.


 


(c)          No
consent or authorization of, filing with, notice to or other act by, or in respect of, any Governmental Authority or any other
Person is required in connection with this Amendment, the extensions of credit under the Amended Loan Agreement or the execution,
delivery, performance, validity or enforceability of this Amendment, or the performance, validity or enforceability of the Amended
Loan Agreement, except consents, authorizations, filings and notices which have been obtained or made and are in full force and
effect.


 


(d)          This
Amendment has been duly executed and delivered on behalf of each Borrower. This Amendment and the Amended Loan Agreement constitute
the legal, valid and binding obligations of each Borrower and are enforceable against such Borrower in accordance with their terms
except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings
in equity or at law).


 




     


     


    

 


(e)          Each
of the representations and warranties made by any Borrower herein or in or pursuant to the Loan Documents is true and correct on
and as of the Effective Date as if made on and as of such date (except that any representation or warranty which by its terms is
made as of an earlier date shall be true and correct as of such earlier date).


 


(f)           No
Default or Event of Default has occurred and is continuing, or will result from this Amendment or any extension of credit under
the Amended Loan Agreement.


 


(g)          Each
Borrower has performed all agreements and satisfied all conditions which this Amendment and the other Loan Documents provide shall
be performed or satisfied by such Borrower on or before the Effective Date.


 


6.           Successors
and Assigns. This Amendment shall inure to the benefit of and be binding upon the Borrowers, the Investor, and the other investors
from time to time parties to the Loan Agreement, and each of their respective successors and assigns.


 


7.           Governing
Law. This Agreement and all questions relating to its validity, interpretation and performance shall be governed by and construed
in accordance with the laws of the State of New York, without regard to conflicts of laws principles.


 


8.           Counterparts.
This Amendment may be executed in any number of counterparts, all of which shall constitute one and the same agreement, and any
party hereto may execute this Amendment by signing and delivering one or more counterparts. Delivery of an executed counterpart
of this Amendment electronically or by facsimile shall be effective as delivery of an original executed counterpart of this Amendment.


 


9.           Costs
and Expenses. The Borrower agrees to pay or reimburse the Investor for all of its reasonable out-of-pocket costs and expenses
incurred in connection with this Amendment, any other documents prepared in connection herewith and the transactions contemplated
hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Investor.


 


[SIGNATURE PAGE FOLLOWS]


 




     


     


    

 


IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date first above written.


 


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


 


(Signature Page to Amendment No. 1 to Subordinated Loan Agreement)


 




     


     


    

 


	 	iNVEstor:
	 	 
	 	NewSpring Mezzanine Capital III, L.P.
	 	 	 
	 	By:   NSM III GP, L.P.
	 	Its General Partner
	 	 	 
	 	By:   NSM III GP, LLC
	 	Its General Partner
	 	 	 
	 	By:	/s/ Steven D. Hobman
	 	Name:	Steven D. Hobman
	 	Title:	President


 


(Signature Page to Amendment No. 1 to Subordinated Loan Agreement)


 




     


     


    

 


Schedule I


(See attached)


 




     


     


    

 


APPENDIX II


 


INVESTORS AND NOTE AMOUNTS


 


	INVESTOR	 	ORIGINAL PRINCIPAL NOTE

AMOUNT
	 	 	 
	NEWSPRING MEZZANINE CAPITAL III, L.P.	 	$15,300,000.00
	 	 	 
	 	 	Total:  $15,300,000.00