<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 6, 1996
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
MERCURY, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
LOUISIANA 4812 72-0647424
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
CM TOWER, SUITE 1900
ONE LAKESHORE DRIVE
LAKE CHARLES, LA 70629
(318) 436-9000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
WILLIAM L. HENNING, JR.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
P.O. DRAWER 3104
LAKE CHARLES, LA 70602-3104
(318) 436-9000
(Name and address, including zip code, and telephone
number, including area code, of agent for service)
Copies to:
<TABLE>
<S> <C> <C>
ANTHONY J. CORRERO, III THOMAS G. HENNING BRYANT B. EDWARDS
LOUIS Y. FISHMAN SECRETARY AND GENERAL COUNSEL LATHAM & WATKINS
CORRERO FISHMAN HAYGOOD MERCURY, INC. 633 W. FIFTH STREET, SUITE 4000
PHELPS WEISS WALMSLEY P.O. DRAWER 3104 LOS ANGELES, CALIFORNIA 90071-2007
& CASTEIX, L.L.P. LAKE CHARLES, LA 70602-3104 (213) 485-1234
201 ST. CHARLES AVENUE, SUITE 4700 (318) 436-9000
NEW ORLEANS, LOUISIANA 70170-4700
(504) 586-5252
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
---------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
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TITLE OF EACH CLASS OF SECURITIES PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C>
Class A Common Stock, $.01 par value $47,437,500 $14,375.00
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</TABLE>
(1) Estimated solely for purposes of computing the registration fee pursuant to
Rule 457(o) under the Securities Act of 1933.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER 6, 1996
PROSPECTUS
, 1996
2,750,000 SHARES
[US UNWIRED INC. LOGO]
CLASS A COMMON STOCK
All of the shares of Class A Common Stock, par value $.01 per share ("Class
A Common Stock"), being offered hereby (the "Offering") are being sold by US
Unwired Inc. (the "Company"). Prior to this Offering, there has been no public
market for the Class A Common Stock. See "Underwriting" for information relating
to the factors considered in determining the initial public offering price. It
is currently anticipated that the initial public offering price will be between
$ and $ per share.
The Company's authorized common stock includes Class A Common Stock and
Class B Common Stock, par value $.01 per share ("Class B Common Stock" and,
together with Class A Common Stock, "Common Stock"). The rights of Class A
Common Stock and Class B Common Stock are substantially identical, except that
holders of Class A Common Stock are entitled to one vote per share and holders
of Class B Common Stock are entitled to 10 votes per share. Both classes will
vote together as one class on all matters generally submitted to a vote of
shareholders, including the election of directors. Shares of Class B Common
Stock are convertible into Class A Common Stock on a share-for-share basis
subject to certain procedures and restrictions. See "Description of Capital
Stock." After the sale of the shares of Class A Common Stock offered hereby, the
Company's existing shareholders will own shares of Common Stock representing in
the aggregate approximately 97.6% of the voting power entitled to vote in
matters affecting shareholders generally.
Application has been made to have the Class A Common Stock quoted on the
Nasdaq National Market under the symbol "UNWR."
SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR CERTAIN INFORMATION THAT SHOULD
BE CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
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PRICE UNDERWRITING PROCEEDS
TO THE DISCOUNTS AND TO THE
PUBLIC COMMISSIONS(1) COMPANY(2)
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share........................ $ $ $
Total(3)......................... $ $ $
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</TABLE>
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities pursuant to the Securities Act of 1933,
as amended. See "Underwriting."
(2) Before deducting expenses estimated at $500,000, which will be paid by the
Company.
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 412,500 additional shares of Class A Common Stock solely to cover
over-allotments, if any. If such option is exercised in full, the total
Price to the Public, Underwriting Discounts and Commissions and Proceeds to
the Company would be $ , $ and $ , respectively.
See "Underwriting."
The shares are being offered by the several Underwriters when, as and if
delivered to and accepted by the Underwriters and subject to various prior
conditions, including their right to reject orders in whole or in part. It is
expected that delivery of share certificates will be made in New York, New York
on or about , 1996.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
A.G. EDWARDS & SONS, INC.
THE ROBINSON-HUMPHREY COMPANY, INC.
<PAGE> 3
[INSIDE COVER OF PROSPECTUS -- FOLDED OUT]
[MAP SHOWING MARKETS]
<PAGE> 4
[INSIDE COVER OF PROSPECTUS -- FOLDED IN]
CERTAIN TERMS
Wireless communications markets in the United States include (among others)
cellular markets and, more recently, Personal Communications Service ("PCS")
markets and are licensed and regulated by the Federal Communications Commission
(the "FCC"). The cellular markets are geographically divided into 306
Metropolitan Statistical Areas ("MSAs") and 428 Rural Service Areas ("RSAs")
devised by Rand McNally and adopted by the FCC. The PCS markets are similarly
divided into 51 Metropolitan Trading Areas ("MTAs") and 493 Basic Trading Areas
("BTAs"). The Company anticipates that PCS service will appear essentially the
same to the user as cellular service, except for certain issues of compatibility
when subscribers leave (or "roam" out of) the licensed area covered by the
wireless communications "System" of their service provider. Cellular and PCS
markets are sometimes measured by "Pops," which means the estimated population
of the specified market; and "Net Pops," which means such population multiplied
by the percentage interest the Company holds in the license for the particular
market. The number of Pops or Net Pops does not refer to subscribers and is not
necessarily indicative of the number of subscribers to the Company's Systems.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), a Registration Statement on Form S-1 under the Securities Act of
1933, as amended (the "Securities Act") with respect to the Class A Common Stock
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement including the exhibits and schedules
thereto. For further information with respect to the Company and the Class A
Common Stock, reference is hereby made to such Registration Statement and the
exhibits and schedules thereto. Statements contained in this Prospectus as to
the contents of any contract or other document are not necessarily complete and,
in each instance, reference is made to the copy of such contract or document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference. Upon consummation of this Offering,
the Company will be subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith the Company will file periodic reports and other information with the
Commission relating to its business, financial statements and other matters.
Copies of the Registration Statement, including all exhibits thereto, may be
obtained from the Commission's principal office in Washington, D.C. and at the
following regional offices of the Commission: Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and at Seven World Trade
Center, Suite 1300, New York, New York 10048. Copies of all or any part thereof
may be obtained from the Public Reference Section, Securities and Exchange
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 upon payment of the
prescribed fees. The Commission maintains a World Wide Web site on the Internet
which contains the foregoing information and the address of which is
"http://www.sec.gov."
The Company intends to furnish its shareholders annual reports containing
consolidated financial statements of the Company audited by its independent
auditors and quarterly reports containing unaudited condensed consolidated
financial statements for each of the first three quarters of each fiscal year.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A COMMON
STOCK OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
2
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information (including the financial statements and the notes thereto) included
elsewhere in this Prospectus. Unless otherwise indicated, all references to the
"Company" include it and its subsidiaries and their respective predecessors.
Except as otherwise indicated, the information in this Prospectus assumes no
exercise of the Underwriters' over-allotment option.
THE COMPANY
The Company owns and operates cellular communications systems in 14 RSAs
and one MSA which together have 1.3 million Net Pops. These markets consist
primarily of four clusters that are located in Louisiana, Mississippi, Alabama
and Kansas. In its Louisiana Cluster, the Company markets under the MERCURY
CELLULAR AND PAGING(TM) trade name and in its other clusters under the
CELLULARONE(R) service mark. As of September 30, 1996, the Company served
approximately 77,000 cellular subscribers through cellular Systems covering more
than 72,000 square miles, and served over 14,000 paging subscribers by providing
paging services in its Louisiana market and by reselling such services in
certain other markets. The Company owns a 24 1/3% limited partnership interest
in Meretel Communications Limited Partnership (the "PCS Partnership"), which, as
the successful bidder in the FCC auction, has been awarded five broadband PCS
licenses that cover five BTAs with an aggregate of 1.8 million Pops. These PCS
markets, together with the Louisiana Cluster cellular market, are expected to
create a large seamless market traversed by Interstate Highway 10 ("I-10")
between Houston and New Orleans.
The Company focuses on RSAs and small MSAs because it believes that such
markets, which are usually less densely populated, generally provide greater
capacity for growth and less competition than most major markets. Cellular
service was generally introduced later in RSAs and small MSAs than in major
markets, with the result that, based on industry averages, cellular penetration
is currently lower and subscriber growth rates are significantly higher than in
major markets. The Company's markets exhibit positive characteristics for
wireless communications, including a high percentage of business customers with
substantial needs for wireless communications, such as those employed in the
agriculture and oil and gas industries, and a higher percentage of populations
accustomed to long travel times. Additionally, the Company's cellular service
areas cover approximately 1,100 highway miles, providing attractive sources for
roaming revenues.
The Company believes that the wireless communications industry will
continue to grow as enhanced services are offered at lower prices and as
customer awareness of the productivity, convenience and security benefits
associated with wireless communications increases. The Company believes it is
well positioned to take advantage of this growth opportunity. The Company's
growth strategy focuses on the following: (i) internal growth through increased
penetration in the Company's existing markets; (ii) acquisition of licenses
contiguous to the Company's existing market clusters from independent or smaller
licensees; (iii) acquisition of new market clusters; and (iv) acquisition of PCS
licenses, where available, to expand and complement its wireless network. In
addition, the Company believes that by geographically clustering service areas
it can offer high quality service at competitive prices with larger, seamless
service networks.
Since January 1, 1995, the Company has acquired the Kansas and Alabama
Clusters, representing approximately 600,000 Net Pops. Upon acquiring a cellular
system, the Company's objective is to increase operating cash flow by (i)
emphasizing the Company's dedication to customer service and satisfaction; (ii)
implementing aggressive marketing of cellular service to add subscribers and
reduce the "churn rate" at which customers terminate service; (iii) selectively
upgrading the existing cellular network to increase signal coverage, with the
eventual goal of providing handheld quality network coverage; (iv) implementing
the Company's distribution strategy, which seeks to maximize the Company's local
market presence through local retail stores with a direct sales force; and (v)
using its centralized upper management and back office functions to support the
needs of subscribers and of the Company's retail sales offices, thereby
maximizing economies of scale.
3
<PAGE> 6
The Company seeks to position its cellular systems, including its local
retail stores, as the quality local service provider. Management believes that
the Company's local presence through its retail stores enhances its ability to
provide a higher level of long-term customer service and satisfaction. The
Company's 22 retail stores are staffed with both sales and customer service
representatives, differentiating the Company from many of its competitors which
provide neither the same concentration of local sales locations nor the local
availability of customer service. The retail stores provide the Company with
greater control over the sales process than would be provided by the use of
independent agents alone, although the Company does use independent agents on a
selective basis to expand its distribution network. In addition, the Company's
billing and customer information system is operated by an affiliated corporation
which provides the Company with a high level of customization and access. The
Company believes that these factors enable its sales and customer service
personnel to be more responsive than competitors using third-party billing and
information systems.
Prior to this Offering, 78.0% of the Company's equity and voting power was
held by members of the Henning family, and the remaining 22.0% was owned by
approximately 11 minority shareholders. After this Offering, members of the
Henning family will own 62.7% of the Company's equity and 76.2% of the Company's
voting power. See "Principal Shareholders." The Henning family has been involved
in the communications industry since W. T. Henning founded a landline telephone
company in 1928 in southwest Louisiana. The family became involved in the
wireless communications industry with the introduction of paging services in
1980 and cellular services in 1987. The Henning family will remain in the
landline business through their majority ownership of an affiliated corporation.
See "Certain Transactions."
4
<PAGE> 7
CELLULAR AND PAGING OPERATIONS
The Company's cellular markets are grouped geographically and strategically
into four clusters, known as the Louisiana, Mississippi, Alabama and Kansas
Clusters. The following table summarizes certain information concerning the
Company's cellular markets.
<TABLE>
<CAPTION>
INTERSTATE
& OTHER % OF HH
COMPANY WIRELINE OR HIGHWAY WITH EBI> DATE OF
MARKET TOTAL POPS OWNERSHIP% NET POPS NON-WIRELINE MILES $35K(A) ACQUISITION
- ------------------------ ---------- ---------- --------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Louisiana Cluster
Lake Charles, LA MSA.... 174,000 100.0% 174,000 WL 102 46.0% Aug. 1987(b)
De Soto, LA-3 B1(c)..... 59,000 100.0 59,000 WL 115 28.1 Apr. 1991(b)
Beauregard, LA-5
B1(c)................. 142,000 100.0 142,000 WL 175 30.6 Mar. 1991(b)
--------- --------- -----
Total Louisiana....... 375,000 375,000 392
--------- --------- -----
Mississippi Cluster
Tunica, MS-1............ 170,000 100.0 170,000 NWL 69 28.4 Apr. 1993
Bolivar, MS-3(d)........ 156,000 51.0 80,000 NWL 66 25.7 Apr. 1993
Yalobusha, MS-4(d)...... 127,000 51.0 65,000 NWL 62 31.5 Apr. 1993
Washington, MS-5(e)..... 160,000 -- -- NWL 62 33.2 Jan. 1994
--------- ----- --------- -----
Total Mississippi..... 613,000 315,000 259
--------- --------- -----
Alabama Cluster
Lamar, AL-3............. 136,000 100.0 136,000 NWL 70 30.5 May 1996
Bibb, AL-4.............. 138,000 100.0 138,000 NWL 66 29.5 Jul. 1996
--------- --------- -----
Total Alabama......... 274,000 274,000 136
--------- --------- -----
Kansas Cluster
Cheyenne, KS-1.......... 27,000 100.0 27,000 NWL 84 32.2 Apr. 1995
Norton, KS-2............ 30,000 100.0 30,000 NWL 0 27.9 Apr. 1995
Wallace, KS-6........... 20,000 100.0 20,000 NWL 39 37.2 Apr. 1995
Trego, KS-7............. 78,000 100.0 78,000 NWL 112 37.1 Apr. 1995
Hamilton, KS-11......... 85,000 100.0 85,000 NWL 17 44.8 Apr. 1995
Hodgeman, KS-12......... 42,000 100.0 42,000 NWL 12 40.1 Apr. 1995
Edwards, KS-13.......... 28,000 100.0 28,000 NWL 6 33.3 Apr. 1995
Cimarron, OK-1(e)....... 24,000 -- -- NWL 7 34.9 Apr. 1995
--------- ----- --------- -----
Total Kansas.......... 334,000 310,000 277
--------- --------- -----
Minority Interest
Chambers, TX-21(f)...... 21,000 25.0 5,300 WL 34 50.4 Apr. 1993
--------- --------- -----
TOTAL................. 1,617,000 1,279,300 1,098
========= ========= =====
</TABLE>
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(a) The percentage of households (HH) with effective buying income (EBI) greater
than $35,000 is based on Kagan's Cellular Telephone Atlas 1995. Effective
buying income is comparable to disposable after-tax income.
(b) The Company was the original licensee in these markets.
(c) These are partitioned cellular markets.
(d) These RSAs are licensed to a corporation in which the Company has a 51%
interest.
(e) The Mississippi-5 RSA and Oklahoma-1 RSA are operated under interim
authority granted by the FCC pending auction of the licenses by the FCC. The
number of Company subscribers in these RSAs is insignificant.
(f) The Texas-21 RSA is owned by a partnership in which the Company owns a 25%
interest and in which GTE Mobilnet, which operates the System, owns 75%.
5
<PAGE> 8
The Company offers its subscribers cellular and in certain markets paging
services and, without additional charge, offers custom calling features such as
call forwarding, call waiting, conference calling and no-answer transfer. The
Company also provides voice message storage and retrieval free of charge in the
Kansas Cluster, and at nominal rates in the other clusters. The Company has
roaming arrangements with virtually every cellular carrier in North America and
is also a member of North American Cellular Network ("NACN"), a wireless network
linking non-wireline cellular operations throughout the United States, Canada,
Puerto Rico and the Virgin Islands. NACN participation allows the Company to
offer convenient cellular access to the Company's subscribers when they roam
throughout the United States and Canada.
The Company began offering paging services in the Louisiana Cluster in 1980
and, through a resale agreement with another provider, in Beaumont, Texas in
1995. The Company has entered into agreements to enable it to provide regional
and nationwide paging services. As of September 30, 1996, the Company had over
14,000 paging subscribers.
PCS OPERATIONS
As the successful bidder in the FCC's C-block auction, the PCS Partnership
has been granted five PCS licenses covering 1.8 million Pops in five BTAs. These
PCS markets and the Company's Louisiana Cluster cellular market are expected to
create a large seamless market between Houston and New Orleans. The Company
intends to provide its subscribers and the PCS Partnership's subscribers with
the ability to roam seamlessly throughout the Company's Louisiana Cluster and
the PCS Partnership's markets as soon as technically feasible at a reasonable
cost. Each of these BTA markets is presently in the design and engineering
stage. The PCS Partnership has retained the Company to manage the design,
construction and daily operations of the Lafayette, Beaumont and Lufkin BTAs,
for which the Company is paid a monthly management fee and is reimbursed for its
expenses. The Company has invested $2.9 million in the PCS Partnership and has
committed to contribute up to an additional $10.1 million. The PCS Partnership
bid $61.2 million for its licenses, which is payable over 10 years, and
currently estimates that capital expenditures of at least an additional $69.0
million will be required over the next 10 years to build out its PCS markets.
The PCS Partnership has obtained a commitment for $59.0 million of financing for
capital expenditures under which the Company would be required to guarantee
repayment of up to $6.2 million. There can be no assurance that the build-out of
the PCS markets will not cost materially more than is currently anticipated, or
that additional financing, if required, will be available at all or in the
absence of additional guarantees by the Company and other partners.
PCS is a new generation of wireless communications, offering customers
advanced, secure, two-way digital wireless services and applications. Services
that permit sophisticated call management, enhanced two-way messaging and,
eventually, high-speed data and video transmission, will enable customers to
better manage personal and business needs. The Company believes that the
introduction of PCS into the wireless market will stimulate demand for wireless
communications services, attract customers who are not currently subscribers to
wireless service and increase usage by current wireless customers. PCS will
compete with existing cellular telephone service, and may provide features not
currently offered by cellular providers.
6
<PAGE> 9
THE OFFERING
<TABLE>
<S> <C>
Class A Common Stock offered(1)....................... 2,750,000 shares
Common Stock to be outstanding after this Offering:
Class A Common Stock(1)(2).......................... 2,750,000 shares
Class B Common Stock................................ 11,250,000 shares
-----------------
Total(1)(2)................................. 14,000,000 shares
</TABLE>
- ---------------
(1) Assumes no exercise of the Underwriters' over-allotment option.
(2) Does not include options to purchase an aggregate of up to approximately
270,000 shares of Class A Common Stock expected to be granted pursuant to
the Company's 1996 Stock Option Plan.
---------------------
Use of Proceeds................ For acquisitions of additional wireless
Systems, the expansion of existing cellular
Systems and for general corporate purposes.
Pending such uses, the proceeds will be applied
to reduce existing bank debt. See "Use of
Proceeds" and "Capitalization."
Voting Rights..................
Holders of Class A Common Stock are entitled to
one vote per share while holders of Class B
Common Stock are entitled to 10 votes per
share. The Class A Common Stock and Class B
Common Stock will vote together as one class on
all matters submitted to a vote of shareholders
generally, including the election of directors.
Immediately following the closing of this
Offering, the outstanding shares of Class A
Common Stock will represent approximately 2.4%
of the combined voting power of the outstanding
Common Stock (2.7% if the Underwriters'
over-allotment option is exercised in full).
The Company's existing shareholders will own
shares of Class B Common Stock representing in
the aggregate approximately 97.6% of the
combined voting power of the Common Stock
(97.3% if the Underwriters' over-allotment
option is exercised in full) and thereby will
continue to be able to control the election of
the Company's Board of Directors and generally
will be able to direct the affairs of the
Company. See "Principal Shareholders" and
"Description of Capital Stock."
Dividends on Common Stock...... Holders of Class A Common Stock and Class B
Common Stock will be entitled to share ratably,
as if a single class, in any dividends declared
by the Company on the Common Stock. The Company
does not anticipate paying dividends on its
Common Stock in the foreseeable future. See
"Dividend Policy" and "Description of Capital
Stock."
Conversion of Class B Common
Stock........................ Shares of Class B Common Stock are convertible
into Class A Common Stock on a share-for-share
basis subject to certain procedures and
restrictions. See "Description of Capital
Stock."
NASDAQ National Market Symbol.. UNWR
7
<PAGE> 10
SUMMARY FINANCIAL AND CERTAIN OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)
<TABLE>
<CAPTION>
HISTORICAL
---------------------------------------------------- PRO FORMA COMBINED AS ADJUSTED(1)
YEAR ENDED -----------------------------------
DECEMBER 31, NINE MONTHS YEAR ENDED NINE MONTHS
----------------------------- ENDED DECEMBER 31, ENDED
1993 1994 1995 SEPTEMBER 30, 1996 1995 SEPTEMBER 30, 1996
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenues............. $14,435 $22,711 $39,479 $ 44,176 $ 50,095 $ 48,719
Cost of service............ 4,513 7,445 11,430 11,622 14,121 12,653
Merchandise cost of
sales.................... 720 2,518 3,373 3,377 4,418 3,709
General and administrative
expense.................. 1,692 2,498 5,308 6,944 7,653 7,736
Sales and marketing
expense.................. 2,736 3,768 6,262 5,448 6,887 5,652
Depreciation and
amortization............. 2,037 2,892 5,686 6,432 9,478 7,851
Operating income........... 2,737 3,590 7,420 10,353 7,538 11,118
Interest income (expense),
net...................... 92 (629) (3,065) (4,296) (5,008) (3,861)
Other income............... 84 422 312 224 312 224
Net income................. 1,962 1,845 2,739 4,233 1,684 5,010
Net income per share....... $ 0.18 $ 0.17 $ 0.24 $ 0.38 $ 0.12 $ 0.36
OTHER FINANCIAL DATA:
EBITDA(2).................. $ 4,774 $ 6,482 $13,106 $ 16,785 $ 17,016 $ 18,969
</TABLE>
<TABLE>
<CAPTION>
HISTORICAL AS ADJUSTED(1)
AS OF AS OF
SEPTEMBER 30, 1996 SEPTEMBER 30, 1996
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital............ $ 4,931 $ 12,928
Property and equipment,
net...................... 26,407 26,407
Cellular licenses, net..... 73,320 73,320
Total assets............... 128,770 128,489
Long-term debt............. 87,682 60,373
Total liabilities.......... 102,608 67,303
Shareholders' equity....... 26,162 61,186
</TABLE>
<TABLE>
<CAPTION>
HISTORICAL
----------------------------------------------------
YEAR ENDED
DECEMBER 31, NINE MONTHS
----------------------------- ENDED
1993 1994 1995 SEPTEMBER 30, 1996
<S> <C> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
Ending subscribers......... 15,942 27,313 55,576 76,907
Penetration(3)............. 1.9% 3.3% 4.9% 5.4%
Churn(4)................... 1.2% 1.1% 1.4% 1.7%
Subscriber revenue per
average subscriber....... $ 61 $ 57 $ 58 $ 55
Selling & marketing costs
(all in) per net
additional
subscriber(5)............ $ 414 $ 465 $ 473 $ 599
</TABLE>
- ---------------
(1) The unaudited pro forma statement of operations data and EBITDA for the year
ended December 31, 1995 and the nine months ended September 30, 1996 include
the historical operations of the Company and give effect to the following as
if they occurred as of January 1, 1995, (i) the acquisition of the Kansas
Cluster, (ii) the acquisition of the Alabama-3 RSA, (iii) the acquisition of
the Alabama-4 RSA, (iv) this Offering and (v) the repayment of certain
existing debt. The unaudited balance sheet data as adjusted as of September
30, 1996 includes the historical accounts of the Company and gives effect to
the following as if they occurred as of September 30, 1996, (i) this
Offering and (ii) the repayment of certain existing debt.
(2) EBITDA represents operating income before depreciation and amortization.
EBITDA is not intended to represent cash flows from operating activities, as
determined in accordance with generally accepted accounting principles, nor
has it been presented as an alternative to operating income as an indicator
of operating performance. EBITDA should not be considered as a substitute
for measures of performance prepared in accordance with generally accepted
accounting principles.
(3) Represents the ratio of ending subscribers to total Pops.
(4) Represents the average of the monthly churn rates during the periods
presented. Churn equals the ratio of disconnected monthly subscribers to
average monthly subscribers.
(5) Includes selling and marketing expense and equipment subsidy (merchandise
cost of sales net of merchandise sales).
8
<PAGE> 11
RISK FACTORS
In addition to the other matters described in this Prospectus, each
prospective purchaser of the Class A Common Stock offered hereby should consider
the specific risk factors set forth below. This Prospectus contains certain
forward-looking statements which involve known and unknown risks, uncertainties
and other factors which may cause actual results, performance or achievements of
the Company or industry trends to differ materially from those expressed or
implied by such forward-looking statements. Such factors include, among others,
those discussed below and elsewhere in this Prospectus.
GROWTH BY ACQUISITIONS
The Company's growth strategy relies in part upon the acquisition and
development of additional wireless communications Systems. There can be no
assurance, however, that suitable acquisitions will be available to the Company,
that the Company will be able to obtain additional financing for any such
acquisitions, if required, or that the Company will be able to compete
effectively for these Systems against other potential purchasers, most of which
are larger and have greater financial resources than the Company. In addition,
the Company will be subject to risks that its existing and new Systems will not
perform as expected and that the returns from such Systems will not justify the
consideration paid or to be paid for them or the capital expenditures needed to
develop them.
COMPETITION
Competition for subscribers among wireless licensees is based principally
upon the services and enhancements offered, the technical quality of the System,
customer service, System coverage, capacity and price. There are currently two
cellular providers and will be up to six PCS providers in each market. The
Company believes that PCS service will in most respects appear essentially the
same to the user as cellular service. Consequently, the Company believes that
the primary competitive impact of PCS service on cellular operators will be the
addition of up to six additional competitors in each cellular market, in which
cellular operators previously had only one competitor. In the future, the
Company may face increased competition from entities providing similar services
using other communications technologies and services. The Company also competes
with paging and dispatch service providers, resellers and, to a lesser extent,
landline telephone service providers. Competition is expected to be intense. New
technologies may evolve that compete with the Company's products and services. A
number of the Company's competitors have substantially greater resources than
the Company. Several of the Company's competitors are operating or planning to
operate, through joint ventures and affiliation arrangements, wireless
communications systems that encompass most of the continental United States. See
"Business -- Competition."
SERVICE MARKS
The Company uses the CELLULARONE(R) service mark in all of its cellular
markets except the Louisiana Cluster. AT&T Wireless, which had been the single
largest user of the CELLULARONE(R) mark, has reduced its use of the mark. If for
some reason the name CELLULARONE(R) were to suffer diminished marketing appeal,
the Company's ability both to attract new subscribers and retain existing
subscribers could be materially impaired. In such circumstances or otherwise,
the Company may be required to develop a new service mark. Competitors of the
Company possess, and others may develop over time, branding with significantly
greater name recognition than that of the Company. A failure by the Company to
maintain existing rights to its current cellular branding or to develop suitable
alternatives thereto would have a material adverse effect on the Company's
ability to market its products and services and could require the Company to
invest significant additional funds to develop such alternatives. See
"Business -- Trade Name; Service Mark."
GOVERNMENTAL REGULATION
The licensing, construction, operation, acquisition and sale of cellular
and PCS Systems, as well as the number of cellular, PCS and other wireless
licensees permitted in each market, are regulated by the FCC. Changes in the
regulation of such activities, such as a decision by the FCC to issue new
licenses or permit
9
<PAGE> 12
more than two licenses in each market for cellular communications services or
more than six licenses for PCS services, could have a material adverse effect on
the Company's operations. In addition, all cellular and PCS licenses in the
United States are granted for an initial 10-year term, are subject to renewal
and may be revoked by the FCC at any time for cause. The Company believes that
each of its cellular licenses would, if currently up for renewal, be renewed
based upon FCC rules establishing a presumption in favor of licensees that have
provided "substantial" service during the past license term and have
substantially complied with their regulatory obligations during the initial
license period, but there can be no assurance that all of the Company's licenses
will be renewed. The wireless communications industry is also subject to certain
state and local governmental regulation. Operating costs are affected by these
and other governmental actions that are beyond the Company's control. See
"Business -- Governmental Regulation."
CERTAIN PCS RISKS
PCS Systems have no significant operating history in the United States and
there can be no assurance that these Systems will become profitable. There are
numerous significant risks associated with the PCS business in general and the
business of the PCS Partnership, in which the Company has a 24 1/3% interest, in
particular. First, PCS operators are free to choose from among several competing
technologies that are not interoperable. As a result, the PCS Partnership could
be deprived of revenues from PCS customers who roam into the PCS Partnership's
markets, and could lose PCS customers who become dissatisfied because they are
unable to roam outside the PCS Partnership's markets. Second, successful
build-out of a PCS System in each of the PCS Partnership's BTAs is subject to
completion of the network design; acquisition of appropriate sites for base
station equipment, which may require zoning variances and local regulatory
approval; the purchase and the installation of the network equipment, which are
susceptible to unpredictable supply or construction delays; and satisfactory
accommodation of microwave users currently using the spectrum. Third, although
the PCS Partnership, as the successful bidder, has been issued five licenses by
the FCC to operate PCS systems, these grants are subject to reconsideration by
the FCC and review by a court of competent jurisdiction. Fourth, the PCS
Partnership may ultimately be unable to finance the build-out and operation of
its PCS Systems without additional guarantees of financing from its partners,
including the Company, whose risk from the PCS Partnership could thereby be
significantly increased. The PCS Partnership has obtained a commitment for $59.0
million of financing, of which the Company would be required to guarantee
repayment of up to $6.2 million. See "Business -- PCS Operations,"
"-- Organization" and "-- Regulation -- Licensing of PCS Systems."
RADIO FREQUENCY EMISSION CONCERNS; MEDICAL DEVICE INTERFERENCE
Media reports have suggested that certain radio frequency ("RF") emissions
from wireless handsets may be linked to various health concerns, including
cancer, and may interfere with various electronic medical devices, including
hearing aids and pacemakers. Concerns over RF emissions may have the effect of
discouraging the use of wireless handsets, which could have an adverse effect
upon the Company's business. The FCC has a rulemaking proceeding pending to
update the guidelines and methods it uses for evaluating RF emissions from radio
equipment, including wireless handsets. While the proposal would impose more
restrictive standards on RF emissions from lower power devices such as wireless
handsets, it is believed that all wireless handsets currently marketed by the
Company and in use by the Company's subscribers already comply with the new
proposed standards.
EQUIPMENT FAILURE; NATURAL DISASTER
The Company's Systems include nine mobile telephone switching offices,
which are the point of connection between a wireless System and the local
landline telephone company and approximately 88 cell sites, which are the base
stations from which the cellular signal is transmitted to and from the user's
handset. The Company does not carry "business interruption" insurance, and major
equipment failure or a natural disaster affecting these switching offices or
sites could have a material adverse effect on the Company's operations.
10
<PAGE> 13
CONTROL BY EXISTING SHAREHOLDERS; ANTI-TAKEOVER EFFECT OF DUAL CLASSES OF COMMON
STOCK
Holders of Class A Common Stock are entitled to one vote per share, while
holders of Class B Common Stock are entitled to 10 votes per share. Class B
Common Stock will not trade in the public market, and applicable transfer
restrictions prevent Class B Common Stock from being acquired by persons other
than those who held Class B Common Stock of the Company immediately prior to
this Offering, their affiliates and certain other "qualified holders." See
"Shares Eligible for Future Sale." Immediately following the closing of this
Offering, the outstanding shares of Class A Common Stock will represent
approximately 2.4% of the combined voting power of the outstanding Common Stock
(2.7% if the Underwriters' over-allotment option is exercised in full). The
Company's existing shareholders, who will hold Class B shares, will continue to
be able to control the election of the Company's Board of Directors and
generally will be able to direct the affairs of the Company. Such control will
allow those persons to determine whether the Company should enter into
transactions involving an actual or potential change of control of the Company,
including transactions in which the holders of Class A Common Stock might
receive a premium for their shares over the then-prevailing market price, and
such control may therefore have a depressive effect on the market price for
Class A Common Stock.
NO PRIOR MARKET; POSSIBLE VOLATILITY OF STOCK PRICE
There has been no public market for the shares of the Company prior to this
Offering, and there is no assurance that a significant public market for the
Class A Common Stock will develop or be sustained after this Offering. The
initial public offering price of the Class A Common Stock was determined by
negotiations between the Company and the representatives of the Underwriters.
See "Underwriting." The market price of the Class A Common Stock may be
extremely volatile. Factors such as fluctuations in the valuation of wireless
licenses, results of current and future FCC auctions, acquisitions by the
Company, significant announcements by the Company and its competitors, quarterly
fluctuations in the Company's operating results and general conditions in the
communications market may have a significant impact on the market price of the
Class A Common Stock. In addition, in recent years the stock market has
experienced extreme price and volume fluctuations. These fluctuations have had a
substantial effect on the market prices for many high technology and
communications companies, often unrelated to the operating performance of the
specific companies.
SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of Class A Common Stock in the public market
after this Offering could adversely affect prevailing market prices. The Company
has agreed that, for a period of 180 days after the date of this Prospectus, it
will not sell additional shares of Common Stock or securities convertible into
or exchangeable for Class A Common Stock without the prior consent of Donaldson,
Lufkin & Jenrette Securities Corporation. The Company's Articles of
Incorporation provide that, subject to certain limitations, Class B Common Stock
may be converted into Class A Common Stock. Sales of certain shares of Class B
Common Stock are subject to certain restrictions set forth in the Company's
Articles of Incorporation and pursuant to Rule 144 under the Securities Act. See
"Shares Eligible for Future Sale."
DILUTION
Purchasers of the Class A Common Stock offered hereby will suffer immediate
dilution of $15.12 in the net tangible book value per share of the Class A
Common Stock from the initial public offering price. See "Dilution."
ABSENCE OF DIVIDENDS
The Company does not anticipate paying any dividends on its Common Stock in
the foreseeable future. See "Dividend Policy."
11
<PAGE> 14
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the Class A
Common Stock offered hereby (after deducting the underwriting discounts and
commissions and estimated offering expenses) are estimated to be approximately
$35.3 million ($40.7 million if the Underwriters' over-allotment option is
exercised in full). The Company intends to use the net proceeds of this Offering
for acquisitions of additional Systems, the expansion of existing cellular
Systems and for general corporate purposes. Pending such uses the proceeds will
be applied to reduce existing bank debt incurred to finance recent acquisitions.
The Company's long-term borrowings from 1994 through September 30, 1996 were
made through various credit facilities bearing various rates of interest at both
fixed and variable terms ranging from 5.45% to 10.50%, with maturity dates
ranging from December 20, 2002 to December 20, 2003. See Note (7) to the
consolidated financial statements of the Company, included elsewhere herein.
DIVIDEND POLICY
The Company anticipates that any income generated in the foreseeable future
will be retained for the development and expansion of its business and the
repayment of indebtedness, and therefore does not anticipate paying dividends on
its Common Stock in the foreseeable future. The payment of dividends is
restricted under the Company's long-term debt agreements.
DILUTION
The net tangible book deficit of the Company as of September 30, 1996, was
$51.0 million. Without taking into account any changes in such net tangible book
deficit after September 30, 1996, other than to give effect to the receipt of
net proceeds from the sale of the 2,750,000 shares of Class A Common Stock
offered at an assumed initial public offering price of $14.00 per share
(assuming the Underwriters' over-allotment option is not exercised), the net
tangible book deficit of the Company as adjusted for this Offering, would have
been $(1.12) per share, representing an immediate dilution to new investors of
$15.12 per share and an immediate increase of $3.41 per share to existing
shareholders. The following table illustrates the per share dilution:
<TABLE>
<S> <C> <C>
Assumed initial public offering price(1)........................... $14.00
------
Net tangible book deficit(2)..................................... $(4.53)
------
Decrease in net tangible book deficit per share attributable to
payments by new investors..................................... 3.41
------
Net tangible book deficit per share as adjusted for this
Offering(2)...................................................... (1.12)
------
Dilution per share to new investors(3)............................. $15.12
======
</TABLE>
- ---------------
(1) Before deducting the underwriting discounts and commissions and offering
expenses to be paid by the Company.
(2) "Net tangible book deficit per share" represents the amount of total assets
less total liabilities, excluding intangibles of $77.2 million, consisting
primarily of cellular licenses and deferred financing costs, divided by the
number of shares of Common Stock outstanding of 11,250,000 before this
Offering and 14,000,000 after this Offering.
(3) Dilution is the difference between the amount of cash paid by new investors
for a share of Class A Common Stock and net tangible book deficit per share
as adjusted for this Offering.
The foregoing table assumes no exercise of outstanding stock options. As of
the date of this Prospectus, there are outstanding stock options to purchase up
to approximately 270,000 shares of Class A Common Stock at an exercise price of
approximately $14.00 per share. If all such options had been outstanding and
exercised at September 30, 1996, the consolidated net tangible book deficit per
share of Common Stock as of such date would have been $(4.10) and the
consolidated net tangible book deficit per share after this Offering would
12
<PAGE> 15
have been $(0.84), representing an immediate dilution to new investors of $14.84
per share and an immediate increase of $3.26 per share to existing shareholders.
The following table sets forth on a pro forma basis as of September 30,
1996, the number of shares of Common Stock purchased from the Company and the
total consideration paid and the average price per share paid by the existing
shareholders of the Company and by new investors purchasing shares in this
Offering, before deducting the underwriting discounts and commissions and
offering expenses.
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
----------------------- --------------------- PRICE PER
NUMBER PERCENT(1) AMOUNT PERCENT SHARE
---------- ---------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing shareholders(2)........... 11,250,000 80.4% $ -- --% $ --
New investors...................... 2,750,000 19.6 38,500,000 100.0 14.00
---------- ----- ----------- -----
Total.................... 14,000,000 100.0% $38,500,000 100.0%
========== ===== =========== =====
</TABLE>
- ---------------
(1) Percentage of total shares of Common Stock to be outstanding after this
Offering.
(2) The Common Stock held by existing shareholders has been issued over time
and, for purposes of this comparison, is assumed to have been issued for
nominal consideration.
13
<PAGE> 16
CAPITALIZATION
The following table sets forth the unaudited consolidated capitalization of
the Company as of September 30, 1996, and the unaudited consolidated
capitalization as adjusted for this Offering. This table should be read in
conjunction with the financial statements appearing elsewhere in this
Prospectus, including the notes thereto, the "Unaudited Pro Forma Condensed
Combined Financial Data" and notes thereto and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
<TABLE>
<CAPTION>
ACTUAL AS ADJUSTED
-------- -----------
<S> <C> <C>
Current portion of long-term debt....................................... $ 7,996 $ --
======== ========
Long-term debt.......................................................... 87,682 60,373
Shareholders' equity:
Preferred Stock, no par value, 40,000,000 shares authorized and no
shares issued and outstanding actual and as adjusted............... -- --
Class A Common Stock, $.01 par value per share, 100,000,000 shares
authorized and no shares issued and outstanding actual, 2,750,000
shares outstanding as adjusted..................................... -- 28
Class B Common Stock, $.01 par value per share, 60,000,000 shares
authorized and 11,250,000 shares issued and outstanding actual and
as adjusted........................................................ 112 112
Additional paid-in capital............................................ 1,835 37,112
Retained earnings..................................................... 24,215 23,934
-------- --------
Total shareholders' equity.................................... 26,162 61,186
-------- --------
Total capitalization.......................................... $113,844 $ 121,559
======== ========
</TABLE>
14
<PAGE> 17
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The following unaudited pro forma condensed combined statements of
operations of the Company for the year ended December 31, 1995 and the nine
months ended September 30, 1996 give effect to the following transactions as if
they occurred as of January 1, 1995: (i) the acquisition of the assets of
Miscellco Communications, Inc., which includes the System serving the Kansas
Cluster (Kansas-1, 2, 6, 7, 11, 12, 13 RSAs and Oklahoma-1 RSA) on April 30,
1995; (ii) the acquisition of the assets of West Alabama Cellular Telephone
Company, Inc., which includes the System serving Alabama-3 RSA on May 15, 1996;
(iii) the acquisition of the Alabama-4 RSA on July 1, 1996; and (iv) the sale by
the Company of the Common Stock offered hereby (assuming no exercise of the
Underwriters' over-allotment option) and the application of the net proceeds
therefrom to repay a portion of existing debt. The following condensed balance
sheet as adjusted as of September 30, 1996 gives effect to (iv) noted above as
if such transaction had occurred on September 30, 1996. The unaudited pro forma
condensed combined financial statements give effect to the aforementioned
acquisitions under the purchase method of accounting and the assumptions in the
accompanying notes to the pro forma condensed combined financial statements. The
historical financial statements relating to the Kansas and Alabama Clusters
include the financial position and results of operations of the Systems through
the date of acquisition by the Company.
The following unaudited pro forma condensed combined financial information
has been prepared by the Company's management based in part on information
provided with respect to historical financial statements of the Systems included
elsewhere in this Prospectus. The unaudited pro forma data is not designed to
represent and does not represent what the Company's financial position or
results of operations actually would have been had the aforementioned
transactions been completed as of the date or the beginning of the periods
indicated, or to project the Company's financial position or results of
operations at any future date or for any future period. The pro forma condensed
combined financial statements should be read in conjunction with the financial
statements and notes of the Company contained elsewhere herein.
15
<PAGE> 18
US UNWIRED INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL
-------------------------------------------- PRO FORMA
WEST PRO FORMA PRO FORMA OFFERING COMBINED
US UNWIRED MISCELLCO ALABAMA ALABAMA 4 ADJUSTMENTS COMBINED ADJUSTMENTS AS ADJUSTED
---------- --------- ------- --------- ----------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues...................... $39,479 $ 2,356 $3,366 $ 4,894 $ -- $50,095 $ -- $50,095
Costs and expenses:
Costs of service............ 11,430 416 854 1,421 -- 14,121 -- 14,121
Merchandise cost of sales... 3,373 357 337 351 -- 4,418 -- 4,418
General and
administrative............ 5,308 550 1,129 666 -- 7,653 -- 7,653
Sales and marketing......... 6,262 366 73 186 -- 6,887 -- 6,887
Depreciation and
amortization.............. 5,686 250 252 455 2,835(a) 9,478 -- 9,478
------- ------- ------ ------- ------- ------- --------- -------
32,059 1,939 2,645 3,079 2,835 42,557 -- 42,557
------- ------- ------ ------- ------- ------- --------- -------
Operating income.............. 7,420 417 721 1,815 (2,835) 7,538 -- 7,538
Other income (expense):
Interest expense, net....... (3,065) (317) (170) (460) (4,068)(b) (8,080) 3,072(c) (5,008)
Gain (loss) on sale of
assets.................... (32) -- -- -- -- (32) -- (32)
Investment income........... 344 -- -- -- -- 344 -- 344
------- ------- ------ ------- ------- ------- --------- -------
Total other income
(expense)................... (2,753) (317) (170) (460) (4,068) (7,768) 3,072 (4,696)
------- ------- ------ ------- ------- ------- --------- -------
Income (loss) before income
taxes and minority
interest.................... 4,667 100 551 1,355 (6,903) (230) 3,072 2,842
------- ------- ------ ------- ------- ------- --------- -------
Income tax expense
(benefit)................... 2,382 -- -- 438 (2,375)(d) 445 1,167(e) 1,612
------- ------- ------ ------- ------- ------- --------- -------
Income (loss) before minority
interest.................... 2,285 100 551 917 (4,528) (675) 1,905 1,230
------- ------- ------ ------- ------- ------- --------- -------
Minority interest in losses of
subsidiary.................. 454 -- -- -- -- 454 -- 454
------- ------- ------ ------- ------- ------- --------- -------
Net income (loss) applicable
to common shareholders...... $ 2,739 $ 100 $ 551 $ 917 $(4,528) $ (221) $ 1,905 $ 1,684
======= ======= ====== ======= ======= ======= ========= =======
Net income per common share... $ 0.24 $ 0.12
======= =======
Weighted average number of
shares outstanding.......... 11,242,334 2,750,000 13,992,334
========== ========= ==========
</TABLE>
16
<PAGE> 19
US UNWIRED INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL
---------------------------------- PRO FORMA
WEST PRO FORMA PRO FORMA OFFERING COMBINED AS
US UNWIRED ALABAMA ALABAMA 4 ADJUSTMENTS COMBINED ADJUSTMENTS ADJUSTED
---------- ------- --------- ----------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues............................ $ 44,176 $1,641 $ 2,902 $ -- $48,719 $ -- $ 48,719
Costs and expenses:
Costs of service.................. 11,622 339 692 -- 12,653 -- 12,653
Merchandise costs of sales........ 3,377 155 177 -- 3,709 -- 3,709
General and administrative........ 6,944 529 263 -- 7,736 -- 7,736
Sales and marketing............... 5,448 37 167 -- 5,652 -- 5,652
Depreciation and amortization..... 6,432 102 563 754(a) 7,851 -- 7,851
--------- ------ ------- ------- ------- --------- ----------
33,823 1,162 1,862 754 37,601 -- 37,601
--------- ------ ------- ------- ------- --------- ----------
Operating income.................... 10,353 479 1,040 (754) 11,118 -- 11,118
Other income (expense):
Interest expense, net............. (4,296) (61) -- (1,808)(b) (6,165) 2,304(c) (3,861)
Investment income................. 224 -- -- -- 224 -- 224
--------- ------ ------- ------- ------- --------- ----------
Total other income (expense)........ (4,072) (61) -- (1,808) (5,941) 2,304 (3,637)
--------- ------ ------- ------- ------- --------- ----------
Income before income taxes and
minority interest................. 6,281 418 1,040 (2,562) 5,177 2,304 7,481
--------- ------ ------- ------- ------- --------- ----------
Income tax expense (benefit)........ 2,351 -- 362 (815)(d) 1,898 876(e) 2,774
--------- ------ ------- ------- ------- --------- ----------
Income before minority interest..... 3,930 418 678 (1,747) 3,279 1,428 4,707
--------- ------ ------- ------- ------- --------- ----------
Minority interest in losses of
subsidiary........................ 303 -- -- -- 303 -- 303
--------- ------ ------- ------- ------- --------- ----------
Net income applicable to common
shareholders...................... $ 4,233 $ 418 $ 678 $(1,747) $ 3,582 $ 1,428 $ 5,010
========= ====== ======= ======= ======= ========= ==========
Net income per common share......... $ 0.38 $ 0.36
========= ==========
Weighted average number of shares
outstanding....................... 11,250,000 2,750,000 14,000,000
========== ========= ==========
</TABLE>
17
<PAGE> 20
US UNWIRED INC.
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
AS OF SEPTEMBER 30, 1996
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
HISTORICAL OFFERING
US UNWIRED ADJUSTMENTS AS ADJUSTED
---------- ----------- -----------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents.......................... $ 8,166 $ -- $ 8,166
Subscriber receivables, net........................ 7,890 -- 7,890
Other receivables.................................. 1,721 -- 1,721
Inventory.......................................... 1,683 -- 1,683
Prepaid expenses................................... 258 -- 258
-------- -------- --------
Total current assets............................ 19,718 -- 19,718
Investments in unconsolidated affiliates............. 5,426 -- 5,426
Property and equipment, net.......................... 26,407 -- 26,407
Cellular licenses, net............................... 73,320 -- 73,320
Deferred income taxes................................ 44 -- 44
Other assets......................................... 3,855 (281)(g) 3,574
-------- -------- --------
Total assets.................................... $128,770 $ (281) $ 128,489
======== ======== ========
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses.............. $ 6,790 $ -- $ 6,790
Current maturities of long-term debt............... 7,996 (7,996)(f) --
-------- -------- --------
Total current liabilities....................... 14,786 (7,996) 6,790
Long-term debt....................................... 87,682 (27,309)(f) 60,373
Minority interest.................................... 140 -- 140
Shareholders' equity................................. 26,162 35,024(f)(g) 61,186
-------- -------- --------
Total liabilities and shareholders' equity...... $128,770 $ (281) $ 128,489
======== ======== ========
</TABLE>
18
<PAGE> 21
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
(IN THOUSANDS)
For purposes of determining the pro forma effect of the transactions
described in the previous pages on the Company's Unaudited Pro Forma Condensed
Combined Statements of Operations for the year ended December 31, 1995 and the
nine months ended September 30, 1996, the following adjustments have been made:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, 1995 1996
----------------- -----------------
<S> <C> <C>
(a) Represents incremental amortization and depreciation due
to the application of purchase accounting, which
increased the basis of intangible assets, primarily
license costs. Intangible assets are amortized on a
straight line basis over 20 years. Property and
equipment, which consists primarily of cell site
equipment, is depreciated on a straight line basis over
five years.
Elimination of historical amortization and depreciation... $ (957) $ (665)
Amortization of cellular licenses......................... 2,454 927
Depreciation of cell site equipment....................... 1,338 492
------- -------
$ 2,835 $ 754
======= =======
(b) Represents the net effect on interest expense resulting
from (i) additional borrowings required to finance the
acquisition of the Kansas and Alabama Clusters under
bank credit facilities with a weighted average interest
rate of 8.7% per annum and (ii) interest on debt not
assumed in connection with the acquisitions.
Interest expense related to borrowings under bank credit
facilities............................................. $ 5,015 $ 1,869
Elimination of historical interest expense on debt not
assumed................................................ (947) (61)
------- -------
$ 4,068 $ 1,808
======= =======
(c) Represents the elimination of interest expense as a
result of the application of proceeds from this Offering
to repay a portion of the debt incurred in the
acquisitions.............................................. $ 3,072 $ 2,304
======= =======
(d) Represents income tax benefit calculated using statutory
income tax rates, applicable to the pro forma
adjustments and to record income tax on acquired
companies where no prior income taxes were provided....... $(2,375) $ (815)
======= =======
(e) Represents income tax expense, calculated using
statutory income tax rates, related to the elimination
of interest expense resulting from the application of
proceeds from this Offering to repay a portion of
indebtedness.............................................. $ 1,167 $ 876
======= =======
</TABLE>
19
<PAGE> 22
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
(IN THOUSANDS)
For purposes of determining the pro forma effect of the transactions
described in the previous pages on the Company's Unaudited Pro Forma Condensed
Balance Sheet as of September 30, 1996, the following adjustments have been
made:
<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30, 1996
------------------
<S> <C>
(f) Represents the application of the net proceeds of this Offering to repay
a portion of debt incurred in the acquisitions.
Offering of Class A Common Stock, after deducting underwriting
discounts and commissions and estimated expenses of this Offering
(assumes the sale of 2,750,000 shares of Class A Common Stock at
$14.00 per share, the midpoint of the range set forth on the cover of
this Prospectus)...................................................... $ 35,305
========
Retirement of long-term debt:
Current portion...................................................... $ (7,996)
Long-term portion.................................................... (27,309)
--------
Total repayment of long-term debt................................. $(35,305)
========
(g) Represents the net adjustment to shareholders' equity and other assets,
to show the result of the write-off of deferred financing costs
associated with the early extinguishment of existing debt
Other assets........................................................... $ (281)
========
Shareholders' equity................................................... $ (281)
========
</TABLE>
20
<PAGE> 23
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data set forth below for the Company
for the fiscal years ended December 31, 1993, 1994, 1995, and as of December 31,
1994 and 1995 is derived from, and qualified by reference to, the consolidated
financial statements of the Company, which financial statements have been
audited by KPMG Peat Marwick LLP, independent certified public accountants. The
consolidated financial statements as of December 31, 1994 and 1995 and for the
years ended December 31, 1993, 1994 and 1995, and the report thereon, are
included elsewhere in this Prospectus. The selected consolidated financial data
set forth below for the Company as of and for the nine months ended September
30, 1995 and 1996 are derived from unaudited consolidated financial statements
of the Company included elsewhere in this Prospectus and have been prepared on
the same basis as the audited financial statements and contain all adjustments,
consisting of normal recurring accruals, that the Company considers necessary
for a fair presentation of the financial position and results of operations for
the periods presented. The selected consolidated financial data set forth below
for the Company for the years ended December 31, 1991 and 1992 and as of
December 31, 1991, 1992 and 1993, are derived from unaudited consolidated
financial statements not included elsewhere herein. The selected consolidated
financial data set forth below should be read in conjunction with the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements of the Company and the
Notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS
FISCAL YEARS ENDED DECEMBER 31, ENDED SEPTEMBER 30,
-------------------------------------------------------------- -----------------------
1991 1992 1993 1994 1995 1995 1996
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Total revenues......... $ 9,189 $ 11,314 $ 14,435 $ 22,711 $ 39,479 $ 26,829 $ 44,176
Cost of service........ 2,814 2,963 4,513 7,445 11,430 7,891 11,622
Merchandise cost of
sales................ 407 554 720 2,518 3,373 1,923 3,377
General and
administrative....... 1,908 1,890 1,692 2,498 5,308 3,553 6,944
Sales and marketing.... 1,619 2,124 2,736 3,768 6,262 3,986 5,448
Depreciation and
amortization......... 1,200 1,337 2,037 2,892 5,686 3,854 6,432
----------- ----------- ----------- ----------- ----------- ----------- -----------
Operating income....... 1,241 2,446 2,737 3,590 7,420 5,622 10,353
Interest income
(expense), net....... 445 373 92 (629) (3,065) (2,018) (4,296)
Other income (expense),
net.................. 74 278 84 422 312 272 224
Income tax expense..... 588 1,276 1,352 1,977 2,382 1,841 2,351
Minority interest in
losses of
subsidiary........... -- -- 401 439 454 380 303
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income............. $ 1,172 $ 1,821 $ 1,962 $ 1,845 $ 2,739 $ 2,415 $ 4,233
=========== =========== =========== =========== =========== =========== ===========
Net income per share... $ 0.11 $ 0.17 $ 0.18 $ 0.17 $ 0.24 $ 0.21 $ 0.38
=========== =========== =========== =========== =========== =========== ===========
Weighted average shares
outstanding.......... 10,933,782 10,933,782 10,933,782 11,108,874 11,242,334 11,239,783 11,250,000
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
AS OF SEPTEMBER
AS OF DECEMBER 31, 30,
----------------------------------------------- ------------------
1991 1992 1993 1994 1995 1995 1996
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital...................... $ 9,682 $ 6,854 $ 1,727 $ 6,672 $ 5,846 $ 4,904 $ 4,931
Property and equipment, net.......... 5,371 5,663 11,882 13,261 20,911 21,429 26,407
Cellular licenses, net............... -- -- 10,969 10,095 38,427 39,225 73,320
Total assets......................... 16,506 16,420 29,887 35,500 78,523 77,091 128,770
Long-term debt....................... 2,293 618 7,728 13,020 49,274 47,764 87,682
Total liabilities.................... 3,638 1,731 13,237 16,632 56,774 55,666 102,608
Shareholders' equity................. 12,868 14,689 16,650 18,868 21,749 21,425 26,162
</TABLE>
21
<PAGE> 24
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the Company's consolidated financial statements and notes thereto and other
financial information included elsewhere in this Prospectus.
OVERVIEW
The Company owns and operates cellular communications Systems in 14 RSAs
and one MSA. The Company has been operating cellular Systems since 1987 and has
experienced rapid growth during the last few years. The Company's cellular
subscribers and penetration were approximately 77,000 and 5.4%, respectively, at
September 30, 1996 compared to approximately 9,000 and 2.4% at January 1, 1993.
The Company intends to continue to increase its total number of subscribers
through increased penetration of its existing markets and through acquisitions
of new markets. The Company's results of operations for the periods described
herein will not necessarily be indicative of future performance.
The Company's revenues consist primarily of subscriber revenues (including
access charges and usage charges), roaming revenues (fees charged for providing
services to subscribers of other cellular communications systems when such
subscribers "roam" by placing or receiving a phone call within one of the
Company's service areas) and merchandise sales (sales of cellular phones and
accessories). The Company offers promotional discounts on phones in order to
attract new subscribers and expects to continue this practice. Because of such
promotional discounts, increases in merchandise sales typically result in
decreases in operating income. The majority of the Company's revenues are
derived from subscriber revenues. Subscriber revenues and merchandise sales also
include amounts recognized for sales of paging service; however, revenues from
paging are expected to account for less than 4% of the Company's total revenues
for the year ended December 31, 1996.
Average monthly revenue per subscriber (based upon subscriber revenues
only) from its cellular operations decreased to $58.37 in 1995 compared to
$61.36 in 1993. The Company's decrease in average monthly revenue per
subscriber, which is consistent with industry trends, reflects its efforts to
expand subscriber base and overall penetration by lowering its prices (including
roaming rates) and offering affordable rate plans in its markets. The Company
believes that, by lowering its prices and increasing the quality of its
services, it will build subscriber loyalty in its existing markets, reduce
potential churn and provide a competitive advantage against PCS and other
wireless competitors. The Company anticipates that, although the average monthly
subscriber revenue per subscriber may decline due to additional price decreases
and increased competition, these decreases will eventually be offset by an
enlarged subscriber base and by increased usage once subscribers begin taking
advantage of the full potential and utility of cellular phone service.
Cost of service consists of the costs of providing wireless service to
subscribers, which includes costs to access local exchange and long distance
carrier facilities, costs of maintaining the Company's wireless network, and
costs associated with subscribers roaming on other carriers' networks. Costs of
merchandise sales consist of inventory costs associated primarily with cellular
phones and related accessories. General and administrative expenses include
billing costs, administrative costs associated with maintaining subscribers,
which include customer service, accounting and other centralized functions, and
provisions for subscriber bad debt. Sales and marketing costs include costs
associated with acquiring subscribers, including sales, advertising and
promotional expenses. Depreciation and amortization include primarily
depreciation expense associated with the Company's property and equipment in
service and amortization associated with its wireless licenses for operational
markets.
22
<PAGE> 25
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1995
The Company had 76,907 cellular subscribers at September 30, 1996, an
increase of 21,331 or 38.4% from December 31, 1995. At September 30, 1995, the
Company had 48,475 subscribers, an increase of 21,162 or 77.5% from December 31,
1994. For the nine months ended September 30, 1996 and September 30, 1995, net
subscribers added through cellular System acquisitions were 8,800 and 10,900,
respectively. Excluding such acquired cellular subscribers, the percentage of
net cellular subscriber additions were 22.6% and 37.8%, respectively. Of the
total subscribers added in the nine month period ended September 30, 1996, 61.7%
were from direct Company sales versus 38.3% added through independent agent and
retailer distribution channels. This reflects the Company's focus on direct
retail sales channels.
REVENUES
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C>
Subscriber revenues.............................................. $19,423 $32,851
Roaming revenues................................................. 6,248 9,711
Merchandise sales................................................ 998 1,287
Other revenue.................................................... 160 327
------- -------
Total revenues......................................... $26,829 $44,176
======= =======
</TABLE>
Subscriber revenues increased to $32.9 million for the nine months ended
September 30, 1996 from $19.4 million for the nine months ended September 30,
1995. This $13.5 million or 69.6% increase was primarily due to the increased
number of cellular subscribers in 1996, including those acquired in the
acquisitions of the Kansas and Alabama Clusters. Average monthly cellular
subscriber revenue per subscriber was $55.10 for the nine months ended September
30, 1996 compared to $56.95 for the nine months ended September 30, 1995. The
Company believes the decrease in subscriber revenue per subscriber primarily
reflects price decreases implemented to build subscriber base and stimulate
cellular usage.
Roaming revenues were $9.7 million for the nine months ended September 30,
1996 compared to $6.2 million for the nine months ended September 30, 1995, an
increase of $3.5 million or 56.5%. Growth in the Company's roaming revenues
generally reflected increases in the Company's geographical coverage and market
penetration levels in adjacent markets and the cellular industry as a whole.
Roaming revenues as a percentage of total revenues declined to 22.0% for the
nine months ended September 30, 1996 from 23.3% for the nine months ended
September 30, 1995 as a result of the 69.6% growth in subscriber revenues, which
exceeded the 56.5% increase in roaming revenues. Although the Company expects
total roaming revenues to continue to increase as the Company and the cellular
industry grow, it expects its roaming revenues as a percentage of total revenues
to continue to decline as its subscriber base grows and it reduces roaming
rates.
Merchandise sales, which consist primarily of cellular handset sales,
increased to $1.3 million for the nine months ended September 30, 1996 from
$998,339 for the nine months ended September 30, 1995. This $288,256 or 28.9%
increase was primarily due to the increase in subscriber additions partially
offset by a decrease in the average handset sales price. The Company anticipates
continued growth in merchandise sales as a result of increases in net subscriber
additions.
Other revenues, which consist primarily of microwave and management
operations, were $327,844 for the nine months ended September 30, 1996, compared
to $160,077 for the nine months ended September 30, 1995. This represents
$167,767 or a 104.8% increase which resulted primarily from the management
services provided to the PCS Partnership and other non-consolidated affiliates.
However, other revenues remained approximately 0.7% of total revenues for the
nine months ended September 30, 1996 and 1995.
23
<PAGE> 26
OPERATING EXPENSES
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C>
Cost of service......................................... $ 7,891 $11,622
Merchandise cost of sales............................... 1,923 3,377
General and administrative.............................. 3,553 6,944
Sales and marketing..................................... 3,986 5,448
Depreciation and amortization........................... 3,854 6,432
------- -------
Total operating expenses...................... $21,207 $33,823
======= =======
</TABLE>
Cost of service increased to $11.6 million for the nine months ended
September 30, 1996 from $7.9 million for the nine months ended September 30,
1995. This increase was primarily attributable to the increased number of
subscribers which resulted in increased costs to access local exchange and long
distance carrier facilities and maintain the Company's expanding wireless
network. While cost of service increased $3.7 million or 46.8%, it decreased as
a percentage of service revenues to 27.3% for the nine months ended September
30, 1996 from 30.7% for the nine months ended September 30, 1995, which was
primarily due to efficiencies gained from the growing subscriber base. Service
revenues equal total revenues less merchandise sales.
Merchandise cost of sales increased to $3.4 million for the nine months
ended September 30, 1996 from $1.9 million for the nine months ended September
30, 1995, an increase of $1.5 million or 79.0%, which was primarily attributable
to the increased number of subscribers.
General and administrative costs increased to $6.9 million for the nine
months ended September 30, 1996 from $3.6 million for the nine months ended
September 30, 1995, an increase of $3.3 million or 91.7%. The increase was
largely attributable to the added costs associated with rapid expansion of the
Company's subscriber base. These costs represent salaries for an incremental
increase in the number of customer service representatives and increased costs
of service and collections. As a percentage of service revenues general and
administrative costs increased to 16.3% for the nine months ended September 30,
1996 from 13.8% for the nine months ended September 30, 1995. This increase
reflects the Company's commitment to quality customer service and the aggressive
promotion of its cellular service offset somewhat by economies of scale.
Sales and marketing costs increased to $5.4 million for the nine months
ended September 30, 1996 from $4.0 million for the nine months ended September
30, 1995, an increase of $1.4 million or 35.0%, which was primarily due to
subscriber additions. Sales and marketing costs per net subscriber added
(excluding equipment subsidy) increased to $433 for the nine months ended
September 30, 1996 from $387 for the nine months ended September 30, 1995, an
increase primarily attributable to added marketing costs in the acquired
cellular Systems, emphasizing the Company's aggressive marketing in newly
acquired Systems. The Company believes that, prior to its acquisition of these
Systems, past marketing efforts in acquired Systems were inadequate. After
giving effect to equipment subsidy, costs per net subscriber added increased to
$599 for the nine months ended September 30, 1996 from $476 for the nine months
ended September 30, 1995.
Depreciation and amortization expense increased to $6.4 million for the
nine months ended September 30, 1996 from $3.9 million for the nine months ended
September 30, 1995. This $2.5 million or 64.1% increase is primarily
attributable to the expansion of the Company's cellular Systems, and to an
increase in gross cellular licensing costs and other assets to $82.3 million at
September 30, 1996 from $41.9 million at September 30, 1995.
24
<PAGE> 27
OPERATING INCOME
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------
1995 1996
------ -------
(IN THOUSANDS)
<S> <C> <C>
Operating income...................................... $5,622 $10,353
====== ======
</TABLE>
Total operating income increased to $10.4 million for the nine months ended
September 30, 1996 from $5.6 million for the nine months ended September 30,
1995. This increase of $4.8 million or 85.7% was due to increased revenues,
which exceeded increases in operating expenses.
OTHER INCOME (EXPENSE)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C>
Interest expense.................................... $(2,253) $(4,510)
Interest income..................................... 235 214
Investment income................................... 272 224
------- -------
Total other income (expense).............. $(1,746) $(4,072)
======= =======
</TABLE>
Interest expense increased to $4.5 million for the nine months ended
September 30, 1996 from $2.3 million for the nine months ended September 30,
1995. The $2.2 million or 95.7% increase was primarily attributable to an
increase in borrowings, which increased to $95.7 million at September 30, 1996
from $50.1 million at September 30, 1995, to fund the Company's expansion and
capital expenditures, and was partially offset by a decrease in interest and
investments income items to $438,026 for the nine months ended September 30,
1996 from $507,087 for the nine months ended September 30, 1995. The interest
expense was further affected by a decline in the weighted average interest rate
to 8.27% at September 30, 1996 from 8.88% at September 30, 1995.
NET INCOME
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------
1995 1996
------ ------
(IN THOUSANDS)
<S> <C> <C>
Net income............................................. $2,415 $4,233
====== ======
</TABLE>
Net income increased to $4.2 million for the nine months ended September
30, 1996 from $2.4 million for the nine months ended September 30, 1995. This
$1.8 million or 75.0% increase was due to the changes described in the various
revenue and expense items which are primarily driven by the 58.7% increase in
subscribers. Net income was also impacted by income tax expense which increased
by $509,984 for the nine months ended September 30, 1996 over the same period in
1995.
EBITDA
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------
1995 1996
------ -------
(IN THOUSANDS)
<S> <C> <C>
EBITDA................................................ $9,476 $16,785
====== ======
</TABLE>
25
<PAGE> 28
EBITDA improved to $16.8 million for the nine months ended September 30,
1996 from $9.5 million for the nine months ended September 30, 1995. The $7.3
million or 76.8% increase was primarily the result of increased revenues due to
the increased subscriber base and the related cost efficiencies. As a result,
EBITDA as a percentage of revenues increased to 38.0% for the nine months ended
September 30, 1996 from 35.3% for the nine months ended September 30, 1995.
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
The Company had 55,576 cellular subscribers at December 31, 1995, an
increase of 28,263 or 103.5% during 1995. At December 31, 1994, the Company had
27,313 subscribers, an increase of 11,371 or 71.3% during 1994. During 1995 and
1994, net subscribers added through cellular System acquisitions were
approximately 10,900 and 0, respectively. Excluding such acquired cellular
subscribers in 1995, the percentage of net cellular subscriber additions
increased by 63.7%.
REVENUES
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------------
1994 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Subscriber revenues................................. $14,706 $29,029
Roaming revenues.................................... 6,603 8,909
Merchandise sales................................... 1,002 1,404
Other revenue....................................... 400 137
------- -------
Total revenues............................ $22,711 $39,479
======= =======
</TABLE>
Subscriber revenues increased to $29.0 million in 1995 from $14.7 million
in 1994. This $14.3 million or 97.4% increase was primarily due to the 103.5%
growth in the number of subscribers, including subscribers added in the
acquisition of the Kansas Cluster. Average monthly cellular subscriber revenue
per subscriber was $58.37 in 1995, compared to $56.66 in 1994. The Company
believes this increase in average monthly subscriber revenue per subscriber is
due to the higher subscriber revenue per subscriber in the Kansas Cluster.
Roaming revenues were $8.9 million in 1995 compared to $6.6 million in
1994, an increase of $2.3 million or 34.9%. Growth in the Company's roaming
revenues generally reflected increases in the Company's geographical coverage
and market penetration levels in adjacent markets and the cellular industry as a
whole. Roaming revenues as a percentage of total revenues declined to 22.6% in
1995 from 29.1% in 1994 as a result of the 97.4% growth in subscriber revenues,
which exceeded the 34.9% increase in roaming revenues.
Merchandise sales, which consist primarily of cellular handset sales,
increased to $1.4 million in 1995 from $1.0 million in 1994. This $401,204 or
40.0% increase was primarily due to the increase in subscriber additions
partially offset by a decrease in the average handset sales price. The Company
anticipates continued growth in merchandise sales as a result of increases in
subscriber additions.
Other revenues which consist primarily of management, microwave and
voice-mail operations, were $136,962 in 1995 compared to $400,257 in 1994. This
$263,295 or 65.8% decrease was primarily the result of the Company's sale of the
voice mail operations in 1994.
26
<PAGE> 29
OPERATING EXPENSES
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------------
1994 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Cost of service................................................ $ 7,445 $11,430
Merchandise cost of sales...................................... 2,518 3,373
General and administrative..................................... 2,498 5,308
Sales and marketing............................................ 3,768 6,262
Depreciation and amortization.................................. 2,892 5,686
------- -------
Total operating expenses............................. $19,121 $32,059
======= =======
</TABLE>
Cost of service increased to $11.4 million in 1995 from $7.4 million in
1994, primarily as a result of the 103.5% increase in the number of subscribers
(including acquired subscribers) which resulted in increased costs to access
local exchange and long distance carrier facilities and maintain the Company's
expanding wireless network. While cost of service increased $4.0 million or
54.1% for the year, it decreased as a percentage of service revenues to 30.1% in
1995 from 34.9% in 1994, which was primarily due to efficiencies gained from the
growing subscriber base.
Merchandise cost of sales increased to $3.4 million in 1995 from $2.5
million in 1994, an increase of $854,826 or 34.0%, which was primarily
attributable to the increased number of subscriber additions.
General and administrative costs increased to $5.3 million in 1995 from
$2.5 million in 1994, an increase of $2.8 million or 112.0%. The increase was
primarily attributable to the added costs associated with supporting the
increased subscriber base. These costs represent salaries for an incremental
increase in the number of customer service representatives and increased costs
of service and collections. As a percentage of service revenues, general and
administrative costs increased to 14.0% for 1995 from 11.7% in 1994. This
increase reflects the Company's commitment to quality customer service and its
aggressive promotion of cellular service offset somewhat by economies of scale.
The increase in general and administrative support costs was directly driven by
the acquisition of the Kansas Cluster.
Sales and marketing costs increased to $6.3 million in 1995 from $3.8
million in 1994, an increase of $2.5 million or 65.8%, which was primarily due
to subscriber additions, and an increase in start-up marketing costs in newly
acquired markets. Sales and marketing costs per net subscriber added (excluding
equipment subsidy) increased to $360 in 1995 from $332 in 1994. After giving
effect to equipment subsidy, costs per net subscriber added increased to $473 in
1995 from $465 in 1994.
Depreciation and amortization expense was $5.7 million in 1995 compared to
$2.9 in 1994. This $2.8 million or 96.6% increase is primarily attributable to
the expansion of the Company's cellular Systems (including Systems acquired),
and to an increase in gross cellular licensing costs and other assets to $41.8
million at December 31, 1995 from $13.1 million at December 31, 1994.
OPERATING INCOME
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------------
1994 1995
------ ------
(IN THOUSANDS)
<S> <C> <C>
Operating income................................................. $3,590 $7,420
====== ======
</TABLE>
27
<PAGE> 30
Total operating income increased to $7.4 million in 1995 from $3.6 million
in 1994, an increase of $3.8 million or 105.6% due to increased revenues, which
exceeded increases in operating expenses.
OTHER INCOME (EXPENSE)
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------
1994 1995
------ -------
(IN THOUSANDS)
<S> <C> <C>
Interest expense............................................... $ (790) $(3,401)
Interest income................................................ 160 336
Gain (loss) on sale of assets.................................. 25 (32)
Investment income.............................................. 398 344
-------- ------
Total other income (expense)......................... $ (207) $(2,753)
======== ======
</TABLE>
Interest expense increased to $3.4 million in 1995 from $789,856 in 1994.
The $2.6 million or 330.5% increase was primarily attributable to an increase in
borrowings, which increased to $52.1 million at December 31, 1995 from $13.7
million at December 31, 1994, to fund the Company's expansion and capital
expenditures, and was partially offset by an increase in interest and investment
income items to $680,679 in 1995 from $558,200 in 1994. The interest expense was
further affected by an increase in the weighted average interest rate to 8.73%
in 1995 from 8.51% for 1994.
NET INCOME
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------------
1994 1995
------ ------
(IN THOUSANDS)
<S> <C> <C>
Net income....................................................... $1,845 $2,739
====== ======
</TABLE>
Net income increased to $2.7 million in 1995 from $1.8 million in 1994,
this $894,355 or 49.7% increase was due to the changes described in the various
revenue and expense items which are primarily driven by the 103.5% increase in
the number of subscribers. Net income was also impacted by income tax expense
which increased by $404,745 in 1995.
EBITDA
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------
1994 1995
------ -------
(IN THOUSANDS)
<S> <C> <C>
EBITDA.......................................................... $6,482 $13,106
======= ======
</TABLE>
EBITDA improved to $13.1 million in 1995 from $6.5 million in 1994. The
$6.6 million or 101.5% increase was primarily the result of increased revenues
due to the increased subscriber base and the related cost efficiencies. As a
result, EBITDA as a percentage of revenues increased to 33.2% in 1995 from 28.5%
in 1994.
YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993
The Company had 27,313 cellular subscribers at December 31, 1994, an
increase of 11,371 or 71.3% during 1994. At December 31, 1993, the Company had
15,942 subscribers, an increase of 7,037 or 79.0% during 1993. During 1994 and
1993, there were no subscribers added through cellular System acquisitions.
28
<PAGE> 31
REVENUES
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------------
1993 1994
------- -------
(IN THOUSANDS)
<S> <C> <C>
Subscriber revenues............................................ $ 9,148 $14,706
Roaming revenues............................................... 4,085 6,603
Merchandise sales.............................................. 541 1,002
Other revenue.................................................. 661 400
------- -------
Total revenues....................................... $14,435 $22,711
======= =======
</TABLE>
Subscriber revenues increased to $14.7 million in 1994 from $9.1 million in
1993. This $5.6 million or 61.5% increase was primarily due to the 71.3% growth
in the number of subscribers. Average monthly cellular subscriber revenue per
subscriber was $56.66 in 1994, compared to $61.36 in 1993. This 7.7% decrease is
a result of price decreases implemented by the Company to build the subscriber
base and stimulate cellular usage.
Roaming revenues were $6.6 million in 1994 compared to $4.1 million in
1993, an increase of $2.5 million or 61.0%. Growth in the Company's roaming
revenues generally reflects increases in the Company's geographical coverage and
market penetration levels in adjacent markets and the cellular industry as a
whole. Roaming revenues as a percentage of total revenues increased to 29.1% in
1994 from 28.3% in 1993 as a result of significant increases in cell site
additions, primarily in newly acquired markets. These acquisitions resulted in
added geographic coverage and the addition and modification of several roaming
agreements.
Merchandise sales, which consist primarily of cellular handset sales,
increased to $1.0 million in 1994 from $540,961 in 1993. This $461,260 or 85.2%
increase was primarily due to the increase in subscriber additions partially
offset by a decrease in the average handset sales price. The Company anticipates
continued growth in merchandise sales as a result of increases in subscriber
additions.
Other revenue, which consists primarily of revenue from microwave and voice
mail operations, was $400,257 in 1994 compared to $661,369 in 1993. This
$261,112 or 39.5% decrease is primarily the result of the Company's decision to
focus on cellular telephone operations and to decrease voice mail operations,
primarily non-cellular related voice mail.
OPERATING EXPENSES
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------------
1993 1994
------- -------
(IN THOUSANDS)
<S> <C> <C>
Cost of service................................................ $ 4,513 $ 7,445
Merchandise cost of sales...................................... 720 2,518
General and administrative..................................... 1,692 2,498
Sales and marketing............................................ 2,736 3,768
Depreciation and amortization.................................. 2,037 2,892
------- -------
Total operating expenses............................. $11,698 $19,121
======= =======
</TABLE>
Cost of service increased to $7.4 million in 1994 from $4.5 million in
1993. This increase was primarily a result of the 71.3% increase in the number
of subscribers which resulted in increased costs to access local exchange and
long distance carrier facilities and maintain the Company's expanding wireless
network. This represented an increase of $2.9 million or 64.4% for the year, and
34.9% and 34.1% of service revenues for 1994 and 1993, respectively. This
increase was principally attributable to start-up costs associated with the
Mississippi Cluster.
Merchandise cost of sales increased to $2.5 million in 1994 from $719,884
in 1993, an increase of $1.8 million or 249.7% which was primarily attributable
to the increased number of subscribers.
29
<PAGE> 32
General and administrative costs increased to $2.5 million in 1994 from
$1.7 million in 1993, an increase of $806,131 or 47.4% which was primarily
attributable to the increase in the costs associated with supporting the
increased subscriber base. However, as a percentage of service revenues general
and administrative costs decreased to 11.7% in 1994 from 12.8% in 1993,
reflecting certain economies of scale.
Sales and marketing costs increased to $3.8 million in 1994 from $2.7
million in 1993, an increase of $1.1 million or 40.7% which was primarily due to
subscriber additions and an increase in start-up marketing costs in newly
acquired markets. Sales and marketing costs per net subscriber added (excluding
equipment subsidy) decreased to $331 in 1994 from $389 in 1993, a decrease
primarily attributable to improved efficiencies. After giving effect to
equipment subsidy the costs per net subscriber added increased to $465 in 1994
from $414 in 1993.
Depreciation and amortization expense was $2.9 million in 1994 compared to
$2.0 million in 1993. This $855,580 or 42.8% increase is primarily attributable
to the expansion of the Company's cellular Systems, and to an increase in gross
cellular licensing costs and other assets to $13.1 million at December 31, 1994
from $12.1 million at December 31, 1993.
OPERATING INCOME
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------------
1993 1994
------ ------
(IN THOUSANDS)
<S> <C> <C>
Operating income...................................... $2,737 $3,590
====== ======
</TABLE>
Total operating income increased to $3.6 million in 1994 from $2.7 million
in 1993, an increase of $852,581 or 31.6% due to increased revenues, which
exceeded increases in operating expenses.
OTHER INCOME (EXPENSE)
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------
1993 1994
----- -----
(IN THOUSANDS)
<S> <C> <C>
Interest expense...................................... $(177) $(790)
Interest income....................................... 270 160
Gain on sale of assets................................ 10 25
Investment income..................................... 74 398
----- -----
Total other income (expense)................ $ 177 $(207)
===== =====
</TABLE>
Interest expense increased to $789,856 in 1994 from $177,472 in 1993. The
$612,384 or 345.1% increase was primarily attributable to an increase in
borrowings, which increased to $13.7 million at December 31, 1994 from $7.7
million at December 31, 1993, to fund the Company's expansion and capital
expenditures, partially offset by an increase in interest and investment income
items to $558,200 in 1994 from $343,287 in 1993. The interest expense was
further affected by an increase in the weighted average interest rate to 8.51%
in 1994 from 5.85% for 1993.
NET INCOME
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------------
1993 1994
------ ------
(IN THOUSANDS)
<S> <C> <C>
Net income............................................ $1,962 $1,845
====== ======
</TABLE>
30
<PAGE> 33
Net income decreased to $1.8 million in 1994 from $2.0 million in 1993.
This $116,847 or 5.8% decrease was due to the changes described in the various
revenue and expense items which are primarily driven by the 71.3% increase in
subscribers and related costs of borrowing to finance buildout. Net income was
also impacted by income tax expense which increased by $624,464 in 1994.
EBITDA
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------------
1993 1994
------ ------
(IN THOUSANDS)
<S> <C> <C>
EBITDA................................................ $4,774 $6,482
====== ======
</TABLE>
EBITDA improved to $6.5 million in 1994 from $4.8 million in 1993. The $1.7
million or 35.4% increase is primarily the result of increased revenues due to
the increased subscriber base and the related cost efficiencies. However, EBITDA
as a percentage of revenues decreased to 28.5% in 1994 from 33.1% in 1993. This
is primarily the result of initial start-up operating costs in the newly
acquired markets that had no existing subscriber base.
LIQUIDITY AND CAPITAL RESOURCES
The Company believes the proceeds from this Offering, together with
anticipated cash flows from operations, will be sufficient to fund capital
expenditures and working capital necessary for the continued growth of its
existing cellular operations. In the ordinary course of its business, the
Company reviews potential acquisition opportunities and expects to finance such
future acquisitions in part with proceeds from this Offering. The Company
currently anticipates that, depending on the availability of favorable
acquisition opportunities and the rate of growth of the Company's cellular
operations, it may require funds in excess of the proceeds of this Offering to
finance such future acquisitions, to expand operations in existing markets, and
to provide working capital.
Historically, the Company has relied on bank financing to fund expansion.
At September 30, 1996, the Company had $95.7 million of debt outstanding. The
Company's long-term borrowings from 1994 through September 30, 1996 were made
through various credit facilities bearing various rates of interest at both
fixed and variable terms ranging from 5.45% to 10.50%, with maturity dates
ranging from December 20, 2002 to December 20, 2003. At September 30, 1996
approximately $2.1 million remains available for borrowing under these credit
facilities.
The Company has initiated discussions with commercial lenders to secure a
credit facility to be available for future acquisition opportunities or other
working capital needs. Based on such discussions, the Company believes that such
a facility would provide for additional borrowings of up to approximately $90
million after applying the proceeds from this Offering to repay a portion of
existing debt.
Net cash provided by operations was $8.6 million for the nine months ended
September 30, 1996 consisting of $4.2 million of net income, $6.4 million of
depreciation and amortization and other adjustments consisting primarily of
changes in current assets and current liabilities. Net cash provided by
operations was $6.4 million in 1995 consisting of $2.7 million of net income,
$5.7 million of depreciation and amortization and other adjustments consisting
primarily of changes in current assets and current liabilities. Net cash
provided by operating activities was $1.6 million and $7.5 million in 1994 and
1993, respectively.
Net cash used in investing activities was $48.8 million for the nine months
ended September 30, 1996, which consisted primarily of capital expenditures for
property and equipment of $3.4 million and the acquisition of cellular
properties of $45.6 million. Net cash used in investing activities was $44.8
million in 1995, which consisted primarily of capital expenditures for property
and equipment of $7.1 million, the acquisition of cellular properties of $33.5
million, and investments in unconsolidated subsidiaries of $4.9 million. Net
cash used in investing activities was $5.2 million and $17.2 million in 1994 and
1993, respectively.
31
<PAGE> 34
Net cash provided by financing activities was $43.3 million for the nine
months ended September 30, 1996, which consisted primarily of additions to
long-term debt of $46.0 million for the acquisition of cellular properties. Net
cash provided by financing activities was $38.1 million in 1995, which consisted
primarily of additions to long-term debt of $40.3 million for the acquisition of
cellular properties. Net cash provided by financing activities was $5.8 million
and $6.5 million in 1994 and 1993, respectively.
The Company anticipates that it will expend approximately $5.0 million
during the remainder of 1996 and approximately $8.0 million in 1997 for existing
cellular System and capacity expansion and centralized infrastructure
improvements. The Company may be required to make expenditures sooner than
anticipated or in greater amounts than expected based on a number of variables,
including increased subscriber growth, increased losses resulting from
merchandise sales and increased construction costs associated with expanding
coverage areas.
In addition, the Company is obligated to fund up to approximately $13.0
million of capital to the PCS Partnership as part of the license acquisition
costs and other working capital needs. The Company has funded $2.9 million of
this obligation as of September 30, 1996. The PCS Partnership is subject to the
FCC build-out requirements and will therefore require significant additional
amounts to complete the build-out of its PCS systems. The potential sources of
such additional amounts include vendor loans, loans or capital contributions by
the various partners, or other third party financing. There are no current
agreements or plans with respect thereto. The PCS Partnership has obtained a
commitment for $59.0 million of financing for capital expenditures under which
the Company would be required to guarantee repayment of up to $6.2 million.
There can be no assurance that the build-out of the PCS markets will not cost
materially more than is currently anticipated, or that financing will be
available at all or in the absence of additional guarantees by the Company and
other partners. To the extent that the Company is required to make capital
contributions to the PCS Partnership faster than expected, the capital
requirements are greater than anticipated or the Company elects to take
advantage of acquisition opportunities, including those that may arise through
future FCC auctions, the Company may require additional funding to implement its
business strategy.
Based upon additional financing arrangements under negotiation, and
anticipated cash flows from operations, the Company believes that it will have
sufficient liquidity to accomplish its business objectives. Anticipated core
business growth is anticipated to increase the overall borrowing capacity of the
Company beyond current levels, and it is believed that potential future
acquisitions will increase the capacity even further. The Company also believes
that it will be able to achieve more favorable financing terms after this
Offering, and that these more favorable terms will further increase its
financing capacity and its liquidity.
SEASONALITY
The Company, and the wireless communications industry in general, have
historically experienced significant subscriber growth during the fourth
calendar quarter. Accordingly, during such quarter the Company experiences
greater losses on merchandise sales and increases in sales and marketing
expenses. The Company has historically experienced highest usage and revenue per
subscriber during the summer months. The Company expects these trends to
continue.
32
<PAGE> 35
BUSINESS
The Company owns and operates cellular communications systems in 14 RSAs
and one MSA which together have 1.3 million Net Pops. These markets consist
primarily of four clusters that are located in Louisiana, Mississippi, Alabama
and Kansas. In its Louisiana Cluster, the Company markets under the MERCURY
CELLULAR AND PAGING(TM) trade name and in its other clusters under the
CELLULARONE(R) service mark. As of September 30, 1996, the Company served
approximately 77,000 cellular subscribers through cellular Systems covering more
than 72,000 square miles, and served over 14,000 paging subscribers by providing
paging services in its Louisiana market and by reselling such services in
certain other markets. The Company owns a 24 1/3% limited partnership interest
in the PCS Partnership, which, as the successful bidder in the FCC auction, has
been granted five licenses for broadband PCS that cover five BTAs with an
aggregate population of 1.8 million Pops. These PCS markets, together with the
Louisiana Cluster cellular market, are expected to create a large seamless
market traversed by I-10 between Houston and New Orleans.
The Company was incorporated in Louisiana as Mercury, Inc. on March 3, 1967
to conduct telecommunications activities that complemented the local landline
telephone service of an affiliated corporation. See "Certain
Transactions -- Tax-Free Restructuring" for information concerning transactions
in which the Company recently acquired the wireless communications operations of
the affiliated corporation. The Henning family, whose members incorporated the
Company and the affiliated corporation and have always been their principal
shareholders, has been involved in the communications industry since W. T.
Henning founded a landline telephone company in 1928 in southwest Louisiana,
where it still operates. The family became involved in the wireless
communications industry with the introduction of paging services in 1980 and
cellular services in 1987.
The principal executive offices of the Company are located at One Lakeshore
Drive, Suite 1900, Lake Charles, Louisiana 70629, and its telephone number is
(318) 436-9000.
BUSINESS STRATEGY
GROWTH STRATEGY
The Company believes that the wireless communications industry will
continue to grow as enhanced services are offered at lower prices and as
customer awareness of the productivity, convenience and security benefits
associated with wireless communications increases. The Company believes it is
well positioned to take advantage of this growth opportunity. The Company's
growth strategy focuses on the following: (i) internal growth through increased
penetration in the Company's existing markets; (ii) acquisition of licenses
contiguous to the Company's existing market clusters from independent or smaller
licensees; (iii) acquisition of new market clusters; and (iv) acquisition of PCS
licenses to expand and complement its wireless network. In addition, the Company
believes that by geographically clustering service areas it can best offer high
quality service at competitive prices with larger, seamless service networks.
OPERATING STRATEGY
Upon acquiring a cellular System, the Company's objective has been to
increase operating cash flow growth through the following practices:
Dedication to Customer Service. The Company trains its sales force and
customer service representatives in the Company's philosophy that long-term
customer service and satisfaction are critical to the Company's success.
The Company strives to minimize customer churn by maintaining a high level
of customer satisfaction through a variety of techniques, including tying
sales commissions to subscriber retention, outbound telemarketing to
subscribers on a regular basis, maintaining extended live customer service
operation hours, a quarterly customer newsletter and active post-sale
follow-ups for new customers. In addition, the Company provides to
subscribers in most of its markets free roadside assistance services that
include gas, a battery jump and changing of flat tires.
33
<PAGE> 36
Aggressive Marketing of Cellular Service. The Company uses aggressive
marketing and customer maintenance programs to increase subscriber
activations and reduce customer churn. These programs include offering
distinctive local and roaming rate plans to emphasize the "value" and
"advantage" of the Company's cellular service, launching targeted
advertising campaigns which emphasize quality and value, and taking an
active role in community, government and charity organizations. Many of
these programs are designed to distinguish the Company's cellular service
as the "local" quality service provider by stressing local offices, local
sales personnel, the availability of local customer service and the
Company's commitment to the community. Each major market cluster of the
Company is under the responsibility of a local marketing manager.
Management believes that positioning its cellular service as the local
quality service often contrasts favorably with its larger competitors,
which frequently standardize service plans, do not provide local
availability of customer service and use third party billing vendors,
making it more difficult for these competitors to be as responsive to
customer needs.
System Engineering to Increase Signal Coverage. Where practical, the
Company strives to "fill in" the Cellular Geographic Service Area ("CGSA")
within its markets by adding network facilities to increase the coverage of
its radio signal. The Company monitors the signal coverage and selectively
seeks to add additional radio channels and/or cell sites to upgrade the
capacity and reach of the cellular signal, the ultimate goal being to
provide handheld quality network coverage. In addition, the Company has
local technicians and engineers in its markets to maintain the quality of
the local service network and to respond promptly to any System problems.
Strong Retail and Direct Sales Effort. A key element of the Company's
positioning in its markets is the use of 22 local retail stores. A local
direct sales force provides the Company with more control over the sales
process, especially in meeting subscriber growth goals, than if it were to
rely only on independent agents. Although the Company selectively includes
independent agents in its distribution strategy, management believes that
the Company's local presence enhances its ability to provide a higher level
of quality customer service and satisfaction. In addition, the Company has
recently engaged in a program that uses Company sales personnel in
independent retail establishments, such as WalMart and Sam's Club, as
distribution channels.
Centralized Upper Management and Backoffice Operations. For those
operations that are common to all markets, the Company takes advantage of
economies of scale by centralizing all the upper management and backoffice
operations at its corporate headquarters. This includes the upper
management for sales, marketing, engineering, customer service, credit and
collection and financial functions. By combining decentralized sales
management with the centralized upper management and backoffice functions,
the Company can simultaneously take advantage of the economies of scale
while offering custom service through the decentralized sales management
and sales force.
34
<PAGE> 37
MARKETS AND SYSTEMS
Cellular Markets
The Company's cellular markets are grouped geographically and strategically
into four clusters, known as the Louisiana, Mississippi, Alabama and Kansas
Clusters. The following table summarizes certain information concerning the
Company's cellular markets.
<TABLE>
<CAPTION>
INTERSTATE
& OTHER % OF HH
COMPANY WIRELINE OR HIGHWAY WITH EBI> DATE OF
MARKET TOTAL POPS OWNERSHIP% NET POPS NON-WIRELINE MILES $35K(A) ACQUISITION
- ------------------------ ---------- ---------- --------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Louisiana Cluster
Lake Charles, LA MSA.... 174,000 100.0% 174,000 WL 102 46.0% Aug. 1987(b)
De Soto, LA-3 B1(c)..... 59,000 100.0 59,000 WL 115 28.1 Apr. 1991(b)
Beauregard, LA-5
B1(c)................. 142,000 100.0 142,000 WL 175 30.6 Mar. 1991(b)
--------- --------- -----
Total Louisiana....... 375,000 375,000 392
--------- --------- -----
Mississippi Cluster
Tunica, MS-1............ 170,000 100.0 170,000 NWL 69 28.4 Apr. 1993
Bolivar, MS-3(d)........ 156,000 51.0 80,000 NWL 66 25.7 Apr. 1993
Yalobusha, MS-4(d)...... 127,000 51.0 65,000 NWL 62 31.5 Apr. 1993
Washington, MS-5(e)..... 160,000 -- -- NWL 62 33.2 Jan. 1994
--------- ----- --------- -----
Total Mississippi..... 613,000 315,000 259
--------- --------- -----
Alabama Cluster
Lamar, AL-3............. 136,000 100.0 136,000 NWL 70 30.5 May 1996
Bibb, AL-4.............. 138,000 100.0 138,000 NWL 66 29.5 Jul. 1996
--------- --------- -----
Total Alabama......... 274,000 274,000 136
--------- --------- -----
Kansas Cluster
Cheyenne, KS-1.......... 27,000 100.0 27,000 NWL 84 32.2 Apr. 1995
Norton, KS-2............ 30,000 100.0 30,000 NWL 0 27.9 Apr. 1995
Wallace, KS-6........... 20,000 100.0 20,000 NWL 39 37.2 Apr. 1995
Trego, KS-7............. 78,000 100.0 78,000 NWL 112 37.1 Apr. 1995
Hamilton, KS-11......... 85,000 100.0 85,000 NWL 17 44.8 Apr. 1995
Hodgeman, KS-12......... 42,000 100.0 42,000 NWL 12 40.1 Apr. 1995
Edwards, KS-13.......... 28,000 100.0 28,000 NWL 6 33.3 Apr. 1995
Cimarron, OK-1(e)....... 24,000 -- -- NWL 7 34.9 Apr. 1995
--------- ----- --------- -----
Total Kansas.......... 334,000 310,000 277
--------- --------- -----
Minority Interest
Chambers, TX-21(f)...... 21,000 25.0 5,300 WL 34 50.4 Apr. 1993
--------- --------- -----
TOTAL................. 1,617,000 1,279,300 1,098
========= ========= =====
</TABLE>
- ---------------
(a) The percentage of households (HH) with effective buying income (EBI) greater
than $35,000 is based on Kagan's Cellular Telephone Atlas 1995. Effective
buying income is comparable to disposable after-tax income.
(b) The Company was the original licensee in these markets.
(c) These are partitioned cellular markets.
(d) These RSAs are licensed to a corporation in which the Company has a 51%
interest.
(e) The Mississippi-5 RSA and Oklahoma-1 RSA are operated under interim
authority granted by the FCC pending auction of the licenses by the FCC. The
number of Company subscribers in these RSAs is insignificant.
(f) The Texas-21 RSA is owned by a partnership in which the Company owns a 25%
interest and in which GTE Mobilnet, which operates the System, owns 75%.
35
<PAGE> 38
Louisiana Cluster
The Company's cellular operations began in August 1987 with the Lake
Charles, LA MSA, which the Company acquired in the FCC cellular lottery. The
Louisiana Cluster includes 174,000 Net Pops in the Lake Charles, LA MSA, 59,000
Net Pops in the Louisiana-3 RSA and 142,000 Net Pops in the Louisiana-5 RSA.
This cluster comprises more than 6,000 square miles and uses 18 cell sites,
which effectively cover 100% of the total geographic area. An additional three
cell sites are expected to be added by the end of 1996 to upgrade handheld
service. An upgrade to the cellular system in this cluster during 1995 included
the addition of digital channels. This upgrade enhanced System capacity,
provided a new marketing avenue for digital service and prepared the cluster to
complement the planned PCS Systems in which the Company has an interest through
the PCS Partnership. See "Markets and Systems -- PCS Markets." All licenses in
the Louisiana Cluster are in the "wireline band" (see "Governmental
Regulation -- Licensing of Cellular Telephone Systems") and are therefore
commonly referred to as wireline cellular licenses.
Although the Louisiana Cluster is comprised of a mid-sized MSA and parts of
two RSAs, the Company manages the cluster as if it were one market with both
urban and suburban features. The Louisiana Cluster is traversed by I-10, which
is a major source of roaming revenues. Lake Charles is the seat of parish
government for Calcasieu Parish, one of the larger parishes in Louisiana.
Several major petrochemical refineries are located in this market area, one of
which recently announced a $860 million expansion of its Lake Charles facility.
I-10 is a heavily traveled artery for many commuting employees, vendors and
contractors who conduct business with these entities. The Port of Lake Charles,
located at the edge of Lake Charles on the Calcasieu River (which opens into the
Gulf of Mexico), is a major bulk cargo port which handles cargo generated by the
local petrochemical facilities. Other major industries for the area include
lumber and agricultural related businesses that are heavy users of cellular
service. There are four riverboat casinos based in Lake Charles that use
cellular service for communications and data transmission. These casinos attract
customers from the surrounding area, including east Texas, and thereby generate
significant traffic which provides roaming revenues to the Company.
Additionally, a large facility of Northrop-Grumman, a major U.S. government
contractor, and McNeese State University are located in Lake Charles.
The Company's cellular service in the Louisiana Cluster is marketed under
the trade name MERCURY CELLULAR AND PAGING(TM). The Company's principal cellular
competitors in these markets are Western Cellular in the Lake Charles, LA MSA
and Centennial Cellular in the Louisiana-3 and -5 RSAs. Each of these
competitors uses the CELLULARONE(R) service mark.
Mississippi Cluster
In April 1993, the Company acquired the Mississippi-1 RSA and a 51%
interest in a corporation which holds the licenses to operate the Mississippi-3
and -4 RSAs. The Company manages for that corporation the design, construction
and installation of the control point, base station and business office sites,
and the daily operations of the cellular System, for which the Company is paid a
monthly management fee and is reimbursed for its capital costs and expenses. The
Mississippi Cluster has 613,000 Pops, of which 315,000 are Net Pops. This
cluster covers more than 11,000 square miles and uses 21 cell sites (with one
additional site expected to become operational by the end of 1996), all of which
can be upgraded to provide digital service. The Mississippi Cluster is located
just south of Memphis, Tennessee and north of Jackson, Mississippi. All licenses
in the Mississippi Cluster are in the "non-wireline band" (see "Governmental
Regulation -- Licensing of Cellular Telephone Systems") and are therefore
referred to as non-wireline cellular licenses.
The Company earns substantial roaming revenues in the Tunica, Mississippi-1
RSA market, which has 170,000 Net Pops and is directly adjacent to the Memphis,
TN MSA. Some of this revenue results from traffic attributable to the several
casinos located near Tunica. Much of the roaming traffic in the RSA is along
U.S. Highway 61 and Interstate Highway 55, both of which run north and south
from Memphis and continue south through Mississippi to Baton Rouge, Louisiana.
The Bolivar, Mississippi-3 RSA market services 156,000 Pops, of which
80,000 are Net Pops, and covers over 4,200 square miles. Two of the larger towns
in this RSA are Greenwood and Indianola. A number of colleges, including
Mississippi State University, Mississippi University for Women, Delta State
University, the
36
<PAGE> 39
University of Mississippi and Mississippi Valley State University, are located
within 100 miles of this market. Each city and town is easily accessible to
Greenwood and surrounding towns via U.S. Highways 82 and 49, as well as
Mississippi Highway 7.
The Yalobusha, Mississippi-4 RSA market is located next to the
Mississippi-3 RSA and has 127,000 Pops, of which 65,000 are Net Pops. The town
of Grenada is the principal community in this RSA. Area economic resources
include timber and manufacturing.
The Company's cellular service in the Mississippi Cluster is marketed under
the CELLULARONE(R) service mark. Its principal cellular competitors in these
markets are BellSouth Mobility Services and Cellular South.
Alabama Cluster
The Company acquired the Alabama-3 RSA in May 1996 and acquired the
Alabama-4 RSA in July 1996. The Alabama Cluster covers more than 10,000 square
miles and uses 20 cell sites. An additional three cell sites are expected to be
added by the end of 1996. The Company operates non-wireline cellular licenses in
this cluster, which has 274,000 Pops, all of which are Net Pops.
The Alabama Cluster is located along the western border of Alabama, and the
northern tip of the Alabama-3 RSA is directly adjacent to the Mississippi-4 RSA.
This cluster borders the Tuscaloosa, Birmingham and Montgomery, AL MSAs.
The Lamar, Alabama-3 RSA market is positioned along Alabama's western
border and serves 136,000 Net Pops. Interstate Highways 20 and 59, as well as
U.S. Highways 43 and 82, traverse the RSA en route to Tuscaloosa and Birmingham.
Traffic to and from Tuscaloosa, which is the site of the University of Alabama
and is less than 50 miles from the Alabama-3 RSA border, is a major source of
roaming revenue. Demopolis, which has two 130-acre industrial parks, is the
largest city in the RSA and is located on U.S. Highway 80.
The Bibb, Alabama-4 RSA market is adjacent to the Alabama-3 RSA and serves
138,000 Net Pops. Located less than 100 miles from Birmingham and Montgomery,
this RSA has 66 interstate and other highway miles. The major industries of
Alabama-3 include cattle, timber, cotton, milk and grain. The city of Selma, an
industrial community, is the hub of the RSA.
The Company's cellular service in this cluster is marketed under the
CELLULARONE(R) service mark. The Company's principal cellular competitors in
these markets are BellSouth Mobility Services in the Alabama-3 RSA and Frontier
Cellular in the Alabama-4 RSA.
Kansas Cluster
The Company acquired the Kansas Cluster in April 1995. This market has
334,000 Pops, of which 310,000 are Net Pops. It covers more than 45,000 square
miles and uses 29 cell sites. An additional two cell sites are expected to be
added by the end of 1996. The Company operates the non-wireline cellular
licenses in this cluster.
The Kansas Cluster covers the entire western half of the State of Kansas
and has several U.S. highways running through it. Interstate Highway 70 extends
westward to connect the markets to Denver, Colorado and extends eastward to the
Topeka, KS and Kansas City, MO MSAs. While this market is relatively thinly
populated, it has features that are indicative of high cellular usage including
a concentration of small businesses and farms, longer commute times and well
traveled roads. The Kansas Cluster includes 277 interstate and other highway
miles. Major industries include oil and gas drilling, cattle and agriculture.
The Company's cellular service in the Kansas Cluster is marketed under the
CELLULARONE(R) service mark. The Company's principal cellular competitor in each
of these markets is Kansas Cellular, a consortium of rural telephone companies.
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<PAGE> 40
Paging Markets
The Company owns and operates its own paging network within the Louisiana
Cluster with paging licenses in the 158.10 and 152.84 MHz range. It cross
markets paging and cellular services in this market. Paging is also marketed in
Beaumont, Texas and parts of the Mississippi Cluster through a resale agreement
with other providers.
The Louisiana paging license was acquired in 1980 and currently covers a
population of approximately 868,000 persons. The Company began marketing paging
in the Beaumont market, which has a population of approximately 369,000 persons,
in July 1995. As of September 30, 1996, the Company had over 14,000 paging
subscribers. In December 1994 and April 1995 the Company entered into agreements
to provide regional and nationwide paging services to the Company's paging
subscribers.
PCS Markets
The Company owns a 24 1/3% limited partnership interest in the PCS
Partnership, which has been granted five broadband PCS licenses in the FCC's
C-block auction, for a total of $61.2 million. These PCS markets offer a
strategic fit to the Company's existing cellular markets in the Louisiana
Cluster, with which they create a large seamless market cluster that covers the
areas along I-10 between Houston and New Orleans. The table below summarizes
certain information concerning these PCS markets:
<TABLE>
<CAPTION>
INTERSTATE
& OTHER % OF HH
COMPANY HIGHWAY WITH EBI>
MARKET TOTAL POPS OWNERSHIP % NET POPS MILES $35K(a)
----------------------------------- ---------- ----------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Baton Rouge, LA BTA #032........... 624,000 24.33% 152,000 369 48.1%
Beaumont, TX BTA #034.............. 432,000 24.33 105,000 293 41.9
Hammond, LA BTA #180............... 96,000 24.33 23,000 153 34.4
Lafayette, LA BTA #236............. 497,000 24.33 121,000 343 35.7
Lufkin, TX BTA #265................ 144,000 24.33 35,000 70 36.1
--------- ------- -----
TOTAL.................... 1,793,000 436,000 1,228
========= ======= =====
</TABLE>
- ---------------
(a) The percent of households (HH) with effective buying income (EBI) greater
than $35,000 is based on The 1995 PCS Atlas and Data Book. Effective buying
income is comparable to disposable after-tax income.
The PCS competitors in these markets will include Wireless Co. and PCS
PrimeCo. The PCS operations will also compete with cellular operators in these
markets such as AT&T Wireless Services, ALLTEL, BellSouth Mobility Services,
Centennial Cellular, GTE and US Cellular, among others.
The general partner of the PCS Partnership has contracted with the Company
to manage the design, construction and daily operations of the Lafayette,
Beaumont and Lufkin BTAs, for which the Company is paid a monthly management fee
and is reimbursed for its expenses.
CELLULAR AND PAGING OPERATIONS
Marketing
The Company's marketing strategy for its cellular and paging operations is
designed to generate continued net subscriber growth, while simultaneously
maintaining low subscriber addition costs. For the nine months ended September
30, 1996, the Company's average net cost to add a net cellular subscriber was
$599 (including an equipment subsidy of $166) which management believes compares
favorably to industry averages. The Company believes its cost advantage is
principally due to its use of an in-house sales and marketing staff and retail
outlets and to a low churn rate relative to industry averages.
In training and compensating its sales force, the Company emphasizes the
importance of customer service, high penetration levels and minimum costs per
subscriber. The Company's sales staff has a two-tier
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<PAGE> 41
structure. A retail sales force handles walk-in traffic, whereas a targeted
sales staff solicits certain industrial, governmental and other potential
subscribers. The Company believes that its internal sales force is better able
than independent agents to select and screen new subscribers and select pricing
plans that match subscriber means and needs. The Company motivates its direct
sales force to sell appropriate rate plans to subscribers by linking payment of
commissions to subscriber retention, thereby reducing churn. While the Company
selectively uses independent agents, it places internal sales personnel in the
more highly visible and critical market areas. The Company compensates the
independent agents similarly, by linking the agents' compensation to customer
retention and lower churn. The Company believes that this mix of internal sales
personnel and independent agents increases the Company's market presence and
distribution capacity, minimizes churn and maximizes customer retention and
long-term subscriber growth. Recently, the Company has implemented a retail
distribution program that uses independent retail establishments such as WalMart
and Sam's Club as distribution channels, but staffed with Company sales
personnel.
"Mercury Monitor" is a program that seeks to ensure each customer is
enrolled in the most appropriate service program for his or her usage. This
program is implemented through the Company's sales force, customer service
personnel and a special division called Customer Care which is primarily
responsible for the program. Mercury Monitor not only enhances customer loyalty,
which reduces churn, but also provides an after-sale survey of how well the
sales force and customer service personnel performed in meeting the subscriber's
needs. This allows the Company to continually monitor and improve the various
sales and customer programs. In addition, the program promotes sales and
customer referrals and makes subscribers aware of additional calling features,
such as voicemail related services, call waiting and call forwarding.
The Company's sales force works principally out of the Company's retail
stores, in which the Company offers a full line of cellular products and
services. The Company operates 22 retail stores, 21 of which are fully equipped
to handle sales, customer service and telephone maintenance, and one of which
handles only paging sales and service. Certain of these stores are also
authorized warranty repair centers. The Company's stores provide
subscriber-friendly retail environments (large selection, an expert sales staff
and convenient locations) which make the sales process quick and easy for the
subscriber.
Products and Services
In addition to providing high-quality cellular telephone service in each of
its markets, the Company also offers, at no additional charge, various custom
calling features such as call forwarding, call waiting, conference calling and
no-answer transfer. Additionally, voice message storage and retrieval services
are offered without additional charge in the Kansas Cluster and at nominal rates
in the other clusters. The Company also sells cellular and paging equipment at
discount prices as an incentive to attract customers.
In July 1996, the Company introduced in the Louisiana Cluster, and intends
to make available in its other cellular markets, a service that allows a
cellular subscriber to combine all of his or her telephone numbers (home,
business, cellular and pager) into a single number. Subscribers can instruct the
service to reach them at more than one telephone number or location at different
times of the day or to continue calling other locations until the subscriber is
located. This state-of-the-art technology gives someone calling a cellular
subscriber the option to leave a message or to remain on hold while the system
outdials predetermined phone numbers. When the system reaches the subscriber,
the subscriber has the option of immediately connecting to the caller to begin a
conversation or to connect the caller to the voice mailbox and listen while the
caller leaves a message. The Company is currently evaluating voice dialing and
intends to implement it when it becomes feasible.
Several rate plans are presented to subscribers so that each can choose the
plan that will best fit his or her expected calling needs. The Company designs
rate plans on a market-by-market basis, unlike some of its competitors that
offer only standardized rate plans. The Company's local sales market managers
also initiate ideas for new rate plans depending upon local market and
competitive conditions. Generally, rate plans consist of a high user plan, a
medium user plan, a basic plan and an economy plan. Most rate plans combine a
fixed monthly access fee, per minute usage charges and custom-calling features
in a package which is intended to provide value to the customer while enhancing
airtime use and revenues for the Company. In general, rate
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<PAGE> 42
plans which include a higher monthly access fee typically include a lower usage
rate per minute. In some markets, statewide long distance calling without
additional long distance charges is offered under certain rate plans. The
Company conducts an on-going review of competitors' equipment, service and
pricing to maintain the Company's competitiveness. Revisions to pricing of
service plans and equipment are made as appropriate to conditions in the local
marketplace.
In most of its markets, the Company offers an emergency roadside assistance
service that is available on a 24-hour basis without additional charge to
cellular subscribers. This service, which the subscriber accesses by pressing
"*SOS," provides three gallons of gasoline, a battery jump-start and tire
changing assistance.
Reciprocal agreements between each of the Company's cellular Systems and
the cellular Systems of other operators allow their respective subscribers to
place calls in most cellular service areas throughout the country. Roamers are
charged usage fees which are generally higher than a given cellular System's
regular usage fees, thereby resulting in a higher profit margin. Roaming revenue
is a substantial source of revenue to the Company because a number of its
cellular Systems are located along major travel corridors and because certain of
the Company's Systems are in early stages of their growth cycle. The Company
subscribes to "net settlement" services through its roaming clearing house
arrangements. Net settlement provides for electronic exchange of funds between
carriers for roaming services and is administered through the clearing house and
a designated financial institution. This arrangement reduces the cost of billing
and collecting for these services.
Customer Service
Customer service is an essential element of the Company's marketing and
operating philosophy. The Company is committed to attracting new subscribers and
retaining existing subscribers by providing consistently high-quality customer
service both through its central office and in the local markets. In each of its
cellular service areas the Company maintains a local staff, including a sales
market manager, customer service representatives, technical staff, sales
representatives and installation and repair personnel. Each cellular service
area initiates its own customer-related functions such as credit evaluation,
subscriber activation, account adjustments and rate plan changes. Through the
use of sophisticated monitoring equipment, engineering technicians are able to
monitor the technical performance of the cellular service areas and respond
promptly to any need.
The Company's customers are able to report cellular telephone service or
account problems to a local office representative. The subscriber can also speak
with a customer service representative about technical issues or problems from
7:00 a.m. to 7:00 p.m. at the main customer service center located at the
corporate offices. In addition, the Company has a technical representative on
call 24 hours per day to respond to emergency subscriber needs. Whereas most
competitors either strictly centralize or decentralize customer service
functions, the Company has structured its customer service both ways to meet the
particular needs of any subscriber at any given time.
System Development and Expansion
The Company develops its cellular service areas by adding channels to
existing cell sites and by building new cell sites. Such development is designed
to increase capacity and improve coverage in direct response to projected
subscriber demand, which is calculated for each cellular service area on a
cell-by-cell basis. These projections involve a traffic analysis of usage by
existing subscribers and an estimation of the number of additional subscribers
in each service area. In calculating projected subscriber demand, the Company
builds into its design assumptions a maximum call "blockage" rate of 1%
(percentage of calls that are not connected on the first attempt at peak usage
times during the day). After calculating projected subscriber demand, the
Company determines the most cost-efficient manner of meeting the projected
demand through a combination of augmenting channel capacity in existing cell
sites and building new cell sites.
40
<PAGE> 43
The table below sets forth, by market, as of the dates indicated, the
number of the Company's operational and planned additional cell sites.
<TABLE>
<CAPTION>
CELL SITES
------------------------------------------
ADDITIONAL SITES
PLANNED BY
MARKETS AT SEPTEMBER 30, 1996 DECEMBER 31, 1996
--------------------------------------------------- --------------------- -----------------
<S> <C> <C>
Louisiana Cluster.................................. 18 3
Mississippi Cluster................................ 21 1
Alabama Cluster.................................... 20 3
Kansas Cluster..................................... 29 2
</TABLE>
Cell site expansion is expected to enable the Company to provide better
quality handheld coverage, continue to add subscribers, enhance use of the
Systems by existing subscribers, increase roamer traffic due to the larger
geographic area covered and further enhance the overall efficiency of the
network. The Company believes that the increased cellular coverage will have a
positive impact on market penetration and subscriber usage.
The Company continues to evaluate expansion through acquisitions of other
cellular and PCS properties that will further enhance its network. In evaluating
acquisition targets, the Company considers, among other things, demographic
factors, including population size and density, traffic patterns, cell site
coverage and required capital expenditures.
PCS OPERATIONS
General
As the successful bidder in the FCC's C-block auction, the PCS Partnership
has been awarded five PCS licenses covering 1.8 million Pops in five BTAs. These
PCS markets and the Company's Louisiana Cluster cellular market are expected to
create a large seamless market along I-10 between Houston and New Orleans. Each
of these BTA markets is presently in the design and engineering stage.
PCS is a new generation of wireless communications, offering customers
advanced, secure, two-way digital wireless services and applications. Services
that permit sophisticated call management, enhanced two-way messaging and,
eventually, high-speed data and video transmission, will enable customers to
better manage personal and business needs. The Company believes that the
introduction of PCS into the wireless market will stimulate demand for wireless
communications services, attract customers who are not currently subscribers to
wireless service and increase usage by current wireless customers. PCS will
compete with existing cellular telephone service, and will provide features not
currently offered by cellular providers.
Auction Process
The PCS Partnership's application for a PCS license in the Baton Rouge, LA
BTA was the subject of a Petition to Deny filed with the FCC by Radiofone, Inc.,
which has asked that the FCC reauction the license. The Petition to Deny was
denied by an Order of the FCC on November 1, 1996. This Order will become final
on December 13, 1996, unless a petition for reconsideration is filed or the FCC
reconsiders the grant on its own motion.
The PCS Partnership participated in the C-block auction as a Small
Business, as defined by FCC rules, and the Company believes that the PCS
Partnership has satisfied all requirements necessary to qualify as a Small
Business, and it will continue to take any actions needed to maintain such
status. Nonetheless, if the PCS Partnership is found by the FCC to be ineligible
or otherwise disqualified from holding C-block PCS licenses, the FCC could
impose substantial financial and regulatory penalties on it, including the
refusal to grant PCS licenses.
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<PAGE> 44
The Company also holds a 50% interest in Mercury Mobility, LLC
("Mobility"), which was organized in 1994 to participate in PCS auctions.
Mobility is presently participating in the third stage of the FCC's D, E and
F-block auctions and is bidding on licenses covering areas contiguous to the
Company's existing markets in addition to other licenses that appear
advantageous to the Company. Mobility is participating in the F-block auction as
a Small Business and the Company believes that Mobility has satisfied all
requirements necessary to qualify as a Small Business.
Planned PCS Strategy; Financing
The Company believes that technical differences that could currently affect
the ability of subscribers in a PCS system to roam into cellular systems or
other PCS systems (see "-- The PCS Industry -- Operation of PCS Systems") will
be resolved and that PCS will have the ultimate practical effect of increasing
from two to eight the number of potential competitors in a given market. The
Company perceives this as an opportunity for it to enter additional markets that
otherwise may not have been available to it at attractive prices and to take
advantage in those markets of the Company's experience in wireless
communications obtained through the operation of its cellular Systems.
The PCS Partnership's existing markets are contiguous to the Company's
Louisiana Cluster, thereby creating a substantially larger overall wireless
cluster that stretches along I-10 between Houston and New Orleans. This corridor
has historically high traffic density that generates substantial roaming
traffic. The Company intends to provide its subscribers and the PCS
Partnership's subscribers with the ability to roam seamlessly throughout the
Company's Louisiana Cluster and the PCS Partnership's markets as soon as
technically feasible at a reasonable cost. Each of the BTAs in the PCS
Partnership's market has many positive attributes as a stand alone market.
According to The 1995 PCS Atlas and Data Book, each BTA has a central
metropolitan area with concentrated population densities. Each market is
expected to continue enjoying population growth over the next few years and each
has high interstate or other highway traffic volume.
The PCS Partnership's overall financing plan involves three sources. First,
the federal government will finance the license acquisition cost of $61.2
million with a 10-year debt facility under which only interest, at the 10-year
U.S. Treasury Note rate, is paid for the first six years and principal is
amortized in equal installments over the last four years. Second, the partners
have committed to make capital contributions of up to a total of $42.0 million,
of which the Company has committed to contribute up to $13.0 million (of which
$2.9 million has been contributed to date), for working capital requirements.
Finally, the equipment and infrastructure build-out will require external
financing estimated at $69.0 million. The PCS Partnership has obtained a
financing commitment for $59.0 million under which the Company will guarantee
repayment of up to $6.2 million. There can be no assurance that the build-out of
the PCS markets will not cost materially more than is currently anticipated, or
that additional financing, if necessary, will be available at all in the absence
of additional guarantees by the Company and other partners.
TRADE NAME; SERVICE MARK
In its Louisiana Cluster the Company uses the trade name MERCURY CELLULAR
AND PAGING(TM) and in its other clusters uses the CELLULARONE(R) service mark.
The Company has no federal service mark registration of MERCURY CELLULAR AND
PAGING(TM) and, while it has not encountered any conflict with the use of that
name in Louisiana, it cannot be certain that such a conflict will not arise or
that such name could be used in other markets if desired.
CELLULARONE(R) is a service mark registered with the United States Patent
and Trademark Office. The service mark is owned by CellularOne(R) Group, a
Delaware general partnership comprised of CellularOne(R) Marketing, Inc., a
subsidiary of Southwestern Bell Mobile Systems, together with CellularOne(R)
Development, Inc., a subsidiary of AT&T Wireless Services, Inc. and Vanguard
Cellular Systems, Inc. The Company uses the CELLULARONE(R) service mark pursuant
to its licensing agreement with CellularOne(R) Group. The licensing agreement
requires the Company to provide high-quality cellular telephone service to its
customers and to maintain a certain minimum overall customer satisfaction rating
in surveys commissioned by CellularOne(R) Group. The agreement has an original
five-year term expiring in April 1998 and, assuming
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<PAGE> 45
compliance by the Company with the provisions of the agreement, may be renewed
at the Company's option for three additional five-year terms.
AT&T Wireless, which had been the single largest user of the CELLULARONE(R)
service mark, has reduced its use of the mark. If for some reason the name
CELLULARONE(R) were to suffer diminished marketing appeal, the Company's ability
both to attract new subscribers and retain existing subscribers could be
materially impaired. In such circumstances or otherwise, the Company may be
required to develop a new service mark. Competitors of the Company possess, and
others may develop over time, branding with significantly greater name
recognition than that of the Company. A failure by the Company to maintain
existing rights to its current cellular branding or to develop suitable
alternatives thereto would have a material adverse effect on the Company's
ability to market its products and services and could require the Company to
invest significant additional funds to develop such alternatives.
EMPLOYEES AND LABOR RELATIONS
The Company considers its labor relations to be good, and none of its
employees is covered by a collective bargaining agreement. As of September 30,
1996, the Company employed a total of 250 persons.
PROPERTIES
The Company leases approximately 40,000 square feet for its principal
executive offices, which are located in Lake Charles, Louisiana. The Company
owns two and leases 20 retail sales locations, which include administrative
offices and inventory storage space, and leases locations for microwave, cell
site and switching equipment.
LEGAL PROCEEDINGS
There are no material, pending legal proceedings to which the Company or
any of its subsidiaries or affiliates is a party or of which any of their
property is subject which, if adversely decided, would have a material adverse
effect on the Company. For information concerning certain legal proceedings
relating to FCC license grants, see "Risk Factors -- Certain PCS Risks,"
"Governmental Regulation" and "-- PCS Operations -- Auction Process."
CERTAIN RESTRICTIONS
A Shareholders Agreement between the Company and the minority shareholders
of the subsidiary that owns the Mississippi-3 and -4 RSA cellular licenses
restricts transfers of shares, provides certain rights of first refusal if
shares are transferred and requires the affirmative vote of holders of 65% of
the shares to approve any business combination, any extension by the Company of
cellular telephone coverage from its Mississippi-1 RSA System into the
subsidiary's markets, any transaction between the subsidiary and the Company (or
any other shareholder of the subsidiary) and any financing of the subsidiary
exceeding $10.0 million.
The partnership agreement of the PCS Partnership provides that during the
term of the partnership, which expires December 31, 2015, and for two years
thereafter, no partner or its affiliates will compete (or own more than a 1%
interest in any entity that competes) with the PCS Partnership in the geographic
areas covered by the licenses acquired by the PCS Partnership in the C-block
auction. These provisions are expressly made applicable to any entity that
acquires a partner, but the acquiring entity is given 12 months within which to
dispose of any of its operations that violate the noncompetition provision. The
effect of this provision may be to make the Company a less attractive candidate
for acquisition by any entity with operations that would violate the
noncompetition provision. The partnership agreement further provides that
partnership interests may not be transferred without the consent of the general
partner and a majority of the limited partnership interests. Finally, although
the partners, including the Company, are required to make capital contributions
up to specified amounts, none is required without its express consent to bear
any other financial risk of the PCS Partnership such as providing or acting as a
guarantor for the PCS Partnership's financing. See "-- PCS Operations -- Planned
PCS Strategy; Financing."
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<PAGE> 46
THE CELLULAR TELEPHONE INDUSTRY
Overview
Cellular telephone service is provided by a wireless communications System
that uses radio frequencies to transmit voice and data. Broadly defined, the
wireless communications industry also includes one-way radio applications, such
as paging or beeper services, and two-way radio applications, such as cellular,
PCS and enhanced specialized mobile radio ("ESMR"). Historically, each
application has been licensed and operates in a distinct radio frequency block.
Introduced in 1983, cellular service is the predominant form of wireless
voice communications service currently available, with two cellular providers in
each market. Operating in a portion of the radio spectrum from 830-870 MHz,
cellular service is capable of providing high quality, high capacity service to
and from mobile, portable and stationary telephones. Cellular handsets are
affordable and easy to use. Fully equipped, multi-cell cellular Systems are
capable of handling thousands of calls at any given time and thus are capable of
providing service to hundreds of thousands of subscribers in a given market.
Over the past decade, cellular service has grown dramatically with over 33.8
million cellular subscribers in the United States as of December 31, 1995. The
following table sets forth certain domestic cellular industry statistics derived
from the Data Survey Results published semi-annually by the Cellular Telephone
Industry Association:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1991 1992 1993 1994 1995
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
CELLULAR INDUSTRY STATISTICS
Total Service Revenues (in billions)................... $ 5.8 $ 7.8 $10.9 $14.2 $19.0
Ending Cellular Subscribers (in millions).............. 7.6 11.0 16.0 24.1 33.8
Subscriber Growth...................................... 43.0% 46.0% 45.1% 50.8% 40.0%
Average Monthly Service Revenue per Subscriber......... $74.10 $70.13 $67.13 $59.08 $54.90
Average Monthly Subscriber Revenue per Subscriber...... $64.96 $61.40 $58.74 $51.48 $47.59
Ending Penetration..................................... 3.0% 4.4% 6.2% 9.4% 13.0%
</TABLE>
These statistics represent results for the cellular industry in the United
States as a whole. Average Monthly Service Revenue per Subscriber reflects per
subscriber revenue including roaming revenue, and Average Monthly Subscriber
Revenue per Subscriber reflects per subscriber revenue excluding roaming
revenue. In general, rural markets, where the Company concentrates its cellular
operations, were licensed later by the FCC than urban markets and, consequently,
have a shorter operating history. The Company has operated cellular Systems
since 1987. While the Company's cellular subscriber base is growing more rapidly
than the industry average, the Company's level of penetration is lower than the
overall industry average.
The Company believes that certain demographic characteristics of rural
markets facilitate commercial use of its cellular network. As compared to urban
residents, rural residents generally travel greater distances by personal
vehicle and have access to fewer public telephones along their routes. In
addition, the Company's cellular service area includes a high percentage of
business customers with substantial needs for wireless communications, such as
those employed in agriculture and oil and gas, and also includes numerous
destinations for outdoor recreational activities, such as boating, fishing and
hunting, which often increase cellular usage. The Company believes that these
factors will sustain demand for wireless communication services in the rural
marketplace.
Roaming revenues are generated by subscribers of other cellular carriers
traveling through the Company's cellular service area. Reciprocal agreements
among cellular System operators allow subscribers to place and receive calls in
most cellular service areas throughout the country. Roaming revenues result in
higher margins because roaming calls are usually priced at higher rates than
local calls and the Company does not incur sales commissions or other costs to
attract roaming customers.
Operation of Cellular Systems
Cellular telephone service is capable of providing high quality, high
capacity service to and from mobile, portable and fixed radio telephones.
Cellular telephone technology is based upon the division of a given market
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<PAGE> 47
area into a number of regions, or "cells," which in most cases are contiguous.
Each cell contains a low-power transmitter-receiver at a "base station" or "cell
site" that communicates by radio signal with cellular telephones located in the
cell. A cell generally has a radius ranging from two miles to more than 25
miles. Cell boundaries are determined by the strength of the signal emitted by
the cell's transmitter-receiver. Each cell site is connected to a MTSO (mobile
telephone switching office), which, in turn, is connected to the local landline
telephone network.
When a cellular subscriber in a particular cell enters a number, the
cellular telephone sends the call by radio signal to the cell's
transmitter-receiver, which then sends it to the MTSO. The MTSO completes the
call by connecting it with the landline telephone network or another cellular
telephone unit. Incoming calls are received by the MTSO, which instructs the
appropriate cell to complete the communications link by radio signal between the
cell's transmitter-receiver and the cellular telephone. By leaving the cellular
telephone on, a signal is emitted so the MTSO can sense in which cell the
cellular telephone is located. The MTSO also records information on system usage
and subscriber statistics.
FCC rules require that all cellular telephones be functionally compatible
with cellular telephone Systems in all markets within the United States and with
all frequencies allocated for cellular use, so that a cellular telephone may be
used wherever a subscriber is located, subject to appropriate arrangements for
service charges. Changes to cellular telephone numbers or other technical
adjustments to cellular telephones by the manufacturer or local cellular
telephone service businesses may be required, however, to enable the subscriber
to change from one cellular service provider to another within a service area.
Because cellular telephone Systems are fully interconnected with the
landline telephone network and long distance networks, subscribers can receive
and originate both local and long-distance calls from their cellular telephones.
Cellular telephone Systems operate under interconnection agreements with various
local exchange carriers and interexchange carriers. The interconnection
agreements establish the manner in which the cellular telephone System
integrates with other telecommunications systems. By law, the cellular operator
and the local landline telephone company must cooperate in the interconnection
between the cellular and landline telephone systems, to permit cellular
subscribers to call landline subscribers and vice versa. The technical and
financial details of such interconnection arrangements are subject to
negotiation and vary from system to system. On August 8, 1996, the FCC
promulgated new regulations governing the interconnection of wireless and
landline systems. If these regulations survive pending legal challenges
substantially as enacted, they may ultimately lower the interconnection rates to
be paid by the Company and increase interconnection revenues paid to the
Company.
THE PCS INDUSTRY
Overview
PCS is a term commonly used in the United States to describe a portion of
radio spectrum (1850-1990 MHz) that has been divided by the FCC into six blocks
(blocks A-F) to be used by PCS licensees to provide wireless communications
services. The first portions of PCS spectrum (the A, B and C-blocks, each 30
MHz) have been auctioned by the FCC as of May 1996, and licenses have been
granted for operating in the A and B-blocks. PCS will initially compete directly
with existing cellular telephone, paging and specialized mobile radio services.
PCS will also include features which are not currently offered by cellular
providers, such as data transmissions to and from portable computers, advanced
paging services and facsimile services. The Company believes that PCS providers
will be the first direct wireless competitors to cellular providers and the
first to offer mass market all-digital mobile networks that will increase
security of communications and capacity. In addition, PCS providers may be the
first to offer mass market wireless local loop applications, in competition with
wired local communications services. See "-- Government Regulation" for a
discussion of the FCC auction process and allocation of wireless licenses.
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<PAGE> 48
Operation of PCS Systems
PCS Systems use similar technologies and hardware to cellular Systems (for
example, PCS Systems use the same type of "cell site" architecture), but operate
on different frequencies and may use different technical and network standards.
As a result, as discussed further below, it initially may not be possible for
users of one type of System to "roam" on a different type of System outside of
their service area, or to hand off calls from one type of System to another.
This is also true for PCS subscribers seeking to roam in a PCS service area
served by operators using different technical standards.
PCS Systems are expected to operate under one of three principal digital
signal transmission technologies, or standards, that have been proposed by
various operators and vendors for use in PCS Systems: GSM, CDMA or TDMA, all
three of which are currently incompatible with each other. Accordingly, at the
present time a subscriber of a system that uses one technology will be unable to
use his handset when traveling in an area not served by PCS operators using the
same technology, unless the subscriber carries a dual-band handset that permits
the subscriber to use the cellular system in that area. Such dual-band handsets
are just becoming available and are expected to be more expensive than
single-band handsets.
COMPETITION; NEW TECHNOLOGY
Competition in the wireless communications industry is intense. Competition
for subscribers among wireless licensees is based primarily upon the services
and features offered, the technical quality of the wireless system, customer
service, system coverage, capacity and price. Such competition may increase to
the extent that licenses are transferred from smaller, stand-alone operators to
large, better capitalized and more experienced wireless communications
operators.
In each of its cellular markets the Company has one cellular competitor,
including BellSouth, Centennial Cellular, Frontier Cellular, Kansas Cellular and
Western Cellular, and will face new competition from up to six PCS licensees in
each of its cellular markets. The PCS Partnership's principal competitors in its
PCS markets are Wireless Co. and PCS PrimeCo, which will provide PCS services,
and the existing cellular providers, which include AT&T Wireless, GTE, US
Cellular and others. The Company also competes with paging and dispatch
companies, resellers and landline telephone service providers. Potential users
of cellular systems may, however, find their communications needs satisfied by
other current and developing technologies. One- or two-way paging or beeper
services that feature voice messaging and data display as well as tone only
service may be adequate for potential subscribers who do not need to speak to
the caller. In the future, cellular service may also compete more directly with
traditional landline telephone service providers. See "Risk
Factors -- Competition."
The FCC requires all commercial wireless System operators to provide
service to "resellers" at non-discriminatory rates. A reseller provides cellular
service to customers but does not hold an FCC license or own infrastructure
facilities. Instead, the reseller buys blocks of cellular telephone numbers and
capacity (minutes) from a licensed carrier and resells service through its own
distribution network to the public. Thus, a reseller is both a customer of a
cellular licensee's services and also a competitor of that licensee. Several
small resellers currently operate in competition with the Company's Systems.
The PCS Partnership's PCS business will directly compete in each market
with up to five other PCS providers and with the two existing cellular service
providers. Such cellular providers have typically been operational for a number
of years. Many of them and many of the PCS providers have significantly greater
financial and technical resources than those available to the Company or the PCS
Partnership. Cellular providers may upgrade their systems to provide comparable
services in competition with the PCS Partnership's PCS Systems. The Company
believes that being first to offer PCS services in a market will be a key
competitive advantage. The PCS Partnership's goal is to achieve significant
market penetration by aggressively marketing competitively priced PCS services,
offering enhanced services not currently provided by analog or digital cellular
operators and providing superior customer service. In addition, the Company
believes that the PCS Partnership can become a low-cost provider of PCS services
by taking advantage, in those BTAs in which the Company will manage the PCS
operations of the PCS Partnership, of the existing business
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<PAGE> 49
infrastructure established for the Company's cellular operations, including
management, marketing, billing and customer service functions, and by
emphasizing efficient customer acquisition and retention.
The cost to the PCS Partnership of PCS handsets initially will be higher
than the Company's cost of cellular handsets. In order to compete effectively
with sellers of analog cellular handsets, the PCS Partnership may have to
subsidize the sale of its PCS handsets to a greater extent than sales of
cellular handsets are typically subsidized.
The Company expects that it and the PCS Partnership will face increased
competition from entities providing other communications technologies and
services. While some of these technologies and services are currently operating,
others are being developed or may be developed in the future. See "Risk
Factors -- Competition."
The FCC has licensed SMR dispatch System operators to construct "enhanced
specialized mobile radio" digital mobile communications systems on existing SMR
frequencies, referred to as ESMR, in many areas throughout the United States,
including most of the areas in which the Company operates. As a result of
advances in digital technology, ESMR operators have begun to design and deploy
digital mobile networks that increase the frequency capacity of ESMR systems to
a level that may be competitive with that of wireless systems. A limited number
of ESMR operators have recently begun offering short messaging, data services
and interconnected voice telephone services on a limited basis. Several ESMR
licensees have recently announced their intention to merge into one company and
plan to build and operate digital mobile networks in most major United States
markets.
The FCC has also allocated radio channels to a satellite system in which
transmissions from mobile units to satellites may augment or replace
transmissions to cellular or PCS cell sites. Several companies have announced
plans to design, construct, deploy and operate satellite-based
telecommunications systems worldwide. American Mobile Satellite Corporation has
designed a geosynchronous earth orbit satellite system for communications
services, which has recently begun providing voice services. Several low earth
orbit ("LEO") satellite systems have been proposed that would use multiple
satellites to provide worldwide coverage. The first LEO system is proposed for
service in 1998. In addition, others have applied to the FCC for licenses to
operate satellite communications and video transmission systems in the 28 GHz Ka
band. The Company does not currently view such systems as direct competitors,
and in some cases, such systems may complement the Company's service offerings.
Continuing technological advances in communications and FCC policies that
encourage the development of new spectrum-based technologies may result in new
technologies that compete with cellular and PCS systems. In addition, the
Omnibus Budget Reconciliation Act of 1993 requires, among other things, the
allocation to commercial use of a portion of 200 MHz of the spectrum currently
reserved for government use. It is expected that some portion of the spectrum
that is reallocated will be used to create new land-mobile services or to expand
existing land-mobile services.
GOVERNMENTAL REGULATION
The FCC regulates the licensing, construction, operation, acquisition and
sale of cellular and PCS Systems in the United States pursuant to the
Communications Act of 1934, as amended from time to time, and the rules,
regulations and policies promulgated by the FCC thereunder (the "Communications
Act"). The Communications Act governs applications to construct and operate
cellular and PCS Systems, licensing and administrative appeals and technical
standards for the provision of cellular and PCS service. The FCC also regulates
coordination of proposed frequency usage, height and power of base station
transmitting facilities and types of signals emitted by such stations. In
addition, the FCC regulates (or forbears from regulating) certain aspects of the
business operations of cellular and PCS Systems.
Licensing of Cellular Telephone Systems
For cellular licensing purposes, the FCC established 734 discrete
geographically defined market areas comprising 306 MSAs and 428 RSAs. In each
market area, the FCC awarded only two cellular licenses
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<PAGE> 50
authorizing the use of radio frequencies for cellular telephone service. The
allocated cellular frequencies were divided into two equal 25 MHz blocks. One
block of frequencies (known as the "wireline band") and the associated operating
license were initially reserved for exclusive use by entities owned and
controlled by local landline telephone companies or their affiliates. The second
block of frequencies (known as the "non-wireline band") initially was reserved
for use by entities that did not provide landline telephone service in the
market area. Upon the issuance of a construction permit, either wireline or
nonwireline, such construction permit could be sold to any qualified buyer,
regardless of its affiliation with a landline telephone company. The FCC
generally prohibits a single entity from holding an interest in both the
wireline and the nonwireline licensee in the same market.
Cellular authorizations are issued generally for a 10-year term beginning
on the date of the grant of the initial construction permit. Under FCC rules,
the authorized service area of a cellular provider in each of its markets is
referred to as the CGSA. A cellular licensee has the exclusive right to serve
the entire area that falls within the licensee's MSA or RSA for a period of five
years after the grant of the licensee's construction permit.
At the end of the five-year period, however, the licensee's exclusive CGSA
rights become limited to the area actually served by the licensee as of that
time, as determined pursuant to a formula adopted by the FCC. After the
five-year period any entity may apply to serve portions of the MSA or RSA not
being served by the licensee. The five-year exclusivity period has expired for
most licensees and parties have filed unserved area applications. After the
five-year exclusive period has expired, any entity may apply to serve any
unserved area of the market that comprises at least 50 contiguous square miles
outside of the licensee's CGSA.
Near the conclusion of the 10-year license term, licensees must file
applications with the FCC for renewal of their licenses. The FCC has established
rules and procedures to process cellular renewal applications filed by existing
carriers and the competing applications filed by renewal challengers. The
renewal proceeding is a two-step hearing process. The first step of the hearing
process is to determine whether the existing cellular licensee is entitled to a
renewal expectancy and otherwise remains basically qualified to hold a cellular
license. This first step is subject to waiver by the FCC upon a request by a
competing applicant proposing to provide service that far exceeds the service
presently being provided by the incumbent licensee. If no such waiver is
granted, two criteria are evaluated to determine whether the existing licensee
will receive a renewal expectancy: (i) whether the licensee has provided
"substantial" service during its past license term, defined as service which is
sound, favorable and substantially above a level of mediocre service which
minimally might justify renewal; and (ii) whether the licensee has substantially
complied with applicable FCC rules and policies and the Communications Act.
Under this second criterion, the FCC will not grant a renewal expectancy if a
licensee has demonstrated a pattern of noncompliance. If the FCC grants the
licensee a renewal expectancy during the first step of the hearing process and
the licensee is basically qualified, its license renewal application will be
automatically granted and any competing applications will be denied. If however,
the FCC denies the licensee's request for renewal expectancy or grants an
applicant's request for waiver of the first step, the licensee's application
will be comparatively evaluated under specifically enumerated criteria with the
applications filed by competing applicants.
Cellular radio service providers also must satisfy a variety of FCC
requirements relating to technical and reporting matters. One such requirement
is the coordination of proposed frequency usage with adjacent cellular users,
permittees and licensees in order to avoid electrical interference between
adjacent systems. In addition, the height and power of base station transmitting
facilities and the type of signals they emit must fall within specified
parameters. The FCC has also provided guidelines respecting cellular service
resale practices and the terms under which certain ancillary services may be
provided through cellular facilities.
Cellular and PCS systems are subject to certain Federal Aviation
Administration regulations respecting the location, lighting and construction of
transmitter towers and antennae and may be subject to regulation under the
National Environmental Policy Act and the environmental regulations of the FCC.
State or local zoning and land use regulations also apply to the Company's
activities. The Company uses common carrier point to point microwave facilities
to connect cell sites and to link them to the main switching office. These
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<PAGE> 51
facilities are separately licensed by the FCC and are subject to regulation as
to technical parameters and service.
The Communications Act preempts state and local regulation of the entry of,
or the rates charged by, any provider of commercial mobile radio service
("CMRS") or any private mobile radio service ("PMRS"), which includes cellular
(and PCS) service.
Transfers and Assignments of Cellular Licenses
The Communications Act and FCC rules require the FCC's prior approval of
the assignment or transfer of control of a construction permit or license for a
cellular system. Subject to FCC approval, a license or permit may be transferred
from a non-wireline entity to a wireline entity, or vice versa. Non-controlling
interests in an entity that holds a cellular license or cellular system
generally may be bought or sold without prior FCC approval. Any acquisition or
sale by the Company of cellular interests may also require the prior approval of
the Federal Trade Commission and the Department of Justice, if over a certain
size, as well as any state or local regulatory authorities having competent
jurisdiction.
In addition, the FCC's rules prohibit the alienation of any ownership
interest in an RSA application, or any entity holding such an application, prior
to the grant of a construction permit. For unserved cellular areas, no change of
control may take place until after the FCC has granted both a construction
permit and a license and the licensee has provided service to the public for at
least one year. These restrictions affect the ability of prospective purchasers,
including the Company, to enter into agreements for RSA and unserved area
acquisitions prior to the lapse of the applicable transfer restriction periods.
The restriction on sale of interests in RSA and unserved area applications and
on agreements for such sales should not have a greater effect on the Company
than other prospective buyers.
Licensing of PCS Systems
A PCS system operates under a protected geographic service area license
granted by the FCC for a particular market on one of six frequency blocks
allocated for broadband PCS service. The FCC has divided the United States and
its possessions and territories into PCS markets made up of 493 BTAs and 51
MTAs. As many as six licensees will compete in each PCS service area. The FCC
has allocated 120 MHz of spectrum into six individual blocks, each of which is
allocated to serve either MTAs or BTAs. The spectrum allocation includes two 30
MHz (A and B Blocks) licensed for each of the 51 MTAs, one 30 MHz block (C
Block) licensed for each of the 493 BTAs and three 10 MHz blocks (D, E and F
Blocks) licensed for each of the 493 BTAs. A PCS license will be awarded for
each MTA or BTA in every block, for a total of more than 2,000 licenses.
Under the FCC's rules, no CMRS carrier may hold an attributable interest in
licenses for more than 45 MHz of PCS, cellular and SMR services regulated as
CMRS where there is significant overlap in any geographic area (significant
overlap will occur when at least 10% of the population of the PCS licensed
service area is within the CGSA(s) and/or SMR service area(s)). For example, an
entity may not hold an attributable interest (defined as a controlling or more
than 20% ownership interest) both in a cellular licensee and a 30 MHz PCS
licensee that holds licenses for geographic areas with significant overlaps.
When mutually exclusive applications (i.e., two or more applications
competing for the same service in the same geographic area) are filed for the
same MTA or BTA, those licenses will be awarded pursuant to auctions. The FCC
has adopted comprehensive rules that outline the bidding process, describe the
bidding application and payment process, establish penalties for certain bid
withdrawals, default or disqualification, establish regulatory safeguards,
reserve two of the six frequency blocks (the C and F-blocks) for "entrepreneurs"
and small businesses. The FCC has already completed the auction of the A, B and
C-block licenses.
All PCS licenses will be granted for a 10-year period, at the end of which
they must be renewed. The FCC has adopted specific standards to apply to PCS
renewals, under which the FCC will award a renewal expectancy to a PCS licensee
that (i) has provided substantial service during its past license term and (ii)
has substantially complied with the Communications Act. All 30 MHz broadband PCS
licensees must construct
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facilities that offer coverage to one-third of the population of their service
area within five years of their initial license grants and to two-thirds of the
population within 10 years. Licensees that fail to meet the coverage
requirements may be subject to forfeiture of the license. FCC rules restrict the
voluntary assignments or transfers of control of C and F-block licenses. During
the first five years of the license term, any proposed assignee or transferee
must meet the eligibility criteria for participation in the entrepreneur block
auction at the time the application for assignment or transfer of control is
filed, or the proposed assignee or transferee must hold other licenses for C and
F-blocks and, at the time of receipt of such licenses, have met the same
eligibility criteria. Any transfers or assignments during the remaining 10 years
of the license term are subject to unjust enrichment penalties, i.e., forfeiture
of any bidding credits and acceleration of any installment payment plans should
the assignee or transferee not qualify for the same benefits. Violations of the
Communications Act or the FCC's rules could result in license revocations,
forfeitures or fines. Non-controlling interests in any entity that holds a PCS
license or PCS System generally may be bought or sold without FCC approval. Any
acquisition or sale by the Company or PCS Partnership of PCS interests may also
require the prior approval of the Federal Trade Commission and the Department of
Justice if over a certain size, as well as state or local regulatory authorities
having competent jurisdiction.
For a period of up to five years after the grant of a PCS license (subject
to extension), a PCS licensee will be required to share spectrum with existing
licensees that operate certain fixed microwave systems within its license area.
To secure a sufficient amount of unencumbered spectrum to operate its PCS
Systems efficiently and with adequate population coverage, the PCS Partnership
will need to relocate many of these incumbent licenses. There can be no
assurance that the PCS Partnership will be successful in reaching timely
agreements with the existing microwave licensees needed to construct and operate
its PCS Systems or that any such agreements will be on terms favorable to it.
Foreign Ownership
The Communications Act prohibits the holding of a common carrier license
(such as a cellular or PCS license) by a corporation of which more than 20% of
the capital stock is owned directly or beneficially by aliens. This requirement
cannot be waived by the FCC. When a corporation controls another entity that
holds an FCC license, such corporation may not have more than 25% of its capital
stock owned directly or beneficially by aliens unless the FCC finds that the
public interest would be served by such additional foreign ownership. Failure to
comply with these requirements may result in the FCC issuing an order requiring
divestiture of alien ownership to bring the licensee into compliance with the
Communications Act. The Company has no knowledge of any present foreign
ownership in violation of these restrictions. The Company's Articles of
Incorporation permit it to redeem shares of Common Stock that are held by
persons whose ownership would cause a violation of the Communications Act or
would prevent the Company from holding or materially delay it from obtaining any
license. See "Description of Capital Stock -- Certain Charter, By-Law and
Statutory Provisions -- Redemption of Capital Stock."
Telecommunications Act of 1996
On February 8, 1996, the Telecommunications Act of 1996 (the
"Telecommunications Act") was signed into law, substantially revising the
regulation of communications. The Telecommunications Act seeks to enhance
competition and remove barriers to market entry, while deregulating the
communications industry to the greatest extent possible. To this end, local and
long-distance communications providers will, for the first time, be able to
compete in the other's market, and telephone and cable companies will likewise
be able to compete. To facilitate the entry of new carriers into existing
markets, the Telecommunications Act imposes certain interconnection and equal
access requirements on incumbent carriers. Additionally, all communications
carriers providing interstate communications services must contribute to the
federal universal service support mechanisms that the FCC will establish. The
Company cannot predict the outcome of the FCC's rulemaking proceedings to
promulgate regulations to implement the new law or the effect of the new
regulations on cellular service or PCS, and there can be no assurance that such
regulations will not adversely affect the Company's business or financial
condition.
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At present, cellular providers, other than the regional Bell operating
companies, have the option of using only one designated long distance carrier.
The Telecommunications Act codifies the policy that CMRS providers will not be
required to provide equal access to long distance carriers. The FCC, however,
may require CMRS carriers to offer unblocked access (i.e., implemented by the
subscriber's use of a carrier identification code or other mechanisms at the
time of placing a call) to the long distance provider of the subscriber's
choice. The FCC has recently terminated its inquiry into the imposition of equal
access requirements on CMRS providers. The FCC recently adopted rules
implementing the interconnection policies imposed by the Telecommunications Act,
various aspects of which are being appealed in Federal court. While it is too
soon to predict the actual effect of these new rules, the Company believes that
they will result in a decrease in the Company's interconnection expense.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
directors and executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE OFFICE
- ----------------------------------- --- ---------------------------------------
<S> <C> <C>
William L. Henning, Jr............. 43 Chairman, Chief Executive Officer and
Director
Robert Piper....................... 38 President, Chief Operating Officer and
Director
Dusty J. Dumas..................... 33 Chief Financial Officer
Michael Clark...................... 43 Vice President/General Manager
Paul Clifton....................... 39 Vice President/Engineering and
Technical Services
Thomas G. Henning.................. 37 Secretary, General Counsel and Director
William L. Henning, Sr............. 74 Director
John A. Henning.................... 40 Director
</TABLE>
WILLIAM L. HENNING, JR. has been involved since 1976 in the senior
management of entities comprising the landline telephone operations of an
affiliate of the Company (the "Landline Entities") and since 1984 in the senior
management of entities now comprising the Company's wireless communications
operations (the "Wireless Entities"), some of which were owned by the affiliate
until consummation of the restructuring described under "Certain
Transactions -- Tax-Free Restructuring." Such management capacities have
included Director, Chairman, President and Vice President. Mr. Henning's time in
recent years has been allocated between the Wireless Entities (which since the
restructuring comprise the Company) and the Landline Entities of its affiliate.
After consummation of this Offering, Mr. Henning will devote his time primarily
to the Company. Mr. Henning has served as a Director and President of the
Company since 1988. Prior to that time he was the Company's General Manager for
more than 12 years. Mr. Henning, a founder of the facilities-based long distance
operations of the Company, managed such operations as President from 1988 until
it was sold in 1990. He has for more than five years served as President of
Mercury Information Technologies, Inc. ("MIT") (see "Certain
Transactions -- Affiliate Transactions -- Management and Accounting Services"),
which owns and operates a cable television franchise, a voice mail service and
an Internet access service. Since 1991 he has served as a director of First
National Bank of Lake Charles.
ROBERT PIPER was employed by the Company in 1985 as a comptroller. He was
Vice President and General Manager of the Company's long-distance operations
from 1987 until such operations were sold in 1990, and of Wireless Entities,
including the Company, from 1987 until 1994, when he became Chief Financial
Officer with responsibility also for mergers and acquisitions. From 1995 until
the present time he has been the President and Chief Operating Officer of
Wireless Entities, including the Company. He served on the Board of Directors of
CTIA (the Cellular Telephone Industry Association) from 1992 to 1994.
DUSTY J. DUMAS was employed by the Company in January 1994 as its Chief
Financial Officer. For one year prior to that time he was a staff Certified
Public Accountant with the public accounting firm of McElroy, Quirk and Burch,
Lake Charles, Louisiana. From 1984 to 1989 he served at different times and in
different capacities with the public accounting firms of Grant Thornton, L.L.P.,
and Deloitte & Touche, L.L.P. From 1989 to 1993, he was assistant controller of
Chemical Waste Management, Inc., a chemical waste management company. He has
been a Certified Public Accountant since 1987 and a Certified Management
Accountant since 1993.
MICHAEL CLARK has since 1994 served as Vice President and General Manager
of the Company. His responsibilities include the day-to-day management of the
operations of the Louisiana, Alabama, Kansas and Mississippi Clusters. From 1985
to 1993 he was Director of Data Processing for the Company's landline affiliate.
PAUL CLIFTON has been the Company's Vice President for Engineering and
Technical Services since 1994. From 1993 to 1994, he was the Company's manager
of network systems, in which capacity he was responsible for overseeing all
engineering and technical aspects of the operations of the Wireless Entities.
From 1988 to
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1993 he was traffic manager and then traffic coordinator for the Company's
landline affiliate, by which he was first employed in 1980. In those capacities
he was responsible for design and implementation projects associated with the
operation of cellular, paging, voice mail, central office, personal computer,
cable television and long distance operations.
THOMAS G. HENNING, an attorney, has been the General Counsel of the Company
and its landline affiliate since January 1994. Prior to becoming General
Counsel, Mr. Henning had since 1984 been an associate, and since 1988 a partner,
of the law firm of Stockwell, Sievert, Viccellio, Clements & Shaddock, L.L.P.,
Lake Charles, Louisiana. He has been an officer and Director of the Company
since 1988. He also serves as an officer and director of other Wireless
Entities.
WILLIAM L. HENNING, SR. practiced law for 10 years, following which he has
for more than 40 years been an executive officer and director of the Landline
Entities. He has been a Director of the Company since its incorporation in 1967.
He has been a director of the National Rural Telecom Association (formerly known
as the National REA Telephone Association) since 1973. He was President of the
Louisiana Telephone Association in 1955; a director of the West Calcasieu Port,
Harbor and Terminal District from 1964 to 1978; a director of the Calcasieu
Parish Industrial Development Board from 1972 to 1986; a director of the United
States Telephone Association from 1982 to 1988; a director of Calcasieu Marine
National Bank from 1985 to 1996; and a commissioner of the Chenault Industrial
Airpark Authority from 1986 to 1988.
JOHN A. HENNING served, from 1987 to 1995, as President of the Wireless
Entity that operated the Louisiana Cluster. Since 1988 he has served as an
officer of various Landline Entities. He has been an officer and Director of the
Company since 1988. He was a director of the Louisiana Telephone Association
from 1984 to 1995 and served as its President from 1993 to 1995. He has served
as a director of Cameron State Bank since 1988.
William L. Henning, Jr., Thomas G. Henning and John A. Henning are
brothers. William L. Henning, Sr. is their father.
The Company has undertaken, pursuant to a resolution of the Board of
Directors, to appoint within 12 months of the closing of this Offering and to
maintain thereafter at least one independent director (defined as a director who
(a) is not an officer or employee of the Company or any of its subsidiaries, (b)
is not related to such officers, (c) is not the beneficial owner of 10% or more
of the Common Stock of the Company or related to such an owner, and (d) in the
view of the Company's Board of Directors, is free of any relationship that would
interfere with the exercise of independent judgment) on its Board of Directors.
The Company's Board of Directors has established an Audit Committee and a
Compensation and Stock Option Committee. William L. Henning, Sr. and John A.
Henning are the members of both committees. It is expected that the independent
director referred to in the preceding paragraph will serve on each of these
committees. The Audit Committee recommends the annual engagement of the
Company's auditors, with whom the Audit Committee will review the scope of audit
and non-audit assignments, related fees, the accounting principles used by the
Company in financial reporting, internal financial auditing procedures and the
adequacy of the Company's internal control procedures. The Compensation and
Stock Option Committee determines officers' salaries and bonuses and administers
the Company's benefit plans that involve stock or interests therein. Further,
the approval of disinterested directors will be required for any material
agreements or arrangements between the Company and directors, officers, existing
principal shareholders and their affiliates. Prior to October 1996, the Company
did not have a compensation committee, and the functions of such a committee
were performed by the Board of Directors. William L. Henning, Jr., Thomas G.
Henning and Robert Piper, who are executive officers of the Company and serve on
its Board of Directors, participated in deliberations of the Board of Directors
concerning executive officer compensation.
Under the Company's By-Laws, the Board of Directors may establish an
Executive Committee which, if appointed, will consist of up to five members and
will have all powers of the Board of Directors when the Board is not in session
except powers expressly reserved to other Committees. A unanimous vote of the
Executive Committee would be required for that Committee to authorize the
issuance and sale of any shares of capital stock or any indebtedness other than
trade indebtedness incurred in the ordinary course of the Company's business and
other than indebtedness not in excess of $1.0 million.
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NO EMPLOYMENT AGREEMENTS
The Company has no employment agreements with its officers or employees,
each of whom may terminate his or her employment, or be terminated, at will.
Persons employed by the Company within the last five years have agreed to be
subject to restrictions on competing with the Company should his or her
employment with the Company terminate.
DIRECTOR COMPENSATION
Directors have not previously been paid fees for service in their capacity
as directors. The Company anticipates that, following consummation of this
Offering, it will pay director fees to, and reimburse expenses incurred in
attending meetings of the Board and its Committees to, its independent
directors.
EXECUTIVE COMPENSATION
The following table sets forth the compensation earned by the Company's
executive officers for the year ended December 31, 1995 and expected to be
earned for the year ended December 31, 1996.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
------------------------------
BONUS
------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY CASH STOCK COMPENSATION(1)
--------------------------- ---- ------- -------- ------- ---------------
<S> <C> <C> <C> <C> <C>
William L. Henning, Jr.
Chairman & Chief Executive Officer 1995 $42,000 $ 10,850 $40,500 $ 2,326
1996 52,000 100,000 45,000 1,763
Robert Piper
President & Chief Operating Officer 1995 58,156 11,200 20,250 4,425
1996 73,608 -- 45,000 4,730
Thomas G. Henning
Secretary & General Counsel 1995 25,000 10,500 40,500 790
1996 35,000 100,000 45,000 1,049
</TABLE>
- ---------------
(1) Does not include compensation from affiliated companies.
1996 STOCK OPTION PLAN
The Board of Directors of the Company has adopted, and the shareholders of
the Company have approved, the US Unwired Inc. 1996 Stock Option Plan (the
"Stock Option Plan"). Under the Stock Option Plan, stock options and other
equity-based awards may be granted to senior officers, senior management and
other selected employees and consultants of the Company and its subsidiaries.
The Compensation and Stock Option Committee (the "Committee") expects to
grant, upon consummation of this Offering, five year options to purchase up to
approximately 270,000 shares of Class A Common Stock to certain executive
officers and employees of the Company pursuant to the Stock Option Plan. The
exercise price of each option granted will be the initial public offering price
per share of the Class A Common Stock offered hereby. Such options will vest in
equal 25% annual installments over a four year period.
The Stock Option Plan will be administered by the Committee, which may
grant stock options, stock appreciation rights and other stock-based awards to
eligible persons. In no event, however, may the Committee grant awards relating
to more than 1,400,000 shares of Class A Common Stock pursuant to the Stock
Option Plan. Shares subject to awards that are cancelled, forfeited or otherwise
settled without the delivery of shares, and shares surrendered to or withheld by
the Company in satisfaction of the exercise price or withholding tax arising in
connection with the exercise of an award, shall be added back to the total
number of shares in respect of which awards may be granted under the Stock
Option Plan.
Awards may be satisfied by the delivery of either authorized but unissued
Class A Common Stock or treasury shares. The Committee may grant one or more
types of awards in any combination to a particular participant in a particular
year; however, no individual may be granted awards under the Stock Option Plan
relating to more than 75,000 shares in any year. No awards may be made under the
Stock Option Plan after the tenth anniversary of the effective date of the Stock
Option Plan, and no shares may be issued under the
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<PAGE> 57
Stock Option Plan after that date, except in respect of awards made prior to
that date. Each award will be confirmed by, and is subject to the terms of, an
agreement executed by the participant and the Company.
Following is a description of each type of award or grant that may be made
under the Stock Option Plan.
STOCK OPTIONS
Stock options may be incentive stock options that comply with the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code") or nonqualified stock options that do not comply with Section 422
of the Code. The Committee will determine the exercise price and other terms and
conditions of options, subject to the limitation that the exercise price of
options may not be less than fair market value of the underlying shares on the
date of grant.
To the extent permitted by the Committee, the exercise price for an option
may be paid in shares of Class A Common Stock valued at their then fair market
value.
STOCK APPRECIATION RIGHTS
Stock appreciation rights ("SARs") may be granted in conjunction with all
or any part of a stock option or independently. Upon the exercise of an SAR, the
participant will be entitled to receive, for each share of Class A Common Stock
to which the exercised SAR relates, the excess of the fair market value per
share of Class A Common Stock on the date of exercise over the grant price of
the SAR. SARs shall have such terms and conditions as may be established by the
Committee.
OTHER STOCK-BASED AWARDS
The Committee has the authority under the Stock Option Plan to make other
awards that are valued in whole or in part by reference to, or are payable in or
otherwise based upon, shares of Class A Common Stock, including awards valued by
reference to the performance of a subsidiary of the Company. The Committee will
determine the participants to whom and the times at which these awards will be
made, the number of shares of Class A Common Stock to be awarded and all other
terms and conditions of the awards.
Any award granted under the Stock Option Plan may include the right to
receive, either currently or on a deferred basis, dividends or dividend
equivalents with respect to the number of shares covered by the award.
If the Committee determines that any stock split, stock dividend or other
distribution (whether in the form of cash, securities or other property),
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of shares, issuance of warrants or other
rights to purchase shares at a price below fair market value, or other similar
corporate event affects the Class A Common Stock such that an adjustment is
required in order to preserve the benefits intended under the Stock Option Plan,
then the Committee may in its discretion (i) make equitable adjustments (a) in
the number and kind of shares that may be the subject of future awards under the
Stock Option Plan or (b) the number and kind of shares (or other securities or
property) subject to outstanding awards and the respective grant or exercise
thereof and (ii) if appropriate, provide for the payment of cash to a
participant.
The Stock Option Plan may be amended or terminated at any time by the Board
of Directors, except that no amendment may be made without shareholder approval
if such approval is necessary to comply with any tax or regulatory requirement.
The Stock Option Plan is not subject to any provision of ERISA and is not
qualified under Section 401(a) of the Code.
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PRINCIPAL SHAREHOLDERS
The following table provides certain information regarding the beneficial
ownership of the Company's Common Stock upon the closing of this Offering by (i)
each of the Company's directors and officers listed in the summary compensation
table, (ii) all directors and officers as a group and (iii) each person known to
the Company to be the beneficial owner of 5% or more of any class of the
Company's voting securities.
<TABLE>
<CAPTION>
CLASS A AND CLASS B COMMON
STOCK(1)
CLASS A CLASS B --------------------------
COMMON STOCK(1) COMMON STOCK(1) PERCENTAGE
-------------------- ----------------------- PERCENTAGE OF COMBINED
PERCENTAGE PERCENTAGE OF COMBINED VOTING
NAME OF BENEFICIAL OWNER SHARES OF CLASS SHARES OF CLASS CLASSES POWER
- ------------------------------------------ ------ ---------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
William L. Henning, Sr. .................. -- -- 4,613,011(2) 41.0% 32.9% 40.0%
William L. Henning, Jr. .................. -- -- 1,043,988(3) 9.3 7.5 9.1
John A. Henning........................... -- -- 994,058(3) 8.8 7.1 8.6
Thomas G. Henning......................... -- -- 1,343,561(4) 11.9 9.6 11.7
Thomas D. Henning......................... -- -- 779,596 6.9 5.6 6.8
Robert Piper.............................. -- -- 33,286(5) 0.3 0.2 0.3
All officers and directors as a group (8
persons total, 5 with ownership
interests).............................. -- -- 8,027,904 71.4 57.3 69.7
</TABLE>
- ---------------
(1) As used in this table "beneficial ownership" means the sole or shared power
to vote or direct the voting or to dispose or direct the disposition of any
security. A person is deemed as of any date to have "beneficial ownership"
of any security that such person has a right to acquire within 60 days
after such date, except that shares of Class A Common Stock issuable upon
conversion of Class B Common Stock (see "Description of Capital Stock") are
shown only as Class B Common Stock beneficially owned and not also as Class
A Common Stock beneficially owned. Any security that any person named above
has the right to acquire within 60 days (other than Class A Common Stock
issuable upon conversion of Class B Common Stock) is deemed to be
outstanding for purposes of calculating the ownership percentage of any
other person.
(2) Includes the community property interest of Mrs. Henning. Also includes Mr.
Henning's proportionate interest in 33,286 shares held by a general
partnership comprised of Mr. and Mrs. William L. Henning, Sr., William L.
Henning, Jr., John A. Henning and Thomas G. Henning, based on his interest
in that partnership.
(3) Excludes 116,501 shares held in each of two trusts for the benefit of the
minor children of William L. Henning Jr. and John A. Henning, respectively,
of which shares each of them disclaims beneficial ownership. Includes each
of William L. Henning, Jr.'s and John A. Henning's proportionate interest
in 33,286 shares held by a general partnership comprised of Mr. and Mrs.
William L. Henning, Sr., William L. Henning, Jr., John A. Henning and
Thomas G. Henning, based on each of their respective interests in that
partnership.
(4) Includes 233,002 shares held by Mr. Henning as trustee for the minor
children of William L. Henning, Jr. and John A. Henning (see Note (3)
above), and 116,501 shares held by Mr. Henning as trustee for his own minor
children, of all of which shares he disclaims beneficial ownership. Also
includes Mr. Henning's proportionate interest in 33,286 shares held by a
general partnership comprised of Mr. and Mrs. William L. Henning, Sr.,
William L. Henning, Jr., John A. Henning and Thomas G. Henning, based on
his interest in that partnership.
(5) Includes the community property interest of Dr. Eileen Piper, the spouse of
Robert Piper.
CERTAIN TRANSACTIONS
TAX FREE RESTRUCTURING
In preparation for this Offering, the Company and its affiliate through
common control, Cameron Communications Corporation ("Cameron"), completed a
restructuring plan pursuant to which the wireless communications interests of
Cameron were separated from its landline telephone business and combined with
the wireless communications interests of the Company (the "Tax Free
Restructuring"). To accomplish this restructuring, Cameron, the Company, and
subsidiaries of each entered into an Agreement and Plan of
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Reorganization (the "Reorganization Agreement") pursuant to which the following
transactions occurred. Cameron transferred, to a new wholly-owned subsidiary
("Newco"), all of Cameron's assets and liabilities, other than its 96% interest
in the subsidiary that operates the Louisiana and Kansas Clusters. Next, Cameron
"spun off" (transferred), as a distribution to its shareholders, all of the
shares of Newco. Then, Cameron was merged into the Company. In consideration for
this merger, shareholders of Cameron received, in exchange for their shares of
Cameron, shares of common stock of the Company which, together with all other
then outstanding shares, have been reclassified into Class B Common Stock.
Following the restructuring, the name of Newco was changed to "Cameron
Communications Corporation," and the name of the Company, which had been
Mercury, Inc., was changed to "US Unwired Inc.," its present name.
The Reorganization Agreement further provides for the allocation of
obligations and liabilities between Newco and the Company. In general, Newco
will be responsible for all obligations and liabilities relating to the landline
communications business and the Company will be responsible for those relating
to the wireless communications business. Liabilities of a corporate nature, such
as indemnification of officers and directors and securities law liabilities
relating to the issuance of securities in connection with the restructuring, are
allocated to Newco if the liability is attributable to Cameron as it existed
prior to the restructuring, and otherwise to the Company. If an obligation or
liability that is to be allocated to Newco or the Company is asserted against
the other of them, the one to which the obligation or liability was allocated by
the Reorganization Agreement will defend and indemnify the one against which it
is asserted.
Prior to the restructuring, Cameron received from the Internal Revenue
Service a private letter ruling to the effect that no gain or loss would be
recognized by Cameron or its shareholders by virtue of the transfer of assets to
Newco or the spin-off of Newco to Cameron's shareholders, because those
transactions would qualify as a reorganization under Section 368(a)(1)(D) of the
Code and a distribution under Section 355 of the Code. In addition, tax counsel
for the Company had informed it that the merger of Cameron into the Company
would qualify as a reorganization under Section 368(a)(1)(A) of the Code so that
no gain or loss would be recognized by the respective corporations or their
shareholders by virtue of that merger.
AFFILIATE TRANSACTIONS
GENERAL
During a period of many years prior to the restructuring described in the
preceding section, the Company, Cameron and their respective subsidiaries
entered into a variety of contractual relationships with one another and with
other companies under common control. Certain current transactions are
summarized below. There have been additional transactions which have included
cost sharing arrangements among the companies and their affiliates, sharing of
services and salary expenses of personnel, including officers of the companies,
and inter-company sales of assets, including transfers of the assets of a local
long distance company that was subsequently sold by the Company to a third
party.
BILL PROCESSING SERVICES
In 1995, Cameron entered into agreements with six corporations that were
then subsidiaries of it and/or the Company, under which Cameron performs bill
processing and related services for each of those corporations. Each agreement
had an initial term of six months and is now subject to termination by either
party on 30 days' notice. Prior to these agreements being entered into, Cameron
provided comparable services under oral agreements. The aggregate amounts paid
to Cameron by subsidiaries engaged in the wireless communications business for
all such services during the years ended December 31, 1995, 1994 and 1993 were
$1.1 million, $635,000 and $553,000, respectively, and $1.3 million for the nine
month period ended September 30, 1996.
Upon consummation of the restructuring transactions described above, Newco
succeeded to the interest of Cameron in these agreements. The Company believes
that the terms of these agreements are no less favorable to it than terms that
would be available from unaffiliated third persons.
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SYSTEM MANAGEMENT AND CONSTRUCTION SERVICES
On May 1, 1996, the Company entered into agreements with two subsidiaries
of Cameron (and now, because of the restructuring, are wholly-owned subsidiaries
of the Company) under which the Company provides construction and management
services for the respective systems owned by those corporations. Such services
include reviewing and, if necessary, modifying system design; obtaining
governmental and regulatory approvals; preparation of control point, base
station and business office sites; purchase and installation of switching and
base station equipment; negotiating interconnection to the local exchange
switched telephone network; and general management of the operations of the
system. In return for these services, each of the corporations pays the Company
a management fee and reimburses it for all of its expenses. The management fees
used by the two corporations under the agreements have been $216,000 per month
and $42,000 per month. Prior to these agreements being entered into, the Company
provided comparable services for the corporations under oral arrangements. The
aggregate amounts paid to the Company for such services, including expense
reimbursements, during the years ended December 31, 1995, 1994 and 1993,
respectively, were $3.3 million, $1.7 million and $1.4 million. These amounts
have been eliminated in the consolidated financial statements of the Company.
LONG DISTANCE SERVICES
The Company purchases long distance service from Cameron and resells the
service to the Company's customers. The rates paid by the Company for this
service are comparable to rates at similar volumes charged by Cameron to other
customers and are competitive with rates that the Company would expect to pay
for similar service from an unaffiliated third party. For the nine months ended
September 30, 1996, the Company has paid Cameron $495,000 for long distance
service. In the years ending December 31, 1995, 1994 and 1993, the Company paid
Cameron $386,000, $228,000 and $225,000, respectively.
FLIGHT SERVICES
The Company has been and is expected to continue to be permitted to use,
for the rate of $2.75 per air mile, a Mitsubishi Diamond 1A aircraft owned and
operated by Cameron. For the nine months ended September 30, 1996, the Company
paid Cameron $56,000 for such flight services. In the years ended December 31,
1995, 1994 and 1993, the Company paid Cameron $85,000, $23,000 and $21,000,
respectively, for flight services. It is believed that the rates paid for these
services are rates that the Company would be required to pay to an unaffiliated
third party for equivalent services.
MISCELLANEOUS EXPENSE ARRANGEMENTS
The Company and Cameron have historically used certain common vendors and
suppliers to provide various materials and routine services, such as office
supplies, advertising, computer programming and maintenance services. Each of
the Company, Cameron and their subsidiaries bears its proportionate share of
such expenses.
LOAN FROM CAMERON SUBSIDIARY
The Company's acquisition of the Mississippi and Alabama Clusters has been
financed, in large part, through loans from a subsidiary of Cameron and joint
financing arrangements with another Cameron subsidiary and the National Bank for
Cooperatives ("CoBank"). Both of these subsidiaries are now subsidiaries of
Newco. As of September 30, 1996, direct financing from the first mentioned
subsidiary of Cameron was in the aggregate principal amount of $3.0 million. The
note evidencing the loan is dated April 14, 1993 and bears interest at the rate
of 5.45% per annum. The note makes certain provisions for payment only of
interest for the first two years, with the first principal payment due on April
14, 1995 and the balance payable in 28 equal monthly installments thereafter.
The loan is secured by a mortgage on the real property and the grant of a
security interest in the personal property related to the Mississippi-1 RSA. The
security interest is subordinated to the security interest of CoBank in the same
property pursuant to another credit facility between CoBank and the Company. As
of September 30, 1996, loans from CoBank to the
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<PAGE> 61
second mentioned Cameron subsidiary which were reloaned on a pass through basis
to the Company and/or its subsidiaries were in an aggregate principal amount of
$64.1 million. The pass through loans are represented by a series of promissory
notes executed between September 1994 and July 1996. The notes were executed in
stages as funds were required for the acquisition and build out of the Company's
cellular telephone properties. The notes bear rates of interest ranging from
8.12% to 10.11% and mature at different times between December 31, 1996 and
December 20, 2003. The notes are governed by the terms of loan agreements which
provide, generally as to the bulk of the borrowings, that the Company will pay
interest, only, for a period of up to two years and will thereafter pay
principal and interest in monthly installments for a fixed term. The loans are
secured by mortgages of the Company's Alabama and Mississippi real property, the
grant of a security interest in the Company's personal property and continuing
guarantees of the Company. All of the CoBank Loans, including those made
available to Cameron and its subsidiaries, are secured by pledges of or
mortgages on the assets of the Company and its subsidiaries and guarantees of
the Company and certain principal shareholders of the Company. In preparation
for this Offering, the Company's debt to Cameron's subsidiaries was repaid.
After this Offering, the Company intends to consolidate the loans from CoBank to
the Company and its subsidiaries.
MANAGEMENT AND OTHER SERVICES
William L. Henning, Jr., the Company's Chairman of the Board and Chief
Executive Officer and a principal shareholder of the Company; John A. Henning, a
Director and a principal shareholder of the Company; and Thomas G. Henning, the
Secretary and General Counsel and a principal shareholder of the Company, own
equal interests in MIT, which has, since January 1, 1996, paid the Company a
monthly fee of $2,300 for certain accounting services and a monthly fee of
$3,218 for certain management services. MIT also provides the Company with
voicemail services which the Company uses itself and also resells to its
cellular subscribers. During the nine months ended September 30, 1996, the
Company has paid MIT $216,000 for such services and paid MIT $154,000 for such
services during the year ended December 31, 1995. Pursuant to an agreement dated
October 27, 1995, the Company retains 15% of the revenues from customer
voicemail services to the Company in exchange for the Company providing MIT with
billing, collecting, advertising and network services associated with the
voicemail services offered by MIT. Before October 27, the terms of the October
27, 1995 agreement were implemented pursuant to an oral agreement between the
Company and MIT. It is believed that the terms of these arrangements are no less
fair to the Company than would be expected in a comparable arrangements with
unaffiliated third persons, although it is unlikely that the Company would be
willing to enter into such arrangements with unaffiliated third persons. Under
an agreement dated June 6, 1996, with Maas.net, LLC, a limited liability company
that is owned 63% by MIT and 27% by Mr. Henning, Jr., the Company pays Maas.net
$2,000 per month for certain Internet services.
PCS PARTNERSHIP
MIT owns a one-third interest in the corporation that serves as general
partner of the PCS Partnership. For information concerning the partnership
agreement, see "Business -- Organization."
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 100,000,000 shares
of Class A Common Stock, par value $.01 per share; 60,000,000 shares of Class B
Common Stock, par value $.01 per share; and 40,000,000 shares of preferred
stock, no par value (the "Preferred Stock"). Immediately prior to the Company's
issuance of Class A Common Stock pursuant to this Offering, there were
11,250,000 shares of Class B Common Stock and no shares of Class A Common Stock
or Preferred Stock issued and outstanding and the Company had approximately 16
holders of record of its Class B Common Stock.
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COMMON STOCK
The Company has two classes of authorized Common Stock, Class A Common
Stock and Class B Common Stock. Other than as described herein with respect to
voting rights and transfer restrictions applicable to the Class B shares, the
Class A and Class B shares have identical rights. The Class A Common Stock has
one vote per share and the Class B Common Stock has 10 votes per share. The
Class A and Class B shares vote together in the election of Directors and
generally with respect to all matters for which a vote of shareholders is
required.
Shares of Class B Common Stock generally convert automatically into shares
of Class A Common Stock on a share-for-share basis immediately upon any transfer
of the Class B Common Stock other than a transfer from an original holder of
Class B Common Stock to certain "qualified holders," who are other original
holders of Class B Common Stock, descendants of such persons, entities owned
exclusively by any of such persons, or trustees or other fiduciaries for any of
them. Holders of Class B Common Stock are subject to certain transfer
restrictions that are described under the heading "Shares Eligible for Future
Sale," including a requirement that Class B shares be first offered to other
Class B shareholders before any transfer can be made to anyone other than a
"qualified holder" and before any related conversion into Class A Common Stock.
Such restrictions do not apply to the Class A Common Stock.
Holders of Common Stock have no cumulative voting rights and no preemptive,
subscription or sinking fund rights. Subject to preferences that may be
applicable to any then outstanding Preferred Stock, holders of Common Stock will
be entitled to receive ratably such dividends as may be declared by the Board of
Directors out of funds legally available therefore. See "Dividend Policy." In
the event of a liquidation, dissolution or winding up of the Company, holders of
Common Stock will be entitled to share ratably in all assets remaining after
payment of liabilities and the liquidation preference to any then outstanding
Preferred Stock.
PREFERRED STOCK
The Company is authorized under its Articles of Incorporation to issue
40,000,000 shares of Preferred Stock, which may be issued from time to time in
one or more series upon authorization by the Company's Board of Directors. The
Board of Directors, without further approval of the shareholders, is authorized
to fix the dividend rights and terms, conversion rights, voting rights,
redemption rights and terms, liquidation preferences and any other rights,
preferences, privileges and restrictions applicable to each series of Preferred
Stock. The issuance of Preferred Stock, while providing flexibility in
connection with possible acquisitions and other corporate purposes, could, among
other things, adversely affect the voting power of the holders of Common Stock
and, under certain circumstances, make it more difficult for a third party to
gain control of the Company, discourage bids for the Company's Common Stock at a
premium or otherwise adversely affect the market price of the Class A Common
Stock. The Company has no current plans to issue any Preferred Stock.
CERTAIN CHARTER, BY-LAW AND STATUTORY PROVISIONS
The following sections describe certain provisions of the Company's
Articles of Incorporation and By-Laws, and of the Louisiana Business Corporation
Law ("LBCL").
CLASSIFIED BOARD OF DIRECTORS
The Articles of Incorporation divide the members of the Board of Directors
into three classes as nearly equal in size as possible serving three-year
staggered terms each. The initial Class I directors are John A. Henning and
Thomas G. Henning, whose terms expire in 1997. The initial Class II directors
are William L. Henning, Sr. and Robert Piper, whose terms expire in 1998. The
initial Class III director is William L. Henning, Jr., whose term expires in
1999. The independent director will be appointed to Class III.
SPECIAL MEETINGS OF SHAREHOLDERS
The Articles of Incorporation and By-Laws provide that meetings of the
shareholders of the Company may be called only by the Board of Directors, the
Chairman of the Board, or the President, or upon written
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request of any shareholder or shareholders holding in the aggregate 60% of the
total voting power of the Company. In addition, a special meeting of
shareholders of any class or series may be called upon written request of any
shareholder or group of shareholders holding in the aggregate 60% of the total
voting power of such class or series.
ADVANCE NOTICE REQUIREMENTS FOR DIRECTOR NOMINATIONS
The Company's By-Laws provide that nominations of persons for election to
the Board of Directors of the Company may be made at a meeting of shareholders
by or at the direction of the Board of Directors or by any shareholder of record
of the Company entitled to vote for the election of directors at the meeting who
complies with the notice procedures set forth in the By-Laws. Such nominations,
other than those made by or at the direction of the Board of Directors, shall be
made pursuant to timely notice in writing to the Secretary of the Company. To be
timely, a shareholder's notice must be delivered or mailed and received at the
principal office of the Company not less than 45 days nor more than 90 days
prior to the meeting, provided, however, that in the event that less than 55
days notice or prior public disclosure of the date of the meeting is given or
made to shareholders, notice by the shareholder to be timely must be received no
later than the close of business on the tenth day following the day on which
such notice of the date of the meeting was mailed or such public disclosure was
made.
