Exhibit 10.44.1
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THE CHILLICOTHE TELEPHONE COMPANY
FIRST AMENDMENT TO NOTE AGREEMENT
Dated as of April 1, 1999
Re: Note Agreement dated as of June 1, 1998
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THE CHILLICOTHE TELEPHONE COMPANY
FIRST AMENDMENT TO NOTE AGREEMENT
Re: Note Agreement dated as of June 1, 1998
To the Noteholders which are signatories Dated as of
to this First Amendment April 1, 1999
Ladies and Gentlemen:
Reference is hereby made to the Note Agreement, dated as of June 1, 1998
(the "Note Agreement") among The Chillicothe Telephone Company, an Ohio
corporation (the "Company"), American United Life Insurance Company and The
State Life Insurance Company (the "Noteholders") under and pursuant to which
$12,000,000 6.62% Senior Notes due June 1, 2018 ("Notes") of the Company were
issued.
The Company desires to amend the Note Agreement as hereinafter set forth.
Pursuant to Section 10(c) of the Note Agreement, holders of at least two-thirds
in aggregate principal amount of the outstanding Notes (the "Requisite Holders")
must consent to such amendments. Since you are the holders of the outstanding
Notes in the principal amount set opposite your names on Schedule I, the Company
hereby requests that you accept the amendments as set forth below. Upon
satisfaction of the conditions precedent set forth in Section 3 hereto, this
instrument shall constitute an agreement which amends and restates the Note
Agreement as of the Effective Date in the respects hereinafter set forth:
SECTION 1. AMENDMENTS TO NOTE AGREEMENT.
Section 1.1. Amendments to Section 5(i). Section 5(i) of the Note Agreement
is hereby amended and restated in its entirety to read as follows:
(i) Restricted Payments and Restricted Investments.
(1) Declare or make, or incur any liability to make any
Restricted Payments or Restricted Investments, except:
(A) a Subsidiary may, pay dividends to the Company; and
(B) subject to the limitations in clauses (2) and (3) below,
the Company and its Subsidiaries may declare or make Restricted
Payments and Restricted Investments, provided that immediately
after giving effect to any such action, (x) no Event of Default
or event which with the passing of time or the giving of notice,
or both, would constitute an Event of Default shall exist, (y)
the Company would be able to incur at least $1.00 of additional
Funded Debt pursuant to Section 5(a), and (z) the aggregate
amount of all Restricted Payments and Restricted Investments
declared or made on or after July 1, 1998 to and including the
date such Restricted Payment or Restricted Investment is declared
or made, as the case may be, would not exceed the sum of (i)
$3,000,000, plus (ii) 60% of any Cumulative Consolidated Net
Income, minus (iii) 100% of any Cumulative Consolidated Net Loss,
plus (iv) the net proceeds to the Company from any issuance of
capital stock from and after July 1, 1998;
(2) In addition to the limitations contained in clause (1) above,
from January 1, 1997 through December 31, 1998, the Company shall not
increase the aggregate quarterly dividend on its common stock above
$710,000; and
(3) In addition to the limitations contained in clause (1) above,
the aggregate amount of all Restricted Investments of the Company and
its Subsidiaries outstanding at any time on or after June 23, 1998
shall not exceed $2,500,000.
In valuing any Investments for the purpose of applying the limitations set
forth in this Section 5(i), Investments shall be taken at the original cost
thereof, without allowance for any subsequent write-offs or appreciation or
depreciation therein, but less any amount repaid or recovered in cash on account
of capital or principal.
Section 1.2. Amendments to Section 12. Section 12 of the Note Agreement is
hereby amended by restating in their entirety the following definitions to read
as follows:
"Cumulative Consolidated Net Income" shall mean the excess, if any, of:
(i) the sum of (A) Consolidated Net Income, if any, for each completed
fiscal year of the Company commencing on or after January 1, 1999 and (B)
Consolidated Net Income, if any, (x) for each completed quarter commencing
on or after July 1, 1998 and ending on or prior to December 3 1, 1998 and
(y) for each completed quarter ending after the end of the most recently
completed fiscal year of the Company; over
(ii) the sum of (A) Consolidated Net Loss, if any, for each completed
fiscal year of the Company commencing on or after January 1, 1999 and (B)
Consolidated Net Loss, if any, (x) for each completed quarter commencing on
or after July 1, 1998 and ending on or prior to December 31, 1998 and (y)
for each completed quarter ending after the end of the most recently
completed fiscal year of the Company.
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"Cumulative Consolidated Net Loss" shall mean the excess, if any, of:
(i) the sum of (A) Consolidated Net Loss, if any, for each completed
fiscal year of the Company commencing on or after January 1, 1999 and (B)
Consolidated Net Loss, if any, (x) for each completed quarter commencing on
or after July 1, 1998 and ending on or prior to December 31, 1998 and (y)
for each completed quarter ending after the end of the most recently
completed fiscal year of the Company; over
(ii) the sum of (A) Consolidated Net Income, if any, for each
completed fiscal year of the Company commencing on or after January 1, 1999
and (B) Consolidated Net Income, if any, (x) for each completed quarter
commencing on or after July 1, 1998 and ending on or prior to December 31,
1998 and (y) for each completed quarter ending after the end of the most
recently completed fiscal year of the Company.
