PROFESSIONAL SERVICES FEE AGREEMENT

EX-10.9 20 y67741exv10w9.txt PROFESSIONAL SERVICES FEE AGREEMENT Exhibit 10.9 CONSOLIDATED COMMUNICATIONS, INC. 121 SOUTH 17TH STREET MATTOON, IL ###-###-#### April 14, 2004 Providence Equity Partners IV Inc. 50 Kennedy Plaza, 18th Floor Providence, RI 02903 Applegate & Collatos, Inc. One International Place, 29th Floor Boston, MA 02110 Richard A. Lumpkin P.O. Box 1234 Mattoon, IL 61938 Gentlemen: Reference is made to the Second Amended and Restated Homebase Acquisition, LLC Limited Liability Company Agreement dated as of January 15, 2004 (the "LLC Agreement") among Homebase Acquisition, LLC, a Delaware limited liability company ("Homebase"), and affiliates of each of you and that certain professional services fee letter dated December 30, 2002, between the parties hereto (the "2002 Services Fee Letter"). This letter agreement amends and replaces the 2002 Services Fee Letter in its entirety. Capitalized terms used herein without definition are used with the meanings ascribed thereto in the LLC Agreement. This letter sets forth our agreement that, in consideration of (i) you and your respective affiliates' unique knowledge and understanding of the RLEC industry in general and specifically of the business of Consolidated Communications, Inc. ("CCI") and its subsidiaries, and (ii) the consulting, advisory and other professional services that each of you and your respective affiliates expect to continue to provide to CCI and its direct and indirect subsidiaries, CCI agrees to pay a professional services fee of $2,000,000 (the "Services Fee") per calendar year in the aggregate (payable in four equal quarterly payments of $500,000 each) to you and your respective affiliates or designees, provided, however, that in no case shall the Services Fee be paid in cash unless the Consolidated EBITDA (as calculated in accordance with that certain Credit Agreement, dated as of the date hereof, by and among Homebase, Consolidated Communications Illinois Holdings, Inc., Consolidated Communications Texas Holdings, Inc., CCI, Consolidated Communications Acquisition Texas, Inc., and the financial institutions listed on Schedule 2.01 thereto, and Citicorp North America, Inc., as administrative agent (as the same may be amended from time to time) or corresponding term as defined in any replacement financing facility (the "Credit Agreement") exceeds $106,000,000 per calendar year as Richard A. Lumpkin Providence Equity Partners, Inc. Applegate & Collatos, Inc. April 14, 2004 Page 2 determined by the good faith calculations of the respective officers of CCI and Consolidated Communications Acquisition Texas, Inc. Each of you (or your respective affiliates) shall each receive one-third of such Services Fee. To the extent payment of the Services Fee in cash is restricted as provided above or by the terms of the Credit Agreement or any other debt instrument of Homebase or the Subsidiaries that has been approved by the Board, such Services Fee will be payable in the form of additional Class A Preferred Shares (issued at the rate of one Class A Preferred Share for each $1,000 of Services Fees not paid in cash). In addition, your (and your respective affiliates') rights to such Services Fees will terminate upon a public offering of equity securities of PUBCO, CCI or any other Subsidiary. [END OF TEXT; THE NEXT PAGE IS THE SIGNATURE PAGE] 2004 Illinois Services Fee Letter Richard A. Lumpkin Providence Equity Partners, Inc. Applegate & Collatos, Inc. April 14, 2004 Page 3 Please acknowledge your agreement to the foregoing by executing this letter where indicated below. Sincerely, CONSOLIDATED COMMUNICATIONS, INC. By: /s/ Robert J. Currey --------------------------------------- Robert J. Currey, President and Chief Executive Officer AGREEMENT ACKNOWLEDGED: PROVIDENCE EQUITY PARTNERS IV, INC. By: /s/ Mark A. Pelson ------------------------------- Duly Authorized Agent APPLEGATE & COLLATOS, INC. By: /s/ Kevin J. Maroni ------------------------------- Duly Authorized Agent RICHARD A. LUMPKIN By: /s/ Richard A. Lumpkin ------------------------------- 2004 Illinois Services Fee Letter Richard A. Lumpkin Providence Equity Partners, Inc. Applegate & Collatos, Inc. April 14, 2004 Page 4 Homebase Acquisition, LLC hereby agrees to issue Class A Preferred Shares in satisfaction of unpaid Services Fees as described above. HOMEBASE ACQUISITION, LLC By: /s/ Robert J. Currey --------------------------------------- Robert J. Currey, President and Chief Executive Officer 2004 Illinois Services Fee Letter