DIRECTOR AND OFFICER INDEMNIFICATION AND LIMITATION OF LIABILITY
As permitted by the LBCL, the Company's Articles of Incorporation contain
provisions eliminating the personal liability of directors and officers to the
Company and its shareholders for monetary damages for breaches of their
fiduciary duties as directors or officers, except for (i) a breach of a
director's or officer's duty of loyalty to the Company or its shareholders, (ii)
acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) liability for unlawful distributions of the
Company's assets to, or redemptions or repurchases of the Company's shares from,
shareholders of the Company, under and to the extent provided in the LBCL, and
(iv) any transaction in which a director or officer receives an improper
personal benefit. As a result of the inclusion of such provisions, shareholders
may be unable to recover monetary damages against directors or officers for
actions taken by them that constitute negligence or gross negligence or that are
in violation of their fiduciary duties, although it may still be possible to
obtain injunctive or other equitable relief with respect to such actions. If
equitable remedies are found not to be available to shareholders in any
particular case, shareholders may not have any effective remedy against the
challenged conduct.
The Company's Articles of Incorporation and By-Laws provide in effect that
the Company shall, to the fullest extent permitted by the LBCL, as amended from
time to time, indemnify and advance expenses to each of its directors and
officers, and may so indemnify and advance expenses to employees and agents.
The Company believes the foregoing provisions are necessary to attract and
retain qualified persons as directors and officers. Prior to the consummation of
this Offering, the Company intends to enter into separate indemnification
agreements with each of its directors and executive officers in order to
effectuate such provisions.
REDEMPTION OF CAPITAL STOCK
The Company's Articles of Incorporation permit it to redeem shares of its
capital stock from any shareholder(s) whose ownership causes the Company to
violate foreign ownership restrictions applicable to FCC licensees (see
"Business -- Governmental Regulation -- Foreign Ownership") or otherwise would
prevent the Company from holding or delay it in obtaining any governmental
license or franchise that is necessary to conduct any material portion of its
communications business or would materially increase the Company's cost of
obtaining or operating under any such license or franchise. Shares to be
redeemed are to be selected in a manner determined by the Board of Directors.
The redemption price is the average market price for the 10 trading days
preceding the day on which notice of redemption is given. The redemption price
may be paid in cash or in debt or equity securities of the Company or any other
entity.
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REMOVAL OF DIRECTORS; FILLING VACANCIES ON BOARD OF DIRECTORS
The Articles of Incorporation provide that any director elected by holders
of the Common Stock may be removed, with or without cause, by a vote of a
majority of the total voting power of the Common Stock at any meeting of
shareholders. The Articles of Incorporation provide that any vacancies on the
Board of Directors (including any resulting from an increase in the authorized
number of directors) may be filled by the affirmative vote of a majority of the
directors remaining in office, provided that the shareholders have the right, at
any special meeting called for that purpose prior to such action by the Board,
to fill the vacancy.
ADOPTION AND AMENDMENT OF BY-LAWS
The Articles of Incorporation and By-Laws provide that the By-Laws may be
adopted, amended, or repealed by a majority vote of the Board of Directors,
subject to any power granted by the LBCL to shareholders to change or repeal any
By-Laws so adopted or amended. Any amendment to the By-Laws that would add a
matter not expressly covered in the By-Laws prior to such amendment will be
deemed the adoption of a new By-Law and not an amendment.
SPECIAL SHAREHOLDER VOTING REQUIREMENTS
The Articles of Incorporation provide that any proposal to approve a
merger, consolidation, share exchange, disposition of all or substantially all
of the Company's assets, dissolution, or any amendment to the Articles of
Incorporation, requires the affirmative vote of a majority of the total voting
power, with all classes and series voting together as if a single class. The
LBCL provides that if a proposed amendment to the Articles of Incorporation
would adversely affect, within the meaning of the LBCL, the shares of any class
of capital stock, then the amendment must also be approved by holders of the
shares of that class. Under the Company's Articles of Incorporation, such
approval would require the affirmative vote of holders of a majority of the
voting power present of that class.
TRANSFER AGENT
The Company's transfer agent for its Class A Common Stock is First Chicago
Trust Company of New York.
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this Offering, there has been no market for the Class A Common
Stock of the Company. Future sales of substantial amounts of Class A Common
Stock in the public market could adversely affect prevailing market prices.
Upon the closing of this Offering, the Company will have 14,000,000 shares
of Common Stock outstanding (14,412,500 shares if the Underwriters'
over-allotment option is exercised in full), of which 2,750,000 shares will be
shares of Class A Common Stock sold in this Offering (3,162,500 shares if the
Underwriters' over-allotment option is exercised in full), and 11,250,000 shares
will be shares of Class B Common Stock. Of these shares, the 2,750,000 shares of
Class A Common Stock sold in this Offering (3,162,500 shares if the
Underwriters' over-allotment option is exercised in full) will be freely
tradeable without restriction (except as to affiliates of the Company) and the
11,250,000 outstanding shares of Class B Common Stock will be "restricted
securities" as defined in Rule 144 under the Securities Act. Without
consideration of the restrictions described below, 3,861,184 of the restricted
shares would be available for immediate sale in the public market 91 days after
the date of this Prospectus, subject to volume and other limitations under Rule
144; and on February 14, 1997 and February 19, 1998, 116,501 shares and 66,572
shares will become eligible, respectively. In addition, subject to certain
restrictions set forth in the Company's Articles of Incorporation described
below, on October 31, 1998, when the holding period imposed by the IRS as a
condition to the Tax Free Restructuring expires, 7,588,532 shares will become
eligible. Those Rule 144 restrictions generally terminate, except as to
affiliates of the Company, three years after the securities are acquired from
the Company or any affiliate of the Company. The Commission is considering
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certain amendments to Rule 144 that, if adopted, would shorten by one year each
of the time periods referred to in the two preceding sentences, except that no
such date would be earlier than the 91st day after the date of this Prospectus.
All of the officers, directors and shareholders of the Company who hold in
the aggregate 11,250,000 of the Class B shares have agreed, subject to certain
limitations, that for a period of 180 days after the date of this Prospectus
they will not, without the prior written consent of Donaldson, Lufkin & Jenrette
Securities Corporation, offer, sell, contract to sell, grant any option to
purchase, or otherwise dispose of any Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or in any other manner
transfer all or a portion of the economic consequences associated with the
ownership of Common Stock. If and to the extent Donaldson, Lufkin & Jenrette
Securities Corporation should release such shares earlier, they would be
available for immediate sale in the public market subject to restrictions
contained in the Company's Articles of Incorporation and applicable to shares of
Class B Common Stock. Under these restrictions, a holder of Class B Common Stock
who desires to sell them in the public market must first offer them at a price
determined pursuant to a formula based on the public market price to all other
holders of Class B Common Stock and to the Company and, to any extent to which
the shares are not thereby purchased, may convert them to Class A Common Stock
for sale in the public market. Then the offering shareholder may withdraw the
offer if the market price declines before acceptance by the offerees. The
Articles of Incorporation further provide, however, that no holder may sell such
converted shares in the public market if such sale would cause the number of
such shares that have been sold in the public market by such holder and such
holder's affiliates (and any other holder(s) acting in concert with them) during
the three-month period ending on the date of such sale to exceed 1% of the total
number of shares of Class A Common Stock outstanding on such date. This
limitation may be waived by holders of a majority of the Class B Common Stock,
and such holders have agreed to grant a waiver for sales made for the purpose of
paying estate and similar taxes of a deceased shareholder. In addition, the
Company has agreed with the holders of Class B Common Stock, subject to certain
limitations, to provide piggyback registration rights for holders of Class B
Common Stock.
The Company has also agreed that, without the prior written consent of
Donaldson, Lufkin & Jenrette Securities Corporation, it will not offer, sell,
contract to sell or otherwise dispose of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, for
a period of 180 days after the date of the initial public offering of the shares
of Class A Common Stock offered hereby, subject to certain limited exceptions.
See "Underwriting." The Company intends to file a registration statement
covering the sale of shares of Class A Common Stock available for issuance upon
exercise of options under the 1996 Stock Option Plan within 180 days after the
date of this Prospectus.
In general, under Rule 144 as currently in effect, if two years have
elapsed since the later of the date of acquisition of restricted shares from the
Company or any "affiliate" of the Company, as that term is defined under the
Securities Act, the acquiror or subsequent holder thereof is entitled to sell
within any three-month period a number of shares that does not exceed the
greater of 1% of the then outstanding shares of the Company's Class A Common
Stock (such 1% would be 27,500 shares immediately after this Offering or 31,625
shares if the Underwriter's over-allotment option is exercised in full) or the
average weekly trading volume of the Company's Common Stock on all exchanges
and/or reported through the automated quotation system of a registered
securities association during the four calendar weeks preceding the date of
which notice of the sale is filed with the Commission. Sales under Rule 144 are
also subject to certain manner of sales provisions, notice requirements and the
availability of current public information about the Company. If three years
have elapsed since the later of the date of acquisition of restricted shares
from the Company or from any affiliate of the Company, and the acquiror or
subsequent holder thereof is deemed not to have been an affiliate of the Company
at any time during the 90 days preceding a sale, such person would be entitled
to sell such shares in the public market under Rule 144(k) without regard to the
volume limitations, manner of sale provisions, public information requirements
or notice requirements.
63
<PAGE> 66
UNDERWRITING
Subject to the terms and conditions contained in the Underwriting Agreement
(the "Underwriting Agreement"), the Underwriters named below (the
"Underwriters"), for whom Donaldson, Lufkin & Jenrette Securities Corporation,
A.G. Edwards & Sons, Inc. and The Robinson-Humphrey Company, Inc. are acting as
representatives (the "Representatives"), have severally agreed to purchase from
the Company the respective number of shares of Class A Common Stock set forth in
the table below:
<TABLE>
<CAPTION>
NUMBER
UNDERWRITERS OF SHARES
------------ ---------
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation.............
A.G. Edwards & Sons, Inc. ......................................
The Robinson-Humphrey Company, Inc. ............................
---------
Total................................................. 2,750,000
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase and accept delivery of the shares of Class A Common
Stock offered hereby are subject to approval of certain legal matters by counsel
and to certain other conditions. If any shares of Class A Common Stock are
purchased by the Underwriters pursuant to the Underwriting Agreement, all such
shares (other than shares covered by the over-allotment option described below)
must be purchased.
The Representatives have advised the Company that the Underwriters propose
to offer the shares of Class A Common Stock to the public initially at the price
to the public set forth on the cover page of this Prospectus and to certain
dealers (who may include the Underwriters) at such price less a concession not
to exceed $ per share. The Underwriters may allow, and such dealers may
reallow, discounts not in excess of $ per share to any other Underwriter and
certain other dealers. After this Offering, the offering price and other selling
terms may be changed by the Representatives.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that the Underwriters may be required to make in respect thereof.
The Company has granted the Underwriters an option to purchase up to an
aggregate of 412,500 additional shares of Class A Common Stock, at the public
offering price net of underwriting discounts and commissions, solely to cover
over-allotments. Such option may be exercised at any time within 30 days after
the date of this Prospectus. To the extent that the Underwriters exercise such
option, each of the Underwriters will be committed, subject to certain
conditions, to purchase a number of option shares proportionate to such
Underwriter's initial commitment as indicated in the preceding table.
The Company, all of the current officers and directors and certain
shareholders of the Company have agreed, subject to certain limited exceptions,
not to offer, sell, contract to sell, grant any option to purchase, or otherwise
dispose of any Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or in any other manner transfer all or a portion
of the economic consequences associated with the ownership of Common Stock for a
period of 180 days after the date of this Prospectus, without the prior written
consent of Donaldson, Lufkin & Jenrette Securities Corporation.
Up to an aggregate of shares of Class A Common Stock, or
approximately % of the shares offered hereby, have been reserved for sale
to certain employees of the Company and its affiliates and other persons
designated by the Company. The price per share of the shares to be sold to these
persons is the same as the price to the public in this Offering. The maximum
investment of any such person may be limited by the
64
<PAGE> 67
Company in its sole discretion. This program will be administered by Donaldson,
Lufkin & Jenrette Securities Corporation.
Prior to this Offering, there has been no public market for the Class A
Common Stock. The initial public offering price will be determined by
negotiations among the Company and the Representatives. Among the factors to be
considered in such negotiations will be the history of, and the prospects for,
the Company and the industry in which it competes, an assessment of the
Company's management, the Company's past and present operations, its past and
present income and the trend of such income, the prospects for future income of
the Company, the present state of the Company's development, the general
condition of the securities markets at the time of this Offering and the market
prices of publicly traded common stocks of comparable companies in recent
periods.
LEGAL MATTERS
The validity of the Class A Common Stock and certain other legal matters in
connection with this Offering will be passed upon for the Company by Correro
Fishman Haygood Phelps Weiss Walmsley & Casteix, L.L.P., New Orleans, Louisiana.
Certain legal matters in connection with the Class A Common Stock offered hereby
will be passed upon for the Underwriters by Latham & Watkins, Los Angeles,
California.
EXPERTS
The consolidated financial statements of US Unwired Inc. and subsidiaries
as of December 31, 1994 and 1995 and for each of the years in the three-year
period ended December 31, 1995, and the financial statements of Miscellco
Communications, Inc. for the year ended December 31, 1994 and the four-month
period ended April 30, 1995, and the financial statements of West Alabama
Cellular Telephone Company, Inc. as of December 31, 1995 and May 15, 1996 and
for the year ended December 31, 1995 and the period from January 1, 1996 to May
15, 1996, and the financial statements of Alabama 4 System as of June 30, 1996
and for the period October 1, 1995 to November 6, 1995 and the period from
November 7, 1995 to June 30, 1996, have been included herein and in the
Registration Statement in reliance upon the reports of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.
The report of KPMG Peat Marwick LLP covering the financial statements of
Alabama 4 System contains an explanatory paragraph that refers to a business
combination in 1995 accounted for as a purchase involving assets comprising a
portion of Alabama 4 System. As a result of the acquisition, financial
information of Alabama 4 System for periods after November 6, 1995 is presented
on a different cost basis than that for periods before November 6, 1995 and,
therefore, such information is not comparable.
The balance sheet of Alabama 4 System as of September 30, 1995 and the
related statements of operations, stockholders' equity (deficit) and cash flows
for the years ended September 30, 1994 and 1995 have been included herein and in
the Registration Statement in reliance on the report of Elliot H. Goldberg, CPA,
P.C., independent auditor, upon the authority of such person as an expert in
accounting and auditing.
The statements of operations, stockholders' equity and cash flows of
Miscellco Communications, Inc. for the year ended December 31, 1993 have been
included herein and in the Registration Statement in reliance upon the report of
Smith, Turner & Reeves, independent certified public accountants, appearing
elsewhere herein, and upon the authority of said firm as experts in accounting
and auditing.
65
<PAGE> 68
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
US UNWIRED INC.:
Independent Auditors' Report........................................................ F-2
Consolidated Balance Sheets as of December 31, 1994 and 1995 and
September 30, 1996 (unaudited)................................................... F-3
Consolidated Statements of Operations for the years ended December 31, 1993, 1994
and 1995 and the nine months ended September 30, 1995 and 1996 (unaudited)....... F-4
Consolidated Statements of Shareholders' Equity for the years ended December 31,
1993, 1994 and 1995 and the nine months ended September 30, 1996 (unaudited)..... F-5
Consolidated Statements of Cash Flows for the years ended December 31, 1993, 1994
and 1995 and the nine months ended September 30, 1995 and 1996 (unaudited)....... F-6
Notes to Consolidated Financial Statements.......................................... F-7
MISCELLCO COMMUNICATIONS, INC.:
Independent Auditors' Report........................................................ F-18
Independent Auditors' Report........................................................ F-19
Statements of Operations for the years ended December 31, 1993, 1994 and the four
months ended April 30, 1995...................................................... F-20
Statements of Stockholders' Equity for the years ended December 31, 1993 and 1994
and the four months ended April 30, 1995......................................... F-21
Statements of Cash Flows for the years ended December 31, 1993 and 1994 and the four
months ended April 30, 1995...................................................... F-22
Notes to Financial Statements....................................................... F-23
WEST ALABAMA CELLULAR TELEPHONE COMPANY, INC.:
Independent Auditors' Report........................................................ F-25
Balance Sheets as of December 31, 1995 and May 15, 1996............................. F-26
Statements of Operations for the year ended December 31, 1995 and the period from
January 1, 1996 to May 15, 1996.................................................. F-27
Statements of Stockholders' Equity (Deficit) for the year ended December 31, 1995
and the period from January 1, 1996 to May 15, 1996.............................. F-28
Statements of Cash Flows for the year ended December 31, 1995 and the period from
January 1, 1996 to May 15, 1996.................................................. F-29
Notes to Financial Statements....................................................... F-30
ALABAMA 4 SYSTEM:
Independent Auditors' Report........................................................ F-33
Independent Auditors' Report........................................................ F-34
Balance Sheets as of September 30, 1995 and June 30, 1996........................... F-35
Statements of Operations for the years ended September 30, 1994 and 1995, the period
from October 1, 1995 to November 6, 1995 and the period from November 7, 1995
to June 30, 1996................................................................. F-36
Statements of Stockholders' Equity (Deficit) for the years ended September 30, 1994
and 1995, the period from October 1, 1995 to November 6, 1995 and the period from
November 7, 1995 to June 30, 1996................................................ F-37
Statements of Cash Flows for the years ended September 30, 1994 and 1995, the period
from October 1, 1995 to November 6, 1995 and the period from November 7, 1995 to
June 30, 1996.................................................................... F-38
Notes to Financial Statements....................................................... F-39
</TABLE>
F-1
<PAGE> 69
When the transactions referred to in note 15 of the Notes to Consolidated
Financial Statements have been consummated, we will be in a position to render
the following report.
KPMG Peat Marwick LLP
November 6, 1996
INDEPENDENT AUDITORS' REPORT
The Board of Directors
US Unwired Inc. and subsidiaries:
We have audited the accompanying consolidated balance sheets of US Unwired
Inc. and subsidiaries as of December 31, 1994 and 1995, and the related
consolidated statements of operations, shareholders' equity, and cash flows for
each of the years in the three-year period ended December 31, 1995. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of US Unwired
Inc. and subsidiaries as of December 31, 1994 and 1995, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1995 in conformity with generally accepted accounting
principles.
New Orleans, Louisiana
October 31, 1996, except as to note 15
which is as of
F-2
<PAGE> 70
US UNWIRED INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------- SEPTEMBER 30,
1994 1995 1996
----------- ----------- -------------
(UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents........................ $ 5,323,594 $ 5,101,601 $ 8,166,407
Subscriber receivables (less allowance for
doubtful accounts of $339,898, $1,006,000 and
$2,213,570 (unaudited) at December 31, 1994
and 1995, and September 30, 1996,
respectively)................................. 2,445,891 5,831,179 7,889,946
Receivable from affiliate........................ 424,497 -- --
Other receivables................................ 266,066 235,439 1,721,016
Inventory........................................ 804,878 1,600,570 1,683,137
Prepaid expenses................................. 121,644 133,515 257,050
----------- ----------- -------------
Total current assets..................... 9,386,570 12,902,304 19,717,556
Investments in unconsolidated affiliates........... 554,291 5,449,719 5,426,434
Property and equipment, net of accumulated
depreciation of $9,702,939, $13,484,855 and
$17,473,925 (unaudited) as of December 31, 1994
and 1995 and September 30, 1996, respectively.... 13,261,076 20,911,272 26,407,022
Cellular licenses, net of accumulated amortization
of $1,008,478, $2,779,000 and $5,153,136
(unaudited) as of December 31, 1994 and 1995 and
September 30, 1996, respectively................. 10,094,786 38,427,432 73,320,260
Deferred income taxes.............................. 211,635 252,862 44,135
Other assets....................................... 1,992,064 579,262 3,854,496
----------- ----------- -------------
Total assets............................. $35,500,422 $78,522,851 $ 128,769,903
=========== =========== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable................................. $ 1,368,685 $ 2,821,966 $ 4,604,590
Accrued expenses................................. 680,227 1,457,406 2,185,275
Current maturities of long-term debt............. 665,762 2,776,828 7,996,363
----------- ----------- -------------
Total current liabilities................ 2,714,674 7,056,200 14,786,228
Long-term debt..................................... 13,020,412 49,274,443 87,681,399
Minority interest.................................. 896,902 442,981 139,935
Shareholders' equity:
Preferred stock, authorized 40,000,000 shares;
none issued or outstanding.................... -- -- --
Common stock, $0.01 par value
Class A: Authorized 100,000,000 shares; none
issued or outstanding....................... -- -- --
Class B: Authorized 60,000,000 shares; issued
and outstanding, 11,066,927, 11,183,428 and
11,250,000 (unaudited) shares at December
31, 1994 and 1995 and September 30, 1996.... 110,669 111,834 112,500
Additional paid-in capital....................... 1,514,724 1,655,309 1,834,643
Retained earnings................................ 17,243,041 19,982,084 24,215,198
----------- ----------- -------------
Total shareholders' equity............... 18,868,434 21,749,227 26,162,341
Commitments and contingencies
Total liabilities and shareholders' ----------- ----------- -------------
equity................................. $35,500,422 $78,522,851 $ 128,769,903
=========== =========== =============
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE> 71
US UNWIRED INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------- --------------------------
1993 1994 1995 1995 1996
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Cellular service:
Subscriber...................... $ 9,148,203 $14,705,619 $29,028,812 $19,422,669 $32,851,017
Roaming......................... 4,084,268 6,603,242 8,909,395 6,248,134 9,710,664
Merchandise sales.................. 540,961 1,002,221 1,403,425 998,339 1,286,595
Other revenue...................... 661,369 400,257 136,962 160,077 327,844
----------- ----------- ----------- ----------- -----------
14,434,801 22,711,339 39,478,594 26,829,219 44,176,120
----------- ----------- ----------- ----------- -----------
Operating expenses:
Cost of service.................... 4,512,823 7,444,662 11,430,334 7,891,366 11,621,569
Merchandise cost of sales.......... 719,884 2,517,994 3,372,820 1,922,518 3,376,837
General and administrative......... 1,692,353 2,498,484 5,308,109 3,553,544 6,944,147
Sales and marketing................ 2,735,772 3,768,069 6,261,559 3,986,169 5,448,448
Depreciation and amortization...... 2,036,877 2,892,457 5,685,911 3,853,731 6,432,076
----------- ----------- ----------- ----------- -----------
11,697,709 19,121,666 32,058,733 21,207,328 33,823,077
----------- ----------- ----------- ----------- -----------
Operating income..................... 2,737,092 3,589,673 7,419,861 5,621,891 10,353,043
----------- ----------- ----------- ----------- -----------
Other income (expense):
Interest expense................... (177,472) (789,856) (3,401,424) (2,253,020) (4,510,445)
Interest income.................... 269,548 160,405 336,253 234,771 213,952
Gain (loss) on sale of assets...... 9,984 24,611 (32,137) -- --
Investment income.................. 73,739 397,795 344,426 272,316 224,074
----------- ----------- ----------- ----------- -----------
Total other income
(expense)................ 175,799 (207,045) (2,752,882) (1,745,933) (4,072,419)
----------- ----------- ----------- ----------- -----------
Income before income taxes and
minority interest.................. 2,912,891 3,382,628 4,666,979 3,875,958 6,280,624
Income tax expense................... 1,352,648 1,977,112 2,381,857 1,840,572 2,350,556
----------- ----------- ----------- ----------- -----------
Income before minority interest...... 1,560,243 1,405,516 2,285,122 2,035,386 3,930,068
Minority interest in losses of
subsidiary......................... 401,292 439,172 453,921 379,170 303,046
----------- ----------- ----------- ----------- -----------
Net income........................... $ 1,961,535 $ 1,844,688 $ 2,739,043 $ 2,414,556 $ 4,233,114
=========== =========== =========== =========== ===========
Net income per share................. $ 0.18 $ 0.17 $ 0.24 $ 0.21 $ 0.38
=========== =========== =========== =========== ===========
Weighted average shares
outstanding........................ 10,933,782 11,108,874 11,242,334 11,239,783 11,250,000
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE> 72
US UNWIRED INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995 AND
THE NINE MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
CLASS A CLASS B ADDITIONAL
PREFERRED COMMON COMMON PAID-IN RETAINED
STOCK STOCK STOCK CAPITAL EARNINGS TOTAL
--------- ------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1993..................... $ -- $ -- $108,672 $1,143,428 $13,436,818 $14,688,918
Net income..................................... -- -- -- -- 1,961,535 1,961,535
--------- ------- -------- ---------- ----------- -----------
Balance at December 31, 1993................... -- -- 108,672 1,143,428 15,398,353 16,650,453
Issuance of 199,716.42 shares of Class B Common
stock........................................ -- -- 1,997 112,003 -- 114,000
Contributed capital............................ -- -- -- 259,293 -- 259,293
Net income..................................... -- -- -- -- 1,844,688 1,844,688
--------- ------- -------- ---------- ----------- -----------
Balance at December 31, 1994................... -- -- 110,669 1,514,724 17,243,041 18,868,434
Issuance of 116,501.24 shares of Class B Common
stock........................................ -- -- 1,165 140,585 -- 141,750
Net income..................................... -- -- -- -- 2,739,043 2,739,043
--------- ------- -------- ---------- ----------- -----------
Balance at December 31, 1995................... -- -- 111,834 1,655,309 19,982,084 21,749,227
Issuance of 66,572.14 shares of Class B Common
stock (unaudited)............................ -- -- 666 179,334 -- 180,000
Net income (unaudited)......................... -- -- -- -- 4,233,114 4,233,114
--------- ------- -------- ---------- ----------- -----------
Balance at September 30, 1996 (unaudited)...... $ -- $ -- $112,500 $1,834,643 $24,215,198 $26,162,341
========= ======= ======== ========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE> 73
US UNWIRED INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------- ----------------------------
1993 1994 1995 1995 1996
------------ ------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income............................... $ 1,961,535 $ 1,844,688 $ 2,739,043 $ 2,414,556 $ 4,233,114
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization.......... 2,036,877 2,892,457 5,685,911 3,853,731 6,432,076
Minority interest...................... (401,292) (439,172) (453,921) (379,171) (303,046)
Bad debt provision..................... 154,344 106,349 589,338 299,717 1,120,351
Deferred tax expense................... 111,593 (267,179) (41,227) 7,581 208,727
Gain on the sale of assets............. (9,984) (24,611) (32,137) --
Equity in income of affiliates......... (73,739) (397,795) (344,426) (272,316) (224,074)
Non-cash compensation.................. -- 114,000 141,750 141,750 180,000
Changes in operating assets and
liabilities:
Subscriber receivables................... (185,758) (1,087,295) (3,191,096) (1,449,966) (2,417,090)
Receivable from affiliates............... (542,139) 542,139 424,497 424,497 --
Other receivables........................ (272,892) 11,658 30,627 29,374 (1,485,577)
Inventory................................ (99,524) (578,223) (639,131) (111,782) 47,981
Prepaid expenses......................... (75,323) (23,313) 357 (262,147) (116,904)
Other assets............................. 1,485,346 937,485 2,534,922 2,556,359 (407,300)
Accounts payable......................... 1,576,843 (876,938) 1,199,684 (1,104,527) 694,828
Accrued expenses......................... 1,870,811 (1,190,584) (2,263,800) (536,087) 596,244
------------ ------------ ------------ ------------ ------------
Net cash provided by operating
activities...................... 7,536,698 1,563,666 6,380,391 5,611,569 8,559,330
------------ ------------ ------------ ------------ ------------
Cash flows from investing activities:
Purchase of property and equipment....... (8,038,020) (4,460,389) (7,084,437) (5,089,328) (3,411,038)
Proceeds from sale of property and
equipment.............................. 20,800 756,443 404,084 420,535 2,226
Acquisition of Kansas RSAs............... -- -- (33,520,288) (33,520,288) --
Acquisition of Alabama RSA 3............. -- -- -- -- (17,836,724)
Acquisition of Alabama RSA 4............. -- -- -- -- (27,776,313)
Acquisition of Mississippi RSA 1......... (6,000,000) -- -- -- --
Acquisition of Mississippi RSAs 3 and 4.. (3,042,608) -- -- -- --
Transfer to escrow....................... -- (1,736,517) -- -- --
Distributions from unconsolidated
affiliates............................. -- 360,909 368,998 285,299 2,247,359
Investment in unconsolidated
affiliates............................. (184,016) (104,828) (4,920,000) (2,920,000) (2,000,000)
------------ ------------ ------------ ------------ ------------
Net cash used in investing
activities...................... (17,243,844) (5,184,382) (44,751,643) (40,823,782) (48,774,490)
------------ ------------ ------------ ------------ ------------
Cash flows from financing activities:
Proceeds from long-term debt, including
interest capitalized................... 6,539,970 7,625,966 40,321,946 37,862,813 46,026,906
Principal payments on long-term debt..... -- (1,668,076) (1,956,849) (1,448,203) (2,400,415)
Deferred financing costs................. -- (155,189) (215,838) (322,935) (346,525)
------------ ------------ ------------ ------------ ------------
Net cash provided by financing
activities...................... 6,539,970 5,802,701 38,149,259 36,091,675 43,279,966
------------ ------------ ------------ ------------ ------------
Net increase (decrease) in cash... (3,167,176) 2,181,985 (221,993) 879,462 3,064,806
Cash at beginning of period................ 6,308,785 3,141,609 5,323,594 5,323,594 5,101,601
------------ ------------ ------------ ------------ ------------
Cash at end of period...................... $ 3,141,609 $ 5,323,594 $ 5,101,601 $ 6,203,056 $ 8,166,407
============ ============ ============ ============ ============
Supplemental disclosures of cash flow
information:
Cash paid for interest................... $ 60,361 $ 30,532 $ 2,190,027 $ 2,094,352 $ 4,108,555
============ ============ ============ ============ ============
Cash paid for income taxes............... $ 1,530,595 $ 2,534,902 $ 2,280,200 $ 1,756,200 $ 2,315,000
============ ============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE> 74
US UNWIRED INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Description of Organization
US Unwired Inc. ("Company") is principally engaged in the ownership and
operation of wireless communications systems in the south-central and the
mid-western United States. At December 31, 1995, the Company owned and operated
cellular communications systems in 14 Rural Service Areas ("RSAs"), excluding
two RSAs which it operates under interim operating authority from the Federal
Communications Commission ("FCC"), and one Metropolitan Statistical Area
("MSA"). These markets are clustered into geographic regions that include
portions of Louisiana, Mississippi, Alabama, Texas, Kansas and Oklahoma.
(b) Consolidation Policy
The consolidated financial statements include the accounts of US Unwired
Inc. and its majority-owned subsidiaries. All significant intercompany balances
and transactions are eliminated in consolidation. Losses of subsidiaries
attributable to minority shareholders in excess of the minority interest in the
equity capital of the subsidiary are not eliminated in consolidation.
(c) Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with remaining maturities of three
months or less to be cash equivalents.
(d) Inventory
Inventory consists of cellular telephones and related accessories and is
carried at the lower of cost or market. Cost is determined by the first-in,
first-out method.
(e) Property and Equipment
Property and equipment is stated at cost and depreciated on a straight-line
basis over the estimated useful lives of the assets as follows:
<TABLE>
<CAPTION>
YEARS
-------
<S> <C>
Buildings.......................................................... 31.5
Leasehold improvements............................................. 5
Cellular facilities and equipment.................................. 5 to 7
Furniture and fixtures............................................. 5
Vehicles........................................................... 5
</TABLE>
Routine maintenance and repairs are charged to operating expense while
costs of betterments and renewals are capitalized.
Cellular equipment held under capital leases is amortized on a
straight-line basis over the lease term of 5 years. Amortization of assets held
under capital leases is included in depreciation and amortization.
(f) Cellular Licenses and Other Assets
Cellular licenses consist primarily of costs incurred in connection with
the Company's acquisition of cellular licenses and systems. These assets are
recorded at cost and amortized using the straight-line method over an estimated
useful life of 20 years. The Company annually evaluates the propriety of the
carrying values
F-7
<PAGE> 75
US UNWIRED INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
of its cellular licenses and other system-related assets using estimated
undiscounted future cash flows of the market to which the license relates to
determine whether current events or circumstances warrant adjustments to reduce
the carrying amounts to fair value. There have been no such reductions through
December 31, 1995.
Other assets include deferred financing costs incurred in connection with
the issuance of the Company's long-term debt which are capitalized and amortized
over the terms of the related debt using the interest method.
(g) Investments in Unconsolidated Affiliates
The Company's investments in less than majority-owned affiliated companies
in which the Company's interest is 20% or more are accounted for using the
equity method and equity in earnings are reported as investment income.
(h) Revenue Recognition
The Company earns revenue by providing access to and usage of its cellular
and paging networks and sales of cellular and paging merchandise. Access revenue
is billed one month in advance and is recognized when earned. Usage revenue is
recognized when the service is rendered. Both access and usage revenues are
classified as service revenues in the accompanying statements of operations.
Revenues from sales of merchandise are recognized when the merchandise is
delivered.
(i) Commissions
Commissions are paid to sales agents for customer activations and are
recognized in the month the customer is activated within the cellular system.
(j) Income Taxes
The Company accounts for income taxes using the asset and liability method,
under which deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
(k) Stock Based Compensation
The Company plans to adopt a stock option plan providing for the grant of a
fixed number of shares to employees with an exercise price equal to the fair
value of the shares at the date of grant. The Company will account for stock
option grants in accordance with APB Opinion 25, Accounting for Stock Issued to
Employees, and accordingly, will recognize no compensation expense for stock
option grants.
(l) Net Income Per Share
Net income per share is based on net income divided by the weighted average
number of common shares and common share equivalents outstanding during the
period presented. All share and per share data have been restated to give effect
to the recapitalization and reorganization discussed in note 2 to the
consolidated financial statements.
F-8
<PAGE> 76
US UNWIRED INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
(m) Use of Estimates
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(n) Interim Financial Information (unaudited)
In the opinion of management, the accompanying unaudited consolidated
financial information of the Company contains all adjustments, consisting only
of those of a normal recurring nature, necessary to present fairly the Company's
financial position as of September 30, 1996 and the results of its operations
and cash flows for the nine month periods ended September 30, 1995 and 1996.
These results are not necessarily indicative of the results to be expected for
the full fiscal year.
(2) RECAPITALIZATION AND REORGANIZATION
The Company was incorporated as Mercury, Inc. in 1967 by the principal
shareholders of Cameron Communications Corporation ("Cameron") to provide
complimentary services to Cameron's local landline telephone service. Prior to
October 31, 1996, the cellular and paging communications services provided by
the Company were conducted by a subsidiary of Cameron and by the Company and its
subsidiaries, all of which were affiliated through common stock ownership
control by a related group of shareholders. In anticipation of the Company's
initial public offering of its common stock, effective October 31, 1996, the
Company and Cameron completed a reorganization plan for the purpose of combining
the wireless communications businesses of these related entities and separating
the wireless communications business of Cameron from its traditional landline
telephone business.
To accomplish the restructuring, the Company and Cameron executed a series
of transactions which included the following: (i) transfer of the landline
telephone business to a newly-formed subsidiary of Cameron ("Newco") and spin
off of Newco to its shareholders, and (ii) merger of Cameron into the Company
and issuance of 2.192108 shares of Class B Common Stock of the Company on a
pro-rata basis to Cameron shareholders, resulting in the combination of all
wireless telecommunications businesses within the Company. In October 1996, the
Board of Directors of the Company authorized the issuance of Class A Common
Stock, $0.01 par value per share, to be registered under Securities Act of 1933
in the Company's initial public offering.
Accordingly, the accompanying financial statements of the Company reflect
the reorganization of the business as a change in the reporting entity. In
addition, all share and per share amounts have been retroactively adjusted to
give effect to the issuance of Class B shares described above.
(3) ACQUISITIONS
In December of 1992, the Company acquired a 36.25% interest in Mississippi
34 Cellular Corporation ("MS 34") for approximately $2.6 million. In April of
1993, the Company purchased an additional 14.75% interest in MS 34 for
approximately $900,000 bringing the total investment to 51%. The Company's
investment in MS 34 was accounted for using the equity method from December 1992
until April 1993, when the Company acquired its controlling interest. The
acquisition of MS 34 has been accounted for using the purchase method of
accounting and, accordingly, the results of operations of MS 34 have been
consolidated from the date on which the Company acquired majority ownership of
MS 34.
F-9
<PAGE> 77
US UNWIRED INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
In April 1995, the Company purchased the assets of Miscellco
Communications, Inc., principally consisting of the Kansas-1, 2, 6, 7, 11, 12
and 13 RSAs for a purchase price of approximately $35.9 million. In May 1996,
the Company purchased the assets of West Alabama Cellular Telephone Company,
Inc., principally consisting of the Alabama-3 RSA, for a purchase price of
approximately $17.9 million. In July 1996, the Company purchased the Alabama 4
System assets from PriCellular Corporation principally consisting of the Alabama
4 RSA, for a purchase price of approximately $27.5 million. These acquisitions
have been accounted for using the purchase method of accounting and,
accordingly, the results of operations of the acquired businesses are included
in the results of operations of the Company from the effective dates of the
acquisitions. The Company recorded cellular licenses acquired in these
transactions in the amounts of $30.1 and $14.5 million, respectively, during the
year ended December 31, 1995 and the nine months ended September 30, 1996, which
are being amortized over a twenty year period using the straight-line method.
Pro forma unaudited consolidated operating results of the Company and the
acquired businesses for the years ended December 31, 1994 and 1995, and the nine
months ended September 30, 1996, assuming the acquisitions had been made as of
January 1, 1994 with respect to Miscellco and January 1, 1995 with respect to
Alabama RSA 3 and RSA 4, are summarized below:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER NINE MONTHS
31, ENDED
---------------------- SEPTEMBER 30,
1994 1995 1996
------- ----------- -------------
<S> <C> <C> <C>
Revenues........................................... $28,702 $50,095 $48,719
Net income (loss).................................. $(1,182) $ (221) $ 3,582
Net income (loss) per common share................. $ (0.11) $ (0.02) $ 0.32
</TABLE>
(4) PROPERTY AND EQUIPMENT
Major categories of property and equipment are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1994 1995
----------- ------------
<S> <C> <C>
Land..................................................... $ 1,102,897 $ 1,130,302
Buildings................................................ 1,411,592 1,854,277
Leasehold improvements................................... 55,409 207,158
Cellular facilities and equipment........................ 19,604,054 29,407,076
Furniture and fixtures................................... 599,450 1,110,567
Vehicles................................................. -- 156,756
Construction in progress................................. 190,613 529,991
----------- ------------
22,964,015 34,396,127
Less accumulated depreciation.................. (9,702,939) (13,484,855)
----------- ------------
$13,261,076 $ 20,911,272
=========== ============
</TABLE>
F-10
<PAGE> 78
US UNWIRED INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
During the year ended December 31, 1995, the Company began leasing certain
cellular equipment under agreements classified as capital leases. The following
is a summary of equipment held under capital leases as of December 31, 1995:
<TABLE>
<S> <C>
Cellular facilities and equipment........................................ $3,144,276
Less accumulated depreciation............................................ 302,352
----------
$2,841,924
==========
</TABLE>
(5) INVESTMENTS IN UNCONSOLIDATED AFFILIATES
Investments in unconsolidated affiliates at December 31, 1994 and 1995,
consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
PERCENTAGE ----------------------
OWNERSHIP 1994 1995
---------- -------- ----------
<S> <C> <C> <C>
Meretel Communications, L.P......................... 24.33% $ -- $2,920,000
Mercury Mobility, LLC............................... 50% 1,500 2,001,500
GTE Mobilnet of Texas RSA #21 Limited Partnership... 25% 552,791 528,219
-------- ----------
$554,291 $5,449,719
======== ==========
</TABLE>
Summary financial information for GTE Mobilnet of Texas RSA #21 Limited
Partnership is as follows for the years ended December 31, 1994 and 1995,
respectively:
<TABLE>
<CAPTION>
1994 1995
---------- ----------
<S> <C> <C>
Total assets................................................ $2,307,919 $2,248,559
Total liabilities........................................... 96,752 135,679
---------- ----------
Partners' capital........................................... $2,211,167 $2,112,880
========== ==========
Revenues.................................................... $2,281,484 $2,067,719
========== ==========
Operating expenses.......................................... $ 707,786 $ 716,345
========== ==========
Net income.................................................. $1,591,181 $1,377,703
========== ==========
</TABLE>
In June 1995 the Company invested approximately $2.9 million in Meretel
Communications L.P. (the "PCS Partnership") and has committed to make additional
capital contributions of up to approximately $10.1 million upon the successful
acquisition of one or more licenses in certain FCC auctions for broadband
personal communications services ("PCS") licenses. In May 1996, the FCC
completed the auctions for which the PCS Partnership was formed to participate,
and the PCS Partnership was the high bidder for five PCS licenses for a total
bid price of $61.2 million. Four of these licenses were granted in October 1996.
Mercury Mobility, LLC ("Mobility") was organized in September 1994 for the
purpose of participating in certain FCC auctions for PCS licenses. The Company
and a related party, each have a 50% equity interest in Mobility. As of
September 30, 1996, Mobility has not commenced active operations.
F-11
<PAGE> 79
US UNWIRED INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
(6) ACCRUED EXPENSES
Accrued expenses consists of the following at December 31, 1994 and 1995:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1994 1995
-------- ----------
<S> <C> <C>
Accrued taxes, other than income............................. $186,791 $ 382,593
Accrued interest expense..................................... 32,493 295,471
Accrued payroll.............................................. 100,000 262,312
Customer deposits............................................ 79,359 123,017
Other........................................................ 281,584 394,013
---------- ----------
$680,227 $1,457,406
========== ==========
</TABLE>
(7) LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER
-------------------------- 30,
1994 1995 1996
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Debt outstanding under credit facilities:
Bank financing.............................. $ 2,446,075 $36,448,395 $80,356,066
Vendor financing............................ 7,763,922 9,690,298 9,690,298
Capitalized lease obligation.................. -- 2,950,869 2,549,208
Subordinated note payable to a related party,
interest at 5.45%, principal and interest
payable in quarterly installments, due
January 2002................................ 2,740,415 2,891,709 3,012,190
Other notes payable to related parties........ 735,762 70,000 70,000
----------- ----------- -----------
13,686,174 52,051,271 95,677,762
Less current maturities............. (665,762) (2,776,828) (7,996,363)
----------- ----------- -----------
Long-term debt, excluding current
maturities.................................. $13,020,412 $49,274,443 $87,681,399
=========== =========== ===========
</TABLE>
Long-term obligations mature as follows:
<TABLE>
<CAPTION>
DEBT LEASES TOTAL
----------- ---------- -----------
<S> <C> <C> <C>
1996......................................... $ 2,282,500 $ 700,456 $ 2,982,956
1997......................................... 3,281,082 764,134 4,045,216
1998......................................... 4,375,108 764,134 5,139,242
1999......................................... 6,413,060 764,134 7,177,194
2000......................................... 7,424,719 571,448 7,996,167
Thereafter................................... 25,323,933 -- 25,323,933
----------- ---------- -----------
$49,100,402 $3,564,306 $52,664,708
=========== ========== ===========
</TABLE>
Long-term lease obligation includes amounts representing interest at 8.24%
totaling $613,437 at December 31, 1995.
F-12
<PAGE> 80
US UNWIRED INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
The notes outstanding under the bank credit facilities include loans from a
subsidiary of Cameron and joint financing arrangements with another Cameron
subsidiary which have been loaned to the Cameron subsidiary and reloaned on a
pass through basis to the Company. The notes outstanding under the bank credit
facilities generally provide for monthly amortization of principal and interest
with final maturities at various dates through December 20, 2002. The notes
outstanding under the vendor credit facility provide for quarterly interest
payments beginning March 1996 and quarterly amortization of principal beginning
December 1997 with the final maturity on December 20, 2003. Weighted average
interest rates, which are a combination of fixed rates over the term of the note
or variable rates based on either a variable lending rate established by a
commercial bank plus a margin ranging up to 1% or the average offering rate for
three-month commercial paper of major corporations, are 9.33%, 8.92% and 8.27%
at December 31, 1994 and 1995, and September 30, 1996. As of December 31, 1995,
the Company had an unused commitment with a commercial bank of approximately
$1.4 million which expires December 31, 1996. Substantially all of the assets of
the Company are pledged to secure the Company's obligations under the various
loans and credit facilities described above. The payment of dividends is
restricted under the Company's long-term debt agreements.
(8) INCOME TAXES
Income tax expense (benefit) for the years ended December 31, 1993, 1994,
and 1995, are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1993 1994 1995
---------- ---------- -----------
<S> <C> <C> <C>
Federal:
Current..................................... $1,051,668 $1,923,534 $ 2,082,151
Deferred.................................... 99,846 (239,055) (36,887)
---------- ---------- -----------
1,151,514 1,684,479 2,045,264
---------- ---------- -----------
State:
Current..................................... 189,387 320,757 340,933
Deferred.................................... 11,747 (28,124) (4,340)
---------- ---------- -----------
201,134 292,633 336,593
---------- ---------- -----------
Total............................... $1,352,648 $1,977,112 $ 2,381,857
========== ========== ===========
</TABLE>
Income tax benefit differed from the amounts computed by applying the U.S.
federal income tax rate of 34% for the years ended December 31, 1993, 1994, and
1995, to income before income taxes and minority interest as a result of the
following:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1993 1994 1995
---------- ---------- ----------
<S> <C> <C> <C>
Computed "expected" tax benefit................ $ 990,383 $1,150,094 $1,586,773
Change in valuation allowance.................. 315,840 594,716 635,622
State income taxes, net of federal income
taxes........................................ 132,747 193,138 222,152
Gain from sale of voice mail operations........ -- 88,159 --
Other, net..................................... (86,322) (48,995) (62,690)
---------- ---------- ----------
$1,352,648 $1,977,112 $2,381,857
========== ========== ==========
</TABLE>
F-13
<PAGE> 81
US UNWIRED INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
The tax effects of temporary differences that give rise to the significant
components of deferred tax assets and deferred tax liabilities are presented
below:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1994 1995
---------- -----------
<S> <C> <C>
Deferred tax assets:
Operating loss carryforwards............................. $1,306,123 $ 2,359,372
Allowance for doubtful accounts.......................... 129,161 382,280
Accrued interest to related parties...................... 277,109 304,901
Other.................................................... 38,000 76,000
---------- -----------
Gross deferred tax asset......................... 1,750,393 3,122,553
Less valuation allowance................................... (947,041) (1,582,663)
---------- -----------
Net deferred tax asset........................... 803,352 1,539,890
Deferred tax liabilities --
Fixed assets, principally due to differences in
depreciation.......................................... 484,447 1,179,758
Other.................................................... 107,270 107,270
---------- -----------
Deferred tax liabilities......................... 591,717 1,287,028
---------- -----------
$ 211,635 $ 252,862
========== ===========
</TABLE>
In assessing the realizability of deferred tax assets, the Company
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. The Company
considers the scheduled reversal of deferred tax liabilities, projected future
taxable income and tax planning strategies in making this assessment. Based upon
these considerations, the Company has provided a valuation allowance to reduce
the carrying value of deferred tax assets related to net operating losses of the
Company's 51% owned subsidiary to the amounts that can be realized through
future reversals of existing taxable temporary differences.
Prior to consummation of the reorganization described in Note 2, certain of
the Company's cellular and paging activities were included in the consolidated
federal income tax returns of Cameron and US Unwired Inc. Effective November 1,
1996, the Company will file a consolidated federal income tax return which will
include US Unwired Inc. and its qualifying subsidiaries. MS 34, a 51%-owned
subsidiary, files a separate federal income tax return.
The Company has obtained a private letter ruling from the Internal Revenue
Service to the effect that no gain or loss would be recognized by Cameron or its
shareholders by virtue of the transfer of assets or spin-off of Cameron's
landbased telephone business. In addition, tax counsel for the Company has
informed it that the merger of Cameron into the Company qualifies as a
reorganization under Section 368(a)(1)(A) of the Internal Revenue Code so that
no gain or loss would be recognized by the respective corporations or their
shareholders by virtue of the mergers.
The Company had the following net operating loss carryforwards ("NOL") as
of December 31, 1995 for Federal income tax purposes, expiring in the year
indicated.
<TABLE>
<CAPTION>
COMPANY NOL EXPIRATION
------- --- ----------
<S> <C> <C>
US Unwired Inc............................................... $1,340,000 2007
MS 34........................................................ 4,790,000 2007
</TABLE>
F-14
<PAGE> 82
US UNWIRED INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
(9) SHAREHOLDERS' EQUITY
The Company is authorized by its Articles of Incorporation to issue
40,000,000 shares of preferred stock upon the authorization of the Company's
Board of Directors. The Board of Directors is authorized to fix the dividend
rights and terms, conversion and voting rights, redemption rights and other
privileges and restrictions applicable to the stock.
The Company has two classes of authorized common stock, Class A Common
Stock and Class B Common Stock. Other than as to voting rights and transfer
restrictions applicable to the Class B shares, the Class A and Class B shares
have identical rights.
Class A shares have one vote per share and Class B shares have ten votes
per share. Shares of Class B Common Stock generally convert automatically into
shares of Class A Common Stock on a share-for-share basis upon the transfer of
the Class B shares to other than a "qualified holder," generally the original
holders of Class B shares. Class B shares are also subject to other transfer
restrictions.
In February 1994, January 1995 and January 1996 the Company granted to key
employees shares of Common Stock that, after the reclassification of Common
Stock discussed in note 2, amounts to 199,716.42, 116,501.24 and 66,572.14
shares, respectively, of Class B Common Stock. The shares were issued at the
fair market value of the Company's common stock at the date of the grant. The
Company recognized compensation expense of $114,000 and $141,750, respectively,
during the years ended December 31, 1994 and 1995, and $180,000 during the nine
months ended September 30, 1996.
(10) COMMITMENTS AND CONTINGENCIES
The Company participates in a 401(k) retirement plan (the "401(k) plan")
sponsored by a related party for the benefit of its employees. Employees are
eligible to participate in the 401(k) plan when the employee has completed one
year of service and has attained an age of 18. Under the 401(k) plan,
participating employees may defer a portion of their pretax earnings up to
certain limits prescribed by the Internal Revenue Service. The Company
contributes a discretionary match equal to a percentage of the amount deferred
by the employee and a discretionary amount determined by the Company from
current or accumulated net profits. The Company's contributions are fully vested
upon the completion of 5 years of service. Compensation expense related to the
401(k) plan was approximately $37,000, $63,000 and $118,000 for the years ended
December 31, 1993, 1994 and 1995, respectively.
The Company is a party to various operating leases for facilities and
equipment. Future minimum lease payments due under operating leases are as
follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
- ------------------------
<S> <C>
1996............................................. $448,597
1997............................................. 352,650
1998............................................. 274,023
1999............................................. 221,430
2000............................................. 149,025
Thereafter....................................... 319,652
</TABLE>
Rental expense related to operating leases was $147,529, $214,444 and
$459,740, for the years ended December 31, 1993, 1994, and 1995, respectively.
The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's consolidated financial position, results of operations or liquidity.
F-15
<PAGE> 83
US UNWIRED INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
The Company has agreed to guarantee repayment of up to $6.2 million, plus
interest and fees thereon, under a commitment for financing obtained by the PCS
Partnership from Rural Telephone Finance Corporation ("RTFC").
(11) CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially expose the Company to
concentrations of credit risk, as defined by Financial Accounting Standards
Board Statement No. 105, consist primarily of cash and accounts receivable. The
Company places its cash and temporary cash investments with high credit quality
financial services companies. Collectibility of subscriber receivables is
impacted by economic trends in each of the Company's markets and the Company has
provided an allowance which it believes is adequate to absorb losses from
uncollectible accounts.
(12) SUPPLEMENTAL CASH FLOW DISCLOSURE
The Company has consummated the acquisition of various cellular operations,
along with certain other assets, during the three years ended December 31, 1995
and the nine months ended September 30, 1995 and 1996 (unaudited). In connection
with these acquisitions, the following assets were acquired and liabilities
assumed:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------ ---------------------------
1993 1994 1995 1995 1996
----------- ----------- ------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Property and equipment.... $ 246,451 $ -- $ 4,768,191 $ 4,768,191 $ 5,150,143
Intangible assets......... 11,076,716 -- 30,104,585 30,104,585 37,249,856
Long-term debt............ (570,000) -- -- -- --
Other assets and
liabilities excluding
cash and cash
equivalents............. 26,807 -- (1,352,488) (1,352,488) 3,213,038
Minority interest......... (1,737,366) -- -- -- --
----------- ----------- ------------ ------------ ------------
$ 9,042,608 $ -- $ 33,520,288 $ 33,520,288 $45,613,037
=========== =========== ============ ============ ============
</TABLE>
In 1994, the Company received a note receivable for the sale of the assets
of the voice mail operations in the amount of $424,497 from a related party.
(13) DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of cash and cash equivalents, subscriber receivables,
accrued interest and other receivables, and accounts payable and accrued
expenses approximate fair value because of the short maturity of these items.
The estimated fair value of the Company's long-term debt at December 31, 1995 is
$54,595,646, compared to its carrying value of $52,051,271. The fair value of
long-term debt is valued at future cash flows discounted using the current
borrowing rate for loans of a comparable maturity.
Fair value estimates are subject to inherent limitations. Estimates of fair
value are made at a specific point in time, based on relevant market information
and information about the financial instrument. The estimated fair values of
financial instruments presented above are not necessarily indicative of amounts
the Company might realize in actual market transactions. Estimates of fair value
are subjective in nature and involve uncertainties and matters of significant
judgment and therefore cannot be determined with precision. Changes in
assumptions could significantly affect the estimates.
F-16
<PAGE> 84
US UNWIRED INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(INFORMATION AS OF SEPTEMBER 30, 1996 AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1995 AND 1996 IS UNAUDITED)
(14) RELATED PARTY TRANSACTIONS
During 1994, in connection with the Company's decision to focus on its
wireless communications services, the Company completed a transaction to divest
its voice mail operation and assets to a company owned by certain of the
Company's principal shareholders for a sales price of $424,497. The carrying
value of the assets sold was $165,204 resulting in contributed capital of
$259,293 reflected in the 1994 statement of stockholders' equity.
During each of the three years ended December 31, 1995, the Company has
utilized certain bill processing services of Cameron. The aggregate amounts paid
to Cameron for such services during 1993, 1994 and 1995 totaled $552,448,
$634,573 and $1,049,607, respectively.
The Company also purchases long distance services from Cameron pursuant to
an oral agreement and resells the service to the Company's customers. The
aggregate amounts paid to Cameron for such services during 1993, 1994 and 1995
totaled $225,000, $228,000 and $386,000, respectively.
During the year ended December 31, 1995 and the nine months ended September
30, 1996, the Company paid $154,000 and $216,000, respectively, to a related
party that provides the Company with voice-mail services which the Company uses
itself and also resells to its cellular subscribers.
(15) SUBSEQUENT EVENTS
In the Company issued 16,643.034544 shares of Class B Common Stock in
exchange for each outstanding share of Common Stock of the Company in a
reclassification of the Common Stock. The Company also changed its name from
Mercury, Inc. to US Unwired Inc. Accordingly, the accompanying financial
statements of the Company reflect the reclassification and the change of
Company's name to US Unwired Inc.
In , 1996, the Company adopted the US Unwired Inc. 1996 Stock Option
Plan (the "Plan"), which provides for the grant of stock options and other
equity-based awards to key employees of the Company. The total number of shares
of Class A Common Stock which may be granted pursuant to the Plan is 1,400,000.
The Plan will terminate on the tenth anniversary of the effective date of the
Plan.
Option awards and the exercise price of options granted under the Plan will
be determined by the Compensation Committee of the Board of Directors, but may
not be less than 100% of the fair market value of the Class A Common Stock on
the date of the grant, and the term of the grant may not exceed 10 years from
the date of the grant. Options granted under the Plan will vest upon a proposed
sale of substantially all of the assets of the Company, or the merger of the
Company with or into another corporation. Options vest over a four-year period
commencing on the date of the grant and expire five years from the date of the
grant. Options granted in conjunction with adoption of the Plan in
1996 totaled shares at an exercise price of $ per share.
F-17
<PAGE> 85
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Miscellco Communications, Inc.:
We have audited the accompanying statements of operations, stockholders'
equity and cash flows of Miscellco Communications, Inc. for the year ended
December 31, 1994 and the four-month period ended April 30, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of operations and cash flows of Miscellco
Communications, Inc. for the year ended December 31, 1994 and the four-month
period ended April 30, 1995, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
August 2, 1996
New Orleans, Louisiana
F-18
<PAGE> 86
The Board of Directors
Miscellco Communications, Inc.
Jackson, Mississippi
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying statements of operations, stockholders'
equity and cash flows of Miscellco Communications, Inc. for the year ended
December 31, 1993. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of operations and cash flows of Miscellco
Communications, Inc. for the year ended December 31, 1993, in conformity with
generally accepted accounting principles.
SMITH, TURNER & REEVES
March 3, 1994
Jackson, Mississippi
F-19
<PAGE> 87
MISCELLCO COMMUNICATIONS, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED FOUR MONTHS
DECEMBER 31, ENDED
-------------------------- APRIL 30,
1993 1994 1995
----------- ---------- -----------
<S> <C> <C> <C>
Revenues:
Cellular service.................................... $ 3,124,105 $5,428,903 $ 2,224,085
Merchandise and installation sales.................. 610,311 562,119 132,280
----------- ---------- -----------
3,734,416 5,991,022 2,356,365
----------- ---------- -----------
Operating expenses:
System operations................................... 955,166 1,069,816 415,660
Cost of equipment and installation sales............ 752,310 874,094 357,433
Marketing and selling............................... 1,100,950 1,212,686 366,066
General and administrative.......................... 1,098,935 1,992,729 550,210
Depreciation and amortization....................... 486,889 683,197 249,736
----------- ---------- -----------
4,394,250 5,832,522 1,939,105
----------- ---------- -----------
Operating income (loss)............................... (659,834) 158,500 417,260
----------- ---------- -----------
Other income (expense):
Interest expense.................................... (403,235) (729,280) (317,680)
Other............................................... 13,455 1,402 843
----------- ---------- -----------
Total other expense......................... (389,780) (727,878) (316,837)
----------- ---------- -----------
Net income (loss)........................... $(1,049,614) $ (569,378) $ 100,423
=========== ========== ===========
</TABLE>
See accompanying notes to financial statements.
F-20
<PAGE> 88
MISCELLCO COMMUNICATIONS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN ACCUMULATED
STOCK CAPITAL DEFICIT TOTAL
--------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Balance at December 31, 1992............... $ 420,400 $2,827,948 $(3,452,492) $ (204,144)
Net loss................................... -- -- (1,049,614) (1,049,614)
Issuance of 22,105 shares of common
stock.................................... 22,105 359,006 -- 381,111
Exercise of stock options (note 2)......... 15,631 109,417 -- 125,048
--------- ----------- ----------- -----------
Balance at December 31, 1993............... 458,136 3,296,371 (4,502,106) (747,599)
Net loss................................... -- -- (569,378) (569,378)
Exercise of stock options (note 2)......... 4,981 61,705 -- 66,686
Repurchase and retirement of 102,956 shares
of common stock.......................... (102,956) (692,565) (2,954,479) (3,750,000)
--------- ----------- ----------- -----------
Balance at December 31, 1994............... 360,161 2,665,511 (8,025,963) (5,000,291)
Net income................................. -- -- 100,423 100,423
--------- ----------- ----------- -----------
Balance at April 30, 1995.................. $ 360,161 $2,665,511 $(7,925,540) $(4,899,868)
========= =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
F-21
<PAGE> 89
MISCELLCO COMMUNICATIONS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED FOUR MONTHS
DECEMBER 31, ENDED
--------------------------- APRIL 30,
1993 1994 1995
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss).................................. $(1,049,614) $ (569,378) $ 100,423
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization................... 486,889 683,197 249,736
Compensation expense for employee stock options
exercised..................................... 109,417 61,705 --
(Gain) loss on sale of assets................... (10,265) 862 --
Increase in allowance for uncollectible
accounts...................................... 8,000 13,000 5,000
Changes in operating assets and liabilities:
Receivables................................... (312,662) (322,223) (269,167)
Inventory..................................... (82,787) (106,718) 152,399
Prepaid expenses.............................. (108,170) 70,018 73,041
Other assets.................................. (319) (1,778) 18
Accounts payable.............................. 396,975 (271,529) (197,843)
Customer deposits and advance billings........ 166,724 91,669 32,380
Accrued expenses.............................. (21,672) 158,115 (114,582)
----------- ----------- ---------
Net cash provided by (used in) operating
activities............................... (417,484) (193,060) 31,405
----------- ----------- ---------
Cash flows from investing activities:
Purchases of property and equipment................ (592,253) (1,944,641) (450,505)
Disposals of property and equipment................ 352,352 3,514 --
Acquisition of intangible assets................... (12,631) (594,392) (7,608)
----------- ----------- ---------
Net cash used in investing activities...... (252,532) (2,535,519) (458,113)
----------- ----------- ---------
Cash flows from financing activities:
Proceeds from issuance of long-term debt........... 558,144 11,393,588 355,000
Principal payments on long-term debt............... (210,962) (4,835,245) (33,334)
Proceeds from issuance of common stock............. 381,111 4,981 --
Payments to repurchase common stock................ -- (3,750,000) --
----------- ----------- ---------
Net cash provided by financing
activities............................... 728,293 2,813,324 321,666
Net increase (decrease) in cash and cash
equivalents.............................. 58,277 84,745 (105,042)
Cash and cash equivalents, beginning of period....... 13,420 71,697 156,442
----------- ----------- ---------
Cash and cash equivalents, end of period............. $ 71,697 $ 156,442 $ 51,400
=========== =========== =========
Cash payments for interest........................... $ 379,938 $ 641,827 $ 354,873
=========== =========== =========
</TABLE>
See accompanying notes to financial statements.
F-22
<PAGE> 90
MISCELLCO COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1994
AND THE FOUR MONTH PERIOD ENDED APRIL 30, 1995
(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Description of Business
Miscellco Communications, Inc. (the Company) owns and operates cellular
telephone service in the following rural service areas (RSAs) of Kansas and
Oklahoma: KS1, KS2, KS6, KS7, KS11, KS12, KS13 and OK1. The RSAs are
geographically outlined by the Federal Communications Commission (FCC). In 1989
through 1994 the Company was awarded the non-wireline A band rights and given
construction permits to construct the above RSAs in compliance with FCC
regulations and guidelines. The OK1 RSA is operated under an interim operating
authority granted by the FCC.
Effective April 30, 1995, the assets of the Company were sold to Mercury
Cellular of Kansas, Inc. (Mercury), a Louisiana corporation for a purchase price
of $35,895,663. The accompanying financial statements reflect the results of
operations of the Company for the respective periods prior to the sale of the
Company's assets to Mercury.
(b) Property and Equipment
Property and equipment are stated at cost and include, among other items,
the cost of transmission equipment, structures and installation equipment.
Depreciation is calculated on a straight-line basis over the estimated useful
lives of the assets. Routine maintenance and repairs are charged to operating
expense while costs of betterments and renewals are capitalized.
(c) Intangible Assets
Intangible assets consist primarily of costs incurred in connection with
the Company's acquisition of cellular licenses. These assets are recorded at
cost and amortized using the straight-line method over a ten year period.
(d) Inventory
Inventory consists of cellular telephones and equipment held for resale and
is stated at the lower of average cost or market.
(e) Revenue Recognition
The Company earns revenue by providing access to the cellular network and
for usage of the cellular network. Access revenue is billed one month in advance
and is recognized when earned. Usage revenue is recognized when the service is
rendered. Both access and usage revenues are classified as cellular service
revenues in the accompanying statements of operations. Revenues from the sale
and installation of merchandise is recognized when merchandise is delivered.
(f) Income Taxes
No income taxes have been provided as the stockholders of the Company
elected to file as an S-corporation.
(g) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the
F-23
<PAGE> 91
MISCELLCO COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
(h) Cash and Cash Equivalents
Cash and cash equivalents include cash on deposit and money market mutual
funds.
(2) STOCKHOLDERS' EQUITY
In March 1991, the Company adopted stock option plans (the Plans) for two
key employees. The Plans, as amended, provided the right and option to acquire
37,051 shares of the Company's common stock. The exercise price of the options
granted under the plan was $1 per share. Effective August 24, 1994, the plans
were amended and terminated resulting in the issuance of the final 4,981 shares
to be issued under the plan. During 1993 and 1994, 15,631 and 4,981 shares of
common stock were issued under the plan with related compensation expense of
$109,417 and $61,705, respectively.
(3) OPERATING LEASES
The Company leases equipment, towers and office space under operating
leases having expiration dates 1995 through 2003. Generally, the Company is
responsible for executory costs such as maintenance and taxes. The minimum
future rental payments under the noncancelable operating leases for each of the
succeeding five years and in the aggregate follow:
<TABLE>
<S> <C>
1995.............................................. $106,100
1996.............................................. 68,445
1997.............................................. 63,034
1998.............................................. 62,616
1999.............................................. 62,616
Thereafter........................................ 189,098
--------
$551,909
========
</TABLE>
Rental expense associated with the operating leases was $202,236, $249,061
and $108,048 for the years ended December 31, 1993 and 1994, and for the four
month period ended April 30, 1995, respectively. Management anticipates that
these leases will be renewed or replaced upon expiration.
F-24
<PAGE> 92
INDEPENDENT AUDITORS' REPORT
The Board of Directors
West Alabama Cellular Telephone Company, Inc.:
We have audited the accompanying balance sheets of West Alabama Cellular
Telephone Company, Inc. as of December 31, 1995 and May 15, 1996, and the
related statements of operations, stockholders' equity (deficit) and cash flows
for the year ended December 31, 1995 and the period from January 1, 1996 to May
15, 1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of West Alabama Cellular
Telephone Company, Inc. as of December 31, 1995 and May 15, 1996, and the
results of its operations and cash flows for the year ended December 31, 1995
and the period from January 1, 1996 to May 15, 1996 in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
New Orleans, Louisiana
August 16, 1996
F-25
<PAGE> 93
WEST ALABAMA CELLULAR TELEPHONE COMPANY, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, MAY 15,
1995 1996
------------ ----------
<S> <C> <C>
Current assets:
Cash and cash equivalents........................................ $ 568,756 739,044
Subscriber receivables (less allowance for doubtful accounts of
$85,500 and $11,813 at December 31, 1995 and May 15, 1996,
respectively)................................................. 399,143 567,392
Inventory........................................................ 88,262 54,160
Prepaid expenses................................................. 11,319 5,538
---------- ----------
Total current assets..................................... 1,067,480 1,366,134
Property and equipment, net........................................ 1,447,612 1,364,882
Other assets....................................................... 7,302 4,564
---------- ----------
Total assets............................................. $2,522,394 2,735,580
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of vendor note payable........................... 300,564 300,564
Note payable to affiliate........................................ 300,000 300,000
Accounts payable................................................. 218,644 183,397
Accrued expenses................................................. 165,746 146,481
---------- ----------
Total current liabilities................................ 984,954 930,442
---------- ----------
Long-term vendor note payable...................................... 1,577,973 1,427,691
Stockholders' equity (deficit):
Common stock, $1 par value, 5,000 shares authorized, 1,150 issued
and outstanding at December 31, 1995 and May 15, 1996,
respectively.................................................. 1,150 1,150
Additional paid-in capital....................................... 61,963 61,963
Retained earnings (deficit)...................................... (103,646) 314,334
---------- ----------
Total stockholders' equity (deficit)..................... (40,533) 377,447
---------- ----------
Commitments and contingencies
Total liabilities and stockholders' equity (deficit)..... $2,522,394 2,735,580
========== ==========
</TABLE>
See accompanying notes to financial statements.
F-26
<PAGE> 94
WEST ALABAMA CELLULAR TELEPHONE COMPANY, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED JANUARY 1,
DECEMBER 31, 1996 TO MAY
1995 15, 1996
------------ -----------
<S> <C> <C>
Revenues:
Cellular service................................................. $3,226,218 1,541,434
Merchandise sales................................................ 114,029 52,939
Miscellaneous.................................................... 25,634 46,589
---------- ----------
3,365,881 1,640,962
---------- ----------
Operating expenses:
Cost of service.................................................. 854,388 339,173
Merchandise cost of sales........................................ 336,664 154,728
Sales and marketing.............................................. 72,490 36,788
General and administrative....................................... 908,112 521,073
Bad debt expense................................................. 220,896 7,969
Depreciation and amortization.................................... 252,400 102,265
---------- ----------
2,644,950 1,161,996
---------- ----------
Operating income......................................... 720,931 478,966
---------- ----------
Other (income) expense:
Interest expense................................................. 213,998 69,995
Interest income.................................................. (43,737) (9,009)
Gain on sale of assets........................................... (333) --
---------- ----------
Total other expense...................................... 169,928 60,986
---------- ----------
Net income............................................... $ 551,003 417,980
========== ==========
</TABLE>
See accompanying notes to financial statements.
F-27
<PAGE> 95
WEST ALABAMA CELLULAR TELEPHONE COMPANY, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN RETAINED
STOCK CAPITAL EARNINGS TOTAL
------ ---------- -------- --------
<S> <C> <C> <C> <C>
Balance at January 1, 1995.......................... $1,150 61,963 (319,128) (256,015)
Net income.......................................... -- -- 551,003 551,003
Distributions....................................... -- -- (335,521) (335,521)
------ ------ -------- --------
Balance at December 31, 1995........................ 1,150 61,963 (103,646) (40,533)
Net income.......................................... -- -- 417,980 417,980
------ ------ -------- --------
Balance at May 15, 1996............................. $1,150 61,963 314,334 377,447
====== ====== ======== ========
</TABLE>
See accompanying notes to financial statements.
F-28
<PAGE> 96
WEST ALABAMA CELLULAR TELEPHONE COMPANY, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1,
YEAR ENDED 1996 TO
DECEMBER 31, MAY 15,
1995 1996
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net income...................................................... $ 551,003 417,980
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization................................ 252,400 102,265
Gain on sale of assets....................................... (333) --
Changes in operating assets and liabilities:
Subscriber receivables..................................... (83,869) (168,249)
Inventory.................................................. 20,163 34,102
Prepaid expenses........................................... (3,116) 5,781
Accounts payable........................................... 128,393 (35,247)
Accrued expenses........................................... 10,175 (19,265)
---------- ----------
Net cash provided by operating activities............... 874,816 337,367
---------- ----------
Cash flows from investing activities:
Proceeds from sale of equipment................................. 7,000 --
Capital expenditures............................................ (789,517) (16,797)
---------- ----------
Net cash used in investing activities................... (782,517) (16,797)
---------- ----------
Cash flows from financing activities:
Principal payments on note payable.............................. (226,737) (150,282)
Distributions to shareholders................................... (335,521) --
Proceeds from note payable to affiliate......................... 300,000 --
---------- ----------
Net cash flows used in financing activities............. (262,258) (150,282)
---------- ----------
Net increase (decrease) in cash and cash equivalents.............. (169,959) 170,288
Beginning cash and cash equivalents............................... 738,715 568,756
---------- ----------
Ending cash and cash equivalents.................................. $ 568,756 739,044
========== ==========
</TABLE>
See accompanying notes to financial statements.
F-29
<PAGE> 97
WEST ALABAMA CELLULAR TELEPHONE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Description of Organization
West Alabama Cellular Telephone Company, Inc. (the Company) was
incorporated on February 2, 1991 under the laws of Alabama. The Company provides
cellular telephone service to the general public and commercial customers in the
Demopolis, Fayette, and Marengo, Alabama area.
On May 15, 1996, the Company sold substantially all of its assets to
Mississippi One Cellular Telephone Company for $17,870,000. The assets sold
included the cellular licenses for the Rural Service Area known as Alabama 3,
the related system subscribers, permits and authorizations, and certain personal
property used in the operation of the system. The accompanying financial
statements reflect the financial position and results of operations of the
Company as of and for the period immediately prior to the sale of the assets to
Mississippi One Cellular Telephone Company.
(b) Inventory
Inventory consists of cellular telephone equipment for sale in the course
of the Company's activities and is valued using the lower of cost, on a
first-in, first-out basis, or market.
(c) Property and equipment
Property and equipment are stated at cost. Depreciation is being provided
by the straight-line and accelerated methods over the estimated useful lives of
the assets as follows:
<TABLE>
<S> <C>
Cellular equipment................................ 5 to 15 years
Buildings......................................... 15 to 31 years
Automobiles....................................... 5 years
Office equipment.................................. 5 to 7 years
</TABLE>
Routine maintenance and repairs are charged to operating expense while
costs of betterments and renewals are capitalized.
(d) Revenue Recognition
The Company earns revenue by providing access to its cellular network and
for usage of the cellular network. Access revenue is billed one month in advance
and is recognized when earned. Usage revenue is recognized when the service is
rendered. Both access and usage revenues are classified as cellular service
revenues in the accompanying statements of operations. Revenues from the sale
and installation of merchandise is recognized when merchandise is delivered.
(e) Commissions
Commissions are paid to sales agents for customer activations and are
recognized in the month the customer is activated within the cellular system.
(f) Income Taxes
The Company is an S-Corporation for federal and state income tax reporting
purposes. Federal and state income taxes are paid by the stockholders on their
respective share of the Company's income.
F-30
<PAGE> 98
WEST ALABAMA CELLULAR TELEPHONE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(g) Cash Flow Information
The Company considers all short-term investments with remaining maturities
of three months or less to be cash equivalents.
Cash paid for interest for the year ended December 31, 1995 and the period
from January 1, 1996 to May 15, 1996 was $200,125 and $90,631, respectively.
(h) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(2) PROPERTY AND EQUIPMENT
Major categories of property and equipment are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, MAY 15,
1995 1996
------------ -----------
<S> <C> <C>
Cellular equipment........................................ $ 2,506,422 $ 2,519,467
Buildings................................................. 109,194 109,194
Automobiles............................................... 20,481 20,481
Office equipment.......................................... 48,770 52,521
----------- -----------
2,684,867 2,701,663
Less accumulated depreciation........................... (1,237,255) (1,336,781)
----------- -----------
$ 1,447,612 $ 1,364,882
=========== ===========
</TABLE>
(3) NOTE PAYABLE
The note payable is to the Company's principal supplier of equipment used
to construct the cellular telephone system. The funds advanced were used for
acquisition of equipment and services and working capital. The principal amount
of the note is due in quarterly payments of $75,141 over a seven year period
beginning three years after the date of conditional acceptance which was in
December 1991. Interest is payable quarterly, in addition to any principal
amounts due, and is calculated at 1.25% per annum in excess of the Corporate
Base Rate of Chase Manhattan Bank in effect on the first day of each calendar
quarter. The interest rate on the note is 9.0% as of May 15, 1996.
Subsequent to May 15, 1996, the unpaid principal balance was paid in full
with proceeds received from the sale of the assets of the Company.
(4) OPERATING LEASES
The Company is obligated under several noncancelable operating lease
commitments having remaining terms in excess of one year. The annual minimum
lease payments under noncancelable operating leases as of May 15, 1996, are as
follows:
<TABLE>
<S> <C>
1997............................................... $38,260
1998............................................... 28,740
1999............................................... 21,665
2000............................................... 5,950
</TABLE>
F-31
<PAGE> 99
WEST ALABAMA CELLULAR TELEPHONE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Rental expense under the operating leases was $34,116 and $14,161 for the
year ended December 31, 1995 and the period from January 1, 1996 to May 15,
1996, respectively. Management anticipates these leases will be renewed or
replaced upon expiration.
(5) CONCENTRATION OF CREDIT RISK
Financial instruments which potentially expose the Company to
concentrations of credit risk, as defined by Financial Accounting Standards
Board Statement No. 105, consist primarily of cash and accounts receivable. The
Company places its cash and temporary cash investments with high credit quality
financial services companies. Collectibility of subscriber accounts receivable
is impacted by economic trends in each of the Company's markets and the Company
has provided an allowance which it believes is adequate to absorb losses from
uncollectible accounts.
(6) RELATED PARTY TRANSACTIONS
The Company has a note payable in the amount of $300,000 to a company that
is 100% owned by the Company's shareholders as of December 31, 1995 and May 15,
1996. The terms of the note call for interest at the rate of 5% with the
principal balance to be paid on January 14, 1997. Accrued interest on the note
as of December 31, 1995 and May 15, 1996 was $15,000 and $20,625, respectively.
(7) DISCLOSURE ABOUT FAIR VALUE
The carrying amounts of financial instruments approximate fair value
principally because of the short maturity or variable interest rate of the
instruments. Fair value estimates are subject to inherent limitations. Estimates
of fair value are made at a specific point in time, based on relevant market
information and information about the financial instrument. The estimated fair
values of financial instruments presented above are not necessarily indicative
of amounts the Company might realize in actual market transactions. Estimates of
fair value are subjective in nature and involve uncertainties and matters of
significant judgment and therefore cannot be determined with precision. Changes
in assumptions could significantly affect the estimates.
F-32
<PAGE> 100
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Alabama 4 System:
We have audited the accompanying balance sheet of Alabama 4 System as of
June 30, 1996, and the related statements of operations, stockholders' equity
(deficit), and cash flows for the period from October 1, 1995 to November 6,
1995 and the period from November 7, 1995 to June 30, 1996. These financial
statements are the responsibility of the System's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Alabama 4 System as of June
30, 1996, and the results of its operations and its cash flows for the period
from October 1, 1995 to November 6, 1995 and the period from November 7, 1995 to
June 30, 1996, in conformity with generally accepted accounting principles.
As discussed in note 1 to the financial statements, on November 7, 1995,
PriCellular and its wholly owned subsidiary Northland Cellular purchased certain
assets of the Alabama 4 System in a business combination accounted for as a
purchase. As a result of the acquisition, financial information for the period
after November 6, 1995 is presented on a different cost basis than that for the
periods before November 6, 1995 and, therefore, such information is not
comparable.
KPMG Peat Marwick LLP
New Orleans, Louisiana
September 18, 1996
F-33
<PAGE> 101
INDEPENDENT AUDITORS' REPORT
Dominion Cellular, Inc.
Clanton, Alabama
We have audited the accompanying balance sheet of Dominion Cellular, Inc.
(Alabama 4 System) as of September 30, 1995, and the statements of operations,
stockholders' equity (deficit), and cash flows for the years ended September 30,
1994 and 1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Dominion Cellular, Inc.
(Alabama 4 System) as of September 30, 1995, and the results of its operations
and its cash flow for the years ended September 30, 1994 and 1995, in conformity
with generally accepted accounting principles.
Elliot H. Goldberg, CPA, P.C.
December 16, 1995
F-34
<PAGE> 102
ALABAMA 4 SYSTEM
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1995 1996
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents..................................... $ 322,057 $ 44,033
Subscriber receivables (less allowance for doubtful accounts
of $133,070 and $77,734 at September 30, 1995 and June 30,
1996, respectively)........................................ 808,780 634,866
Receivable from parent........................................ 2,100,000 2,470,978
Receivable from affiliates.................................... -- 412,632
Inventory..................................................... 43,535 79,287
Prepaid expenses and other.................................... 33,592 5,216
----------- -----------
Total current assets.................................. 3,307,964 3,647,012
Property and equipment, net..................................... 4,007,474 3,736,719
Cellular telephone license costs, net of accumulated
amortization of $103,839 and $357,395 at September 30, 1995
and June 30, 1996, respectively............................... 28,284 21,215,502
----------- -----------
Total assets.......................................... $ 7,343,722 $28,599,233
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.............................................. $ 288,877 $ 279,516
Accrued expenses and other liabilities........................ 263,358 82,578
Payable to affiliates......................................... -- 659,441
Payable to parent............................................. 1,019,537 --
Current maturities of long-term debt.......................... 4,986,057 --
----------- -----------
Total current liabilities............................. 6,557,829 1,021,535
Stockholders' equity:
Common stock, $.001 par value, 50,000 shares authorized,
issued and outstanding at September 30, 1995............... 50 --
Common stock, $.01 par value, 1,000 shares authorized, 100
shares issued and outstanding at June 30, 1996............. -- 1
Additional paid-in capital.................................... 50,050 26,817,177
Retained earnings............................................. 735,793 760,520
----------- -----------
Total stockholders' equity............................ 785,893 27,577,698
Commitments and contingencies
----------- -----------
Total liabilities and stockholders' equity............ $ 7,343,722 $28,599,233
=========== ===========
</TABLE>
See accompanying notes to financial statements.
F-35
<PAGE> 103
ALABAMA 4 SYSTEM
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30, OCTOBER 1, 1995 NOVEMBER 7, 1995
----------------------- TO TO
1994 1995 NOVEMBER 6, 1995 JUNE 30, 1996
---------- ---------- ---------------- ----------------
<S> <C> <C> <C> <C>
Revenues:
Cellular service:
Subscriber.................... $ 881,364 $1,268,938 $143,770 $1,858,815
Roaming....................... 2,126,971 3,357,745 401,796 1,833,219
Merchandise sales................ 147,725 150,985 7,654 60,049
Other revenue.................... 28,997 115,912 2,636 15,300
---------- ---------- -------- ----------
3,185,057 4,893,580 555,856 3,767,383
---------- ---------- -------- ----------
Operating expenses:
Cost of service.................. 752,245 1,420,857 176,948 896,420
Merchandise cost of sales........ 251,744 351,395 26,794 291,890
General and administrative....... 807,529 665,985 92,898 358,070
Sales and marketing.............. 116,967 185,400 21,383 251,405
Depreciation and amortization.... 336,643 454,953 45,495 756,648
---------- ---------- -------- ----------
2,265,128 3,078,590 363,518 2,554,433
---------- ---------- -------- ----------
Operating income................... 919,929 1,814,990 192,338 1,212,950
Other expense -- interest.......... 306,007 460,476 185,076 --
---------- ---------- -------- ----------
Income before income taxes......... 613,922 1,354,514 7,262 1,212,950
Income tax provision............... -- 437,720 2,709 452,430
---------- ---------- -------- ----------
Net income......................... $ 613,922 $ 916,794 $ 4,553 $ 760,520
========== ========== ======== ==========
</TABLE>
See accompanying notes to financial statements.
F-36
<PAGE> 104
ALABAMA 4 SYSTEM
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
ADDITIONAL RETAINED
COMMON PAID-IN EARNINGS
STOCK CAPITAL (DEFICIT) TOTAL
------ ----------- --------- -----------
<S> <C> <C> <C> <C>
Balance at October 1, 1993..................... $ 50 $ 50,050 $(794,923) $ (744,823)
Net income for year............................ -- -- 613,922 613,922
---- ----------- --------- -----------
Balance at September 30, 1994.................. 50 50,050 (181,001) (130,901)
Net income for year............................ -- -- 916,794 916,794
---- ----------- --------- -----------
Balance at September 30, 1995.................. 50 50,050 735,793 785,893
Net income for period October 1, 1995 to
November 6, 1995............................. -- -- 4,553 4,553
---- ----------- --------- -----------
Balance at November 6, 1995.................... 50 50,050 740,346 790,446
Elimination of Dominion equity................. (50) (50,050) (740,346) (790,446)
Investment of PriCellular...................... 1 26,817,177 -- 26,817,178
Net income for period November 7, 1995 to
June 30, 1996................................ -- -- 760,520 760,520
---- ----------- --------- -----------
Balance at June 30, 1996....................... $ 1 $26,817,177 $ 760,520 $27,577,698
==== =========== ========= ===========
</TABLE>
See accompanying notes to financial statements.
F-37
<PAGE> 105
ALABAMA 4 SYSTEM
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED
SEPTEMBER 30 OCTOBER 1, 1995 NOVEMBER 7, 1995
-------------------------- TO TO
1994 1995 NOVEMBER 6, 1995 JUNE 30, 1996
----------- ----------- ---------------- ----------------
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income...................... $ 613,922 $ 916,794 $ 4,553 $ 760,520
Adjustments to reconcile net
income to net cash provided
by (used in) operating
activities:
Depreciation and
amortization............... 336,643 454,953 45,495 756,648
Bad debt provision........... 134,000 (82,140) -- --
Changes in operating assets
and liabilities:
(Increase) decrease in:
Subscriber
receivables........... (413,924) (232,525) (168,281) (357,654)
Inventory............... (40,739) 24,897 -- (47,010)
Prepaid expenses and
other................. (13,318) (4,607) (200) 7,127
Receivable from parent
and affiliates........ 288,906 (2,100,000) -- (1,558,720)
Increase (decrease) in:
Accounts payable,
accrued expenses and
other liabilities..... 403,343 (101,967) (60,314) (235,997)
Payable to parent....... -- 753,034 (35,291) --
Payable to affiliate.... -- -- -- 659,441
----------- ----------- ---------- ------------
Net cash provided by (used
in) operating activities... 1,308,833 (371,561) (214,038) (15,645)
----------- ----------- ---------- ------------
Cash flows from investing
activities:
Capital expenditures............ (1,406,510) (1,154,793) (4,886) (60,264)
Acquisition of Alabama 4 RSA.... -- -- -- 16,809
----------- ----------- ---------- ------------
Net cash used in investing
activities................. (1,406,510) (1,154,793) (4,886) (43,455)
----------- ----------- ---------- ------------
Cash flows from financing
activities:
Proceeds from issuance of
long-term debt............... 55,441 2,000,000 -- --
Principal payments on long-term
debt......................... -- (299,272) -- --
----------- ----------- ---------- ------------
Net cash provided by
financing activities....... 55,441 1,700,728 -- --
----------- ----------- ---------- ------------
Net increase (decrease) in
cash....................... (42,236) 174,374 (218,924) (59,100)
Cash at beginning of period....... 189,919 147,683 322,057 103,133
----------- ----------- ---------- ------------
Cash at end of period............. $ 147,683 $ 322,057 $ 103,133 $ 44,033
=========== =========== ========== ============
Supplemental disclosure of cash
flow information -- cash payment
for interest.................... $ 306,007 $ 345,079 $ 246,954 $ --
=========== =========== ========== ============
</TABLE>
See accompanying notes to financial statements.
F-38
<PAGE> 106
ALABAMA 4 SYSTEM
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Background and Basis of Presentation
The accompanying financial statements reflect the historical financial
position, results of operations and cash flows of the assets and liabilities
comprising the wireless communication system in the Bibb County, Alabama, Rural
Service Area ("RSA") Alabama 4 ("the System"). Until November 7, 1995, the
assets and liabilities comprising the System were owned by Dominion Cellular,
Inc. ("Dominion"), a wholly owned subsidiary of Dominion Resources, Inc.
Accordingly, the financial statements as of September 30, 1995 and for the
years ended September 30, 1994 and 1995 and the period from October 1, 1995 to
November 6, 1995 reflects Dominion's historical cost of the assets and
liabilities comprising the System.
On November 7, 1995, PriCellular and its wholly owned subsidiary Northland
Cellular ("PriCellular") purchased for approximately $25,300,000 the cellular
assets comprising the System from Dominion (see note 7). PriCellular accounted
for the acquisition as a purchase and, accordingly, established a new cost basis
with respect to the assets purchased from Dominion.
The financial information as of June 30, 1996 and for the period from
November 7, 1995 to June 30, 1996 reflects PriCellular's historical cost of the
assets and liabilities comprising the System. As a result of the acquisition and
the different cost basis with respect to the assets and liabilities comprising
the System, financial information for periods before and after November 7, 1995
are not comparable.
On July 1, 1996, Mercury, Inc. purchased substantially all of the System's
assets from PriCellular for approximately $27,500,000. The assets acquired
included the licenses in the RSA known as Alabama 4, the related system
subscribers, permits and authorization, and certain personal property used in
the operation of the system.
(b) Cash and Cash Equivalents
For purposes of the statement of cash flows, the System considers all
temporary cash investments with original maturities of three months or less to
be cash and cash equivalents.
(c) Inventory
Inventory is stated at the lower of cost or market. Cost is determined by
the first-in, first-out method. Inventory consists principally of cellular
telephones and related accessories.
(d) Property and Equipment
Property and equipment is stated at cost and depreciated on a straight-line
basis over the estimated useful lives of the assets as follows:
<TABLE>
<S> <C>
Buildings and leasehold improvements...................... 30 years
Operating equipment....................................... 10 years
Furniture and fixtures.................................... 7 years
</TABLE>
Routine maintenance and repairs are charged to operating expense while costs of
betterments and renewals are capitalized.
(e) Cellular Licenses and Other Assets
Cellular telephone license costs prior to November 7, 1995, represent
expenses incurred by the System for the acquisition of site locations, zoning
approvals, and technical and other expenses related to construction and
obtaining the necessary approvals and licenses to operate and preparing to
operate a cellular telephone
F-39
<PAGE> 107
ALABAMA 4 SYSTEM
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
system. These costs are capitalized and are amortized through charges to
operations over their estimated useful lives, currently estimated to be five
years.
Cellular licenses recorded in connection with the acquisition of the system
on November 7, 1995 are recorded at cost and amortized using the straight-line
method over the assets estimated useful lives, 40 years. The System annually
evaluates the propriety of the carrying values of its cellular licenses using
estimated undiscounted future cash flows of the market to which the license
relates, and estimates of the market value of the cellular systems to determine
whether current events or circumstances warrant adjustments to reduce the
carrying amounts to fair value. There have been no such reductions through June
30, 1996.
(f) Revenue Recognition
The System earns revenue by providing access to and usage of the cellular
network and sales of cellular merchandise. Access revenue is billed one month in
advance and is recognized when earned. Usage revenue is recognized when the
service is rendered. Both access and usage revenues are classified as service
revenues in the accompanying statements of operations. Revenues from the sale
and installation of merchandise is recognized when the merchandise is delivered.
(g) Commissions
Commissions are paid to sales agents for customer activations and are
recognized in the month the customer is activated within the cellular system.
(h) Income Taxes
The System accounts for income taxes using the asset and liability method,
under which deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
The System is included in the consolidated federal income tax return of
Dominion Resources, Inc. and PriCellular for the respective periods of
ownership. An income tax provision is reflected in the System's separate
financial statements based on applicable statutory rates. Amounts to be settled
among members of the group are included in amounts payable to parent in the
accompanying balance sheet. The related payables to parent were $437,720 and
$452,430 at September 30, 1995 and June 30, 1996, respectively.
The principal temporary difference between the basis of assets and
liabilities for financial reporting and tax purposes relates to operating losses
incurred prior to 1993. Net deferred tax assets related to such differences were
offset by a valuation allowance. The valuation allowance was reduced during 1994
and 1995 in the amounts of $233,000 and $69,000, respectively, which accounts
for the difference between the actual effective tax rate and the expected tax
rate for 1994 and 1995.
F-40
<PAGE> 108
ALABAMA 4 SYSTEM
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(i) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
(2) PROPERTY AND EQUIPMENT
Major categories of property and equipment are as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1995 1996
------------- ---------
<S> <C> <C>
Operating equipment......................................... $ 3,245,769 4,029,379
Cell site preparation and equipment......................... 1,764,489 --
Furniture and fixtures...................................... 117,459 106,592
------------ ---------
5,127,717 4,135,971
Less accumulated depreciation and amortization.............. (1,120,243) (399,252)
------------ ---------
$ 4,007,474 3,736,719
============ =========
</TABLE>
(3) LONG-TERM DEBT
Long-term debt at September 30, 1995 includes notes payable to Motorola,
Inc. ("Motorola") in the amount of $2,986,057. The System entered into a
Cellular System Purchase Agreement with Motorola ("Purchase Agreement") pursuant
to which the System purchased and Motorola designed, manufactured, and produced
specified cellular fixed network equipment together with expansion products,
hardware, and software products and related services. Pursuant to the Purchase
Agreement, Motorola assisted in the construction and implementation of the
system.
Motorola agreed to lend up to $1,650,000 to purchase equipment and services
to be provided primarily by Motorola for construction and installation of the
cellular telephone system and up to $950,000 for working capital. All such loans
were repayable interest only until the third year after Dominion placed the
cellular telephone system into commercial service and then paid over a four year
period on a seven year amortization schedule. Interest was calculated at the
rate of 3% per annum in excess of the Chase Manhattan Bank's Corporate Base
Rate, which was 9% at September 30, 1995. Dominion has the right to repay such
loans in whole or in part and the Financing Agreement also provides for certain
mandatory prepayments including prepayments equal to 75% of Dominion's "Free
Cash Flow" (operating cash flow less non-financed capital purchases and debt
service).
The Financing Agreement required the parent Company (Dominion Resources) to
execute a Stock Pledge Agreement pledging all of the issued and outstanding
capital stock of Dominion with Motorola as collateral. As additional collateral,
Dominion has assigned all of its cell site, tower, and building leases to
Motorola together with a security interest in all of its tangible and intangible
assets. The Financing Agreement contains certain financial covenants and
restrictions on the payment of dividends, which Dominion has complied with.
In conjunction with the sale of the System's cellular telephone system, the
outstanding indebtedness to Motorola was paid from proceeds of the sale which
took place in November 1995.
In anticipation of the execution of the Asset Purchase Agreement,
PriCellular extended a $2,000,000 loan to the System on April 7, 1995. From the
$2,000,000 of loan proceeds, the System (1) made a $1,417,598 loan
F-41
<PAGE> 109
ALABAMA 4 SYSTEM
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
to an entity of which the System's principal stockholder is a creditor; (2) paid
$250,000 to a corporation owned by the System's president and her husband in
payment of bills rendered for previously completed cell site and tower
construction for the System; and (3) prepaid $125,000 of indebtedness owed to an
entity owned by members of the principal stockholder's immediate family. The
balance was applied to legal and professional fees related to the sale of the
System. The $2,000,000 loan was repaid with interest at 8% from proceeds of the
sale of the System which took place in November 1995.
(4) COMMITMENTS AND CONTINGENCIES
The Company is obligated under several noncancelable operating lease
commitments having remaining terms in excess of one year. Future minimum lease
payments due under these leases as of June 30, 1996 are as follows:
<TABLE>
<S> <C>
1997................................................... $10,500
1998................................................... 6,000
1999................................................... 2,600
2000................................................... 2,400
2001................................................... 2,000
</TABLE>
Rental expense related to other operating leases were $72,000, $101,100,
$5,800 and $23,800 for the years ended September 30, 1994 and 1995 the period
from October 1, 1995 to November 6, 1995 and the period from November 7, 1995 to
June 30, 1996, respectively.
(5) CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially expose the Company to
concentrations of credit risk, as defined by Financial Accounting Standards
Board Statement No. 105, consist primarily of cash and accounts receivable. All
deposits in demand deposit accounts are within existing FDIC insurance levels.
The Company has not experienced any losses on its deposits. Subscriber accounts
receivable collectibility is impacted by economic trends in each of the
Company's markets. Such receivables are typically collected between thirty and
sixty days.
(6) RELATED PARTY TRANSACTIONS
At September 30, 1995, Dominion has $581,817 included in due to parent
related to funds provided during the fiscal year in connection with new cell
site equipment purchases.
Effective August 1, 1995, PriCellular became the manager of the System
pursuant to a management agreement providing for a management fee to be paid to
PriCellular equal to 7% of the gross revenues of the System during the term of
the management agreement. Through November 7, 1995, the Company accrued $114,600
in connection with the management agreement.
F-42
<PAGE> 110
ALABAMA 4 SYSTEM
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(7) PURCHASE OF ASSETS FROM DOMINION BY PRICELLULAR
On November 7, 1995 the sale of the System from Dominion was recorded and
payable by PriCellular in cash and stock for approximately $25,300,000. The cash
portion of the purchase price received by Dominion was reduced to the extent
required to repay Dominion's outstanding debt to Motorola (approximately
$2,864,000) and to repay the 8%, $2,000,000 loan extended to Dominion by
PriCellular. An aggregate $400,000 was placed in escrow for a one year period
following the closing to ensure the accuracy of Dominion's representations and
warranties.
In connection with this purchase, the following assets were acquired and
liabilities assumed by PriCellular and contributed to their wholly owned
subsidiary:
<TABLE>
<S> <C>
Property and equipment......................................... $ 4,075,707
Intangible assets.............................................. 21,572,898
Contributed capital............................................ (25,346,898)
Other assets and liabilities excluding cash and cash
equivalents.................................................. (318,516)
------------
Increase in cash due to acquisition............................ $ (16,809)
============
</TABLE>
(8) DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL STATEMENTS
The carrying amounts of financial instruments approximate fair value
principally because of the short maturity of these items. Fair value estimates
are subject to inherent limitations. Estimates of fair value are made at a
specific point in time, based on relevant market information and information
about the financial instrument. The estimated fair values of financial
instruments presented above are not necessarily indicative of amounts the
Company might realize in actual market transactions. Estimates of fair value are
subjective in nature and involve uncertainties and matters of significant
judgment and therefore cannot be determined with precision. Changes in
assumptions could significantly affect the estimates.
F-43
<PAGE> 111
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Certain Terms......................... 2
Additional Information................ 2
Prospectus Summary.................... 3
Risk Factors.......................... 9
Use of Proceeds....................... 12
Dividend Policy....................... 12
Dilution.............................. 12
Capitalization........................ 14
Unaudited Pro Forma Condensed Combined
Financial Data...................... 15
Selected Consolidated Financial
Data................................ 21
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 22
Business.............................. 33
Management............................ 52
Principal Shareholders................ 56
Certain Transactions.................. 56
Description of Capital Stock.......... 60
Shares Eligible for Future Sale....... 62
Underwriting.......................... 64
Legal Matters......................... 65
Experts............................... 65
Index to Financial Statements......... F-1
</TABLE>
---------------------
THROUGH AND INCLUDING , 1996 (THE 25TH DAY AFTER THE DATE OF THIS
PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE CLASS A COMMON STOCK,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2,750,000 SHARES
[US UNWIRED INC. LOGO]
CLASS A COMMON STOCK
-----------------------
PROSPECTUS
-----------------------
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
A.G. EDWARDS & SONS, INC.
THE ROBINSON-HUMPHREY
COMPANY, INC.
, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 112
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemized statement of expenses incurred in connection
with this Registration Statement. All such expenses will be paid by the Company.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee....................... $ 14,375
NASD fee.................................................................. 5,244
NASDAQ National Market listing fee........................................ *
Legal fees and expenses................................................... *
Accounting fees and expenses.............................................. *
Printing and engraving expenses........................................... *
Blue Sky fees and expenses................................................ *
Miscellaneous expenses.................................................... *
--------
TOTAL........................................................... *
========
</TABLE>
- ---------------
* To be filed by amendment.
All of the above items are estimates except the Securities and Exchange
Commission registration fee and the NASD filing fee.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 83 of the Louisiana Business Corporation Law (the "LBCL") gives
Louisiana corporations broad powers to indemnify their present and former
directors and officers and those of affiliated corporations against expenses
incurred in the defense of any lawsuit to which they are made parties by reason
of being or having been such directors or officers; subject to specific
conditions and exclusions gives a director or officer who successfully defends
an action the right to be so indemnified; and authorizes Louisiana corporations
to buy directors' and officers' liability insurance. Such indemnification is not
exclusive of any other rights to which those indemnified may be entitled under
any by-law, agreement, authorization of shareholders or otherwise.
The Company's By-laws make mandatory the indemnification of directors and
officers permitted by the LBCL. The standard to be applied in evaluating any
claim for indemnification (excluding claims for expenses incurred in connection
with the successful defense of any proceeding or matter therein for which
indemnification is mandatory without reference to any such standard) is whether
the claimant acted in good faith and in a manner he reasonably believed to be in
or not opposed to, the best interests of the Company. With respect to any
criminal action or proceeding, the standard is that the claimant had no
reasonable cause to believe the conduct was unlawful. No indemnification is
permitted in respect of any claim, issue or matter as to which a director or
officer shall have been adjudged by a court of competent jurisdiction to be
liable for willful or intentional misconduct or to have obtained an improper
personal benefit, unless, and only to the extent that the court shall determine
upon application that, in view of all the circumstances of the case, he is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper.
In addition, the Company's Articles of Incorporation provide that, pursuant
to Louisiana law, its directors shall not be liable for monetary damages for
breach of the directors' fiduciary duty of care to the Company and its
shareholders. This provision in the Articles of Incorporation does not eliminate
the duty of care, and in appropriate circumstances equitable remedies such as
injunctive or other forms of nonmonetary relief will remain available under
Louisiana law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the Company for acts
or omissions not in good faith or involving intentional misconduct, for knowing
violations of law, for actions leading to improper personal benefit to the
director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under
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<PAGE> 113
Louisiana law. The Company also intends to enter into separate indemnification
agreements with each of its directors to effectuate these indemnity provisions
and to purchase directors' and officers' liability insurance.
The Underwriters have also agreed to indemnify the directors and certain of
the Company's officers against certain liabilities, including liabilities under
the Securities Act of 1933, as amended, or to contribute to payments that such
directors and officers may be required to make in respect thereof.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
On October 31, 1996, Cameron Communications Corporation ("Cameron") merged
into the Company (the "Merger"). In consideration of the Merger, shareholders of
Cameron received 2.192108 shares of Common Stock, par value $50 per share, of
the Company (the "Old Common Stock") in exchange for each share of common stock
of Cameron owned by them on the effective date of the Merger, for a total of
455.958460 shares of Old Common Stock. The issuance of Old Common Stock as
consideration for the Merger is exempt under Section 4(2) of the Securities Act
of 1933 (the "Act") and/or Regulation D thereunder as a transaction by an issuer
not involving any public offering. Fourteen Cameron shareholders received Old
Common Stock in the Merger. Seven of them were also shareholders of the Company
at the time of the Merger. Of those seven shareholders, four are officers and/or
directors of the Company. Of the remaining seven Cameron shareholders, four are
members of the same family who were represented by counsel in connection with
the Merger. All Cameron shareholders were provided with extensive information
about Cameron, the Company and the Merger before the Special Meeting of
Shareholders held on October 11, 1996 at which the Merger was approved.
Certificates representing the shares of Old Common Stock were appropriately
legended to prevent resales or retransfers in violation of registration
requirements. Subsequent to the Merger, each share of Old Common Stock of the
Company was reclassified into 16,643 shares of Class B Common Stock.
Certificates representing the Class B Common Stock contain the same restrictive
legends as those representing the Old Common Stock.
In each of 1994, 1995 and 1996, the Company awarded Old Common Stock as
bonuses to certain officers of the Company in recognition of services performed
on its behalf. Each of William L. Henning, Jr., John A. Henning and Thomas G.
Henning received four shares of Old Common Stock in 1994, two shares of Old
Common Stock in 1995 and one share of Old Common Stock in 1996. Robert Piper
received one share of Old Common Stock in 1995 and one share in 1996. A total of
23 shares of Old Common Stock were so awarded. The issuance of the Old Common
Stock as bonuses in each instance was exempt from registration under Section
4(2) of the Act as a transaction by an issuer not involving any public offering.
Each of the recipients was an officer and a director of the Company at the time
of each bonus award. Each share of Old Common Stock was subsequently
reclassified into 16,643 shares of Class B Common Stock. Certificates
representing the Class B Common Stock were appropriately legended to prevent
resales or retransfers in violation of registration requirements.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C>
1.1 -- Form of Underwriting Agreement*
2.1 -- Agreement and Plan of Reorganization by and among Cameron
Communications Corporation, Mercury, Inc., Mercury Cellular Telephone
Company, Mercury Cellular of Kansas, Inc., Mississippi One Cellular
Telephone Company, CCC Holding Company, Cameron Telephone Company,
and Elizabeth Telephone Company dated September 19, 1996*
3.1 -- Form of Articles of Incorporation of US Unwired Inc.*
3.2 -- Form of By-Laws of US Unwired Inc.*
</TABLE>
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<PAGE> 114
<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C>
4.1 -- Amended and Restated Loan Agreement By and Between CoBank, ACB and
CTC Financial, Inc., dated September 27, 1994, in the principal sum
of $17,400,000
4.2 -- Amended and Restated Continuing Guaranty By and Between Miss One
Cellular Telephone Co. and CoBank, ACB, dated September 27, 1994, in
the principal sum of $17,400,000
4.3 -- Amended and Restated Promissory Note By CTC Financial, Inc. in favor
of CoBank dated May 15, 1996 in the principal sum of $17,400,000
4.4 -- First Amendment and Supplement to Security Agreement By and Between
Miss One and CoBank, ACB dated May 15, 1996
4.5 -- First Amendment and Supplement to Deed of Trust, Security Agreement,
and Fixture Filing By and Between Miss One to Karen Hawkins, Trustee
in the principal sum of CoBank, ACB dated May 15, 1996
4.6 -- Mortgage By Miss One to and for the benefit of CoBank, ACB dated May
15, 1996 in the principal sum of $17,400,000
4.7 -- Continuing Guaranty made by Mercury, Inc. for the benefit of CoBank,
ACB, dated May 15, 1996, in the principal sum of $17,400,000
4.8 -- First Amendment and Supplement to Pledge Agreement By and Between
Mercury, Inc. and CoBank, ACB, dated May 15, 1996, in the principal
sum of $17,400,000
4.9 -- Limited Recourse Continuing Guaranty By William Henning, Sr., in
favor of CoBank, ACB, dated May 15, 1996, in the principal sum of
$17,400,000
4.10 -- Amended and Restated Act of Subordination By Cameron Telephone and
Miss One in favor of CoBank, ACB, dated September 27, 1996
4.11 -- Amended and Restated Promissory Note By Miss One in favor of CTC
Financial, dated May 15, 1996, in the principal sum of $17,400,000
4.12 -- Security Agreement By and Between Mercury, Inc. and CoBank, ACB,
dated July 1, 1996
4.13 -- First Amendment and Supplement to Amended and Restated Loan Agreement
By and Between CoBank, ACB and CTC Financial, Inc., dated July 1,
1996
4.14 -- Second Amended and Restated Promissory Note By Miss One in favor of
CTC Financial, Inc., dated July 1, 1996, in the principal sum of
$32,400,000
4.15 -- Second Amended and Restated Promissory Note By CTC Financial, Inc. in
favor of CoBank, ACB, dated July 1, 1996, in the principal sum of
$32,400,000
4.16 -- First Amendment and Supplement to Amended and Restated Continuing
Guaranty By and Between Miss One and CoBank, ACB, dated July 1, 1996
4.17 -- Second Amendment and Supplement to Security Agreement By and Between
Miss One and CoBank, ACB, dated July 1, 1996
4.18 -- Second Amendment and Supplement to Deed of Trust By and Between Miss
One and Karen Hawkins, Trustee for CoBank, ACB, dated July 1, 1996
4.19 -- First Amendment and Supplement to Mortgage By and Between Miss One
and CoBank, ACB, dated July 1, 1996
4.20 -- First Amendment and Supplement to Continuing Guaranty Made by
Mercury, Inc. in favor of CoBank, ACB, dated July 1, 1996
4.21 -- Second Amendment and Supplement to Pledge Agreement By and Between
Mercury, Inc. and CoBank, ACB, dated July 1, 1996
</TABLE>
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<PAGE> 115
<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION OF EXHIBIT
- -------------------- ------------------------------------------------------------------------
<C> <S>
4.22 -- First Amendment to Limited Recourse Continuing Guaranty By and
Between William Henning, Sr. and CoBank, ACB, dated July 1, 1996*
4.23 -- First Amendment and Supplement to Amended and Restated Act of
Subordination by and Among Cameron Telephone, Miss One and CoBank,
ACB, dated July 1, 1996
4.24 -- Promissory Note dated May 15, 1996 by CTC Financial, Inc. in favor of
CoBank, ACB, in the principal sum of $5,000,000
4.25 -- Promissory Note dated May 15, 1996 by Mercury, Inc. in favor of CTC
Financial, Inc. in the principal sum of $5,000,000
4.26 -- Loan Agreement By and Between CoBank, ACB, and CTC Financial, Inc.
dated July 1, 1996 in the principal sum of $13,000,000
4.27 -- Promissory Note By CTC Financial, Inc. in favor of CoBank, ACB, dated
July 1, 1996 in the principal sum of $13,000,000
4.28 -- First Amendment and Supplement to Continuing Guaranty By and Between
Mercury Cellular Telephone Co. and CoBank, ACB, dated July 1, 1996
4.29 -- First Amendment and Supplement to Security Agreement By and Between
Mercury Cellular Telephone Co. and CoBank, ACB, dated July 1, 1996
4.30 -- First Amendment and Supplement to Mortgage and Security Agreement
Mercury Cellular Telephone Co. and CoBank, ACB, dated July 1, 1996
4.31 -- First Amendment and Supplement to Limited Recourse Continuing
Guaranty By and Between Cameron Communications Corporation and
CoBank, ACB, dated July 1, 1996
4.32 -- First Amendment and Supplement to Pledge Agreement By and Between
Cameron Communications Corporation and CoBank, ACB, dated July 1,
1996
4.33 -- First Amendment and Supplement to Limited Recourse Continuing
Guaranty By and Between Mercury and CoBank, ACB, dated July 1, 1996
4.34 -- First Amendment and Supplement to Pledge Agreement By and Between
Mercury, Inc. and CoBank, ACB, dated July 1, 1996
4.35 -- Act of Subordination By Mercury Cellular Telephone Company and Miss
One, in favor of CoBank, ACB, dated July 1, 1996
4.36 -- Promissory Note Mississippi-34 Cellular Corp. to Cameron
Communications Corp., dated November 20, 1992, in the principal sum
of $20,000
4.37 -- Subordination Agreement By and Among Robert G. Mounger, William M.
Mounger, II, William Yandell, III and Wirt A. Yerger, III,
Mississippi-34 Cellular Corporation and Mercury, Inc., dated November
20, 1992
4.38 -- Promissory Note By Miss-3 Cellular Corporation in favor of Robert
Mounger, dated March 27, 1992, in the principal sum of $16,500
4.39 -- Promissory Note By Miss-3 Cellular Corporation in favor of Robert
Mounger, dated April 15, 1992, in the principal sum of $7,500
4.40 -- Promissory Note By Miss-3 Cellular Corporation in favor of Robert
Mounger, II, dated April 1, 1992, in the principal sum of $17,500.00
4.41 -- Promissory Note By Miss-3 Cellular Corporation in favor of William M.
Yandell, III dated April 30, 1992, in the principal sum of $17,500.00
4.42 -- Promissory Note By Miss-3 Cellular Corporation in favor of Wirt A.
Yerger, III, dated May 12, 1992, in the principal sum of $2,500.00
</TABLE>
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<PAGE> 116
<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C>
4.43 -- Promissory Note By Miss-3 Cellular Corporation, in favor of Wirt A.
Yerger, III dated March 25, 1992, in the principal sum of $25,000
4.44 -- Pledge Agreement By and Among the owners of capital stock of Miss-34
Cellular Corporation and AT&T Credit Corporation, dated December 20,
1993*
4.45 -- Capital Note By Miss-34 Cellular Corporation to AT&T Credit
Corporation, dated December 30, 1993, in the principal sum of
$1,684,987*
4.46 -- Deed of Trust, Security Agreement, Financing Statement and Assignment
of Rents and Leases Entered into by Miss-34 Cellular Corporation in
favor of AT&T Credit Corporation, dated December 20, 1993, in the
principal sum of $9,980,000*
4.47 -- Equipment Note Miss-34 By Cellular Corporation in favor of AT&T
Credit Corporation, dated December 30, 1993, in the principal sum of
$2,138,836*
4.48 -- General Agreement for Purchase Between AT&T and Mercury
Communications Company of Cellular Systems, dated July 7-9, 1993*
4.49 -- Mortgage and Security Agreement By Mercury Cellular Telephone Co. in
favor of CoBank, ACB, dated April 20, 1995
4.50 -- Security Agreement By and Between Mercury Cellular Telephone Company
and CoBank dated, April 20, 1995
4.51 -- Loan Agreement By and Between CoBank, ACB and CTC Financial, Inc.,
dated April 20, 1995 dated April 20, 1995
4.52 -- Continuing Guaranty By Mercury Cellular Telephone Company for the
benefit of CoBank, ACB dated April 20, 1995
4.53 -- Limited Recourse Continuing By Mercury, Inc. for the benefit of
CoBank, ACB, dated April 20, 1995
4.54 -- Limited Recourse Continuing Guaranty By Cameron Communications
Corporation for the benefit of CoBank, ACB, dated April 20, 1995
4.55 -- Promissory Note by CTC Financial, Inc. to CoBank, ACB, dated April
20, 1995, in the principal sum of $18,000,000*
4.56 -- Promissory Note By Mercury Cellular Telephone Co. in favor of CTC
Financial, Inc. dated April 20, 1995, in the principal sum of
$18,000,000
4.57 -- Pledge Agreement By and Between Cameron Communications Corporation
and CoBank, ACB, dated April 20, 1995
4.58 -- Pledge Agreement By and Between Mercury, Inc. and CoBank, ACB, dated
April 20, 1995
4.59 -- Security Agreement By and Between Mercury Cellular Telephone Company
and CoBank, ACB, dated April 20, 1995
4.60 -- Security Agreement By and Between Mercury Cellular of Kansas, Inc.
and CoBank, ACB, dated April 5, 1995
4.61 -- Loan Agreement By and Between CoBank, ACB and Mercury Cellular of
Kansas, Inc., dated April 20, 1995, in the principal sum of
$17,100,000
4.62 -- Limited Recourse Continuing Guaranty By Mercury Cellular Telephone
Company in favor of CoBank, ACB, dated April 20, 1995
4.63 -- Collateral Assignment of Tenant's Interest in Leases By and Between
Mercury Cellular of Kansas, Inc. and CoBank, ACB, dated April 20,
1995, in the principal sum of $17,100,000
</TABLE>
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<PAGE> 117
<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
4.64 -- Security Agreement By and Between Mercury Cellular of Kansas, Inc.
and CoBank, ACB, dated April 20, 1995
4.65 -- Pledge Agreement By and Between Mercury Cellular Telephone Company
and CoBank, ACB, dated April 20, 1995
4.66 -- Promissory Note By Mercury Cellular of Kansas, Inc. in favor of
CoBank, ACB, dated April 20, 1995, in the principal sum of
$17,100,000
4.67 -- Loan and Security Agreement dated as of December 20, 1993 between
Mississippi-34 Cellular Corporation and AT&T Credit Corporation*
4.68 -- Promissory Note dated April 14, 1993 in the principal sum of
$2,779,924 by Mercury, Inc. in favor of Cameron Telephone Company.
5.1 -- Opinion of Correro Fishman Haygood Phelps Weiss Walmsley & Casteix,
L.L.P. re: legality of Class A Common Stock*
10.1 -- BTA Management and Construction Services Agreement By and Between
Mercury, Inc. and Meretel Communications, Limited Partnership dated
July 1, 1996*
10.2 -- Articles of Partnership in Commendam of Meretel Communications
Limited Partnership By and Among Wireless Management Corporation and
Eatel Corp, Inc., Mercury Cellular Telephone Company, Fort Bend
Telephone Company and Meretel Wireless, Inc. dated July 25, 1995*
10.3 -- Nationwide Messaging Reseller Agreement By and Between MobileComm
Nationwide Operations, Inc. and Mercury Cellular Telephone Co. dated
December 19, 1994
10.4 -- Arch Nationwide Paging Reseller Agreement By and Between Arch
Nationwide Paging and Mercury Cellular Telephone Company, dated April
7, 1995
10.5 -- RSA Management and Construction Services Agreement By and Between
Mercury Inc. and Miss-34 Cellular Corporation dated June 1, 1994*
10.6 -- RSA Management and Construction Services Agreement By and Between
Mercury, Inc. and Miss.-1 Telephone Co. dated May 1, 1996*
10.7 -- RSA Management and Construction Services Agreement By and Between
Mercury, Inc. and Mercury Cellular Telephone Co. dated May 1, 1996*
10.8 -- RSA Management and Construction Services Agreement By and Between
Mercury, Inc. and Mercury Cellular of Kansas, Inc., dated May 1,
1996*
10.9 -- RSA Management and Construction Services By and Between Mercury
Cellular Telephone Company Agreement dated May 1, 1996*
10.10 -- Asset Purchase Agreement By and Between West Alabama Cellular
telephone Company, Inc. and Mississippi One Cellular Telephone Co.,
dated March 4, 1996
10.11 -- CellularOne License Agreement Between CellularOne Group and Mercury,
Inc., dated April 13, 1993
10.12 -- Management and Accounting Services By and Between Mercury Information
Technologies, Inc. and Mercury, Inc. Agreement dated November 7, 1995
10.13 -- MIS Services Agreement By and Between Mercury, Inc. and Maas.net,
LLC, dated June 6, 1996
10.14 -- Lease Agreement By and Between William L. Henning and Lena B. Henning
and Mercury Cellular Telephone Company, Inc., dated January 1, 1990
</TABLE>
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<PAGE> 118
<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C>
10.15 -- Lease By and Between Mercury, Inc. ("Lessor") and Mercury Cellular
Telephone Company ("Lessee"), dated March 1, 1992
10.16 -- Commitment Letter, dated September 13, 1996, from CoBank, ACB*
10.17 -- Purchase Agreement By and Between Miscellco Communications, Inc. and
Mercury Cellular of Kansas, Inc. dated April 19, 1995
10.18 -- Letter Agreement dated October 18, 1995 between Cameron
Communications Corporation and Mercury Information Technologies, Inc.
10.19 -- Act of Sale dated August 31, 1994 between Mercury, Inc. and
Mississippi One Cellular Telephone Company.
10.20 -- US Unwired Inc. 1996 Stock Option Plan*
21 -- List of Subsidiaries
23.1 -- Consent of KPMG Peat Marwick LLP
23.2 -- Consent of KPMG Peat Marwick LLP
23.3 -- Consent of KPMG Peat Marwick LLP
23.4 -- Consent of KPMG Peat Marwick LLP
23.5 -- Consent of Smith, Turner & Reeves
23.6 -- Consent of Elliot Goldberg CPA
23.7 -- Consent of Correro Fishman Haygood Phelps Weiss Walmsley & Casteix,
L.L.P. (included in opinion filed as Exhibit 5.1)*
24.1 -- Powers of Attorney (included on the Signature Page)
27.1 -- Financial Data Schedule
</TABLE>
- ---------------
* To be filed by amendment.
(b) Financial Statement Schedules
Schedule II -- Valuation and Qualifying Accounts
All other schedules are omitted because they are inapplicable or the
requested information is shown in the consolidated financial statements or
notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery of each purchaser.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at the
time shall be deemed to be the initial bona fide offering thereof.
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<PAGE> 119
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons pursuant
to the provisions described in Item 14, above, or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
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<PAGE> 120
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Lake Charles, State of
Louisiana, on November 6, 1996.
MERCURY, INC.
By: /s/ WILLIAM L. HENNING, JR.
------------------------------------
William L. Henning, Jr.
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Robert Piper, Dusty Dumas and Thomas G.
Henning, his true and lawful attorney-in-fact, each acting alone, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities to sign any and all amendments including
post-effective amendments to this registration statement and any registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that said attorneys-in-fact or their substitutes, each acting
alone, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ WILLIAM L. HENNING, JR. Chairman, Chief Executive November 6, 1996
- --------------------------------------------- Officer and Director
William L. Henning, Jr.
/s/ ROBERT PIPER President, Chief Operating November 6, 1996
- --------------------------------------------- Officer and Director
Robert Piper
/s/ DUSTY J. DUMAS Chief Financial Officer November 6, 1996
- ---------------------------------------------
Dusty J. Dumas
/s/ THOMAS G. HENNING Secretary, General Counsel November 6, 1996
- --------------------------------------------- and Director
Thomas G. Henning
/s/ WILLIAM L. HENNING, SR. Director November 6, 1996
- ---------------------------------------------
William L. Henning, Sr.
/s/ JOHN A. HENNING Director November 6, 1996
- ---------------------------------------------
John A. Henning
</TABLE>
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<PAGE> 121
SCHEDULE II
US UNWIRED INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
----------- ---------- ---------- -------- ----------
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND AT END
DESCRIPTION OF PERIOD EXPENSES OTHER OF PERIOD
----------- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C>
1993
Deducted in balance sheet from subscriber
receivables:
Allowance for doubtful accounts.......... $ 22,686 $ 154,344 $ 68,165 $ 245,195
---------- ---------- -------- ----------
1994
Deducted in balance sheet from subscriber
receivables:
Allowance for doubtful accounts.......... $ 245,195 $ 106,349 $(11,646) $ 339,898
---------- ---------- -------- ----------
1995
Deducted in balance sheet from subscriber
receivables:
Allowance for doubtful accounts.......... $ 339,898 $ 589,338 $ 76,764 $1,006,000
---------- ---------- -------- ----------
</TABLE>
<PAGE> 122
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- --------------------
<C> <S>
1.1 -- Form of Underwriting Agreement*
2.1 -- Agreement and Plan of Reorganization by and among Cameron
Communications Corporation, Mercury, Inc., Mercury Cellular Telephone
Company, Mercury Cellular of Kansas, Inc., Mississippi One Cellular
Telephone Company, CCC Holding Company, Cameron Telephone Company,
and Elizabeth Telephone Company dated September 19, 1996*
3.1 -- Form of Articles of Incorporation of US Unwired Inc.*
3.2 -- Form of By-Laws of US Unwired Inc.*
4.1 -- Amended and Restated Loan Agreement By and Between CoBank, ACB and
CTC Financial, Inc., dated September 27, 1994, in the principal sum
of $17,400,000
4.2 -- Amended and Restated Continuing Guaranty By and Between Miss One
Cellular Telephone Co. and CoBank, ACB, dated September 27, 1994, in
the principal sum of $17,400,000
4.3 -- Amended and Restated Promissory Note By CTC Financial, Inc. in favor
of CoBank dated May 15, 1996 in the principal sum of $17,400,000
4.4 -- First Amendment and Supplement to Security Agreement By and Between
Miss One and CoBank, ACB dated May 15, 1996
4.5 -- First Amendment and Supplement to Deed of Trust, Security Agreement,
and Fixture Filing By and Between Miss One to Karen Hawkins, Trustee
in the principal sum of CoBank, ACB dated May 15, 1996
4.6 -- Mortgage By Miss One to and for the benefit of CoBank, ACB dated May
15, 1996 in the principal sum of $17,400,000
4.7 -- Continuing Guaranty made by Mercury, Inc. for the benefit of CoBank,
ACB, dated May 15, 1996, in the principal sum of $17,400,000
4.8 -- First Amendment and Supplement to Pledge Agreement By and Between
Mercury, Inc. and CoBank, ACB, dated May 15, 1996, in the principal
sum of $17,400,000
4.9 -- Limited Recourse Continuing Guaranty By William Henning, Sr., in
favor of CoBank, ACB, dated May 15, 1996, in the principal sum of
$17,400,000
4.10 -- Amended and Restated Act of Subordination By Cameron Telephone and
Miss One in favor of CoBank, ACB, dated September 27, 1996
4.11 -- Amended and Restated Promissory Note By Miss One in favor of CTC
Financial, dated May 15, 1996, in the principal sum of $17,400,000
4.12 -- Security Agreement By and Between Mercury, Inc. and CoBank, ACB,
dated July 1, 1996
4.13 -- First Amendment and Supplement to Amended and Restated Loan Agreement
By and Between CoBank, ACB and CTC Financial, Inc., dated July 1,
1996
4.14 -- Second Amended and Restated Promissory Note By Miss One in favor of
CTC Financial, Inc., dated July 1, 1996, in the principal sum of
$32,400,000
4.15 -- Second Amended and Restated Promissory Note By CTC Financial, Inc. in
favor of CoBank, ACB, dated July 1, 1996, in the principal sum of
$32,400,000
4.16 -- First Amendment and Supplement to Amended and Restated Continuing
Guaranty By and Between Miss One and CoBank, ACB, dated July 1, 1996
</TABLE>
<PAGE> 123
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
4.17 -- Second Amendment and Supplement to Security Agreement By and Between
Miss One and CoBank, ACB, dated July 1, 1996
4.18 -- Second Amendment and Supplement to Deed of Trust By and Between Miss
One and Karen Hawkins, Trustee for CoBank, ACB, dated July 1, 1996
4.19 -- First Amendment and Supplement to Mortgage By and Between Miss One
and CoBank, ACB, dated July 1, 1996
4.20 -- First Amendment and Supplement to Continuing Guaranty Made by
Mercury, Inc. in favor of CoBank, ACB, dated July 1, 1996
4.21 -- Second Amendment and Supplement to Pledge Agreement By and Between
Mercury, Inc. and CoBank, ACB, dated July 1, 1996
4.22 -- First Amendment to Limited Recourse Continuing Guaranty By and
Between William Henning, Sr. and CoBank, ACB, dated July 1, 1996*
4.23 -- First Amendment and Supplement to Amended and Restated Act of
Subordination by and Among Cameron Telephone, Miss One and CoBank,
ACB, dated July 1, 1996
4.24 -- Promissory Note dated May 15, 1996 by CTC Financial, Inc. in favor of
CoBank, ACB, in the principal sum of $5,000,000
4.25 -- Promissory Note dated May 15, 1996 by Mercury, Inc. in favor of CTC
Financial, Inc. in the principal sum of $5,000,000
4.26 -- Loan Agreement By and Between CoBank, ACB, and CTC Financial, Inc.
dated July 1, 1996 in the principal sum of $13,000,000
4.27 -- Promissory Note By CTC Financial, Inc. in favor of CoBank, ACB, dated
July 1, 1996 in the principal sum of $13,000,000
4.28 -- First Amendment and Supplement to Continuing Guaranty By and Between
Mercury Cellular Telephone Co. and CoBank, ACB, dated July 1, 1996
4.29 -- First Amendment and Supplement to Security Agreement By and Between
Mercury Cellular Telephone Co. and CoBank, ACB, dated July 1, 1996
4.30 -- First Amendment and Supplement to Mortgage and Security Agreement
Mercury Cellular Telephone Co. and CoBank, ACB, dated July 1, 1996
4.31 -- First Amendment and Supplement to Limited Recourse Continuing
Guaranty By and Between Cameron Communications Corporation and
CoBank, ACB, dated July 1, 1996
4.32 -- First Amendment and Supplement to Pledge Agreement By and Between
Cameron Communications Corporation and CoBank, ACB, dated July 1,
1996
4.33 -- First Amendment and Supplement to Limited Recourse Continuing
Guaranty By and Between Mercury and CoBank, ACB, dated July 1, 1996
4.34 -- First Amendment and Supplement to Pledge Agreement By and Between
Mercury, Inc. and CoBank, ACB, dated July 1, 1996
4.35 -- Act of Subordination By MCTC Company and Miss One, in favor of
CoBank, ACB, dated July 1, 1996
4.36 -- Promissory Note Mississippi-34 Cellular Corp. to Cameron
Communications Corp., dated November 20, 1992, in the principal sum
of $20,000
4.37 -- Subordination Agreement By and Among Robert G. Mounger, William M.
Mounger, II, William Yandell, III and Wirt A. Yerger, III,
Mississippi-34 Cellular Corporation and Mercury, Inc., dated November
20, 1992
</TABLE>
<PAGE> 124
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
4.38 -- Promissory Note By Miss-3 Cellular Corporation in favor of Robert
Mounger, dated March 27, 1992, in the principal sum of $16,500
4.39 -- Promissory Note By Miss-3 Cellular Corporation in favor of Robert
Mounger, dated April 15, 1992, in the principal sum of $7,500
4.40 -- Promissory Note By Miss-3 Cellular Corporation in favor of Robert
Mounger, II, dated April 1, 1992, in the principal sum of $17,500.00
4.41 -- Promissory Note By Miss-3 Cellular Corporation in favor of William M.
Yandell, III dated April 30, 1992, in the principal sum of $17,500.00
4.42 -- Promissory Note By Miss-3 Cellular Corporation in favor of Wirt A.
Yerger, III, dated May 12, 1992, in the principal sum of $2,500.00
4.43 -- Promissory Note By Miss-3 Cellular Corporation, in favor of Wirt A.
Yerger, III dated March 25, 1992, in the principal sum of $25,000
4.44 -- Pledge Agreement By and Among the owners of capital stock of Miss-34
Cellular Corporation and AT&T Credit Corporation, dated December 20,
1993*
4.45 -- Capital Note By Miss-34 Cellular Corporation to AT&T Credit
Corporation, dated December 30, 1993, in the principal sum of
$1,684,987*
4.46 -- Deed of Trust, Security Agreement, Financing Statement and Assignment
of Rents and Leases Entered into by Miss-34 Cellular Corporation in
favor of AT&T Credit Corporation, dated December 20, 1993, in the
principal sum of $9,980,000*
4.47 -- Equipment Note Miss-34 By Cellular Corporation in favor of AT&T
Credit Corporation, dated December 30, 1993, in the principal sum of
$2,138,836*
4.48 -- General Agreement for Purchase Between AT&T and Mercury
Communications Company of Cellular Systems, dated July 7-9, 1993*
4.49 -- Mortgage and Security Agreement By Mercury Cellular Telephone Co. in
favor of CoBank, ACB, dated April 20, 1995
4.50 -- Security Agreement By and Between Mercury Cellular Telephone Company
and CoBank dated, April 20, 1995
4.51 -- Loan Agreement By and Between CoBank, ACB and CTC Financial, Inc.,
dated April 20, 1995 dated April 20, 1995
4.52 -- Continuing Guaranty By Mercury Cellular Telephone Company for the
benefit of CoBank, ACB dated April 20, 1995
4.53 -- Limited Recourse Continuing By Mercury, Inc. for the benefit of
CoBank, ACB, dated April 20, 1995
4.54 -- Limited Recourse Continuing Guaranty By Cameron Communications
Corporation for the benefit of CoBank, ACB, dated April 20, 1995
4.55 -- Promissory Note by CTC Financial, Inc. to CoBank, ACB, dated April
20, 1995, in the principal sum of $18,000,000*
4.56 -- Promissory Note By Mercury Cellular Telephone Co. in favor of CTC
Financial, Inc. dated April 20, 1995, in the principal sum of
$18,000,000
4.57 -- Pledge Agreement By and Between Cameron Communications Corporation
and CoBank, ACB, dated April 20, 1995
4.58 -- Pledge Agreement By and Between Mercury, Inc. and CoBank, ACB, dated
April 20, 1995
4.59 -- Security Agreement By and Between Mercury Cellular Telephone Company
and CoBank, ACB, dated April 20, 1995
</TABLE>
<PAGE> 125
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
4.60 -- Security Agreement By and Between Mercury Cellular of Kansas, Inc.
and CoBank, ACB, dated April 5, 1995
4.61 -- Loan Agreement By and Between CoBank, ACB and Mercury Cellular of
Kansas, Inc., dated April 20, 1995, in the principal sum of
$17,100,000
4.62 -- Limited Recourse Continuing Guaranty By Mercury Cellular Telephone
Company in favor of CoBank, ACB, dated April 20, 1995
4.63 -- Collateral Assignment of Tenant's Interest in Leases By and Between
Mercury Cellular of Kansas, Inc. and CoBank, ACB, dated April 20,
1995, in the principal sum of $17,100,000
4.64 -- Security Agreement By and Between Mercury Cellular of Kansas, Inc.
and CoBank, ACB, dated April 20, 1995
4.65 -- Pledge Agreement By and Between Mercury Cellular Telephone Company
and CoBank, ACB, dated April 20, 1995
4.66 -- Promissory Note By Mercury Cellular of Kansas, Inc. in favor of
CoBank, ACB, dated April 20, 1995, in the principal sum of
$17,100,000
4.67 -- Loan and Security Agreement dated as of December 20, 1993 between
Mississippi-34 Cellular Corporation and AT&T Credit Corporation*
4.68 -- Promissory Note dated April 14, 1993 in the principal sum of
$2,779,924 by Mercury, Inc. in favor of Cameron Telephone Company.
5.1 -- Opinion of Correro Fishman Haygood Phelps Weiss Walmsley & Casteix,
L.L.P. re: legality of Class A Common Stock*
10.1 -- BTA Management and Construction Services Agreement By and Between
Mercury, Inc. and Meretel Communications, Limited Partnership dated
July 1, 1996*
10.2 -- Articles of Partnership in Commendam of Meretel Communications
Limited Partnership By and Among Wireless Management Corporation and
Eatel Corp, Inc., Mercury Cellular Telephone Company, Fort Bend
Telephone Company and Meretel Wireless, Inc. dated July 25, 1995*
10.3 -- Nationwide Messaging Reseller Agreement By and Between MobileComm
Nationwide Operations, Inc. and Mercury Cellular Telephone Co. dated
December 19, 1994
10.4 -- Arch Nationwide Paging Reseller Agreement By and Between Arch
Nationwide Paging and Mercury Cellular Telephone Company, dated April
7, 1995
10.5 -- RSA Management and Construction Services Agreement By and Between
Mercury Inc. and Miss-34 Cellular Corporation dated June 1, 1994*
10.6 -- RSA Management and Construction Services Agreement By and Between
Mercury, Inc. and Miss.-1 Telephone Co. dated May 1, 1996*
10.7 -- RSA Management and Construction Services Agreement By and Between
Mercury, Inc. and Mercury Cellular Telephone Co. dated May 1, 1996*
10.8 -- RSA Management and Construction Services Agreement By and Between
Mercury, Inc. and Mercury Cellular of Kansas, Inc., dated May 1,
1996*
10.9 -- RSA Management and Construction Services By and Between Mercury
Cellular Telephone Company Agreement dated May 1, 1996*
10.10 -- Asset Purchase Agreement By and Between West Alabama Cellular
telephone Company, Inc. and Mississippi One Cellular Telephone Co.,
dated March 4, 1996
</TABLE>
<PAGE> 126
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
10.11 -- CellularOne License Agreement Between CellularOne Group and Mercury,
Inc., dated April 13, 1993
10.12 -- Management and Accounting Services By and Between Mercury Information
Technologies, Inc. and Mercury, Inc. Agreement dated November 7, 1995
10.13 -- MIS Services Agreement By and Between Mercury, Inc. and Maas.net,
LLC, dated June 6, 1996
10.14 -- Lease Agreement By and Between William L. Henning and Lena B. Henning
and Mercury Cellular Telephone Company, Inc., dated January 1, 1990
10.15 -- Lease By and Between Mercury, Inc. ("Lessor") and Mercury Cellular
Telephone Company ("Lessee"), dated March 1, 1992
10.16 -- Commitment Letter, dated September 13, 1996, from CoBank, ACB*
10.17 -- Purchase Agreement By and Between Miscellco Communications, Inc. and
Mercury Cellular of Kansas, Inc. dated April 19, 1995
10.18 -- Letter Agreement dated October 18, 1995 between Cameron
Communications Corporation and Mercury Information Technologies, Inc.
10.19 -- Act of Sale dated August 31, 1994 between Mercury, Inc. and
Mississippi One Cellular Telephone Company.
10.20 -- US Unwired Inc. 1996 Stock Option Plan*
21 -- List of Subsidiaries
23.1 -- Consent of KPMG Peat Marwick LLP
23.2 -- Consent of KPMG Peat Marwick LLP
23.3 -- Consent of KPMG Peat Marwick LLP
23.4 -- Consent of KPMG Peat Marwick LLP
23.5 -- Consent of Smith, Turner & Reeves
23.6 -- Consent of Elliot Goldberg CPA
23.7 -- Consent of Correro Fishman Haygood Phelps Weiss Walmsley & Casteix,
L.L.P. (included in opinion filed as Exhibit 5.1)*
24.1 -- Powers of Attorney (included on the Signature Page)
27.1 -- Financial Data Schedule
</TABLE>
- ---------------
* To be filed by amendment.
<PAGE> 1
EXHIBIT 4.1
LOAN NO. T0310
COBANK, ACB
AMENDED AND RESTATED LOAN AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
BEFORE the respective undersigned Notaries Public, and in the presence
of the respective undersigned competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") is made
and entered into as of May 15, 1996, by and between COBANK, ACB ("CoBank") and
CTC FINANCIAL, INC., a Louisiana corporation (the "Borrower"), and amends and
restates that certain Loan Agreement, dated as of September 27, 1994, between
CoBank and the Borrower, as previously amended by that certain First Amendment
and Supplement to Loan Agreement, dated as of September 15, 1995, between
CoBank and the Borrower.
SECTION 1. THE LOAN. On the terms and conditions set forth in
this Agreement, and subject to Section 11, CoBank agrees to make a loan (the
"Loan") to the Borrower, by means of one or more advances, during the period
commencing on September 27, 1994 and ending on but not including May 31, 1996,
or such later date as CoBank may in its sole discretion authorize in writing,
in an aggregate outstanding principal amount not to exceed $17,400,000. Under
the Loan, amounts borrowed and later repaid or prepaid may not be reborrowed.
SECTION 2. PURPOSES AND USE OF PROCEEDS. The proceeds of the
Loan advanced prior to the date of this Agreement shall be, and have been,
reloaned by the Borrower to Mississippi One Cellular Telephone Company
("Mississippi One") to be applied by Mississippi One solely (a) to the
repayment, in an amount equal to $1,700,000, of the outstanding principal
balance of the indebtedness of Mississippi One to Cameron Telephone Company
("Cameron Telephone"), which Mississippi One assumed from Mercury, Inc.
("Mercury"); (b) to pay the fees and costs associated with the Loan and the
initial closing thereof; and (c) for capital expenditures and working capital.
The proceeds of the Loan advanced on or after the date of this Agreement shall
be reloaned by the Borrower to Mississippi One to be applied by Mississippi One
solely to finance the acquisition of the assets of West Alabama Cellular
Telephone Company, Inc. ("West Alabama") pursuant to the terms of that certain
Asset Purchase Agreement, dated as of March 4, 1996, by and between Mississippi
One and West Alabama (the "Acquisition Agreement"), related acquisition costs
and costs and fees associated with closing the Loan as hereby amended.
<PAGE> 2
Amended and Restated Loan
Agreement/CTC Financial
Loan No. T0310
The Borrower agrees that the proceeds of the Loan shall be used only for the
purposes set forth in this Section 2.
SECTION 3. AVAILABILITY. Subject to Section 11, advances under
the Loan will be made on any day on which CoBank is open for business (a
"Business Day"), except any day on which Federal Reserve Banks are closed,
within two Business Days of receipt by CoBank of a written or telephonic
request of an authorized employee of the Borrower. Unless otherwise agreed,
all advances will be made available by wire transfer of immediately available
funds to such account or accounts as the Borrower may designate from time to
time on forms supplied by CoBank. In making advances upon telephonic requests,
CoBank shall be entitled to rely on (and shall incur no liability to the
Borrower in acting upon) any request made by a person identifying himself or
herself as one of the persons authorized by the Borrower to request advances
hereunder, so long as the funds are wired to an account previously designated
by the Borrower.
SECTION 4. INTEREST AND FEES.
(A) RATE OPTIONS, ETC. The unpaid principal balance of
the Loan shall accrue interest at the rate or rates determined or selected by
the Borrower in accordance with this Subsection (A).
(1) VARIABLE RATE OPTION. As to any portion
of the unpaid principal balance of the Loan selected by the Borrower
(any such portion, and any portion selected pursuant to Subsection
(A)(2), a "Portion" of the Loan), interest shall accrue pursuant to
this variable rate option at a variable annual interest rate (the
"Variable Rate") equal at all times to the sum of the National
Variable Rate (as hereinafter defined) plus a margin (the "NVR
Margin") equal to the percentage determined in accordance with
Subsection (B); provided, however, the Portion of the Loan accruing
interest at the Variable Rate shall be repaid in part as provided in
Section 5 on each Payment Date (as defined in Section 5). The term
"National Variable Rate" shall mean the rate of interest established
by CoBank from time to time as its National Variable Rate. The
National Variable Rate is intended by CoBank to be a reference rate,
and CoBank may charge other borrowers rates at, above, or below that
rate. Any change in the National Variable Rate shall take effect on
the date established by CoBank as the effective date of such change,
and CoBank shall notify the Borrower promptly after any such change.
(2) FIXED RATE OPTIONS.
(a) TREASURY RATE OPTION. As to any
Portion or Portions of the Loan selected by the Borrower,
interest shall accrue pursuant to this fixed rate option at a
fixed annual interest rate (a "Treasury Rate") equal to
-2-
<PAGE> 3
Amended and Restated Loan
Agreement/CTC Financial
Loan No. T0310
the sum of the U.S. Treasury Rate (as hereinafter defined)
plus a margin (the "Treasury Margin") equal to the percentage
determined in accordance with Subsection (B). Under this
option, the interest rate on any Portion of the Loan, in
minimum amounts of $100,000, may be fixed for a period (any
such period, and any period selected pursuant to Subsection
(A)(2)(b), an "Interest Period") of one year or more but not
beyond the Maturity Date (as defined in Section 5); provided,
however, that such Interest Period may expire only on a
Business Day; and provided further, however, that each Portion
of the Loan accruing interest at a Treasury Rate shall be
repaid in part as provided in Section 5 on each Payment Date
occurring during the applicable Interest Period. The term
"U.S. Treasury Rate" shall mean the yield to maturity on U.S.
Treasury instruments having the same maturity as the last day
of the Interest Period selected, as indicated by Telerate
(page 5) at approximately 9:30 a.m., Eastern time, on the date
the interest rate is fixed. If, however, no yield is
available for the period selected, then the interest rate
shall be interpolated based on the interest rates quoted for
the next longest and shortest periods of time. In the event
Telerate ceases to provide such quotations or materially
changes the form or substance of page 5 (as determined by
CoBank), then CoBank will notify the Borrower and the parties
hereto will agree upon a substitute basis for obtaining such
quotations.
(b) QUOTED RATE OPTION. As to any
Portion or Portions of the Loan selected by the Borrower,
interest shall accrue pursuant to this quoted fixed rate
option at a fixed annual interest rate (a "Quoted Rate") equal
to the rate quoted by CoBank, in its sole and absolute
discretion, on the date any such Portion is to be fixed
pursuant to this option for the Interest Period selected by
the Borrower for such Portion. Under this option, each
Portion so fixed for any separate Interest Period must be in a
minimum amount of $100,000 and Portions may be fixed for
Interest Periods ranging from 30 days to the Maturity Date;
provided, that Interest Periods must expire on a Business Day;
and provided further, however, that each Portion of the Loan
accruing interest at a Quoted Rate shall be repaid in part as
provided in Section 5 on each Payment Date occurring during
the applicable Interest Period.
(3) SELECTION AND CHANGES OF RATES. The Borrower
shall select the applicable interest rate or rates at the time it
requests an advance pursuant to Section 3. The Borrower may, on any
Business Day, elect to have one of the fixed rate options apply to any
Portion of the Loan then accruing interest at the Variable Rate. In
addition, with respect to any Portion of the Loan accruing interest
pursuant to one of the fixed rate options, the Borrower may, subject
to Subsection(A)(2), on the last day of the Interest Period for such
Portion elect to fix the interest rate
-3-
<PAGE> 4
Amended and Restated Loan
Agreement/CTC Financial
Loan No. T0310
accruing on such Portion for a new Interest Period(s) at a new fixed
rate(s). In the absence of any such election, interest shall
automatically accrue on such Portion of the Loan at the Variable Rate.
From time to time the Borrower may elect on a Business Day and upon
payment of the Surcharge (as defined in, and calculated pursuant to,
Section 6) to convert all, but not part of, any Portion of the Loan
accruing interest pursuant to one of the fixed rate options to accrue
interest at the Variable Rate and/or pursuant to another fixed rate(s)
for a new Interest Period(s) selected in accordance with Subsection
(A)(2) above. Except for the initial selection of a rate or rates for
each advance, all interest rate selections provided for herein shall
be made by telephonic or written request of an authorized employee of
the Borrower by 12:00 noon, Eastern time, on the relevant day.
(4) ACCRUAL OF INTEREST. Interest shall accrue
pursuant to any of the fixed rate options selected by the Borrower
from and including the first day of the applicable Interest Period to
but excluding the last day of the Interest Period. If the Borrower
elects to refix the interest rate on any Portion of the Loan pursuant
to Subsection (A)(3), the first day of the new Interest Period shall
be the last day of the preceding Interest Period. In the absence of
any such election, interest shall accrue on such Portion at the
Variable Rate from and including the last day of such Interest Period.
If the Borrower elects to convert from one of the fixed rate options
to the Variable Rate or to another fixed rate option upon payment of
the Surcharge as provided in Subsection (A)(3), interest at the
existing fixed rate shall accrue through the day before such
conversion and either (a) the first day of any new Interest Period
shall be the date of such conversion or (b) interest at the Variable
Rate shall accrue on the Portion of the Loan so converted from and
including the date of conversion.
(B) MARGINS. On the date of this Agreement, the NVR
Margin shall be 1.00% and the Treasury Margin shall be 3.00%. Thereafter, each
such margin shall be determined based on the Total Leverage Ratio (as
hereinafter defined) of Mississippi One, determined in accordance with
generally accepted accounting principles ("GAAP"), on the last day of the
immediately preceding fiscal quarter of Mississippi One, as set forth in the
following table:
<TABLE>
<CAPTION>
Total Leverage Ratio NVR Margin Treasury Margin
-------------------- ---------- ---------------
<S> <C> <C>
5.00 or greater 1.00% 3.00%
3.50 to 4.99 0.50% 2.25%
Less than 3.50 0.00% 2.00%
</TABLE>
-4-
<PAGE> 5
Amended and Restated Loan
Agreement/CTC Financial
Loan No. T0310
The applicable margin shall be (i) increased, if warranted,
beginning the 5th Business Day following CoBank's receipt of the financial
statements required pursuant to Sections 13(I)(1) and (2) and the certificate
required pursuant to Section 13(I)(9) and (ii) decreased, if warranted,
beginning the 5th Business Day following CoBank's receipt of such financial
statements and certificate and the Borrower's written request to decrease the
margin. In the event that CoBank shall not receive when due such financial
statements and certificate, then from such due date and until the 5th Business
Day following CoBank's receipt of such overdue financial statements and
certificate (and in the event a decrease in the applicable margin is then
warranted, receipt of the Borrower's written request to decrease such margin),
the NVR Margin shall be 1.00% and the Treasury Margin shall be 3.00%. The
Treasury Rate with respect to any portion of the Loan fixed pursuant to Section
4(A)(2)(a) may fluctuate during the Interest Period so selected for such
Portion, which fluctuation shall depend on changes in the applicable Treasury
Margin pursuant to this Section 4(B), and the timing of such changes to be
effective as described above.
The term "Total Leverage Ratio" shall mean the ratio of
Indebtedness to Operating Cash Flow (as such terms are hereinafter defined).
The term "Indebtedness" shall mean (i) obligations for borrowed money, (ii)
obligations representing the deferred purchase price of property or services
other than accounts payable arising in connection with the purchase of
inventory on terms customary in the trade, (iii) obligations, whether or not
assumed, secured by liens or payable out of the proceeds or production from
property now or hereafter owned or acquired, (iv) obligations which are
evidenced by notes, acceptances or other instruments, (v) capitalized
agreements, (vi) fixed rate hedging obligations that are due (after giving
effect to any period of grace or notice requirement applicable thereto) and
remain unpaid, and (vii) fixed payment obligations under guarantees that are
due and remain unpaid; provided, however, that "Indebtedness" shall not include
the Cameron Debt (as defined in Section 11(A)(11)). The term "Operating Cash
Flow" shall mean the sum of (a) pre-tax income, or deficit, as the case may be,
after payment of all management fees (excluding extraordinary gains and the
write up of any asset), (b) total interest expense (including non-cash
interest), (c) depreciation and amortization expense, (d) management fees
accruing during the applicable period but unpaid, and (e) interest on the
Cameron Debt accruing during the applicable period but unpaid. Operating Cash
Flow shall be measured for the then most recently completed four fiscal
quarters, adjusted to give effect to any acquisition, sale or other disposition
of any operation or business (or any portion thereof) during the period of
calculation as if such acquisition, sale or other disposition occurred on the
first day of such period of calculation.
Notwithstanding the foregoing provisions of this Subsection
(B), if at any time after the date hereof the spread between CoBank's cost of
funds (as determined by CoBank in accordance with its methodology) and any
applicable U.S. Treasury Rate for any Interest Period selected by the Borrower
pursuant to Subsection (A) above should be greater (or smaller) than the spread
in effect on July 19, 1994, then the Treasury Margin may thereafter
-5-
<PAGE> 6
Amended and Restated Loan
Agreement/CTC Financial
Loan No. T0310
be increased (or decreased) at CoBank's discretion to reflect any such change.
No such adjustment in the Treasury Margin shall be applied to any Portion of
the Loan accruing interest at a Treasury Rate prior to the end of the then
applicable Interest Period for such Portion.
(C) PAYMENT AND CALCULATION. The Borrower shall pay
interest monthly in arrears by the 20th day of the following month, upon any
prepayment and at maturity. Interest shall be calculated on the actual number
of days any part of the Loan is outstanding on the basis of a year consisting
of 360 days. In calculating accrued interest, the date the Loan is made shall
be included and the date any principal amount of the Loan is repaid or prepaid
shall be excluded as to such amount.
(D) DEFAULT RATE. If prior to maturity the Borrower
fails to make any payment or investment required to be made under the terms of
this Agreement (including this Section 4) or the Notes (as defined in Section
7), then, at CoBank's option in each instance, such payment or investment shall
accrue interest at 4% per annum in excess of the Variable Rate. After
maturity, whether by reason of acceleration or otherwise, the unpaid principal
balance of the Loan shall automatically accrue interest at 4% per annum in
excess of the Variable Rate. All interest provided for in this Subsection (D)
shall be payable on demand and shall be calculated from and including the date
such payment was due to but excluding the date paid on the basis of a year
consisting of 360 days.
(E) ORIGINATION FEE. The Borrower has paid to CoBank a
non-refundable loan origination fee for the initial Loan in the amount of
$38,000. The Borrower shall pay to CoBank a non-refundable loan origination
fee for the Loan as hereby amended in the amount of $136,525, of which $10,000
was paid upon acceptance by the Borrower of the commitment letter dated
February 23, 1996. The remaining $126,525 shall be payable on the date of this
Agreement.
SECTION 5. PRINCIPAL REPAYMENT AND MATURITY. The unpaid
principal balance of the Loan on December 31, 1997 shall be repaid in
seventy-two (72) consecutive monthly installments. The amount of each such
monthly installment payment shall be equal to the percentage set forth below of
the unpaid principal balance of the Loan on December 31, 1997; provided,
however, that the final installment payable on December 20, 2003 (the "Maturity
Date") shall be in the amount of the then unpaid principal balance of the Loan
and any and all other amounts due and owing hereunder and under all other Loan
Documents (as defined in Section 11):
-6-
<PAGE> 7
Amended and Restated Loan
Agreement/CTC Financial
Loan No. T0310
<TABLE>
<CAPTION>
Each monthly installment Percentage of unpaid
due during the twelve principal balance of
months beginning January 1 the Loan on December 31, 1997
-------------------------- -----------------------------
<S> <C>
1998 0.834%
1999 1.042%
2000 1.250%
2001 1.667%
2002 1.667%
2003 1.875%
</TABLE>
Each such installment shall be due on the 20th day of each month (each, a
"Payment Date"), with the first Payment Date being January 20, 1998, and the
last payment date being on the Maturity Date. The portion of the Loan accruing
interest at the Variable Rate and each Portion of the Loan accruing interest
pursuant to one of the fixed rate options shall be reduced by an amount equal
to the amount of each installment payment made pursuant to this Section 5
multiplied by a fraction, the numerator of which is the outstanding principal
balance of such Portion immediately prior to such payment and the denominator
of which is the total outstanding principal balance of the Loan immediately
prior to such payment, If any Payment Date is not a Business Day, then the
installment then due shall be paid on the next Business Day and shall continue
to accrue interest until paid.
SECTION 6. PREPAYMENT. The Borrower may, on one Business Day's
prior written notice, (i) prepay in full or in part any Portion of the Loan
accruing interest at the Variable Rate and (ii) prepay in full (but not in
part) any Portion of the Loan accruing interest pursuant to one of the fixed
rate options. After December 31, 1997, any prepayment shall be applied in such
a manner as to reduce the amount owing on each remaining principal installment
pursuant to Section 5 by a percentage determined by dividing the amount prepaid
by the total unpaid principal balance of the Loan immediately prior to such
prepayment. For purposes of calculating the surcharge as provided in this
Section 6, but not for purposes of reducing amounts due on each Payment Date,
conversion of a Portion of the Loan accruing interest pursuant to one of the
fixed rate options to a different rate pursuant to Section 4(A)(3) shall be
deemed a prepayment in full of that Portion of the Loan. Notwithstanding the
foregoing, upon any prepayment of any Portion of the Loan accruing interest
pursuant to one of the fixed rate options, and as a condition to any
conversion, the Borrower shall pay to CoBank, on the date of such prepayment or
conversion, a surcharge (the "Surcharge") determined and calculated as follows:
(A) Determine the difference between: (i) CoBank's cost
of funds (determined in accordance with its standard methodology) on the date
the interest rate was fixed to fund the Portion of the Loan being paid; minus
(ii) CoBank's cost of funds (determined in accordance with such methodology) on
the date of payment to fund a new
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loan with a maturity equal to the remainder of the selected Interest Period of
the Portion of the Loan being paid. If such difference is negative, then for
purposes of the remaining calculations such difference shall be deemed to be
zero.
(B) Divide the result determined in Subsection (A) by 12.
(C) For each month or part thereof during which the
Portion of the Loan being paid was scheduled to have been outstanding, multiply
the amount determined in Subsection (B) by that part of the Portion of the Loan
being paid that was scheduled to have been outstanding during such month (such
that there is a monthly calculation for each month during which the Portion of
the Loan being paid was scheduled to have been outstanding).
(D) Determine the present value of each monthly
calculation made under Subsection (C) based upon the scheduled time that
interest on the Portion of the Loan being paid would have been payable and a
discount rate equal to the rate set forth in Subsection (A)(ii).
(E) Add all of the calculations made under Subsection
(D). The result shall be the Surcharge.
SECTION 7. NOTE. The Borrower's obligation to repay the Loan
shall be evidenced by a promissory note in form and content acceptable to
CoBank (as the same may be amended, modified, supplemented, extended or
restated from time to time and any promissory note that may be issued from time
to time in substitution, renewal, extension, replacement or exchange therefor,
the "Note").
SECTION 8. MANNER AND TIME OF PAYMENT. If any date on which
payment is due hereunder is not a Business Day, the payment shall be made on
the next succeeding Business Day. The Borrower shall make each payment under
this Agreement and under the Note by wire transfer of immediately available
funds or by check. Wire transfers shall be made to the Federal Reserve Bank of
Kansas City for advice to and credit of CoBank, Federal Reserve Bank account
number 3070- 8875-4 (or to such other account as CoBank may designate by
notice) with sufficient information to identify the source and application of
such funds. The Borrower shall give CoBank telephonic notice no later than
12:00 noon, Eastern time, of its intent to pay by wire transfer. Wire
transfers received after 3:00 p.m., Eastern time, shall be credited on the next
Business Day. Checks shall be mailed or delivered to CoBank at Drawer CS
198552, Atlanta, Georgia 30384-8552 (or to such other address as CoBank may
designate by notice). Credit for payment by check will not be given until the
next Business Day after receipt of the check or the actual receipt of
immediately available funds, whichever is later.
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SECTION 9. CAPITALIZATION. The Borrower agrees to purchase
such participation certificates in CoBank as CoBank may require from time to
time in accordance with its bylaws. The Borrower hereby consents and agrees
that the amount of any distributions with respect to its patronage with CoBank
that are made and qualified written notices of allocation (as defined in 26
U.S.C. Section 1388) and that are received by the Borrower from CoBank, will be
taken into account by the Borrower at their stated dollar amounts whether the
distribution be evidenced by a Participation Certificate or other form of
written notice that such distribution has been made and recorded in the name of
the Borrower on the records of CoBank. All such investments and all other
equities which the Borrower may now own or hereafter acquire or be allocated in
CoBank shall be subject to a statutory first lien in favor of CoBank.
SECTION 10. SECURITY. The Loan shall be secured by an
assignment by the Borrower to CoBank of that certain Amended and Restated
Promissory Note dated of even date herewith, made by Mississippi One to the
order of the Borrower, in the original principal face amount of $17,400,000 (as
the same may be amended, modified, supplemented, extended or restated from time
to time and any promissory note or notes that may be issued from time to time
in substitution, renewal, extension, replacement or exchange therefor, the
"Mississippi One Note").
The Loan shall be guaranteed by (a) that certain Amended and Restated
Continuing Guaranty, dated as of even date herewith, made by Mississippi One
for the benefit of CoBank (as the same may be amended, modified, supplemented,
extended or restated from time to time, the "Mississippi One Guaranty"); (b)
that certain Continuing Guaranty, dated as of even date herewith, made by
Mercury for the benefit of CoBank (as the same may be amended, modified,
supplemented, extended or restated from time to time, the "Mercury Guaranty");
and (c) that certain Continuing Guaranty, dated as of even date herewith, made
by William Henning, Sr. ("Mr. Henning") for the benefit of CoBank, which shall
be limited to $5,000,000 and shall terminate upon the payment in full of CoBank
Loan No. T0347 (as the same may be may be amended, modified, supplemented,
extended or restated from time to time, the "Henning Guaranty").
The Note, the Mississippi One Note, the Henning Guaranty, the Mercury
Guaranty and the Mississippi One Guaranty shall be secured by that certain (i)
Deed of Trust, Security Agreement and Fixture Filing, dated as of September 27,
1994, made by Mississippi One in favor of CoBank, as holder of the Note and the
Mississippi One Note and as beneficiary of the Mississippi One Guaranty, the
Henning Guaranty and the Mercury Guaranty, as amended by that certain First
Amendment to Deed of Trust, Security Agreement and Fixture Filing, dated as of
even date herewith, between CoBank and Mississippi One (as the same may be
concurrently or hereafter amended, modified, supplemented, extended or restated
from time to time, the "Mississippi One Deed of Trust"), pursuant to which
Mississippi One shall grant to CoBank a first priority lien and security
interest in all of its
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now hereafter leased and owned real property located in the State of
Mississippi; (ii) Security Agreement, dated as of September 27, 1994, made by
Mississippi One in favor of CoBank, as holder of the Note and the Mississippi
One Note and as beneficiary of the Mississippi One Guaranty, the Henning
Guaranty and the Mercury Guaranty, as amended by that certain First Amendment
to Security Agreement, dated as of even date herewith, between CoBank and
Mississippi One (as the same may be concurrently or hereafter amended,
modified, supplemented, extended or restated from time to time, the
"Mississippi One Security Agreement"), pursuant to which Mississippi One shall
grant to CoBank a first priority security interest in all of its now owned or
hereafter acquired tangible and intangible personal property (including,
without limitation, all rights of Mississippi One under that certain Agreement
for Lease of Switch Capacity, dated July 27, 1994, between Mississippi 34
Cellular Corporation and Mercury, subsequently assigned to Mississippi One by
Mercury, and, to the extent permitted by law, all licenses and permits issued
by the Federal Communications Commission (the "FCC")); (iii) Mortgage, dated as
of even date herewith, made by Mississippi One in favor of CoBank, as holder of
the Note and the Mississippi One Note and as beneficiary of the Mississippi One
Guaranty, the Henning Guaranty and the Mercury Guaranty (as the same may be
amended, modified, supplemented, extended or restated from time to time, the
"Mississippi One Mortgage"), pursuant to which Mississippi One shall grant to
CoBank a first priority lien and security interest in all of its now hereafter
leased and owned real property located in the State of Alabama; and (iv) Pledge
Agreement, dated as of September 27, 1994, by and between Mercury and CoBank,
as holder of the Note and the Mississippi One Note and as beneficiary of the
Mississippi One Guaranty, the Henning Guaranty and the Mercury Guaranty, as
amended by that certain First Amendment to Pledge Agreement, dated as of even
date herewith, between CoBank and Mercury (as the same may be concurrently or
hereafter amended, modified, supplemented, extended or restated from time to
time, the "Mercury Pledge Agreement"), pursuant to which Mercury shall pledge,
on a first-priority basis, all of its capital stock in Mississippi One and in
Mercury Cellular Telephone Company ("MCTC") and shall covenant and agree to
pledge to CoBank, on a first-priority basis, all capital stock of Mississippi
One and MCTC it may hereafter acquire.
SECTION 11. CONDITIONS PRECEDENT.
(A) INITIAL ADVANCE. CoBank's obligation to make the
initial advance on the Loan on or after the date of this Agreement is subject
to satisfaction of each of the following conditions precedent on or before the
date of such advance:
(1) LOAN DOCUMENTS. That CoBank receive duly
executed originals of this Agreement, the Note, the Mississippi One
Note, duly assigned to CoBank, the Mississippi One Guaranty, the
Mississippi One Deed of Trust, the Mississippi One Security Agreement,
the Mississippi One Mortgage, the Mercury Guaranty, the Mercury Pledge
Agreement, the Henning Guaranty and all other
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instruments and documents contemplated hereby or thereby
(collectively, the "Loan Documents").
(2) AUTHORIZATION. That CoBank receive copies
of all corporate documents and proceedings of the Borrower,
Mississippi One and Mercury authorizing the execution, delivery, and
performance of the Loan Documents to which each is a party, certified
by appropriate officers of such entities.
(3) APPROVALS. That CoBank receive evidence
satisfactory to it that all federal and state consents and approvals
(including, without limitation, all regulatory approvals) which are
necessary for, or required as a condition of, the validity and
enforceability of the Loan Documents or the creation or perfection of
the liens and security interests identified in Section 10, or the
completion of the acquisition of West Alabama's assets by Mississippi
One pursuant to the Acquisition Agreement, have been obtained and are
in full force and effect.
(4) OPINIONS OF COUNSEL. That CoBank receive
opinions of counsel for the Borrower, Mississippi One, Mercury and Mr.
Henning (who shall be mutually acceptable to CoBank) in form and
content acceptable to all parties.
(5) FEES AND EXPENSES. That the Borrower pay
the origination fee set forth in Section 4(E) with respect to the Loan
and the costs and expenses required by Section 20 to be paid by the
Borrower.
(6) PERMITS. That CoBank receive evidence
satisfactory to it that the Borrower, Mississippi One and Mercury
possesses all necessary operating permits, authorizations, approvals,
and the like which are material to the conduct of the Borrower's,
Mississippi One's and Mercury's business or which may otherwise be
required by law.
(7) INSURANCE. That CoBank receive evidence
of insurance by Mississippi One and Mercury in such amounts and
covering such risks as are usually carried by companies in the same or
similar business.
(8) ENVIRONMENTAL CHECKLIST. That CoBank
receive from Mississippi One an environmental checklist on a form
prescribed by CoBank covering all real property owned or leased by
Mississippi One and Mississippi One's environmental records and
procedures, all of such information to be satisfactory to CoBank in
its sole discretion.
(9) PERFECTION AND PRIORITY OF LIENS. That
CoBank receive an opinion of counsel in form and content acceptable to
it to the effect that, as of the
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date of such advance, CoBank has a duly perfected security interest in
all collateral covered by the Mississippi One Deed of Trust, the
Mississippi One Mortgage, the Mississippi One Security Agreement and
the Mercury Pledge Agreement, subject to no prior liens except a lien
in favor of Cameron Telephone subordinated to all liens in favor of
CoBank on terms and conditions satisfactory to CoBank.
(10) WEST ALABAMA ACQUISITION. That,
concurrently with such advance, Mississippi One shall have acquired
the real and personal property of West Alabama in accordance with the
terms of the Acquisition Agreement, free and clear of any and all
liens and encumbrances, and that CoBank receives such evidence thereof
as it shall reasonably require.
(11) SUBORDINATED DEBT. That Cameron Telephone
reaffirm its subordination of all indebtedness of Mississippi One to
Cameron Telephone (the "Cameron Debt") in right of payment and in all
other respects, to any indebtedness of Mississippi One to CoBank
including the Loan, which subordination shall provide that no interest
or principal payments may be made on the Cameron Debt without the
consent of CoBank.
(12) NO MATERIAL ADVERSE CHANGE. That from
December 31, 1995, to the date of such advance there shall not have
occurred any event which has had or could have a Material Adverse
Effect (as hereinafter defined) on the Borrower or Mississippi One.
For purposes of this Agreement, the term "Material Adverse Effect"
when used with reference to any entity shall mean a material adverse
effect on the condition, financial or otherwise, operations,
properties or business of such entity or on the ability of such entity
to perform its obligations under the Loan Documents to which it is a
party.
(13) NO INJUNCTION. That no court or other
government body or public authority shall have issued an order which
shall then be in effect restraining or prohibiting the completion of
the transactions contemplated hereby.
(14) OTHER DOCUMENTS. That CoBank receive such
other documents, instruments, certificates and opinions of counsel as
CoBank or its counsel may reasonably request.
(B) ALL ADVANCES. CoBank's obligation to make each
advance under the Loan is subject to the satisfaction of each of the following
conditions precedent on or before the date of such advance:
(1) EVENT OF DEFAULT. That no Event of
Default (as that term is defined in Section 15) exists, and that there
has occurred no event which with the
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passage of time or the giving of notice, or both, could become an
Event of Default (each such event, a "Default").
(2) REPRESENTATIONS AND WARRANTIES. That the
representations and warranties of (a) the Borrower contained in this
Agreement and any other Loan Document to which it is a party, (b)
Mississippi One contained in the Mississippi One Guaranty and any
other Loan Document to which it is a party, (c) Mercury contained in
the Mercury Guaranty and any other Loan Document to which it is a
party and (d) Mr. Henning contained in the Henning Guaranty and any
other Loan Document to which he is a party be true and correct in all
material respects on and as of the date of such advance, as though
made on and as of such date.
(3) OFFICER'S CERTIFICATE. That CoBank
receive, if it so requests, a certificate from appropriate officers of
the Borrower, Mississippi One, Mercury and from Mr. Henning as to the
continuing truth and accuracy of the representations and warranties of
the Borrower, Mississippi One, Mercury and Mr. Henning under the Loan
Documents to which each is a party and the satisfaction of each of the
conditions applicable to the making of the advance.
SECTION 12. REPRESENTATIONS AND WARRANTIES. To induce CoBank to
make advances hereunder, and recognizing that CoBank is relying hereon, the
Borrower represents and warrants, on and as of the date hereof and on and as of
each date on which an advance is made hereunder, as follows:
(A) ORGANIZATION; POWERS; ETC. The Borrower (i) is duly
organized, validly existing, and in good standing under the laws of its state
of incorporation; (ii) is duly qualified to do business and is in good standing
in each jurisdiction in which the character of its properties or the nature of
its business requires such qualification; (iii) has all requisite corporate and
legal power to own and operate its assets and to carry on its business and to
enter into and perform its obligations under the Loan Documents to which it is
a party; (iv) has duly and lawfully obtained and maintains all licenses,
certificates, permits, authorizations, approvals, and the like which are
necessary in the conduct of its business or which may be otherwise required by
law; and (v) is eligible to borrow from CoBank.
(B) DUE AUTHORIZATION; NO VIOLATIONS; ETC. The
execution and delivery by the Borrower of, and the performance by the Borrower
of its obligations under, the Loan Documents to which it is a party have been
duly authorized by all requisite corporate action and do not and will not (i)
violate any provision of any law, rule or regulation, any judgment, order or
ruling of any court or governmental agency applicable to it, its articles of
incorporation or bylaws, or any agreement, indenture, mortgage, or other
instrument to which the Borrower is a party or by which the Borrower or its
property is bound, or (ii) be in conflict with, result in a breach of, or
constitute with the giving of notice or lapse of time,
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or both, a default under any such agreement, indenture, mortgage, or other
instrument. All actions on the part of the shareholders of the Borrower
necessary in connection with the execution and delivery by the Borrower, and
the performance by the Borrower of its obligations under, the Loan Documents to
which it is a party have been taken and remain in full force and effect as of
the date hereof.
(C) GOVERNMENTAL APPROVAL. No consent, permission,
authorization, order, or license of any governmental authority is necessary in
connection with the execution, delivery, performance, or enforcement of the
Loan Documents to which the Borrower is a party or to the creation and
perfection of the liens and security interests granted thereby, except such as
have been obtained and are in full force and effect.
(D) BINDING AGREEMENT. Each of the Loan Documents to
which it is a party is, or when executed and delivered will be, the legal,
valid, and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms, subject only to limitations on enforceability
imposed by (i) applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting creditors' rights generally, and (ii) general
equitable principles.
(E) COMPLIANCE WITH LAWS. The Borrower is in compliance
in all material respects with all federal, state, and local laws, rules,
regulations, ordinances, codes, and orders (collectively, "Laws"), the failure
to comply with which could have a Material Adverse Effect on the Borrower.
(F) ENVIRONMENTAL COMPLIANCE. Without limiting the
provisions of Subsection (E) above, all property owned or leased by the
Borrower and all operations conducted by it are in compliance in all material
respects with all Laws relating to environmental protection, the failure to
comply with which could have a Material Adverse Effect on the Borrower.
(G) LITIGATION. There are no pending legal,
arbitration, or governmental actions or proceedings to which the Borrower is a
party or to which its property is subject which could have a Material Adverse
Effect on the Borrower, and to the best of the Borrower's knowledge, no such
actions or proceedings are threatened or contemplated.
(H) PRINCIPAL PLACE OF BUSINESS; RECORDS. The principal
place of business and chief executive office of the Borrower and the place
where the records required by Section 13(G) are kept is at the address of the
Borrower shown in Section 19.
(I) EMPLOYEE BENEFIT PLANS. To the extent applicable,
the Borrower is in compliance in all material respects with the applicable
provisions of the Employee
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Retirement Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder.
(J) TAXES. The Borrower has filed or caused to be filed
all federal, state and local tax returns that are required to be filed, and has
paid all taxes as shown on said returns or on any assessment received by the
Borrower, to the extent that such taxes have become due, unless such taxes are
being contested by the Borrower, in good faith and by appropriate proceedings
and then only to the extent adequate reserves have been set aside on the
Borrower's books therefor.
(K) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT. The Borrower is not an "investment company" as that term is
defined in, and is not otherwise subject to regulation under, the Investment
Company Act of 1940, as amended. The Borrower is not a "holding company" as
that term is defined in, and is not otherwise subject to regulation under, the
Public Utility Holding Company Act of 1935, as amended.
(L) USE OF PROCEEDS. The funds to be borrowed hereunder
will be used only as contemplated hereby. No part of such funds will be used
to purchase any "margin securities" or otherwise in violation of the
regulations of the Federal Reserve System.
(M) BUSINESS. The Borrower's sole business activity
and operation is to borrow from CoBank and reloan proceeds of such borrowings
to affiliated entities.
SECTION 13. AFFIRMATIVE COVENANTS. Unless otherwise agreed to
in writing by CoBank, while this Agreement is in effect the Borrower covenants
and agrees to:
(A) CORPORATE EXISTENCE. Preserve and keep in full
force and effect its corporate existence and good standing in the jurisdiction
of its incorporation, and its qualification to transact business and good
standing in all places in which the character of its properties or the nature
of its business requires such qualification.
(B) COMPLIANCE WITH LAWS AND AGREEMENTS. Comply in all
material respects with (i) all Laws, the failure to comply with which could
have a Material Adverse Effect on the Borrower, and (ii) all agreements,
indentures, mortgages, and other instruments to which it is a party or by which
it or any of its property is bound.
(C) COMPLIANCE WITH ENVIRONMENTAL LAWS. Without
limiting the provisions of Subsection (B) above, comply in all material
respects with, and cause all persons occupying or present on any properties
owned or leased by it to so comply with, all Laws relating to environmental
protection, the failure to comply with which could have a Material Adverse
Effect on the Borrower.
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(D) LICENSES; PERMITS; ETC. Duly and lawfully obtain
and maintain in full force and effect all licenses, certificates, permits,
authorizations, approvals, and the like which are material to the conduct of
its business or which may be required by Law.
(E) INSURANCE. Maintain insurance with insurance
companies or associations acceptable to CoBank in such amounts and covering
such risks as are usually carried by companies engaged in the same or similar
business and similarly situated, and make such increases in the type or amount
of coverage as CoBank may request. All such policies insuring any collateral
provided for in any Loan Document shall provide for loss payable clauses or
endorsements in form and content acceptable to CoBank. At the request of
CoBank, all policies (or such other proof of compliance with this Subsection
(E) as may be satisfactory) shall be delivered to CoBank.
(F) PROPERTY MAINTENANCE. Maintain and preserve at all
times its property, and each and every part and parcel thereof, in good repair,
working order and condition, ordinary wear and tear excepted, and in compliance
with all applicable laws, regulations and orders.
(G) BOOKS AND RECORDS. Keep adequate records and books
of account in accordance with GAAP consistently applied and any system of
accounts to which the Borrower is subject.
(H) INSPECTION. Permit CoBank or its agents, during
normal business hours or at such other times as the parties may agree, to
examine its properties, books, and records, and to discuss its affairs,
finances, operations, and accounts with its officers, directors, employees, and
independent certified public accountants.
(I) REPORTS AND NOTICES. Furnish to CoBank:
(1) AUDITED ANNUAL FINANCIAL STATEMENTS. As
soon as available, but in no event later than 120 days after the end
of each fiscal year of Mississippi One occurring during the term
hereof, audited annual financial statements of Mississippi One
prepared in accordance with GAAP consistently applied and any system
of accounts to which Mississippi One is subject. Such financial
statements shall: (a) be audited by independent certified public
accountants selected by Mississippi One and acceptable to CoBank; (b)
be accompanied by a report of such accountants containing an opinion
acceptable to CoBank; and (c) include a balance sheet, a statement of
income, a statement of retained earnings, a statement of cash flows,
and all notes and schedules relating thereto.
(2) MONTHLY FINANCIAL STATEMENTS. As soon as
available but in no event later than 60 days after the end of each of
the first three fiscal quarters of
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each fiscal year of Mississippi One occurring during the term hereof,
unaudited monthly financial statements of Mississippi One for the
three months ending during such quarter prepared in accordance with
GAAP consistently applied and any system of accounts to which
Mississippi One is subject (except for the omission of footnotes and
for the effect of normal year-end audit adjustments). Such financial
statements shall: (a) be prepared in reasonable detail; and (b)
include a balance sheet, a statement of income for such months and for
the period year-to-date as internally prepared by Mississippi One, and
such other monthly statements as CoBank may specifically request,
which monthly statements shall include any and all supplements
thereto.
(3) FINANCIAL FORECAST. As soon as available,
but in no event later than 90 days after the first day of each fiscal
year of Mississippi One, a one-year financial forecast for Mississippi
One which shall include, without limitation, statements of income,
balance sheets, statements of sources and uses of funds, capital
expenditure projections and such other information as CoBank shall
reasonably require for each such one-year period.
(4) NOTICE OF DEFAULT. Promptly after
becoming aware thereof, notice of (a) the occurrence of any Default or
Event of Default hereunder or under any other Loan Document, and (b)
the occurrence of any breach, default, event of default, or other
event which with the giving of notice or lapse of time, or both, could
become a breach, default, or event of default under any agreement,
indenture, mortgage, or other instrument (other than the Loan
Documents) to which the Borrower is a party or by which the Borrower
or any of its property is bound or affected if the effect of such
breach, default, event of default, or other event is to accelerate, or
to permit the acceleration of, the maturity of any indebtedness under
such agreement, indenture, mortgage, or other instrument; provided,
however, that the failure to give such notice shall not affect the
right and power of CoBank to exercise any and all of the remedies
specified herein.
(5) NOTICE OF NON-ENVIRONMENTAL LITIGATION.
Promptly after the commencement thereof, notice of the commencement of
all actions, suits, or proceedings before any court, arbitrator, or
governmental department, commission, board, bureau, agency, or
instrumentality affecting the Borrower which could have a Material
Adverse Effect on the Borrower.
(6) NOTICE OF ENVIRONMENTAL LITIGATION.
Without limiting the provisions of Paragraph (5) above, promptly after
receipt or becoming aware thereof, notice of the receipt of all
pleadings, orders, complaints, indictments, or other communications
alleging a condition that may require the Borrower to undertake or to
contribute to a cleanup or other response under Laws relating to
environmental
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protection, or which seeks penalties, damages, injunctive relief, or
criminal sanctions related to alleged violations of such Laws, or
which claims personal injury or property damage to any person as a
result of environmental factors or conditions or which could have a
Material Adverse Effect on the Borrower.
(7) REGULATORY AND OTHER NOTICES. Promptly
after filing, receipt or becoming aware thereof, copies of any filings
or communications sent to or notices and other communications received
by the Borrower from any governmental authority, including, without
limitation, the Louisiana Public Service Commission (the "LPSC"), the
Mississippi Public Service Commission (the "MPSC"), the Alabama Public
Service Commission (the "APSC"), the FCC, and the Securities and
Exchange Commission (the "SEC"), relating to any noncompliance by the
Borrower with any Law or with respect to any matter or proceeding the
effect of which could have a Material Adverse Effect on the Borrower
or Mississippi One.
(8) MATERIAL ADVERSE CHANGE. Prompt notice of
any matter which has had or could have a Material Adverse Effect on
the Borrower or Mississippi One.
(9) COMPLIANCE CERTIFICATES. Concurrently
with each statement required to be furnished pursuant to Paragraph (1)
and (2) above, a certificate in the form attached hereto as Exhibit A
executed by the chief accounting officer of Mississippi One.
(10) ERISA REPORTABLE EVENTS. Within 10 days
after the Borrower becomes aware of the occurrence of any Reportable
Event (as defined in Section 4043 of ERISA) with respect to the
Borrower, a statement describing such Reportable Event and the actions
proposed to be taken in response to such Reportable Event.
(11) OTHER INFORMATION. Such other information
regarding the condition, financial or otherwise, or operations of the
Borrower as CoBank may, from time to time, reasonably request.
SECTION 14. NEGATIVE COVENANTS. Unless otherwise agreed to in
writing by CoBank, while this Agreement is in effect, the Borrower shall not:
(A) BORROWINGS. Create, incur, assume, or allow to
exist, directly or indirectly, any indebtedness or liability for borrowed
money, for the deferred purchase price of property or services, or for the
lease of real or personal property which lease is required to be capitalized
under GAAP or which is treated as an operating lease under regulations
applicable to it but which otherwise would be required to be capitalized under
GAAP (a "Capital Lease"), except for obligations to CoBank.
