OTEL Otelco Inc

On March 2, 2020, Otelco Inc. (the “Company”) entered into an Agreement Regarding Amendments to Credit Agreement (the “Amendment”), which amended the Company’s Credit Agreement dated as of November 2, 2017 (as amended, the “Credit Agreement”), by and among the Company, as borrower, each subsidiary of the Company listed as a guarantor on the signature pages thereto, as guarantors (such guarantors, together with the Company, the “Loan Parties”), the lenders party thereto from time to time, as lenders, and CoBank, ACB, as administrative agent (“CoBank”).

The Amendment, among other things, amends the financial covenants set forth in the Credit Agreement, effective as of December 31, 2019, to: (i) remove the required minimum fixed charge coverage ratio; (ii) add a maximum annual aggregate capital expenditures covenant of $10,500,000 for fiscal year 2020 and $10,000,000 for each year fiscal year thereafter ; (iii) modify the required maximum leverage ratio to the following maximum levels for each fiscal quarter end during the following periods (A) 3.50:1.00 for any fiscal quarter ending during the period from October 1, 2019 through March 30, 2021, (B) 3.25:1.00 for any fiscal quarter ending during the period from April 1, 2021 through December 31, 2021, and (C) 3.00:1.00 for any fiscal quarter ending on or after January 1, 2022; and (iv) add a new minimum debt service coverage ratio covenant of not less than 1.75:1.00, measured as of the end of each fiscal quarter.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.