SECTION 2. WARRANTIES AND REPRESENTATIONS.
The Company represents and warrants that all representations and warranties
set forth in Annex A attached hereto are true and correct as of the Effective
Date.
SECTION 3. CONDITIONS PRECEDENT.
The effectiveness of this First Amendment shall be subject to the Company
obtaining the written consent of the Requisite Holders, as evidenced by their
signatures at the foot of this First Amendment.
SECTION 4. MISCELLANEOUS PROVISIONS.
Section 4.1. Effective Date. This First Amendment shall become effective
on and as of the Closing Date for the sale of the Notes which was June 23, 1998
(the "Effective Date").
Section 4.2. Ratification of Note Agreement. Except as herein expressly
amended, the Note Agreement are in all respects ratified and confirmed. If and
to the extent that any of the terms or provisions of the Note Agreement are in
conflict or inconsistent with any of the terms or provisions of this First
Amendment, this First Amendment shall govern.
Section 4.3. Counterparts. This First Amendment may be simultaneously
executed in any number of counterparts, and all such counterparts together, each
as an original, shall constitute but one and the same instrument.
Section 4.4. Payment of Fees and Expenses. All reasonable fees and
disbursements of Chapman and Cutler, your special counsel, relating to the
preparation, execution and delivery of this First Amendment, shall be paid by
the Company.
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Section 4.5. Reference to Note Agreement. Any and all notices, requests,
certificates and any other instruments, including the Notes, may refer to the
Note Agreement or the Note Agreement dated as of June 1, 1998, without making
specific reference to this First Amendment, but all such references shall be
deemed to include this First Amendment.
The execution hereof by you shall constitute an agreement between us for
the uses and purposes hereinabove set forth, and this First Amendment may be
executed in any number of counterparts, each executed counterpart constituting
an original but all together only one agreement.
THE CHILLICOTHE TELEPHONE COMPANY
By /s/ Thomas McKell
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Its President
Accepted:
AMERICAN UNITED LIFE INSURANCE
COMPANY
By /a/ Christopher D. Pahlke
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Its Vice President of Private Placements
THE STATE LIFE INSURANCE COMPANY
By /s/ Christopher D. Pahlke
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Its Vice President of Private Placements
for American United Life Insurance
Company as agent for The State Life
Insurance Company
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NAME OF NOTEHOLDER PRINCIPAL AMOUNT OF NOTES HELD
American United Life $11,000,000
Insurance Company
The State Life Insurance Company $1,000,000
SCHEDULE I
(to First Amendment)
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to you as follows:
1. Corporate Organization and Authority. The Company
(a) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) as all requisite power and authority and all necessary licenses
and permits to own and operate its properties and to carry on its business as
now conducted and as presently proposed to be conducted; and
(c) is duly licensed or qualified and is in good standing as a foreign
corporation in each jurisdiction wherein the nature of the business transacted
by it or the nature of the property owned or leased by it makes such licensing
or qualification necessary.
2. First Amendment is Legal and Authorized. (a) The compliance by the
Company with all of the provisions of the Note Agreement, as amended by the
First Amendment -
(i) is within the corporate powers of the Company; and
(ii) will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict
with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the Articles of
Incorporation or By-laws of the Company or any indenture or other
agreement or instrument to which the Company is a party or by which it
may be bound or result in the imposition of any Liens or encumbrances
on any property of the Company.
(b) The execution and delivery of the First Amendment has been duly
authorized by proper corporate action on the part of the Company (no action by
the stockholders of the Company being required by law, by the Articles of
Incorporation or By-laws of the Company or otherwise); and the First Amendment
has been executed and delivered by the Company and the Note Agreement, as
amended by the First Amendment, constitutes the legal, valid and binding
agreement of the Company enforceable in accordance with its terms.
3. No Defaults. No Default or Event of Default has occurred and is
continuing.
4. Governmental Consent. No approval, consent or withholding of objection
on the part of, or filing, registration or qualification with any governmental
body, Federal or state, is necessary in connection with the execution and
delivery of the First Amendment.
5. Existing Restricted Investments. Schedule I hereto correctly describes
the Restricted Investments of the Company made prior to, and outstanding on,
July 1, 1998.
ANNEX A
(to First Amendment)
RESTRICTED INVESTMENTS
MADE PRIOR TO, AND OUTSTANDING ON, JULY 1, 1998
Independent Telecommunications Network $250,000 equity Investment
ComNet, Inc. $18,500 equity Investment
Guarantee of Chillicothe Long Distance Debt $55,000 Contingent obligation
to MCI, Inc.
Intercompany Advances from the Company To $831,733
Horizon PCS, Inc. (formerly Horizon Infotech) Intercompany Receivable
Intercompany Advances from the Company To $168,244
United Communications, Inc. Intercompany Receivable
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Total $1,323,477
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SCHEDULE I
(to Annex A to First Amendment)
1352438