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Amended and Restated Loan
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(B) LIENS. Create, incur, assume, or allow to exist any
mortgage, deed of trust, deed to secure debt, pledge, lien (including the lien
of an attachment, judgment, or execution), security interest, or other
encumbrance of any kind upon any of its property, real or personal, except in
favor of CoBank.
(C) MERGERS; ACQUISITIONS; ETC. Merge or consolidate
with any other entity or acquire all or substantially all of the assets of any
person or entity, or form or create any subsidiary, or commence operations
under any other name, organization, or entity, including any joint venture.
(D) TRANSFER OF ASSETS. Sell, transfer, lease, enter
into any contract for the sale, transfer or lease of, or otherwise dispose of,
any of its assets.
(E) LOANS AND INVESTMENTS. After the date hereof, make
any loan or advance to, invest in, purchase or make any commitment to purchase
any stock, bonds, notes or other securities of any person or entity other than
stock or other securities of CoBank and the advances to its affiliated entities
of loan proceeds received from CoBank as contemplated by this Agreement or any
other loan agreement entered into between CoBank and the Borrower.
(F) GUARANTEES. Guarantee, assume or otherwise become
obligated or liable with respect to the indebtedness or other obligations of
any person or entity.
(G) CHANGE IN BUSINESS. Engage in any business activity
or operation different from or unrelated to the Borrower's current business
activities or operations, as described in Section 12(M).
(H) DISPOSITION OF LICENSES. Sell, assign, transfer, or
otherwise dispose of, or attempt to dispose of, in any way, any registrations,
licenses, franchises, grants, permits, or other governmental approvals.
SECTION 15. EVENTS OF DEFAULT. Each of the following shall
constitute an "Event of Default" hereunder:
(A) PAYMENT DEFAULT. The failure by the Borrower to
make any payment or investment required to be made hereunder, under the Note,
or under any other Loan Document when due.
(B) REPRESENTATIONS AND WARRANTIES. Any representation
or warranty made by the Borrower, Mississippi One or Mercury herein or in any
other Loan Document, or any factual statement made in any certificate delivered
in connection with the Loan, shall prove to have been false or misleading in
any material respect on or as of the date made.
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Amended and Restated Loan
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(C) CERTAIN AFFIRMATIVE COVENANTS. The failure by the
Borrower to perform or comply with any covenant set forth in Section 13 (other
than Sections 13(A) and 13(I)(4), (5), (6), (7), (8) and (10)), and such
failure continues for 30 days after written notice thereof shall have been
delivered by CoBank to the Borrower.
(D) OTHER COVENANTS AND AGREEMENTS. The failure by the
Borrower to perform or comply with any other covenant or agreement contained
herein, including, without limitation, any covenant excluded under Subsection
(C) above.
(E) CROSS-DEFAULT. The occurrence of any (i) breach,
default, event of default, or event which with the giving of notice or lapse of
time, or both, could become a default or event of default under, or (ii)
failure on the part of the Borrower, Mississippi One, Mercury or Mr. Henning to
observe, keep or perform any covenant or agreement contained in (a) any Loan
Document other than this Agreement, including, without limitation, the
Mississippi One Guaranty, the Mercury Guaranty and the Henning Guaranty, or (b)
the terms of any agreement (other than the Loan Documents) between the
Borrower, Mississippi One or Mercury and CoBank, including, without limitation,
that certain Loan Agreement, dated of even date hereof, between the Borrower
and CoBank in connection with CoBank Loan No. T0347 and any other guaranty,
loan agreement, security agreement, pledge agreement, mortgage, deed to secure
debt, or deed of trust.
(F) OTHER INDEBTEDNESS. The occurrence of any breach,
default, event of default, or event which with the giving of notice or lapse of
time, or both, could become a default or event of default under any agreement,
indenture, mortgage, or other instrument by which the Borrower, Mississippi One
or Mercury or any of their respective property is bound or affected (other than
the Loan Documents) if the effect of such breach, default, event of default, or
event is to accelerate, or to permit the acceleration of, the maturity of any
indebtedness under such agreement, indenture, mortgage, or other instrument.
(G) JUDGMENTS. Any judgment, decree or order for the
payment of money shall be rendered against the Borrower or judgments, decrees,
or orders for the payment of money in an aggregate amount in excess of $75,000
shall be rendered against Mississippi One and either (i) enforcement
proceedings shall have been commenced; or (ii) such judgments, decrees, and
orders shall continue unsatisfied and in effect for a period of 45 consecutive
days without being vacated, discharged, satisfied, or stayed pending appeal.
(H) INSOLVENCY, ETC. The Borrower, Mississippi One or
Mercury (i) shall become insolvent or shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts as they come due;
or (ii) shall suspend its business operations or a material part thereof or
make an assignment for the benefit of creditors; or (iii) shall apply for,
consent to, or acquiesce in the appointment of a trustee, receiver, or other
custodian for it or any of its property or, in the absence of such application,
consent, or acquiescence, a
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Amended and Restated Loan
Agreement/CTC Financial
Loan No. T0310
trustee, receiver, or other custodian is so appointed; or (iv) shall commence
with respect to it or have commenced against it any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, or
liquidation law or statute of any jurisdiction.
(I) ELIGIBILITY. The failure by the Borrower to
maintain its eligibility to borrow from CoBank.
(J) SECURITY. Any of the Mississippi One Deed of Trust,
the Mississippi One Mortgage, the Mississippi One Security Agreement or the
Mercury Pledge Agreement, or the filings contemplated thereby, shall for any
reason fail (i) to create a valid and perfected first-priority lien, security
interest, or security title (subject only to such exceptions as are therein
permitted) on any of the property identified therein, or (ii) to secure
thereunder the obligations evidenced by the Note, the Mississippi One Note, the
Mississippi One Guaranty, the Henning Guaranty and the Mercury Guaranty as
provided therein. Any of the Note, the Mississippi One Note, the Mississippi
One Guaranty, the Henning Guaranty and the Mercury Guaranty shall fail for any
reason to be the valid and binding obligations of Mississippi One, Mercury or
Mr. Henning, respectively, or any of Mississippi One, Mercury or Mr. Henning
shall in any way contest or dispute the validity and binding effect of the
Mississippi One Guaranty, the Henning Guaranty or the Mercury Guaranty.
SECTION 16. REMEDIES UPON EVENT OF DEFAULT.
(A) AUTOMATIC ACCELERATION. Upon the occurrence of an
Event of Default under Section 15(H), the entire unpaid principal balance of
the Note, all accrued interest thereon, and all other amounts payable under
this Agreement, the Note, and all other agreements between CoBank and the
Borrower shall become immediately due and payable without protest, presentment,
demand, or further notice of any kind, all of which are hereby expressly waived
by the Borrower.
(B) ACCELERATION; ETC. Upon the occurrence of an Event
of Default other than under Section 15(H), upon notice to the Borrower, CoBank
may declare the entire unpaid principal balance of the Note, all accrued
interest thereon, and all other amounts payable under this Agreement and all
other agreements between CoBank and the Borrower, to be immediately due and
payable. Upon such a declaration, the unpaid principal balance of the Note and
all such other amounts shall become immediately due and payable, without
protest, presentment, demand, or further notice of any kind, all of which are
hereby expressly waived by the Borrower.
(C) ENFORCEMENT. Upon the occurrence of an Event of
Default, CoBank may proceed to protect, exercise, and enforce such rights and
remedies as may be provided by agreement or under law including, without
limitation, the rights and remedies provided
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Amended and Restated Loan
Agreement/CTC Financial
Loan No. T0310
for in the Note and any of the other Loan Documents. Each and every one of
such rights and remedies shall be cumulative and may be exercised from time to
time, and no failure on the part of CoBank to exercise, and no delay in
exercising, any right or remedy shall operate as a waiver thereof, nor shall
any single or partial exercise of any right or remedy preclude any other or
future exercise thereof, or the exercise of any other right. In addition,
CoBank may hold and/or set off and apply against the Borrower's indebtedness
any and all cash, accounts, securities, or other property in CoBank's
possession or under its control.
(D) APPLICATION OF PAYMENTS. After acceleration of the
Loan, all amounts received by CoBank shall be applied to the amounts owing
hereunder, under the Note, and the other Loan Documents in whatever order and
manner as CoBank shall elect.
(E) REGULATORY APPROVALS. Upon any action by CoBank to
commence the exercise of remedies hereunder or under the Mississippi One Deed
of Trust, the Mississippi One Mortgage, the Mississippi One Security Agreement
or the Mercury Pledge Agreement, the Borrower hereby undertakes and agrees to
cooperate and join with CoBank in any application to the LPSC, the MPSC, the
APSC, the FCC, the SEC or any other regulatory body, administrative agency,
court or other forum (any such entity, a "Governmental Authority") with respect
thereto and to provide such assistance in connection therewith as CoBank may
request, including, without limitation, the preparation of filings and
appearances of officers and employees of the Borrower before such Governmental
Authority, in each case in support of any such application made by CoBank, and
the Borrower shall not, directly or indirectly, oppose any such action by
CoBank before any such Governmental Authority.
SECTION 17. COMPLETE AGREEMENT; AMENDMENT. This Agreement, the
Note, and the other Loan Documents are intended by the parties to be a complete
and final expression of their agreement. No amendment, modification, or waiver
of any provision hereof or thereof, nor any consent to any departure of the
Borrower herefrom or therefrom, shall be effective unless approved by CoBank
and contained in a writing signed by or on behalf of CoBank, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 18. APPLICABLE LAW. Except to the extent governed by
applicable federal law, this Agreement shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
SECTION 19. NOTICES. All notices hereunder shall be in writing
and shall be deemed to be duly given upon delivery, if delivered by "Express
Mail," overnight courier, messenger or other form of hand delivery or sent by
telegram or facsimile transmission, or 3 days after mailing if sent by
certified or registered mail, to the parties at the following addresses (or
such other address for a party as shall be specified by like notice):
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Amended and Restated Loan
Agreement/CTC Financial
Loan No. T0310
If to CoBank, as follows: If to the Borrower, as follows:
CoBank, ACB CTC Financial, Inc.
200 Galleria Parkway P.O. Box 3709
Suite 1900 Lake Charles, Louisiana 70602
Atlanta, Georgia 30339 Attn: Dusty Dumas;
Attn: Rural Utility Banking Group cc: Thomas G. Henning
Fax No.: (770) 618-3202 Fax No.: (318) 439-0769
SECTION 20. COSTS AND EXPENSES. The Borrower shall reimburse
CoBank on demand for all reasonable out- of-pocket costs and expenses incurred
by CoBank in connection with the origination, negotiation, preparation and
administration of this Agreement and all other Loan Documents, and the
preservation and enforcement of CoBank's rights and remedies hereunder and
thereunder, including, without limitation: all (a) costs and expenses
(including intangible and other taxes and any recording fees or expenses)
incurred by CoBank to obtain, perfect, maintain, determine the priority of, or
release any security contemplated hereunder; (b) fees and expenses of any
outside counsel retained by CoBank to assist CoBank with respect to any matter
contemplated by this Section or to review this Agreement and all other Loan
Documents and advise CoBank as to its rights and remedies hereunder or
thereunder; (c) fees and expenses of any outside counsel retained by CoBank to
represent it in any litigation involving the parties to any of the Loan
Documents, including but not limited to, bankruptcy, receivership, or similar
proceedings; and (d) fees, costs and expenses incurred in connection with
obtaining surveys and appraisals, if any, required under this Agreement or any
other Loan Document; provided, however, that the Borrower shall not be required
to reimburse CoBank for its legal fees (exclusive of legal expenses) in excess
of $35,000 for the negotiation and documentation of the Loan as hereby amended
and CoBank Loan No. T0347.
SECTION 21. EFFECTIVENESS; SEVERABILITY. This Agreement
shall continue in effect until all indebtedness and obligations of the Borrower
hereunder and under all other Loan Documents shall have been fully and finally
repaid or the Maturity Date, whichever is later. Any provision of the Loan
Documents which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
thereof.
SECTION 22. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the Borrower and CoBank and their
respective successors and assigns, except that the Borrower may not assign or
transfer its rights or obligations hereunder without the prior written consent
of CoBank. Without the consent of, but with notice to, the Borrower, CoBank
may (a) sell participations to one or more banks or other entities in all
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Amended and Restated Loan
Agreement/CTC Financial
Loan No. T0310
or a portion of its rights and obligations under this Agreement, or (b) assign
to one or more banks or other entities all or a portion of its rights and
obligations under this Agreement.
SECTION 23. CONSENT TO JURISDICTION. To the maximum extent
permitted by law, the Borrower agrees that any legal action or proceeding with
respect to this Agreement or any of the other Loan Documents may be brought in
the courts of the State of Louisiana or of the United States of America for the
Western District of Louisiana, all as CoBank may elect. By execution of this
Agreement, the Borrower hereby irrevocably submits to each such jurisdiction,
expressly waiving any objection it may have to the laying of venue by reason of
its present or future domicile. Nothing contained herein shall affect the
right of CoBank to commence legal proceedings or otherwise proceed against the
Borrower in any other jurisdiction or to serve process in any manner permitted
or required by law.
SECTION 24. OBLIGATIONS ABSOLUTE. The obligation of the
Borrower to make all payments required to be made under this Agreement shall be
independent of any action by the LPSC, the MPSC, the APSC or the FCC with
respect to rates and/or disallowance of debt.
SECTION 25. DEFINED TERMS. For convenience of reference, set
forth below opposite each defined term used in this Agreement is the location
in this Agreement of the definition of such term:
<TABLE>
<CAPTION>
Defined Term Location
------------ --------
<S> <C>
Acquisition Agreement Section 2
Agreement Introductory Paragraph
APSC Section 13(I)(7)
Borrower Introductory Paragraph
Business Day Section 3
Cameron Debt Section 11(A)(11)
Cameron Telephone Section 2
Capital Lease Section 14(A)
CoBank Introductory Paragraph
Default Section 11(B)(1)
Event of Default Section 15
FCC Section 10
Governmental Authority Section 16(E)
Henning Guaranty Section 10
Indebtedness Section 4(B)
Interest Period Section 4(A)(2)(a)
Laws Section 12(E)
Loan Section 1
</TABLE>
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Amended and Restated Loan
Agreement/CTC Financial
Loan No. T0310
<TABLE>
<S> <C>
Loan Documents Section 11(A)(1)
LPSC Section 13(I)(7)
Material Adverse Effect Section 11(A)(12)
Maturity Date Section 5
MCTC Section 10
Mercury Section 2
Mercury Guaranty Section 10
Mercury Pledge Agreement Section 10
Mississippi One Section 2
Mississippi One Deed of Trust Section 10
Mississippi One Guaranty Section 10
Mississippi One Mortgage Section 10
Mississippi One Note Section 10
Mississippi One Security Agreement Section 10
MPSC Section 13(I)(7)
Mr. Henning Section 10
National Variable Rate Section 4(A)(1)
Note Section 7
NVR Margin Section 4(A)(1)
Operating Cash Flow Section 4(B)
Payment Date Section 5
Portion Section 4(A)(1)
Quoted Rate Section 4(A)(2)(b)
SEC Section 13(I)(7)
Surcharge Section 6
Total Leverage Ratio Section 4(B)
Treasury Margin Section 4(A)(2)(a)
Treasury Rate Section 4(A)(2)(a)
U.S. Treasury Rate Section 4(A)(2)
Variable Rate Section 4(A)(1)
West Alabama Section 2
</TABLE>
[Signatures on next page]
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Amended and Restated Loan
Agreement/CTC Financial
Loan No. T0310
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below, and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
duly authorized officers of the respective parties, after a due reading of the
whole.
At Lake Charles, Louisiana, on May 15, 1996.
CTC FINANCIAL, INC.
By: /s/ WILLIAM L. HENNING JR.
-----------------------------------
Name: William L. Henning Jr.
------------------------------
Title: President
-----------------------------
Attest: /s/ THOMAS G. HENNING
-------------------------------
Name: Thomas G. Henning
--------------------------
Title: Secretary
-------------------------
[CORPORATE SEAL]
Witnesses to all signatures:
/s/ SHEILA KING
- ------------------------------------------
Witness
/s/ SHELLY F. VICKERS
- ------------------------------------------
Witness
/s/ SANDRA L. [ILLEGIBLE]
- ------------------------------------------
Notary Public
My commission expires: lifetime commission
-------------------
[NOTARIAL SEAL]
(Signatures continued on next page)
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Amended and Restated Loan
Agreement/CTC Financial
Loan No. T0310
(Signatures continued from previous page)
At Atlanta, Georgia, on May 15, 1996.
COBANK, ACB
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
Witnesses to signature:
/s/ TIMOTHY W. HENRY
- ----------------------------------------
Witness
/s/ ANNE T. APPLEBY
- ----------------------------------------
Witness
/s/ SUSAN L. SOUTH
- ----------------------------------------
Notary Public
My commission expires:
-----------------
[NOTARIAL SEAL]
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Amended and Restated Loan
Agreement/CTC Financial
Loan No. T0310
EXHIBIT A
COMPLIANCE CERTIFICATE - LOAN NO. T0310
THIS COMPLIANCE CERTIFICATE is given by ________________ the [CHIEF
ACCOUNTING OFFICER] of MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY ("Mississippi
One"), pursuant to Section 13(I)(9) of that certain Amended and Restated Loan
Agreement (the "Loan Agreement"), dated as of May 15, 1996, by and between
CoBank, ACB and CTC Financial, Inc. (the "Borrower"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to
them in the Loan Agreement.
I hereby certify as follows:
1. I am the [CHIEF ACCOUNTING OFFICER] of Mississippi One and as
such possess the knowledge and authority to certify to the matters set forth in
this Compliance Certificate;
2. Attached hereto as Annex A are the [AUDITED/UNAUDITED]
[ANNUAL/MONTHLY] [CONSOLIDATED AND CONSOLIDATING] financial statements of
Mississippi One, for the fiscal [YEAR/QUARTER] ended ________, as required by
Section 13(I) [(1)/(2)] of the Loan Agreement. Such financial statements were
prepared in accordance with GAAP consistently applied (except as may be noted
therein) and any system of accounts to which Mississippi One is subject and
fairly present the financial condition of Mississippi One during the periods
covered thereby and as of the dates thereof (subject, if applicable, to normal
year-end adjustments);
3. As of the date of such financial statements, Mississippi One is
in compliance with the covenants set forth in Sections 6(I), 6(J), 6(K), 6(L)
and 6(N) of the Mississippi One Guaranty. Attached hereto as Annex B are
calculations which demonstrate the compliance by Mississippi One with such
covenants; and
4. I have reviewed the activities of the Borrower and Mississippi
One, and consulted with appropriate representatives of the Borrower and
Mississippi One during the fiscal [YEAR/QUARTER] ended ________, and reviewed
the Loan Documents. As of the date of this Compliance Certificate, there exists
no condition, event or act which would constitute a Default or Event of Default
under the Loan Agreement, except as disclosed on Annex C hereto.
IN WITNESS WHEREOF, I have executed this Compliance Certificate
as of ________________, ________.
----------------------------------------
[CHIEF ACCOUNTING OFFICER]
Mississippi One Cellular Telephone Company
<PAGE> 1
EXHIBIT 4.2
LOAN NO. T0310
LOAN NO. T0347
AMENDED AND RESTATED CONTINUING GUARANTY
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
BEFORE the respective undersigned Notary Publics, and in the presence of
the respective undersigned competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS AMENDED AND RESTATED CONTINUING GUARANTY (this "Guaranty") is made
as of May 15, 1996, by and between MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY
("Mississippi One") and COBANK, ACB ("CoBank"), and amends and restates that
certain Continuing Guaranty, dated as of September 27, 1994, made by
Mississippi One for the benefit of CoBank.
R E C I T A L S:
WHEREAS, CoBank and CTC Financial, Inc., a Louisiana corporation (the
"Borrower"), have entered into that certain Amended and Restated Loan
Agreement, dated as of even date herewith (as the same may be amended,
modified, supplemented, extended or restated from time to time, the
"Mississippi One Loan Agreement"), providing for a loan of up to $17,400,000
(the "Mississippi One Loan") and CoBank and the Borrower have entered into that
certain Loan Agreement, dated as of even date herewith (as the same may be
amended, modified, supplemented, extended or restated from time to time, the
"Mercury Loan Agreement"; the Mississippi One Loan Agreement and the Mercury
Loan Agreement, collectively, the "Loan Agreements"), providing for a loan of
up to $5,000,000 (the "Mercury Loan"; the Mississippi One Loan and the Mercury
Loan, collectively, the "Loans"); and
WHEREAS, the proceeds of the Loans have been or will be reloaned by the
Borrower to Mississippi One or to Mercury, Inc. ("Mercury") for investment into
Mississippi One for the purposes set forth in the Loan Agreements; and
WHEREAS, as an inducement to CoBank to enter into the Loan Agreements
and to make the Loans, Mississippi One has agreed to guarantee the Obligations
(as hereinafter defined);
<PAGE> 2
Amended and Restated Continuing
Guaranty/Mississippi One
Loan No. T0310
Loan No. T0347
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, Mississippi One hereby agrees as follows:
SECTION 1. DEFINITIONS. Capitalized terms used in this
Guaranty, unless otherwise defined herein, shall have the meanings assigned to
them in the Loan Agreements.
SECTION 2. OBLIGATIONS. "Obligations" shall mean (a) the
principal, interest and other amounts becoming due and payable, whether by
acceleration or otherwise, under that certain Amended and Restated Promissory
Note, dated of even date herewith, made by the Borrower to the order of CoBank
in the original principal face amount of $17,400,000 (such Promissory Note and
all amendments, modifications, extensions, renewals and replacements thereof,
the "CTC One Note"); (b) the principal, interest and other amounts becoming due
and payable, whether by acceleration or otherwise, under that certain
Promissory Note, dated of even date herewith, made by the Borrower to the order
of CoBank in the original principal face amount of $5,000,000 (such Promissory
Note and all amendments, modifications, extensions, renewals and replacements
thereof, the "CTC Two Note"); (c) the principal, interest and other amounts
becoming due and payable, whether by acceleration or otherwise, under that
certain Promissory Note, dated of even date herewith, made by Mercury to the
order of the Borrower, assigned to CoBank, in the original principal face
amount of $5,000,000 (such Promissory Note and all amendments, modifications,
extensions, renewals and replacements thereof, the "Mercury Note"; the CTC One
Note, the CTC Two Note and the Mercury Note, collectively, the "Notes"); (d)
all other payments or performances to be made by the Borrower and Mercury under
the other Loan Documents to which either is a party; and (e) all other
indebtedness and liabilities of the Borrower and Mercury to CoBank of every
kind and description whatsoever, whether now existing or hereafter arising,
fixed or contingent, as primary obligor or as guarantor or surety, acquired
directly or by assignment or otherwise, liquidated or unliquidated, regardless
of how they arise or by what agreement or instrument they may be evidenced,
including, without limitation, all loans, advances and other extensions of
credit and all covenants, agreements, and provisions contained in all loan and
other agreements between the parties.
SECTION 3. GUARANTY PROVISIONS.
(A) In consideration of the loans to be made by CoBank
to the Borrow pursuant to the Loan Agreement and for other good and valuable
consideration, the adequacy, sufficiency and receipt of which are hereby
acknowledged, Mississippi One hereby absolutely, unconditionally, directly,
irrevocably, completely and immediately guarantees the full and prompt payment,
when due, whether by acceleration or otherwise, and the prompt performance, of
the Obligations;
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<PAGE> 3
Amended and Restated Continuing
Guaranty/Mississippi One
Loan No. T0310
Loan No. T0347
(B) Mississippi One further agrees to pay to CoBank,
upon demand, all losses and reasonable costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses, that may be incurred by
CoBank in attempting to cause the Obligations to be paid, performed or
otherwise satisfied or in attempting to cause satisfaction of Mississippi One's
liability under this Guaranty or in attempting to protect or preserve any
property, personal or real, securing the Obligations;
(C) Mississippi One agrees that this Guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment by the Borrower, Mercury, William Henning, Sr. ("Mr. Henning") or
any other person to CoBank on account of the Obligations is rescinded or must
otherwise be returned or restored by CoBank upon the insolvency or bankruptcy
of the Borrower, Mercury, Mr. Henning or any other obligor, guarantor, endorser
or surety of the Obligations, all as though such payment had not been made;
(D) Mississippi One assents to all terms and
agreements heretofore or hereafter made by the Borrower with CoBank;
(E) Mississippi One hereby consents to the following
and agrees, with or without notice (all notices being hereby waived), that its
liability will not be affected or impaired by (i) the exchange, release or
surrender of any collateral or any claim against the Borrower, Mercury, Mr.
Henning or any other person, or the waiver, release or subordination of any
security interest, in whole or in part; (ii) the waiver or delay in the
exercise of any of CoBank's rights or remedies against the Borrower, Mercury,
Mr. Henning or any other person; (iii) the renewal, extension or modification
of the terms or amounts of any of the Obligations, the Loan Documents or any
other instrument or agreement evidencing the same; or (iv) the acceptance by
CoBank of other guaranties;
(F) Mississippi One waives acceptance hereof, notice
of acceptance hereof, and notice of acceleration of and intention to accelerate
the Obligations, and waives presentment, demand, protest, notice of dishonor,
notice of default, notice of nonpayment or protest in relation to any
instrument evidencing any of the Obligations, and any other demands and notices
required by law except as such waiver may be expressly prohibited by law;
(G) This is a guaranty of payment and performance and
not of collection only. The liability of Mississippi One under this Guaranty
shall be absolute, unconditional, direct, irrevocable, complete and immediate
and shall not be contingent upon the pursuit of any remedies against the
Borrower, Mercury, Mr. Henning or any other person, nor
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<PAGE> 4
Amended and Restated Continuing
Guaranty/Mississippi One
Loan No. T0310
Loan No. T0347
against any security or lien available to CoBank, its successors,
successors-in-title, endorsees or assigns, and shall be joint and several with
the liabilities of all other guarantors of the Obligations. Mississippi One
waives any right to require that an action be brought against the Borrower,
Mercury, Mr. Henning or any other person or to require that resort be had to
any security. In the event of a default under any of the Loan Documents,
CoBank shall have the right to enforce its rights, powers and remedies under
any of the Loan Documents in any order, and all rights, powers and remedies
available to CoBank in such event shall be nonexclusive and cumulative of all
other rights, powers and remedies provided thereunder or hereunder or by law or
in equity. Accordingly, Mississippi One hereby authorizes and empowers CoBank
upon acceleration of the maturity of the Notes or any other Obligation, at its
sole discretion, and without notice to Mississippi One, to exercise any right
or remedy which CoBank may have or any right or remedy hereinafter granted
which CoBank may have as to any security. Mississippi One waives any right to
require any action on the part of CoBank to proceed to collect amounts due
under the Notes or any other Obligation;
(H) Mississippi One hereby subordinates any and all
indebtedness of the Borrower now or hereafter owed to Mississippi One to all
Obligations of the Borrower to CoBank, and agrees with CoBank that, from and
after the occurrence of a default or event of default under any of the Loan
Documents, and for so long as such default or event of default exists,
Mississippi One shall not demand or accept any payment of principal or interest
from the Borrower, shall not claim any offset or other reduction of Mississippi
One's liability hereunder because of any such indebtedness and shall not take
any action to obtain any of the security for the Obligations; provided,
however, that, if CoBank so requests, such indebtedness shall be collected,
enforced and received by Mississippi One as trustee for CoBank and be paid over
to CoBank on account of the Obligations of the Borrower to CoBank, but without
reducing or affecting in any manner the liability of Mississippi One under the
other provisions of this Guaranty;
(I) Mississippi One hereby authorizes CoBank, without
notice to Mississippi One, to apply all payments and credits received from the
Borrower, Mercury, Mr. Henning or any other person or realized from any
security in such manner and in such priority as CoBank in its sole judgment
shall see fit to the Obligations or to any other liabilities of the Borrower,
Mercury, Mr. Henning or any other person to CoBank, and Mississippi One agrees
that any such application shall not in any way affect its liabilities
hereunder;
(J) The liability of Mississippi One under this
Guaranty shall not in any manner be affected by reason of any action taken or
not taken by CoBank, which action or inaction is hereby consented and agreed to
by Mississippi One, nor by the partial or
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complete unenforceability or invalidity of any other guaranty or surety
agreement, pledge, assignment, or other security for any of the Obligations.
No delay in making demand on Mississippi One for satisfaction of its liability
hereunder shall prejudice CoBank's right to enforce such satisfaction. All of
CoBank's rights and remedies shall be cumulative and any failure of CoBank to
exercise any right hereunder shall not be construed as a waiver of the right to
exercise the same or any other right at any time, and from time to time,
thereafter;
(K) This Guaranty shall be a continuing one and shall
be binding upon Mississippi One regardless of how long before or after the date
hereof the Obligations are incurred. This Guaranty shall remain in full force
and effect until a written instrument of termination shall be executed and
delivered by a duly authorized officer of CoBank. CoBank will only be
obligated to execute such an instrument of termination if: (i) all Obligations
have been paid in full; (ii) CoBank has no further commitment or obligation to
extend credit to the Borrower; and (iii) any preference period applicable to
payments made on or security given for the Obligations has expired under
applicable bankruptcy and insolvency laws; and
(L) Mississippi One hereby irrevocably waives any and
all rights it may have to enforce any of CoBank's rights or remedies or
participate in any security now or hereafter held by CoBank, and any and all
such other rights of subrogation, reimbursement, contribution or
indemnification against the Borrower, Mercury, Mr. Henning or any other person
having any manner of liability for the Borrower's obligations to CoBank,
whether or not arising hereunder, by agreement, at law or in equity.
SECTION 4. SECURITY. This Guaranty is secured by the
Mississippi One Deed of Trust, the Mississippi One Mortgage and the Mississippi
One Security Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Mississippi One
represents and warrants to CoBank, on and as of the date hereof and on and as
of each date on which the Borrower receives an advance under the Loans, as
follows:
(A) ORGANIZATION; POWERS; ETC. Mississippi One (i) is
duly organized, validly existing, and in good standing under the laws of its
state of incorporation; (ii) is duly qualified to do business and is in good
standing in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification; (iii) has all requisite
corporate and legal power to own and operate its assets and to carry on its
business and to enter into and perform its obligations under the Loan Documents
to which it is a party; and (iv) has duly and lawfully obtained and maintains
all licenses, certificates, permits,
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authorizations, approvals, and the like which are necessary in the conduct of
its business or which may be otherwise required by law.
(B) DUE AUTHORIZATION; NO VIOLATIONS; ETC. The
execution and delivery by Mississippi One of, and the performance by
Mississippi One of its obligations under, the Loan Documents to which it is a
party have been duly authorized by all requisite corporate action and do not
and will not (i) violate any provision of any law, rule or regulation, any
judgment, order or ruling of any court or governmental agency applicable to
Mississippi One, its articles of incorporation or bylaws, or any agreement,
indenture, mortgage, or other instrument to which Mississippi One is a party or
by which Mississippi One or any of its properties are bound, or (ii) be in
conflict with, result in a breach of, or constitute with the giving of notice
or lapse of time, or both, a default under any such agreement, indenture,
mortgage, or other instrument. All actions on the part of the shareholders of
Mississippi One necessary in connection with the execution and delivery by
Mississippi One of, and the performance by Mississippi One of its obligations
under, the Loan Documents to which it is a party have been taken and remain in
full force and effect.
(C) GOVERNMENTAL APPROVAL. No consent, permission,
authorization, order, or license of any governmental authority is necessary in
connection with the execution, delivery, performance, or enforcement of the
Loan Documents to which Mississippi One is a party, or to the creation and
perfection of the liens and security interests granted thereby, or the
acquisition by Mississippi One of West Alabama in accordance with the
Acquisition Agreement, except such as have been obtained and are in full force
and effect.
(D) BINDING AGREEMENT. Each of the Loan Documents to
which Mississippi One is a party, is, or when executed and delivered will be,
the legal, valid, and binding obligation of Mississippi One, enforceable
against Mississippi One in accordance with its terms, subject only to
limitations on enforceability imposed by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally, and (ii) general equitable principles.
(E) COMPLIANCE WITH LAWS. Mississippi One is in
compliance in all material respects with all Laws, the failure to comply with
which could have a Material Adverse Effect (as hereinafter defined) on
Mississippi One. For purposes of this Guaranty, the term "Material Adverse
Effect" shall mean a material adverse effect on the condition, financial or
otherwise, operations, properties or business of Mississippi One or on the
ability of Mississippi One to perform its obligations under the Loan Documents
to which it is a party.
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(F) ENVIRONMENTAL COMPLIANCE. Without limiting the
provisions of Subsection (E) above, all property owned or leased by Mississippi
One and all operations conducted by it are in compliance in all material
respects with all Laws relating to environmental protection, the failure to
comply with which could have a Material Adverse Effect on Mississippi One.
(G) LITIGATION. There are no pending legal,
arbitration, or governmental actions or proceedings to which Mississippi One is
a party or to which any of its property is subject which could have a Material
Adverse Effect on Mississippi One, and to the best of Mississippi One's
knowledge, no such actions or proceedings are threatened or contemplated.
(H) FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE;
ETC. The unaudited financial statements of Mississippi One for the period
ended December 31, 1995, submitted to CoBank in connection with the Loan,
fairly and fully present in all material respects the financial condition of
Mississippi One and the results of Mississippi One's operations for the periods
covered thereby and were prepared in accordance with GAAP consistently applied
and any system of accounts to which Mississippi One is subject. Since December
31, 1995, there has occurred no event which has had or could have a Material
Adverse Effect on Mississippi One. All budgets, projections, feasibility
studies, and other documentation submitted by Mississippi One to CoBank in
connection with the Loans were based upon assumptions that were reasonable and
realistic at the time submitted and, as of the date hereof, no fact has come to
light, and no event or transaction has occurred, which would cause any
assumption made therein not to be reasonable or realistic.
(I) PRINCIPAL PLACE OF BUSINESS; RECORDS. The
principal place of business and chief executive office of Mississippi One and
the place where the records required by Section 6(G) are kept is at the address
of Mississippi One shown in Section 8(E).
(J) EMPLOYEE BENEFIT PLANS. To the extent applicable,
Mississippi One is in compliance in all material respects with the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder.
(K) TAXES. Mississippi One has filed or caused to be
filed all federal, state and local tax returns that are required to be filed,
and has paid all taxes as shown on said returns or on any assessment received
by it to the extent that such taxes have become due, unless such taxes are
being contested by Mississippi One in good faith and by
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appropriate proceedings and then only to the extent adequate reserves have been
set aside on Mississippi One's books therefor.
(L) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT. Mississippi One is not an "investment company" as that term is
defined in, or otherwise subject to regulation under, the Investment Company
Act of 1940, as amended. Mississippi One is not a "holding company" as that
term is defined in, or otherwise subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended.
(M) USE OF PROCEEDS. The funds to be borrowed under
the Loan Agreements will be used only as contemplated thereby. No part of such
funds will be used to purchase any "margin securities" or otherwise in
violation of the regulations of the Federal Reserve System.
(N) STOCK OF SUBSIDIARIES. Mississippi One has no
subsidiary other than as described on Exhibit A hereto. Mississippi One is the
registered and beneficial owner of the specified percentage of the shares of
issued and outstanding capital stock of each of the subsidiaries as set forth
on Exhibit A hereto, which stock is owned free and clear of all liens,
warrants, options, rights to purchase, rights of first refusal and other
interests of any person. The stock of each of the subsidiaries describes on
Exhibit A hereto has been duly authorized and validly issued and is fully paid
and non-assessable.
(O) FINANCIAL CONDITION. The liability and
obligations of Mississippi One incurred or arising under this Guaranty and the
other Loan Documents to which it is a party and of the Borrower incurred or
arising under the Notes, the Loan Agreements and the other Loan Documents to
which it is a party will benefit substantially Mississippi One directly and
indirectly, and Mississippi One's board of directors has made that
determination. Mississippi One has full and complete access to all of the Loan
Documents and other documents relating to the Obligations, has reviewed them
and is fully aware of the meaning and effect of their contents. Mississippi
One is fully informed of all circumstances that bear upon the risks of
executing this Guaranty which a diligent inquiry would reveal. Mississippi One
has adequate means to obtain from the Borrower, on a continuing basis,
information concerning the financial condition of the Borrower and is not
depending on CoBank to provide such information, now or in the future.
Mississippi One agrees that CoBank will have no obligation to advise or notify
Mississippi One of or provide Mississippi One with any data or information.
(P) LICENSES; PERMITS; ETC. Mississippi One is the
valid holder of all licenses, certificates, permits, authorizations, approvals,
and the like which are material to
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the conduct of its business or which may be required by law, including, without
limitation, all FCC licenses, and all such licenses, certificates, permits,
authorizations, approvals, and the like are in full force and effect on the
date hereof.
(Q) BUSINESS. Mississippi One is not engaged in any
business activity or operation other than the provision of telecommunications
services.
(R) REAL PROPERTY. Other than as specifically
described in the Mississippi One Deed of Trust, Mississippi One owns no real
property.
SECTION 6. AFFIRMATIVE COVENANTS. Mississippi One covenants
and agrees with CoBank that so long as this Guaranty shall remain in effect or
the Obligations have not been fully paid or otherwise satisfied, Mississippi
One, unless CoBank shall otherwise consent in writing, will do the following:
(A) CORPORATE EXISTENCE. Preserve and keep in full
force and effect its corporate existence and good standing in the jurisdiction
of its incorporation, and its qualification to transact business and good
standing in all places in which the character of its properties or the nature
of its business requires such qualification.
(B) COMPLIANCE WITH LAWS AND AGREEMENTS. Comply in
all material respects with (i) all Laws, the failure to comply with which could
have a Material Adverse Effect on Mississippi One, and (ii) all agreements,
indentures, mortgages, and other instruments to which it is a party or by which
it or any of its property is bound.
(C) COMPLIANCE WITH ENVIRONMENTAL LAWS. Without
limiting the provisions of Subsection (B) above, comply in all material
respects with, and cause all persons occupying or present on any properties
owned or leased by it to so comply with, all Laws relating to environmental
protection, the failure to comply with which could have a Material Adverse
Effect on Mississippi One.
(D) LICENSES; PERMITS; ETC. Duly and lawfully obtain
and maintain in full force and effect all licenses, certificates, permits,
authorizations, approvals, and the like which are material to the conduct of
its business or which may be required by Law, including without limitation, all
FCC licenses.
(E) INSURANCE. Maintain insurance with insurance
companies or associations acceptable to CoBank in such amounts and covering
such risks as are usually carried by companies engaged in the same or similar
business and similarly situated, and
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make such increases in the type or amount of coverage as CoBank may request.
All such policies insuring any collateral provided for in any of the Loan
Documents to which Mississippi One is a party shall provide for loss payable
clauses or endorsements in form and content acceptable to CoBank. At the
request of CoBank, all policies (or such other proof of compliance with this
Subsection (E) as may be satisfactory to CoBank) shall be delivered to CoBank.
(F) PROPERTY MAINTENANCE. Maintain and preserve at
all times its property, and each and every part and parcel thereof, in good
repair, working order and condition, ordinary wear and tear excepted, and in
compliance with all applicable Laws.
(G) BOOKS AND RECORDS. Keep adequate records and
books of account in accordance with GAAP consistently applied and any system of
accounts to which it is subject.
(H) INSPECTION. Permit CoBank or its agents, during
normal business hours or at such other times as the parties may agree, to
examine its properties, books, and records, and to discuss its affairs,
finances, operations, and accounts with its officers, directors, employees, and
independent certified public accountants.
(I) TOTAL LEVERAGE RATIO. Maintain at all times during
each period set forth below, a Total Leverage Ratio (as defined below) not
exceeding the ratio set forth opposite such period:
Period Total Leverage Ratio
------ --------------------
From the date hereof through
and including June 30, 1996 8.50:1.0
From July 1, 1996 through
and including September 30, 1996 8.00:1.0
From and including October 1, 1996
through and including December 31, 1996 7.50:1.0
From and including January 1, 1997
through and including March 31, 1997 7.00:1.0
From and including April 1, 1997
through and including June 30, 1997 6.00:1.0
From and including July 1, 1997
through and including September 30, 1997 5.50:1.0
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Period Total Leverage Ratio
------ --------------------
From and including October 1, 1997
through and including December 31, 1997 5.00:1.0
From and including January 1, 1998
through and including December 31, 1998 4.00:1.0
From and including January 1, 1999
and thereafter 3.50:1.0
The term "Total Leverage Ratio" shall mean the ratio of Indebtedness (as
defined below) to Operating Cash Flow. The term "Indebtedness" shall mean (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property or services other than accounts payable arising in
connection with the purchase of inventory on terms customary in the trade,
(iii) obligations, whether or not assumed, secured by liens or payable out of
the proceeds or production from property now or hereafter owned or acquired,
(iv) obligations which are evidenced by notes, acceptances or other
instruments, (v) capitalized agreements, (vi) fixed rate hedging obligations
that are due (after giving effect to any period of grace or notice requirement
applicable thereto) and remain unpaid, and (vii) fixed payment obligations
under guarantees that are due and remain unpaid; provided, however, that
"Indebtedness" shall not include the Cameron Debt. The term "Operating Cash
Flow" shall mean the sum of (i) pre-tax income, or deficit, as the case may be,
after payment of all management fees (excluding extraordinary gains and the
write up of any asset), (ii) total interest expense (including non-cash
interest), (iii) depreciation and amortization expense, (iv) management fees
accrued during the applicable period but unpaid, and (v) interest on the
Cameron Debt accrued during the applicable period but unpaid. Operating Cash
Flow shall be measured for the then most recently completed four fiscal
quarters, adjusted to give effect to any acquisition, sale or other disposition
of any operation or business (or any portion thereof) during the period of
calculation as if such acquisition, sale or other disposition occurred on the
first day of such period of calculation.
(J) EQUITY TO TOTAL ASSETS RATIO. Commencing June 30,
1996, maintain at all times during each period set forth below, a Equity to
Total Assets Ratio (as hereinafter defined) of not less than the percentage set
forth opposite each such period:
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Equity to Total
Period Assets Ratio
------ ----------------
From and including June 30, 1996 through
and including December 31, 1998 20%
From and including January 1, 1999 through
and including December 31, 1999 25%
From and including January 1, 2000
and thereafter 30%
The term "Equity to Total Assets Ratio" shall mean the ratio derived by
dividing (i) total assets minus total liabilities by (ii) total assets, all as
determined in accordance with GAAP consistently applied.
(K) DEBT SERVICE COVERAGE. Commencing December 31,
1996, maintain at all times, a debt service coverage ratio ("DSC") of at least
1.25:1.0. DSC shall mean the ratio derived by dividing (i) Operating Cash Flow
minus cash taxes by (ii) the cumulative total of principal and cash interest
payments required during the then most recently completed previous four fiscal
quarters, all as determined in accordance with GAAP consistently applied.
(L) FIXED CHARGE COVERAGE RATIO. Commencing on
December 31, 1998, maintain at all times, a Fixed Charge Coverage Ratio (as
hereinafter defined), calculated for the then most recently completed four
fiscal quarters, greater than or equal to 1.0:1.0. The term "Fixed Charged
Coverage Ratio" shall mean the ratio derived by dividing (i) the result of (a)
Operating Cash Flow minus (b) the sum of (x) cash taxes plus (y) expenditures
made for fixed or capital assets plus (z) dividends or other cash
distributions, in each case for the then most recently completed previous four
fiscal quarters by (ii) the cumulative total of principal and cash interest
payments required during the then most recently completed previous four fiscal
quarters, all as determined in accordance with GAAP consistently applied.
(M) FURTHER ASSURANCES. Give CoBank 10 days' prior
written notice of any acquisition or lease of real property after the date
hereof and enter into such mortgages, deeds of trust, collateral assignments or
other instruments as CoBank shall request in order to grant to CoBank a first
priority perfected security interest in the Borrower's interests in any real
property acquired or leased after the date hereof.
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(N) WEIGHTED AVERAGE INTEREST RATE. Maintain at all
times a weighted average interest rate on the indebtedness under and pursuant
to the Notes of not greater than 11.0%.
(O) REPORTS AND NOTICES. Furnish or cause to be
furnished to CoBank:
(1) AUDITED ANNUAL FINANCIAL STATEMENTS. As
soon as available, but in no event later than 120 days after the end
of each fiscal year of Mississippi One occurring during the term
hereof, audited annual financial statements of Mississippi One
prepared in accordance with GAAP consistently applied and any system
of accounts to which Mississippi One is subject. Such financial
statements shall: (a) be audited by independent certified public
accountants selected by Mississippi One and acceptable to CoBank; (b)
be accompanied by a report of such accountants containing an opinion
acceptable to CoBank; and (c) include a balance sheet, a statement of
income, a statement of retained earnings, a statement of cash flows,
and all notes and schedules relating thereto.
(2) MONTHLY FINANCIAL STATEMENTS. As soon as
available, but in no event later than 60 days after the end of each of
the first three fiscal quarters of each fiscal year of Mississippi One
occurring during the term hereof, unaudited monthly financial
statements of Mississippi One for the three months ending during such
quarter prepared in accordance with GAAP consistently applied and any
system of accounts to which Mississippi One is subject (except for the
omission of footnotes and for the effect of normal year-end audit
adjustments). Such financial statements shall: (a) be prepared in
reasonable detail; and (b) include a balance sheet, a statement of
income for such months and for the period year-to-date internally
prepared by Mississippi One, and such other monthly statements as
CoBank may specifically request, which monthly statements shall
include any and all supplements thereto.
(3) FINANCIAL FORECAST. As soon as available,
but in no event later than 90 days after the first day of each fiscal
year of the Borrower, a one-year financial forecast for Mississippi
One which shall include, without limitation, statements of income,
balance sheets, statements of sources and uses of funds, capital
expenditure projections and such other information as CoBank shall
reasonably require for each such one-year period.
(4) NOTICE OF DEFAULT. Promptly after becoming
aware thereof, notice of (a) the occurrence of any Default or Event of
Default under any of the
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Loan Documents; and (b) the occurrence of any breach, default, event
of default, or other event which with the giving of notice or lapse of
time, or both, could become a breach, default, or event of default
under any agreement, indenture, mortgage, or other instrument (other
than the Loan Documents) to which it is a party or by which it or any
of its property is bound or affected if the effect of such breach,
default, event of default, or other event is to accelerate, or to
permit the acceleration of, the maturity of any indebtedness under
such agreement, indenture, mortgage, or other instrument; provided,
however, that the failure to give such notice shall not affect the
right and power of CoBank to exercise any and all of the remedies
specified herein.
(5) NOTICE OF NON-ENVIRONMENTAL LITIGATION.
Promptly after the commencement thereof, notice of the commencement of
all actions, suits, or proceedings before any court, arbitrator, or
governmental department, commission, board, bureau, agency, or
instrumentality affecting it which could have a Material Adverse
Effect on Mississippi One.
(6) NOTICE OF ENVIRONMENTAL LITIGATION.
Without limiting the provisions of Paragraph 5 above, promptly after
receipt or becoming aware thereof, notice of the receipt of all
pleadings, orders, complaints, indictments, or other communications
alleging a condition that may require it to undertake or to contribute
to a cleanup or other response under Laws relating to environmental
protection, or which seeks penalties, damages, injunctive relief, or
criminal sanctions related to alleged violations of such Laws, or
which claims personal injury or property damage to any person as a
result of environmental factors or conditions or which could have a
Material Adverse Effect on Mississippi One.
(7) REGULATORY AND OTHER NOTICES. Promptly
after filing, receipt or becoming aware thereof, copies of any filings
or communications sent to and notices or other communications received
by Mississippi One from any governmental authority, including, without
limitation, the LPSC, the MPSC, the APSC, the FCC, and the SEC,
relating to any noncompliance by Mississippi One with any Law or with
respect to any matter or proceeding the effect of which could have a
Material Adverse Effect on Mississippi One.
(8) MATERIAL ADVERSE CHANGE. Prompt notice of
any matter which has had or could have a Material Adverse Effect on
Mississippi One.
(9) COMPLIANCE CERTIFICATES. Concurrently with
each statement required to be furnished pursuant to Paragraph (1) or
(2) above, a certificate in the
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form attached hereto as Exhibit A to the Loan Agreement executed by
the chief accounting officer of Mississippi One.
(10) ERISA REPORTABLE EVENTS. Within 10 days
after it becomes aware of the occurrence of any Reportable Event (as
defined in Section 4043 of ERISA) applicable to Mississippi One, a
statement describing such Reportable Event and the actions it proposes
to take in response to such Reportable Event.
(11) OTHER INFORMATION. Such other information
regarding the condition, financial or otherwise, or operations of
Mississippi One as CoBank may, from time to time, reasonably request.
SECTION 7. NEGATIVE COVENANTS. Unless otherwise agreed to in
writing by CoBank, Mississippi One covenants and agrees with CoBank that, so
long as this Guaranty shall remain in effect or the Obligations shall be unpaid
or otherwise unsatisfied, Mississippi One will not:
(A) BORROWINGS. Create, incur, assume, or allow to
exist, directly or indirectly, any indebtedness or liability for borrowed
money, for the deferred purchase price of property or services, or for the
lease of real or personal property which lease is required to be capitalized
under GAAP or which is treated as an operating lease under regulations
applicable to it but which otherwise would be required to be capitalized under
GAAP (a "Capital Lease"), except for (i) obligations to the Borrower for the
reloan of the proceeds of the Loan as contemplated by the Loan Agreement, (ii)
accounts payable to trade creditors and current operating liabilities (other
than for borrowed money) incurred in the ordinary course of its business, (iii)
Capital Leases, the aggregate amount of which for Mississippi One does not
exceed $50,000 at any one time; and (iv) the Cameron Debt.
(B) LIENS. Create, incur, assume, or allow to exist
any mortgage, deed of trust, deed to secure debt, pledge, lien (including the
lien of an attachment, judgment, or execution), security interest, or other
encumbrance of any kind upon any of its property, real or personal. The
foregoing restrictions shall not apply to (i) liens in favor of CoBank; (ii)
liens for taxes, assessments, or governmental charges that are not past due,
unless the same are being contested in good faith and by appropriate
proceedings and then only to the extent adequate reserves have been set aside
therefor; (iii) liens, pledges, and deposits under workers' compensation,
unemployment insurance, and social security laws; (iv) liens, deposits, and
pledges to secure the performance of bids, tenders, contracts (other than
contracts for the payment of money), and like obligations arising in the
ordinary course of its business as conducted on the date hereof; (v) liens
imposed by law in favor of mechanics,
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materialmen, warehousemen, lessors and like persons that secure obligations
that are not past due, unless the same are being contested in good faith and by
appropriate proceedings and then only to the extent adequate reserves have been
set aside therefor; and (vi) liens in favor of Cameron Telephone and
subordinated to all liens in favor of CoBank, which subordination shall be on
terms and conditions satisfactory to CoBank.
(C) MERGERS; ACQUISITIONS; ETC. Merge or consolidate
with any other entity, or acquire all or substantially all of the assets of any
person or entity, or form or create any subsidiary, or commence operations
under any other name, organization, or entity, including any joint venture.
(D) TRANSFER OF ASSETS. Sell, transfer, lease, enter
into any contract for the sale, transfer or lease of, or otherwise dispose of,
any of its assets, except in the ordinary course of its business.
(E) LOANS AND INVESTMENTS. After the date hereof, make
any loan or advance to, invest in, purchase or make any commitment to purchase
any commercial paper, stock, bonds, notes, or other securities of any person or
entity (each, whether made directly or indirectly, an "Investment") in an
amount in excess of $100,000 as to any single Investment or in excess of
$1,000,000 as to all Investments existing at any time, other than (i)
securities or deposits issued, guaranteed or fully insured as to payment by the
United States of America or any agency thereof, (ii) stock or other securities
of CoBank, (iii) commercial paper, stocks, bonds, notes or other securities of
institutions whose senior unsecured debt obligations are rated by a nationally
recognized rating organization in any of its three highest rating categories or
any equivalent successor rating categories, or (iv) mutual funds that have a
four star rating by Morningstar Mutual Funds, 225 West Wacker Drive, Chicago,
Illinois 60606, or an equivalent rating by a nationally recognized rating
organization.
(F) GUARANTEES. Guarantee, assume, or otherwise become
obligated or liable with respect to the indebtedness or other obligations of
any person or entity.
(G) CHANGE IN BUSINESS. Engage in any business
activity or operation different from or unrelated to its current business
activities or operations.
(H) DISPOSITION OF LICENSES. Sell, assign, transfer or
otherwise dispose of, or attempt to dispose of, in any way, any registrations,
licenses, franchises, grants, permits or other governmental approvals.
-16-
<PAGE> 17
Amended and Restated Continuing
Guaranty/Mississippi One
Loan No. T0310
Loan No. T0347
(I) DIVIDENDS; MANAGEMENT FEES. Make, declare or pay,
directly or indirectly, any dividend or other distribution of assets to
shareholders of Mississippi One, retire, redeem, purchase or otherwise acquire
for value any capital stock of Mississippi One or, if a Default, Event of
Default or a breach of any covenant or obligation of any of the Borrower or
Mississippi One under any of the Loan Documents then exists or would occur as
the result thereof, pay any management fees to any of its affiliates,
including, without limitation, Mercury.
(J) SALARIES; WAGES; COMPENSATION. Pay any wages,
salaries or other compensation to any officer, director, stockholder (or
relative thereof) of Mississippi One unless such compensation shall be (i)
reasonable and comparable with compensation paid by companies of like nature,
similarly situated, and (ii) payment for services actually rendered.
SECTION 8. MISCELLANEOUS.
(A) GOVERNING LAW. Except to the extent governed by
applicable federal law, this Guaranty shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
(B) BINDING EFFECT. This Guaranty shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns, including any holder or owner of the Notes or any other
Loan Document.
(C) SEVERABILITY. If any one or more of the provisions
contained herein shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Guaranty, but this Guaranty shall
be construed as if such invalid, illegal or unenforceable provision had not
been contained herein.
(D) NON-WAIVER; MODIFICATION; ELECTION OF REMEDIES.
The failure of CoBank to insist, in any one or more instances, upon a strict
performance of any of the terms and conditions of this Guaranty, or to exercise
or fail to exercise any option or right contained herein, shall not be
construed as a waiver or a relinquishment for the future of such right or
option, but the same shall continue and remain in full force and effect.
CoBank's knowledge of the breach of any term or condition hereof shall not be
deemed a waiver of such breach, and no waiver by CoBank of any provision hereof
shall be deemed to have been made, or operate as an estoppel, unless expressed
in writing and signed by CoBank. No enforcement of any remedy shall constitute
an election of remedies.
-17-
<PAGE> 18
Amended and Restated Continuing
Guaranty/Mississippi One
Loan No. T0310
Loan No. T0347
(E) NOTICES. All notices hereunder shall be made, and
shall be deemed to be duly given if made, in the manner provided for notices
under Section 19 of the Loan Agreement, to the parties at the following
addresses (or such other address for a party as shall be specified by like
notice):
If to Mississippi One, as follows:
Mississippi One Cellular Telephone Company
P.O. Box 3709
Lake Charles, Louisiana 70602
Attn: Dusty Dumas; cc: Thomas G. Henning
Fax No.: (318) 439-0769
If to CoBank, as follows:
CoBank, ACB
200 Galleria Parkway
Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No.: (770) 618-3202
(F) REGULATORY APPROVALS. Upon any action by CoBank to
commence the exercise of remedies hereunder or under the Mississippi One Deed
of Trust, the Mississippi One Security Agreement or the Mercury Pledge
Agreement, Mississippi One hereby undertakes and agrees to cooperate and join
with CoBank in any application to the LPSC, the MPSC, the APSC, the FCC, the
SEC or any other regulatory body, administrative agency, court or other forum
(any such entity, a "Governmental Authority") with respect thereto and to
provide such assistance in connection therewith as CoBank may request,
including, without limitation, the preparation of filings and appearances of
officers and employees of Mississippi One before such Governmental Authority,
in each case in support of any such application made by CoBank, and Mississippi
One shall not, directly or indirectly, oppose any such action by CoBank before
any such Governmental Authority.
SECTION 9. CONSENT TO JURISDICTION; REGISTERED AGENT. To the
maximum extent permitted by law, Mississippi One agrees that any legal action
or proceeding with respect to this Guaranty or any other Loan Document may be
brought in the courts of the State of Louisiana or of the United States of
America for the Western District of Louisiana, all as CoBank may elect. By
execution of this Guaranty, Mississippi One hereby irrevocably submits to each
such jurisdiction, expressly waiving any objection it may have to the laying of
venue by reason of its present or future domicile. Nothing contained herein
shall affect
-18-
<PAGE> 19
Amended and Restated Continuing
Guaranty/Mississippi One
Loan No. T0310
Loan No. T0347
the right of CoBank to commence legal proceedings or otherwise proceed against
Mississippi One in any other jurisdiction or to serve process in any manner
permitted or required by law. Mississippi One further agrees to maintain a
registered agent in the State of Louisiana and will notify CoBank in writing of
such registered agent's name and address and of any changes in such name or
address.
[Signatures on next page]
-19-
<PAGE> 20
Amended and Restated Continuing
Guaranty/Mississippi One
Loan No. T0310
Loan No. T0347
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below, by duly authorized officers of the respective parties,
after a reading of the whole.
At the City of Lake Charles, State of Louisiana, on May 15, 1996.
MISSISSIPPI ONE CELLULAR TELEPHONE
COMPANY
By: /s/ THOMAS G. HENNING
------------------------------------
Name: THOMAS G. HENNING
-------------------------------
Title: PRESIDENT
------------------------------
Attest: /s/ ROBERT PIPER
--------------------------------
Name: ROBERT PIPER
---------------------------
Title: SECRETARY
--------------------------
[CORPORATE SEAL]
Witness to both signatures:
/s/ SHELIA KING
- ---------------------------------------------
Witness
/s/ SHELLY F. VICKERS
- ---------------------------------------------
Witness
/s/ SANDRA L. DALLY
- ---------------------------------------------
Notary Public
My commission expires: LIFETIME COMMISSION
[NOTARIAL SEAL]
[Signatures continued on next page]
-20-
<PAGE> 21
Amended and Restated Continuing
Guaranty/Mississippi One
Loan No. T0310
Loan No. T0347
[Signatures continued from previous page]
At Atlanta, Georgia, on May 15, 1996
COBANK, ACB
By: /s/ MARY KAY DEERING
-----------------------------------------
Name: MARY KAY DEERING
-----------------------------------
Title: VICE PRESIDENT
-----------------------------------
Witness to the signature:
/s/ TIMOTHY W. HENRY
- ---------------------------------------------
Witness
/s/ ANNA T. APPLEBY
- ---------------------------------------------
Witness
/s/ SUSAN L. SOUTH
- ---------------------------------------------
Notary Public
My commission expires:
[NOTARIAL SEAL]
-21-
<PAGE> 1
EXHIBIT 4.3
LOAN NO. T0310
COBANK, ACB
AMENDED AND RESTATED PROMISSORY NOTE
CTC FINANCIAL, INC.
LAKE CHARLES, LOUISIANA
$17,400,000 DATED: MAY 15, 1996
FOR VALUE RECEIVED, CTC FINANCIAL, INC. (the "Borrower"), promises to
pay to the order of COBANK, ACB, formerly known as the National Bank for
Cooperatives (the "Payee"), at the times and in the manner set forth in that
certain Amended and Restated Loan Agreement, dated as of even date herewith,
and numbered Loan No. T0310, by and between the Borrower and the Payee, and as
that agreement may be amended, modified, supplemented, extended or restated
from time to time (the "Loan Agreement"), the principal sum of SEVENTEEN
MILLION FOUR HUNDRED THOUSAND DOLLARS ($17,400,000) or such lesser amount as
may be advanced hereunder, together with interest on the unpaid principal
balance hereof at the rate or rates provided for in the Loan Agreement.
This Note is given for one or more advances to be made by the Payee to
the Borrower pursuant to the Loan Agreement, all of the terms and provisions of
which are hereby incorporated by reference. This Note is given in substitution
for and supersedes and replaces that certain Promissory Note dated September
27, 1994 (the "Original Note"). This Note is not delivered in extinguishment
of the indebtedness evidenced by the Original Note and does not constitute a
novation of the Original Note, but is made to evidence indebtedness in the
principal amount of $2,393,575 outstanding under the Original Note as of the
date hereof and any additional indebtedness incurred or to be incurred by the
Borrower under the Loan Agreement. Advances, accrued interest and payments
shall be posted by the Payee upon an appropriate accounting record, which
record (and all computer printouts thereof) shall constitute prima facie
evidence of the outstanding principal and interest on the advances. The total
of such advances may exceed the face amount of this note but the unpaid
principal balance shall not at any time exceed such face amount. Any amount of
the principal hereof which is not paid when due, whether at stated maturity, by
acceleration or otherwise, shall bear interest from the date when due until
said principal amount is paid in full, payable on demand, at a rate per annum
set forth in the Loan Agreement.
The Borrower hereby waives presentment for payment, demand, protest,
and notice of dishonor and nonpayment of this Note, and all defenses on the
ground of delay or of any extension of time for the payment hereof which may be
hereafter given by the holder or holders hereof to it or to anyone who has
assumed the payment of this Note, and it is specifically agreed that the
obligations of the Borrower shall not be in anywise affected or altered
<PAGE> 2
Amended and Restated Promissory
Note/CTC Financial
Loan No. T0310
to the prejudice of the holder or holders hereof by reason of the assumption of
payment of the same by any other person or entity.
Should this Note be placed in the hands of an attorney for collection
or the services of any attorney become necessary in connection with enforcing
its provisions, the Borrower agrees to pay reasonable attorneys' fees, together
with all costs and expenses incident thereto, to the extent allowed by law.
Except to the extent governed by applicable federal law, this Note shall be
governed by and construed in accordance with the laws of the State of
Louisiana, without reference to choice of law doctrine.
IN WITNESS WHEREOF, the Borrower has caused this Amended and Restated
Promissory Note to be executed, attested, sealed and delivered by its duly
authorized officers as of the date first shown above.
CTC FINANCIAL, INC.
By: /s/ WILLIAM L. HENNING, JR.
----------------------------------------
[CORPORATE SEAL] Name: WILLIAM L. HENNING, JR.
----------------------------------
Title: PRESIDENT
----------------------------------
Attest: /s/ THOMAS G. HENNING
------------------------------------
Name: THOMAS G. HENNING
-------------------------------
Title: SECRETARY
------------------------------
-2-
<PAGE> 1
EXHIBIT 4.4
LOAN NO. T0310
LOAN NO. T0347
COBANK, ACB
FIRST AMENDMENT AND SUPPLEMENT TO SECURITY AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
BEFORE the respective undersigned Notaries Public, and in the presence
of the respective undersigned competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS FIRST AMENDMENT AND SUPPLEMENT TO SECURITY AGREEMENT (this "First
Amendment") is made and entered into as of May 15, 1996, by and between
MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY (the "Debtor") having its place of
business (or chief executive office if more than one place of business) located
at P.O. Box 3709, Lake Charles, Louisiana 70602 and whose taxpayer
identification number is 72-1265201, and COBANK, ACB, formerly known as the
National Bank for Cooperatives (the "Secured Party"), whose mailing address is
200 Galleria Parkway, Suite 1900, Atlanta, Georgia 30339.
RECITALS:
WHEREAS, CTC Financial, Inc. (the "Borrower") and the Secured Party
entered into that certain Loan Agreement, dated as of September 27, 1994 (the
"Original Loan Agreement"); and
WHEREAS, as security for the Borrower's obligations under the Original
Loan Agreement, the Secured Party executed and delivered that certain Security
Agreement, dated as of September 27, 1994 (the "Security Agreement"), pursuant
to which the Debtor granted to the Secured Party a first priority security
interest and lien on the property described therein; and
WHEREAS, the Borrower and the Secured Party are entering into (i) that
certain Amended and Restated Loan Agreement, dated as of even date herewith,
amending and restating the Original Loan Agreement and (ii) that certain Loan
Agreement, dated as of even date herewith (collectively, the "Additional Loan
Agreements"); and
<PAGE> 2
First Amendment to Security
Agreement/Mississippi One
Loan No. T0310
Loan No. T0347
WHEREAS, as an inducement to the Secured Party to enter into the
Additional Loan Agreements and to make the loans provided for therein, the
Debtor has agreed to amend the Security Agreement as herein provided;
NOW, THEREFORE, in consideration of the foregoing and the agreements
contained herein and intending to be legally bound hereby, the Debtor hereby
agrees with the Secured Party as follows:
1. Section 2 of the Security Agreement is hereby amended and
restated to read in its entirety as follows:
"The security interest granted hereunder shall secure the
following obligations (the "Obligations"): (a) all payments or
performances to be made by the Borrower under the "Loan Documents" (as
defined in that certain Amended and Restated Loan Agreement, dated as of
even date herewith, between the Borrower and CoBank (the "Mississippi
One Loan Agreement")), including, without limitation, the payment of all
principal, interest and other amounts becoming due and payable, whether
by acceleration or otherwise, under that certain Amended and Restated
Promissory Note, dated of even date herewith (the "Amended CoBank
Note"), made by the Borrower to the Secured Party in the original
principal face amount of $17,400,000 (as any such Loan Documents may be
amended, supplemented, modified, extended or restated from time to
time); (b) all payments or performances to be made by the Debtor under
the "Loan Documents" (as defined in the Mississippi One Loan Agreement),
including, without limitation, the payment of all principal, interest
and other amounts becoming due and payable, whether by acceleration or
otherwise, under that certain Amended and Restated Promissory Note,
dated of even date herewith (the "Mississippi One Note"), made by the
Debtor to the order of the Borrower, and assigned to the Secured Party,
in the original face principal amount of $17,400,000, and all payments
or performances under that certain Amended and Restated Continuing
Guaranty, dated as of even date herewith (the "Mississippi One
Guaranty"), made by the Debtor for the benefit of the Secured Party (as
any such Loan Documents may be amended, supplemented, modified, extended
or restated from time to time); (c) all payments or performances to be
made by Mercury, Inc. ("Mercury") under the "Loan Documents" (as defined
in the Mississippi One Loan Agreement), including, without limitation,
all payments and performances under that certain Continuing Guaranty
(the "Mercury Guaranty"), dated as of even date herewith, made by
Mercury for the benefit of the Secured Party (as any such Loan Documents
may be amended, supplemented, modified, extended or restated from time
to time); (d) all payments or performances to be made by the Borrower
under
-2-
<PAGE> 3
First Amendment to Security
Agreement/Mississippi One
Loan No. T0310
Loan No. T0347
the "Loan Documents" (as defined in that certain Loan Agreement, dated
as of even date herewith, between the Borrower and CoBank (the "Mercury
Loan Agreement")), including, without limitation, the payment of all
principal, interest and other amounts becoming due and payable, whether
by acceleration or otherwise, under that certain Promissory Note, dated
of even date herewith (the "CoBank Note"), made by the Borrower to the
Secured Party in the original principal face amount of $5,000,000 (as
any such Loan Documents may be amended, supplemented, modified, extended
or restated from time to time); (e) all payments or performance to be
made by the Debtor under the "Loan Documents" (as defined in the Mercury
Loan Agreement), including, without limitation, all payments or
performances under the Mississippi One Guaranty (as any such Loan
Documents may be amended, supplemented, modified, extended or restated
from time to time); (f) all payments or performances to be made by
Mercury under the "Loan Documents" (as defined in the Mercury Loan
Agreement), including, without limitation, the payment of all principal,
interest and other amounts becoming due and payable, whether by
acceleration or otherwise, under that certain Promissory Note, dated of
even date herewith (the "Mercury Note"; the Amended CoBank Note, the
Mississippi One Note, the CoBank Note and the Mercury Note,
collectively, the "Notes"), made by Mercury to the order of the
Borrower, and assigned to the Secured Party, in the original face
principal amount of $5,000,000, and all payments or performances under
the Mercury Guaranty (as any such Loan Documents may be amended,
modified, extended, renewed, reinstated or replaced from time to time);
and (g) the payment of all other indebtedness and the performance of all
other obligations of the Borrower, Mercury or the Debtor to the Secured
Party of every type and description, whether now existing or hereafter
arising, fixed or contingent, as primary obligor or as guarantor or
surety, acquired directly or by assignment or otherwise, liquidated or
unliquidated, regardless of how they arise or by what agreement or
instrument they may be evidenced, including, without limitation, all
loans, advances and other extensions of credit and all covenants,
agreements, and provisions contained in all loan and other agreements
between the parties."
2. The "Loan Documents" or a "Loan Document", when used in the
Security Agreement, shall mean the "Loan Documents" as defined in the
Additional Loan Documents.
3. Section 4 of the Security Agreement is hereby amended so as to
strike the phrase "(including, without limitation, the Loan Agreement, the
Notes and the Mississippi One Guaranty)" and substitute the phrase "(including,
without limitation, the Mississippi One
-3-
<PAGE> 4
First Amendment to Security
Agreement/Mississippi One
Loan No. T0310
Loan No. T0347
Loan Agreement, the Mercury Loan Agreement, the Notes, the Mississippi One
Guaranty and the Mercury Guaranty)".
4. Section 6(D) of the Security Agreement is hereby amended so as to
strike the phrase "(as defined in the Loan Agreement)" and substitute the
phrase "(as defined in the Mississippi One Loan Agreement)".
5. Section 6(G) of the Security Agreement is hereby amended and
restated to read in its entirety as follows:
"This Security Agreement, the Secured Party's security interest
in the Collateral, and all other documents or instruments contemplated
hereby shall continue in full force and effect until all of the
Obligations have been satisfied in full, each of the Mississippi One
Loan Agreement, the Mercury Loan Agreement, the Mississippi One Guaranty
and the Mercury Guaranty has been terminated in accordance with its
respective terms and the Debtor has sent a valid written demand to the
Secured Party for termination of this Security Agreement."
6. The introduction to Section 7(D) of the Security Agreement is
hereby amended and restated to read in its entirety as follows:
"(D) EVENT OF DEFAULT; REMEDIES. Upon the occurrence of any
Default hereunder, the Secured Party shall have the following rights and
remedies with respect to the Louisiana Collateral, which rights and
remedies are in addition to and are not in lieu or limitation of any
other rights and remedies that may be provided in this Security
Agreement, the Mississippi One Loan Agreement, the Mercury Loan
Agreement, the Mississippi One Guaranty, the Mercury Guaranty or any
related documents, under Chapter 9 of the Louisiana Commercial Laws (La.
R.S. Sections 10:9-101, et seq.), under the Uniform Commercial Code of
any state other than Louisiana, or at law or equity generally:"
7. The first sentence of Section 7(D)(3) is hereby amended and
restated to read in its entirety as follows:
"(3) Should any of the Louisiana Collateral be seized as an
incident to an action for the recognition or enforcement of the
Obligations or this Security Agreement, the Mississippi One Loan
Agreement, the Mercury Loan Agreement, the Mississippi One Guaranty, the
Mercury Guaranty or any related document, by executory process,
sequestration, attachment, writ of fieri facias or otherwise, the
-4-
<PAGE> 5
First Amendment to Security
Agreement/Mississippi One
Loan No. T0310
Loan No. T0347
Debtor agrees that the court issuing any such order shall, if requested
by the Secured Party, appoint the Secured Party or any person or entity
named by the Secured Party at the time such seizure is requested, or at
any time thereafter, as keeper of the Louisiana Collateral as provided
under La. R.S. Sections 9:5136, et seq."
8. Schedule A to the Security Agreement is hereby amended by
deleting it in its entirety and substituting in lieu thereof Schedule A
attached hereto.
9. After giving effect to the amendments to and restatement of the
Security Agreement set forth in this First Amendment, the representations and
warranties of the Debtor set forth in the Security Agreement are true and
correct as of the date hereof as if made on the date hereof.
10. It is the intention of the parties hereto that this First
Amendment shall not constitute a novation and shall in no way adversely affect
or impair (i) the validity of the "Loan Documents" (as defined in the
Additional Loan Agreements) or (ii) the validity or priority of the security
interest created by the Security Agreement, it being the intention of the
parties hereto merely to amend and restate the Security Agreement as expressly
set forth herein. To the extent not inconsistent herewith, all of the terms
and conditions of the Security Agreement shall remain in full force and effect
and are hereby ratified and confirmed by the Debtor.
11. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
12. This First Amendment shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
[Signatures on next page]
-5-
<PAGE> 6
First Amendment to Security
Agreement/Mississippi One
Loan No. T0310
Loan No. T0347
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
the duly authorized officers of the respective parishes, after a due reading of
the whole.
At Lake Charles, Louisiana, on May 15, 1996.
MISSISSIPPI ONE CELLULAR
TELEPHONE COMPANY
By: /s/ THOMAS G. HENNING
----------------------------------
Name: THOMAS G. HENNING
-----------------------------
Title: PRESIDENT
----------------------------
Attest: /s/ ROBERT PIPER
------------------------------
Name: ROBERT PIPER
-------------------------
Title: SECRETARY
------------------------
[CORPORATE SEAL]
Witnesses to all Signatures:
/s/ SHEILA KING
- -----------------------------------
Witness
/s/ SHELLY F. VICKERS
- -----------------------------------
Witness
/s/ SANDRA L. DALLY
- -----------------------------------
Notary Public
My commission expires: LIFETIME COMMISSION
-------------------
[NOTARIAL SEAL]
-6-
<PAGE> 7
First Amendment to Security
Agreement/Mississippi One
Loan No. T0310
Loan No. T0347
At Atlanta, Georgia on May 15, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
-----------------------------------
Name: MARY KAY DEERING
------------------------------
Title: VICE PRESIDENT
-----------------------------
Witnesses to Signature:
/s/ TIMOTHY W. HENRY
- -----------------------------------
Witness
[ILLEGIBLE]
- -----------------------------------
Witness
/s/ SUSAN L. SOUTH
- -----------------------------------
Notary Public
My commission expires: LIFETIME COMMISSION
-------------------
[NOTARIAL SEAL]
-7-
<PAGE> 8
SCHEDULE A
TO
SECURITY AGREEMENT
OF
MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY
1. Set forth below are the present locations (by county or parish
and state) of the Debtor's inventory and equipment:
Retail Store - Lafayette County, MS
Cell Site - Lafayette County, MS
Cell Site - Tate County, MS
Cell Site - Panola County, MS
Cell Site - Quitman County, MS
Cell Site - Tunica County, MS
Cell Site - Marshall County, MS
Cell Site - Coahoma County, MS
Office Site - Marengo, AL
Office Site - Fayette, AL
Cell Sites(2) - Pickens County, AL
Cell Site - Choctaw County, AL
Cell Site - Greene County, AL
Cell Site - Fayette County, AL
Cell Sites(2) - Marengo County, AL
Cell Site - Sumter County, AL
Cell Site - Lamar County, AL
2. Set forth below are the locations (by county or parish and
state) at which any of the Debtor's inventory and equipment has been located
within the past five years;
Retail Store - Lafayette County, MS
Cell Site - Lafayette County, MS
Cell Site - Tate County, MS
Cell Site - Panola County, MS
Cell Site - Quitman County, MS
Cell Site - Tunica County, MS
Cell Site - Marshall County, MS
Cell Site - Coahoma County, MS
Office Site - Marengo, AL
Office Site - Fayette, AL
Cell Sites(2) - Pickens County, AL
Cell Site - Choctaw County, AL
Cell Site - Greene County, AL
<PAGE> 9
Cell Site - Fayette County, AL
Cell Sites(2) - Marengo County, AL
Cell Site - Sumter County, AL
Cell Site - Lamar County, AL
3. Set forth below is a description of any exceptions to the
representation made in Section 3(E) of the Security Agreement:
None.
<PAGE> 1
EXHIBIT 4.5
CROSS REFERENCES:
LAFAYETTE COUNTY, MS - BOOK 628, PAGE 529
QUITMAN COUNTY, MS - BOOK 196, PAGE 834
TUNICA COUNTY, MS - BOOK 136, PAGE 343
PANOLA COUNTY, SECOND JUDICIAL DISTRICT, MS -
BOOK 617, PAGE 669
TATE COUNTY, MS - BOOK 411, PAGE 646
MARSHALL COUNTY, MS - BOOK 195, PAGE 622
LOAN NO. T0310
LOAN NO. T0347
FIRST AMENDMENT AND SUPPLEMENT TO DEED OF TRUST,
SECURITY AGREEMENT, AND FIXTURE FILING
FROM
MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY
TO
KAREN HAWKINS, TRUSTEE
FOR
COBANK, ACB
(FORMERLY KNOWN AS NATIONAL BANK FOR COOPERATIVES)
This instrument was prepared by, and after recording should be returned
to, Peter A. Fozzard, Esq., Sutherland, Asbill & Brennan, 999 Peachtree Street,
Atlanta, Georgia 30309, telephone (404) 853-8000.
This instrument, in addition to being a deed of trust on real property,
is a financing statement for goods that are or are to become fixtures related
to the real estate described herein, and should be appropriately indexed.
Mississippi One Cellular Telephone Company is the record lessee of the real
estate.
This instrument secures a line of credit used primarily for business,
commercial or agricultural purposes.
<PAGE> 2
This cover sheet is a part of this instrument and should be recorded
with it.
<PAGE> 3
Indexing Instruction: This instrument affects land located as follows:
Lafayette County - NE 1/4 of Section 25, Township 8 South, Range 4
West and SW 1/4 of Section 32, Township 8 South,
Range 3 West
Quitman County - SE 1/4 of Section 7, Township 27 North, Range 2
West
Tunica County - SW 1/4 of Section 5, Township 4 South, Range 11
West
Panola County - SW 1/4 of Section 27, Township 9 South, Range 7
West 2d Judicial District
Tate County - NE 1/4 of Section 16, Township 6 South, Range 7
West
Marshall County - SW 1/4 of Section 33, Township 3 South, Range 2
West
Coahoma County - NE 1/4 of Section 7, Township 30 North, Range 3
West
<PAGE> 4
FIRST AMENDMENT AND SUPPLEMENT TO DEED OF TRUST,
SECURITY AGREEMENT, AND FIXTURE FILING
THIS FIRST AMENDMENT AND SUPPLEMENT TO DEED OF TRUST, SECURITY
AGREEMENT, AND FIXTURE FILING (this "First Amendment") is made and entered into
as of May 15, by and between MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY, a
Louisiana corporation (the "Grantor"), and COBANK, ACB, a national banking
association (formerly known as National Bank for Cooperatives; the
"Beneficiary"), having an address at 200 Galleria Parkway, Suite 1900, Atlanta,
Georgia 30339;
RECITALS:
WHEREAS, CTC Financial, Inc. (the "Borrower") and the Beneficiary
entered into that certain Loan Agreement, dated as of September 27, 1994 (the
"Original Loan Agreement"); and
WHEREAS, as security for the Borrower's obligations under the Original
Loan Agreement, the Grantor executed and delivered that certain Deed of Trust,
Security Agreement and Fixture Filing, dated September 27, 1994 (the "Deed of
Trust"), pursuant to which the Grantor granted to the Beneficiary a first
priority security interest and lien on the real property described therein; and
WHEREAS, the Borrower and the Beneficiary are entering into (i) that
certain Amended and Restated Loan Agreement, dated as of even date herewith,
amending and restating the Original Loan Agreement and (ii) that certain Loan
Agreement, dated as of even date herewith (collectively, the "Additional Loan
Agreements"); and
WHEREAS, as an inducement to the Beneficiary to enter into the
Additional Loan Agreements and to make the loans provided for therein, the
Grantor has agreed to amend the Deed of Trust as herein provided; and
WHEREAS, by amendment to its charter documents, the Beneficiary has
changed its name from National Bank for Cooperatives to CoBank, ACB;
NOW, THEREFORE, in consideration of the foregoing and the agreements
contained herein and intending to be legally bound hereby, the Grantor hereby
agrees with the Beneficiary as follows:
1. The name of the Beneficiary in the Deed of Trust is changed to
"CoBank, ACB."
2. The "Background Statement" on pages 1 and 2 of the Deed of
Trust is hereby amended and restated to read in its entirety as follows:
<PAGE> 5
Loan No. T0310
Loan No. T0347
BACKGROUND STATEMENT
"The Borrower and the Beneficiary previously entered into that
certain Loan Agreement, dated as of September 27, 1994 (the "Original
Loan Agreement"), pursuant to which the Beneficiary agreed to loan to
the Borrower up to $3,800,000. The Borrower's obligation to repay
amounts advanced under the Original Loan Agreement is evidenced by a
Promissory Note dated as of September 27, 1994, made by the Borrower
in favor of the Beneficiary, having a final maturity date of December
20, 2002 (the "Original CoBank Note"). The proceeds of such loan were
reloaned by the Borrower to the Grantor for the purposes set forth in
the Original Loan Agreement. Such reloan is evidenced by that certain
Promissory Note dated as of September 27, 1994, made by the Grantor in
favor of the Borrower in the original principal amount of $3,800,000
and having a final maturity date of December 20, 2002 (the "Original
Note"), which Original Note has been assigned to the Beneficiary. As
a condition to the Beneficiary's obligation to advance funds under the
Original Loan Agreement, the Grantor executed and delivered that
certain Continuing Guaranty, dated as of September 27, 1994, in favor
of the Beneficiary (the "Original Guaranty"), guaranteeing the
"Obligations" (as defined in the Original Guaranty). As a further
condition to the obligation of the Beneficiary to advance funds under
the Original Loan Agreement, the Grantor executed and delivered that
certain Security Agreement, dated as of September 27, 1994, in favor
of the Beneficiary (the "Security Agreement") and this Deed of Trust
to secure the Grantor's performance under the Original Guaranty and
under the Original Note and to secure the Original CoBank Note.
The Borrower and the Beneficiary have now entered into that
certain Amended and Restated Loan Agreement, dated as of even date
herewith (the "Mississippi One Loan Agreement"), pursuant to which the
Original Loan Agreement was amended and restated to increase the
availability of the loan thereunder to $17,400,000. The Borrower's
obligation to repay amounts advanced under the Mississippi One Loan
Agreement is evidenced by an Amended and Restated Promissory Note
dated as of even date herewith, made by the Borrower in favor of the
Beneficiary, having a final maturity date of December 20, 2003 and
amending and restating the Original Note (said promissory note, as the
same may be amended, modified, supplemented, extended or restated from
-2-
<PAGE> 6
Loan No. T0310
Loan No. T0347
time to time is hereinafter referred to as the "Amended CoBank Note").
The proceeds of such loan are to be reloaned by the Borrower to the
Grantor for the purposes set forth in the Mississippi One Loan
Agreement. Such reloan is evidenced by that certain Amended and
Restated Promissory Note dated of even date herewith, made by the
Grantor in favor of the Borrower in the original principal amount of
$17,400,000 and having a final maturity date of December 20, 2003 and
amending and restating the Original Note (said promissory note, as the
same may be amended, modified, supplemented, extended or restated from
time to time is hereinafter referred to as the "Mississippi One
Note"), which Mississippi One Note has been assigned to the
Beneficiary. The Borrower and the Beneficiary have now also entered
into that certain Loan Agreement, dated as of even date herewith (the
"Mercury Loan Agreement"), pursuant to which the Beneficiary agreed to
loan the Borrower up to $5,000,000. The Borrower's obligation to
repay amounts advanced under the Mercury Loan Agreement is evidenced
by a Promissory Note dated of even date herewith, made by the Borrower
in favor of the Beneficiary, having a final maturity date as provided
in the Mercury Loan Agreement (said promissory note, as the same may
be amended, modified, supplemented, extended or restated from time to
time is hereinafter referred to as the "CoBank Note"). The proceeds
of such loan are to be reloaned by the Borrower to Mercury, Inc.
("Mercury") for the purposes set forth in the Mercury Loan Agreement.
Such reloan is evidenced by that certain Promissory Note dated of even
date herewith, made by Mercury in favor of the Borrower in the
original principal amount of $5,000,000 and having a final maturity
date as provided in the Mercury Loan Agreement (said promissory note,
as the same may be amended, modified, supplemented, extended or
restated from time to time is hereinafter referred to as the "Mercury
Note"), which Mercury Note has been assigned to the Beneficiary.
As conditions to the Beneficiary's obligation to advance funds
under the Mississippi One Loan Agreement and the Mercury Loan
Agreement: (a) the Grantor has executed and delivered that certain
Amended and Restated Continuing Guaranty, dated as of even date
herewith, in favor of the Beneficiary and amending and restating the
Original Guaranty (said guaranty, as the same may be amended,
modified, supplemented, extended, or restated from time to time is
hereinafter referred to as the "Mississippi One Guaranty"),
guaranteeing the "Obligations" (as defined in the Mississippi One
Guaranty); and (b) Mercury has executed and delivered that certain
Continuing Guaranty, dated as of even date herewith, in favor of the
Beneficiary (said guaranty, as the same may be amended, modified,
supplemented, extended, or restated from time to time is hereinafter
referred to as the "Mercury Guaranty"), guaranteeing the "Obligations"
(as defined in the Mercury Guaranty). As a further condition to the
Beneficiary's obligations to advance funds under the Mississippi One
Loan Agreement and the Mercury Loan Agreement, the Grantor has
executed and delivered that certain First Amendment and Supplement to
Security Agreement, dated as of even date herewith, in favor of the
Beneficiary (the Security Agreement, as amended, the "Amended Security
Agreement") and this Amendment to secure the Grantor's performance
under the Mississippi One Guaranty and the Mississippi One Note, and
to secure the Mercury Guaranty, the Mercury Note, the Amended CoBank
Note and the CoBank Note.
The Mississippi One Loan Agreement, the Mercury Loan
Agreement, the Amended Security Agreement, the Mississippi One
Guaranty, the Mercury Guaranty, the Mississippi
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<PAGE> 7
Loan No. T0310
Loan No. T0347
One Note, the Amended CoBank Note, the Mercury Note and the CoBank
Note, this Amendment, and all other instruments evidencing, securing
or otherwise relating to the indebtedness and obligations hereinabove
described are hereinafter referred to as the "Loan Documents.""
3. The first full paragraph on page 4 of the Deed of Trust is
hereby amended and restated to read in its entirety as follows:
"This Deed of Trust is given to secure the payment and
performance of the following described obligations (collectively, the
"Secured Obligations"): (a) all of the Grantor's obligations, whether
now existing or hereafter arising, under the Mississippi One Guaranty;
(b) all of the Grantor's obligations, whether now existing or
hereafter arising, under the Mississippi One Note; (c) all of
Mercury's obligations, whether now existing or hereafter arising,
under the Mercury Guaranty and the Mercury Note; (d) all of Borrower's
obligations, whether now existing or hereafter arising, under the
Mississippi One Loan Agreement, the Mercury Loan Agreement, the
Amended CoBank Note and the CoBank Note; (e) all advances,
re-advances, renewals, extensions, replacements, consolidations,
modifications, restatements and amendments of the Loan Documents and
of all such other sums, obligations and amounts (it being agreed no
such renewal, extension, consolidation, modification, restatement or
amendment shall affect the security title or priority hereof); and (f)
all other indebtedness and liabilities of the Borrower, Mercury or the
Grantor to the Beneficiary of every kind and description whatsoever,
whether now existing or hereafter arising, fixed or contingent, as
primary obligor or as guarantor or surety, acquired directly or by
assignment or otherwise, liquidated or unliquidated, regardless of how
they arise or by what agreement or instrument they may be evidenced,
including, without limitation, all loans, advances and other extension
of credit and all covenants, agreements, and provisions contained in
all loan and other agreements between the parties (it being agreed
that no such additional indebtedness shall affect the security title
or priority hereof)."
4. Exhibits A and B to the Deed of Trust are hereby amended by
adding to them the information set forth on Exhibits A-1 and B-1 attached to
this First Amendment, respectively.
5. The Grantor conveys and warrants to the Trustee and her
successors all of the Grantor's rights and interests in and to:
(a) that land leased by the Grantor located in Coahoma
County described in Exhibit A-1 (the "Coahoma Property") pursuant to
the lease of such land described in Exhibit B-1 (the "Leasehold
Lease");
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<PAGE> 8
Loan No. T0310
Loan No. T0347
(b) all Improvements (as defined in the Deed of Trust);
(c) all easements, rights-of-way, strips and gores of
land, streets, ways, alleys, passages, sewer rights, water rights and
powers, water courses, minerals, crops, timber and other emblements
now or hereafter located on the Coahoma Property or under or above the
same or any part or parcel thereof, and all estates, rights, titles,
interests, tenements, hereditaments and appurtenances, reversions and
remainders whatsoever, in any way belonging, relating or appertaining
to the Coahoma Property or any part thereof, or which hereafter shall
in any way belong, relate or be appurtenant thereto, whether now owned
or hereafter acquired by the Grantor;
(d) all easements, rights, rights-of-way, satellite
dishes, towers, equipment and all other personal property comprising
the utility system operated by the Grantor;
(e) all monies and proceeds from the Coahoma Property,
the Improvements and the Leasehold Lease, including, without
limitation, from leases, subleases, tenant contracts, rental
agreements, contracts, licenses, permits, rents, issues or profits,
including, but not limited, to all rents, refunds, rebates, tenant
reimbursements, condemnation awards and proceeds of the sale of,
insurance on or other borrowings secured in whole by any of the
Coahoma Property, the Improvements or the Leasehold Lease, or such
leases, subleases, tenant contracts, rental agreements, contracts,
licenses, permits, rents issues or profits; reserving only the right
to the Grantor (except as otherwise provided herein) to collect the
same so long as there is no Default (as defined in the Deed of Trust)
which shall have occurred and be continuing;
(f) all claims and causes of action arising from or
otherwise related to any of the foregoing, and all rights and
judgments related to any legal actions in connection with such claims
or causes of action, and all cash (or evidences of cash or of rights
to cash) or other property or rights thereto relating to such claims
or causes of action; and
(g) all other real property of every kind, nature and
description, and wheresoever located, now owned or leased or hereafter
acquired or leased by Grantor.
This conveyance of the property described above is in trust to secure prompt
payment of the obligations secured by the Deed of Trust and this First
Amendment and any and all other indebtedness and liabilities of the Borrower or
the Grantor to the Beneficiary of every kind and description whatsoever,
whether now existing or hereafter arising, fixed or contingent, as primary
obligor or as guarantor or surety, acquired directly or by assignment or
otherwise, liquidated or unliquidated, regardless of how they arise or by what
agreement or instrument they may be evidenced, including, without limitation,
all loans, advances and other extension of credit and all
-5-
<PAGE> 9
Loan No. T0310
Loan No. T0347
covenants, agreements, and provisions contained in all loan and other
agreements between the parties (it being agreed that no such additional
indebtedness shall affect the security title or priority hereof).
6. After giving effect to the amendments to and restatement of
the Deed of Trust set forth in this First Amendment, the representations and
warranties of the Grantor set forth in the Deed of Trust are true and correct
as of the date hereof as if made on the date hereof.
7. It is the intention of the parties hereto that this First
Amendment shall not constitute a novation and shall in no way adversely affect
or impair (i) the validity of the Loan Documents or (ii) the validity or
priority of the security interest created by the Deed of Trust, it being the
intention of the parties hereto merely to amend and restate the Deed of Trust
as expressly set forth herein. To the extent not inconsistent herewith, all of
the terms and conditions of the Deed of Trust shall remain in full force and
effect and are hereby ratified and confirmed by the Grantor.
8. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
9. This First Amendment shall be governed by and construed in
accordance with the laws of the State of Mississippi, without reference to
choice of law doctrine.
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<PAGE> 10
Loan No. T0310
Loan No. T0347
IN WITNESS WHEREOF, the Grantor and the Beneficiary, acting by and
through their duly authorized officers, have executed this instrument on the
date below their respective signatures, but effective on May 15, 1996.
MISSISSIPPI ONE CELLULAR
TELEPHONE COMPANY
By: /s/ THOMAS G. HENNING
-------------------------------------
Name: THOMAS G. HENNING
--------------------------------
Title: PRESIDENT
-------------------------------
Date: 7/8/96
--------------------------------
COBANK, ACB
By: /s/ THOMAS A. SMITH
-------------------------------------
Name: THOMAS A. SMITH
--------------------------------
Title: SR. V.P.
-------------------------------
Date: 7/24/96
-------------------------------
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<PAGE> 11
Loan No. T0310
Loan No. T0347
STATE OF LOUISIANA
COUNTY OF CALCASIEU
PERSONALLY APPEARED BEFORE ME, the undersigned authority in and for
the jurisdiction aforesaid, the within named THOMAS G. HENNING, who
acknowledged that s/he is the PRESIDENT of Mississippi One Cellular Telephone
Company, a Louisiana corporation, and that for and on behalf of said
Mississippi One Cellular Telephone Company and as its act and deed, s/he signed
and delivered the above and foregoing instrument of writing on the day and in
the year therein mentioned, after first having been duly authorized to do so.
WITNESS my hand and official seal in the county and state last
aforesaid, this 1st day of July, 1996.
/s/ SANDRA L. DALLY
---------------------------------------
Notary Public
My commission expires: LIFETIME COMMISSION
-------------------
[NOTARIAL SEAL]
-8-
<PAGE> 12
Loan No. T0310
Loan No. T0347
STATE OF GEORGIA
COUNTY OF DOUGLAS
PERSONALLY APPEARED BEFORE ME, the undersigned authority in and for
the jurisdiction aforesaid, the within named THOMAS A. SMITH, who acknowledged
that s/he is the Sr. V.P. of CoBank, ACB (formerly known as National Bank for
Cooperatives), a federally chartered bank, and that for and on behalf of said
bank and as its act and deed, s/he signed and delivered the above and foregoing
instrument of writing on the day and in the year therein mentioned, after first
having been duly authorized to do so.
WITNESS my hand and official seal in the county and state last
aforesaid, this 24th day of July.
/s/ SUSAN R. SOUTH
-------------------------------------
Notary Public
My commission expires:
---------------
[NOTARIAL SEAL]
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<PAGE> 13
Loan No. T0310
Loan No. T0347
EXHIBIT A-1
LEGAL DESCRIPTION LEASEHOLD PROPERTIES
Commencing at the northeast corner of Section 7, Township 30 North, Range 3
West, Coahoma County, Mississippi; thence
South 0 degrees 48'10" East, 2046.54 feet along the centerline of the
Ferry Landing Road; thence
North 88 degrees 32'00" West, 380.61 feet to the POINT OF BEGINNING
of the land herein described; thence
North 88 degrees 32'00" West, 502.29 feet to a point; thence
North 31 degrees 28'00" East, 502.29 feet to a point; thence
South 28 degrees 32'05" East, 502.29 feet to the POINT OF BEGINNING,
containing 2.51 acres, and all being in the northeast Quarter
of Section 7, Township 30
North, Range 3 West, in Coahoma County, Mississippi
Record Owner is Darrel Byrd.
<PAGE> 14
Loan No. T0310
Loan No. T0347
EXHIBIT B-1
LESSOR DATE OF LEASE COUNTY
------ ------------- ------
Darrel Byrd April 17, 1996 Coahoma
<PAGE> 1
EXHIBIT 4.6
LOAN NUMBER: T0310
T0347
MORTGAGE
THIS MORTGAGE (this "MORTGAGE"), is made and entered into as of May 15,
1996 by MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY (the "MORTGAGOR"), having
its place of business at P.O. Box 3709, Lake Charles, Louisiana 70602, to and
for the benefit of COBANK, ACB ("COBANK"), having an address at 200 Galleria
Parkway, Suite 1900, Atlanta, Georgia 30339;
W I T N E S S E T H:
WHEREAS, CoBank and CTC Financial, Inc. (the "BORROWER") have entered
into that certain Amended and Restated Loan Agreement, dated as of even date
herewith (as it may be amended, modified, supplemented, renewed, extended,
restated or replaced, from time to time, the "MISSISSIPPI ONE LOAN AGREEMENT"),
pursuant to which the Borrower has executed and delivered to CoBank an Amended
and Restated Promissory Note, dated of even date herewith in the original
principal amount of $17,400,000 (as it may be amended, modified, supplemented,
renewed, extended, restated or replaced, from time to time, the "AMENDED COBANK
NOTE"; the amounts loaned thereunder the "MISSISSIPPI ONE LOAN"); and
WHEREAS, the proceeds of the Mississippi One Loan are to be reloaned by
the Borrower to the Mortgagor, as evidenced by that certain Amended and
Restated Promissory Note dated as of even date herewith, made by the Mortgagor
in favor of the Borrower in the original principal amount of $17,400,000 (said
promissory note, as the same may be amended, modified, supplemented, extended
or restated from time to time is hereinafter referred to as the "MISSISSIPPI
ONE NOTE"), which Mississippi One Note has been assigned to CoBank; and
WHEREAS, CoBank and the Borrower have entered into that certain Loan
Agreement, dated as of even date herewith (as it may be amended, modified,
supplemented, renewed, extended, restated or replaced, from time to time, the
"MERCURY LOAN AGREEMENT"), pursuant to which the Borrower has executed and
delivered to CoBank a Promissory Note, dated of even date herewith in the
original principal amount of $5,000,000 (as it may be amended, modified,
supplemented, renewed, extended, restated or replaced, from time to time, the
"COBANK NOTE"; the amounts loaned thereunder the "MERCURY LOAN"); and
WHEREAS, the proceeds of the Mercury Loan are to be reloaned by the
Borrower to Mercury, Inc. ("MERCURY"), as evidenced by that certain Promissory
Note dated as of even date herewith, made by Mercury in favor of Borrower in
the original principal amount of $5,000,000 (said promissory note, as the same
may be amended, modified, supplemented, extended or restated from time to time
is hereinafter referred to as the "MERCURY NOTE"), which Mercury Note has been
assigned to CoBank; and
<PAGE> 2
Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
WHEREAS, as a condition to CoBank's obligation to advance funds under
the Mississippi One Loan Agreement and the Mercury Loan Agreement: (a) the
Mortgagor has executed and delivered that certain Continuing Guaranty, dated as
of even date herewith, in favor of CoBank (as the same may be amended,
modified, supplemented, extended, or restated from time to time, the
"MISSISSIPPI ONE GUARANTY"), guaranteeing the "Obligations" (as defined in the
Mississippi One Guaranty); (b) the Mortgagor has executed and delivered that
certain First Amendment and Supplement to Security Agreement, dated as of even
date herewith, amending that certain Security Agreement, dated as of September
27, 1994, in favor of CoBank (as the same may be amended, modified,
supplemented, extended, or restated from time to time, the "MISSISSIPPI ONE
SECURITY AGREEMENT"); (c) the Mortgagor has executed and delivered that certain
First Amendment and Supplement to Deed of Trust, Security Agreement and Fixture
Filing, dated as of even date herewith, amending that certain Deed of Trust,
Security Agreement and Fixture Filing, dated as of September 27, 1994, in favor
of CoBank (as the same may be amended, modified, supplemented, extended, or
restated from time to time, the "MISSISSIPPI ONE DEED OF TRUST"); (d) Mercury
has executed and delivered that certain Continuing Guaranty, dated as of even
date herewith, in favor of CoBank (as the same may be amended, modified,
supplemented, extended, or restated from time to time, the "MERCURY GUARANTY"),
guaranteeing the "Obligations" (as defined in the Mercury Guaranty); and (e)
Mercury has executed and delivered that certain First Amendment and Supplement
to Pledge Agreement, dated as of even date herewith, amending that certain
Pledge Agreement, dated as of September 27, 1994, in favor of CoBank (as the
same may be amended, modified, supplemented, extended, or restated from time to
time, the "MERCURY PLEDGE AGREEMENT"; this Mortgage, the Mississippi One Loan
Agreement, the Amended CoBank Note, the Mississippi One Note, the Mercury Loan
Agreement, the CoBank Note, the Mercury Note, the Mississippi One Guaranty, the
Mississippi One Security Agreement, the Mississippi One Deed of Trust, the
Mercury Guaranty, the Mercury Pledge Agreement and all other instruments
evidencing, securing or otherwise relating to the indebtedness created by the
Mississippi One Loan Agreement and the Mercury Loan Agreement are hereinafter
referred to as the "LOAN DOCUMENTS");
WHEREAS, to induce CoBank to make the extension of credit contemplated
by the Mississippi One Loan Agreement and the Mercury Loan Agreement, the
Mortgagor desires to grant to CoBank a lien in and to the Premises (as
hereinafter defined);
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the Mortgagor hereby agrees as follows:
1.1 FOR AND IN CONSIDERATION of the sum of $10.00 and other valuable
consideration, the receipt and sufficiency whereof are hereby acknowledged, and
in order to secure the full and prompt payment when due and performance of the
Secured
-2-
<PAGE> 3
Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
Obligations (as hereinafter defined), the Mortgagor does hereby grant, bargain,
sell, assign and convey over unto CoBank all right, title and interest of the
Mortgagor in and to the following described property (collectively, the
"PREMISES"):
(a) all those certain tracts, pieces or parcels of land (and
any easements, rights of way or other rights or interests in land)
leased by the Mortgagor located in the Counties of Pickens, Sumter,
Greene, Choctaw, Fayette, Marengo and Lamar, Alabama, including, without
limitation, those parcels described on EXHIBIT A hereto and made a part
hereof (the "REAL PROPERTY") pursuant to the leases described on Exhibit
B hereto and made a part hereof (collectively, the "LEASEHOLD LEASES");
(b) all buildings, structures and improvements of every nature
whatsoever now or hereafter situated on, under or above the Real
Property and all fixtures now or hereafter attached thereto and
equipment located thereon (excluding motor vehicles for which ownership
is required by law to be evidenced by certificates of title), all
telecommunications and radio transmitting and receiving equipment,
antennaes, microwave communication equipment, machinery, satellite
dishes, poles, posts, towers, cross-arms, conduits, ducts, lines
(whether overhead or underground or otherwise), wires, cables,
exchanges, switches, including, without limitation, host switches and
remote switches, desks, testboards, frames, racks, motors, generators,
batteries, central office equipment, pay stations, protectors,
subscriber equipment, instruments, connectors, connections, appliances,
and all other personal property located on the Real Property or
otherwise used, useful or acquired for use in connection with the
Mortgagor's business, including all accessions, replacements, or
substitutions thereof (the "IMPROVEMENTS");
(c) all easements, rights-of-way, strips and gores of land,
streets, ways, alleys, passages, sewer rights, water rights, minerals,
crops, timber and other emblements now or hereafter located on the Real
Property or under or above the same or any part or parcel thereof, and
all estates, rights, titles, interests, tenements, hereditaments and
appurtenances, reversions and remainders whatsoever, in any way
belonging, relating or appertaining to the Real Property or any part
thereof, or which hereafter shall in any way belong, relate or be
appurtenant thereto, whether now owned or hereafter acquired by the
Mortgagor (the "EASEMENTS AND APPURTENANCES"; together with the Real
Property, the Leasehold Leases and the Improvements, the "PROPERTY");
(d) all easements, rights, rights-of-way, satellite dishes,
towers, equipment and all other real and personal property comprising
the utility system of the Mortgagor;
-3-
<PAGE> 4
Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
(e) all right, title and interest of the Mortgagor in any and
all leases, rental agreements and arrangements of any sort now or
hereafter affecting the Property or any portion thereof and providing
for or resulting in the payment of money to the Mortgagor for the use of
the Property or any portion thereof, whether the user enjoys the
Property or any portion thereof as tenant for years, invitee, licensee,
tenant at sufferance or otherwise, and irrespective of whether such
leases, rental agreements and arrangements be oral or written, and
including any and all extensions, renewals and modifications thereof
(the "LEASES") and guaranties of the performance or Secured Obligations
of any tenants or lessees thereunder (the "TENANTS"), together with all
income, rents, issues, profits and revenues from the Leases (including
all tenant security deposits and all other tenant deposits, whether held
by the Mortgagor or in a trust account, and all other deposits and
escrow funds relating to any Leases), and all the estate, right, title,
interest, property, possession, claim and demand whatsoever at law, as
well as in equity, of the Mortgagor of, in and to the same; provided,
however, that although this Mortgage contains (and it is hereby agreed
that this Mortgage contains) a present, current, unconditional and
absolute assignment of all of said income, rents, issues, profits and
revenues, the Mortgagor and CoBank have agreed that so long as there
shall exist no Default (as hereinafter defined) the Mortgagor shall have
a revocable license to collect routine rental payments and revenues
which do not relate to periods more than one month after collection, it
being agreed that CoBank shall be entitled at all times to possession of
all other income, rents, issues, profits and revenues (including
deposits), and it being further agreed that upon the occurrence of a
Default hereunder such license shall be automatically revoked without
the necessity of further action by CoBank;
(f) all right, title and interest of the Mortgagor in any and
all awards, payments, proceeds and the right to receive the same, either
before or after any foreclosure hereunder, as a result of any temporary
or permanent injury or damage to, taking of or decrease in the value of
the Property by reason of casualty, condemnation or otherwise;
(g) all claims and causes of action arising from or otherwise
related to any of the foregoing, and all rights and judgments related to
any legal actions in connection with such claims or causes of action,
and all cash (or evidences of cash or of rights to cash) or other
property or rights thereto relating to such claims or causes of action;
(h) all other real property of every kind, nature and
description, and wheresoever located, now owned or leased or hereafter
acquired or leased by the Mortgagor; and
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(i) all extensions, additions, improvements, betterments,
renewals and replacements, substitutions, or proceeds of any of the
foregoing.
1.2 TO HAVE AND TO HOLD the Premises and all parts, rights, members
and appurtenances thereof forever. The Mortgagor covenants that the Mortgagor
is lawfully seized and possessed of the leasehold estates created by the
Leasehold Leases and has good right and is lawfully authorized to convey the
Premises, that the Premises are unencumbered by any liens or judgments except
for the matters set forth on EXHIBIT C hereto and made a part hereof (the
"PERMITTED TITLE EXCEPTIONS"), and the Mortgagor does warrant and will forever
defend the title thereto against the claims of all persons whomsoever, except
for the Permitted Title Exceptions. This Mortgage is a self-operative security
agreement with respect to the Premises and is intended to constitute a security
agreement as required under the Alabama Uniform Commercial Code, but the
Mortgagor agrees to execute and deliver on demand such other security
agreements, financing statements and other instruments as CoBank may request in
order to perfect its security interest or to impose the lien hereof more
specifically upon any of the Premises and CoBank shall have all the rights and
remedies of a secured party under the Alabama Uniform Commercial Code in
addition to those specified herein.
1.3 THIS MORTGAGE is given to secure the payment and performance of
the following described obligations (collectively, the "SECURED OBLIGATIONS"):
(a) all of the Mortgagor's obligations, whether now existing or hereafter
arising, under the Mississippi One Guaranty and the Mississippi One Note; (b)
all of Mercury's obligations, whether now existing or hereafter arising, under
the Mercury Guaranty and the Mercury Note; (d) all indebtedness and obligations
of the Borrower to CoBank, whether now existing or hereafter arising, under the
Mississippi One Loan Agreement, the Mercury Loan Agreement, the Amended CoBank
Note and the CoBank Note; (e) all advances, re-advances, renewals, extensions,
replacements, consolidations, modifications, restatements and amendments of the
Loan Documents and of all such other sums, obligations and amounts (it being
agreed no such renewal, extension, consolidation, modification, restatement or
amendment shall affect the security title or priority hereof); and (f) all
other indebtedness and liabilities of the Borrower, Mercury or the Mortgagor to
CoBank of every kind and description whatsoever, whether now existing or
hereafter arising, fixed or contingent, as primary obligor or as guarantor or
surety, acquired directly or by assignment or otherwise, liquidated or
unliquidated, regardless of how they arise or by what agreement or instrument
they may be evidenced, including, without limitation, all loans, advances and
other extension of credit and all covenants, agreements, and provisions
contained in all loan and other agreements between the parties (it being agreed
that no such additional indebtedness shall affect the security title or
priority hereof).
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1.4 SHOULD THE SECURED OBLIGATIONS BE PAID according to the tenor and
effect thereof when the same shall become due and payable, and should the
Mortgagor perform all covenants herein contained in a timely manner, then this
Mortgage and the conveyance effected and the liens granted hereby shall be
released and terminated and shall be cancelled and surrendered.
COVENANTS AND AGREEMENTS
2.1 PAYMENT OF SECURED OBLIGATIONS. The Mortgagor shall pay all
amounts due under the Secured Obligations promptly as the same shall become
due.
2.2 TAXES, LIENS AND OTHER CHARGES. The Mortgagor shall pay, on or
before the due date thereof, all (a) taxes, assessments, and other charges of
every character whatsoever now or hereafter levied on, assessed, placed or made
against the Secured Obligations, the Premises, this Mortgage, or any other Loan
Document, or any interest of CoBank in the Secured Obligations, the Premises or
the Loan Documents; (b) premiums on policies of insurance now or hereafter
covering the Premises, and any and all other insurance policies now or
hereafter collaterally pledged to CoBank; (c) ground rentals or other lease
rentals, if any, payable by the Mortgagor; (d) utility charges, whether public
or private; and (e) penalties and interest on any of the foregoing. The
Mortgagor will pay at the time this Mortgage is presented for recording all
recording taxes or fees, intangibles taxes, mortgage or stamp taxes or other
taxes or fees assessed against this Mortgage or the indebtedness secured
hereby. The Mortgagor will promptly pay any tax arising out of the passage of
any law, order, rule or regulation, subsequent to the date hereof, in any
manner changing or modifying the laws now in force governing the taxation of
mortgages or security agreements, or indebtedness secured thereby, or the
manner of collection thereof. The Mortgagor shall promptly deliver to CoBank
upon demand receipts showing timely payment in full of all of the above items.
2.3 INSURANCE AND CONDEMNATION.
2.3.1 The Mortgagor shall procure for, deliver to and maintain
for the benefit of CoBank during the term of this Mortgage, original, fully
paid insurance policies issued by such insurance companies, in such amounts,
form and substance, insuring such parties (including the Mortgagor and any
contractor performing work upon the Premises) and with such expiration dates as
required by the Mississippi One Loan Agreement and the Mercury Loan Agreement,
naming CoBank as mortgagee and loss payee with respect to all property
insurance and as an additional insured with respect to all liability insurance
except worker's compensation. The Mortgagor shall cause any builder's risk
insurance covering any
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improvements to the Premises to be replaced by permanent insurance promptly
upon completion of such improvements and without any lapse in coverage. At the
request of CoBank, the Mortgagor shall provide evidence satisfactory to CoBank
that all such insurance is in effect. If the Premises or any part thereof is
damaged by fire or any other cause, the Mortgagor will give immediate written
notice thereof to CoBank.
2.3.2 The Mortgagor shall notify CoBank immediately upon
obtaining knowledge of the institution, or the proposed, contemplated or
threatened institution, of any action for the taking through condemnation
(which term when used in this Mortgage shall include any damage or taking by
any governmental or quasi-governmental authority and any transfer by private
sale in lieu thereof) of the Premises or any part thereof.
2.3.3 CoBank shall be entitled to all compensation, awards and
other payments arising from any casualty, condemnation or damage to the
Premises or any portion thereof or to any other property of the Mortgagor and
to give receipts and acquittances therefor, and is hereby authorized, at its
option, to adjust or compromise any casualty, condemnation or damage claim or
cause of action, to commence, appear in and prosecute, in its own or in the
Mortgagor's name, any action or proceeding relating to any casualty,
condemnation or damage claim or cause of action, and to settle or compromise
any claim or cause of action in connection therewith. Each insurance company,
condemning authority or other party is hereby authorized and directed to make
payment for all such claims and causes of action directly to CoBank, instead of
to the Mortgagor and CoBank jointly. In the event any insurance company,
condemning authority or other party fails to disburse directly and solely to
CoBank to the extent herein required but disburses instead either solely to the
Mortgagor or to the Mortgagor and CoBank jointly, the Mortgagor agrees
immediately to endorse and transfer such payments to CoBank. Upon the failure
of the Mortgagor to endorse and transfer such payments as aforesaid, CoBank may
execute such endorsements or transfers for and in the name of the Mortgagor and
the Mortgagor hereby irrevocably appoints CoBank as the Mortgagor's agent and
attorney-in-fact so to do. CoBank shall not be responsible for any failure to
collect any insurance proceeds, any condemnation award or any other payment
relating to the Premises, regardless of the cause of such failure. After
deducting from any condemnation, insurance or other proceeds received by CoBank
all expenses of CoBank incurred in the collection and administration of such
sums, including attorney's fees, CoBank may apply the net proceeds or any part
thereof, at its option, to any one or more of the following: (i) the payment
of the Secured Obligations, whether or not due and in whatever order CoBank
elects, (ii) the repair, replacement or restoration of the Premises or any part
thereof, and (iii) any other purposes for which CoBank is entitled to advance
funds under this Mortgage, all without affecting the security interest created
by this Mortgage; and any balance of such moneys not applied by CoBank as
aforesaid shall be paid to the Mortgagor or the person or entity lawfully
entitled thereto. In the event that the
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Mortgagor receives any condemnation, insurance or other proceeds directly, it
shall apply them for the purposes described in clauses (i) and (ii) in the
immediately preceding sentence. In the event of the foreclosure of this
Mortgage or any other transfer of title to the Premises in extinguishment or
partial extinguishment of the Secured Obligations, all right, title and
interest of the Mortgagor in and to all insurance policies then in force
(including any premiums paid in advance), all insurance proceeds, all
condemnation proceeds and awards and all claims and judgments for damage to the
Premises or any portion thereof shall pass to the purchaser or CoBank, and said
purchaser or CoBank shall have the right to receive all awards, proceeds or
payments relating thereto to the extent of any unpaid Secured Obligations
following such sale, with legal interest thereon, whether or not a deficiency
judgment on this Mortgage or the Secured Obligations shall have been sought or
recovered, and to the extent of reasonable counsel fees, costs and
disbursements incurred by CoBank in connection with the collection of such
award, proceeds or payments.
2.4 LEASES. The Mortgagor shall (a) fulfill, perform and observe
each and every condition and covenant of landlord or lessor contained in each
of the Leases; (b) give prompt notice to CoBank of any claim of default or
notice of any event or condition which, with notice or passage of time or both,
would constitute a default under any of the Leases, whether given by or given
to the Mortgagor, together with a complete copy of any notice expressing such
claim; (c) at no cost or expense to CoBank, enforce, short of termination, the
performance and observance of each and every condition and covenant of each of
the parties under the Leases; (d) appear in and defend any action against any
one or more of the Mortgagor, CoBank, and the Premises arising out of, or in
any manner connected with, any of the Leases, or the obligations or liabilities
of any party thereto or any guarantor thereof; and (e) furnish to CoBank upon
demand copies of all Leases. The Mortgagor shall not, without the prior
written consent of CoBank, (i) enter into new Leases, except Leases for a term
of less than one (1) year (including renewals at the right of the lessee) in
connection with property not necessary to the operations of the Mortgagor; (ii)
modify any Leases; (iii) terminate or accept the surrender of any Leases; (iv)
waive or release any other party from the performance or observance of any
obligation or condition under any Leases; (v) give any consent to any
assignment or sublease by any Tenant under any of the Leases; (vi) permit the
prepayment of any rents under any of the Leases for more than one month prior
to the accrual thereof; or (vii) assign its interest in, to or under any Leases
or the rents, issues and profits from the Leases or from the Premises to any
person or entity other than CoBank, except as otherwise expressly permitted by
CoBank in writing. The Mortgagor shall take no action which will cause or
permit the estate of any Tenant under any of the Leases to merge with the
interest of the Mortgagor in the Premises or any portion thereof. The
Mortgagor shall and does hereby authorize and direct each and every present and
future Tenant of all or any part of the Premises to pay all rent (and any other
sums due the landlord under the Lease) to CoBank and to perform all other
obligations of that Tenant
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for the direct benefit of CoBank, as if CoBank were the landlord under the
Lease with that Tenant, immediately upon receipt of a demand by CoBank to make
such payment or perform such obligations, it being acknowledged that no such
demand by CoBank shall constitute or be deemed to constitute any assumption by
CoBank of any obligations of the landlord under such Lease. No Tenant shall
have any responsibility to ascertain whether such demand is permitted hereunder
or whether a default shall have occurred. The Mortgagor hereby waives any
right, claim or demand it may now or hereafter have against any such Tenant by
reason of such payment of rent or other sums or performance of obligations to
or for CoBank; and any such payment or performance to or for CoBank shall
discharge the obligations of the Tenant to make such payment or performance to
or for the Mortgagor.
2.5 OPERATION, CARE AND INSPECTION OF PREMISES. The Mortgagor shall
maintain the Premises in good condition and repair, shall not commit or suffer
any waste to the Premises or do or suffer to be done anything which would
increase the risk of casualty to the Premises or any part thereof or which
would result in the cancellation of any insurance policy carried with respect
to the Premises. The Mortgagor shall comply promptly with all applicable laws,
rules, ordinances, regulations, judgments, governmental determinations,
restrictive covenants and easements affecting the Premises or any part thereof
(the "REQUIREMENTS") and shall cause the Premises to comply at all times and
in all respects with all Requirements, and shall at all times operate the
Premises, and perform any construction of any portion thereof, in all respects
in accordance with all Requirements. The Mortgagor shall promptly repair,
restore or replace, to the extent and in a manner satisfactory to CoBank, any
part of the Premises which may be damaged by fire or other casualty or which
may be affected by any condemnation proceeding, provided that CoBank thereafter
makes available to the Mortgagor (pursuant to a procedure satisfactory to
CoBank) any net insurance or condemnation proceeds actually received by CoBank
in connection with such casualty, loss or condemnation, to the extent such
proceeds are required to defray the expense of such restoration, repair or
replacement; provided, however, that the insufficiency of or delay in receipt
by the Mortgagor of any such net proceeds shall in no way relieve the Mortgagor
of its obligation to promptly restore, repair or replace. CoBank and any
persons authorized by CoBank shall have the right at all reasonable times to
inspect the Premises, any improvements existing or being constructed thereon
and all materials used or to be used in such improvements; provided, however,
that nothing contained herein shall be deemed to impose upon CoBank any
obligation to undertake such inspections or any liability for the failure to
detect or failure to act with respect to any defect which was or might have
been disclosed by such inspections. Notwithstanding anything to the contrary
herein, no part of the Premises now or hereafter conveyed as security under
this Mortgage shall be removed, demolished or materially altered without the
prior written consent of CoBank.
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2.6 FURTHER ASSURANCES; AFTER-ACQUIRED PROPERTY. The Mortgagor
represents and warrants to CoBank that the property described on EXHIBIT A
constitutes all of the real property leased by the Mortgagor or in which it has
an interest located in the State of Alabama. The Mortgagor further represents
and warrants to CoBank that it does not currently own any real property located
in the State of Alabama in fee simple. The lien of this Mortgage shall attach
automatically, without further act, to all of the after acquired or leased
property used or intended to be used in connection with the operation of the
Mortgagor's business or otherwise. Without limiting the foregoing, the
Mortgagor will notify CoBank in writing promptly following the acquisition or
lease of any real property or any interest therein and will provide such
additional documents as CoBank may require pursuant to this Section 2.6. The
Mortgagor shall execute and deliver (and pay the costs of preparation and
recording thereof) to CoBank, upon demand, any further instrument or
instruments so as to extend the lien of this Mortgage to such after acquired or
leased property, to evidence, reaffirm, correct, perfect, continue or preserve
the obligations of the Mortgagor under the Loan Documents, the collateral at
any time securing or intended to secure the Secured Obligations, and the first
and prior legal security title and interest of CoBank to all or any part of the
Premises, whether now owned or hereafter acquired by the Mortgagor. Upon any
failure of the Mortgagor so to do, CoBank may make, execute, record, file,
re-record and/or re-file any and all such instruments for and in the name of
the Mortgagor, and the Mortgagor hereby irrevocably appoints CoBank the agent
and attorney-in-fact of the Mortgagor to do so.
2.7 EXPENSES. The Mortgagor will pay or reimburse CoBank, upon
demand therefor, for all costs and expenses of any kind (including, without
limitation, fees of attorneys, auditors, appraisers and inspectors) paid or
incurred by CoBank in connection with the collection of the Secured Obligations
or in connection with the collection of any insurance or other proceeds or
enforcement of any rights of CoBank under or relating to this Mortgage or the
other Loan Documents, including, without limitation, the costs of any suits or
proceedings or disputes of any kind in which CoBank is made or appears as a
party plaintiff or defendant or which are, in the judgment of CoBank, expedient
to preserve or protect its interest in the Premises (including, without
limitation, condemnation, insolvency, bankruptcy or probate proceedings,
administrative proceedings, proceedings relating to enforcement of laws or
regulations, forfeiture proceedings, and appeals at all levels of appeal,
whether before or after entry of judgment or other determination). The
Mortgagor will pay any and all interest and penalties owing on account of the
Secured Obligations or any one or more of the Loan Documents, including any
interest or penalties arising on account of failure or delay in payment of any
of the items referred to in this provision. All such costs, expenses,
penalties and interest paid or incurred by CoBank shall be added to the Secured
Obligations and shall be secured by this Mortgage.
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2.8 ENCUMBRANCE. Except as provided for in Section 1.2 hereinabove,
the Mortgagor shall not, without the prior written consent of CoBank, create,
incur, assume, or allow to exist any mortgage, deed of trust, deed to secure
debt, pledge, lien (including the lien of an attachment, judgment, or
execution), security interest, or other encumbrance of any kind upon any of the
Premises. The foregoing restrictions shall not apply to (a) liens in favor of
CoBank; (b) liens for taxes, assessments, or governmental charges that are not
past due; (c) liens, pledges, and deposits under workers' compensation,
unemployment insurance, and social security laws; (d) liens, deposits, and
pledges to secure the performance of bids, tenders, contracts (other than
contracts for the payment of money), and like obligations arising in the
ordinary course of its business as conducted on the date hereof; and (e) liens
imposed by law in favor of mechanics, materialmen, warehousemen and like
persons that secure obligations that are not past due.
2.9 CONVEYANCE. The Mortgagor shall not, without the prior written
consent of CoBank, sell, transfer, lease, or otherwise dispose of any of the
Premises, except as provided in the Loan Documents.
2.10 SECURITY AGREEMENT.
(a) The Mortgagor grants to CoBank a security interest in the
fixtures and goods and other property that are to become fixtures, equipment,
facilities, appliances, appurtenances, hardware, poles, posts, towers, cross-
arms, conduits, ducts, lines (whether overhead or underground or otherwise),
wires, cables, exchanges, switches, including, without limitation, host
switches and remote switches, desks, testboards, frames, racks, motors,
generators, batteries, central office equipment, pay stations, protectors,
subscriber instruments, connections, appliances, and all other personal
property referred to or described in this Mortgage, or in any way a part of or
connected with the use and enjoyment of the Premises. This Mortgage is hereby
made and declared to be a security agreement encumbering each and every item of
such property included herein as a part of the Premises, in compliance with the
provisions of the Uniform Commercial Code as enacted in the State of Alabama.
Upon request by CoBank, at any time and from time to time, a financing
statement or statements reciting this Mortgage to be a security agreement
affecting all of such property shall be executed by the Mortgagor and CoBank
and appropriately filed. This Mortgage is a fixture filing as well as a deed
of trust and a security agreement. The remedies for any violation of the
covenants, terms and conditions of the security agreement contained in this
Mortgage shall be (i) as prescribed herein, or (ii) as prescribed by general
law, or (iii) as prescribed by the specific statutory consequences now or
hereafter enacted and specified in said Uniform Commercial Code, all at
CoBank's sole election. The Mortgagor and CoBank agree that the filing of any
such financing statement or statements in the records normally having to do
with personal property shall not in any way affect the
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agreement of the Mortgagor and CoBank that everything owned by the Mortgagor
and used in connection with the production of income from the Premises or
adapted for use therein or which is described or reflected in this Mortgage is,
and at all times and for all purposes and in all proceedings, both legal and
equitable, shall be, regarded as part of the real estate conveyed hereby
regardless of whether (x) any such item is physically attached to the
improvements, (y) serial numbers are used for the better identification of
certain items capable of being thus identified in any exhibit to this Mortgage,
or (z) any such item is referred to or reflected in any such financing
statement or statements so filed at any time. Similarly, the mention in any
such financing statement or statements of the rights in and to (1) the proceeds
of any fire and/or hazard insurance policy, or (2) any award in eminent domain
proceedings for a taking or for loss of value, or (3) the Mortgagor's interest
as lessor in any present or future lease, sublease or rights to income growing
out of the use and/or occupancy of the Premises, whether pursuant to lease,
subleases or otherwise, shall not in any way alter any of the rights of CoBank
as determined by this Mortgage or affect the priority of CoBank's security
interest granted hereby or by any other recorded document. It is understood
and agreed that such mention in such financing statement or statements is
solely for the protection of CoBank in the event any court shall at any time
hold with respect to the foregoing clauses (1), (2) or (3) of this sentence,
that notice of CoBank's priority of interest, to be effective against a
particular class of persons, must be filed in the Uniform Commercial Code
records.
(b) The Mortgagor warrants that (i) the Mortgagor's (that is,
"Debtor's") name, identity or corporate structure and residence or principal
place of business are as set forth in paragraph (c) of this Section 2.10; (ii)
the Mortgagor (that is, "Debtor") has been using or operating under said name,
identity or corporate structure without change for the time period set forth in
paragraph (c) of this Section 2.10; and (iii) the location of the personal
property collateral described herein is upon the Real Property. The Mortgagor
covenants and agrees that the Mortgagor will furnish CoBank with notice of any
change in the matters addressed by clauses (i) or (iii) of this paragraph (b)
of this Section 2.10 within thirty (30) days of the effective date of any such
change and the Mortgagor will promptly execute any financing statements or
other instruments deemed necessary by CoBank to prevent any filed financial
statement from becoming misleading or losing its perfected status.
(c) The information contained in this paragraph (c) of this
Section 2.10 is provided in order that this Mortgage shall comply with the
requirements of the Uniform Commercial Code, as enacted in the State of
Alabama, for instruments to be filed as financing statements. The names of the
"Debtor" and the "Secured Party," the identity or corporate structure and
residence or principal place of business of "Debtor," and the time period for
which "Debtor" has been using or operating under said name and identity or
corporate structure without change, are as set forth in Schedule 1 of EXHIBIT D
attached
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hereto and by this reference made a part hereof; the mailing address of the
"Secured Party" from which information concerning the security interest may be
obtained, and the mailing address of "Debtor," are as set forth in Schedule 2
of said EXHIBIT D attached hereto; and a statement indicating the types, or
describing the items, of collateral is set forth hereinabove.
2.11 PROVISIONS REGARDING LEASEHOLD LEASES.
(a) The Mortgagor will duly and punctually perform and comply
with all of the terms of the Leasehold Leases required to be performed and
complied with by the lessee or tenant therein, and will do all things necessary
to keep unimpaired its right in and to the Leasehold Leases and to prevent any
default thereunder or forfeiture or impairment thereof. The Mortgagor will
not, except with the prior written consent of CoBank: (a) cancel, terminate or
surrender any Leasehold Lease, or consent to or accept any cancellation or
termination thereof, or permit any condition or event to exist which would
terminate or cancel the same or permit such termination or cancellation; (b)
materially amend, modify or otherwise change any term of any Leasehold Lease;
or (c) take any action in connection with any Leasehold Lease which would have
the effect of impairing the value of the Mortgagor's interest thereunder or of
the Premises, or of impairing the interest of CoBank therein; provided,
however, that the Mortgagor may do any of the foregoing without the prior
written consent of CoBank, in the ordinary course of its business so long as
(i) Grantor determines that such action is necessary or desirable in the
conduct of its business, (ii) no Default, or event which with the passage of
time or the giving of notice or both, could become a default, shall have
occurred and be continuing or shall occur as a result thereof and (iii) the
Mortgagor has substituted for such Leasehold Lease other property not
necessarily of the same character but of at least equal value to the Mortgagor
as such Leasehold Lease and subjected said substitute property to the lien
hereof. As further security for the repayment of the indebtedness secured
hereby and for the performance of the covenant herein and contained in the
Leasehold Leases, the Mortgagor hereby assigns to CoBank any and all of the
Mortgagor's rights, privileges and prerogatives as lessee or tenant under any
Leasehold Lease or otherwise to terminate, cancel, modify, change, supplement,
alter, amend, renew or extend such Leasehold Lease, or to purchase the Real
Property and any such termination, cancellation, modification, change,
supplement, alteration, amendment or extension of such Leasehold Lease or
purchase of such Real Property, without the prior and written consent thereto
by CoBank shall be void and of no force and effect. No release of or
forbearance to enforce any of the Mortgagor's obligations under any Leasehold
Lease, pursuant to such Leasehold Lease or otherwise, shall release the
Mortgagor from any of its obligations under this Mortgage, including, without
limitation, its obligations with respect to payment of rent as provided for in
such Leasehold Lease and the performance of all of the terms, provisions,
covenants, conditions and agreements
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contained in such Leasehold Lease, to be kept, performed and complied with by
the lessee or tenant therein. The Mortgagor shall cause each Leasehold Lease
to be renewed and to remain in effect or shall make other arrangements,
reasonably acceptable to CoBank, for the lease of substitute space prior to the
expiration of each such Leasehold Lease so long as any amount secured hereby
shall remain outstanding. The Mortgagor covenants and agrees that it shall
provide CoBank with written notice prior to leasing any such substitute space
and the Mortgagor shall take all steps necessary to subject the lease of such
substitute space to the lien of this Mortgage.
(b) The Mortgagor will deliver to CoBank, promptly upon receipt
thereof, copies of all notices, certificates, requests, demands and other
instruments furnished or delivered to or by the Mortgagor under any Leasehold
Lease in any way relating to such Leasehold Lease or the Mortgagor's interest
thereunder.
DEFAULT AND REMEDIES
3.1 DEFAULTS. The term "DEFAULT," wherever used in this Mortgage,
shall mean any one or more of the following events:
(a) the failure by the Mortgagor to pay when due any amount
due under or in connection with any of the Secured Obligations; or
(b) the Mortgagor shall violate, or fail to comply fully, with
all of the terms and conditions of this Mortgage; provided, however, if such
violation or failure is nonmonetary in nature, the Mortgagor shall have thirty
(30) days after receipt of written notice thereof from CoBank to cure such
violation or failure; or
(c) there shall occur or exist any Event of Default as defined
in the Mississippi One Loan Agreement or the Mercury Loan Agreement.
3.2 RIGHTS OF COBANK UPON DEFAULT. If a Default shall have occurred
and be continuing, then the entire Secured Obligations shall, at the option of
CoBank, immediately become due and payable without notice or demand, time being
of the essence, and CoBank, at its option, may do any one or more of the
following (and, if more than one, either concurrently or independently, and in
such order as CoBank may determine in its discretion), all without regard to
the adequacy or value of the security for the Secured Obligations:
3.2.1 Enter upon and take possession of the Premises without the
appointment of a receiver, or an application therefor; at its option, operate
the Premises;
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at its option, exclude the Mortgagor and its agents and employees wholly
therefrom; at its option, employ a managing agent of the Premises; and at its
option, exercise any one or more of the rights and powers of the Mortgagor to
the same extent as the Mortgagor could, either in its own name, or in the name
of the Mortgagor; and receive the rents, incomes, issues and profits of the
Premises. CoBank shall have no obligation to discharge any duties of a
landlord to any Tenant or to incur any liability as a result of any exercise by
CoBank of any rights hereunder; and CoBank shall not be liable for any failure
to collect rents, issues, profits or revenues, nor be liable to account for any
rents, issues, profits or revenues unless actually received by CoBank.
3.2.2 Apply, as a matter of strict right, without notice and
without regard to the solvency of any party bound for its payment or the value
of the Premises as security for the Secured Obligations, for the appointment of
a receiver to take possession of and to operate the Premises and to collect and
apply the incomes, rents, issues, profits and revenues thereof.
3.2.3 Pay, perform or observe any term, covenant or condition of
this Mortgage and any of the other Loan Documents and all payments made or
costs or expenses incurred by CoBank in connection therewith shall be secured
hereby and shall be, without demand, immediately repaid by the Mortgagor to
CoBank with interest thereon at the National Variable Rate (as defined in the
Mississippi One Loan Agreement) plus four percent (4.0%) (the "DEFAULT RATE").
The necessity for any such actions and the amounts to be paid shall be
determined by CoBank in its discretion. CoBank is hereby empowered to enter
and to authorize others to enter upon the Premises or any part thereof for the
purpose of performing or observing any such defaulted term, covenant or
condition without thereby becoming liable to the Mortgagor or any person in
possession holding under the Mortgagor. The Mortgagor hereby acknowledges and
agrees that the remedies set forth in this Subsection 3.2.3 shall be
exercisable by CoBank, and any and all payments made or costs or expenses
incurred by CoBank in connection therewith shall be secured hereby and shall
be, without demand, immediately repaid by the Mortgagor with interest thereon
at the Default Rate, notwithstanding the fact that such remedies were exercised
and such payments made and costs incurred by CoBank after the filing by the
Mortgagor of a voluntary case or the filing against the Mortgagor of an
involuntary case pursuant to or within the meaning of Bankruptcy Code, Title 11
U.S.C., or after any similar action pursuant to any other debtor relief law
(whether statutory, common law, case law or otherwise) of any jurisdiction
whatsoever, now or hereafter in effect, which may be or become applicable to
CoBank, Guarantor, the Secured Obligations or any of the Loan Documents. All
interest provided for in this Subsection 3.2.3 shall be payable on demand and
shall be calculated from the date such payment was due to the date paid on the
basis of a year consisting of 360 days.
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3.2.4 Sell the Premises or any part of the Premises at one or
more public sale or sales before the entrance of the courthouse in the county
in which the Real Property or any part of the Real Property is situated, at
public outcry for cash or credit, after first giving notice of the time, place
and terms of such sale by publication once a week for three (3) successive
weeks prior to such sale in the newspaper customarily used for such notices
published in such county in which such Real Property is located; and upon
receipt of the purchase money, CoBank, its agents or its attorneys, or any
person conducting such sale for CoBank, is authorized to execute to the
purchaser at such sale a deed to the property so purchased in the name of the
Mortgagor, and such purchaser shall not be held to inquire as to the
application of the proceeds of such sale. The presence of any portion of the
property constituting the property at the place of sale is expressly waived.
The Mortgagor hereby constitutes and appoints CoBank the agent and
attorney-in-fact of the Mortgagor to make such sale and conveyance, and thereby
to divest the Mortgagor of all right, title and equity that the Mortgagor may
have in and to the Premises and to vest the same in the purchaser or purchasers
at such sale or sales, and all the acts and doings of said agent and
attorney-in-fact are hereby ratified and confirmed, and any recitals in said
conveyance or conveyances as to facts essential to a valid sale shall be
binding upon the Mortgagor. The aforesaid power of sale and agency hereby
granted are coupled with an interest and are irrevocable by death or otherwise,
and shall not be exhausted by one exercise thereof but may be exercised until
full payment of all of the Secured Obligations. In the event of any sale under
this Mortgage by virtue of the exercise of the powers herein granted, or
pursuant to any order in any judicial proceeding or otherwise, the Premises may
be sold as an entirety or in separate parcels and in such manner or order as
CoBank in its discretion may elect, and one or more exercises of the powers
herein granted shall not extinguish nor exhaust such powers, until the entire
Premises are sold or the Secured Obligations are paid in full. CoBank may, at
its option, sell the Premises subject to the rights of any tenants of the
Premises, and the failure to make any such tenants parties to any foreclosure
proceedings and to foreclose their rights will not be asserted by the Mortgagor
to be a defense to any proceedings instituted by CoBank to collect the Secured
Obligations. If the Secured Obligations are now or hereafter further secured
by any chattel mortgages, pledges, contracts of guaranty, assignments of lease
or other security instruments, CoBank may at its option exhaust the remedies
granted under any of said security either concurrently or independently, and in
such order as CoBank may determine in its discretion. Upon any foreclosure
sale, CoBank may bid for and purchase the Premises and shall be entitled to
apply all or any part of the Secured Obligations as a credit to the purchase
price. In the event of any such foreclosure sale by CoBank, the Mortgagor
shall be deemed a tenant holding over and shall forthwith deliver possession to
the purchaser or purchasers at such sale or be summarily dispossessed according
to provisions of law applicable to tenants holding over. In case CoBank shall
have proceeded to enforce any right, power or remedy under this Mortgage by
foreclosure, entry or otherwise or in the event CoBank commences
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advertising of the intended exercise of the sale under power provided
hereunder, and such proceeding or advertisement shall have been withdrawn,
discontinued or abandoned for any reason, then in every such case (i) the
Mortgagor and CoBank shall be restored to their former positions and rights,
(ii) all rights, powers and remedies of CoBank shall continue as if no such
proceeding had been taken, (iii) each and every Default declared or occurring
prior or subsequent to such withdrawal, discontinuance or abandonment shall be
deemed to be a continuing Default, and (iv) neither this Mortgage, nor the
Secured Obligations, nor any other Loan Document shall be or shall be deemed to
have been reinstated or otherwise affected by such withdrawal, discontinuance
or abandonment; and the Mortgagor hereby expressly waives the benefit of any
statute or rule of law now provided, or which may hereafter be provided, which
would produce a result contrary to or in conflict with this sentence.
3.2.5 Upon the occurrence of a Default, CoBank shall, to the
extent permitted by applicable law, be entitled to the appointment of a
receiver, without notice to the Mortgagor, to enter upon and take and maintain
full control of the Premises in order to perform all acts necessary and
appropriate for the operation and maintenance thereof, including, but not
limited to, the execution, cancellation or modification of the Leasehold Leases
or any leases or subleases, the making of repairs to the Premises and the
execution or termination of contracts providing for the management or
maintenance of the Premises, all on such terms as are deemed best to protect
the security of this Deed of Trust. To the extent permitted by applicable law,
CoBank shall be entitled to the appointment of such receiver as a matter of
right, without regard to the value of the Premises as security for the Secured
Obligations or the solvency of the Mortgagor or any person or legal entity, if
any, which may be liable for the payment of all or any part of the Secured
Obligations. The receiver shall be entitled to receive a reasonable fee for so
managing the Premises. All rents collected pursuant to this paragraph shall be
applied first to the costs of taking control of and managing the Premises and
collecting the rents, including, but not limited to, attorney's fees,
receiver's fees, premiums on receiver's bonds, costs of repairs to the
Premises, premiums on insurance policies, taxes, assessments and other charges
on the Premises, and the costs of discharging any obligation or liability of
the Mortgagor as lessor or landlord of the Premises and then to the sums
secured by this Deed of Trust. CoBank or the receiver shall have access to the
books and records used in the operation and maintenance of the Premises and
shall be liable to account only for those rents actually received. CoBank
shall not be liable to the Mortgagor, anyone claiming under or through the
Mortgagor, or anyone having an interest in the Premises by reason of anything
done or left undone by the Mortgagor under this Section 3.2. If the rents of
the Premises are not sufficient to meet the costs of taking control of and
managing the Premises and collecting the rents, CoBank, at its sole option, may
advance moneys to meet the costs. Any funds expended by CoBank for such
purposes shall become indebtedness of the Mortgagor to CoBank secured by this
Deed
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of Trust. Unless CoBank and the Mortgagor agree in writing to other terms of
payment, such amounts shall be payable thereof and shall bear interest from the
date of disbursement at the Default Rate unless payment of interest at such
rate would be contrary to applicable law, in which event such amounts shall
bear interest at the highest rate which may be collected from the Mortgagor
under applicable law. The entering upon and taking and maintaining of control
of the Premises by CoBank or the receiver and the application of rents as
provided herein shall not cure or waive any default hereunder or invalidate any
other right or remedy of CoBank hereunder.
3.2.6 Proceed by a suit or suits in law or in equity or by any
other appropriate proceeding or remedy (a) to enforce payment of the Secured
Obligations or the performance of any term, covenant, condition or agreement of
this Mortgage or any of the other Loan Documents or any other right or (b) to
pursue any other remedy available to CoBank.
3.2.7 CoBank may apply any moneys and proceeds received by
CoBank as a result of the exercise by CoBank of any right conferred under this
Section 3.2 in such order as CoBank in its discretion may elect against (a) all
costs and expenses, including reasonable attorneys' fees, incurred in
connection with the operation of the Premises, the performance of the
Mortgagor's obligations under the Leases and the collection of the rents
thereunder; (b) all costs and expenses, including reasonable attorneys' fees,
incurred in the collection of any or all of the Secured Obligations, including
those incurred in seeking to realize on or to protect or preserve CoBank's
interest in any other collateral securing any or all of the Secured
Obligations; (c) any or all unpaid principal on the Secured Obligations; (c)
any other amounts owing under the Loan Documents; and (e) accrued interest and
charges on any or all of the foregoing. The remainder, if any, shall be paid
to the Mortgagor or any person or entity lawfully entitled thereto.
3.3 APPLICATION OF PROCEEDS OF SALE AND INCOME FROM MANAGEMENT. The
proceeds of any sale of the Premises or any part thereof or any interest
therein, whether pursuant to foreclosure or otherwise hereunder, and all
amounts received by CoBank by reason of any holding, operation or management of
the Premises or any part thereof, together with any other monies at the time
held by CoBank as part of the Premises, shall be applied as CoBank may
determine to pay:
(a) all costs and expenses of the sale of the Premises or any
part thereof or any interest in connection therewith, and all costs and
expenses of entering upon, taking possession of, removal from, holding,
operating and managing the Premises or any part thereof, as the case may be,
together with any taxes, assessments or other charges which CoBank may consider
it necessary or desirable to pay;
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(b) the payments, costs and expenses, if any, referred to in
Section 2.2 and Section 2.3 hereof;
(c) all amounts of principal, premiums, if any, and interest at
the time due and payable on the Amended CoBank Note, the CoBank Note, the
Mississippi One Note and the Mercury Note and under the other Loan Documents
(whether at maturity or on a date fixed for any installment payment or any
prepayment or upon acceleration after a default by the Mortgagor or otherwise);
and
(d) any other portions of the Secured Obligations.
The balance, if any, of such proceeds, amounts and monies shall be paid over to
the Mortgagor or as it may direct or as may be required by law.
3.4 SUBROGATION. To the full extent of the Secured Obligations, CoBank
is hereby subrogated to the liens, claims and demands, and to the rights of the
owners and holders of each and every lien, claim, demand and other encumbrance
on the Premises which is paid or satisfied, in whole or in part, out of the
proceeds of the Secured Obligations, and the respective liens, claims, demands
and other encumbrances shall be and each of them is hereby preserved and shall
pass to and be held by CoBank as additional collateral and further security for
the Secured Obligations, to the same extent they would have been preserved and
would have been passed to and held by CoBank had they been duly and legally
assigned, transferred, set over and delivered unto CoBank by assignment,
notwithstanding the fact that the same may be satisfied and cancelled of
record.
3.5 SEPARATE SALES. In the event of any sale under this Mortgage or
pursuant to any order in any judicial proceeding or otherwise, the Premises may
be sold as an entirety or in separate parcels in such manner or order as CoBank
in its sole discretion may elect; and if CoBank so elects it may sell or cause
to be sold the personal property collateral described herein at one or more
separate sales in any manner permitted by the Alabama Uniform Commercial Code;
and one or more exercises of the powers herein granted shall not extinguish nor
exhaust such powers, until the entire Premises are sold or the Secured
Obligations are paid in full. If the Secured Obligations are now or hereafter
further secured by any chattel mortgages, security agreements, pledges,
contracts of guaranty, assignments of lease or other security, CoBank may at
its option exhaust or cause to be exhausted the remedies granted under any of
said security, either concurrently or independently, and in such order as it
may determine.
3.6 RESTORATION OF PARTIES. In the event CoBank shall have proceeded
to enforce any right or remedy under this Mortgage, and such proceedings are
discontinued or
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abandoned for any reason, then CoBank and the Mortgagor shall immediately be
restored to their former positions and rights hereunder, and all rights, powers
and remedies of CoBank shall continue as if no such proceeding had taken place.
GENERAL CONDITIONS
4.1 NO WAIVER; REMEDIES CUMULATIVE. No delay or omission by CoBank
to exercise any right, power or remedy accruing upon any Default shall exhaust
or impair any such right, power or remedy or shall be construed to be a waiver
of any such Default, or acquiescence therein, and every right, power and remedy
given by this instrument to CoBank may be exercised from time to time and as
often as may be deemed expedient by CoBank. No consent or waiver, expressed or
implied, by CoBank to or of any Default shall be deemed or construed to be a
consent or waiver to or of any other Default. No delay, indulgence, departure,
act or omission by CoBank shall release, discharge, modify, change or otherwise
affect the original liability under the Loan Documents or any other obligation
of the Mortgagor or any subsequent purchaser of the Premises or any part
thereof, or any maker, surety or guarantor, or preclude CoBank from exercising
any right, privilege or power granted herein or alter the security title or
lien hereof. CoBank may at any time, without notice to or further consent from
the Mortgagor, surrender or substitute any property or other security of any
kind or nature whatsoever securing the Secured Obligations or release any
guarantor, and no such action will release the Mortgagor's obligations
hereunder or alter the effect hereof. No right, power or remedy conferred upon
or reserved to CoBank hereunder is intended to be exclusive of any other right,
power or remedy, but each and every such right, power and remedy shall be
cumulative and concurrent and shall be in addition to any other right, power
and remedy given hereunder or under the other Loan Documents or now or
hereafter existing at law, in equity or by statute.
4.2 REPLACEMENT OF LOAN DOCUMENTS. In the event of loss, theft,
destruction, total or partial obliteration, mutilation or inappropriate
cancellation of any of the instruments or agreements evidencing the Secured
Obligations, the Mortgagor will execute and deliver, in lieu thereof, a
replacement for such instrument or agreement, identical in form and substance
to such instrument or agreement and dated as of the date of such instrument or
agreement.
4.3 SURVIVAL OF CERTAIN AGREEMENTS. Notwithstanding the repayment of
the Secured Obligations and the cancellation or transfer of the Loan Documents,
or any foreclosure of, or sale under power contained in, this Mortgage, or the
acquisition by CoBank of title to the Premises in lieu of foreclosure, or any
other realization upon collateral securing the Secured Obligations, all
agreements of the Mortgagor contained
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herein or in any of the Secured Obligations to pay the costs and expenses of
CoBank in connection therewith and all agreements of the Mortgagor contained
herein or in any of the other Loan Documents or any other instrument or
agreement evidencing the Secured Obligations to indemnify and/or hold harmless
CoBank shall continue in full force and effect so long as there exists any
possibility of expense or liability on the part of CoBank.
4.4 NO OBLIGATION TO THIRD PARTIES. This Mortgage is made solely for
the benefit of CoBank. No tenant nor any party involved with the construction
of any improvements on any part of the Premises nor any other party whatsoever
shall have standing to bring any action against CoBank as the result of the
Loan Documents, or to assume that CoBank will exercise any remedies provided
herein, and no party other than CoBank shall be deemed to be a beneficiary of
any provision of this Mortgage, and any and all of which may be freely waived
in whole or in part by CoBank in its discretion at any time. Nothing contained
in the this Mortgage shall be deemed to impose upon CoBank any liability for
the performance of any obligation of the Mortgagor under any of the Leases.
Nothing contained in this Section 4.4 is intended to deprive the Mortgagor of
the benefit of any covenant by CoBank in favor of the Mortgagor contained in
the Loan Documents or any other instrument or agreement evidencing any of the
Secured Obligations.
4.5 MISCELLANEOUS. This Mortgage shall inure to the benefit of and
be binding upon the Mortgagor and CoBank and their respective successors,
successors-in-title and assigns, subject to all restrictions on transfer herein
or in the other Loan Documents. The Secured Obligations and this Mortgage (and
any interest therein) are assignable by CoBank, and any assignment of this
Mortgage by CoBank shall operate to vest in the assignee all rights and powers
conferred upon and granted to CoBank by this Mortgage; and, in the event of any
such assignment of the entire interest of CoBank in this Mortgage, CoBank shall
be relieved of all obligations and liabilities under this Mortgage; neither
this Mortgage nor the proceeds of the loan contemplated by this Mortgage may be
assigned by the Mortgagor without the prior consent of CoBank, which may be
given or withheld at the discretion of CoBank. This Mortgage may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against whom enforcement of such change, waiver, discharge or termination
is sought. Nothing contained in this Mortgage shall be construed to create an
agency, partnership or joint venture between the Mortgagor and CoBank. All
personal pronouns used in this Mortgage whether used in the masculine, feminine
or neuter gender, shall include all other genders; the singular shall include
the plural, and vice versa. Titles of articles and sections in this Mortgage
are for convenience only and in no way define, limit, amplify or describe the
scope or intent of any provisions thereof. When anything is described or
referred to in this Mortgage in general terms and one or more examples or
components of what has been described or referred to generally is associated
with that description (whether or not following the word "including"), the
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examples or components shall be deemed illustrative only and shall not be
construed as limiting the generality of the description or reference in any
way. Wherever in this Mortgage the approval or consent of CoBank is required
or permitted, or wherever a requirement of CoBank or the standard of
acceptability or satisfaction of CoBank must be determined, such approval,
consent or determination of CoBank shall not be unreasonably exercised;
provided, however, that wherever it is indicated that such approval, consent or
determination is to be given or made at the option or in the discretion or
judgment of CoBank, then CoBank may grant or withhold such approval or consent
or make such determination without restriction in its sole and absolute
discretion. If any provisions of this Mortgage or the application thereof to
any person or circumstance shall be invalid or unenforceable to any extent, the
remainder of each of this Mortgage and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law. Time is of the essence with
respect to each and every covenant, agreement and obligation of the Mortgagor
under this Mortgage. All exhibits referred to in this Mortgage are by such
reference incorporated into this Mortgage as if fully set forth therein.
4.6 NOTICES. All notices hereunder shall be in writing and shall be
deemed to be duly given upon delivery, if delivered by "Express Mail,"
overnight courier, messenger or other form of hand delivery or sent by telegram
or facsimile transmission, or three (3) days after mailing if sent by certified
or registered mail, to the parties at the following addresses (or such other
address for a party as shall be specified by like notice):
If to CoBank, as follows:
CoBank, ACB
200 Galleria Parkway, Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No.: (770) 618-3202
If to the Mortgagor, as follows:
Mississippi One Cellular Telephone Company
P. O. Box 3709
Lake Charles, Louisiana 70602
Attn: Dusty Dumas; cc: Thomas G. Henning
Fax No.: (318) 439-0769
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4.7 INDEMNITY. The Mortgagor shall protect, defend, indemnify and
save harmless CoBank from and against all liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses (including attorneys'
fees and expenses) imposed upon or incurred by CoBank by reason of (a) any
claim for brokerage fees or other such commissions relating to the Premises or
the Secured Obligations, or (b) the condition of the Premises, or (c) failure
to pay recording, mortgage, intangibles or similar taxes, fees or charges
relating to the Secured Obligations or any one or more of the Loan Documents,
or (d) the Loan Documents or any claim or demand whatsoever which may be
asserted against CoBank by reason of any alleged action, obligation or
undertaking of CoBank relating in any way to the Secured Obligations or to any
matter contemplated by the Loan Documents. Nothing contained in this Section
4.7 shall be construed to indemnify or hold harmless CoBank against liability
for damages arising out of bodily injury to persons or damage to property
caused by or resulting from the sole negligence of CoBank, its agents or
employees ("COBANK CAUSED BODILY INJURY OR PROPERTY DAMAGES"), which shall be
deemed an exception to the indemnity and hold harmless provision contained in
the immediately preceding sentence; provided, however, that such exception
shall be strictly limited to liability for CoBank Caused Bodily Injury or
Property Damages; and provided, further, that the Mortgagor assumes the burden
of proof that any liability for which CoBank claims the benefit of the
foregoing indemnity and hold harmless provision is, in fact, liability for
CoBank Caused Bodily Injury or Property Damages.
4.8 GREATER ESTATE. In the event that the Mortgagor is the owner of
a leasehold estate with respect to any portion of the Premises and the
Mortgagor obtains a fee estate in such portion of the Premises, then, such fee
estate shall automatically, and without further action of any kind on the part
of the Mortgagor, be and become subject to the security title and lien hereof.
4.9 NOTICE IN EVENT OF FORECLOSURE. In accordance with the
requirements of 47 C.F.R. 22.917 (1991), or any successor provision thereto,
CoBank shall notify the Mortgagor and the FCC in writing at least ten (10) days
prior to the date on which CoBank intends to exercise its rights pursuant to
this Mortgage by foreclosing on, or otherwise disposing of, any part of the
Premises.
4.10 APPLICABLE LAW. This Mortgage shall be interpreted, construed
and enforced according to the laws of the State of Alabama.
4.11 CONSENT TO JURISDICTION. The Mortgagor agrees that any legal
action or proceeding with respect to this Mortgage may be brought in the courts
of the State of Alabama or the United States of America in Alabama, all as
CoBank may elect. By execution of this Mortgage, the Mortgagor hereby submits
to each such jurisdiction, hereby expressly waiving any objection it may have
to the laying of venue by reason of its present
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or future domicile. Nothing herein shall affect the right of CoBank to
commence legal proceedings or otherwise proceed against the Mortgagor in any
other jurisdiction or to serve process in any manner permitted or required by
law.
ENVIRONMENTAL REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1 ENVIRONMENTAL REPRESENTATIONS, WARRANTIES AND COVENANTS. The
Mortgagor further makes the following representations, warranties, and
covenants, all of which are subject to any exceptions that the Mortgagor may
have previously disclosed in writing to CoBank, and which, to the extent that
they deal with representations of fact, are based on the Mortgagor's present
knowledge, arrived at after reasonable inquiry.
5.1.1 USE OF PROPERTY AND FACILITIES.
(i) The Mortgagor will (a) use, handle, transport or store
Hazardous Materials (as hereafter defined) as defined under any
Environmental Law (as hereafter defined) and (b) store or treat
nonhazardous wastes (1) in a good and prudent manner in the ordinary
course of business, and (2) in compliance with all applicable
Environmental Laws.
(ii) The Mortgagor will not conduct or allow to be conducted,
in violation of any Environmental Law, any business, operations or
activity on the Premises, or employ or use the property to generate,
use, handle, manufacture, treat, store, process, transport or dispose of
any Hazardous Materials, or any other substance which is prohibited,
controlled or regulated under applicable law, or which poses a threat or
nuisance to public safety, health or the environment or cause, or allow
to be caused, a known or suspected release of Hazardous Materials, on,
under or from the Premises.
(iii) The Mortgagor will not do or permit any act or thing,
business or operation, that poses an unreasonable risk of harm, or
impairs, or may impair the value of the Premises, or any part thereof.
5.1.2 CONDITION OF PROPERTY.
(i) The Mortgagor shall take all appropriate response action,
including any removal and remedial action, in the event of a release,
emission, discharge or disposal of Hazardous Materials in, on, under or
about the Premises, so as to remain in compliance with Environmental Law
as hereinafter defined.
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(ii) Underground tanks, wells (except domestic water wells),
septic tanks, ponds, pits, or any other storage tanks (whether currently
in use or abandoned) on the Premises, if any, are maintained in
compliance with applicable Environmental Law.
5.1.3 NOTICE OF ENVIRONMENTAL PROBLEM OR LITIGATION. Neither
the Mortgagor nor any of its tenants or landlords have given, nor were they
required to give, nor have they received, any notice, letter, citation, order,
warning, complaint, inquiry, claim or demand that: (a) the Mortgagor and/or any
tenants have violated, or are about to violate, any Environmental Law, judgment
or order; (b) there has been a release, or there is a threat of release, of
Hazardous Materials from the Premises; (c) the Mortgagor and/or any tenants may
be or are liable, in whole or in part, for the costs of cleaning up,
remediating, removing or responding to a release or threatened release of
Hazardous Materials; (d) the Premises are subject to a lien in favor of any
governmental entity or any liability, costs or damages, under any Environmental
Law arising from or costs incurred by such governmental entity in response to a
release or a threatened release of a Hazardous Material. The Mortgagor further
represents and warrants that no conditions currently exist or are currently
reasonably foreseeable, that would subject the Mortgagor to any such
investigation, litigation, administrative enforcement or any damages,
penalties, injunctive relief, or cleanup costs under any Environmental Law. In
the event of such notice, the Mortgagor and any tenants shall immediately
provide a copy to CoBank.
5.1.4 RIGHT OF INSPECTION. The Mortgagor hereby grants, and
will cause any tenants to grant, to CoBank, its agents, attorneys, employees,
consultants, contractors, successors and assigns, an irrevocable license and
authorization, upon reasonable notice, to enter upon and inspect the Premises
and facilities thereon, and perform such tests, including without limitation,
subsurface testing, soils and groundwater testing, and other tests which may
physically invade the property thereon, as CoBank, in its sole discretion,
determines are necessary to protect its security interest, provided, however,
that under no circumstances shall CoBank be obligated to perform such
inspections or tests.
5.1.5 INDEMNITY. The Mortgagor agrees to indemnity and hold
CoBank, its directors, employees, agents and its successors and assigns,
harmless from and against any and all claims, losses, damages, liabilities,
fines, penalties, charges, judgments, administrative orders, remedial action
requirements, enforcement actions of any kind, and all costs and expenses
incurred in connection therewith (including, but not limited to, attorney's
fees and expenses) arising directly or indirectly, in whole or in part, out of
any failure of the Mortgagor to comply with the environmental representations,
warranties and covenants contained herein.
-25-
<PAGE> 26
Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
5.1.6 CONTINUATION OF REPRESENTATIONS, WARRANTIES, COVENANTS
AND INDEMNITIES. The Mortgagor's representations, warranties, covenants and
indemnities contained herein shall survive the occurrence of any event
whatsoever, including without limitation, the satisfaction of the Secured
Obligations, the reconveyance or foreclosure of this Mortgage, the acceptance
by CoBank of a deed in lieu of foreclosure, or any transfer or abandonment of
the Premises.
5.1.7 CORRECTIVE ACTION. In the event the Mortgagor is in
breach of any of its representations, warranties or agreements as set forth
above, the Mortgagor at its sole expense, shall take all action required,
including environmental cleanup of the Premises, to comply with the
representations, warranties and covenants herein or applicable legal
requirements and, in any event, shall take all action deemed necessary under
all applicable Environmental Laws.
5.1.8 HAZARDOUS MATERIALS DEFINED. The term "HAZARDOUS
MATERIALS" shall mean dangerous, toxic, or hazardous pollutants, contaminants,
chemicals, wastes, materials or substances, as defined in or governed by the
provisions of any Environmental Law.
5.1.9 ENVIRONMENTAL LAW DEFINED. The term "ENVIRONMENTAL LAW"
shall mean any federal, state or local law, statute, ordinance, rule,
regulation, administrative order and permit now in effect or hereinafter
enacted, pertaining to the public health, safety, industrial hygiene, or the
environmental conditions on, under or about the property.
[Signatures follow on next page.]
-26-
<PAGE> 27
Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
IN WITNESS WHEREOF, the Mortgagor has executed this Mortgage under seal,
as of the day and year first above written.
MISSISSIPPI ONE CELLULAR
TELEPHONE COMPANY
By: /s/ THOMAS G. HENNING
-----------------------------------------
Name: THOMAS G. HENNING
------------------------------------
Title: PRESIDENT
-----------------------------------
Attest: /s/ ROBERT PIPER
-------------------------------------
Name: ROBERT PIPER
------------------------------------
Title: SECRETARY
-----------------------------------
[CORPORATE SEAL]
Signed, sealed and delivered
in the presence of:
/s/ SHEILA KING
- --------------------------------
Witness
/s/ SANDRA DALLY
- --------------------------------
Notary Public
Commission Expiration: LIFETIME COMMISSION
-------------------
[NOTARIAL SEAL]
This document prepared by:
Sutherland, Asbill & Brennan
999 Peachtree Street, Suite 2300
Atlanta, Georgia 30309-3996
-27-
<PAGE> 28
EXHIBIT B
LEASEHOLD LEASES
<TABLE>
<CAPTION>
LESSOR LEASE DATE COUNTY
------ ---------- ------
<S> <C> <C>
Charles A. & Robbie A. Davis 1-28-94 Pickens
Scott Paper Company 2-16-94 Choctaw
L-Square Land Company 9-22-93 Greene
John Cash & Ivalene Walden 5-1-94 Fayette
Leroy & Matty E. Hill 12-13-93 Marengo
Livingston University 2-25-92 Sumter
Board of Trustees
Charles B. McGahey 6-21-94 Pickens
Mr. J. L. Duckworth 4-5-94 Lamar
Fayette Center Associates, Ltd. 8-29-94 Fayette
Lowe Jewelry, Inc. 10-19-91 Marengo
L-Square Land Company 9-22-93 Marengo
</TABLE>
<PAGE> 29
EXHIBIT C
PERMITTED TITLE EXCEPTIONS
None
<PAGE> 30
EXHIBIT D
Schedule 1
(DESCRIPTION OF "DEBTOR" AND "SECURED PARTY")
A. Debtor
1. Name and Identity and Structure:
Mississippi One Cellular Telephone Company, a Louisiana
corporation.
2. The principal place of business of Debtor in the State of
Alabama is as follows:
Demopolis Office
932 Highway 80, East
Demopolis, Alabama
3. Debtor has been using or operating under said name and
identity or corporate structure without change since February,
1994.
B. Secured Party:
CoBank, ACB
200 Galleria Parkway, Suite 1900
Atlanta, Georgia 30339
<PAGE> 31
EXHIBIT D (continued)
SCHEDULE 2
(DESCRIPTION OF "DEBTOR" AND "SECURED PARTY")
(Notice of Mailing Addresses of "Debtor" and "Secured Party")
A. The mailing address of Debtor is:
Mississippi One Cellular Telephone Company
P. O. Box 3709
Lake Charles, Louisiana 70602
Attn: Dusty Dumas; cc: Thomas G. Henning
B. The mailing address of Secured Party is:
CoBank, ACB
200 Galleria Parkway, Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
<PAGE> 1
EXHIBIT 4.7
LOAN NO. T0347
LOAN NO. T0310
CONTINUING GUARANTY
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
BEFORE the undersigned Notary Public, and in the presence of the
undersigned competent witnesses, personally came and appeared the party listed
below, who, after being duly sworn, did state:
THIS CONTINUING GUARANTY (this "Guaranty") is made as of May 15, 1996,
made by MERCURY, INC. ("Mercury") for the benefit of COBANK, ACB ("CoBank").
R E C I T A L S:
WHEREAS, CoBank and CTC Financial, Inc., a Louisiana corporation (the
"Borrower"), have entered into that certain Amended and Restated Loan
Agreement, dated as of even date herewith (as the same may be amended,
modified, supplemented, extended or restated from time to time, the
"Mississippi One Loan Agreement"), providing for a loan of up to $17,400,000
(the "Mississippi One Loan"), and CoBank and the Borrower have entered into
that certain Loan Agreement, dated as of even date herewith (as the same may be
amended, modified, supplemented, extended or restated from time to time, the
"Mercury Loan Agreement"; the Mississippi One Loan Agreement and the Mercury
Loan Agreement, collectively, the "Loan Agreements"), providing for a loan of
up to $5,000,000 (the "Mercury Loan"; the Mississippi One Loan and the Mercury
Loan, collectively, the "Loans"); and
WHEREAS, the proceeds of the Loans have been or will be reloaned by
the Borrower to Mississippi One Cellular Telephone Company ("Mississippi One"),
or to Mercury for investment into Mississippi One, for the purposes set forth
in the Loan Agreements; and
WHEREAS, as an inducement to CoBank to enter into the Loan Agreements
and to make the Loans, Mercury has agreed to guarantee the Obligations (as
hereinafter defined);
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, Mercury hereby agrees as follows:
<PAGE> 2
Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
SECTION 1. DEFINITIONS. Capitalized terms used in this
Guaranty, unless otherwise defined herein, shall have the meanings assigned to
them in the Loan Agreements.
SECTION 2. OBLIGATIONS. "Obligations" shall mean (a) the
principal, interest and other amounts becoming due and payable, whether by
acceleration or otherwise, under that certain Amended and Restated Promissory
Note, dated of even date herewith, made by the Borrower to the order of CoBank
in the original principal face amount of $17,400,000 (such Promissory Note and
all amendments, modifications, extensions, renewals and replacements thereof,
the "CTC One Note"); (b) the principal, interest and other amounts becoming due
and payable, whether by acceleration or otherwise, under that certain
Promissory Note, dated of even date herewith, made by the Borrower to the order
of CoBank in the original principal face amount of $5,000,000 (such Promissory
Note and all amendments, modifications, extensions, renewals and replacements
thereof, the "CTC Two Note"); (c) the principal, interest and other amounts
becoming due and payable, whether by acceleration or otherwise, under that
certain Amended and Restated Promissory Note, dated of even date herewith, made
by Mississippi One to the order of the Borrower, assigned to CoBank, in the
original principal face amount of $17,400,000 (such Promissory Note and all
amendments, modifications, extensions, renewals and replacements thereof, the
"Mississippi One Note"; the CTC One Note, the CTC Two Note and the Mississippi
One Note, collectively, the "Notes"); (d) all other payments or performances to
be made by the Borrower and Mississippi One under the other Loan Documents to
which either is a party; and (e) all other indebtedness and liabilities of the
Borrower and Mississippi One to CoBank of every kind and description
whatsoever, whether now existing or hereafter arising, fixed or contingent, as
primary obligor or as guarantor or surety, acquired directly or by assignment
or otherwise, liquidated or unliquidated, regardless of how they arise or by
what agreement or instrument they may be evidenced, including, without
limitation, all loans, advances and other extensions of credit and all
covenants, agreements, and provisions contained in all loan and other
agreements between the parties.
SECTION 3. GUARANTY PROVISIONS.
(A) In consideration of the loans to be made by CoBank
to the Borrower pursuant to the Loan Agreement and for other good and valuable
consideration, the adequacy, sufficiency and receipt of which are hereby
acknowledged, Mercury hereby absolutely, unconditionally, directly,
irrevocably, completely and immediately guarantees the full and prompt payment,
when due, whether by acceleration or otherwise, and the prompt performance, of
the Obligations;
(B) Mercury further agrees to pay to CoBank, upon
demand, all losses and reasonable costs and expenses, including, without
limitation, reasonable attorneys' fees
-2-
<PAGE> 3
Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
and expenses, that may be incurred by CoBank in attempting to cause the
Obligations to be paid, performed or otherwise satisfied or in attempting to
cause satisfaction of Mercury's liability under this Guaranty or in attempting
to protect or preserve any property, personal or real, securing the
Obligations;
(C) Mercury agrees that this Guaranty shall continue
to be effective or be reinstated, as the case may be, if at any time any
payment by the Borrower, Mississippi One, William Henning, Sr. ("Mr. Henning")
or any other person to CoBank on account of the Obligations is rescinded or
must otherwise be returned or restored by CoBank upon the insolvency or
bankruptcy of the Borrower, Mississippi One, Mr. Henning or any other obligor,
guarantor, endorser or surety of the Obligations, all as though such payment
had not been made;
(D) Mercury assents to all terms and agreements
heretofore or hereafter made by the Borrower with CoBank;
(E) Mercury hereby consents to the following and
agrees, with or without notice (all notices being hereby waived), that its
liability will not be affected or impaired by (i) the exchange, release or
surrender of any collateral or any claim against the Borrower, Mississippi One,
Mr. Henning or any other person, or the waiver, release or subordination of any
security interest, in whole or in part; (ii) the waiver or delay in the
exercise of any of CoBank's rights or remedies against the Borrower,
Mississippi One, Mr. Henning or any other person; (iii) the renewal, extension
or modification of the terms or amounts of any of the Obligations, the Loan
Documents or any other instrument or agreement evidencing the same; or (iv) the
acceptance by CoBank of other guaranties;
(F) Mercury waives acceptance hereof, notice of
acceptance hereof, and notice of acceleration of and intention to accelerate
the Obligations, and waives presentment, demand, protest, notice of dishonor,
notice of default, notice of nonpayment or protest in relation to any
instrument evidencing any of the Obligations, and any other demands and notices
required by law except as such waiver may be expressly prohibited by law;
(G) This is a guaranty of payment and performance and
not of collection only. The liability of Mercury under this Guaranty shall be
absolute, unconditional, direct, irrevocable, complete and immediate and shall
not be contingent upon the pursuit of any remedies against the Borrower,
Mississippi One, Mr. Henning or any other person, nor against any security or
lien available to CoBank, its successors, successors-in-title, endorsees or
assigns, and shall be joint and several with the liabilities of all other
guarantors of the Obligations. Mercury waives any right to require that an
action be brought against the
-3-
<PAGE> 4
Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
Borrower, Mississippi One, Mr. Henning or any other person or to require that
resort be had to any security. In the event of a default under any of the Loan
Documents, CoBank shall have the right to enforce its rights, powers and
remedies under any of the Loan Documents in any order, and all rights, powers
and remedies available to CoBank in such event shall be nonexclusive and
cumulative of all other rights, powers and remedies provided thereunder or
hereunder or by law or in equity. Accordingly, Mercury hereby authorizes and
empowers CoBank upon acceleration of the maturity of the Notes or any other
Obligation, at its sole discretion, and without notice to Mercury, to exercise
any right or remedy which CoBank may have or any right or remedy hereinafter
granted which CoBank may have as to any security. Mercury waives any right to
require any action on the part of CoBank to proceed to collect amounts due
under the Notes or any other Obligation;
(H) Mercury hereby subordinates any and all
indebtedness of the Borrower now or hereafter owed to Mercury to all
Obligations of the Borrower to CoBank, and agrees with CoBank that, from and
after the occurrence of a default or event of default under any of the Loan
Documents, and for so long as such default or event of default exists,
Mississippi One shall not demand or accept any payment of principal or interest
from the Borrower, shall not claim any offset or other reduction of Mercury's
liability hereunder because of any such indebtedness and shall not take any
action to obtain any of the security for the Obligations; provided, however,
that, if CoBank so requests, such indebtedness shall be collected, enforced and
received by Mercury as trustee for CoBank and be paid over to CoBank on account
of the Obligations of the Borrower to CoBank, but without reducing or affecting
in any manner the liability of Mercury under the other provisions of this
Guaranty;
(I) Mercury hereby authorizes CoBank, without notice
to Mercury, to apply all payments and credits received from the Borrower,
Mississippi One, Mr. Henning or any other person or realized from any security
in such manner and in such priority as CoBank in its sole judgment shall see
fit to the Obligations or to any other liabilities of the Borrower, Mississippi
One, Mr. Henning or any other person to CoBank, and Mercury agrees that any
such application shall not in any way affect its liabilities hereunder;
(J) The liability of Mercury under this Guaranty shall
not in any manner be affected by reason of any action taken or not taken by
CoBank, which action or inaction is hereby consented and agreed to by Mercury,
nor by the partial or complete unenforceability or invalidity of any other
guaranty or surety agreement, pledge, assignment, or other security for any of
the Obligations. No delay in making demand on Mercury for satisfaction of its
liability hereunder shall prejudice CoBank's right to enforce such
satisfaction. All of CoBank's rights and remedies shall be cumulative and any
failure of CoBank to exercise any right hereunder shall not be construed as a
waiver of the right to exercise the same or any other right at any time, and
from time to time, thereafter;
-4-
<PAGE> 5
Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
(K) This Guaranty shall be a continuing one and shall
be binding upon Mercury regardless of how long before or after the date hereof
the Obligations are incurred. This Guaranty shall remain in full force and
effect until a written instrument of termination shall be executed and
delivered by a duly authorized officer of CoBank. CoBank will only be
obligated to execute such an instrument of termination if: (i) all Obligations
have been paid in full; (ii) CoBank has no further commitment or obligation to
extend credit to the Borrower; and (iii) any preference period applicable to
payments made on or security given for the Obligations has expired under
applicable bankruptcy and insolvency laws; and
(L) Mercury hereby irrevocably waives any and all
rights it may have to enforce any of CoBank's rights or remedies or participate
in any security now or hereafter held by CoBank, and any and all such other
rights of subrogation, reimbursement, contribution or indemnification against
the Borrower, Mississippi One, Mr. Henning or any other person having any
manner of liability for the Borrower's obligations to CoBank, whether or not
arising hereunder, by agreement, at law or in equity.
SECTION 4. SECURITY. This Guaranty is secured by the Mercury
Pledge Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Mercury
represents and warrants to CoBank, on and as of the date hereof and on and as
of each date on which the Borrower receives an advance under the Loans, as
follows:
(A) ORGANIZATION; POWERS; ETC. Mercury (i) is duly
organized, validly existing, and in good standing under the laws of its state
of incorporation; (ii) is duly qualified to do business and is in good standing
in each jurisdiction in which the character of its properties or the nature of
its business requires such qualification; (iii) has all requisite corporate and
legal power to own and operate its assets and to carry on its business and to
enter into and perform its obligations under the Loan Documents to which it is
a party; and (iv) has duly and lawfully obtained and maintains all licenses,
certificates, permits, authorizations, approvals, and the like which are
necessary in the conduct of its business or which may be otherwise required by
law.
(B) DUE AUTHORIZATION; NO VIOLATIONS; ETC. The
execution and delivery by Mercury of, and the performance by Mercury of its
obligations under, the Loan Documents to which it is a party have been duly
authorized by all requisite corporate action and do not and will not (i)
violate any provision of any law, rule or regulation, any judgment, order or
ruling of any court or governmental agency applicable to Mercury, its articles
of incorporation or bylaws, or any agreement, indenture, mortgage, or other
instrument to which Mercury is a party or by which Mercury or any of its
properties are bound, or (ii) be
-5-
<PAGE> 6
Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
in conflict with, result in a breach of, or constitute with the giving of
notice or lapse of time, or both, a default under any such agreement,
indenture, mortgage, or other instrument. All actions on the part of the
shareholders of Mercury necessary in connection with the execution and delivery
by Mercury of, and the performance by Mercury of its obligations under, the
Loan Documents to which it is a party have been taken and remain in full force
and effect.
(C) GOVERNMENTAL APPROVAL. No consent, permission,
authorization, order, or license of any governmental authority is necessary in
connection with the execution, delivery, performance, or enforcement of the
Loan Documents to which Mercury is a party, or to the creation and perfection
of the liens and security interests granted thereby, except such as have been
obtained and are in full force and effect.
(D) BINDING AGREEMENT. Each of the Loan Documents to
which Mercury is a party, is, or when executed and delivered will be, the
legal, valid, and binding obligation of Mercury, enforceable against Mercury in
accordance with its terms, subject only to limitations on enforceability
imposed by (i) applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting creditors' rights generally, and (ii) general
equitable principles.
(E) COMPLIANCE WITH LAWS. Mercury is in compliance in
all material respects with all Laws, the failure to comply with which could
have a Material Adverse Effect (as hereinafter defined) on Mercury. For
purposes of this Guaranty, the term "Material Adverse Effect" shall mean a
material adverse effect on the condition, financial or otherwise, operations,
properties or business of Mercury or on the ability of Mercury to perform its
obligations under the Loan Documents to which it is a party.
(F) ENVIRONMENTAL COMPLIANCE. Without limiting the
provisions of Subsection (E) above, all property owned or leased by Mercury and
all operations conducted by it are in compliance in all material respects with
all Laws relating to environmental protection, the failure to comply with which
could have a Material Adverse Effect on Mercury.
(G) LITIGATION. There are no pending legal,
arbitration, or governmental actions or proceedings to which Mercury is a party
or to which any of its property is subject which could have a Material Adverse
Effect on Mercury, and to the best of Mercury's knowledge, no such actions or
proceedings are threatened or contemplated.
(H) FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE;
ETC. The unaudited financial statements of Mercury for the period ended
December 31, 1995,
-6-
<PAGE> 7
Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
submitted to CoBank in connection with the Loan, fairly and fully present in
all material respects the financial condition of Mercury and the results of
Mercury's operations for the periods covered thereby and were prepared in
accordance with GAAP consistently applied and any system of accounts to which
Mercury is subject. Since December 31, 1995, there has occurred no event which
has had or could have a Material Adverse Effect on Mercury. All budgets,
projections, feasibility studies, and other documentation submitted by Mercury
to CoBank in connection with the Loans were based upon assumptions that were
reasonable and realistic at the time submitted and, as of the date hereof, no
fact has come to light, and no event or transaction has occurred, which would
cause any assumption made therein not to be reasonable or realistic.
(I) PRINCIPAL PLACE OF BUSINESS; RECORDS. The
principal place of business and chief executive office of Mercury and the place
where the records required by Section 6(G) are kept is at the address of
Mercury shown in Section 8(E).
(J) EMPLOYEE BENEFIT PLANS. To the extent applicable,
Mercury is in compliance in all material respects with the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder.
(K) TAXES. Mercury has filed or caused to be filed
all federal, state and local tax returns that are required to be filed, and has
paid all taxes as shown on said returns or on any assessment received by it to
the extent that such taxes have become due, unless such taxes are being
contested by Mercury in good faith and by appropriate proceedings and then only
to the extent adequate reserves have been set aside on Mercury's books
therefor.
(L) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT. Mercury is not an "investment company" as that term is defined
in, or otherwise subject to regulation under, the Investment Company Act of
1940, as amended. Mercury is not a "holding company" as that term is defined
in, or otherwise subject to regulation under, the Public Utility Holding
Company Act of 1935, as amended.
(M) USE OF PROCEEDS. The funds to be borrowed under
the Loan Agreements will be used only as contemplated thereby. No part of such
funds will be used to purchase any "margin securities" or otherwise in
violation of the regulations of the Federal Reserve System.
(N) STOCK OF SUBSIDIARIES. Mercury has no subsidiary
other than as described on Exhibit A hereto. Mercury is the registered and
beneficial owner of the specified percentage of the shares of issued and
outstanding capital stock of each of the
-7-
<PAGE> 8
Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
subsidiaries as set forth on Exhibit A hereto, which stock is owned free and
clear of all liens, warrants, options, rights to purchase, rights of first
refusal and other interests of any person unless indicated otherwise. The
stock of each of the subsidiaries described on Exhibit A hereto has been duly
authorized and validly issued and is fully paid and non-assessable.
(O) FINANCIAL CONDITION. The liability and
obligations of Mercury incurred or arising under this Guaranty and the other
Loan Documents to which it is a party and of the Borrower incurred or arising
under the Note, the Loan Agreement and the other Loan Documents to which it is
a party will benefit substantially Mercury directly and indirectly, and
Mercury's board of directors has made that determination. Mercury has full and
complete access to all of the Loan Documents and other documents relating to
the Obligations, has reviewed them and is fully aware of the meaning and effect
of their contents. Mercury is fully informed of all circumstances that bear
upon the risks of executing this Guaranty which a diligent inquiry would
reveal. Mercury has adequate means to obtain from the Borrower, on a
continuing basis, information concerning the financial condition of the
Borrower and is not depending on CoBank to provide such information, now or in
the future. Mercury agrees that CoBank will have no obligation to advise or
notify Mercury of or provide Mercury with any data or information.
(P) LICENSES; PERMITS; ETC. Mercury is the valid
holder of all licenses, certificates, permits, authorizations, approvals, and
the like which are material to the conduct of its business or which may be
required by law, including, without limitation, all FCC licenses, and all such
licenses, certificates, permits, authorizations, approvals, and the like are in
full force and effect on the date hereof.
(Q) BUSINESS. Mercury is not engaged in any business
activity or operation other than the provision of telecommunications services,
real estate rental and farming.
SECTION 6. AFFIRMATIVE COVENANTS. Mercury covenants and
agrees with CoBank that so long as this Guaranty shall remain in effect or the
Obligations have not been fully paid or otherwise satisfied, Mercury, unless
CoBank shall otherwise consent in writing, will do the following:
(A) CORPORATE EXISTENCE. Preserve and keep in full
force and effect its corporate existence and good standing in the jurisdiction
of its incorporation, and its qualification to transact business and good
standing in all places in which the character of its properties or the nature
of its business requires such qualification.
-8-
<PAGE> 9
Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
(B) COMPLIANCE WITH LAWS AND AGREEMENTS. Comply in
all material respects with (i) all Laws, the failure to comply with which could
have a Material Adverse Effect on Mercury, and (ii) all agreements, indentures,
mortgages, and other instruments to which it is a party or by which it or any
of its property is bound.
(C) COMPLIANCE WITH ENVIRONMENTAL LAWS. Without
limiting the provisions of Subsection (B) above, comply in all material
respects with, and cause all persons occupying or present on any properties
owned or leased by it to so comply with, all Laws relating to environmental
protection, the failure to comply with which could have a Material Adverse
Effect on Mercury.
(D) LICENSES; PERMITS; ETC. Duly and lawfully obtain
and maintain in full force and effect all licenses, certificates, permits,
authorizations, approvals, and the like which are material to the conduct of
its business or which may be required by Law, including without limitation, all
FCC licenses.
(E) INSURANCE. Maintain insurance with insurance
companies or associations acceptable to CoBank in such amounts and covering
such risks as are usually carried by companies engaged in the same or similar
business and similarly situated, and make such increases in the type or amount
of coverage as CoBank may request. All such policies insuring any collateral
provided for in any of the Loan Documents to which Mercury is a party shall
provide for loss payable clauses or endorsements in form and content acceptable
to CoBank. At the request of CoBank, all policies (or such other proof of
compliance with this Subsection (E) as may be satisfactory to CoBank) shall be
delivered to CoBank.
(F) PROPERTY MAINTENANCE. Maintain and preserve at
all times its property, and each and every part and parcel thereof, in good
repair, working order and condition, ordinary wear and tear excepted, and in
compliance with all applicable Laws.
(G) BOOKS AND RECORDS. Keep adequate records and
books of account in accordance with GAAP consistently applied and any system of
accounts to which it is subject.
(H) INSPECTION. Permit CoBank or its agents, during
normal business hours or at such other times as the parties may agree, to
examine its properties, books, and records, and to discuss its affairs,
finances, operations, and accounts with its officers, directors, employees, and
independent certified public accountants.
-9-
<PAGE> 10
Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
(I) MISSISSIPPI ONE COVENANTS. Unless otherwise
agreed to in writing by CoBank, while this Guaranty remains in effect any of or
the Obligations have not been fully paid or otherwise satisfied, Mercury agrees
to cause Mississippi One to comply with the affirmative and negative covenants
and agreements contained in Sections 6 and 7 of the Mississippi One Guaranty.
(J) DEBT SERVICE COVERAGE. Commencing June 30, 1996,
maintain at all times a debt service coverage ratio ("DSC") of at least
1.10:1.0. DSC shall mean the ratio derived by dividing (i) Operating Cash Flow
(as defined below) for the most recently completed fiscal quarter by (ii) the
cumulative total of interest payments required during the then most recently
completed fiscal quarter, all as determined in accordance with GAAP
consistently applied, provided that such determination shall be based solely on
Mercury without taking into account any of Mercury's subsidiaries (i.e., on an
unconsolidated basis). For purposes of determining this ratio, "Operating Cash
Flow" shall mean the sum of (i) pre-tax income, or deficit, as the case may be,
excluding extraordinary gains, the write-up of any asset, investment income and
income from any subsidiary, (ii) total interest expense (including non-cash
interests) and (iii) depreciation and amortization expense.
(K) FURTHER ASSURANCES. Give CoBank 10 days' prior
written notice of any acquisition or lease of real property after the date
hereof and enter into such mortgages, deeds of trust, collateral assignments or
other instruments as CoBank shall request in order to grant to CoBank a first
priority perfected security interest in the Borrower's interests in any real
property acquired or leased after the date hereof.
(L) REPORTS AND NOTICES. Furnish or cause to be
furnished to CoBank:
(1) AUDITED ANNUAL FINANCIAL STATEMENTS. As
soon as available, but in no event later than 120 days after the end
of each fiscal year of Mercury occurring during the term hereof,
audited annual financial statements of Mercury prepared in accordance
with GAAP consistently applied and any system of accounts to which
Mercury is subject. Such financial statements shall: (a) be audited
by independent certified public accountants selected by Mercury and
acceptable to CoBank; (b) be accompanied by a report of such
accountants containing an opinion acceptable to CoBank; and (c)
include a balance sheet, a statement of income, a statement of
retained earnings, a statement of cash flows, and all notes and
schedules relating thereto.
(2) MONTHLY FINANCIAL STATEMENTS. As soon as
available, but in no event later than 60 days after the end of each of
the first three fiscal quarters of each fiscal year of Mercury
occurring during the term hereof, unaudited monthly
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Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
financial statements of Mercury for the three months ending during
such quarter prepared in accordance with GAAP consistently applied and
any system of accounts to which Mercury is subject (except for the
omission of footnotes and for the effect of normal year-end audit
adjustments). Such financial statements shall: (a) be prepared in
reasonable detail; and (b) include a balance sheet, a statement of
income for such months and for the period year-to-date internally
prepared by Mercury, and such other monthly statements as CoBank may
specifically request, which monthly statements shall include any and
all supplements thereto.
(3) NOTICE OF DEFAULT. Promptly after becoming
aware thereof, notice of (a) the occurrence of any Default or Event of
Default under any of the Loan Documents; and (b) the occurrence of any
breach, default, event of default, or other event which with the
giving of notice or lapse of time, or both, could become a breach,
default, or event of default under any agreement, indenture, mortgage,
or other instrument (other than the Loan Documents) to which it is a
party or by which it or any of its property is bound or affected if
the effect of such breach, default, event of default, or other event
is to accelerate, or to permit the acceleration of, the maturity of
any indebtedness under such agreement, indenture, mortgage, or other
instrument; provided, however, that the failure to give such notice
shall not affect the right and power of CoBank to exercise any and all
of the remedies specified herein.
(4) NOTICE OF NON-ENVIRONMENTAL LITIGATION.
Promptly after the commencement thereof, notice of the commencement of
all actions, suits, or proceedings before any court, arbitrator, or
governmental department, commission, board, bureau, agency, or
instrumentality affecting it which could have a Material Adverse
Effect on Mississippi One.
(5) NOTICE OF ENVIRONMENTAL LITIGATION.
Without limiting the provisions of Paragraph 4 above, promptly after
receipt or becoming aware thereof, notice of the receipt of all
pleadings, orders, complaints, indictments, or other communications
alleging a condition that may require it to undertake or to contribute
to a cleanup or other response under Laws relating to environmental
protection, or which seeks penalties, damages, injunctive relief, or
criminal sanctions related to alleged violations of such Laws, or
which claims personal injury or property damage to any person as a
result of environmental factors or conditions or which could have a
Material Adverse Effect on Mercury.
(6) REGULATORY AND OTHER NOTICES. Promptly
after filing, receipt or becoming aware thereof, copies of any filings
or communications sent to and notices or other communications received
by Mercury from any governmental
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Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
authority, including, without limitation, the LPSC, the MPSC, the
APSC, the FCC, and the SEC, relating to any noncompliance by
Mississippi One with any Law or with respect to any matter or
proceeding the effect of which could have a Material Adverse Effect on
Mercury.
(7) MATERIAL ADVERSE CHANGE. Prompt notice of
any matter which has had or could have a Material Adverse Effect on
Mercury.
(8) COMPLIANCE CERTIFICATES. Concurrently with
each statement required to be furnished pursuant to Paragraph (1) or
(2) above, a certificate in the form attached hereto as Exhibit A to
the Loan Agreement executed by the chief accounting officer of
Mercury.
(9) ERISA REPORTABLE EVENTS. Within 10 days
after it becomes aware of the occurrence of any Reportable Event (as
defined in Section 4043 of ERISA) applicable to Mercury, a statement
describing such Reportable Event and the actions it proposes to take
in response to such Reportable Event.
(10) OTHER INFORMATION. Such other information
regarding the condition, financial or otherwise, or operations of
Mercury as CoBank may, from time to time, reasonably request.
SECTION 7. NEGATIVE COVENANTS. Unless otherwise agreed to in
writing by CoBank, Mercury covenants and agrees with CoBank that, so long as
this Guaranty shall remain in effect or the Obligations shall be unpaid or
otherwise unsatisfied, Mercury will not:
(A) BORROWINGS. Create, incur, assume, or allow to
exist, directly or indirectly, any indebtedness or liability for borrowed
money, for the deferred purchase price of property or services, or for the
lease of real or personal property which lease is required to be capitalized
under GAAP or which is treated as an operating lease under regulations
applicable to it but which otherwise would be required to be capitalized under
GAAP (a "Capital Lease"), except for (i) obligations to the Borrower for the
reloan of the proceeds of the Loan as contemplated by the Loan Agreement, and
(ii) accounts payable to trade creditors and current operating liabilities
(other than for borrowed money) incurred in the ordinary course of its
business.
(B) LIENS. Create, incur, assume, or allow to exist
any mortgage, deed of trust, deed to secure debt, pledge, lien (including the
lien of an attachment, judgment, or execution), security interest, or other
encumbrance of any kind upon any of its property, real
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<PAGE> 13
Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
or personal. The foregoing restrictions shall not apply to (i) liens in favor
of CoBank; (ii) liens for taxes, assessments, or governmental charges that are
not past due, unless the same are being contested in good faith and by
appropriate proceedings and then only to the extent adequate reserves have been
set aside therefor; (iii) liens, pledges, and deposits under workers'
compensation, unemployment insurance, and social security laws; (iv) liens,
deposits, and pledges to secure the performance of bids, tenders, contracts
(other than contracts for the payment of money), and like obligations arising
in the ordinary course of its business as conducted on the date hereof; and (v)
liens imposed by law in favor of mechanics, materialmen, warehousemen, lessors
and like persons that secure obligations that are not past due, unless the same
are being contested in good faith and by appropriate proceedings and then only
to the extent adequate reserves have been set aside therefor.
(C) MERGERS; ACQUISITIONS; ETC. Merge or consolidate
with any other entity, or acquire all or substantially all of the assets of any
person or entity, or form or create any subsidiary, or commence operations
under any other name, organization, or entity, including any joint venture.
(D) TRANSFER OF ASSETS. Sell, transfer, lease, enter
into any contract for the sale, transfer or lease of, or otherwise dispose of,
any of its assets, except in the ordinary course of its business.
(E) LOANS AND INVESTMENTS. After the date hereof,
make any loan or advance to, invest in, purchase or make any commitment to
purchase any commercial paper, stock, bonds, notes, or other securities of any
person or entity (each, whether made directly or indirectly, an "Investment")
in an amount in excess of $100,000 as to any single Investment or in excess of
$1,000,000 as to all Investments existing at any time, other than (i)
securities or deposits issued, guaranteed or fully insured as to payment by the
United States of America or any agency thereof, (ii) stock or other securities
of CoBank, (iii) commercial paper, stocks, bonds, notes or other securities of
institutions whose senior unsecured debt obligations are rated by a nationally
recognized rating organization in any of its three highest rating categories or
any equivalent successor rating categories, or (iv) mutual funds that have a
four star rating by Morningstar Mutual Funds, 225 West Wacker Drive, Chicago,
Illinois 60606, or an equivalent rating by a nationally recognized rating
organization.
(F) GUARANTEES. Guarantee, assume, or otherwise
become obligated or liable with respect to the indebtedness or other
obligations of any person or entity.
(G) CHANGE IN BUSINESS. Engage in any business
activity or operation different from or unrelated to its current business
activities or operations.
-13-
<PAGE> 14
Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
(H) DISPOSITION OF LICENSES. Sell, assign, transfer
or otherwise dispose of, or attempt to dispose of, in any way, any
registrations, licenses, franchises, grants, permits or other governmental
approvals.
(I) DIVIDENDS; MANAGEMENT FEES. Make, declare or pay,
directly or indirectly, any dividend or other distribution of assets to
shareholders of Mercury, retire, redeem, purchase or otherwise acquire for
value any capital stock of Mercury or pay any management fees to any of its
affiliates.
(J) SALARIES; WAGES; COMPENSATION. Pay any wages,
salaries or other compensation to any officer, director, stockholder (or
relative thereof) of Mercury unless such compensation shall be (i) reasonable
and comparable with compensation paid by companies of like nature, similarly
situated, and (ii) payment for services actually rendered.
SECTION 8. MISCELLANEOUS.
(A) GOVERNING LAW. Except to the extent governed by
applicable federal law, this Guaranty shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
(B) BINDING EFFECT. This Guaranty shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns, including any holder or owner of the Notes or any other
Loan Document.
(C) SEVERABILITY. If any one or more of the
provisions contained herein shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Guaranty, but
this Guaranty shall be construed as if such invalid, illegal or unenforceable
provision had not been contained herein.
(D) NON-WAIVER; MODIFICATION; ELECTION OF REMEDIES.
The failure of CoBank to insist, in any one or more instances, upon a strict
performance of any of the terms and conditions of this Guaranty, or to exercise
or fail to exercise any option or right contained herein, shall not be
construed as a waiver or a relinquishment for the future of such right or
option, but the same shall continue and remain in full force and effect.
CoBank's knowledge of the breach of any term or condition hereof shall not be
deemed a waiver of such breach, and no waiver by CoBank of any provision hereof
shall be deemed to have been made, or operate as an estoppel, unless expressed
in writing and signed by CoBank. No enforcement of any remedy shall constitute
an election of remedies.
-14-
<PAGE> 15
Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
(E) NOTICES. All notices hereunder shall be made, and
shall be deemed to be duly given if made, in the manner provided for notices
under Section 19 of the Loan Agreement, to the parties at the following
addresses (or such other address for a party as shall be specified by like
notice):
If to Mississippi One, as follows:
Mercury, Inc.
P.O. Box 3709
Lake Charles, Louisiana 70602
Attn: Dusty Dumas; cc: Thomas G.
Henning
Fax No.: (318) 439-0769
If to CoBank, as follows:
CoBank, ACB
200 Galleria Parkway
Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No.: (770) 618-3202
(F) REGULATORY APPROVALS. Upon any action by CoBank to
commence the exercise of remedies hereunder or under the Mississippi One Deed
of Trust, the Mississippi One Mortgage, the Mississippi One Security Agreement
or the Mercury Pledge Agreement, Mercury hereby undertakes and agrees to
cooperate and join with CoBank in any application to the LPSC, the MPSC, the
APSC, the FCC, the SEC or any other regulatory body, administrative agency,
court or other forum (any such entity, a "Governmental Authority") with respect
thereto and to provide such assistance in connection therewith as CoBank may
request, including, without limitation, the preparation of filings and
appearances of officers and employees of Mercury before such Governmental
Authority, in each case in support of any such application made by CoBank, and
Mercury shall not, directly or indirectly, oppose any such action by CoBank
before any such Governmental Authority.
SECTION 9. CONSENT TO JURISDICTION; REGISTERED AGENT. To the
maximum extent permitted by law, Mercury agrees that any legal action or
proceeding with respect to this Guaranty or any other Loan Document may be
brought in the courts of the State of Louisiana or of the United States of
America for the Western District of Louisiana, all as CoBank may elect. By
execution of this Guaranty, Mercury hereby irrevocably submits to each such
jurisdiction, expressly waiving any objection it may have to the laying of
venue by reason of its present or future domicile. Nothing contained herein
shall affect the right of
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<PAGE> 16
Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
CoBank to commence legal proceedings or otherwise proceed against Mercury in
any other jurisdiction or to serve process in any manner permitted or required
by law. Mercury further agrees to maintain a registered agent in the State of
Louisiana and will notify CoBank in writing of such registered agent's name and
address and of any changes in such name or address.
[Signatures on next page]
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<PAGE> 17
Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
THUS DONE AND SIGNED in several counterparts at the place and on the
date indicated below, by duly authorized officers of Mercury, after a reading
of the whole.
At the City of Lake Charles, State of Louisiana, on May 15, 1996.
MERCURY, INC.
By: /s/ WILLIAM L. HENNING, JR.
------------------------------------
Name: WILLIAM L. HENNING, JR.
-------------------------------
Title: PRESIDENT
------------------------------
Attest: /s/ THOMAS G. HENNING
--------------------------------
Name: THOMAS G. HENNING
---------------------------
Title: SECRETARY
--------------------------
[CORPORATE SEAL]
Witness to both signatures:
/s/ SHEILA KING
- ---------------------------------------
Witness
/s/ SHELLY L. VICKERS
- ---------------------------------------
Witness
/s/ SANDRA L. DULLY
- ---------------------------------------
Notary Public
My commission expires: LIFETIME COMMISSION
[NOTARIAL SEAL]
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<PAGE> 18
EXHIBIT A
<TABLE>
<CAPTION>
Subsidiary Percentage Ownership Number of Shares
---------- -------------------- ----------------
<S> <C> <C>
Mississippi One Cellular 100% 367,658
Telephone Company
Mississippi 34 Cellular
Corporation 51% 5,100
(all shares pledged to
AT&T Finance Corporation)
Mercury Cellular Telephone
Company 4% 517
</TABLE>
<PAGE> 1
EXHIBIT 4.8
LOAN NO. T0310
LOAN NO. T0347
COBANK, ACB
FIRST AMENDMENT AND SUPPLEMENT TO PLEDGE AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
BEFORE the respective undersigned Notaries Public, and in the presence
of the undersigned respective competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS FIRST AMENDMENT AND SUPPLEMENT TO PLEDGE AGREEMENT (this "First
Amendment") is made as of May 15, 1996, by and between MERCURY, INC., as
pledgor (the "Pledgor"), and COBANK, ACB, formerly known as the National Bank
for Cooperatives, as pledgee ("CoBank").
R E C I T A L S:
WHEREAS, CoBank and CTC Financial, Inc. (the "Borrower") have entered
into that certain Amended and Restated Loan Agreement, dated as of even date
herewith (as the same may be amended, modified, supplemented, extended or
restated from time to time, the "Mississippi One Loan Agreement"), providing
for a loan of up to $17,400,000 (the "Mississippi One Loan"), and that certain
Loan Agreement, dated as of even date herewith (as the same may be amended,
modified, supplemented, extended or restated from time to time, the "Mercury
Loan Agreement"; the Mississippi One Loan Agreement and the Mercury Loan
Agreement, collectively, the "Loan Agreements"; capitalized terms used herein
and not otherwise defined shall have the meanings ascribed thereto in the Loan
Agreements), providing for a loan of up to $5,000,000 (the "Mercury Loan"; the
Mississippi One Loan and the Mercury Loan, collectively, the "Loans"); and
WHEREAS, the proceeds of the Mississippi One Loan will be reloaned by
the Borrower to Mississippi One Cellular Telephone Company ("Mississippi One")
for the purposes set forth in the Mississippi One Loan Agreement, and the
proceeds of the Mercury Loan will be reloaned by the Borrower to the Pledgor
for the purposes set forth in the Mercury Loan Agreement; and
WHEREAS, the Pledgor owns all of the issued and outstanding capital
stock of Mississippi One; and
<PAGE> 2
Pledge Agreement/Mercury
Loan No. T0310
Loan No. T0347
WHEREAS, the Pledgor had previously entered into that certain Pledge
Agreement, dated as of September 27, 1994, for the benefit of CoBank (the
"Pledge Agreement"); and
WHEREAS, as an inducement to CoBank to execute the Loan Agreements and
to make the Loans, the Pledgor has made that certain Continuing Guaranty, dated
as of even date herewith (as the same may be amended, modified, supplemented,
extended or restated from time to time, the "Mercury Guaranty"), for the
benefit of CoBank, and has agreed to amend the Pledge Agreement as herein
provided;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the Pledgor and CoBank agree as follows:
1. Section 2 of the Pledge Agreement is hereby amended and restated
to read in its entirety as follows:
"SECTION 2. PLEDGE. This Pledge Agreement is given to secure
the following obligations (the "Secured Obligations"): (a) all payments
or performances to be made by the Borrower under the "Loan Documents"
(as defined in the Mississippi One Loan Agreement), including, without
limitation, the payment of all principal, interest and other amounts
becoming due and payable, whether by acceleration or otherwise, under
that certain Amended and Restated Promissory Note, dated as of even date
herewith (the "Amended CoBank Note"), made by the Borrower to CoBank in
the principal face amount of $17,400,000 (as any such Loan Documents may
be amended, supplemented, modified, extended or restated from time to
time); (b) all payments or performances to be made by Mississippi One
under the "Loan Documents" (as defined in the Mississippi One Loan
Agreement and the Mercury Loan Agreement), including, without
limitation, the payment of all principal, interest and other amounts
becoming due and payable, whether by acceleration or otherwise, under
that certain Amended and Restated Promissory Note, dated as of even date
herewith (the "Mississippi One Note"), made by Mississippi One to the
order of the Borrower, and assigned to CoBank, in the face principal
amount of $17,400,000, and all payments or performances under that
certain Amended and Restated Continuing Guaranty, dated as of even date
herewith, made by Mississippi One for the benefit of CoBank (as any such
Loan Documents may be amended, supplemented, modified, extended or
restated from time to time); (c) all payments or performances to be made
by the Borrower under the "Loan Documents" (as defined in the Mercury
Loan Agreement), including, without limitation, the payment of all
principal, interest and other amounts becoming due and payable, whether
by acceleration or otherwise, under that certain Promissory Note, dated
as of even date herewith (the "CoBank Note"), made by the Borrower to
CoBank in the principal face amount of $5,000,000
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<PAGE> 3
Pledge Agreement/Mercury
Loan No. T0310
Loan No. T0347
(as any such Loan Documents may be amended, supplemented, modified,
extended or restated from time to time); (d) all payments or
performances to be made by the Pledgor under the "Loan Documents" (as
defined in the Mercury Loan Agreement and in the Mississippi One Loan
Agreement), including, without limitation, the payment of all principal,
interest and other amounts becoming due and payable, whether by
acceleration or otherwise, under that certain Promissory Note, dated as
of even date herewith (the "Mercury Note"), made by the Pledgor to the
order of the Borrower, and assigned to CoBank, in the face principal
amount of $5,000,000 (as such Promissory Note may be amended, modified,
extended, renewed, reinstated or replaced from time to time), and all
payments or performances under that certain Continuing Guaranty, dated
as of even date herewith, made by the Pledgor for the benefit of CoBank
(as any such Loan Documents may be amended, supplemented, modified,
extended or restated from time to time); and (e) all other indebtedness
and liabilities of the Pledgor, the Borrower or Mississippi One to
CoBank of every kind and description whatsoever, whether now existing or
hereafter arising, fixed or contingent, as primary obligor or as
guarantor or surety, acquired directly or by assignment or otherwise,
liquidated or unliquidated, regardless of how they arise or by what
agreement or instrument they may be evidenced, including, without
limitation, all loans, advances and other extensions of credit and all
covenants, agreements and provisions contained in all loan and other
agreements between the parties. To secure the Secured Obligations, the
Pledgor hereby pledges, hypothecates, assigns, transfers, sets over and
delivers unto CoBank, and grants to CoBank a lien upon and a security
interest in (i) all now owned or hereafter acquired capital stock of
Mississippi One; (ii) all now or hereafter acquired capital stock of
Mercury Cellular Telephone Company ("MCTC"); and (iii) any cash,
additional shares or securities or other property at any time and from
time to time receivable or otherwise distributable in respect of, and
exchange for, or in distribution of, any and all such stock, together
with the proceeds thereof (all such shares, common stock, capital stock,
securities, cash, property and other proceeds thereof, collectively, the
"Pledged Collateral"). Upon delivery to CoBank, (A) any securities now
or hereafter included in the Pledged Collateral (the "Pledged
Securities") shall be accompanied by duly executed stock powers in blank
and by such other instruments or documents as CoBank or its counsel may
reasonably request and (B) all other property comprising part of the
Pledged Collateral shall be accompanied by proper instruments of
assignment duly executed by the Pledgor and by such other instruments or
documents as CoBank or its counsel may reasonably request. Each
delivery of certificates for such Pledged Securities shall be
accompanied by a schedule showing the number of shares and the numbers
of the certificates therefor, theretofore and then being pledged
hereunder, which schedules shall be attached
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Pledge Agreement/Mercury
Loan No. T0310
Loan No. T0347
hereto as Schedule 1 and made a part hereof. Each schedule so delivered
shall supersede any prior schedules so delivered."
2. Section 4 of the Pledge Agreement is hereby amended and restated
to read in its entirety as follows:
"SECTION 4. STOCK OF MISSISSIPPI ONE AND MCTC. The Pledgor
represents that it is the registered and beneficial owner of the shares
and percentage of the capital stock of each of Mississippi One and MCTC
set forth on Schedule 1 hereto, which stock is owned free and clear of
all liens, warrants, options, rights to purchase, rights of first
refusal and other interests of any person other than CoBank. The
outstanding capital stock of each of Mississippi One and MCTC has been
duly authorized and is validly issued, fully paid and non-assessable."
3. Section 5 of the Pledge Agreement is hereby amended and restated
to read in its entirety as follows:
SECTION 5. ADDITIONAL SHARES OF CAPITAL STOCK; TRANSFER.
Without the prior written consent of CoBank, the Pledgor will not (a)
consent to or approve of the issuance of any additional shares of any
class of capital stock by Mississippi One or MCTC, or to any options,
subscription rights, warrants or other instruments in respect thereof,
(b) consent to or approve of the establishment of any additional class
or classes of capital stock by Mississippi One or MCTC or the issuance
of any shares thereunder, (c) consent to or approve of any merger,
consolidation, reorganization or any sale or lease of substantially all
the assets of Mississippi One or MCTC, or (d) consent to or approve the
repurchase or redemption by Mississippi One or MCTC of any of its
capital stock."
4. Section 6 of the Pledge Agreement is hereby amended and restated
to read in its entirety as follows:
"SECTION 6. COVENANTS WITH RESPECT TO COLLATERAL. The Pledgor
hereby covenants and agrees with respect to the Pledged Collateral as
follows:
(A) The Pledgor will cause any additional securities issued by
Mississippi One or MCTC or property issued by Mississippi One or MCTC
with respect to the Pledged Collateral, whether for value paid by the
Pledgor or otherwise, to be forthwith deposited and pledged hereunder
and delivered to CoBank, in each case accompanied by proper instruments
of assignment duly executed; and
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<PAGE> 5
Pledge Agreement/Mercury
Loan No. T0310
Loan No. T0347
(B) The Pledgor will defend its title to the Pledged
Collateral against the claims of all persons whomsoever."
5. Section 10(i) and Section 10(ii) of the Pledge Agreement are
hereby amended and restated to read in their entirety as follows:
"(i) any Default or Event of Default under any of the Loan
Documents, including, without limitation, any failure of Borrower to pay
when due under the Mississippi One Loan Agreement, the Amended CoBank
Note, the Mercury Loan Agreement or the CoBank Note, any failure by
Mississippi One to pay when due any amount due under the Mississippi One
Note or the Mississippi One Guaranty, or any failure by the Pledgor to
pay when due any amount due under the Mercury Note or to perform or
observe any of its covenants or agreements in the Mercury Guaranty.
(ii) any written representation or warranty made in the Mercury
Guaranty or in connection with this Pledge Agreement shall prove to have
been false or misleading in any material respect as of the date made;
or"
6. Section 12 of the Pledge Agreement is hereby amended so as to add
to its second sentence, such that the second sentence reads in its entirety as
follows:
"The Pledgor shall notify CoBank in writing promptly upon its
acquisition of capital stock of Mississippi One or MCTC and shall
execute and deliver to CoBank, upon request, an amendment to this Pledge
Agreement or such other instruments as CoBank may request together with
certificates evidencing such capital stock accompanied by stock transfer
powers executed in blank, and shall take such other action requested by
CoBank to effectuate the pledge of such capital stock to CoBank in
accordance with the provisions of this Pledge Agreement."
7. Section 17 of the Pledge Agreement is hereby amended so as to
strike the phrase "Section 8(E) of the Guaranty" and substitute the phrase
"Section 8(E) of the Mercury Guaranty" therefor.
8. Schedule 1 to the Pledge Agreement is hereby amended to delete it
in its entirety and substitute in lieu thereof Schedule 1 attached hereto.
9. The "Loan Documents" or a "Loan Document," when used in the
Pledge Agreement, shall mean the "Loan Documents" as defined in the Loan
Agreements.
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<PAGE> 6
Pledge Agreement/Mercury
Loan No. T0310
Loan No. T0347
10. After giving effect to the amendments to and restatement of the
Pledge Agreement set forth in this First Amendment, the representations and
warranties of the Pledgor set forth in the Pledge Agreement are true and
correct as of the date hereof as if made on the date hereof.
11. It is the intention of the parties hereto that this First
Amendment shall not constitute a novation and shall in no way adversely affect
or impair (i) the validity of the Loan Documents or (ii) the validity or
priority of the security interest created by the Pledge Agreement, it being the
intention of the parties hereto merely to amend and restate the Pledge
Agreement as expressly set forth herein. To the extent not inconsistent
herewith, all of the terms and conditions of the Pledge Agreement shall remain
in full force and effect and are hereby ratified and confirmed by the Pledgor.
12. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
13. This First Amendment shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
[Signatures on next page]
-6-
<PAGE> 7
Pledge Agreement/Mercury
Loan No. T0310
Loan No. T0347
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
the duly authorized officers of the respective parishes, after a due reading of
the whole.
At Lake Charles, Louisiana, on May 15, 1996.
MISSISSIPPI ONE CELLULAR
TELEPHONE COMPANY
By: /s/ WILLIAM L. HENNING, JR.
----------------------------------
Name: WILLIAM L. HENNING, JR.
-----------------------------
Title: PRESIDENT
----------------------------
Attest: /s/ THOMAS G. HENNING
-------------------------------
Name: THOMAS G. HENNING
--------------------------
Title: SECRETARY
-------------------------
[CORPORATE SEAL]
Witnesses to all Signatures:
/s/ SHEILA KING
- -----------------------------------
Witness
/s/ SHELLY F. VICKERS
- -----------------------------------
Witness
/s/ SANDRA L. DULLY
- -----------------------------------
Notary Public
My commission expires: LIFETIME COMMISSION
[NOTARIAL SEAL]
[Signatures continue on next page.]
-7-
<PAGE> 8
Pledge Agreement/Mercury
Loan No. T0310
Loan No. T0347
[Signatures continued from previous page.]
At Atlanta, Georgia on May 15, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
---------------------------------
Name: MARY KAY DEERING
----------------------------
Title: VICE PRESIDENT
---------------------------
Witnesses to Signature:
/s/ TIMOTHY W. HENRY
- -----------------------------------
Witness
/s/ ANNE O. APPLEBY
- -----------------------------------
Witness
/s/ SUSAN R. SOUTH
- -----------------------------------
Notary Public
My commission expires:
------------
[NOTARIAL SEAL]
-8-
<PAGE> 9
SCHEDULE 1
TO
FIRST AMENDMENT AND SUPPLEMENT
TO
TO PLEDGE AGREEMENT
<TABLE>
<CAPTION>
Percentage of Total
Number of Shares Outstanding Shares
Entity Owned by the Pledgor Owned by the Pledgor
------ -------------------- --------------------
<S> <C> <C>
Mississippi One Cellular
Telephone Company 367,658 100%
Mercury Cellular Telephone 517 4%
Company
</TABLE>
<PAGE> 1
EXHIBIT 4.9
LOAN NO. T0310
LOAN NO. T0347
LIMITED RECOURSE CONTINUING GUARANTY
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
BEFORE ME, the undersigned Notary Public, and in the presence of the
undersigned competent witnesses, personally came and appeared the party listed
below, who, after being duly sworn, did state:
THIS LIMITED RECOURSE CONTINUING GUARANTY (this "Guaranty") is made as
of May 15, 1996 by WILLIAM HENNING, SR. ("Mr. Henning") for the benefit of the
COBANK, ACB ("CoBank").
R E C I T A L S:
WHEREAS, Mr. Henning owns 8.46% of the capital stock of Mercury, Inc.
("Mercury"), and Mercury owns 100% of the capital stock of Mississippi One
Cellular Telephone Company ("Mississippi One"); and
WHEREAS, CoBank and CTC Financial, Inc. (the "Borrower"), have entered
into that certain Amended and Restated Loan Agreement, dated as of even date
herewith (as the same may be amended, modified, supplemented, extended or
restated from time to time, the "Mississippi One Loan Agreement"), providing
for a loan of up to $17,400,000 (the "Mississippi One Loan"), and CoBank and
the Borrower have entered into that certain Loan Agreement, dated as of even
date herewith (as the same may be amended, modified, supplemented, extended or
restated from time to time, the "Mercury Loan Agreement"; the Mississippi One
Loan Agreement and the Mercury Loan Agreement, collectively, the "Loan
Agreements"), providing for a loan of up to $5,000,000 (the "Mercury Loan"; the
Mississippi One Loan and the Mercury Loan, collectively, the "Loans"); and
WHEREAS, the proceeds of the Loans have been or will be reloaned by
the Borrower to Mississippi One, or to Mercury for investment into Mississippi
One, for the purposes set forth in the Loan Agreements; and
WHEREAS, as an inducement to CoBank to enter into the Loan Agreements
and to make the Loans, Mr. Henning has agreed to guarantee the Obligations (as
hereinafter defined);
<PAGE> 2
Continuing Guaranty/Mr. Henning
Loan No. T0310
Loan No. T0347
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, Mr. Henning hereby agrees as follows:
SECTION 1. DEFINITIONS. Capitalized terms used in this
Guaranty, unless otherwise defined herein, shall have the meanings assigned to
them in the Loan Agreements.
SECTION 2. OBLIGATIONS. "Obligations" shall mean (a) the
principal, interest and other amounts becoming due and payable, whether by
acceleration or otherwise, under that certain Amended and Restated Promissory
Note, dated of even date herewith, made by the Borrower to the order of CoBank
in the original principal face amount of $17,400,000 (such Promissory Note and
all amendments, modifications, extensions, renewals and replacements thereof,
the "CTC One Note"); (b) the principal, interest and other amounts becoming due
and payable, whether by acceleration or otherwise, under that certain
Promissory Note, dated of even date herewith, made by the Borrower to the order
of CoBank in the original principal face amount of $5,000,000 (such Promissory
Note and all amendments, modifications, extensions, renewals and replacements
thereof, the "CTC Two Note"); (c) the principal, interest and other amounts
becoming due and payable, whether by acceleration or otherwise, under that
certain Amended and Restated Promissory Note, dated of even date herewith, made
by Mississippi One to the order of the Borrower, assigned to CoBank, in the
original principal face amount of $17,400,000 (such Promissory Note and all
amendments, modifications, extensions, renewals and replacements thereof, the
"Mississippi One Note"); (d) the principal, interest and other amounts becoming
due and payable, whether by acceleration or otherwise, under that certain
Promissory Note, dated of even date herewith, made by Mercury to the order of
the Borrower, assigned to CoBank, in the original principal face amount of
$5,000,000 (such Promissory Note and all amendments, modifications, extensions,
renewals and replacements thereof, the "Mercury Note"; the CTC One Note, the
CTC Two Note, the Mississippi One Note and the Mercury Note, collectively, the
"Notes"); (e) all other payments or performances to be made by the Borrower,
Mercury and Mississippi One under the other Loan Documents to which either is a
party; and (f) all other indebtedness and liabilities of the Borrower, Mercury
and Mississippi One to CoBank of every kind and description whatsoever, whether
now existing or hereafter arising, fixed or contingent, as primary obligor or
as guarantor or surety, acquired directly or by assignment or otherwise,
liquidated or unliquidated, regardless of how they arise or by what agreement
or instrument they may be evidenced, including, without limitation, all loans,
advances and other extensions of credit and all covenants, agreements, and
provisions contained in all loan and other agreements between the parties.
SECTION 3. LIMITATIONS ON RECOURSE. Notwithstanding any
provision of this Guaranty or of any other Loan Document to the contrary, Mr.
Henning's guaranty liability under this Guaranty with respect to any of the
Obligations representing principal shall not
-2-
<PAGE> 3
Continuing Guaranty/Mr. Henning
Loan No. T0310
Loan No. T0347
exceed $5,000,000.00; provided, however, that nothing contained in this
sentence shall limit or relieve Mr. Henning from liability for failing to
comply with the terms, covenants, conditions and provisions of this Guaranty or
any other agreement to which Mr. Henning is a party.
SECTION 4. GUARANTY PROVISIONS.
(A) In consideration of the Loans to be made by CoBank
to the Borrower pursuant to the Loan Agreements and for other good and valuable
consideration, the adequacy, sufficiency and receipt of which are hereby
acknowledged, Mr. Henning hereby absolutely, unconditionally, directly,
irrevocably, completely and immediately guarantees the full and prompt payment,
when due, whether by acceleration or otherwise, and the prompt performance, of
the Obligations; provided, however, that recourse hereunder is limited as
provided in Section 3;
(B) Mr. Henning further agrees to pay to CoBank, upon
demand, all losses and reasonable costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses, that may be incurred by
CoBank in attempting to cause the Obligations to be paid, performed or
otherwise satisfied or in attempting to cause satisfaction of Mr. Henning's
liability under this Guaranty or in attempting to protect or preserve any
property, personal or real, securing the Obligations;
(C) Mr. Henning agrees that this Guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment by the Borrower, Mississippi One or any other person to CoBank on
account of the Obligations is rescinded or must otherwise be returned or
restored by CoBank upon the insolvency or bankruptcy of the Borrower, Mercury,
Mississippi One or any other obligor, guarantor, endorser or surety of the
Obligations, all as though such payment had not been made; provided, however,
that recourse hereunder is limited as provided in Section 3;
(D) Mr. Henning assents to all terms and agreements
heretofore or hereafter made by the Borrower, Mercury or Mississippi One with
CoBank;
(E) Mr. Henning hereby consents to the following and
agrees, with or without notice (all notices being hereby waived), that its
liability (as limited in Section 3) will not be affected or impaired by (i) the
exchange, release or surrender of any collateral or any claim against the
Borrower, Mercury, Mississippi One or any other person, or pledgor or grantor,
or the waiver, release or subordination of any security interest, in whole or
in part; (ii) the waiver or delay in the exercise of any of CoBank's rights or
remedies against the Borrower, Mercury, Mississippi One or any other person;
(iii) the renewal, extension or
-3-
<PAGE> 4
Continuing Guaranty/Mr. Henning
Loan No. T0310
Loan No. T0347
modification of the terms or amounts of any of the Obligations, the Loan
Documents or any other instrument or agreement evidencing the same; or (iv) the
acceptance by CoBank of other guaranties;
(F) Mr. Henning waives acceptance hereof, notice of
acceptance hereof, and notice of acceleration of and intention to accelerate
the Obligations, and waives presentment, demand, protest, notice of dishonor,
notice of default, notice of nonpayment or protest in relation to any
instrument evidencing any of the Obligations, and any other demands and notices
required by law except as such waiver may be expressly prohibited by law;
(G) This is a limited recourse guaranty (as provided
in Section 3) of payment and performance and not of collection only. The
liability of Mr. Henning under this Guaranty (as limited as provided in Section
3) shall be absolute, unconditional, direct, irrevocable, complete and
immediate and shall not be contingent upon the pursuit of any remedies against
the Borrower, Mercury, Mississippi One or any other person, nor against any
security or lien available to CoBank, its successors, successors-in-title,
endorsees or assigns, and shall be joint and several with the liabilities of
all other guarantors of the Obligations. Mr. Henning waives any right to
require that an action be brought against the Borrower, Mercury, Mississippi
One or any other person or to require that resort be had to any security of the
Borrower, Mercury, Mississippi One or any other person (provided that all
remedies hereunder are limited as provided in Section 3). In the event of a
default under any of the Loan Documents, CoBank shall have the right to enforce
its rights, powers and remedies under any of the Loan Documents in any order,
and all rights, powers and remedies available to CoBank in such event shall be
nonexclusive and cumulative of all other rights, powers and remedies provided
thereunder or hereunder or by law or in equity. Accordingly, Mr. Henning
hereby authorizes and empowers CoBank upon acceleration of the maturity of any
of the Notes or any other Obligations, at its sole discretion, and without
notice to Mr. Henning, to exercise any right or remedy which CoBank may have
under the Loan Documents. Mr. Henning waives any right to require any action
on the part of CoBank to proceed to collect amounts due under the Notes or any
other Obligation;
(H) Mr. Henning hereby subordinates any and all
indebtedness of the Borrower, Mercury or Mississippi One now or hereafter owed
to Mr. Henning to all Obligations of the Borrower, Mercury or Mississippi One
to CoBank, and agrees with CoBank that, from and after the occurrence of a
default or event of default under any of the Loan Documents, and for so long as
such default or event of default exists, Mr. Henning shall not demand or accept
any payment of principal or interest from the Borrower, Mercury or Mississippi
One, shall not claim any offset or other reduction of Mr. Henning's liability
hereunder because of any such indebtedness and shall not take any action to
obtain any of
-4-
<PAGE> 5
Continuing Guaranty/Mr. Henning
Loan No. T0310
Loan No. T0347
the security for the Obligations; provided, however, that, if CoBank so
requests, such indebtedness shall be collected, enforced and received by Mr.
Henning as trustee for CoBank and be paid over to CoBank on account of the
Obligations of the Borrower, Mercury or Mississippi One to CoBank, but without
reducing or affecting in any manner the liability of Mr. Henning under the
other provisions of this Guaranty;
(I) Mr. Henning hereby authorizes CoBank, without
notice to Mr. Henning, to apply all payments and credits received from the
Borrower, Mercury, Mississippi One or any other person or realized from any
security in such manner and in such priority as CoBank in its sole judgment
shall see fit to the Obligations or to any other liabilities of the Borrower,
Mercury, Mississippi One or any other person to CoBank, and Mr. Henning agrees
that any such application shall not in any way affect its liabilities
hereunder;
(J) The liability of Mr. Henning under this Guaranty
shall not in any manner be affected by reason of any action taken or not taken
by CoBank, which action or inaction is hereby consented and agreed to by Mr.
Henning, nor by the partial or complete unenforceability or invalidity of any
other guaranty or surety agreement, pledge, assignment, or other security for
any of the Obligations. No delay in making demand on Mr. Henning for
satisfaction of its liability hereunder shall prejudice CoBank's right to
enforce such satisfaction. All of CoBank's rights and remedies shall be
cumulative and any failure of CoBank to exercise any right hereunder shall not
be construed as a waiver of the right to exercise the same or any other right
at any time, and from time to time, thereafter;
(K) This Guaranty shall be a continuing one and shall
be binding upon Mr. Henning regardless of how long before or after the date
hereof the Obligations are incurred. This Guaranty shall remain in full force
and effect until payment in full of CoBank Loan No. T0347, at which time a
written instrument of termination shall be executed and delivered by a duly
authorized officer of CoBank, such termination to be subject to the provisions
of Subsection (C) above as applied to CoBank Loan No. T0347; and
(L) Mr. Henning hereby irrevocably waives any and all
rights it may have to enforce any of CoBank's rights or remedies or participate
in any security now or hereafter held by CoBank, and any and all such other
rights of subrogation, reimbursement, contribution or indemnification against
the Borrower, Mercury, Mississippi One or any other person having any manner of
liability for the Borrower's obligations to CoBank, whether or not arising
hereunder, by agreement, at law or in equity.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Mr. Henning
represents and warrants to CoBank, on and as of the date hereof and on and as
of each date on which the Borrower receives an advance under the Loans, as
follows:
-5-
<PAGE> 6
Continuing Guaranty/Mr. Henning
Loan No. T0310
Loan No. T0347
(A) BINDING AGREEMENT. Each of the Loan Documents to
which Mr. Henning, the Borrower, Mercury or Mississippi One is a party, is, or
when executed and delivered will be, the legal, valid, and binding obligation
of Mr. Henning, the Borrower, Mercury or Mississippi One, as applicable,
enforceable against such party in accordance with its terms, subject only to
limitations on enforceability imposed by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally, and (ii) general equitable principles.
(B) FINANCIAL CONDITION. The liability and
obligations of Mr. Henning incurred or arising under this Guaranty, of the
Borrower incurred or arising under the CTC One Note and the CTC Two Note, the
Loan Agreements and the other Loan Documents to which it is a party, of Mercury
incurred or arising under the Mercury Guaranty, the Mercury Note and the other
Loan Documents to which it is a party, and of Mississippi One incurred or
arising under the Mississippi One Note, the Mississippi One Guaranty and the
other Loan Documents to which it is a party will benefit substantially Mr.
Henning directly and indirectly. Mr. Henning has full and complete access to
all of the Loan Documents and other documents relating to the Obligations, has
reviewed them and is fully aware of the meaning and effect of their contents.
Mr. Henning is fully informed of all circumstances that bear upon the risks of
executing this Guaranty which a diligent inquiry would reveal. Mr. Henning has
adequate means to obtain from the Borrower, Mercury and Mississippi One, on a
continuing basis, information concerning the financial condition of the
Borrower, Mercury and Mississippi One and is not depending on CoBank to provide
such information, now or in the future. Mr. Henning agrees that CoBank will
have no obligation to advise or notify Mr. Henning of or provide Mr. Henning
with any data or information.
SECTION 6. COVENANTS. Unless otherwise agreed to in writing
by CoBank, while this Guaranty remains in effect any of or the Obligations have
not been fully paid or otherwise satisfied, Mr. Henning agrees to cause Mercury
to comply with the affirmative and negative comments and agreements contained
in Sections 6 and 7 of the Mercury Guaranty.
SECTION 7. MISCELLANEOUS.
(A) GOVERNING LAW. Except to the extent governed by
applicable federal law, this Guaranty shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
(B) BINDING EFFECT. This Guaranty shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns, including any holder or owner of the Notes or any other
Loan Document.
-6-
<PAGE> 7
Continuing Guaranty/Mr. Henning
Loan No. T0310
Loan No. T0347
(C) SEVERABILITY. If any one or more of the
provisions contained herein shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Guaranty, but
this Guaranty shall be construed as if such invalid, illegal or unenforceable
provision had not been contained herein.
(D) NON-WAIVER; MODIFICATION; ELECTION OF REMEDIES.
The failure of CoBank to insist, in any one or more instances, upon a strict
performance of any of the terms and conditions of this Guaranty, or to exercise
or fail to exercise any option or right contained herein, shall not be
construed as a waiver or a relinquishment for the future of such right or
option, but the same shall continue and remain in full force and effect.
CoBank's knowledge of the breach of any term or condition hereof shall not be
deemed a waiver of such breach, and no waiver by CoBank of any provision hereof
shall be deemed to have been made, or operate as an estoppel, unless expressed
in writing and signed by CoBank. No enforcement of any remedy shall constitute
an election of remedies.
(E) NOTICES. All notices hereunder shall be made, and
shall be deemed to be duly given if made, in the manner provided for notices
under Section 19 of the Mercury Loan Agreement, to the parties at the following
addresses (or such other address for a party as shall be specified by like
notice):
If to Mr. Henning, as follows:
William L. Henning
-----------------------------------
101 E. Thomas St.
-----------------------------------
Sulphur La 70663
-----------------------------------
-----------------------------------
Fax No. (318) 439-0769
If to CoBank, as follows:
CoBank, ACB
200 Galleria Parkway
Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No.: (770) 618-3202
(F) REGULATORY APPROVALS. Upon any action by CoBank to
commence the exercise of remedies hereunder or under the Mississippi One Deed
to Secure Debt, the Mississippi One Mortgage, the Mississippi One Security
Agreement or the Mercury Pledge Agreement, Mr. Henning hereby undertakes and
agrees on behalf of itself, Mercury and
-7-
<PAGE> 8
Continuing Guaranty/Mr. Henning
Loan No. T0310
Loan No. T0347
Mississippi One, to cooperate and join with CoBank in any application to the
LPSC, the MPSC, the FCC, the SEC or any other regulatory body, administrative
agency, court or other forum (any such entity, a "Governmental Authority") with
respect thereto and to provide such assistance in connection therewith as
CoBank may request, including, without limitation, the preparation of filings
and appearances before such Governmental Authority, in each case in support of
any such application made by CoBank, and none of Mr. Henning, Mercury or
Mississippi One shall, directly or indirectly, oppose any such action by CoBank
before any such Governmental Authority.
SECTION 8. CONSENT TO JURISDICTION; REGISTERED AGENT. To the
maximum extent permitted by law, Mr. Henning agrees that any legal action or
proceeding with respect to this or any other Loan Document may be brought in
the courts of the State of Louisiana or of the United States of America for the
Western District of Louisiana, all as CoBank may elect. By execution of this
Guaranty, Mr. Henning hereby irrevocably submits to each such jurisdiction,
expressly waiving any objection it may have to the laying of venue by reason of
its present or future domicile. Nothing contained herein shall affect the
right of CoBank to commence legal proceedings pursuant to the limitations set
forth herein or otherwise proceed against Mr. Henning in any other jurisdiction
or to serve process in any manner permitted or required by law.
[Signatures on next page]
-8-
<PAGE> 9
Continuing Guaranty/Mr. Henning
Loan No. T0310
Loan No. T0347
THUS DONE AND SIGNED on May 15, 1996 in the City of Lake Charles, State
of Louisiana, before me, Notary Public, after a due reading of the whole.
/s/ WILLIAM HENNING, SR. (SEAL)
------------------------------------
William Henning, Sr.
Witness to all signatures:
/s/ SHEILA KING
- ---------------------------------------------
Witness
/s/ SHELLY F. VICKERS
- ---------------------------------------------
Witness
/s/ SANDRA L. [ILLEGIBLE]
- ---------------------------------------------
Notary Public
My commission expires: lifetime commission
[NOTARIAL SEAL]
-9-
<PAGE> 1
EXHIBIT 4.10
LOAN NO. T0310
LOAN NO. T0347
AMENDED AND RESTATED ACT OF SUBORDINATION
BEFORE ME, the respective undersigned Notaries Public, and in the
presence of the witnesses hereinafter named and undersigned, personally came
and appeared the parties listed below, who, after being duly sworn, did state:
THIS AMENDED AND RESTATED ACT OF SUBORDINATION (this "Agreement") is
made and entered into as of May 15, 1996, by CAMERON TELEPHONE COMPANY
("Cameron Telephone") and MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY
("Mississippi One"), in favor of COBANK, ACB, formerly known as the National
Bank for Cooperatives ("CoBank"), and amends and restates that certain Act of
Subordination, dated as of September 27, 1994, among Cameron Telephone,
Mississippi One and CoBank.
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, Cameron Telephone, Mississippi One and CoBank hereby
agree as follows:
SECTION 1. SUBORDINATION OF DEBT. Cameron Telephone and Mississippi
One agree that all obligations of Mississippi One to Cameron Telephone, whether
direct or indirect, absolute or contingent, secured or unsecured, due or to
become due, now existing or hereafter arising, including, without limitation,
(i) that certain Collateral Mortgage Note, dated April 14, 1993, drawn by
Mercury Inc. ("Mercury") to the order of bearer, in the face principal amount
of $5,000,000, and assumed by Mississippi One pursuant to that certain Act of
Sale, dated as of August 31, 1994, between Mercury and Mississippi One (the
"Assumption Agreement"); and (ii) that certain Note, dated April 14, 1993,
drawn by Mercury to the order of Cameron Telephone, in the face principal
amount of $2,729,924.84, and assumed by Mississippi One pursuant to the
Assumption Agreement (all such obligations, collectively, the "Subordinated
Debt"), are and shall be subordinate in payment and right of payment to the
prior payment in full of all obligations of Mississippi One to CoBank, whether
direct or indirect, absolute or contingent, secured or unsecured, due or to
become due, now existing or hereafter arising, principal, interest (accruing
both before and after any default by, or insolvency or bankruptcy of,
Mississippi One) or other cost or charge, including, without limitation, all
obligations hereafter arising under that certain Amended and Restated
Continuing Guaranty, dated as of even date herewith (as the same may be
amended, modified, supplemented, extended or restated from time to time, the
"Mississippi One Guaranty"), made by Mississippi One for the benefit of CoBank
(all such obligations, collectively, the "CoBank Debt"). For purposes of this
Agreement, the CoBank Debt shall not be deemed to have been paid in full until
all loan agreements between CoBank and Mississippi One or any affiliate of
Mississippi One if, with respect to such affiliate, Mississippi One has
guaranteed the affiliate's obligations under such loan
<PAGE> 2
Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
agreements, including, without limitation, that certain Amended and Restated
Loan Agreement, dated as of even date herewith, providing for a loan of up to
$17,400,000, and that certain Loan Agreement, dated as of even date herewith,
providing for a loan of up to $5,000,000, all by and between CoBank and CTC
Financial, Inc. (the foregoing loan agreements, collectively, the "Loan
Agreements"), shall have been terminated and CoBank shall have received
irrevocable payment of the CoBank Debt in immediately available funds or in
another manner satisfactory to CoBank. Cameron Telephone agrees not to ask,
demand, sue for, take or receive from Mississippi One, directly or indirectly,
in cash or other property or by set-off or in any other manner, payment of or
collateral for the payment of all or any of the Subordinated Debt unless or
until the CoBank Debt shall be paid in full and, without the prior written
consent of CoBank, will not exercise any remedies available to it, whether by
agreement, law or equity or otherwise, in respect to the nonpayment of the
Subordinated Debt, including, without limitation, the acceleration of the
Subordinated Debt.
SECTION 2. PRIORITIES OF SECURITY INTERESTS.
A. Cameron Telephone hereby subordinates any and all security
interests or liens it may now have or hereafter obtain or reserve with respect
to any property or rights of Mississippi One (the "Collateral"), including,
without limitation, the security interests created pursuant to that certain
Deed of Trust, Security Agreement and Fixture Filing entered into by Mercury
for the benefit of Cameron Telephone, dated as of April 14, 1993, and assumed
by Mississippi One pursuant to the Assumption Agreement, and related UCC
Financing Statement filed with the Secretary of State of the State of
Mississippi (collectively, the "Cameron Telephone Security Interests"), to all
security interests and liens now or hereafter created in favor of CoBank in
connection with any of the CoBank Debt, including, without limitation, the
security interest created by that certain Security Agreement, dated as of
September 27, 1994, as amended by that First Amendment and Supplement to
Security Agreement, dated as of even date herewith (as the same may be amended,
modified, supplemented, extended or restated from time to time, the "Security
Agreement"), entered into by Mississippi One for the benefit of CoBank, the
lien created by that certain Deed of Trust, Security Agreement and Fixture
Filing, dated as of September 27, 1994, as amended by that certain First
Amendment and Supplement to Deed of Trust, Security Agreement and Fixture
Filing, dated as of even date herewith (as the same may be amended, modified,
supplemented, extended or restated from time to time, the "Deed of Trust"),
entered into by Mississippi One for the benefit of CoBank, and the lien created
by that certain Mortgage, dated as of even date herewith (as the same may be
amended, modified, supplemented, extended or restated from time to time, the
"Mortgage"), entered into by Mississippi One for the benefit of CoBank
(collectively, the "CoBank Security Interests").
-2-
<PAGE> 3
Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
B. The subordinations and priorities specified herein apply
irrespective of (i) the time or order of attachment or perfection of the
security interests or liens, (ii) the time or order of filing any financing
statements with respect to the security interests or liens or the time or order
of filing or recording any other documents evidencing the security interests or
liens or the time or order of the delivery or taking of possession of any of
the Collateral, (iii) the time of giving or failure to give notice of the
acquisition of such security interests or liens, (iv) the date on which any of
the Subordinated Debt or CoBank Debt arises, or (v) any priority granted by any
principle of law or any statute.
C. The proceeds resulting from the enforcement of or the
realization on the Cameron Telephone Security Interests and all other proceeds
received by Cameron Telephone in respect of the Cameron Telephone Security
Interests, including, without limitation, insurance and condemnation proceeds,
will be dealt with in such a way as to give effect to the provisions of this
Agreement and the priorities created and established hereby.
SECTION 3. PROCEEDS HELD IN TRUST. In the event that Cameron Telephone
shall receive any proceeds from the sale, liquidation, casualty, condemnation
or other disposition of or realization on any Collateral or as a result of the
Cameron Telephone Security Interests at any time prior to the payment in full
of the CoBank Debt, then it shall hold such proceeds in trust for CoBank and
shall promptly pay over the same to CoBank for the application to the CoBank
Debt.
SECTION 4. AGREEMENTS OF CAMERON TELEPHONE. Cameron Telephone
covenants and agrees that CoBank may possess, sell, lease or otherwise dispose
of or realize on the Collateral in any manner or order that CoBank, in its sole
and absolute discretion, chooses and without regard to the Cameron Telephone
Security Interests therein, and Cameron Telephone hereby waives any right it
may have to require CoBank to marshal assets or any similar right. Nothing
contained in this Agreement shall in any way limit the rights and remedies of
CoBank under the Mississippi One Guaranty, the Security Agreement, the Deed of
Trust, the Mortgage, or under any other agreement or instrument evidencing or
relating to the CoBank Debt or the CoBank Security Interests, or under
applicable law. Cameron Telephone agrees that it will not commence, or join
with any creditor other than CoBank in commencing, any bankruptcy or insolvency
proceeding against Mississippi One. Cameron Telephone shall not transfer,
assign, pledge, encumber, negotiate or otherwise convey to any person any
interest in the Subordinated Debt unless Cameron Telephone shall have received
the prior written consent of CoBank. Cameron Telephone shall promptly notify
CoBank of the creation of any Subordinated Debt and of any payments on any of
the Subordinated Debt.
-3-
<PAGE> 4
Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
SECTION 5. IN FURTHERANCE OF SUBORDINATION. Cameron Telephone agrees
as follows:
A. Upon any distribution of all or any of the assets of
Mississippi One to its creditors upon the dissolution, winding up, liquidation,
arrangement or reorganization of Mississippi One, whether in any bankruptcy,
insolvency, arrangement, reorganization or receivership proceedings or upon an
assignment for the benefit of creditors or any other marshalling of the assets
and liabilities of Mississippi One or otherwise, any payment or distribution of
any kind (whether in cash, property or securities) which otherwise would be
payable or deliverable upon or with respect to the Subordinated Debt shall be
paid or delivered directly to CoBank for application (in the case of cash) to
or as collateral (in the case of non-cash property or securities) for the
payment or prepayment of the CoBank Debt until the CoBank Debt shall have been
paid in full.
B. If any proceeding referred to in Clause A above is commenced
by or against Mississippi One after the date hereof, (i) CoBank is hereby
irrevocably authorized and empowered (in its own name or in the name of Cameron
Telephone), but shall have no obligation, to demand, sue for, collect and
receive every payment or distribution referred to in Clause A above and give
acquittance therefor and to file claims and proofs of claim and take such other
action (including, without limitation, voting the Subordinated Debt or
enforcing any security interest or other lien securing payment of the
Subordinated Debt) as it may deem necessary or advisable for the exercise or
enforcement of any of its rights or interests hereunder; and (ii) Cameron
Telephone shall duly and promptly take such action as CoBank may request (a) to
collect the Subordinated Debt for the account of CoBank and to file appropriate
claims or proofs of claim in respect of the Subordinated Debt; (b) to execute
and deliver to CoBank such powers of attorney, assignments or other instruments
as it may request in order to enable it to enforce any and all claims with
respect to, and any security interests and other liens securing payment of, the
Subordinated Debt; and (c) to collect and receive any and all payments or
distributions which may be payable or deliverable upon or with respect to the
Subordinated Debt.
C. All payments or distributions upon or with respect to the
Subordinated Debt which are received by Cameron Telephone prior to the payment
or prepayment in full of the CoBank Debt shall be received in trust for the
benefit of CoBank, shall be segregated from other funds and property held by
Cameron Telephone and shall be forthwith paid over to CoBank in the same form
as so received (with any necessary endorsement) to be applied (in the case of
cash) to or held as collateral (in the case of non-cash property or securities)
for the payment or prepayment of the CoBank Debt.
-4-
<PAGE> 5
Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
SECTION 6. RIGHTS OF SUBROGATION. Cameron Telephone agrees that no
payment or distribution to CoBank pursuant to the provisions of this Agreement
shall entitle Cameron Telephone to exercise any rights of subrogation in
respect thereof until the CoBank Debt shall have been paid in full.
SECTION 7. OBLIGATIONS HEREUNDER NOT AFFECTED. The subordination of
the Cameron Telephone Security Interests provided hereby, the priority of
CoBank Security Interests in the Collateral as against the Cameron Telephone
Security Interests in the Collateral, the rights and interests of CoBank
hereunder, and all agreements and obligations of Cameron Telephone under this
Agreement, shall remain in full force and effect irrespective of (i) any lack
of validity or enforceability of the Mississippi One Guaranty or any other
agreement or instrument relating to the CoBank Debt or the CoBank Security
Interests; (ii) any change, amendment, modification or extension in the time,
manner or place of payment of, or in any other term of, all or any of the
CoBank Debt or the CoBank Security Interests, or any documents evidencing the
CoBank Debt or the CoBank Security Interests, or any other amendment to or
waiver of or any consent to departure from the terms and conditions of the
Mississippi One Guaranty or any other agreement or instrument relating to the
CoBank Debt or the CoBank Security Interests; (iii) any exchange, release or
non-perfection of any collateral for the CoBank Debt, including, without
limitation, the Mississippi One Guaranty, the Security Agreement, the Deed of
Trust or the Mortgage; or (iv) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, Cameron Telephone in
respect of this Agreement other than as expressly provided herein, and CoBank
shall not be required to give Cameron Telephone notice of any such occurrence.
SECTION 8. WAIVER. Each of Cameron Telephone and Mississippi One
hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the CoBank Debt and this Agreement and any requirement
that CoBank protect, secure, perfect or insure any security interest or lien or
any property subject thereto or exhaust any right or take any action against
Mississippi One or any other person or entity or any collateral.
SECTION 9. SUBORDINATED DEBT LEGEND. Mississippi One and Cameron
Telephone will cause each instrument evidencing Subordinated Debt to be
endorsed with the following legend:
"The indebtedness evidenced by this instrument is subordinated to
the prior payment in full of the "CoBank Debt" (as defined in the
Act of Subordination hereinafter referred to) pursuant to, and to
the extent
-5-
<PAGE> 6
Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
provided in that certain Amended and Restated Act of
Subordination, dated as of May 15, 1996, by the maker hereof and
payee named herein in favor of CoBank, ACB."
In the case of any Subordinated Debt which is not evidenced by an instrument,
upon CoBank's request, Mississippi One and Cameron Telephone shall cause such
Subordinated Debt to be evidenced by an appropriate instrument or instruments
endorsed with the above legend.
SECTION 10. FURTHER ASSURANCES. Cameron Telephone and Mississippi One
shall do such further acts and things and execute, deliver, register and file
such further deeds, documents and assurances which may be reasonably required
to give full effect to the intent and purpose of this Agreement. None of the
parties hereto shall take any steps or do anything whereby the priorities
provided for herein may be defeated or impaired.
SECTION 11. RIGHTS AND REMEDIES CUMULATIVE. The subordinations and
priorities set forth herein and the rights and remedies of CoBank hereunder are
in addition to, and not in derogation of the rights and remedies of CoBank
under the Uniform Commercial Code of the State of Louisiana and other
applicable law.
SECTION 12. CONTINUATION OF AGREEMENT. This Agreement shall be a
continuing agreement until the complete termination and release of all of
CoBank Security Interests in the Collateral and the payment in full of all
CoBank Debt. This Agreement shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the CoBank Debt is
rescinded or must otherwise be returned by CoBank upon the insolvency,
bankruptcy or reorganization of Mississippi One, Mercury, CTC Financial, Inc.,
or otherwise, all as though such payment had not been made.
SECTION 13. NOTICES.
All notices to the parties hereto shall be in writing and shall
be delivered in person, telecopied or sent by registered or certified mail to
the following addresses:
If to CoBank, to:
CoBank, ACB
200 Galleria Parkway, N.W.
Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No: (770) 618-3202
-6-
<PAGE> 7
Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
If to Cameron Telephone, to:
Cameron Telephone Company
P.O. Box 162
Sulphur, Louisiana 70663
Attn.: President
If to Mississippi One, to:
Mississippi One Cellular Telephone Company
P.O. Box 3709
Lake Charles, Louisiana 70602
Attn.: Dusty Dumas; cc: Thomas G. Henning
Fax No: (318) 439-0769
or to such other address as may be designated by any party hereto in a written
notice to the other party hereto. All notices hereunder shall be deemed to be
duly given and received on the date of delivery if delivered personally, on the
date telecopied if telecopied, or on the third business day after the deposit
in the United States Mail if mailed by prepaid first class registered or
certified mail, properly addressed with appropriate postage paid thereon.
SECTION 14. ENTIRE AGREEMENT; AMENDMENTS. This Agreement contains the
entire understanding of the parties with respect to the subject matter hereof.
It may not be changed orally but only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification, extension,
or discharge is sought.
SECTION 15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon Cameron Telephone, Mississippi One and their respective successors and
assigns and shall inure to the benefit of CoBank and its successors and
assigns.
SECTION 16. GOVERNING LAW. This Agreement shall be governed, construed
and enforced in accordance with the laws of the State of Louisiana without
regard for its choice of law rules.
[Signatures on next page]
-7-
<PAGE> 8
Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below, and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
duly authorized officers of the respective parties, after a due reading of the
whole.
At Lake Charles, Louisiana, on May 15, 1996.
CAMERON TELEPHONE COMPANY
By: /s/ SHELBY HOFFPAUIR
-----------------------------------------
Name: Shelby Hoffpauir
-----------------------------------
Title: President
----------------------------------
Attest: /s/ LENA B. HENNING
-------------------------------------
Name: Lena B. Henning
------------------------------
Title: Secretary
-----------------------------
[CORPORATE SEAL]
Witnesses to all signatures:
/s/ SHEILA KING
- -------------------------------
Witness
/s/ DANA PUDATT
- -------------------------------
Witness
/s/ [ILLEGIBLE]
- -------------------------------
Notary Public
My commission expires: [LIFE]
--------
[NOTARIAL SEAL]
(Signatures continued on next page)
-8-
<PAGE> 9
Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
(Signatures continued from previous page)
At Lake Charles, Louisiana, on May 15, 1996.
MISSISSIPPI ONE CELLULAR TELEPHONE
COMPANY
By: /s/ THOMAS G. HENNING
-----------------------------------------
Name: Thomas G. Henning
-----------------------------------
Title: President
----------------------------------
Witnesses to signature:
/s/ SHEILA KING
- ------------------------------
Witness
/s/ DANA PUDATT
- ------------------------------
Witness
/s/ [ILLEGIBLE]
- ------------------------------
Notary Public
My commission expires: [LIFE]
-------
[NOTARIAL SEAL]
(Signatures continued on next page)
-9-
<PAGE> 10
Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
(Signatures continued from previous page)
At Atlanta, Georgia, on May 15, 1996.
COBANK, ACB
By: /s/ THOMAS A. SMITH
-----------------------------------------
Name: Thomas A. Smith
-----------------------------------
Title: Senior Vice-President
----------------------------------
Witnesses to signature:
/s/ GLORIA S. HANCOCK
- --------------------------------------
Witness
/s/ CAROLINA PAULK
- --------------------------------------
Witness
/s/ SUSAN L. SOUTH
- --------------------------------------
Notary Public
My commission expires: June 18, 2000
---------------
[NOTARIAL SEAL]
-10-
<PAGE> 11
EXHIBIT A
UNITED STATES OF AMERICA
STATE OF LOUISIANA
FOX MCKEITHEN
SECRETARY OF STATE
As Secretary of State, of the State of Louisiana, I do hereby Certify that
the annexed and following is a True and Correct copy of the Articles of
Incorporation and Initial Report as shown by comparison with documents filed
and recorded in this Office on July 21, 1986.
In testimony whereof, I have hereunto set
my hand and caused the Seal of my Office
to be affixed at the City of Baton Rouge on,
May 8, 1996
/s/ FOX MCKEITHEN State of Louisiana
Secretary of State
[Seal]
CBU
Secretary of State
<PAGE> 1
EXHIBIT 4.11
LOAN NO. T0310
COBANK, ACB
AMENDED AND RESTATED PROMISSORY NOTE
MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY
LAKE CHARLES, LOUISIANA
$17,400,000 DATED: MAY 15, 1996
FOR VALUE RECEIVED, MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY
("Mississippi One") hereby promises to pay to the order of CTC FINANCIAL, INC.
("Finance"; Finance or any subsequent holder of this Amended and Restated
Promissory Note, the "Holder") the principal amount of SEVENTEEN MILLION FOUR
HUNDRED THOUSAND DOLLARS ($17,400,000), or so much as may have been advanced
under that certain Amended and Restated Promissory Note, dated of even date
herewith, made by Finance to the order of CoBank, ACB, formerly known as the
National Bank for Cooperatives ("CoBank"), in the principal face amount of
$17,400,000 (including any amendment, modification, supplement, extension, or
restatement thereof, the "Finance Note"), and that certain Amended and Restated
Loan Agreement, dated as of even date herewith, and numbered Loan No. T0310, by
and between Finance and CoBank (including any amendment, modification,
supplement, extension, or restatement thereof, the "Loan Agreement"), and
reloaned by Finance to Mississippi One, together with interest as hereinafter
provided from the date hereof until paid in full, plus amounts equal to all
other costs, fees, expenses, premiums, surcharges and all other amounts due
under or in connection with the Finance Note and the Loan Agreement. For
purposes of this Amended and Restated Promissory Note, the "Finance Loan" shall
mean the amounts borrowed by Finance from CoBank pursuant to the Loan Agreement
and evidenced by the Finance Note, and the "Loan" shall mean the amounts of the
Finance Loan reloaned by Finance to Mississippi One and evidenced by this
Amended and Restated Promissory Note.
1. AMENDMENT AND RESTATEMENT OF NOTE. This Note is given in
substitution for and supersedes and replaces that certain Promissory Note dated
September 27, 1994 (the "Original Note"), entered into by Mississippi One to
the order of Finance and assigned to CoBank. This Note is not delivered in
extinguishment of the indebtedness evidenced by the Original Note and does not
constitute a novation of the Original Note, but is made to evidence
indebtedness in the principal amount of $2,393,575 outstanding under the
Original Note as of the date hereof and any additional indebtedness incurred or
to be incurred by Finance and reloaned to the undersigned under the Loan
Agreement.
2. INTEREST. The aggregate amount of interest accruing under this
Note shall at all times equal the aggregate amount of interest accruing under
the Finance Note. Accordingly, interest on the principal balance outstanding
hereunder shall accrue as follows:
<PAGE> 2
Amended and Restated Promissory
Note/Mississippi One
Loan No. T0310
(a) As to a principal amount equal to the Portion (as defined
in the Loan Agreement) of the Finance Loan, if any, from time to time accruing
interest at the Variable Rate (as defined in the Loan Agreement), at a rate
equal to the Variable Rate applicable from time to time under the Loan
Agreement; and
(b) As to a principal amount equal to each Portion of the
Finance Loan, if any, from time to time accruing interest pursuant to one of
the fixed rate options as provided for in Section 4(A)(2)(a) or (b) of the Loan
Agreement, at a fixed rate equal to the fixed rate so accruing on each such
Portion.
3. REPAYMENT OF PRINCIPAL; INTEREST AND OTHER AMOUNTS PAYABLE. This
Note evidences Mississippi One's obligations with respect to the Loan.
Mississippi One shall pay to the Holder an amount equal to the aggregate
principal amount of the Loan, together with accrued interest thereon, plus all
other costs, fees, expenses, premiums, surcharges and all other amounts due
under or in connection with the Finance Note and the Loan Agreement, in such
amounts and at such times as shall be sufficient to make, when and as due, all
payments required under the Finance Note and the Loan Agreement with respect to
the Finance Loan, interest thereon, and such other amounts due thereunder.
Advances, accrued interest and payments under the Finance Note and the Loan
Agreement shall be posted by CoBank upon an appropriate accounting record,
which record (and all computer printouts thereof) shall constitute prima facie
evidence of the outstanding principal and interest under the Finance Note and
the Loan Agreement. So long as CoBank shall be the Holder hereof, payments
received by CoBank pursuant to this Note shall be deemed to constitute payments
made pursuant to the Finance Note.
4. MANNER AND PLACE OF PAYMENT. Payments of all amounts due
hereunder are to be made at such location as the Holder may designate in
writing in accordance with Paragraph 11 hereof, in lawful money of the United
States of America.
5. LOAN DOCUMENTS. This Note is executed pursuant to the terms of
the Loan Agreement. This Note, the Finance Note and the Loan Agreement and any
other agreements, documents or instruments securing the indebtedness or
evidencing or relating to the transactions contemplated in the Loan Agreement
shall sometimes herein be collectively called the "Loan Documents."
6. COST OF COLLECTION. In the event this Note or any amount due
hereunder is not paid promptly when due, Mississippi One shall pay the
reasonable fees and all other costs and expenses of any attorneys at law who
may be employed to recover the amount overdue, or to protect the interest of
the Holder, or to enforce any Loan Document or to compromise or take other
action in regard hereto or thereto.
-2-
<PAGE> 3
Amended and Restated Promissory
Note/Mississippi One
Loan No. T0310
7. WAIVER. Mississippi One hereby waives any right to consent to
any modification, amendment, supplement, extension, or restatement of the
Finance Note, the Loan Agreement or any of the other Loan Documents; waives
presentment for payment, demand, protest and notice of dishonor and nonpayment;
and agrees that the payment hereof or of the Finance Note and the Loan
Agreement may be extended one or more times without notice. Mississippi One
hereby waives all defenses on the ground of delay or of any extension of time
for the payment hereof which may be hereafter given by the Holder hereof to it
or to anyone who has assumed the payment of this Note, and it is specifically
agreed that the obligations of Mississippi One shall not be in anywise affected
or altered to the prejudice of the Holder hereof by reason of the assumption of
payment of the same by any other person or entity.
8. PARTIES BOUND. As used herein, the terms "Mississippi One" and
the "Holder" shall be deemed to include their respective successors and
assigns.
9. MISCELLANEOUS. The Holder shall not by any act, delay, omission
or otherwise be deemed to have waived any of its rights or remedies, and no
waiver of any kind shall be valid, unless in writing and signed by the Holder.
All rights and remedies of the Holder under the terms of this Note and under
any statutes or rules of law shall be cumulative and may be exercised
successively or concurrently. Any provision of this Note which may be
unenforceable or invalid under any law shall be ineffective to the extent of
such unenforceability or invalidity without affecting the enforceability or
validity of any other provision hereof. Except to the extent governed by
applicable federal law, this Note shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
10. CONSENT TO JURISDICTION. To the maximum extent permitted by law,
Mississippi One agrees that any legal action or proceeding with respect to this
Note may be brought in the courts of the State of Louisiana or the United
States of America for the Western District of Louisiana, all as the Holder may
elect. By execution of this Note, Mississippi One hereby irrevocably submits
to each such jurisdiction, expressly waiving any objection it may have to the
laying of venue by reason of its present or future domicile. Nothing contained
herein shall affect the right of the Holder to commence legal proceedings or
otherwise proceed against Mississippi One in any other jurisdiction or to serve
process in any manner permitted or required by law.
11. NOTICES. All notices herein authorized or required to be given
to Mississippi One or the Holder shall be given and delivery may be effected in
the manner set forth in the Loan Agreement to the addresses set forth below or
to such other address as the parties may designate from time to time in
accordance with this paragraph:
-3-
<PAGE> 4
Amended and Restated Promissory
Note/Mississippi One
Loan No. T0310
<TABLE>
<S> <C> <C> <C>
Mississippi One: Mississippi One Cellular Holder: CoBank, ACB
Telephone Company 200 Galleria Parkway
P.O. Box 3709 Suite 1900
Lake Charles, Louisiana 70602 Atlanta, Georgia 30339
Attn: Dusty Dumas; cc: Thomas Attn: Rural Utility Banking
G. Henning Fax No.: (770) 618-3202
Fax No.: (318) 439-0769
</TABLE>
[Signature follows on next page.]
-4-
<PAGE> 5
Amended and Restated Promissory
Note/Mississippi One
Loan No. T0310
WHEREFOR, Mississippi One has caused this Note to be executed,
attested, sealed and delivered by its duly authorized officers on the day and
year first written above.
MISSISSIPPI ONE CELLULAR
TELEPHONE COMPANY
By: /s/ THOMAS G. HENNING
----------------------------------
Name: Thomas G. Henning
-----------------------------
Title: President
----------------------------
Attest: /s/ [ILLEGIBLE]
------------------------------
Name: [ILLEGIBLE]
-------------------------
Title: Secretary
------------------------
[CORPORATE SEAL]
-5-
<PAGE> 6
Amended and Restated Promissory
Note/Mississippi One
Loan No. T0310
FOR VALUE RECEIVED, CTC FINANCIAL, INC. ("Finance") hereby assigns to COBANK,
ACB ("CoBank") all of its interest in this Note to secure the prompt payment
and performance of the Obligations (as hereinafter defined). As used herein,
the term "Obligations" shall mean (i) the principal, interest and any other
charges provided for in the Finance Note (as defined in this Note) and the Loan
Agreement (as defined in this Note); (ii) all payments or performances under
any other agreements, instruments and documents now or hereafter evidencing or
relating to the transactions contemplated in the Loan Agreement; and (iii) all
indebtedness, obligations and liabilities of Finance to CoBank of every kind,
character and description whatsoever, direct or indirect, absolute or
contingent, due or to become due, now existing or hereinafter incurred,
contracted or arising, joint or several, liquidated or unliquidated, regardless
of how they arise or by what agreement or instrument they may be evidenced or
whether they are evidenced by any agreement or instrument, or whether incurred
as maker, drawer, endorser, surety, guarantor or otherwise.
WHEREFOR, Finance has caused this assignment to be executed and
delivered as of May 15, 1996.
CTC FINANCIAL, INC.
By: /s/ WILLIAM L. HENNING, JR.
-------------------------------------------
Name: William L. Henning, Jr.
-------------------------------------
Title: President
------------------------------------
Attest: /s/ THOMAS G. HENNING
---------------------------------------
Name: Thomas G. Henning
---------------------------------
Title: Secretary
--------------------------------
[CORPORATE SEAL]
-6-
<PAGE> 1
EXHIBIT 4.12
LOAN NO. T0310
LOAN NO. T0347
COBANK, ACB
SECURITY AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the respective undersigned Notaries Public, and in the presence
of the respective undersigned competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS SECURITY AGREEMENT (this "Security Agreement") is made and entered
into as of July 1, 1996, by and between MERCURY, INC. (the "Debtor") having its
place of business (or chief executive office if more than one place of
business) located at P.O. Box 3709, Lake Charles, Louisiana 70602 and whose
taxpayer identification number is 72-0647424, and COBANK, ACB (the "Secured
Party"), whose mailing address is 200 Galleria Parkway, Suite 1900, Atlanta,
Georgia 30339.
SECTION 1. GRANT OF SECURITY INTEREST. For valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Debtor hereby
grants to the Secured Party a security interest in all of the following
property, wherever located and whether now existing or hereafter acquired,
together with all accessions and additions thereto, and all products and
proceeds thereof:
accounts; inventory (including, without limitation, returned or
repossessed goods); chattel paper; instruments (including, without
limitation, certificated securities); letters of credit; contracts and
contract rights; leases; documents; equipment (including, without
limitation, telecommunications and radio transmitting and receiving
equipment, antennae, towers, microwave communication equipment,
machinery, computers, parts, tools, implements, poles, posts,
cross-arms, conduits, ducts, lines (whether underground or overhead or
otherwise), wires, cables, exchanges, switches
<PAGE> 2
Security Agreement/Mercury
Loan No. T0310
Loan No. T0347
(including, without limitation, host switches and remote switches),
desks, testboards, racks, frames, motors, generators, batteries, items
of central office equipment, pay-stations, protectors, subscriber
equipment, instruments, connections and appliances, office furniture and
equipment and work equipment and any and all other equipment used,
useful or acquired for use in the business of the Debtor or the
operation of the Debtor's properties); fixtures; general intangibles
(including, without limitation, permits, licenses, grants, franchises,
privileges, permissions, certificates and choses or things in action,
litigation rights and resulting judgments, goodwill, patents, trademarks
and other intellectual property, tax refunds, miscellaneous rights to
payment, entitlements, uncertificated investment securities and
investments, margin accounts, computer programs, invoices, books,
records and other information relating to or arising out of the Debtor's
business, and, to the extent permitted by law, all licenses and permits
issued by the Federal Communications Commission (the "FCC")); and, to
the extent not covered by the above, all other personal property of, the
Debtor of every type and description, including, without limitation,
interests or claims in or under any policy of insurance, tort claims,
deposit accounts, money, and judgments; provided, however, that no
security interest is granted in licenses, permits, leases, franchises,
privileges, permissions and grants which by their terms or by reason of
applicable law would become void or voidable if a security interest
therein were granted or if the granting of a security interest therein
would violate any law, rule, regulation or order of any governmental
body or regulatory authority (collectively, the "Collateral").
Where applicable, all terms used herein shall have the same meaning as set
forth in the Uniform Commercial Code as codified at Title 10 of the Louisiana
Revised Statutes Annotated, as amended (the "UCC").
SECTION 2. OBLIGATIONS. The security interest granted hereunder shall
secure the following obligations (the "Obligations"): (a) all payments or
performances to be made by CTC Financial, Inc. (the "Borrower") under the "Loan
Documents" (as defined in that certain Amended and Restated Loan Agreement,
dated as of May 15, 1996, between the Borrower and CoBank, as amended by that
certain First Amendment and Supplement to Amended and Restated Loan Agreement,
dated as of July 1, 1996 (as so amended and as amended, modified, restated and
replaced from time to time, the "Mississippi One Loan Agreement")), including,
without limitation, the payment of all principal, interest and other amounts
becoming due and payable, whether by acceleration or otherwise, under that
certain Second Amended and Restated Promissory Note, dated July 1, 1996 (the
"Amended CoBank Note"), made by the Borrower to CoBank in the principal face
amount of $32,400,000 (as any such Loan Documents may be amended, supplemented,
modified, extended or restated from time to time); (b) all payments or
performances to be made by Mississippi One Cellular Telephone Company ("MCTC")
under the "Loan Documents" (as defined in the Mississippi One Loan Agreement
and that certain Loan Agreement, between the Borrower and
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CoBank, dated as of May 15, 1996 (as amended, modified, restated and replaced
from time to time, the "Mercury Loan Agreement"; the Mississippi Loan Agreement
and the Mercury Loan Agreement, the "Loan Agreements")), including, without
limitation, the payment of all principal, interest and other amounts becoming
due and payable, whether by acceleration or otherwise, under that certain
Second Amended and Restated Promissory Note, dated July 1, 1996 (the
"Mississippi One Note"), made by Mississippi One to the order of the Borrower,
and assigned to CoBank, in the face principal amount of $32,400,000, and all
payments or performances under that certain Amended and Restated Continuing
Guaranty, dated as of May 15, 1996, made by Mississippi One for the benefit of
CoBank, as amended by that certain First Amendment and Supplement to Amended
and Restated Continuing Guaranty, dated as of July 1, 1996 (as so amended and
as any such Loan Documents may be amended, supplemented, modified, extended or
restated from time to time); (c) all payments or performances to be made by the
Borrower under the "Loan Documents" (as defined in the Mercury Loan Agreement),
including, without limitation, the payment of all principal, interest and other
amounts becoming due and payable, whether by acceleration or otherwise, under
that certain Promissory Note, dated May 15, 1996 (the "CoBank Note"), made by
the Borrower to CoBank in the principal face amount of $5,000,000 (as any such
Loan Documents may be amended, supplemented, modified, extended or restated
from time to time); (d) all payments or performances to be made by the Debtor
under the "Loan Documents" (as defined in the Mercury Loan Agreement and in the
Mississippi One Loan Agreement), including, without limitation, the payment of
all principal, interest and other amounts becoming due and payable, whether by
acceleration or otherwise, under that certain Promissory Note, dated May 15,
1996 (the "Mercury Note"; the Amended CoBank Note, the Mississippi One Note,
the CoBank Note and the Mercury Note collectively, the "Notes" and, each a
"Note"), made by the Debtor to the order of the Borrower, and assigned to
CoBank, in the face principal amount of $5,000,000 (as such Promissory Note may
be amended, modified, extended, renewed, reinstated or replaced from time to
time), and all payments or performances under that certain Continuing Guaranty,
dated as of May 15, 1996, made by the Debtor for the benefit of CoBank, as
amended by that certain First Amendment and Supplement to Continuing Guaranty
(as so amended and as amended, modified, restated and replaced from time to
time, the "Mercury Guaranty"), dated as of July 1, 1996 (as any such Loan
Documents may be amended, supplemented, modified, extended or restated from
time to time); and (e) all other indebtedness and liabilities of the Debtor,
the Borrower or Mississippi One to CoBank of every kind and description
whatsoever, whether now existing or hereafter arising, fixed or contingent, as
primary obligor or as guarantor or surety, acquired directly or by assignment
or otherwise, liquidated or unliquidated, regardless of how they arise or by
what agreement or instrument they may be evidenced, including, without
limitation, all loans, advances and other extensions of credit and all
covenants, agreements and provisions contained in all loan and other agreements
between the parties.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Debtor
represents, warrants and covenants as follows:
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(A) OWNERSHIP OF COLLATERAL. Except for any security interest
in favor of the Debtor owns and possesses all of the Collateral free and clear
of all adverse claims, interests, liens, encumbrances, or other defects.
Without the prior written consent of the Secured Party, the Debtor shall not
create or permit the existence of any adverse claim, interest, lien, or other
encumbrance against any of the Collateral, except as expressly permitted by the
Loan Documents. The Debtor shall provide prompt written notice to the Secured
Party upon learning of any future adverse claim, interest, lien, or encumbrance
against any of the Collateral, and shall defend diligently the Debtor's and the
Secured Party's interests in the Collateral.
(B) VALIDITY OF SECURITY AGREEMENT; CORPORATE AUTHORITY. This
Security Agreement is the legal, valid and binding obligation of the Debtor,
enforceable in accordance with its terms, subject only to limitations on
enforceability imposed (i) by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally and (ii) by general equitable principles. The Debtor has the
corporate power to execute, deliver and carry out the terms and provisions of
this Security Agreement and all related documents, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Security Agreement and all related documents.
(C) LOCATION OF THE DEBTOR. The Debtor's place of business
(or chief executive office if more than one place of business) is located at
the address shown above.
(D) LOCATION OF COLLATERAL. All equipment and inventory are
now at the location or locations specified on Schedule A attached hereto and
made a part hereof and except as otherwise disclosed to the Secured Party on
said Schedule A, the Debtor has not maintained any other location or locations
of inventory and equipment within the past 5 years.
(E) NAME, IDENTITY, AND CORPORATE STRUCTURE. Except as
otherwise disclosed to the Secured Party on Schedule A, the Debtor has not
within the past 10 years changed its name, identity or corporate structure
through incorporation, merger, consolidation, joint venture or otherwise.
(F) CHANGE IN NAME, LOCATION OF COLLATERAL, ETC. Without
giving at least 30 days' prior written notice to the Secured Party, the Debtor
shall not change its name, identity or corporate structure, the location of its
place of business (or chief executive office if more than one place of
business), or the location of the Collateral.
(G) FURTHER ASSURANCES. Upon the request of the Secured Party,
the Debtor shall do all acts and things as the Secured Party may from time to
time deem necessary or advisable to enable it to perfect, maintain, and continue
the perfection and priority of the security interest of the Secured Party in the
Collateral, or to facilitate the exercise by the Secured Party of any rights or
remedies granted to the Secured Party hereunder or provided by law. Without
limiting the foregoing,
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the Debtor agrees to execute, in form and substance satisfactory to the Secured
Party, such financing statements, amendments thereto, supplemental agreements,
assignments, notices of assignments, and other instruments and documents as the
Secured Party may from time to time request. In addition, in the event the
Collateral or any part thereof consists of instruments, documents, chattel
paper, or money (whether or not proceeds of the Collateral), the Debtor shall,
upon the request of the Secured Party, deliver possession thereof to the
Secured Party (or to an agent of the Secured Party retained for that purpose),
together with any appropriate endorsements and/or assignments. Without
limiting the generality of the foregoing, the Debtor shall take such action as
the Secured Party may request from time to time to create and perfect a
security interest in favor of the Secured Party in any and all leases, licenses
and permits relating to the location of antennae and other transmission and
receiving equipment on the towers or other property of third parties,
including, without limitation, amending such leases, licenses or permits to
allow the creation and perfection of such security interest and obtaining the
consent of all third parties whose consents may be necessary to the creation
and perfection of such security interest. The Secured Party shall use
reasonable care in the custody and preservation of such Collateral in its
possession, but shall not be required to take any steps necessary to preserve
rights against prior parties. All costs and expenses incurred by the Secured
Party to establish, perfect, maintain, determine the priority of, or release
the security interest granted hereunder (including the cost of all filings,
recordings, and taxes thereon and the reasonable fees and expenses of any agent
retained by the Secured Party) shall become part of the Obligations secured
hereby and be paid by the Debtor on demand.
(H) INSURANCE. The Debtor shall maintain such property and
casualty insurance with such insurance companies, in such amounts, and covering
such risks, as are at all times reasonably satisfactory to the Secured Party.
All such policies shall provide for loss payable clauses or endorsements in
form and content acceptable to the Secured Party. Upon the request of the
Secured Party, all policies (or such other proof of compliance with this
Section as may be satisfactory to the Secured Party) shall be delivered to the
Secured Party. The Debtor shall pay all insurance premiums when due. In the
event of loss, damage, or injury to any insured Collateral, the Secured Party
shall have full power to collect any and all insurance proceeds due under any
of such policies, and shall apply such proceeds to the repair or replacement of
such Collateral or, if such Collateral is not repairable or replaceable, to the
payment of any of the Obligations secured hereby.
(I) TAXES, LEVIES, ETC. The Debtor has paid and shall
continue to pay when due all taxes, levies, assessments, or other charges which
may become an enforceable lien against the Collateral, except such taxes,
levies, assessments, or other charges contested by the Debtor in good faith and
diligently prosecuted and for which reasonable reserves have been set aside on
the books of the Debtor.
(J) DISPOSITION AND USE OF COLLATERAL BY THE DEBTOR. Without
the prior written consent of the Secured Party, the Debtor shall not at any
time sell, transfer, lease, abandon, or otherwise dispose of any Collateral
other than in accordance with the provisions of the Mercury
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Guaranty; provided, however, that no such dispositions shall be made if an
Event of Default (as defined in Section 4) shall have occurred and be
continuing. The Debtor shall not use any of the Collateral in any manner which
violates any statute, regulation, ordinance, rule, decree, order, or insurance
policy.
(K) RECEIVABLES. The Debtor shall preserve, enforce, and
collect all accounts, chattel paper, instruments, documents and general
intangibles, whether now owned or hereafter acquired or arising (the
"Receivables"), in a commercially reasonable fashion and, if an Event of
Default shall have occurred, upon the request of the Secured Party, the Debtor
shall execute an agreement in form and substance satisfactory to the Secured
Party by which the Debtor shall direct all account debtors and obligors on
instruments to make payment to a lock box deposit account under the exclusive
control of the Secured Party.
(L) CONDITION OF COLLATERAL. All tangible Collateral is now
in good repair and condition and the Debtor shall at all times hereafter, at
its own expense, maintain all such Collateral in good repair and condition,
ordinary wear and tear excepted.
(M) CONDITION OF BOOKS AND RECORDS. The Debtor has maintained
and shall maintain complete, accurate and up-to-date books, records, accounts,
and other information relating to all Collateral in the present form and
detail, and shall allow the Secured Party or its representatives to examine and
copy such books, records, accounts, and other information at any reasonable
time, upon reasonable notice from the Secured Party.
(N) RIGHT OF INSPECTION. At all reasonable times and upon
reasonable notice from the Secured Party, the Debtor shall allow the Secured
Party or its representatives to visit any of the Debtor's properties or
locations so that the Secured Party or its representatives may confirm, inspect
and appraise any of the Collateral.
(O) PLEDGE OF STOCK. Upon the acquisition of capital stock of
any subsidiary, the Debtor shall execute and deliver to the Secured Party a
stock pledge agreement in form and substance satisfactory to the Secured Party,
pursuant to which the Debtor shall pledge, on a first-priority basis, all of
its stock in such subsidiary and shall covenant and agree to pledge to the
Secured Party, on a first-priority basis, all capital stock it may thereafter
acquire in that or any other subsidiary.
SECTION 4. DEFAULT. The occurrence of an event of default under any of
the Loan Documents (including, without limitation, the Loan Agreements, the
Notes and the Mercury Guaranty), the breach of or failure to perform any
covenant or agreement contained in this Security Agreement, or any material
inaccuracy as of the date made in any representation or warranty contained in
this Security Agreement shall constitute an "Event of Default" hereunder;
provided that the Debtor shall have 30 days after notice from the Secured Party
to cure any breach of the covenants set forth in Sections 3(H), (K), (L), (M),
and (N).
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SECTION 5. RIGHTS AND REMEDIES. Upon the occurrence of any Event of
Default and at any time during the continuance thereof, the Secured Party may
declare all Obligations to be immediately due and payable and, to the extent
permitted by applicable law and subject to any necessary approval of the
Federal Communications Commission relating to the exercise of remedies
hereunder involving any transfer, sale or disposition of the Debtor's assets,
may exercise any and all rights and remedies of the Secured Party in the
enforcement of its security interest under the UCC, this Security Agreement
(including, without limitation, Section 7), or any other applicable law.
Without limiting the foregoing:
(A) DISPOSITION OF COLLATERAL. The Secured Party may sell,
lease, or otherwise dispose of all or any part of the Collateral, in its then
present condition or following any commercially reasonable preparation or
processing thereof, whether by public or private sale or at any brokers' board,
in lots or in bulk, for cash, on credit or otherwise, with or without
representations or warranties, and upon such other terms as may be acceptable
to the Secured Party, and the Secured Party may purchase such Collateral at any
public sale. At any time when advance notice of sale is required, the Debtor
agrees that 10 days' prior written notice shall be reasonable. In connection
with the foregoing, the Secured Party may:
(1) require the Debtor to assemble the Collateral and all
records pertaining thereto and make such Collateral and records
available to the Secured Party at a place to be designated by the
Secured Party which is reasonably convenient to both parties;
(2) enter the premises of the Debtor or premises under the
Debtor's control and take possession of the Collateral;
(3) without charge by the Debtor, use or occupy the premises
of the Debtor or premises under the Debtor's control, including, without
limitation, warehouse and other storage facilities;
(4) without charge by the Debtor, use any patent, trademark,
trade name, or other intellectual property or technical process used by
the Debtor in connection with any of the Collateral, provided, however,
that any use of federally registered trademarks as to any goods shall be
subject to the control as to the quality of such goods of the owner of
such trademarks and the goodwill of the business symbolized thereby; and
(5) rely conclusively upon the advice or instructions of any
one or more brokers or other experts selected by the Secured Party to
determine the method or manner of disposition of any of the Collateral
and, in such event, any disposition of the Collateral by the Secured
Party in accordance with such advice or instructions shall be deemed to
be commercially reasonable.
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(B) COLLECTION OF RECEIVABLES. The Secured Party may, but
shall not be obligated to, take all actions reasonable or necessary to
preserve, enforce or collect the Receivables, including, without limitation,
the right to notify account debtors and obligors on instruments to make direct
payment to the Secured Party, to permit any extension, compromise, or
settlement of any of the Receivables for less than face value, or to sue on any
Receivable, all without prior notice to the Debtor.
(C) PROCEEDS. The Secured Party may collect and apply all
proceeds of the Collateral, and may endorse the name of the Debtor in favor of
the Secured Party on any and all checks, drafts, money orders, notes,
acceptances, or other instruments of the same or a different nature,
constituting, evidencing, or relating to the Collateral. The Secured Party may
receive and open all mail addressed to the Debtor and remove therefrom any cash
or non-cash items of payment constituting proceeds of the Collateral.
(D) INSURANCE ADJUSTMENTS. The Secured Party may adjust and
settle any and all insurance covering any Collateral, endorse the name of the
Debtor on any and all checks or drafts drawn by any insurer, whether
representing payment for a loss or a return of unearned premium, and execute
any and all proofs of claim and other documents or instruments of every kind
required by any insurer in connection with any payment by such insurer.
The net proceeds of any disposition of the Collateral shall be applied by the
Secured Party, after deducting its reasonable expenses incurred in such
disposition, to the payment in whole or in part of the Obligations in such
order as the Secured Party may elect. The enumeration of the foregoing rights
and remedies is not intended to be exhaustive, and the exercise of any right
and/or remedy shall not preclude the exercise of any other rights or remedies,
all of which are cumulative and non-exclusive.
SECTION 6. OTHER PROVISIONS.
(A) AMENDMENT, MODIFICATION, AND WAIVER. Without the prior
written consent of the Secured Party, no amendment, modification, or waiver of,
or consent to any departure by the Debtor from, any provision hereunder shall
be effective. Any such amendment, modification, waiver, or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No delay or failure by the Secured Party to exercise any remedy
hereunder shall be deemed a waiver thereof or of any other remedy hereunder. A
waiver on any one occasion shall not be construed as a bar to or waiver of any
remedy on any subsequent occasion.
(B) COSTS AND ATTORNEYS' FEES. Except as prohibited by law,
if at any time the Secured Party employs counsel in connection with the
creation, perfection, preservation, or release of the Secured Party's security
interest in the Collateral or the enforcement of any of the Secured Party's
rights or remedies hereunder, all of the Secured Party's reasonable attorneys'
fees arising from
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such services and all expenses, costs, or charges relating thereto shall become
part of the Obligations secured hereby and be paid by the Debtor on demand.
(C) REVIVAL OF OBLIGATIONS. To the extent the Debtor or any
third party makes a payment or payments to the Secured Party or the Secured
Party enforces its security interest or exercises any right of setoff, and such
payment or payments or the proceeds thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, and/or required to be
repaid to a trustee, receiver, or any other party under any bankruptcy,
insolvency or other law or in equity, then, to the extent of such recovery, the
Obligations or any part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment or payments
had not been made, or such enforcement or setoff had not occurred.
(D) PERFORMANCE BY THE SECURED PARTY. In the event the Debtor
shall at any time fail to pay or perform punctually any of its duties hereunder
within any grace period provided therefor, the Secured Party may, at its option
and without notice to or demand upon the Debtor, without obligation and without
waiving or diminishing any of its other rights or remedies hereunder, fully
perform or discharge any of such duties. All costs and expenses incurred by
the Secured Party in connection therewith, together with interest thereon at
the Secured Party's National Variable Rate (as defined in the Mississippi One
Loan Agreement) plus 4% per annum, shall become part of the Obligations secured
hereby and be paid by the Debtor upon demand.
(E) INDEMNIFICATION, ETC. The Debtor hereby expressly
indemnifies and holds the Secured Party harmless from any and all claims,
causes of action, or other proceedings, and from any and all liability, loss,
damage, and expense of every nature, arising by reason of the Secured Party's
enforcement of its rights and remedies hereunder, or by reason of the Debtor's
failure to comply with any environmental or other law or regulation, other than
any such claim, cause of action or other proceeding, liability, loss, damage or
expense arising by reason of gross negligence, willful misconduct or violation
of law on the part of the Secured Party.
(F) POWER OF ATTORNEY. The Debtor hereby constitutes and
appoints the Secured Party or the Secured Party's designee during the term of
any Obligations secured by this Security Agreement as its attorney-in-fact,
which appointment is an irrevocable, durable agency, and coupled with an
interest, with full power of substitution. This power of attorney and mandate
is for the purpose of taking, upon an Event of Default, whether in the name of
the Debtor or in the name of the Secured Party, any action which the Debtor is
obligated to perform hereunder or which the Secured Party may deem necessary or
advisable to accomplish the purposes of this Security Agreement. In taking any
action in accordance with this Section 6(F), the Secured Party shall not be
deemed to be the agent of the Debtor. The powers conferred upon the Secured
Party in this Section are solely to protect its interest in the Collateral and
shall not impose any duty upon the Secured Party to exercise any such powers.
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(G) CONTINUING EFFECT. This Security Agreement, the Secured
Party's security interest in the Collateral, and all other documents or
instruments contemplated hereby shall continue in full force and effect until
all of the Obligations have been satisfied in full, each of the Loan Agreements
and the Mercury Guaranty has been terminated in accordance with its respective
terms and the Debtor has sent a valid written demand to the Secured Party for
termination of this Security Agreement.
(H) BINDING EFFECT. This Security Agreement shall be binding
upon and inure to the benefit of the Debtor and the Secured Party and their
respective successors and assigns.
(I) SECURITY AGREEMENT AS FINANCING STATEMENT. A photographic
copy or other reproduction of this Security Agreement may be used as a
financing statement.
(J) GOVERNING LAW. Except to the extent governed by
applicable federal law, this Security Agreement shall be governed by and
construed in accordance with the laws of the State of Louisiana without
reference to choice of law doctrine.
(K) NOTICES. All notices hereunder shall be deemed to be duly
given upon delivery in the form and manner set forth in Section 8(E) of the
Mercury Guaranty to the parties at the following addresses (or such other
address for a party as shall be specified by like notice):
If to CoBank, as follows: If to the Debtor, as follows:
CoBank, ACB Mercury, Inc.
200 Galleria Parkway P.O. Box 3709
Suite 1900 Lake Charles, Louisiana 70602
Atlanta, Georgia 30339 Attn: Dusty Dumas; cc: Thomas G. Henning
Attn: Rural Utility Banking Group Fax No.: (318) 439-0769
Fax No.: (770) 618-3202
(L) SEVERABILITY. The determination that any term or
provision of this Security Agreement is unenforceable or invalid shall not
affect the enforceability or validity of any other term or provision hereof.
SECTION 7. LOUISIANA PROVISIONS.
(A) GENERAL. The provisions of this Section 7 shall apply to
the Collateral and all proceeds thereof at all times during which such
Collateral or the proceeds thereof are located in Louisiana or are otherwise
subject to the application of Louisiana law in any respect. The term
"Louisiana Collateral" as used herein shall refer to all portions of the
Collateral and the proceeds thereof that are from time to time located in the
State of Louisiana or are otherwise subject to
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Louisiana law at all times during which such portions or proceeds thereof are
located in Louisiana or are otherwise mandatorily subject to the application of
Louisiana law under the applicable laws of other states.
(B) FINANCING STATEMENTS. Contemporaneously with the
execution of this Security Agreement, the Debtor has completed and signed one
or more appropriate Louisiana UCC-1 financing statements with regard to the
Collateral and the proceeds thereof. The Debtor authorizes the Secured Party,
at the Debtor's expense, to file multiple originals, or photocopies, carbon
copies or facsimile copies of such Louisiana UCC-1 financing statements with
the appropriate filing officer or officers in the State of Louisiana, pursuant
to the provisions of Chapter 9 of the Louisiana Commercial Laws.
(C) IDENTIFICATION NUMBER. The Debtor shall give the Secured
Party 30 days' written notice prior to any change in the Debtor's employer
identification number by the Debtor. In the event of any change whatsoever in
the Debtor's employer identification number, the Debtor will execute and file
any new financing statements or any other documents that are necessary or
desirable as determined by the Secured Party in its sole discretion to preserve
and continue the Secured Party's security interests under this Security
Agreement within thirty (30) days after such change.
(D) EVENT OF DEFAULT; REMEDIES. Upon the occurrence of any
Default hereunder, the Secured Party shall have the following rights and
remedies with respect to the Louisiana Collateral, which rights and remedies
are in addition to and are not in lieu or limitation of any other rights and
remedies that may be provided in this Security Agreement, the Loan Agreements,
the Mercury Guaranty or any related documents, under Chapter 9 of the Louisiana
Commercial Laws (La. R.S. Sections 10:9-101, et seq.), under the Uniform
Commercial Code of any state other than Louisiana, or at law or equity
generally:
(1) The Secured Party may cause the Louisiana
Collateral, or any part or parts thereof, to be immediately seized
wherever found, and sold, whether in term of court or in vacation, under
ordinary or executory process, in accordance with applicable Louisiana
law, to the highest bidder for cash, with or without appraisement,
without the necessity of making additional demand, or of notifying the
Debtor or placing the Debtor in default.
(2) For purposes of foreclosure under Louisiana
executory process procedures, the Debtor confesses judgment and
acknowledges to be indebted unto and in favor of the Secured Party up to
the full amount of the Obligations, in principal, interest, costs,
expenses, attorneys' fees and other fees and charges. To the extent
permitted under applicable Louisiana law, the Debtor additionally
waives: (a) the benefit of appraisal as provided in Articles 2332,
2336, 2723 and 2724 of the Louisiana Code of Civil Procedure and all
other laws with regard to appraisal upon judicial sale; (b) the demand
and 3 days' delay as provided under Articles 2639 and 2721 of the
Louisiana Code of Civil Procedure; (c) the notice of seizure as provided
under Articles 2293 and 2721 of the Louisiana Code of Civil Procedure;
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(d) the 3 days' delay provided under Articles 2331 and 2722 of the
Louisiana Code of Civil Procedure; and (e) all other benefits provided
under Articles 2331, 2722 and 2723 of the Louisiana Code of Civil
Procedure and all other similar provisions of the Louisiana Code of
Civil Procedure not specifically listed hereinabove.
(3) Should any of the Louisiana Collateral be seized as
an incident to an action for the recognition or enforcement of the
Obligations or this Security Agreement, the Loan Agreements, the Mercury
Guaranty or any related document, by executory process, sequestration,
attachment, writ of fieri facias or otherwise, the Debtor agrees that
the court issuing any such order shall, if requested by the Secured
Party, appoint the Secured Party or any person or entity named by the
Secured Party at the time such seizure is requested, or at any time
thereafter, as keeper of the Louisiana Collateral as provided under La.
R.S. Sections 9:5136, et seq. The Debtor agrees to pay the reasonable
fees of such keeper, which compensation to the keeper shall also be a
part of the Obligations secured under this Security Agreement.
(4) Should it become necessary for the Secured Party to
foreclose against the Louisiana Collateral, all declarations of fact
that are made under an authentic act before a Notary Public in the
presence of two witnesses, by a person declaring such facts to lie
within his or her knowledge, shall constitute authentic evidence for
purposes of executory process and also for purposes of La. R.S. Section
9:3509.1, La. R.S. Section 9:3504(D)(6) and La. R.S. Section 10:9-508,
as applicable.
(E) GOVERNING LAW. ANYTHING TO THE CONTRARY CONTAINED IN THIS
SECURITY AGREEMENT NOTWITHSTANDING, THE SECURITY INTERESTS IN THE LOUISIANA
COLLATERAL GRANTED IN THIS SECURITY AGREEMENT, AND THE SECURED PARTY'S REMEDIES
IN THE COURTS SITTING IN AND FOR THE STATE OF LOUISIANA WITH RESPECT TO THE
LOUISIANA COLLATERAL SHALL BE GOVERNED BY LOUISIANA LAW.
SECTION 8. FCC MATTERS. Notwithstanding any other provision of this
Security Agreement:
(A) Any foreclosure on, sale, transfer or other disposition
of, or the exercise or relinquishment of any right to vote or consent with to,
any of the Collateral by the Secured Party shall be pursuant to Section 310(d)
of the Communications Act of 1934, as amended, and the applicable rules and
regulations thereunder, and, if and to the extent required thereby, subject to
the prior approval or notice to and non-opposition of the FCC.
(B) If a Default shall have occurred and be continuing, the
Debtor shall take any action, which the Secured Party may reasonably request in
order to transfer and assign to the Secured Party, or to such one or more third
parties as the Secured Party may designate, or to a combination
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of the foregoing, each FCC license or permit owned by the Debtor. The Secured
Party is empowered, to the extent permitted by applicable law, to request the
appointment of a receiver from any court of competent jurisdiction. Such
receiver may be instructed by the Secured Party to seek from the FCC an
involuntary transfer of control of each such FCC license or permit for the
purpose of seeking a bona fide purchaser to whom control will ultimately be
transferred. The Debtor hereby agrees to authorize such an involuntary
transfer of control upon the request of the receiver so appointed and, if the
Debtor shall refuse to authorize the transfer, its approval may be required by
the court. Upon the occurrence and during the continuance of a Default, the
Debtor shall further use its best efforts to assist in obtaining approval of
the FCC and any state regulatory bodies, if required, for any action or
transactions contemplated by this Security Agreement, including, without
limitation, the preparation, execution and filing with the FCC and any state
regulatory bodies of the assignor's or transferor's portion of any application
or applications for consent to the assignment of any FCC license or permit or
transfer of control necessary or appropriate under the rules and regulations of
the FCC or any state regulatory body for approval or non-opposition of the
transfer or assignment of any portion of the Collateral, together with any FCC
license or permit.
(C) The Debtor acknowledges that the assignment or transfer of
each FCC license or permit is integral to the Secured Party's realization of
the value of the Collateral, that there is no adequate remedy at law for
failure by the Secured Party to comply with the provisions of this Section 8
and that such failure would not be adequately compensable in damages, and
therefore agrees, without limiting the right of the Secured Party to seek and
obtain specific performance of other obligations of the Debtor contained in
this Security Agreement, that the agreements contained in this Section 8 may be
specifically enforced.
(D) In accordance with the requirements of 47 C.F.R. Section
22.937(F), or any successor provision thereto, the Secured Party shall notify
the Debtor and the FCC in writing at least 10 days prior to the date on which
the Secured Party intends to exercise its rights, pursuant to this Security
Agreement or any of the other Loan Documents, by foreclosing on, or otherwise
disposing of, any Collateral in connection with which such notice is required
pursuant to 47 C.F.R. Section 22.937(F) or any successor provision thereto.
[Signatures on next page]
-13-
<PAGE> 14
Security Agreement/Mercury
Loan No. T0310
Loan No. T0347
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
the duly authorized officers of the respective parishes, after a due reading of
the whole.
At Lake Charles, Louisiana, on July 1, 1996.
MERCURY, INC.
By: /s/ WILLIAM L. HENNING, JR.
------------------------------------
Name: WILLIAM L. HENNING, JR.
-------------------------------
Title: PRESIDENT
------------------------------
Attest:
By: /s/ THOMAS G. HENNING
------------------------------------
Name: THOMAS G. HENNING
-------------------------------
Title: SECRETARY
-----------------------------
[CORPORATE SEAL]
Witnesses to all Signatures:
/s/ SHEILA KING
- -------------------------------------------
Witness
/s/ PAT HAMILTON
- -------------------------------------------
Witness
(ILLEGIBLE)
- -------------------------------------------
Notary Public
My commission expires: LIFETIME COMMISSION
--------------------
[NOTARIAL SEAL]
(Signatures Continued on Next Page)
-14-
<PAGE> 15
Security Agreement/Mercury
Loan No. T0310
Loan No. T0347
(Signatures Continued from Previous Page)
At Atlanta, Georgia on July 2, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
-----------------------------------
Name: MARY KAY DEERING
------------------------------
Title: VICE PRESIDENT
-----------------------------
Witnesses to Signature:
/s/ SHAWNE KEENAN
- -----------------------------------
Witness
/s/ PETE ALFORD
- -----------------------------------
Witness
/s/ MARIANNE R. HOWELL
- -----------------------------------
Notary Public
My commission expires: Notary Public, Cobb County, Georgia
My Commission Expires April 25, 1999
------------------------------------
[NOTARIAL SEAL]
-15-
<PAGE> 16
SCHEDULE A
TO
SECURITY AGREEMENT
OF
MERCURY, INC.
1. Set forth below are the present locations (by county or parish
and state) of the Debtor's inventory and equipment:
Calcasieu Parish, Louisiana
East Baton Rouge Parish, Louisiana
Jeff Davis Parish, Louisiana
Lafayette Parish, Louisiana
Pointe Coupee Parish, Louisiana
Vermilion Parish, Louisiana
2. Set forth below are the locations (by county or parish and state)
at which any of the Debtor's inventory and equipment has been located within
the past five years:
Calcasieu Parish, Louisiana
East Baton Rouge Parish, Louisiana
Jeff Davis Parish, Louisiana
Lafayette Parish, Louisiana
Pointe Coupee Parish, Louisiana
Vermilion Parish, Louisiana
3. Set forth below is a description of any exceptions to the
representation made in Section 3(E) of the Security Agreement:
None.
<PAGE> 1
EXHIBIT 4.13
LOAN NO. T0310
COBANK, ACB
FIRST AMENDMENT AND SUPPLEMENT TO
AMENDED AND RESTATED LOAN AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the respective undersigned Notaries Public, and in the presence
of the respective undersigned competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS FIRST AMENDMENT AND SUPPLEMENT TO AMENDED AND RESTATED LOAN
AGREEMENT (this "First Amendment") is made and entered into as of July 1, 1996,
by and between COBANK, ACB ("CoBank") and CTC FINANCIAL, INC., a Louisiana
corporation (the "Borrower"), and amends that certain Amended and Restated Loan
Agreement, dated as of May 15, 1996, between CoBank and the Borrower (the
"Original Loan Agreement").
SECTION 1. Terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Original Loan Agreement.
SECTION 2. Section 1 of the Original Loan Agreement is hereby amended
and supplemented by deleting such Section in its entirety and substituting in
lieu thereof the following Section:
"SECTION 1. THE LOAN. On the terms and conditions set forth in
this Agreement, and subject to Section 11, CoBank agrees to make a loan
(the "Original Loan") to the Borrower, by means of one or more advances,
during the period commencing on September 27, 199 and ending but not
including May 31, 1996, or such later date as CoBank may in its sole
discretion authorize in writing, in an aggregate principal amount not to
exceed $17,00,000. Further, on the terms and conditions set forth in
this Agreement, and subject to Section 11, CoBank agrees to make a loan
(the "Additional Loan") to the Borrower, by means of a single advance in
a principal amount not to exceed $15,000,000 (the Original
<PAGE> 2
First Amendment to Amended and Restated
Loan Agreement/CTC Financial
Loan No. T0310
Loan and the Additional Loan, collectively, the "Loan"). Under the
Loan, amounts borrowed and later repaid or prepaid may not be
reborrowed."
SECTION 3. Section 2 of the Original Loan Agreement is hereby amended
and supplemented by deleting such Section in its entirety and substituting in
lieu thereof the following Section:
"SECTION 2. PURPOSES AND USE OF PROCEEDS. The proceeds of the
Original Loan advanced prior to May 15, 1996 shall be, and have been,
reloaned by the Borrower to Mississippi One Cellular Telephone Company
("Mississippi One") to be applied by Mississippi One solely (a) to the
repayment, in an amount equal to $1,700,000, of the outstanding
principal balance of the indebtedness of Mississippi One to Cameron
Telephone Company ("Cameron Telephone"), which Mississippi One assumed
from Mercury, Inc. ("Mercury"); (b) to pay the fees and costs associated
with the Loan and the initial closing thereof; and (c) for capital
expenditures and working capital. The proceeds of the Original Loan
advanced on and after May 15, 1996 shall be, and have been, reloaned by
the Borrower to Mississippi One to be applied by Mississippi One solely
to finance the acquisition of the assets of West Alabama Cellular
Telephone Company, Inc. ("West Alabama") pursuant to the terms of that
certain Asset Purchase Agreement, dated as of March , 1996, by and
between Mississippi One and West Alabama (the "West Alabama Acquisition
Agreement"), related acquisition costs and costs and fees associated
with closing the Original. The proceeds of the Additional Loan shall be
reloaned by the Borrower to Mississippi One to be applied by Mississippi
One solely to finance a portion of the acquisition of the assets of
Northland Cellular Corporation ("Northland Cellular"), pursuant to the
terms of that certain Asset Purchase Agreement, dated as of April 9,
1996, by and among [MISSISSIPPI ONE] and Northland Cellular, Pricellular
Corporation and Pricellular Wireless Corporation (the "Northland
Cellular Acquisition Agreement"), related acquisition costs and costs
and fees associated with closing the Additional Loan. The Borrower
agrees that the proceeds of the Loan shall be used only for the purposes
set forth in this Section 2."
SECTION 4. Section 3 of the Original Loan Agreement is hereby amended
and supplemented by deleting such Section in its entirety and substituting in
lieu thereof the following Section:
"SECTION 3. AVAILABILITY. Subject to Section 11, advances under
the Original Loan will be made on any day on which CoBank is open for
business (a "Business Day"), except any day on which Federal Reserve
Banks are closed, within two Business Days of receipt by CoBank of a
written or telephonic request
-2-
<PAGE> 3
First Amendment to Amended and Restated
Loan Agreement/CTC Financial
Loan No. T0310
of an authorized employee of the Borrower. Further, subject to Section
11, the Additional Loan will be made on the closing date under the
Northland Cellular Acquisition Agreement (the "Funding Date"), which
shall be a Business Day and shall occur on or before July 31, 1996.
Unless otherwise agreed, all advances will be made available by wire
transfer of immediately available funds to such account or accounts as
the Borrower may designate from time to time on forms supplied by
CoBank. In making advances upon telephonic requests, CoBank shall be
entitled to rely on (and shall incur no liability to the Borrower in
acting upon) any request made by a person identifying himself or herself
as one of the persons authorized by the Borrower to request advances
hereunder, so long as the funds are wired to an account previously
designated by the Borrower."
SECTION 5. Section 4(B) of the Original Loan Agreement is hereby
amended and supplemented by deleting the reference in such Section to "Cameron
Debt (as defined in Section 11(A)(11))" and substituting in lieu thereof the
"Subordinate Debt (as defined in Section 11(C)(11))."
SECTION 6. Section 4(E) of the Original Loan Agreement is hereby
further amended and supplemented by deleting such Section in its entirety and
substituting in lieu thereof the following Section:
"(E) ORIGINATION FEE. In connection with the Original Loan, the
Borrower has paid to CoBank non-refundable loan origination fees in the
aggregate amount of $17,525. The Borrower shall pay to CoBank a
non-refundable loan origination fee for the Additional Loan in the
amount of $150,000, of which $10,000 was paid upon acceptance by the
Borrower of the commitment letter dated June 5, 1996. The remaining
$10,000 shall be payable on the Funding Date."
SECTION 7. Section 8 of the Original Loan Agreement is hereby amended
and supplemented by deleting in its entirety the second-to-last sentence of
such Section and substituting in lieu thereof the following sentence:
"Checks shall be mailed or delivered to CoBank at Department 167,
Denver, Colorado 80291-0167 (or to such other address as CoBank may
designate by notice)."
SECTION 8. Section 10 of the Original Loan Agreement is hereby
amended and supplemented by deleting such Section in its entirety and
substituting in lieu thereof the following Section:
-3-
<PAGE> 4
First Amendment to Amended and Restated
Loan Agreement/CTC Financial
Loan No. T0310
"SECTION 10. SECURITY. The Loan shall be secured by an
assignment by the Borrower to CoBank of that certain Second Amended and
Restated Promissory Note dated of even date herewith, made by
Mississippi One to the order of the Borrower, in the original principal
face amount of $32,00,000 (as the same may be amended, modified,
supplemented, extended or restated from time to time and any promissory
note or notes that may be issued from time to time in substitution,
renewal, extension, replacement or exchange therefor, the "Mississippi
One Note").
The Loan shall be guaranteed by (a) that certain Amended and
Restated Continuing Guaranty, dated as of May 15, 1996, made by
Mississippi One for the benefit of CoBank, as amended by that certain
First Amendment and Supplement to Amended and Restated Continuing
Guaranty, dated as of even date herewith (as so amended and as the same
hereafter may be amended, modified, supplemented, extended or restated
from time to time, the "Mississippi One Guaranty"); (b) that certain
Continuing Guaranty, dated as of May 15, 1996, made by Mercury for the
benefit of CoBank, as amended by that certain First Amendment and
Supplement to Continuing Guaranty, dated as of even date herewith (as so
amended and as the same hereafter may be amended, modified,
supplemented, extended or restated from time to time, the "Mercury
Guaranty"); and (c) that certain Continuing Guaranty, dated as of May
15, 1996, made by William Henning, Sr. ("Mr. Henning") for the benefit
of CoBank, as amended by that certain First Amendment and Supplement to
Continuing Guaranty, dated as of even date herewith, (as so amended and
as the same hereafter may be may be amended, modified, supplemented,
extended or restated from time to time, the "Henning Guaranty") which
shall be limited to $5,000,000 and shall terminate upon the payment in
full of CoBank Loan No. T037.
The Note, the Mississippi One Note, the Henning Guaranty, the
Mercury Guaranty and the Mississippi One Guaranty shall be secured by
that certain (i) Deed of Trust, Security Agreement and Fixture Filing,
dated as of September 27, 199, made by Mississippi One in favor of
CoBank, as holder of the Note and the Mississippi One Note and as
beneficiary of the Mississippi One Guaranty, the Henning Guaranty and
the Mercury Guaranty, as amended by that certain First Amendment and
Supplement to Deed of Trust, Security Agreement and Fixture Filing,
dated as of May 15, 1996, and as amended by that certain Second
Amendment and Supplement to Deed of Trust, Security Agreement and
Fixture Filing, dated as of even date herewith (as so amended and as the
same hereafter may be amended, modified, supplemented, extended or
restated from time to time, the "Mississippi One Deed of Trust"),
pursuant to which Mississippi One shall grant to CoBank a first priority
lien and security interest in all of its now hereafter
-4-
<PAGE> 5
First Amendment to Amended and Restated
Loan Agreement/CTC Financial
Loan No. T0310
leased and owned real property located in the State of Mississippi; (ii)
Security Agreement, dated as of September 27, 1994, made by Mississippi
One in favor of CoBank, as holder of the Note and the Mississippi One
Note and as beneficiary of the Mississippi One Guaranty, the Henning
Guaranty and the Mercury Guaranty, as amended by that certain First
Amendment and Supplement to Security Agreement, dated as of May 15,
1996, and as amended by that certain Second Amendment and Supplement to
Security Agreement, dated as of even date herewith (as so amended and as
the same hereafter may be amended, modified, supplemented, extended or
restated from time to time, the "Mississippi One Security Agreement"),
pursuant to which Mississippi One shall grant to CoBank a first priority
security interest in all of its now owned or hereafter acquired tangible
and intangible personal property (including, without limitation, all
rights of Mississippi One under that certain Agreement for Lease of
Switch Capacity, dated July 27, 1994, between Mississippi 34 Cellular
Corporation and Mercury, subsequently assigned to Mississippi One by
Mercury, and, to the extent permitted by law, all licenses and permits
issued by the Federal Communications Commission (the "FCC")); (iii)
Mortgage, dated as of May 15, 1996, made by Mississippi One in favor of
CoBank, as holder of the Note and the Mississippi One Note and as
beneficiary of the Mississippi One Guaranty, the Henning Guaranty and
the Mercury Guaranty, as so amended by that certain First Amendment and
Supplement to Mortgage, dated as of even date herewith (as so amended
and as the same hereafter may be amended, modified, supplemented,
extended or restated from time to time, the "Mississippi One Mortgage"),
pursuant to which Mississippi One shall grant to CoBank a first priority
lien and security interest in all of its now hereafter leased and owned
real property located in the State of Alabama; and (iv) Pledge
Agreement, dated as of September 27, 1994, by and between Mercury and
CoBank, as holder of the Note and the Mississippi One Note and as
beneficiary of the Mississippi One Guaranty, the Henning Guaranty and
the Mercury Guaranty, as amended by that certain First Amendment and
Supplement to Pledge Agreement, dated as of May 15, 1996, and as amended
by that certain Second Amendment and Supplement to Pledge Agreement,
dated as of even date herewith (as so amended and as the same may
hereafter be amended, modified, supplemented, extended or restated from
time to time, the "Mercury Pledge Agreement"), pursuant to which Mercury
shall pledge, on a first-priority basis, all of its capital stock in
Mississippi One and in Mercury Cellular Telephone Company ("MCTC") and
shall covenant and agree to pledge to CoBank, on a first-priority basis,
all capital stock of Mississippi One and MCTC it may hereafter acquire."
SECTION 9. Section 11 of the Original Loan Agreement is hereby amended
and restated by inserting the following new Subsection (C) at the end of such
Section:
-5-
<PAGE> 6
First Amendment to Amended and Restated
Loan Agreement/CTC Financial
Loan No. T0310
"(C) CoBank's obligation to make the Additional Loan is subject
to satisfaction of each of the following conditions precedent on or
before the Funding Date:
(1) LOAN DOCUMENTS. That CoBank receive duly executed
originals the Loan Documents.
(2) AUTHORIZATION. That CoBank receive copies of all
corporate documents and proceedings of the Borrower, Mississippi
One and Mercury authorizing the execution, delivery, and
performance of the Loan Documents to which each is a party,
certified by appropriate officers of such entities.
(3) APPROVALS. That CoBank receive evidence
satisfactory to it that all federal and state consents and
approvals (including, without limitation, all regulatory
approvals) which are necessary for, or required as a condition
of, the validity and enforceability of the Loan Documents or the
creation or perfection of the liens and security interests
identified in Section 10, or the completion of the acquisition of
Northland Cellular's assets by Mississippi One pursuant to the
Northland Cellular Acquisition Agreement, have been obtained and
are in full force and effect.
(4) OPINIONS OF COUNSEL. That CoBank receive opinions
of counsel for the Borrower, Mississippi One, Mercury, Cameron
Telephone, MCTC and Mr. Henning (who shall be mutually acceptable
to CoBank) in form and content acceptable to all parties.
(5) FEES AND EXPENSES. That the Borrower pay the
origination fee set forth in Section 4(E) with respect to the
Additional Loan and the costs and expenses required by Section 20
to be paid by the Borrower.
(6) PERMITS. That CoBank receive evidence satisfactory
to it that the Borrower, Mississippi One and Mercury possess all
necessary operating permits, authorizations, approvals, and the
like which are material to the conduct of the Borrower's,
Mississippi One's and Mercury's business or which may otherwise
be required by law.
(7) INSURANCE. That CoBank receive evidence of
insurance by Mississippi One and Mercury in such amounts and
covering such risks as are usually carried by companies in the
same or similar business.
-6-
<PAGE> 7
First Amendment to Amended and Restated
Loan Agreement/CTC Financial
Loan No. T0310
(8) ENVIRONMENTAL CHECKLIST. That CoBank receive from
Mississippi One an environmental checklist on a form prescribed
by CoBank covering all real property owned or leased by
Mississippi One and Mississippi One's environmental records and
procedures, all of such information to be satisfactory to CoBank
in its sole discretion.
(9) PERFECTION AND PRIORITY OF LIENS. That CoBank
receive an opinion of counsel in form and content acceptable to
it to the effect that, as of the date of such advance, CoBank has
a duly perfected security interest in all collateral covered by
the Mississippi One Deed of Trust, the Mississippi One Mortgage,
the Mississippi One Security Agreement and the Mercury Pledge
Agreement, subject to no prior liens except a liens in favor of
Cameron Telephone subordinated to all liens in favor of CoBank on
terms and conditions satisfactory to CoBank.
(10) NORTHLAND CELLULAR ACQUISITION. That on or before
the Funding Date, Mississippi One shall have acquired the real
and personal property of Northland Cellular in accordance with
the terms of the Northland Cellular Acquisition Agreement, free
and clear of any and all liens and encumbrances, and that CoBank
receives such evidence thereof as it shall reasonably require.
(11) SUBORDINATED DEBT. That Cameron Telephone reaffirm
its subordination of the Cameron Debt, and MCTC subordinate all
indebtedness of Mississippi One to MCTC (the "MCTC Debt"; with
the Cameron Debt, collectively, the "Subordinate Debt"), in both
cases in right of payment and in all other respects, to any
indebtedness of Mississippi One to CoBank including the Loan,
which subordination shall provide that no interest or principal
payments may be made on the Subordinate Debt without the consent
of CoBank.
(12) NO MATERIAL ADVERSE CHANGE. That from December 31,
1995, to the date of such advance there shall not have occurred
any event which has had or could have a Material Adverse Effect
(as hereinafter defined) on the Borrower or Mississippi One. For
purposes of this Agreement, the term "Material Adverse Effect"
when used with reference to any entity shall mean a material
adverse effect on the condition, financial or otherwise,
operations, properties or business of such entity or on the
ability of such entity to perform its obligations under the Loan
Documents to which it is a party.
-7-
<PAGE> 8
First Amendment to Amended and Restated
Loan Agreement/CTC Financial
Loan No. T0310
(13) NO INJUNCTION. That no court or other government
body or public authority shall have issued an order which shall
then be in effect restraining or prohibiting the completion of
the transactions contemplated hereby.
(14) OTHER DOCUMENTS. That CoBank receive such other
documents, instruments, certificates and opinions of counsel as
CoBank or its counsel may reasonably request."
SECTION 10. Section 15(e) of the Original Loan Agreement is hereby
amended and supplemented by inserting after "CoBank Loan No. T037" the
following:", CoBank Loan No. T0388."
SECTION 11. Section 20 of the Original Loan Agreement is hereby amended
and restated by deleting such Section in its entirety and inserting in lieu
thereof the following new Section:
"SECTION 20. COSTS AND EXPENSES. The Borrower shall reimburse
CoBank on demand for all reasonable out-of-pocket costs and expenses
incurred by CoBank in connection with the origination, negotiation,
preparation and administration of this Agreement and all other Loan
Documents, and the preservation and enforcement of CoBank's rights and
remedies hereunder and thereunder, including, without limitation: all
(a) costs and expenses (including intangible and other taxes and any
recording fees or expenses) incurred by CoBank to obtain, perfect,
maintain, determine the priority of, or release any security
contemplated hereunder; (b) fees and expenses of any outside counsel
retained by CoBank to assist CoBank with respect to any matter
contemplated by this Section or to review this Agreement and all other
Loan Documents and advise CoBank as to its rights and remedies hereunder
or thereunder; (c) fees and expenses of any outside counsel retained by
CoBank to represent it in any litigation involving the parties to any of
the Loan Documents, including but not limited to, bankruptcy,
receivership, or similar proceedings; and (d) fees, costs and expenses
incurred in connection with obtaining surveys and appraisals, if any,
required under this Agreement or any other Loan Document; provided,
however, that the Borrower shall not be required to reimburse CoBank for
its legal fees (exclusive of legal expenses) in excess of $35,000 for
the negotiation and documentation of the Additional Loan and CoBank Loan
No. T0388."
SECTION 12. All references in the Original Loan Agreement, to "this
Agreement" shall hereafter be to the Original Loan Agreement as amended by this
First Amendment.
-8-
<PAGE> 9
First Amendment to Amended and Restated
Loan Agreement/CTC Financial
Loan No. T0310
SECTION 13. This First Amendment shall not constitute a novation of any
of the promissory notes or other documents or agreements executed or delivered
in connection with the loan or reloan pursuant to the Original Loan Agreement
or any of the other Loan Documents.
SECTION 14. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
SECTION 15. Except to the extent governed by applicable federal law,
this First Amendment shall be governed by and construed in accordance with the
laws of the State of Louisiana, without reference to choice of law doctrine.
[Signatures on next page]
-9-
<PAGE> 10
First Amendment to Amended and Restated
Loan Agreement/CTC Financial
Loan No. T0310
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below, and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
duly authorized officers of the respective parties, after a due reading of the
whole.
At Lake Charles, Louisiana, on July 1, 1996.
CTC FINANCIAL, INC.
By: /s/ WILLIAM L. HENNING, JR.
--------------------------------------
Name: William L. Henning, Jr.
---------------------------------
Title: President
--------------------------------
Attest: /s/ THOMAS G. HENNING
-----------------------------------
Name: Thomas G. Henning
-----------------------------
Title: Secretary
----------------------------
[CORPORATE SEAL]
Witnesses to all signatures:
/s/ SHEILA KING
- ------------------------------------
Witness
/s/ PAT HAMILTON
- ------------------------------------
Witness
/s/ SANDEL DIAZ
- ------------------------------------
Notary Public
My commission expires: lifetime commission
--------------------
[NOTARIAL SEAL]
[Signatures continued on next page]
-10-
<PAGE> 11
First Amendment to Amended and Restated
Loan Agreement/CTC Financial
Loan No. T0310
[Signatures continued from previous page]
At Atlanta, Georgia, on July 2, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
---------------------------------------
Name: Mary Kay Deering
---------------------------------
Title: Vice President
--------------------------------
Witnesses to signature:
/s/ [ILLEGIBLE]
- ------------------------------------
Witness
/s/ [ILLEGIBLE]
- ------------------------------------
Witness
/s/ MARIANNE K. HOWELL
- ------------------------------------
Notary Public
My commission expires: April 25, 1999
--------------
[NOTARIAL SEAL]
-11-
<PAGE> 1
EXHIBIT 4.14
LOAN NO. T0310
COBANK, ACB
SECOND AMENDED AND RESTATED PROMISSORY NOTE
MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY
LAKE CHARLES, LOUISIANA
$32,400,000 DATED: JULY 1, 1996
FOR VALUE RECEIVED, MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY
("Mississippi One") hereby promises to pay to the order of CTC FINANCIAL, INC.
("Finance"; Finance or any subsequent holder of this Second Amended and
Restated Promissory Note, the "Holder") the principal amount of THIRTY-TWO
MILLION FOUR HUNDRED THOUSAND DOLLARS ($32,400,000), or so much as may have
been advanced under that certain Second Amended and Restated Promissory Note,
dated of even date herewith, made by Finance to the order of CoBank, ACB,
formerly known as the National Bank for Cooperatives ("CoBank"), in the
principal face amount of $32,400,000 (including any amendment, modification,
supplement, extension, or restatement thereof, the "Finance Note"), and that
certain Amended and Restated Loan Agreement, dated as of May 15, 1996, as
amended by that certain First Amendment to Amended and Restated Loan Agreement,
dated as of even date herewith, by and between Finance and CoBank (including
any amendment, modification, supplement, extension, or restatement thereof, the
"Loan Agreement"), and reloaned by Finance to Mississippi One, together with
interest as hereinafter provided from the date hereof until paid in full, plus
amounts equal to all other costs, fees, expenses, premiums, surcharges and all
other amounts due under or in connection with the Finance Note and the Loan
Agreement. For purposes of this Note, the "Finance Loan" shall mean the
amounts borrowed by Finance from CoBank pursuant to the Loan Agreement and
evidenced by the Finance Note, and the "Loan" shall mean the amounts of the
Finance Loan reloaned by Finance to Mississippi One and evidenced by this Note.
1. AMENDMENT AND RESTATEMENT OF NOTE. This Note is given in
substitution for and supersedes and replaces that certain Amended and Restated
Promissory Note, dated May 15, 1996 entered into by Mississippi One to the
order of Finance and assigned to CoBank (the "First 1996 Note"), which in turn
was given in substitution for and replaced that certain Promissory Note dated
September 27, 1994 entered into by Mississippi One to the order of Finance and
assigned to CoBank (the "Original Note"); the First 1996 Note and the Original
Note, collectively, the "Previous Notes"). This Note is not delivered in
extinguishment of the indebtedness evidenced by the Previous Notes and does not
constitute a novation of the Previous Notes, but is made to evidence
indebtedness in the principal amount of $17,400,000 outstanding under the
Previous Notes as of the date hereof and any additional indebtedness incurred
or to be incurred by the Borrower under the Loan Agreement.
<PAGE> 2
Second Amended and Restated Promissory
Note/Mississippi One
Loan No. T0310
2. INTEREST. The aggregate amount of interest accruing under this
Note shall at all times equal the aggregate amount of interest accruing under
the Finance Note. Accordingly, interest on the principal balance outstanding
hereunder shall accrue as follows:
(a) As to a principal amount equal to the Portion (as defined
in the Loan Agreement) of the Finance Loan, if any, from time to time accruing
interest at the Variable Rate (as defined in the Loan Agreement), at a rate
equal to the Variable Rate applicable from time to time under the Loan
Agreement; and
(b) As to a principal amount equal to each Portion of the
Finance Loan, if any, from time to time accruing interest pursuant to one of
the fixed rate options as provided for in Section 4(A)(2)(a) or (b) of the Loan
Agreement, at a fixed rate equal to the fixed rate so accruing on each such
Portion.
3. REPAYMENT OF PRINCIPAL; INTEREST AND OTHER AMOUNTS PAYABLE. This
Note evidences Mississippi One's obligations with respect to the Loan.
Mississippi One shall pay to the Holder an amount equal to the aggregate
principal amount of the Loan, together with accrued interest thereon, plus all
other costs, fees, expenses, premiums, surcharges and all other amounts due
under or in connection with the Finance Note and the Loan Agreement, in such
amounts and at such times as shall be sufficient to make, when and as due, all
payments required under the Finance Note and the Loan Agreement with respect to
the Finance Loan, interest thereon, and such other amounts due thereunder.
Advances, accrued interest and payments under the Finance Note and the Loan
Agreement shall be posted by CoBank upon an appropriate accounting record,
which record (and all computer printouts thereof) shall constitute prima facie
evidence of the outstanding principal and interest under the Finance Note and
the Loan Agreement. So long as CoBank shall be the Holder hereof, payments
received by CoBank pursuant to this Note shall be deemed to constitute payments
made pursuant to the Finance Note.
4. MANNER AND PLACE OF PAYMENT. Payments of all amounts due
hereunder are to be made at such location as the Holder may designate in
writing in accordance with Paragraph 11 hereof, in lawful money of the United
States of America.
5. LOAN DOCUMENTS. This Note is executed pursuant to the terms of
the Loan Agreement. This Note, the Finance Note and the Loan Agreement and any
other agreements, documents or instruments securing the indebtedness or
evidencing or relating to the transactions contemplated in the Loan Agreement
shall sometimes herein be collectively called the "Loan Documents."
6. COST OF COLLECTION. In the event this Note or any amount due
hereunder is not paid promptly when due, Mississippi One shall pay the
reasonable fees and all other costs and expenses
-2-
<PAGE> 3
Second Amended and Restated Promissory
Note/Mississippi One
Loan No. T0310
of any attorneys at law who may be employed to recover the amount overdue, or
to protect the interest of the Holder, or to enforce any Loan Document or to
compromise or take other action in regard hereto or thereto.
7. WAIVER. Mississippi One hereby waives any right to consent to
any modification, amendment, supplement, extension, or restatement of the
Finance Note, the Loan Agreement or any of the other Loan Documents; waives
presentment for payment, demand, protest and notice of dishonor and nonpayment;
and agrees that the payment hereof or of the Finance Note and the Loan
Agreement may be extended one or more times without notice. Mississippi One
hereby waives all defenses on the ground of delay or of any extension of time
for the payment hereof which may be hereafter given by the Holder hereof to it
or to anyone who has assumed the payment of this Note, and it is specifically
agreed that the obligations of Mississippi One shall not be in anywise affected
or altered to the prejudice of the Holder hereof by reason of the assumption of
payment of the same by any other person or entity.
8. PARTIES BOUND. As used herein, the terms "Mississippi One" and
the "Holder" shall be deemed to include their respective successors and
assigns.
9. MISCELLANEOUS. The Holder shall not by any act, delay, omission
or otherwise be deemed to have waived any of its rights or remedies, and no
waiver of any kind shall be valid, unless in writing and signed by the Holder.
All rights and remedies of the Holder under the terms of this Note and under
any statutes or rules of law shall be cumulative and may be exercised
successively or concurrently. Any provision of this Note which may be
unenforceable or invalid under any law shall be ineffective to the extent of
such unenforceability or invalidity without affecting the enforceability or
validity of any other provision hereof. Except to the extent governed by
applicable federal law, this Note shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
10. CONSENT TO JURISDICTION. To the maximum extent permitted by law,
Mississippi One agrees that any legal action or proceeding with respect to this
Note may be brought in the courts of the State of Louisiana or the United
States of America for the Western District of Louisiana, all as the Holder may
elect. By execution of this Note, Mississippi One hereby irrevocably submits
to each such jurisdiction, expressly waiving any objection it may have to the
laying of venue by reason of its present or future domicile. Nothing contained
herein shall affect the right of the Holder to commence legal proceedings or
otherwise proceed against Mississippi One in any other jurisdiction or to serve
process in any manner permitted or required by law.
11. NOTICES. All notices herein authorized or required to be given
to Mississippi One or the Holder shall be given and delivery may be effected in
the manner set forth in the Loan
-3-
<PAGE> 4
Second Amended and Restated Promissory
Note/Mississippi One
Loan No. T0310
Agreement to the addresses set forth below or to such other address as the
parties may designate from time to time in accordance with this paragraph:
<TABLE>
<S> <C>
Mississippi One: Mississippi One Cellular Holder: CoBank, ACB
Telephone Company 200 Galleria Parkway
P.O. Box 3709 Suite 1900
Lake Charles, Louisiana 70602 Atlanta, Georgia 30339
Attn: Dusty Dumas; cc: Thomas Attn: Rural Utility Banking
G. Henning Fax No.: (770) 618-3202
Fax No.: (318) 439-0769
</TABLE>
[Signature follows on next page.]
-4-
<PAGE> 5
Second Amended and Restated Promissory
Note/Mississippi One
Loan No. T0310
WHEREFOR, Mississippi One has caused this Note to be executed, attested
and delivered under seal by its duly authorized officers on the day and year
first written above.
MISSISSIPPI ONE CELLULAR
TELEPHONE COMPANY
By: /s/ THOMAS G. HENNING
---------------------------------------
Name: Thomas G. Henning
---------------------------------
Title: President
--------------------------------
Attest: /s/ ROBERT PIPER
-----------------------------------
Name: Robert Piper
------------------------------
Title: SEL
-----------------------------
[CORPORATE SEAL]
-5-
<PAGE> 6
Second Amended and Restated Promissory
Note/Mississippi One
Loan No. T0310
FOR VALUE RECEIVED, CTC FINANCIAL, INC. ("Finance") hereby assigns to COBANK,
ACB ("CoBank") all of its interest in the instant promissory note to secure the
prompt payment and performance of the Obligations (as hereinafter defined). As
used herein, the term "Obligations" shall mean (i) the principal, interest and
any other charges provided for in the Finance Note (as defined in the instant
promissory note) and the Loan Agreement (as defined in the instant promissory
note); (ii) all payments or performances under any other agreements,
instruments and documents now or hereafter evidencing or relating to the
transactions contemplated in the Loan Agreement; and (iii) all indebtedness,
obligations and liabilities of Finance to CoBank of every kind, character and
description whatsoever, direct or indirect, absolute or contingent, due or to
become due, now existing or hereinafter incurred, contracted or arising, joint
or several, liquidated or unliquidated, regardless of how they arise or by what
agreement or instrument they may be evidenced or whether they are evidenced by
any agreement or instrument, or whether incurred as maker, drawer, endorser,
surety, guarantor or otherwise.
WHEREFOR, Finance has caused this assignment to be executed, attested
and delivered under seal as of July 1, 1996.
CTC FINANCIAL, INC.
By: /s/ WILLIAM L. HENNING, JR.
---------------------------------------
Name: William L. Henning, Jr.
---------------------------------
Title: President
--------------------------------
Attest: /s/ THOMAS G. HENNING
-----------------------------------
Name: Thomas G. Henning
-----------------------------
Title: Secretary
----------------------------
[CORPORATE SEAL]
-6-
<PAGE> 1
EXHIBIT 4.15
LOAN NO. T0310
COBANK, ACB
SECOND AMENDED AND RESTATED PROMISSORY NOTE
CTC FINANCIAL, INC.
LAKE CHARLES, LOUISIANA
$32,400,000 DATED: JULY 1, 1996
FOR VALUE RECEIVED, CTC FINANCIAL, INC. (the "Borrower"), promises to
pay to the order of COBANK, ACB, formerly known as the National Bank for
Cooperatives (the "Payee"), at the times and in the manner set forth in that
certain Amended and Restated Loan Agreement, dated as of May 15, 1995, as
amended by that certain First Amendment to Amended and Restated Loan Agreement,
dated as of even date herewith, and numbered Loan No. T0310, by and between the
Borrower and the Payee, and as that agreement may be amended, modified,
supplemented, extended or restated from time to time (the "Loan Agreement"),
the principal sum of THIRTY-TWO MILLION FOUR HUNDRED THOUSAND DOLLARS
($32,400,000) or such lesser amount as may be advanced hereunder, together with
interest on the unpaid principal balance hereof at the rate or rates provided
for in the Loan Agreement.
This Note is given for one or more advances to be made by the Payee to
the Borrower pursuant to the Loan Agreement, all of the terms and provisions of
which are hereby incorporated by reference. This Note is given in substitution
for and supersedes and replaces that certain Amended and Restated Promissory
Note, dated May 15, 1996 (the "First 1996 Note"), which in turn was given in
substitution for and replaced that certain Promissory Note dated September 27,
1994 (the "Original Note"; the First 1996 Note and the Original Note,
collectively, the "Previous Notes"). This Note is not delivered in
extinguishment of the indebtedness evidenced by the Previous Notes and does not
constitute a novation of the Previous Notes, but is made to evidence
indebtedness in the principal amount of $17,400,000 outstanding under the
Previous Notes as of the date hereof and any additional indebtedness incurred
or to be incurred by the Borrower under the Loan Agreement. Advances, accrued
interest and payments shall be posted by the Payee upon an appropriate
accounting record, which record (and all computer printouts thereof) shall
constitute prima facie evidence of the outstanding principal and interest on
the advances.
The Borrower hereby waives presentment for payment, demand, protest, and
notice of dishonor and nonpayment of this Note, and all defenses on the ground
of delay or of any extension of time for the payment hereof which may be
hereafter given by the holder or holders hereof to it or to anyone who has
assumed the payment of this Note, and it is specifically agreed that the
obligations of the Borrower shall not be in anywise affected or altered to the
prejudice of the holder or holders hereof by reason of the assumption of
payment of the same by any other person or entity.
<PAGE> 2
Second Amended and Restated Promissory
Note/CTC Financial
Loan No. T0310
Should this Note be placed in the hands of an attorney for collection or
the services of any attorney become necessary in connection with enforcing its
provisions, the Borrower agrees to pay reasonable attorneys' fees, together
with all costs and expenses incident thereto, to the extent allowed by law.
Except to the extent governed by applicable federal law, this Note shall be
governed by and construed in accordance with the laws of the State of
Louisiana, without reference to choice of law doctrine.
IN WITNESS WHEREOF, the Borrower has caused this Second Amended and
Restated Promissory Note to be executed, attested, sealed and delivered by its
duly authorized officers as of the date first shown above.
CTC FINANCIAL, INC.
By: /s/ WILLIAM L. HENNING, JR.
--------------------------------------
[CORPORATE SEAL] Name: William L. Henning, Jr.
---------------------------------
Title: President
--------------------------------
Attest: /s/ THOMAS G. HENNING
-----------------------------------
Name: Thomas G. Henning
------------------------------
Title: Secretary
-----------------------------
-2-
<PAGE> 1
EXHIBIT 4.16
LOAN NO. T0310
LOAN NO. T0347
COBANK, ACB
FIRST AMENDMENT AND SUPPLEMENT TO
AMENDED AND RESTATED CONTINUING GUARANTY
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the respective undersigned Notaries Public, and in the presence
of the respective undersigned competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS FIRST AMENDMENT AND SUPPLEMENT TO AMENDED AND RESTATED CONTINUING
GUARANTY (this "First Amendment") is made as of July 1, 1996, by and between
MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY ("Mississippi One") and COBANK, ACB
("CoBank"), and amends that certain Amended and Restated Continuing Guaranty,
dated as of May 15, 1996, made by Mississippi One for the benefit of CoBank
(the "Guaranty").
R E C I T A L S:
WHEREAS, CoBank and CTC Financial, Inc., a Louisiana corporation (the
"Borrower"), have entered into that certain Amended and Restated Loan
Agreement, dated as of May 15, 1996, as amended by that certain First Amendment
and Supplement to Amended and Restated Loan Agreement (the "First Amendment to
Loan Agreement"), dated as of even date herewith (as so amended and as the same
hereafter may be amended, modified, supplemented, extended or restated from
time to time, the "Mississippi One Loan Agreement"), providing for a loan of up
to $32,400,000 (the "Mississippi One Loan"), and CoBank and the Borrower have
entered into that certain Loan Agreement, dated as of May 15, 1996 (as the same
may be amended, modified, supplemented, extended or restated from time to time,
the "Mercury Loan Agreement"; the Mississippi One Loan Agreement and the
Mercury Loan Agreement, collectively, the "Loan
<PAGE> 2
First Amendment to Amended and Restated
Continuing Guaranty/Mississippi One
Loan No. T0310
Loan No. T0347
Agreements"), providing for a loan of up to $5,000,000 (the "Mercury Loan"; the
Mississippi One Loan and the Mercury Loan, collectively, the "Loans"); and
WHEREAS, the proceeds of the Loans have been or will be reloaned by the
Borrower to Mississippi One, or to Mercury, Inc. ("Mercury") for investment
into Mississippi One, for the purposes set forth in the Loan Agreements; and
WHEREAS, as an inducement to CoBank to enter into the Loan Agreements
and to make the Loans, Mississippi One has entered into the Guaranty;
WHEREAS, as an inducement to CoBank to enter into the First Amendment to
Loan Agreement, Mississippi One has agreed to enter into this First Amendment;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, Mississippi One and CoBank hereby agree as follows:
SECTION 1. Definitions. Capitalized terms used in this First
Amendment, unless otherwise defined herein, shall have the meanings assigned to
them in the Guaranty.
SECTION 2. Section 2 of the Guaranty is hereby amended and
supplemented by deleting such Section in its entirety and substituting in lieu
thereof the following Section:
"SECTION 2. OBLIGATIONS. "Obligations" shall mean (a) the
principal, interest and other amounts becoming due and payable, whether
by acceleration or otherwise, under that certain Second Amended and
Restated Promissory Note, dated of even date herewith, made by the
Borrower to the order of CoBank in the original principal face amount of
$32,400,000 (such Promissory Note and all amendments, modifications,
extensions, renewals and replacements thereof, the "CTC One Note"); (b)
the principal, interest and other amounts becoming due and payable,
whether by acceleration or otherwise, under that certain Promissory
Note, dated May 15, 1996, made by the Borrower to the order of CoBank in
the original principal face amount of $5,000,000 (such Promissory Note
and all amendments, modifications, extensions, renewals and replacements
thereof, the "CTC Two Note"); (c) the principal, interest and other
amounts becoming due and payable, whether by acceleration or otherwise,
under that certain Promissory Note, dated of even date herewith, made by
Mercury to the order of the Borrower, assigned to CoBank, in the
original principal face amount of $5,000,000 (such Promissory Note and
all amendments, modifications, extensions, renewals and replacements
thereof, the "Mercury Note"; the CTC One Note, the CTC Two Note and the
-2-
<PAGE> 3
First Amendment to Amended and Restated
Continuing Guaranty/Mississippi One
Loan No. T0310
Loan No. T0347
Mercury Note, collectively, the "Notes"); (d) all other payments or
performances to be made by the Borrower and under the other Loan
Documents to which each is a party; and (e) all other indebtedness and
liabilities of the Borrower and Mercury to CoBank of every kind and
description whatsoever, whether now existing or hereafter arising, fixed
or contingent, as primary obligor or as guarantor or surety, acquired
directly or by assignment or otherwise, liquidated or unliquidated,
regardless of how they arise or by what agreement or instrument they may
be evidenced, including, without limitation, all loans, advances and
other extensions of credit and all covenants, agreements, and provisions
contained in all loan and other agreements between the parties."
SECTION 3. Section 5(C) of the Guaranty is hereby amended and
supplemented by deleting such Section in its entirety and substituting in lieu
thereof the following new Section:
"(C) GOVERNMENTAL APPROVAL. No consent, permission,
authorization, order, or license of any governmental authority is
necessary in connection with the execution, delivery, performance, or
enforcement of the Loan Documents to which Mississippi One is a party,
or to the creation and perfection of the liens and security interests
granted thereby, or the acquisition by Mississippi One of West Alabama
in accordance with the West Alabama Acquisition Agreement or the
acquisition by Mississippi One of Northland Cellular in accordance with
the Northland Cellular Acquisition Agreement, except such as have been
obtained and are in full force and effect."
SECTION 4. Section 6(I) of the Guaranty is hereby amended and
supplemented by deleting the terms "7.50:1.0" and "7.00:1.0" as the Total
Leverage Ratios applicable to the periods "From and including October 1, 1996
through and including December 31, 1996," and "From and including January 1,
1997 through and including March 31, 1997," respectively, and substituting the
new term "6.50:1.0" as the applicable Total Leverage Ratios for both such
periods. Section 6(J) of the Guaranty is hereby amended and supplemented by
deleting such Section in its entirety.
SECTION 5. Section 7(A) of the Guaranty is hereby amended and
supplemented by deleting the reference in such Section to "Cameron Debt" and
substituting in lieu thereof "Subordinated Debt."
SECTION 6. Section 7(B) of the Guaranty is hereby amended and
supplemented by deleting such Section in its entirety and inserting in lieu
thereof the following Section:
-3-
<PAGE> 4
First Amendment to Amended and Restated
Continuing Guaranty/Mississippi One
Loan No. T0310
Loan No. T0347
"(B) LIENS. Create, incur, assume, or allow to exist any
mortgage, deed of trust, deed to secure debt, pledge, lien (including
the lien of an attachment, judgment, or execution), security interest,
or other encumbrance of any kind upon any of its property, real or
personal. The foregoing restrictions shall not apply to (i) liens in
favor of CoBank; (ii) liens for taxes, assessments, or governmental
charges that are not past due, unless the same are being contested in
good faith and by appropriate proceedings and then only to the extent
adequate reserves have been set aside therefor; (iii) liens, pledges,
and deposits under workers' compensation, unemployment insurance, and
social security laws; (iv) liens, deposits, and pledges to secure the
performance of bids, tenders, contracts (other than contracts for the
payment of money), and like obligations arising in the ordinary course
of its business as conducted on the date hereof; (v) liens imposed by
law in favor of mechanics, materialmen, warehousemen, lessors and like
persons that secure obligations that are not past due, unless the same
are being contested in good faith and by appropriate proceedings and
then only to the extent adequate reserves have been set aside therefor;
and (vi) liens in favor of Cameron Telephone and subordinated to all
liens in favor of CoBank, which subordination shall be on terms and
conditions satisfactory to CoBank."
SECTION 7. All references in the Guaranty to "this Guaranty" shall
hereafter be to the Guaranty as amended by this First Amendment.
SECTION 8. After giving effect to the amendments to and restatements
of the Guaranty as set forth in this First Amendment, the representations and
warranties of Mississippi One set forth in the Guaranty are true and correct as
of the date hereof as if made on the date hereof.
SECTION 9. The Guaranty is hereby amended and supplemented by
deleting all references in such Guaranty to "Loan Agreement" and substituting
in lieu thereof "Loan Agreements."
SECTION 10. This First Amendment shall not constitute a novation of
any of the promissory notes or other documents or agreements executed or
delivered in connection with the loan or reloan pursuant to the Loan Agreements
or any of the other Loan Documents.
SECTION 11. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
-4-
<PAGE> 5
First Amendment to Amended and Restated
Continuing Guaranty/Mississippi One
Loan No. T0310
Loan No. T0347
SECTION 12. Except to the extent governed by applicable federal law,
this First Amendment shall be governed by and construed in accordance with the
laws of the State of Louisiana, without reference to choice of law doctrine.
[Signatures Follow on Next Page]
-5-
<PAGE> 6
First Amendment to Amended and Restated
Continuing Guaranty/Mississippi One
Loan No. T0310
Loan No. T0347
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below, by duly authorized officers of the respective parties,
after a reading of the whole.
At the City of Lake Charles, State of Louisiana, on July 1, 1996.
MISSISSIPPI ONE CELLULAR TELEPHONE
COMPANY
By: /s/ THOMAS G. HENNING
---------------------------------------
Name: Thomas G. Henning
----------------------------------
Title: President
---------------------------------
Attest: /s/ ROBERT PIPER
-----------------------------------
Name: Robert Piper
------------------------------
Title: SEL
-----------------------------
[CORPORATE SEAL]
Witness to both signatures:
/s/ SHEILA KING
- ------------------------------------
Witness
/s/ PAT HAMILTON
- ------------------------------------
Witness
/s/ SANDEL DIAZ
- ------------------------------------
Notary Public
My commission expires: lifetime commission
-------------------
[NOTARIAL SEAL]
[Signatures Continued on Next Page]
-6-
<PAGE> 7
First Amendment to Amended and Restated
Continuing Guaranty/Mississippi One
Loan No. T0310
Loan No. T0347
[Signatures Continued from Previous Page]
At Atlanta, Georgia, on July 2, 1996
COBANK, ACB
By: /s/ MARY KAY DEERING
---------------------------------------
Name: Mary Kay Deering
--------------------------------
Title: Vice President
-------------------------------
Witness to the signature:
/s/ [ILLEGIBLE]
- ------------------------------------
Witness
/s/ [ILLEGIBLE]
- ------------------------------------
Witness
/s/ MARIANNE R. HOWELL
- ------------------------------------
Notary Public
My commission expires: Notary Public, Cobb County, Georgia
My Commission Expires April 25, 1999
------------------------------------
[NOTARIAL SEAL]
-7-
<PAGE> 1
EXHIBIT 4.17
LOAN NO. T0310
LOAN NO. T0347
COBANK, ACB
SECOND AMENDMENT AND SUPPLEMENT TO SECURITY AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the respective undersigned Notaries Public, and in the presence
of the respective undersigned competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS SECOND AMENDMENT AND SUPPLEMENT TO SECURITY AGREEMENT (this "Second
Amendment") is made and entered into as of July 1, 1996, by and between
MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY (the "Debtor") having its place of
business (or chief executive office if more than one place of business) located
at P.O. Box 3709, Lake Charles, Louisiana 70602 and whose taxpayer
identification number is 72-1265201, and COBANK, ACB, formerly known as the
National Bank for Cooperatives (the "Secured Party"), whose mailing address is
200 Galleria Parkway, Suite 1900, Atlanta, Georgia 30339.
RECITALS:
WHEREAS, CTC Financial, Inc. (the "Borrower") and the Secured Party
entered into (i) that certain Amended and Restated Loan Agreement, dated as of
May 15, 1996 (the "Original Mississippi One Loan Agreement") and (ii) that
certain Loan Agreement, dated as of May 15, 1996 (the "Mercury Loan
Agreement"); and
WHEREAS, as security for the Borrower's obligations under the Original
Mississippi One Loan Agreement and certain other obligations of the Debtor, the
Debtor executed and delivered that certain Security Agreement, dated as of
September 27, 1994, and First Amendment and Supplement to Security Agreement,
dated as of May 15, 1996 (such security agreement, as so
<PAGE> 2
Second Amendment to Security
Agreement/Mississippi One
Loan No. T0310
Loan No. T0347
amended and as amended modified, restated or replaced from time to time, the
"Security Agreement"), pursuant to which the Debtor granted to the Secured
Party a first priority security interest and lien on the property described
therein; and
WHEREAS, the Borrower and the Secured Party are entering into that
certain First Amendment to Amended and Restated Loan Agreement, dated as of
even date herewith, amending the Original Mississippi One Loan Agreement (as
amended, the "Mississippi One Loan Agreement"; the Mississippi One Loan
Agreement and the Mercury Loan Agreement, collectively, the "Loan Agreements");
and
WHEREAS, as an inducement to the Secured Party to enter into the Loan
Agreements and to make the loans provided for therein, the Debtor has agreed to
amend the Security Agreement as herein provided;
NOW, THEREFORE, in consideration of the foregoing and the agreements
contained herein and intending to be legally bound hereby, the Debtor hereby
agrees with the Secured Party as follows:
1. Section 2 of the Security Agreement is hereby amended and
restated to read in its entirety as follows:
"The security interest granted hereunder shall secure the
following obligations (the "Obligations"): (a) all payments or
performances to be made by the Borrower under the "Loan Documents" (as
defined in the Mississippi One Loan Agreement), including, without
limitation, the payment of all principal, interest and other amounts
becoming due and payable, whether by acceleration or otherwise, under
that certain Second Amended and Restated Promissory Note, dated July 1,
1996 (the "Amended CoBank Note"), made by the Borrower to the Secured
Party in the original principal face amount of $32,400,000 (as any such
Loan Documents may be amended, supplemented, modified, extended or
restated from time to time); (b) all payments or performances to be made
by the Debtor under the "Loan Documents" (as defined in the Mississippi
One Loan Agreement), including, without limitation, the payment of all
principal, interest and other amounts becoming due and payable, whether
by acceleration or otherwise, under that certain Second Amended and
Restated Promissory Note, dated July 1, 1996 (the "Mississippi One
Note"), made by the Debtor to the order of the Borrower, and assigned to
the Secured Party, in the original face principal amount of $32,400,000,
and all payments or performances under that certain Amended and Restated
Continuing Guaranty, dated as of May 15, 1996, as amended by that
certain First Amendment and Supplement to Amended
-2-
<PAGE> 3
Second Amendment to Security
Agreement/Mississippi One
Loan No. T0310
Loan No. T0347
and Restated Continuing Guaranty, dated as of July 1, 1996 (as amended
the "Mississippi One Guaranty"), made by the Debtor for the benefit of
the Secured Party (as any such Loan Documents may be amended,
supplemented, modified, extended or restated from time to time); (c) all
payments or performances to be made by Mercury, Inc. ("Mercury") under
the "Loan Documents" (as defined in the Mississippi One Loan Agreement),
including, without limitation, all payments and performances under that
certain Continuing Guaranty, dated as of May 15, 1996, as amended by
that certain First Amendment and Supplement to Continuing Guaranty,
dated as July 1, 1996, as so amended (the "Mercury Guaranty"), made by
Mercury for the benefit of the Secured Party (as any such Loan Documents
may be amended, supplemented, modified, extended or restated from time
to time); (d) all payments or performances to be made by the Borrower
under the "Loan Documents" (as defined in that certain Loan Agreement,
dated as of May 15, 1996, between the Borrower and CoBank (the "Mercury
Loan Agreement")), including, without limitation, the payment of all
principal, interest and other amounts becoming due and payable, whether
by acceleration or otherwise, under that certain Promissory Note, dated
of May 15, 1996 (the "Mercury CoBank Note"), made by the Borrower to the
Secured Party in the original principal face amount of $5,000,000 (as
any such Loan Documents may be amended, supplemented, modified, extended
or restated from time to time); (e) all payments or performance to be
made by the Debtor under the "Loan Documents" (as defined in the Mercury
Loan Agreement), including, without limitation, all payments or
performances under the Mississippi One Guaranty (as any such Loan
Documents may be amended, supplemented, modified, extended or restated
from time to time); (f) all payments or performances to be made by
Mercury under the "Loan Documents" (as defined in the Mercury Loan
Agreement), including, without limitation, the payment of all principal,
interest and other amounts becoming due and payable, whether by
acceleration or otherwise, under that certain Promissory Note, dated
July 1, 1996 (the "Mercury Note"; the Amended CoBank Note, the
Mississippi One Note, the Mercury CoBank Note and the Mercury Note,
collectively, the "Notes"), made by Mercury to the order of the
Borrower, and assigned to the Secured Party, in the original face
principal amount of $5,000,000, and all payments or performances under
the Mercury Guaranty (as any such Loan Documents may be amended,
modified, extended, renewed, reinstated or replaced from time to time);
and (g) the payment of all other indebtedness and the performance of all
other obligations of the Borrower, Mercury or the Debtor to the Secured
Party of every type and description, whether now existing or hereafter
arising, fixed or contingent, as primary obligor or as guarantor or
surety, acquired directly or by assignment or otherwise, liquidated or
unliquidated, regardless of how they arise or by what agreement or
instrument they may be evidenced, including, without limitation, all
-3-
<PAGE> 4
Second Amendment to Security
Agreement/Mississippi One
Loan No. T0310
Loan No. T0347
loans, advances and other extensions of credit and all covenants,
agreements, and provisions contained in all loan and other agreements
between the parties."
2. The Loan Documents, any Loan Document or Loans, when used in the
Security Agreement, shall mean the Loan Documents, a Loan Document or Loans,
respectively, as defined in the Loan Agreements.
3. The "Loan Agreements" or "Mississippi One Loan Agreement," when
used in the Security Agreement, shall mean the "Loan Agreements," or
"Mississippi One Loan Agreement," respectively, as defined in the Second
Amendment. All references in the Security Agreement to "this Security
Agreement" shall hereafter be to the Security Agreement as amended by this
Second Amendment.
4. Section 6(D) of the Security Agreement is hereby amended so as to
strike the phrase "(as defined in the Loan Agreement)" and substitute the
phrase "(as defined in the Mississippi One Loan Agreement)".
5. Schedule A to the Security Agreement is hereby amended by
deleting it in its entirety and inserting in lieu thereof the Schedule A
attached hereto.
6. After giving effect to the amendments to and restatement of the
Security Agreement set forth in this Second Amendment, the representations and
warranties of the Debtor set forth in the Security Agreement are true and
correct as of the date hereof as if made on the date hereof.
7. It is the intention of the parties hereto that this Second
Amendment shall not constitute a novation and shall in no way adversely affect
or impair (i) the validity of the "Loan Documents" (as defined in the Loan
Agreements) or (ii) the validity or priority of the security interest created
by the Security Agreement, it being the intention of the parties hereto merely
to amend and restate the Security Agreement as expressly set forth herein. To
the extent not inconsistent herewith, all of the terms and conditions of the
Security Agreement shall remain in full force and effect and are hereby
ratified and confirmed by the Debtor.
8. This Second Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
9. This Second Amendment shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
-4-
<PAGE> 5
Second Amendment to Security
Agreement/Mississippi One
Loan No. T0310
Loan No. T0347
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
the duly authorized officers of the respective parishes, after a due reading of
the whole.
At Lake Charles, Louisiana, on July 1, 1996.
MISSISSIPPI ONE CELLULAR TELEPHONE
COMPANY
By: /s/ THOMAS G. HENNING
-----------------------------------
Name:Thomas G. Henning
-----------------------------
Title: President
----------------------------
Attest:/s/ ROBERT PIPER
-------------------------------
Name: Robert Piper
-------------------------
Title: Secretary
------------------------
[CORPORATE SEAL]
Witnesses to all Signatures:
/s/ SHEILA KING
- ------------------------------------
Witness
/s/ PAT HAMILTON
- ------------------------------------
Witness
/s/ SANDEL DIAZ
- ------------------------------------
Notary Public
My commission expires: lifetime commission
-------------------
[NOTARIAL SEAL]
-5-
<PAGE> 6
Second Amendment to Security
Agreement/Mississippi One
Loan No. T0310
Loan No. T0347
[Signatures Continued from Previous Page]
At Atlanta, Georgia on July 2, 1996.
COBANK, ACB
By: /s/ Mary Kay Deering
-----------------------------------
Name:Mary Kay Deering
-----------------------------
Title: Vice President
----------------------------
Witnesses to Signature:
/s/ SHAWNA KEENAN
- ------------------------------------
Witness
/s/ [ILLEGIBLE]
- ------------------------------------
Witness
/s/ MARIANNE R. HOWELL
- ------------------------------------
Notary Public
My commission expires: April 25, 1999
--------------
[NOTARIAL SEAL]
-6-
<PAGE> 1
EXHIBIT 4.18
CROSS REFERENCES:
LAFAYETTE COUNTY, MS - BOOK 628, PAGE 529; AND ___________
QUITMAN COUNTY, MS - BOOK 196, PAGE 834; AND ___________
TUNICA COUNTY, MS - BOOK 136, PAGE 343; AND___________
PANOLA COUNTY, SECOND JUDICIAL DISTRICT, MS -
BOOK 617, PAGE 669; AND _____________
TATE COUNTY, MS - BOOK 411, PAGE 646; AND ____________
MARSHALL COUNTY, MS - BOOK 195, PAGE 622; AND ____________
COAHOMA COUNTY, MS - __________; AND _________
LOAN NO. T0310
LOAN NO. T0347
SECOND AMENDMENT AND SUPPLEMENT TO DEED OF TRUST,
SECURITY AGREEMENT, AND FIXTURE FILING
FROM
MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY
TO
KAREN HAWKINS, TRUSTEE
FOR
COBANK, ACB
(FORMERLY KNOWN AS NATIONAL BANK FOR COOPERATIVES)
This instrument was prepared by, and after recording should be returned
to, Peter A. Fozzard, Esq., Sutherland, Asbill & Brennan, 999 Peachtree Street,
Atlanta, Georgia 30309, telephone (404) 853-8000.
This instrument, in addition to being a deed of trust on real property,
is a financing statement for goods that are or are to become fixtures related
to the real estate described herein, and should be appropriately indexed.
Mississippi One Cellular Telephone Company is the record lessee of the real
estate.
This instrument secures a line of credit used primarily for business,
commercial or agricultural purposes.
These cover sheets are a part of this instrument and should be recorded
with it.
<PAGE> 2
Indexing Instruction: This instrument affects land located as follows:
Lafayette County - NE 1/4 of Section 25, Township 8 South,
Range 4 West and SW 1/4 of Section 32,
Township 8 South, Range 3 West
Quitman County - SE 1/4 of Section 7, Township 27 North,
Range 2 West
Tunica County - SW 1/4 of Section 5, Township 4 South, Range
11 West
Panola County - SW 1/4 of Section 27, Township 9 South,
2d Judicial District Range 7 West
Tate County - NE 1/4 of Section 16, Township 6 South,
Range 7 West
Marshall County - SW 1/4 of Section 33, Township 3 South,
Range 2 West
Coahoma County - NE 1/4 of Section 7, Township 30 North,
Range 3 West
<PAGE> 3
Second Amendment to Deed of Trust/Mississippi One
Loan No. T0310
Loan No. T0347
SECOND AMENDMENT AND SUPPLEMENT TO DEED OF TRUST, SECURITY
AGREEMENT, AND FIXTURE FILING
THIS SECOND AMENDMENT AND SUPPLEMENT TO DEED OF TRUST, SECURITY
AGREEMENT, AND FIXTURE FILING (this "Second Amendment") is made and entered
into as of July 1, 1996, by and between MISSISSIPPI ONE CELLULAR TELEPHONE
COMPANY, a Louisiana corporation (the "Grantor") and COBANK, ACB, a national
banking association (formerly known as National Bank for Cooperatives; the
"Beneficiary"), having an address at 200 Galleria Parkway, Suite 1900, Atlanta,
Georgia 30339.
RECITALS:
WHEREAS, CTC Financial, Inc. (the "Borrower") and the Beneficiary
entered into that certain Amended and Restated Loan Agreement, dated as of May
15, 1996 (the "Amended and Restated Loan Agreement"), which amended and
restated that certain Loan Agreement, dated as of September 27, 1994; and
WHEREAS, as security for the Borrower's obligations under the Amended
and Restated Loan Agreement, the Grantor executed and delivered that certain
Deed of Trust, Security Agreement and Fixture Filing, dated September 27, 1994,
as amended by that certain First Amendment and Supplement to Deed of Trust,
Security Agreement and Fixture Filing, dated as of May 15, 1996 (the "First
Amendment"; the Deed of Trust as amended by the First Amendment, the "Deed of
Trust"), pursuant to which the Grantor granted to the Beneficiary a first
priority security interest and lien on the real property described therein; and
WHEREAS, the Borrower and the Beneficiary are entering into that certain
First Amendment and Supplement to Amended and Restated Loan Agreement, dated as
of even date herewith, amending the Amended and Restated Loan Agreement (the
"First Amendment to Loan Agreement"); and
WHEREAS, as an inducement to the Beneficiary to enter into the First
Amendment to Loan Agreement and to make the loan provided for therein, the
Grantor has agreed to amend the Deed of Trust as herein provided;
NOW, THEREFORE, in consideration of the foregoing and the agreements
contained herein and intending to be legally bound hereby, the Grantor hereby
agrees with the Beneficiary as follows:
<PAGE> 4
Second Amendment to Deed of Trust/Mississippi One
Loan No. T0310
Loan No. T0347
SECTION 1. DEFINITIONS. Capitalized terms, when used in this Second
Amendment, unless otherwise defined herein, shall have the meanings ascribed to
them in the Deed of Trust.
SECTION 2. THE "BACKGROUND STATEMENT" on pages 1 and 2 of the Deed of
Trust is hereby amended and restated to read in its entirety as follows:
BACKGROUND STATEMENT
"The Borrower and the Beneficiary previously entered into that
certain Loan Agreement, dated as of September 27, 1994 (the "Original
Loan Agreement"), pursuant to which the Beneficiary agreed to loan to
the Borrower up to $3,800,000. The Borrower's obligation to repay
amounts advanced under the Original Loan Agreement is evidenced by a
Promissory Note dated September 27, 1994, made by the Borrower in favor
of the Beneficiary, having a final maturity date of December 20, 2002
(the "Original CoBank Note"). The proceeds of such loan were reloaned
by the Borrower to the Grantor for the purposes set forth in the
Original Loan Agreement. Such reloan is evidenced by that certain
Promissory Note dated September 27, 1994, made by the Grantor in favor
of the Borrower in the original principal amount of $3,800,000 and
having a final maturity date of December 20, 2002 (the "Original Note"),
which Original Note has been assigned to the Beneficiary. As a
condition to the Beneficiary's obligation to advance funds under the
Original Loan Agreement, the Grantor executed and delivered that certain
Continuing Guaranty, dated as of September 27, 1994, in favor of the
Beneficiary (the "Original Guaranty"), guaranteeing the "Obligations"
(as defined in the Original Guaranty). As a further condition to the
obligation of the Beneficiary to advance funds under the Original Loan
Agreement, the Grantor executed and delivered that certain Security
Agreement, dated as of September 27, 1994, in favor of the Beneficiary
(the "Security Agreement") and this Deed of Trust to secure the
Grantor's performance under the Original Guaranty and under the Original
Note and to secure the Original CoBank Note.
The Borrower and the Beneficiary later entered into that certain
Amended and Restated Loan Agreement, dated as of May 15, 1996 (the
"Amended and Restated Loan Agreement"), pursuant to which the Original
Loan Agreement was amended and restated to increase the availability of
the loan thereunder to $17,400,000, and have now entered into that
certain First Amendment and Supplement to Amended and Restated Loan
Agreement, dated of even date herewith (the "First Amendment to Loan
Agreement"; the Amended and Restated Loan Agreement as amended by the
First Amendment to Loan Agreement, and as may hereafter be amended,
supplemented, extended or restated from time to time, the "Mississippi
One Loan Agreement"), pursuant to which the Amended and Restated Loan
Agreement was amended to increase the availability of the loan
thereunder to $32,400,000. The Borrower's obligation to repay amounts
advanced under
-2-
<PAGE> 5
Second Amendment to Deed of Trust/Mississippi One
Loan No. T0310
Loan No. T0347
the Mississippi One Loan Agreement is evidenced by that certain Second
Amended and Restated Promissory Note dated of even date herewith, made
by the Borrower in favor of the Beneficiary, having a final maturity
date of December 20, 2003 and amending and restating the Original CoBank
Note (said promissory note, as amended and the same hereafter may be
amended, modified, supplemented, extended or restated from time to time,
is hereinafter referred to as the "Amended CoBank Note"). The proceeds
of such loan are to be reloaned by the Borrower to the Grantor for the
purposes set forth in the Mississippi One Loan Agreement. Such reloan
is evidenced by that certain Second Amended and Restated Promissory
Note, dated July 1, 1996, made by the Grantor in favor of the Borrower
in the original principal amount of $32,400,000 and having a final
maturity date of December 20, 2003 and amending and restating the
Original Note (said promissory note, as the same may be amended,
modified, supplemented, extended or restated from time to time is
hereinafter referred to as the "Mississippi One Note"), which
Mississippi One Note has been assigned to the Beneficiary. The Borrower
and the Beneficiary have also entered into that certain Loan Agreement,
dated as of May 15, 1996 (the "Mercury Loan Agreement"), pursuant to
which the Beneficiary agreed to loan the Borrower up to $5,000,000. The
Borrower's obligation to repay amounts advanced under the Mercury Loan
Agreement is evidenced by a Promissory Note dated May 15, 1996, made by
the Borrower in favor of the Beneficiary, having a final maturity date
as provided in the Mercury Loan Agreement (said promissory note, as the
same may be amended, modified, supplemented, extended or restated from
time to time is hereinafter referred to as the "CoBank Note"). The
proceeds of such loan are to be reloaned by the Borrower to Mercury,
Inc. ("Mercury") for the purposes set forth in the Mercury Loan
Agreement. Such reloan is evidenced by that certain Promissory Note,
dated May 15, 1996, made by Mercury in favor of the Borrower in the
original principal amount of $5,000,000 and having a final maturity date
as provided in the Mercury Loan Agreement (said promissory note, as the
same may be amended, modified, supplemented, extended or restated from
time to time is hereinafter referred to as the "Mercury Note"), which
Mercury Note has been assigned to the Beneficiary.
As conditions to the Beneficiary's obligation to advance funds
under the Mississippi One Loan Agreement and the Mercury Loan Agreement:
(a) the Grantor has executed and delivered that certain Amended and
Restated Continuing Guaranty, dated as of May 15, 1996, in favor of the
Beneficiary, as amended by that certain First Amendment and Supplement
to Amended and Restated Continuing Guaranty, dated as of July 1, 1996
(said guaranty, as so amended and as the same may be amended, modified,
supplemented, extended, or restated from time to time is hereinafter
referred to as the "Mississippi One Guaranty"), guaranteeing the
"Obligations" (as defined in the Mississippi One Guaranty); and (b)
Mercury has executed and delivered that certain Continuing Guaranty,
dated as of May 15, 1996, in favor of the Beneficiary, as amended by
that certain First Amendment
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<PAGE> 6
Second Amendment to Deed of Trust/Mississippi One
Loan No. T0310
Loan No. T0347
and Supplement to Continuing Guaranty, dated as of July 1, 1996 (said
guaranty, as so amended and as the same may be amended, modified,
supplemented, extended, or restated from time to time is hereinafter
referred to as the "Mercury Guaranty"), guaranteeing the "Obligations"
(as defined in the Mercury Guaranty). As a further condition to the
Beneficiary's obligations to advance funds under the Mississippi One
Loan Agreement and the Mercury Loan Agreement, the Grantor has executed
and delivered that certain First Amendment and Supplement to Security
Agreement, dated as of May 15, 1996, and that certain Second Amendment
and Supplement to Security Agreement, dated as of July 1, 1996 (the
Security Agreement, as so amended, and as the same may be amended,
modified, supplemented, extended or restated from time to time, the
"Amended Security Agreement") and this Deed of Trust to secure the
Grantor's performance under the Mississippi One Guaranty and the
Mississippi One Note, and to secure the Mercury Guaranty, the Mercury
Note, the Amended CoBank Note and the CoBank Note.
The Mississippi One Loan Agreement, the Mercury Loan Agreement,
the Amended Security Agreement, the Mississippi One Guaranty, the
Mercury Guaranty, the Mississippi One Note, the Amended CoBank Note, the
Mercury Note and the CoBank Note, this Deed of Trust, and all other
instruments evidencing, securing or otherwise relating to the
indebtedness and obligations hereinabove described are hereinafter
referred to as the "Loan Documents."
SECTION 3. All references in the Deed of Trust to this "Deed of
Trust" shall hereafter be to the Deed of Trust as amended by this Second
Amendment.
SECTION 4. After giving effect to the amendments to and restatement
of the Deed of Trust set forth in this Second Amendment, the representations
and warranties of the Grantor set forth in the Deed of Trust are true and
correct as of the date hereof as if made on the date hereof.
SECTION 5. It is the intention of the parties hereto that this Second
Amendment shall not constitute a novation and shall in no way adversely affect
or impair (i) the validity of the Loan Documents or (ii) the validity or
priority of the security interest created by the Deed of Trust, it being the
intention of the parties hereto merely to amend and restate the Deed of Trust
as expressly set forth herein. To the extent not inconsistent herewith, all of
the terms and conditions of the Deed of Trust shall remain in full force and
effect and are hereby ratified and confirmed by the Grantor.
-4-
<PAGE> 7
Second Amendment to Deed of Trust/Mississippi One
Loan No. T0310
Loan No. T0347
SECTION 6. This Second Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
SECTION 7. This Second Amendment shall be governed by and construed
in accordance with the laws of the State of Mississippi, without reference to
choice of law doctrine.
IN WITNESS WHEREOF, the Grantor and the Beneficiary, acting by and
through their duly authorized officers, have executed this instrument on the
date below their respective signatures, but effective on May 15, 1996.
MISSISSIPPI ONE CELLULAR
TELEPHONE COMPANY
By: /s/ THOMAS G. HENNING
---------------------------------------
Name: Thomas G. Henning
----------------------------------
Title: President
---------------------------------
Date: July 1, 1996
----------------------------------
COBANK, ACB
By: /s/ MARY KAY DEERING
---------------------------------------
Name: Mary Kay Deering
----------------------------------
Title: Vice President
---------------------------------
Date: July 2, 1996
----------------------------------
-5-
<PAGE> 8
Second Amendment to Deed of Trust/Mississippi One
Loan No. T0310
Loan No. T0347
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
PERSONALLY APPEARED BEFORE ME, the undersigned authority in and for the
jurisdiction aforesaid, the within named Thomas G. Henning, who acknowledged
that s/he is the President of Mississippi One Cellular Telephone Company, a
Louisiana corporation, and that for and on behalf of said Mississippi One
Cellular Telephone Company and as its act and deed, s/he signed and delivered
the above and foregoing instrument of writing on the day and in the year
therein mentioned, after first having been duly authorized to do so.
WITNESS my hand and official seal in the county and state last
aforesaid, this 1st day of July, 1996.
/s/ SANDRA DIAZ
------------------------------------------
Notary Public
My commission expires: lifetime commission
-------------------
[NOTARIAL SEAL]
-6-
<PAGE> 9
Second Amendment to Deed of Trust/Mississippi One
Loan No. T0310
Loan No. T0347
STATE OF GEORGIA )
)
COUNTY OF FULTON )
PERSONALLY APPEARED BEFORE ME, the undersigned authority in and for the
jurisdiction aforesaid, the within named Mary Kay Deering, who acknowledged
that s/he is the Vice President of CoBank, ACB (formerly known as National Bank
for Cooperatives), a federally chartered bank, and that for and on behalf of
said bank and as its act and deed, s/he signed and delivered the above and
foregoing instrument of writing on the day and in the year therein mentioned,
after first having been duly authorized to do so.
WITNESS my hand and official seal in the county and state last
aforesaid, this 2nd day of July 1996.
/s/ MARIANE R. HOWELL
------------------------------------------
Notary Public
My commission expires: April 25, 1999
-------------------
[NOTARIAL SEAL]
-7-
<PAGE> 1
EXHIBIT 4.19
CROSS-REFERENCE:
BOOK ____, PAGE ____
_______________ COUNTY, AL
LOAN NUMBER: T0310
T0347
COBANK, ACB
FIRST AMENDMENT AND SUPPLEMENT TO MORTGAGE
THIS FIRST AMENDMENT AND SUPPLEMENT TO MORTGAGE (this "FIRST
AMENDMENT"), is made and entered into as of July 1, 1996, by and between
MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY (the "MORTGAGOR"), having its place
of business at P.O. Box 3709, Lake Charles, Louisiana 70602, and COBANK, ACB
("COBANK"), having an address at 200 Galleria Parkway, Suite 1900, Atlanta,
Georgia 30339, and amends that certain Mortgage, dated as of May 15, 1996, by
the Mortgagor for the benefit of CoBank (the "Mortgage");
W I T N E S S E T H:
WHEREAS, CoBank and CTC Financial, Inc. (the "BORROWER") have entered
into that certain Amended and Restated Loan Agreement, dated as of May 15,
1996, as amended by that certain First Amendment and Supplement to Amended and
Restated Loan Agreement, dated as of even date herewith (as so amended and as
the same may be amended, modified, supplemented, renewed, extended, restated or
replaced, from time to time, the "MISSISSIPPI ONE LOAN AGREEMENT"), pursuant to
which the Borrower has executed and delivered to CoBank a Second Amended and
Restated Promissory Note, dated of even date herewith in the original principal
amount of $32,400,000 (as it may be amended, modified, supplemented, renewed,
extended, restated or replaced, from time to time, the "AMENDED COBANK NOTE";
the amounts loaned thereunder the "MISSISSIPPI ONE LOAN"); and
WHEREAS, the proceeds of the Mississippi One Loan have been or will be
reloaned by the Borrower to the Mortgagor, as evidenced by that certain Second
Amended and Restated Promissory Note dated as of even date herewith, made by
the Mortgagor in favor of the Borrower in the original principal amount of
$32,400,000 (said promissory note, as the same may be amended, modified,
supplemented, extended or restated from time to time is hereinafter referred to
as the "MISSISSIPPI ONE NOTE"), which Mississippi One Note has been assigned to
CoBank; and
WHEREAS, CoBank and the Borrower have entered into that certain Loan
Agreement, dated as of May 15, 1996 (as it may be amended, modified,
supplemented, renewed, extended, restated or replaced, from time to time, the
"MERCURY LOAN AGREEMENT"), pursuant to which the
<PAGE> 2
First Amendment to Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
Borrower has executed and delivered to CoBank a Promissory Note, dated May 15,
1996 in the original principal amount of $5,000,000 (as it may be amended,
modified, supplemented, renewed, extended, restated or replaced, from time to
time, the "COBANK NOTE"; the amounts loaned thereunder the "MERCURY LOAN"); and
WHEREAS, the proceeds of the Mercury Loan have been reloaned by the
Borrower to Mercury, Inc. ("MERCURY"), as evidenced by that certain Promissory
Note, dated May 15, 1996 made by Mercury in favor of Borrower in the original
principal amount of $5,000,000 (said promissory note, as the same may be
amended, modified, supplemented, extended or restated from time to time is
hereinafter referred to as the "MERCURY NOTE"), which Mercury Note has been
assigned to CoBank; and
WHEREAS, as a condition to CoBank's obligation to advance funds under
the Mississippi One Loan Agreement and the Mercury Loan Agreement: (a) the
Mortgagor has executed and delivered, as amended by that certain First
Amendment and Supplement to Continuing Guaranty, dated as of even date
herewith, amending that certain Continuing Guaranty, dated as of May 15, 1996,
in favor of CoBank (as so amended and as the same may be amended, modified,
supplemented, extended, or restated from time to time, the "MISSISSIPPI ONE
GUARANTY"), guaranteeing the "Obligations" (as defined in the Mississippi One
Guaranty); (b) the Mortgagor has executed and delivered that certain Second
Amendment and Supplement to Security Agreement, dated as of even date herewith,
amending that certain Security Agreement, dated as of September 27, 1994, in
favor of CoBank, as previously amended by that certain First Amendment and
Supplement to Security Agreement, dated as of May 15, 1996 (as so amended and
as the same may be amended, modified, supplemented, extended, or restated from
time to time, the "MISSISSIPPI ONE SECURITY AGREEMENT"); (c) the Mortgagor has
executed and delivered that certain Second Amendment and Supplement to Deed of
Trust, Security Agreement and Fixture Filing, dated as of even date herewith,
amending that certain Deed of Trust, Security Agreement and Fixture Filing,
dated as of September 27, 1994, in favor of CoBank, as previously amended by
that certain First Amendment and Supplement to Deed of Trust, Security
Agreement and Fixture Filing, dated as of May 15, 1996 (as so amended and as
the same may be amended, modified, supplemented, extended, or restated from
time to time, the "MISSISSIPPI ONE DEED OF TRUST"); (d) Mercury has executed
and delivered that certain First Amendment and Supplement to Continuing
Guaranty, dated as of even date herewith, amending that certain Continuing
Guaranty, dated as of May 15, 1996, in favor of CoBank (as so amended and as
the same may be amended, modified, supplemented, extended, or restated from
time to time, the "MERCURY GUARANTY"), guaranteeing the "Obligations" (as
defined in the Mercury Guaranty); and (e) Mercury has executed and delivered
that certain Second Amendment and Supplement to Pledge Agreement, dated as of
even date herewith, amending that certain Pledge Agreement, dated as of
September 27, 1994, in favor of CoBank, as previously amended by that certain
First Amendment
-2-
<PAGE> 3
First Amendment to Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
and Supplement to Pledge Agreement, dated as of May 15, 1996 (as so amended and
as the same may be amended, modified, supplemented, extended, or restated from
time to time, the "MERCURY PLEDGE AGREEMENT"; this Mortgage, the Mississippi
One Loan Agreement, the Amended CoBank Note, the Mississippi One Note, the
Mercury Loan Agreement, the CoBank Note, the Mercury Note, the Mississippi One
Guaranty, the Mississippi One Security Agreement, the Mississippi One Deed of
Trust, the Mercury Guaranty, the Mercury Pledge Agreement and all other
instruments evidencing, securing or otherwise relating to the indebtedness
created by the Mississippi One Loan Agreement and the Mercury Loan Agreement
are hereinafter referred to as the "LOAN DOCUMENTS"); and
WHEREAS, to induce CoBank to make the extension of credit contemplated
by the Mississippi One Loan Agreement and the Mercury Loan Agreement, the
Mortgagor granted to CoBank a lien in and to the Premises (as defined in the
Mortgage), and to induce CoBank to make the additional extension of credit
contemplated by the amendments to the Mississippi One Loan Agreement, the
Mortgagor has agreed to supplement and amend the Mortgage as herein provided;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the Mortgagor hereby agrees with CoBank as follows:
1. FOR AND IN CONSIDERATION of the sum of $10.00 and other valuable
consideration, the receipt and sufficiency whereof are hereby acknowledged, and
in order to secure the full and prompt payment when due and performance of the
"SECURED OBLIGATIONS" (as defined in the Mortgage, as amended by this First
Amendment), the Mortgagor does hereby grant, bargain, sell, assign and convey
over unto CoBank all right, title and interest of the Mortgagor in and to the
following described property (collectively, the "ADDITIONAL PREMISES"):
(a) all those certain tracts, pieces or parcels of land (and
any easements, rights of way or other rights or interests in land) owned
or leased by the Mortgagor located in the Counties of Bibb, Dallas,
Chilton, Lowndes and Wilcox, Alabama, including, without limitation,
those parcels described on EXHIBIT A hereto and made a part hereof (the
"ADDITIONAL REAL PROPERTY"), the Mortgagor's interest in the leased
Additional Real Property being pursuant to the leases described on
EXHIBIT B hereto and made a part hereof (collectively, the "ADDITIONAL
LEASEHOLD LEASES");
(b) all buildings, structures and improvements of every nature
whatsoever now or hereafter situated on, under or above the Additional
Real Property and all fixtures now or hereafter attached thereto and
equipment located thereon (excluding motor vehicles for which ownership
is required by law to be evidenced by certificates of title), all
telecommunications and radio transmitting and receiving equipment,
antennas, microwave
-3-
<PAGE> 4
First Amendment to Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
communication equipment, machinery, satellite dishes, poles, posts,
towers, cross-arms, conduits, ducts, lines (whether overhead or
underground or otherwise), wires, cables, exchanges, switches,
including, without limitation, host switches and remote switches, desks,
testboards, frames, racks, motors, generators, batteries, central office
equipment, pay stations, protectors, subscriber equipment, instruments,
connectors, connections, appliances, and all other personal property
located on the Additional Real Property or otherwise used, useful or
acquired for use in connection with the Mortgagor's business, including
all accessions, replacements, or substitutions thereof (the "ADDITIONAL
IMPROVEMENTS");
(c) all easements, rights-of-way, strips and gores of land,
streets, ways, alleys, passages, sewer rights, water rights, minerals,
crops, timber and other emblements now or hereafter located on the
Additional Real Property or under or above the same or any part or
parcel thereof, and all estates, rights, titles, interests, tenements,
hereditaments and appurtenances, reversions and remainders whatsoever,
in any way belonging, relating or appertaining to the Additional Real
Property or any part thereof, or which hereafter shall in any way
belong, relate or be appurtenant thereto, whether now owned or hereafter
acquired by the Mortgagor (the "ADDITIONAL EASEMENTS AND APPURTENANCES";
together with the Additional Real Property, the Additional Leasehold
Leases and the Additional Improvements, the "ADDITIONAL PROPERTY");
(d) all easements, rights, rights-of-way, satellite dishes,
towers, equipment and all other real and personal property comprising
the utility system of the Mortgagor;
(e) all right, title and interest of the Mortgagor in any and
all leases, rental agreements and arrangements of any sort now or
hereafter affecting the Additional Property or any portion thereof and
providing for or resulting in the payment of money to the Mortgagor for
the use of the Additional Property or any portion thereof, whether the
user enjoys the Additional Property or any portion thereof as tenant for
years, invitee, licensee, tenant at sufferance or otherwise, and
irrespective of whether such leases, rental agreements and arrangements
be oral or written, and including any and all extensions, renewals and
modifications thereof (the "ADDITIONAL LEASES") and guaranties of the
performance or Secured Obligations of any tenants or lessees thereunder
(the "ADDITIONAL TENANTS"), together with all income, rents, issues,
profits and revenues from the Additional Leases (including all tenant
security deposits and all other tenant deposits, whether held by the
Mortgagor or in a trust account, and all other deposits and escrow funds
relating to any Additional Leases), and all the estate, right, title,
interest, property, possession, claim and demand whatsoever at law, as
well as in equity, of the Mortgagor of, in and to the same; provided,
however, that although this First Amendment contains (and it is hereby
agreed that this First Amendment contains) a present, current,
-4-
<PAGE> 5
First Amendment to Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
unconditional and absolute assignment of all of said income, rents,
issues, profits and revenues, the Mortgagor and CoBank have agreed that
so long as there shall exist no Default (as defined in the Mortgage) the
Mortgagor shall have a revocable license to collect routine rental
payments and revenues which do not relate to periods more than one month
after collection, it being agreed that CoBank shall be entitled at all
times to possession of all other income, rents, issues, profits and
revenues (including deposits), and it being further agreed that upon the
occurrence of a Default hereunder such license shall be automatically
revoked without the necessity of further action by CoBank;
(f) all right, title and interest of the Mortgagor in any and
all awards, payments, proceeds and the right to receive the same, either
before or after any foreclosure hereunder, as a result of any temporary
or permanent injury or damage to, taking of or decrease in the value of
the Additional Property by reason of casualty, condemnation or
otherwise;
(g) all claims and causes of action arising from or otherwise
related to any of the foregoing, and all rights and judgments related to
any legal actions in connection with such claims or causes of action,
and all cash (or evidences of cash or of rights to cash) or other
property or rights thereto relating to such claims or causes of action;
(h) all other real property of every kind, nature and
description, and wheresoever located, now owned or leased or hereafter
acquired or leased by the Mortgagor; and
(i) all extensions, additions, improvements, betterments,
renewals and replacements, substitutions, or proceeds of any of the
foregoing.
2. TO HAVE AND TO HOLD the Additional Premises and all parts,
rights, members and appurtenances thereof forever. The Mortgagor covenants
that the Mortgagor is lawfully seized and possessed of the leasehold estates
created by the Additional Leasehold Leases and has good right and is lawfully
authorized to convey the Additional Premises, that the Additional Premises are
unencumbered by any liens or judgments except for the matters set forth on
EXHIBIT C hereto and made a part hereof (the "ADDITIONAL PERMITTED TITLE
EXCEPTIONS"), and the Mortgagor does warrant and will forever defend the title
thereto against the claims of all persons whomsoever, except for the Additional
Permitted Title Exceptions. This First Amendment, in combination with the
Mortgage, is a self-operative security agreement with respect to the
Additional Premises and is intended to constitute a security agreement as
required under the Alabama Uniform Commercial Code, but the Mortgagor agrees to
execute and deliver on demand such other security agreements, financing
statements and other instruments as CoBank may request in order to perfect its
security interest or to impose the lien hereof more specifically
-5-
<PAGE> 6
First Amendment to Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
upon any of the Premises and CoBank shall have all the rights and remedies of a
secured party under the Alabama Uniform Commercial Code in addition to those
specified herein.
3. THIS FIRST AMENDMENT is given to secure the payment and
performance of the Secured Obligations.
4. SHOULD THE SECURED OBLIGATIONS BE PAID according to the tenor and
effect thereof when the same shall become due and payable, and should the
Mortgagor perform all covenants herein contained in a timely manner, then this
First Amendment and the conveyance effected and the liens granted hereby shall
be released and terminated and shall be cancelled and surrendered.
5. All references in the Mortgage to the "Mississippi One Loan
Agreement," the "Amended CoBank Note," the "Mississippi One Note," the "Mercury
Loan Agreement," the "CoBank Note," the "Mercury Note," the "Mississippi One
Guaranty," the "Mississippi One Security Agreement," the "Mississippi One Deed
of Trust," the "Mercury Guaranty," the "Mercury Pledge Agreement," and the
"Loan Documents" shall be to each such term, respectively, as defined in this
First Amendment.
6. All references in the Mortgage to the "Premises," the "Real
Property," the "Leasehold Leases," the "Improvements," the "Easements and
Appurtenances," the "Property," the "Leases," the "Tenants" and the "Permitted
Title Exceptions" shall include within their definitions the "Additional
Premises," the "Additional Real Property," the "Additional Leasehold Leases,"
the "Additional Improvements," the "Additional Easements and Appurtenances,"
the "Additional Property," the "Additional Leases," the "Additional Tenants"
and the "Additional Permitted Title Exceptions," respectively.
7. All references in the Mortgage to the "Mortgage" shall be to the
Mortgage as amended by this First Amendment.
8. After giving effect to the amendments to and the restatement of
the Mortgage set forth in this First Amendment, the representations and
warranties of Mississippi One set forth in the Mortgage are true and correct as
of the date hereof as if made on the date hereof.
9. It is the intention of the parties hereto that this First
Amendment shall not constitute a novation and shall in no way adversely affect
or impair the validity of the Loan Documents, it being the intention of the
parties hereto merely to amend the Mortgage as expressly set forth herein. To
the extent not inconsistent herewith, all the terms and conditions of the
Mortgage shall remain in full force and effect and are hereby ratified and
confirmed by Mississippi One.
-6-
<PAGE> 7
First Amendment to Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
10. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
11. This First Amendment shall be governed by and construed in
accordance with the laws of the State of Alabama, without reference to choice
of law doctrine.
(Signatures on Next Page)
-7-
<PAGE> 8
First Amendment to Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
IN WITNESS WHEREOF, the Mortgagor has executed, attested and delivered
this First Amendment under seal, and CoBank has executed and delivered this
First Amendment, as of the day and year first above written.
MISSISSIPPI ONE CELLULAR
TELEPHONE COMPANY
By: /s/ THOMAS G. HENNING
---------------------------------------
Name: Thomas G. Henning
--------------------------------
Title: President
-------------------------------
Attest: /s/ ROBERT PIPER
-----------------------------------
Name: Robert Piper
--------------------------------
Title: Secretary
-------------------------------
[CORPORATE SEAL]
Signed, sealed and delivered
in the presence of:
/s/ SHEILA KING
- ------------------------------------
Witness
/s/ SANDRA DIAZ
- ------------------------------------
Notary Public
Commission Expiration: lifetime commission
-------------------
[NOTARIAL SEAL]
(Signatures Continue on Next Page)
-8-
<PAGE> 9
First Amendment to Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
(Signatures Continued from Previous Page)
COBANK, ACB
By: /s/ MARY KAY DEERING
---------------------------------------
Name:
--------------------------------
Title:
-------------------------------
Signed, sealed and delivered
in the presence of:
/s/ [ILLEGIBLE]
- ------------------------------------
Witness
/s/ MARIANNE R. HOWELL
- ------------------------------------
Notary Public
Notary Public, Cobb County, Georgia
Commission Expiration: My Commission Expires April 25, 1999
--------------
[NOTARIAL SEAL]
This document prepared by:
Sutherland, Asbill & Brennan
999 Peachtree Street, Suite 2300
Atlanta, Georgia 30309-3996
-9-
<PAGE> 10
First Amendment to Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
EXHIBIT A
Legal Description
Attached.
<PAGE> 11
EXHIBIT "A"
LEGAL DESCRIPTIONS
AL-3
================================================================================
ALICEVILLE
================================================================================
LESSOR LEGAL DESCRIPTION
------ -----------------
Charles A. & Robbie A. Davis A part of Fractional Section 34, Township 22
South, Range 15 West and being more
particularly described as follows:
Commence at the southeast corner of said
Section 34, thence run westerly and along
the section line 1877.95 feet to the Point
of Beginning thence continue westwardly
along said course 684.27 feet; thence, with
an interior angle left of 90 degrees, 80
minutes, run northwardly 604.90 feet;
thence, with an interior angle left of 96
degrees, 80 minutes, run eastwardly 696.99
feet, thence, with an interior angle left of
85 degrees, 00 minutes, run southwardly
664.94 feet to the Point of Beginning thus
making a closing interior angle left of 90
degrees, 80 minutes.
Said parcel containing 9.99 acres, more or
less.
================================================================================
BUTLER
================================================================================
Scott Paper Company A part of the Southeast Quarter of the
Northwest Quarter and a part of the
Northeast Quarter of the Northwest Quarter
all in Section 10, Township 12 North, Range
3 West, being more particularly described as
follows:
Commence at the southwest corner of said
Southeast Quarter of the Northwest Quarter;
thence run northwardly and along Quarter
line 901.69 feet; thence with a deflection
angle right of 90 degrees, 00 minutes, run
eastwardly 445.57 feet to the Point of
Beginning; thence with a deflection angle
right of 9 degrees, 26 minutes, run
southeastwardly 721.33 feet; thence with an
interior angle right of 60 degrees, 00
minutes, run northwestwardly 695.0 feet; run
southwestwardly 708.77 feet to the Point of
Beginning, thus making a closing interior
right of 58 degrees, 11 minutes.
Said parcel containing 4.99 acres, more or
less.
<PAGE> 12
================================================================================
EUTAW
================================================================================
L-Square Land Company A parcel of land in the Southeast Quarter of
Section 14, Township 22 North, Range 2 East
of the St. Stephens Meridian, Greene County,
Alabama and being more particularly
described as follows:
To locate the POINT OF BEGINNING, commence
at the Southwest corner of said Section 14,
said corner being a one inch rebar; thence
run in an Easterly direction and along the
South boundary of said Section 14 a distance
of 5340.79 feet to the Southeast corner of
said Section 14, said corner being a nail in
a fence post; thence with a right angle from
line back of 89 degrees 44 minutes 52
seconds run in a Northerly direction and
along the East boundary of said Section 14 a
distance of 2658.15 feet to the North
boundary of the Southeast Quarter of said
Section 14; thence with a right angle from
line back of 89 degrees 41 minutes 50
seconds, run in a Westerly direction and
along the North boundary of said Southeast
Quarter a distance of 614.63 feet to the
POINT OF BEGINNING, said POINT OF BEGINNING
being a 1/2 inch rebar; thence continue on
the North boundary of said Southeast Quarter
in a Westerly direction a distance of 705.17
feet to a 1/2 rebar; thence with an interior
angle to the right of 89 degrees 18 minutes
00 seconds, run in a Southerly direction a
distance of 625.77 feet to a /12 inch rebar;
thence with an interior angle to the right
of 90 degrees 00 minutes 00 seconds, thence
with an interior angle to the right of 90
degrees 99 minutes 00 seconds, run in a
Northerly direction 617.18 feet to the POINT
OF BEGINNING, and having a closing angle of
90 degrees 42 minutes 00 seconds and
containing 10.1 acres, more or less.
================================================================================
FAYETTE
================================================================================
John Cash & Ivalene Walden A part of the southeast quarter of the
southwest quarter of section 25, and a part
of the northeast quarter of the northwest
quarter of Section 36, all in Township 16
South, Range 13 West and being more
particularly described as follows:
Commence at the southwest corner of said
Section 25, thence run eastwardly and along
the section line 1556.88 feet to the Point
of Beginning; thence, with a deflection
angle left of 90 degrees, 00 minutes, run
northwardly 517.31 feet; thence, with an
interior angle left of 90 degrees, 00
minutes, run eastwardly 628.46 feet; thence,
with an interior angle left of 90 degrees,
00 minutes, run southwardly 683.38 feet;
thence, with an interior angle left of 90
degrees, 00 minutes, run westwardly 628.46
feet; thence, with an interior angle left of
90 degrees, 00 minutes, run northwardly
<PAGE> 13
166.07 feet to the Point of Beginning, thus
making a closing interior angle left of 180
degrees,00 minutes.
Said parcel containing 9.86 acres, more or
less.
================================================================================
LINDEN
================================================================================
Leroy & Matty E. Hill A parcel of land situated in the SE 1/4 of
Section 16, Township 14 North, Range 3 East,
Marengo County, Alabama, more particularly
described as follows:
Commence at the southeast corner of said
Section 16; thence, run northwardly along
the east boundary of said Section 16 for
1329.65 feet; thence, with a deflection
angle left of 90 degrees, 00 minutes, run
westwardly for 153.09 feet to the POINT OF
BEGINNING; thence, with a deflection angle
left of 07 degrees, 18 minutes, run
westwardly for 672.43 feet, thence, with an
interior angle left of 90 degrees, 00
minutes, run northwardly for 645.16 feet;
thence, with an interior angle left of 90
degrees, 00 minutes, run eastwardly for
672.43 feet; thence, with an interior angle
left of 90 degrees, 00 minutes, run
southwardly for 645.16 feet to the POINT OF
BEGINNING, thus forming a closing interior
angle left of 90 degrees, 00 minutes.
LESS AND EXCEPT that portion, if any, of the
property described in Deed Book 7C, at Page
722 in the Probate Office of Marengo County,
Alabama.
Said parcel contains 9.96 acres, more or
less.
Property described herein subject to any and
all easements, restrictions, reservations
and rights-of-way of record.
================================================================================
LIVINGSTON
================================================================================
Board of Trustees of
Livingston University Part of the Northwest Quarter of the
Northwest Quarter of Section 21, Township 19
North, Range 2 West, Sumter County, Alabama,
being more particularly described as
follows:
Commence at the northeast corner of the
Northwest Quarter of the Northwest Quarter
of Section 21; thence, run southwardly and
along the east line of said Northwest
Quarter of the Northwest Quarter for a
distance of 1,041.24 feet to the Point of
Beginning; thence, run southwardly and along
the last stated course for a distance of
720.97 feet; thence, with an interior angle
left of 90 degrees, 00 minutes, run
westwardly for a distance of 660.78 feet,
thence, with an interior angle left of 90
degrees, 00 minutes, run
<PAGE> 14
northwardly for a distance of 720.97 feet;
thence, with an interior angle left of 90
degrees, 00 minutes, run eastwardly for a
distance of 660.78 feet to the Point of
Beginning, thus making a closing interior
angle left of 90 degrees, 00 minutes.
================================================================================
REFORM
================================================================================
Mr. Charles B. McGabey A parcel of land situated in the SE 1/4 of
the SW 1/4 of Section 25, Township 18 South,
Range 15 West, Pickens County, Alabama, more
particularly described as follows:
Commence at the southwest comer of the SE
1/4 of the SW 1/4 of said Section 25;
thence, run northwardly along the accepted
west boundary of the SE 1/4 of the SW 1/4 of
said Section 25 for a distance of 893.42
feet; thence, with a deflection angle right
of 90 degrees, 00 minutes, run eastwardly for
a distance of 151.02 feet to the POINT OF
BEGINNING; thence, continue eastwardly along
the previous course for a distance of 633.79
feet; thence, with an interior angle left
of 90 degrees, 00 minutes, run southwardly
for a distance of 681.88 feet; thence, with
an interior angle left of 90 degrees, 00
minutes, run westwardly for a distance of
375.26 feet; thence, with an interior angle
left of 112 degrees, 24 minutes, run
northwestwardly for a distance of 196.72
feet to a concrete monument; thence, with an
interior angle left of 264 feet; thence,
with an interior angle left of 72 degrees,
42 minutes, run northwardly for a distance
of 557.20 feet to the POINT OF BEGINNING,
thus forming a closing interior angle left
of 90 degrees, 00 minutes.
Said parcel contains 9.12 acres, more or
less.
================================================================================
VERNON
================================================================================
Mr. J. L. Duckworth A part of the Northeast Quarter of the
Northwest Quarter and a part of the
Northwest Quarter of the Northeast Quarter
all in Section 18, Township 15 South, Range
14 West, being more particularly described
as follows:
Commence at the northwest corner of said
Northeast Quarter of the Northwest Quarter;
thence run eastwardly and along Section line
819.29 feet; thence with a deflection angle
right of 90 degrees, 00 minutes, run
southwardly 39.34 feet to the Point of
Beginning; thence continue southwardly along
said course 628.98 feet; thence eastwardly
683.24 feet; thence with an interior angle
right of 90 degrees, 00 minutes, run
northwardly 628.98 feet; thence, with an
interior angle right of 90 degrees, 00
minutes, run westwardly 683.24 feet to the
Point of Beginning, thus making a
<PAGE> 15
closing interior angle right of 90 degree, 00
minutes.
Said Parcel containing 9.87 acres, more or
less.
================================================================================
DEMOPOLIS
================================================================================
L-Square Land Company A parcel of land situated in the SE 1/4 of
Section 16, Township 14 North, range 3 East,
Marengo County, Alabama, more particularly
described as follows:
Commence at the southeast corner of said
Section 16; thence, run northwardly along
the east boundary of said Section 16 for
1329.65 feet; thence, with a deflection
angle left of 90 degrees, 00 minutes, run
westwardly for 153.09 feet to the POINT OF
BEGINNING; thence, with a deflection angle
left of 07 degrees, 18 minutes, run
westwardly for 672.43 feet; thence, with an
interior angle left of 90 degrees, 00
minutes, run northwardly for 645.16 feet;
thence, with an interior angle left of 90
degrees, 00 minutes, run eastwardly for
672.43 feet; thence, with an interior angle
left of 90 degrees, 00 minutes, run
southwardly for 645.16 feet to the POINT OF
BEGINNING, thus forming a closing interior
angle left of 90 degrees, 00 minutes.
LESS AND EXCEPT that portion, if any, of the
property described in Deed Book 7C, at Page
722 in the Probate Office in Marengo County,
Alabama.
Said parcel contains 9.96 acres, more or
less.
Property described herein subject to any and
all easements, restrictions, reservations
and rights-of-way of record.
OFFICES LEGAL DESCRIPTION
------- -----------------
================================================================================
FAYETTE
================================================================================
Fayette Center Associates, Inc. 1552 Temple Avenue, North
Fayette, Alabama
================================================================================
DEMOPOLIS
================================================================================
Lowe Jewelry, Inc. 932 Highway 80, East
Demopolis, Alabama
<PAGE> 16
EXHIBIT B
SPECIAL MEETING OF THE BOARD OF DIRECTORS
OF
MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY
A special meeting of the Board of Directors was held on June 26, 1996
at One Lakeshore Drive, Suite 1492, Lake Charles, Louisiana after due and
proper notice.
The following Directors were present:
Thomas G. Henning
Robert Piper
Mike Clark
Paul Clifton
being all of the Directors of the corporation.
The President outlined the progress on financing the purchase of the
assets of PriCellular Corporation, PriCellular Wireless Corporation and
Northland Cellular Corporation (hereafter collectively referred to as
"PriCellular") as they relate to Alabama RSA #4 and the buildout and operations
of Alabama RSA #4 through the National Bank for Cooperatives. That due to the
laws creating the National Bank for Cooperatives, CTC Financial, Inc. will
borrow the funds necessary to purchase, build out and operate Alabama RSA #4
from the CoBank, ACB in the amount of $28,000,000 of which CTC Financial, Inc.
will loan $15,000,000 to the Corporation and CTC Financial, Inc. will loan
$13,000,000 to Mercury Cellular Telephone Company ("MCTC") which MCTC will
reloan to the Corporation. The Corporation will issue a Second Amended and
Restated Promissory Note to CTC Financial, Inc. and a Promissory Note to MCTC,
both notes will be assigned to CoBank, ACB, a First Amendment and Supplement to
Amended and Restated Continuing Guaranty to CoBank, ACB, a Second Amendment and
Supplement to the Security Agreement to CoBank, ACB, a Second Amendment and
Supplement to the Deed of Trust and Security Agreement to CoBank, ACB and a
First Amendment and Supplement to Mortgage to CoBank, ACB.
After lengthy discussion of this matter, the following resolutions
were adopted:
BE IT RESOLVED that Mississippi One Cellular Telephone Company be
authorized to borrow $15,000,000 from CTC Financial, Inc. and $13,000,000 from
MCTC which amounts will be borrowed by CTC Financial, Inc. and MCTC from
CoBank, ACB and agree and accept all the terms and conditions thereof.
BE IT FURTHER RESOLVED that Thomas G. Henning, President of
Mississippi One Cellular Telephone Company and Robert Piper, Secretary of
Mississippi One Cellular Telephone Company be authorized and directed on behalf
of Mississippi One Cellular Telephone Company, to issue, enter into, agree to,
accept, attest, seal and deliver a Second Amended and Restated Promissory Note
to CTC Financial, Inc. and a Promissory Note to MCTC, both notes will be
<PAGE> 17
assigned to CoBank, ACB, a First Amendment and Supplement to Amended and
Restated Continuing Guaranty to CoBank, ACB, a Second Amendment and Supplement
to the Security Agreement to CoBank, ACB, a Second Amendment and Supplement to
the Deed of Trust and Security Agreement to CoBank, ACB and a First Amendment
and Supplement to Mortgage to CoBank, ACB, a proposed copy of each document is
attached hereto and made a part of these minutes.
BE IT FURTHER RESOLVED that Thomas G. Henning, President of
Mississippi One Cellular Telephone Company and Robert Piper, Secretary of
Mississippi One Cellular Telephone Company be authorized and directed to enter
into, agree to accept, attest, seal and deliver any other documents and take
such other action which they deem is necessary and proper to effectuate the
$15,000,000 loan from CTC Financial, Inc. and the $13,000,000 loan from MCTC as
set forth herein and negotiate and finalize the terms of all such documents
necessary.
There being no further business, the meeting was adjourned.
/s/ ROBERT PIPER
------------------------
ROBERT PIPER, Secretary
APPROVED:
/s/ THOMAS G. HENNING
- ------------------------------
THOMAS G. HENNING, President
2
<PAGE> 18
First Amendment to Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
EXHIBIT B
Leasehold Leases
<TABLE>
<CAPTION>
LESSOR LEASE DATE COUNTY
------ ---------- ------
<S> <C> <C>
George Allen Desmond 2-22-95 Bibb
Dominion Resources, Inc. 9-1-91 Chilton
Dominion Resources, Inc. 3-27-95 Dallas
Owings Properties 9-1-95 Bibb
</TABLE>
<PAGE> 19
First Amendment to Mortgage/Mississippi One
Loan No. T0310
Loan No. T0347
EXHIBIT C
Permitted Title Exceptions
None.
<PAGE> 1
EXHIBIT 4.20
LOAN NO. T0347
LOAN NO. T0310
COBANK, ACB
FIRST AMENDMENT AND SUPPLEMENT TO CONTINUING GUARANTY
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the undersigned Notaries Public, and in the presence of the
undersigned competent witnesses, personally came and appeared the party listed
below, who, after being duly sworn, did state:
THIS FIRST AMENDMENT AND SUPPLEMENT TO CONTINUING GUARANTY (this "First
Amendment") is made as of July 1, 1996, made by MERCURY, INC. ("Mercury") for
the benefit of COBANK, ACB ("CoBank") and amends that certain Continuing
Guaranty, dated as of May 15, 1996, by Mercury for the benefit of CoBank (the
"Continuing Guaranty").
R E C I T A L S:
WHEREAS, CoBank and CTC Financial, Inc., a Louisiana corporation (the
"Borrower"), have entered into that certain Amended and Restated Loan
Agreement, dated as of May 15, 1996, as amended by that certain First Amendment
and Supplement to Amended and Restated Loan Agreement (this "First Amendment to
Loan Agreement"), dated as of even date herewith (as so amended and as the same
hereafter may be amended, modified, supplemented, extended or restated from
time to time, the "Mississippi One Loan Agreement"), providing for a loan of up
to $32,400,000 (the "Mississippi One Loan"), and CoBank and the Borrower have
entered into that certain Loan Agreement, dated as of even date herewith (as
the same may be amended, modified, supplemented, extended or restated from time
to time, the "Mercury Loan Agreement"; the Mississippi One Loan Agreement and
the Mercury Loan Agreement, collectively, the "Loan Agreements"), providing for
a loan of up to $5,000,000 (the "Mercury Loan"; the Mississippi One Loan and
the Mercury Loan, collectively, the "Loans"); and
<PAGE> 2
First Amendment to Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
WHEREAS, the proceeds of the Loans have been or will be reloaned by the
Borrower to Mississippi One Cellular Telephone Company ("Mississippi One"), or
to Mercury for investment into Mississippi One, for the purposes set forth in
the Loan Agreements; and
WHEREAS, as an inducement to CoBank to enter into the Loan Agreements
and to make the Loans, Mercury has entered into the Continuing Guaranty;
WHEREAS, as an inducement to CoBank to enter into the First Amendment to
Loan Agreement, Mercury has agreed to amend the Continuing Guaranty as herein
provided;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, Mercury and CoBank hereby agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used in this First
Amendment, unless otherwise defined herein, shall have the meanings ascribed to
them in the Continuing Guaranty.
SECTION 2. Section 2 of the Continuing Guaranty is hereby amended and
restated to read in its entirety as follows:
"SECTION 2. OBLIGATIONS. "Obligations" shall mean (a) the
principal, interest and other amounts becoming due and payable, whether
by acceleration or otherwise, under that certain Second Amended and
Restated Promissory Note, dated of even date herewith, made by the
Borrower to the order of CoBank in the original principal face amount of
$32,400,000 (such Promissory Note and all amendments, modifications,
extensions, renewals and replacements thereof, the "CTC One Note"); (b)
the principal, interest and other amounts becoming due and payable,
whether by acceleration or otherwise, under that certain Promissory
Note, dated May 15, 1996, made by the Borrower to the order of CoBank in
the original principal face amount of $5,000,000 (such Promissory Note
and all amendments, modifications, extensions, renewals and replacements
thereof, the "CTC Two Note"); (c) the principal, interest and other
amounts becoming due and payable, whether by acceleration or otherwise,
under that certain Second Amended and Restated Promissory Note, dated of
even date herewith, made by Mississippi One to the order of the
Borrower, assigned to CoBank, in the original principal face amount of
$32,400,000 (such Promissory Note and all amendments, modifications,
extensions, renewals and replacements thereof, the "Mississippi One
Note"; the CTC One Note, the CTC Two Note and the Mississippi One Note,
collectively, the "Notes"); (d) all other payments or performances to be
made by the Borrower and Mississippi One under the other Loan Documents
to which either is a party; and (e) all other indebtedness and
liabilities of the Borrower and Mississippi One to CoBank of every kind
and description whatsoever, whether now existing or hereafter arising,
fixed or contingent, as primary obligor or as
-2-
<PAGE> 3
First Amendment to Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
guarantor or surety, acquired directly or by assignment or otherwise,
liquidated or unliquidated, regardless of how they arise or by what
agreement or instrument they may be evidenced, including, without
limitation, all loans, advances and other extensions of credit and all
covenants, agreements, and provisions contained in all loan and other
agreements between the parties."
SECTION 3. All references to the "Loan Documents" or a "Loan
Document," when used in the Continuing Guaranty shall mean the "Loan Documents"
as defined in the Loan Agreements (as amended).
SECTION 4. All references to this "Guaranty" in the Continuing
Guaranty shall mean the Continuing Guaranty as amended by this First Amendment.
SECTION 5. After giving effect to the amendments to and restatement
of the Continuing Guaranty set forth in this First Amendment, the
representations and warranties of Mercury set forth in the Continuing Guaranty
are true and correct as of the date hereof as if made on the date hereof.
SECTION 6. It is the intention of the parties hereto that this First
Amendment shall not constitute a novation and shall in no way adversely affect
or impair the validity of the "Loan Documents" (as defined in the Loan
Agreements, as amended), it being the intention of the parties hereto merely to
amend the Continuing Guaranty as expressly set forth herein. To the extent not
inconsistent herewith, all of the terms and conditions of the Continuing
Guaranty shall remain in full force and effect and are hereby ratified and
confirmed by Mercury.
SECTION 7. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
SECTION 8. This First Amendment shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
[Signatures Follow on Next Page]
-3-
<PAGE> 4
First Amendment to Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
THUS DONE AND SIGNED in several counterparts at the place and on the
date indicated below, by duly authorized officers of Mercury, after a reading
of the whole.
At the City of Lake Charles, State of Louisiana, on July 1, 1996.
MERCURY, INC.
By: /s/ WILLIAM L. HENNING, JR.
---------------------------------------
Name: William L. Henning, Jr.
--------------------------------
Title: President
-------------------------------
Attest: /s/ THOMAS G. HENNING
-----------------------------------
Name: Thomas G. Henning
-------------------------------------
Title: Secretary
-------------------------------
[CORPORATE SEAL]
Witness to both signatures:
/s/ SHEILA KING
- ------------------------------------
Witness
/s/ PAT HAMILTON
- ------------------------------------
Witness
/s/ SANDRA DIAZ
- ------------------------------------
Notary Public
My commission expires: liftime commission
------------------
[NOTARIAL SEAL]
[Signatures Continued on Next Page]
-4-
<PAGE> 5
First Amendment to Continuing Guaranty/Mercury
Loan No. T0347
Loan No. T0310
[Signatures Continued from Previous Page]
At Atlanta, Georgia, on July 2, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
---------------------------------------
Name: Mary Kay Deering
---------------------------------
Title: Vice President
--------------------------------
Witnesses to signature:
/s/ SHAWNE KEENAN
- ------------------------------------
Witness
/s/ [ILLEGIBLE]
- ------------------------------------
Witness
/s/ MARIANNE R. HOWELL
- ------------------------------------
Notary Public
Notary Public, Cobb County, Georgia
My commission expires: My Commission Expires April 25, 1999
------------------------------------
[NOTARIAL SEAL]
-5-
<PAGE> 1
EXHIBIT 4.21
LOAN NO. T0310
LOAN NO. T0347
COBANK, ACB
SECOND AMENDMENT AND SUPPLEMENT TO PLEDGE AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
BEFORE the respective undersigned Notaries Public, and in the presence
of the undersigned respective competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS SECOND AMENDMENT AND SUPPLEMENT TO PLEDGE AGREEMENT (this "Second
Amendment") is made as of July 1, 1996 by and between MERCURY, INC., as pledgor
(the "Pledgor"), and COBANK, ACB, formerly known as the National Bank for
Cooperatives, as pledgee ("CoBank").
R E C I T A L S:
WHEREAS, CoBank and CTC Financial, Inc. (the "Borrower") have entered
into that certain Amended and Restated Loan Agreement, dated as of May 15,
1996, as amended by that certain First Amendment and Supplement to Amended and
Restated Loan Agreement, dated as of even date herewith (the "First Amendment
to Loan Agreement") (as so amended and as the same hereafter may be amended,
modified, supplemented, extended or restated from time to time, the
"Mississippi One Loan Agreement"), providing for a loan of up to $32,400,000
(the "Mississippi One Loan"), and that certain Loan Agreement, dated as of May
15, 1996 (as the same may be amended, modified, supplemented, extended or
restated from time to time, the "Mercury Loan Agreement"; the Mississippi One
Loan Agreement and the Mercury Loan Agreement, collectively, the "Loan
Agreements"; capitalized terms used herein and not otherwise defined shall have
the meanings ascribed thereto in the Loan Agreements), providing for a loan of
up to $5,000,000 (the "Mercury Loan"; the Mississippi One Loan and the Mercury
Loan, collectively, the "Loans"); and
WHEREAS, the proceeds of the Mississippi One Loan have been or will be
reloaned by the Borrower to Mississippi One Cellular Telephone Company
("Mississippi One") for the purposes set forth in the Mississippi One Loan
Agreement, and the proceeds of the Mercury Loan have been reloaned by the
Borrower to the Pledgor for the purposes set forth in the Mercury Loan
Agreement; and
<PAGE> 2
Second Amendment to Pledge Agreement/Mercury
Loan No. T0310
Loan No. T0347
WHEREAS, the Pledgor owns all of the issued and outstanding capital
stock of Mississippi One; and
WHEREAS, as an inducement to CoBank to execute the Loan Agreements and
to make the Loans, the Pledgor has made that certain Continuing Guaranty, dated
as of May 15, 1996, as amended by that certain First Amendment and Supplement
to Continuing Guaranty, dated as of even date herewith (as so amended and as
the same hereafter may be amended, modified, supplemented, extended or restated
from time to time, the "Mercury Guaranty"), for the benefit of CoBank;
WHEREAS, to secure its obligations under the Mercury Guaranty, the
Pledgor entered into that certain Pledge Agreement, dated as of September 27,
1994, for the benefit of CoBank, as previously amended by that certain First
Amendment and Supplement to Pledge Agreement, dated as of May 15, 1996 (as
amended, the "Pledge Agreement"); and
WHEREAS, as an inducement to CoBank to execute the First Amendment to
Loan Agreement, the Pledgor has agreed to further amend the Pledge Agreement as
herein provided;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the Pledgor and CoBank agree as follows:
SECTION 1. Definitions. Capitalized terms, when used in this
Second Amendment, unless otherwise defined herein, shall have the meanings
ascribed to them in the Pledge Agreement.
SECTION 2. Section 2 of the Pledge Agreement is hereby amended
and restated to read in its entirety as follows:
"SECTION 2. PLEDGE. This Pledge Agreement is given to secure
the following obligations (the "Secured Obligations"): (a) all
payments or performances to be made by the Borrower under the "Loan
Documents" (as defined in the Mississippi One Loan Agreement,
including, without limitation, the payment of all principal, interest
and other amounts becoming due and payable, whether by acceleration or
otherwise, under that certain Second Amended and Restated Promissory
Note, dated July 1, 1996 (the "Amended CoBank Note"), made by the
Borrower to CoBank in the principal face amount of $32,400,000 (as any
such Loan Documents may be amended, supplemented, modified, extended
or restated from time to time); (b) all payments or performances to be
made by Mississippi One under the "Loan Documents" (as defined in the
Mississippi One Loan Agreement and the Mercury Loan Agreement),
including, without limitation, the payment of all principal, interest
and other amounts becoming due and payable, whether by
-2-
<PAGE> 3
Second Amendment to Pledge Agreement/Mercury
Loan No. T0310
Loan No. T0347
acceleration or otherwise, under that certain Second Amended and
Restated Promissory Note, dated July 1, 1996 (the "Mississippi One
Note"), made by Mississippi One to the order of the Borrower, and
assigned to CoBank, in the face principal amount of $32,400,000, and
all payments or performances under that certain Amended and Restated
Continuing Guaranty, dated as of May 15, 1996, made by Mississippi One
for the benefit of CoBank, as amended by that certain First Amendment
and Supplement to Amended and Restated Continuing Guaranty, dated as
of July 1, 1996 (as so amended and as any such Loan Documents
hereafter may be amended, supplemented, modified, extended or restated
from time to time); (c) all payments or performances to be made by the
Borrower under the "Loan Documents" (as defined in the Mercury Loan
Agreement), including, without limitation, the payment of all
principal, interest and other amounts becoming due and payable,
whether by acceleration or otherwise, under that certain Promissory
Note, dated May 15, 1996 (the "CoBank Note"), made by the Borrower to
CoBank in the principal face amount of $5,000,000 (as any such Loan
Documents may be amended, supplemented, modified, extended or restated
from time to time); (d) all payments or performances to be made by the
Pledgor under the "Loan Documents" (as defined in the Mercury Loan
Agreement and in the Mississippi One Loan Agreement), including,
without limitation, the payment of all principal, interest and other
amounts becoming due and payable, whether by acceleration or
otherwise, under that certain Promissory Note, dated May 15, 1996 (the
"Mercury Note"), made by the Pledgor to the order of the Borrower, and
assigned to CoBank, in the face principal amount of $5,000,000 (as
such Promissory Note may be amended, modified, extended, renewed,
reinstated or replaced from time to time), and all payments or
performances under that certain Continuing Guaranty, dated as of May
15, 1996, made by the Pledgor for the benefit of CoBank, as amended by
that certain First Amendment and Supplement to Continuing Guaranty,
dated as of July 1, 1996 (as so amended and as any such Loan Documents
hereafter may be amended, supplemented, modified, extended or restated
from time to time); and (e) all other indebtedness and liabilities of
the Pledgor, the Borrower or Mississippi One to CoBank of every kind
and description whatsoever, whether now existing or hereafter arising,
fixed or contingent, as primary obligor or as guarantor or surety,
acquired directly or by assignment or otherwise, liquidated or
unliquidated, regardless of how they arise or by what agreement or
instrument they may be evidenced, including, without limitation, all
loans, advances and other extensions of credit and all covenants,
agreements and provisions contained in all loan and other agreements
between the parties. To secure the Secured Obligations, the Pledgor
hereby pledges, hypothecates, assigns, transfers, sets over and
delivers unto CoBank, and grants to CoBank a lien upon and a security
interest in (i) all now owned or hereafter acquired capital stock of
Mississippi One; (ii) all now or hereafter acquired capital stock of
Mercury Cellular Telephone Company ("MCTC"); and (iii) any cash,
additional shares or securities or other property at any time and from
time to time receivable or otherwise distributable in respect of, and
exchange for, or in distribution of,
-3-
<PAGE> 4
Second Amendment to Pledge Agreement/Mercury
Loan No. T0310
Loan No. T0347
any and all such stock, together with the proceeds thereof (all such
shares, common stock, capital stock, securities, cash, property and
other proceeds thereof, collectively, the "Pledged Collateral"). Upon
delivery to CoBank, (A) any securities now or hereafter included in
the Pledged Collateral (the "Pledged Securities") shall be accompanied
by duly executed stock powers in blank and by such other instruments
or documents as CoBank or its counsel may reasonably request and (B)
all other property comprising part of the Pledged Collateral shall be
accompanied by proper instruments of assignment duly executed by the
Pledgor and by such other instruments or documents as CoBank or its
counsel may reasonably request. Each delivery of certificates for
such Pledged Securities shall be accompanied by a schedule showing the
number of shares and the numbers of the certificates therefor,
theretofore and then being pledged hereunder, which schedules shall be
attached hereto as Schedule 1 and made a part hereof. Each schedule
so delivered shall supersede any prior schedules so delivered."
SECTION 3. All references in the Pledge Agreement to "this Pledge
Agreement" shall hereafter be to the Pledge Agreement as amended by this Second
Amendment.
SECTION 4. The Loan Documents or any Loan Document, when used in
the Pledge Agreement, shall mean the Loan Documents or the applicable Loan
Document as defined in the Loan Agreements.
SECTION 5. After giving effect to the amendments to and
restatement of the Pledge Agreement set forth in this Second Amendment, the
representations and warranties of the Pledgor set forth in the Pledge Agreement
are true and correct as of the date hereof as if made on the date hereof.
SECTION 6. It is the intention of the parties hereto that this
Second Amendment shall not constitute a novation and shall in no way adversely
affect or impair (i) the validity of the Loan Documents or (ii) the validity or
priority of the security interest created by the Pledge Agreement, it being the
intention of the parties hereto merely to amend and restate the Pledge
Agreement as expressly set forth herein. To the extent not inconsistent
herewith, all of the terms and conditions of the Pledge Agreement shall remain
in full force and effect and are hereby ratified and confirmed by the Pledgor.
SECTION 7. This Second Amendment may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original and shall be
binding upon all parties and their respective permitted successors and assigns,
and all of which taken together shall constitute one and the same agreement.
-4-
<PAGE> 5
Second Amendment to Pledge Agreement/Mercury
Loan No. T0310
Loan No. T0347
SECTION 8. This Second Amendment shall be governed by and
construed in accordance with the laws of the State of Louisiana, without
reference to choice of law doctrine.
(Signatures follow on next page)
-5-
<PAGE> 6
Second Amendment to Pledge Agreement/Mercury
Loan No. T0310
Loan No. T0347
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
the duly authorized officers of the respective parishes, after a due reading of
the whole.
At Lake Charles, Louisiana, on July 1, 1996.
MISSISSIPPI ONE CELLULAR
TELEPHONE COMPANY
By: /s/ THOMAS G. HENNING
----------------------------------
Name:Thomas G. Henning
----------------------------
Title: President
---------------------------
Attest: /s/ ROBERT PIPER
-----------------------------
Name: Robert Piper
------------------------
Title: Secretary
-----------------------
[CORPORATE SEAL]
Witnesses to all Signatures:
/s/ SHEILA KING
- -----------------------------------
Witness
/s/ PAT HAMILTON
- -----------------------------------
Witness
/s/ [ILLEGIBLE]
- -----------------------------------
Notary Public
My commission expires: [ILLEGIBLE]
------------
[NOTARIAL SEAL]
(Signatures Continue on Following Page)
-6-
<PAGE> 7
Second Amendment to Pledge Agreement/Mercury
Loan No. T0310
Loan No. T0347
(Signatures Continued from Previous Page)
At Atlanta, Georgia on July 2, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
-----------------------------
Name:Mary Kay Deering
-----------------------
Title: Vice President
----------------------
Witnesses to Signature:
/s/ SHAWNE KEENAN
- --------------------------------------
Witness
/s/ [ILLEGIBLE]
- --------------------------------------
Witness
/s/ MARIANNE ROTOWELL
- --------------------------------------
Notary Public
My commission expires: April 25, 1999
---------------
[NOTARIAL SEAL]
-7-
<PAGE> 1
EXHIBIT 4.23
LOAN NO. T0310
LOAN NO. T0347
COBANK, ACB
FIRST AMENDMENT AND SUPPLEMENT TO AMENDED AND RESTATED
ACT OF SUBORDINATION
BEFORE, the respective undersigned Notaries Public, and in the presence
of the respective witnesses hereinafter named and undersigned, personally came
and appeared the parties listed below, who, after being duly sworn, did state:
THIS FIRST AMENDMENT AND SUPPLEMENT TO AMENDED AND RESTATED ACT OF
SUBORDINATION (this "First Amendment") is made and entered into as of July 1,
1996 by and among CAMERON TELEPHONE COMPANY ("Cameron Telephone"), MISSISSIPPI
ONE CELLULAR TELEPHONE COMPANY ("Mississippi One"), and COBANK, ACB, formerly
known as the National Bank for Cooperatives ("CoBank"), and amends that certain
Amended and Restated Act of Subordination, dated as of May 15, 1996 among
Cameron Telephone, Mississippi One and CoBank.
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, Cameron Telephone, Mississippi One and CoBank hereby
agree as follows:
1. Section 1 of the Amended and Restated Act of Subordination is
hereby amended and restated to read in its entirety as follows:
"SECTION 1. SUBORDINATION OF DEBT. Cameron Telephone and
Mississippi One agree that all obligations of Mississippi One to
Cameron Telephone, whether direct or indirect, absolute or
contingent, secured or unsecured, due or to become due, now
existing or hereafter arising, including, without limitation, (i)
that certain Collateral Mortgage Note, dated April 14, 1993,
drawn by Mercury Inc. ("Mercury") to the order of bearer, in the
face principal amount of $5,000,000, and assumed by Mississippi
One pursuant to that certain Act of Sale, dated as of August 31,
1994, between Mercury and Mississippi One (the "Assumption
Agreement"); and (ii) that certain Note, dated April 14, 1993,
drawn by Mercury to the order of Cameron Telephone, in the face
principal amount of $2,729,924.84, and assumed by Mississippi One
pursuant to the Assumption Agreement (all such obligations,
collectively, the "Subordinated Debt"), are and shall be
subordinate in payment and right of payment to the prior payment
in full of all obligations of Mississippi One to CoBank, whether
direct or indirect, absolute or contingent, secured or unsecured,
due or to become due, now existing or hereafter arising,
principal, interest (accruing both before and after any default
by, or insolvency or bankruptcy of, Mississippi One) or other
cost or
<PAGE> 2
First Amendment to Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
charge, including, without limitation, all obligations hereafter
arising under that certain First Amended and Restated Continuing
Guaranty, dated as of May 15, 1996, as amended by that certain
First Amendment and Supplement to Amended and Restated Continuing
Guaranty, dated as of July 1, 1996 (as so amended and as the same
may be amended, modified, supplemented, extended or restated from
time to time, the "Mississippi One Guaranty"), made by
Mississippi One for the benefit of CoBank (all such obligations,
collectively, the "CoBank Debt"). For purposes of this
Agreement, the CoBank Debt shall not be deemed to have been paid
in full until all loan agreements between CoBank and Mississippi
One or any affiliate of Mississippi One if, with respect to such
affiliate, Mississippi One has guaranteed the affiliate's
obligations under such loan agreements, including, without
limitation, that certain Amended and Restated Loan Agreement,
dated as of May 15, 1996, as amended by that certain First
Amendment and Supplement to Loan Agreement, dated as of July 1,
1996, providing for a loan of up to $32,400,000, and that certain
Loan Agreement, dated as of May 15, 1996, providing for a loan of
up to $5,000,000, all by and between CoBank and CTC Financial,
Inc. (the foregoing loan agreements, collectively, the "Loan
Agreements"), shall have been terminated and CoBank shall have
received irrevocable payment of the CoBank Debt in immediately
available funds or in another manner satisfactory to CoBank.
Cameron Telephone agrees not to ask, demand, sue for, take or
receive from Mississippi One, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment of
or collateral for the payment of all or any of the Subordinated
Debt unless or until the CoBank Debt shall be paid in full and,
without the prior written consent of CoBank, will not exercise
any remedies available to it, whether by agreement, law or equity
or otherwise, in respect to the nonpayment of the Subordinated
Debt, including, without limitation, the acceleration of the
Subordinated Debt."
2. Subsection A of Section 2 of the Amended and Restated Act of
Subordination is hereby amended and restated to read in its entirety as
follows:
"SECTION 2. PRIORITIES OF SECURITY INTERESTS.
A. Cameron Telephone hereby subordinates any
and all security interests or liens it may now have or hereafter
obtain or reserve with respect to any property or rights of
Mississippi One (the "Collateral"), including, without
limitation, the security interests created pursuant to that
certain Deed of Trust, Security Agreement and Fixture Filing
entered into by Mercury for the benefit of Cameron Telephone,
dated as of April 14, 1993, and assumed by Mississippi One
-2-
<PAGE> 3
First Amendment to Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
pursuant to the Assumption Agreement, and related UCC Financing
Statement filed with the Secretary of State of the State of
Mississippi (collectively, the "Cameron Telephone Security
Interests"), to all security interests and liens now or hereafter
created in favor of CoBank in connection with any of the CoBank
Debt, including, without limitation, the security interest
created by that certain Security Agreement, dated as of September
27, 1994, as amended by that certain First Amendment and
Supplement to Security Agreement, dated as of May 15, 1996, and
that Second Amendment and Supplement to Security Agreement, dated
as of July 1, 1996 (as so modified and as the same may be
amended, modified, supplemented, extended or restated from time
to time, the "Security Agreement"), entered into by Mississippi
One for the benefit of CoBank, the lien created by that certain
Deed of Trust, Security Agreement and Fixture Filing, dated as of
September 27, 1994, as amended by that certain First Amendment
and Supplement to Deed of Trust, Security Agreement and Fixture
Filing, dated as of May 15, 1996, and that certain Second
Amendment and Supplement to Deed of Trust, Security Agreement and
Fixture Filing, dated as of July 1, 1996, (as so modified and as
the same may be amended, modified, supplemented, extended or
restated from time to time, the "Deed of Trust"), entered into by
Mississippi One for the benefit of CoBank, and the lien created
by that certain Mortgage, dated as of May 15, 1996, as amended
by that certain First Amendment and Supplement to Mortgage, dated
as of July 1, 1996 (as so amended and as the same may be amended,
modified, supplemented, extended or restated from time to time,
the "Mortgage"), entered into by Mississippi One for the benefit
of CoBank (collectively, the "CoBank Security Interests")."
3. Section 9 of the Amended and Restated Act of Subordination is
hereby amended and restated to read in its entirety as follows:
"SECTION 9. SUBORDINATED DEBT LEGEND. Mississippi One
and Cameron Telephone will cause each instrument evidencing
Subordinated Debt to be endorsed with the following legend:
"The indebtedness evidenced by this instrument is
subordinated to the prior payment in full of the "CoBank
Debt" (as defined in the Amended and Restated Act of
Subordination hereinafter referred to) pursuant to, and to
the extent provided in that certain Amended and Restated
Act of Subordination, dated as of May 15, 1996, as amended
by that certain First Amendment and Supplement
-3-
<PAGE> 4
First Amendment to Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
to Amended and Restated Act of Subordination, dated as of
July 1, 1996 by the maker hereof and payee named herein in
favor of CoBank, ACB."
In the case of any Subordinated Debt which is not evidenced by an
instrument, upon CoBank's request, Mississippi One and Cameron
Telephone shall cause such Subordinated Debt to be evidenced by
an appropriate instrument or instruments endorsed with the above
legend."
4. It is the intention of the parties hereto that this First
Amendment shall not constitute a novation, it being the intention of the
parties hereto merely to amend the Amended and Restated Act of Subordination as
expressly set forth herein. To the extent not inconsistent herewith, all of
the terms and conditions of the Amended and Restated Act of Subordination shall
remain in full force and effect and are hereby ratified and confirmed by
Cameron Telephone, Mississippi One and CoBank.
5. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
6. This First Amendment shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
[Signatures on next page]
-4-
<PAGE> 5
First Amendment to Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below, and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
duly authorized officers of the respective parties, after a due reading of the
whole.
At Lake Charles, Louisiana, on July 1, 1996.
CAMERON TELEPHONE COMPANY
By: /s/ SHELBY HOFFDAUIR
-----------------------------------------
Name: Shelby Hoffdauir
-----------------------------------
Title: President
----------------------------------
Attest: /s/ LENA B. HENNING
-------------------------------------
Name: LENA B. HENNING
------------------------------
Title: Secretary
-----------------------------
[CORPORATE SEAL]
Witnesses to all signatures:
/s/ SHEILA KING
- --------------------------------
Witness
/s/ PAT HAMILTON
- --------------------------------
Witness
/s/ [ILLEGIBLE]
- --------------------------------
Notary Public
My commission expires: [LIFE]
---------
[NOTARIAL SEAL]
(Signatures continued on next page)
-5-
<PAGE> 6
First Amendment to Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
(Signatures continued from previous page)
At Lake Charles, Louisiana, on July 1, 1996.
MISSISSIPPI ONE CELLULAR TELEPHONE
COMPANY
By: /s/ THOMAS G. HENNING
-----------------------------------------
Name: Thomas G. Henning
-----------------------------------
Title: President
----------------------------------
Witnesses to signature:
/s/ SHEILA KING
- -------------------------------
Witness
/s/ PAT HAMILTON
- -------------------------------
Witness
/s/ [ILLEGIBLE]
- -------------------------------
Notary Public
My commission expires: [LIFE]
--------
[NOTARIAL SEAL]
(Signatures continued on next page)
-6-
<PAGE> 7
First Amendment to Amended and Restated Act of
Subordination/Cameron Telephone
Loan No. T0310
Loan No. T0347
(Signatures continued from previous page)
At Atlanta, Georgia, on July 2, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
-----------------------------------------
Name: Mary Kay Deering
-----------------------------------
Title: Vice President
----------------------------------
Witnesses to signature:
/s/ SHAWNE KEENAN
- ---------------------------------------
Witness
/s/ [ILLEGIBLE]
- ---------------------------------------
Witness
/s/ MARIANNE R. HOWELL
- ---------------------------------------
Notary Public
My commission expires: April 25, 1999
----------------
[NOTARIAL SEAL]
-7-
<PAGE> 1
EXHIBIT 4.24
LOAN NO. T0347
COBANK, ACB
PROMISSORY NOTE
CTC FINANCIAL, INC.
LAKE CHARLES, LOUISIANA
$5,000,000 DATED: MAY 15, 1996
FOR VALUE RECEIVED, CTC FINANCIAL, INC. (the "Borrower"), promises to
pay to the order of COBANK, ACB (the "Payee"), at the times and in the manner
set forth in that certain Loan Agreement, dated as of even date herewith, and
numbered Loan No. T0347, by and between the Borrower and the Payee, and as that
agreement may be amended, modified, supplemented, extended or restated from
time to time (the "Loan Agreement"), the principal sum of FIVE MILLION DOLLARS
($5,000,000) or such lesser amount as may be advanced hereunder, together with
interest on the unpaid principal balance hereof at the rate or rates provided
for in the Loan Agreement.
This Note is given for one or more advances to be made by the Payee to
the Borrower pursuant to the Loan Agreement, all of the terms and provisions of
which are hereby incorporated by reference. Advances, accrued interest and
payments shall be posted by the Payee upon an appropriate accounting record,
which record (and all computer printouts thereof) shall constitute prima facie
evidence of the outstanding principal and interest on the advances. The total
of such advances may exceed the face amount of this note but the unpaid
principal balance shall not at any time exceed such face amount. Any amount of
the principal hereof which is not paid when due, whether at stated maturity, by
acceleration or otherwise, shall bear interest from the date when due until
said principal amount is paid in full, payable on demand, at a rate per annum
set forth in the Loan Agreement.
The Borrower hereby waives presentment for payment, demand, protest, and
notice of dishonor and nonpayment of this Note, and all defenses on the ground
of delay or of any extension of time for the payment hereof which may be
hereafter given by the holder or holders hereof to it or to anyone who has
assumed the payment of this Note, and it is specifically agreed that the
obligations of the Borrower shall not be in anywise affected or altered to the
prejudice of the holder or holders hereof by reason of the assumption of
payment of the same by any other person or entity.
Should this Note be placed in the hands of an attorney for collection or
the services of any attorney become necessary in connection with enforcing its
provisions, the Borrower agrees to pay reasonable attorneys' fees, together
with all costs and expenses incident thereto, to the extent allowed by law.
Except to the extent governed by applicable federal law, this Note shall be
governed by and construed in accordance with the laws of the State of
Louisiana, without reference to choice of law doctrine.
<PAGE> 2
Promissory Note/CTC Financial
Loan No. T0347
IN WITNESS WHEREOF, the Borrower has caused this Promissory Note to be
executed, attested, sealed and delivered by its duly authorized officers as of
the date first shown above.
CTC FINANCIAL, INC.
By: /s/ WILLIAM L. HENNING, JR.
--------------------------------
[CORPORATE SEAL] Name: William L. Henning, Jr.
---------------------------
Title: President
--------------------------
Attest: /s/ THOMAS G. HENNING
-----------------------------
Name: Thomas G. Henning
-----------------------
Title: Secretary
-----------------------
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<PAGE> 1
EXHIBIT 4.25
LOAN NO. T0347
COBANK, ACB
PROMISSORY NOTE
AMENDED AND RESTATED
MERCURY, INC.
LAKE CHARLES, LOUISIANA
$5,000,000 DATED: MAY 15, 1996
FOR VALUE RECEIVED, MERCURY, INC. ("Mercury") hereby promises to pay to
the order of CTC FINANCIAL, INC. ("Finance"; Finance or any subsequent holder
of this Amended and Restated Promissory Note, the "Holder") the principal
amount of FIVE MILLION DOLLARS ($5,000,000), or so much as may have been
advanced under that certain Promissory Note, dated of even date herewith, made
by Finance to the order of CoBank, ACB ("CoBank"), in the principal face amount
of $5,000,000 (including any amendment, modification, supplement, extension, or
restatement thereof, the "Finance Note"), and that certain Loan Agreement,
dated as of even date herewith, and numbered Loan No. T0347, by and between
Finance and CoBank (including any amendment, modification, supplement,
extension, or restatement thereof, the "Loan Agreement"), and reloaned by
Finance to Mercury, together with interest as hereinafter provided from the
date hereof until paid in full, plus amounts equal to all other costs, fees,
expenses, premiums, surcharges and all other amounts due under or in connection
with the Finance Note and the Loan Agreement. For purposes of this Promissory
Note, the "Finance Loan" shall mean the amounts borrowed by Finance from CoBank
pursuant to the Loan Agreement and evidenced by the Finance Note, and the
"Loan" shall mean the amounts of the Finance Loan reloaned by Finance to
Mercury and evidenced by this Promissory Note.
1. INTEREST. The aggregate amount of interest accruing under this
Note shall at all times equal the aggregate amount of interest accruing under
the Finance Note, and shall accrue at the Variable Rate applicable from time to
time under the Loan Agreement.
2. REPAYMENT OF PRINCIPAL; INTEREST AND OTHER AMOUNTS PAYABLE. This
Note evidences Mercury's obligations with respect to the Loan. Mercury shall
pay to the Holder an amount equal to the aggregate principal amount of the
Loan, together with accrued interest thereon, plus all other costs, fees,
expenses, premiums, surcharges and all other amounts due under or in connection
with the Finance Note and the Loan Agreement, in such amounts and at such times
as shall be sufficient to make, when and as due, all payments required under
the Finance Note and the Loan Agreement with respect to the Finance Loan,
interest thereon, and such other amounts due thereunder. Advances, accrued
interest and payments under the Finance Note and the Loan Agreement shall be
posted by CoBank upon an appropriate accounting record, which record (and all
computer printouts thereof) shall constitute prima facie evidence of the
outstanding principal and interest under
<PAGE> 2
Promissory Note/Mercury
Loan No. T0347
the Finance Note and the Loan Agreement. So long as CoBank shall be the Holder
hereof, payments received by CoBank pursuant to this Note shall be deemed to
constitute payments made pursuant to the Finance Note.
3. MANNER AND PLACE OF PAYMENT. Payments of all amounts due
hereunder are to be made at such location as the Holder may designate in
writing in accordance with Paragraph 10 hereof, in lawful money of the United
States of America.
4. LOAN DOCUMENTS. This Note is executed pursuant to the terms of
the Loan Agreement. This Note, the Finance Note and the Loan Agreement and any
other agreements, documents or instruments securing the indebtedness or
evidencing or relating to the transactions contemplated in the Loan Agreement
shall sometimes herein be collectively called the "Loan Documents."
5. COST OF COLLECTION. In the event this Note or any amount due
hereunder is not paid promptly when due, Mercury shall pay the reasonable fees
and all other costs and expenses of any attorneys at law who may be employed to
recover the amount overdue, or to protect the interest of the Holder, or to
enforce any Loan Document or to compromise or take other action in regard
hereto or thereto.
6. WAIVER. Mercury hereby waives any right to consent to any
modification, amendment, supplement, extension, or restatement of the Finance
Note, the Loan Agreement or any of the other Loan Documents; waives presentment
for payment, demand, protest and notice of dishonor and nonpayment; and agrees
that the payment hereof or of the Finance Note and the Loan Agreement may be
extended one or more times without notice. Mercury hereby waives all defenses
on the ground of delay or of any extension of time for the payment hereof which
may be hereafter given by the Holder hereof to it or to anyone who has assumed
the payment of this Note, and it is specifically agreed that the obligations of
Mercury shall not be in anywise affected or altered to the prejudice of the
Holder hereof by reason of the assumption of payment of the same by any other
person or entity.
7. PARTIES BOUND. As used herein, the terms "Mercury" and the
"Holder" shall be deemed to include their respective successors and assigns.
8. MISCELLANEOUS. The Holder shall not by any act, delay, omission
or otherwise be deemed to have waived any of its rights or remedies, and no
waiver of any kind shall be valid, unless in writing and signed by the Holder.
All rights and remedies of the Holder under the terms of this Note and under
any statutes or rules of law shall be cumulative and may be exercised
successively or concurrently. Any provision of this Note which may be
unenforceable or invalid under any law shall be ineffective to the extent of
such
-2-
<PAGE> 3
Promissory Note/Mercury
Loan No. T0347
unenforceability or invalidity without affecting the enforceability or validity
of any other provision hereof. Except to the extent governed by applicable
federal law, this Note shall be governed by and construed in accordance with
the laws of the State of Louisiana, without reference to choice of law
doctrine.
9. CONSENT TO JURISDICTION. To the maximum extent permitted by law,
Mercury agrees that any legal action or proceeding with respect to this Note
may be brought in the courts of the State of Louisiana or the United States of
America for the Western District of Louisiana, all as the Holder may elect. By
execution of this Note, Mercury hereby irrevocably submits to each such
jurisdiction, expressly waiving any objection it may have to the laying of
venue by reason of its present or future domicile. Nothing contained herein
shall affect the right of the Holder to commence legal proceedings or otherwise
proceed against Mercury in any other jurisdiction or to serve process in any
manner permitted or required by law.
10. NOTICES. All notices herein authorized or required to be given
to Mercury or the Holder shall be given and delivery may be effected in the
manner set forth in the Loan Agreement to the addresses set forth below or to
such other address as the parties may designate from time to time in accordance
with this paragraph:
Mercury: Mercury, Inc. Holder: CoBank, ACB
P.O. Box 3709 200 Galleria Parkway
Lake Charles, Louisiana 70602 Suite 1900
Attn: Dusty Dumas; cc: Thomas Atlanta, Georgia 30339
G. Henning Attn: Rural Utility Banking
Fax No.: (318) 439-0769 Fax No.: (770) 618-3202
[Signature follows on next page.]
-3-
<PAGE> 4
Promissory Note/Mercury
Loan No. T0347
WHEREFOR, Mercury has caused this Note to be executed, attested,
sealed and delivered by its duly authorized officers on the day and year first
written above.
MERCURY, INC.
By: /s/ WILLIAM L. HENNING, JR.
----------------------------------------
Name: William L. Henning, Jr.
----------------------------------
Title: President
---------------------------------
Attest: /s/ THOMAS G. HENNING
------------------------------------
Name: Thomas G. Henning
-----------------------------
Title: Secretary
----------------------------
[CORPORATE SEAL]
-4-
<PAGE> 5
Promissory Note/Mercury
Loan No. T0347
FOR VALUE RECEIVED, CTC FINANCIAL, INC. ("Finance") hereby assigns to COBANK,
ACB ("CoBank") all of its interest in this Note to secure the prompt payment
and performance of the Obligations (as hereinafter defined). As used herein,
the term "Obligations" shall mean (i) the principal, interest and any other
charges provided for in the Finance Note (as defined in this Note) and the Loan
Agreement (as defined in this Note); (ii) all payments or performances under
any other agreements, instruments and documents now or hereafter evidencing or
relating to the transactions contemplated in the Loan Agreement; and (iii) all
indebtedness, obligations and liabilities of Finance to CoBank of every kind,
character and description whatsoever, direct or indirect, absolute or
contingent, due or to become due, now existing or hereinafter incurred,
contracted or arising, joint or several, liquidated or unliquidated, regardless
of how they arise or by what agreement or instrument they may be evidenced or
whether they are evidenced by any agreement or instrument, or whether incurred
as maker, drawer, endorser, surety, guarantor or otherwise.
WHEREFOR, Finance has caused this assignment to be executed and
delivered as of May 15, 1996.
CTC FINANCIAL, INC.
By: /s/ WILLIAM L. HENNING, JR.
--------------------------------------------
Name: William L. Henning, Jr.
--------------------------------------
Title: President
-------------------------------------
Attest: /s/ THOMAS G. HENNING
----------------------------------------
Name: Thomas G. Henning
----------------------------------
Title: Secretary
---------------------------------
[CORPORATE SEAL]
-5-
<PAGE> 1
EXHIBIT 4.26
LOAN NO. T0388
LOAN AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the respective undersigned Notaries Public, and in the presence
of the respective undersigned competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS LOAN AGREEMENT (this "Agreement") is made and entered into as of
July 1, 1996, by and between COBANK, ACB ("CoBank") and CTC FINANCIAL, INC., a
corporation formed and existing under the laws of the State of Louisiana (the
"Borrower").
SECTION 1. THE LOAN. On the terms and conditions set forth in this
Agreement, and subject to Section 11, CoBank agrees to make a loan to the
Borrower, by means of a single advance, in a principal amount not to exceed
$13,000,000 (the "Loan").
SECTION 2. PURPOSES AND USE OF PROCEEDS. The proceeds of the Loan
shall be reloaned by the Borrower to Mercury Cellular Telephone Company
("MCTC") to be used by MCTC in an amount not to exceed $13,000,000, to reloan
to Mississippi One Cellular Telephone Company ("Mississippi One"), an affiliate
of MCTC, to be used by Mississippi One to finance its acquisition of the
assets of Northland Cellular Telephone Corporation. The Borrower agrees that
the proceeds of the Loan shall be used only for the purposes set forth in this
Section 2.
SECTION 3. AVAILABILITY. Subject to Section 11, the Loan will be made
on any day on which CoBank is open for business (a "Business Day"), except any
day when Federal Reserve Banks are closed, by wire transfer of immediately
available funds to such account or accounts as the Borrower may designate;
provided that an authorized officer of the Borrower shall have provided CoBank
with at least two Business Days' prior written notice of the date on which the
Loan is to be made (the "Funding Date"), and the Funding Date so designated
shall not be later than July 31, 1996.
<PAGE> 2
Loan Agreement/CTC Financial
Loan No. T0388
SECTION 4. INTEREST AND FEES.
(A) RATE OPTIONS; ETC. The unpaid principal balance of the
Loan shall accrue interest at the rate or rates determined or selected by the
Borrower in accordance with this Subsection (A).
(1) VARIABLE RATE OPTION. As to any portion of the
unpaid principal balance of the Loan selected by the Borrower (any such
portion, and any portion selected pursuant to Subsection (A)(2), a
"Portion" of the Loan), interest shall accrue pursuant to this variable
rate option at a variable annual interest rate (the "Variable Rate")
equal at all times to the National Variable Rate (as hereinafter
defined) less 0.25%. The term "National Variable Rate" shall mean the
rate of interest established by CoBank from time to time as its National
Variable Rate. The National Variable Rate is intended by CoBank to be a
reference rate, and CoBank may charge other borrowers rates at, above,
or below that rate. Any change in the National Variable Rate shall take
effect on the date established by CoBank as the effective date of such
change, and CoBank shall notify the Borrower promptly after any such
change.
(2) FIXED RATE OPTIONS.
(A) TREASURY RATE OPTION. As to any Portion or
Portions of the Loan selected by the Borrower, interest shall
accrue pursuant to this fixed rate option at a fixed annual
interest rate (a "Treasury Rate") equal to the sum of the U.S.
Treasury Rate (as hereinafter defined) plus a margin (the
"Treasury Margin") equal to 1.75% (subject to Subsection (B)).
Under this option, the interest rate on any Portion of the Loan,
in minimum amounts of $100,000, may be fixed for a period (any
such period, and any period selected pursuant to Subsection
(A)(2)(b), an "Interest Period") of one year or more but not
beyond the Maturity Date (as defined in Section 5); provided,
however, that such Interest Period may expire only on a Business
Day; and provided further, however, that each Portion of the Loan
accruing interest at a Treasury Rate shall be repaid in part as
provided in Section 5 on each Payment Date (as defined in Section
5) occurring during its applicable Interest Period. The term
"U.S. Treasury Rate" shall mean the yield to maturity on U.S.
Treasury instruments having the same maturity as the last day of
the Interest Period selected, as indicated by Telerate (page 5)
at approximately 9:30 a.m., Eastern time, on the date the
interest rate is fixed. If, however, no yield is available for
the period selected, then the interest rate shall be interpolated
based on the interest rates quoted for the next longest and
shortest periods of time. In the event Telerate ceases to
provide such quotations or materially changes the form or
substance of page 5 (as determined by CoBank), then CoBank will
notify the
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<PAGE> 3
Loan Agreement/CTC Financial
Loan No. T0388
Borrower and the parties hereto will agree upon a substitute
basis for obtaining such quotations.
(B) QUOTED RATE OPTIONS. As to any Portion or
Portions selected by the Borrower, interest shall accrue pursuant
to this quoted fixed rate option at a fixed annual interest rate
(a "Quoted Rate") equal to the rate quoted by CoBank, in its sole
and absolute discretion, on the date any such Portion is to be
fixed pursuant to this option for the Interest Period selected by
the Borrower for such Portion. Under this option, each Portion
so fixed for any separate Interest Period must be in a minimum
amount of $100,000 and Portions may be fixed for Interest Periods
ranging from five days to the Maturity Date; provided, however,
that Interest Periods may expire only on a Business Day; and
provided further, however, that each Portion of the Loan accruing
interest at a Quoted Rate shall be repaid in part as provided in
Section 5 on each Payment Date occurring during its applicable
Interest Period.
(3) SELECTION AND CHANGES OF RATES. The Borrower
shall select the initial interest rate or rates at the time it gives
CoBank written notice of the Funding Date pursuant to Section 3. The
Borrower may, on any Business Day, elect to have one of the fixed rate
options apply to any Portion of the Loan then accruing interest at the
Variable Rate. With respect to any Portion of the Loan accruing
interest pursuant to one of the fixed rate options, the Borrower may,
subject to Subsection (A)(2), on the last day of the Interest Period
for such Portion, elect to fix the interest rate accruing on such
Portion for another Interest Period pursuant to one of the fixed rate
options. In the absence of any such election, interest shall
automatically accrue on such Portion of the Loan at the Variable Rate.
From time to time the Borrower may elect on a Business Day and upon
payment of the Surcharge (as defined in, and calculated pursuant to,
Section 6) to convert all, but not part, of any Portion of the Loan
accruing interest pursuant to one of the fixed rate options to accrue
interest at the Variable Rate or pursuant to another fixed rate option
for an Interest Period as provided in Subsection (A)(2). Except for
the initial selection, all interest rate selections provided for
herein shall be made by telephonic or written request of an authorized
employee of the Borrower by 12:00 noon, Eastern time, on the relevant
day.
(4) ACCRUAL OF INTEREST. Interest shall accrue
pursuant to the one of the fixed rate options from and including the
first day of the applicable Interest Period to but excluding the last
day of the Interest Period. If the Borrower elects to refix the
interest rate on any Portion of the Loan pursuant to Subsection
(A)(3), the first day of the new Interest Period shall be the last day
of the preceding Interest Period. In the absence of any such
election, interest shall accrue on such Portion at the Variable Rate
from and including
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<PAGE> 4
Loan Agreement/CTC Financial
Loan No. T0388
the last day of such Interest Period. If the Borrower elects to
convert from one of the fixed rate options to the Variable Rate or to
another fixed rate upon payment of the Surcharge as provided in
Subsection (A)(3), interest at the existing fixed rate shall accrue
through the day before such conversion and either (i) the first day of
any new Interest Period shall be the date of such conversion, or (ii)
interest at the Variable Rate shall accrue on the Portion of the Loan
so converted from and including the date of conversion.
(B) MARGIN ADJUSTMENTS. Notwithstanding the foregoing,
if the spread between CoBank's cost of funds (as determined by CoBank in
accordance with its methodology) and the U.S. Treasury Rate for any Interest
Period selected by the Borrower pursuant to Subsection (A) should widen (or
lessen) from the spread in effect for the same period of time on June 5, 1996,
then the Treasury Margin may be adjusted upward (or downward) at CoBank's
discretion to reflect any such change. No adjustment shall be applied
retroactively to any Portion of the Loan prior to the end of the Interest
Period for such Portion.
(C) PAYMENT AND CALCULATION. The Borrower shall pay
interest monthly in arrears by the 20th day of the following month, upon any
prepayment and at maturity. Interest shall be calculated on the actual number
of days the Loan, or any part thereof, is outstanding on the basis of a year
consisting of 360 days. In calculating accrued interest, the date the Loan is
made shall be included and the date any principal amount of the Loan is repaid
or prepaid shall be excluded as to such amount.
(D) DEFAULT RATE. If prior to maturity the Borrower
fails to make any payment or investment required to be made under the terms of
this Agreement or the CoBank Note (including this Section 4) or the CoBank Note
(as defined in Section 7), then, at CoBank's option in each instance, such
payment or investment shall accrue interest at 4% per annum in excess of the
Variable Rate. After maturity, whether by reason of acceleration or otherwise,
the unpaid principal balance of the Loan shall automatically accrue interest at
4% per annum in excess of the Variable Rate. All interest provided for in this
Subsection (D) shall be payable on demand and shall be calculated from and
including the date such payment was due to but excluding the date paid on the
basis of a year consisting of 360 days.
(E) ORIGINATION FEE. The Borrower shall pay to CoBank a
non-refundable origination fee in the amount of $65,000, of which $10,000 was
paid by the Borrower upon acceptance of CoBank's commitment letter, dated June
5, 1996, relating to the Loan.
SECTION 5. PRINCIPAL REPAYMENT AND MATURITY. The outstanding
principal balance of the Loan on July 31, 1996 shall be repaid in ninety-six
(96) consecutive equal monthly installments, due on the 20th day of each month
(each, a "Payment Date"), commencing on August 20, 1996, with the last such
installment due on July 20, 2004 (the "Maturity Date").
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<PAGE> 5
Loan Agreement/CTC Financial
Loan No. T0388
Any Portion of the Loan accruing interest at the Variable Rate and each Portion
of the Loan accruing interest at a Treasury Rate or a Quoted Rate shall be
reduced by an amount equal to the amount of each installment payment made
pursuant to this Section 5 multiplied by a fraction, the numerator of which is
the outstanding principal balance of such Portion immediately prior to such
payment and the denominator of which is the total outstanding principal balance
of the Loan immediately prior to such payment. On the Maturity Date, the
amount of the then unpaid principal balance of the Loan and any and all other
amounts due and owing hereunder or under any other Loan Document shall be due
and payable. If any Payment Date is not a Business Day, then the principal
installment then due shall be paid on the next Business Day and shall continue
to accrue interest until paid.
SECTION 6. PREPAYMENT. The Borrower may, on one Business Day's prior
written notice, (i) prepay in full or in part any Portion of the Loan accruing
interest at the Variable Rate, and (ii) prepay in full (but not in part) any
Portion of the Loan accruing interest pursuant to one of the fixed rate
options. Any prepayment shall be applied in such a manner as to reduce the
amount owing on each remaining principal installment due pursuant to Section 5
by a percentage determined by dividing the amount prepaid by the total unpaid
principal balance of the Loan immediately prior to such prepayment. For
purposes of calculating the surcharge provided in this Section 6, but not for
purposes of reducing amounts due on each Payment Date, conversion of a Portion
of the Loan accruing interest pursuant to one of the fixed rate options to a
different rate pursuant to Section 4(A)(3) shall be deemed a prepayment in full
of that Portion of the Loan. Notwithstanding the foregoing, upon any
prepayment of any Portion of the Loan accruing interest pursuant to one of the
fixed rate options, and as a condition to any voluntary prepayment, the
Borrower shall pay to CoBank, on the date of such prepayment, a surcharge (the
"Surcharge") determined and calculated as follows:
(A) Determine the difference between: (i) CoBank's cost
of funds (determined in accordance with its standard methodology) on the date
the interest rate was fixed to fund the Portion of the Loan being prepaid;
minus (ii) CoBank's cost of funds (determined in accordance with such
methodology) on the date of prepayment to fund a new loan with a maturity equal
to the remainder of the selected Interest Period of the Portion of the Loan
being prepaid. If such difference is negative, then no Surcharge is payable.
(B) If such difference is positive, divide the result
determined in Subsection (A) by 12.
(C) For each month or part thereof during which the
Portion of the Loan being prepaid was scheduled to have been outstanding,
multiply the amount determined in Subsection (B) by that part of the Portion of
the Loan being prepaid that was scheduled to have been
-5-
<PAGE> 6
Loan Agreement/CTC Financial
Loan No. T0388
outstanding during such month (such that there is a monthly calculation for
each month during which the Portion of the Loan being prepaid was scheduled to
have been outstanding).
(D) Determine the present value of each monthly
calculation made under Subsection (C) based upon the scheduled time that
interest on the Portion of the Loan being prepaid would have been payable and a
discount rate equal to the rate set forth in Subsection (A)(ii).
(E) Add all of the calculations made under Subsection
(D). The result shall be the Surcharge.
SECTION 7. NOTE. The Borrower's obligation to repay the Loan shall
be evidenced by a promissory note in form and content acceptable to CoBank and
the Borrower (as the same may be amended, supplemented, extended or restated
from time to time, and any promissory note that may be issued from time to time
in substitution, renewal, extension, replacement or exchange therefor, the
"CoBank Note").
SECTION 8. MANNER AND TIME OF PAYMENT. If any date on which payment
is due hereunder is not a Business Day, the payment shall be made on the next
succeeding Business Day. The Borrower shall make each payment under this
Agreement and under the CoBank Note by wire transfer of immediately available
funds or by check. Wire transfers shall be made to the Federal Reserve Bank of
Kansas City for advice to and credit of CoBank, Federal Reserve Bank account
number 3070-88-75-4 (or to such other account as CoBank may designate by
notice) with sufficient information to identify the source and application of
such funds. The Borrower shall give CoBank telephonic notice no later than
12:00 noon, Eastern time, of its intent to pay by wire transfer. Wire
transfers received after 3:00 p.m., Eastern time, shall be credited on the next
Business Day. Checks shall be mailed or delivered to CoBank at Department 167,
Denver, Colorado 80291-0167 (or to such other address as CoBank may designate
by notice). Credit for payment by check will not be given until the next
Business Day after receipt of the check or the actual receipt of immediately
available funds, whichever is later.
SECTION 9. CAPITALIZATION. The Borrower agrees to purchase such
equity in CoBank as CoBank may from time to time require in accordance with its
bylaws and capital plan; provided, however, that CoBank may not require the
Borrower to purchase equity in CoBank in an amount greater than 13% of the
portion of CoBank's five-year average risk-adjusted asset base attributable to
loans made by CoBank to the Borrower. In connection with the foregoing, the
Borrower hereby acknowledges receipt, prior to the execution of this Agreement,
of CoBank's bylaws, a written description of the terms and conditions under
which the equity is issued, CoBank's Loan-Based Capital Plan, CoBank's most
recent annual report, and if more recent than CoBank's latest annual report,
its latest quarterly report. The Borrower hereby consents and
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<PAGE> 7
Loan Agreement/CTC Financial
Loan No. T0388
agrees that the amount of any distributions with respect to its patronage with
CoBank that are made in qualified written notices of allocation (as defined in
26 U.S.C. Section 1388) and that are received by the Borrower from CoBank,
will be taken into account by the Borrower at the stated dollar amounts whether
the distribution is evidenced by a Participation Certificate or other form of
written notice that such distribution has been made and recorded in the name of
the Borrower on the records of CoBank. All such investments and all other
equities which the Borrower may now own or hereafter acquire or be allocated in
CoBank shall be subject to a statutory first lien in favor of CoBank.
SECTION 10. SECURITY. The Loan and the CoBank Note are secured by an
assignment of that certain Promissory Note, dated of even date herewith, made
by MCTC to the order of the Borrower, in the original principal amount of
$13,000,000 (as the same may be amended, supplemented, extended or restated
from time to time, and any promissory note that may be issued from time to time
in substitution, renewal, extension, replacement or exchange therefor, "MCTC
Note").
The Loan is guaranteed by that certain Continuing Guaranty, dated as
of April 20, 1995, made by MCTC for the benefit of CoBank, as amended by that
certain First Amendment and Supplement to Continuing Guaranty, dated as of even
date herewith (as so amended and as the same hereafter may be amended,
supplemented, extended or restated from time to time, the "MCTC Guaranty").
The Loan, the CoBank Note, the MCTC Note and MCTC Guaranty are secured by (a)
that certain Multiple Indebtedness Mortgage, dated as of April 20, 1995, made
by MCTC to CoBank, as beneficiary of the MCTC Guaranty and the holder of the
CoBank Note and the MCTC Note, as amended by that certain First Amendment and
Supplement to Multiple Indebtedness Mortgage, dated as of even date herewith
(as so amended and as the same hereafter may be amended, supplemented, extended
or restated from time to time, the "Mortgage"), pursuant to which MCTC has
granted to CoBank a first priority lien and security interest in all of its now
owned or hereafter acquired real property; (b) that certain Security Agreement,
dated as of April 20, 1995, made by MCTC to CoBank, as beneficiary of the MCTC
Guaranty and holder of the CoBank Note and the MCTC Note, as amended by that
certain First Amendment and Supplement to Security Agreement, dated as of even
date herewith (as so amended and as the same hereafter may be amended,
supplemented, extended or restated from time to time, the "Security
Agreement"), pursuant to which MCTC shall grant to CoBank a first priority
security interest in all of its now owned or hereafter acquired tangible and
intangible personal property (including, without limitation, to the extent
permitted by law, all licenses and permits issued by the Federal Communications
Commission ("FCC")), subject to such exceptions as are therein permitted; and
(c) that certain Pledge Agreement, dated as of April 20, 1995, by and between
MCTC and CoBank, as beneficiary of the MCTC Guaranty and as holder of the
CoBank Note and the MCTC Note, as amended by that certain First Amendment and
Supplement to Pledge Agreement, dated as of even date herewith (as so amended
and as the same hereafter may be amended,
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supplemented, extended or restated from time to time, the "MCTC Pledge
Agreement"), pursuant to which MCTC has pledged, on a first priority basis, all
of its now owned or hereafter acquired capital stock of Mercury Cellular of
Kansas, Inc.
The Loan, the CoBank Note, the MCTC Note and the MCTC Guaranty are
guaranteed by those certain Limited Recourse Continuing Guaranties, each dated
as of April 20, 1995, each as amended by that certain First Amendment and
Supplement to Limited Recourse Continuing Guaranty, dated as of even date
herewith, made by (I) Cameron Communications Corporation ("CCC") for the
benefit of CoBank (as so amended and as the same hereafter may be amended,
supplemented, extended or restated from time to time, the "CCC Limited Recourse
Guaranty"), and (II) Mercury, Inc. ("Mercury") for the benefit of CoBank (as so
amended and as the same hereafter may be amended, supplemented, extended or
restated from time to time, the "Mercury Limited Recourse Guaranty").
The Loan, the CoBank Note, the MCTC Note, the MCTC Guaranty, and the
CCC Limited Recourse Guaranty are secured by that certain Pledge Agreement,
dated as of April 20, 1995, by and between CCC and CoBank, as beneficiary of
the MCTC Guaranty and the CCC Limited Recourse Guaranty and as holder of the
CoBank Note and MCTC Note, as amended by that certain First Amendment and
Supplement to Pledge Agreement, dated as of even date herewith (as so amended
and as the same hereafter may be amended, supplemented, extended or restated
from time to time, the "CCC Pledge Agreement"), pursuant to which CCC has
pledged, on a first priority basis, all of its now owned or hereafter acquired
capital stock in MCTC. The Loan, the CoBank Note, the MCTC Note, the MCTC
Guaranty and the Mercury Limited Recourse Guaranty are secured by that certain
Pledge Agreement, dated as of April 20, 1995, by and between Mercury and
CoBank, as beneficiary of the MCTC Guaranty and the Mercury Limited Recourse
Guaranty and as holder of the CoBank Note and the MCTC Note, as amended by that
certain First Amendment and Supplement to Pledge Agreement, dated as of even
date herewith (as so amended and as the same hereafter may be amended,
supplemented, extended or restated from time to time, the "Mercury Pledge
Agreement"), pursuant to which Mercury has pledged, on a first priority basis,
all of its now owned or hereafter acquired capital stock in MCTC.
SECTION 11. CONDITIONS PRECEDENT. CoBank's obligation to make the
Loan is subject to the satisfaction of each of the following conditions
precedent on or before the Funding Date:
(A) LOAN DOCUMENTS. That CoBank receive duly executed
originals of this Agreement, the CoBank Note, the MCTC Note, duly assigned to
it, the MCTC Guaranty, the Mortgage, the Security Agreement, the CCC Limited
Recourse Guaranty, the CCC Pledge Agreement, the Mercury Limited Recourse
Guaranty, the Mercury Pledge Agreement, and all other instruments and documents
contemplated hereby or thereby (collectively, the "Loan Documents").
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(B) AUTHORIZATION. That CoBank receive copies of all
corporate documents and proceedings of the Borrower, MCTC, CCC and Mercury
authorizing the execution, delivery, and performance of the Loan Documents to
which each is a party, certified by appropriate officers of such entities.
(C) APPROVALS. That CoBank receive evidence satisfactory
to it that all federal and state consents and approvals (including, without
limitation, all regulatory approvals) which are necessary for, or required as a
condition of, the validity and enforceability of the Loan Documents or the
creation or perfection of the liens and security interests identified in
Section 10 have been obtained and are in full force and effect.
(D) OPINIONS OF COUNSEL. That CoBank receive opinions of
counsel for the Borrower, MCTC, CCC and Mercury (who shall be mutually
acceptable to CoBank) in form and content acceptable to all parties.
(E) FEES AND EXPENSES. That the Borrower pay the
remainder of the origination fee set forth in Section 4(E) and the costs and
expenses required to be paid by the Borrower pursuant to Section 20.
(F) PERMITS. That CoBank receive evidence satisfactory
to it that the Borrower and MCTC possesses all necessary operating permits,
authorizations, approvals, and the like which are material to the conduct of
the Borrower's business or which may otherwise be required by law.
(G) INSURANCE. That CoBank receive evidence of insurance
by the Borrower in such amounts and covering such risks as are usually carried
by companies in the same or similar business.
(H) ENVIRONMENTAL MATTERS. That CoBank receive from MCTC
an environmental checklist on a form prescribed by CoBank covering all real
property owned or leased by MCTC and copies of MCTC's environmental records and
procedures, all of such information to be satisfactory to CoBank in its sole
discretion.
(I) PERFECTION AND PRIORITY OF LIENS. That CoBank
receive an opinion of counsel in form and content acceptable to it to the
effect that, as of the Funding Date, CoBank has a duly perfected security
interest or lien in all collateral covered by the Mortgage, the Security
Agreement, the CCC Pledge Agreement and the Mercury Pledge Agreement subject in
each case to no prior liens other than as may be permitted under any such
document.
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(J) NO MATERIAL ADVERSE CHANGE. That from December 31,
1995, to the Funding Date there shall not have occurred any event which has had
or could have a Material Adverse Effect (as hereinafter defined) on the
Borrower or MCTC. For purposes of this Agreement, the term "Material Adverse
Effect" when used with reference to any entity shall mean a material adverse
effect on the condition, financial or otherwise, operations, properties or
business of such entity or on the ability of such entity to perform its
obligations under the Loan Documents to which it is a party.
(K) NO INJUNCTION. That no court or other government
body or public authority shall have issued an order which shall then be in
effect restraining or prohibiting the completion of the transactions
contemplated hereby.
(L) CLOSING CERTIFICATE. That CoBank receive a
certificate, in the form attached hereto as Exhibit A, dated the Funding Date,
signed by officers of the Borrower, MCTC, CCC and Mercury as CoBank shall
request acceptable to CoBank, certifying as to the truth and accuracy of the
representations and warranties of the Borrower, MCTC, CCC and Mercury under the
Loan Documents to which each is a party, the satisfaction of each of the
conditions applicable to the making of the Loan specified herein and the other
matters set forth therein.
(M) SUBORDINATED DEBT. That MCTC subordinate all
indebtedness of Mississippi One to MCTC (the "Mercury Cellular Debt") in right
of payment and in all other respects, to any indebtedness of Mississippi One to
CoBank including the loan made to the Borrower by CoBank in the aggregate
amount of $32,400,000, for reloan to Mississippi One (the "Mississippi One
Loan"), which subordination shall provide that no interest or principal
payments may be made on the Mercury Cellular Debt without the consent of
CoBank.
(N) EVENT OF DEFAULT. That no Event of Default (as that
term is defined in Section 15) exists, and that there has occurred no event
which with the passage of time or the giving of notice, or both, could become
an Event of Default (each such event, a "Default").
(O) REPRESENTATIONS AND WARRANTIES. That the
representations and warranties of the Borrower contained in this Agreement and
any other Loan Document to which it is a party, of MCTC contained in the MCTC
Guaranty and any other Loan Document to which it is a party, of CCC contained
in the CCC Limited Recourse Guaranty and any other Loan Document to which it is
a party, and of Mercury contained in the Mercury Limited Recourse Guaranty and
any other Loan Document to which it is a party, be true and correct in all
material respects on and as of the Funding Date, as though made on and as of
the Funding Date.
(P) OTHER DOCUMENTS. That CoBank receive such other
opinions, certificates and documents as CoBank may reasonably request.
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SECTION 12. REPRESENTATIONS AND WARRANTIES. To induce CoBank to make
the Loan hereunder, and recognizing that CoBank is relying hereon, the Borrower
represents and warrants, as of the date of this Agreement and as of the Funding
Date, as follows:
(A) ORGANIZATION; POWERS; ETC. The Borrower (i) is duly
organized, validly existing, and in good standing under the laws of the state
of its incorporation; (ii) is duly qualified to do business and is in good
standing in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification; (iii) has all requisite
corporate and legal power to own and operate its assets and to carry on its
business and to enter into and perform its obligations under the Loan Documents
to which it is a party; (iv) has duly and lawfully obtained and maintains all
licenses, certificates, permits, authorizations, approvals, and the like which
are material to the conduct of its business or which may be otherwise required
by law; (v) is a wholly-owned subsidiary of Cameron Telephone Company; and (vi)
is eligible to borrow from CoBank.
(B) DUE AUTHORIZATION; NO VIOLATIONS; ETC. The execution
and delivery by the Borrower of, and the performance by the Borrower of its
obligations under, the Loan Documents to which it is a party have been duly
authorized by all requisite corporate action on the part of the Borrower and
its shareholders and do not and will not (i) violate any provision of any law,
rule or regulation, any judgment, order or ruling of any court or governmental
agency, the articles of incorporation or bylaws, if any, of the Borrower, or
any agreement, indenture, mortgage, or other instrument to which the Borrower
is a party or by which the Borrower or any of its properties are bound, or (ii)
be in conflict with, result in a breach of, or constitute with the giving of
notice or lapse of time, or both, a default under any such agreement,
indenture, mortgage, or other instrument.
(C) GOVERNMENTAL APPROVAL. No consent, permission,
authorization, order, or license of any governmental authority is necessary in
connection with the execution, delivery, performance, or enforcement of the
Loan Documents to which the Borrower is a party or the creation and perfection
of the liens and security interests granted thereby, except such as have been
obtained and are in full force and effect.
(D) BINDING AGREEMENT. Each of the Loan Documents to
which the Borrower is a party is, or when executed and delivered will be, the
legal, valid, and binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms, subject only to limitations on
enforceability imposed by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally, and (ii) general equitable principles.
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(E) COMPLIANCE WITH LAWS. The Borrower is in compliance
in all material respects with all federal, state, and local laws, rules,
regulations, ordinances, codes, and orders (collectively, "Laws"), the failure
to comply with which could have a Material Adverse Effect on the Borrower.
(F) ENVIRONMENTAL COMPLIANCE. Without limiting the
provisions of Subsection (E), all property owned or leased by the Borrower and
all operations conducted by it are in compliance in all material respects with
all Laws relating to environmental protection, the failure to comply with which
could have a Material Adverse Effect on the Borrower.
(G) LITIGATION. There are no pending legal, arbitration,
or governmental actions or proceedings to which the Borrower is a party or to
which any of its property is subject which could have a Material Adverse Effect
on the Borrower, and to the best of the Borrower's knowledge, no such actions
or proceedings are threatened or contemplated.
(H) FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE;
ETC. The audited financial statements of MCTC for the fiscal year ended
December 31, 1995, and the unaudited financial statements of MCTC for the
three-month period ended March 31, 1996, submitted to CoBank in connection with
the Loan fairly and fully present in all material respects the financial
condition of MCTC and the results of MCTC's operations for the periods covered
thereby and were prepared in accordance with generally accepted accounting
principles ("GAAP") consistently applied and any system of accounts to which
MCTC is subject. Since December 31, 1995, there has occurred no event which
has had or would have a Material Adverse Effect on the Borrower. All budgets,
projections, feasibility studies, and other documentation submitted by MCTC to
CoBank in connection with the Loan were based upon assumptions that were
reasonable and realistic at the time submitted and, as of the date hereof, no
fact has come to light, and no event or transaction has occurred, which would
cause any assumption made therein not to be reasonable or realistic.
(I) PRINCIPAL PLACE OF BUSINESS; RECORDS. The principal
place of business and chief executive office of the Borrower and the place
where the records required by Section 13(G) are kept is at the address of the
Borrower shown in Section 19.
(J) EMPLOYEE BENEFIT PLANS. To the extent applicable,
the Borrower is in compliance in all material respects with the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder.
(K) TAXES. The Borrower has filed or caused to be filed
all federal, state and local tax returns that are required to be filed, and has
paid all taxes as shown on said returns or
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Loan Agreement/CTC Financial
Loan No. T0388
on any assessment received by the Borrower to the extent that such taxes have
become due, unless such taxes are being contested by the Borrower, in good
faith and by appropriate proceedings and then only to the extent reserves
required by GAAP have been set aside on the Borrower's books therefor.
(L) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT. The Borrower is not an "investment company" as that term is
defined in, and is not otherwise subject to regulation under, the Investment
Company Act of 1940, as amended. The Borrower is not a "holding company" as
that term is defined in, and is not otherwise subject to regulation under, the
Public Utility Holding Company Act of 1935, as amended.
(M) USE OF PROCEEDS. The funds to be borrowed hereunder
will be used only as contemplated hereby. No part of such funds will be used
to purchase any "margin securities" or otherwise in violation of the
regulations of the Federal Reserve System.
(N) SUBSIDIARIES. The Borrower has no subsidiaries.
(O) BUSINESS. The Borrower's sole business activity and
operation is to borrow and reloan proceeds of such borrowings to MCTC and other
affiliated entities.
SECTION 13. AFFIRMATIVE COVENANTS. Unless otherwise agreed to in
writing by CoBank, while this Agreement is in effect, the Borrower covenants
and agrees to:
(A) CORPORATE EXISTENCE. Preserve and keep in full force
and effect its corporate existence and good standing in the jurisdiction of its
incorporation, and its qualification to transact business and good standing in
all places in which the character of its properties or the nature of its
business requires such qualification.
(B) COMPLIANCE WITH LAWS AND AGREEMENTS. Comply in all
material respects with (i) all Laws, the failure to comply with which could
have a Material Adverse Effect on the Borrower; and (ii) all agreements,
indentures, mortgages, and other instruments to which it is a party or by which
it or any of its property is bound.
(C) COMPLIANCE WITH ENVIRONMENTAL LAWS. Without limiting
the provisions of Subsection (B), comply in all material respects with, and
cause all persons occupying or present on any properties owned or leased by it
to so comply with, all Laws relating to environmental protection, the failure
to comply with which could have a Material Adverse Effect on the Borrower.
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Loan Agreement/CTC Financial
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(D) LICENSES; PERMITS; ETC. Duly and lawfully obtain and
maintain in full force and effect all licenses, certificates, permits,
authorizations, approvals, and the like which are material to the conduct of
its business or which may be required by Law.
(E) INSURANCE. Maintain insurance with insurance
companies or associations acceptable to CoBank in such amounts and covering
such risks as are usually carried by companies engaged in the same or similar
business and similarly situated, and make such increases in the type or amount
of coverage as CoBank may request. All such policies insuring any collateral
provided for in any Loan Document shall provide for loss payable clauses or
endorsements in form and content acceptable to CoBank. At the request of
CoBank, all policies (or such other proof of compliance with this Subsection
(E) as may be to CoBank) shall be delivered to CoBank.
(F) PROPERTY MAINTENANCE. Maintain and preserve at all
times its property, and each and every part and parcel thereof, in good repair,
working order and condition, ordinary wear and tear excepted.
(G) BOOKS AND RECORDS. Keep adequate records and books
of account in accordance with GAAP consistently applied and any system of
accounts to which it is subject.
(H) INSPECTION. Permit CoBank or its agents, during
normal business hours or at such other times as the parties may agree, to
examine its properties, books, and records, and to discuss its affairs,
finances, operations, and accounts with its officers, directors, employees, and
independent certified public accountants.
(I) REPORTS AND NOTICES. Furnish to CoBank:
(1) ANNUAL FINANCIAL STATEMENTS. As soon as
available, but in no event later than 120 days after the end of each
fiscal year of MCTC occurring during the term hereof, annual
consolidated and consolidating financial statements of MCTC prepared
in accordance with GAAP consistently applied and any system of
accounts to which MCTC is subject. Each of such financial statements
shall: (i) be audited by independent certified public accountants
selected by MCTC and acceptable to CoBank; (ii) be accompanied by a
report of such accountants containing an opinion acceptable to CoBank;
(iii) be prepared in reasonable detail; and (iv) include a balance
sheet, a statement of income, a statement of retained earnings, a
statement of cash flows, and all notes and schedules relating thereto.
(2) MONTHLY AND YEAR-TO-DATE FINANCIAL
STATEMENTS. As soon as available but in no event later than 60 days
after the end of each of the first three fiscal quarters of each
fiscal year of MCTC occurring during the term hereof, unaudited
monthly
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Loan No. T0388
(for the three months immediately preceding such fiscal quarter end)
and year-to-date financial statements of MCTC prepared in accordance
with GAAP consistently applied and any system of accounts to which
MCTC is subject (except for the omission of footnotes and for the
effect of normal year-end audit adjustments). Each of such financial
statements shall: (i) be prepared in reasonable detail; and (ii)
include a balance sheet, a statement of income for such months and
period year-to-date, a statement of cash flows, and such other months
statements as CoBank may specifically request, which statements shall
include any and all supplements thereto.
(3) FINANCIAL FORECAST. As soon as available,
but in no event later than 30 days after the first day of each fiscal
year of MCTC occurring during the term hereof, a one-year financial
forecast for MCTC which shall include, without limitation, a statement
of income, a balance sheet, a statement of sources and uses of funds,
capital expenditure projections and such other information as CoBank
shall reasonably require.
(4) NOTICE OF DEFAULT. Promptly after becoming
aware thereof, notice of (a) the occurrence of any Default or Event of
Default hereunder or under any other Loan Document, and (b) the
occurrence of any breach, default, event of default, or other event
which with the giving of notice or lapse of time, or both, could
become a breach, default, or event of default under any agreement,
indenture, mortgage, or other instrument (other than the Loan
Documents) to which the Borrower is a party or by which the Borrower
or any of its property is bound or affected if the effect of such
breach, default, event of default, or other event is to accelerate, or
to permit the acceleration of, the maturity of any indebtedness under
such agreement, indenture, mortgage, or other instrument; provided,
however, that the failure to give such notice shall not affect the
right and power of CoBank to exercise any and all of the remedies
specified herein.
(5) NOTICE OF NON-ENVIRONMENTAL LITIGATION.
Promptly after the commencement thereof, notice of the commencement of
all actions, suits, or proceedings before any court, arbitrator, or
governmental department, commission, board, bureau, agency, or
instrumentality affecting the Borrower which could have a Material
Adverse Effect on the Borrower.
(6) NOTICE OF ENVIRONMENTAL LITIGATION. Without
limiting the provisions of Subsection (I)(5), promptly after receipt
or becoming aware thereof, notice of the receipt of all pleadings,
orders, complaints, indictments, or other communications alleging a
condition that may require the Borrower to undertake or to contribute
to a cleanup or other response under Laws relating to environmental
protection, or which seeks penalties, damages, injunctive relief, or
criminal sanctions related to alleged violations of such Laws, or
which claims personal injury or property damage to any person or
property
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as a result of environmental factors or conditions or which could have
a Material Adverse Effect on the Borrower.
(7) REGULATORY AND OTHER NOTICES. Promptly after
filing, receipt or becoming aware thereof, copies of any filings or
communications sent to or notices or other communications received by
the Borrower or MCTC from any governmental authority, including,
without limitation, the Louisiana Public Service Commission (the
"Commission") and the FCC, relating to any noncompliance by the
Borrower or MCTC with any Law or with respect to any matter or
proceeding the effect of which could have a Material Adverse Effect on
the Borrower or MCTC.
(8) MATERIAL ADVERSE CHANGE. Prompt notice of
any matter which has had or could have a Material Adverse Effect on
the Borrower or MCTC.
(9) COMPLIANCE CERTIFICATES. Concurrently with
each financial statement required to be furnished pursuant to
Subsections (I)(1) and (I)(2), a certificate in the form attached
hereto as Exhibit B executed by the chief accounting officer of MCTC.
(10) ERISA REPORTABLE EVENTS. Within 10 days
after the Borrower becomes aware of the occurrence of any Reportable
Event (as defined in Section 4043 of ERISA) with respect to the
Borrower or MCTC, a statement describing such Reportable Event and the
actions proposed to be taken in response to such Reportable Event.
(11) OTHER INFORMATION. Such other information
regarding the condition, financial or otherwise, or operations of the
Borrower or MCTC as CoBank may, from time to time, reasonably request.
SECTION 14. NEGATIVE COVENANTS. Unless otherwise agreed to in
writing by CoBank, while this Agreement is in effect, the Borrower shall not:
(A) BORROWINGS. Create, incur, assume, or allow to
exist, directly or indirectly, any indebtedness or liability for borrowed
money, for the deferred purchase price of property or services, or for the
lease of real or personal property which lease is required to be capitalized
under GAAP or which is treated as an operating lease under regulations
applicable to it but which otherwise would be required to be capitalized under
GAAP, except for obligations to CoBank.
(B) LIENS. Create, incur, assume, or allow to exist any
mortgage, deed of trust, deed to secure debt, pledge, lien (including the lien
of an attachment, judgment, or execution),
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security interest, or other encumbrance of any kind upon any of its
property, real or personal, except in favor of CoBank.
(C) MERGERS; ACQUISITIONS; ETC. Merge or consolidate
with any other entity or acquire all or substantially all of the assets of any
person or entity, or form or create any subsidiary, or commence operations
under any other name, organization, or entity, including any joint venture.
(D) TRANSFER OF ASSETS. Sell, transfer, lease, enter
into any contract for the sale, transfer or lease of, or otherwise dispose of,
any of its assets.
(E) LOANS AND INVESTMENTS. After the date hereof, make
any loan or advance to, invest in, purchase or make any commitment to purchase
any stock, bonds, notes, or other securities of any person or entity, other
than stock or other securities of CoBank and the advances to its affiliated
entities of loan proceeds received from CoBank as contemplated by this
Agreement or any other loan agreement entered into between CoBank and the
Borrower.
(F) GUARANTEES. Guarantee, assume or otherwise become
obligated or liable with respect to the indebtedness or other obligations of
any person or entity.
(G) CHANGE IN BUSINESS. Engage in any business activity
or operation different from or unrelated to the Borrower's current business
activities or operations.
(H) DISPOSITION OF LICENSES. Sell, assign, transfer, or
otherwise dispose of, or attempt to dispose of, in any way, any registrations,
licenses, franchises, grants, permits, or other governmental approvals.
SECTION 15. EVENTS OF DEFAULT. Each of the following shall
constitute an "Event of Default" hereunder:
(A) PAYMENT DEFAULT. The failure by the Borrower to make
any payment or investment required to be made hereunder, under the CoBank Note,
or under any other Loan Document when due.
(B) REPRESENTATIONS AND WARRANTIES. Any representation
or warranty made by the Borrower, MCTC, CCC or Mercury herein or in any other
Loan Document, or any factual statement made in any certificate delivered in
connection with the Loan, shall prove to have been false or misleading in any
material respect on or as of the date made.
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(C) CERTAIN AFFIRMATIVE COVENANTS. The failure by the
Borrower to perform or comply with any covenant set forth in Section 13 (other
than Sections 13(A) and 13(I)(4), (5), (6), (7), (8) and (10)), and such
failure continues for 30 days after written notice thereof shall have been
delivered by CoBank to the Borrower.
(D) OTHER COVENANTS AND AGREEMENTS. The failure by the
Borrower to perform or comply with any other covenant or agreement contained
herein, including, without limitation, any covenant excluded under Subsection
(C) above.
(E) CROSS-DEFAULT. The occurrence of any breach,
default, event of default, or event which with the giving of notice or lapse of
time, or both, could become a default or event of default under (i) any Loan
Document other than this Agreement, (ii) that certain Loan Agreement, dated as
of April 20, 1995, by and between the Borrower and CoBank, providing for a loan
of up to $18,000,000, (iii) that certain Amended and Restated Loan Agreement,
dated as of May 15, 1996, as amended by that certain First Amendment and
Supplement to Amended and Restated Loan Agreement, dated as of even date
herewith, each by and between the Borrower and CoBank, providing for a loan of
up to $32,400,000, (iv) that certain Loan Agreement, dated as of May 15, 1996,
by and between the Borrower and CoBank, providing for a loan of up to
$5,000,000, or (v) the terms of any other agreement (other than the Loan
Documents) between the Borrower, MCTC, Mississippi One, CCC or Mercury, and
CoBank, including, without limitation, any guaranty, loan agreement, security
agreement, pledge agreement, mortgage, deed to secure debt, or deed of trust.
(F) OTHER INDEBTEDNESS. The occurrence of any breach,
default, event of default, or event which with the giving of notice or lapse of
time, or both, could become a default or event of default under any agreement,
indenture, mortgage, or other instrument by which the Borrower or MCTC or any
of their respective property is bound or affected (other than the Loan
Documents) if the effect of such breach, default, event of default, or event is
to accelerate, or to permit the acceleration of, the maturity of any
indebtedness under such agreement, indenture, mortgage, or other instrument.
(G) JUDGMENTS. Any judgment, decree or order for the
payment of money shall be rendered against the Borrower or judgments, decrees
or orders for the payment of money in an aggregate amount in excess of $75,000
shall be rendered against MCTC and either (i) enforcement proceedings shall
have been commenced; or (ii) such judgments, decrees, and orders shall continue
unsatisfied and in effect for a period of 45 consecutive days without being
vacated, discharged, satisfied, or stayed pending appeal.
(H) INSOLVENCY, ETC. Any of the Borrower, MCTC, CCC or
Mercury (i) shall become insolvent or shall generally not, or shall be unable
to, or shall admit in writing its inability
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Loan Agreement/CTC Financial
Loan No. T0388
to, pay its debts as they come due; or (ii) shall suspend its business
operations or a material part thereof or make an assignment for the benefit of
creditors; or (iii) shall apply for, consent to, or acquiesce in the
appointment of a trustee, receiver, or other custodian for it or any of its
property or, in the absence of such application, consent, or acquiescence, a
trustee, receiver, or other custodian is so appointed; or (iv) shall commence
with respect to it or have commenced against it any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, or
liquidation law or statute of any jurisdiction.
(I) ELIGIBILITY. The failure by the Borrower to maintain
its eligibility to borrow from CoBank.
(J) SECURITY. Any of the Mortgage, the Security
Agreement, the CCC Pledge Agreement or the Mercury Pledge Agreement or the
filings contemplated thereby, shall for any reason fail (i) to create a valid
and perfected first-priority lien or security interest (subject only to such
exceptions as are therein permitted) on any of the property identified therein,
or (ii) to secure thereunder the obligations evidenced by this Agreement, the
CoBank Note, the MCTC Note, the MCTC Guaranty, the CCC Limited Recourse
Guaranty or the Mercury Limited Recourse Guaranty, as applicable. Any of the
MCTC Guaranty, the CCC Limited Recourse Guaranty or the Mercury Limited
Recourse Guaranty shall fail for any reason to be the valid and binding
obligations of MCTC, CCC or Mercury, respectively, or any of MCTC, CCC or
Mercury shall in any way contest or dispute the validity and binding effect of
the MCTC Guaranty, the CCC Limited Recourse Guaranty or the Mercury Limited
Recourse Guaranty.
SECTION 16. REMEDIES UPON EVENT OF DEFAULT.
(A) AUTOMATIC ACCELERATION. Upon the occurrence of an
Event of Default under Section 15(H), the entire unpaid principal balance of
the CoBank Note, all accrued interest thereon, and all other amounts payable
under this Agreement, the CoBank Note, and all other agreements between CoBank
and the Borrower shall become immediately due and payable without protest,
presentment, demand, or further notice of any kind, all of which are hereby
expressly waived by the Borrower.
(B) ACCELERATION; ETC. Upon the occurrence of an Event
of Default other than under Section 15(H), upon notice to the Borrower, CoBank
may declare the entire unpaid principal balance of the CoBank Note, all accrued
interest thereon, and all other amounts payable under this Agreement and all
other agreements between CoBank and the Borrower, to be immediately due and
payable. Upon such a declaration, the unpaid principal balance of the CoBank
Note and all such other amounts shall become immediately due and payable,
without protest, presentment, demand, or further notice of any kind, all of
which are hereby expressly waived by the Borrower.
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<PAGE> 20
Loan Agreement/CTC Financial
Loan No. T0388
(C) ENFORCEMENT. Upon the occurrence of an Event of
Default, CoBank may proceed to protect, exercise, and enforce such rights and
remedies as may be provided by agreement or under law including, without
limitation, the rights and remedies provided for in the CoBank Note and any of
the other Loan Documents. Each and every one of such rights and remedies shall
be cumulative and may be exercised from time to time, and no failure on the
part of CoBank to exercise, and no delay in exercising, any right or remedy
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right or remedy preclude any other or future exercise thereof, or the
exercise of any other right. In addition, CoBank may hold and/or set off and
apply against the Borrower's indebtedness any and all cash, accounts,
securities, or other property in CoBank's possession or under its control.
(D) APPLICATION OF PAYMENTS. After acceleration of the
Loan, all amounts received by CoBank shall be applied to the amounts owing
hereunder, under the CoBank Note, and the other Loan Documents in whatever
order and manner as CoBank shall elect.
(E) REGULATORY APPROVALS. Upon any action by CoBank to
commence the exercise of remedies hereunder or under the Mortgage, the Security
Agreement, the CCC Pledge Agreement or the Mercury Pledge Agreement, the
Borrower hereby undertakes and agrees to cooperate and join with CoBank in any
application to the Commission, the FCC, or any other regulatory body,
administrative agency, court or other forum (any such entity, a "Governmental
Authority") with respect thereto and to provide such assistance in connection
therewith as CoBank may request, including, without limitation, the preparation
of filings and appearances of officers and employees of the Borrower before
such Governmental Authority, in each case in support of any such application
made by CoBank, and the Borrower shall not, directly or indirectly, oppose any
such action by CoBank before any such Governmental Authority.
SECTION 17. COMPLETE AGREEMENT; AMENDMENT. This Agreement and the
other Loan Documents are intended by the parties to be a complete and final
expression of their agreement. No amendment, modification, or waiver of any
provision hereof or thereof, nor any consent to any departure of the Borrower
herefrom or therefrom, shall be effective unless approved by CoBank and
contained in a writing signed by or on behalf of CoBank, and then such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 18. APPLICABLE LAW. Except to the extent governed by
applicable federal law, this Agreement shall be governed by and construed in
accordance with the laws of the State of Louisiana without reference to choice
of law doctrine.
SECTION 19. NOTICES. All notices hereunder shall be in writing and
shall be deemed to be duly given upon delivery, if delivered by "Express Mail,"
overnight courier, messenger or
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Loan Agreement/CTC Financial
Loan No. T0388
other form of hand delivery or sent by telegram or facsimile transmission, or 3
days after mailing if sent by certified or registered mail, to the parties at
the following addresses (or such other address for a party as shall be
specified by like notice):
<TABLE>
<CAPTION>
If to CoBank, as follows: If to the Borrower, as follows:
<S> <C>
CoBank, ACB CTC Financial, Inc.
200 Galleria Parkway One Lakeshore Drive, Suite 1495
Suite 1900 P.O. Drawer 3709
Atlanta, Georgia 30339 Lake Charles, Louisiana 70602
Attn: Rural Utility Banking Group Attn: Dusty Dumas; cc:Thomas G. Henning
Fax No.: (770) 618-3202 Fax No.: (318) 439-0769
</TABLE>
SECTION 20. COSTS AND EXPENSES. The Borrower shall reimburse CoBank
on demand for all reasonable out-of-pocket costs and expenses incurred by
CoBank in connection with the origination, negotiation, preparation and
administration of this Agreement and all other Loan Documents, and the
preservation and enforcement of CoBank's rights and remedies hereunder and
thereunder, including, without limitation: all (a) costs and expenses
(including intangible and other taxes and any recording fees or expenses)
incurred by CoBank to obtain, perfect, maintain, determine the priority of, or
release any security contemplated hereunder; (b) fees and expenses of any
outside counsel retained by CoBank to assist CoBank with respect to any matter
contemplated by this Section 20 or to review this Agreement and all other Loan
Documents and advise CoBank as to its rights and remedies hereunder or
thereunder; (c) fees and expenses of any outside counsel retained by CoBank to
represent it in any litigation involving the parties to any of the Loan
Documents, including but not limited to, bankruptcy, receivership, or similar
proceedings; and (d) fees, costs and expenses incurred in connection with
obtaining surveys and appraisals, if any, required under this Agreement or any
other Loan Document; provided, however, that the Borrower shall not be
obligated to reimburse CoBank for legal fees (exclusive of associated expenses)
for the initial negotiation and documentation of the Loan which, when
aggregated with the legal fees (exclusive of associated expenses) of CoBank in
connection with the negotiation and documentation of certain amendments to the
Mississippi One Loan, exceed $35,000.
SECTION 21. EFFECTIVENESS; SEVERABILITY. This Agreement shall
continue in effect until all indebtedness and obligations of the Borrower
hereunder and under all other Loan Documents shall have been fully and finally
repaid. Any provision of the Loan Documents which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof.
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Loan Agreement/CTC Financial
Loan No. T0388
SECTION 22. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the Borrower and CoBank and their respective
successors and assigns, except that the Borrower may not assign or transfer its
rights or obligations hereunder without the prior written consent of CoBank.
Without the consent of, but with notice to, the Borrower, CoBank may (a) sell
participations to one or more banks or other entities in all or a portion of
its rights and obligations under this Agreement, or (b) assign to one or more
banks or other entities all or a portion of its rights and obligations under
this Agreement.
SECTION 23. CONSENT TO JURISDICTION. To the maximum extent permitted
by law, the Borrower agrees that any legal action or proceeding with respect to
this Agreement or any of the other Loan Documents may be brought in the courts
of the State of Louisiana or of the United States of America for the Western
District of Louisiana, all as CoBank may elect. By execution of this
Agreement, the Borrower hereby irrevocably submits to each such jurisdiction,
expressly waiving any objection it may have to the laying of venue by reason of
its present or future domicile. Nothing contained herein shall affect the
right of CoBank to commence legal proceedings or otherwise proceed against the
Borrower in any other jurisdiction or to serve process in any manner permitted
or required by law.
SECTION 24. OBLIGATIONS ABSOLUTE. The obligation of the Borrower to
make all payments required to be made under this Agreement shall be independent
of any action by the Commission or the FCC with respect to rates and/or
disallowance of debt.
SECTION 25. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original and
shall be binding upon all parties and their respective permitted successors and
assigns, and all of which taken together shall constitute one and the same
agreement.
SECTION 26. DEFINED TERMS. For convenience of reference, set forth
below opposite each defined term used in this Agreement is the location in this
Agreement of the definition of such term:
<TABLE>
<CAPTION>
Defined Term Location
------------ --------
<S> <C>
Agreement Introductory Paragraph
Borrower Introductory Paragraph
Business Day Section 3
CCC Section 10
CCC Limited Recourse Guaranty Section 10
CCC Pledge Agreement Section 10
</TABLE>
-22-
<PAGE> 23
Loan Agreement/CTC Financial
Loan No. T0388
<TABLE>
<S> <C>
CoBank Introductory Paragraph
CoBank Note Section 7
Commission Section 13(I)(7)
Default Section 11(N)
Event of Default Section 15
FCC Section 10
Funding Date Section 3
GAAP Section 12(H)
Governmental Authority Section 16(E)
Interest Period Section 4(A)(2)
Laws Section 12(E)
Loan Section 1
Loan Documents Section 11(A)
Material Adverse Effect Section 11(J)
Maturity Date Section 5
Mississippi One Section 2
Mississippi One Loan Section 11(M)
MCTC Section 2
MCTC Guaranty Section 10
MCTC Note Section 10
MCTC Pledge Agreement Section 10
Mercury Section 10
Mercury Cellular Debt Section 11(M)
Mercury Limited Recourse Guaranty Section 10
Mercury Pledge Agreement Section 10
Mortgage Section 10
National Variable Rate Section 4(A)(1)
Payment Date Section 5
Portion Section 4(A)(1)
Quoted Rate Section 4(A)(2)
Security Agreement Section 10
Surcharge Section 6
Treasury Margin Section 4(A)(2)
Treasury Rate Section 4(A)(2)
U.S. Treasury Rate Section 4(A)(2)
Variable Rate Section 4(A)(1)
</TABLE>
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<PAGE> 24
Loan Agreement/CTC Financial
Loan No. T0388
THUS DONE AND SIGNED, in several counterparts at the places and on the
dates indicated below, and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
duly authorized officers of the respective parties, after a due reading of the
whole.
At Lake Charles, Louisiana, on July 1, 1996.
CTC FINANCIAL, INC.
By: /s/ WILLIAM L. HENNING JR.
----------------------------------------
Name: William L. Henning Jr.
Title: President
Attest: /s/ THOMAS G. HENNING
-----------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
Witnesses to all signatures:
/s/ SHEILA KING
- --------------------------------------------
Witness
/s/ PATRICIA HAMILTON
- --------------------------------------------
Witness
/s/ [ILLEGIBLE]
- --------------------------------------------
Notary Public
My commission expires: LIFE
-------------
[NOTARIAL SEAL]
[Signatures Continued on Next Page]
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<PAGE> 25
Loan Agreement/CTC Financial
Loan No. T0388
[Signatures Continued from Previous Page]
At Atlanta, Georgia, on July 2, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
-------------------------------------
Name: Mary Kay Deering
-------------------------------
Title: Vice President
------------------------------
Witnesses to signature:
/s/ SHAUNE KEENAN
- --------------------------------------------
Witness
/s/ [ILLEGIBLE]
- --------------------------------------------
Witness
MARIANNE R. HOWELL
- --------------------------------------------
Notary Public
Notary Public, Cobb County, Georgia
My commission expires: My Commission Expires April 25, 1999
-------------------------------------
[NOTARIAL SEAL]
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<PAGE> 26
Loan Agreement/CTC Financial
Loan No. T0388
EXHIBIT A
CLOSING CERTIFICATE - LOAN NO. T0388
THIS CLOSING CERTIFICATE is given by ________________________,
President of CTC FINANCIAL, INC. (the "Borrower"), ___________________,
President of MERCURY CELLULAR TELEPHONE COMPANY ("MCTC"), ___________________,
President of CAMERON COMMUNICATIONS CORPORATION ("CCC"), and _________________,
President of MERCURY, INC. ("Mercury"), pursuant to Section 11(L) of that
certain Loan Agreement, dated as of July 1, 1996, by and between CoBank, ACB
and the Borrower (the "Loan Agreement"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the Loan
Agreement.
We hereby certify as follows:
1. We are the President of the Borrower, the President of MCTC,
the President of CCC, and the President of Mercury, respectively, and as such
possess the knowledge and authority to certify to the matters herein set forth,
and the matters herein set forth are true and accurate to the best of our
present knowledge, information and belief after due inquiry;
2. The representations and warranties of the Borrower contained
in the Loan Agreement, of MCTC contained in the MCTC Guaranty, the Mortgage,
and the Security Agreement, of CCC contained in the CCC Limited Recourse
Guaranty and the CCC Pledge Agreement, and of Mercury contained in the Mercury
Limited Recourse Guaranty and the Mercury Pledge Agreement, are true and
correct in all material respects on and as of the date hereof;
3. No Default or Event of Default exists as of the date hereof;
and
4. Each of the conditions specified in Section 11 of the Loan
Agreement required to be satisfied on or prior to the effective date hereof has
been fulfilled as of the date hereof.
A-1
<PAGE> 27
Loan Agreement/CTC Financial
Loan No. T0388
IN WITNESS WHEREOF, we have executed this Closing Certificate as of
____________, 1996.
----------------------------------------------
, President
---------------------------------
CTC Financial, Inc.
----------------------------------------------
, President
---------------------------------
Mercury Cellular Telephone Company
----------------------------------------------
, President
---------------------------------
Cameron Communications Corporation
----------------------------------------------
, President
---------------------------------
Mercury, Inc.
A-2
<PAGE> 28
Loan Agreement/CTC Financial
Loan No. T0388
EXHIBIT B
COMPLIANCE CERTIFICATE - LOAN NO. T0388
THIS COMPLIANCE CERTIFICATE is given by __________________, the [CHIEF
ACCOUNTING OFFICER] of MERCURY CELLULAR TELEPHONE COMPANY ("MCTC"), pursuant to
Section 13(I)(9) of that certain Loan Agreement (the "Loan Agreement"), dated
as of July 1, 1996, by and between CoBank, ACB and CTC Financial, Inc. (the
"Borrower"), and Section 5(I)(9) of that certain Continuing Guaranty, dated as
of April 20, 1995, made by MCTC for the benefit of CoBank, as amended by that
certain First Amendment and Supplement to Continuing Guaranty, dated as of July
1, 1996 (the "MCTC Guaranty"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Loan Agreement.
I hereby certify as follows:
1. I am the [CHIEF ACCOUNTING OFFICER] of MCTC and as such
possess the knowledge and authority to certify to the matters set forth in this
Compliance Certificate;
2. Attached hereto as Annex A are the [AUDITED/UNAUDITED]
[ANNUAL/MONTHLY] [CONSOLIDATED AND CONSOLIDATING] financial statements of MCTC,
for the fiscal [YEAR/QUARTER] ended ______________, as required by Section
13(I) [(1)/(2)] of the Loan Agreement and Section 6(I) [(1)/(2)] of the MCTC
Guaranty. Such financial statements were prepared in accordance with GAAP
consistently applied (except as may be noted therein) and any system of
accounts to which MCTC is subject and fairly present the financial condition of
MCTC during the periods covered thereby and as of the dates thereof (subject,
if applicable, to normal year-end adjustments);
3. As of the date of such financial statements, MCTC is in
compliance with the covenants set forth in Section 5(J) of the MCTC Guaranty.
Attached hereto as Annex B are calculations which demonstrate the compliance by
MCTC with such covenants; and
B-1
<PAGE> 29
Loan Agreement/CTC Financial
Loan No. T0388
4. I have reviewed the activities of the Borrower and MCTC, and
consulted with appropriate representatives of the Borrower and MCTC during the
fiscal [YEAR/QUARTER] ended ______________, and reviewed the Loan Documents.
As of the date of this Compliance Certificate, there exists no condition, event
or act which would constitute a Default or Event of Default under the Loan
Agreement, except as disclosed on Annex C hereto.
IN WITNESS WHEREOF, I have executed this Compliance Certificate as of
_____________, _____.
---------------------------------------------------
, [CHIEF ACCOUNTING
--------------------------------
OFFICER]
Mercury Cellular Telephone Company
B-2
<PAGE> 30
CTC
LOAN NO. T0388
COBANK, ACB
PROMISSORY NOTE
CTC FINANCIAL, INC.
LAKE CHARLES, LOUISIANA
$13,000,000 DATED: JULY 1, 1996
FOR VALUE RECEIVED, CTC FINANCIAL, INC. (the "Borrower"), promises to
pay to the order of COBANK, ACB (the "Payee"), at the times and in the manner
set forth in that certain Loan Agreement, dated as of even date herewith, and
numbered T0388, by and between the Borrower and the Payee (as that agreement
may be amended, supplemented, extended or restated from time to time, the "Loan
Agreement"), the principal sum of THIRTEEN MILLION DOLLARS ($13,000,000) or
such lesser amount as may be advanced hereunder, together with interest on the
unpaid principal balance hereof at the rate or rates provided for in the Loan
Agreement.
This Note is given for one or more advances to be made by the Payee to
the Borrower pursuant to the Loan Agreement, all of the terms and provisions of
which are incorporated herein by reference. Advances, accrued interest and
payments shall be posted by the Payee upon an appropriate accounting record,
which record (and all computer printouts thereof) shall constitute prima facie
evidence of the outstanding principal and interest on the advances.
The Borrower hereby waives presentment for payment, demand, protest, and
notice of dishonor and nonpayment of this Note, and all defenses on the ground
of delay or of any extension of time for the payment hereof which may be
hereafter given by the holder or holders hereof to it or to anyone who has
assumed the payment of this Note, and it is specifically agreed that the
obligations of the Borrower shall not be in anywise affected or altered to the
prejudice of the holder or holders hereof by reason of the assumption of
payment of the same by any other person or entity.
Should this Note be placed in the hands of an attorney for collection or
the services of any attorney become necessary in connection with enforcing its
provisions, the Borrower agrees to pay reasonable attorneys' fees, together
with all costs and expenses incident thereto, to the extent allowed by law.
Except to the extent governed by applicable federal law, this Note shall be
governed by and construed in accordance with the laws of the State of Louisiana
without reference to choice of law doctrine.
[Signatures follow on next page.]
<PAGE> 31
Promissory Note/CTC
Loan No. T0388
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed,
attested and delivered under seal by its duly authorized officers as of the
date first shown above.
CTC FINANCIAL, INC.
By: WILLIAM L. HENNING, JR.
------------------------------
[CORPORATE SEAL] Name: William L. Henning, Jr.
-----------------------------
Title: President
Attest: /s/ THOMAS G. HENNING
---------------------------
Name: Thomas G. Henning
---------------------
Title: Secretary
-2-
<PAGE> 1
EXHIBIT 4.27
CTC
LOAN NO. T0388
COBANK, ACB
PROMISSORY NOTE
MERCURY CELLULAR TELEPHONE COMPANY
LAKE CHARLES, LOUISIANA
$13,000,000 DATED: JULY 1, 1996
FOR VALUE RECEIVED, MERCURY CELLULAR TELEPHONE COMPANY ("MCTC") hereby
promises to pay to the order of CTC FINANCIAL, INC. ("Finance"; Finance or any
subsequent holder of this Note, the "Holder") the principal amount of THIRTEEN
MILLION DOLLARS ($13,000,000), or so much as may have been advanced under that
certain Promissory Note, dated of even date herewith, made by Finance to the
order of CoBank, ACB ("CoBank"), in the original principal amount of
$13,000,000 (including any amendment, supplement, extension or restatement
thereof, the "Finance Note"), and that certain Loan Agreement, dated as of even
date herewith, by and between Finance and CoBank (including any amendment,
modification, supplement, extension or restatement thereof, the "Loan
Agreement") and reloaned by Finance to MCTC, together with interest as
hereinafter provided from the date hereof until paid in full, plus amounts
equal to all other costs, fees, expenses, premiums, surcharges and all other
amounts due under or in connection with the Finance Note and the Loan
Agreement. For purposes of this Note, the "Finance Loan" shall mean the
amounts borrowed by Finance from CoBank pursuant to the Loan Agreement and
evidenced by the Finance Note, and the "Loan" shall mean the amounts of the
Finance Loan reloaned by Finance to MCTC and evidenced by this Note.
1. INTEREST. The aggregate amount of interest accruing under this
Note shall at all times equal the aggregate amount of interest accruing under
the Finance Note. Accordingly, interest on the principal balance outstanding
hereunder shall accrue as follows:
(a) As to a principal amount equal to the Portion (as defined
in the Loan Agreement) of the Finance Loan, if any, from time to time accruing
interest at the Variable Rate (as defined in the Loan Agreement), at a rate
equal to the Variable Rate applicable from time to time under the Loan
Agreement; and
(b) As to a principal amount equal to each Portion of the
Finance Loan, if any, from time to time accruing interest pursuant to one of
the fixed rate options as provided for in Section 4(A)(2)(a) or (b) of the Loan
Agreement, at a fixed rate equal to the fixed rate so accruing on each such
Portion.
<PAGE> 2
Promissory Note/MCTC
Loan No. T0388
2. REPAYMENT OF PRINCIPAL; INTEREST AND OTHER AMOUNTS PAYABLE. This
Note evidences MCTC's obligations with respect to the Loan. MCTC shall pay to
the Holder an amount equal to the aggregate principal amount of the Loan,
together with accrued interest thereon, plus all other costs, fees, expenses,
premiums, surcharges and all other amounts due under or in connection with the
Finance Note and the Loan Agreement, in such amounts and at such times as shall
be sufficient to make, when and as due, all payments required under the Finance
Note and the Loan Agreement with respect to the Finance Loan, interest thereon,
and such other amounts due thereunder. Advances, accrued interest and payments
under the Finance Note and the Loan Agreement shall be posted by CoBank upon an
appropriate accounting record, which record (and all computer printouts
thereof) shall constitute prima facie evidence of the outstanding principal and
interest under the Finance Note and the Loan Agreement. So long as CoBank
shall be the Holder hereof, payments received by CoBank pursuant to this Note
shall be deemed to constitute payments made pursuant to the Finance Note.
3. MANNER AND PLACE OF PAYMENT. Payments of all amounts due
hereunder are to be made at such location as the Holder may designate in
writing in accordance with Paragraph 10 hereof, in lawful money of the United
States of America.
4. LOAN DOCUMENTS. This Note is executed pursuant to the terms of
the Loan Agreement. This Note, the Finance Note and the Loan Agreement and any
other agreements, documents or instruments securing the indebtedness or
evidencing or relating to the transactions contemplated in the Loan Agreement
shall sometimes herein be collectively called the "Loan Documents."
5. COST OF COLLECTION. In the event this Note or any amount due
hereunder is not paid promptly when due, MCTC shall pay the reasonable fees and
all other costs and expenses of any attorneys at law who may be employed to
recover the amount overdue, or to protect the interest of the Holder, or to
enforce any Loan Document or to compromise or take other action in regard
hereto or thereto.
6. WAIVER. MCTC hereby waives any right to consent to any
amendment, supplement, extension or restatement of the Finance Note, the Loan
Agreement or any of the other Loan Documents; waives presentment for payment,
demand, protest and notice of dishonor and nonpayment; and agrees that the
payment hereof or of the Finance Note and the Loan Agreement may be extended
one or more times without notice. MCTC hereby waives all defenses on the
ground of delay or of any extension of time for the payment hereof which may be
hereafter given by the Holder hereof to it or to anyone who has assumed the
payment of this Note, and it is specifically agreed that the obligations of
MCTC shall not be in anywise affected or altered to the prejudice of the Holder
hereof by reason of the assumption of payment of the same by any other person
or entity.
-2-
<PAGE> 3
Promissory Note/MCTC
Loan No. T0388
7. PARTIES BOUND. As used herein, the terms "MCTC" and the "Holder"
shall be deemed to include their respective successors and assigns.
8. MISCELLANEOUS. The Holder shall not by any act, delay, omission
or otherwise be deemed to have waived any of its rights or remedies, and no
waiver of any kind shall be valid, unless in writing and signed by the Holder.
All rights and remedies of the Holder under the terms of this Note and under
any statutes or rules of law shall be cumulative and may be exercised
successively or concurrently. Any provision of this Note which may be
unenforceable or invalid under any law shall be ineffective to the extent of
such unenforceability or invalidity without affecting the enforceability or
validity of any other provision hereof. Except to the extent governed by
applicable federal law, this Note shall be governed by and construed in
accordance with the laws of the State of Louisiana without reference to choice
of law doctrine.
9. CONSENT TO JURISDICTION. To the maximum extent permitted by law,
MCTC agrees that any legal action or proceeding with respect to this Note may
be brought in the courts of the State of Louisiana or the United States of
America for the Western District of Louisiana, all as the Holder may elect. By
execution of this Note, MCTC hereby irrevocably submits to such jurisdiction,
expressly waiving any objection it may have to the laying of venue by reason of
its present or future domicile. Nothing contained herein shall affect the
right of the Holder to commence legal proceedings or otherwise proceed against
MCTC in any other jurisdiction or to serve process in any manner permitted or
required by law.
10. NOTICES. All notices herein authorized or required to be given
to MCTC or the Holder shall be given and delivery may be effected in the manner
set forth in the Loan Agreement to the addresses set forth below or to such
other address as the parties may designate from time to time in accordance with
this paragraph:
MCTC: Mercury Cellular Holder: CoBank, ACB
Telephone Company 200 Galleria Parkway
P. O. Box 3709 Suite 1900
Lake Charles, Louisiana 70602 Atlanta, Georgia 30339
Attn: Dusty Dumas; Attn: Rural Utility Banking
cc: Thomas G. Henning Fax No.: (770) 618-3202
Fax No.: (318) 439-0769
[Signatures on next page]
-3-
<PAGE> 4
Promissory Note/MCTC
Loan No. T0388
WHEREFOR, MCTC has caused this Note to be executed, attested and
delivered under seal by its duly authorized officers on the day and year first
written above.
MERCURY CELLULAR
TELEPHONE COMPANY
By: /s/ ROBERT PIPER
---------------------------------------
Name: Robert Piper
---------------------------------
Title: President
Attest: /s/ THOMAS G. HENNING
-----------------------------------
Name: Thomas G. Henning
----------------------------
Title: Secretary
[CORPORATE SEAL]
-4-
<PAGE> 5
Promissory Note/MCTC
Loan No. T0388
FOR VALUE RECEIVED, CTC FINANCIAL, INC. ("Finance") hereby assigns to COBANK,
ACB ("CoBank") all of its interest in the instant promissory note to secure the
prompt payment and performance of the Obligations (as hereinafter defined). As
used herein, the term "Obligations" shall mean (i) the principal, interest and
any other charges provided for in the Finance Note (as defined in the instant
promissory note) and the Loan Agreement (as defined in the instant promissory
note); (ii) all payments or performances under any other agreements,
instruments and documents now or hereafter evidencing or relating to the
transactions contemplated in the Loan Agreement; and (iii) all indebtedness,
obligations and liabilities of Finance to CoBank of every kind, character and
description whatsoever, direct or indirect, absolute or contingent, due or to
become due, now existing or hereinafter incurred, contracted or arising, joint
or several, liquidated or unliquidated, regardless of how they arise or by what
agreement or instrument they may be evidenced or whether they are evidenced by
any agreement or instrument, or whether incurred as maker, drawer, endorser,
surety, guarantor or otherwise.
WHEREFOR, Finance has caused this assignment to be executed, attested
and delivered under seal as of July 1, 1996.
CTC FINANCIAL, INC.
By: WILLIAM L. HENNING, JR.
------------------------------
Name: William L. Henning, Jr.
------------------------
Title: President
Attest: THOMAS G. HENNING
--------------------------
Name: Thomas G. Henning
--------------------
Title: Secretary
[CORPORATE SEAL]
-5-
<PAGE> 1
EXHIBIT 4.28
LOAN NO. T0362
LOAN NO. T0388
FIRST AMENDMENT AND SUPPLEMENT TO
CONTINUING GUARANTY
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE ME, the respective undersigned Notaries Public, and in the
presence of the undersigned competent witnesses, personally came and appeared
the party listed below, who, after being duly sworn, did state:
THIS FIRST AMENDMENT AND SUPPLEMENT TO CONTINUING GUARANTY (this "First
Amendment"), dated as of July 1, 1996, is by and between MERCURY CELLULAR
TELEPHONE COMPANY ("MCTC") and COBANK, ACB ("CoBank"), and amends and
supplements that certain Continuing Guaranty, dated as of April 20, 1995, made
by MCTC for the benefit of CoBank (the "Guaranty").
R E C I T A L S:
WHEREAS, CoBank and CTC Financial, Inc. (the "Borrower") have entered
into that certain Loan Agreement, dated as of April 20, 1995 (as the same may
be amended, supplemented, extended or restated from time to time, the "First
Loan Agreement"), providing for a loan of up to $18,000,000 (the "First Loan"),
and into that certain Loan Agreement, dated as of even date herewith (as the
same may be amended, supplemented, extended or restated from time to time, the
"Second Loan Agreement"; the First Loan Agreement and the Second Loan
Agreement, collectively, the "Loan Agreements"), providing for a loan of up to
$13,000,000 (the "Second Loan"; the First Loan and the Second Loan,
collectively, the "Loans"); and
WHEREAS, the proceeds of the Loans will be reloaned by the Borrower to
MCTC for the purposes set forth in the Loan Agreements; and
WHEREAS, as an inducement to CoBank to enter into the First Loan
Agreement and to make the First Loan, MCTC entered into the Guaranty;
<PAGE> 2
First Amendment to Continuing Guaranty/MCTC
Loan No. T0362
Loan No. T0388
WHEREAS, as an inducement to CoBank to enter into the Second Loan
Agreement and to make the Second Loan, MCTC has agreed to amend the Guaranty as
herein provided;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, MCTC and CoBank hereby agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used in this First
Amendment, unless otherwise defined herein, shall have the meanings assigned to
them in the Guaranty.
SECTION 2. Section 2 of the Guaranty is hereby amended and
supplemented by deleting Section 2 in its entirety and substituting in lieu
thereof the following Section:
"SECTION 2. OBLIGATIONS. "Obligations" shall mean (a) the principal,
interest and other amounts becoming due and payable, whether by
acceleration or otherwise, under that certain Promissory Note, dated of
April 20, 1995, made by the Borrower to the order of CoBank, in the
original principal amount of $18,000,000 (as the same may be amended,
extended, renewed or replaced from time to time, the "First Note"); (b)
the principal, interest and other amounts becoming due and payable,
whether by acceleration or otherwise, under that certain Promissory
Note, dated of even date herewith, made by Borrower to the order of
CoBank, in the original principal amount of $13,000,000 (as the same may
be amended, extended, renewed or replaced from time to time, the "Second
Note"; the First Note and the Second Note, collectively, the "Notes");
and (c) all other payments or performances to be made by the Borrower
under the other Loan Documents to which it is a party."
SECTION 3. Section 4(H) of the Guaranty is hereby amended and
supplemented by deleting such Section in its entirety and substituting in lieu
thereof the following Section:
"(H) FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE; ETC. The
audited financial statements of MCTC for the fiscal year ended December
31, 1995, and the unaudited financial statements for the three-month
period ended March 31, 1996, submitted to CoBank in connection with the
Loans, fairly and fully present in all material respects the financial
condition of MCTC and the results of MCTC's operations for the periods
covered thereby and were prepared in accordance with GAAP consistently
applied and any system of accounts to which MCTC is subject. Since
December 31, 1995, there has occurred no event which has had or could
have a Material Adverse Effect on MCTC. All budgets, projections,
feasibility studies, and other documentation submitted to CoBank in
connection with the Loans were based upon assumptions that were
reasonable and realistic at the time submitted and, as of the date
hereof, no fact has come to light, and no event or transaction has
occurred, which would cause any assumption made therein not to be
reasonable or realistic."
-2-
<PAGE> 3
First Amendment to Continuing Guaranty/MCTC
Loan No. T0362
Loan No. T0388
SECTION 4. All references to the "Loan Agreement" or "Note" and "Loan"
in the Guaranty shall be to the "Loan Agreements," "Notes" and "Loans" as
defined in this First Amendment.
SECTION 5. Section 5(J)(1) of the Guaranty is hereby amended and
supplemented by deleting the second-to-last sentence of such Section in its
entirety and substituting in lieu thereof the following sentence:
"The term "Operating Cash Flow" shall mean the sum of (a) pre-tax
income, or deficit, as the case may be, after payment of all management
fees (excluding extraordinary gains, the write up of any asset and any
investment income or loss, and interest income on the Mercury Cellular
Debt), (b) total interest expense (including non-cash interest), (c)
depreciation and amortization expense, and (d) management fees accruing
during the applicable period but unpaid."
SECTION 6. Section 6(A) and (B) are hereby amended and supplemented by
deleting such Sections in their entirety and substituting in lieu thereof the
following Sections:
(A) BORROWINGS. Create, incur, assume, enter into or allow to
exist, directly or indirectly, (i) any indebtedness or liability for
borrowed money, for the deferred purchase price of property or services,
or for the lease of real or personal property which lease is required to
be capitalized under GAAP or which is treated as an operating lease
under regulations applicable to it but which otherwise would be required
to be capitalized under GAAP, or (ii) any reimbursement obligation with
respect to a letter of credit or similar instrument, except for (a)
obligations to the Borrower for the reloan of the proceeds of the Loans
as contemplated by the Loan Agreements; (b) accounts payable to trade
creditors and current operating liabilities (other than for borrowed
money) incurred in the ordinary course of its business; (c) purchase
money indebtedness for the financing of certain inventory obtained from
Audiovox South Corporation; (d) purchase money indebtedness for the
financing of, or Capital Lease indebtedness with respect to, Northern
Telecom Finance Corporation equipment in an amount not to exceed
$3,500,000 at any time outstanding; and (e) any reimbursement obligation
with respect to a letter of credit, draws under which are available to
fund capital contribution requirements of MCTC with respect to any "PCS
Investment" (as defined in Subsection (E)) and which has an available
amount not in excess of $2,500,000 (provided that the available amount
of the letter of credit declines by the amount of (I) any PCS
Investments made in lieu of a draw on such letter of credit and (II) any
draws under such letter of credit).
(B) LIENS. Create, incur, assume, or allow to exist any
mortgage, deed of trust, deed to secure debt, pledge, lien (including
the lien of an attachment, judgment, or execution), security interest,
or other encumbrance of any kind upon any of its property,
-3-
<PAGE> 4
First Amendment to Continuing Guaranty/MCTC
Loan No. T0362
Loan No. T0388
real or personal. The foregoing restrictions shall not apply to (a)
liens in favor of CoBank; (b) liens for taxes, assessments, or
governmental charges that are not past due, or are being contested in
good faith and by appropriate proceedings and then only to the extent
reserves required by GAAP have been set aside therefor; (c) liens,
pledges, and deposits under workers' compensation, unemployment
insurance, and social security laws; (d) liens, deposits, and pledges to
secure the performance of bids, tenders, contracts (other than contracts
for the payment of money), and like obligations arising in the ordinary
course of its business as conducted on the date hereof; (e) liens
imposed by law in favor of mechanics, materialmen, warehousemen, lessors
and like persons that secure obligations that are not past due, or are
being contested in good faith and by appropriate proceedings and then
only to the extent reserves required by GAAP have been set aside
therefor; and (f) liens or other encumbrances on the equipment (and any
proceeds therefrom) financed with indebtedness identified in Subsections
(A)(c) and (d)."
SECTION 7. All references to the "Loan Documents" or a "Loan
Document," when used in the Continuing Guaranty shall mean the "Loan Documents"
as defined in the Loan Agreements (as amended).
SECTION 8. All references to this "Guaranty" in the Continuing
Guaranty shall mean the Continuing Guaranty as amended by this First Amendment.
SECTION 9. After giving effect to the amendments to and restatement
of the Continuing Guaranty set forth in this First Amendment, the
representations and warranties of MCTC set forth in the Continuing Guaranty are
true and correct as of the date hereof as if made on the date hereof.
SECTION 10. It is the intention of the parties hereto that this First
Amendment shall not constitute a novation and shall in no way adversely affect
or impair the validity of the "Loan Documents" (as defined in the Loan
Agreements, as amended), it being the intention of the parties hereto merely to
amend the Continuing Guaranty as expressly set forth herein. To the extent not
inconsistent herewith, all of the terms and conditions of the Continuing
Guaranty shall remain in full force and effect and are hereby ratified and
confirmed by MCTC.
SECTION 11. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
SECTION 12. This First Amendment shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
-4-
<PAGE> 5
First Amendment to Continuing Guaranty/MCTC
Loan No. T0362
Loan No. T0388
THUS DONE AND SIGNED, at the place and on the date indicated below, and
in the presence of the undersigned Notary Public and the respective undersigned
witnesses indicated below, by duly authorized officers of MCTC, after a due
reading of the whole.
At Lake Charles, Louisiana, on July 1, 1996.
MERCURY CELLULAR TELEPHONE COMPANY
By: /s/ ROBERT PIPER
------------------------------------------
Name: Robert Piper
-------------------------------------
Title: President
------------------------------------
Attest: /s/ THOMAS G. HENNING
---------------------------------------
Name: Thomas G. Henning
----------------------------------
Title: Secretary
---------------------------------
[CORPORATE SEAL]
Witnesses to all signatures:
/s/ SHEILA KING
- --------------------------------
Witness
/s/ PAT HAMILTON
- --------------------------------
Witness
[ILLEGIBLE]
- --------------------------------
Notary Public
My commission expires: LIFE
----------
[NOTARIAL SEAL]
-5-
<PAGE> 6
First Amendment to Continuing Guaranty/MCTC
Loan No. T0362
Loan No. T0388
[Signatures Continued from Previous Page]
At Atlanta, Georgia, on July 2, 1996, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
------------------------------------------
Name: Mary Kay Deering
-------------------------------------
Title: Vice President
------------------------------------
Witnesses to signature:
/s/ SHAUNE KEENAN
- --------------------------------
Witness
/s/ [ILLEGIBLE]
- --------------------------------
Witness
/s/ MARIANNE R. HOWELL
- --------------------------------
Notary Public
Notary Public, Cobb County, Georgia
My commission expires: My Commission Expires April 25, 1999
------------------------------------
[NOTARIAL SEAL]
-6-
<PAGE> 1
EXHIBIT 4.29
LOAN NO. T0362
LOAN NO. T0388
COBANK, ACB
FIRST AMENDMENT AND SUPPLEMENT TO
SECURITY AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the respective undersigned Notaries Public, and in the presence
of the respective undersigned competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS FIRST AMENDMENT AND SUPPLEMENT TO SECURITY AGREEMENT (this "First
Amendment") is made and entered into as of July 1, 1996, by and between MERCURY
CELLULAR TELEPHONE COMPANY (the "Debtor") having its place of business (or
chief executive office if more than one place of business) located at P.O. Box
3709, Lake Charles, Louisiana 70602 and whose taxpayer identification number is
72-1099261, and COBANK, ACB (the "Secured Party"), whose mailing address is 200
Galleria Parkway, Suite 1900, Atlanta, Georgia 30339, and amends and
supplements that certain Security Agreement, dated as of April 20, 1995 (the
"Security Agreement"), by and between the Debtor and the Secured Party.
SECTION 1. DEFINITIONS. Capitalized terms, when used in this First
Amendment, unless otherwise defined herein, shall have the meanings ascribed to
them in the Security Agreement.
SECTION 2. Section 2 of the Security Agreement is hereby amended and
supplemented by deleting such Section in its entirety and substituting in lieu
thereof the following Section:
"SECTION 2. OBLIGATIONS. The security interest granted
hereunder shall secure the following obligations (the "Obligations"):
(a) all payments or performances to be made by CTC Financial, Inc. (the
"Borrower") under the "Loan Documents" as defined in that
<PAGE> 2
First Amendment to Security Agreement/MCTC
Loan No. T0362
Loan No. T0388
certain Loan Agreement, dated as of April 20, 1995 between the Borrower
and the Secured Party (as the same may be amended, supplemented,
extended or restated from time to time, the "First Loan Agreement"),
including, without limitation, the payment of all principal, interest
and other amounts becoming due and payable, whether by acceleration or
otherwise, under that certain Promissory Note, dated April 20, 1995,
made by the Borrower to the order of the Secured Party in the original
principal amount of $18,000,000 (as the same may be amended,
supplemented, extended, renewed or replaced from time to time, the
"First CTC Note"); (b) all payments or performances to be made by the
Debtor under the Loan Documents as defined in the First Loan Agreement,
including, without limitation, the payment of all principal, interest
and other amounts becoming due and payable, whether by acceleration or
otherwise, under that certain Promissory Note, dated April 20, 1995,
made by the Debtor to the order of the Borrower, and assigned to the
Secured Party, in the original principal amount of $18,000,000 (as the
same may be amended, supplemented, extended, renewed or replaced from
time to time, the "First MCTC Note"); (c) all payments or performances
to be made by the Borrower under the "Loan Documents" as defined in that
certain Loan Agreement, dated as of July 1, 1996, between the Borrower
and the Secured Party (as the same may be amended, supplemented,
extended or restated from time to time, the "Second Loan Agreement"; the
First Loan Agreement and the Second Loan Agreement, collectively, the
"Loan Agreements"), including, without limitation, the payment of all
principal, interest and other amounts becoming due and payable, whether
by acceleration or otherwise, under that certain Promissory Note, dated
July 1, 1996, made by the Borrower to the order of the Secured Party in
the original principal amount of $13,000,000 (as the same may be
amended, supplemented, extended or restated from time to time, the
"Second CTC Note"); (d) all payments or performances to be made by the
Debtor under the Loan Documents as defined in the Second Loan Agreement,
including, without limitation, the payment of all principal, interest
and other amounts becoming due and payable, whether by acceleration or
otherwise, under that certain Promissory Note, dated July 1, 1996, made
by the Debtor to the order of the Borrower, and assigned to the Secured
Party, in the original principal amount of $13,000,000 (as the same may
be amended, supplemented, extended or restated from time to time, the
"Second MCTC Note"; the First CTC Note, the Second CTC Note, the First
MCTC Note and the Second MCTC Note, collectively, the "Notes" and, each,
a "Note"); (e) all payments or performances under that certain
Continuing Guaranty, dated as of April 20, 1995, made by the Debtor for
the benefit of the Secured Party, as amended by that certain First
Amendment and Supplement to Continuing Guaranty, dated as of July 1,
1996 (as so amended and as the same hereafter may be amended,
supplemented, extended or restated from time to time, the "MCTC
Guaranty"); and (f) the payment of all other indebtedness and the
performance of all other obligations of the Borrower and the Debtor to
the Secured Party of every type and description, whether now existing or
-2-
<PAGE> 3
First Amendment to Security Agreement/MCTC
Loan No. T0362
Loan No. T0388
hereafter arising, fixed or contingent, as primary obligor or as a
guarantor or surety, acquired directly or by assignment or otherwise,
liquidated or unliquidated, regardless of how they arise or by what
agreement or instrument they may be evidenced, including, without
limitation, all loans, advances and other extensions of credit and all
covenants, agreements, and provisions contained in all loan and other
agreements between the parties. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the
Loan Agreements."
SECTION 3. All references in the Security Agreement to "this Security
Agreement" shall hereafter be to the Security Agreement as amended by this
First Amendment.
SECTION 4. The "Loan Documents" or a "Loan Document," when used in the
Security Agreement, shall mean the "Loan Documents" as defined in the Loan
Agreements.
SECTION 5. The Security Agreement is hereby amended by replacing all
references therein to the "Loan Agreement" with the "Loan Agreements."
SECTION 6. It is the intention of the parties hereto that this First
Amendment shall not constitute a novation and shall in no way adversely affect
or impair the validity of the "Loan Documents" (as defined in the Loan
Agreements, as amended), it being the intention of the parties hereto merely to
amend the Security Agreement expressly set forth herein. To the extent not
inconsistent herewith, all of the terms and conditions of the Security
Agreement shall remain in full force and effect and are hereby ratified and
confirmed by the Debtor.
SECTION 7. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
SECTION 8. This First Amendment shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
(Signatures on the next page)
-3-
<PAGE> 4
First Amendment to Security Agreement/MCTC
Loan No. T0362
Loan No. T0388
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
the duly authorized officers of the respective parties, after a due reading of
the whole.
At Lake Charles, Louisiana, on July 1, 1996.
MERCURY CELLULAR TELEPHONE COMPANY
By: /s/ ROBERT PIPER
--------------------------------
Name: Robert Piper
--------------------------
Title: President
Attest: /s/ THOMAS G. HENNING
----------------------------
Name: Thomas G. Henning
----------------------
Title: Secretary
[CORPORATE SEAL]
Witnesses to all Signatures:
/s/ SHEILA KING
- -------------------------------------------
Witness
/s/ PAT HAMILTON
- -------------------------------------------
Witness
[ILLEGIBLE]
- -------------------------------------------
Notary Public
My commission expires: LIFE TIME COMMISSION
---------------------
[NOTARIAL SEAL]
[Signatures Continued on Next Page]
-4-
<PAGE> 5
First Amendment to Security Agreement/MCTC
Loan No. T0362
Loan No. T0388
[Signatures Continued from Previous Page]
At Atlanta, Georgia on July 2, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
------------------------------------------
Name: Mary Kay Deering
---------------------------------------
Title: Vice President
--------------------------------------
Witnesses to all Signatures:
/s/ SHAUNE KEENAN
- -----------------------------------
Witness
[ILLEGIBLE]
- -----------------------------------
Witness
/s/ MARIANNE R. HOWELL
- -----------------------------------
Notary Public
Notary Public, Cobb County, Georgia
My commission expires: My Commission Expires April 25, 1999
-------------------------------------
[NOTARIAL SEAL]
-5-
<PAGE> 6
Loan No. T0362
Loan No. T0388
FIRST AMENDMENT AND SUPPLEMENT TO
MORTGAGE AND SECURITY AGREEMENT
<TABLE>
<S> <C> <C> <C>
MORTGAGOR: MERCURY CELLULAR TELEPHONE COMPANY MORTGAGEE: COBANK, ACB
1 LAKESHORE DRIVE, CM TOWER (TIN: 84-1102254)
SUITE 1495 200 GALLERIA PARKWAY
P.O. DRAWER 3104 SUITE 1900
LAKE CHARLES, LA 70602-3104 ATLANTA, GA 30339
</TABLE>
<PAGE> 1
EXHIBIT 4.30
FIRST AMENDMENT AND SUPPLEMENT TO
MORTGAGE AND SECURITY AGREEMENT
UNITED STATES OF AMERICA
STATE OF LOUISIANA
PARISH OF CALCASIEU
BY:
MERCURY CELLULAR TELEPHONE COMPANY
IN FAVOR OF:
COBANK, ACB
AND ANY FUTURE HOLDER OR HOLDERS
BEFORE ME, THE RESPECTIVE UNDERSIGNED NOTARIES PUBLIC, AND IN THE
PRESENCE OF THE RESPECTIVE UNDERSIGNED COMPETENT WITNESSES;
PERSONALLY CAME AND APPEARED:
MERCURY CELLULAR TELEPHONE COMPANY, TIN: 72-1099261, A
CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING
UNDER THE LAWS OF THE STATE OF LOUISIANA, AND HAS ITS REGISTERED
OFFICES AT 1 LAKESHORE DRIVE, CM TOWER, SUITE 1495, P. O. DRAWER
3104, LAKE CHARLES, LA 70602-3104 APPEARING HEREIN THROUGH ITS
DULY AUTHORIZED REPRESENTATIVE(S), PURSUANT TO A RESOLUTION OF
ITS BOARD OF DIRECTORS, A CERTIFIED COPY OF WHICH IS ATTACHED
HERETO AND EXPRESSLY MADE A PART HEREOF (THE "MORTGAGOR"); AND
COBANK, ACB, TIN: 84-1102254, A BANK CHARTERED UNDER THE LAWS OF
THE UNITED STATES OF AMERICA, WITH AN OFFICE AT 200 GALLERIA
PARKWAY, SUITE 1900, ATLANTA, GEORGIA 30339 ("MORTGAGEE");
WHO DECLARED THAT:
THIS FIRST AMENDMENT AND SUPPLEMENT TO MORTGAGE (this "First
Amendment") is made and entered into as of July 1, 1996, by and
between the Mortgagor and Mortgagee.
<PAGE> 2
FIRST AMENDMENT TO MORTGAGE PAGE 2
RECITALS:
WHEREAS, the Mortgagee and CTC Financial, Inc. (the "Borrower") have
entered into that certain Loan Agreement, dated as of April 20, 1995 (the
"Original Loan Agreement"); and
WHEREAS, the funds advanced to the Borrower pursuant to the Original
Loan Agreement were reloaned by the Borrower to the Mortgagor for the purposes
set forth in the Original Loan Agreement; and
WHEREAS, as an inducement to the Mortgagee to enter into the Original
Loan Agreement and to make the loan provided for therein, the Mortgagor entered
into that certain Continuing Guaranty, dated as of April 20, 1995 (the
"Original Guaranty"), for the benefit of CoBank, pursuant to which the
Mortgagor guaranteed the "Obligations" as therein defined; and
WHEREAS, as security for the Mortgagor's obligations under the Original
Guaranty and the "Obligations" as therein defined, the Mortgagor executed and
delivered that certain Mortgage and Security Agreement, dated as of April 20,
1995 (the "Mortgage"), pursuant to which the Mortgagor granted to CoBank a
first priority lien on the "Property" as therein defined; and
WHEREAS, the Mortgagee and the Borrower have entered into that certain
Loan Agreement, dated as of even date herewith (the "Additional Loan
Agreement"); and
WHEREAS, the funds advanced to the Borrower pursuant to the Additional
Loan Agreement will be reloaned by the Borrower to the Mortgagor for the
purposes set forth in the Additional Loan Agreement; and
WHEREAS, as an inducement to the Mortgagee to enter into the Additional
Loan Agreement and to make the loan provided for therein, the Mortgagor has
agreed to amend the Original Guaranty as set forth in that certain First
Amendment and Supplement to;
WHEREAS, as an inducement to the Mortgagee to enter into the Additional
Loan Agreement and to make the loan provided for therein, and to secure the
Mortgagee's "Obligations" under the Guaranty, the Mortgagor has agreed to amend
the Mortgage as herein provided;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the Mortgagor hereby agrees with CoBank as follows:
SECTION 1. DEFINITIONS. Capitalized terms, when used in this First
Amendment, unless otherwise defined herein, shall have the meanings ascribed to
them in the Mortgage.
<PAGE> 3
FIRST AMENDMENT TO MORTGAGE PAGE 3
SECTION 2. The Mortgage is hereby amended by deleting from its
Definitions Section the definitions for "CTC Note," "Guaranty," "Indebtedness,"
"Loan Agreement" and "Notes" in their entirety and substituting in lieu thereof
the following definitions:
"CTC NOTES. The words "CTC Notes" mean, collectively, that certain
Promissory Note dated July 1, 1996, made by the Borrower to the order of
the Mortgagee, in the original principal amount of $18,000,000, and that
certain Promissory Note, dated July 1, 1996, made by the Borrower to the
order of CoBank, in the original principal amount of $13,000,000 (as the
same may be amended, supplemented, modified or restated from time to
time).
GUARANTY. The word "Guaranty" means that certain Continuing Guaranty,
dated as of April 20, 1995, made by the Mortgagor to the Mortgagee, as
amended by that certain First Amendment and Supplement to Continuing
Guaranty, dated as of July 1, 1996, securing among other things, the CTC
Notes, as such amended Continuing Guaranty may be amended, supplemented,
modified or restated from time to time.
INDEBTEDNESS. The word "Indebtedness" means individually, collectively
and interchangeably the CTC Notes and any and all present and future
loans, advances, and/or other extensions of credit obtained and/or to be
obtained by Mortgagor from Mortgagee, directly or indirectly, as well as
Mortgagee's successors and assigns, from time to time, one or more
times, now and in the future, and any and all promissory notes
evidencing such present and/or future loans, advances, and/or other
extensions of credit, including, without limitation, the Notes, and any
and all amendments thereto and/or substitutions therefor, and any and
all renewals, extensions and refinancings thereof, as well as any and
all other obligations, including, without limitation, Mortgagor's
covenants and agreements in any present or future guaranty, loan or
credit agreement or any other agreement, document or instrument executed
by Mortgagor, including, without limitation, the Guaranty, and
liabilities that Mortgagor may now and/or in the future owe to and/or
incur in favor of Mortgagee, whether direct or indirect, or by way of
assignment or purchase of a participation interest, and whether related
or unrelated, or whether committed or purely discretionary, and whether
absolute or contingent, liquidated or unliquidated, voluntary or
involuntary, determined or undetermined, due or to become due, and
whether now existing or hereafter arising, or otherwise secured or
unsecured, whether Mortgagor is obligated alone or with others on a
"solidary" or "joint and several" basis, as a principal obligor or as a
surety, guarantor, or endorser, of every nature and kind whatsoever,
whether or not any such Indebtedness may be barred under any statute of
limitations or prescriptive period or may be or become otherwise
unenforceable or voidable for any reason whatsoever. Notwithstanding
any other provision of this Mortgage, the maximum amount of Indebtedness
secured hereby shall be limited to $31,000,000.
<PAGE> 4
FIRST AMENDMENT TO MORTGAGE PAGE 4
LOAN AGREEMENTS. The words "Loan Agreements" shall mean, collectively,
that certain Loan Agreement, dated as of April 20, 1995, by and between
the Borrower and the Mortgagee, and that certain Loan Agreement, dated
as of July 1, 1996, by and between the Borrower and the Mortgagee (as
either of the same may be amended, supplemented or modified from time to
time).
NOTES. The word "Notes" shall mean, collectively, that certain
Promissory Note, dated April 20, 1995, made by the Mortgagor to the
order of the Borrower and assigned to the Mortgagee, in the original
principal amount of $18,000,000, and that certain Promissory Note, dated
July 1, 1996, made by the Mortgagor to the order of the Borrower and
assigned to the Mortgagee, in the original principal amount of
$13,000,000 (as either of the same may be amended, supplemented,
modified or restated from time to time)."
SECTION 3. The Mortgage is hereby amended by deleting its Notices
Section in its entirety and substituting in lieu thereof the following Section:
"NOTICES. All demands, notices, reports, approvals, designations, or
directions required or permitted to be given hereunder shall be in
writing and shall be deemed to be duly given upon delivery, if delivered
by "Express Mail," overnight courier, messenger or other form of hand
delivery or sent by telegram or facsimile transmission, or three (3)
days mail if sent by certified or registered mail, to the parties at the
following addresses (or such other address for a party as shall be
specified by like notice):
As to Mortgagor: Mercury Cellular Telephone Company
1 Lakeshore Drive, CM Tower
Suite 1495
P.O. Drawer 3104
Lake Charles, LA 70602-3104
Attn: Dusty Dumas; cc: Thomas G. Henning
Fax No.: (318) 439-0769
As to Mortgagee: National Bank for Cooperatives
200 Galleria Parkway
Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No.: (770) 618-3202
and as to any other person, firm, corporation or governmental body or
agency having an interest herein by reason of being a Mortgagee or
otherwise, at the last address designated by such person, firm,
corporation, governmental body or agency to Mortgagor and Mortgagee."
<PAGE> 5
FIRST AMENDMENT TO MORTGAGE PAGE 5
SECTION 4. All references in the Mortgage to "this Mortgage" shall
hereafter be to the Mortgage as amended by this First Amendment.
SECTION 5. The Mortgage is hereby amended and supplemented by
deleting all references therein to the "CTC Note," "Note" and "Loan Agreement"
and substituting in lieu thereof the words "CTC Notes," "Notes" and "Loan
Agreements," respectively.
SECTION 6. After giving effect to the amendments to and restatement
of the Mortgage as set forth in this First Amendment, the representations and
warranties of the Mortgagor set forth in the Mortgage are true and correct as
of the date hereof as if made on the date hereof.
SECTION 7. It is the intention of the parties hereto that this First
Amendment shall not constitute a novation, it being the intention of the
parties hereto merely to amend the Mortgage as expressly set forth herein. To
the extent not inconsistent herewith, all of the terms and conditions of the
Mortgage shall remain in full force and effect and are hereby ratified and
confirmed by the Mortgagor and CoBank.
SECTION 8. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
SECTION 9. This First Amendment shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
[Signatures on Next Page]
<PAGE> 6
FIRST AMENDMENT TO MORTGAGE PAGE 6
THUS DONE AND PASSED, AS OF THE DAY, MONTH AND YEAR FIRST WRITTEN ABOVE, IN THE
PRESENCE OF THE RESPECTIVE UNDERSIGNED NOTARIES AND THE RESPECTIVE UNDERSIGNED
COMPETENT WITNESSES, WHO HEREUNTO SIGN THEIR NAMES AFTER READING OF THE WHOLE.
WITNESS: MORTGAGOR:
MERCURY CELLULAR TELEPHONE COMPANY
X /s/ SHEILA KING
---------------------------
BY: /s/ ROBERT PIPER
-----------------------------------
X /s/ PAT HAMILTON NAME: Robert Piper
--------------------------- --------------------------------
TITLE: President
------------------------------
ATTEST: /s/ THOMAS G. HENNING
-------------------------------
NAME: Thomas G. Henning
-------------------------------
TITLE: SECRETARY
[ILLEGIBLE]
- -----------------------------
NOTARY PUBLIC
MY COMMISSION EXPIRES Life Time Commission
-----------------------
[NOTARIAL SEAL]
(Signatures Continued on Next Page)
<PAGE> 7
FIRST AMENDMENT TO MORTGAGE PAGE 7
(Signatures Continued from Previous Page)
WITNESS: MORTGAGEE:
COBANK, ACB
X /s/ SHAUNE KEENAN
---------------------------
BY: /s/ MARY KAY DEERING
-------------------------------------
X [ILLEGIBLE] NAME: Mary Kay Deering
--------------------------- ----------------------------------
TITLE: Vice President
----------------------------------
/s/ MARIANNE R. HOWELL
- ----------------------------
NOTARY PUBLIC
Notary Public, Cobb County, Georgia
MY COMMISSION EXPIRES My Commission Expires April 25, 1999
------------------------------------
[NOTARIAL SEAL]
<PAGE> 1
EXHIBIT 4.31
LOAN NO. T0362
LOAN NO. T0388
COBANK, ACB
FIRST AMENDMENT AND SUPPLEMENT TO
LIMITED RECOURSE CONTINUING GUARANTY
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE ME, the respective undersigned Notaries Public, and in the
presence of the respective undersigned competent witnesses, personally came and
appeared the party listed below, who, after being duly sworn, did state:
THIS FIRST AMENDMENT AND SUPPLEMENT TO LIMITED RECOURSE CONTINUING
GUARANTY (this "First Amendment") is made as of July 1, 1996, by and between
CAMERON COMMUNICATIONS CORPORATION ("CCC") and COBANK, ACB ("CoBank"), and
amends that certain Limited Recourse Continuing Guaranty, dated as of April 20,
1995 (the "Guaranty") made by CCC for the benefit of CoBank.
R E C I T A L S:
WHEREAS, CCC owns 96% of the capital stock of Mercury Cellular Telephone
Company ("MCTC"); and
WHEREAS, CoBank and CTC Financial, Inc. (the "Borrower") have entered
into that certain Loan Agreement, dated as of April 20, 1995 (as the same may
be amended, supplemented, extended or restated from time to time, the "First
Loan Agreement"), providing for a loan of up to $18,000,000 (the "First Loan"),
and into that certain Loan Agreement, dated as of even date herewith (the
"Second Loan Agreement"; the First Loan Agreement and the Second Loan
Agreement, collectively, the "Loan Agreements"), providing for a loan of up to
$13,000,000 (the "Second Loan"; the First Loan and the Second Loan,
collectively, the "Loans"); and
WHEREAS, the proceeds of the Loans have been or will be reloaned by the
Borrower to MCTC for the purposes set forth in the Loan Agreements; and
<PAGE> 2
First Amendment to Limited Recourse
Continuing Guaranty/CCC
Loan No. T0362
Loan No. T0388
WHEREAS, as an inducement to CoBank to enter into the Loan Agreements
and to make the Loans, CCC has agreed to pledge its stock of MCTC pursuant to a
Pledge Agreement, dated as of April 20, 1995, as amended by that certain First
Amendment and Supplement to Pledge Agreement, dated as of even date herewith,
which stock shall be used as the sole collateral for CCC's guarantee of the
Obligations as defined in the Guaranty, provided that CoBank's sole recourse
with respect to the guarantee is against such stock pursuant to such Pledge
Agreement;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, CCC and CoBank hereby agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms when used in this First
Amendment, unless otherwise defined herein, shall have the meanings ascribed to
them in the Guaranty.
SECTION 2. Section 2 of the Guaranty is hereby amended and restated
to read in its entirety as follows:
"SECTION 2. OBLIGATIONS. "Obligations" shall mean (a) the
principal, interest and other amounts becoming due and payable, whether
by acceleration or otherwise, under that certain Promissory Note, dated
of April 20, 1995, made by the Borrower to the order of CoBank, in the
original principal amount of $18,000,000 (as the same may be amended,
extended, renewed or replaced from time to time, the "First Note"); (b)
the principal, interest and other amounts becoming due and payable,
whether by acceleration or otherwise, under that certain Promissory
Note, dated of April 20, 1995, made by MCTC to the order of the
Borrower, and assigned to CoBank, in the original principal amount of
$18,000,000 (as the same may be amended, extended, renewed or replaced
from time to time, the "First MCTC Note"); (c) the principal, interest
and other amounts becoming due and payable, whether by acceleration or
otherwise, under that certain Promissory Note, dated July 1, 1996, made
by the Borrower to the order of CoBank, in the original principal amount
of $13,000,000 (as the same may be amended, extended, renewed or
replaced from time to time, the "Second Note"); (d) the principal,
interest and other amounts becoming due and payable, whether by
acceleration or otherwise, under that certain Promissory Note, dated
July 1, 1996, made by MCTC to the order of the Borrower, and assigned to
CoBank, in the original principal amount of $13,000,000 (as the same may
be amended, extended, renewed or replaced from time to time, the "Second
MCTC Note"; the First Note, the Second Note, the First MCTC Note, and
the Second MCTC Note, collectively, the "Notes"); (e) all other payments
or performances to be made by the Borrower or MCTC under the other Loan
Documents to which each is a party; and (f) all other indebtedness and
liabilities of MCTC to CoBank of every kind and description whatsoever,
whether now existing or hereafter arising, fixed or contingent, as
-2-
<PAGE> 3
First Amendment to Limited Recourse
Continuing Guaranty/CCC
Loan No. T0362
Loan No. T0388
primary obligor or as guarantor or surety, acquired directly or by
assignment or otherwise, liquidated or unliquidated, regardless of how
they arise or by what agreement or instrument they may be evidenced,
including, without limitation, all loans, advances and other extensions
of credit and all covenants, agreements, and provisions contained in all
loan and other agreements between the parties."
SECTION 3. Subsection L of Section 5 of the Guaranty is hereby
amended and restated to read in its entirety as follows:
"(L) FINANCIAL CONDITION. The liability and obligations of CCC
incurred or arising under this Guaranty and the other Loan Documents to
which it is a party of the Borrower incurred or arising under the Loan
Agreements, the First Note, the Second Note and the other Loan Documents
to which it is a party, and of MCTC incurred or arising under the MCTC
Guaranty, the First MCTC Note, the Second MCTC Note or the other Loan
Documents to which it is a party, will benefit substantially CCC
directly and indirectly, and CCC's board of directors has made that
determination. CCC has full and complete access to all of the Loan
Documents and other documents relating to the Obligations, has reviewed
them and is fully aware of the meaning and effect of their contents.
CCC is fully informed of all circumstances that bear upon the risks of
executing this Guaranty which a diligent inquiry would reveal. CCC has
adequate means to obtain from the Borrower and MCTC, on a continuing
basis, information concerning the financial condition of the Borrower or
MCTC and is not depending on CoBank to provide such information, now or
in the future. CCC agrees that CoBank will have no obligation to advise
or notify CCC of or provide CCC with any data or information."
SECTION 4. Subsection B of Section 7 of the Guaranty is hereby
amended and restated to read in its entirety as follows:
"(B) BINDING EFFECT. This Guaranty shall inure to the benefit
of and be binding upon the parties hereto and their respective
successors and assigns, including any holder or owner of any of the
Notes or any other Loan Document."
SECTION 5. All references in the Guaranty to "this Guaranty" shall
hereafter be to the Guaranty as amended by this First Amendment.
SECTION 6. The Guaranty is hereby amended by replacing all references
in the Guaranty to the "Loan Agreement" with the "Loan Agreements."
-3-
<PAGE> 4
First Amendment to Limited Recourse
Continuing Guaranty/CCC
Loan No. T0362
Loan No. T0388
SECTION 7. After giving effect to the amendments to and restatement of
the Guaranty as set forth in this First Amendment, the representations and
warranties of CCC set forth in the Guaranty, are true and correct as of the
date hereof as if made on the date hereof.
SECTION 8. It is the intention of the parties hereto that this First
Amendment shall not constitute a novation, it being the intention of the
parties hereto merely to amend the Guaranty as expressly set forth herein. To
the extent not inconsistent herewith, all of the terms and conditions of the
Guaranty shall remain in full force and effect and are hereby ratified and
confirmed by CCC and CoBank.
SECTION 9. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
SECTION 10. This First Amendment shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
[Signatures on Next Page]
-4-
<PAGE> 5
First Amendment to Limited Recourse
Continuing Guaranty/CCC
Loan No. T0362
Loan No. T0388
THUS DONE AND SIGNED, on July 1, 1996, in the City of Lake
Charles, State of Louisiana, before me, notary public, after a due reading of
the whole.
CAMERON COMMUNICATIONS CORPORATION
By: /s/ WILLIAM L. HENNING, JR.
----------------------------------------
Name: William L. Henning, Jr.
----------------------------------
Title: President
Witness to all signatures:
Attest: /s/ LENA B. HENNING
------------------------------------
Name: Lena B. Henning
-------------------------------
Title: Secretary
/s/ SHEILA KING
- ----------------------------
Witness
/s/ CAROLYN NUNEZ [CORPORATE SEAL]
- ----------------------------
Witness
(ILLEGIBLE)
- ----------------------------
Notary Public
My commission expires: LIFETIME COMMISSION
[NOTARIAL SEAL]
[Signatures Continued on Next Page]
-5-
<PAGE> 6
First Amendment to Limited Recourse
Continuing Guaranty/CCC
Loan No. T0362
Loan No. T0388
[Signatures Continued from Previous Page]
At Atlanta, Georgia, on July 2, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
---------------------------------------
Name: Mary Kay Deering
----------------------------------
Title: Vice President
---------------------------------
Witnesses to signature:
/s/ SHAWNE KEENAN
- -----------------------------------
Witness
/s/ PETE ALFORD
- -----------------------------------
Witness
/s/ MARIANNE R. HOWELL
- -----------------------------------
Notary Public
Notary Public, Cobb County, Georgia
My commission expires: April 25, 1999
-----------------------------------
[NOTARIAL SEAL]
-6-
<PAGE> 1
EXHIBIT 4.32
LOAN NO. T0362
LOAN NO. T0388
COBANK, ACB
FIRST AMENDMENT AND SUPPLEMENT TO PLEDGE AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the respective undersigned Notaries Public, and in the presence
of the undersigned respective competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS FIRST AMENDMENT AND SUPPLEMENT TO PLEDGE AGREEMENT (this "First
Amendment") is made as of July 1, 1996, by and between CAMERON COMMUNICATIONS
CORPORATION, as pledgor (the "Pledgor"), and COBANK, ACB, as pledgee
("CoBank"), amending that certain Pledge Agreement, dated as of April 20, 1995
(the "Pledge Agreement"), by and between the Pledgor and CoBank.
R E C I T A L S:
WHEREAS, the Pledgor owns 96% of the capital stock of Mercury Cellular
Telephone Company ("MCTC"); and
WHEREAS, CoBank and CTC Financial, Inc. (the "Borrower") have entered
into that certain Loan Agreement, dated as of April 20, 1995 (as the same may
be amended, supplemented, extended or restated from time to time, the "First
Loan Agreement"), providing for a loan of up to $18,000,000 (the "First Loan"),
and into that certain Loan Agreement, dated as of even date herewith (the
"Second Loan Agreement"; the First Loan Agreement and the Second Loan
Agreement, collectively, the "Loan Agreements"), providing for a loan of up to
$13,000,000 (the "Second Loan"; the First Loan and the Second Loan,
collectively, the "Loans"); and
WHEREAS, the proceeds of the First Loan have been reloaned by the
Borrower to MCTC for the purposes set forth in the First Loan Agreement and the
proceeds of the Second Loan will be reloaned by the Borrower to MCTC for the
purposes set forth in the Second Loan Agreement; and
<PAGE> 2
First Amendment to Pledge Agreement/CCC
Loan No. T0362
Loan No. T0388
WHEREAS, as an inducement to CoBank to execute the Loan Agreements and
to make the Loans, the Pledgor has made that certain Limited Recourse
Continuing Guaranty, dated as of April 20, 1995, as amended by that certain
First Amendment and Supplement to Limited Recourse Guaranty, dated as of even
date herewith (as so amended and as the same may hereafter be amended,
supplemented, extended or restated from time to time, the "CCC Limited Recourse
Guaranty"), for the benefit of CoBank; and
WHEREAS, to secure the Pledgor's obligations to CoBank under the CCC
Limited Recourse Guaranty and the "Obligations" (as therein defined), the
Pledgor has agreed to pledge to CoBank the hereinafter defined Pledged
Collateral on the terms and conditions set forth in the Pledge Agreement as
amended by this First Amendment as hereby amended;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the Pledgor and CoBank agree as follows:
SECTION 1. Terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Pledge Agreement.
SECTION 2. Section 2 of the Pledge Agreement is hereby amended and
restated to read in its entirety as follows:
"SECTION 2. PLEDGE. To secure the payment or performance of
the Obligations, including, without limitation, the payment of all
principal, interest and other amounts becoming due and payable,
whether by acceleration or otherwise, under that certain Promissory
Note, dated April 20, 1995, made by the Borrower to the order of
CoBank (as the same may be amended, extended, renewed or replaced from
time to time, the "First Note"), that certain Promissory Note, dated
July 1, 1996, made by the Borrower to the order of CoBank (as the same
may be amended, extended, renewed or replaced from time to time, the
"Second Note"; the First Note and the Second Note, collectively, the
"Notes"), that certain Promissory Note, dated as of April 20, 1995,
made by MCTC to the order of the Borrower and assigned to CoBank (as
the same may be amended, extended, renewed or replaced from time to
time, the "First MCTC Note"), and that certain Promissory Note, dated
July 1, 1996, made by MCTC to the order of the Borrower and assigned
to CoBank (as the same may be amended, extended, renewed or replaced
from time to time, the "Second MCTC Note"; the First MCTC Note and the
Second MCTC Note, collectively, the "MCTC Notes") and the performance
by the Pledgor under the CCC Limited Recourse Guaranty and the
performance by the Pledgor under the CCC Limited Recourse Guaranty as
amended by that certain First Amendment and Supplement to Continuing
Guarantee, dated as of July 1,1996 (collectively, including the
Obligations, the "Secured Obligations"), the Pledgor hereby pledges,
hypothecates, assigns, transfers, sets over and delivers unto CoBank,
and grants to CoBank a lien upon
-2-
<PAGE> 3
First Amendment to Pledge Agreement/CCC
Loan No. T0362
Loan No. T0388
and a security interest in (a) all now owned or hereafter acquired
capital stock of MCTC; and (b) any cash, additional shares or
securities or other property at any time and from time to time
receivable or otherwise distributable in respect of, in exchange for,
or in liquidation of, any and all such stock, together with the
proceeds thereof (all such shares, capital stock, securities, cash,
property and other proceeds thereof, collectively, the "Pledged
Collateral"). Upon delivery to CoBank, (i) any securities now or
hereafter included in the Pledged Collateral (the "Pledged
Securities") shall be accompanied by duly executed stock powers in
blank and by such other instruments or documents as CoBank or its
counsel may reasonably request and (ii) all other property comprising
part of the Pledged Collateral shall be accompanied by proper
instruments of assignment duly executed by the Pledgor and by such
other instruments or documents as CoBank or its counsel may reasonably
request. Each delivery of certificates for such Pledged Securities
shall be accompanied by a schedule showing the number of shares and
the numbers of the certificates therefor, theretofore and then being
pledged hereunder, which schedules shall be attached hereto as
Schedule 1 and made a part hereof. Each schedule so delivered shall
supersede any prior schedules so delivered.
TO HAVE AND TO HOLD the Pledged Collateral, together with all
rights, titles, interests, powers, privileges and preferences
pertaining or incidental thereto, unto CoBank, its successors and
assigns, forever, subject, however, to the terms, covenants and
conditions hereinafter set forth."
SECTION 3. All references in the Pledge Agreement and any other
Loan Documetns (as defined in the Loan Agreemetns) to "this Pledge Agreement"
shall hereafter be to the Pledge Agreement as amended by this First Amendment.
SECTION 4. After giving effect to the amendments to and the
restatement of the Pledge Agreement set forth in this First Amendment, the
representations and warranties of CCC set forth in the Pledge Agreement are
true and correct as of the date hereof as if made on the date hereof.
SECTION 5. It is the intention of the parties hereto that this
First Amendment shall not constitute a novation, it being the intention of the
parties hereto merely to amend the Pledge Agreement as expressly set forth
herein. To the extent not inconsistent herewith, all of the terms and
conditions of the Pledge Agreement shall remain in full force and effect and
are hereby ratified and confirmed by CCC and CoBank.
SECTION 6. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted
-3-
<PAGE> 4
First Amendment to Pledge Agreement/CCC
Loan No. T0362
Loan No. T0388
successors and assigns, and all of which taken together shall constitute one
and the same agreement.
SECTION 7. This First Amendment shall be governed by and construed
in accordance with the laws of the State of Louisiana, without reference to
choice of law doctrine.
[Signatures Follow on Next Page]
-4-
<PAGE> 5
First Amendment to Pledge Agreement/CCC
Loan No. T0362
Loan No. T0388
THUS DONE AND SIGNED, in several counterparts at the places and on the
dates indicated below, and in the presence of the respective Notaries Public
and the respective undersigned witnesses indicated below, by duly authorized
officers of the respective parties, after a due reading of the whole.
At Lake Charles, Louisiana, on July 1, 1996.
CAMERON COMMUNICATIONS
CORPORATION
By: /s/ WILLIAM L. HENNING, JR.
-------------------------------------
Name: William L. Henning, Jr.
--------------------------------
Title: President
Attest: /s/ LENA B. HENNING
---------------------------------
Name: Lena B. Henning
----------------------------
Title: Secretary
[CORPORATE SEAL]
Witnesses to all signatures:
/s/ SHEILA KING
- -------------------------------------------
Witness
/s/ CAROLYN NUNEZ
- -------------------------------------------
Witness
(ILLEGIBLE)
- -------------------------------------------
Notary Public
My commission expires: LIFETIME COMMISSION
--------------------
[NOTARIAL SEAL]
[Signatures Continued on Next Page]
-5-
<PAGE> 6
First Amendment to Pledge Agreement/CCC
Loan No. T0362
Loan No. T0388
[Signatures Continued from Previous Page]
At Atlanta, Georgia, on July 2, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
-----------------------------
Name: Mary Kay Deering
------------------------
Title: Vice President
----------------------
Witnesses to signature:
/s/ SHAWNE KEENAN
- -------------------------------------------
Witness
/s/ PETE ALFORD
- -------------------------------------------
Witness
/s/ MARIANNE R. HOWELL
- -------------------------------------------
Notary Public
Notary Public, Cobb County, Georgia
My commission expires: My Commission expires April 25, 1999
------------------------------------
[NOTARIAL SEAL]
-6-
<PAGE> 1
EXHIBIT 4.33
LOAN NO. T0362
LOAN NO. T0388
COBANK, ACB
FIRST AMENDMENT AND SUPPLEMENT TO
LIMITED RECOURSE CONTINUING GUARANTY
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the respective undersigned Notaries Public, and in the presence
of the respective undersigned competent witnesses, personally came and appeared
the party listed below, who, after being duly sworn, did state:
THIS FIRST AMENDMENT AND SUPPLEMENT TO LIMITED RECOURSE CONTINUING
GUARANTY (this "First Amendment") is made as of July 1, 1996, by and between
MERCURY, INC. ("Mercury") and COBANK, ACB ("CoBank"), and amends that certain
Limited Recourse Continuing Guaranty, dated as of April 20, 1995 (the
"Guaranty"), made by Mercury for the benefit of CoBank.
R E C I T A L S:
WHEREAS, Mercury owns 4% of the capital stock of Mercury Cellular
Telephone Company ("MCTC"); and
WHEREAS, CoBank and CTC Financial, Inc. (the "Borrower") have entered
into that certain Loan Agreement, dated April 20, 1995 (as the same may be
amended, supplemented, extended or restated from time to time, the "First Loan
Agreement"), providing for a loan of up to $18,000,000 (the "First Loan") and
into that certain Loan Agreement, dated as of even date herewith (the "Second
Loan Agreement"; the First Loan Agreement and the Second Loan Agreement,
collectively, the "Loan Agreements"), providing for a loan of up to $13,000,000
(the "Second Loan"; the First Loan and the Second Loan, collectively, the
"Loans"); and
WHEREAS, the proceeds of the Loans has been or will be reloaned by the
Borrower to MCTC for the purposes set forth in the Loan Agreements; and
<PAGE> 2
First Amendment to Limited Recourse
Continuing Guaranty/Mercury
Loan No. T0362
Loan No. T0388
WHEREAS, as an inducement to CoBank to enter into the Loan Agreements
and to make the Loans, Mercury has agreed to pledge its stock of MCTC pursuant
to a Pledge Agreement, dated as of April 20, 1995, as amended by that certain
First Amendment and Supplement to Pledge Agreement, dated as of even date
herewith, which stock shall be used as the sole collateral for Mercury's
guarantee of the Obligations as defined in the Guaranty, provided that CoBank's
sole recourse with respect to the guarantee is against such stock pursuant to
such Pledge Agreement;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, Mercury and CoBank hereby agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used in this First
Amendment, unless otherwise defined herein, shall have the meanings ascribed to
them in the Pledge Agreement.
SECTION 2. Section 2 of the Guaranty is hereby amended and restated to
read in its entirety as follows:
"SECTION 2. OBLIGATIONS. "Obligations" shall mean (a) the
principal, interest and other amounts becoming due and payable, whether
by acceleration or otherwise, under that certain Promissory Note, dated
of April 20, 1995, made by the Borrower to the order of CoBank, in the
original principal amount of $18,000,000 (as the same may be amended,
extended, renewed or replaced from time to time, the "First Note"); (b)
the principal, interest and other amounts becoming due and payable,
whether by acceleration or otherwise, under that certain Promissory
Note, dated of April 20, 1995, made by MCTC to the order of the
Borrower, and assigned to CoBank, in the original principal amount of
$18,000,000 (as the same may be amended, extended, renewed or replaced
from time to time, the "First MCTC Note"); (c) the principal, interest
and other amounts becoming due and payable, whether by acceleration or
otherwise, under that certain Promissory Note, dated July 1, 1996, made
by the Borrower to the order of CoBank, in the original principal amount
of $13,000,000 (as the same may be amended, extended, renewed or
replaced from time to time, the "Second Note"); (d) the principal,
interest and other amounts becoming due and payable, whether by
acceleration or otherwise, under that certain Promissory Note, dated
July 1, 1996, made by MCTC to the order of the Borrower, and assigned to
CoBank, in the original principal amount of $13,000,000 (as the same may
be amended, extended, renewed or replaced from time to time, the "Second
MCTC Note"; the First Note, the Second Note, the First MCTC Note, and
the Second MCTC Note, collectively, the "Notes"); (e) all other payments
or performances to be made by the Borrower or MCTC under the other Loan
Documents to which each is a party; and (f) all
-2-
<PAGE> 3
First Amendment to Limited Recourse
Continuing Guaranty/Mercury
Loan No. T0362
Loan No. T0388
other indebtedness and liabilities of MCTC to CoBank of every kind and
description whatsoever, whether now existing or hereafter arising, fixed
or contingent, as primary obligor or as guarantor or surety, acquired
directly or by assignment or otherwise, liquidated or unliquidated,
regardless of how they arise or by what agreement or instrument they may
be evidenced, including, without limitation, all loans, advances and
other extensions of credit and all covenants, agreements, and provisions
contained in all loan and other agreements between the parties."
SECTION 3. Subsection L of Section 5 of the Guaranty is hereby
amended and restated to read in its entirety as follows:
"(L) FINANCIAL CONDITION. The liability and obligations of
Mercury incurred or arising under this Guaranty and the other Loan
Documents to which it is a party of the Borrower incurred or arising
under the Loan Agreements, the First Note, the Second Note and the other
Loan Documents to which it is a party, and of MCTC incurred or arising
under the MCTC Guaranty, the First MCTC Note, the Second MCTC Note or
the other Loan Documents to which it is a party, will benefit
substantially Mercury directly and indirectly, and Mercury's board of
directors has made that determination. Mercury has full and complete
access to all of the Loan Documents and other documents relating to the
Obligations, has reviewed them and is fully aware of the meaning and
effect of their contents. Mercury is fully informed of all
circumstances that bear upon the risks of executing this Guaranty which
a diligent inquiry would reveal. Mercury has adequate means to obtain
from the Borrower and MCTC, on a continuing basis, information
concerning the financial condition of the Borrower or MCTC and is not
depending on CoBank to provide such information, now or in the future.
Mercury agrees that CoBank will have no obligation to advise or notify
Mercury of or provide Mercury with any data or information."
SECTION 4. Subsection B of Section 7 of the Guaranty is hereby
amended and restated to read in its entirety as follows:
"(B) BINDING EFFECT. This Guaranty shall inure to the benefit
of and be binding upon the parties hereto and their respective
successors and assigns, including any holder or owner of any of the
Notes or any other Loan Document."
SECTION 5. All references in the Guaranty to "this Guaranty" shall
hereafter be to the Guaranty as amended by this First Amendment.
-3-
<PAGE> 4
First Amendment to Limited Recourse
Continuing Guaranty/Mercury
Loan No. T0362
Loan No. T0388
SECTION 6. The Guaranty is hereby amended by replacing all
references in the Guaranty to the "Loan Agreement" with the "Loan Agreements."
SECTION 7. After giving effect to the amendments to and restatements
of the Guaranty set forth in this First Amendment, the representations and
warranties of CCC set forth in the Guaranty are true and correct as of the date
hereof as if made on the date hereof.
SECTION 8. It is the intention of the parties hereto that this First
Amendment shall not constitute a novation, it being the intention of the
parties hereto merely to amend the Guaranty as expressly set forth herein. To
the extent not inconsistent herewith, all of the terms and conditions of the
Guaranty shall remain in full force and effect and are hereby ratified and
confirmed by CCC and CoBank.
SECTION 9. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
SECTION 10. This First Amendment shall be governed by and construed in
accordance with the laws of the State of Louisiana, without reference to choice
of law doctrine.
[Signatures on next page]
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<PAGE> 5
First Amendment to Limited Recourse
Continuing Guaranty/Mercury
Loan No. T0362
Loan No. T0388
THUS DONE AND SIGNED, on July 1, 1996, in the City of Lake
Charles, State of Louisiana, before me, notary public, after a due reading of
the whole.
MERCURY, INC.
Witness to all signatures: By: /s/ WILLIAM L. HENNING, JR.
-----------------------------------
Name: William L. Henning, Jr.
------------------------------
Title: President
/s/ SHEILA KING
- ----------------------------
Witness Attest: /s/ THOMAS G. HENNING
-------------------------------
Name: Thomas G. Henning
--------------------------
Title: Secretary
/s/ PATRICIA HAMILTON
- ----------------------------
Witness [CORPORATE SEAL]
(Illegible)
- ----------------------------
Notary Public
My commission expires: (Illegible)
[NOTARIAL SEAL]
[Signatures Continued on Next Page]
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<PAGE> 6
First Amendment to Limited Recourse
Continuing Guaranty/Mercury
Loan No. T0362
Loan No. T0388
[Signatures Continued from Previous Page]
At Atlanta, Georgia, on July 2, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
----------------------------------------
Name: Mary Kay Deering
-----------------------------------
Title: Vice President
----------------------------------
Witnesses to signature:
/s/ SHAWNE KEENAN
- -----------------------------------
Witness
/s/ PETE ALFORD
- -----------------------------------
Witness
/s/ MARIANNE R. HOWELL
- -----------------------------------
Notary Public
Notary Public, Cobb County, Georgia
My commission expires: April 25, 1996
-----------------------------------
[NOTARIAL SEAL]
-6-
<PAGE> 1
EXHIBIT 4.34
LOAN NO. T0362
LOAN NO. T0388
COBANK, ACB
FIRST AMENDMENT AND SUPPLEMENT TO PLEDGE AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the respective undersigned Notaries Public, and in the presence
of the undersigned respective competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS FIRST AMENDMENT AND SUPPLEMENT TO PLEDGE AGREEMENT (this "First
Amendment") is made as of July 1, 1996, by and between MERCURY, INC., as
pledgor (the "Pledgor"), and COBANK, ACB, as pledgee ("CoBank"), amending that
certain Pledge Agreement, dated as of April 20, 1995 (the "Pledge Agreement"),
by and between the Pledgor and CoBank.
R E C I T A L S:
WHEREAS, the Pledgor owns 4% of the capital stock of Mercury Cellular
Telephone Company ("MCTC"); and
WHEREAS, CoBank and CTC Financial, Inc. (the "Borrower") have entered
into that certain Loan Agreement, dated as of April 20, 1995 (as the same may
be amended, supplemented, extended or restated from time to time, the "First
Loan Agreement"), providing for a loan of up to $18,000,000 (the "First Loan"),
and into that certain Loan Agreement, dated as of even date herewith (the
"Second Loan Agreement"; the First Loan Agreement and the Second Loan
Agreement, collectively, the "Loan Agreements"), providing for a loan of up to
$13,000,000 (the "Second Loan"; the First Loan and the Second Loan,
collectively, the "Loans"); and
WHEREAS, the proceeds of the First Loan have been reloaned by the
Borrower to MCTC for the purposes set forth in the First Loan Agreement and the
proceeds of the Second Loan will
<PAGE> 2
First Amendment to Pledge Agreement/Mercury
Loan No. T0362
Loan No. T0388
be reloaned by the Borrower to MCTC for the purposes set forth in the Second
Loan Agreement; and
WHEREAS, as an inducement to CoBank to execute the Loan Agreements and
to make the Loans, the Pledgor has made that certain Limited Recourse
Continuing Guaranty, dated as of April 20, 1995, as amended by that certain
First Amendment and Supplement to Limited Recourse Continuing Guaranty, dated
as of even date herewith (as so amended and as the same may be hereafter
amended, supplemented, extended or restated from time to time, the "Mercury
Limited Recourse Guaranty"), for the benefit of CoBank; and
WHEREAS, to secure the Pledgor's obligations to CoBank under the Mercury
Limited Recourse Guaranty and the "Obligations" (as therein defined), the
Pledgor has agreed to pledge to CoBank the hereinafter defined Pledged
Collateral on the terms and conditions set forth in this Pledge Agreement as
hereby amended;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the Pledgor and CoBank agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms, when used in this
First Amendment, unless otherwise defined herein, shall have the meanings
ascribed to them in the Pledge Agreement.
SECTION 2. Section 2 of the Pledge Agreement is hereby amended and
restated to read in its entirety as follows:
"SECTION 2. PLEDGE. To secure the payment or
performance of the Obligations, including, without limitation, the
payment of all principal, interest and other amounts becoming due and
payable, whether by acceleration or otherwise, under that certain
Promissory Note, dated April 20, 1995, made by the Borrower to the
order of CoBank (as the same may be amended, extended, renewed or
replaced from time to time, the "First Note"), that certain Promissory
Note, dated July 1, 1996, made by the Borrower to the order of CoBank
(as the same may be amended, extended, renewed or replaced from time
to time, the "Second Note"; the First Note and the Second Note,
collectively, the "Notes"), that certain Promissory Note, dated as of
April 20, 1995, made by MCTC to the order of the Borrower and assigned
to CoBank (as the same may be amended, extended, renewed or replaced
from time to time, the "First MCTC Note"), and that certain Promissory
Note, dated July 1, 1996, made by MCTC to the order of the Borrower
and assigned to CoBank (as the same may be amended, extended, renewed
or replaced from time to time, the "Second MCTC Note"; the First MCTC
Note and the Second MCTC Note, collectively, the "MCTC Notes") and the
performance by the Pledgor under the CCC
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<PAGE> 3
First Amendment to Pledge Agreement/Mercury
Loan No. T0362
Loan No. T0388
Limited Recourse Guaranty as amended by that certain First Amendment
and Supplement to Continuing Guaranty, dated as of July 1, 1996
(collectively, including the Obligations, the "Secured Obligations"),
the Pledgor hereby pledges, hypothecates, assigns, transfers, sets
over and delivers unto CoBank, and grants to CoBank a lien upon and a
security interest in (a) all now owned or hereafter acquired capital
stock of MCTC; and (b) any cash, additional shares or securities or
other property at any time and from time to time receivable or
otherwise distributable in respect of, in exchange for, or in
liquidation of, any and all such stock, together with the proceeds
thereof (all such shares, capital stock, securities, cash, property
and other proceeds thereof, collectively, the "Pledged Collateral").
Upon delivery to CoBank, (i) any securities now or hereafter included
in the Pledged Collateral (the "Pledged Securities") shall be
accompanied by duly executed stock powers in blank and by such other
instruments or documents as CoBank or its counsel may reasonably
request and (ii) all other property comprising part of the Pledged
Collateral shall be accompanied by proper instruments of assignment
duly executed by the Pledgor and by such other instruments or
documents as CoBank or its counsel may reasonably request. Each
delivery of certificates for such Pledged Securities shall be
accompanied by a schedule showing the number of shares and the numbers
of the certificates therefor, theretofore and then being pledged
hereunder, which schedules shall be attached hereto as Schedule 1 and
made a part hereof. Each schedule so delivered shall supersede any
prior schedules so delivered.
TO HAVE AND TO HOLD the Pledged Collateral, together with all
rights, titles, interests, powers, privileges and preferences
pertaining or incidental thereto, unto CoBank, its successors and
assigns, forever, subject, however, to the terms, covenants and
conditions hereinafter set forth."
SECTION 3. All references in the Pledge Agreement and any other
Loan Documents (as defined in the Loan Agreements) to "this Pledge Agreement"
shall hereafter be to the Pledge Agreement, as amended by this First Amendment.
SECTION 4. After giving effect to the amendments to and the
restatement of the Pledge Agreement set forth in this First Amendment, the
representations and warranties of CCC set forth in the Pledge Agreement are
true and correct as of the date hereof as if made on the date hereof.
SECTION 5. It is the intention of the parties hereto that this
First Amendment shall not constitute a novation, it being the intention of the
parties hereto merely to amend the Pledge Agreement as expressly set forth
herein. To the extent not inconsistent herewith, all of the terms and
conditions of the Pledge Agreement shall remain in full force and effect and
are hereby ratified and confirmed by Mercury and CoBank.
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<PAGE> 4
First Amendment to Pledge Agreement/Mercury
Loan No. T0362
Loan No. T0388
SECTION 6. This First Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and shall be binding
upon all parties and their respective permitted successors and assigns, and all
of which taken together shall constitute one and the same agreement.
SECTION 7. This First Amendment shall be governed by and construed
in accordance with the laws of the State of Louisiana, without reference to
choice of law doctrine.
(Signatures continued on next page.)
-4-
<PAGE> 5
First Amendment to Pledge Agreement/Mercury
Loan No. T0362
Loan No. T0388
THUS DONE AND SIGNED, in several counterparts at the places and on the
dates indicated below, and in the presence of the respective Notaries Public
and the respective undersigned witnesses indicated below, by duly authorized
officers of the respective parties, after a due reading of the whole.
At Lake Charles, Louisiana, on July 1, 1996.
MERCURY, INC.
By: /s/ WILLIAM L. HENNING, JR.
-----------------------------------
Name: William L. Henning, Jr.
------------------------------
Title: President
Attest: /s/ THOMAS G. HENNING
-------------------------------
Name: Thomas G. Henning
--------------------------
Title: Secretary
[CORPORATE SEAL]
Witnesses to all signatures:
/s/ SHEILA KING
- ----------------------------------------------
Witness
/s/ PAT HAMILTON
- ----------------------------------------------
Witness
(Illegible)
- ----------------------------------------------
Notary Public
My commission expires: (Illegible
-------------
[NOTARIAL SEAL]
[Signatures Continued on Next Page]
-5-
<PAGE> 6
First Amendment to Pledge Agreement/Mercury
Loan No. T0362
Loan No. T0388
[Signatures Continued from Previous Page]
At Atlanta, Georgia, on July 2, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
----------------------------------
Name: Mary Kay Deering
-----------------------------
Title: Vice President
----------------------------
Witnesses to signature:
/s/ SHAWNE KEENAN
- ----------------------------------------------
Witness
/s/ PETE ALFORD
- ----------------------------------------------
Witness
/s/ MARIANNE R. HOWELL
- ----------------------------------------------
Notary Public
Notary Public, Cobb County, Georgia
My commission expires: April 25, 1999
-----------------------------------
[NOTARIAL SEAL]
-6-
<PAGE> 1
EXHIBIT 4.35
LOAN NO. T0310
LOAN NO. T0347
COBANK, ACB
ACT OF SUBORDINATION
BEFORE ME, the respective undersigned Notaries Public, and in the
presence of the witnesses hereinafter named and undersigned, personally came
and appeared the parties listed below, who, after being duly sworn, did state:
THIS ACT OF SUBORDINATION (this "Agreement") is made and entered into as
of July 1, 1996, by MCTC COMPANY ("MCTC") and MISSISSIPPI ONE CELLULAR
TELEPHONE COMPANY ("Mississippi One"), in favor of COBANK, ACB, formerly known
as the National Bank for Cooperatives ("CoBank").
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, MCTC, Mississippi One and CoBank hereby agree as follows:
SECTION 1. SUBORDINATION OF DEBT. MCTC and Mississippi One agree that
all obligations of Mississippi One to MCTC, whether direct or indirect,
absolute or contingent, secured or unsecured, due or to become due, now
existing or hereafter arising, including, without limitation, that certain
Note, dated July 1, 1996, drawn by Mississippi One to the order of MCTC, in the
face principal amount of $13,000,000 (all such obligations, collectively, the
"Subordinated Debt"), are and shall be subordinate in payment and right of
payment to the prior payment in full of all obligations of Mississippi One to
CoBank, whether direct or indirect, absolute or contingent, secured or
unsecured, due or to become due, now existing or hereafter arising, principal,
interest (accruing both before and after any default by, or insolvency or
bankruptcy of, Mississippi One) or other cost or charge, including, without
limitation, all obligations hereafter arising under that certain Amended and
Restated Continuing Guaranty, dated as of May 15, 1996, as amended by that
certain First Amendment and Supplement to Amended and Restated Continuing
Guaranty, dated as of even date herewith (as so amended and as the same may be
amended, modified, supplemented, extended or restated from time to time, the
"Mississippi One Guaranty"), made by Mississippi One for the benefit of CoBank
(all such obligations, collectively, the "CoBank Debt"). For purposes of this
Agreement, the CoBank Debt shall not be deemed to have been paid in full until
all loan agreements between CoBank and Mississippi One or any affiliate of
Mississippi One if, with respect to such affiliate, Mississippi One has
guaranteed the affiliate's obligations under such loan agreements, including,
without limitation, that certain Amended and Restated Loan Agreement, dated as
of May 15, 1996, as amended by that certain First Amendment and Supplement to
Amended and Restated Loan Agreement, dated as of even date herewith, providing
for a loan of up to $32,400,000, and that
<PAGE> 2
Act of Subordination/MCTC
Loan No. T0310
Loan No. T0347
certain Loan Agreement, dated as of May 15, 1996, providing for a loan of up to
$5,000,000, all by and between CoBank and CTC Financial, Inc. (the foregoing
loan agreements, collectively, the "Loan Agreements"), shall have been
terminated and CoBank shall have received irrevocable payment of the CoBank
Debt in immediately available funds or in another manner satisfactory to
CoBank. MCTC agrees not to ask, demand, sue for, take or receive from
Mississippi One, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment of or collateral for the payment of all
or any of the Subordinated Debt unless or until the CoBank Debt shall be paid
in full and, without the prior written consent of CoBank, will not exercise any
remedies available to it, whether by agreement, law or equity or otherwise, in
respect to the nonpayment of the Subordinated Debt, including, without
limitation, the acceleration of the Subordinated Debt.
SECTION 2. PRIORITIES OF SECURITY INTERESTS.
A. MCTC hereby subordinates any and all security interests or
liens it may now have or hereafter obtain or reserve with respect to any
property or rights of Mississippi One (the "Collateral"), collectively, the
"MCTC Security Interests"), to all security interests and liens now or
hereafter created in favor of CoBank in connection with any of the CoBank Debt,
including, without limitation, the security interest created by that certain
Security Agreement, dated as of September 27, 1994, as amended by that certain
Fisrt Amendment and Supplement to Security Agreement, dated as of May 15, 1996,
and by that Second Amendment and Supplement to Security Agreement, dated as of
even date herewith (as the same may be amended, modified, supplemented,
extended or restated from time to time, the "Security Agreement"), entered into
by Mississippi One for the benefit of CoBank, the lien created by that certain
Deed of Trust, Security Agreement and Fixture Filing, dated as of September 27,
1994, as amended by that certain First Amendment and Supplement to Deed of
Trust, Security Agreement and Fixture Filing, dated as of May 15, 1996, and by
that certain Second Amendment and Supplement to Deed of Trust, Security
Agreement and Fixture Filing, dated as of May 15, 1996 (as the same may be
amended, modified, supplemented, extended or restated from time to time, the
"Deed of Trust"), entered into by Mississippi One for the benefit of CoBank,
and the lien created by that certain Mortgage, dated as of even date herewith
(as the same may be amended, modified, supplemented, extended or restated from
time to time, the "Mortgage"), entered into by Mississippi One for the benefit
of CoBank (collectively, the "CoBank Security Interests").
B. The subordinations and priorities specified herein apply
irrespective of (i) the time or order of attachment or perfection of the
security interests or liens, (ii) the time or order of filing any financing
statements with respect to the security interests or liens or the time or order
of filing or recording any other documents evidencing the security interests or
liens or the time or order of the delivery or taking of possession of any of
the Collateral, (iii) the time of giving or failure to give notice of the
acquisition of such security interests or liens, (iv) the date
-2-
<PAGE> 3
Act of Subordination/MCTC
Loan No. T0310
Loan No. T0347
on which any of the Subordinated Debt or CoBank Debt arises, or (v) any
priority granted by any principle of law or any statute.
C. The proceeds resulting from the enforcement of or the
realization on the MCTC Security Interests and all other proceeds received by
MCTC in respect of the MCTC Security Interests, including, without limitation,
insurance and condemnation proceeds, will be dealt with in such a way as to
give effect to the provisions of this Agreement and the priorities created and
established hereby.
SECTION 3. PROCEEDS HELD IN TRUST. In the event that MCTC shall
receive any proceeds from the sale, liquidation, casualty, condemnation or
other disposition of or realization on any Collateral or as a result of the
MCTC Security Interests at any time prior to the payment in full of the CoBank
Debt, then it shall hold such proceeds in trust for CoBank and shall promptly
pay over the same to CoBank for the application to the CoBank Debt.
SECTION 4. AGREEMENTS OF MCTC. MCTC covenants and agrees that CoBank
may possess, sell, lease or otherwise dispose of or realize on the Collateral
in any manner or order that CoBank, in its sole and absolute discretion,
chooses and without regard to the MCTC Security Interests therein, and MCTC
hereby waives any right it may have to require CoBank to marshal assets or any
similar right. Nothing contained in this Agreement shall in any way limit the
rights and remedies of CoBank under the Mississippi One Guaranty, the Security
Agreement, the Deed of Trust, the Mortgage, or under any other agreement or
instrument evidencing or relating to the CoBank Debt or the CoBank Security
Interests, or under applicable law. MCTC agrees that it will not commence, or
join with any creditor other than CoBank in commencing, any bankruptcy or
insolvency proceeding against Mississippi One. MCTC shall not transfer,
assign, pledge, encumber, negotiate or otherwise convey to any person any
interest in the Subordinated Debt unless MCTC shall have received the prior
written consent of CoBank. MCTC shall promptly notify CoBank of the creation
of any Subordinated Debt and of any payments on any of the Subordinated Debt.
SECTION 5. IN FURTHERANCE OF SUBORDINATION. MCTC agrees as follows:
A. Upon any distribution of all or any of the assets of
Mississippi One to its creditors upon the dissolution, winding up, liquidation,
arrangement or reorganization of Mississippi One, whether in any bankruptcy,
insolvency, arrangement, reorganization or receivership proceedings or upon an
assignment for the benefit of creditors or any other marshaling of the assets
and liabilities of Mississippi One or otherwise, any payment or distribution of
any kind (whether in cash, property or securities) which otherwise would be
payable or deliverable upon or with respect to the Subordinated Debt shall be
paid or delivered directly to CoBank for application (in the case of cash) to
or as collateral (in the case of non-cash
-3-
<PAGE> 4
Act of Subordination/MCTC
Loan No. T0310
Loan No. T0347
property or securities) for the payment or prepayment of the CoBank Debt until
the CoBank Debt shall have been paid in full.
B. If any proceeding referred to in Clause A above is commenced
by or against Mississippi One after the date hereof, (i) CoBank is hereby
irrevocably authorized and empowered (in its own name or in the name of MCTC),
but shall have no obligation, to demand, sue for, collect and receive every
payment or distribution referred to in Clause A above and give acquittance
therefor and to file claims and proofs of claim and take such other action
(including, without limitation, voting the Subordinated Debt or enforcing any
security interest or other lien securing payment of the Subordinated Debt) as
it may deem necessary or advisable for the exercise or enforcement of any of
its rights or interests hereunder; and (ii) MCTC shall duly and promptly take
such action as CoBank may request (a) to collect the Subordinated Debt for the
account of CoBank and to file appropriate claims or proofs of claim in respect
of the Subordinated Debt; (b) to execute and deliver to CoBank such powers of
attorney, assignments or other instruments as it may request in order to enable
it to enforce any and all claims with respect to, and any security interests
and other liens securing payment of, the Subordinated Debt; and (c) to collect
and receive any and all payments or distributions which may be payable or
deliverable upon or with respect to the Subordinated Debt.
C. All payments or distributions upon or with respect to the
Subordinated Debt which are received by MCTC prior to the payment or prepayment
in full of the CoBank Debt shall be received in trust for the benefit of
CoBank, shall be segregated from other funds and property held by MCTC and
shall be forthwith paid over to CoBank in the same form as so received (with
any necessary endorsement) to be applied (in the case of cash) to or held as
collateral (in the case of non-cash property or securities) for the payment or
prepayment of the CoBank Debt.
SECTION 6. RIGHTS OF SUBROGATION. MCTC agrees that no payment or
distribution to CoBank pursuant to the provisions of this Agreement shall
entitle MCTC to exercise any rights of subrogation in respect thereof until the
CoBank Debt shall have been paid in full.
SECTION 7. OBLIGATIONS HEREUNDER NOT AFFECTED. The subordination of
the MCTC Security Interests provided hereby, the priority of CoBank Security
Interests in the Collateral as against the MCTC Security Interests in the
Collateral, the rights and interests of CoBank hereunder, and all agreements
and obligations of MCTC under this Agreement, shall remain in full force and
effect irrespective of (i) any lack of validity or enforceability of the
Mississippi One Guaranty or any other agreement or instrument relating to the
CoBank Debt or the CoBank Security
-4-
<PAGE> 5
Act of Subordination/MCTC
Loan No. T0310
Loan No. T0347
Interests; (ii) any change, amendment, modification or extension in the time,
manner or place of payment of, or in any other term of, all or any of the
CoBank Debt or the CoBank Security Interests, or any documents evidencing the
CoBank Debt or the CoBank Security Interests, or any other amendment to or
waiver of or any consent to departure from the terms and conditions of the
Mississippi One Guaranty or any other agreement or instrument relating to the
CoBank Debt or the CoBank Security Interests; (iii) any exchange, release or
non-perfection of any collateral for the CoBank Debt, including, without
limitation, the Mississippi One Guaranty, the Security Agreement, the Deed of
Trust or the Mortgage; or (iv) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, MCTC in respect of this
Agreement other than as expressly provided herein, and CoBank shall not be
required to give MCTC notice of any such occurrence.
SECTION 8. WAIVER. Each of MCTC and Mississippi One hereby waives
promptness, diligence, notice of acceptance and any other notice with respect
to any of the CoBank Debt and this Agreement and any requirement that CoBank
protect, secure, perfect or insure any security interest or lien or any
property subject thereto or exhaust any right or take any action against
Mississippi One or any other person or entity or any collateral.
SECTION 9. SUBORDINATED DEBT LEGEND. Mississippi One and MCTC will
cause each instrument evidencing Subordinated Debt to be endorsed with the
following legend:
"The indebtedness evidenced by this instrument is subordinated to
the prior payment in full of the "CoBank Debt" (as defined in the
Act of Subordination hereinafter referred to) pursuant to, and to
the extent provided in that certain Act of Subordination, dated
as of July 1, 1996 by the maker hereof and payee named herein in
favor of CoBank, ACB."
In the case of any Subordinated Debt which is not evidenced by an instrument,
upon CoBank's request, Mississippi One and MCTC shall cause such Subordinated
Debt to be evidenced by an appropriate instrument or instruments endorsed with
the above legend.
SECTION 10. FURTHER ASSURANCES. MCTC and Mississippi One shall do such
further acts and things and execute, deliver, register and file such further
deeds, documents and assurances which may be reasonably required to give full
effect to the intent and purpose of this Agreement. None of the parties hereto
shall take any steps or do anything whereby the priorities provided for herein
may be defeated or impaired.
SECTION 11. RIGHTS AND REMEDIES CUMULATIVE. The subordinations and
priorities set forth herein and the rights and remedies of CoBank hereunder are
in addition to, and not in derogation of the rights and remedies of CoBank
under the Uniform Commercial Code of the State of Louisiana and other
applicable law.
-5-
<PAGE> 6
Act of Subordination/MCTC
Loan No. T0310
Loan No. T0347
SECTION 12. CONTINUATION OF AGREEMENT. This Agreement shall be a
continuing agreement until the complete termination and release of all of
CoBank Security Interests in the Collateral and the payment in full of all
CoBank Debt. This Agreement shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the CoBank Debt is
rescinded or must otherwise be returned by CoBank upon the insolvency,
bankruptcy or reorganization of Mississippi One, Mercury Cellular, Inc., CTC
Financial, Inc., or otherwise, all as though such payment had not been made.
SECTION 13. NOTICES.
All notices to the parties hereto shall be in writing and shall
be delivered in person, telecopied or sent by registered or certified mail to
the following addresses:
If to CoBank, to:
CoBank, ACB
200 Galleria Parkway, N.W.
Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No: (770) 618-3202
If to MCTC, to:
Mercury Cellular Telephone Company
One Lakeshore Drive, Suite 1495
P.O. Box 3709
Lake Charles, Louisiana 70602
Attn.: Dusty Dumas; cc: Thomas G. Henning
Fax No: (318) 439-0769
If to Mississippi One, to:
Mississippi One Cellular Telephone Company
One Lakeshore Drive, Suite 1495
P.O. Box 3709
Lake Charles, Louisiana 70602
Attn.: Dusty Dumas; cc: Thomas G. Henning
Fax No: (318) 439-0769
or to such other address as may be designated by any party hereto in a written
notice to the other party hereto. All notices hereunder shall be deemed to be
duly given and received on the date of
-6-
<PAGE> 7
Act of Subordination/MCTC
Loan No. T0310
Loan No. T0347
delivery if delivered personally, on the date telecopied if telecopied, or on
the third business day after the deposit in the United States Mail if mailed by
prepaid first class registered or certified mail, properly addressed with
appropriate postage paid thereon.
SECTION 14. ENTIRE AGREEMENT; AMENDMENTS. This Agreement contains the
entire understanding of the parties with respect to the subject matter hereof.
It may not be changed orally but only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification, extension,
or discharge is sought.
SECTION 15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon MCTC, Mississippi One and their respective successors and assigns and
shall inure to the benefit of CoBank and its successors and assigns.
SECTION 16. GOVERNING LAW. This Agreement shall be governed, construed
and enforced in accordance with the laws of the State of Louisiana without
regard for its choice of law rules.
[Signatures on next page]
-7-
<PAGE> 8
Act of Subordination/MCTC
Loan No. T0310
Loan No. T0347
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below, and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
duly authorized officers of the respective parties, after a due reading of the
whole.
At Lake Charles, Louisiana, on July 1, 1996.
MERCURY CELLULAR TELEPHONE COMPANY
By: /s/ ROBERT PIPER
-----------------------------------------
Name: Robert Piper
-----------------------------------
Title: President
----------------------------------
Attest: /s/ THOMAS G. HENNING
-------------------------------------
Name: Thomas G. Henning
------------------------------
Title: Secretary
-----------------------------
[CORPORATE SEAL]
Witnesses to all signatures:
/s/ SHEILA KING
- --------------------------------
Witness
/s/ PAT HAMILTON
- --------------------------------
Witness
/s/ [ILLEGIBLE]
- --------------------------------
Notary Public
My commission expires: lifetime
---------
[NOTARIAL SEAL]
(Signatures continued on next page)
-8-
<PAGE> 9
Act of Subordination/MCTC
Loan No. T0310
Loan No. T0347
(Signatures continued from previous page)
At Lake Charles, Louisiana, on July 1, 1996.
MISSISSIPPI ONE CELLULAR TELEPHONE
COMPANY
By: /s/ THOMAS G. HENNING
-----------------------------------------
Name: Thomas G. Henning
-----------------------------------
Title: President
----------------------------------
Witnesses to signature:
/s/ SHEILA KING
- ---------------------------------
Witness
/s/ PAT HAMILTON
- ---------------------------------
Witness
/s/ [ILLEGIBLE]
- ---------------------------------
Notary Public
My commission expires: litetime
----------
[NOTARIAL SEAL]
(Signatures continued on next page)
-9-
<PAGE> 10
Act of Subordination/MCTC
Loan No. T0310
Loan No. T0347
(Signatures continued from previous page)
At Atlanta, Georgia, on July 2, 1996.
COBANK, ACB
By: /s/ MARY KAY DEERING
-----------------------------------------
Name: Mary Kay Deering
-----------------------------------
Title: Vice President
----------------------------------
Witnesses to signature:
/s/ SHAWNE KEENAN
- --------------------------------------
Witness
/s/ [ILLEGIBLE]
- --------------------------------------
Witness
/s/ MARIANNE R. HOWELL
- --------------------------------------
Notary Public
My commission expires: April 25, 1999
---------------
[NOTARIAL SEAL]
-10-
<PAGE> 1
EXHIBIT 4.36
PROMISSORY NOTE
$20,000.00 November 20, 1992
FOR VALUE RECEIVED, the undersigned, Mississippi-34 Cellular Corporation,
a Mississippi corporation ("Maker") promises to pay to the order of Cameron
Communications Corporation, a Louisiana corporation ("Payee"), on demand, at
its office at CM Tower, One Lakeshore Drive, Suite 1495, Lake Charles,
Louisiana 70601 or such other address as may hereafter be specified by Payee,
the principal sum of Twenty Thousand Dollars ($20,000.00), together with
interest thereon at an annual rate, determined daily, of two percentage points
above the prime rate of interest which is publicly announced from time to time
by Chase Manhattan Bank in New York, New York ("Prime Rate"), said interest to
be paid at least once each year on or before December 31. Each change in the
interest rate of this Note shall take effect simultaneously with the
corresponding change in the Prime Rate. The indebtedness evidenced by this
Note represents a loan ("Loan") made by Payee to Maker on November 20, 1992.
Maker may prepay all or any amount due under this Note at any time without
premium or penalty. If this Note is not paid when demanded, Maker agrees to
pay (1) all costs and expenses of collection, including without limitation,
reasonable attorneys fees and any other expenses and (2) interest after demand
at a rate equal to two percentage points in excess of the then applicable rate
of interest under this Note until the Loan is paid in full (such rate, the
"Default Rate"), including the period following entry of any judgment.
Maker waives presentment, demand, protest and notice of non-payment. Maker
consents to any number of renewals or extensions of the time of payment hereof
without notice to any of those parties. The granting, without notice, of any
extension of time for the payment of any sum due under this Note shall in no
way release or discharge the liability of Maker.
Payee shall not be deemed, by any act or omission or commission, to have
waived any of its rights or remedies hereunder unless such waiver is in writing
and signed by Payee, and then only to the extent specifically set forth in the
writing. A waiver as to one event shall not be construed as continuing or as
a bar to or waiver of any right or remedy as to a subsequent event.
This Note shall be governed by and construed according to the laws of the
State of Mississippi. Maker's obligation shall extend to and bind Maker's
successors and assigns. This Note may only be amended by an instrument in
writing signed by both Maker and the holder hereof.
<PAGE> 2
IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has
caused this Note to be executed by its duly authorized officer on this the 19th
day of November, 1992, to be effective as of November 20, 1992.
MISSISSIPPI-34 CELLULAR CORPORATION
By: /s/ WILLIAM M. YANDELL, III
---------------------------------------
WILLIAM M. YANDELL, III,
President
<PAGE> 1
EXHIBIT 4.37
SUBORDINATION AGREEMENT
This Subordination Agreement ("Agreement") is made by and between Robert
G. Mounger, William M. Mounger, II, William M. Yandell, III and Wirt A. Yerger,
III (all of whom are collectively referred to herein as "Lenders"),
Mississippi-34 Cellular Corporation, a Mississippi corporation ("Company") and
Mercury, Inc., a Louisiana corporation ("MLA").
WHEREAS, Lenders have loaned the Company certain monies as evidences by 6
promissory notes, copies of which are attached hereto ("Subordinated
Obligations");
WHEREAS, the total current outstanding balance owing on the Subordinated
Obligations is $50,000; and
WHEREAS, all of the parties hereto and certain other individual
shareholders of the Company have entered into that certain Securities Purchase
Agreement dated as of November 13, 1992 ("Purchase Agreement") in which MLA has
agreed to purchase 51% of the outstanding stock of the Company.
Now, therefore, in order to induce MLA to enter into the Purchase
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Lenders do hereby jointly
and severally agree and covenant as follows:
1. Agreement to Subordinate. All amounts owing by the Company
under or in respect of the Subordinated Obligations are and shall be
subordinate, to the extent and in the manner hereinafter set forth, in right of
payment to the prior payment in full of all indebtedness and obligations of the
Company, now or hereafter owing
<PAGE> 2
by the Company whether for principal, interest, premium fees, expenses or
otherwise (all such obligations and indebtedness being referred to hereinafter
as the "Senior Obligations"). For purposes of this Agreement, the Senior
Obligations shall not be deemed paid in full until the owners or holders of the
Senior Obligations have received full payment in cash. After full payment of
the Senior Obligations, the Company shall make payments on the Subordinated
Obligations only out of cash flow of the Company.
2. No Payment on Subordinated Obligations. None of the Lenders
shall ask, demand, sue for, take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or in any manner, and
hereby waive any provision of the Subordinated Obligations requiring payment
of all or any of the Subordinated Obligations, unless and until the Senior
Obligations shall have been paid in full; nor will any Lender transfer, assign,
negotiate or otherwise convey to any person, firm or corporation any interest
in or the whole of the Subordinated Obligations unless and until the Senior
Obligations have been paid and discharged in full.
3. Priority on Distribution. In the event of any distribution,
division or application, partial or complete, voluntary or involuntary, by
operation of law or otherwise, of all or any part of the assets or properties
of the Company or the proceeds thereof to creditors of the Company or upon any
indebtedness of the Company, by reason of the liquidation, dissolution or other
winding up of the Company or Company's
-2-
<PAGE> 3
business, or in the event of any sale, receivership, insolvency or bankruptcy
proceedings or assignment for the benefit of creditors, or any proceeding by or
against the Company for any relief under any bankruptcy or insolvency law or
laws relating to the relief of debtors, readjustments of indebtedness,
reorganization, compositions or extensions, then and in any such event any
payment or distribution of any kind or character, either in cash, securities or
other property which shall be payable or deliverable upon or with respect to
any or all indebtedness of the Company to any Lender for or on account, of
the Subordinated Obligations shall be paid or delivered directly to the Company
for application upon the Senior Obligations in such order and manner as the
Company shall elect, whether the Senior Obligations to which such payment may
be applied be then due or not due. Each Lender hereby irrevocably authorizes
the Company to demand, sue for, collect and receive every such payment or
distribution and to give full acquittances therefore and to file claims and
take such other steps and proceedings, in the Company's name or in the name of
any Lender, or otherwise, as the Company deems suitable for the enforcement of
this Agreement.
4. Lenders' Receipt. Should any payment or distribution or
security or proceeds thereof be received by any Lender upon or with respect to
any indebtedness evidenced by a Subordinated Obligation prior to the
satisfaction in full of all of the Senior Obligations, such Lender shall
deliver the same to the Company in precisely the form received (with any
endorsements necessary to effect collection
-3-
<PAGE> 4
or transfer) for application upon the Senior Obligations and until so
delivered, the same shall be held in trust by the Company as its property. If
a Lender shall fail, neglect or refuse to make any such endorsement or
assignment, the Company or any of its officers are hereby authorized to make
the same.
5. No Proceedings. So long as any of the Senior Obligations remain
unpaid, no Lender shall commence, or join with any creditor in commencing, any
proceeding referred to in Section 3 above.
6. Lenders' Receipts. All payments or distributions upon or with
respect to the Subordinated Obligations which are received by a Lender contrary
to the provisions of this Agreement shall be received in trust for the benefit
of the Company, shall be segregated from other funds and property held by the
Lender and shall be forthwith paid over to the Company in the same form as so
received (with any necessary endorsement) to be applied (in the case of cash)
to, or held as collateral (in the case of non-cash property or securities) for,
the payment or prepayment of the Senior Obligations.
7. Additional Borrowings. At any time and from time to time,
without notice to any Lender, the Company may enter into any agreement or
agreements with other lenders creating new or additional debt, extend and renew
the payment of any debt for any term or terms, take and release collateral
and/or security, accept and receive payments upon the Senior Obligations,
grant indulgences and compromise claims and do anything generally with respect
to the
-4-
<PAGE> 5
Senior Obligations without in any manner impairing or altering any right or
remedy conferred upon the Company or intended to be conferred upon the Company
under the terms of this Agreement.
8. Rights of Subrogation. No payment or distribution by the
Company on the Senior Obligations shall entitle any Lender to exercise any
rights or subrogation in respect thereof until the Senior Obligations have been
paid in full.
9. Legend; Further Assurances. Each Lender and the Company will
cause each instrument evidencing the Subordinated Obligations to be endorsed
with the following legend:
This Note and the indebtedness evidenced hereby is subordinated in
right of payment to the prior payment in full of the Senior
Obligations (as defined in the Subordination Agreement hereinafter
referred to) pursuant to, and to the extent provided in, that
certain Subordination Agreement dated as of November 20, 1992
executed by the maker hereof and the payee named herein in favor of
maker.
Each Lender and the COmpany will each, at its expense and at any time and from
time to time, promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable or
that the Company may reasonably request, in order to protect any right or
interest granted or purported to be granted in this Agreement or to enable the
Company to exercise and enforce its rights and remedies hereunder.
10. Representations and Warranties. Each Lender represents and
warrants as follows:
-5-
<PAGE> 6
a. The maximum aggregate principal amount of the Subordinated
Obligations does not exceed $50,000 and no default exists in respect of any
such Subordinated Obligation.
b. Lenders own the Subordinated Obligations now outstanding free and
clear of any lien, security interest, charge or encumbrance.
c. This Agreement constitutes a legal, valid and binding obligation of
Lender, enforcable in accordance with these terms.
11. Amendments. No amendment or waiver of any provision of this
Agreement, nor consent to any departure by any Lender or the Company herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Company and MLA, and then such waiver, amendment or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
12. Termination. This Agreement shall terminate upon the
termination of that certain Option Agreement of even date hereof between the
parties hereto and certain other shareholders of the Company ("OPTION
AGREEMENT") unless MLA acquires a majority interest in the common stock of the
Company pursuant to the Option Agreement or unless there is a breach by the
Sellers (as defined in the Option Agreement) of that certain Repurchase
Agreement of even date hereof between the parties hereto and certain other
shareholders of the Company.
13. Waiver. Any waiver, forbearance, failure or delay by the
Company in exercising any right, power or remedy, simultaneous or later shall
not preclude the further, simultaneous or later
-6-
<PAGE> 7
excise thereof, and every right, power and remedy of the Company shall continue
in full force and effect until such right, power or remedy is specifically
waived in writing executed by the Company and MLA. The remedies herein
provided are cumulative and non-exclusive of any remedies provided by law.
14. Legal Fees. If any party to this Agreement shall employ legal
counsel to protect his or its rights hereunder or to enforce any term or
provision herein, then the party not prevailing in any such action shall pay
the prevailing party all of his or its reasonable attorneys fees and expenses
incurred in such action.
15. Notices. All notices and other communications provided for
herein shall be in writing, duly signed and shall be delivered by hand, by
certified mail postage prepaid return receipt requiested, by confirmed
facsimile transmission or by overnight delivery service to the respective party
at the following address or to such other address as each party may hereafter
designate in writing in accordance with the provisions of this section:
Robert G. Mounger
200 East Capitol Street, Suite 1647
Jackson, MS 39201
Fax: (601) 948-1102
William M. Mounger, II
200 East Capitol Street, Suite 1647
Jackson, MS 39201
(601) 948-1102
William M. Yandell, III
200 East Capitol Street, Suite 1647
Jackson, MS 39201
Fax: (601) 948-1102
-7-
<PAGE> 8
Wirt A. Yerger, III
200 East Capitol Street, Suite 1647
Jackson, MS 39201
Fax: (601) 355-3227
Mercury, Inc.
CM Tower
One Lakeshore Drive
Suite 1495
Lake Charles, LA 70601
Fax: (318) 433-0587
Mississippi-34 Cellular Corporation:
CM Tower
One Lakeshore Drive
Suite 1495
Lake Charles, LA 70601
Fax: (318) 433-0587
All such notices and other communications shall be deemed to have been duly
delivered and received (a) on the date of delivery by hand, (b) two days
following prepaid deposit with an overnight delivery service, (c) on the date
of receipt (as shown on the return receipt) if mailed by certified mail postage
prepaid return receipt requested, or (d) one day after confirmed facsimile
transmission, as the case may be.
16. Entire Agreement; Severability. This Agreement and the Purchase
Agreement set forth the entire understanding of the parties hereto concerning
the subordination of the Subordinated Obligations and supersede all previous
agreements and understandings among them concerning such matters. If any
provisions of this Agreement shall be held invalid or unenforceable, this
Agreement shall be construed as if not containing those provisions, and the
rights and obligations of the parties hereto shall be construed and enforced
accordingly.
-8-
<PAGE> 9
17. Continuing Agreement. This Agreement is a continuing agreement
of subordination and the Company may, from time to time and without notice to
the Lenders, borrow money and make other financial arrangements in reliance
hereon. This Agreement shall be binding upon and inure to the benefit of the
Company and each Lender and their respective successors and assigns, until the
Subordinated Obligations shall have been paid in full.
18. Governing Law. This Agreement shall be governed by and
construed in accordance with, the internal laws of the State of Mississippi.
19. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Witness our signatures on the dates indicated below to be effective as of
November 20, 1992.
Date: 11/19/92 /s/ ROBERT G. MOUNGER
-------- -------------------------------------------
Robert G. Mounger
Date: 11/19/92 /s/ WILLIAM M. MOUNGER, II
-------- -------------------------------------------
William M. Mounger, II
Date: 11/19/92 /s/ WILLIAM M. YANDELL, III
-------- -------------------------------------------
William M. Yandell, III
Date: 11/19/92 /s/ WIRT A. YERGER, III
-------- -------------------------------------------
Wirt A. Yerger, III
-9-
<PAGE> 10
MISSISSIPPI-34 CELLULAR CORPORATION
Date: 11/19/92 By: /s/ WILLIAM M. YANDELL, III
-------- -----------------------------------
William M. Yandell, III,
President
MERCURY, INC.
Date: 11/19/92 By: /s/ WILLIAM L. HENNING, JR.
-------- -----------------------------------
William L. Henning, Jr.
Chairman/CEO
-10-
<PAGE> 11
MISSISSIPPI 34
N/P - LONG TERM STOCKHOLDERS
ACCT 4-100-2530-000
<TABLE>
<CAPTION>
SHAREHOLDER AMOUNT
- ----------------------------------------------------------
<S> <C>
Robert G. Mounger 8,000.00 was 16,500
William M. Mounger, II 14,000.00 was 17,500
William M. Yandell, III 14,000.00 was 17,500
Wirt A. Yerger, III 14,000.00 was 25,000
---------
50,000.00
=========
</TABLE>
Page 1
<PAGE> 12
Shareholders of Mississippi 34 Cellular Corporation
Mercury Inc. 51%
David Bailey 25%
Bailey Cable Vision
807 Church Street
Port Gibson, MS 39150
E.B. Martin, Jr. 1.8%
Young, Scanlan, Sessums
P.O. Box 23059
Jackson, MS 39225-3059
Robert Mounger 3.3%
200 E. Capitol Street, Suite 1601
Jackson, MS 39201
William M. Mounger, III 5.7%
1410 Livingston Lane
Jackson, MS 39213
James Murrell 1.8%
1410 Livingston Lane
Jackson, MS 39213
William M. Yandall, III 5.7%
6082 Wood Way Drive
Memphis, TN 38120
Wirt A. Yerger, III 5.7%
Cotton Communications
2600 Insurance Center Drive, Suite A-200
Jackson, MS 39216
<PAGE> 1
EXHIBIT 4.38
PROMISSORY NOTE
$16,500.00 As of March 27, 1992
Jackson, Mississippi
FOR VALUE RECEIVED, the undersigned promises unconditionally to pay to the
order of ROBERT G. MOUNGER, III an individual resident of the State of
Mississippi, the principal sum of SIXTEEN THOUSAND FIVE HUNDRED AND NO/100
DOLLARS ($16,500.00), with interest on the unpaid balance from the date
hereof until paid at an annual rate, determined daily, which is two (2)
percentage points above the Prime Rate, as hereinafter defined, said principal
and interest being due and payable ON DEMAND. For purposes of this Note,
"Prime Rate" shall mean the rate of interest announced by Deposit Guaranty
National Bank, Jackson, Mississippi, from time to time as its "Prime Rate."
Each change in the interest rate shall take effect simultaneously with the
corresponding change in the Prime Rate.
Should the indebtedness evidenced by this Note be collected by an action
at law, or in equity, the undersigned agrees to pay all costs of collection,
including reasonable attorney's fees.
The undersigned reserves the right to prepay this Note, or any part
thereof, at any time, without penalty.
The undersigned hereby waives presentment for payment, demand, protest or
notice of protest and of non-payment of this Note.
This Note shall be the joint and several obligation of all of the
undersigned and all makers, sureties, guarantors and endorsers hereof.
This Note is made and delivered in the State of Mississippi and shall be
governed by the laws thereof.
WITNESS the execution hereof as of the day and year first written above.
MISSISSIPPI-3 CELLULAR CORPORATION
By: /s/ WILLIAM M. YANDELL, III,
--------------------------------------
William M. Yandell, III
<PAGE> 2
This Note and the indebtedness evidenced hereby is subordinated in right of
payment to the prior payment in full of the Senior Obligations (as defined in
the Subordination Agreement hereinafter referred to) pursuant to, and to the
extent provided in, that certain Subordination Agreement dated as of November
20, 1992, executed by the maker hereof and payee named herein in favor of
maker.
<PAGE> 1
EXHIBIT 4.39
PROMISSORY NOTE
$7,500.00 As of April 15, 1992
Jackson, Mississippi
FOR VALUE RECEIVED, the undersigned promises unconditionally to pay to the
order of ROBERT G. MOUNGER, an individual resident of the State of Mississippi,
the principal sum of SEVEN THOUSAND FIVE HUNDRED AND NO/100 DOLLARS
($7,500.00), with interest on the unpaid balance from the date hereof until
paid at an annual rate, determined daily, which is two (2) percentage points
above the Prime Rate, as hereinafter defined, said principal and interest being
due and payable ON DEMAND. For purposes of this Note, "Prime Rate" shall mean
the rate of interest announced by Deposit Guaranty National Bank, Jackson,
Mississippi, from time to time as its "Prime Rate". Each change in the
interest rate shall take effect simultaneously with the corresponding change in
the Prime Rate.
Should the indebtedness evidenced by this Note be collected by an action
at law, or in equity, the undersigned agrees to pay all costs of collection,
including reasonable attorney's fee.
The undersigned reserves the right to prepay this Note, or any part
thereof, at any time, without penalty.
The undersigned hereby waives presentment for payment, demand, protest or
notice of protest and of non-payment of this Note.
This Note shall be the joint and several obligation of all of the
undersigned and all makers, sureties, guarantors and endorsers hereof.
This Note is made and delivered in the State of Mississippi and shall be
governed by the laws thereof.
WITNESS the execution hereof as of the day and year first written above.
MISSISSIPPI-3 CELLULAR CORPORATION
By: /s/ WILLIAM M. YANDELL, III,
--------------------------------------
William M. Yandell, III
Its President
<PAGE> 2
This Note and the indebtedness evidenced hereby is subordinated in right of
payment to the prior payment in full of the Senior Obligations (as defined in
the Subordination Agreement hereinafter referred to) pursuant to, and to the
extent provided in, that certain Subordination Agreement dated as of November
20, 1992, executed by the maker hereof and payee named herein in favor of
maker.
<PAGE> 1
EXHIBIT 4.40
PROMISSORY NOTE
$17,500.00 As of April 1, 1992
Jackson, Mississippi
FOR VALUE RECEIVED, the undersigned promises unconditionally to pay to the
order of WILLIAM M. MOUNGER, II, an individual resident of the State of
Mississippi, the principal sum of SEVENTEEN THOUSAND FIVE HUNDRED AND NO/100
DOLLARS ($17,500.00), with interest on the unpaid balance from the date
hereof until paid at an annual rate, determined daily, which is two (2)
percentage points above the Prime Rate, as hereinafter defined, said principal
and interest being due and payable ON DEMAND. For purposes of this Note,
"Prime Rate" shall mean the rate of interest announced by Deposit Guaranty
National Bank, Jackson, Mississippi, from time to time as its "Prime Rate."
Each change in the interest rate shall take effect simultaneously with the
corresponding change in the Prime Rate.
Should the indebtedness evidenced by this Note be collected by an action
at law, or in equity, the undersigned agrees to pay all costs of collection,
including reasonable attorney's fees.
The undersigned reserves the right to prepay this Note, or any part
thereof, at any time, without penalty.
The undersigned hereby waives presentment for payment, demand, protest or
notice of protest and of non-payment of this Note.
This Note shall be the joint and several obligation of all of the
undersigned and all makers, sureties, guarantors and endorsers hereof.
This Note is made and delivered in the State of Mississippi and shall be
governed by the laws thereof.
WITNESS the execution hereof as of the day and year first written above.
MISSISSIPPI-3 CELLULAR CORPORATION
By: /s/ WILLIAM M. YANDELL, III
--------------------------------------
William M. Yandell, III,
Its President
<PAGE> 2
This Note and the indebtedness evidenced hereby is subordinated in right of
payment to the prior payment in full of the Senior Obligations (as defined in
the Subordination Agreement hereinafter referred to) pursuant to, and to the
extent provided in, that certain Subordination Agreement dated as of November
20, 1992, executed by the maker hereof and payee named herein in favor of
maker.
<PAGE> 1
EXHIBIT 4.41
PROMISSORY NOTE
$17,500.00 As of April 30, 1992
Jackson, Mississippi
FOR VALUE RECEIVED, the undersigned promises unconditionally to pay to the
order of WILLIAM M. YANDALL, III, an individual resident of the State of
Mississippi, the principal sum of SEVENTEEN THOUSAND FIVE HUNDRED AND NO/100
DOLLARS ($17,500.00), with interest on the unpaid balance from the date
hereof until paid at an annual rate, determined daily, which is two (2)
percentage points above the Prime Rate, as hereinafter defined, said principal
and interest being due and payable ON DEMAND. For purposes of this Note,
"Prime Rate" shall mean the rate of interest announced by Deposit Guaranty
National Bank, Jackson, Mississippi, from time to time as its "Prime Rate".
Each change in the interest rate shall take effect simultaneously with the
corresponding change in the Prime Rate.
Should the indebtedness evidenced by this Note be collected by an action
at law, or in equity, the undersigned agrees to pay all costs of collection,
including reasonable attorney's fees.
The undersigned reserves the right to prepay this Note, or any part
thereof, at any time, without penalty.
The undersigned hereby waives presentment for payment, demand, protest or
notice of protest and of non-payment of this Note.
This Note shall be the joint and several obligation of all of the
undersigned and all makers, sureties, guarantors and endorsers hereof.
This Note is made and delivered in the State of Mississippi and shall be
governed by the laws thereof.
WITNESS the execution hereof as of the day and year first written above.
MISSISSIPPI-3 CELLULAR CORPORATION
By: /s/ WILLIAM M. YANDELL, III
--------------------------------------
William M. Yandell, III
Its President
<PAGE> 2
This Note and the indebtedness evidenced hereby is subordinated in right of
payment to the prior payment in full of the Senior Obligations (as defined in
the Subordination Agreement hereinafter referred to) pursuant to, and to the
extent provided in, that certain Subordination Agreement dated as of November
20, 1992, executed by the maker hereof and payee named herein in favor of
maker.
<PAGE> 1
EXHIBIT 4.42
PROMISSORY NOTE
$2,500.00 As of May 12, 1992
Jackson, Mississippi
FOR VALUE RECEIVED, the undersigned promises unconditionally to pay to the
order of WIRT A. YERGER, III, an individual resident of the State of
Mississippi, the principal sum of TWO THOUSAND FIVE HUNDRED AND NO/100 DOLLARS
($2,500.00), with interest on the unpaid balance from the date hereof until
paid at an annual rate, determined daily, which is two (2) percentage points
above the Prime Rate, as hereinafter defined, said principal and interest being
due and payable ON DEMAND. For purposes of this Note, "Prime Rate" shall mean
the rate of interest announced by Deposit Guaranty National Bank, Jackson,
Mississippi, from time to time as its "Prime Rate". Each change in the
interest rate shall take effect simultaneously with the corresponding change in
the Prime Rate.
Should the indebtedness evidenced by this Note be collected by an action
at law, or in equity, the undersigned agrees to pay all costs of collection,
including reasonable attorney's fees.
The undersigned reserves the right to prepay this Note, or any part
thereof, at any time, without penalty.
The undersigned hereby waives presentment for payment, demand, protest or
notice of protest and of non-payment of this Note.
This Note shall be the joint and several obligation of all of the
undersigned and all makers, sureties, guarantors and endorsers hereof.
This Note is made and delivered in the State of Mississippi and shall be
governed by the laws thereof.
WITNESS the execution hereof as of the day and year first written above.
MISSISSIPPI-3 CELLULAR CORPORATION
By: /s/ WILLIAM M. YANDELL, III
--------------------------------------
William M. Yandell, III,
Its President
<PAGE> 2
This Note and the indebtedness evidenced hereby is subordinated in right of
payment to the prior payment in full of the Senior Obligations (as defined in
the Subordination Agreement hereinafter referred to) pursuant to, and to the
extent provided in, that certain Subordination Agreement dated as of November
20, 1992, executed by the maker hereof and payee named herein in favor of
maker.
<PAGE> 1
EXHIBIT 4.43
PROMISSORY NOTE
$25,000.00 As of March 25, 1992
Jackson, Mississippi
FOR VALUE RECEIVED, the undersigned promises unconditionally to pay to the
order of WIRT A. YERGER, III, an individual resident of the State of
Mississippi, the principal sum of TWENTY-FIVE THOUSAND AND NO/100
DOLLARS ($25,000.00), with interest on the unpaid balance from the date
hereof until paid at an annual rate, determined daily, which is two (2)
percentage points above the Prime Rate, as hereinafter defined, said principal
and interest being due and payable ON DEMAND. For purposes of this Note,
"Prime Rate" shall mean the rate of interest announced by Deposit Guaranty
National Bank, Jackson, Mississippi, from time to time as its "Prime Rate."
Each change in the interest rate shall take effect simultaneously with the
corresponding change in the Prime Rate.
Should the indebtedness evidenced by this Note be collected by an action
at law, or in equity, the undersigned agrees to pay all costs of collection,
including reasonable attorney's fees.
The undersigned reserves the right to prepay this Note, or any part
thereof, at any time, without penalty.
The undersigned hereby waives presentment for payment, demand, protest or
notice of protest and of non-payment of this Note.
This Note shall be the joint and several obligation of all of the
undersigned and all makers, sureties, guarantors and endorsers hereof.
This Note is made and delivered in the State of Mississippi and shall be
governed by the laws thereof.
WITNESS the execution hereof as of the day and year first written above.
MISSISSIPPI-3 CELLULAR CORPORATION
By: /s/ WILLIAM M. YANDELL, III
--------------------------------------
William M. Yandell, III,
Its President
<PAGE> 2
This Note and the indebtedness evidenced hereby is subordinated in right of
payment to the prior payment in full of the Senior Obligations (as defined in
the Subordination Agreement hereinafter referred to) pursuant to, and to the
extent provided in, that certain Subordination Agreement dated as of November
20, 1992, executed by the maker hereof and payee named herein in favor of
maker.
<PAGE> 1
EXHIBIT 4.49
MORTGAGE AND SECURITY AGREEMENT
UNITED STATES OF AMERICA
STATE OF LOUISIANA
PARISH OF CALCASIEU
BY:
MERCURY CELLULAR TELEPHONE COMPANY
IN FAVOR OF:
COBANK, ACB
AND ANY FUTURE HOLDER OR HOLDERS
BE IT KNOWN, THAT ON THE 20TH DAY OF APRIL, 1995;
BEFORE ME, THE UNDERSIGNED NOTARY PUBLIC, AND IN THE PRESENCE OF THE
UNDERSIGNED COMPETENT WITNESSES;
PERSONALLY CAME AND APPEARED:
MERCURY CELLULAR TELEPHONE COMPANY, TIN: 72-1099261, A
CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING
UNDER THE LAWS OF THE STATE OF LOUISIANA, AND HAS ITS REGISTERED
OFFICES AT 1 LAKESHORE DRIVE, CM TOWER, SUITE 1495, P.O. DRAWER
3104, LAKE CHARLES, LA 70602-3104 APPEARING HEREIN THROUGH ITS
DULY AUTHORIZED REPRESENTATIVE(S), PURSUANT TO A RESOLUTION OF
ITS BOARD OF DIRECTORS, A CERTIFIED COPY OF WHICH IS ATTACHED
HERETO AND EXPRESSLY MADE A PART HEREOF ("MORTGAGOR");
WHO DECLARED THAT:
TERMS AND CONDITIONS:
DEFINITIONS. THE FOLLOWING WORDS SHALL HAVE THE FOLLOWING MEANINGS WHEN USED IN
THIS MORTGAGE:
ADDITIONAL ADVANCES. The words "Additional Advances" mean any and all
additional sums that Mortgagee may advance on Mortgagor's behalf as
provided under this Mortgage.
BORROWER. The word "Borrower" means CTC Financial, Inc., a Louisiana
corporation, and its successors and assigns.
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MORTGAGE Page 2
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CTC NOTE. The words "CTC Note" mean that certain promissory note dated
of even date made by Borrower to the order of Mortgagee in the original
principal amount of $18,000,000, as the same may be amended,
supplemented, modified or restated from time to time.
ENCUMBRANCES. The word "Encumbrances" means individually, collectively
and interchangeably any and all presently existing and/or future
mortgages, liens, privileges, encumbrances, and other contractual and/or
statutory security interests and rights of every nature and kind that,
now and/or in the future, may affect the Property or any part or parts
thereof.
ENVIRONMENTAL LAWS. The words "Environmental Laws" mean individually,
collectively and interchangeably, any of those laws, statutes,
ordinances, rules, regulations, administrative orders or permits
described in the subsection set forth below entitled "Compliance with
Environmental Laws."
EVENT OF DEFAULT. The words "Event of Default" mean individually,
collectively, and interchangeably any of the Events of Default set forth
below in the section titled "Events of Default."
GUARANTY. The word "Guaranty" means that certain Continuing Guaranty of
even date herewith made by Mortgagor in favor of Mortgagee, securing
among other things, the CTC Note, as such Continuing Guaranty may be
amended, supplemented, modified or restated from time to time.
HAZARDOUS MATERIALS. The words "Hazardous Materials" means and includes
all those materials and substances described in the subsection set forth
below entitled "Compliance with Environmental Laws."
INDEBTEDNESS. The word "Indebtedness" means individually, collectively
and interchangeably the CTC Note and any and all present and future
loans, advances, and/or other extensions of credit obtained and/or to be
obtained by Mortgagor from Mortgagee, directly or indirectly, as well as
Mortgagee's successors and assigns, from time to time, one or more
times, now and in the future, and any and all promissory notes
evidencing such present and/or future loans, advances, and/or other
extensions of credit, including, without limitation, the Note, and any
and all amendments thereto and/or substitutions therefor, and any and
all renewals, extensions and refinancings thereof, as well as any and
all other obligations, including, without limitation, Mortgagor's
covenants and agreements in any present or future guaranty, loan or
credit agreement or any other agreement, document or instrument executed
by Mortgagor, including, without limitation, the Guaranty, and
liabilities that Mortgagor may now and/or in the future owe to and/or
incur in favor of Mortgagee, whether direct or indirect, or by way of
assignment or purchase of a participation interest, and whether related
or unrelated, or whether
<PAGE> 3
MORTGAGE Page 3
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committed or purely discretionary, and whether absolute or contingent,
liquidated or unliquidated, voluntary or involuntary, determined or
undetermined, due or to become due, and whether now existing or
hereafter arising, or otherwise secured or unsecured, whether Mortgagor
is obligated alone or with others on a "solidary" or "joint and several"
basis, as a principal obligor or as a surety, guarantor, or endorser, of
every nature and kind whatsoever, whether or not any such Indebtedness
may be barred under any statute of limitations or prescriptive period or
may be or become otherwise unenforceable or voidable for any reason
whatsoever. Notwithstanding any other provision of this Mortgage, the
maximum amount of Indebtedness secured hereby shall be limited to
$18,000,000.
LEASEHOLD LEASES. The words "Leasehold Leases" mean individually,
collectively and interchangeably, any of those leases or other
arrangements identified in Exhibit B attached hereto and expressly made
a part hereof by which lessors have leased, let and demised to Mortgagor
the Leased Property.
LEASED PROPERTY. The words "Leased Property" mean that certain immovable
(real) property as more fully described in Exhibit C attached hereto and
expressly made a part hereof.
LOAN AGREEMENT. The words "Loan Agreement" mean that certain Loan
Agreement of even date herewith by and between Borrower and Mortgagee,
as the same may be amended, supplemented or modified from time to time.
MORTGAGE. The word "Mortgage" means this Mortgage and Security Agreement
as this Mortgage and Security Agreement may be amended, supplemented,
restated or otherwise modified from time to time.
MORTGAGEE. The word "Mortgagee" means CoBank, ACB (TIN:84-1102254), its
successors and assigns, and any future holder or holders of any of the
Indebtedness.
MORTGAGOR. The word "Mortgagor" means individually, collectively and
interchangeably the above referenced Mortgagor, as well as any and all
persons and entities subsequently purchasing the Property, with or
without assumption of this Mortgage.
NOTE: The word "Note" means that certain Promissory Note of even date
herewith made by Mortgagor to the order of Borrower and assigned to
Mortgagee in the original principal amount of $18,000,000, as the same
may be amended, supplemented, modified or restated from time to time.
PROPERTY. The word "Property" means individually, collectively and
interchangeably any and all of Mortgagor's present and future property
subject to this Mortgage, including, without limitation, the Leasehold
Leases.
<PAGE> 4
MORTGAGE Page 4
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RELATED DOCUMENTS. The words "Related Documents" mean and include
individually, collectively, interchangeably and without limitation all
promissory notes, credit agreements, loan agreements, guaranties,
security agreements, mortgages, collateral mortgages, deeds of trust,
and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the Indebtedness,
including, without limitation, the Loan Agreement, the Guaranty, the
Note and the CTC Note.
GRANTING OF MORTGAGE. And now, in order to secure the prompt and
punctual payment and satisfaction of the Indebtedness, including,
without limitation, the obligations of Mortgagor under the Note and the
Guaranty and of Borrower under the CTC Note and the Loan Agreement, from
which Mortgagor hereby acknowledges that it will receive direct and
substantial benefit, in principal, interest, costs, expenses, attorneys'
fees and other fees and charges, and additionally to secure repayment of
any and all Additional Advances that Mortgagee may make on behalf of or
for the benefit of Mortgagor as provided in this Mortgage, together with
interest thereon, Mortgagor does by these presents specifically
mortgage, affect and hypothecate unto and in favor of Mortgagee, any and
all of Mortgagor's present and future rights, title and interest in and
to the following described Property:
THE IMMOVABLE (REAL) PROPERTY, AND LEASEHOLD ESTATES IN THE IMMOVABLE
(REAL) PROPERTY, AS MORE FULLY DESCRIBED IN EXHIBIT A AND EXHIBIT C
ATTACHED HERETO AND EXPRESSLY MADE A PART HEREOF, AND ANY AFTER-ACQUIRED
ESTATE OF MORTGAGOR IN THE LEASED PROPERTY AND ANY OPTION TO PURCHASE
THE LEASED PROPERTY NOW OR HEREAFTER EXISTING IN FAVOR OF MORTGAGOR,
TOGETHER WITH ANY AND ALL PRESENT AND FUTURE BUILDING(S), CONSTRUCTIONS,
COMPONENT PARTS, IMPROVEMENTS, ATTACHMENTS, APPURTENANCES, FIXTURES,
RIGHTS, WAYS, PRIVILEGES, ADVANTAGES, BATTURE, AND BATTURE RIGHTS,
SERVITUDES AND EASEMENTS OF EVERY TYPE AND DESCRIPTION, NOW AND/OR IN
THE FUTURE RELATING TO THE PROPERTY AND THE LEASED PROPERTY, AND ANY AND
ALL ITEMS AND FIXTURES ATTACHED TO AND/OR FORMING INTEGRAL OR COMPONENT
PARTS OF THE PROPERTY AND THE LEASED PROPERTY IN ACCORDANCE WITH THE
LOUISIANA CIVIL CODE, INCLUDING, WITHOUT LIMITATION, ALL POLES, POSTS,
CROSSARMS, CONDUITS, DUCTS, LINES, WHETHER UNDERGROUND OR OVERHEAD OR
OTHERWISE, WIRES, CABLES, EXCHANGES, SWITCHES, INCLUDING, WITHOUT
LIMITATION, HOST SWITCHES AND REMOTE SWITCHES, DESKS, TESTBOARDS,
FRAMES, RACKS, MOTORS, GENERATORS, BATTERIES AND OTHER ITEMS OF CENTRAL
OFFICE EQUIPMENT, PAY-STATIONS, PROTECTORS, INSTRUMENTS, CONNECTORS AND
APPLIANCES. ALL EASEMENTS, RIGHTS-OF-WAY, RIGHTS, SATELLITE DISHES,
TOWERS, EQUIPMENT AND ALL OTHER PERSONAL PROPERTY COMPRISING THE UTILITY
SYSTEM OPERATED BY MORTGAGOR. ALL MONIES AND PROCEEDS FROM THE
PROPERTY, INCLUDING, WITHOUT LIMITATION, FROM LEASES, SUBLEASES, TENANT,
CONTRACTS, RENTAL AGREEMENTS, CONTRACTS, LICENSES AND PERMITS, RENTS,
ISSUES AND PROFITS, INCLUDING, WITHOUT LIMITATION, ALL RENTS, REFUNDS,
REBATES, TENANT REIMBURSEMENTS, CONDEMNATION AWARDS, AND THE PROCEEDS OF
THE SALE OF, INSURANCE ON OR OTHER BORROWINGS SECURED IN WHOLE OR IN
PART BY ANY OF THE PROPERTY. ALL CLAIMS AND CAUSES OF ACTION ARISING
FROM OR OTHERWISE RELATED TO ANY OF THE FOREGOING, AND ALL RIGHTS AND
JUDGMENTS RELATED TO ANY LEGAL ACTIONS IN CONNECTION WITH SUCH CLAIMS OR
CAUSES OF ACTION, AND ALL
<PAGE> 5
MORTGAGE Page 5
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CASH OR OTHER PROPERTY OR RIGHTS THERETO RELATING TO SUCH CLAIMS OR
CAUSES OF ACTION. ALL OTHER IMMOVABLE (REAL) PROPERTY OF EVERY KIND,
NATURE AND DESCRIPTION, AND WHERESOEVER LOCATED, NOW OWNED OR LEASED OR
HEREAFTER ACQUIRED OR LEASED BY MORTGAGOR. THE IMMOVABLE (REAL)
PROPERTY NOW OWNED OR LEASED BY MORTGAGOR IS DESCRIBED ON EXHIBIT A AND
EXHIBIT C ATTACHED HERETO AND HEREBY MADE A PART HEREOF.
MORTGAGE SECURING FUTURE INDEBTEDNESS. This Mortgage has been executed by
Mortgagor pursuant to Article 3298 of the Louisiana Civil Code for the purpose
of securing the Indebtedness that may now be existing and/or that may arise in
the future as provided herein, with the preferences and priorities provided
under applicable Louisiana law. However, nothing under this Mortgage shall be
construed as limiting the duration of this Mortgage or the purpose or purposes
for which the Indebtedness may be requested or extended. Mortgagor's additional
loans or guarantees will automatically be secured by this Mortgage without the
necessity that Mortgagor agree or consent to such a result at the time such
additional loans or guarantees are made and that the note or notes and guaranty
or guaranties evidencing such additional loans or guarantees reference the fact
that such notes or guaranties are secured by this Mortgage. Mortgagor
understands that Mortgagor may not subsequently have a change of mind and
insist that Mortgagor's additional loans or guaranties not be secured by this
Mortgage unless Mortgagee specifically agrees to such a request in writing.
MORTGAGE AND SECURITY AGREEMENT. This Mortgage is a self operative security
agreement with respect to the Property and is intended to constitute a security
agreement as required under the Louisiana Uniform Commercial Code, but the
Mortgagor agrees to execute and deliver on demand such other security
agreements, financing statements and other instruments as Mortgagee may request
in order to perfect its security interest or to impose the lien hereof more
specifically upon any of the Property and Mortgagee shall have all the rights
and remedies of a secured party under the Louisiana Uniform Commercial Code in
addition to those specified herein.
DURATION OF MORTGAGE. This Mortgage will remain in effect until; (a) all of the
Indebtedness is fully paid and satisfied and there is no agreement or
commitment to advance any additional Indebtedness; and (b) Mortgagor cancels
this Mortgage by filing a written cancellation instrument signed by Mortgagee.
After the condition set forth in clause (a) of the preceding sentence has been
satisfied, Mortgagor may request Mortgagee to sign such a written cancellation
instrument by writing Mortgagee at the above address or at such other address
as Mortgagee may advise. Mortgagee may delay providing Mortgagor with such a
mortgage cancellation instrument for a period of thirty (30) days following
receipt of Mortgagor's written request for Mortgagee to verify that all
conditions precedent for mortgage cancellation have been satisfied.
PROHIBITIONS REGARDING PROPERTY. So long as this Mortgage remains in effect,
and to the extent not permitted in the Guaranty, Mortgagor agrees not to,
without
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MORTGAGE Page 6
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Mortgagee's prior written consent: (a) sell, assign, transfer, convey, option,
mortgage, or lease the Property or enter into any type of bond for deed
contract (or make any agreement therefor) concerning all or any part of the
Property other than as permitted in the Guaranty; (b) permit any Encumbrance to
be placed on or to attach to the Property; or (c) do anything or permit
anything to be done that may in any way impair Mortgagee's security interests
and rights in and to the Property.
REPRESENTATIONS AND WARRANTIES CONCERNING THE PROPERTY. Except as previously
disclosed to Mortgagee in writing, Mortgagor represents and warrants that: (a)
Mortgagor is and will continue to be the lawful owner of the Property and the
lawful tenant of the Leased Property and owner of the leasehold estates created
by the Leasehold Leases; (b) Mortgagor has the right to mortgage the Property
to Mortgagee; (c) as of the time this Mortgage is recorded, there are no
Encumbrances affecting the Property except as set forth on Exhibit D attached
hereto and made a part hereof; (d) security rights and interest granted under
this Mortgage are not nor will they become subordinate or junior to any
security rights, interests, liens, or claims of; or in favor of; any person,
firm, corporation, or other entity, including, without limitation, the United
States, or any department, agency or instrumentality thereof; or any state,
county, parish, city, or local governmental agency; and (e) this Mortgage is
binding upon Mortgagor as well as Mortgagor's successors and assigns, and
subject to limitations on enforceability imposed by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting creditors
rights generally, is legally enforceable in accordance with its terms. The
above representations and warranties, and all other representations and
warranties contained in this Mortgage, are and will be continuing in nature and
will remain in full force and effect until such time as this Mortgage is
canceled in the manner provided above.
INSURANCE PROVISIONS. The following insurance provisions are a part of this
Mortgage.
REQUIRED INSURANCE. So long as this Mortgage remains in effect,
Mortgagor shall, at its sole cost, keep and/or cause others, at their
expense, to keep the Property constantly insured against loss by fire,
by hazards included within the term "extended coverage," and by such
other hazards and in such amounts (including flood insurance, where
applicable) as may be required by Mortgagee. Such insurance shall be in
an amount not less than the full replacement value of the Property, or
such other amount or amounts as Mortgagee may require or approve in
writing. Mortgagor shall further provide and maintain, at its sole cost
and expense, comprehensive public liability insurance, naming Mortgagor
as the party insured and Mortgagee as loss payee, protecting against
claims for bodily injury, death and/or property damage arising out of
the use, ownership, occupancy, possession, operation and condition of
the Property, and further containing a broad form contractual liability
endorsement covering Mortgagor's obligations to indemnify Mortgagee as
provided hereunder. Should the Property at any time become located in an
area designated by the Director of the Federal Emergency Management
<PAGE> 7
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Agency as a special flood hazard area, Mortgagor agrees to obtain and
maintain Federal flood Insurance to the extent such insurance is
required and is or becomes available, for the term of the loan and for
the full unpaid principal balance of the loan, or the maximum limit of
coverage that is available, whichever is less.
INSURANCE COMPANIES AND POLICIES. Mortgagor may purchase such insurance
from any insurance company or broker that is acceptable to Mortgagee,
provided that such approval may not be unreasonably withheld. All such
insurance policies, including renewals and replacements, must also be in
form and substance acceptable to Mortgagee, and must additionally
contain a lender's loss payee endorsement in favor of Mortgagee,
providing in part that (a) all proceeds and returned premiums under such
policies of insurance will be paid directly to Mortgagee, and (b) no act
or omission on the part of Mortgagor, or any of its directors, officers,
agents, employees or representatives, nor breach of any warranty
contained in such policies, shall affect the obligations of the insurer
to pay the full amount of any loss to Mortgagee. Such policies of
insurance must also contain a provision prohibiting cancellation,
nonrenewal, or the alteration of such insurance without at least ten
(10) days' prior written notice to Mortgagee of such intended
cancellation or alteration. Mortgagor agrees to provide Mortgagee with
originals or certified copies of such policies of insurance. Mortgagor
further agrees to promptly furnish Mortgagee with copies of all renewal
notices and, if requested by Mortgagee, with copies of receipts for paid
premiums. Mortgagor shall provide Mortgagee with originals or certified
copies of all renewal or replacement policies of insurance no later than
fifteen (15) days before any such existing policy or policies should
expire. If Mortgagor's insurance policies and renewals are held by
another person, Mortgagor agrees to supply original or certified copies
of the same to Mortgagee within the time periods required above.
PROPERTY LOSSES AND CLAIMS. Mortgagor agrees to immediately notify
Mortgagee in writing of any material casualty to or accident involving
the Property, whether or not such casualty or loss is covered by
insurance. Mortgagor further agrees to promptly notify Mortgagor's
insurance company and to submit an appropriate claim and proof of claim
to the insurance company in the event that any material part of the
Property is lost, damaged, or destroyed as a result of an insured
hazard. Mortgagee may submit such a claim and proof of claim to the
insurance company on Mortgagor's behalf, should Mortgagor fail to do so
promptly for any reason. Mortgagor hereby irrevocably appoints Mortgagee
as its agent and attorney-in-fact, such agency being coupled with an
interest, to make, settle and adjust claims under such policy or
policies of insurance and to endorse the name of Mortgagor on any check
or other item of payment for the proceeds thereof; it being understood,
however, that unless one or more Events of Default exist under this
Mortgage, Mortgagee will not settle or adjust any such claim without the
prior approval of Mortgagor (which approval shall not be unreasonably
withheld).
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INSURANCE PROCEEDS. Mortgagee shall have the right to directly receive
the proceeds of all insurance protecting the Property. In the event that
Mortgagor should receive any such insurance proceeds, Mortgagor agrees
to immediately turn over and to pay such proceeds directly to Mortgagee.
All insurance proceeds may be applied, at Mortgagee's sole option and
discretion, and in such a manner as Mortgagee may determine (after
payment of all reasonable costs, expenses and attorney's fees
necessarily paid or fees necessarily paid or incurred by Mortgagee in
this connection), for the purpose of: (a) repairing or restoring the
lost, damaged or destroyed Property; or (b) reducing the then
outstanding balance of the Indebtedness and any Additional Advances that
Mortgagee may have made on Mortgagor's behalf; together with interest
thereon. Mortgagee's receipt of such insurance proceeds and the
application of such proceeds as provided herein shall not, however,
affect the lien of this Mortgage. Nothing under this section shall be
deemed to excuse Mortgagor from its obligations to promptly repair,
replace or restore any lost or damaged Property which is useful or
necessary in its business, whether or not the same may be covered by
insurance, and whether or not such proceeds of insurance are available,
and whether such proceeds are sufficient in amount to complete such
repair, replacement or restoration to the satisfaction of Mortgagee.
Furthermore, unless otherwise confirmed by Mortgagee in writing, the
application or release of any insurance proceeds by Mortgagee shall not
be deemed to cure or waive any Event of Default under this Mortgage.
Notwithstanding the foregoing, so long as no Event of Default shall have
occurred and be continuing, and provided that there shall be no denial
of liability to a named insured by the insurance carrier, Mortgagee
shall allow the use of insurance proceeds in the following manner: All
insurance proceeds shall be delivered to Mortgagee. Mortgagor shall
furnish to Mortgagee evidence satisfactory to Mortgagee of the total
costs of restoration, replacement or rebuilding of the Property and
evidence that the Property may, in accordance with applicable law, be
restored to the condition and use existing immediately prior to such
casualty. Mortgagee shall hold all such insurance proceeds until
Mortgagor deposits with Mortgagee the total amount of money which, when
added to the net insurance proceeds on hand, is sufficient in
Mortgagee's reasonable judgment to pay the costs of the restoration (the
total of such insurance proceeds on hand and the amounts deposited by
Mortgagor are hereinafter collectively referred to as the "Net Damage
Proceeds"). The Net Damage Proceeds shall, unless an Event of Default
(or any event or condition has occurred which after notice, lapse of
time or otherwise will become an Event of Default if the same were not
corrected) has occurred and is continuing, be paid to Mortgagor from
time to time as restoration progresses, to pay (or reimburse Mortgagor
for) the costs of restoration. Such payments shall be made only upon the
written request of Mortgagor accompanied by a completed voucher and such
backup materials as Mortgagee may reasonably request, consistent with
Mortgagee's standard lending practices.
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TAXES AND LIENS. The following provisions relating to the taxes and liens on
the Property are a part of this Mortgage.
PAYMENT. Mortgagor shall promptly pay or cause to be paid when due, all
taxes, local and special assessments, and governmental and other
charges, as well as all public and/or private utility charges, of every
type and description, that may from time to time be imposed, assessed
and levied against the Property or against Mortgagor. Mortgagor further
agrees to furnish Mortgagee upon Mortgagee's written request with
evidence that such taxes, assessments, and governmental and other
charges have been paid in full and in a timely manner. Notwithstanding
the foregoing, Mortgagor may contest the validity or amount of any taxes
or governmental and other charges; provided that: (a) Mortgagor contests
the assessment of such taxes or governmental and other charges in good
faith and at Mortgagor's sole expense; (b) the contesting of such taxes
or governmental and other charges will not subject the Property to
forfeiture or sale; (c) Mortgagor provides Mortgagee with prior written
notice of Mortgagor's intent to contest such taxes or governmental and
other charges; and (d) Mortgagor provides Mortgagee with additional
collateral security or an appropriate bond in form and amount
satisfactory to Mortgagee for payment of the amount being contested.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Mortgagor agrees that Mortgagor's
possession and use of the Property shall be governed by the following
provisions:
USE OF PROPERTY. Mortgagor shall not use the Property and shall not
permit others to use the Property, for any purpose or purposes other
than those previously disclosed to Mortgagee in writing, and in no event
shall any of the Property be used in any manner that would damage,
depreciate, or diminish its value, or that may result in a cancellation
or termination of insurance coverage. Mortgagor additionally agrees not
to do or to suffer to be done anything which may increase the risk of
fire or other hazard to the Property or any part or parts thereof.
Mortgagor shall not suffer or permit the Property, or any portion
thereof, to be used by the public and others as such, without
restriction or in such manner as might impair Mortgagor's title to the
Property or any portion thereof, or in such manner as may make possible
a claim or claims of adverse usage, easement, servitude, right of way or
habitation, or adverse possession by the public and others, or any
implied, tacit or other dedication of the Property.
COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS. Mortgagor shall observe
and abide by, and shall cause others to observe and abide by, all
present and future laws, ordinances, orders, rules, regulations,
restrictions, and requirements of all federal, state and municipal
governments, courts, departments, commissions, boards, agencies, and
officers, including, without limitation, all zoning and/or building
codes, environmental protection statutes, ordinances, regulations,
orders, judgments, decrees, and restrictions, which may be applicable to
the Property or any part or parts thereof and the sidewalks
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and curbs adjoining the Property, or the use or manner of use of the
Property, whether or not any such law, ordinance, order, rule,
regulation, restriction or requirement shall necessitate any structural
changes or improvements to the Property. Mortgagor shall have the right,
after prior written notice to Mortgagee, to contest by appropriate legal
proceedings diligently conducted in good faith, without cost or expense
to Mortgagee, the validity or applicability of any law, ordinance,
order, rule or regulation, or requirement of the nature referred to
above, and which does not subject Mortgagee to any civil or criminal
liability, subject to the following: (a) if by the terms of any such
law, ordinance, order, rule, regulation or requirement, compliance
therewith pending the prosecution of any such proceeding may legally be
delayed without incurring any lien or charge of any kind against the
Property, Mortgagor may delay compliance therewith until the final
determination of such proceeding; and (b) if any lien or charge against
the Property would arise by reason of any such delay, Mortgagor may,
nevertheless, contest any such law, ordinance, order, rule, regulation
or requirement and delay compliance therewith, provided that Mortgagor
(i) notifies Mortgagee in writing in advance of its intent to contest
the foregoing, (ii) furnishes to Mortgagee an appropriate bond or other
security satisfactory to Mortgagee against any loss or injury by reason
of such contest or delay, and (iii) prosecutes the contest with due
diligence. Notwithstanding the foregoing, if the contesting of the
validity or legality of any such law, ordinance, order, rule, regulation
or requirement may cause a breach of any of the terms, conditions and/or
covenants of any lease as to which Mortgagor may be a party, then
Mortgagor shall not have the right to delay compliance therewith.
Mortgagor shall further promptly perform and observe, and shall cause
others to promptly perform and observe, all the terms, covenants and
conditions of any requirements, instruments and agreements affecting the
Property, non-compliance with which may adversely affect the priority
of this Mortgage, or which may impose any duty or obligation upon
Mortgagor, or upon any lessee or other occupant of the Property.
Mortgagor shall further do and cause to be done all things necessary to
preserve intact and unimpaired any and all easements, servitudes,
appurtenances and other interests and rights in favor of, or
constituting any portion of, the Property.
COMPLIANCE WITH ENVIRONMENTAL LAWS. Mortgagor further makes the
following representations, covenants, and warranties, all of which are
subject to any exceptions that Mortgagor may have previously disclosed
in writing to Mortgagee, and which, to the extent that they deal with
representations of fact, are based on Mortgagor's present knowledge,
arrived at after reasonable inquiry.
(a) Use of Property and Facilities.
(i) Mortgagor will (A) use, handle, transport or store Hazardous
Materials as defined under any Environmental Law and (B) store or treat
nonhazardous wastes (1) in a good
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and prudent manner in the ordinary course of business, and (2) in
compliance with all applicable Environmental Laws.
(ii) Mortgagor will not conduct or allow to be conducted, in
violation of any Environmental Law, any business, operations or activity
on the Property, or employ or use the Property to generate, use, handle,
manufacture, treat, store, process, transport or dispose of any
Hazardous Materials, or any other substance which is prohibited,
controlled or regulated under applicable law, or which poses a threat or
nuisance to public safety, health or the environment or cause, or allow
to be caused, a known or suspected release of Hazardous Materials on,
under or from the Property.
(iii) Mortgagor will not do or permit any act or thing, business
or operation, that poses an unreasonable risk of harm, or impairs or may
impair the value of the Property, or any part thereof.
(b) Condition of Property.
(i) Mortgagor shall take all appropriate response action,
including any removal and remedial action, in the event of a release,
emission, discharge or disposal of Hazardous Materials in, on, under or
about the Property, so as to remain in compliance with Environmental Law
as hereinafter defined.
(ii) Underground tanks, wells (except domestic water wells),
septic tanks, ponds, pits, or any other storage tanks (whether currently
in use or abandoned) on the Property, if any, are maintained and will
continue to be maintained in compliance with applicable Environmental
Law.
(c) Notice of Environmental Problem or Litigation.
Neither Mortgagor nor any of its tenants have given, nor were
they required to give, nor have they received, any notice, letter,
citation, order, warning, complaint, inquiry, claim or demand that: (i)
Mortgagor and/or any tenants have violated, or are about to violate, any
Environmental Law, judgment or order; (ii) there has been a release, or
there is a threat of release, of Hazardous Materials from the Property;
(iii) Mortgagor and/or any tenants may be or are liable, in whole or in
part, for the costs or cleaning up, remediating, removing or responding
to a release or threatened release of Hazardous Materials; (iv) the
Property is subject to a lien in favor of any governmental entity or any
liability, costs or damages, under any Environmental Law arising from or
costs incurred by such governmental entity in response to a release or a
threatened release of a Hazardous Material. Mortgagor further
represents and warrants that no conditions currently exist or are
currently reasonably foreseeable, that would subject Mortgagor to any
such investigation, litigation, administrative enforcement or any
damages, penalties,
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injunctive relief; or cleanup costs under any Environmental Law. In the
event of such notice, Mortgagor and any tenants shall immediately
provide a copy to Mortgagee.
(d) Right of Inspection.
Mortgagor hereby grants, and will cause any tenants to grant, to
Mortgagee, its agents, attorneys, employees, consultants, contractors,
successors and assigns, an irrevocable license and authorization, upon
reasonable notice, to enter upon and inspect the Property and faculties
thereon, and perform such tests, including without limitation,
subsurface testing, soils and groundwater testing, and other tests which
may physically invade the Property thereon, as Mortgagee, in its sole
discretion, determines are necessary to protect its security interest,
provided, however, that under no circumstances shall Mortgagee be
obligated to perform such inspections or tests.
(e) Indemnity.
Mortgagor agrees to indemnify and hold Mortgagee, its directors,
employees, agents, and its successors and assigns, harmless from and
against any and all claims, losses, damages, liabilities, fines,
penalties, charges, judgments, administrative orders, remedial action
requirements, enforcement actions of any kind, and all costs and
expenses incurred in connection therewith (including, but not limited
to, attorneys' fees and expenses) arising directly or indirectly, in
whole or in part, out of any failure of Mortgagor to comply with the
environmental representations, warranties and covenants contained
herein.
(f) Continuation of Representations and Warranties, Covenants and
Indemnities.
Mortgagor's representations, warranties, covenants and indemnities
contained herein shall survive the occurrence of any event whatsoever,
including without limitation, the satisfaction of the Note, the partial
release or release or foreclosure of this Mortgage, the acceptance by
Mortgagee of a deed in lieu of foreclosure, or any transfer or
abandonment of the Property.
(g) Corrective Action.
In the event Mortgagor is in breach of any of its
representations, warranties or agreements as set forth above, Mortgagor
at its sole expense, shall take all action required, including
environmental cleanup of the Property, to comply with the
representations, warranties and covenants herein or applicable legal
requirements and, in any event, shall take all action deemed necessary
under all applicable Environmental Laws.
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(h) Hazardous Materials Defined.
The term "Hazardous Materials" shall mean dangerous, toxic, or
hazardous pollutants, contaminants, chemicals, wastes, materials or
substances, as defined in or governed by the provisions of any
Environmental Law.
(i) Environmental Law Defined.
The term "Environmental Law" shall mean any federal, state or
local law, statute, ordinance, rule, regulation, administrative order
and permit now in effect or hereinafter enacted, pertaining to the
public health, safety, industrial hygiene, or the environmental
conditions on, under or about the Property.
ERISA. Mortgagor represents and warrants to Lender that the granting of
this Mortgage and the consummation of any loan or loans or other
transactions contemplated or secured hereby will not violate the
provisions of, and will not constitute a prohibited transaction under
the Employee Retirement Income Security Act of 1974 ("ERISA").
ALTERATIONS. All accessories, additions, modifications and fixtures
installed on or attached to the Property shall, without further action
by the parties hereto, automatically become additional Property subject
to this Mortgage.
ENCUMBRANCES. The following provisions relating to Encumbrances on the Property
are a part of this Mortgage.
FUTURE ENCUMBRANCES. Except to the extent permitted in the Guaranty,
Mortgagor shall not, without the prior written consent of Mortgagee,
grant any Encumbrance that may affect the Property, or any part or parts
thereof; nor shall Mortgagor permit or consent to any Encumbrance
attaching to or being filed against any of the Property in favor of
anyone other than Mortgagee. Mortgagor shall further promptly pay when
due all statements and charges of mechanics, materialmen, laborers and
others incurred in connection with the alteration, improvement, repair
and maintenance of the Property, or otherwise furnish appropriate
security or bond, so that no future Encumbrance may ever attach to or be
filed against the Property or any of Mortgagor's rights therein.
NOTICE OF ENCUMBRANCES. Mortgagor shall immediately notify Mortgagee in
writing upon the filing of any attachment, lien, judicial process,
claim, or other Encumbrance. Mortgagor additionally agrees to notify
Mortgagee immediately in writing upon the occurrence of any default, or
event that with the passage of time, failure to cure, or giving of
notice, might result in a default under any of Mortgagor's obligations
that may be secured by any presently existing or future Encumbrance, or
that might result in an Encumbrance affecting the Property, or should
any of the Property be seized or attached
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or levied upon, or threatened by seizure or attachment or levy, by any
person other than Mortgagee.
ADDITIONAL ADVANCES FOR SPECIFIC PURPOSES. Mortgagee shall have the right,
within Mortgagee's sole option and discretion, to make Additional Advances on
Mortgagor's behalf for the following purposes:
INSURANCE. If Mortgagor should for any reason fail to maintain
insurance on the Property as required under this Mortgage, Mortgagee may
make Additional Advances on Mortgagor's behalf for the purpose of
purchasing and maintaining, and Mortgagee may purchase and maintain such
insurance coverage (including insurance protecting only Mortgagee's
interests in the Property).
TAXES. If Mortgagor should for any reason fail to promptly pay when due
taxes, assessments and governmental and other charges as required under
this Mortgage, Mortgagee may make Additional Advances on Mortgagor's
behalf for the purpose of paying, and Mortgagee may pay, such taxes,
assessments and governmental and other charges.
REPAIRS. If Mortgagor should for any reason fail to make all necessary
repairs to the Property and to keep the Property in good working order
and condition as required under this Mortgage, Mortgagor agrees that
Mortgagee may make Additional Advances on Mortgagor's behalf for the
purpose of making, and Mortgagee may make, such repairs and maintenance
to the Property as Mortgagee may deem to be necessary and proper within
its sole discretion.
ENCUMBRANCES. If Mortgagor should permit or allow any Encumbrance to
attach to or be recorded or filed against the Property, without having
first obtained Mortgagee's prior written consent, or if Mortgagor should
for any reason default under any obligation secured by any presently
existing or future Encumbrance, Mortgagee may make Additional Advances
on Mortgagor's behalf and take such other action or actions as Mortgagee
may deem to be necessary and proper, within Mortgagee's sole discretion,
to pay and fully satisfy such obligation and/or Encumbrance, to cure or
rectify any such default or defaults, and to prevent the occurrence of
any future defaults.
OTHER. Mortgagee may further make Additional Advances on Mortgagor's
behalf and take such other action or actions as Mortgagee may deem to be
necessary and proper, within Mortgagee's sole discretion, to cure and
rectify any actions or inactions on Mortgagor's part, as are required
under this Mortgage, that are not listed immediately above.
NO OBLIGATIONS. Nothing under this Mortgage shall obligate Mortgagee to
make any such Additional Advances, or to take any of the above actions
on Mortgagor's behalf; or
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as making Mortgagee in any way responsible or liable for any loss,
damage or injury to Mortgagor, or to any other person or entity,
resulting from Mortgagee's election not to advance any such additional
sums or to take any such action or actions. In addition, Mortgagee's
election to make Additional Advances and/or to take any above action or
actions on Mortgagor's behalf, shall not constitute a waiver or
forbearance by Mortgagee of any Event of Default under this Mortgage.
OBLIGATION TO REPAY ADDITIONAL ADVANCES; INTEREST. Mortgagor unconditionally
agrees to repay any and all Additional Advances that Mortgagee may elect to
make on Mortgagor's behalf, together with interest as provided herein,
immediately upon demand by Mortgagee. Mortgagor further agrees to pay Mortgagee
interest on the amount of such Additional Advances at the default rate of
interest provided under the Note and Related Documents, from the date of each
such Advance until all such Advances are repaid in full. Mortgagor's
obligations to repay Additional Advances to Mortgagee, together with interest
thereon, shall be secured by this Mortgage.
CONDEMNATION. The following provisions relating to condemnation of the Property
are a part of this Mortgage.
NOTICE OF PROCEEDINGS. Mortgagor shall immediately notify Mortgagee in
writing should all or any material part of the Property become subject
to any condemnation or expropriation proceedings or other similar
proceedings, including without limitation, any condemnation,
confiscation, or temporary requisition or taking of the Property, or any
material part or parts thereof. Mortgagor further agrees to promptly
take such steps as may be necessary and/or proper within Mortgagee's
sole judgment and at Mortgagor's expense, to defend any such
condemnation or expropriation proceedings and obtain the proceeds
derived therefrom. Mortgagor shall not agree to any settlement or
compromise or any condemnation or expropriation claim with respect to
all or any material part of the Property without Mortgagee's prior
written consent.
MORTGAGEE'S PARTICIPATION. Mortgagee may, at its sole option, elect to
participate in any such condemnation or expropriation proceedings
represented by counsel of Mortgagee's choice. Mortgagor agrees to
provide Mortgagee with such documentation as Mortgagee may request to
permit Mortgagee to so participate and to reimburse Mortgagee for its
costs associated therewith, including Mortgagee's reasonable attorneys'
fees.
CONDUCT OF PROCEEDINGS. Should Mortgagor fail to defend any such
condemnation or expropriation proceedings to Mortgagee's satisfaction,
Mortgagee may undertake the defense of such a proceeding for and on
behalf of Mortgagor. To this end, Mortgagor hereby irrevocably appoints
Mortgagee as its agent and attorney-in-fact, such agency being coupled
with an interest, to bring, defend, adjudicate, settle, or otherwise
compromise such condemnation or expropriation claims; it being
understood, however, that, unless one or more Events of Default (other
than the condemnation or
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expropriation of the Property) then exist under this Mortgage, Mortgagee
will not agree to any final settlement or compromise of any such
condemnation or expropriation claim without the prior approval of
Mortgagor, which approval shall not be unreasonably withheld.
PROCEEDS. Mortgagee shall have the right to receive all proceeds derived
or to be derived from the condemnation, expropriation or any permanent
or temporary taking of the Property, or any part or parts thereof. In
the event that Mortgagor should receive any such condemnation proceeds,
Mortgagor agrees to immediately turn over and to pay such proceeds to
Mortgagee. All condemnation proceeds, which are received by, or which
are payable to either Mortgagor or Mortgagee, shall be applied, at
Mortgagee's sole option and discretion, and in such manner as Mortgagee
may determine (after payment of all reasonable costs, expenses and
attorneys' fees necessarily paid or incurred by Mortgagor and/or
Mortgagee), for the purpose of: (a) replacing or restoring the
condemned, expropriated, or taken Property; or (b) reducing the then
outstanding balance of the Indebtedness and any Additional Advances that
Mortgagee may have made on Mortgagor's behalf, together with interest
thereon, with such payments being applied in the manner provided in this
Mortgage. Mortgagee's receipt of such condemnation proceeds and the
application of such proceeds as provided herein shall not, however,
affect the lien of this Mortgage.
AFTER-ACQUIRED PROPERTY. Mortgagor will notify Mortgagee in writing promptly
following the acquisition or lease of any real (immovable) property or any
interest therein and will, prior to any such acquisition or lease, provide such
additional documents as Mortgagee require pursuant to this paragraph. Mortgagor
shall execute and/or deliver (and pay the cost of preparation and recording
thereof) to Mortgagee, upon demand, any further instrument or instruments so as
to evidence, reaffirm, correct, perfect, continue or preserve the obligations
of Mortgagor under this Mortgage, the Guaranty, the Note or the other Related
Documents, the collateral at any time securing or intended to secure the
Indebtedness, and the first and prior legal security title and interest of
Mortgagee to all or any part of the Property, whether now owned or hereafter
acquired or leased by Mortgagor. Upon any failure by Mortgagor to do so,
Mortgagee may make, execute, record, file, rerecord and/or refile any and all
such instruments for and in the name of Mortgagor, and Mortgagor hereby
irrevocably appoints Mortgagee the agent and attorney-in-fact of Mortgagor to
do so. The security title of this Mortgage and the security title created
hereby will automatically attach, without further act to all after-acquired or
leased property.
SECURITY AGREEMENT.
SECURITY AGREEMENT WITH REGARD TO PERSONAL PROPERTY. With respect to all
movable property (including, without limitation, all poles, posts,
crossarms, conduits, ducts, lines, whether underground or overhead or
otherwise, wires, cables, exchanges, switches (including, without
limitation, host switches and remote switches), desks, testboards,
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frames, racks, motors, generators, batteries and other items of central
office equipment, pay-stations, protectors, instruments, connectors and
appliances; all easements, rights-of-way, rights, satellite dishes,
towers, equipment; all monies and proceeds from the Property, including,
without limitation, from leases, subleases, tenant, contracts, rental
agreements, contracts, licenses and permits, rents, issues and profits
(including, without limitation, all rents, refunds, rebates, tenant
reimbursements, condemnation awards, and the proceeds of the sale of;
insurance on or other borrowings secured in whole or in part by any of
the Property); all claims and causes of action arising from or otherwise
related to any of the foregoing; all rights and judgments related to any
legal actions in connection with such claims or causes of action, and
all cash or other property or rights thereto relating to such claims or
causes of action), wheresoever located, now owned or leased or hereafter
acquired or leased by Mortgagor, this Mortgage is hereby made and
declared to be a security agreement encumbering each and every item of
such property included herein as a part of the Property, in compliance
with the provisions of the Uniform Commercial Code as enacted in the
State of Louisiana. Upon request by Mortgagee, at any time and from time
to time, a financing statement or statements reciting this Mortgage to
be a security agreement affecting all of such property shall be executed
by Mortgagor and Mortgagee and appropriately filed. The remedies for any
violation of the covenants, terms and conditions of the security
agreement contained in this Mortgage shall be (i) as prescribed herein,
or (ii) as prescribed by general law, or (iii) as prescribed by the
specific statutory consequences now or hereafter enacted and specified
in said Uniform Commercial Code, all at Mortgagee's sole election.
Mortgagor and Mortgagee agree that the filing of any such financing
statement or statements in the records normally having to do with
personal property shall not in any way affect the agreement of Mortgagor
and Mortgagee that everything owned by Mortgagor and used in connection
with the production of income from the Property or adapted for use
therein or which is described or reflected in this Mortgage is, and at
all times and for all purposes and in all proceedings, both legal and
equitable, shall be, regarded as part of the real estate conveyed hereby
regardless of whether (i) any such item is physically attached to the
improvements, (ii) serial numbers are used for the better identification
of certain items capable of being thus identified in any exhibit to this
Mortgage, or (iii) any such item is referred to or reflected in any such
financing statement or statements so filed at any time. Similarly, the
mention in any such financing statement or statements of the rights in
and to (i) the proceeds of any fire and/or hazard insurance policy, or
(ii) any award in eminent domain proceedings for a taking or for loss of
value, or (iii) Mortgagor's interest as lessor in any present or future
lease or rights to income growing out of the use and/or occupancy of the
Property, whether pursuant to lease or otherwise, shall not in any way
alter any of the rights of Mortgagee as determined by this Mortgage or
affect the priority of Mortgagee's security interest granted hereby or
by any other recorded document, it being understood and agreed that such
mention in such financing statement or statements is solely for the
protection of Mortgagee in the event any court shall at any time hold
with respect to the foregoing clauses (i), (ii) or (iii) of this
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sentence, that notice of Mortgagee's priority of interest, to be
effective against a particular class of persons, must be filed in the
Uniform Commercial Code records.
IDENTITY OF MORTGAGOR. Mortgagor warrants that (i) Mortgagor's (that is,
"Debtor's") name, identity or corporate structure and residence or
principal place of business are as set forth on Exhibit E hereto and
made a part hereof; (ii) Mortgagor (that is, "Debtor") has been using or
operating under said name, identity or corporate structure without
change for the time period set forth in the next paragraph; and (iii)
the location of the collateral is upon the Property. Mortgagor covenants
and agrees that Mortgagor will furnish Mortgagee with notice of any
change in the matters addressed by clauses (i) or (iii) of this
paragraph within thirty (30) days of the effective date of any such
change and Mortgagor will promptly execute any financing statements or
other instruments deemed necessary by Mortgagee to prevent any filed
financial statement from becoming misleading or losing its perfected
status.
COMPLIANCE. The information contained in this paragraph is provided in
order that this Mortgage shall comply with the requirements of the
Uniform Commercial Code, as enacted in the State of Louisiana, for
instruments to be filed as financing statements. The names of the
"Debtor" and the "Secured Party," the identity or corporate structure
and residence or principal place of business of "Debtor," and the time
period for which "Debtor" has been using or operating under said name
and identity or corporate structure without change, are as set forth in
Schedule 1 of Exhibit E attached hereto and by this reference made a
part hereof; the mailing address of the "Secured Party" from which
information concerning the security interest may be obtained, and the
mailing address of "Debtor," are as set forth in Schedule 2 of said
Exhibit E attached hereto; and a statement indicating the types, or
describing the items, of collateral is set forth hereinabove.
PROVISIONS REGARDING LEASEHOLD LEASES.
(a) Mortgagor will duly and punctually perform and comply with all of the
terms of the Leasehold Leases required to be performed and complied with
by the lessee or tenant therein, and will do all things necessary to
keep unimpaired its right in and to the Leasehold Leases and to prevent
any default thereunder or forfeiture or impairment thereof. Mortgagor
will not, except with the prior written consent of Mortgagee: (a)
cancel, terminate or surrender any Leasehold Lease, or consent to or
accept any cancellation or termination thereof; or permit any condition
or event to exist which would terminate or cancel the same or permit
such termination or cancellation; (b) materially amend, modify or
otherwise change any term of any Leasehold Lease; or (c) take any action
in connection with any Leasehold Lease which would have the effect of
impairing the value of Mortgagor's interest thereunder or of the
Property, or of impairing the interest of Mortgagee therein; provided,
however, that Mortgagor may do any of the foregoing without the prior
written
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consent of Mortgagee, in the ordinary course of its business so long as
(i) Mortgagor determines that such action is necessary or desirable in
the conduct of its business, (ii) no Event of Default, or event which
with the passage of time or the giving of notice or both, could become
an Event of Default, shall have occurred and be continuing or shall
occur as a result thereof and (iii) Mortgagor has substituted for such
Leasehold Lease other property not necessarily of the same character but
of at least equal value to Mortgagor as such Leasehold Lease and
subjected said substitute property to the lien hereof. As further
security for the repayment of the Indebtedness secured hereby and for
the performance of the covenants herein and contained in the Leasehold
Leases, Mortgagor hereby assigns to Mortgagee any and all of Mortgagor's
rights, privileges and prerogatives as lessee or tenant under any
Leasehold Lease or otherwise to terminate, cancel, modify, change,
supplement, alter, amend, renew or extend such Leasehold Lease, or to
purchase the Leased Property and any such termination, cancellation,
modification, change, supplement, alteration, amendment or extension of
such Leasehold Lease or purchase of such Leased Property, without the
prior written consent thereto by Mortgagee shall be void and of no force
and effect. No release of or forbearance to enforce any of Mortgagor's
obligations under any Leasehold Lease, pursuant to such Leasehold Lease
or otherwise, shall release Mortgagor from any of its obligations under
this Mortgage, including, without limitation, its obligations with
respect to payment of rent as provided for in such Leasehold Lease and
the performance of all of the terms, provisions, covenants, conditions
and agreements contained in such Leasehold Lease, to be kept, performed
and complied with by the lessee or tenant therein. Mortgagor shall
cause each Leasehold Lease to be renewed and to remain in effect or
shall make other arrangements, reasonably acceptable to Mortgagee, for
the lease of substitute space prior to the expiration of each such
Leasehold Lease so long as any amount secured hereby shall remain
outstanding. Mortgagor covenants and agrees that it shall provide
Mortgagee with written notice prior to leasing any such substitute space
and Mortgagor shall take all steps necessary to subject the lease of
such substitute space to the lien of this Mortgage.
(b) Mortgagor will deliver to Mortgagee, promptly upon receipt thereof;
copies of all notices, certificates, requests, demands and other
instruments furnished or delivered to or by Mortgagor under any
Leasehold Lease in any way relating to such Leasehold Lease or
Mortgagor's interest thereunder.
EVENTS OF DEFAULT. The following actions or inactions or both shall constitute
Events of Default under this Mortgage:
DEFAULT UNDER THE INDEBTEDNESS. Should Mortgagor or Borrower default in
the payment of principal or interest under any of the Indebtedness.
<PAGE> 20
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DEFAULT UNDER THIS MORTGAGE. Should Mortgagor violate, or fail to comply
fully with any of the terms and conditions of this Mortgage, provided
that, other than with respect to violations of or failures to comply
with or defaults under the provisions of this Mortgage entitled
"Possession and Maintenance of Property" and "Encumbrances" as to which
no notice or grace period shall be applicable, such violation, failure
to comply or default shall continue for a period of thirty (30) days
after written notice specifying such default and requiring the same to
be remedied shall have been given to Mortgagor by Mortgagee.
DEFAULT UNDER OTHER AGREEMENTS. Should any event of default or breach of
covenant occur or exist under the Guaranty, the Loan Agreement or any
other Related Document.
FALSE STATEMENTS. Should any representation or warranty of Mortgagor
made in connection with the Indebtedness prove to be incorrect or
misleading in any material respect.
MORTGAGEE'S RIGHTS UPON DEFAULT. Should one or more Events of Default occur or
exist under this Mortgage, as provided above, subject to such filings and
consents as may be necessary under the applicable laws, rules and regulations
relating to public utilities, Mortgagee, at its option, may exercise any one or
more of the following rights and remedies, in addition to any other rights and
remedies provided by law:
ACCELERATION; FORECLOSURE. Mortgagee shall have the right, at its sole
option, to accelerate the maturity and demand immediate payment in full
of any and all of the Indebtedness. Mortgagee shall then have the right
to commence appropriate foreclosure proceedings against the Property as
provided in this Mortgage.
SEIZURE AND SALE OF PROPERTY. In the event that Mortgagee elects to
commence appropriate Louisiana foreclosure proceedings under this
Mortgage, Mortgagee may cause the Property, or any part or parts
thereof, to be immediately seized and sold, whether in term of court or
in vacation, under ordinary or executory process, in accordance with
applicable Louisiana law, to the highest bidder for cash, with or
without appraisement.
CONFESSION OF JUDGMENT. For purposes of foreclosure under Louisiana
executory process procedures, Mortgagor confesses judgment and
acknowledges to be indebted unto and in favor of Mortgagee, up to the
full amount of the Indebtedness, in principal, interest, costs,
expenses, attorneys' fees and other fees and charges. Mortgagor further
confesses judgment and acknowledges to be indebted unto and in favor of
Mortgagee in the amount of all Additional Advances that Mortgagee may
make on Mortgagor's behalf pursuant to this Mortgage, together with
interest thereon. To the extent permitted under applicable Louisiana
law, Mortgagor additionally waives: (a) the benefit of appraisal as
provided in Articles 2332, 2336, 2723 and 2724 of the Louisiana Code of
Civil Procedure,
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MORTGAGE Page 21
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and all other laws with regard to appraisal upon judicial sale; (b) the
demand and three (3) days' delay as provided under Articles 2639 and
2721 of the Louisiana Code of Civil Procedure; (c) the notice of seizure
as provided under Articles 2293 and 2721 of the Louisiana Code of Civil
Procedure; (d) the three (3) days' delay provided under Articles 2331
and 2722 of the Louisiana Code of Civil Procedure; and (e) all other
benefits provided under Articles 2331, 2722 and 2723 of the Louisiana
Code of Civil Procedure and all other Articles not specifically
mentioned above.
KEEPER. Should any or all of the Property be seized as an incident to an
action for the recognition or enforcement of this Mortgage, by executory
process, sequestration, attachment, writ of fieri facias or otherwise,
Mortgagor hereby agrees that the court issuing any such order shall, if
requested by Mortgagee, appoint Mortgagee, or any agent designated by
Mortgagee, or any person or entity named by Mortgagee at the time such
seizure is requested, or any time thereafter, as Keeper of the Property
as provided under La. R.S. 9:5136, et seq. Such a Keeper shall be
entitled to reasonable compensation. Mortgagor agrees to pay the
reasonable fees of such Keeper, which are hereby fixed at $50.00 per
hour for each hour actually worked, which compensation to the Keeper
shall also be secured by this Mortgage in the form of an Additional
Advance as provided herein.
DECLARATION OF FACT. Should it become necessary for Mortgagee to
foreclose under this Mortgage, all declarations of fact, which are made
under an authentic act before a Notary Public in the presence of two
witnesses, by a person declaring such facts to lie within his or her
knowledge, shall constitute authentic evidence for purposes of executory
process and also for purposes of La. R.S. 9:3509.1, La. R.S.
9:3504(D)(6) and La. R.S. 10:9-508, where applicable.
SPECIFIC PERFORMANCE. Mortgagee may, in addition to the foregoing
remedies, or in lieu thereof; in Mortgagee's sole discretion, commence
an appropriate action against Mortgagor seeking specific performance of
any covenant contained herein, or in aid of the execution or enforcement
of any power herein granted.
CUMULATIVE REMEDIES. Mortgagee's remedies as provided herein shall be
cumulative in nature and nothing under this Mortgage shall be construed
as to limit or restrict the options and remedies available to Mortgagee
following any Event of Default, or to in any Way limit or restrict the
rights and ability of Mortgagee to proceed directly against Mortgagor
and/or against any guarantor, surety or endorser of the Indebtedness, or
to proceed against other collateral directly or indirectly securing any
such Indebtedness.
PROTECTION OF MORTGAGEE'S SECURITY RIGHTS. Mortgagor will be fully responsible
for any losses that Mortgagee may suffer as a result of anyone other than
Mortgagee asserting any rights or interest in or to the Property. Mortgagor
agrees to appear in and to defend all actions or proceedings purporting to
affect Mortgagee's security interests
<PAGE> 22
MORTGAGE Page 22
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in any of the Property and any of the rights and powers granted Mortgagee
hereunder. In the event that Mortgagor fails to do what is required of it under
this Mortgage, or if any action or proceeding is commenced naming Mortgagee as
a party or affecting Mortgagee's security interests or the rights and powers
granted under this Mortgage, then Mortgagee may, without releasing Mortgagor
from any of its obligations under this Mortgage, do whatever Mortgagee believes
to be necessary and proper within its sole discretion to protect the security
of this Mortgage, including without limitation making Additional Advances on
Mortgagor's behalf as provided herein. Should the reappraisal of the Property
occur, whether to comply with appropriate regulatory requirements or otherwise,
Mortgagor agrees to pay the costs of such appraisal or reappraisals or to
reimburse Mortgagee for the costs thereof.
INDEMNIFICATION OF MORTGAGEE. Mortgagor agrees to indemnify, to defend and to
save and hold Mortgagee harmless from any and all claims, suits, obligations,
damages, losses, costs, expenses (including, without limitation, Mortgagee's
attorney's fees), demands, liabilities, penalties, fines and forfeitures of any
nature whatsoever that may be asserted against or incurred by Mortgagee, its
officers, directors, employees, and agents arising out of or in any manner
occasioned by this Mortgage and the exercise of the rights and remedies granted
Mortgagee hereunder, as well as by: (a) the ownership, use, operation,
construction, renovation, demolition, preservation, management, repair,
condition, or maintenance of any part of the Property; (b) any failure of
Mortgagor to perform any of its obligations hereunder; and/or (c) any failure
of Mortgagor to comply with the environmental and ERISA obligations,
representations and warranties set forth herein. The foregoing indemnity
provisions shall survive the cancellation of this Mortgage as to all matters
arising or accruing prior to such cancellation and the foregoing indemnity
shall survive in the event that Mortgagee elects to exercise any of the
remedies as provided under this Mortgage following default hereunder. The
indemnity obligations of Mortgagor under this section shall not in any way be
affected by the presence or absence of covering insurance, or by the amount of
such insurance or by the failure or refusal of any insurance carrier to perform
any obligation on its part under any insurance policy or policies affecting the
Property and/or Mortgagor's business activities. Should any claim, action or
proceeding be made or brought against Mortgagee by reason of any event as to
which Mortgagor's indemnification obligations apply, then, upon demand by
Mortgagee, Mortgagor, at its sole cost and expense, shall defend such claim,
action or proceeding in Mortgagor's name, if necessary, by the attorneys for
Mortgagor's insurance carrier (if such claim, action or proceeding is covered
by insurance), or otherwise by such attorneys as Mortgagee shall approve.
Mortgagee may also engage its own attorneys at its reasonable discretion to
defend Mortgagee and to assist in its defense and Mortgagor agrees to pay the
fees and disbursements of such attorneys.
EXECUTION OF ADDITIONAL DOCUMENTS. Mortgagor agrees to execute all additional
documents, instruments and agreements that Mortgagee may deem to be necessary
and proper, within its sole discretion, in form and substance satisfactory to
Mortgagee, to keep this Mortgage in effect, to better reflect the true intent
of the parties to this Mortgage, and
<PAGE> 23
MORTGAGE Page 23
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to consummate fully all of the transactions contemplated hereby and by any
other agreement, instrument or document heretofore, now or at any time or times
hereafter executed by Mortgagor and delivered to Mortgagee.
ESTOPPEL CERTIFICATE. Within ten (10) calendar days after being requested to do
so by Mortgagee, Mortgagor will execute and deliver to Mortgagee an estoppel
certificate identifying this Mortgage and the Indebtedness secured hereby, and
all documents and instruments executed in connection herewith and therewith,
and acknowledging the status of this Mortgage, and further acknowledging and
agreeing to such notice provisions and other matters as may be reasonably
required by Mortgagee.
APPLICATION OF PAYMENTS. Mortgagor agrees that all payments and other sums and
amounts received by Mortgagee under the Indebtedness or under this Mortgage,
shall be applied: first, to reimburse Mortgagee for its costs of collecting the
same (including, but not limited to, reimbursement of Mortgagee's reasonable
attorney's fees); second, to the repayment of interest on all Additional
Advances that Mortgagee may have made on Mortgagor's behalf pursuant to this
Mortgage; third, to the payment of principal of all such Additional Advances;
and finally, to the payment of principal and interest on the Indebtedness then
outstanding, which may be applied in such order and priority as Mortgagee may
determine within its sole discretion.
TAXATION. In the event that there should be any change in law with regard to
taxation of mortgages or the debts they secure, Mortgagor agrees to pay any
taxes, assessments or charges that may be imposed upon Mortgagee as a result of
this Mortgage. Mortgagor further agrees to promptly pay when due, or if, at
Mortgagee's option, Mortgagee has paid them on Mortgagor's behalf, to promptly
reimburse Mortgagee for, all sales, use, excise, stamp, personal property and
other taxes, assessments and governmental charges, however designated, any
amounts in lieu of such taxes, assessments and charges, and any penalties and
interest on any of the foregoing, imposed, levied or based upon or in
connection with (a) the purchase, ownership, use, or financing of any of the
Property, (b) receipts by Mortgagee with respect to the Indebtedness, or (c)
this Mortgage or any instrument or instruments evidencing the Indebtedness, or
the filing or recording of any thereof, whether the same may be payable by or
assessed to Mortgagee or Mortgagor and whether assessed during or after the
expiration of this Mortgage (excluding, however, any tax on or measured by
Mortgagee's net income), and Mortgagor shall hold and save Mortgagee free and
harmless therefrom.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Mortgage:
WAIVERS. In granting this Mortgage, Mortgagor waives any homestead and
other exemptions from seizure with regard to the Property to which
Mortgagor may be entitled under the laws of the State of Louisiana.
<PAGE> 24
MORTGAGE Page 24
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EFFECT OF WAIVERS. Any failure or delay on the part of the Mortgagee to
exercise any of the rights and remedies granted under this Mortgage or
under any other agreement or agreements by and between Mortgagor and
Mortgagee, shall not have the effect of waiving any of Mortgagee's
rights and remedies. Any partial exercise of any rights and remedies
granted to Mortgagee shall furthermore not constitute a waiver of any of
Mortgagee's other rights and remedies; it being Mortgagor's intent and
agreement that all of Mortgagee's rights and remedies shall be
cumulative in nature. Furthermore, any failure on the part of Mortgagee
at any time or times hereafter to require strict performance by
Mortgagor of any of the provisions, warranties, terms and conditions
contained herein or in any other agreement, document or instrument now
or hereafter executed by Mortgagor and delivered to Mortgagee, shall not
waive, affect, or diminish the rights of Mortgagee to thereafter demand
strict compliance and performance therewith and with respect to all
other provisions, warranties, terms and conditions contained herein or
therein. None of the warranties, conditions, provisions and terms
contained in this Mortgage or any other agreement, document, or
instrument now or hereafter executed by Mortgagor and delivered to
Mortgagee, shall be deemed to have been waived by any act or knowledge
of Mortgagee, its agents, directors, officers or employees; but only by
an instrument in writing specifying such waiver, signed by a duly
authorized officer of Mortgagee and delivered to Mortgagor. A waiver or
forbearance on the part of Mortgagee as to one Event of Default shall
not constitute a waiver or forbearance as to any other or subsequent
default.
SUCCESSORS AND ASSIGNS BOUND. Mortgagor's obligations and agreements
under this Mortgage shall be binding upon Mortgagor's successors and
assigns.
CAPTION HEADINGS. Caption headings of the sections of this Mortgage are
for convenience purposes only and are not to be used to interpret or to
define their provisions. In this Mortgage, whenever the context so
requires, the singular includes the plural and the plural also includes
the singular.
GOVERNING LAW. This Mortgage shall be governed and construed in
accordance with the laws of the State of Louisiana.
SEVERABILITY. If any provision of this Mortgage is held to be invalid,
illegal or unenforceable by any court, that provision shall be deleted
from this Mortgage and the balance of this Mortgage shall be interpreted
as if the deleted provision never existed.
NOTICES. All demands, notices, reports, approvals, designations, or
directions required or permitted to be given hereunder shall be in
writing and shall be deemed to be duly given upon delivery, if delivered
by "Express Mail," overnight courier, messenger or other form of hand
delivery or sent by telegram or facsimile transmission, or three (3)
days mail if sent by certified or registered mail, to the parties at the
following addresses (or such other address for a party as shall be
specified by like notice):
<PAGE> 25
MORTGAGE Page 25
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As to Mortgagor: Mercury Cellular Telephone Company
1 Lakeshore Drive, CM Tower
Suite 1495
P.O. Drawer 3104
Lake Charles, LA 70602-3104
Attn: Robert Piper; cc: Thomas G. Henning
Fax No.: (318) 439-0769
As to Mortgagee: National Bank for Cooperatives
200 Galleria Parkway
Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No.: (404) 618-3202
and as to any other person, firm, corporation or governmental body or
agency having an interest herein by reason of being a Mortgagee or
otherwise, at the last address designated by such person, firm,
corporation, governmental body or agency to Mortgagor and Mortgagee.
SOLE DISCRETION OF MORTGAGEE. Whenever Mortgagee's consent or approval
is required under this Mortgage, the decision as to whether or not to
consent or approve shall be in the sole and exclusive discretion of
Mortgagee, and Mortgagee's decision shall be final and conclusive.
WAIVER OF CERTIFICATES. The parties to this Mortgage hereby waive the
production of mortgage, conveyance, tax, paving, chattel mortgage, assignment
of accounts, and all other certificates and relieve and release the Notary
before whom this Mortgage was passed from all responsibilities and liabilities
in connection therewith.
<PAGE> 26
MORTGAGE Page 26
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THUS DONE AND PASSED, ON THE DAY, MONTH AND YEAR FIRST WRITTEN ABOVE, IN THE
PRESENCE OF THE UNDERSIGNED NOTARY AND THE UNDERSIGNED COMPETENT WITNESSES, WHO
HEREUNTO SIGN THEIR NAMES WITH MORTGAGOR AFTER READING OF THE WHOLE.
WITNESS: MORTGAGOR:
MERCURY CELLULAR TELEPHONE COMPANY
X /s/ SHEILA KING By: /s/ ROBERT PIPER
------------------------------ ---------------------------------
X /s/ CAROLYN NUNEZ Name: Robert Piper
------------------------------ Title: President
By: /s/ THOMAS G. HENNING
---------------------------------
Name: Thomas G. Henning
Title: Secretary
/s/ SANDRA DIAZ
- ------------------------------
NOTARY PUBLIC
MY COMMISSION EXPIRES AT DEATH
[NOTARIAL SEAL]
<PAGE> 27
EXHIBIT "A"
MERCURY CELLULAR TELEPHONE COMPANY MORTGAGE List of all real
property owned, parish location and legal description.
1. ALLEN PARISH:
KINDER
Highway 165 North, Kinder, Louisiana 70648
Beginning at the intersection of existing fences used for the Southeast
corner of the Northeast Quarter of Southwest Quarter (NE/2 of SW/4),
Section 7, Township 6 South, Range 4 West, thence North 1 degree 26
minutes East 440.0 feet; thence West 440.0 feet: thence South l degree
26 minutes West 440.0 feet; thence East 440.0 feet to the point of
beginning.
2. BEAUREGARD PARISH:
RAGLEY
142 First Pentecostal Church Road, Ragley, Louisiana 70657
A part of the Southeast 1/4 of the Southeast 1/4 of the Northeast 1/4 of
Section 24, Township 6 South, Range 9 West, Beauregard Parish,
Louisiana, described as follows; Commence at the Southeast corner of said
SE 1/4-SE 1/4, thence S 89 degrees 17 minutes 38 seconds W along the
South line of said SE 1/4-SE 1/4 NE 1/4, 280.0 feet to the Point of
Beginning thence N 0 degrees 14 minutes 17 seconds E - 320.27 feet;
thence N 89 degrees 17 minutes 38 seconds E - 40.66 feet, thence N 0
degrees 15 minutes 46 seconds E - 119.73 feet; thence S 89 degrees 17
minutes 40 seconds W - 440 feet to the West line of said SE 1/4-SE
1/4-NE 1/4; thence S 0 degrees 15 minutes 48 seconds W along said West
line, 335.65 feet; thence N 89 degrees 17 minutes 40 seconds E - 208.71
feet; thence S 0 degrees 15 minutes 48 seconds W - 104.35 feet to the
South line of said SE 1/4 of SE 1/4 of NE 1/4; thence N 89 degrees 17
minutes 40 seconds E along said South line, 191.07 feet to the point of
beginning, containing 3.636 acres.
3. CALCASIEU PARISH:
DEQUINCY
Coward Road & Dalhquist, DeQuincy, Louisiana 70633
Beginning 20 feet West of the Northeast Corner of the Northeast Quarter
of the Northwest Quarter of Section 7, Township 7 South, Range 10 West,
thence West 375 feet, thence South 375, thence East 375 feet, thence
North 375 feet to the point of commencement, together with all
improvements thereon situated.
<PAGE> 28
EXHIBIT "C"
MERCURY CELLULAR TELEPHONE COMPANY MORTGAGE
LEGAL DESCRIPTION OF LEASED PROPERTIES
BEAUREGARD PARISH:
DERIDDER - TOWER - INTERNATIONAL PAPER
Martin Luther King Drive, DeRidder, Louisiana 70634
A part of the West 1/2 of the Southeast 1/4 of Section 3, Township 3
South, Range 9 West, Beauregard Parish, Louisiana, described as follows;
Commence at the Southeast corner of said West 1/2 of Southeast 1/4 thence
N 0 degrees 54' W along the East line of said W 1/2 of SE 1/4 1281.29
feet; thence S 89 degrees 06' W - 30 feet to the Point of Beginning of
the herein described tract; thence S 89 degrees 06 W - 565.0 feet; thence
N 0 degrees 54' W - 575.0 feet; thence N 89 degrees 06' E 565.0 feet;
thence S 0 degrees 54' E - 575.0 feet to the Point of Beginning.
MERRYVILLE - TOWER - BOISE SOUTHERN COMPANY
12014 Highway 190, Merryville, Louisiana 70653
T3S, R12W: Section 35-The S/2 of S/2 of SE/4 of SE/4. T4S, R12W: Section
2 - That part of the NE/4 of NE/4 lying North of Louisiana State Highway
190 and East of current lease to Merryville VFW Post. Said real property
to be used for radio tower construction shall not exceed 3.0 acres in
size upon final survey by licensed Louisiana surveyor.
CALCASIEU PARISH:
SULPHUR - RETAIL STORE - BUD CARTER
230 North Cities Service Highway, Sulphur, Louisiana 70663 Commencing at
a point on the Westerly Boundary of Lot 2, Block 16 of Beverley Hills
subdivision in Section 31, Township 9 South, Range 9 West, Louisiana
Meridian, said point located North 15 degrees 57 minutes West a distance
of 150 feet from the Southwest corner of said Lot 2; thence North 15
degrees 57 minutes West a distance of 419.4 feet to TSRC concrete
monument marked 4-A at the Northwest corner of Lot 6 of said Block 16 of
Beverley Hills Subdivision, and said point also being on the South line
of West Lee of said Beverley Hills Subdivision, thence South 89 degrees
54 minutes 30 seconds West at right angles to East right-of-way line of
State Highway 108 a distance of 108.4 feet more or less to the North and
South center line of said Section 31; thence South 0 degrees 0 minutes
and 22 seconds West along said North and South Center line of said
Section 31 a distance of 403.44 feet more or less to the North deed
dated December 24, 1968, and recorded in the files of Calcasieu Parish
under File Number
<PAGE> 29
1124390; thence North 80 degrees 54 minutes 30 seconds East along said
North line of said tract sold to vendor, a distance of 224.53 feet more
or less to the West line of said Lot 2 of Block 16 of Beverley Hills
Subdivision and to the point of commencement.
SULPHUR - TOWER - WILLIAM L. HENNING, SR.
316 Cain Street, Sulphur, Louisiana 70663
Commencing 175 feet West of the Northeast Corner of the Northwest Quarter
of the Southwest Quarter (NW 1/4 of SW 1/4) Section 35, Township Nine
(9) South, Range Ten (10) West, thence South 275 feet, thence East 300
feet, thence North 151 feet, thence West 145 feet, thence North to the
North line of the Northwest
LAKE CHARLES - RETAIL STORE - MERCURY, INC.
Lot Thirty-Five (35) of Block One (1) of Plat No. 2 of Southton, a
subdivision of the Northwest Quarter of the Northeast Quarter (NW 1/4 of
NE 1/4) and the Northeast Quarter of the Northwest Quarter (NE 1/4 of NW
1/4) of Section 18, Township 10 South, Range 8 West, as per plat
recorded in Plat Book 3, page 174, records of Calcasieu Parish,
Louisiana, together with all buildings and other improvements located
thereon, but subject to all rights, title and interest conveyed to the
State of Louisiana, Department of Highways, as per act of sale dated
January 7, 1969, recorded under Clerk's File No. 1126518, in Conveyance
Book 1064, page 600.
LAKE CHARLES-CMNB TOWER - TOWER - CAMERON TELEPHONE COMPANY
One Lakeshore Drive, Lake Charles, Louisiana 70629
That certain tract or parcel of land situated in the City of Lake
Charles, Calcasieu Parish, State of Louisiana, being that tract of land
bounded by Mill Street, Fron Street and North Lakeshore Drive (Formerly
U.S. Highway 90, now Louisiana State Highway No. 385) and more
particularly described as follows:
Beginning at the point of intersection of the North line of Division
Street, now abandoned, with West line of Front Street; thence North 008'
East along said West line of Front Street 393.55 feet to the South line
of Mill Street; thence North 89 degrees 59' West along said South line
of Mill Street 371.91 feet to the East right-of-way line of North
Lakeshore Drive (formerly U.S. Highway 90, now Louisiana State Highway
No. 385); thence following the East right-of-way line of North Lakeshore
Drive the following courses and distances:
South 4 degrees 40' East 362.43 feet to a point of curve; Thence
Southeasterly 287.26 feet along the arc of a curve to the left, said
curve having a radius of 278.38 feet and the long chord bearing being
South 3413' 40" East 274.69 feet to a point; Thence South 7915' East
172.27 feet to the intersection of the North line of North Lakeshore
Drive with the West line of Front Street; Thence North 253' 45" East
along said West line of Front Street 179.98
2
<PAGE> 30
feet to the South line of Division Street, now abandoned; thence North
10 degrees 22' 55" East along said West line of Front Street 48.25 feet
to the intersection of the North line Division Street, now abandoned,
with the West line of Front Street, the point of beginning.
LAKE CHARLES-CMNB TOWER - OFFICE - MERCURY, INC.
One Lakeshore Drive, Lake Charles, Louisiana 70629
That certain tract or parcel of land situated in the City of Lake
Charles, Calcasieu Parish, State of Louisiana, being that tract of land
bounded by Mill Street, Fron Street and North Lakeshore Drive (Formerly
U.S. Highway 90, now Louisiana State Highway No. 385) and more
particularly described as follows:
Beginning at the point of intersection of the North line of Division
Street, now abandoned, with West line of Front Street; thence North 008'
East along said West line of Front Street 393.55 feet to the South line
of Mill Street; thence North 89 degrees 59' West along said South line of
Mill Street 371.91 feet to the East right-of-way line of North Lakeshore
Drive (formerly U.S. Highway 90, now Louisiana State Highway No. 385);
thence following the East right-of-way line of North Lakeshore Drive the
following courses and distances:
South 4 degrees 40' East 362.43 feet to a point of curve; Thence
Southeasterly 287.26 feet along the arc of a curve to the left, said
curve having a radius of 278.38 feet and the long chord bearing being
South 3413' 40" East 274.69 feet to a point; Thence South 7915' East
172.27 feet to the intersection of the North line of North Lakeshore
Drive with the West line of Front Street; Thence North 253' 45" East
along said West line of Front Street 179.98 feet to the South line of
Division Street, now abandoned; thence North 10 degrees 22' 55" East
along said West line of Front Street 48.25 feet to the intersection of
the North line Division Street, now abandoned, with the West line of
Front Street, the point of beginning.
CAMERON PARISH:
GRAND CHENIER - TOWER - MARIAN REYNAUD
Highway 82, Grand Chenier, Louisiana 70631
To find the place of beginning, commence at the Southeast corner of
irregular Section 42, Township 15 South, Range 5 West, Cameron Parish,
Louisiana, thence North 72 degrees 54 minutes 20 seconds West, a
distance of 211.51 feet to a point, thence North 10 degrees 28 minutes
00 seconds East, a distance of 981.10 feet to a point, thence South 72
degrees 08 minutes 16 seconds East, a distance of 12.38 feet to a point,
thence South 72 degrees 08 minutes 54 seconds East, a distance of 335.89
feet to a point for the place of beginning, thence South 72 degrees 08
minutes 54 seconds East, a distance of 55.81 feet to a point, thence
North 10 degrees 31 minutes 03 seconds East, a distance of 390.76 feet
to a point, thence 67
3
<PAGE> 31
degrees 55 minutes 16 seconds West, a distance of 42.29 feet to a point,
thence South 12 degrees 33 minutes 06 seconds West, a distance of 392.36
feet to the place of beginning containing 18,997 square feet or 0.4361
acres. The above described parcel is situated in irregular Section 43,
Township 15 South, Range 5 West, Cameron Parish, Louisiana.
GRAND CHENIER - TOWER - WALTER THOMAS MCCALL
Highway 82, Grand Chenier, Louisiana 70631
To find the place of beginning, commence at the Southeast corner of
irregular Section 42, Township 15 South, Range 5 West, Cameron Parish,
Louisiana, thence North 72 degrees 54 minutes 20 seconds West, a
distance of 211.51 feet to a point, thence North 10 degrees 28 minutes
00 seconds East, a distance of 981.10 feet to a point, thence South 72
degrees 08 minutes 16 seconds East, a distance of 12.38 feet to a point,
thence South 72 degrees 08 minutes 54 seconds East, a distance of 335.89
feet to a point for the place of beginning, thence South 72 degrees 08
minutes 54 seconds East, a distance of 55.81 feet to a point, thence
North 10 degrees 31 minutes 03 seconds East, a distance of 390.76 feet
to a point, thence 67 degrees 55 minutes 16 seconds West, a distance of
42.29 feet to a point, thence South 12 degrees 33 minutes 06 seconds
West, a distance of 392.36 feet to the place of beginning containing
18,997 square feet or 0.4361 acres. The above described parcel is
situated in irregular Section 43, Township 15 South, Range 5 West,
Cameron Parish, Louisiana.
CAMERON - TOWER - MERCURY, INC.
232 VJ Street, Cameron, Louisiana 70631
All that certain lot or parcel of land situated in the Parish of
Cameron, State of Louisiana, described in a certain deed, dated July 1,
1970, executed by Mercury, Inc., and recorded in the office of the Clerk
and Ex-Officio Recorder for Cameron Parish, July 22, 1970, recorded in
Conveyance Book 267, File No. 122953, to-wit:
Beginning at a point 360 feet North of the Southwest corner of Lot Twelve
(12) or irregular Section 45, Township Fourteen (14) South, Range Nine
(9) West, Louisiana Meridian; thence running North along the West line of
Lot Twelve (12) or irregular Section 45, a distance of 240 feet, thence
running East 120 feet, thence running South 240 feet, thence running West
120 feet to the point of beginning with all buildings and improvements
situated thereon, and all furniture, fixtures and equipment that are
situated therein
JOHNSON BAYOU - TOWER - ELVIN DONAHOE
967 Smith Ridge, Johnson Bayou, Louisiana 70631
To find the place of beginning, commence at the Northeast corner of the
Northwest quarter of the Southwest quarter of Section 1, Township 15
4
<PAGE> 32
South, Range 14 West, Cameron Parish, Louisiana. Thence North 88
degrees 37 minutes 11 seconds West, a distance of 105.23 feet to a
point; thence South 1 degree 22 minutes 49 seconds West, a distance of
21.70 feet to a point for the place of beginning; thence North 84
degrees 03 minutes 39 seconds West, a distance of 308.00 feet to a
point; thence South 1 degree 22 minutes 49 seconds West, a distance of
356.00 feet to a point; thence South 84 degrees 03 minutes 39 seconds
East, a distance of 308.00 feet to a point feet to a point; thence North
1 degree 22 minutes 49 seconds East, a distance of 356.00 feet to the
place of beginning containing 109301.09 square feet or 2.5092 acres.
JEFFERSON DAVIS PARISH:
JENNINGS - RETAIL STORE - ELROY TRAHAN
Beg 30' W & 30' S of NE cor of SESW 34-9-3, W220' S208.7' E220;
N208.7' 487-59691
1075 South Lake Arthur Ave., Suite 6, Jennings, LA 70546
VERNON PARISH:
LEESVILLE - TOWER - RUSSELL BAILES
8778 Highway 171, Leesville, Louisiana 71496
A part of the East 1/2 of the Southeast 1/4 of Section 10, Township 2
North, Range 9 West, Vernon Parish, Louisiana, described as follows;
Commence at the Southeast corner of said Section 10, thence N 0 degrees
19' E along the East line of said Section 10 a distance of 853.12 feet;
thence N 89 degrees 33' W, 285.6 feet to the Point of Beginning; thence
continue N 89 degrees 33' W - 580 feet; thence N 0 degrees 19' W - 580
feet thence S 89 degrees 33' E - 580 feet; thence S 0 degrees 19' E 580
feet to the Point of Beginning.
FORT POLK - TOWER
1803 Louisiana Avenue, Building 208, Fort Polk, Louisiana 71459
Corner of 4th Street and Alabama
LEESVILLE - EQUIPMENT ON TOWER - PENE BROADCASTING
Latitude N31 degrees 08' 28" and Longitude W73 degrees 17' 44".
LEESVILLE - RETAIL STORE - WINFORD MORRIS
1622 Southgate Plaza, Leesville, Louisiana 71446
Beginning at the Northwest Corner of Lot 7, Moore Addition, running
South along the West line in a Southerly direction of Lot 7, 347.16 ft.
from the Point of Beginning. Thence East 239.9 feet to the West Right
of Way line of Highway 171, North 12 degrees 06 minutes East along the
side Right of Way 100 feet, West 350 feet, South 12 degrees 6 minutes
West parallel with the West Right of Way of Highway 100 feet,
5
<PAGE> 33
East 110.1 feet to the Point of Beginning. Beginning at the Northwest
corner of lot 7 of Moore Addition running East 315 feet to the West Right
of Way line of US Highway 171 thence South 12 degrees 06 minutes West
153.64 feet to the Point of Beginning, thence West 350 feet, South 12
degrees 06 minutes West 100 feet, East 350 feet to the West Right of Way
line of US Highway 171, North 12 degrees 06 minutes East 100 feet to the
Point of Beginning. Beginning 99.45 feet East of the Northwest corner of
the Southwest quarter of the Northwest Section 26, Township 2 North
Range 9 West at a point on the North line of Lot 6 of Moore Addition
thence South 0 degrees 33 minutes West 359.7 feet, East 255.4 feet,
North 12.54 feet along the East line in a southerly direction of Lot 6,
West 109.9 feet, North 12 degrees 06 minutes East 200 feet, East 350
feet to West Right of Way line of US Highway 171, North 12 degrees 06
minutes East 153. 64 feet along a southerly direction line to the North
line of Lot 7 West along the North Line of Lots 7 & 6 in a southerly
direction 565.35 ft to the Point of Beginning, less lot sold. Lot 1,
Block 31, also South 35 feet of Franklin Street (abandoned) which
adjoins the North line of Lot 1, Block 3 Lots 1 & 2 Block 32, Achw-Mcf
Addition #2. Also all the dedicated BU not opened at West 4th Street
lying South of Franklin Avenue and that portion of the alley between
Lots 1 & 2 Block 32 lying South of Franklin Avenue.
6
<PAGE> 34
EXHIBIT "D"
MERCURY CELLULAR TELEPHONE COMPANY MORTGAGE
PERMITTED TITLE EXCEPTIONS
1. All nonmaterial encumbrances of record which do not adversely affect the
use of such real property for the purposes for which such real property is
currently being used and the lien for ad valorem taxes not yet due and payable
but expressly excluding any mortgage, security agreement, judgement lien,
mechanics or materialmen's lien, or any other lien securing a financial
obligation of Mercury Cellular Telephone Company.
2. All security interest in favor of Northern Telecom Finance Corporation.
3. All security interest in favor of Audiovox South Corporation.
<PAGE> 35
EXHIBIT E
Schedule 1
(Description of "Debtor" and "Secured Party")
A. Debtor
1. Name and Identity or Corporate Structure:
Mercury Cellular Telephone Company, a Louisiana corporation
2. The principal place of business of Debtor in the State of
Louisiana is as follows:
Mercury Cellular Telephone Company
1 Lakeshore Drive, CM Tower
Suite 1495
P.O. Drawer 3104
Lake Charles, LA 70602-3104
3. Debtor has been using or operating under said name and identity
or corporate structure without change since May 29, 1987.
B. Secured Party:
CoBank, ACB
200 Galleria Parkway, Suite 1900
Atlanta, Georgia 30339
Schedule 2
(Notice of Mailing Addresses of "Debtor" and "Secured Party")
A. The mailing address of Debtor is:
Mercury Telephone Company
1 Lakeshore Drive, CM Tower
Suite 1495
P.O. Drawer 3104
Lake Charles, LA 70602-3104
Attn: Robert Piper; cc: Thomas G. Henning
<PAGE> 36
B. The mailing address of Secured Party is:
CoBank, ACB
200 Galleria Parkway, Suite 1900
Atlanta, Georgia 30339
Attention: Rural Utility Banking Group
<PAGE> 1
EXHIBIT 4.50
CTC
LOAN NO. T0362
SECURITY AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the respective undersigned Notaries Public, and in the presence
of the respective undersigned competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS SECURITY AGREEMENT (this "Security Agreement") is made and
entered into as of April 20, 1995, by and between MERCURY CELLULAR TELEPHONE
COMPANY (the "Debtor") having its place of business (or chief executive office
if more than one place of business) located at P.O. Box 3709, Lake Charles,
Louisiana 70602 and whose taxpayer identification number is 72-1099261, and
COBANK, ACB (the "Secured Party"), whose mailing address is 200 Galleria
Parkway, Suite 1900, Atlanta, Georgia 30339.
SECTION 1. GRANT OF SECURITY INTEREST. For valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Debtor hereby
grants to the Secured Party a security interest in all of the following
property, wherever located and whether now existing or hereafter acquired,
together with all accessions and additions thereto, and all products and
proceeds thereof:
accounts; inventory (including, without limitation, returned or
repossessed goods); chattel paper; instruments (including, without
limitation, certificated securities); letters of credit; contracts and
contract rights; leases; documents; equipment (including, without
limitation, telecommunications and radio transmitting and receiving
equipment, antennae, towers, microwave communication equipment,
machinery, computers, parts, tools, implements, poles, posts,
cross-arms, conduits, ducts, lines (whether underground or overhead or
otherwise), wires, cables, exchanges, switches (including, without
limitation, host switches and remote switches), desks, testboards,
racks, frames, motors, generators, batteries, items of central office
equipment, pay-stations, protectors, subscriber equipment,
instruments, connections and appliances, office furniture and
equipment and work equipment and any and all other
<PAGE> 2
Security Agreement/MCTC
Loan No. T0362
equipment used, useful or acquired for use in the business of the
Debtor or the operation of the Debtor's properties); fixtures; general
intangibles (including, without limitation, permits, licenses, grants,
franchises, privileges, permissions, certificates and choses or things
in action, litigation rights and resulting judgments, goodwill,
patents, trademarks and other intellectual property, tax refunds,
miscellaneous rights to payment, entitlements, uncertificated
investment securities and investments, margin accounts, computer
programs, invoices, books, records and other information relating to
or arising out of the Debtor's business, and, to the extent permitted
by law, all licenses and permits issued by the Federal Communications
Commission (the "FCC")); and, to the extent not covered by the above,
all other personal property of the Debtor of every type and
description, including, without limitation, interests or claims in or
under any policy of insurance, tort claims, deposit accounts, money,
and judgments; provided, however, that no security interest is granted
in licenses, permits, leases, franchises, privileges, permissions and
grants which by their terms or by reason of applicable law would
become void or voidable if a security interest therein were granted or
if the granting of a security interest therein would violate any law,
rule, regulation or order of any governmental body or regulatory
authority (collectively, the "Collateral").
Where applicable, all terms used herein shall have the same meaning as set
forth in the Uniform Commercial Code as codified at Title 10 of the Louisiana
Revised Statutes Annotated, as amended (the "UCC").
SECTION 2. OBLIGATIONS. The security interest granted hereunder shall
secure the following obligations (the "Obligations"): (a) all payments or
performances to be made by CTC Financial, Inc. (the "Borrower") under the "Loan
Documents" as defined in that certain Loan Agreement, dated as of even date
herewith, between the Borrower and the Secured Party (as the same may be
amended, supplemented, extended or restated from time to time, the "Loan
Agreement"), including, without limitation, the payment of all principal,
interest and other amounts becoming due and payable, whether by acceleration or
otherwise, under that certain Promissory Note, dated of even date herewith,
made by the Borrower to the order of the Secured Party in the original
principal amount of $18,000,000 (as the same may be amended, supplemented,
extended, renewed or replaced from time to time, the "CTC Note"); (b) all
payments or performances to be made by the Debtor under the Loan Documents,
including, without limitation, the payment of all principal, interest and other
amounts becoming due and payable, whether by acceleration or otherwise, under
that certain Promissory Note, dated of even date herewith, made by the Debtor
to the order of the Borrower, and assigned to the Secured Party, in the
original principal amount of $18,000,000 (as the same may be amended,
supplemented, extended, renewed or replaced from time to
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Security Agreement/MCTC
Loan No. T0362
time, the "MCTC Note"; the CTC Note and the MCTC Note, collectively, the
"Notes" and, each, a "Note"), and all payments or performances under that
certain Continuing Guaranty, dated as of even date herewith, made by the Debtor
for the benefit of the Secured Party (as the same may be amended, supplemented,
extended or restated from time to time, the "MCTC Guaranty"); and (c) the
payment of all other indebtedness and the performance of all other obligations
of the Debtor to the Secured Party of every type and description, whether now
existing or hereafter arising, fixed or contingent, as primary obligor or as a
guarantor or surety, acquired directly or by assignment or otherwise,
liquidated or unliquidated, regardless of how they arise or by what agreement
or instrument they may be evidenced, including, without limitation, all loans,
advances and other extensions of credit and all covenants, agreements, and
provisions contained in all loan and other agreements between the parties.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Loan Agreement.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Debtor
represents, warrants and covenants as follows:
(A) OWNERSHIP OF COLLATERAL. Except for any security
interest in favor of (i) the Secured Party, (ii) Northern Telecom Finance
Corporation securing indebtedness not in excess of $3,500,000 and attaching
only to the equipment (and any proceeds therefrom) purchased or leased from
Northern Telecom Finance Corporation with the proceeds of such indebtedness,
and (iii) Audiovox South Corporation securing indebtedness in connection with
certain equipment obtained from Audiovox South Corporation and attaching only
to such equipment (and any proceeds therefrom), the Debtor owns and possesses
all of the Collateral free and clear of all adverse claims, interests, liens,
encumbrances, or other defects. Without the prior written consent of the
Secured Party, the Debtor shall not create or permit the existence of any
adverse claim, interest, lien, or other encumbrance against any of the
Collateral, except as expressly permitted by the Loan Documents. The Debtor
shall provide prompt written notice to the Secured Party upon learning of any
future adverse claim, interest, lien, or encumbrance against any of the
Collateral, and shall defend diligently the Debtor's and the Secured Party's
interests in the Collateral.
(B) VALIDITY OF SECURITY AGREEMENT; CORPORATE AUTHORITY.
This Security Agreement is the legal, valid and binding obligation of the
Debtor, enforceable in accordance with its terms, subject only to limitations
on enforceability imposed by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally and (ii) general equitable principles. The Debtor has the corporate
power to execute, deliver and carry out the terms and provisions of this
Security Agreement and all related documents, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Security Agreement and all related documents.
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Security Agreement/MCTC
Loan No. T0362
(C) LOCATION OF THE DEBTOR. The Debtor's place of
business (or chief executive office if more than one place of business) is
located at the address shown above.
(D) LOCATION OF COLLATERAL. All equipment and inventory
are now at the location or locations specified on Schedule A attached hereto
and made a part hereof and, except as otherwise disclosed to the Secured Party
on Schedule A, the Debtor has not maintained any other location or locations of
inventory and equipment within the past 5 years.
(E) NAME, IDENTITY, AND CORPORATE STRUCTURE. Except as
otherwise disclosed to the Secured Party on Schedule A, the Debtor has not
within the past 10 years changed its name, identity or corporate structure
through incorporation, merger, consolidation, joint venture or otherwise.
(F) CHANGE IN NAME, LOCATION OF COLLATERAL, ETC. Without
giving at least 30 days' prior written notice to the Secured Party, the Debtor
shall not change its name, identity or corporate structure, the location of its
place of business (or chief executive office if more than one place of
business), or the location of the Collateral.
(G) FURTHER ASSURANCES. Upon the request of the Secured
Party, the Debtor shall do all acts and things as the Secured Party may from
time to time deem necessary or advisable to enable it to perfect, maintain, and
continue the perfection and priority of the security interest of the Secured
Party in the Collateral, or to facilitate the exercise by the Secured Party of
any rights or remedies granted to the Secured Party hereunder or provided by
law. Without limiting the foregoing, the Debtor agrees to execute, in form and
substance satisfactory to the Secured Party, such financing statements,
continuation statements, amendments thereto, supplemental agreements,
assignments, notices of assignments, and other instruments and documents as the
Secured Party may from time to time request. In addition, in the event the
Collateral or any part thereof consists of instruments, documents, chattel
paper, or money (whether or not proceeds of the Collateral), the Debtor shall,
upon the request of the Secured Party, deliver possession thereof to the
Secured Party (or to an agent of the Secured Party retained for that purpose),
together with any appropriate endorsements and/or assignments. Without
limiting the generality of the foregoing, the Debtor shall take such action as
the Secured Party may request from time to time to create and perfect a
security interest in favor of the Secured Party in any and all leases, licenses
and permits relating to the location of antennae and other transmission and
receiving equipment on the towers or other property of third parties,
including, without limitation, amending such leases, licenses or permits to
allow the creation and perfection of such security interest and obtaining the
consent of all third parties whose consents may be necessary to the creation
and perfection of such security interest. The Secured Party shall use
reasonable care in the custody and preservation of any Collateral
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Security Agreement/MCTC
Loan No. T0362
in its possession, but shall not be required to take any steps necessary to
preserve rights against prior parties. All costs and expenses incurred by the
Secured Party to establish, perfect, maintain, determine the priority of, or
release the security interest granted hereunder (including the cost of all
filings, recordings, and taxes thereon and the reasonable fees and expenses of
any agent retained by the Secured Party) shall become part of the Obligations
secured hereby and be paid by the Debtor on demand.
(H) INSURANCE. The Debtor shall maintain such property
and casualty insurance with such insurance companies, in such amounts, and
covering such risks, as are at all times reasonably satisfactory to the Secured
Party. All such policies shall provide for loss payable clauses or
endorsements in form and content acceptable to the Secured Party. Upon the
request of the Secured Party, all policies (or such other proof of compliance
with this Section as may be satisfactory to the Secured Party) shall be
delivered to the Secured Party. The Debtor shall pay all insurance premiums
when due. In the event of loss, damage, or injury to any insured Collateral,
the Secured Party shall have full power to collect any and all insurance
proceeds due under any of such policies, and shall apply such proceeds to the
repair or replacement of such Collateral or, if such Collateral is not
repairable or replaceable, to the payment of any of the Obligations secured
hereby.
(I) TAXES, LEVIES, ETC. The Debtor has paid and shall
continue to pay when due all taxes, levies, assessments, or other charges which
may become an enforceable lien against the Collateral, unless such taxes,
levies, assessments, or other charges are being contested by the Debtor in good
faith and by appropriate proceedings and then only to the extent reasonable
reserves required by generally accepted accounting principles have been set
aside on the Debtor's books therefor.
(J) DISPOSITION AND USE OF COLLATERAL BY THE DEBTOR.
Without the prior written consent of the Secured Party, the Debtor shall not at
any time sell, transfer, lease, abandon, or otherwise dispose of any Collateral
other than in accordance with the provisions of the MCTC Guaranty; provided,
however, that no dispositions shall be made if an Event of Default (as defined
in Section 4) shall have occurred and be continuing. The Debtor shall not use
any of the Collateral in any manner which violates any statute, regulation,
ordinance, rule, decree, order, or insurance policy.
(K) RECEIVABLES. The Debtor shall preserve, enforce, and
collect all accounts, chattel paper, instruments, documents and general
intangibles, whether now owned or hereafter acquired or arising (the
"Receivables"), in a commercially reasonable fashion and, if an Event of
Default shall have occurred and be continuing, upon the request of the Secured
Party, the Debtor shall execute an agreement in form and substance satisfactory
to the Secured Party by which the Debtor shall direct all account debtors and
obligors on
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<PAGE> 6
Security Agreement/MCTC
Loan No. T0362
instruments to make payment to a lock box deposit account under the exclusive
control of the Secured Party.
(L) CONDITION OF COLLATERAL. All tangible Collateral is
now in good repair and condition and the Debtor shall at all times hereafter,
at its own expense, maintain all such Collateral in good repair and condition,
ordinary wear and tear excepted.
(M) CONDITION OF BOOKS AND RECORDS. The Debtor has
maintained and shall maintain complete, accurate and up-to-date books, records,
accounts, and other information relating to all Collateral in the present form
and detail, and shall allow the Secured Party or its representatives to examine
and copy such books, records, accounts, and other information at any reasonable
time, upon reasonable notice from the Secured Party.
(N) RIGHT OF INSPECTION. At all reasonable times and upon
reasonable notice from the Secured Party, the Debtor shall allow the Secured
Party or its representatives to visit any of the Debtor's properties or
locations so that the Secured Party or its representatives may confirm, inspect
and appraise any of the Collateral.
(O) PLEDGE OF STOCK. Upon the acquisition of capital
stock of any subsidiary, the Debtor shall execute and deliver to the Secured
Party a stock pledge agreement in form and substance satisfactory to the
Secured Party, pursuant to which the Debtor shall pledge, on a first-priority
basis, all of its stock in such subsidiary and shall covenant and agree to
pledge to the Secured Party, on a first-priority basis, all capital stock it
may thereafter acquire in that or any other subsidiary.
SECTION 4. DEFAULT. The occurrence of an event of default under any of
the Loan Documents (including, without limitation, the Loan Agreement, the
Notes and the MCTC Guaranty), the breach of or failure to perform any covenant
or agreement contained in this Security Agreement, or any material inaccuracy
as of the date made in any representation or warranty contained in this
Security Agreement shall constitute an "Event of Default" hereunder; provided
that the Debtor shall have 30 days after notice from the Secured Party to cure
any breach of the covenants set forth in Sections 3(H), (K), (L), (M), and (N).
SECTION 5. RIGHTS AND REMEDIES. Upon the occurrence of any Event of
Default and at any time during the continuance thereof, the Secured Party may
declare all Obligations to be immediately due and payable and, to the extent
permitted by applicable law and subject to any necessary approval of the FCC
relating to the exercise of remedies hereunder involving any transfer, sale or
disposition of the Debtor's assets, may exercise any and all rights and
remedies of the Secured Party in the enforcement of its security interest under
the UCC, this Security Agreement (including, without limitation, Section 7), or
any other applicable law. Without limiting the foregoing:
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<PAGE> 7
Security Agreement/MCTC
Loan No. T0362
(A) DISPOSITION OF COLLATERAL. The Secured Party may
sell, lease, or otherwise dispose of all or any part of the Collateral, in its
then present condition or following any commercially reasonable preparation or
processing thereof, whether by public or private sale or at any brokers' board,
in lots or in bulk, for cash, on credit or otherwise, with or without
representations or warranties, and upon such other terms as may be acceptable
to the Secured Party, and the Secured Party may purchase such Collateral at any
public sale. At any time when advance notice of sale is required, the Debtor
agrees that 10 days' prior written notice shall be reasonable. In connection
with the foregoing, the Secured Party may:
(1) require the Debtor to assemble the Collateral and all
records pertaining thereto and make such Collateral and records
available to the Secured Party at a place to be designated by the
Secured Party which is reasonably convenient to both parties;
(2) enter the premises of the Debtor or premises under
the Debtor's control and take possession of the Collateral;
(3) without charge by the Debtor, use or occupy the
premises of the Debtor or premises under the Debtor's control,
including, without limitation, warehouse and other storage facilities;
(4) without charge by the Debtor, use any patent,
trademark, trade name, or other intellectual property or technical
process used by the Debtor in connection with any of the Collateral;
and
(5) rely conclusively upon the advice or instructions of
any one or more brokers or other experts selected by the Secured Party
to determine the method or manner of disposition of any of the
Collateral and, in such event, any disposition of the Collateral by
the Secured Party in accordance with such advice or instructions shall
be deemed to be commercially reasonable.
(B) COLLECTION OF RECEIVABLES. The Secured Party may, but
shall not be obligated to, take all actions reasonable or necessary to
preserve, enforce or collect the Receivables, including, without limitation,
the right to notify account debtors and obligors on instruments to make direct
payment to the Secured Party, to permit any extension, compromise, or
settlement of any of the Receivables for less than face value, or to sue on any
Receivable, all without prior notice to the Debtor.
(C) PROCEEDS. The Secured Party may collect and apply all
proceeds of the Collateral, and may endorse the name of the Debtor in favor of
the Secured Party on any
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<PAGE> 8
Security Agreement/MCTC
Loan No. T0362
and all checks, drafts, money orders, notes, acceptances, or other instruments
of the same or a different nature, constituting, evidencing, or relating to the
Collateral. The Secured Party may receive and open all mail addressed to the
Debtor and remove therefrom any cash or non-cash items of payment constituting
proceeds of the Collateral.
(D) INSURANCE ADJUSTMENTS. The Secured Party may adjust
and settle any and all insurance covering any Collateral, endorse the name of
the Debtor on any and all checks or drafts drawn by any insurer, whether
representing payment for a loss or a return of unearned premium, and execute
any and all proofs of claim and other documents or instruments of every kind
required by any insurer in connection with any payment by such insurer.
The net proceeds of any disposition of the Collateral shall be applied by the
Secured Party, after deducting its reasonable expenses incurred in such
disposition, to the payment in whole or in part of the Obligations in such
order as the Secured Party may elect. The enumeration of the foregoing rights
and remedies is not intended to be exhaustive, and the exercise of any right
and/or remedy shall not preclude the exercise of any other rights or remedies,
all of which are cumulative and non-exclusive.
SECTION 6. OTHER PROVISIONS.
(A) AMENDMENT AND WAIVER. Without the prior written
consent of the Secured Party, no amendment or waiver of, or consent to any
departure by the Debtor from, any provision hereunder shall be effective. Any
such amendment, waiver, or consent shall be effective only in the specific
instance and for the specific purpose for which given. No delay or failure by
the Secured Party to exercise any remedy hereunder shall be deemed a waiver
thereof or of any other remedy hereunder. A waiver on any one occasion shall
not be construed as a bar to or waiver of any remedy on any subsequent
occasion.
(B) COSTS AND ATTORNEYS' FEES. Except as prohibited by
law, if at any time the Secured Party employs counsel in connection with the
creation, perfection, preservation, or release of the Secured Party's security
interest in the Collateral or the enforcement of any of the Secured Party's
rights or remedies hereunder, all of the Secured Party's reasonable attorneys'
fees arising from such services and all expenses, costs, or charges relating
thereto shall become part of the Obligations secured hereby and be paid by the
Debtor on demand.
(C) REVIVAL OF OBLIGATIONS. To the extent the Debtor or
any third party makes a payment or payments to the Secured Party or the Secured
Party enforces its security interest or exercises any right of setoff, and such
payment or payments or the proceeds thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, and/or required to be
repaid to a trustee, receiver, or any other party under any
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Security Agreement/MCTC
Loan No. T0362
bankruptcy, insolvency or other law or in equity, then, to the extent of such
recovery, the Obligations or any part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment or payments had not been made, or such enforcement or setoff had not
occurred.
(D) PERFORMANCE BY THE SECURED PARTY. In the event the
Debtor shall at any time fail to pay or perform punctually any of its duties
hereunder within any grace period provided therefor, the Secured Party may, at
its option and without notice to or demand upon the Debtor, without obligation
and without waiving or diminishing any of its other rights or remedies
hereunder, fully perform or discharge any of such duties. All costs and
expenses incurred by the Secured Party in connection therewith, together with
interest thereon at the Secured Party's National Variable Rate (as defined in
the Loan Agreement) plus 4% per annum, shall become part of the Obligations
secured hereby and be paid by the Debtor upon demand.
(E) INDEMNIFICATION, ETC. The Debtor hereby expressly
indemnifies and holds the Secured Party harmless from any and all claims,
causes of action, or other proceedings, and from any and all liability, loss,
damage, and expense of every nature, arising by reason of the Secured Party's
enforcement of its rights and remedies hereunder, or by reason of the Debtor's
failure to comply with any environmental or other law or regulation, other than
any such claim, cause of action or other proceeding, liability, loss, damage or
expense arising by reason of gross negligence, willful misconduct or violation
of law on the part of the Secured Party.
(F) POWER OF ATTORNEY. The Debtor hereby constitutes and
appoints the Secured Party or the Secured Party's designee during the term of
any Obligations secured by this Security Agreement as its attorney-in-fact,
which appointment is an irrevocable, durable agency, and coupled with an
interest, with full power of substitution. This power of attorney and mandate
is for the purpose of taking, upon an Event of Default, whether in the name of
the Debtor or in the name of the Secured Party, any action which the Debtor is
obligated to perform hereunder or which the Secured Party may deem necessary or
advisable to accomplish the purposes of this Security Agreement. In taking any
action in accordance with this Section 6(F), the Secured Party shall not be
deemed to be the agent of the Debtor. The powers conferred upon the Secured
Party in this Section are solely to protect its interest in the Collateral and
shall not impose any duty upon the Secured Party to exercise any such powers.
(G) CONTINUING EFFECT. This Security Agreement, the
Secured Party's security interest in the Collateral, and all other documents or
instruments contemplated hereby shall continue in full force and effect until
all of the Obligations have been satisfied in full, each of the Loan Agreement
and the MCTC Guaranty has been terminated in
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Security Agreement/MCTC
Loan No. T0362
accordance with its respective terms and the Debtor has sent a valid written
demand to the Secured Party for termination of this Security Agreement.
(H) BINDING EFFECT. This Security Agreement shall be
binding upon and inure to the benefit of the Debtor and the Secured Party and
their respective successors and assigns.
(I) SECURITY AGREEMENT AS FINANCING STATEMENT. A
photographic copy or other reproduction of this Security Agreement may be used
as a financing statement.
(J) GOVERNING LAW. Except to the extent governed by
applicable federal law, this Security Agreement shall be governed by and
construed in accordance with the laws of the State of Louisiana without
reference to choice of law doctrine.
(K) NOTICES. All notices hereunder shall be deemed to be
duly given upon delivery in the form and manner set forth in Section 7(E) of
the MCTC Guaranty to the parties at the following addresses (or such other
address for a party as shall be specified by like notice):
If to CoBank, as follows: If to the Debtor, as follows:
CoBank, ACB Mercury Cellular Telephone Company
200 Galleria Parkway P.O. Box 3709
Suite 1900 Lake Charles, Louisiana 70602
Atlanta, Georgia 30339 Attn: Robert Piper;
Attn: Rural Utility Banking Group cc: Thomas G. Henning
Fax No.: (404) 618-3202 Fax No.: (318) 439-0769
(L) SEVERABILITY. The determination that any term or
provision of this Security Agreement is unenforceable or invalid shall not
affect the enforceability or validity of any other term or provision hereof.
SECTION 7. LOUISIANA PROVISIONS.
(A) GENERAL. The provisions of this Section 7 shall apply
to the Collateral and all proceeds thereof at all times during which such
Collateral or the proceeds thereof are located in Louisiana or are otherwise
subject to the application of Louisiana law in any respect. The term "Louisiana
Collateral" as used herein shall refer to all portions of the Collateral and
the proceeds thereof that are from time to time located in the State of
Louisiana or are otherwise subject to Louisiana law at all times during which
such portions
-10-
<PAGE> 11
Security Agreement/MCTC
Loan No. T0362
or proceeds thereof are located in Louisiana or are otherwise mandatorily
subject to the application of Louisiana law under the applicable laws of other
states.
(B) FINANCING STATEMENTS. Contemporaneously with the
execution of this Security Agreement, the Debtor has completed and signed one
or more appropriate Louisiana UCC-1 financing statements with regard to the
Collateral and the proceeds thereof. The Debtor authorizes the Secured Party,
at the Debtor's expense, to file multiple originals, or photocopies, carbon
copies or facsimile copies of such Louisiana UCC-1 financing statements with
the appropriate filing officer or officers in the State of Louisiana, pursuant
to the provisions of Chapter 9 of the Louisiana Commercial Laws.
(C) IDENTIFICATION NUMBER. The Debtor shall give the
Secured Party 30 days' written notice prior to any change in the Debtor's
employer identification number by the Debtor and shall give the Secured Party
written notice of any change in the Debtor's employer identification number
that is not made by the Debtor within 30 days after such change. In the event
of any change whatsoever in the Debtor's employer identification number, the
Debtor will execute and file any new financing statements or any other
documents that are necessary or desirable as determined by the Secured Party in
its sole discretion to preserve and continue the Secured Party's security
interests under this Security Agreement within thirty (30) days after such
change.
(D) EVENT OF DEFAULT; REMEDIES. Upon the occurrence of
any Default hereunder, the Secured Party shall have the following rights and
remedies with respect to the Louisiana Collateral, which rights and remedies
are in addition to and are not in lieu or limitation of any other rights and
remedies that may be provided in this Security Agreement, the Loan Agreement,
the MCTC Guaranty or any related documents, under Chapter 9 of the Louisiana
Commercial Laws (La. R.S. Sections 10:9-101, et seq.), under the Uniform
Commercial Code of any state other than Louisiana, or at law or equity
generally:
(1) The Secured Party may cause the Louisiana
Collateral, or any part or parts thereof; to be immediately seized
wherever found, and sold, whether in term of court or in vacation,
under ordinary or executory process, in accordance with applicable
Louisiana law, to the highest bidder for cash, with or without
appraisement, without the necessity of making additional demand, or of
notifying the Debtor or placing the Debtor in default.
(2) For purposes of foreclosure under Louisiana
executory process procedures, the Debtor confesses judgment and
acknowledges to be indebted unto and in favor of the Secured Party up
to the full amount of the Obligations, in principal, interest, costs,
expenses, attorneys' fees and other fees and charges. To the extent
permitted under applicable Louisiana law, the Debtor additionally
waives: (a)
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<PAGE> 12
Security Agreement/MCTC
Loan No. T0362
the benefit of appraisal as provided in Articles 2332, 2336, 2723 and
2724 of the Louisiana Code of Civil Procedure and all other laws with
regard to appraisal upon judicial sale; (b) the demand and 3 days'
delay as provided under Articles 2639 and 2721 of the Louisiana Code
of Civil Procedure; (c) the notice of seizure as provided under
Articles 2293 and 2721 of the Louisiana Code of Civil Procedure; (d)
the 3 days' delay provided under Articles 2331 and 2722 of the
Louisiana Code of Civil Procedure; and (e) all other benefits provided
under Articles 2331, 2722 and 2723 of the Louisiana Code of Civil
Procedure and all other similar provisions of the Louisiana Code of
Civil Procedure not specifically listed hereinabove.
(3) Should any of the Louisiana Collateral be
seized as an incident to an action for the recognition or enforcement
of the Obligations or this Security Agreement, the Loan Agreement, the
MCTC Guaranty or any related document, by executory process,
sequestration, attachment, writ of fieri facias or otherwise, the
Debtor agrees that the court issuing any such order shall, if
requested by the Secured Party, appoint the Secured Party or any
person or entity named by the Secured Party at the time such seizure
is requested, or at any time thereafter, as keeper of the Louisiana
Collateral as provided under La. R.S. Sections 9:5136, et seq. The
Debtor agrees to pay the reasonable fees of such keeper, which
compensation to the keeper shall also be a part of the Obligations
secured under this Security Agreement.
(4) Should it become necessary for the Secured
Party to foreclose against the Louisiana Collateral, all declarations
of fact that are made under an authentic act before a Notary Public in
the presence of two witnesses, by a person declaring such facts to lie
within his or her knowledge, shall constitute authentic evidence for
purposes of executory process and also for purposes of La. R.S.
Section 9:3509.1, La. R.S. Section 9:3504(D)(6) and La. R.S. Section
10:9-508, as applicable.
(E) GOVERNING LAW. ANYTHING TO THE CONTRARY CONTAINED IN
THIS SECURITY AGREEMENT NOTWITHSTANDING, THE SECURITY INTERESTS IN THE
LOUISIANA COLLATERAL GRANTED IN THIS SECURITY AGREEMENT, AND THE SECURED
PARTY'S REMEDIES IN THE COURTS SITTING IN AND FOR ThE STATE OF LOUISIANA WITH
RESPECT TO THE LOUISIANA COLLATERAL SHALL BE GOVERNED BY LOUISIANA LAW.
SECTION 8. FCC MATTERS. Notwithstanding any other provision of this
Security Agreement:
(A) Any foreclosure on, sale, transfer or other
disposition of any of the Collateral by the Secured Party shall be pursuant to
Section 310(d) of the Communications Act of 1934, as amended, and the
applicable rules and regulations thereunder, and, if and
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<PAGE> 13
Security Agreement/MCTC
Loan No. T0362
to the extent required thereby, subject to the prior approval or notice to and
non-opposition of the FCC.
(B) If a Default shall have occurred and be continuing,
the Debtor shall take any action, which the Secured Party may reasonably
request in order to transfer and assign to the Secured Party, or to such one or
more third parties as the Secured Party may designate, or to a combination of
the foregoing, each FCC license or permit held by the Debtor. The Secured Party
is empowered, to the extent permitted by applicable law, to request the
appointment of a receiver from any court of competent jurisdiction. Such
receiver may be instructed by the Secured Party to seek from the FCC an
involuntary transfer of control of each such FCC license or permit for the
purpose of seeking a bona fide purchaser to whom control will ultimately be
transferred. The Debtor hereby agrees to authorize such an involuntary transfer
of control upon the request of the receiver so appointed and, if the Debtor
shall refuse to authorize the transfer, its approval may be required by the
court. Upon the occurrence and during the continuance of a Default, the Debtor
shall further use its best efforts to assist in obtaining approval of the FCC
and any state regulatory bodies, if required, for any action or transactions
contemplated by this Security Agreement, including, without limitation, the
preparation, execution and filing with the FCC and any state regulatory bodies
of the assignor's or transferor's portion of any application or applications
for consent to the assignment of any FCC license or permit or transfer of
control necessary or appropriate under the rules and regulations of the FCC or
any state regulatory body for approval or non-opposition of the transfer or
assignment of any portion of the Collateral, including, without limitation,
with any FCC license or permit.
(C) The Debtor acknowledges that the assignment or
transfer of each FCC license or permit is integral to the Secured Party's
realization of the value of the Collateral, that there is no adequate remedy at
law for failure by the Secured Party to comply with the provisions of this
Section 8 and that such failure would not be adequately compensable in damages,
and therefore agrees, without limiting the right of the Secured Party to seek
and obtain specific performance of other obligations of the Debtor contained in
this Security Agreement, that the agreements contained in this Section 8 may be
specifically enforced.
(D) In accordance with the requirements of 47 C.F.R.
Section 22.917, or any successor provision thereto, the Secured Party shall
notify the Debtor and the FCC in writing at least 10 days prior to the date on
which the Secured Party intends to exercise its rights, pursuant to this
Security Agreement or any of the other Loan Documents, by foreclosing on, or
otherwise disposing of, any Collateral in connection with which such notice is
required pursuant to 47 C.F.R. Section 22.917 or any successor provision
thereto.
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<PAGE> 14
Security Agreement/MCTC
Loan No. T0362
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
the duly authorized officers of the respective parties, after a due reading of
the whole.
At Lake Charles, Louisiana, on April 20, 1995.
MERCURY CELLULAR TELEPHONE COMPANY
By: /s/ ROBERT PIPER
--------------------
Name: Robert Piper
Title: President
Attest: /s/ THOMAS G. HENNING
-----------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
Witnesses to all Signatures:
/s/SHEILA KING
- ------------------
Witness
/s/ CAROLYN NUNEZ
- ------------------
Witness
[ILLEGIBLE]
- ------------------
Notary Public
My commission expires: Lifetime Commission
[NOTARIAL SEAL]
(Signatures Continued on Next Page)
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<PAGE> 15
Security Agreement/MCTC
Loan No. T0362
(Signatures Continued from Previous Page)
At Atlanta, Georgia on April 26, 1995.
COBANK, ACB
By: /s/ MARY KAY DEERING
-------------------------
Name: Mary Kay Deering
Title: Assistant Vice President
Witnesses to Signature:
[ILLEGIBLE]
- --------------------------
Witness
[ILLEGIBLE]
- --------------------------
Witness
/s/ SANDRA S. JONES
- --------------------------
Notary Public
My commission expires: Notary Public, Paulding County, Georgia
My Commission Expires July 14, 1997
[NOTARIAL SEAL]
-15-
<PAGE> 16
SCHEDULE A
TO
SECURITY AGREEMENT
OF
MERCURY CELLULAR TELEPHONE COMPANY
1. Set for the below are the present locations (by county or parish and
state) of the Debtor's inventory and equipment:
<TABLE>
<CAPTION>
LOUISIANA PARISHES LOCATION TYPE OF PROPERTY
<S> <C> <C>
Allen Kinder Tower
Beauregard DeRidder Tower
Merryville Tower
Ragley Tower
Calcasieu Vinton Tower
Edgerly Tower
Sulphur Tower and Retail Store
DeQuincy Tower
Lake Charles - Nelson Road Tower
Lake Charles - CM Tower Tower and Office
Lake Charles Retail Store
Cameron Cameron Tower
Grand Chenier Tower
Johnson Bayou Tower
Jefferson Davis Jennings Tower
Jennings Retail Store
Vernon Leesville Retail Store
Fort Polk Tower
</TABLE>
2. Set forth below are the locations (by county or parish and state) at
which any of the Debtor's inventory and equipment has been located within the
past five years:
See Above
3. Set forth below is a description of any exception to the
representation made in Section 3(E) of the Security Agreement:
None
<PAGE> 1
EXHIBIT 4.51
CTC
Loan No. T0362
LOAN AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the respective undersigned Notaries Public, and in the presence
of the respective undersigned competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS LOAN AGREEMENT (this "Agreement") is made and entered into as of
April 20, 1995, by and between the COBANK, ACB ("CoBank") and CTC FINANCIAL,
INC., a corporation formed and existing under the laws of the State of
Louisiana (the "Borrower").
SECTION 1. THE LOAN. On the terms and conditions set forth in this
Agreement, and subject to Section 11, CoBank agrees to make a loan to the
Borrower, by means of a single advance, in a principal amount not to exceed
$18,000,000 (the "Loan").
SECTION 2. PURPOSES AND USE OF PROCEEDS. The proceeds of the Loan shall
be reloaned by the Borrower to Mercury Cellular Telephone Company ("MCTC") to
be used by MCTC (a) to make an equity contribution to Mercury Cellular of
Kansas, Inc. ("MCK"), a wholly-owned subsidiary of MCTC, for the purpose of MCK
acquiring Miscellco Communications, Inc., and (b) to pay the fees and costs
associated with the Loan and the closing thereof. The Borrower agrees that the
proceeds of the Loan shall be used only for the purposes set forth in this
Section 2.
SECTION 3. AVAILABILITY. Subject to Section 11, the Loan will be made on
any day on which CoBank is open for business (a "Business Day"), except any day
when Federal Reserve Banks are closed, by wire transfer of immediately
available funds to such account or accounts as the Borrower may designate;
provided that an authorized officer of the Borrower shall have provided CoBank
with at least two Business Days' prior written notice of the date on which the
Loan is to be made (the "Funding Date"), and the Funding Date so designated
shall not be later than May 15,1995.
<PAGE> 2
Loan Agreement/CTC Financial
Loan No. T0362
SECTION 4. INTEREST AND FEES.
(A) RATE OPTIONS; ETC. The unpaid principal balance of the Loan
shall accrue interest at the rate or rates determined or selected by the
Borrower in accordance with this Subsection (A).
(1) VARIABLE RATE OPTION. As to any portion of the unpaid
principal balance of the Loan selected by the Borrower (any such portion,
and any portion selected pursuant to Subsection (A)(2), a "Portion" of
the Loan), interest shall accrue pursuant to this variable rate option at
a variable annual interest rate (the "Variable Rate") equal at all times
to the National Variable Rate (as hereinafter defined) less 0.25%. The
term "National Variable Rate" shall mean the rate of interest established
by CoBank from time to time as its National Variable Rate. The National
Variable Rate is intended by CoBank to be a reference rate, and CoBank
may charge other borrowers rates at, above, or below that rate. Any
change in the National Variable Rate shall take effect on the date
established by CoBank as the effective date of such change, and CoBank
shall notify the Borrower promptly after any such change.
(2) FIXED RATE OPTIONS.
(a) TREASURY RATE OPTION. As to any Portion or Portions
of the Loan selected by the Borrower, interest shall accrue
pursuant to this fixed rate option at a fixed annual interest rate
(a "Treasury Rate") equal to the sum of the U.S. Treasury Rate (as
hereinafter defined) plus a margin (the "Treasury Margin") equal to
1.75% (subject to Subsection (B)). Under this option, the interest
rate on any Portion of the Loan, in minimum amounts of $100,000,
may be fixed for a period (any such period, and any period selected
pursuant to Subsection (A)(2)(b), an "Interest Period") of one
year or more but not beyond the Maturity Date (as defined in
Section 5); provided, however, that such Interest Period may expire
only on a Business Day; and provided further, however, that each
Portion of the Loan accruing interest at a Treasury Rate shall be
repaid in part as provided in Section 5 on each Payment Date (as
defined in Section 5) occurring during its applicable Interest
Period. The term "U.S. Treasury Rate" shall mean the yield to
maturity on U.S. Treasury instruments having the same maturity as
the last day of the Interest Period selected, as indicated by
Telerate (page 5) at approximately 9:30 a.m., Eastern time, on the
date the interest rate is fixed. If; however, no yield is
available for the period selected, then the interest rate shall be
interpolated based on the interest rates quoted for the next
longest and shortest periods of time. In the event Telerate ceases
to provide such quotations or materially changes the form or
substance of page 5 (as
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<PAGE> 3
Loan Agreement/CTC Financial
Loan No. T0362
determined by CoBank), then CoBank will notify the Borrower and
the parties hereto will agree upon a substitute basis for
obtaining such quotations.
(b) QUOTED RATE OPTIONS. As to any Portion or
Portions selected by the Borrower, interest shall accrue pursuant
to this quoted fixed rate option at a fixed annual interest rate
(a "Quoted Rate") equal to the rate quoted by CoBank, in its sole
and absolute discretion, on the date any such Portion is to be
fixed pursuant to this option for the Interest Period selected by
the Borrower for such Portion. Under this option, each Portion
so fixed for any separate Interest Period must be in a minimum
amount of $100,000 and Portions may be fixed for Interest Periods
ranging from 30 days to the Maturity Date; provided, however,
that Interest Periods may expire only on a Business Day; and
provided further, however, that each Portion of the Loan accruing
interest at a Quoted Rate shall be repaid in part as provided in
Section 5 on each Payment Date occurring during its applicable
Interest Period.
(3) SELECTION AND CHANGES OF RATES. The Borrower
shall select the initial interest rate or rates at the time it gives
CoBank written notice of the Funding Date pursuant to Section 3. The
Borrower may, on any Business Day, elect to have one of the fixed rate
options apply to any Portion of the Loan then accruing interest at the
Variable Rate. With respect to any Portion of the Loan accruing interest
pursuant to one of the fixed rate options, the Borrower may, subject to
Subsection (A)(2), on the last day of the Interest Period for such
Portion, elect to fix the interest rate accruing on such Portion for
another Interest Period pursuant to one of the fixed rate options. In
the absence of any such election, interest shall automatically accrue on
such Portion of the Loan at the Variable Rate. From time to time the
Borrower may elect on a Business Day and upon payment of the Surcharge
(as defined in, and calculated pursuant to, Section 6) to convert all,
but not part, of any Portion of the Loan accruing interest pursuant to
one of the fixed rate options to accrue interest at the Variable Rate or
pursuant to another fixed rate option for an Interest Period as provided
in Subsection (A)(2). Except for the initial selection, all interest
rate selections provided for herein shall be made by telephonic or
written request of an authorized employee of the Borrower by 12:00 noon,
Eastern time, on the relevant day.
(4) ACCRUAL OF INTEREST. Interest shall accrue
pursuant to the one of the fixed rate options from and including the
first day of the applicable Interest Period to but excluding the last
day of the Interest Period. If the Borrower elects to refix the interest
rate on any Portion of the Loan pursuant to Subsection (A)(3), the first
day of the new Interest Period shall be the last day of the preceding
Interest
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<PAGE> 4
Loan Agreement/CTC Financial
Loan No. T0362
Period. In the absence of any such election, interest shall accrue on
such Portion at the Variable Rate from and including the last day of
such Interest Period. If the Borrower elects to convert from one of the
fixed rate options to the Variable Rate or to another fixed rate upon
payment of the Surcharge as provided in Subsection (A)(3), interest at
the existing fixed rate shall accrue through the day before such
conversion and either (i) the first day of any new Interest Period shall
be the date of such conversion, or (ii) interest at the Variable Rate
shall accrue on the Portion of the Loan so converted from and including
the date of conversion.
(B) MARGIN ADJUSTMENTS. Notwithstanding the foregoing, if the
spread between CoBank's cost of funds (as determined by CoBank in accordance
with its methodology) and the U.S. Treasury Rate for any Interest Period
selected by the Borrower pursuant to Subsection (A) should widen (or lessen)
from the spread in effect for the same period of time on December 19, 1994, then
the Treasury Margin may be adjusted upward (or downward) at CoBank's discretion
to reflect any such change. No adjustment shall be applied retroactively to any
Portion of the Loan prior to the end of the Interest Period for such Portion.
(C) PAYMENT AND CALCULATION. The Borrower shall pay interest
monthly in arrears by the 20th day of the following month, upon any prepayment
and at maturity. Interest shall be calculated on the actual number of days the
Loan, or any part thereof; is outstanding on the basis of a year consisting of
360 days. In calculating accrued interest, the date the Loan is made shall be
included and the date any principal amount of the Loan is repaid or prepaid
shall be excluded as to such amount.
(D) DEFAULT RATE. If prior to maturity the Borrower fails to make
any payment or investment required to be made under the terms of this Agreement
or the Note (including this Section 4) or the Note (as defined in Section 7),
then, at CoBank's option in each instance, such payment or investment shall
accrue interest at 4% per annum in excess of the Variable Rate. After maturity,
whether by reason of acceleration or otherwise, the unpaid principal balance of
the Loan shall automatically accrue interest at 4% per annum in excess of the
Variable Rate. All interest provided for in this Subsection (D) shall be payable
on demand and shall be calculated from and including the date such payment was
due to but excluding the date paid on the basis of a year consisting of 360
days.
(E) ORIGINATION FEE. The Borrower shall pay to CoBank a
non-refundable origination fee in the amount of $135,000, of which $10,000 was
paid by the Borrower upon acceptance of CoBank's commitment letter, dated
December 5, 1994, relating to the Loan.
SECTION 5. PRINCIPAL REPAYMENT AND MATURITY. The outstanding principal
balance of the Loan shall be repaid in ninety-one (91) consecutive monthly
installments, due on the
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<PAGE> 5
Loan Agreement/CTC Financial
Loan No. T0362
20th day of each month (each, a "Payment Date"), commencing on June 20, 1995,
with the last such monthly installment due on December 20, 2002 (the "Maturity
Date"). The amount of each such monthly installment of principal during each of
the following periods shall be equal to the amount derived by multiplying the
initial principal balance of the Loan by the percentage set forth below for
each such period:
<TABLE>
<CAPTION>
PERIOD PERCENTAGE
------ ----------
<S> <C>
June 1995 to December 1995 0.643%
January 1996 to December 1996 0.667%
January 1997 to December 1997 0.834%
January 1998 to December 1998 0.834%
January 1999 to December 1999 1.042%
January 2000 to December 2000 1.042%
January 2001 to December 2001 1.459%
January 2002 to December 2002 2.084%
</TABLE>
Any Portion of the Loan accruing interest at the Variable Rate and each Portion
of the Loan accruing interest at a Treasury Rate shall be reduced by an amount
equal to the amount of each installment payment made pursuant to this Section 5
multiplied by a fraction, the numerator of which is the outstanding principal
balance of such Portion immediately prior to such payment and the denominator
of which is the total outstanding principal balance of the Loan immediately
prior to such payment. On the Maturity Date, the amount of the then unpaid
principal balance of the Loan and any and all other amounts due and owing
hereunder or under any other Loan Document shall be due and payable. If any
Payment Date is not a Business Day, then the principal installment then due
shall be paid on the next Business Day and shall continue to accrue interest
until paid.
SECTION 6. PREPAYMENT. The Borrower may, on one Business Day's prior
written notice, (i) prepay in full or in part any Portion of the Loan accruing
interest at the Variable Rate, and (ii) prepay in full (but not in part) any
Portion of the Loan accruing interest pursuant to one of the fixed rate
options. Any prepayment shall be applied in such a manner as to reduce the
amount owing on each remaining principal installment due pursuant to Section 5
by a percentage determined by dividing the amount prepaid by the total unpaid
principal balance of the Loan immediately prior to such prepayment. For
purposes of calculating the surcharge provided in this Section 6, but not for
purposes of reducing amounts due on each Payment Date, conversion of a Portion
of the Loan accruing interest pursuant to one of the fixed rate options to a
different rate pursuant to Section 4(A)(3) shall be deemed a prepayment in
full of that Portion of the Loan. Notwithstanding the foregoing, upon any
prepayment of any Portion of the Loan accruing interest pursuant to one of the
fixed rate options, and as a condition to any voluntary prepayment, the
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<PAGE> 6
Loan Agreement/CTC Financial
Loan No. T0362
Borrower shall pay to CoBank, on the date of such prepayment, a surcharge (the
"Surcharge") determined and calculated as follows:
(A) Determine the difference between: (i) CoBank's cost of funds
(determined in accordance with its standard methodology) on the date the
interest rate was fixed to fund the Portion of the Loan being prepaid; minus
(ii) CoBank's cost of funds (determined in accordance with such methodology) on
the date of prepayment to fund a new loan with a maturity equal to the
remainder of the selected Interest Period of the Portion of the Loan being
prepaid. If such difference is negative, then no Surcharge is payable.
(B) If such difference is positive, divide the result determined
in Subsection (A) by 12.
(C) For each month or part thereof during which the Portion of
the Loan being prepaid was scheduled to have been outstanding, multiply the
amount determined in Subsection (B) by that part of the Portion of the Loan
being prepaid that was scheduled to have been outstanding during such month
(such that there is a monthly calculation for each month during which the
Portion of the Loan being prepaid was scheduled to have been outstanding).
(D) Determine the present value of each monthly calculation made
under Subsection (C) based upon the scheduled time that interest on the Portion
of the Loan being prepaid would have been payable and a discount rate equal to
the rate set forth in Subsection (A)(ii).
(E) Add all of the calculations made under Subsection (D). The
result shall be the Surcharge.
SECTION 7. NOTE. The Borrower's obligation to repay the Loan shall be
evidenced by a promissory note in form and content acceptable to CoBank and the
Borrower (as the same may be amended, supplemented, extended or restated from
time to time, and any promissory note that may be issued from time to time in
substitution, renewal, extension, replacement or exchange therefor, the
"Note").
SECTION 8. MANNER AND TIME OF PAYMENT. If any date on which payment is
due hereunder is not a Business Day, the payment shall be made on the next
succeeding Business Day. The Borrower shall make each payment under this
Agreement and under the Note by wire transfer of immediately available funds or
by check. Wire transfers shall be made to the Federal Reserve Bank of Kansas
City for advice to and credit of CoBank, Federal Reserve Bank account number
3070-88-75-4 (or to such other account as CoBank may designate by notice) with
sufficient information to identify the source and application
-6-
<PAGE> 7
Loan Agreement/CTC Financial
Loan No. T0362
of such funds. The Borrower shall give CoBank telephonic notice no later than
12:00 noon, Eastern time, of its intent to pay by wire transfer. Wire transfers
received after 3:00 p.m., Eastern time, shall be credited on the next Business
Day. Checks shall be mailed or delivered to CoBank at Drawer CS 198552,
Atlanta, Georgia 30384-8552 (or to such other address as CoBank may designate
by notice). Credit for payment by check will not be given until the next
Business Day after receipt of the check or the actual receipt of immediately
available funds, whichever is later.
SECTION 9. CAPITALIZATION. The Borrower agrees to purchase such equity
in CoBank as CoBank may from time to time require in accordance with its bylaws
and capital plan; provided, however, that CoBank may not require the Borrower
to purchase equity in CoBank in an amount greater than 13% of the portion of
CoBank's five-year average risk-adjusted asset base attributable to loans made
by CoBank to the Borrower. In connection with the foregoing, the Borrower
hereby acknowledges receipt, prior to the execution of this Agreement, of
CoBank's bylaws, a written description of the terms and conditions under which
the equity is issued, CoBank's Loan-Based Capital Plan, CoBank's most recent
annual report, and if more recent than CoBank's latest annual report, its
latest quarterly report. The Borrower hereby consents and agrees that the
amount of any distributions with respect to its patronage with CoBank that are
made in qualified written notices of allocation (as defined in 26 U.S.C.
Section 1388) and that are received by the Borrower from CoBank, will be taken
into account by the Borrower at the stated dollar amounts whether the
distribution is evidenced by a Participation Certificate or other form of
written notice that such distribution has been made and recorded in the name of
the Borrower on the records of CoBank. All such investments and all other
equities which the Borrower may now own or hereafter acquire or be allocated in
CoBank shall be subject to a statutory first lien in favor of CoBank.
SECTION 10. SECURITY. The Loan and the Note are secured by an assignment
of that certain Promissory Note, dated of even date herewith, made by MCTC to
the order of the Borrower, in the original principal amount of $18,000,000 (as
the same may be amended, supplemented extended or restated from time to time,
and any promissory note that may be issued from time to time in substitution,
renewal, extension, replacement or exchange therefore, "MCTC Note").
The Loan is guaranteed by that certain (i) Continuing Guaranty, dated as
of even date herewith, made by MCTC for the benefit of CoBank (as the same may
be amended, supplemented, extended or restated from time to time, the "MCTC
Guaranty"). The Loan, the Note, the MCTC Note and MCTC Guaranty are secured by
that certain (a) Multiple Indebtedness Mortgage, dated as of even date
herewith, made by MCTC to CoBank, as beneficiary of the MCTC Guaranty and the
holder of the Note and the MCTC Note (as the same may be amended, supplemented,
extended or restated from time to time, the
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"Mortgage"), pursuant to which MCTC shall grant to CoBank a first priority lien
and security interest in all of its now owned or hereafter acquired real
property, and (b) Security Agreement, dated as of even date herewith, made by
MCTC to CoBank, as beneficiary of the MCTC Guaranty and holder of the Note and
the MCTC Note (as the same may be amended, supplemented, extended or restated
from time to time, the "Security Agreement"), pursuant to which MCTC shall
grant to CoBank a first priority security interest in all of its now owned or
hereafter acquired tangible and intangible personal property (including,
without limitation, to the extent permitted by law, all licenses and permits
issued by the Federal Communications Commission ("FCC")), subject to such
exceptions as are therein permitted.
The Loan, the Note, the MCTC Note and the MCTC Guaranty are guaranteed
by those certain Limited Recourse Continuing Guaranties, each dated as of even
date herewith, made by (I) Cameron Communications Corporation ("CCC") for the
benefit of CoBank (as the same may be amended, supplemented, extended or
restated from time to time, the "CCC Limited Recourse Guaranty"), and (II)
Mercury, Inc. ("Mercury") for the benefit of CoBank (as the same may be
amended, supplemented, extended or restated from time to time, the "Mercury
Limited Recourse Guaranty").
The Loan, the Note, the MCTC Note, the MCTC Guaranty, and the CCC
Limited Recourse Guaranty are secured by that certain Pledge Agreement, dated
as of even date herewith, by and between CCC and CoBank, as beneficiary of the
MCTC Guaranty and the CCC Limited Recourse Guaranty and as holder of the Note
and MCTC Note (as the same may be amended, supplemented, extended or restated
from time to time, the "CCC Pledge Agreement"), pursuant to which CCC shall
pledge, on a first priority basis, all of its now owned or hereafter acquired
capital stock in MCTC. The Loan, the Note, the MCTC Note, the MCTC Guaranty and
the Mercury Limited Recourse Guaranty are secured by that certain Pledge
Agreement, dated as of even date herewith, by and between Mercury and CoBank,
as beneficiary of the MCTC Guaranty and the Mercury Limited Recourse Guaranty
and as holder of the Note and the MCTC Note (as the same may be amended,
supplemented, extended or restated from time to time, the "Mercury Pledge
Agreement"), pursuant to which Mercury shall pledge, on a first priority basis,
all of its now owned or hereafter acquired capital stock in MCTC.
SECTION 11. CONDITIONS PRECEDENT. CoBank's obligation to make the Loan
is subject to the satisfaction of each of the following conditions precedent on
or before the Funding Date:
(A) LOAN DOCUMENTS. That CoBank receive duly executed originals
of this Agreement, the Note, the MCTC Note, duly assigned to it, the MCTC
Guaranty, the Mortgage, the Security Agreement, the CCC Limited Recourse
Guaranty, the CCC Pledge
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Agreement, the Mercury Limited Recourse Guaranty, the Mercury Pledge Agreement
and all other instruments and documents contemplated hereby or thereby
(collectively, the "Loan Documents").
(B) AUTHORIZATION. That CoBank receive copies of all corporate
documents and proceedings of the Borrower, MCTC, CCC and Mercury authorizing
the execution, delivery, and performance of the Loan Documents to which each is
a party, certified by appropriate officers of such entities.
(C) APPROVALS. That CoBank receive evidence satisfactory to it
that all federal and state consents and approvals (including, without
limitation, all regulatory approvals) which are necessary for, or required as a
condition of, the validity and enforceability of the Loan Documents or the
creation or perfection of the liens and security interests identified in
Section 10 have been obtained and are in full force and effect.
(D) OPINIONS OF COUNSEL. That CoBank receive opinions of counsel
for the Borrower, MCTC, CCC and Mercury (who shall be mutually acceptable to
CoBank) in form and content acceptable to all parties.
(E) FEES AND EXPENSES. That the Borrower pay the remainder of
the origination fee set forth in Section 4(E) and the costs and expenses
required to be paid by the Borrower pursuant to Section 20.
(F) PERMITS. That CoBank receive evidence satisfactory to it
that the Borrower and MCTC possesses all necessary operating permits,
authorizations, approvals, and the like which are material to the conduct of
the Borrower's business or which may otherwise be required by law.
(G) INSURANCE. That CoBank receive evidence of insurance by the
Borrower in such amounts and covering such risks as are usually carried by
companies in the same or similar business.
(H) ENVIRONMENTAL MATTERS. That CoBank receive from MCTC an
environmental checklist on a form prescribed by CoBank covering all real
property owned or leased by MCTC and copies of MCTC's environmental records and
procedures, all of such information to be satisfactory to CoBank in its sole
discretion.
(I) PERFECTION AND PRIORITY OF LIENS. That CoBank receive an
opinion of counsel in form and content acceptable to it to the effect that, as
of the Funding Date, CoBank has a duly perfected security interest or lien in
all collateral covered by the Mortgage, the Security Agreement, the CCC Pledge
Agreement and the Mercury Pledge
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Agreement subject in each case to no prior liens other than as may be permitted
under any such document.
(J) NO MATERIAL ADVERSE CHANGE. That from December 31, 1993, to
the Funding Date there shall not have occurred any event which has had or could
have a Material Adverse Effect (as hereinafter defined) on the Borrower or
MCTC. For purposes of this Agreement, the term "Material Adverse Effect" when
used with reference to any entity shall mean a material adverse effect on the
condition, financial or otherwise, operations, properties or business of such
entity or on the ability of such entity to perform its obligations under the
Loan Documents to which it is a party.
(K) NO INJUNCTION. That no court or other government body or
public authority shall have issued an order which shall then be in effect
restraining or prohibiting the completion of the transactions contemplated
hereby.
(L) CLOSING CERTIFICATE. That CoBank receive a certificate, in
the form attached hereto as Exhibit A, dated the Funding Date, signed by
officers of the Borrower, MCTC, CCC and Mercury as CoBank shall request
acceptable to CoBank, certifying as to the truth and accuracy of the
representations and warranties of the Borrower, MCTC, CCC and Mercury under the
Loan Documents to which each is a party, the satisfaction of each of the
conditions applicable to the making of the Loan specified herein and the other
matters set forth therein.
(M) MCK LOAN. That all conditions precedent to the making of the
initial advance set forth in Section 11(A) of the certain Loan Agreement, by
and between CoBank and MCK, dated as of April 20, 1995, be satisfied (the "MCK
Loan).
(N) EVENT OF DEFAULT. That no Event of Default (as that term is
defined in Section 15) exists, and that there has occurred no event which with
the passage of time or the giving of notice, or both, could become an Event of
Default (each such event, a "Default").
(O) REPRESENTATIONS AND WARRANTIES. That the representations
and warranties of the Borrower contained in this Agreement and any other Loan
Document to which it is a party, of MCTC contained in the MCTC Guaranty and any
other Loan Document to which it is a party, of CCC contained in the CCC Limited
Recourse Guaranty and any other Loan Document to which it is a party, and of
Mercury contained in the Mercury Limited Recourse Guaranty and any other Loan
Document to which it is a party, be true and correct in all material respects
on and as of the Funding Date, as though made on and as of the Funding Date.
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(P) OTHER DOCUMENTS. That CoBank receive such other opinions,
certificates and documents as CoBank may reasonably request.
SECTION 12. REPRESENTATIONS AND WARRANTIES. To induce CoBank to make the
Loan hereunder, and recognizing that CoBank is relying hereon, the Borrower
represents and warrants, as of the date of this Agreement and as of the Funding
Date, as follows:
(A) ORGANIZATION; POWERS; ETC. The Borrower (i) is duly
organized, validly existing, and in good standing under the laws of the state
of its incorporation; (ii) is duly qualified to do business and is in good
standing in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification; (iii) has all requisite
corporate and legal power to own and operate its assets and to carry on its
business and to enter into and perform its obligations under the Loan Documents
to which it is a party; (iv) has duly and lawfully obtained and maintains all
licenses, certificates, permits, authorizations, approvals, and the like which
are material to the conduct of its business or which may be otherwise required
by law; (v) is a wholly-owned subsidiary of Cameron Telephone Company; and (vi)
is eligible to borrow from CoBank.
(B) DUE AUTHORIZATION; NO VIOLATIONS; ETC. The execution and
delivery by the Borrower of, and the performance by the Borrower of its
obligations under, the Loan Documents to which it is a party have been duly
authorized by all requisite corporate action on the part of the Borrower and
its shareholders and do not and will not (i) violate any provision of any law,
rule or regulation, any judgment, order or ruling of any court or governmental
agency, the articles of incorporation or bylaws, if any, of the Borrower, or
any agreement, indenture, mortgage, or other instrument to which the Borrower
is a party or by which the Borrower or any of its properties are bound, or (ii)
be in conflict with, result in a breach of, or constitute with the giving of
notice or lapse of time, or both, a default under any such agreement,
indenture, mortgage, or other instrument.
(C) GOVERNMENTAL APPROVAL. No consent, permission,
authorization, order, or license of any governmental authority is necessary in
connection with the execution, delivery, performance, or enforcement of the
Loan Documents to which the Borrower is a party or the creation and perfection
of the liens and security interests granted thereby, except such as have been
obtained and are in full force and effect.
(D) BINDING AGREEMENT. Each of the Loan Documents to which the
Borrower is a party is, or when executed and delivered will be, the legal,
valid, and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms, subject only to limitations on enforceability
imposed by (i) applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting creditors' rights generally, and (ii) general
equitable principles.
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(E) COMPLIANCE WITH LAWS. The Borrower is in compliance in all
material respects with all federal, state, and local laws, rules, regulations,
ordinances, codes, and orders (collectively, "Laws"), the failure to comply
with which could have a Material Adverse Effect on the Borrower.
(F) ENVIRONMENTAL COMPLIANCE. Without limiting the provisions
of Subsection (E), all property owned or leased by the Borrower and all
operations conducted by it are in compliance in all material respects with all
Laws relating to environmental protection, the failure to comply with which
could have a Material Adverse Effect on the Borrower.
(G) LITIGATION. There are no pending legal, arbitration, or
governmental actions or proceedings to which the Borrower is a party or to
which any of its property is subject which could have a Material Adverse Effect
on the Borrower, and to the best of the Borrower's knowledge, no such actions
or proceedings are threatened or contemplated.
(H) FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE; ETC. The
audited financial statements of MCTC for the fiscal year ended December 31,
1993, the unaudited financial statements of MCTC for the fiscal year ended
December 31, 1994, and the unaudited financial statements of MCTC for the
two-month period ended February 28, 1995, submitted to CoBank in connection
with the Loan fairly and fully present in all material respects the financial
condition of MCTC and the results of MCTC's operations for the periods covered
thereby and were prepared in accordance with generally accepted accounting
principles ("GAAP") consistently applied and any system of accounts to which
MCTC is subject. Since December 31, 1993, there has occurred no event which has
had or would have a Material Adverse Effect on the Borrower. All budgets,
projections, feasibility studies, and other documentation submitted by MCTC to
CoBank in connection with the Loan were based upon assumptions that were
reasonable and realistic at the time submitted and, as of the date hereof, no
fact has come to light, and no event or transaction has occurred, which would
cause any assumption made therein not to be reasonable or realistic.
(I) PRINCIPAL PLACE OF BUSINESS; RECORDS. The principal place of
business and chief executive office of the Borrower and the place where the
records required by Section 13(G) are kept is at the address of the Borrower
shown in Section 19.
(J) EMPLOYEE BENEFIT PLANS. To the extent applicable, the
Borrower is in compliance in all material respects with the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder.
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(K) TAXES. The Borrower has filed or caused to be filed all
federal, state and local tax returns that are required to be filed, and has
paid all taxes as shown on said returns or on any assessment received by the
Borrower to the extent that such taxes have become due, unless such taxes are
being contested by the Borrower, in good faith and by appropriate proceedings
and then only to the extent reserves required by GAAP have been set aside on
the Borrower's books therefor.
(L) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.
The Borrower is not an "investment company" as that term is defined in, and is
not otherwise subject to regulation under, the Investment Company Act of 1940,
as amended. The Borrower is not a "holding company" as that term is defined
in, and is not otherwise subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended.
(M) USE OF PROCEEDS. The funds to be borrowed hereunder will be
used only as contemplated hereby. No part of such funds will be used to
purchase any "margin securities" or otherwise in violation of the regulations
of the Federal Reserve System.
(N) SUBSIDIARIES. The Borrower has no subsidiaries.
(O) BUSINESS. The Borrower's sole business activity and
operation is to borrow and reloan proceeds of such borrowings to MCTC and other
affiliated entities.
SECTION 13. AFFIRMATIVE COVENANTS. Unless otherwise agreed to in writing
by CoBank, while this Agreement is in effect, the Borrower covenants and agrees
to:
(A) CORPORATE EXISTENCE. Preserve and keep in full force and
effect its corporate existence and good standing in the jurisdiction of its
incorporation, and its qualification to transact business and good standing in
all places in which the character of its properties or the nature of its
business requires such qualification.
(B) COMPLIANCE WITH LAWS AND AGREEMENTS. Comply in all material
respects with (i) all Laws, the failure to comply with which could have a
Material Adverse Effect on the Borrower; and (ii) all agreements, indentures,
mortgages, and other instruments to which it is a party or by which it or any
of its property is bound.
(C) COMPLIANCE WITH ENVIRONMENTAL LAWS. Without limiting the
provisions of Subsection (B), comply in all material respects with, and cause
all persons occupying or present on any properties owned or leased by it to so
comply with, all Laws relating to environmental protection, the failure to
comply with which could have a Material Adverse Effect on the Borrower.
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(D) LICENSES; Permits; Etc. Duly and lawfully obtain and
maintain in full force and effect all licenses, certificates, permits,
authorizations, approvals, and the like which are material to the conduct of
its business or which may be required by Law.
(E) INSURANCE. Maintain insurance with insurance companies or
associations acceptable to CoBank in such amounts and covering such risks as
are usually carried by companies engaged in the same or similar business and
similarly situated, and make such increases in the type or amount of coverage
as CoBank may request. All such policies insuring any collateral provided for
in any Loan Document shall provide for loss payable clauses or endorsements in
form and content acceptable to CoBank. At the request of CoBank, all policies
(or such other proof of compliance with this Subsection (E) as may be to
CoBank) shall be delivered to CoBank.
(F) PROPERTY MAINTENANCE. Maintain and preserve at all times
its property, and each and every part and parcel thereof, in good repair,
working order and condition, ordinary wear and tear excepted.
(G) BOOKS AND RECORDS. Keep adequate records and books of
account in accordance with GAAP consistently applied and any system of accounts
to which it is subject.
(H) INSPECTION. Permit CoBank or its agents, during normal
business hours or at such other times as the parties may agree, to examine its
properties, books, and records, and to discuss its affairs, finances,
operations, and accounts with its officers, directors, employees, and
independent certified public accountants.
(I) REPORTS AND NOTICES. Furnish to CoBank:
(1) ANNUAL FINANCIAL STATEMENTS. As soon as available,
but in no event later than 120 days after the end of each fiscal year of
MCTC occurring during the term hereof, annual consolidated and
consolidating financial statements of MCTC prepared in accordance with
GAAP consistently applied and any system of accounts to which MCTC is
subject. Each of such financial statements shall: (i) be audited by
independent certified public accountants selected by MCTC and acceptable
to CoBank; (ii) be accompanied by a report of such accountants
containing an opinion acceptable to CoBank; (iii) be prepared in
reasonable detail; and (iv) include a balance sheet, a statement of
income, a statement of retained earnings, a statement of cash flows, and
all notes and schedules relating thereto.
(2) MONTHLY AND YEAR-TO-DATE FINANCIAL STATEMENTS. As
soon as available but in no event later than 60 days after the end of
each of the first three
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fiscal quarters of each fiscal year of MCTC occurring during the term
hereof, unaudited monthly (for the three months immediately preceding
such fiscal quarter end) and year-to-date financial statements of MCTC
prepared in accordance with GAAP consistently applied and any system of
accounts to which MCTC is subject (except for the omission of footnotes
and for the effect of normal year-end audit adjustments). Each of such
financial statements shall: (i) be prepared in reasonable detail; and
(ii) include a balance sheet, a statement of income for such months and
period year-to-date, a statement of cash flows, and such other months
statements as CoBank may specifically request, which statements shall
include any and all supplements thereto.
(3) FINANCIAL FORECAST. As soon as available, but in no
event later than 30 days after the first day of each fiscal year of MCTC
occurring during the term hereof, a one-year financial forecast for MCTC
which shall include, without limitation, a statement of income, a
balance sheet, a statement of sources and uses of funds, capital
expenditure projections and such other information as CoBank shall
reasonably require.
(4) NOTICE OF DEFAULT. Promptly after becoming aware
thereof, notice of (a) the occurrence of any Default or Event of Default
hereunder or under any other Loan Document, and (b) the occurrence of
any breach, default, event of default, or other event which with the
giving of notice or lapse of time, or both, could become a breach,
default, or event of default under any agreement, indenture, mortgage,
or other instrument (other than the Loan Documents) to which the
Borrower is a party or by which the Borrower or any of its property is
bound or affected if the effect of such breach, default, event of
default, or other event is to accelerate, or to permit the acceleration
of, the maturity of any indebtedness under such agreement, indenture,
mortgage, or other instrument; provided, however, that the failure to
give such notice shall not affect the right and power of CoBank to
exercise any and all of the remedies specified herein.
(5) NOTICE OF NON-ENVIRONMENTAL LITIGATION. Promptly
after the commencement thereof, notice of the commencement of all
actions, suits, or proceedings before any court, arbitrator, or
governmental department, commission, board, bureau, agency, or
instrumentality affecting the Borrower which could have a Material
Adverse Effect on the Borrower.
(6) NOTICE OF ENVIRONMENTAL LITIGATION. Without limiting
the provisions of Subsection (I)(5), promptly after receipt or becoming
aware thereof, notice of the receipt of all pleadings, orders,
complaints, indictments, or other communications alleging a condition
that may require the Borrower to undertake or
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to contribute to a cleanup or other response under Laws relating to
environmental protection, or which seeks penalties, damages, injunctive
relief, or criminal sanctions related to alleged violations of such
Laws, or which claims personal injury or property damage to any person
or property as a result of environmental factors or conditions or which
could have a Material Adverse Effect on the Borrower.
(7) REGULATORY AND OTHER NOTICES. Promptly after filing,
receipt or becoming aware thereof, copies of any filings or
communications sent to or notices or other communications received by
the Borrower or MCTC from any governmental authority, including, without
limitation, the Louisiana Public Service Commission (the "Commission")
and the FCC, relating to any noncompliance by the Borrower or MCTC with
any Law or with respect to any matter or proceeding the effect of which
could have a Material Adverse Effect on the Borrower or MCTC.
(8) MATERIAL ADVERSE CHANGE. Prompt notice of any matter
which has had or could have a Material Adverse Effect on the Borrower or
MCTC.
(9) COMPLIANCE CERTIFICATES. Concurrently with each
financial statement required to be furnished pursuant to Subsections
(I)(1) and (I)(2), a certificate in the form attached hereto as Exhibit
B executed by the chief accounting officer of MCTC.
(10) ERISA REPORTABLE EVENTS. Within 10 days after the
Borrower becomes aware of the occurrence of any Reportable Event (as
defined in Section 4043 of ERISA) with respect to the Borrower or MCTC,
a statement describing such Reportable Event and the actions proposed to
be taken in response to such Reportable Event.
(11) OTHER INFORMATION. Such other information regarding
the condition, financial or otherwise, or operations of the Borrower or
MCTC as CoBank may, from time to time, reasonably request.
SECTION 14. NEGATIVE COVENANTS. Unless otherwise agreed to in writing
by CoBank, while this Agreement is in effect, the Borrower shall not:
(A) BORROWINGS. Create, incur, assume, or allow to exist,
directly or indirectly, any indebtedness or liability for borrowed money, for
the deferred purchase price of property or services, or for the lease of real
or personal property which lease is required to be capitalized under GAAP or
which is treated as an operating lease under regulations applicable to it but
which otherwise would be required to be capitalized under GAAP, except for
obligations to CoBank.
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(B) LIENS. Create, incur, assume, or allow to exist any
mortgage, deed of trust, deed to secure debt, pledge, lien (including the lien
of an attachment, judgment, or execution), security interest, or other
encumbrance of any kind upon any of its property, real or personal, except in
favor of CoBank.
(C) MERGERS; ACQUISITIONS; ETC. Merge or consolidate with any
other entity or acquire all or substantially all of the assets of any person or
entity, or form or create any subsidiary, or commence operations under any
other name, organization, or entity, including any joint venture.
(D) TRANSFER OF ASSETS. Sell, transfer, lease, enter into any
contract for the sale, transfer or lease of, or otherwise dispose of, any of
its assets.
(E) LOANS AND INVESTMENTS. After the date hereof, make any loan
or advance to, invest in, purchase or make any commitment to purchase any
stock, bonds, notes, or other securities of any person or entity, other than
stock or other securities of CoBank and the advances to its affiliated entities
of loan proceeds received from CoBank as contemplated by this Agreement or any
other loan agreement entered into between CoBank and the Borrower.
(F) GUARANTEES. Guarantee, assume or otherwise become obligated
or liable with respect to the indebtedness or other obligations of any person
or entity.
(G) CHANGE IN BUSINESS. Engage in any business activity or
operation different from or unrelated to the Borrower's current business
activities or operations.
(H) DISPOSITION OF LICENSES. Sell, assign, transfer, or
otherwise dispose of, or attempt to dispose of, in any way, any registrations,
licenses, franchises, grants, permits, or other governmental approvals.
SECTION 15. EVENTS OF DEFAULT. Each of the following shall constitute an
"Event of Default" hereunder:
(A) PAYMENT DEFAULT. The failure by the Borrower to make any
payment or investment required to be made hereunder, under the Note, or under
any other Loan Document when due.
(B) REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made by the Borrower, MCTC, CCC or Mercury herein or in any other Loan
Document, or any factual statement made in any certificate delivered in
connection with the Loan, shall prove to have been false or misleading in any
material respect on or as of the date made.
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(C) CERTAIN AFFIRMATIVE COVENANTS. The failure by the Borrower
to perform or comply with any covenant set forth in Section 13 (other than
Sections 13(A) and 13(I)(4), (5), (6), (7), (8) and (10)), and such failure
continues for 30 days after written notice thereof shall have been delivered by
CoBank to the Borrower.
(D) OTHER COVENANTS AND AGREEMENTS. The failure by the Borrower
to perform or comply with any other covenant or agreement contained herein,
including, without limitation, any covenant excluded under Subsection (C)
above.
(E) CROSS-DEFAULT. The occurrence of any breach, default, event
of default, or event which with the giving of notice or lapse of time, or both,
could become a default or event of default under (i) any Loan Document other
than this Agreement, or (ii) the terms of any agreement (other than the Loan
Documents) between the Borrower, MCTC, CCC or Mercury, and CoBank, including,
without limitation, any guaranty, loan agreement, security agreement, pledge
agreement, mortgage, deed to secure debt, or deed of trust.
(F) OTHER INDEBTEDNESS. The occurrence of any breach, default,
event of default, or event which with the giving of notice or lapse of time, or
both, could become a default or event of default under any agreement,
indenture, mortgage, or other instrument by which the Borrower or MCTC or any
of their respective property is bound or affected (other than the Loan
Documents) if the effect of such breach, default, event of default, or event is
to accelerate, or to permit the acceleration of, the maturity of any
indebtedness under such agreement, indenture, mortgage, or other instrument.
(G) JUDGMENTS. Any judgment, decree or order for the payment of
money shall be rendered against the Borrower or judgments, decrees or orders
for the payment of money in an aggregate amount in excess of $75,000 shall be
rendered against MCTC and either (i) enforcement proceedings shall have been
commenced; or (ii) such judgments, decrees, and orders shall continue
unsatisfied and in effect for a period of 45 consecutive days without being
vacated, discharged, satisfied, or stayed pending appeal.
(H) INSOLVENCY, ETC. Any of the Borrower, MCTC, CCC or Mercury
(i) shall become insolvent or shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they come due; or
(ii) shall suspend its business operations or a material part thereof or make
an assignment for the benefit of creditors; or (iii) shall apply for, consent
to, or acquiesce in the appointment of a trustee, receiver, or other custodian
for it or any of its property or, in the absence of such application, consent,
or acquiescence, a trustee, receiver, or other custodian is so appointed; or
(iv) shall commence with respect to it or have commenced against it any
proceeding under any
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bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, or
liquidation law or statute of any jurisdiction.
(I) ELIGIBILITY. The failure by the Borrower to maintain its
eligibility to borrow from CoBank.
(J) SECURITY. Any of the Mortgage, the Security Agreement, the
CCC Pledge Agreement or the Mercury Pledge Agreement or the filings
contemplated thereby, shall for any reason fail (i) to create a valid and
perfected first-priority lien or security interest (subject only to such
exceptions as are therein permitted) on any of the property identified therein,
or (ii) to secure thereunder the obligations evidenced by this Agreement, the
Note, the MCTC Note, the MCTC Guaranty, the CCC Limited Recourse Guaranty or
the Mercury Limited Recourse Guaranty, as applicable. Any of the MCTC Guaranty,
the CCC Limited Recourse Guaranty or the Mercury Limited Recourse Guaranty
shall fail for any reason to be the valid and binding obligations of MCTC, CCC
or Mercury, respectively, or any of MCTC, CCC or Mercury shall in any way
contest or dispute the validity and binding effect of the MCTC Guaranty, the
CCC Limited Recourse Guaranty or the Mercury Limited Recourse Guaranty.
SECTION 16. REMEDIES UPON EVENT OF DEFAULT.
(A) AUTOMATIC ACCELERATION. Upon the occurrence of an Event of
Default under Section 15(H), the entire unpaid principal balance of the Note,
all accrued interest thereon, and all other amounts payable under this
Agreement, the Note, and all other agreements between CoBank and the Borrower
shall become immediately due and payable without protest, presentment, demand,
or further notice of any kind, all of which are hereby expressly waived by the
Borrower.
(B) ACCELERATION; ETC. Upon the occurrence of an Event of
Default other than under Section 15(H), upon notice to the Borrower, CoBank may
declare the entire unpaid principal balance of the Note, all accrued interest
thereon, and all other amounts payable under this Agreement and all other
agreements between CoBank and the Borrower, to be immediately due and payable.
Upon such a declaration, the unpaid principal balance of the Note and all such
other amounts shall become immediately due and payable, without protest,
presentment, demand, or further notice of any kind, all of which are hereby
expressly waived by the Borrower.
(C) ENFORCEMENT. Upon the occurrence of an Event of Default,
CoBank may proceed to protect, exercise, and enforce such rights and remedies
as may be provided by agreement or under law including, without limitation, the
rights and remedies provided for in the Note and any of the other Loan
Documents. Each and every one of such rights
-19-
<PAGE> 20
Loan Agreement/CTC Financial
Loan No. T0362
and remedies shall be cumulative and may be exercised from time to time, and no
failure on the part of CoBank to exercise, and no delay in exercising, any
right or remedy shall operate as a waiver thereof; nor shall any single or
partial exercise of any right or remedy preclude any other or future exercise
thereof, or the exercise of any other right. In addition, CoBank may hold
and/or set off and apply against the Borrower's indebtedness any and all cash,
accounts, securities, or other property in CoBank's possession or under its
control.
(D) APPLICATION OF PAYMENTS. After acceleration of the Loan, all
amounts received by CoBank shall be applied to the amounts owing hereunder,
under the Note, and the other Loan Documents in whatever order and manner as
CoBank shall elect.
(E) REGULATORY APPROVALS. Upon any action by CoBank to commence
the exercise of remedies hereunder or under the Mortgage, the Security
Agreement, the CCC Pledge Agreement or the Mercury Pledge Agreement, the
Borrower hereby undertakes and agrees to cooperate and join with CoBank in any
application to the Commission, the FCC, or any other regulatory body,
administrative agency, court or other forum (any such entity, a "Governmental
Authority") with respect thereto and to provide such assistance in connection
therewith as CoBank may request, including, without limitation, the preparation
of filings and appearances of officers and employees of the Borrower before
such Governmental Authority, in each case in support of any such application
made by CoBank, and the Borrower shall not, directly or indirectly, oppose any
such action by CoBank before any such Governmental Authority.
SECTION 17. COMPLETE AGREEMENT; AMENDMENT. This Agreement and the other
Loan Documents are intended by the parties to be a complete and final
expression of their agreement. No amendment, modification, or waiver of any
provision hereof or thereof, nor any consent to any departure of the Borrower
herefrom or therefrom, shall be effective unless approved by CoBank and
contained in a writing signed by or on behalf of CoBank, and then such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 18. APPLICABLE LAW. Except to the extent governed by applicable
federal law, this Agreement shall be governed by and construed in accordance
with the laws of the State of Louisiana without reference to choice of law
doctrine.
SECTION 19. NOTICES. All notices hereunder shall be in writing and shall
be deemed to be duly given upon delivery, if delivered by "Express Mail,"
overnight courier, messenger or other form of hand delivery or sent by telegram
or facsimile transmission, or 3 days after mailing if sent by certified or
registered mail, to the parties at the following addresses (or such other
address for a party as shall be specified by like notice):
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<PAGE> 21
Loan Agreement/CTC Financial
Loan No. T0362
If to CoBank, as follows: If to the Borrower, as follows:
CoBank, ACB CTC Financial, Inc.
200 Galleria Parkway One Lakeshore Drive, Suite 1495
Suite 1900 P.O. Drawer 3709
Atlanta, Georgia 30339 Lake Charles, Louisiana 70602
Attn: Rural Utility Banking Group Attn: Robert Piper; cc:Thomas G. Henning
Fax No.: (404) 618-3202 Fax No.: (318) 439-0769
SECTION 20. COSTS AND EXPENSES. The Borrower shall reimburse CoBank on
demand for all reasonable out-of-pocket costs and expenses incurred by CoBank
in connection with the origination, negotiation, preparation and administration
of this Agreement and all other Loan Documents, and the preservation and
enforcement of CoBank's rights and remedies hereunder and thereunder,
including, without limitation: all (a) costs and expenses (including intangible
and other taxes and any recording fees or expenses) incurred by CoBank to
obtain, perfect, maintain, determine the priority of, or release any security
contemplated hereunder; (b) fees and expenses of any outside counsel retained
by CoBank to assist CoBank with respect to any matter contemplated by this
Section 20 or to review this Agreement and all other Loan Documents and advise
CoBank as to its rights and remedies hereunder or thereunder; (c) fees and
expenses of any outside counsel retained by CoBank to represent it in any
litigation involving the parties to any of the Loan Documents, including but
not limited to, bankruptcy, receivership, or similar proceedings; and (d) fees,
costs and expenses incurred in connection with obtaining surveys and
appraisals, if any, required under this Agreement or any other Loan Document;
provided, however, that the Borrower shall not be obligated to reimburse CoBank
for legal fees (exclusive of associated expenses) for the initial negotiation
and documentation of the Loan which, when aggregated with the legal fees
(exclusive of associated expenses) of CoBank reimbursed by MCK in connection
with the initial negotiation and documentation of the MCK Loan, exceed $60,000.
SECTION 21. EFFECTIVENESS; SEVERABILITY. This Agreement shall continue
in effect until all indebtedness and obligations of the Borrower hereunder and
under all other Loan Documents shall have been fully and finally repaid. Any
provision of the Loan Documents which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or thereof
SECTION 22. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the Borrower and CoBank and their respective
successors and assigns, except that the Borrower may not assign or transfer its
rights or obligations hereunder
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<PAGE> 22
Loan Agreement/CTC Financial
Loan No. T0362
without the prior written consent of CoBank. Without the consent of, but with
notice to, the Borrower, CoBank may (a) sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement, or (b) assign to one or more banks or other entities all or a
portion of its rights and obligations under this Agreement.
SECTION 23. CONSENT TO JURISDICTION. To the maximum extent permitted by
law, the Borrower agrees that any legal action or proceeding with respect to
this Agreement or any of the other Loan Documents may be brought in the courts
of the State of Louisiana or of the United States of America for the Western
District of Louisiana, all as CoBank may elect. By execution of this Agreement,
the Borrower hereby irrevocably submits to each such jurisdiction, expressly
waiving any objection it may have to the laying of venue by reason of its
present or future domicile. Nothing contained herein shall affect the right of
CoBank to commence legal proceedings or otherwise proceed against the Borrower
in any other jurisdiction or to serve process in any manner permitted or
required by law.
SECTION 24. OBLIGATIONS ABSOLUTE. The obligation of the Borrower to make
all payments required to be made under this Agreement shall be independent of
any action by the Commission or the FCC with respect to rates and/or
disallowance of debt.
SECTION 25. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original and shall be
binding upon all parties and their respective permitted successors and assigns,
and all of which taken together shall constitute one and the same agreement.
SECTION 26. DEFINED TERMS. For convenience of reference, set forth
below opposite each defined term used in this Agreement is the location in this
Agreement of the definition of such term:
<TABLE>
<CAPTION>
Defined Term Location
------------ --------
<S> <C>
Agreement Introductory Paragraph
Borrower Introductory Paragraph
Business Day Section 3
CCC Section 10
CCC Limited Recourse Guaranty Section 10
CCC Pledge Agreement Section 10
CoBank Introductory Paragraph
Commission Section 13(I)(7)
Default Section 11(N)
Event of Default Section 15
</TABLE>
-22-
<PAGE> 23
Loan Agreement/CTC Financial
Loan No. T0362
<TABLE>
<S> <C>
FCC Section 10
Funding Date Section 3
GAAP Section 12(H)
Governmental Authority Section 16(E)
Interest Period Section 4(A)(2)
Laws Section 12(E)
Loan Section 1
Loan Documents Section 11(A)
Material Adverse Effect Section 11(J)
Maturity Date Section 5
MCK Section 2
MCK Loan Section 11(M)
MCTC Section 2
MCTC Guaranty Section 10
MCTC Note Section 10
Mercury Section 10
Mercury Limited Recourse Guaranty Section 10
Mercury Pledge Agreement Section 10
Mortgage Section 10
National Variable Rate Section 4(A)(1)
Note Section 7
Payment Date Section 5
Portion Section 4(A)(1)
Security Agreement Section 10
Surcharge Section 6
Treasury Margin Section 4(A)(2)
Treasury Rate Section 4(A)(2)
U.S. Treasury Rate Section 4(A)(2)
Variable Rate Section 4(A)(1)
</TABLE>
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<PAGE> 24
Loan Agreement/CTC Financial
Loan No. T0362
THUS DONE AND SIGNED, in several counterparts at the places and on the
dates indicated below, and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
duly authorized officers of the respective parties, after a due reading of the
whole.
At Lake Charles, Louisiana, on April 20, 1995.
CTC FINANCIAL, INC.
By:/s/ WILLIAM L. HENNING, JR.
----------------------------------
Name: William L. Henning, Jr.
Title: President
Attest: /s/ THOMAS G. HENNING
---------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
Witnesses to all signatures:
/s/ SHEILA KING
- ------------------------------
Witness
/s/ CAROLYN NUNEZ
- ------------------------------
Witness
/s/ SANDRA DIAZ
- ------------------------------
Notary Public
My commission expires: lifetime commission
-------------------
[NOTARIAL SEAL]
(Signatures Continued on Next Page)
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<PAGE> 25
Loan Agreement/CTC Financial
Loan No. T0362
(Signatures Continued from Previous Page)
At Atlanta, Georgia, on April 26, 1995.
COBANK, ACB
By: /s/ MARY KAY DEERING
--------------------------------
Name: Mary Kay Deering
Title: Assistant Vice President
Witnesses to signature:
/s/ [ILLEGIBLE]
- ------------------------------------
Witness
/s/ MARA MORE
- ------------------------------------
Witness
/s/ SANDRA S. JONES
- ------------------------------------
Notary Public
My commission expires: July 14, 1997
--------------
[NOTARIAL SEAL]
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<PAGE> 26
Loan Agreement/CTC Financial
Loan No. T0362
EXHIBIT A
CLOSING CERTIFICATE - LOAN NO. T0362
THIS CLOSING CERTIFICATE is given by ____________________, President of
CTC FINANCIAL, INC. (the "Borrower"), _____________, President of MERCURY
CELLULAR TELEPHONE COMPANY ("MCTC"), _____________, President of CAMERON
COMMUNICATIONS CORPORATION ("CCC"), and __________________, President of
MERCURY, INC. ("Mercury"), pursuant to Section 11(L) of that certain Loan
Agreement, dated as of April 20, 1995, by and between CoBank, ACB and the
Borrower (the "Loan Agreement"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the Loan
Agreement.
We hereby certify as follows:
1. We are the President of the Borrower, the President of MCTC, the
President of CCC, and the President of Mercury, respectively, and as such
possess the knowledge and authority to certify to the matters herein set forth,
and the matters herein set forth are true and accurate to the best of our
present knowledge, information and belief after due inquiry;
2. The representations and warranties of the Borrower contained in the
Loan Agreement, of MCTC contained in the MCTC Guaranty, the Mortgage, and the
Security Agreement, of CCC contained in the CCC Limited Recourse Guaranty and
the CCC Pledge Agreement, and of Mercury contained in the Mercury Limited
Recourse Guaranty and the Mercury Pledge Agreement, are true and correct in all
material respects on and as of the date hereof;
3. No Default or Event of Default exists as of the date hereof; and
4. Each of the conditions specified in Section 11 of the Loan Agreement
required to be satisfied on or prior to the effective date hereof has been
fulfilled as of the date hereof.
A-1
<PAGE> 27
Loan Agreement/CTC Financial
Loan No. T0362
IN WITNESS WHEREOF, we have executed this Closing Certificate as of May
____, 1995.
----------------------------------
, President
-----------------------
CTC Financial, Inc.
----------------------------------
, President
-----------------------
Mercury Cellular Telephone Company
----------------------------------
, President
-----------------------
Cameron Communications Corporation
----------------------------------
, President
-----------------------
Mercury, Inc.
A-2
<PAGE> 28
Loan Agreement/CTC Financial
Loan No. T0362
EXHIBIT B
COMPLIANCE CERTIFICATE - LOAN NO. T0362
THIS COMPLIANCE CERTIFICATE is given by ______________, the [CHIEF
ACCOUNTING OFFICER] of MERCURY CELLULAR TELEPHONE COMPANY ("MCTC"), pursuant to
Section 13(I)(9) of that certain Loan Agreement (the "Loan Agreement"), dated
as of April 20, 1995, by and between CoBank, ACB and CTC Financial, Inc. (the
"Borrower"), and Section 5(I)(9) of that certain Continuing Guaranty, dated as
of April 20, 1995, made by MCTC for the benefit of CoBank (the "MCTC
Guaranty"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Loan Agreement.
I hereby certify as follows:
1. I am the [CHIEF ACCOUNTING OFFICER] of MCTC and as such possess
the knowledge and authority to certify to the matters set forth in this
Compliance Certificate;
2. Attached hereto as Annex A are the [AUDITED/UNAUDITED]
[ANNUAL/MONTHLY] [CONSOLIDATED AND CONSOLIDATING] financial statements of MCTC,
for the fiscal [YEAR/QUARTER] ended ______________, as required by Section
13(I) [(1)/(2)] of the Loan Agreement and Section 6(I) [(1)1(2)] of the MCTC
Guaranty. Such financial statements were prepared in accordance with GAAP
consistently applied (except as may be noted therein) and any system of
accounts to which MCTC is subject and fairly present the financial condition of
MCTC during the periods covered thereby and as of the dates thereof (subject,
if applicable, to normal year-end adjustments);
3. As of the date of such financial statements, MCTC is in
compliance with the covenants set forth in Section 5(J) of the MCTC Guaranty.
Attached hereto as Annex B are calculations which demonstrate the compliance by
MCTC with such covenants; and
4. I have reviewed the activities of the Borrower and MCTC, and
consulted with appropriate representatives of the Borrower and MCTC during the
fiscal [YEAR/QUARTER] ended ______________, and reviewed the Loan Documents.
As of the date of this Compliance Certificate, there exists no condition, event
or act which would constitute a Default or Event of Default under the Loan
Agreement, except as disclosed on Annex C hereto.
B-1
<PAGE> 29
Loan Agreement/CTC Financial
Loan No. T0362
IN WITNESS WHEREOF, I have executed this Compliance Certificate as of
_____________, ______.
--------------------------------------------
, [CHIEF ACCOUNTING
--------------------------
OFFICER]
Mercury Cellular Telephone Company
B-2
<PAGE> 1
EXHIBIT 4.52
CTC
LOAN NO. T0362
CONTINUING GUARANTY
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
BEFORE ME, the undersigned Notary Public, and in the presence of the
undersigned competent witnesses, personally came and appeared the party listed
below, who, after being duly sworn, did state:
THIS CONTINUING GUARANTY (this "Guaranty") is made as of April 20, 1995,
by MERCURY CELLULAR TELEPHONE COMPANY ("MCTC") for the benefit of the COBANK,
ACB ("CoBank").
R E C I T A L S:
WHEREAS, CoBank and CTC Financial, Inc. (the "Borrower") have entered
into that certain Loan Agreement, dated as of even date herewith (as the same
may be amended, supplemented, extended or restated from time to time, the "Loan
Agreement"), providing for a loan of up to $18,000,000 (the "Loan"); and
WHEREAS, the proceeds of the Loan will be reloaned by the Borrower to
MCTC for the purposes set forth in the Loan Agreement; and
WHEREAS, as an inducement to CoBank to enter into the Loan Agreement and
to make the Loan, MCTC has agreed to guarantee the Obligations (as hereinafter
defined);
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, MCTC hereby agrees as follows:
SECTION 1. DEFINITIONS. Capitalized terms used in this Guaranty, unless
otherwise defined herein, shall have the meanings assigned to them in the Loan
Agreement.
SECTION 2. OBLIGATIONS. "Obligations" shall mean (a) the principal,
interest and other amounts becoming due and payable, whether by acceleration or
otherwise, under that certain Promissory Note, dated of even date herewith,
made by the Borrower to the order of CoBank, in the original principal amount
of $18,000,000 (as the same may be amended, extended, renewed or replaced from
time to time, the "Note"); and (b) all other payments or performances to be
made by the Borrower under the other Loan Documents to which it is a party.
<PAGE> 2
CONTINUING GUARANTY/MCTC
LOAN NO. T0362
SECTION 3. GUARANTY PROVISIONS.
(A) In consideration of the loans made and to be made by
CoBank to the Borrower pursuant to the Loan Agreement and for other good and
valuable consideration, the adequacy, sufficiency and receipt of which are
hereby acknowledged, MCTC hereby absolutely, unconditionally, directly,
irrevocably, completely and immediately guarantees the full and prompt payment,
when due, whether by acceleration or otherwise, and the prompt performance, of
the Obligations;
(B) MCTC further agrees to pay to CoBank, upon demand, all
losses and reasonable costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses, that may be incurred by CoBank in
attempting to cause the Obligations to be paid, performed or otherwise
satisfied or in attempting to cause satisfaction of MCTC's liability under this
Guaranty or in attempting to protect or preserve any property, personal or
real, securing the Obligations;
(C) MCTC agrees that this Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time any payment by
the Borrower, Cameron Communications Corporation ("CCC"), Mercury, Inc.
("Mercury") or any other person to CoBank on account of the Obligations is
rescinded or must otherwise be returned or restored by CoBank upon the
insolvency or bankruptcy of the Borrower, CCC, Mercury or any other obligor,
guarantor, endorser or surety of the Obligations, all as though such payment
had not been made;
(D) It is the intention of MCTC and CoBank that MCTC's
liability hereunder shall not be in excess of the maximum amount permitted by
applicable federal bankruptcy, state insolvency, or similar laws (collectively,
the "Applicable Laws"). To that end, but only to the extent such liability
would otherwise be subject to avoidance under the Applicable Laws if MCTC is
not deemed to have received valuable consideration, fair value or reasonably
equivalent value for its liability hereunder, MCTC's liability hereunder shall
be reduced to that amount which, after giving effect thereto, would not render
MCTC insolvent, or leave MCTC with unreasonably small capital to conduct
business, or cause MCTC to have incurred debts (or intended to have incurred
debts) beyond MCTC's ability to pay such debts as they mature, at the time such
liability is deemed to have been incurred under the Applicable Laws. As used
herein, the terms "insolvent" and "unreasonably small capital" shall be
determined in accordance with the Applicable Laws. This Subsection (D) is
intended solely to preserve the rights of CoBank hereunder to the maximum
extent permitted by the Applicable Laws, and neither MCTC nor any other person
shall have any right or claim under this Subsection (D) that would not
otherwise be available under the Applicable Laws;
(E) MCTC assents to all terms and agreements heretofore or
hereafter made by the Borrower with CoBank with respect to the Loan and the
Loan Documents;
-2-
<PAGE> 3
Continuing Guaranty/MCTC
Loan No. T0362
(F) MCTC hereby consents to the following and agrees, with or
without notice (all notices being hereby waived), that its liability will not
be affected or impaired by (i) the exchange, release or surrender of any
collateral or any claim against the Borrower, CCC, Mercury or any other person,
or the waiver, release or subordination of any security interest, in whole or
in part; (ii) the waiver or delay in the exercise of any of CoBank's rights or
remedies against the Borrower, CCC, Mercury or any other person; (iii) the
renewal, extension or modification of the terms or amounts of any of the
Obligations, the Loan Documents or any other instrument or agreement evidencing
the same; or (iv) the acceptance by CoBank of other guaranties;
(G) MCTC waives acceptance hereof, notice of acceptance
hereof, and notice of acceleration of and intention to accelerate the
Obligations, and waives presentment, demand, protest, notice of dishonor,
notice of default, notice of nonpayment or protest in relation to any
instrument evidencing any of the Obligations, and any other demands and notices
required by law except as such waiver may be expressly prohibited by law;
(H) This is a guaranty of payment and performance and not of
collection only. The liability of MCTC under this Guaranty shall be absolute,
unconditional, direct, irrevocable, complete and immediate and shall not be
contingent upon the pursuit of any remedies against the Borrower, CCC, Mercury
or any other person, nor against any security or lien available to CoBank, its
successors, successors-in-title, endorsees or assigns, and shall be joint and
several with the liabilities of all other guarantors of the Obligations. MCTC
waives any right to require that an action be brought against the Borrower,
CCC, Mercury or any other person or to require that resort be had to any
security. In the event of a default under any of the Loan Documents, CoBank
shall have the right to enforce its rights, powers and remedies under any of
the Loan Documents in any order, and all rights, powers and remedies available
to CoBank in such event shall be nonexclusive and cumulative of all other
rights, powers and remedies provided thereunder or hereunder or by law or in
equity. Accordingly, MCTC hereby authorizes and empowers CoBank upon
acceleration of the maturity of the Note or any other Obligation, at its sole
discretion, and without notice to MCTC, to exercise any right or remedy which
CoBank may have or any right or remedy hereinafter granted which CoBank may
have as to any security. MCTC waives any right to require any action on the
part of CoBank to proceed to collect amounts due under the Note or any other
Obligation;
(I) MCTC hereby subordinates any and all indebtedness of the
Borrower, CCC or Mercury now or hereafter owed to MCTC to all Obligations of
the Borrower, CCC or Mercury to CoBank, and agrees with CoBank that, from and
after the occurrence of a default or event of default under any of the Loan
Documents, and for so long as such default or event of default exists, MCTC
shall not demand or accept any payment of principal or interest from the
Borrower, CCC or Mercury, shall not claim any offset or other reduction of
MCTC's liability hereunder because of any such indebtedness and shall not take
-3-
<PAGE> 4
Continuing Guaranty/MCTC
Loan No. T0362
any action to obtain any of the security for the Obligations; provided,
however, that, if CoBank so requests, such indebtedness shall be collected,
enforced and received by MCTC as trustee for CoBank and be paid over to CoBank
on account of the Obligations of the Borrower, CCC or Mercury to CoBank, but
without reducing or affecting in any manner the liability of MCTC under the
other provisions of this Guaranty;
(J) MCTC hereby authorizes CoBank, without notice to MCTC, to
apply all payments and credits received from the Borrower, CCC, Mercury any
other person under the Loan Documents or realized from any security in
connection with the Loan in such manner and in such priority as CoBank in its
sole judgment shall see fit to the Obligations or to any other liabilities of
the Borrower, CCC, Mercury or any other person to CoBank, and MCTC agrees that
any such application shall not in any way affect its liabilities hereunder;
(K) The liability of MCTC under this Guaranty shall not in any
manner be affected by reason of any action taken or not taken by CoBank, which
action or inaction is hereby consented and agreed to by MCTC, nor by the
partial or complete unenforceability or invalidity of any other guaranty or
surety agreement, pledge, assignment, or other security for any of the
Obligations. No delay in making demand on MCTC for satisfaction of its
liability hereunder shall prejudice CoBank's right to enforce such
satisfaction. All of CoBank's rights and remedies shall be cumulative and any
failure of CoBank to exercise any right hereunder shall not be construed as a
waiver of the right to exercise the same or any other right at any time, and
from time to time, thereafter;
(L) This Guaranty shall be a continuing one and shall be
binding upon MCTC regardless of how long before or after the date hereof the
Obligations are incurred. This Guaranty shall remain in full force and effect
until a written instrument of termination shall be executed and delivered by a
duly authorized officer of CoBank. CoBank will only be obligated to execute
such an instrument of termination if: (i) all Obligations have been paid in
full; (ii) CoBank has no further commitment or obligation to extend credit to
the Borrower; and (iii) any preference period applicable to payments made on or
security given for the Obligations has expired under applicable bankruptcy and
insolvency laws; and
(M) MCTC hereby irrevocably waives any and all rights it may
have to enforce any of CoBank's rights or remedies or participate in any
security now or hereafter held by CoBank, and any and all such other rights of
subrogation, reimbursement, contribution or indemnification against the
Borrower, CCC, Mercury or any other person having any manner of liability for
the Borrower's, CCC's or Mercury's obligations to CoBank, whether or not
arising hereunder, by agreement, at law or in equity.
SECTION 4. REPRESENTATIONS AND WARRANTIES. To induce CoBank to make the
Loan, and recognizing that CoBank is relying hereon, MCTC represents and
warrants to CoBank, on and as of the date hereof and the Funding Date, as
follows:
-4-
<PAGE> 5
Continuing Guaranty/MCTC
Loan No. T0362
(A) ORGANIZATION; POWERS; ETC. MCTC (i) is duly organized,
validly existing, and in good standing under the laws of the state of its
incorporation; (ii) is duly qualified to do business and is in good standing in
each jurisdiction in which the character of its properties or the nature of its
business requires such qualification; (iii) has all requisite corporate and
legal power to own and operate its assets and to carry on its business and to
enter into and perform its obligations under the Loan Documents to which it is
a party; and (iv) has duly and lawfully obtained and maintains all licenses,
certificates, permits, authorizations, approvals, and the like which are
material to the conduct of its business or which may be otherwise required by
law.
(B) DUE AUTHORIZATION; NO VIOLATIONS; ETC. The execution and
delivery by MCTC of, and the performance by MCTC of its obligations under, the
Loan Documents to which it is a party have been duly authorized by all
requisite corporate action on the part of MCTC and its shareholders and do not
and will not (i) violate any provision of any law, rule or regulation, any
judgment, order or ruling of any court or governmental agency, the articles of
incorporation or bylaws, if any, of MCTC, or any agreement, indenture,
mortgage, or other instrument to which MCTC is a party or by which MCTC or any
of its properties are bound, or (ii) be in conflict with, result in a breach
of, or constitute with the giving of notice or lapse of time, or both, a
default under any such agreement, indenture, mortgage, or other instrument.
(C) GOVERNMENTAL APPROVAL. No consent, permission,
authorization, order, or license of any governmental authority is necessary in
connection with the execution, delivery, performance, or enforcement of the
Loan Documents to which MCTC is a party or the creation and perfection of the
liens and security interests granted thereby, except such as have been obtained
and are in full force and effect.
(D) BINDING AGREEMENT. Each of the Loan Documents to which
MCTC is a party is, or when executed and delivered will be, the legal, valid,
and binding obligation of MCTC, enforceable against MCTC in accordance with its
terms, subject only to limitations on enforceability imposed by (i) applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
creditors' rights generally, and (ii) general equitable principles.
(E) COMPLIANCE WITH LAWS. MCTC is in compliance in all
material respects with all Laws, the failure to comply with which could have a
Material Adverse Effect (as hereinafter defined) on MCTC. For purposes of this
Guaranty, the term "Material Adverse Effect" shall mean a material adverse
effect on the condition, financial or otherwise, operations, properties or
business of MCTC or on the ability of MCTC to perform its obligations under the
Loan Documents to which it is a party.
(F) ENVIRONMENTAL COMPLIANCE. Without limiting the provisions
of Subsection (E), all property owned or leased by MCTC and all operations
conducted by it
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Continuing Guaranty/MCTC
Loan No. T0362
are in compliance in all material respects with all Laws relating to
environmental protection, the failure to comply with which could have a
Material Adverse Effect on MCTC.
(G) LITIGATION. There are no pending legal, arbitration, or
governmental actions or proceedings to which MCTC is a party or to which any of
its property is subject which could have a Material Adverse Effect on MCTC, and
to the best of MCTC's knowledge, no such actions or proceedings are threatened
or contemplated.
(H) FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE; ETC. The
audited financial statements of MCTC for the fiscal year ended December 31,
1993, the unaudited financial statements for the fiscal year ended December 31,
1994, and the unaudited financial statements for the two-month period ended
February 28, 1995, submitted to CoBank in connection with the Loan, fairly and
fully present in all material respects the financial condition of MCTC and the
results of MCTC's operations for the periods covered thereby and were prepared
in accordance with GAAP consistently applied and any system of accounts to
which MCTC is subject. Since December 31, 1993, there has occurred no event
which has had or could have a Material Adverse Effect on MCTC. All budgets,
projections, feasibility studies, and other documentation submitted to CoBank
in connection with the Loan were based upon assumptions that were reasonable
and realistic at the time submitted and, as of the date hereof, no fact has
come to light, and no event or transaction has occurred, which would cause any
assumption made therein not to be reasonable or realistic.
(I) PRINCIPAL PLACE OF BUSINESS; RECORDS. The principal place
of business and chief executive office of MCTC and the place where the records
required by Section 5(G) are kept is at the address of MCTC shown in Section
7(E).
(J) EMPLOYEE BENEFIT PLANS. To the extent applicable, MCTC is
in compliance in all material respects with the applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder.
(K) TAXES. MCTC has filed or caused to be filed all federal,
state and local tax returns that are required to be filed, and has paid all
taxes as shown on said returns or on any assessment received by it to the
extent that such taxes have become due, unless such taxes are being contested
by MCTC in good faith and by appropriate proceedings and then only to the
extent reserves required by GAAP have been set aside on MCTC's books therefor.
(L) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. MCTC is not an "investment company" as that term is defined in, and is not
otherwise subject to regulation under, the Investment Company Act of 1940, as
amended. MCTC is not a
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Continuing Guaranty/MCTC
Loan No. T0362
"holding company" as that term is defined in, and is not otherwise subject to
regulation under, the Public Utility Holding Company Act of 1935, as amended.
(M) USE OF PROCEEDS. The funds to be borrowed under the Loan
Agreement will be used only as contemplated thereby. No part of such funds will
be used to purchase any "margin securities" or otherwise in violation of the
regulations of the Federal Reserve System.
(N) STOCK OF SUBSIDIARIES. MCTC has no subsidiary other than
as described on Exhibit A hereto. MCTC is the registered and beneficial owner
of the specified percentage of the shares of issued and outstanding capital
stock of each such subsidiary as set forth on Exhibit A hereto, which stock is
owned free and clear of all liens, warrants, options, rights to purchase,
rights of first refusal and other interests of any person, except as set forth
on Exhibit A hereto. The stock of each of such subsidiary has been duly
authorized and validly issued and is fully paid and non-assessable.
(O) FINANCIAL CONDITION. The liability and obligations of MCTC
incurred or arising under this Guaranty and the other Loan Documents to which
it is a party and of the Borrower incurred or arising under the Note, the Loan
Agreement and the other Loan Documents to which it is a party will benefit
substantially MCTC directly and indirectly, and MCTC's board of directors has
made that determination. MCTC has full and complete access to all of the Loan
Documents and other documents relating to the Obligations, has reviewed them
and is fully aware of the meaning and effect of their contents. MCTC is fully
informed of all circumstances that bear upon the risks of executing this
Guaranty which a diligent inquiry would reveal. MCTC has adequate means to
obtain from the Borrower, on a continuing basis, information concerning the
financial condition of the Borrower, and is not depending on CoBank to provide
such information, now or in the future. MCTC agrees that CoBank will have no
obligation to advise or notify MCTC of or provide MCTC with any data or
information.
(P) LICENSES; PERMITS; ETC. MCTC is the valid holder of all
licenses, certificates, permits, authorizations, approvals, and the like which
are material to the conduct of its business or which may be required by law,
including, without limitation, all FCC licenses and permits and all licenses
and permits, if any, required by the Commission, and all such licenses,
certificates, permits, authorizations, approvals, and the like are in full
force and effect.
(Q) BUSINESS. MCTC is not engaged in any business activity or
operation other than the provision of telecommunications services.
(R) REAL PROPERTY. MCTC owns no real property other than that
identified in the Mortgage.
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Continuing Guaranty/MCTC
Loan No. T0362
SECTION 5. AFFIRMATIVE COVENANTS. MCTC covenants and agrees with CoBank
that, so long as this Guaranty shall remain in effect or the Obligations have
not been fully paid or otherwise satisfied, MCTC, unless CoBank shall otherwise
consent in writing, will do the following:
(A) CORPORATE EXISTENCE. Preserve and keep in full force and
effect its corporate existence and good standing in the jurisdiction of its
incorporation, and its qualification to transact business and good standing in
all places in which the character of its properties or the nature of its
business requires such qualification.
(B) COMPLIANCE WITH LAWS AND AGREEMENTS. Comply in all
material respects with (i) all Laws, the failure to comply with which could
have a Material Adverse Effect on MCTC, and (ii) all agreements, indentures,
mortgages, and other instruments to which it is a party or by which it or any
of its property is bound.
(C) COMPLIANCE WITH ENVIRONMENTAL LAWS. Without limiting the
provisions of Subsection (B), comply in all material respects with, and cause
all persons occupying or present on any properties owned or leased by it to so
comply with, all Laws relating to environmental protection, the failure to
comply with which could have a Material Adverse Effect on MCTC.
(D) LICENSES; PERMITS; ETC. Duly and lawfully obtain and
maintain in full force and effect all licenses, certificates, permits,
authorizations, approvals, and the like which are material to the conduct of
its business or which may be required by Law, including without limitation, all
FCC licenses and all licenses and permits, if any, of the Commission.
(E) INSURANCE. Maintain insurance with insurance companies or
associations acceptable to CoBank in such amounts and covering such risks as
are usually carried by companies engaged in the same or similar business and
similarly situated, and make such increases in the type or amount of coverage
as CoBank may request. All such policies insuring any collateral provided for
in any of the Loan Documents to which MCTC is a party shall provide for loss
payable clauses or endorsements in form and content acceptable to CoBank. At
the request of CoBank, all policies (or such other proof of compliance with
this Subsection (E) as may be satisfactory to CoBank) shall be delivered to
CoBank.
(F) PROPERTY MAINTENANCE. Maintain and preserve at all times
its property, and each and every part and parcel thereof; in good repair,
working order and condition, ordinary wear and tear excepted.
(G) BOOKS AND RECORDS. Keep adequate records and books of
account in accordance with GAAP consistently applied and any system of accounts
to which it is subject.
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Continuing Guaranty/MCTC
Loan No. T0362
(H) INSPECTION. Permit CoBank or its agents, during normal
business hours or at such other times as the parties may agree, to examine its
properties, books, and records, and to discuss its affairs, finances,
operations, and accounts with its officers, directors, employees, and
independent certified public accountants.
(I) REPORTS AND NOTICES. Furnish to CoBank:
(1) ANNUAL FINANCIAL STATEMENTS. As soon as available,
but in no event later than 120 days after the end of each fiscal year of
MCTC occurring during the term hereof, annual consolidated and
consolidating financial statements of MCTC prepared in accordance with
GAAP consistently applied and any system of accounts to which MCTC is
subject. Each of such financial statements shall: (a) be audited by
independent certified public accountants selected by MCTC and acceptable
to CoBank; (b) be accompanied by a report of such accountants containing
an opinion acceptable to CoBank; (c) be prepared in reasonable detail;
and (d) include a balance sheet, a statement of income, a statement of
retained earnings, a statement of cash flows, and all notes and
schedules relating thereto.
(2) MONTHLY AND YEAR-TO-DATE FINANCIAL STATEMENTS. As
soon as available but in no event later than 60 days after the end of
each of the first three fiscal quarters of each fiscal year of MCTC
occurring during the term hereof, unaudited monthly (for the three
months immediately preceding such fiscal quarter end) and year-to-date
financial statements of MCTC prepared in accordance with GAAP
consistently applied and any system of accounts to which MCTC is subject
(except for the omission of footnotes and for the effect of normal
year-end audit adjustments). Each of such financial statements shall:
(a) be prepared in reasonable detail; and (b) include a balance sheet, a
statement of income for such months and period year-to-date, a statement
of cash flows, and such other statements as CoBank may specifically
request, which statements shall include any and all supplements thereto.
(3) FINANCIAL FORECAST. As soon as available, but in no
event later than 30 days after the first day of each fiscal year of
MCTC, a one-year financial forecast for MCTC which shall include,
without limitation, a statement of income, a balance sheet, a statement
of sources and uses of funds, capital expenditure projections and such
other information as CoBank shall reasonably require.
(4) NOTICE OF DEFAULT. Promptly after becoming aware
thereof, notice of (a) the occurrence of any Default or Event of Default
under any of the Loan Documents, or (b) the occurrence of any breach,
default, event of default, or other event which with the giving of
notice or lapse of time, or both, could become a breach, default, or
event of default under any agreement, indenture, mortgage, or other
instrument (other than the Loan Documents) to which MCTC is a party or
by
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Continuing Guaranty/MCTC
Loan No. T0362
which MCTC or any of its property is bound or affected if the effect of
such breach, default, event of default, or other event is to accelerate,
or to permit the acceleration of, the maturity of any indebtedness under
such agreement, indenture, mortgage, or other instrument; provided,
however, that the failure to give such notice shall not affect the right
and power of CoBank to exercise any and all of the remedies specified
herein.
(5) NOTICE OF NON-ENVIRONMENTAL LITIGATION. Promptly
after the commencement thereof, notice of the commencement of all
actions, suits, or proceedings before any court, arbitrator, or
governmental department, commission, board, bureau, agency, or
instrumentality affecting MCTC which could have a Material Adverse
Effect on MCTC.
(6) NOTICE OF ENVIRONMENTAL LITIGATION. Without
limiting the provisions of Subsection (I)(5), promptly after receipt or
becoming aware thereof, notice of the receipt of all pleadings, orders,
complaints, indictments, or other communications alleging a condition
that may require MCTC to undertake or to contribute to a cleanup or
other response under Laws relating to environmental protection, or which
seeks penalties, damages, injunctive relief, or criminal sanctions
related to alleged violations of such Laws, or which claims personal
injury or property damage to any person or property as a result of
environmental factors or conditions or which could have a Material
Adverse Effect on MCTC.
(7) REGULATORY AND OTHER NOTICES. Promptly after
filing, receipt, or becoming aware thereof, copies of any filings or
communications sent to or notices or other communications received by
MCTC from any governmental authority, including, without limitation, the
Commission and the FCC, relating to any noncompliance by MCTC with any
Law or with respect to any matter or proceeding the effect of which
could have a Material Adverse Effect on MCTC.
(8) MATERIAL ADVERSE CHANGE. Prompt notice of any
matter which has had or could have a Material Adverse Effect on MCTC.
(9) COMPLIANCE CERTIFICATES. Concurrently with each
financial statement required to be furnished pursuant to Subsections
(I)(1) and (I)(2), a certificate in the form attached as Exhibit B to
the Loan Agreement executed by the chief accounting officer of MCTC.
(10) ERISA REPORTABLE EVENTS. Within 10 days after MCTC
becomes aware of the occurrence of any Reportable Event (as defined in
Section 4043 of ERISA) with respect to MCTC, a statement describing such
Reportable Event and the actions proposed to be taken in response to
such Reportable Event.
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Continuing Guaranty/MCTC
Loan No. T0362
(11) OTHER INFORMATION. Such other information regarding
the condition, financial or otherwise, or operations of MCTC as CoBank
may, from time to time, reasonably request.
(J) FINANCIAL COVENANTS. All calculations necessary for the
financial covenants set forth in this Subsection (J) shall be made in
accordance with GAAP consistently applied for MCTC alone, without taking into
account the financial results or assets and liabilities of any affiliated
entity.
(1) TOTAL LEVERAGE RATIO. Commencing June 30, 1995,
maintain at all times a Total Leverage Ratio not in excess of 3.50 to
1.00. The term "Total Leverage Ratio" shall mean the ratio of
Indebtedness to Operating Cash Flow (as such terms are hereinafter
defined). The term "Indebtedness" shall mean (a) obligations for
borrowed money, (b) obligations representing the deferred purchase price
of property or services other than accounts payable arising in
connection with the purchase of inventory on terms customary in the
trade, (c) obligations, whether or not assumed, secured by liens or
payable out of the proceeds or production from property now or hereafter
owned or acquired, (d) obligations which are evidenced by notes,
acceptances or other instruments, (e) capitalized agreements, (f) fixed
rate hedging obligations that are due (after giving effect to any period
of grace or notice requirement applicable thereto) and remain unpaid,
and (g) fixed payment obligations under guaranties that are due and
remain unpaid. The term "Operating Cash Flow" shall mean the sum of (i)
pre-tax income, or deficit, as the case may be, after payment of all
management fees (excluding extraordinary gains and the write up of any
asset and any investment income or loss), (ii) total interest expense
(including non-cash interest), (iii) depreciation and amortization
expense, and (iv) management fees accruing during the applicable period
but unpaid. Operating Cash Flow shall be measured for the then most
recently completed four fiscal quarters, adjusted to give effect to any
acquisition, sale or other disposition of any operation or business (or
any portion thereof) during the period of calculation as if such
acquisition, sale or other disposition occurred on the first day of such
period of calculation.
(2) DEBT SERVICE COVERAGE RATIO. Commencing June 30,
1995, maintain at all times a Debt Service Coverage Ratio, for the
immediately preceding four fiscal quarters, equal to or greater than
1.25 to 1.0. The term "Debt Service Coverage Ratio" shall mean the ratio
derived by dividing (a) Operating Cash Flow minus cash taxes by (b) the
aggregate of principal and interest payments due on Indebtedness during
the period of calculation.
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Continuing Guaranty/MCTC
Loan No. T0362
SECTION 6. NEGATIVE COVENANTS. Unless otherwise agreed to in writing by
CoBank, MCTC covenants and agrees with CoBank that, so long as this Guaranty is
in effect or the Obligations shall be unpaid or otherwise unsatisfied, MCTC
shall not:
(A) BORROWINGS. Create, incur, assume, enter into or allow to
exist, directly or indirectly, (i) any indebtedness or liability for borrowed
money, for the deferred purchase price of property or services, or for the
lease of real or personal property which lease is required to be capitalized
under GAAP or which is treated as an operating lease under regulations
applicable to it but which otherwise would be required to be capitalized under
GAAP, or (ii) any reimbursement obligation with respect to a letter of credit
or similar instrument, except for (a) obligations to the Borrower for the
reloan of the proceeds of the Loan as contemplated by the Loan Agreement; (b)
accounts payable to trade creditors and current operating liabilities (other
than for borrowed money) incurred in the ordinary course of its business; (c)
purchase money indebtedness for the financing of, or Capital Lease indebtedness
with respect to, Northern Telecom Finance Corporation equipment in an amount
not to exceed $3,500,000 at any time outstanding; (d) purchase money
indebtedness for the financing of certain inventory obtained from Audiovox
South Corporation; and (e) any reimbursement obligation with respect to a
letter of credit, draws under which are available to fund capital contribution
requirements of MCTC with respect to any "PCS Investment" (as defined in
Subsection (E)) and which has an available amount not in excess of $2,500,000
(provided that the available amount of the letter of credit declines by the
amount of (I) any PCS Investments made in lieu of a draw on such letter of
credit and (II) any draws under such letter of credit),
(B) LIENS. Create, incur, assume, or allow to exist any
mortgage, deed of trust, deed to secure debt, pledge, lien (including the lien
of an attachment, judgment, or execution), security interest, or other
encumbrance of any kind upon any of its property, real or personal. The
foregoing restrictions shall not apply to (i) liens in favor of CoBank; (ii)
liens for taxes, assessments, or governmental charges that are not past due, or
are being contested in good faith and by appropriate proceedings and then only
to the extent reserves required by GAAP have been set aside therefor; (iii)
liens, pledges, and deposits under workers' compensation, unemployment
insurance, and social security laws; (iv) liens, deposits, and pledges to
secure the performance of bids, tenders, contracts (other than contracts for
the payment of money), and like obligations arising in the ordinary course of
its business as conducted on the date hereof; (v) liens imposed by law in favor
of mechanics, materialmen, warehousemen, lessors and like persons that secure
obligations that are not past due, or are being contested in good faith and by
appropriate proceedings and then only to the extent reserves required by GAAP
have been set aside therefor; and (vi) liens or other encumbrances on the
equipment (and any proceeds therefrom) financed with indebtedness identified in
Subsections (A)(c) and (d).
(C) MERGERS; ACQUISITIONS; ETC. Merge or consolidate with any
other entity or acquire all or substantially all of the assets of any person or
entity, or form or
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Continuing Guaranty/MCTC
Loan No. T0362
create any subsidiary, or commence operations under any other name,
organization, or entity, including any joint venture.
(D) TRANSFER OF ASSETS. Sell, transfer, lease, enter into any
contract for the sale, transfer or lease of, or otherwise dispose of, any of
its assets, except in the ordinary course of its business.
(E) LOANS AND INVESTMENTS. After the date hereof, make any
loan, extension of credit or advance to, invest in, purchase or make any
commitment to purchase any commercial paper, stock, bonds, notes, or other
securities of any person or entity (each, whether made directly or indirectly,
an "Investment"), other than (i) securities or deposits issued, guaranteed or
fully insured as to payment by the United States of America or any agency
thereof, (ii) stock or other securities of CoBank, (iii) commercial paper,
stocks, bonds, notes or other securities of institutions whose senior unsecured
debt obligations are rated by a nationally recognized rating organization in
any of its three highest rating categories or any equivalent successor rating
categories, or (iv) mutual funds that have a four star rating by Morningstar
Mutual Funds, 225 West Wacker Drive, Chicago, Illinois 60606, or an equivalent
rating by a nationally recognized rating organization, except that with respect
to clauses (iii) and (iv) no such Investment in any single institution or
mutual fund shall exceed $1,000,000 at any one time; provided, however, that so
long as no Default or Event of Default exists or would occur as a result
thereof and MCTC has not relied on the last proviso of this Subsection (E) or
the proviso in Subsection (J) to make any Investments or any dividends or other
distributions, MCTC may make Investments as a limited partner in an amount not
to exceed $5,000,000 during the combined calendar years 1995 and 1996 for the
purpose of funding the purchase by such limited partnership of personal
communication services licenses and the build out by a limited partnership of
personal communication services systems under such licenses, and associated
costs (any such Investments, a "PCS Investment"); and provided, further,
however, that so long as no Default or Event of Default exists or would occur
as a result thereof (and, with respect to either of the fiscal years ending
December 31,1995 or December 31, 1996, if MCTC has not made PCS Investments
during such fiscal year in excess of 25% of MCTC's after tax net income for the
immediately preceding fiscal year, determined in accordance with GAAP
consistently applied), MCTC may make Investments (including PCS Investments)
during any fiscal year in an amount which, when aggregated with the amount of
all dividends and other distributions made during such fiscal year, does not
exceed 25% of after tax net income of MCTC for the immediately preceding fiscal
year, determined in accordance with GAAP consistently applied.
(F) GUARANTEES. Guarantee, assume or otherwise become
obligated or liable with respect to the indebtedness or other obligations of
any person or entity.
(G) CHANGE IN BUSINESS. Engage in any business activity or
operation different from or unrelated to MCTC's current business activities or
operations.
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Continuing Guaranty/MCTC
Loan No. T0362
(H) DISPOSITION OF LICENSES. Sell, assign, transfer, or
otherwise dispose of, or attempt to dispose of, in any way, any registrations,
licenses, franchises, grants, permits, or other governmental approvals.
(I) SALARIES; WAGES; COMPENSATION. Pay any wages, salaries or
other compensation to any officer, director, stockholder (or relative thereof)
of MCTC unless such compensation shall be (i) reasonable and comparable with
compensation paid by companies of like nature, similarly situated, and (ii)
payment for services actually rendered.
(J) DIVIDENDS. Make, declare or pay, directly or indirectly,
any dividend or other distribution of assets to shareholders of MCTC, retire,
redeem, purchase or otherwise acquire for value any capital stock of MCTC;
provided, however, that so long as no Default or Event of Default exists or
would occur as a result thereof; MCTC may pay dividends during any fiscal year
in an amount which, when aggregated with the amount of all Investments
(including any PCS Investment) made during such fiscal year, does not exceed
25% of after tax net income of MCTC for the immediately preceding fiscal year,
determined in accordance with GAAP consistently applied.
SECTION 7. MISCELLANEOUS.
(A) GOVERNING LAW. Except to the extent governed by applicable
federal law, this Guaranty shall be governed by and construed in accordance
with the laws of the State of Louisiana, without reference to choice of law
doctrine.
(B) BINDING EFFECT. This Guaranty shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns, including any holder or owner of the Note or any other Loan Document.
(C) SEVERABILITY. If any one or more of the provisions
contained herein shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Guaranty, but this Guaranty shall
be construed as if such invalid, illegal or unenforceable provision had not
been contained herein.
(D) NON-WAIVER; MODIFICATION; ELECTION OF REMEDIES. The
failure of CoBank to insist, in any one or more instances, upon a strict
performance of any of the terms and conditions of this Guaranty, or to exercise
or fail to exercise any option or right contained herein, shall not be
construed as a waiver or a relinquishment for the future of such right or
option, but the same shall continue and remain in full force and effect.
CoBank's knowledge of the breach of any term or condition hereof shall not be
deemed a waiver of such breach, and no waiver by CoBank of any provision hereof
shall be deemed to have been made, or operate as an estoppel, unless expressed
in writing and signed by CoBank. No enforcement of any remedy shall constitute
an election of remedies.
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Continuing Guaranty/MCTC
Loan No. T0362
(E) NOTICES. All notices hereunder shall be made, and shall be
deemed to be duly given if made, in the manner provided for notices under
Section 19 of the Loan Agreement, to the parties at the following addresses (or
such other address for a party as shall be specified by like notice):
If to MCTC, as follows:
Mercury Cellular Telephone Company
One Lakeshore Drive, Suite 1495
P.O. Drawer 3709
Lake Charles, Louisiana 70602
Attn: Robert Piper; cc: Thomas G. Henning
Fax No.: (318) 439-0769
If to CoBank, as follows:
CoBank, ACB
200 Galleria Parkway
Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No.: (404) 618-3202
(F) REGULATORY APPROVALS. Upon any action by CoBank to
commence the exercise of remedies hereunder or under the Mortgage, the Security
Agreement, the CCC Pledge Agreement, or the Mercury Pledge Agreement MCTC
hereby undertakes and agrees to cooperate and join with CoBank in any
application to the Commission or the FCC or any other regulatory body,
administrative agency, court or other forum (any such entity, a "Governmental
Authority") with respect thereto and to provide such assistance in connection
therewith as CoBank may request, including, without limitation, the preparation
of filings and appearances of officers and employees of MCTC before such
Governmental Authority, in each case in support of any such application made by
CoBank, and MCTC shall not, directly or indirectly, oppose any such action by
CoBank before any such Governmental Authority.
SECTION 8. CONSENT TO JURISDICTION. To the maximum extent permitted by
law, MCTC agrees that any legal action or proceeding with respect to this
Guaranty or any other Loan Document may be brought in the courts of the State
of Louisiana or of the United States of America for the Western District of
Louisiana, all as CoBank may elect. By execution of this Guaranty, MCTC hereby
irrevocably submits to each such jurisdiction, expressly waiving any objection
it may have to the laying of venue by reason of its present or future domicile.
Nothing contained herein shall affect the right of CoBank to commence legal
proceedings or otherwise proceed against MCTC in any other jurisdiction or to
serve process in any manner permitted or required by law.
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Continuing Guaranty/MCTC
Loan No. T0362
THUS DONE AND SIGNED, at the place and on the date indicated
below, and in the presence of the undersigned Notary Public and the respective
undersigned witnesses indicated below, by duly authorized officers of MCTC,
after a due reading of the whole.
At Lake Charles, Louisiana, on April 20, 1995.
MERCURY CELLULAR TELEPHONE COMPANY
By: /s/ ROBERT PIPER
--------------------------------------
Name: Robert Piper
Title: President
Attest: /s/ THOMAS G. HENNING
----------------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
Witnesses to all signatures:
/s/ SHEILA KING
- ------------------------------
Witness
/s/ CAROLYN NUNEZ
- ------------------------------
Witness
/s/ SANDRA DIAZ
- ------------------------------
Notary Public
My commission expires: lifetime commission
-------------------
[NOTARIAL SEAL]
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<PAGE> 17
EXHIBIT A
<TABLE>
<CAPTION>
================================================================================
PERCENT OF
SUBSIDIARY SHARES
SUBSIDIARY OWNED BY PARENT OUTSTANDING LIENS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Mercury Cellular of 100% 10 None
Kansas, Inc.
================================================================================
</TABLE>
<PAGE> 1
EXHIBIT 4.53
CTC
LOAN NO. T0362
LIMITED RECOURSE CONTINUING GUARANTY
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
BEFORE ME, the undersigned Notary Public, and in the presence of the
undersigned competent witnesses, personally came and appeared the party listed
below, who, after being duly sworn, did state:
THIS LIMITED RECOURSE CONTINUING GUARANTY (this "Guaranty") is made as
of April 20,1995, by MERCURY, INC. ("Mercury") for the benefit of COBANK, ACB
("CoBank").
R E C I T A L S:
WHEREAS, Mercury owns 4% of the capital stock of Mercury Cellular
Telephone Company ("MCTC"); and
WHEREAS, CoBank and CTC Financial, Inc. (the "Borrower") have entered
into that certain Loan Agreement, dated of even date herewith (as the same may
be amended, supplemented, extended or restated from time to time, the "Loan
Agreement"), providing for a loan of up to $18,000,000 (the "Loan"); and
WHEREAS, the proceeds of the Loan will be reloaned by the Borrower to
MCTC for the purposes set forth in the Loan Agreement; and
WHEREAS, as an inducement to CoBank to enter into the Loan Agreement and
to make the Loan, Mercury has agreed to pledge its stock of MCTC pursuant to a
Pledge Agreement, dated as of even date herewith, which stock shall be used as
the sole collateral for Mercury's guarantee herein of the Obligations (as
hereinafter defined), provided that CoBank's sole recourse with respect to the
guarantee herein contained is against such stock pursuant to such Pledge
Agreement;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, Mercury hereby agrees as follows:
SECTION 1. DEFINITIONS. Capitalized terms used in this Guaranty, unless
otherwise defined herein, shall have the meanings assigned to them in the Loan
Agreement.
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Limited Recourse Continuing Guaranty/Mercury
Loan No. T0362
SECTION 2. OBLIGATIONS. "Obligations" shall mean (a) the principal,
interest and other amounts becoming due and payable, whether by acceleration or
otherwise, under that certain Promissory Note, dated of even date herewith,
made by the Borrower to the order of CoBank, in the original principal amount
of $18,000,000 (as the same may be amended, extended, renewed or replaced from
time to time, the "Note"); (b) the principal, interest and other amounts
becoming due and payable, whether by acceleration or otherwise, under that
certain Promissory Note, dated of even date herewith, made by MCTC to the order
of the Borrower, and assigned to CoBank, in the original principal amount of
$18,000,000 (as the same may be amended, extended, renewed or replaced from
time to time, the "MCTC Note"; together with the Note, collectively, the
"Notes"); (c) all other payments or performances to be made by the Borrower or
MCTC under the other Loan Documents to which it is a party; and (d) all other
indebtedness and liabilities of MCTC to CoBank of every kind and description
whatsoever, whether now existing or hereafter arising, fixed or contingent, as
primary obligor or as guarantor or surety, acquired directly or by assignment
or otherwise, liquidated or unliquidated, regardless of how they arise or by
what agreement or instrument they may be evidenced, including, without
limitation, all loans, advances and other extensions of credit and all
covenants, agreements, and provisions contained in all loan and other
agreements between the parties.
SECTION 3. LIMITATIONS ON RECOURSE. Notwithstanding any provision of
this Guaranty or of any other Loan Document to the contrary, in any action
brought to enforce any obligation of Mercury with respect to the Obligations,
the judgment or decree shall be enforceable only against the "Pledged
Collateral" in which CoBank has a security interest pursuant to the provisions
of the Mercury Pledge Agreement and against Mercury to the extent of its
interest in the Pledged Collateral (and not against any other assets of
Mercury) and Mercury shall not be liable to CoBank hereunder for the
Obligations beyond its interest in the Pledged Collateral; provided, however,
that nothing contained in this Section shall limit or relieve Mercury from
liability for failing to comply with the terms, covenants, conditions and
provisions of this Guaranty or the Mercury Pledge Agreement or any other
agreement to which Mercury is a party, other than for the payment of the
Obligations.
SECTION 4. GUARANTY PROVISIONS.
(A) In consideration of the advances under the Loan made and
to be made by CoBank to the Borrower and by the Borrower to MCTC pursuant to
the Loan Agreement and for other good and valuable consideration, the adequacy,
sufficiency and receipt of which are hereby acknowledged, Mercury hereby
absolutely, unconditionally, directly, irrevocably, completely and immediately
guarantees the full and prompt payment, when due, whether by acceleration or
otherwise, and the prompt performance, of the Obligations; provided, however,
that recourse hereunder is limited as provided in Section 3;
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Limited Recourse Continuing Guaranty/Mercury
Loan No. T0362
(B) Mercury further agrees to pay to CoBank, upon demand, all
losses and reasonable costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses, that may be incurred by CoBank in
attempting to cause the Obligations to be paid, performed or otherwise
satisfied or in attempting to cause satisfaction of Mercury's liability under
this Guaranty or in attempting to protect or preserve any property, personal or
real, securing the Obligations; provided, however, that recourse hereunder is
limited as provided in Section 3;
(C) Mercury agrees that this Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time any payment by
the Borrower, MCTC, CCC or any other person to CoBank on account of the
Obligations is rescinded or must otherwise be returned or restored by CoBank
upon the insolvency or bankruptcy of the Borrower, MCTC, CCC or any other
obligor, guarantor, endorser or surety of the Obligations, all as though such
payment had not been made; provided, however, that recourse hereunder is
limited as provided in Section 3;
(D) It is the intention of Mercury and CoBank that Mercury's
liability hereunder shall not be in excess of the maximum amount permitted by
applicable federal bankruptcy, state insolvency, or similar laws (collectively,
the "Applicable Laws"). To that end, but only to the extent such liability
would otherwise be subject to avoidance under the Applicable Laws if Mercury is
not deemed to have received valuable consideration, fair value or reasonably
equivalent value for its liability hereunder, Mercury's liability hereunder
shall be reduced to that amount which, after giving effect thereto, would not
render Mercury insolvent, or leave Mercury with unreasonably small capital to
conduct business, or cause Mercury to have incurred debts (or intended to have
incurred debts) beyond Mercury's ability to pay such debts as they mature, at
the time such liability is deemed to have been incurred under the Applicable
Laws. As used herein, the terms "insolvent" and unreasonably small capital"
shall be determined in accordance with the Applicable Laws. This Subsection (D)
is intended solely to preserve the rights of CoBank hereunder to the maximum
extent permitted by the Applicable Laws, and neither Mercury nor any other
person shall have any right or claim under this Subsection (D) that would not
otherwise be available under the Applicable Laws;
(E) Mercury assents to all terms and agreements heretofore or
hereafter made by the Borrower, MCTC or CCC with CoBank;
(F) Mercury hereby consents to the following and agrees, with
or without notice (all notices being hereby waived), that its liability (as
limited in Section 3) will not be affected or impaired by (i) the exchange,
release or surrender of any collateral or any claim against the Borrower, MCTC,
CCC or any other person, or the waiver, release or subordination of any
security interest, in whole or in part; (ii) the waiver or delay in the
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Limited Recourse Continuing Guaranty/Mercury
Loan No. T0362
exercise of any of CoBank's rights or remedies against the Borrower, MCTC, CCC
or any other person; (iii) the renewal, extension or modification of the terms
or amounts of any of the Obligations, the Loan Documents or any other
instrument or agreement evidencing the same; or (iv) the acceptance by CoBank
of other guaranties;
(G) Mercury waives acceptance hereof, notice of acceptance
hereof, and notice of acceleration of and intention to accelerate the
Obligations, and waives presentment, demand, protest, notice of dishonor,
notice of default, notice of nonpayment or protest in relation to any
instrument evidencing any of the Obligations, and any other demands and notices
required by law except as such waiver may be expressly prohibited by law;
(H) This is a limited recourse guaranty (as provided in
Section 3) of payment and performance and not of collection only. The liability
of Mercury under this Guaranty (as limited as provided in Section 3) shall be
absolute, unconditional, direct, irrevocable, complete and immediate and shall
not be contingent upon the pursuit of any remedies against the Borrower, MCTC,
CCC or any other person, nor against any security or lien available to CoBank,
its successors, successors-in-title, endorsees or assigns, and shall be joint
and several with the liabilities of all other guarantors of the Obligations.
Mercury waives any right to require that an action be brought against the
Borrower, MCTC, CCC or any other person or to require that resort be had to any
security of the Borrower, MCTC, CCC or any other person (provided that all
remedies hereunder are limited as provided in Section 3). In the event of a
default under any of the Loan Documents, CoBank shall have the right to enforce
its rights, powers and remedies under any of the Loan Documents in any order,
and all rights, powers and remedies available to CoBank in such event shall be
nonexclusive and cumulative of all other rights, powers and remedies provided
thereunder or hereunder or by law or in equity. Accordingly, Mercury hereby
authorizes and empowers CoBank upon acceleration of the maturity of any of the
Notes or any other Obligation, at its sole discretion, and without notice to
Mercury, to exercise any right or remedy which CoBank may have under the
Mercury Pledge Agreement or any right or remedy hereinafter granted under the
Mercury Pledge Agreement which CoBank may have as to the Pledged Collateral.
Mercury waives any right to require any action on the part of CoBank to proceed
to collect amounts due under the Notes or any other Obligation;
(I) Mercury hereby subordinates any and all indebtedness of
the Borrower, MCTC or CCC now or hereafter owed to Mercury to all Obligations
of the Borrower, MCTC or CCC to CoBank, and agrees with CoBank that, from and
after the occurrence of a default or event of default under any of the Loan
Documents, and for so long as such default or event of default exists, Mercury
shall not demand or accept any payment of principal or interest from the
Borrower, MCTC or CCC shall not claim any offset or other reduction of
Mercury's liability hereunder because of any such indebtedness
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Loan No. T0362
and shall not take any action to obtain any of the security for the
Obligations; provided, however, that, if CoBank so requests, such indebtedness
shall be collected, enforced and received by Mercury as trustee for CoBank and
be paid over to CoBank on account of the Obligations of the Borrower, MCTC or
CCC to CoBank, but without reducing or affecting in any manner the liability of
Mercury under the other provisions of this Guaranty;
(J) Mercury hereby authorizes CoBank, without notice to
Mercury, to apply all payments and credits received from the Borrower, MCTC,
CCC or any other person or realized from any security in such manner and in
such priority as CoBank in its sole judgment shall see fit to the Obligations
or to any other liabilities of the Borrower, MCTC, CCC or any other person to
CoBank, and Mercury agrees that any such application shall not in any way
affect its liabilities hereunder;
(K) The liability of Mercury under this Guaranty shall not in
any manner be affected by reason of any action taken or not taken by CoBank,
which action or inaction is hereby consented and agreed to by Mercury, nor by
the partial or complete unenforceability or invalidity of any other guaranty or
surety agreement, pledge, assignment, or other security for any of the
Obligations. No delay in making demand on Mercury for satisfaction of its
liability hereunder shall prejudice CoBank's right to enforce such
satisfaction. All of CoBank's rights and remedies shall be cumulative and any
failure of CoBank to exercise any right hereunder shall not be construed as a
waiver of the right to exercise the same or any other right at any time, and
from time to time, thereafter;
(L) This Guaranty shall be a continuing one and shall be
binding upon Mercury regardless of how long before or after the date hereof the
Obligations are incurred. This Guaranty shall remain in full force and effect
until a written instrument of termination shall be executed and delivered by a
duly authorized officer of CoBank. CoBank will only be obligated to execute
such an instrument of termination if: (i) all Obligations have been paid in
full; (ii) CoBank has no further commitment or obligation to extend credit to
the Borrower, MCTC or CCC; and (iii) any preference period applicable to
payments made on or security given for the Obligations has expired under
applicable bankruptcy and insolvency laws; and
(M) Mercury hereby irrevocably waives any and all rights it
may have to enforce any of CoBank's rights or remedies or participate in any
security now or hereafter held by CoBank, and any and all such other rights of
subrogation, reimbursement, contribution or indemnification against the
Borrower, MCTC, CCC or any other person having any manner of liability for the
Borrower's, MCTC's or CCC's obligations to CoBank, whether or not arising
hereunder, by agreement, at law or in equity.
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Limited Recourse Continuing Guaranty/Mercury
Loan No. T0362
SECTION 5. REPRESENTATIONS AND WARRANTIES. Mercury represents and
warrants to CoBank, on and as of the date hereof and on and as of each date on
which the Borrower receives an advance under the Loan Agreement, as follows:
(A) ORGANIZATION; POWERS; ETC. Mercury (i) is duly organized,
validly existing, and in good standing under the laws of its state of
incorporation; (ii) is duly qualified to do business and is in good standing in
each jurisdiction in which the character of its properties or the nature of its
business requires such qualification; (iii) has all requisite corporate and
legal power to own and operate its assets and to carry on its business and to
enter into and perform its obligations under the Loan Documents to which it is
a party; and (iv) has duly and lawfully obtained and maintains all licenses,
certificates, permits, authorizations, approvals, and the like which are
material to the conduct of its business or which may be otherwise required by
law.
(B) DUE AUTHORIZATION; NO VIOLATIONS; ETC. The execution and
delivery by Mercury of; and the performance by Mercury of its obligations
under, the Loan Documents to which it is a party have been duly authorized by
all requisite corporate action on the part of Mercury and its shareholders and
do not and will not (i) violate any provision of any law, rule or regulation,
any judgment, order or ruling of any court or governmental agency, the articles
of incorporation, if any, or bylaws of Mercury, or any agreement, indenture,
mortgage, or other instrument to which Mercury is a party or by which Mercury
or any of its properties are bound, or (ii) be in conflict with, result in a
breach of; or constitute with the giving of notice or lapse of time, or both, a
default under any such agreement, indenture, mortgage, or other instrument.
(C) GOVERNMENTAL APPROVAL. No consent, permission,
authorization, order, or license of any governmental authority is necessary in
connection with the execution, delivery, performance, or enforcement of the
Loan Documents to which Mercury is a party or the creation and perfection of
the liens and security interests granted thereby, except such as have been
obtained and are in full force and effect.
(D) BINDING AGREEMENT. Each of the Loan Documents to which
Mercury is a party is, or when executed and delivered will be, the legal,
valid, and binding obligation of Mercury, enforceable against Mercury in
accordance with its terms, subject only to limitations on enforceability
imposed by (i) applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting creditors' rights generally, and (ii) general
equitable principles.
(E) COMPLIANCE WITH LAWS. Mercury is in compliance in all
material respects with all Laws, the failure to comply with which could have a
Material Adverse Effect (as hereinafter defined) on Mercury. For purposes of
this Guaranty, the term
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Limited Recourse Continuing Guaranty/Mercury
Loan No. T0362
"Material Adverse Effect" shall mean a material adverse effect on the
condition, financial or otherwise, operations, properties or business of
Mercury or on the ability of Mercury to perform its obligations under the Loan
Documents to which it is a party.
(F) ENVIRONMENTAL COMPLIANCE. Without limiting the provisions
of Subsection (E) above, all property owned or leased by Mercury and all
operations conducted by it are in compliance in all material respects with all
Laws relating to environmental protection, the failure to comply with which
could have a Material Adverse Effect on Mercury.
(G) LITIGATION. There are no pending legal, arbitration, or
governmental actions or proceedings to which Mercury is a party or to which any
of its property is subject which could have a Material Adverse Effect on
Mercury, and to the best of Mercury's knowledge, no such actions or proceedings
are threatened or contemplated.
(H) EMPLOYEE BENEFIT PLANS. To the extent applicable, Mercury
is in compliance in all material respects with the applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder.
(I) TAXES. Mercury has filed or caused to be filed all
federal, state and local tax returns that are required to be filed, and has
paid all taxes as shown on said returns or on any assessment received by them
to the extent that such taxes have become due, unless such taxes are being
contested by Mercury in good faith and by appropriate proceedings and then only
if and to the extent reserves required by GAAP have been set aside on Mercury's
books therefor.
(J) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. Mercury is not an "investment company" as that term is defined in, and is
not otherwise subject to regulation under, the Investment Company Act of 1940,
as amended. Mercury is not a "holding company" as that term is defined in, and
is not otherwise subject to regulation under, the Public Utility Holding
Company Act of 1935, as amended.
(K) STOCK OF SUBSIDIARIES. Mercury has no subsidiary other
than as described on Exhibit A hereto. Mercury is the registered and beneficial
owner of the specified percentage of the shares of issued and outstanding
capital stock of each of the subsidiaries as set forth on Exhibit A hereto,
which stock is owned free and clear of all liens, warrants, options, rights to
purchase, rights of first refusal and other interests of any person, except as
set forth on Exhibit A hereto. The stock of each of such subsidiaries has been
duly authorized and validly issued and is fully paid and non-assessable.
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Limited Recourse Continuing Guaranty/Mercury
Loan No. T0362
(L) FINANCIAL CONDITION. The liability and obligations of
Mercury incurred or arising under this Guaranty and the other Loan Documents to
which it is a party of the Borrower incurred or arising under the Loan
Agreement, the Note and the other Loan Documents to which it is a party, and of
MCTC incurred or arising under the MCTC Guaranty, the MCTC Note or the other
Loan Documents to which it is a party, will benefit substantially Mercury
directly and indirectly, and Mercury's board of directors has made that
determination. Mercury has full and complete access to all of the Loan
Documents and other documents relating to the Obligations, has reviewed them
and is fully aware of the meaning and effect of their contents. Mercury is
fully informed of all circumstances that bear upon the risks of executing this
Guaranty which a diligent inquiry would reveal. Mercury has adequate means to
obtain from the Borrower and MCTC, on a continuing basis, information
concerning the financial condition of the Borrower or MCTC and is not depending
on CoBank to provide such information, now or in the future. Mercury agrees
that CoBank will have no obligation to advise or notify Mercury of or provide
Mercury with any data or information.
(M) LICENSES; PERMITS; ETC. Mercury is the valid holder of all
licenses, certificates, permits, authorizations, approvals, and the like which
are material to the conduct of its business or which may be required by law,
including, without limitation, all FCC licenses and permits and all licenses
and permits, if any, required by the Commission, and all such licenses,
certificates, permits, authorizations, approvals, and the like are in full
force and effect.
SECTION 6. COVENANTS. Unless otherwise agreed to in writing by CoBank,
while this Guaranty remains in effect or any of the Obligations have not been
fully paid or otherwise satisfied, Mercury agrees to cause MCTC to comply with
the affirmative and negative covenants and agreements contained in Sections 5
and 6 of the MCTC Guaranty.
SECTION 7. MISCELLANEOUS.
(A) GOVERNING LAW. Except to the extent governed by applicable
federal law, this Guaranty shall be governed by and construed in accordance
with the laws of the State of Louisiana without reference to choice of law
doctrine.
(B) BINDING EFFECT. This Guaranty shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns, including any holder or owner of the Note or any other Loan Document.
(C) SEVERABILITY. If any one or more of the provisions
contained herein shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Guaranty,
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Limited Recourse Continuing Guaranty/Mercury
Loan No. T0362
but this Guaranty shall be construed as if such invalid, illegal or
unenforceable provision had not been contained herein.
(D) NON-WAIVER; MODIFICATION; ELECTION OF REMEDIES. The
failure of CoBank to insist, in any one or more instances, upon a strict
performance of any of the terms and conditions of this Guaranty, or to exercise
or fail to exercise any option or right contained herein, shall not be
construed as a waiver or a relinquishment for the future of such right or
option, but the same shall continue and remain in full force and effect.
CoBank's knowledge of the breach of any term or condition hereof shall not be
deemed a waiver of such breach, and no waiver by CoBank of any provision hereof
shall be deemed to have been made, or operate as an estoppel, unless expressed
in writing and signed by CoBank. No enforcement of any remedy shall constitute
an election of remedies.
(E) NOTICES. All notices hereunder shall be made, and shall be
deemed to be duly given if made, in the manner provided for notices under
Section 19 of the Loan Agreement, to the parties at the following addresses (or
such other address for a party as shall be specified by like notice):
If to Mercury, as follows: Mercury, Inc.
P.O. Drawer 3709
Lake Charles, Louisiana 70602
Attn: Robert Piper;
cc: Thomas G. Henning
Fax No.: (318) 439-0769
If to CoBank, as follows:
CoBank, ACB
200 Galleria Parkway
Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No.: (404) 618-3202
(F) REGULATORY APPROVALS. Upon any action by CoBank to
commence the exercise of remedies hereunder or under the Mortgage, the Security
Agreement, the Assignment, the MCTC Pledge Agreement or the Mercury Pledge
Agreement, Mercury hereby undertakes and agrees on behalf of itself and of the
Borrower and MCTC to cooperate and join with CoBank in any application to the
Commission, the FCC, or any other regulatory body, administrative agency, court
or other forum (any such entity, a "Governmental Authority") with respect
thereto and to provide such assistance in connection therewith as CoBank may
request, including, without limitation, the preparation of filings and
appearances of officers and employees of Mercury, the Borrower or MCTC before
such
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Loan No. T0362
Governmental Authority, in each case in support of any such application made by
CoBank, and none of Mercury, MCTC nor the Borrower shall, directly or
indirectly, oppose any such action by CoBank before any such Governmental
Authority.
SECTION 8. CONSENT TO JURISDICTION. To the maximum extent permitted by
law, Mercury agrees that any legal action or proceeding with respect to this
Guaranty or any of the other Loan Documents may be brought in the courts of the
State of Louisiana or of the United States of America for the Western District
of Louisiana, all as CoBank may elect. By execution of this Guaranty, Mercury
hereby irrevocably submits to such jurisdiction, expressly waiving any
objection it may have to the laying of venue by reason of its present or future
domicile. Nothing contained herein shall affect the right of CoBank to commence
legal proceedings or otherwise proceed against Mercury in any other
jurisdiction or to serve process in any manner permitted or required by law.
[Signatures on next page]
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Limited Recourse Continuing Guaranty/Mercury
Loan No. T0362
THUS DONE AND SIGNED, on April 20, 1995, in the City of Lake Charles,
State of Louisiana, before me, notary public, after a due reading of the whole.
MERCURY, INC.
Witness to all signatures: By: /s/ WILLIAM L. HENNING, JR.
--------------------------------------
Name: William L. Henning, Jr.
Title: President
/s/ SHEILA KING
- ------------------------------
Witness
Attest: /s/ THOMAS G. HENNING
----------------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
/s/ CAROLYN NUNEZ
- ------------------------------
Witness
/s/ SANDRA DIAZ
- ------------------------------
Notary Public
My commission expires: lifetime commission
-------------------
[NOTARIAL SEAL]
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EXHIBIT A
SECTION 5(M): STOCK OF SUBSIDIARIES
<TABLE>
<CAPTION>
================================================================================
PERCENT OF SUBSIDIARY SHARES
SUBSIDIARY OWNED BY MERCURY OUTSTANDING LIENS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Mercury Cellular
Telephone Company 4% 517 None
- --------------------------------------------------------------------------------
Mississippi One Cellular Pledged to
Telephone Company 100% 367,658 CoBank
- --------------------------------------------------------------------------------
Mississippi 34 Cellular Pledged to
Corporation 51% 5,100 ATT Finance
================================================================================
</TABLE>
<PAGE> 1
EXHIBIT 4.54
CTC
LOAN NO. T0362
LIMITED RECOURSE CONTINUING GUARANTY
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
BEFORE ME, the undersigned Notary Public, and in the presence of the
undersigned competent witnesses, personally came and appeared the party listed
below, who, after being duly sworn, did state:
THIS LIMITED RECOURSE CONTINUING GUARANTY (this "Guaranty") is made as
of April 20, 1995, by CAMERON COMMUNICATIONS CORPORATION ("CCC") for the
benefit of COBANK, ACB ("CoBank").
R E C I T A L S:
WHEREAS, CCC owns 96% of the capital stock of Mercury Cellular Telephone
Company ("MCTC"); and
WHEREAS, CoBank and CTC Financial, Inc. (the "Borrower") have entered
into that certain Loan Agreement, dated of even date herewith (as the same may
be amended, supplemented, extended or restated from time to time, the "Loan
Agreement"), providing for a loan of up to $18,000,000 (the "Loan"); and
WHEREAS, the proceeds of the Loan will be reloaned by the Borrower to
MCTC for the purposes set forth in the Loan Agreement; and
WHEREAS, as an inducement to CoBank to enter into the Loan Agreement and
to make the Loan, CCC has agreed to pledge its stock of MCTC pursuant to a
Pledge Agreement, dated as of even date herewith, which stock shall be used as
the sole collateral for CCC's guarantee herein of the Obligations (as
hereinafter defined), provided that CoBank's sole recourse with respect to the
guarantee herein contained is against such stock pursuant to such Pledge
Agreement;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, CCC hereby agrees as follows:
SECTION 1. DEFINITIONS. Capitalized terms used in this Guaranty, unless
otherwise defined herein, shall have the meanings assigned to them in the Loan
Agreement.
<PAGE> 2
Limited Recourse Continuing Guaranty/CCC
Loan No. T0362
SECTION 2. OBLIGATIONS. "Obligations" shall mean (a) the principal,
interest and other amounts becoming due and payable, whether by acceleration or
otherwise, under that certain Promissory Note, dated of even date herewith,
made by the Borrower to the order of CoBank, in the original principal amount
of $18,000,000 (as the same may be amended, extended, renewed or replaced from
time to time, the "Note"); (b) the principal, interest and other amounts
becoming due and payable, whether by acceleration or otherwise, under that
certain Promissory Note, dated of even date herewith, made by MCTC to the order
of the Borrower, and assigned to CoBank, in the. original principal amount of
$18,000,000 (as the same may be amended, extended, renewed or replaced from
time to time, the "MCTC Note"; together with the Note, collectively, the
"Notes"); (c) all other payments or performances to be made by the Borrower or
MCTC under the other Loan Documents to which it is a party; and (d) all other
indebtedness and liabilities of MCTC to CoBank of every kind and description
whatsoever, whether now existing or hereafter arising, fixed or contingent, as
primary obligor or as guarantor or surety, acquired directly or by assignment
or otherwise, liquidated or unliquidated, regardless of how they arise or by
what agreement or instrument they may be evidenced, including, without
limitation, all loans, advances and other extensions of credit and all
covenants, agreements, and provisions contained in all loan and other
agreements between the parties.
SECTION 3. LIMITATIONS ON RECOURSE. Notwithstanding any provision of
this Guaranty or of any other Loan Document to the contrary, in any action
brought to enforce any obligation of CCC with respect to the Obligations, the
judgment or decree shall be enforceable only against the "Pledged Collateral"
in which CoBank has a security interest pursuant to the provisions of the CCC
Pledge Agreement and against CCC to the extent of its interest in the Pledged
Collateral (and not against any other assets of CCC) and CCC shall not be
liable to CoBank hereunder for the Obligations beyond its interest in the
Pledged Collateral; provided, however, that nothing contained in this Section
shall limit or relieve CCC from liability for failing to comply with the terms,
covenants, conditions and provisions of this Guaranty or the CCC Pledge
Agreement or any other agreement to which CCC is a party, other than for the
payment of the Obligations.
SECTION 4. GUARANTY PROVISIONS.
(A) In consideration of the advances under the Loan made and
to be made by CoBank to the Borrower and by the Borrower to MCTC pursuant to
the Loan Agreement and for other good and valuable consideration, the adequacy,
sufficiency and receipt of which are hereby acknowledged, CCC hereby
absolutely, unconditionally, directly, irrevocably, completely and immediately
guarantees the full and prompt payment, when due, whether by acceleration or
otherwise, and the prompt performance, of the Obligations; provided, however,
that recourse hereunder is limited as provided in Section 3;
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Limited Recourse Continuing Guaranty/CCC
Loan No. T0362
(B) CCC further agrees to pay to CoBank, upon demand, all
losses and reasonable costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses, that may be incurred by CoBank in
attempting to cause the Obligations to be paid, performed or otherwise
satisfied or in attempting to cause satisfaction of CCC's liability under this
Guaranty or in attempting to protect or preserve any property, personal or
real, securing the Obligations; provided, however, that recourse hereunder is
limited as provided in Section 3;
(C) CCC agrees that this Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time any payment by
the Borrower, MCTC, Mercury, Inc. ("Mercury") or any other person to CoBank on
account of the Obligations is rescinded or must otherwise be returned or
restored by CoBank upon the insolvency or bankruptcy of the Borrower, MCTC,
Mercury or any other obligor, guarantor, endorser or surety of the Obligations,
all as though such payment had not been made; provided, however, that recourse
hereunder is limited as provided in Section 3;
(D) It is the intention of CCC and CoBank that CCC's liability
hereunder shall not be in excess of the maximum amount permitted by applicable
federal bankruptcy, state insolvency, or similar laws (collectively, the
"Applicable Laws"). To that end, but only to the extent such liability would
otherwise be subject to avoidance under the Applicable Laws if CCC is not
deemed to have received valuable consideration, fair value or reasonably
equivalent value for its liability hereunder, CCC's liability hereunder shall
be reduced to that amount which, after giving effect thereto, would not render
CCC insolvent, or leave CCC with unreasonably small capital to conduct
business, or cause CCC to have incurred debts (or intended to have incurred
debts) beyond CCC's ability to pay such debts as they mature, at the time such
liability is deemed to have been incurred under the Applicable Laws. As used
herein, the terms "insolvent" and "unreasonably small capital" shall be
determined in accordance with the Applicable Laws. This Subsection (D) is
intended solely to preserve the rights of CoBank hereunder to the maximum
extent permitted by the Applicable Laws, and neither CCC nor any other person
shall have any right or claim under this Subsection (D) that would not
otherwise be available under the Applicable Laws;
(E) CCC assents to all terms and agreements heretofore or
hereafter made by the Borrower, MCTC or Mercury with CoBank;
(F) CCC hereby consents to the following and agrees, with or
without notice (all notices being hereby waived), that its liability (as
limited in Section 3) will not be affected or impaired by (i) the exchange,
release or surrender of any collateral or any claim against the Borrower, MCTC,
Mercury or any other person, or the waiver, release or subordination of any
security interest, in whole or in part; (ii) the waiver or delay in the
exercise of any of CoBank's rights or remedies against the Borrower, MCTC,
Mercury or any
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Limited Recourse Continuing Guaranty/CCC
Loan No. T0362
other person; (iii) the renewal, extension or modification of the terms or
amounts of any of the Obligations, the Loan Documents or any other instrument
or agreement evidencing the same; or (iv) the acceptance by CoBank of other
guaranties;
(G) CCC waives acceptance hereof; notice of acceptance hereof,
and notice of acceleration of and intention to accelerate the Obligations, and
waives presentment, demand, protest, notice of dishonor, notice of default,
notice of nonpayment or protest in relation to any instrument evidencing any of
the Obligations, and any other demands and notices required by law except as
such waiver may be expressly prohibited by law;
(H) This is a limited recourse guaranty (as provided in
Section 3) of payment and performance and not of collection only. The liability
of CCC under this Guaranty (as limited as provided in Section 3) shall be
absolute, unconditional, direct, irrevocable, complete and immediate and shall
not be contingent upon the pursuit of any remedies against the Borrower, MCTC,
Mercury or any other person, nor against any security or lien available to
CoBank, its successors, successors-in-title, endorsees or assigns, and shall be
joint and several with the liabilities of all other guarantors of the
Obligations. CCC waives any right to require that an action be brought against
the Borrower, MCTC, Mercury or any other person or to require that resort be
had to any security of the Borrower, MCTC, Mercury or any other person
(provided that all remedies hereunder are limited as provided in Section 3). In
the event of a default under any of the Loan Documents, CoBank shall have the
right to enforce its rights, powers and remedies under any of the Loan
Documents in any order, and all rights, powers and remedies available to CoBank
in such event shall be nonexclusive and cumulative of all other rights, powers
and remedies provided thereunder or hereunder or by law or in equity.
Accordingly, CCC hereby authorizes and empowers CoBank upon acceleration of the
maturity of any of the Notes or any other Obligation, at its sole discretion,
and without notice to CCC, to exercise any right or remedy which CoBank may
have under the CCC Pledge Agreement or any right or remedy hereinafter granted
under the CCC Pledge Agreement which CoBank may have as to the Pledged
Collateral. CCC waives any right to require any action on the part of CoBank to
proceed to collect amounts due under the Notes or any other Obligation;
(I) CCC hereby subordinates any and all indebtedness of the
Borrower, MCTC or Mercury now or hereafter owed to CCC to all Obligations of
the Borrower, MCTC or Mercury to CoBank, and agrees with CoBank that, from and
after the occurrence of a default or event of default under any of the Loan
Documents, and for so long as such default or event of default exists, CCC
shall not demand or accept any payment of principal or interest from the
Borrower, MCTC or Mercury shall not claim any offset or other reduction of
CCC's liability hereunder because of any such indebtedness and shall not take
any action to obtain any of the security for the Obligations; provided,
however, that, if
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<PAGE> 5
Limited Recourse Continuing Guaranty/CCC
Loan No. T0362
CoBank so requests, such indebtedness shall be collected, enforced and received
by CCC as trustee for CoBank and be paid over to CoBank on account of the
Obligations of the Borrower, MCTC or Mercury to CoBank, but without reducing or
affecting in any manner the liability of CCC under the other provisions of this
Guaranty;
(J) CCC hereby authorizes CoBank, without notice to CCC, to
apply all payments and credits received from the Borrower, MCTC, Mercury or any
other person or realized from any security in such manner and in such priority
as CoBank in its sole judgment shall see fit to the Obligations or to any other
liabilities of the Borrower, MCTC, Mercury or any other person to CoBank, and
CCC agrees that any such application shall not in any way affect its
liabilities hereunder;
(K) The liability of CCC under this Guaranty shall not in any
manner be affected by reason of any action taken or not taken by CoBank, which
action or inaction is hereby consented and agreed to by CCC, nor by the partial
or complete unenforceability or invalidity of any other guaranty or surety
agreement, pledge, assignment, or other security for any of the Obligations. No
delay in making demand on CCC for satisfaction of its liability hereunder shall
prejudice CoBank's right to enforce such satisfaction. All of CoBank's rights
and remedies shall be cumulative and any failure of CoBank to exercise any
right hereunder shall not be construed as a waiver of the right to exercise the
same or any other right at any time, and from time to time, thereafter;
(L) This Guaranty shall be a continuing one and shall be
binding upon CCC regardless of how long before or after the date hereof the
Obligations are incurred. This Guaranty shall remain in full force and effect
until a written instrument of termination shall be executed and delivered by a
duly authorized officer of CoBank. CoBank will only be obligated to execute
such an instrument of termination if: (i) all Obligations have been paid in
full; (ii) CoBank has no further commitment or obligation to extend credit to
the Borrower, MCTC or Mercury; and (iii) any preference period applicable to
payments made on or security given for the Obligations has expired under
applicable bankruptcy and insolvency laws; and
(M) CCC hereby irrevocably waives any and all rights it may
have to enforce any of CoBank's rights or remedies or participate in any
security now or hereafter held by CoBank, and any and all such other rights of
subrogation, reimbursement, contribution or indemnification against the
Borrower, MCTC, Mercury or any other person having any manner of liability for
the Borrower's, MCTC's or Mercury's obligations to CoBank, whether or not
arising hereunder, by agreement, at law or in equity.
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Limited Recourse Continuing Guaranty/CCC
Loan No. T0362
SECTION 5. REPRESENTATIONS AND WARRANTIES. CCC represents and warrants
to CoBank, on and as of the date hereof and on and as of each date on which the
Borrower receives an advance under the Loan Agreement, as follows:
(A) ORGANIZATION; POWERS; ETC. CCC (i) is duly organized,
validly existing, and in good standing under the laws of its state of
incorporation; (ii) is duly qualified to do business and is in good standing in
each jurisdiction in which the character of its properties or the nature of its
business requires such qualification; (iii) has all requisite corporate and
legal power to own and operate its assets and to carry on its business and to
enter into and perform its obligations under the Loan Documents to which it is
a party; and (iv) has duly and lawfully obtained and maintains all licenses,
certificates, permits, authorizations, approvals, and the like which are
material to the conduct of its business or which may be otherwise required by
law.
(B) DUE AUTHORIZATION; NO VIOLATIONS; ETC. The execution and
delivery by CCC of, and the performance by CCC of its obligations under, the
Loan Documents to which it is a party have been duly authorized by all
requisite corporate action on the part of CCC and its shareholders and do not
and will not (i) violate any provision of any law, rule or regulation, any
judgment, order or ruling of any court or governmental agency, the articles of
incorporation, if any, or bylaws of CCC, or any agreement, indenture, mortgage,
or other instrument to which CCC is a party or by which CCC or any of its
properties are bound, or (ii) be in conflict with, result in a breach of, or
constitute with the giving of notice or lapse of time, or both, a default under
any such agreement, indenture, mortgage, or other instrument.
(C) GOVERNMENTAL APPROVAL. No consent, permission,
authorization, order, or license of any governmental authority is necessary in
connection with the execution, delivery, performance, or enforcement of the
Loan Documents to which CCC is a party or the creation and perfection of the
liens and security interests granted thereby, except such as have been obtained
and are in full force and effect.
(D) BINDING AGREEMENT. Each of the Loan Documents to which CCC
is a party is, or when executed and delivered will be, the legal, valid, and
binding obligation of CCC, enforceable against CCC in accordance with its
terms, subject only to limitations on enforceability imposed by (i) applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
creditors' rights generally, and (ii) general equitable principles.
(E) COMPLIANCE WITH LAWS. CCC is in compliance in all material
respects with all Laws, the failure to comply with which could have a Material
Adverse Effect (as hereinafter defined) on CCC. For purposes of this Guaranty,
the term "Material Adverse
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<PAGE> 7
Limited Recourse Continuing Guaranty/CCC
Loan No. T0362
Effect" shall mean a material adverse effect on the condition, financial or
otherwise, operations, properties or business of CCC or on the ability of CCC
to perform its obligations under the Loan Documents to which it is a party.
(F) ENVIRONMENTAL COMPLIANCE. Without limiting the provisions
of Subsection (E) above, all property owned or leased by CCC and all operations
conducted by it are in compliance in all material respects with all Laws
relating to environmental protection, the failure to comply with which could
have a Material Adverse Effect on CCC.
(G) LITIGATION. There are no pending legal, arbitration, or
governmental actions or proceedings to which CCC is a party or to which any of
its property is subject which could have a Material Adverse Effect on CCC, and
to the best of CCC's knowledge, no such actions or proceedings are threatened
or contemplated.
(H) EMPLOYEE BENEFIT PLANS. To the extent applicable, CCC is
in compliance in all material respects with the applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder.
(I) TAXES. CCC has filed or caused to be filed all federal,
state and local tax returns that are required to be filed, and has paid all
taxes as shown on said returns or on any assessment received by them to the
extent that such taxes have become due, unless such taxes are being contested
by CCC in good faith and by appropriate proceedings and then only if and to the
extent reserves required by GAAP have been set aside on CCC's books therefor.
(J) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. CCC is not an "investment company" as that term is defined in, and is not
otherwise subject to regulation under, the Investment Company Act of 1940, as
amended. CCC is not a "holding company" as that term is defined in, and is not
otherwise subject to regulation under, the Public Utility Holding Company Act
of 1935, as amended.
(K) STOCK OF SUBSIDIARIES. CCC has no subsidiary other than as
described on Exhibit A hereto. CCC is the registered and beneficial owner of
the specified percentage of the shares of issued and outstanding capital stock
of each of the subsidiaries as set forth on Exhibit A hereto, which stock is
owned free and clear of all liens, warrants, options, rights to purchase,
rights of first refusal and other interests of any person, except as set forth
on Exhibit A hereto. The stock of each of such subsidiaries has been duly
authorized and validly issued and is fully paid and non-assessable.
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<PAGE> 8
Limited Recourse Continuing Guaranty/CCC
Loan No. T0362
(L) FINANCIAL CONDITION. The liability and obligations of CCC
incurred or arising under this Guaranty and the other Loan Documents to which
it is a party of the Borrower incurred or arising under the Loan Agreement, the
Note and the other Loan Documents to which it is a party, and of MCTC incurred
or arising under the MCTC Guaranty, the MCTC Note or the other Loan Documents
to which it is a party, will benefit substantially CCC directly and indirectly,
and CCC's board of directors has made that determination. CCC has full and
complete access to all of the Loan Documents and other documents relating to
the Obligations, has reviewed them and is fully aware of the meaning and
effect of their contents. CCC is fully informed of all circumstances that bear
upon the risks of executing this Guaranty which a diligent inquiry would
reveal. CCC has adequate means to obtain from the Borrower and MCTC, on a
continuing basis, information concerning the financial condition of the
Borrower or MCTC and is not depending on CoBank to provide such information,
now or in the future. CCC agrees that CoBank will have no obligation to advise
or notify CCC of or provide CCC with any data or information.
(M) LICENSES; PERMITS; ETC. CCC is the valid holder of all
licenses, certificates, permits, authorizations, approvals, and the like which
are material to the conduct of its business or which may be required by law,
including, without limitation, all FCC licenses and permits and all licenses
and permits, if any, required by the Commission, and all such licenses,
certificates, permits, authorizations, approvals, and the like are in full
force and effect.
SECTION 6. COVENANTS. Unless otherwise agreed to in writing by CoBank,
while this Guaranty remains in effect or any of the Obligations have not been
fully paid or otherwise satisfied, CCC agrees to cause MCTC to comply with the
affirmative and negative covenants and agreements contained in Sections 5 and 6
of the MCTC Guaranty.
SECTION 7. MISCELLANEOUS.
(A) GOVERNING LAW. Except to the extent governed by applicable
federal law, this Guaranty shall be governed by and construed in accordance
with the laws of the State of Louisiana without reference to choice of law
doctrine.
(B) BINDING EFFECT. This Guaranty shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns, including any holder or owner of the Note or any other Loan Document.
(C) SEVERABILITY. If any one or more of the provisions
contained herein shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Guaranty,
-8-
<PAGE> 9
Limited Recourse Continuing Guaranty/CCC
Loan No. T0362
but this Guaranty shall be construed as if such invalid, illegal or
unenforceable provision had not been contained herein.
(D) NON-WAIVER; MODIFICATION; ELECTION OF REMEDIES. The
failure of CoBank to insist, in any one or more instances, upon a strict
performance of any of the terms and conditions of this Guaranty, or to exercise
or fail to exercise any option or right contained herein, shall not be
construed as a waiver or a relinquishment for the future of such right or
option, but the same shall continue and remain in full force and effect.
CoBank's knowledge of the breach of any term or condition hereof shall not be
deemed a waiver of such breach, and no waiver by CoBank of any provision hereof
shall be deemed to have been made, or operate as an estoppel, unless expressed
in writing and signed by CoBank. No enforcement of any remedy shall constitute
an election of remedies.
(E) NOTICES. All notices hereunder shall be made, and shall be
deemed to be duly given if made, in the manner provided for notices under
Section 19 of the Loan Agreement, to the parties at the following addresses (or
such other address for a party as shall be specified by like notice):
If to CCC, as follows: Cameron Communications Corporation
P.O. Drawer 3709
Lake Charles, Louisiana 70602
Attn: Robert Piper;
cc: Thomas G. Henning
Fax No.: (318) 439-0769
If to CoBank, as follows:
CoBank, ACB
200 Galleria Parkway
Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No.: (404) 618-3202
(F) REGULATORY APPROVALS. Upon any action by CoBank to
commence the exercise of remedies hereunder or under the Mortgage, the Security
Agreement, the Assignment, the MCTC Pledge Agreement or the CCC Pledge
Agreement, CCC hereby undertakes and agrees on behalf of itself and of the
Borrower and MCTC to cooperate and join with CoBank in any application to the
Commission, the FCC, or any other regulatory body, administrative agency, court
or other forum (any such entity, a "Governmental Authority") with respect
thereto and to provide such assistance in connection therewith as CoBank may
request, including, without limitation, the preparation of filings and
appearances of officers and employees of CCC, the Borrower or MCTC before such
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Limited Recourse Continuing Guaranty/CCC
Loan No. T0362
Governmental Authority, in each case in support of any such application made by
CoBank, and none of CCC, MCTC nor the Borrower shall, directly or indirectly,
oppose any such action by CoBank before any such Governmental Authority.
SECTION 8. CONSENT TO JURISDICTION. To the maximum extent permitted by
law, CCC agrees that any legal action or proceeding with respect to this
Guaranty or any of the other Loan Documents may be brought in the courts of the
State of Louisiana or of the United States of America for the Western District
of Louisiana, all as CoBank may elect. By execution of this Guaranty, CCC
hereby irrevocably submits to such jurisdiction, expressly waiving any
objection it may have to the laying of venue by reason of its present or future
domicile. Nothing contained herein shall affect the right of CoBank to commence
legal proceedings or otherwise proceed against CCC in any other jurisdiction or
to serve process in any manner permitted or required by law.
[Signatures on next page]
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Limited Recourse Continuing Guaranty/CCC
Loan No. T0362
THUS DONE AND SIGNED, on April 20, 1995, in the City of Lake Charles,
State of Louisiana, before me, notary public, after a due reading of the whole.
CAMERON COMMUNICATIONS CORPORATION
By: /s/ WILLIAM L. HENNING, JR.
--------------------------------------
Name: William L. Henning, Jr.
Title: President
Witness to all signatures:
Attest: /s/ THOMAS G. HENNING
----------------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
/s/ SHEILA KING
- ------------------------------
Witness
/s/ CAROLYN NUNEZ
- ------------------------------
Witness
/s/ SANDRA DIAZ
- ------------------------------
Notary Public
My commission expires: lifetime commission
-------------------
[NOTARIAL SEAL]
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<PAGE> 12
EXHIBIT A
SECTION 5(M): STOCK OF SUBSIDIARIES
<TABLE>
<CAPTION>
================================================================================
PERCENT OF SUBSIDIARY SHARES
SUBSIDIARY OWNED BY CCC OUTSTANDING LIENS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Mercury Cellular Telephone
Company 96% 12,301 None
- --------------------------------------------------------------------------------
U.S.
Cameron Telephone Company 100% 271 Government
restrictions
================================================================================
</TABLE>
<PAGE> 1
EXHIBIT 4.56
CTC
LOAN NO. T0362
PROMISSORY NOTE
MERCURY CELLULAR TELEPHONE COMPANY
LAKE CHARLES, LOUISIANA
$18,000,000 DATED: APRIL 20, 1995
FOR VALUE RECEIVED, MERCURY CELLULAR TELEPHONE COMPANY ("MCTC") hereby
promises to pay to the order of CTC FINANCIAL, INC. ("Finance"; Finance or any
subsequent holder of this Note, the "Holder") the principal amount of EIGHTEEN
MILLION DOLLARS ($18,000,000), or so much as may have been advanced under that
certain Promissory Note, dated of even date herewith, made by Finance to the
order of CoBank, ACB ("CoBank"), in the original principal amount of
$18,000,000 (including any amendment, supplement, extension or restatement
thereof; the "Finance Note"), and that certain Loan Agreement, dated as of even
date herewith, by and between Finance and CoBank (including any amendment,
supplement, extension or restatement thereof; the "Loan Agreement") and
reloaned by Finance to MCTC, together with interest as hereinafter provided
from the date hereof until paid in full, plus amounts equal to all other costs,
fees, expenses, premiums, surcharges and all other amounts due under or in
connection with the Finance Note and the Loan Agreement. For purposes of this
Note, the "Finance Loan" shall mean the amounts borrowed by Finance from CoBank
pursuant to the Loan Agreement and evidenced by the Finance Note, and the
"Loan" shall mean the amounts of the Finance Loan reloaned by Finance to MCTC
and evidenced by this Note.
1. INTEREST. The aggregate amount of interest accruing under this
Note shall at all times equal the aggregate amount of interest accruing under
the Finance Note. Accordingly, interest on the principal balance outstanding
hereunder shall accrue as follows:
(a) As to a principal amount equal to the Portion (as defined
in the Loan Agreement) of the Finance Loan, if any, from time to time accruing
interest at the Variable Rate (as defined in the Loan Agreement), at a rate
equal to the Variable Rate applicable from time to time under the Loan
Agreement; and
(b) As to a principal amount equal to each Portion of the
Finance Loan, if any, from time to time accruing interest pursuant to one of
the fixed rate options as provided for in Section 4(A)(2)(a) or (b) of the
Loan Agreement, at a fixed rate equal to the fixed rate so accruing on each
such Portion.
2. REPAYMENT OF PRINCIPAL; INTEREST AND OTHER AMOUNTS PAYABLE. This
Note evidences MCTC's obligations with respect to the Loan. MCTC shall pay to
the Holder an
<PAGE> 2
Promissory Note/MCTC
Loan No. T0362
amount equal to the aggregate principal amount of the Loan, together with
accrued interest thereon, plus all other costs, fees, expenses, premiums,
surcharges and all other amounts due under or in connection with the Finance
Note and the Loan Agreement, in such amounts and at such times as shall be
sufficient to make, when and as due, all payments required under the Finance
Note and the Loan Agreement with respect to the Finance Loan, interest thereon,
and such other amounts due thereunder. Advances, accrued interest and payments
under the Finance Note and the Loan Agreement shall be posted by CoBank upon an
appropriate accounting record, which record (and all computer printouts
thereof) shall constitute prima facie evidence of the outstanding principal and
interest under the Finance Note and the Loan Agreement. So long as CoBank shall
be the Holder hereof; payments received by CoBank pursuant to this Note shall
be deemed to constitute payments made pursuant to the Finance Note.
3. MANNER AND PLACE OF PAYMENT. Payments of all amounts due
hereunder are to be made at such location as the Holder may designate in
writing in accordance with Paragraph 10 hereof; in lawful money of the United
States of America.
4. LOAN DOCUMENTS. This Note is executed pursuant to the terms of
the Loan Agreement. This Note, the Finance Note and the Loan Agreement and any
other agreements, documents or instruments securing the indebtedness or
evidencing or relating to the transactions contemplated in the Loan Agreement
shall sometimes herein be collectively called the "Loan Documents."
5. COST OF COLLECTION. In the event this Note or any amount due
hereunder is not paid promptly when due, MCTC shall pay the reasonable fees and
all other costs and expenses of any attorneys at law who may be employed to
recover the amount overdue, or to protect the interest of the Holder, or to
enforce any Loan Document or to compromise or take other action in regard
hereto or thereto.
6. WAIVER. MCTC hereby waives any right to consent to any amendment,
supplement, extension or restatement of the Finance Note, the Loan Agreement or
any of the other Loan Documents; waives presentment for payment, demand,
protest and notice of dishonor and nonpayment; and agrees that the payment
hereof or of the Finance Note and the Loan Agreement may be extended one or
more times without notice. MCTC hereby waives all defenses on the ground of
delay or of any extension of time for the payment hereof which may be hereafter
given by the Holder hereof to it or to anyone who has assumed the payment of
this Note, and it is specifically agreed that the obligations of MCTC shall not
be in anywise affected or altered to the prejudice of the Holder hereof by
reason of the assumption of payment of the same by any other person or entity.
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<PAGE> 3
Promissory Note/MCTC
Loan No. T0362
7. PARTIES BOUND. As used herein, the terms "MCTC" and the "Holder"
shall be deemed to include their respective successors and assigns.
8. MISCELLANEOUS. The Holder shall not by any act, delay, omission
or otherwise be deemed to have waived any of its rights or remedies, and no
waiver of any kind shall be valid, unless in writing and signed by the Holder.
All rights and remedies of the Holder under the terms of this Note and under
any statutes or rules of law shall be cumulative and may be exercised
successively or concurrently. Any provision of this Note which may be
unenforceable or invalid under any law shall be ineffective to the extent of
such unenforceability or invalidity without affecting the enforceability or
validity of any other provision hereof. Except to the extent governed by
applicable federal law, this Note shall be governed by and construed in
accordance with the laws of the State of Louisiana without reference to choice
of law doctrine.
9. CONSENT TO JURISDICTION. To the maximum extent permitted by law,
MCTC agrees that any legal action or proceeding with respect to this Note may
be brought in the courts of the State of Louisiana or the United States of
America for the Western District of Louisiana, all as the Holder may elect. By
execution of this Note, MCTC hereby irrevocably submits to such jurisdiction,
expressly waiving any objection it may have to the laying of venue by reason of
its present or future domicile. Nothing contained herein shall affect the right
of the Holder to commence legal proceedings or otherwise proceed against MCTC
in any other jurisdiction or to serve process in any manner permitted or
required by law.
10. NOTICES. All notices herein authorized or required to be given to
MCTC or the Holder shall be given and delivery may be effected in the manner
set forth in the Loan Agreement to the addresses set forth below or to such
other address as the parties may designate from time to time in accordance with
this paragraph:
MCTC: Mercury Cellular Holder: CoBank, ACB
Telephone Company 200 Galleria Parkway
P. O. Box 3709 Suite 1900
Lake Charles, Louisiana 70602 Atlanta, Georgia 30339
Attn: Robert Piper; Attn: Rural Utility Banking
cc: Thomas G. Henning Fax No.: (404) 618-3202
Fax No.: (318) 439-0769
[Signatures on next page]
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<PAGE> 4
Promissory Note/MCTC
Loan No. T0362
WHEREFOR, MCTC has caused this Note to be executed, attested, sealed and
delivered under seal by its duly authorized officers on the day and year first
written above.
MERCURY CELLULAR
TELEPHONE COMPANY
By: /s/ ROBERT PIPER
--------------------------------------
Name: Robert Piper
Title: President
Attest: /s/ THOMAS G. HENNING
----------------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
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Promissory Note/MCTC
Loan No. T0362
FOR VALUE RECEIVED, CTC FINANCIAL, INC. ("Finance") hereby assigns to the
COBANK, ACB ("CoBank") all of its interest in the instant promissory note to
secure the prompt payment and performance of the Obligations (as hereinafter
defined). As used herein, the term "Obligations" shall mean (i) the principal,
interest and any other charges provided for in the Finance Note (as defined in
the instant promissory note) and the Loan Agreement (as defined in the instant
promissory note); (ii) all payments or performances under any other agreements,
instruments and documents now or hereafter evidencing or relating to the
transactions contemplated in the Loan Agreement; and (iii) all indebtedness,
obligations and liabilities of Finance to CoBank of every kind, character and
description whatsoever, direct or indirect, absolute or contingent, due or to
become due, now existing or hereinafter incurred, contracted or arising, joint
or several, liquidated or unliquidated, regardless of how they arise or by what
agreement or instrument they may be evidenced or whether they are evidenced by
any agreement or instrument, or whether incurred as maker, drawer, endorser,
surety, guarantor or otherwise.
WHEREFOR, Finance has caused this assignment to be executed, attested
and delivered under seal as of April 20,1995.
CTC FINANCIAL, INC.
By: /s/ WILLIAM L. HENNING, JR.
--------------------------------------
Name: William L. Henning, Jr.
Title: President
Attest: /s/ THOMAS G. HENNING
----------------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
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<PAGE> 1
EXHIBIT 4.57
CTC
Loan No. T0362
PLEDGE AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the respective undersigned Notaries Public, and in the presence
of the undersigned respective competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is made as of April
20, 1995, by and between CAMERON COMMUNICATIONS CORPORATION, as pledgor (the
"Pledgor"), and COBANK, ACB, as pledgee ("CoBank").
RECITALS:
WHEREAS, the Pledgor owns 96% of the capital stock of Mercury Cellular
Telephone Company ("MCTC"); and
WHEREAS, CoBank and CTC Financial, Inc. (the "Borrower") have entered
into that certain Loan Agreement, dated of even date herewith (as the same may
be amended, supplemented, extended or restated from time to time, the "Loan
Agreement"), providing for a loan of up to $18,000,000 (the "Loan"); and
WHEREAS, the proceeds of the Loan will be reloaned by the Borrower to
MCTC for the purposes set forth in the Loan Agreement; and
WHEREAS, as an inducement to CoBank to execute the Loan Agreement and
to make the Loan, the Pledgor has made that certain Limited Recourse Continuing
Guaranty, dated as of even date herewith (as the same may be amended,
supplemented, extended or restated from time to time, the "CCC Limited Recourse
Guaranty"), for the benefit of CoBank; and
WHEREAS, to secure the Pledgor's obligations to CoBank under the CCC
Limited Recourse Guaranty and the "Obligations" (as therein defined), the
Pledgor has agreed to
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Pledge Agreement/CCC
Loan No. T0362
pledge to CoBank the hereinafter defined Pledged Collateral on the terms and
conditions set forth in this Pledge Agreement;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the Pledgor and CoBank agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used in this Pledge
Agreement, unless otherwise defined herein, shall have the meanings assigned to
them in the Loan Agreement.
SECTION 2. PLEDGE. To secure the payment or performance of the
Obligations, including, without limitation, the payment of all principal,
interest and other amounts becoming due and payable, whether by acceleration or
otherwise, under the Note and the MCTC Note and the performance by the Pledgor
under the CCC Limited Recourse Guaranty (collectively, including the
Obligations, the "Secured Obligations"), the Pledgor hereby pledges,
hypothecates, assigns, transfers, sets over and delivers unto CoBank, and
grants to CoBank a lien upon and a security interest in (a) all now owned or
hereafter acquired capital stock of MCTC; and (b) any cash, additional shares
or securities or other property at any time and from time to time receivable or
otherwise distributable in respect of; in exchange for, or in liquidation of;
any and all such stock, together with the proceeds thereof (all such shares,
capital stock, securities, cash, property and other proceeds thereof;
collectively, the "Pledged Collateral"). Upon delivery to CoBank, (i) any
securities now or hereafter included in the Pledged Collateral (the "Pledged
Securities") shall be accompanied by duly executed stock powers in blank and by
such other instruments or documents as CoBank or its counsel may reasonably
request and (ii) all other property comprising part of the Pledged Collateral
shall be accompanied by proper instruments of assignment duly executed by the
Pledgor and by such other instruments or documents as CoBank or its counsel may
reasonably request. Each delivery of certificates for such Pledged Securities
shall be accompanied by a schedule showing the number of shares and the numbers
of the certificates therefor, theretofore and then being pledged hereunder,
which schedules shall be attached hereto as Schedule 1 and made a part hereof.
Each schedule so delivered shall supersede any prior schedules so delivered.
TO HAVE AND TO HOLD the Pledged Collateral, together with all rights,
titles, interests, powers, privileges and preferences pertaining or incidental
thereto, unto CoBank, its successors and assigns, forever, subject, however, to
the terms, covenants and conditions hereinafter set forth.
SECTION 3. REPRESENTATIONS AND WARRANTIES. The Pledgor hereby
represents and warrants that, except for security interests granted to CoBank,
including the interest herein given, the Pledgor is the legal, equitable and
beneficial owner of the Pledged Collateral, holds the same free and clear of
all liens, charges, encumbrances and security interests of every kind and
nature, and will make no voluntary assignment, pledge, mortgage, hypothecation
or transfer of the Pledged Collateral (except as may be permitted under this
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Pledge Agreement/CCC
Loan No. T0362
Pledge Agreement with respect to cash dividends); that the Pledgor has good
right and legal authority to pledge the Pledged Collateral in the manner hereby
done or contemplated and will defend its title thereto against the claims of
all persons whomsoever; that the execution and delivery of this Pledge
Agreement, and the performance of its terms, will not result in any violation
of any provision of the Pledgor's articles of incorporation or bylaws, or
violate or constitute a default under the terms of any agreement, indenture or
other instrument, license, judgment, decree, order, law, statute, ordinance or
other governmental rule or regulation applicable to the Pledgor or any of the
Pledgor's property; that no approval, consent or authorization of any
governmental or regulatory authority which has not heretofore been obtained is
necessary for the execution or delivery by the Pledgor of this Pledge Agreement
or for the performance by the Pledgor of any of the terms or conditions hereof
or thereof; and that this pledge is effective to vest in CoBank the rights of
the Pledgor in the Pledged Collateral as set forth herein.
SECTION 4. STOCK OF MCTC. The Pledgor represents that it is the
registered and beneficial owner of the shares and percentage of the capital
stock of MCTC set forth on Schedule 1 hereto, which stock is owned free and
clear of all liens, warrants, options, rights to purchase, rights of first
refusal and other interests of any person other than CoBank. The outstanding
capital stock of MCTC has been duly authorized and is validly issued, fully
paid and non-assessable.
SECTION 5. ADDITIONAL SHARES OF CAPITAL STOCK; TRANSFER. Without the
prior written consent of CoBank, the Pledgor will not (a) consent to or approve
of the issuance of any additional shares of any class of capital stock by MCTC
or to any options, subscription rights, warrants or other instruments in
respect thereof; (b) consent to or approve of the establishment of any
additional class or classes of capital stock by MCTC or the issuance of any
shares thereunder, (c) consent to or approve of any merger, consolidation,
reorganization or any sale or lease of substantially all the assets of MCTC, or
(d) consent to or approve the repurchase or redemption by MCTC of any of its
capital stock.
SECTION 6. COVENANTS WITH RESPECT TO COLLATERAL. The Pledgor hereby
covenants and agrees with respect to the Pledged Collateral as follows:
(A) The Pledgor will cause any additional securities
issued by MCTC or property issued by MCTC with respect to the Pledged
Collateral, whether for value paid by the Pledgor or otherwise, to be
forthwith deposited and pledged hereunder and delivered to CoBank, in
each case accompanied by proper instruments of assignment duly
executed; and
(B) The Pledgor will defend its title to the Pledged
Collateral against the claims of all persons whomsoever.
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Pledge Agreement/CCC
Loan No. T0362
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(A) In the absence of the occurrence of an Event of
Default. In the absence of the occurrence and continuation of an Event
of Default (as hereinafter defined):
(i) The Pledgor shall be entitled to exercise any
and all voting and/or consensual rights and powers accruing to
an owner of the Pledged Securities or any part thereof for any
purpose not inconsistent with the terms of this Pledge
Agreement (including Section 5) or any agreement giving rise
to any of the Obligations; provided, that the Pledgor shall
not exercise, or refrain from exercising, any such right or
power if any such action would have a material adverse effect
on the value of such Pledged Securities or any part thereof;
(ii) Beyond the exercise of reasonable care to
assure the safe custody of the Pledged Collateral while held
hereunder, CoBank shall have no duty or liability to preserve
rights pertaining thereto and shall be relieved of all
responsibility for the Pledged Collateral upon surrendering it
or tendering surrender of it to the Pledgor;
(iii) The Pledgor shall not be entitled to retain
cash dividends paid on Pledged Securities without the prior
written consent of CoBank if such payment is in violation of
the limitations on dividends set forth in Section 6(J) of the
MCTC Guaranty. CoBank may require any such cash dividends to
be delivered to CoBank as additional security hereunder or
applied toward the satisfaction of the Secured Obligations;
(iv) Any and all stock and/or liquidating dividends,
other distributions in property, return of capital or other
distributions made on or in respect of Pledged Securities,
whether resulting from an increase or reduction of capital, a
subdivision, combination or reclassification of outstanding
capital stock of any corporation, capital stock of which is
pledged hereunder, or received in exchange for Pledged
Securities or any part thereof or as a result of any merger,
consolidation, acquisition, spin-off, split-off or options,
warrants, or rights, whether as an addition to, or in
substitution or in exchange for, any of the Pledged
Collateral, or otherwise, or dividends or distribution of any
sort, or other exchange of assets or on the liquidation,
whether voluntary or involuntary, of any issuer of the Pledged
Securities, or otherwise, shall be and become part of the
Pledged Collateral pledged hereunder and, if received by the
Pledgor, then the Pledgor shall accept the same as CoBank's
agent, in trust for CoBank, and shall deliver them forthwith
to CoBank in the exact form received with, as applicable, the
Pledgor's
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Pledge Agreement/CCC
Loan No. T0362
endorsement when necessary, or appropriate stock powers duly
executed in blank, to be held by CoBank, subject to the terms
hereof; as part of the Pledged Collateral; and
(v) CoBank shall execute and deliver to the
Pledgor, or cause to be executed and delivered to the Pledgor,
as appropriate, all such proxies, powers of attorney, dividend
orders and other instruments as the Pledgor reasonably may
request for the purpose of enabling the Pledgor to exercise
the voting and/or consensual rights and powers which the
Pledgor is entitled to exercise pursuant to paragraph (A)(i)
above and/or to receive any dividends which the Pledgor is
authorized to retain pursuant to paragraph (A)(iii) above.
(B) Upon Default. Upon the occurrence of an Event of
Default, all rights of the Pledgor to exercise the voting and/or
consensual rights and powers which the Pledgor is entitled to exercise
pursuant to paragraph (A)(i) above shall become vested in CoBank upon
one day's prior written notice, which shall have the sole and
exclusive right and authority to exercise such voting and/or
consensual rights and powers which the Pledgor shall otherwise be
entitled to exercise pursuant to paragraph (A)(i) above. Upon the
occurrence of an Event of Default, all dividends shall be delivered to
CoBank as additional security hereunder or applied toward satisfaction
of the Secured Obligations.
SECTION 8. REMEDIES UPON DEFAULT. If an Event of Default shall have
occurred and be continuing, CoBank may sell, assign, transfer, endorse and
deliver the whole or, from time to time, any part of the Pledged Collateral at
public or private sale or on any securities exchange, for cash, upon credit or
for other property, for immediate or future delivery, and for such prices and
on such terms as CoBank in its discretion shall deem appropriate. CoBank shall
be authorized at any sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Pledged Collateral for their own account in compliance
with the Securities Act of 1933, and upon consummation of any such sale CoBank
shall have the right to assign, transfer, endorse and deliver to the purchaser
or purchasers thereof the Pledged Collateral so sold. Each such purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of the Pledgor, and the Pledgor hereby waives (to the extent
permitted by law) all rights of redemption, stay and/or appraisal which the
Pledgor now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. CoBank shall give the Pledgor ten
(10) days' written notice (which the Pledgor agrees is reasonable notification
within the meaning of Section 9-504(3) of the Uniform Commercial Code as in
effect in the State of Louisiana) of CoBank's intention to make any such public
or private sale or sales on any such securities exchange. Such notice, in case
of public sale, shall state the time and place for such sale, and, in the case
of sale on a securities exchange, shall state the exchange at which such sale
is to be made and the day on which the Pledged Collateral, or portion thereof;
will first be offered for sale at such
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Pledge Agreement/CCC
Loan No. T0362
exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as CoBank may fix and shall
state in the notice or publication (if any) of such sale.
At any such sale, the Pledged Collateral, or portion thereof to be
sold, may be sold in one lot as an entirety or in separate portions, as CoBank
in its sole discretion may determine. CoBank shall not be obligated to make any
sale of the Pledged Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of the Pledged Collateral may have been given.
At any public sale made pursuant to this Pledge Agreement, CoBank may bid for
or purchase, free from any right of redemption, stay and/or appraisal on the
part of the Pledgor (all said rights being also hereby waived and released to
the extent permitted by law), any part of or all the Pledged Collateral offered
for sale and may make payment on account thereof by using any claim then due
and payable to CoBank from the Pledgor as a credit against the purchase price,
and CoBank may, upon compliance with the terms of sale, hold, retain and
dispose of such property without further accountability to the Pledgor
therefor. For purposes hereof; a written agreement to purchase all or any part
of the Pledged Collateral shall be treated as a sale thereof; to the extent
permitted by law, CoBank shall be free to carry out such sale pursuant to such
agreement and the Pledgor shall not be entitled to the return of any Pledged
Collateral subject thereto, notwithstanding the fact that after CoBank shall
have entered into such an agreement all Events of Default may have been
remedied or the Secured Obligations may have been paid in full. As an
alternative to exercising the power of sale herein conferred upon it, CoBank
may proceed by suit or suits at law or in equity to foreclose this Pledge
Agreement and may sell the Pledged Collateral or any portion thereof pursuant
to judgment or decree of a court or courts having competent jurisdiction. Any
sale pursuant to this Section 8 shall be deemed to conform to commercially
reasonable standards as provided in Section 9-504(3) of the Uniform Commercial
Code as in effect in the State of Louisiana.
SECTION 9. COBANK APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby
constitutes and appoints CoBank during the term of any of the Secured
Obligations the attorney-in-fact of the Pledgor which appointment is
irrevocable and shall be an agency coupled with an interest. This power of
attorney is for the purpose, upon the occurrence of an Event of Default, of
carrying out the provisions of this Pledge Agreement and taking any action and
executing any instrument which CoBank may deem necessary or advisable to
accomplish the purposes hereof. Without limiting the generality of the
foregoing, CoBank shall have the right, after the occurrence of an Event of
Default, with full power of substitution either in CoBank's name or in the name
of the Pledgor, to ask for, demand, sue for, collect, receive, receipt and give
acquittance for any and all moneys due or to become due under and by virtue of
any Pledged Collateral, to endorse checks, drafts, orders and other instruments
for the payment of money payable to the Pledgor, representing any interest or
dividend or other distribution payable in respect of the Pledged Collateral or
any part thereof or on account thereof and to give full discharge for the same,
to settle, compromise, prosecute, or defend any action, claim or proceeding
with respect thereto, and to sell, assign, endorse, pledge,
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Pledge Agreement/CCC
Loan No. T0362
transfer and make any agreement respecting, or otherwise deal with, the same;
provided, however, that nothing herein contained shall be construed as
requiring or obligating CoBank to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by it, or to present or
file any claim or notice, or to take any action with respect to the Pledged
Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby, and no action taken by CoBank or
omitted to be taken with respect to the Pledged Collateral or any part thereof
shall give rise to any defense, counterclaim or offset in favor of the Pledgor
or to any claim or action against CoBank.
SECTION 10. EVENT OF DEFAULT. For purposes of this Pledge Agreement,
an "Event of Default" shall exist hereunder upon the happening of any of the
following events:
(i) any Event of Default under any of the Loan
Documents; or
(ii) any written representation or warranty made
in the CCC Limited Recourse Guaranty or in connection with
this Pledge Agreement shall prove to have been false or
misleading in any material respect as of the date made; or
(iii) the Pledgor shall default in the performance or
observance of any provisions of this Pledge Agreement;
provided, however, that in the event any default in the
performance or observance of Section 6(B) has occurred, such
default has continued for a period of thirty (30) days; or
(iv) the Pledgor from and after the date hereof
shall, or shall attempt to, encumber, subject to any further
pledge or security interest, sell, transfer or otherwise
dispose of any of the Pledged Collateral or any interest
therein except as otherwise permitted herein, or any of the
Pledged Collateral shall be attached or levied upon or seized
in any legal proceedings, or held by virtue of any lien; or
(v) this Pledge Agreement shall not or shall no
longer be effective in granting to CoBank a first priority
perfected lien on the Pledged Collateral.
SECTION 11. APPLICATION OF PROCEEDS OF SALE AND CASH. The proceeds of
any sale of the whole or any part of the Pledged Collateral, together with any
other moneys held by CoBank under the provisions of this Pledge Agreement,
shall be applied by CoBank as follows:
First: to the payment of all reasonable costs and expenses
incurred by CoBank in connection herewith, including but not limited
to, all court costs and the fees and disbursements of counsel for
CoBank in connection herewith, and to the
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Pledge Agreement/CCC
Loan No. T0362
repayment of all advances made by CoBank hereunder for the account of
the Pledgor, and the payment of all reasonable costs and expenses paid
or incurred by CoBank in connection with the exercise of any right or
remedy hereunder; and
Second: to the payment in full of the Secured Obligations.
Any amounts remaining after such application shall be promptly remitted to the
Pledgor, its successors, legal representatives or assigns, or as otherwise
provided by law.
SECTION 12. FURTHER ASSURANCES. The Pledgor agrees that it will join
with CoBank in executing and will file or record such notices, financing
statements or other documents as may be necessary to the perfection of the
security interest of CoBank hereunder, and as CoBank or its counsel may
reasonably request, such instruments to be in form and substance satisfactory
to CoBank and its counsel, and that the Pledgor will do such further acts and
things and execute and deliver to CoBank such additional conveyances,
assignments, agreements and instruments as CoBank may at any time reasonably
request in connection with the administration and enforcement of this Pledge
Agreement or relative to the Pledged Collateral or any part thereof or in order
to assure and confirm unto CoBank its rights, powers and remedies hereunder.
The Pledgor shall notify CoBank in writing promptly upon its acquisition of
capital stock of MCTC and shall execute and deliver to CoBank, upon request, an
amendment to this Pledge Agreement or such other instruments as CoBank may
request together with certificates evidencing such capital stock accompanied by
stock transfer powers executed in blank, and shall take such other action
requested by CoBank to effectuate the pledge of such capital stock to CoBank in
accordance with the provisions of this Pledge Agreement.
SECTION 13. NO WAIVER; ELECTION OF REMEDIES. No course of dealing
between the Pledgor and CoBank or failure on the part of CoBank to exercise,
and no delay on its part in exercising any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power, or remedy preclude any other or the further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder or under any of the Loan Documents are cumulative and in addition to
and are not exclusive of any other remedies provided by law. No enforcement of
any remedy shall constitute an election of remedies.
SECTION 14. GOVERNING LAW; AMENDMENTS. Except to the extent governed
by applicable federal law, this Pledge Agreement shall be governed by and
construed in accordance with the laws of the State of Louisiana without
reference to choice of law doctrine. This Pledge Agreement may not be amended
or modified nor may any of the Pledged Collateral be released, except in
writing signed by the parties hereto.
SECTION 15. Consent to jurisdiction. The Pledgor agrees that any legal
action or proceeding with respect to this Pledge Agreement may be brought in
the courts of the State
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Pledge Agreement/CCC
Loan No. T0362
of Louisiana or the United States of America for the Western District of
Louisiana, all as CoBank may elect. By execution of this Pledge Agreement, the
Pledgor hereby submits to each such jurisdiction, hereby expressly waiving any
objection it may have to the laying of venue by reason of its present or future
domicile. Nothing herein shall affect the right of CoBank to commence legal
proceedings or otherwise proceed against the Pledgor in any other jurisdiction
or to serve process in any manner permitted or required by law.
SECTION 16. BINDING AGREEMENT; ASSIGNMENT. This Pledge Agreement, and
the terms, covenants and conditions hereof; shall be binding upon and inure to
the benefit of CoBank and to all holders of the indebtedness secured hereby and
their respective successors and assigns and to the Pledgor and its successors,
legal representatives and assigns, except that the Pledgor shall not be
permitted to assign this Pledge Agreement or any interest herein or in the
Pledged Collateral, or any part thereof; or any cash or property held by CoBank
as collateral under this Pledge Agreement. No notice to or demand on the
Pledgor shall entitle the Pledgor to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 17. NOTICES. All notices hereunder shall be deemed to be duly
given upon delivery in the form and manner set forth in Section 7(E) of the CCC
Limited Recourse Guaranty to the parties at the following addresses (or such
other address for a party as shall be specified by like notice):
If to the Pledgor, as follows: Cameron Communications Corporation
One Lakeshore Drive, Suite 1495
P.O. Drawer 3104
Lake Charles, Louisiana 70602
Attn: Robert Piper; cc: Thomas G. Henning
Fax No.: (318) 439-0769
If to CoBank, as follows: CoBank, ACB
200 Galleria Parkway
Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No.: (404) 618-3202
SECTION 18. HEADINGS. Section headings used herein are for convenience
only and are not to affect the construction of or be taken into consideration
in interpreting this Pledge Agreement.
SECTION 19. COUNTERPARTS. This Pledge Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which when taken together constitute but one and the same instrument.
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Pledge Agreement/CCC
Loan No. T0362
SECTION 20. SEVERABILITY. If any one or more of the provisions
contained herein shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Pledge Agreement, but this Pledge
Agreement shall be construed as if such invalid, illegal or unenforceable
provisions had not been contained herein.
SECTION 21. WAIVER OF SUBROGATION. The Pledgor hereby irrevocably
waives any and all rights it may have to enforce any of CoBank's rights or
remedies or participate in any security now or hereafter held by CoBank,, and
any and all such other rights of subrogation, reimbursement, contribution or
indemnification against the Borrower, MCTC or any other person having any
manner of liability for the Borrower's or MCTC's obligations to CoBank arising
under the Loan Documents.
SECTION 22. TERMINATION; REINSTATEMENT. This Pledge Agreement shall
remain in full force and effect until (i) all Secured Obligations have been
paid in full, (ii) CoBank has no further commitment or obligation to make
advances to be secured hereby, and (iii) any preference period applicable to
payments made on or security given for the Secured Obligations has expired
under applicable bankruptcy and insolvency laws, at which time the Pledgor may
request a written instrument of termination be executed and delivered by a duly
authorized officer of CoBank. If so terminated, this Pledge Agreement and the
Pledgor's obligations hereunder shall be automatically reinstated if at any
time payment in whole or in part of any of the Secured Obligations is rescinded
or restored to the Borrower, MCTC or other payor or guarantor of the Secured
Obligations, or must be paid to any other person, upon the insolvency,
bankruptcy, liquidation, dissolution or reorganization of the Borrower, MCTC or
other payor or guarantor of the Secured Obligations, all as though such payment
had not been made.
SECTION 23. FCC MATTERS. Notwithstanding any other provision of this
Pledge Agreement:
(A) Any foreclosure on, sale, transfer or other
disposition of; or the exercise or relinquishment of any right to vote or
consent with respect to, any of the Pledged Collateral by CoBank shall be
pursuant to Section 310(d) of the Communications Act of 1934, as amended, and
the applicable rules and regulations thereunder, and, if and to the extent
required thereby, subject to the prior approval or notice to and non-opposition
of the FCC.
(B) If an Event of Default shall have occurred and be
continuing, the Pledgor shall take any action, and shall cause MCTC to take any
action, which CoBank may reasonably request in order to transfer and assign to
CoBank, or to such one or more third parties as CoBank may designate, or to a
combination of the foregoing, each FCC license or permit owned by MCTC. CoBank
is empowered, to the extent permitted by applicable law, to request the
appointment of a receiver from any court of competent jurisdiction. Such
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Pledge Agreement/CCC
Loan No. T0362
receiver may be instructed by CoBank to seek from the FCC an involuntary
transfer of control of each such FCC license or permit for the purpose of
seeking a bona fide purchaser to whom control will ultimately be transferred.
The Pledgor hereby agrees to authorize such an involuntary transfer of control
upon the request of the receiver so appointed and, if the Pledgor shall refuse
to authorize the transfer, its approval may be required by the court. Upon the
occurrence and during the continuance of an Event of Default, the Pledgor shall
further use its best efforts to assist in obtaining approval of the FCC and any
state regulatory bodies, if required, for any action or transactions
contemplated by this Pledge Agreement, including, without limitation, the
preparation, execution and filing with the FCC and any state regulatory bodies
of the assignor's or transferor's portion of any application or applications
for consent to the assignment of any FCC license or permit or transfer of
control necessary or appropriate under the rules and regulations of the FCC or
any state regulatory body for approval or non-opposition of the transfer or
assignment of any portion of the Pledged Collateral, together with any FCC
license or permit.
(C) The Pledgor acknowledges that the assignment or
transfer of each FCC license or permit is integral to CoBank's realization of
the value of the Pledged Collateral, that there is no adequate remedy at law
for failure by the Pledgor to comply with the provisions of this Section 23 and
that such failure would not be adequately compensable in damages, and therefore
agrees, without limiting the right of CoBank to seek and obtain specific
performance of other obligations of the Pledgor contained in this Pledge
Agreement, that the agreements contained in this Section 23 may be specifically
enforced.
(D) In accordance with the requirements of 47 C.F.R.
Section 22.917, or any successor provision thereto, CoBank shall notify the
Pledgor and the FCC in writing at least ten (10) days prior to the date on
which CoBank intends to exercise its rights, pursuant to this Pledge Agreement
or any of the other Loan Documents, by foreclosing on, or otherwise disposing
of; any Pledged Collateral in connection with which such notice is required
pursuant to 47 C.F.R. Section 22.917 or any successor provision thereto.
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<PAGE> 12
Pledge Agreement/CCC
Loan No. T0362
THUS DONE AND SIGNED, in several counterparts at the places
and on the dates indicated below, and in the presence of the
respective Notaries Public and the respective undersigned witnesses
indicated below, by duly authorized officers of the respective
parties, after a due reading of the whole.
At Lake Charles, Louisiana, on April 20, 1995.
CAMERON COMMUNICATIONS CORPORATION
By: /s/ WILLIAM L. HENNING, JR.
--------------------------------
Name: William L. Henning, Jr.
Title: President
Attest: /s/ THOMAS G. HENNING
---------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
Witnesses to all signatures:
/s/ SHEILA KING
- --------------------
Witness
/s/ CAROLYN NUNEZ
- --------------------
Witness
[ILLEGIBLE]
- --------------------
Notary Public
My commission expires: Lifetime Commission
[NOTARIAL SEAL]
(Signatures Continued on Next Page)
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<PAGE> 13
Pledge Agreement/CCC
Loan No. T0362
(Signatures Continued from Previous Page)
At Atlanta, Georgia, on April 26, 1995.
COBANK, ACB
By: /s/ MARY KAY DEERING
---------------------------------
Name: Mary Kay Deering
Title: Assistant Vice President
Witnesses to signature:
[ILLEGIBLE]
- ------------------------
Witness
[ILLEGIBLE]
- ------------------------
Witness
/s/ SANDRA S. JONES
- ------------------------
Notary Public
My commission expires: Notary Public, Paulding County, Georgia
My Commission Expires July 14, 1997
[NOTARIAL SEAL]
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<PAGE> 14
SCHEDULE 1
to
PLEDGE AGREEMENT
<TABLE>
<CAPTION>
Number of Percentage of Total
Shares Owned Certificate Outstanding Shares
Entity by the Pledgor Number(s) Owned by the Pledgor
- ------ -------------- ----------- --------------------
<S> <C> <C> <C>
Mercury Cellular 96%
Telephone Company 12,301 2
</TABLE>
<PAGE> 1
EXHIBIT 4.58
CTC
LOAN NO. T0362
PLEDGE AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the respective undersigned Notaries Public, and in the presence
of the undersigned respective competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is made as of April 20,
1995, by and between MERCURY, INC., as pledgor (the "Pledgor"), and COBANK,
ACB, as pledgee ("CoBank").
R E C I T A L S:
WHEREAS, the Pledgor owns 4% of the capital stock of Mercury Cellular
Telephone Company ("MCTC"); and
WHEREAS, CoBank and CTC Financial, Inc. (the "Borrower") have entered
into that certain Loan Agreement, dated of even date herewith (as the same may
be amended, supplemented, extended or restated from time to time, the "Loan
Agreement"), providing for a loan of up to $18,000,000 (the "Loan"); and
WHEREAS, the proceeds of the Loan will be reloaned by the Borrower to
MCTC for the purposes set forth in the Loan Agreement; and
WHEREAS, as an inducement to CoBank to execute the Loan Agreement and to
make the Loan, the Pledgor has made that certain Limited Recourse Continuing
Guaranty, dated as of even date herewith (as the same may be amended,
supplemented, extended or restated from time to time, the "Mercury Limited
Recourse Guaranty"), for the benefit of CoBank; and
WHEREAS, to secure the Pledgor's obligations to CoBank under the Mercury
Limited Recourse Guaranty and the "Obligations" (as therein defined), the
Pledgor has
<PAGE> 2
Pledge Agreement/Mercury
Loan No. T0362
agreed to pledge to CoBank the hereinafter defined Pledged Collateral on the
terms and conditions set forth in this Pledge Agreement;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the Pledgor and CoBank agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used in this Pledge Agreement,
unless otherwise defined herein, shall have the meanings assigned to them in
the Loan Agreement.
SECTION 2. PLEDGE. To secure the payment or performance of the
Obligations, including, without limitation, the payment of all principal,
interest and other amounts becoming due and payable, whether by acceleration or
otherwise, under the Note and the MCTC Note and the performance by the Pledgor
under the Mercury Limited Recourse Guaranty (collectively, including the
Obligations, the "Secured Obligations"), the Pledgor hereby pledges,
hypothecates, assigns, transfers, sets over and delivers unto CoBank, and
grants to CoBank a lien upon and a security interest in (a) all now owned or
hereafter acquired capital stock of MCTC; and (b) any cash, additional shares
or securities or other property at any time and from time to time receivable or
otherwise distributable in respect of, in exchange for, or in liquidation of,
any and all such stock, together with the proceeds thereof (all such shares,
capital stock, securities, cash, property and other proceeds thereof,
collectively, the "Pledged Collateral"). Upon delivery to CoBank, (i) any
securities now or hereafter included in the Pledged Collateral (the "Pledged
Securities") shall be accompanied by duly executed stock powers in blank and by
such other instruments or documents as CoBank or its counsel may reasonably
request and (ii) all other property comprising part of the Pledged Collateral
shall be accompanied by proper instruments of assignment duly executed by the
Pledgor and by such other instruments or documents as CoBank or its counsel may
reasonably request. Each delivery of certificates for such Pledged Securities
shall be accompanied by a schedule showing the number of shares and the numbers
of the certificates therefor, theretofore and then being pledged hereunder,
which schedules shall be attached hereto as Schedule 1 and made a part hereof.
Each schedule so delivered shall supersede any prior schedules so delivered.
TO HAVE AND TO HOLD the Pledged Collateral, together with all rights,
titles, interests, powers, privileges and preferences pertaining or incidental
thereto, unto CoBank, its successors and assigns, forever, subject, however, to
the terms, covenants and conditions hereinafter set forth.
SECTION 3. REPRESENTATIONS AND WARRANTIES. The Pledgor hereby represents
and warrants that, except for security interests granted to CoBank, including
the interest herein given, the Pledgor is the legal, equitable and beneficial
owner of the Pledged Collateral, holds the same free and clear of all liens,
charges, encumbrances and security interests of every kind and nature, and will
make no voluntary assignment, pledge, mortgage, hypothecation or transfer of
the Pledged Collateral (except as may be permitted under this
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<PAGE> 3
Pledge Agreement/Mercury
Loan No. T0362
Pledge Agreement with respect to cash dividends); that the Pledgor has good
right and legal authority to pledge the Pledged Collateral in the manner hereby
done or contemplated and will defend its title thereto against the claims of
all persons whomsoever; that the execution and delivery of this Pledge
Agreement, and the performance of its terms, will not result in any violation
of any provision of the Pledgor's articles of incorporation or bylaws, or
violate or constitute a default under the terms of any agreement, indenture or
other instrument, license, judgment, decree, order, law, statute, ordinance or
other governmental rule or regulation applicable to the Pledgor or any of the
Pledgor's property; that no approval, consent or authorization of any
governmental or regulatory authority which has not heretofore been obtained is
necessary for the execution or delivery by the Pledgor of this Pledge Agreement
or for the performance by the Pledgor of any of the terms or conditions hereof
or thereof; and that this pledge is effective to vest in CoBank the rights of
the Pledgor in the Pledged Collateral as set forth herein.
SECTION 4. STOCK OF MCTC. The Pledgor represents that it is the
registered and beneficial owner of the shares and percentage of the capital
stock of MCTC set forth on Schedule 1 hereto, which stock is owned free and
clear of all liens, warrants, options, rights to purchase, rights of first
refusal and other interests of any person other than CoBank. The outstanding
capital stock of MCTC has been duly authorized and is validly issued, fully
paid and non-assessable.
SECTION 5. ADDITIONAL SHARES OF CAPITAL STOCK; TRANSFER. Without the
prior written consent of CoBank, the Pledgor will not (a) consent to or approve
of the issuance of any additional shares of any class of capital stock by MCTC
or to any options, subscription rights, warrants or other instruments in
respect thereof, (b) consent to or approve of the establishment of any
additional class or classes of capital stock by MCTC or the issuance of any
shares thereunder, (c) consent to or approve of any merger, consolidation,
reorganization or any sale or lease of substantially all the assets of MCTC, or
(d) consent to or approve the repurchase or redemption by MCTC of any of its
capital stock.
SECTION 6. COVENANTS WITH RESPECT TO COLLATERAL. The Pledgor hereby
covenants and agrees with respect to the Pledged Collateral as follows:
(A) The Pledgor will cause any additional securities issued by
MCTC or property issued by MCTC with respect to the Pledged Collateral,
whether for value paid by the Pledgor or otherwise, to be forthwith
deposited and pledged hereunder and delivered to CoBank, in each case
accompanied by proper instruments of assignment duly executed; and
(B) The Pledgor will defend its title to the Pledged
Collateral against the claims of all persons whomsoever.
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Pledge Agreement/Mercury
Loan No. T0362
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(A) In the absence of the occurrence of an Event of Default.
In the absence of the occurrence and continuation of an Event of Default
(as hereinafter defined):
(i) The Pledgor shall be entitled to exercise any and
all voting and/or consensual rights and powers accruing to an
owner of the Pledged Securities or any part thereof for any
purpose not inconsistent with the terms of this Pledge Agreement
(including Section 5) or any agreement giving rise to any of the
Obligations; provided, that the Pledgor shall not exercise, or
refrain from exercising, any such right or power if any such
action would have a material adverse effect on the value of such
Pledged Securities or any part thereof;
(ii) Beyond the exercise of reasonable care to assure
the safe custody of the Pledged Collateral while held hereunder,
CoBank shall have no duty or liability to preserve rights
pertaining thereto and shall be relieved of all responsibility
for the Pledged Collateral upon surrendering it or tendering
surrender of it to the Pledgor;
(iii) The Pledgor shall not be entitled to retain cash
dividends paid on Pledged Securities without the prior written
consent of CoBank if such payment is in violation of the
limitations on dividends set forth in Section 6(J) of the MCTC
Guaranty. CoBank may require any such cash dividends to be
delivered to CoBank as additional security hereunder or applied
toward the satisfaction of the Secured Obligations;
(iv) Any and all stock and/or liquidating dividends, other
distributions in property, return of capital or other
distributions made on or in respect of Pledged Securities,
whether resulting from an increase or reduction of capital, a
subdivision, combination or reclassification of outstanding
capital stock of any corporation, capital stock of which is
pledged hereunder, or received in exchange for Pledged Securities
or any part thereof or as a result of any merger, consolidation,
acquisition, spin-off, split-off or options, warrants, or rights,
whether as an addition to, or in substitution or in exchange for,
any of the Pledged Collateral, or otherwise, or dividends or
distribution of any sort, or other exchange of assets or on the
liquidation, whether voluntary or involuntary, of any issuer of
the Pledged Securities, or otherwise, shall be and become part of
the Pledged Collateral pledged hereunder and, if received by the
Pledgor, then the Pledgor shall accept the same as CoBank's
agent, in trust for CoBank, and shall deliver them forthwith to
CoBank in the exact form received with, as applicable, the
Pledgor's
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<PAGE> 5
Pledge Agreement/Mercury
Loan No. T0362
endorsement when necessary, or appropriate stock powers duly
executed in blank, to be held by CoBank, subject to the terms
hereof; as part of the Pledged Collateral; and
(v) CoBank shall execute and deliver to the Pledgor, or
cause to be executed and delivered to the Pledgor, as
appropriate, all such proxies, powers of attorney, dividend
orders and other instruments as the Pledgor reasonably may
request for the purpose of enabling the Pledgor to exercise the
voting and/or consensual rights and powers which the Pledgor is
entitled to exercise pursuant to paragraph (A)(i) above and/or to
receive any dividends which the Pledgor is authorized to retain
pursuant to paragraph (A)(iii) above.
(B) Upon Default. Upon the occurrence of an Event of Default,
all rights of the Pledgor to exercise the voting and/or consensual
rights and powers which the Pledgor is entitled to exercise pursuant to
paragraph (A)(i) above shall become vested in CoBank upon one day's
prior written notice, which shall have the sole and exclusive right and
authority to exercise such voting and/or consensual rights and powers
which the Pledgor shall otherwise be entitled to exercise pursuant to
paragraph (A)(i) above. Upon the occurrence of an Event of Default, all
dividends shall be delivered to CoBank as additional security hereunder
or applied toward satisfaction of the Secured Obligations.
SECTION 8. REMEDIES UPON DEFAULT. If an Event of Default shall have
occurred and be continuing, CoBank may sell, assign, transfer, endorse and
deliver the whole or, from time to time, any part of the Pledged Collateral at
public or private sale or on any securities exchange, for cash, upon credit or
for other property, for immediate or future delivery, and for such prices and
on such terms as CoBank in its discretion shall deem appropriate. CoBank shall
be authorized at any sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Pledged Collateral for their own account in compliance
with the Securities Act of 1933, and upon consummation of any such sale CoBank
shall have the right to assign, transfer, endorse and deliver to the purchaser
or purchasers thereof the Pledged Collateral so sold. Each such purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of the Pledgor, and the Pledgor hereby waives (to the extent
permitted by law) all rights of redemption, stay and/or appraisal which the
Pledgor now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. CoBank shall give the Pledgor ten
(10) days' written notice (which the Pledgor agrees is reasonable notification
within the meaning of Section 9-504(3) of the Uniform Commercial Code as in
effect in the State of Louisiana) of CoBank's intention to make any such public
or private sale or sales on any such securities exchange. Such notice, in case
of public sale, shall state the time and place for such sale, and, in the case
of sale on a securities exchange, shall state the exchange at which such sale
is to be made and the day on which the Pledged Collateral, or portion thereof;
will first be offered for sale at such
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<PAGE> 6
Pledge Agreement/Mercury
Loan No. T0362
exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as CoBank may fix and shall
state in the notice or publication (if any) of such sale.
At any such sale, the Pledged Collateral, or portion thereof to be sold,
may be sold in one lot as an entirety or in separate portions, as CoBank in its
sole discretion may determine. CoBank shall not be obligated to make any sale
of the Pledged Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of the Pledged Collateral may have been given. At any
public sale made pursuant to this Pledge Agreement, CoBank may bid for or
purchase, free from any right of redemption, stay and/or appraisal on the part
of the Pledgor (all said rights being also hereby waived and released to the
extent permitted by law), any part of or all the Pledged Collateral offered for
sale and may make payment on account thereof by using any claim then due and
payable to CoBank from the Pledgor as a credit against the purchase price, and
CoBank may, upon compliance with the terms of sale, hold, retain and dispose of
such property without further accountability to the Pledgor therefor. For
purposes hereof; a written agreement to purchase all or any part of the Pledged
Collateral shall be treated as a sale thereof; to the extent permitted by law,
CoBank shall be free to carry out such sale pursuant to such agreement and the
Pledgor shall not be entitled to the return of any Pledged Collateral subject
thereto, notwithstanding the fact that after CoBank shall have entered into
such an agreement all Events of Default may have been remedied or the Secured
Obligations may have been paid in full. As an alternative to exercising the
power of sale herein conferred upon it, CoBank may proceed by suit or suits at
law or in equity to foreclose this Pledge Agreement and may sell the Pledged
Collateral or any portion thereof pursuant to judgment or decree of a court or
courts having competent jurisdiction. Any sale pursuant to this Section 8 shall
be deemed to conform to commercially reasonable standards as provided in
Section 9-504(3) of the Uniform Commercial Code as in effect in the State of
Louisiana.
SECTION 9. COBANK APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby
constitutes and appoints CoBank during the term of any of the Secured
Obligations the attorney-in-fact of the Pledgor which appointment is
irrevocable and shall be an agency coupled with an interest. This power of
attorney is for the purpose, upon the occurrence of an Event of Default, of
carrying out the provisions of this Pledge Agreement and taking any action and
executing any instrument which CoBank may deem necessary or advisable to
accomplish the purposes hereof. Without limiting the generality of the
foregoing, CoBank shall have the right, after the occurrence of an Event of
Default, with full power of substitution either in CoBank's name or in the name
of the Pledgor, to ask for, demand, sue for, collect, receive, receipt and give
acquittance for any and all moneys due or to become due under and by virtue of
any Pledged Collateral, to endorse checks, drafts, orders and other instruments
for the payment of money payable to the Pledgor, representing any interest or
dividend or other distribution payable in respect of the Pledged Collateral or
any part thereof or on account thereof and to give full discharge for the same,
to settle, compromise, prosecute, or defend any action, claim or proceeding
with respect thereto, and to sell, assign, endorse, pledge,
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<PAGE> 7
Pledge Agreement/Mercury
Loan No. T0362
transfer and make any agreement respecting, or otherwise deal with, the same;
provided, however, that nothing herein contained shall be construed as
requiring or obligating CoBank to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by it, or to present or
file any claim or notice, or to take any action with respect to the Pledged
Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby, and no action taken by CoBank or
omitted to be taken with respect to the Pledged Collateral or any part thereof
shall give rise to any defense, counterclaim or offset in favor of the Pledgor
or to any claim or action against CoBank.
SECTION 10. EVENT OF DEFAULT. For purposes of this Pledge Agreement, an
"Event of Default" shall exist hereunder upon the happening of any of the
following events:
(i) any Event of Default under any of the Loan
Documents; or
(ii) any written representation or warranty made in the
Mercury Limited Recourse Guaranty or in connection with this
Pledge Agreement shall prove to have been false or misleading in
any material respect as of the date made; or
(iii) the Pledgor shall default in the performance or
observance of any provisions of this Pledge Agreement; provided,
however, that in the event any default in the performance or
observance of Section 6(B) has occurred, such default has
continued for a period of thirty (30) days; or
(iv) the Pledgor from and after the date hereof shall,
or shall attempt to, encumber, subject to any further pledge or
security interest, sell, transfer or otherwise dispose of any of
the Pledged Collateral or any interest therein except as
otherwise permitted herein, or any of the Pledged Collateral
shall be attached or levied upon or seized in any legal
proceedings, or held by virtue of any lien; or
(v) this Pledge Agreement shall not or shall no longer
be effective in granting to CoBank a first priority perfected
lien on the Pledged Collateral.
SECTION 11. APPLICATION OF PROCEEDS OF SALE AND CASH. The proceeds of
any sale of the whole or any part of the Pledged Collateral, together with any
other moneys held by CoBank under the provisions of this Pledge Agreement,
shall be applied by CoBank as follows:
First: to the payment of all reasonable costs and expenses
incurred by CoBank in connection herewith, including but not limited to,
all court costs and the fees and disbursements of counsel for CoBank in
connection herewith, and to the
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<PAGE> 8
Pledge Agreement/Mercury
Loan No. T0362
repayment of all advances made by CoBank hereunder for the account of
the Pledgor, and the payment of all reasonable costs and expenses paid
or incurred by CoBank in connection with the exercise of any right or
remedy hereunder; and
Second: to the payment in full of the Secured Obligations.
Any amounts remaining after such application shall be promptly remitted to the
Pledgor, its successors, legal representatives or assigns, or as otherwise
provided by law.
SECTION 12. FURTHER ASSURANCES. The Pledgor agrees that it will join
with CoBank in executing and will file or record such notices, financing
statements or other documents as may be necessary to the perfection of the
security interest of CoBank hereunder, and as CoBank or its counsel may
reasonably request, such instruments to be in form and substance satisfactory
to CoBank and its counsel, and that the Pledgor will do such further acts and
things and execute and deliver to CoBank such additional conveyances,
assignments, agreements and instruments as CoBank may at any time reasonably
request in connection with the administration and enforcement of this Pledge
Agreement or relative to the Pledged Collateral or any part thereof or in order
to assure and confirm unto CoBank its rights, powers and remedies hereunder.
The Pledgor shall notify CoBank in writing promptly upon its acquisition of
capital stock of MCTC and shall execute and deliver to CoBank, upon request, an
amendment to this Pledge Agreement or such other instruments as CoBank may
request together with certificates evidencing such capital stock accompanied by
stock transfer powers executed in blank, and shall take such other action
requested by CoBank to effectuate the pledge of such capital stock to CoBank in
accordance with the provisions of this Pledge Agreement.
SECTION 13. NO WAIVER; ELECTION OF REMEDIES. No course of dealing
between the Pledgor and CoBank or failure on the part of CoBank to exercise,
and no delay on its part in exercising any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power, or remedy preclude any other or the further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder or under any of the Loan Documents are cumulative and in addition to
and are not exclusive of any other remedies provided by law. No enforcement of
any remedy shall constitute an election of remedies.
SECTION 14. GOVERNING LAW; AMENDMENTS. Except to the extent governed by
applicable federal law, this Pledge Agreement shall be governed by and
construed in accordance with the laws of the State of Louisiana without
reference to choice of law doctrine. This Pledge Agreement may not be amended
or modified nor may any of the Pledged Collateral be released, except in
writing signed by the parties hereto.
SECTION 15. CONSENT TO JURISDICTION. The Pledgor agrees that any legal
action or proceeding with respect to this Pledge Agreement may be brought in
the courts of the State
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<PAGE> 9
Pledge Agreement/Mercury
Loan No. T0362
of Louisiana or the United States of America for the Western District of
Louisiana, all as CoBank may elect. By execution of this Pledge Agreement, the
Pledgor hereby submits to each such jurisdiction, hereby expressly waiving any
objection it may have to the laying of venue by reason of its present or future
domicile. Nothing herein shall affect the right of CoBank to commence legal
proceedings or otherwise proceed against the Pledgor in any other jurisdiction
or to serve process in any manner permitted or required by law.
SECTION 16. BINDING AGREEMENT; ASSIGNMENT. This Pledge Agreement, and
the terms, covenants and conditions hereof, shall be binding upon and inure to
the benefit of CoBank and to all holders of the indebtedness secured hereby and
their respective successors and assigns and to the Pledgor and its successors,
legal representatives and assigns, except that the Pledgor shall not be
permitted to assign this Pledge Agreement or any interest herein or in the
Pledged Collateral, or any part thereof, or any cash or property held by CoBank
as collateral under this Pledge Agreement. No notice to or demand on the
Pledgor shall entitle the Pledgor to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 17. NOTICES. All notices hereunder shall be deemed to be duly
given upon delivery in the form and manner set forth in Section 7(E) of the
Mercury Limited Recourse Guaranty to the parties at the following addresses (or
such other address for a party as shall be specified by like notice):
If to the Pledgor, as follows: Mercury, Inc.
One Lakeshore Drive, Suite 1495
P.O. Drawer 3104
Lake Charles, Louisiana 70602
Attn: Robert Piper;
cc: Thomas G. Henning
Fax No.: (318) 439-0769
If to CoBank, as follows: CoBank, ACB
200 Galleria Parkway
Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No.: (404) 618-3202
SECTION 18. HEADINGS. Section headings used herein are for convenience
only and are not to affect the construction of or be taken into consideration
in interpreting this Pledge Agreement.
SECTION 19. COUNTERPARTS. This Pledge Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which when taken together constitute but one and the same instrument.
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Pledge Agreement/Mercury
Loan No. T0362
SECTION 20. SEVERABILITY. If any one or more of the provisions contained
herein shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Pledge Agreement, but this Pledge Agreement shall
be construed as if such invalid, illegal or unenforceable provisions had not
been contained herein.
SECTION 21. WAIVER OF SUBROGATION. The Pledgor hereby irrevocably waives
any and all rights it may have to enforce any of CoBank's rights or remedies or
participate in any security now or hereafter held by CoBank, and any and all
such other rights of subrogation, reimbursement, contribution or
indemnification against the Borrower, MCTC or any other person having any
manner of liability for the Borrower's or MCTC's obligations to CoBank arising
under the Loan Documents.
SECTION 22. TERMINATION; REINSTATEMENT. This Pledge Agreement shall
remain in full force and effect until (i) all Secured Obligations have been
paid in full, (ii) CoBank has no further commitment or obligation to make
advances to be secured hereby, and (iii) any preference period applicable to
payments made on or security given for the Secured Obligations has expired
under applicable bankruptcy and insolvency laws, at which time the Pledgor may
request a written instrument of termination be executed and delivered by a duly
authorized officer of CoBank. If so terminated, this Pledge Agreement and the
Pledgor's obligations hereunder shall be automatically reinstated if at any
time payment in whole or in part of any of the Secured Obligations is rescinded
or restored to the Borrower, MCTC or other payor or guarantor of the Secured
Obligations, or must be paid to any other person, upon the insolvency,
bankruptcy, liquidation, dissolution or reorganization of the Borrower, MCTC or
other payor or guarantor of the Secured Obligations, all as though such payment
had not been made.
SECTION 23. FCC MATTERS. Notwithstanding any other provision of this
Pledge Agreement:
(A) Any foreclosure on, sale, transfer or other disposition
of, or the exercise or relinquishment of any right to vote or consent with
respect to, any of the Pledged Collateral by CoBank shall be pursuant to
Section 310(d) of the Communications Act of 1934, as amended, and the
applicable rules and regulations thereunder, and, if and to the extent required
thereby, subject to the prior approval or notice to and non-opposition of the
FCC.
(B) If an Event of Default shall have occurred and be
continuing, the Pledgor shall take any action, and shall cause MCTC to take any
action, which CoBank may reasonably request in order to transfer and assign to
CoBank, or to such one or more third parties as CoBank may designate, or to a
combination of the foregoing, each FCC license or permit owned by MCTC. CoBank
is empowered, to the extent permitted by applicable law, to request the
appointment of a receiver from any court of competent jurisdiction. Such
-10-
<PAGE> 11
Pledge Agreement/Mercury
Loan No. T0362
receiver may be instructed by CoBank to seek from the FCC an involuntary
transfer of control of each such FCC license or permit for the purpose of
seeking a bona fide purchaser to whom control will ultimately be transferred.
The Pledgor hereby agrees to authorize such an involuntary transfer of control
upon the request of the receiver so appointed and, if the Pledgor shall refuse
to authorize the transfer, its approval may be required by the court. Upon the
occurrence and during the continuance of an Event of Default, the Pledgor shall
further use its best efforts to assist in obtaining approval of the FCC and any
state regulatory bodies, if required, for any action or transactions
contemplated by this Pledge Agreement, including, without limitation, the
preparation, execution and filing with the FCC and any state regulatory bodies
of the assignor's or transferor's portion of any application or applications
for consent to the assignment of any FCC license or permit or transfer of
control necessary or appropriate under the rules and regulations of the FCC or
any state regulatory body for approval or non-opposition of the transfer or
assignment of any portion of the Pledged Collateral, together with any FCC
license or permit.
(C) The Pledgor acknowledges that the assignment or transfer
of each FCC license or permit is integral to CoBank's realization of the value
of the Pledged Collateral, that there is no adequate remedy at law for failure
by the Pledgor to comply with the provisions of this Section 23 and that such
failure would not be adequately compensable in damages, and therefore agrees,
without limiting the right of CoBank to seek and obtain specific performance of
other obligations of the Pledgor contained in this Pledge Agreement, that the
agreements contained in this Section 23 may be specifically enforced.
(D) In accordance with the requirements of 47 C.F.R. Section
22.917, or any successor provision thereto, CoBank shall notify the Pledgor and
the FCC in writing at least ten (10) days prior to the date on which CoBank
intends to exercise its rights, pursuant to this Pledge Agreement or any of the
other Loan Documents, by foreclosing on, or otherwise disposing of; any Pledged
Collateral in connection with which such notice is required pursuant to 47
C.F.R. Section 22.917 or any successor provision thereto.
-11-
<PAGE> 12
Pledge Agreement/Mercury
Loan No. T0362
THUS DONE AND SIGNED, in several counterparts at the places and on the
dates indicated below, and in the presence of the respective Notaries Public
and the respective undersigned witnesses indicated below, by duly authorized
officers of the respective parties, after a due reading of the whole.
At Lake Charles, Louisiana, on April 20, 1995.
MERCURY, INC.
By: /s/ WILLIAM L. HENNING, JR.
--------------------------------------
Name: William L. Henning, Jr.
Title: President
Attest: /s/ THOMAS G. HENNING
----------------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
Witnesses to all signatures:
/s/ SHEILA KING
- ------------------------------
Witness
/s/ CAROLYN NUNEZ
- ------------------------------
Witness
/s/ SANDRA DIAZ
- ------------------------------
Notary Public
My commission expires: lifetime commission
-------------------
[NOTARIAL SEAL]
(Signatures Continued on Next Page)
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<PAGE> 13
Pledge Agreement/Mercury
Loan No. T0362
(Signatures Continued from Previous Page)
At Atlanta, Georgia, on April 26, 1995.
COBANK, ACB
By: /s/ MARY KAY DEERING
-------------------------------------
Name: Mary Kay Deering
Title: Assistant Vice President
Witnesses to signature:
/s/ [ILLEGIBLE]
- ------------------------------
Witness
/s/ MARA MOORE
- ------------------------------
Witness
/s/ SANDRA S. JONES
- ------------------------------
Notary Public
My commission expires: July 14, 1997
-------------
[NOTARIAL SEAL]
-13-
<PAGE> 14
SCHEDULE 1
TO
PLEDGE AGREEMENT
<TABLE>
<CAPTION>
Number of Percentage of Total
Shares Owned Certificate Outstanding Shares
Entity by the Pledgor Number(s) Owned by the Pledgor
- ------ -------------- ----------- --------------------
<S> <C> <C> <C>
Mercury Cellular 4%
Telephone Company 517 3 & 4
</TABLE>
<PAGE> 15
CTC
LOAN NO. T0362
PROMISSORY NOTE
CTC FINANCIAL, INC.
LAKE CHARLES, LOUISIANA
$18,000,000 DATED: APRIL 20, 1995
FOR VALUE RECEIVED, CTC FINANCIAL, INC. (the "Borrower"), promises to
pay to the order of COBANK, ACB (the "Payee"), at the times and in the manner
set forth in that certain Loan Agreement, dated as of even date herewith, and
numbered T0362, by and between the Borrower and the Payee (as that agreement
may be amended, supplemented, extended or restated from time to time, the "Loan
Agreement"), the principal sum of EIGHTEEN MILLION DOLLARS ($18,000,000) or
such lesser amount as may be advanced hereunder, together with interest on the
unpaid principal balance hereof at the rate or rates provided for in the Loan
Agreement.
This Note is given for one or more advances to be made by the Payee to
the Borrower pursuant to the Loan Agreement, all of the terms and provisions of
which are incorporated herein by reference. Advances, accrued interest and
payments shall be posted by the Payee upon an appropriate accounting record,
which record (and all computer printouts thereof) shall constitute prima facie
evidence of the outstanding principal and interest on the advances.
The Borrower hereby waives presentment for payment, demand, protest, and
notice of dishonor and nonpayment of this Note, and all defenses on the ground
of delay or of any extension of time for the payment hereof which may be
hereafter given by the holder or holders hereof to it or to anyone who has
assumed the payment of this Note, and it is specifically agreed that the
obligations of the Borrower shall not be in anywise affected or altered to the
prejudice of the holder or holders hereof by reason of the assumption of
payment of the same by any other person or entity.
Should this Note be placed in the hands of an attorney for collection or
the services of any attorney become necessary in connection with enforcing its
provisions, the Borrower agrees to pay reasonable attorneys' fees, together
with all costs and expenses incident thereto, to the extent allowed by law.
Except to the extent governed by applicable federal law, this Note shall be
governed by and construed in accordance with the laws of the State of Louisiana
without reference to choice of law doctrine.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed,
attested and delivered under seal by its duly authorized officers as of the
date first shown above.
CTC FINANCIAL, INC.
By: /s/ WILLIAM L. HENNING, JR.
--------------------------------------
Name: William L. Henning, Jr.
Title: President
Attest: /s/ THOMAS G. HENNING
----------------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
<PAGE> 1
EXHIBIT 4.59
CTC
LOAN NO. T0362
SECURITY AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF COBB )
BEFORE the respective undersigned Notaries Public, and in the presence
of the respective undersigned competent witnesses, personally came and appeared
the parties listed below, who, after being duly sworn, did state:
THIS SECURITY AGREEMENT (this "Security Agreement") is made and entered
into as of April 20, 1995, by and between MERCURY CELLULAR TELEPHONE COMPANY
(the "Debtor") having its place of business (or chief executive office if more
than one place of business) located at P.O. Box 3709, Lake Charles, Louisiana
70602 and whose taxpayer identification number is 72-1099261, and COBANK, ACB
(the "Secured Party"), whose mailing address is 200 Galleria Parkway, Suite
1900, Atlanta, Georgia 30339.
SECTION 1. GRANT OF SECURITY INTEREST. For valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Debtor hereby
grants to the Secured Party a security interest in all of the following
property, wherever located and whether now existing or hereafter acquired,
together with all accessions and additions thereto, and all products and
proceeds thereof:
accounts; inventory (including, without limitation, returned or
repossessed goods); chattel paper; instruments (including, without
limitation, certificated securities); letters of credit; contracts and
contract rights; leases; documents; equipment (including, without
limitation, telecommunications and radio transmitting and receiving
equipment, antennae, towers, microwave communication equipment,
machinery, computers, parts, tools, implements, poles, posts,
cross-arms, conduits, ducts, lines (whether underground or overhead or
otherwise), wires, cables, exchanges, switches (including, without
limitation, host switches and remote switches), desks, testboards,
racks, frames, motors, generators, batteries, items of central office
equipment, pay stations, protectors, subscriber equipment, instruments,
connections and appliances, office furniture and equipment and work
equipment and any and all other
<PAGE> 2
Security Agreement/MCTC
Loan No. T0362
equipment used, useful or acquired for use in the business of the Debtor
or the operation of the Debtor's properties); fixtures; general
intangibles (including, without limitation, permits, licenses, grants,
franchises, privileges, permissions, certificates and choses or things
in action, litigation rights and resulting judgments, goodwill, patents,
trademarks and other intellectual property, tax refunds, miscellaneous
rights to payment, entitlements, uncertificated investment securities
and investments, margin accounts, computer programs, invoices, books,
records and other information relating to or arising out of the Debtor's
business, and, to the extent permitted by law, all licenses and permits
issued by the Federal Communications Commission (the "FCC")); and, to
the extent not covered by the above, all other personal property of the
Debtor of every type and description, including, without limitation,
interests or claims in or under any policy of insurance, tort claims,
deposit accounts, money, and judgments; provided, however, that no
security interest is granted in licenses, permits, leases, franchises,
privileges, permissions and grants which by their terms or by reason of
applicable law would become void or voidable if a security interest
therein were granted or if the granting of a security interest therein
would violate any law, rule, regulation or order of any governmental
body or regulatory authority (collectively, the "Collateral").
Where applicable, all terms used herein shall have the same meaning as set
forth in the Uniform Commercial Code as codified at Title 10 of the Louisiana
Revised Statutes Annotated, as amended (the "UCC").
SECTION 2. OBLIGATIONS. The security interest granted hereunder shall
secure the following obligations (the "Obligations"): (a) all payments or
performances to be made by CTC Financial, Inc. (the "Borrower") under the "Loan
Documents" as defined in that certain Loan Agreement, dated as of even date
herewith, between the Borrower and the Secured Party (as the same may be
amended, supplemented, extended or restated from time to time, the "Loan
Agreement"), including, without limitation, the payment of all principal,
interest and other amounts becoming due and payable, whether by acceleration or
otherwise, under that certain Promissory Note, dated of even date herewith,
made by the Borrower to the order of the Secured party in the original
principal amount of $18,000,000 (as the same may be amended, supplemented,
extended, renewed or replaced from time to time, the "CTC Note"); (b) all
payments or performances to be made by the Debtor under the Loan Documents,
including, without limitation, the payment of all principal, interest and other
amounts becoming due and payable, whether by acceleration or otherwise, under
that certain Promissory Note, dated of even date herewith, made by the Debtor
to the order of the Borrower, and assigned to the Secured Party, in the
original principal amount of $18,000,000 (as the same may be amended,
supplemented, extended, renewed or replaced from time to
-2-
<PAGE> 3
Security Agreement/MCTC
Loan No. T0362
time, the "MCTC Note"; the CTC Note and the MCTC Note, collectively, the "Notes"
and, each, a "Note"), and all payments or performances under that certain
Continuing Guaranty, dated as of even date herewith, made by the Debtor for the
benefit of the Secured Party (as the same may be amended, supplemented, extended
or restated from time to time, the "MCTC Guaranty"); and (c) the payment of all
other indebtedness and the performance of all other obligations of the Debtor to
the Secured Party of every type and description, whether now existing or
hereafter arising, fixed or contingent, as primary obligor or as a guarantor or
surety, acquired directly or by assignment or otherwise, liquidated or
unliquidated, regardless of how they arise or by what agreement or instrument
they may be evidenced, including, without limitation, all loans, advances and
other extensions of credit and all covenants, agreements, and provisions
contained in all loan and other agreements between the parties. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to them in the Loan Agreement.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Debtor
represents, warrants and covenants as follows:
(A) OWNERSHIP OF COLLATERAL. Except for any security interest
in favor of (i) the Secured Party, (ii) Northern Telecom Finance Corporation
securing indebtedness not in excess of $3,500,000 and attaching only to the
equipment (and any proceeds therefrom) purchased or leased from Northern
Telecom Finance Corporation with the proceeds of such indebtedness, and (iii)
Audiovox South Corporation securing indebtedness in connection with certain
equipment obtained from Audiovox South Corporation and attaching only to such
equipment (and any proceeds therefrom), the Debtor owns and possesses all of
the Collateral free and clear of all adverse claims, interests, liens,
encumbrances, or other defects. Without the prior written consent of the
Secured Party, the Debtor shall not create or permit the existence of any
adverse claim, interest, lien, or other encumbrance against any of the
Collateral, except as expressly permitted by the Loan Documents. The Debtor
shall provide prompt written notice to the Secured Party upon learning of any
future adverse claim, interest, lien, or encumbrance against any of the
Collateral, and shall defend diligently the Debtor's and the Secured Party's
interests in the Collateral.
(B) VALIDITY OF SECURITY AGREEMENT; CORPORATE AUTHORITY. This
Security Agreement is the legal, valid and binding obligation of the Debtor,
enforceable in accordance with its terms, subject only to 'imitations on
enforceability imposed by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally and (il) general equitable principles. The Debtor has the corporate
power to execute, deliver and carry out the terms and provisions of this
Security Agreement and all related documents, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Security Agreement and all related documents.
-3-
<PAGE> 4
Security Agreement/MCTC
Loan No. T0362
(C) LOCATION OF THE DEBTOR. The Debtor's place of business
(or chief executive office if more than one place of business) is located at
the address shown above.
(D) LOCATION OF COLLATERAL. All equipment and inventory are
now at the location or locations specified on Schedule A attached hereto and
made a part hereof and, except as otherwise disclosed to the Secured Party on
Schedule A, the Debtor has not maintained any other location or locations of
inventory and equipment within the past 5 years.
(E) NAME, IDENTITY, AND CORPORATE STRUCTURE. Except as
otherwise disclosed to the Secured Party on Schedule A, the Debtor has not
within the past 10 years changed its name, identity or corporate structure
through incorporation, merger, consolidation, joint venture or otherwise.
(F) CHANGE IN NAME, LOCATION OF COLLATERAL, ETC. Without
giving at least 30 days' prior written notice to the Secured Party, the Debtor
shall not change its name, identity or corporate structure, the location of its
place of business (or chief executive office if more than one place of
business), or the location of the Collateral.
(G) FURTHER ASSURANCES. Upon the request of the Secured
Party, the Debtor shall do all acts and things as the Secured Party may from
time to time deem necessary or advisable to enable it to perfect, maintain, and
continue the perfection and priority of the security interest of the Secured
Party in the Collateral, or to facilitate the exercise by the Secured Party of
any rights or remedies granted to the Secured Party hereunder or provided by
law. Without limiting the foregoing, the Debtor agrees to execute, in form and
substance satisfactory to the Secured Party, such financing statements,
continuation statements, amendments thereto, supplemental agreements,
assignments, notices of assignments, and other instruments and documents as the
Secured Party may from time to time request. In addition, in the event the
Collateral or any part thereof consists of instruments, documents, chattel
paper, or money (whether or not proceeds of the Collateral), the Debtor shall,
upon the request of the Secured Party, deliver possession thereof to the
Secured Party (or to an agent of the Secured Party retained for that purpose),
together with any appropriate endorsements and/or assignments. Without
limiting the generality of the foregoing, the Debtor shall take such action as
the Secured Party may request from time to time to create and perfect a
security interest in favor of the Secured Party in any and all leases, licenses
and permits relating to the location of antennae and other transmission and
receiving equipment on the towers or other property of third parties,
including, without limitation, amending such leases, licenses or permits to
allow the creation and perfection of such security interest and obtaining the
consent of all third parties whose consents may be necessary to the creation
and perfection of such security interest. The Secured Party shall use
reasonable care in the custody and preservation of any Collateral
-4-
<PAGE> 5
Security Agreement/MCTC
Loan No. T0362
in its possession, but shall not be required to take any steps necessary to
preserve rights against prior parties. All costs and expenses incurred by the
Secured Party to establish, perfect, maintain, determine the priority of, or
release the security interest granted hereunder (including the cost of all
filings, recordings, and taxes thereon and the reasonable fees and expenses of
any agent retained by the Secured Party) shall become part of the Obligations
secured hereby and be paid by the Debtor on demand.
(H) INSURANCE. The Debtor shall maintain such property and
casualty insurance with such insurance companies, in such amounts, and covering
such risks, as are at all times reasonably satisfactory to the Secured Party.
All such policies shall provide for loss payable clauses or endorsements in
form and content acceptable to the Secured Party. Upon the request of the
Secured Party, all policies (or such other proof of compliance with this
Section as may be satisfactory to the Secured Party) shall be delivered to the
Secured Party. The Debtor shall pay all insurance premiums when due. In the
event of loss, damage, or injury to any insured Collateral, the Secured Party
shall have full power to collect any and all insurance proceeds due under any
of such policies, and shall apply such proceeds to the repair or replacement of
such Collateral or, if such Collateral is not repairable or replaceable, to the
payment of any of the Obligations secured hereby.
(I) TAXES, LEVIES, ETC. The Debtor has paid and shall continue
to pay when due all taxes, levies, assessments, or other charges which may
become an enforceable lien against the Collateral, unless such taxes, levies,
assessments, or other charges are being contested by the Debtor in good faith
and by appropriate proceedings and then only to the extent reasonable reserves
required by generally accepted accounting principles have been set aside on the
Debtor's books therefor.
(J) DISPOSITION AND USE OF COLLATERAL BY THE DEBTOR. Without
the prior written consent of the Secured Party, the Debtor shall not at any
time sell, transfer, lease, abandon, or otherwise dispose of any Collateral
other than in accordance with the provisions of the MCTC Guaranty; provided,
however, that no dispositions shall be made if an Event of Default (as defined
in Section 4) shall have occurred and be continuing. The Debtor shall not use
any of the Collateral in any manner which violates any statute, regulation,
ordinance, rule, decree, order, or insurance policy.
(K) RECEIVABLES. The Debtor shall preserve, enforce, and
collect all accounts, chattel paper, instruments, documents and general
intangibles, whether now owned or hereafter acquired or arising (the
"Receivables"), in a commercially reasonable fashion and, if an Event of
Default shall have occurred and be continuing, upon the request of the Secured
Party, the Debtor shall execute an agreement in form and substance satisfactory
to the Secured Party by which the Debtor shall direct all account debtors and
obligors on
-5-
<PAGE> 6
Security Agreement/MCTC
Loan No. T0362
instruments to make payment to a lock box deposit account under the exclusive
control of the Secured Party.
(L) CONDITION OF COLLATERAL. All tangible Collateral is now in
good repair and condition and the Debtor shall at all times hereafter, at its
own expense, maintain all such Collateral in good repair and condition,
ordinary wear and tear excepted.
(M) CONDITION OF BOOKS AND RECORDS. The Debtor has maintained
and shall maintain complete, accurate and up-to-date books, records, accounts,
and other information relating to all Collateral in the present form and
detail, and shall allow the Secured Party or its representatives to examine and
copy such books, records, accounts, and other information at any reasonable
time, upon reasonable notice from the Secured Party.
(N) RIGHT OF INSPECTION. At all reasonable times and upon
reasonable notice from the Secured Party, the Debtor shall allow the Secured
Party or its representatives to visit any of the Debtor's properties or
locations so that the Secured Party or its representatives may confirm, inspect
and appraise any of the Collateral.
(O) PLEDGE OF STOCK. Upon the acquisition of capital stock of
any subsidiary, the Debtor shall execute and deliver to the Secured Party a
stock pledge agreement in form and substance satisfactory to the Secured Party,
pursuant to which the Debtor shall pledge, on a first-priority basis, all of
its stock in such subsidiary and shall covenant and agree to pledge to the
Secured Party, on a first-priority basis, all capital stock it may thereafter
acquire in that or any other subsidiary.
SECTION 4. DEFAULT. The occurrence of an event of default under any
of the Loan Documents (including, without limitation, the Loan Agreement, the
Notes and the MCTC Guaranty), the breach of or failure to perform any covenant
or agreement contained in this Security Agreement, or any material inaccuracy
as of the date made in any representation or warranty contained in this
Security Agreement shall constitute an "Event of Default" hereunder; provided
that the Debtor shall have 30 days after notice from the Secured Party to cure
any breach of the covenants set forth in Sections 3(H), (K), (L), (M), and (N).
SECTION 5. RIGHTS AND REMEDIES. Upon the occurrence of any Event of
Default and at any time during the continuance thereof, the Secured Party may
declare all Obligations to be immediately due and payable and, to the extent
permitted by applicable law and subject to any necessary approval of the FCC
relating to the exercise of remedies hereunder involving any transfer, sale or
disposition of the Debtor's assets, may exercise any and all rights and
remedies of the Secured Party in the enforcement of its security interest under
the UCC, this Security Agreement (including, without limitation, Section 7), or
any other applicable law. Without limiting the foregoing:
-6-
<PAGE> 7
Security Agreement/MCTC
Loan No. T0362
(A) DISPOSITION OF COLLATERAL. The Secured Party may sell,
lease, or otherwise dispose of all or any part of the Collateral, in its then
present condition or following any commercially reasonable preparation or
processing thereof; whether by public or private sale or at any brokers' board,
in lots or in bulk, for cash, on credit or otherwise, with or without
representations or warranties, and upon such other terms as may be acceptable
to the Secured Party, and the Secured Party may purchase such Collateral at any
public sale. At any time when advance notice of sale is required, the Debtor
agrees that 10 days' prior written notice shall be reasonable. In connection
with the foregoing, the Secured Party may:
(1) require the Debtor to assemble the Collateral and all
records pertaining thereto and make such Collateral and records
available to the Secured Party at a place to be designated by the
Secured Party which is reasonably convenient to both parties;
(2) enter the premises of the Debtor or premises under the
Debtor's control and take possession of the Collateral;
(3) without charge by the Debtor, use or occupy the premises
of the Debtor or premises under the Debtor's control, including, without
limitation, warehouse and other storage facilities;
(4) without charge by the Debtor, use any patent, trademark,
trade name, or other intellectual property or technical process used by
the Debtor in connection with any of the Collateral; and
(5) rely conclusively upon the advice or instructions of any
one or more brokers or other experts selected by the Secured Party to
determine the method or manner of disposition of any of the Collateral
and, in such event, any disposition of the Collateral by the Secured
Party in accordance with such advice or instructions shall be deemed to
be commercially reasonable.
(B) COLLECTION OF RECEIVABLES. The Secured Party may, but
shall not be obligated to, take all actions reasonable or necessary to
preserve, enforce or collect the Receivables, including, without limitation,
the right to notify account debtors and obligors on instruments to make direct
payment to the Secured Party, to permit any extension, compromise, or
settlement of any of the Receivables for less than face value, or to sue on any
Receivable, all without prior notice to the Debtor.
(C) PROCEEDS. The Secured Party may collect and apply all
proceeds of the Collateral, and may endorse the name of the Debtor in favor of
the Secured Party on any
-7-
<PAGE> 8
Security Agreement/MCTC
Loan No. T0362
and all checks, drafts, money orders, notes, acceptances, or other instruments
of the same or a different nature, constituting, evidencing, or relating to the
Collateral. The Secured Party may receive and open all mail addressed to the
Debtor and remove therefrom any cash or non-cash items of payment constituting
proceeds of the Collateral.
(D) INSURANCE ADJUSTMENTS. The Secured Party may adjust and
settle any and all insurance covering any Collateral, endorse the name of the
Debtor on any and all checks or drafts drawn by any insurer, whether
representing payment for a loss or a return of unearned premium, and execute
any and all proofs of claim and other documents or instruments of every kind
required by any insurer in connection with any payment by such insurer.
The net proceeds of any disposition of the Collateral shall be applied by the
Secured Party, after deducting its reasonable expenses incurred in such
disposition, to the payment in whole or in part of the Obligations in such
order as the Secured Party may elect. The enumeration of the foregoing rights
and remedies is not intended to be exhaustive, and the exercise of any right
and/or remedy shall not preclude the exercise of any other rights or remedies,
all of which are cumulative and non-exclusive.
SECTION 6. OTHER PROVISIONS.
(A) AMENDMENT AND WAIVER. Without the prior written consent of
the Secured Party, no amendment or waiver of, or consent to any departure by
the Debtor from, any provision hereunder shall be effective. Any such
amendment, waiver, or consent shall be effective only in the specific instance
and for the specific purpose for which given. No delay or failure by the
Secured Party to exercise any remedy hereunder shall be deemed a waiver thereof
or of any Other remedy hereunder. A waiver on any one occasion shall not be
construed as a bar to or waiver of any remedy on any subsequent occasion.
(B) COSTS AND ATTORNEYS' FEES. Except as prohibited by law, if
at any time the Secured Party employs counsel in connection with the creation,
perfection, preservation, or release of the Secured Party's security interest
in the Collateral or the enforcement of any of the Secured Party's rights or
remedies hereunder, all of the Secured Party's reasonable attorneys' fees
arising from such services and all expenses, costs, or charges relating thereto
shall become part of the Obligations secured hereby and be paid by the Debtor
on demand.
(C) REVIVAL OF OBLIGATIONS. To the extent the Debtor or any
third party makes a payment or payments to the Secured Party or the Secured
Party enforces its security interest or exercises any right of setoff, and such
payment or payments or the proceeds thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, and/or required to be
repaid to a trustee, receiver, or any other party under any
-8-
<PAGE> 9
Security Agreement/MCTC
Than No. T0362
bankruptcy, insolvency or other law or in equity, then, to the extent of such
recovery, the Obligations or any part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment or payments had not been made, or such enforcement or setoff had not
occurred.
(D) PERFORMANCE BY THE SECURED PARTY. In the event the Debtor
shall at any time fail to pay or perform punctually any of its duties hereunder
within any grace period provided therefor, the Secured Party may, at its option
and without notice to or demand upon the Debtor, without obligation and without
waiving or diminishing any of its other rights or remedies hereunder, fully
perform or discharge any of such duties. All costs and expenses incurred by the
Secured Party in connection therewith, together with interest thereon at the
Secured Party's National Variable Rate (as defined in the Loan Agreement) plus
4% per annum, shall become part of the Obligations secured hereby and be paid
by the Debtor upon demand.
(E) INDEMNIFICATION, ETC. The Debtor hereby expressly
indemnifies and holds the Secured Party harmless from any and all claims,
causes of action, or other proceedings, and from any and all liability, loss,
damage, and expense of every nature, arising by reason of the Secured Party's
enforcement of its rights and remedies hereunder, or by reason of the Debtor's
failure to comply with any environmental or other law or regulation, other than
any such claim, cause of action or other proceeding, liability, loss, damage or
expense arising by reason of gross negligence, willful misconduct or violation
of law on the part of the Secured Party.
(F) POWER OF ATTORNEY. The Debtor hereby constitutes and
appoints the Secured Party or the Secured Party's designee during the term of
any Obligations secured by this Security Agreement as its attorney-in-fact,
which appointment is an irrevocable, durable agency, and coupled with an
interest, with full power of substitution. This power of attorney and mandate
is for the purpose of taking, upon an Event of Default, whether in the name of
the Debtor or in the name of the Secured Party, any action which the Debtor is
obligated to perform hereunder or which the Secured Party may deem necessary or
advisable to accomplish the purposes of this Security Agreement. In taking any
action in accordance with this Section 6(F), the Secured Party shall not be
deemed to be the agent of the Debtor. The powers conferred upon the Secured
Party in this Section are solely to protect its interest in the Collateral and
shall not impose any duty upon the Secured Party to exercise any such powers.
(G) CONTINUING EFFECT. This security Agreement, the Secured
Party's security interest in the Collateral, and all other documents or
instruments contemplated hereby shall continue in full force and effect until
all of the Obligations have been satisfied in full, each of the Loan Agreement
and the MCTC Guaranty has been terminated in
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<PAGE> 10
Security Agreement/MCTC
Loan No. T0362
accordance with its respective terms and the Debtor has sent a valid written
demand to the Secured Party for termination of this Security Agreement.
(H) BINDING EFFECT. This Security Agreement shall be binding
upon and inure to the benefit of the Debtor and the Secured Party and their
respective successors and assigns.
(I) SECURITY AGREEMENT AS FINANCING STATEMENT. A photographic
copy or other reproduction of this Security Agreement may be used as a
financing statement.
(J) GOVERNING LAW. Except to the extent governed by applicable
federal law, this Security Agreement shall be governed by and construed in
accordance with the laws of the State of Louisiana without reference to choice
of law doctrine.
(K) NOTICES. All notices hereunder shall be deemed to be duly
given upon delivery in the form and manner set forth in Section 7(E) of the
MCTC Guaranty to the parties at the following addresses (or such other address
for a party as shall be specified by like notice):
If to CoBank, as follows: If to the Debtor, as follows:
CoBank, ACB Mercury Cellular Telephone Company
200 Galleria Parkway P.O. Box 3709
Suite 1900 Lake Charles, Louisiana 70602
Atlanta, Georgia 30339 Attn: Robert Piper; cc: Thomas G. Henning
Attn: Rural Utility Banking Group Fax No.: (318) 439-0769
Fax No.: (404) 618-3202
(L) SEVERABILITY. The determination that any term or
provision of this Security Agreement is unenforceable or invalid shall not
affect the enforceability or validity of any other term or provision hereof.
SECTION 7. LOUISIANA PROVISIONS.
(A) GENERAL. the provisions of this Section 7 shall apply to
the Collateral and all proceeds thereof at all times during which such
Collateral or the proceeds thereof are located in Louisiana or are otherwise
subject to the application of Louisiana law in any respect. The term "Louisiana
Collateral" as used herein shall refer to all portions of the Collateral and the
proceeds thereof that are from time to time located in the State of Louisiana or
are otherwise subject to Louisiana law at all times during which such portions
-10-
<PAGE> 11
Security Agreement/MCTC
Loan No. T0362
or proceeds thereof are located in Louisiana or are otherwise mandatorily
subject to the application of Louisiana law under the applicable laws of other
states.
(B) FINANCING STATEMENTS. Contemporaneously with the execution
of this Security Agreement, the Debtor has completed and signed one or more
appropriate Louisiana UCC-1 financing statements with regard to the Collateral
and the proceeds thereof. The Debtor authorizes the Secured Party, at the
Debtor's expense, to file multiple originals, or photocopies, carbon copies or
facsimile copies of such Louisiana UCC-1 financing statements with the
appropriate filing officer or officers in the State of Louisiana, pursuant to
the provisions of Chapter 9 of the Louisiana Commercial Laws.
(C) IDENTIFICATION NUMBER. The Debtor shall give the Secured
Party 30 days' written notice prior to any change in the Debtor's employer
identification number by the Debtor and shall give the Secured Party written
notice of any change in the Debtor's employer identification number that is not
made by the Debtor within 30 days after such change. In the event of any change
whatsoever in the Debtor's employer identification number, the Debtor will
execute and file any new financing statements or any other documents that are
necessary or desirable as determined by the Secured Party in its sole discretion
to preserve and continue the Secured Party's security interests under this
Security Agreement within thirty (30) days after such change.
(D) EVENT OF DEFAULT; REMEDIES. Upon the occurrence of any
Default hereunder, the Secured Party shall have the following rights and
remedies with respect to the Louisiana Collateral, which rights and remedies are
in addition to and are not in lieu or limitation of any other rights and
remedies that may be provided in this Security Agreement, the Loan Agreement,
the MCTC Guaranty or any related documents, under Chapter 9 of the Louisiana
Commercial Laws (La. R.S. Sections 10:9-101, et seq.), under the Uniform
Commercial Code of any state other than Louisiana, or at law or equity
generally:
(1) The Secured Party may cause the Louisiana
Collateral, or any part or parts thereof, to be immediately seized
wherever found, and sold, whether in term of court or in vacation, under
ordinary or executory process, in accordance with applicable Louisiana
law, to the highest bidder for cash, with or without appraisement,
without the necessity of making additional demand, or of notifying the
Debtor or placing the Debtor in default.
(2) For purposes of foreclosure under Louisiana
executory process procedures, the Debtor confesses judgment and
acknowledges to be indebted unto and in favor of the Secured Party up to
the full amount of the Obligations, in principal, interest, costs,
expenses, attorneys' fees and other fees and charges. To the extent
permitted under applicable Louisiana law, the Debtor additionally waives:
(a)
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<PAGE> 12
Security Agreement/MCTC
Loan No. T0362
the benefit of appraisal as provided in Articles 2332, 2336, 2723 and
2724 of the Louisiana Code of Civil Procedure and all other laws with
regard to appraisal upon judicial sale; (b) the demand and 3 days' delay
as provided under Articles 2639 and 2721 of the Louisiana Code of Civil
Procedure; (c) the notice of seizure as provided under Articles 2293 and
2721 of the Louisiana Code of Civil Procedure; (d) the 3 days' delay
provided under Articles 2331 and 2722 of the Louisiana Code of Civil
Procedure; and (e) all other benefits provided under Articles 2331, 2722
and 2723 of the Louisiana Code of Civil Procedure and all other similar
provisions of the Louisiana Code of Civil Procedure not specifically
listed hereinabove.
(3) Should any of the Louisiana Collateral be seized
as an incident to an action for the recognition or enforcement of the
Obligations or this Security Agreement, the Loan Agreement, the MCTC
Guaranty or any related document, by executory process, sequestration,
attachment, writ of fieri facias or otherwise, the Debtor agrees that the
court issuing any such order shall, if requested by the Secured Party,
appoint the Secured Party or any person or entity named by the Secured
Party at the time such seizure is requested, or at any time thereafter,
as keeper of the Louisiana Collateral as provided under La. R.S. Section
9:5136, et seq. The Debtor agrees to pay the reasonable fees of such
keeper, which compensation to the keeper shall also be a part of the
Obligations secured under this Security Agreement.
(4) Should it become necessary for the Secured
Party to foreclose against the Louisiana Collateral, all declarations of
fact that are made under an authentic act before a Notary Public in the
presence of two witnesses, by a person declaring such facts to lie within
his or her knowledge, shall constitute authentic evidence for purposes of
executory process and also for purposes of La. R.S. Section 9:3509.1,
La. R.S. Section 9:3504(D)(6) and La. R.S. Section 10:9-508, as
applicable.
(E) GOVERNING LAW. ANYTHING TO THE CONTRARY CONTAINED IN THIS
SECURITY AGREEMENT NOTWITHSTANDING, THE SECURITY INTERESTS IN THE LOUISIANA
COLLATERAL GRANTED IN THIS SECURITY AGREEMENT, AND THE SECURED PARTY'S REMEDIES
IN THE COURTS SITTING IN AND FOR THE STATE OF LOUISIANA WITH RESPECT TO THE
LOUISIANA COLLATERAL SHALL BE GOVERNED BY LOUISIANA LAW.
SECTION 8. FCC MATTERS. Notwithstanding any other provision of this
Security Agreement:
(A) Any foreclosure on, sale, transfer or other
disposition of any of the Collateral by the Secured Party shall be pursuant to
Section 310(d) of the Communications Act of 1934, as amended, and the
applicable rules and regulations thereunder, and, if and
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<PAGE> 13
Security Agreement/MCTC
Loan No. T0362
to the extent required thereby, subject to the prior approval or notice to and
non-opposition of the FCC.
(B) If a Default shall have occurred and be continuing, the
Debtor shall take any action, which the Secured Party may reasonably request in
order to transfer and assign to the Secured Party, or to such one or more third
parties as the Secured Party may designate, or to a combination of the
foregoing, each FCC license or permit held by the Debtor. The Secured Party is
empowered, to the extent permitted by applicable law, to request the appointment
of a receiver from any court of competent jurisdiction. Such receiver may be
instructed by the Secured Party to seek from the FCC an involuntary transfer of
control of each such FCC license or permit for the purpose of seeking a bona
fide purchaser to whom control will ultimately be transferred. The Debtor hereby
agrees to authorize such an involuntary transfer of control upon the request of
the receiver so appointed and, if the Debtor shall refuse to authorize the
transfer, its approval may be required by the court. Upon the occurrence and
during the continuance of a Default, the Debtor shall further use its best
efforts to assist in obtaining approval of the FCC and any state regulatory
bodies, if required, for any action or transactions contemplated by this
Security Agreement, including, without limitation, the preparation, execution
and filing with the FCC and any state regulatory bodies of the assignor's or
transferor's portion of any application or applications for consent to the
assignment of any FCC license or permit or transfer of control necessary or
appropriate under the rules and regulations of the FCC or any state regulatory
body for approval or non-opposition of the transfer or assignment of any portion
of the Collateral, including, without limitation, with any FCC license or
permit.
(C) The Debtor acknowledges that the assignment or transfer of
each FCC license or permit is integral to the Secured Party's realization of the
value of the Collateral, that there is no adequate remedy at law for failure by
the Secured Party to comply with the provisions of this Section 8 and that such
failure would not be adequately compensable in damages, and therefore agrees,
without limiting the right of the Secured Party to seek and obtain specific
performance of other obligations of the Debtor contained in this Security
Agreement, that the agreements contained in this Section 8 may be specifically
enforced.
(D) In accordance with the requirements of 47 C.F.R. Section
22.917, or any successor provision thereto, the Secured Party shall notify the
Debtor and the FCC in writing at least 10 days prior to the date on which the
Secured Party intends to exercise its rights, pursuant to this Security
Agreement or any of the other Loan Documents, by foreclosing on, or otherwise
disposing of, any Collateral in connection with which such notice is required
pursuant to 47 C.F.R. Section 22.917 or any successor provision thereto.
-13-
<PAGE> 14
Security Agreement/MCTC
Loan No. T0362
THUS DONE AND SIGNED in several counterparts at the places and on the
dates indicated below and in the presence of the respective undersigned
Notaries Public and the respective undersigned witnesses indicated below, by
the duly authorized officers of the respective parties, after a due reading of
the whole.
At Lake Charles, Louisiana, on April ____ 1995.
MERCURY CELLULAR TELEPHONE
COMPANY
By:
------------------------------------
Name: Robert Piper
Title: President
Attest:
--------------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
Witnesses to all Signatures:
- ---------------------------------
Witness
- ---------------------------------
Witness
- ---------------------------------
Notary Public
My commission expires:
-----------
[NOTARIAL SEAL]
(Signatures Continued on Next Page)
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<PAGE> 15
Security Agreement/MCTC
Loan No. T0362
(Signatures Continued from Previous Page)
At Atlanta, Georgia on April ____ 1995.
COBANK, ACB
By:
------------------------------------
Name: Mary Kay Deering
Title: Assistant Vice President
Witnesses to Signature:
- --------------------------------
Witness
- --------------------------------
Witness
- --------------------------------
Notary Public
My commission expires:
----------
[NOTARIAL SEAL]
-15-
<PAGE> 16
SCHEDULE A
TO
SECURITY AGREEMENT
OF
MERCURY CELLULAR TELEPHONE COMPANY
1. Set forth below are the present locations (by county or parish and
state) of the Debtor's inventory and equipment:
LOUISIANA PARISHES LOCATION TYPE OF PROPERTY
------------------ -------- ----------------
Allen Kinder Tower
Beauregard DeRidder Tower
Merryville Tower
Ragley Tower
Calcasieu Vinton Tower
Edgerly Tower
Sulphur Tower and Retail Store
DeQuincy Tower
Lake Charles - Nelson Road Tower
Lake Charles - CM Tower Tower and Office
Lake Charles Retail Store
Cameron Cameron Tower
Grand Chenier Tower
Johnson Bayou Tower
Jefferson Davis Jennings Tower
Jennings Retail Store
Vernon Leesville Retail Store
Fort Polk Tower
2. Set forth below are the locations (by county or parish and state) at
which any of the Debtor's inventory and equipment has been located within the
past five years:
See Above
3. Set forth below is a description of any exception to the
representation made in Section 3(E) of the Security Agreement:
None
<PAGE> 17
LAKE CHARLES-NELSON ROAD
4718 Nelson Road, Lake Charles, Louisiana 70605
Commencing 30 feet West of the Southeast Corner of the South Half of the
Northeast Quarter of the Southeast Quarter (S/2 of NE/4 of SE/4) of Section 23,
Township 10 South, Range 9 West, thence North 70 feet, thence West 200 feet,
thence South 70 feet, thence East 200 feet to the point of commencement.
VINTON
2200 Mack Road, Vinton, Louisiana 70669
Commencing at the Northeast corner of the North Half of the Southeast Quarter
of the Southeast Quarter (N/2 of SE/4 of Se/4) of Section 20, Township 10
South, Range 12 West; thence North 89 degrees 17 minutes 22 seconds West along
the North line of said North Half of Southeast Quarter of the Southeast Quarter
(N/2 of SE/4 of SE/4) for a distance of 30 feet to the West right-of-way line
of Mack Road for point of beginning; thence South 00 degrees 42 minutes 53
seconds West along said West right-of-way line for a distance of 540 feet;
thence North 89 degrees 17 minutes 22 seconds West parallel with the aforesaid
North line of the North Half of the Southeast Quarter of the Southeast Quarter
(N/2 of SE/4 of SE/4) for a distance of 480 feet; thence North 00 degrees 42
minutes 53 seconds East parallel with the aforesaid West right-of-way line of
Mack Road for a distance of 540 feet to the North line of said North Half of
the Southeast Quarter of the Southeast Quarter (N/2 of SE/4 of SE/4); thence
South 89 degrees 17 minutes 22 seconds East along said North line for a
distance of 480 feet to the point of beginning; SUBJECT to any easements,
servitudes and/or rights-of-way and containing 5.95 acres, more or less.
EDGERLY
5733 Lisa Lane, Edgerly, Louisiana 70668
Beginning 60 feet West and 187.2 feet South of the Northeast Corner of the
Northwest Quarter of the Southeast Quarter (NW/4 of SE/4) of Section Six (6),
Township Ten (10) South, Range Eleven (11) West, thence West 300 feet, thence
North 300 feet, thence East 300 feet, thence South 300 feet to the point of
commencement situated in the Parish of Calcasieu, State of Louisiana.
4. JEFFERSON DAVIS PARISH:
JENNINGS
811 East Railroad Avenue, Jennings, Louisiana 70546
Commence at the Northwest (N/W) corner of Section 2, TIOS - R 3W, thence East a
distance of 25.0', thence South a distance of 1439.0', thence S61 degrees 21'E,
a distance of 1458.0', thence N41 degrees 14'E, a distance of 676.22',
<PAGE> 18
thence S48 degrees 46'E, a distance of 100.00', thence S41 degrees 14'W, a
distance of 70.00', degrees, thence N48 degrees 46'W, a distance of 100.00',
thence N41 degrees 14'E, a distance of 70.00' degrees to the point of beginning
containing 161 acres located in the city of Jennings, Jefferson Davis Parish,
Louisiana.
<PAGE> 19
EXHIBIT "B"
MERCURY CELLULAR TELEPHONE COMPANY MORTGAGE
LIST OF ALL LEASED PROPERTY, DATE OF LEASE AND PARISH IN WHICH LEASED
PROPERTY IS LOCATED.
<TABLE>
<CAPTION>
TYPE OF
LESSOR DATE OF LEASE PARISH LOCATION PROPERTY
------ ------------- --------------- --------
<S> <C> <C> <C>
International Paper Co. 3/18/91 Beauregard Tower
Boise Southern Company 11/2/92 Beauregard Tower
William L. Henning, Sr. 1/1/90 Calcasieu Tower
Bud Caner 9/30/94 Calcasieu Retail Store
Mercury, Inc. 3/1/92 Calcasieu Retail Store
Cameron Telephone Co. 8/11/83 Calcasieu Tower
Marion M. Reynaud 9/15/94 Cameron Tower
Thomas Walter McCall 9/15/94 Cameron Tower
Mercury, Inc. Cameron Tower
Elvin Donahoe 1/9/95 Cameron Tower
Elroy Trahan 7/1/94 Jefferson Davis Retail Store
Russell F. Bailes 10/1/90 Vernon Tower
Pene Broadcasting 12/15/89 Vernon Equipment on
their tower
Winford H. Morris 3/1/94 Vernon Retail Store
Fort Polk - no lease exists Vernon Tower
</TABLE>
<PAGE> 1
EXHIBIT 4.60
MCK
LOAN NO. T0364
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is made and entered
into as of April 5,1995, by and between MERCURY CELLULAR OF KANSAS, INC. (the
"Debtor") having its place of business (or chief executive office if more than
one place of business) located at [P.O. BOX 3709, LAKE CHARLES, LOUISIANA
70602] and whose taxpayer identification number is [__________], and COBANK,
ACB (the "Secured Party"), whose mailing address is 200 Galleria Parkway, Suite
1900, Atlanta, Georgia 30339.
SECTION 1. GRANT OF SECURITY INTEREST. For valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Debtor hereby
grants to the Secured Party a security interest in all of the following
property, wherever located and whether now existing or hereafter acquired,
together with all accessions and additions thereto, and all products and
proceeds thereof:
accounts; inventory (including, without limitation, returned or
repossessed goods); chattel paper; instruments (including, without
limitation, certificated securities); letters of credit; contracts and
contract rights; leases; documents; equipment (including, without
limitation, telecommunications and radio transmitting and receiving
equipment, antennae, towers, microwave communication equipment,
machinery, computers, parts, tools, implements, poles, posts,
cross-arms, conduits, ducts, lines (whether underground or overhead or
otherwise), wires, cables, exchanges, switches (including, without
limitation, host switches and remote switches), desks, testboards,
racks, frames, motors, generators, batteries, items of central office
equipment, pay-stations, protectors, subscriber equipment, instruments,
connections and appliances, office furniture and equipment and work
equipment and any and all other equipment used, useful or acquired for
use in the business of the Debtor or the operation of the Debtor's
properties); fixtures; general intangibles (including, without
limitation, permits, licenses, grants, franchises, privileges,
permissions, certificates and choses or things in action, litigation
rights and resulting judgments, goodwill, patents, trademarks and other
intellectual property, tax refunds, miscellaneous rights to payment,
entitlements, uncertificated investment securities and investments,
margin accounts, computer programs, invoices, books, records and other
information relating to or arising out of the Debtor's business, and, to
the extent permitted by law, all licenses and permits issued by the
Federal Communications Commission (the "FCC")); and, to the extent not
covered by the above, all other personal property of, the Debtor of
every type and description, including, without limitation, interests or
claims in or under any policy of insurance, tort claims, deposit
accounts, money, and judgments; provided, however, that no security
<PAGE> 2
Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
deposit accounts, money, and judgments; provided, however, that no
security interest is granted in licenses, permits, leases, franchises,
privileges, permissions and grants which by their terms or by reason of
applicable law would become void or voidable if a security interest
therein were granted or if the granting of a security interest therein
would violate any law, rule, regulation or order of any governmental
body or regulatory authority (collectively, the "Collateral").
Where applicable, all terms used herein shall have the same meaning as set
forth in the Uniform Commercial Code as codified at Title __ of the [KANSAS
STATUTES], as amended (the "UCC").
SECTION 2. OBLIGATIONS. The security interest granted hereunder shall
secure the following obligations (the "Obligations"): (a) all payments or
performances to be made by the Debtor under the "Loan Documents" as defined in
that certain Loan Agreement, dated as of even date herewith, between the Debtor
and the Secured Party (as the same may be amended, supplemented, extended or
restated from time to time, the "Loan Agreement"), including, without
limitation, the payment of all principal, interest and other amounts becoming
due and payable, whether by acceleration or otherwise, under that certain
Promissory Note, dated of even date herewith, made by the Debtor to the order
of the Secured Party in the original principal amount of $17,100,000 (as the
same may be amended, supplemented, extended, renewed or replaced from time to
time, the "Note"); and (b) the payment of all other indebtedness and the
performance of all other obligations of the Debtor to the Secured Party of
every type and description, whether now existing or hereafter arising, fixed or
contingent, as primary obligor or as a guarantor or surety, acquired directly
or by assignment or otherwise, liquidated or unliquidated, regardless of how
they arise or by what agreement or instrument they may be evidenced, including,
without limitation, all loans, advances and other extensions of credit and all
covenants, agreements, and provisions contained in all loan and other
agreements between the parties. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the Loan
Agreement.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Debtor
represents, warrants and covenants as follows:
(A) OWNERSHIP OF COLLATERAL. Except for any security interest
in favor of the Secured Party, the Debtor owns and possesses all of the
Collateral free and clear of all adverse claims, interests, liens,
encumbrances, or other defects. Without the prior written consent of the
Secured Party, the Debtor shall not create or permit the existence of any
adverse claim, interest, lien, or other encumbrance against any of the
Collateral, except as expressly permitted by the Loan Documents. The Debtor
shall provide prompt written
-2-
<PAGE> 3
Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
notice to the Secured Party upon learning of any future adverse claim,
interest, lien, or encumbrance against any of the Collateral, and shall defend
diligently the Debtor's and the Secured Party's interests in the Collateral.
(B) VALIDITY OF SECURITY AGREEMENT; CORPORATE AUTHORITY. This
Security Agreement is the legal, valid and binding obligation of the Debtor,
enforceable in accordance with its terms, subject only to limitations on
enforceability imposed by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally and (ii) general equitable principles. The Debtor has the corporate
power to execute, deliver and carry out the terms and provisions of this
Security Agreement and all related documents, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Security Agreement and all related documents.
(C) LOCATION OF THE DEBTOR. The Debtor's place of business (or chief
executive office if more than one place of business) is located at the address
shown above.
(D) LOCATION OF COLLATERAL. All equipment and inventory are now at
the location or locations specified on Schedule A attached hereto and made a
part hereof and, except as otherwise disclosed to the Secured Party on Schedule
A, the Debtor has not maintained any other location or locations of inventory
and equipment within the past 5 years.
(E) NAME, IDENTITY, AND CORPORATE STRUCTURE. Except as otherwise
disclosed to the Secured Party on Schedule A, the Debtor has not within the
past 10 years changed its name, identity or corporate structure through
incorporation, merger, consolidation, joint venture or otherwise.
(F) CHANGE IN NAME, LOCATION OF COLLATERAL, ETC. Without giving at
least 30 days' prior written notice to the Secured Party, the Debtor shall not
change its name, identity or corporate structure, the location of its place of
business (or chief executive office if more than one place of business), or the
location of the Collateral.
(G) FURTHER ASSURANCES. Upon the request of the Secured Party, the
Debtor shall do all acts and things as the Secured Party may from time to time
deem necessary or advisable to enable it to perfect, maintain, and continue the
perfection and priority of the security interest of the Secured Party in the
Collateral, or to facilitate the exercise by the Secured Party of any rights or
remedies granted to the Secured Party hereunder or provided by law. Without
limiting the foregoing, the Debtor agrees to execute, in form and substance
satisfactory to the Secured Party, such financing statements, continuation
statements, amendments thereto, supplemental agreements, assignments,
-3-
<PAGE> 4
Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
notices of assignments, and other instruments and documentS as the Secured
Party may from time to time request. In addition, in the event the Collateral
or any part thereof consists of instruments, documents, chattel paper, or money
(whether or not proceeds of the Collateral), the Debtor shall, upon the request
of the Secured Party, deliver possession thereof to the Secured Party (or to an
agent of the Secured Party retained for that purpose), together with any
appropriate endorsementS and/or assignments. Without limiting the generality of
the foregoing, the Debtor shall take such action as the Secured Party may
request from time to time to create and perfect a security interest in favor of
the Secured Party in any and all leases, licenses and permits relating to the
location of antennae and other transmission and receiving equipment on the
towers or other property of third parties, including, without limitation,
amending such leases, licenses or permits to allow the creation and perfection
of such security interest and obtaining the consent of all third parties whose
consents may be necessary to the creation and perfection of such security
interest. The Secured Party shall use reasonable care in the custody and
preservation of any Collateral in its possessions but shall not be required to
take any steps necessary to preserve rights against prior parties. All costs
and expenses incurred by the Secured Party to establish, perfect, maintain,
determine the priority of, or release the security interest granted hereunder
(including the cost of all filings, recordings, and taxes thereon and the
reasonable fees and expenses of any agent retained by the Secured Party) shall
become part of the Obligations secured hereby and be paid by the Debtor on
demand.
(H) INSURANCE. The Debtor shall maintain such property and casualty
insurance with such insurance companies, in such amounts, and covering such
risks, as are at all times reasonably satisfactory to the Secured Party. All
such policies shall provide for loss payable clauses or endorsementS in form
and content acceptable to the Secured Party. Upon the request of the Secured
Party, all policies (or such other proof of compliance with this Section as may
be satisfactory to the Secured Party) shall be delivered to the Secured Party.
The Debtor shall pay all insurance premiums when due. In the event of loss,
damage, or injury to any insured Collateral, the Secured Party shall have full
power to collect any and all insurance proceeds due under any of such policies,
and shall apply such proceeds to the repair or replacement of such Collateral
or, if such Collateral is not repairable or replaceable, to the payment of any
of the Obligations secured hereby.
(I) TAXES, LEVIES, ETC. The Debtor has paid and shall continue to pay
when due all taxes, levies, assessments, or other charges which may become an
enforceable lien against the Collateral, unless such taxes, levies,
assessments, or other charges are being contested by the Debtor in good faith
and by appropriate proceedings and then only to the extent reasonable reserves
required by generally accepted accounting principles have been set aside on the
Debtor's books therefor.
-4-
<PAGE> 5
Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
(J) DISPOSITION AND USE OF COLLATERAL BY THE DEBTOR. Without
the prior written consent of the Secured Party, the Debtor shall not at any
time sell, transfer, lease, abandon, or otherwise dispose of any Collateral
other than in accordance with the provisions of the Loan Agreement; provided,
however, that no dispositions shall be made if an Event of Default (as defined
in Section 4) shall have occurred and be continuing. The Debtor shall not use
any of the Collateral in any manner which violates any statute, regulation,
ordinance, rule, decree, order, or insurance policy.
(K) RECEIVABLES. The Debtor shall preserve, enforce, and
collect all accounts, chattel paper, instruments, documents and general
intangibles, whether now owned or hereafter acquired or arising (the
"Receivables"), in a commercially reasonable fashion and, if an Event of
Default shall have occurred and be continuing, upon the request of the Secured
Party, the Debtor shall execute an agreement in form and substance satisfactory
to the Secured Party by which the Debtor shall direct all account debtors and
obligors on instruments to make payment to a lock box deposit account under the
exclusive control of the Secured Party.
(L) CONDITION OF COLLATERAL. All tangible Collateral is now in
good repair and condition and the Debtor shall at all times hereafter, at its
own expense, maintain all such Collateral in good repair and condition,
ordinary wear and tear excepted.
(M) CONDITION OF BOOKS AND RECORDS. The Debtor has maintained
and shall maintain complete, accurate and up-to-date books, records, accounts,
and other information relating to all Collateral in the present form and
detail, and shall allow the Secured Party or its representatives to examine and
copy such books, records, accounts, and other information at any reasonable
time, upon reasonable notice from the Secured Party.
(N) RIGHT OF INSPECTION. At all reasonable times and upon
reasonable notice from the Secured Party, the Debtor shall allow the Secured
Party or its representatives to visit any of the Debtor's properties or
locations so that the Secured Party or its representatives may confirm, inspect
and appraise any of the Collateral.
(O) PLEDGE OF STOCK. Upon the acquisition of capital stock of
any subsidiary, the Debtor shall execute and deliver to the Secured Party a
stock pledge agreement in form and substance satisfactory to the Secured Party,
pursuant to which the Debtor shall pledge, on a first-priority basis, all of
its stock in such subsidiary and shall covenant and agree to pledge to the
Secured Party, on a first-priority basis, all capital stock it may thereafter
acquire in that or any other subsidiary.
SECTION 4. DEFAULT. The occurrence of an event of default under any of
the Loan Documents (including, without limitation, the Loan Agreement and the
Note), the breach
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<PAGE> 6
Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
of or failure to perform any covenant or agreement contained in this Security
Agreement, or any material inaccuracy as of the date made in any representation
or warranty contained in this Security Agreement shall constitute an "Event of
Default" hereunder; provided that the Debtor shall have 30 days after notice
from the Secured Party to cure any breach of the covenants set forth in
Sections 3(H), (K), (L), (M), and (N).
SECTION 5. RIGHTS AND REMEDIES. Upon the occurrence of any Event of
Default and at any time during the continuance thereof, the Secured Party may
declare all Obligations to be immediately due and payable and, to the extent
permitted by applicable law and subject to any necessary approval of the FCC
relating to the exercise of remedies hereunder involving any transfer, sale or
disposition of the Debtor's assets, may exercise any and all rights and
remedies of the Secured Party in the enforcement of its security interest under
the UCC, this Security Agreement, or any other applicable law. Without limiting
the foregoing:
(A) DISPOSITION OF COLLATERAL. The Secured Party may sell,
lease, or otherwise dispose of all or any part of the Collateral, in its then
present condition or following any commercially reasonable preparation or
processing thereof, whether by public or private sale or at any brokers' board,
in lots or in bulk, for cash, on credit or otherwise, with or without
representations or warranties, and upon such other terms as may be acceptable
to the Secured Party, and the Secured Party may purchase such Collateral at any
public sale. At any time when advance notice of sale is required, the Debtor
agrees that 10 days' prior written notice shall be reasonable. In connection
with the foregoing, the Secured Party may:
(1) require the Debtor to assemble the Collateral and all
records pertaining thereto and make such Collateral and records
available to the Secured Party at a place to be designated by the
Secured Party which is reasonably convenient to both parties;
(2) enter the premises of the Debtor or premises under the
Debtor's control and take possession of the Collateral;
(3) without charge by the Debtor, use or occupy the premises
of the Debtor or premises under the Debtor's control, including, without
limitation, warehouse and other storage facilities;
(4) without charge by the Debtor, use any patent, trademark,
trade name, or other intellectual property or technical process used by
the Debtor in connection with any of the Collateral; and
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<PAGE> 7
Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
(5) rely conclusively upon the advice or instructions of any
one or more brokers or other experts selected by the Secured Party to
determine the method or manner of disposition of any of the Collateral
and, in such event any disposition of the Collateral by the Secured
Party in accordance with such advice or instructions shall be deemed to
be commercially reasonable.
(B) COLLECTION OF RECEIVABLES. The Secured Party may, but
shall not be obligated to, take all actions reasonable or necessary to
preserve, enforce or collect the Receivables, including, without limitation,
the right to notify account debtors and obligors on instruments to make direct
payment to the Secured Party, to permit any extension, compromise, or
settlement of any of the Receivables for less than face value, or to sue on any
Receivable, all without prior notice to the Debtor.
(C) PROCEEDS. The Secured Party may collect and apply all
proceeds of the Collateral, and may endorse the name of the Debtor in favor of
the Secured Party on any and all checks, drafts, money orders, notes,
acceptances, or other instruments of the same or a different nature,
constituting, evidencing, or relating to the Collateral. The Secured Party may
receive and open all mail addressed to the Debtor and remove therefrom any cash
or non-cash items of payment constituting proceeds of the Collateral.
(D) INSURANCE ADJUSTMENTS. The Secured Party may adjust and
settle any and all insurance covering any Collateral, endorse the name of the
Debtor on any and all checks or drafts drawn by any insurer, whether
representing payment for a loss or a return of unearned premium, and execute
any and all proofs of claim and other documents or instruments of every kind
required by any insurer in connection with any payment by such insurer.
The net proceeds of any disposition of the Collateral shall be applied by the
Secured Party, after deducting its reasonable expenses incurred in such
disposition, to the payment in whole or in part of the Obligations in such
order as the Secured Party may elect. The enumeration of the foregoing rights
and remedies is not intended to be exhaustive, and the exercise of any right
and/or remedy shall not preclude the exercise of any other rights or remedies,
all of which are cumulative and non-exclusive.
SECTION 6. OTHER PROVISIONS.
(A) AMENDMENT AND WAIVER. Without the prior written consent of
the Secured party, no amendment or waiver of, or consent to any departure by
the Debtor from, any provision hereunder shall be effective. Any such
amendment, waiver, or consent shall be effective only in the specific instance
and for the specific purpose for which given. No delay or failure by the
Secured Party to exercise any remedy hereunder shall be deemed a
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<PAGE> 8
Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
waiver thereof or of any other remedy hereunder. A waiver on any one occasion
shall not be construed as a bar to or waiver of any remedy on any subsequent
occasion.
(B) COSTS AND ATTORNEYS' FEES. Except as prohibited by law, if
at any time the Secured Party employs counsel in connection with the creation,
perfection, preservation, or release of the Secured Party's security interest
in the Collateral or the enforcement of any of the Secured Party's rights or
remedies hereunder, all of the Secured Party's reasonable attorneys' fees
arising from such services and all expenses, costs, or charges relating thereto
shall become part of the Obligations secured hereby and be paid by the Debtor on
demand.
(C) REVIVAL OF OBLIGATIONS. To the extent the Debtor or any
third party makes a payment or payments to the Secured Party or the Secured
Party enforces its security interest or exercises any right of setoff, and such
payment or payments or the proceeds thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, and/or required to be
repaid to a trustee, receiver, or any other party under any bankruptcy,
insolvency or other law or in equity, then, to the extent of such recovery, the
Obligations or any part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment or payments
had not been made, or such enforcement or setoff had not occurred.
(D) PERFORMANCE BY THE SECURED PARTY. In the event the Debtor
shall at any time fail to pay or perform punctually any of its duties hereunder
within any grace period provided therefor, the Secured Party may, at its option
and without notice to or demand upon the Debtor, without obligation and without
waiving or diminishing any of its other rights or remedies hereunder, fully
perform or discharge any of such duties. All costs and expenses incurred by the
Secured Party in connection therewith, together with interest thereon at the
Secured Party's National Variable Rate (as defined in the Loan Agreement) plus
4% per annum, shall become part of the Obligations secured hereby and be paid
by the Debtor upon demand.
(E) INDEMNIFICATION, ETC. The Debtor hereby expressly
indemnifies and holds the Secured Party harmless from any and all claims,
causes of action, or other proceedings, and from any and all liability, loss,
damage, and expense of every nature, arising by reason of the Secured Party's
enforcement of its rights and remedies hereunder, or by reason of the Debtor's
failure to comply with any environmental or other law or regulation, other than
any such claim, cause of action or other proceeding, liability, loss, damage or
expense arising by reason of gross negligence, willful misconduct or violation
of law on the part of the Secured Party.
(F) POWER OF ATTORNEY. The Debtor hereby constitutes and
appoints the Secured Party or the Secured Party's designee during the term of
any Obligations secured
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Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
by this Security Agreement as its attorney-in-fact, which appointment is an
irrevocable, durable agency, and coupled with an interest, with full power of
substitution. This power of attorney and mandate is for the purpose of taking,
upon an Event of Default, whether in the name of the Debtor or in the name of
the Secured Party, any action which the Debtor is obligated to perform
hereunder or which the Secured Party may deem necessary or advisable to
accomplish the purposes of this Security Agreement. In taking any action in
accordance with this Section 6(F), the Secured Party shall not be deemed to be
the agent of the Debtor. The powers conferred upon the Secured Party in this
Section are solely to protect its interest in the Collateral and shall not
impose any duty upon the Secured Party to exercise any such powers.
(G) CONTINUING EFFECT. This Security Agreement, the Secured
Party's security interest in the Collateral, and all other documents or
instruments contemplated hereby shall continue in full force and effect until
all of the Obligations have been satisfied in full, each of the Loan Agreement
and the Note has been terminated in accordance with its respective terms and
the Debtor has sent a valid written demand to the Secured Party for termination
of this Security Agreement.
(H) BINDING EFFECT. This Security Agreement shall be binding
upon and inure to the benefit of the Debtor and the Secured Party and their
respective successors and assigns.
(I) SECURITY AGREEMENT AS FINANCING STATEMENT. A photographic
copy or other reproduction of this Security Agreement may be used as a
financing statement.
(J) GOVERNING LAW. Except to the extent governed by applicable
federal law, this Security Agreement shall be governed by and construed in
accordance with the laws of the State of Kansas without reference to choice of
law doctrine.
(K) NOTICES. All notices hereunder shall be deemed to be duly
given upon delivery in the form and manner set forth in Section 19 of the Loan
Agreement to the parties at the following addresses (or such other address for
a party as shall be specified by like notice):
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<PAGE> 10
Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
If to CoBank, as follows: If to the Debtor, as follows:
CoBank, ACB Mercury Cellular of Kansas, Inc.
200 Galleria Parkway One Lakeshore Drive, Suite 1495
Suite 1900 P.O. Box 3709
Atlanta, Georgia 30339 Lake Charles, Louisiana 70602
Attn: Rural Utility Banking Group Attn: Robert Piper; cc: Thomas G. Henning
Fax No.: (404) 618-3202 Fax No.: (318) 439-0769
(L) SEVERABILITY. The determination that any term or provision
of this Security Agreement is unenforceable or invalid shall not affect the
enforceability or validity of any other term or provision hereof.
SECTION 7. FCC MATTERS. Notwithstanding any other provision of this
Security Agreement:
(A) Any foreclosure on, sale, transfer or other disposition of
any of the Collateral by the Secured Party shall be pursuant to Section 310(d)
of the Communications Act of 1934, as amended, and the applicable rules and
regulations thereunder, and, if and to the extent required thereby, subject to
the prior approval or notice to and non-opposition of the FCC.
(B) If a Default shall have occurred and be continuing, the
Debtor shall take any action, which the Secured Party may reasonably request in
order to transfer and assign to the Secured Party, or to such one or more third
parties as the Secured Party may designate, or to a combination of the
foregoing, each FCC license or permit held by the Debtor. The Secured Party is
empowered, to the extent permitted by applicable law, to request the
appointment of a receiver from any court of competent jurisdiction. Such
receiver may be instructed by the Secured Party to seek from the FCC an
involuntary transfer of control of each such FCC license or permit for the
purpose of seeking a bona fide purchaser to whom control will ultimately be
transferred. The Debtor hereby agrees to authorize such an involuntary transfer
of control upon the request of the receiver so appointed and, if the Debtor
shall refuse to authorize the transfer, its approval may be required by the
court. Upon the occurrence and during the continuance of a Default, the Debtor
shall further use its best efforts to assist in obtaining approval of the FCC
and any state regulatory bodies, if required, for any action or transactions
contemplated by this Security Agreement, including, without limitation, the
preparation, execution and filing with the FCC and any state regulatory bodies
of the assignor's or transferor's portion of any application or applications
for consent to the assignment of any FCC license or permit or transfer of
control necessary or appropriate under the rules and regulations of the FCC or
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Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
any state regulatory body for approval or non-opposition of the transfer or
assignment of any portion of the Collateral, including, without limitation,
with any FCC license or permit.
(C) The Debtor acknowledges that the assignment or transfer of
each FCC license or permit is integral to the Secured Party's realization of
the value of the Collateral, that there is no adequate remedy at law for
failure by the Secured Party to comply with the provisions of this Section 7
and that such failure would not be adequately compensable in damages, and
therefore agrees, without limiting the right of the Secured Party to seek and
obtain specific performance of other obligations of the Debtor contained in
this Security Agreement, that the agreements contained in this Section 7 may be
specifically enforced.
(D) In accordance with the requirements of 47 C.F.R. Section
22.917, or any successor provision thereto, the Secured Party shall notify the
Debtor and the FCC in writing at least 10 days prior to the date on which the
Secured Party intends to exercise its rights, pursuant to this Security
Agreement or any of the other Loan Documents, by foreclosing on, or otherwise
disposing of, any Collateral in connection with which such notice is required
pursuant to 47 C.F.R. Section 22.917 or any successor provision thereto.
[Signatures on next page]
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Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
IN WITNESS WHEREOF, the Debtor has caused this Security Agreement to be
executed, attested and delivered under seal by its duly authorized officers as
of the day and year shown above.
MERCURY CELLULAR OF KANSAS, INC.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
Attest:
-----------------------------
Name:
------------------------
Title:
-----------------------
[CORPORATE SEAL]
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<PAGE> 13
SCHEDULE A
TO
SECURITY AGREEMENT
OF
MERCURY CELLULAR OF KANSAS, INC.
1. Set forth below are the present locations (by county or parish
and state) of the Debtor's inventory and equipment:
2. Set forth below are the locations (by county or parish and state)
at which any of the Debtor's inventory and equipment has been located within
the past five years;
3. Set forth below is a description of any exceptions to the
representation made in Section 3(E) of the Security Agreement:
<PAGE> 14
SCHEDULE A
TO
SECURITY AGREEMENT
OF
MERCURY CELLULAR Of KANSAS, INC.
1. Set forth below are the present locations (by county or parish and
state) of the Debtor's inventory and equipment:
<TABLE>
<CAPTION>
KANSAS COUNTIES LOCATION TYPE OF PROPERTY
- --------------- -------- ----------------
<S> <C> <C>
Barton Great Bend, KS Tower
Great Bend, KS Retail Store
Cheyenne St. Francis, KS Tower
Decatur Oberlin, KS Tower
Ellis Hays, KS Tower
Hays, KS Retail Store
Hays, KS Office
Finney Garden City, KS Tower
Garden City, KS Retail Store
Ford Dodge City, KS Tower
Dodge City, KS Retail Store
Grant Ulysses, KS Tower
Gray Copeland, KS Tower
Hamilton Syracuse, KS Tower
Ness Ness City, KS Tower
Norton Norton, KS Tower
Pratt Pratt, KS Tower
Rawlins Atwood, KS Tower
Rooks Stockton, KS Tower
</TABLE>
<PAGE> 15
<TABLE>
<S> <C> <C>
Russell Russell, KS Tower
Scott Scott City, KS Tower
Seward Liberal, KS Tower
Liberal, KS Retail Store
Sheridan Grinnel, KS Tower
Sherman Edson, KS Tower
Stevens Hugoton, KS Tower
Texas Guymon, OK Tower
Thomas Colby, KS Tower
Trego WaKeeney, KS Tower
Smith Smith Center, KS Tower
Wallace Sharon Springs, KS Tower
</TABLE>
2. Set forth below are the locations (by county or parish and state) at
which any of the Debtor's inventory and equipment has been located within the
past five years:
See above
3. Set forth below is a description of any exceptions to the representation
made in Section 3(E) of the Security Agreement:
N/A
<PAGE> 1
EXHIBIT 4.61
MCK
Loan No. T0364
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is made and entered into as of
April 20, 1995, by and between the COBANK, ACB ("CoBank") and MERCURY CELLULAR
OF KANSAS, INC., a corporation formed and existing under the laws of the State
of Kansas (the "Borrower").
SECTION 1. THE LOAN. On the terms and conditions set forth in this
Agreement, and subject to Section 11, CoBank agrees to make a loan (the "Loan")
to the Borrower, by means of one or more advances, during the period commencing
on the date hereof and ending on but not including December 31, 1995, or such
later date as CoBank may in its sole discretion authorize in writing (the
"Termination Date"), in an aggregate outstanding principal amount not to exceed
$17,100,000. Under the Loan, amounts borrowed and later repaid or prepaid may
not be reborrowed.
SECTION 2. PURPOSES AND USE OF PROCEEDS. The proceeds of the Loan shall
be applied by the Borrower to finance (i) the acquisition of all the assets of
Miscellco Communications, Inc. ("Miscellco") pursuant to the terms of that
certain Acquisition Agreement, dated as of November 9, 1994, by and between
Mercury, Inc. and Miscellco (the "Acquisition Agreement") and related
acquisition costs; and (ii) capital expenditures and general corporate needs of
the Borrower. The Borrower agrees that the proceeds of the Loan shall be used
only for the purposes set forth in this Section 2.
SECTION 3. AVAILABILITY. Subject to Section 1l, advances under the Loan
will be made on any day on which CoBank is open for business (a "Business
Day"), except any day when Federal Reserve Banks are closed, within two
Business Days of receipt by CoBank of a written or telephonic request of an
authorized employee of the Borrower; provided, however, that an authorized
officer of the Borrower shall have provided CoBank with at least two Business
Day's prior written notice of the date on which the first advance under the
Loan is to be made (the "Funding Date"), and the Funding Date so designated
shall not be later than May 15, 1995. Unless otherwise agreed, all advances will
be made available by wire transfer of immediately available funds to such
account or accounts as the Borrower may designate from time to time on forms
supplied by CoBank. In making advances upon telephonic requests, CoBank shall
be entitled to rely on (and shall incur no liability to the Borrower in acting
upon) any request made by a person identifying himself or herself as one of the
persons authorized by the Borrower to request advances hereunder, so long as
the funds are wired to an account previously designated by the Borrower.
<PAGE> 2
Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
SECTION 4. INTEREST AND FEES.
(A) RATE OPTIONS; ETC. The unpaid principal balance of the
Loan shall accrue interest at the rate or rates determined or selected by the
Borrower in accordance with this Subsection (A).
(1) VARIABLE RATE OPTION. As to any portion of the
unpaid principal balance of the Loan selected by the Borrower (any such
portion, and any portion selected pursuant to Subsection (A)(2), a
"Portion" of the Loan), interest shall accrue pursuant to this variable
rate option at a variable annual interest rate (the "Variable Rate")
equal at all times to the sum of the National Variable Rate (as
hereinafter defined) plus a margin (the "NVR Margin") equal to the
percentage determined in accordance with Subsection (B). The term
"National Variable Rate" shall mean the rate of interest established by
CoBank from time to time as its National Variable Rate. The National
Variable Rate is intended by CoBank to be a reference rate, and CoBank
may charge other borrowers rates at, above, or below that rate. Any
change in the National Variable Rate shall take effect on the date
established by CoBank as the effective date of such change, and CoBank
shall notify the Borrower promptly after any such change.
(2) FIXED RATE OPTIONS.
(a) TREASURY RATE OPTION. As to any Portion or
Portions of the Loan selected by the Borrower, interest shall
accrue pursuant to this fixed rate option at a fixed annual
interest rate (a "Treasury Rate") equal to the sum of the U.S.
Treasury Rate (as hereinafter defined) plus a margin (the
"Treasury Margin") equal to the percentage determined in
accordance with Subsection (B) (subject to Subsection (C)). Under
this option, the interest rate on any Portion of the Loan, in
minimum amounts of $100,000, may be fixed for a period (any such
period, and any period selected pursuant to Subsection (A)(2)(b),
an "Interest Period") of one year or more but not beyond the
Maturity Date (as defined in Section 5); provided, however, that
such Interest Period may expire only on a Business Day; provided
further, however, that in the written notice of the Funding Date
given pursuant to Section 3, the Borrower may elect (i) to have a
Portion of the Loan in the amount of $5,582,912.43 accrue
interest at a fixed rate equal to 8.09% for an Interest Period
commencing on the Funding Date and ending on February 17, 1998,
and (ii) to have a Portion of the Loan in the amount of
$1,924,676.00 accrue interest at a fixed rate equal to 8.73% for
an Interest Period commencing on the Funding Date and ending on
August 25, 1995 (for purposes of this Agreement, any rate
selected pursuant to this clause shall be
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<PAGE> 3
Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
deemed to be a Treasury Rate); and provided further, however,
that each Portion of the Loan accruing interest at a Treasury
Rate shall be repaid in part as provided in Section 5 on each
Payment Date (as defined in Section 5) occurring during the
applicable Interest Period. The term "U.S. Treasury Rate" shall
mean the yield to maturity on U.S. Treasury instruments having
the same maturity as the last day of the Interest Period
selected, as indicated by Telerate (page 5) at approximately 9:30
a.m., Eastern time, on the date the interest rate is fixed. If,
however, no yield is available for the period selected, then the
interest rate shall be interpolated based on the interest rates
quoted for the next longest and shortest periods of time. In the
event Telerate ceases to provide such quotations or materially
changes the form or substance of page 5 (as determined by
CoBank), then CoBank will notify the Borrower and the parties
hereto will agree upon a substitute basis for obtaining such
quotations.
(b) QUOTED RATE OPTION. As to any Portion or
Portions selected by the Borrower, interest shall accrue pursuant
to this quoted fixed rate option at a fixed annual interest rate
(a "Quoted Rate") equal to the rate quoted by CoBank, in its sole
and absolute discretion, on the date any such Portion is to be
fixed pursuant to this option for the Interest Period selected by
the Borrower for such Portion. Under this option, each Portion so
fixed for any separate Interest Period must be in a minimum
amount of $100,000 and Portions may be fixed for Interest Periods
ranging from 30 days to the Maturity Date; provided, however,
that Interest Periods may expire only on a Business Day; and
provided further, however, that each Portion of the Loan accruing
interest at a Quoted Rate shall be repaid in part as provided in
Section 5 on each Payment Date occurring during the applicable
Interest Period.
(3) SELECTION AND CHANGES OF RATES. The Borrower shall
select the applicable interest rate or rates at the time it gives CoBank
written notice of the Funding Date pursuant to Section 3. The Borrower
may, on any Business Day, elect to have one of the fixed rate options
apply to any Portion of the Loan then accruing interest at the Variable
Rate. With respect to any Portion of the Loan accruing interest pursuant
to one of the fixed rate options, the Borrower may, subject to
Subsection (A)(2), on the last day of the Interest Period for such
Portion, elect to fix the interest rate accruing on such Portion for
another Interest Period pursuant to one of the fixed rate options. In
the absence of any such election, interest shall automatically accrue on
such Portion of the Loan at the Variable Rate. From time to time, the
Borrower may elect on a Business Day and upon payment of the Surcharge
(as defined in, and calculated pursuant to, Section 6) to convert all,
but not
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<PAGE> 4
Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
part, of any Portion of the Loan accruing interest pursuant to one of
the fixed rate options to accrue interest at the Variable Rate or
pursuant to another of the fixed rate options for an Interest Period as
provided in Subsection (A)(2). Except for the initial selection, all
interest rate selections provided for herein shall be made by
telephonic or written request of an authorized employee of the Borrower
by 12:00 noon, Eastern time, on the relevant day.
(4) ACCRUAL OF INTEREST. Interest shall accrue pursuant
to the fixed rate options from and including the first day of the
applicable Interest Period to but excluding the last day of the Interest
Period. If the Borrower elects to refix the interest rate on any Portion
of the Loan pursuant to Subsection (A)(3), the first day of the new
Interest Period shall be the last day of the preceding Interest Period.
In the absence of any such election, interest shall accrue on such
Portion at the Variable Rate from and including the last day of such
Interest Period. If the Borrower elects to convert from one of the fixed
rate options to the Variable Rate or to another fixed rate option upon
payment of the Surcharge as provided in Subsection (A)(3), interest at
the existing fixed rate shall accrue through the day before such
conversion and either (i) the first day of any new Interest Period shall
be the date of such conversion, or (ii) interest at the Variable Rate
shall accrue on the Portion of the Loan so converted from and including
the date of conversion.
(B) MARGINS. The NVR Margin shall be 1.00% and the Treasury
Margin shall be 3.00% from the date hereof through June 30, 1996. Thereafter,
the NVR Margin and the Treasury Margin (accordingly, the Treasury Rate with
respect to any Portion of the Loan fixed pursuant to Sections 4(A)(1) and (2)
may fluctuate during the Interest Period selected for such Portion, which
fluctuation shall depend on changes in the applicable Treasury Margin pursuant
to this Section 4(B)) shall be equal to the percentage specified below based on
the Total Leverage Ratio (as hereinafter defined) of the Borrower on the last
day of the immediately preceding fiscal quarter:
<TABLE>
<CAPTION>
TOTAL LEVERAGE RATIO NVR MARGIN TREASURY MARGIN
-------------------- ---------- ---------------
<S> <C> <C>
Greater than 5.00 1.00% 3.00%
3.50 to 5.00 0.50% 2.25%
Less than 3.50 (0.25)% 1.75%
</TABLE>
The applicable NVR Margin and the Treasury Margin shall be (i)
increased, if warranted, beginning the 5th Business Day following CoBank's
receipt of the financial statements required pursuant to Sections 13(I)(1) and
(2) and the compliance certificate
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<PAGE> 5
Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
required pursuant to Section 13(I)(9) and (ii) decreased, if warranted,
beginning the 5th Business Day following CoBank's receipt of such financial
statements and compliance certificate and the Borrower's written request to
decrease the margin. In the event that CoBank shall not receive when due such
financial statements and compliance certificate, then from such due date and
until the 5th Business Day following CoBank's receipt of such overdue financial
statements and compliance certificate (and in the event a decrease in the
applicable margin is then warranted, receipt of the Borrower's written request
to decrease such margin), the NVR Margin shall be 1.00% and the Treasury Margin
shall be 3.00%.
The term "Total Leverage Ratio" shall mean the ratio of
Indebtedness to Operating Cash Flow (as such terms are hereinafter defined).
The term "Indebtedness" shall mean (i) obligations for borrowed money, (ii)
obligations representing the deferred purchase price of property or services
other than accounts payable arising in connection with the purchase of
inventory on terms customary in the trade, (iii) obligations, whether or not
assumed, secured by liens or payable out of the proceeds or production from
property now or hereafter owned or acquired, (iv) obligations which are
evidenced by notes, acceptances or other instruments, (v) capitalized
agreements, (vi) fixed rate hedging obligations that are due (after giving
effect to any period of grace or notice requirement applicable thereto) and
remain unpaid, and (vii) fixed payment obligations under guarantees that are
due and remain unpaid. The term "Operating Cash Flow" shall mean the sum of (a)
pre-tax income, or deficit, as the case may be, after payment of all management
fees (excluding extraordinary gains and the write up of any asset, and any
investment income or loss), (b) total interest expense (including non-cash
interest), (c) depreciation and amortization expense, and (d) management fees
accruing during the applicable period but unpaid. Operating Cash Flow shall be
measured for the then most recently completed four fiscal quarters, adjusted to
give effect to any acquisition, sale or other disposition of any operation or
business (or any portion thereof) during the period of calculation as if such
acquisition, sale or other disposition occurred on the first day of such period
of calculation. All calculations necessary for the determination of the Total
Leverage Ratio shall be made in accordance with generally accepted accounting
principles ("GAAP") consistently applied for the Borrower alone, without taking
into account the financial results or assets and liabilities of any affiliated
entity.
(C) MARGIN ADJUSTMENTS. Notwithstanding the foregoing, if the
spread between CoBank's cost of funds (as determined by CoBank in accordance
with its methodology) and the U.S. Treasury Rate for any Interest Period
selected by the Borrower pursuant to Subsection (A) should widen (or lessen)
from the spread in effect for the same period of time on December 15, 1994,
then the Treasury Margin may be adjusted upward (or downward) at CoBank's
discretion to reflect any such change. No such adjustment shall be applied
retroactively to any Portion of the Loan prior to the end of the Interest
Period for such Portion.
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(D) PAYMENT AND CALCULATION. The Borrower shall pay interest
monthly in arrears by the 20th day of the following month, upon any prepayment
and at maturity. Interest shall be calculated on the actual number of days the
Loan, or any part thereof, is outstanding on the basis of a year consisting of
360 days. In calculating accrued interest, the date the Loan is made shall be
included and the date any principal amount of the Loan is repaid or prepaid
shall be excluded as to such amount.
(E) DEFAULT RATE. If prior to maturity the Borrower fails to
make any payment or investment required to be made under the terms of this
Agreement or the Note (including this Section 4) or the Note (as defined in
Section 7), then, at CoBank's option in each instance, such payment or
investment shall accrue interest at 4% per annum in excess of the Variable
Rate. After maturity, whether by reason of acceleration or otherwise, the
unpaid principal balance of the Loan shall automatically accrue interest at 4%
per annum in excess of the Variable Rate. All interest provided for in this
Subsection (D) shall be payable on demand and shall be calculated from and
including the date such payment was due to but excluding the date paid on the
basis of a year consisting of 360 days.
(F) ORIGINATION FEE. The Borrower shall pay to CoBank a non-
refundable origination fee in the amount of $149,625, of which $10,000 was paid
by the Borrower upon acceptance of CoBank's commitment letter, dated December
5, 1994, relating to the Loan.
SECTION 5. PRINCIPAL REPAYMENT AND MATURITY. The principal balance of
the Loan outstanding on the Termination Date shall be repaid in eighty-four
(84) consecutive monthly installments, due on the 20th day of each month (each,
a "Payment Date"), commencing on January 20, 1996, with the last such monthly
installment due on December 20, 2002 (the "Maturity Date"). The amount of each
such installment of principal during each of the following calendar years shall
be equal to the amount derived by multiplying the principal balance of the Loan
outstanding on the Termination Date by the percentage set forth below for such
calendar year:
<TABLE>
<CAPTION>
YEAR PERCENTAGE YEAR PERCENTAGE
---- ---------- ---- ----------
<S> <C> <C> <C>
1996 0.417% 2000 1.459%
1997 0.625% 2001 1.667%
1998 0.834% 2002 2.084%
1999 1.250%
</TABLE>
Any Portion of the Loan accruing interest at the Variable Rate and each Portion
of the Loan accruing interest at a Treasury Rate shall be reduced by an amount
equal to the amount of each installment payment made pursuant to this Section 5
multiplied by a
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fraction, the numerator of which is the outstanding principal balance of such
Portion immediately prior to such payment and the denominator of which is the
total outstanding principal balance of the Loan immediately prior to such
payment. On the Maturity Date, the amount of the then unpaid principal balance
of the Loan and any and all other amounts due and owing hereunder or under any
other Loan Document shall be due and payable. If any Payment Date is not a
Business Day, then the principal installment then due shall be paid on the next
Business Day and shall continue to accrue interest until paid.
SECTION 6. PREPAYMENT. The Borrower may, on one Business Day's prior
written notice, (i) prepay in full or in part any Portion of the Loan accruing
interest at the Variable Rate, and (ii) prepay in full (but not in part) any
Portion of the Loan accruing interest pursuant to one of the fixed rate
options. After the Termination Date, any prepayment shall be applied in such a
manner as to reduce the amount owing on each remaining principal installment
due pursuant to Section 5 by a percentage determined by dividing the amount
prepaid by the total unpaid principal balance of the Loan immediately prior to
such prepayment. For purposes of calculating the surcharge provided in this
Section 6, but not for purposes of reducing amounts due on each Payment Date,
conversion of a Portion of the Loan accruing interest pursuant to one of the
fixed rate options to a different rate pursuant to Section 4(A)(3) shall be
deemed a prepayment in full of that Portion of the Loan. Notwithstanding the
foregoing, upon any prepayment of any Portion of the Loan accruing interest
pursuant to one of the fixed rate options and as a condition to any voluntary
prepayment, the Borrower shall pay to CoBank, on the date of such prepayment, a
surcharge (the "Surcharge") determined and calculated as follows:
(A) Determine the difference between: (i) CoBank's cost of
funds (determined in accordance with its standard methodology) on the date the
interest rate was fixed to fund the Portion of the Loan being prepaid; minus
(ii) CoBank's cost of funds (determined in accordance with such methodology) on
the date of prepayment to fund a new loan with a maturity equal to the
remainder of the selected Interest Period of the Portion of the Loan being
prepaid. If such difference is negative, then no Surcharge is payable.
(B) If such difference is positive, divide the result
determined in Subsection (A) by 12.
(C) For each month or part thereof during which the Portion of
the Loan being prepaid was scheduled to have been outstanding, multiply the
amount determined in Subsection (B) by that part of the Portion of the Loan
being prepaid that was scheduled to have been outstanding during such month
(such that there is a monthly calculation for each month during which the
Portion of the Loan being prepaid was scheduled to have been outstanding).
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(D) Determine the present value of each monthly calculation
made under Subsection (C) based upon the scheduled time that interest on the
Portion of the Loan being prepaid would have been payable and a discount rate
equal to the rate set forth in Subsection (A)(ii).
(E) Add all of the calculations made under Subsection (D). The
result shall be the Surcharge.
SECTION 7. NOTE. The Borrower's obligation to repay the Loan shall be
evidenced by a promissory note in form and content acceptable to CoBank and to
the Borrower (as the same may be amended, supplemented, extended or restated
from time to time, and any promissory note that may be issued from time to time
in substitution, renewal, extension, replacement or exchange therefor, the
"Note").
SECTION 8. MANNER AND TIME OF PAYMENT. If any date on which payment is
due hereunder is not a Business Day, the payment shall be made on the next
succeeding Business Day. The Borrower shall make each payment under this
Agreement and under the Note by wire transfer of immediately available funds or
by check. Wire transfers shall be made to the Federal Reserve Bank of Kansas
City for advice to and credit of CoBank, Federal Reserve Bank account number
3070-8875-4 (or to such other account as CoBank may designate by notice) with
sufficient information to identify the source and application of such funds.
The Borrower shall give CoBank telephonic notice no later than 12:00 noon,
Eastern time, of its intent to pay by wire transfer. Wire transfers received
after 3:00 p.m., Eastern time, shall be credited on the next Business Day.
Checks shall be mailed or delivered to CoBank at Drawer CS 198552, Atlanta,
Georgia 30384-8552 (or to such other address as CoBank may designate by
notice). Credit for payment by check will not be given until the next Business
Day after receipt of the check or the actual receipt of immediately available
funds, whichever is later.
SECTION 9. CAPITALIZATION. The Borrower agrees to purchase such equity
in CoBank as CoBank may from time to time require in accordance with its bylaws
and capital plan; provided, however, that CoBank may not require the Borrower
to purchase equity in CoBank in an amount greater than 13% of the portion of
CoBank's five-year average risk-adjusted asset base attributable to loans made
by CoBank to the Borrower. In connection with the foregoing, the Borrower
hereby acknowledges receipt, prior to the execution of this Agreement, of
CoBank's bylaws, a written description of the terms and conditions under which
the equity is issued, CoBank's Loan-Based Capital Plan, CoBank's most recent
annual report, and if more recent than CoBank's latest annual report, its
latest quarterly report. The Borrower hereby consents and agrees that the
amount of any distributions with respect to its patronage with CoBank that are
made in qualified written notices of allocation (as defined in 26 U.S.C.
Section 1388) and that are received by the Borrower from CoBank will be
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taken into account by the Borrower at the stated dollar amounts whether the
distribution is evidenced by a Participation Certificate or other form of
written notice that such distribution has been made and recorded in the name of
the Borrower on the records of CoBank. All such investments and all other
equities which the Borrower may now own or hereafter acquire or be allocated in
CoBank shall be subject to a statutory first lien in favor of CoBank.
SECTION 10. SECURITY. The Loan and the Note are secured by that certain
(i) Security Agreement, dated as of even date herewith, made by the Borrower to
CoBank (as the same may be amended, supplemented, extended or restated from
time to time, the "Security Agreement") pursuant to which the Borrower shall
grant to CoBank a first priority security interest in all of its now owned or
hereafter acquired tangible and intangible personal property; and (ii)
Collateral Assignment of Leases, dated as of even date herewith, made by the
Borrower to CoBank (as the same may be amended, supplemented, extended or
restated from time to time, the "Assignment") pursuant to which the Borrower
shall assign to CoBank all of its rights in and to such leases, permits and
other agreements with respect to cell sites or antenna locations as CoBank
shall require.
The Loan and the Note shall be guaranteed by that certain Limited
Recourse Continuing Guaranty, dated as of even date herewith, made by Mercury
Cellular Telephone Company ("MCTC") for the benefit of CoBank (as the same may
be amended, supplemented, extended or restated from time to time, the "MCTC
Limited Recourse Guaranty"). The Loan, the Note and MCTC Limited Recourse
Guaranty shall be secured by that certain MCTC Pledge Agreement, dated as of
even date herewith, by and between MCTC and CoBank, as beneficiary of the MCTC
Limited Recourse Guaranty and holder of the Note (as the same may be amended,
supplemented or restated from time to time, the "MCTC Pledge Agreement"),
pursuant to which MCTC shall pledge, on a first priority basis, all of its now
owned or hereafter acquired capital stock in the Borrower.
SECTION 11. CONDITIONS PRECEDENT.
(A) INITIAL ADVANCE. CoBank's obligation to make the initial
advance under the Loan is subject to the satisfaction of each of the following
conditions precedent on or before the Funding Date:
(1) LOAN DOCUMENTS. That CoBank receive duly executed
originals of this Agreement, the Note, the Security Agreement, the
Assignment, the MCTC Limited Recourse Guaranty, the MCTC Pledge
Agreement and all other instruments and documents contemplated hereby or
thereby (collectively, the "Loan Documents").
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Loan No. T0364
(2) AUTHORIZATION. That CoBank receive copies of all
corporate documents and proceedings of the Borrower and MCTC authorizing
the execution, delivery, and performance of the Loan Documents to which
each is a party, certified by appropriate officers of such entities.
(3) APPROVALS. That CoBank receive evidence
satisfactory to it that all federal and state consents and approvals
(including, without limitation, all regulatory approvals) which are
necessary for, or required as a condition of, the validity and
enforceability of the Loan Documents, the creation or perfection of the
liens and security interests identified in Section 10, or the completion
of the acquisition of Miscellco's assets by the Borrower pursuant to the
Acquisition Agreement have been obtained and are in full force and
effect.
(4) OPINIONS OF COUNSEL. That CoBank receive opinions
of counsel for the Borrower and MCTC (who shall be mutually acceptable)
in form and content acceptable to all parties.
(5) FEES, EXPENSES AND CAPITAL. That the Borrower (i)
pay the remainder of the origination fee set forth in Section 4(F) and
the costs and expenses required to be paid by the Borrower pursuant to
Section 20; and (ii) make a capital contribution in CoBank in the amount
of $1,000.
(6) PERMITS. That CoBank receive evidence satisfactory
to it that the Borrower possesses all necessary operating permits,
authorizations, approvals, and the like which are material to the
conduct of the Borrower's business or which may otherwise be required by
law.
(7) INSURANCE. That CoBank receive evidence of
insurance by the Borrower in such amounts and covering such risks as are
usually carried by companies in the same or similar business.
(8) ENVIRONMENTAL MATTERS. That CoBank receive from the
Borrower such update of an environmental checklist and such update of
environmental records and procedures for Miscellco as CoBank shall
require, all of such information to be satisfactory to CoBank in its
sole discretion.
(9) PERFECTION AND PRIORITY OF LIENS. That CoBank
receive an opinion of counsel in form and content acceptable to it to
the effect that, as of the Funding Date, CoBank has a duly perfected
security interest or lien in all collateral covered by the Security
Agreement, the Assignment, and the MCTC Pledge
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Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
Agreement, subject in each case to no prior liens other than as
permitted in such documents.
(10) NO MATERIAL ADVERSE CHANGE. That from December 31,
1993, to the Funding Date there shall not have occurred any event which
has had or could have a Material Adverse Effect (as hereinafter defined)
on Miscellco. For purposes of this Agreement, the term "Material Adverse
Effect" when used with reference to any entity shall mean a material
adverse effect on the condition, financial or otherwise, operations,
properties or business of such entity or on the ability of such entity
to perform its obligations under the Loan Documents to which it is a
party.
(11) NO INJUNCTION. That no court or other government
body or public authority shall have issued an order which shall then be
in effect restraining or prohibiting the completion of the transactions
contemplated hereby.
(12) MISCELLCO ACQUISITION. That, concurrently with such
advance, the Borrower shall have acquired the real and personal property
of Miscellco in accordance with the terms of the Acquisition Agreement,
free and clear of any and all liens and encumbrances, and that CoBank
receive such evidence thereof as it shall reasonably require.
(13) RUS ELIGIBILITY. That CoBank receive a
certification satisfactory to it from the Rural Utilities Service to the
effect that the Borrower is eligible to borrow from the Rural Utilities
Service.
(14) OTHER DOCUMENTS. That CoBank receive such other
opinions, certificates and documents as CoBank may reasonably request.
(B) ALL ADVANCES. CoBank's obligation to make each advance
hereunder, including the initial advance, is subject to the satisfaction of
each of the following conditions precedent on or before the date of such
advance:
(1) EVENT OF DEFAULT. That no Event of Default (as that
term is defined in Section 15) exists, and that there has occurred no
event which with the passage of time or the giving of notice, or both,
could become an Event of Default (each such event, a "Default").
(2) REPRESENTATIONS AND WARRANTIES. That the
representations and warranties of the Borrower contained in this
Agreement and any other Loan Document to which it is a party and of MCTC
contained in the MCTC Limited
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Loan No. T0364
Recourse Guaranty, the MCTC Pledge Agreement and any other Loan
Documents to which it is a party be true and correct in all material
respects on and as of the date of such advance, as though made on and as
of such date.
(3) OFFICER'S CERTIFICATE. That CoBank receive, if it
so requests, a certificate, in the form attached hereto as Exhibit A,
dated the date of such advance, signed by an officer of the Borrower
acceptable to CoBank, certifying as to the truth and accuracy of the
representations and warranties of the Borrower and MCTC under the Loan
Documents and the satisfaction of each of the conditions applicable to
the making of the advance under the Loan specified herein and, in
connection with the initial advance hereunder, such other matters
relating to the closing as CoBank shall require.
SECTION 12. REPRESENTATIONS AND WARRANTIES. To induce CoBank to make
advances hereunder, and recognizing that CoBank is relying hereon, the Borrower
represents and warrants, as of the date of this Agreement, as of the Funding
Date, and as of the date of each advance hereunder, as follows:
(A) ORGANIZATION; POWERS; ETC. The Borrower (i) is duly
organized, validly existing, and in good standing under the laws of the state
of its incorporation; (ii) is duly qualified to do business and is in good
standing in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification; (iii) has all requisite
corporate and legal power to own and operate its assets and to carry on its
business and to enter into and perform its obligations under the Loan Documents
to which it is a party; (iv) has duly and lawfully obtained and maintains all
licenses, certificates, permits, authorizations, approvals, and the like which
are material to the conduct of its business or which may be otherwise required
by law; and (v) is eligible to borrow from CoBank.
(B) DUE AUTHORIZATION; NO VIOLATIONS; ETC. The execution and
delivery by the Borrower of, and the performance by the Borrower of its
obligations under, the Loan Documents to which it is a party have been duly
authorized by all requisite corporate action on the part of the Borrower and
its Shareholders and do not and will not (i) violate any provision of any law,
rule or regulation, any judgment, order or ruling of any court or governmental
agency, the articles of incorporation or bylaws of the Borrower, or any
agreement, indenture, mortgage, or other instrument to which the Borrower is a
party or by which the Borrower or any of its properties are bound, or (ii) be
in conflict with, result in a breach of, or constitute with the giving of
notice or lapse of time, or both, a default under any such agreement,
indenture, mortgage, or other instrument.
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(C) GOVERNMENTAL APPROVAL. No consent, permission,
authorization, order, or license of any governmental authority is necessary in
connection with the execution, delivery, performance, or enforcement of the
Loan Documents to which the Borrower is a party, the creation and perfection of
the liens and security interests granted thereby, or the acquisition by the
Borrower of the assets of Miscellco in accordance with the Acquisition
Agreement, except such as have been obtained and are in full force and effect.
(D) BINDING AGREEMENT. Each of the Loan Documents to which the
Borrower is a party is, or when executed and delivered will be, the legal,
valid, and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms, subject only to limitations on enforceability
imposed by (i) applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting creditors' rights generally, and (ii) general
equitable principles.
(E) COMPLIANCE WITH LAWS. The Borrower is in compliance in all
material respects with all federal, state, and local laws, rules, regulations,
ordinances, codes, and orders (collectively, "Laws"), the failure to comply
with which could have a Material Adverse Effect on the Borrower.
(F) ENVIRONMENTAL COMPLIANCE. Without limiting the provisions
of Subsection (E), all property owned or leased by the Borrower and all
operations conducted by it are in compliance in all material respects with all
Laws relating to environmental protection, the failure to comply with which
could have a Material Adverse Effect on the Borrower.
(G) LITIGATION. There are no pending legal, arbitration, or
governmental actions or proceedings to which the Borrower is a party or to
which any of its property is subject which could have a Material Adverse Effect
on the Borrower, and to the best of the Borrower's knowledge, no such actions
or proceedings are threatened or contemplated.
(H) FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE; ETC. The
audited financial statements of MCTC for the fiscal year ended December 31,
1993, the unaudited financial statements of MCTC for the fiscal year ended
December 31, 1994, and the unaudited financial statements of MCTC for the
two-month period ended February 28, 1995, submitted to CoBank in connection
with the Loan fairly and fully present in all material respects the financial
condition of MCTC and the results of the operations of MCTC for the periods
covered thereby and were prepared in accordance with GAAP consistently applied
and any system of accounts to which such entities were subject. Since December
31, 1993, there has occurred no event which has had or could have a Material
Adverse Effect on MCTC. All budgets, projections, feasibility studies, and
other
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documentation submitted by the Borrower to CoBank in connection with the Loan
were based upon assumptions that were reasonable and realistic at the time
submitted and, as of the date hereof, no fact has come to light, and no event
or transaction has occurred, which would cause any assumption made therein not
to be reasonable or realistic.
(I) PRINCIPAL PLACE OF BUSINESS; RECORDS. The principal place
of business and chief executive office of the Borrower and the place where the
records required by Section 13(G) are kept is at the address of the Borrower
shown in Section 19.
(J) EMPLOYEE BENEFIT PLANS. To the extent applicable, the
Borrower is in compliance in all material respects with the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder.
(K) TAXES. The Borrower has filed or caused to be filed all
federal, state and local tax returns that are required to be filed, and has
paid all taxes as shown on said returns or on any assessment received by the
Borrower to the extent that such taxes have become due, unless such taxes are
being contested by the Borrower in good faith and by appropriate proceedings
and then only to the extent reserves required by GAAP have been set aside on
the Borrower's books therefor.
(L) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. The Borrower is not an "investment company" as that term is defined in,
and is not otherwise subject to regulation under, the Investment Company Act of
1940, as amended. The Borrower is not a "holding company" as that term is
defined in, and is not otherwise subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended.
(M) USE OF PROCEEDS. The funds to be borrowed hereunder will
be used only as contemplated hereby. No part of such funds will be used to
purchase any "margin securities" or otherwise in violation of the regulations
of the Federal Reserve System.
(N) LICENSES; PERMITS; ETC. The Borrower is the valid holder
of all licenses, certificates, permits, authorizations, approvals, and the like
which are material to the conduct of its business or which may be required by
law, including, without limitation, all FCC licenses and permits and all
licenses and permits (if any) required by the Commission, and all such
licenses, certificates, permits, authorizations, approvals, and the like are in
full force and effect.
(O) SUBSIDIARIES. The Borrower has no subsidiaries.
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SECTION 13. AFFIRMATIVE COVENANTS. Unless otherwise agreed to in writing
by CoBank, while this Agreement is in effect, the Borrower covenants and agrees
to:
(A) CORPORATE EXISTENCE. Preserve and keep in full force and
effect its corporate existence and good standing in the jurisdiction of its
incorporation, and its qualification to transact business and good standing in
all places in which the character of its properties or the nature of its
business requires such qualification.
(B) COMPLIANCE WITH LAWS AND AGREEMENTS. Comply in all
material respects with (i) all Laws, the failure to comply with which could
have a Material Adverse Effect on the Borrower; and (ii) all agreements,
indentures, mortgages, and other instruments to which it is a party or by which
it or any of its property is bound.
(C) COMPLIANCE WITH ENVIRONMENTAL LAWS. Without limiting the
provisions of Subsection (B), comply in all material respects with, and cause
all persons occupying or present on any properties owned or leased by it to so
comply with, all Laws relating to environmental protection, the failure to
comply with which could have a Material Adverse Effect on the Borrower.
(D) LICENSES; PERMITS; ETC. Duly and lawfully obtain and
maintain in full force and effect all licenses, certificates, permits,
authorizations, approvals, and the like which are material to the conduct of
its business or which may be required by Law, including, without limitation,
all FCC licenses and permits and all licenses and permits, if any, of the
Commission.
(E) INSURANCE. Maintain insurance with insurance companies or
associations acceptable to CoBank in such amounts and covering such risks as
are usually carried by companies engaged in the same or similar business and
similarly situated, and make such increases in the type or amount of coverage
as CoBank may request. All such policies insuring any collateral provided for
in any Loan Document shall provide for loss payable clauses or endorsements in
form and content acceptable to CoBank. At the request of CoBank, all policies
(or such other proof of compliance with this Subsection (E) as may be
satisfactory to CoBank) shall be delivered to CoBank.
(F) PROPERTY MAINTENANCE. Maintain and preserve at all times
its property, and each and every part and parcel thereof, in good repair,
working order and condition, ordinary wear and tear excepted.
(G) BOOKS AND RECORDS. Keep adequate records and books of
account in accordance with GAAP consistently applied and any system of accounts
to which the Borrower is subject.
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(H) INSPECTION. Permit CoBank or its agents, during normal
business hours or at such other times as the parties may agree, to examine its
properties, books, and records, and to discuss its affairs, finances,
operations, and accounts with its officers, directors, employees and
independent certified public accountants.
(I) REPORTS AND NOTICES. Furnish to CoBank:
(1) ANNUAL FINANCIAL STATEMENTS. As soon as available,
but in no event later than 120 days after the end of each fiscal year of
the Borrower occurring during the term hereof, annual consolidated and
consolidating financial statements of the Borrower prepared in
accordance with GAAP consistently applied and any system of accounts to
which the Borrower is subject. Each of such financial statements shall:
(i) be audited by independent certified public accountants selected by
the Borrower and acceptable to CoBank; (ii) be accompanied by a report
of such accountants containing an opinion acceptable to CoBank; (iii) be
prepared in reasonable detail; and (iv) include a balance sheet, a
statement of income, a statement of retained earnings, a statement of
cash flows, and all notes and schedules relating thereto.
(2) MONTHLY AND YEAR-TO-DATE FINANCIAL STATEMENTS. As
soon as available but in no event later than 60 days after the end of
each of the first three fiscal quarters of each fiscal year of the
Borrower occurring during the term hereof, unaudited monthly (for the
three months immediately preceding such fiscal quarter end) and
year-to-date financial statements of the Borrower prepared in accordance
with GAAP consistently applied and any system of accounts to which the
Borrower is subject (except for the omission of footnotes and for the
effect of normal year-end audit adjustments). Each of such financial
statements shall: (i) be prepared in reasonable detail; and (ii) include
a balance sheet, a statement of income for such months and for the
period year-to-date, a statement of cash flows, and such other monthly
and year-to-date statements as CoBank may specifically request, which
statements shall include any and all supplements thereto.
(3) FINANCIAL FORECAST. As soon as available, but in no
event later than 30 days after the first day of each fiscal year of the
Borrower, a one-year financial forecast for the Borrower which shall
include, without limitation, a statement of income, a balance sheet, a
statement of sources and uses of funds, capital expenditure projections
and such other information as CoBank shall reasonably require.
(4) NOTICE OF DEFAULT. Promptly after becoming aware
thereof, notice of (a) the occurrence of any Default or Event of Default
hereunder
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Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
or under any other Loan Document, and (b) the occurrence of any breach,
default, event of default, or other event which with the giving of
notice or lapse of time, or both, could become a breach, default, or
event of default under any agreement, indenture, mortgage, or other
instrument (other than the Loan Documents) to which the Borrower is a
party or by which the Borrower or any of its property is bound or
affected if the effect of such breach, default, event of default, or
other event is to accelerate, or to permit the acceleration of, the
maturity of any indebtedness under such agreement, indenture, mortgage,
or other instrument; provided, however, that the failure to give such
notice shall not affect the right and power of CoBank to exercise any
and all of the remedies specified herein.
(5) NOTICE OF NON-ENVIRONMENTAL LITIGATION. Promptly
after the commencement thereof, notice of the commencement of all
actions, suits, or proceedings before any court, arbitrator, or
governmental department, commission, board, bureau, agency, or
instrumentality affecting the Borrower which could have a Material
Adverse Effect on the Borrower.
(6) NOTICE OF ENVIRONMENTAL LITIGATION. Without
limiting the provisions of Subsection (I)(5), promptly after receipt or
becoming aware thereof, notice of the receipt of all pleadings, orders,
complaints, indictments, or other communications alleging a condition
that may require the Borrower to undertake or to contribute to a cleanup
or other response under Laws relating to environmental protection, or
which seeks penalties, damages, injunctive relief, or criminal sanctions
related to alleged violations of such Laws, or which claims personal
injury or property damage to any person or property as a result of
environmental factors or conditions or which could have a Material
Adverse Effect on the Borrower.
(7) REGULATORY AND OTHER NOTICES. Promptly after
filing, receipt or becoming aware thereof, copies of any filings or
communications sent to or notices or other communications received by
the Borrower from any governmental authority, including, without
limitation, the Kansas Corporation Commission (the "Commission") and the
Federal Communications Commission (the "FCC"), relating to any
noncompliance by the Borrower with any Law or with respect to any matter
or proceeding the effect of which could have a Material Adverse Effect
on the Borrower.
(8) MATERIAL ADVERSE CHANGE. Prompt notice of any
matter which has had or could have a Material Adverse Effect on the
Borrower.
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Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
(9) COMPLIANCE CERTIFICATES. Concurrently with each
financial statement required to be furnished pursuant to Subsections
(I)(1) and (I)(2), a certificate in the form attached hereto as Exhibit
B executed by the chief accounting officer of the Borrower.
(10) ERISA REPORTABLE EVENTS. Within 10 days after the
Borrower becomes aware of the occurrence of any Reportable Event (as
defined in Section 4043 of ERISA) with respect to the Borrower, a
statement describing such Reportable Event and the actions proposed to
be taken in response to such Reportable Event.
(11) OTHER INFORMATION. Such other information regarding
the condition, financial or otherwise, or operations of the Borrower as
CoBank may, from time to time, reasonably request.
(J) FINANCIAL COVENANTS. All calculations necessary for the
financial covenants set forth in this Subsection (J) shall be made in
accordance with GAAP consistently applied for the Borrower alone, without
taking into account the financial results or assets and liabilities of any
affiliated entity.
(1) TOTAL LEVERAGE RATIO. Commencing June 30, 1996,
maintain at all times during the periods set forth below a Total
Leverage Ratio not in excess of the ratios set forth below for such
periods:
<TABLE>
<CAPTION>
PERIOD RATIO
------ -----
<S> <C>
6/30/96 6.50x
9/30/96 6.00x
12/31/96 5.50x
3/31/97 5.25x
6/30/97 5.00x
9/30/97 4.75x
12/31/97 4.50x
3/31/98 4.25x
6/30/98 4.00x
9/30/98 3.75x
12/31/98 and thereafter 3.50x
</TABLE>
(2) EQUITY TO TOTAL CAPITALIZATION RATIO. Maintain at
all times an Equity to Total Capitalization Ratio of not less than
43.0%. The term "Equity to Total Capitalization Ratio" shall mean the
ratio derived by dividing (i) the amount derived
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Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
by subtracting total liabilities from total assets ("Equity") by (ii)
the sum of Indebtedness plus Equity.
(3) DEBT SERVICE COVERAGE RATIO. Commencing June 30, 1996,
maintain at all times a Debt Service Coverage Ratio, for the immediately
preceding four fiscal quarters, equal to or greater than 1.20 to 1.0. The
term "Debt Service Coverage Ratio" shall mean the ratio derived by
dividing (i) Operating Cash Flow minus cash taxes by (ii) the aggregate
of principal and interest payments due on Indebtedness during the period
of calculation.
(4) OPERATING CASH FLOW. For each of the following fiscal
periods, Operating Cash Flow (in each case determined from May 1,1995,
and not over the trailing 12-months) shall not be less than the amounts
specified below:
<TABLE>
<CAPTION>
MAY 1, 1995 THROUGH OPERATING CASH FLOW
------------------- -------------------
<S> <C>
June 30, 1995 $ 300,345
September 30, 1995 $ 796,065
December 31, 1995 $1,332,814
March 31, 1996 $1,865,869
</TABLE>
(K) AFTER-ACQUIRED REAL PROPERTY. Notify CoBank in writing
promptly following the acquisition of any real property or any interest therein
and shall execute, deliver and record such additional documents and
instruments, including, without limitation, deeds of trust, security deeds
and/or mortgages, so as to grant or evidence a grant, and to perfect, a first
priority lien, security interest and/or security title in and unto CoBank,
securing all obligations of the Borrower under the Loan Documents. Upon any
failure of the Borrower to do so, CoBank may make, execute and record any such
documents and instruments for and in the name of the Borrower, and the Borrower
hereby irrevocably appoints CoBank as its attorney-in-fact to do so, which
appointment shall be coupled with an interest.
SECTION 14. NEGATIVE COVENANTS. Unless otherwise agreed to in writing by
CoBank, while this Agreement is in effect, the Borrower shall not:
(A) BORROWINGS. Create, incur, assume, or allow to exist,
directly or indirectly, any indebtedness or liability for borrowed money, for
the deferred purchase price of property or services, or for the lease of real
or personal property which lease is required to be capitalized under GAAP or
which is treated as an operating lease under regulations applicable to it but
which otherwise would be required to be capitalized under GAAP, except for (i)
obligations to CoBank and (ii) accounts payable to trade creditors and current
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Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
operating liabilities (other than for borrowed money) incurred in the ordinary
course of its business.
(B) LIENS. Create, incur, assume, or allow to exist any
mortgage, deed of trust, deed to secure debt, pledge, lien (including the lien
of an attachment, judgment, or execution), security interest, or other
encumbrance of any kind upon any of its property, real or personal. The
foregoing restrictions shall not apply to (i) liens in favor of CoBank; (ii)
liens for taxes, assessments, or governmental charges that are not past due, or
are being contested in good faith and by appropriate proceedings and then only
to the extent reserves required by GAAP have been set aside therefor; (iii)
liens, pledges, and deposits under workers' compensation, unemployment
insurance, and social security laws; (iv) liens, deposits, and pledges to
secure the performance of bids, tenders, contracts (other than contracts for
the payment of money), and like obligations arising in the ordinary course of
its business as conducted on the date hereof; and (v) liens imposed by law in
favor of mechanics, materialmen, warehousemen, lessors and like persons that
secure obligations that are not past due, or are being contested in good faith
and by appropriate proceedings and then only to the extent reserves required by
GAAP have been set aside therefor.
(C) MERGERS; ACQUISITIONS; ETC. Merge or consolidate with any
other entity or acquire all or substantially all of the assets of any person or
entity, or form or create any subsidiary or commence operations under any other
name, organization, or entity, including any joint venture.
(D) TRANSFER OF ASSETS. Sell, transfer, lease, enter into any
contract for the sale, transfer or lease of, or otherwise dispose of, any of
its assets, except in the ordinary course of its business.
(E) LOANS AND INVESTMENTS. After the date hereof, make any
loan or advance to, invest in, purchase or make any commitment to purchase any
commercial paper, stock, bonds, notes, or other securities of any person or
entity (each, whether made directly or indirectly, an "Investment") in an
amount in excess of $100,000 as to any sing]e Investment or in excess of
$1,000,000 as to all Investments existing at any time, other than (i)
securities or deposits issued, guaranteed or fully insured as to payment by the
United States of America or any agency thereof, (ii) stock or other securities
of CoBank, (iii) commercial paper, stocks, bonds, notes or other securities of
institutions whose senior unsecured debt obligations are rated by a nationally
recognized rating organization in any of its three highest rating categories or
any equivalent successor rating categories, or (iv) mutual funds that have a
four star rating by Morningstar Mutual Funds, 225 West Wacker Drive, Chicago,
Illinois 60606, or an equivalent rating by a nationally recognized rating
organization.
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Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
(F) GUARANTEES. Guarantee, assume or otherwise become
obligated or liable with respect to the indebtedness or other obligations of
any person or entity.
(G) CHANGE IN BUSINESS. Engage in any business activity or
operation different from or unrelated to the Borrower's current business
activities or operations.
(H) DISPOSITION OF LICENSES. Sell, assign, transfer, or
otherwise dispose of, or attempt to dispose of, in any way, any registrations,
licenses, franchises, grants, permits, or other governmental approvals.
(I) SALARIES; WAGES; COMPENSATION. Pay any wages, salaries or
other compensation to any officer, director, stockholder (or relative thereof)
of the Borrower unless such compensation shall be (i) reasonable and comparable
with compensation paid by companies of like nature, similarly situated, and
(ii) payment for services actually rendered.
(J) DIVIDENDS. Make, declare or pay, directly or indirectly,
any dividend or other distribution of assets to shareholders of the Borrower,
retire, redeem, purchase or otherwise acquire for value any capital stock of
the Borrower.
SECTION 15. EVENTS OF DEFAULT. Each of the following shall constitute an
"Event of Default" hereunder:
(A) PAYMENT DEFAULT. The failure by the Borrower to make any
payment or investment required to be made hereunder, under the Note, or under
any other Loan Document when due.
(B) REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made by the Borrower or MCTC herein or in any other Loan Document, or
any factual statement made in any certificate delivered in connection with the
Loan, shall prove to have been false or misleading in any material respect on
or as of the date made.
(C) CERTAIN AFFIRMATIVE COVENANTS. The failure by the Borrower
to perform or comply with any covenant set forth in Section 13 (other than
Sections 13(A) and 13(I)(4), (5), (6), (7), (8) and (10)), and such failure
continues for 30 days after written notice thereof shall have been delivered by
CoBank to the Borrower.
(D) OTHER COVENANTS AND AGREEMENTS. The failure by the
Borrower to perform or comply with any other covenant or agreement contained
herein, including, without limitation, any covenant excluded under Subsection
(C).
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Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
(E) CROSS-DEFAULT. The occurrence of any breach, default,
event of default, or event which with the giving of notice or lapse of time, or
both, could become a default or event of default under (i) any Loan Document
other than this Agreement, or (ii) the terms of any agreement (other than the
Loan Documents) between the Borrower or MCTC and CoBank, including, without
limitation, any guaranty, loan agreement, security agreement, pledge agreement,
mortgage, deed to secure debt, or deed of trust.
(F) OTHER INDEBTEDNESS. The occurrence of any breach, default,
event of default, or event which with the giving of notice or lapse of time, or
both, could become a default or event of default under any agreement,
indenture, mortgage, or other instrument by which the Borrower or any of its
property is bound or affected (other than the Loan Documents) if the effect of
such breach, default, event of default, or event is to accelerate, or to permit
the acceleration of, the maturity of any indebtedness under such agreement,
indenture, mortgage, or other instrument.
(G) JUDGMENTS. Any judgment, decree or order for the payment
of money in an aggregate amount in excess of $75,000 shall be rendered against
the Borrower and either (i) enforcement proceedings shall have been commenced;
or (ii) such judgments, decrees, and orders shall continue unsatisfied and in
effect for a period of 45 consecutive days without being vacated, discharged,
satisfied, or stayed pending appeal.
(H) INSOLVENCY, ETC. Any of the Borrower or MCTC (i) shall
become insolvent or shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they come due; or (ii) shall
suspend its business operations or a material part thereof or make an
assignment for the benefit of creditors; or (iii) shall apply for, consent to,
or acquiesce in the appointment of a trustee, receiver, or other custodian for
it or any of its property or, in the absence of such application, consent, or
acquiescence, a trustee, receiver, or other custodian is so appointed; or (iv)
shall commence with respect to it or have commenced against it any proceeding
under any bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution, or liquidation law or statute of any jurisdiction.
(I) ELIGIBILITY. The failure by the Borrower to maintain its
eligibility to borrow from CoBank.
(J) SECURITY. Any of the Security Agreement, the Assignment,
the MCTC Pledge Agreement or any mortgage or other instrument entered into
pursuant to Section 13(K), or the filings contemplated thereby shall for any
reason fail (i) to create a valid and perfected first-priority lien or security
interest (subject only to such exceptions as are therein permitted) on any of
the property identified therein, or (ii) to secure thereunder the obligations
evidenced by the Note, this Agreement or the MCTC Guaranty, as
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Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
applicable. The MCTC Limited Recourse Guaranty shall fail for any reason to be
the valid and binding obligation of MCTC, or MCTC shall in any way contest or
dispute the validity and binding effect of the MCTC Limited Recourse Guaranty.
SECTION 16. REMEDIES UPON EVENT OF DEFAULT.
(A) AUTOMATIC ACCELERATION. Upon the occurrence of an Event of
Default under Section 15(H), the entire unpaid principal balance of the Note,
all accrued interest thereon, and all other amounts payable under this
Agreement, the Note, and all other agreements between CoBank and the Borrower
shall become immediately due and payable without protest, presentment, demand,
or further notice of any kind, all of which are hereby expressly waived by the
Borrower.
(B) ACCELERATION; ETC. Upon the occurrence of an Event of
Default other than under Section 15(H), upon notice to the Borrower, CoBank may
declare the entire unpaid principal balance of the Note, all accrued interest
thereon, and all other amounts payable under this Agreement and all other
agreements between CoBank and the Borrower, to be immediately due and payable.
Upon such a declaration, the unpaid principal balance of the Note and all such
other amounts shall become immediately due and payable, without protest,
presentment, demand, or further notice of any kind, all of which are hereby
expressly waived by the Borrower.
(C) ENFORCEMENT. Upon the occurrence of an Event of Default,
CoBank may proceed to protect, exercise, and enforce such rights and remedies
as may be provided by agreement or under law including, without limitation, the
rights and remedies provided for in the Note and any of the other Loan
Documents. Each and every one of such rights and remedies shall be cumulative
and may be exercised from time to time, and no failure on the part of CoBank to
exercise, and no delay in exercising, any right or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise of any right or remedy
preclude any other or future exercise thereof, or the exercise of any other
right. In addition, CoBank may hold and/or set off and apply against the
Borrower's indebtedness any and all cash, accounts, securities, or other
property in CoBank's possession or under its control.
(D) APPLICATION OF PAYMENTS. After acceleration of the Loan,
all amounts received by CoBank shall be applied to the amounts owing hereunder,
under the Note, and the other Loan Documents in whatever order and manner as
CoBank shall elect.
(E) REGULATORY APPROVALS. Upon any action by CoBank to
commence the exercise of remedies hereunder or under the Mortgage, the Security
Agreement, the Assignment or the MCTC Pledge Agreement, the Borrower hereby
undertakes and agrees
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Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
to cooperate and join with CoBank in any application to the Commission, the FCC
or any other regulatory body, administrative agency, court or other forum (any
such entity, a "Governmental Authority") with respect thereto and to provide
such assistance in connection therewith as CoBank may request, including,
without limitation, the preparation of filings and appearances of officers and
employees of the Borrower before such Governmental Authority, in each case in
support of any such application made by CoBank, and the Borrower shall not,
directly or indirectly, oppose any such action by CoBank before any such
Governmental Authority.
SECTION 17. COMPLETE AGREEMENT; AMENDMENT. This Agreement and the other
Loan Documents are intended by the parties to be a complete and final
expression of their agreement. No amendment, modification, or waiver of any
provision hereof or thereof, nor any consent to any departure of the Borrower
herefrom or therefrom, shall be effective unless approved by CoBank and
contained in a writing signed by or on behalf of CoBank, and then such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 18. APPLICABLE LAW. Except to the extent governed by applicable
federal law, this Agreement shall be governed by and construed in accordance
with the laws of the State of Kansas, without reference to choice of law
doctrine.
SECTION 19. NOTICES. All notices hereunder shall be in writing and shall
be deemed to be duly given upon delivery, if delivered by "Express Mail,"
overnight courier, messenger or other form of hand delivery or sent by telegram
or facsimile transmission, or 3 days after mailing if sent by certified or
registered mail, to the parties at the following addresses (or such other
address for a party as shall be specified by like notice):
If to CoBank, as follows: If to the Borrower, as follows:
CoBank, ACB Mercury Cellular of Kansas, Inc.
200 Galleria Parkway One Lakeshore Drive, Suite 1495
Suite 1900 P.O. Drawer 3709
Atlanta, Georgia 30339 Lake Charles, LA 70602
Attn: Rural Utility Banking Group Attn: Robert Piper;cc:Thomas G. Henning
Fax No.: (404) 618-3202 Fax No.: (318) 439-0769
SECTION 20. COSTS AND EXPENSES. The Borrower shall reimburse CoBank on
demand for all reasonable out-of-pocket costs and expenses incurred by CoBank
in connection with the origination, negotiation, preparation and administration
of this Agreement and all other Loan Documents, and the preservation and
enforcement of CoBank's rights and remedies hereunder and thereunder,
including, without limitation: all
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Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
(i) costs and expenses (including intangible and other taxes and any recording
fees or expenses) incurred by CoBank to obtain, perfect, maintain, determine
the priority of, or release any security contemplated hereunder; (ii) fees and
expenses of any outside counsel retained by CoBank to assist CoBank with
respect to any matter contemplated by this Section 20 or to review this
Agreement and all other Loan Documents and advise CoBank as to its rights and
remedies hereunder or thereunder; (iii) fees and expenses of any outside
counsel retained by CoBank to represent it in any litigation involving the
parties to any of the Loan Documents, including but not limited to,
bankruptcy, receivership, or similar proceedings; and (iv) fees, costs and
expenses incurred in connection with obtaining surveys and appraisals, if any,
required under this Agreement or any other Loan Document; provided, however,
that the Borrower shall not be obligated to reimburse CoBank for legal fees
(exclusive of associated expenses) for the initial negotiation and
documentation of the Loan which, when aggregated with the legal fees (exclusive
of associated expenses) of CoBank reimbursed by CTC Financial, Inc. in
connection with the initial negotiation and documentation of CoBank Loan No.
T0362, exceed $60,000.
SECTION 21. EFFECTIVENESS; SEVERABILITY. This Agreement shall continue
in effect until all indebtedness and obligations of the Borrower hereunder and
under all other Loan Documents shall have been fully and finally repaid. Any
provision of the Loan Documents which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or thereof.
SECTION 22. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the Borrower and CoBank and their respective
successors and assigns, except that the Borrower may not assign or transfer its
rights or obligations hereunder without the prior written consent of CoBank.
Without the consent of, but with notice to, the Borrower, CoBank may (a) sell
participations to one or more banks or other entities in all or a portion of
its rights and obligations under this Agreement, or (b) assign to one or more
banks or other entities all or a portion of its rights and obligations under
this Agreement.
SECTION 23. CONSENT TO JURISDICTION. To the maximum extent permitted by
law, the Borrower agrees that any legal action or proceeding with respect to
this Agreement or any of the other Loan Documents may be brought in the courts
of the State of Louisiana or Kansas or of the United States of America for the
Western District of Louisiana or the District of Kansas all as CoBank may
elect. By execution of this Agreement, the Borrower hereby irrevocably submits
to each such jurisdiction, expressly waiving any objection it may have to the
laying of venue by reason of its present or future domicile. Nothing contained
herein shall affect the right of CoBank to commence legal proceedings or
otherwise proceed against the Borrower in any other jurisdiction or to serve
process in any manner permitted or required by law.
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Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
SECTION 24. OBLIGATIONS ABSOLUTE. The obligation of the Borrower to make
all payments required to be made under this Agreement shall be independent of
any action by the Commission or the FCC with respect to rates and/or
disallowance of debt.
SECTION 25. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original and shall be
binding upon all parties and their respective permitted successors and assigns,
and all of which taken together shall constitute one and the same agreement.
SECTION 26. DEFINED TERMS. For convenience of reference, set forth below
opposite each defined term used in this Agreement is the location in this
Agreement of the definition of such term:
<TABLE>
<CAPTION>
Defined Term Location
------------ --------
<S> <C>
Acquisition Agreement Section 2
Agreement Introductory Paragraph
Assignment Section 10
Borrower Introductory Paragraph
Business Day Section 3
Capital Lease Section 14(A)
CoBank Introductory Paragraph
Commission Section 13(I)(7)
Debt Service Coverage Ratio Section 13(J)(3)
Default Section 11(B)(1)
Equity Section 13(J)(2)
Equity to Total Capitalization Ratio Section 13(J)(2)
Event of Default Section 15
FCC Section 13(I)(7)
Funding Date Section 3
GAAP Section 4(B)
Governmental Authority Section 16(E)
Indebtedness Section 4(B)
Interest Period Section 4(A)(2)
Laws Section 12(E)
Loan Section 1
Loan Documents Section 11(A)(1)
Material Adverse Effect Section 11(A)(10)
Maturity Date Section 5
MCTC Section 10
</TABLE>
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<PAGE> 27
Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
<TABLE>
<S> <C>
MCTC Limited Recourse Guaranty Section 10
MCTC Pledge Agreement Section 10
Miscellco Section 2
National Variable Rate Section 4(A)(1)
Note Section 7
NVR Margin Section 4(A)(1)
Operating Cash Flow Section 4(B)
Payment Date Section 5
Portion Section 4(A)(1)
Security Agreement Section 10
Surcharge Section 6
Termination Date Section 1
Total Leverage Ratio Section 4(B)
Treasury Margin Section 4(A)(2)
Treasury Rate Section 4(A)(2)
U.S. Treasury Rate Section 4(A)(2)
Variable Rate Section 4(A)(1)
</TABLE>
IN WITNESS WHEREOF, the Borrower has caused this Agreement to be
executed and attested under seal and delivered, and CoBank has caused this
Agreement to be executed and delivered, each by its duly authorized officers,
as of the date first shown above.
MERCURY CELLULAR OF KANSAS, INC.
By: /s/ THOMAS G. HENNING
---------------------------------------
Name: Thomas G. Henning
Title: President
Attest: /s/ ROBERT PIPER
-----------------------------------
Name: Robert Piper
Title: Secretary
(CORPORATE SEAL)
COBANK, ACB
By: /s/ MARY KAY DEERING
---------------------------------------
Name: Mary Kay Deering
Title: Assistant Vice President
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<PAGE> 28
Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
EXHIBIT A
ADVANCE CERTIFICATE - LOAN NO. T0364
THIS CLOSING CERTIFICATE is given by ______________________, President
of MERCURY CELLULAR OF KANSAS, INC. (the "Borrower"), pursuant to Section
11(B)(3) of that certain Loan Agreement, dated as of April 20, 1995, by and
between CoBank, ACB and the Borrower (the "Loan Agreement"). Capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed
to them in the Loan Agreement.
I hereby certify as follows:
1. I am the President of the Borrower, and as such possess the
knowledge and authority to certify to the matters herein set forth, and the
matters herein set forth are true and accurate to the best of my present
knowledge, information and belief after due inquiry;
2. The representations and warranties of the Borrower contained in
the Loan Agreement, the Security Agreement and the Collateral Assignment, and
of MCTC contained in the MCTC Limited Recourse Guaranty and the Pledge
Agreement, are true and correct in all material respects on and as of the date
hereof;
3. No Default or Event of Default exists as of the date hereof; and
4. Each of the conditions specified in Section 11 of the Loan
Agreement required to be satisfied on or prior to the effective date hereof has
been fulfilled as of the date hereof.
IN WITNESS WHEREOF, we have executed this Advance Certificate as of
__________ ___, 1995.
-------------------------------------------
,President
----------------------------
Mercury Cellular of Kansas, Inc.
<PAGE> 29
Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
EXHIBIT B
COMPLIANCE CERTIFICATE - LOAN NO. T0364
THIS COMPLIANCE CERTIFICATE is given by ______________, the
[CHIEF ACCOUNTING OFFICER] of MERCURY CELLULAR OF KANSAS, INC. (the
"Borrower"), pursuant to Section 13(I)(9) of that certain Loan Agreement (the
"Loan Agreement"), dated as of April 20, 1995, by and between CoBank, ACB and
the Borrower. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Loan Agreement.
I hereby certify as follows:
1. I am the [CHIEF ACCOUNTING OFFICER] of the Borrower and as such
possess the knowledge and authority to certify to the matters set forth in this
Compliance Certificate;
2. Attached hereto as Annex A are the [AUDITED/UNAUDITED]
[ANNUAL/MONTHLY] [CONSOLIDATED AND CONSOLIDATING] financial statements of the
Borrower, for the fiscal [YEAR/QUARTER] ended ______________, as required by
Section 13(I) [(1)/(2)] of the Loan Agreement. Such financial statements were
prepared in accordance with GAAP consistently applied (except as may be noted
therein) and any system of accounts to which the Borrower is subject and fairly
present the financial condition of the Borrower during the periods covered
thereby and as of the dates thereof (subject, if applicable, to normal year-end
adjustments);
3. As of the date of such financial statements, the Borrower is in
compliance with the covenants set forth in Section 13(J) of the Loan Agreement.
Attached hereto as Annex B are calculations which demonstrate the compliance by
the Borrower with such covenants; and
4. I have reviewed the activities of the Borrower, and consulted
with appropriate representatives of the Borrower during the fiscal
[YEAR/QUARTER] ended _____________, and reviewed the Loan Documents. As of the
date of this Compliance Certificate, there exists no condition, event or act
which would constitute a Default or Event of Default under the Loan Agreement,
except as disclosed on Annex C hereto.
IN WITNESS WHEREOF, I have executed this Compliance Certificate as of
-----------------------------------------
[CHIEF ACCOUNTING OFFICER]
Mercury Cellular of Kansas, Inc.
<PAGE> 1
EXHIBIT 4.62
MCK
LOAN NO. T0364
LIMITED RECOURSE CONTINUING GUARANTY
THIS LIMITED RECOURSE CONTINUING GUARANTY (this "Guaranty") is made as
of April 20, 1995, by MERCURY CELLULAR TELEPHONE COMPANY ("MCTC") for the
benefit of the COBANK, ACB ("CoBank").
R E C I T A L S:
WHEREAS, MCTC owns 100% of the capital stock of Mercury Cellular of
Kansas, Inc. (the "Borrower"); and
WHEREAS, CoBank and the Borrower have entered into that certain Loan
Agreement, dated of even date herewith (as the same may be amended,
supplemented, extended or restated from time to time, the "Loan Agreement"),
providing for a loan of up to $17,100,000 (the "Loan"); and
WHEREAS, as an inducement to CoBank to enter into the Loan Agreement and
to make the Loan, MCTC has agreed to pledge all of its stock of the Borrower
pursuant to a Pledge Agreement, dated as of even date herewith, which stock
shall be used as the sole collateral for MCTC's guarantee herein of the
Obligations (as hereinafter defined), provided that CoBank's sole recourse with
respect to the guarantee herein contained is against such stock pursuant to
such Pledge Agreement;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, MCTC hereby agrees as follows:
SECTION 1. DEFINITIONS. Capitalized terms used in this Guaranty, unless
otherwise defined herein, shall have the meanings assigned to them in the Loan
Agreement.
SECTION 2. OBLIGATIONS. "Obligations" shall mean (a) the principal,
interest and other amounts becoming due and payable, whether by acceleration or
otherwise, under that certain Promissory Note, dated of even date herewith,
made by the Borrower to the order of CoBank, in the original principal amount
of $17,100,000 (as the same may be amended, extended, renewed or replaced from
time to time, the "Note'); (b) all other payments or performances to be made by
the Borrower under the other Loan Documents to which it is a party; and (c) all
other indebtedness and liabilities of the Borrower to CoBank of every kind and
description whatsoever, whether now existing or hereafter arising, fixed or
contingent, as primary obligor or as guarantor or surety, acquired directly or
by assignment or otherwise, liquidated or unliquidated, regardless of how they
arise or by what agreement or instrument they may be evidenced, including,
without limitation, all loans, advances and
<PAGE> 2
Limited Recourse Continuing Guaranty/MCTC
Loan No. T0364
other extensions of credit and all covenants, agreements, and provisions
contained in all loan and other agreements between the parties.
SECTION 3. LIMITATIONS ON RECOURSE. Notwithstanding any provision of
this Guaranty or of any other Loan Document to the contrary, in any action
brought to enforce any obligation of MCTC with respect to the Obligations, the
judgment or decree shall be enforceable only against the "Pledged Collateral"
in which CoBank has a security interest pursuant to the provisions of the MCTC
Pledge Agreement and against MCTC to the extent of its interest in the Pledged
Collateral (and not against any other assets of MCTC) and MCTC shall not be
liable to CoBank hereunder for the Obligations beyond its interest in the
Pledged Collateral; provided, however, that nothing contained in this Section
shall limit or relieve MCTC from liability for failing to comply with the
terms, covenants, conditions and provisions of this Guaranty or the MCTC Pledge
Agreement or any other agreement to which MCTC is a party, other than for the
payment of the Obligations.
SECTION 4. GUARANTY PROVISIONS.
(A) In consideration of the advances under the Loan made and
to be made by CoBank to the Borrower pursuant to the Loan Agreement and for
other good and valuable consideration, the adequacy, sufficiency and receipt of
which are hereby acknowledged, MCTC hereby absolutely, unconditionally,
directly, irrevocably, completely and immediately guarantees the full and
prompt payment, when due, whether by acceleration or otherwise, and the prompt
performance, of the Obligations; provided, however, that recourse hereunder is
limited as provided in Section 3;
(B) MCTC further agrees to pay to CoBank, upon demand, all
losses and reasonable costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses, that may be incurred by CoBank in
attempting to cause the Obligations to be paid, performed or otherwise
satisfied or in attempting to cause satisfaction of MCTC's liability under this
Guaranty or in attempting to protect or preserve any property, personal or
real, securing the Obligations; provided, however, that recourse hereunder is
limited as provided in Section 3;
(C) MCTC agrees that this Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time any payment by
the Borrower or any other person to CoBank on account of the Obligations is
rescinded or must otherwise be returned or restored by CoBank upon the
insolvency or bankruptcy of the Borrower or any other obligor, guarantor,
endorser or surety of the Obligations, all as though such payment had not been
made; provided, however, that recourse hereunder is limited as provided in
Section 3;
-2-
<PAGE> 3
Limited Recourse Continuing Guaranty/MCTC
Loan No. T0364
(D) It is the intention of MCTC and CoBank that MCTC's
liability hereunder shall not be in excess of the maximum amount permitted by
applicable federal bankruptcy, state insolvency, or similar laws (collectively,
the "Applicable Laws"). To that end, but only to the extent such liability
would otherwise be subject to avoidance under the Applicable Laws if MCTC is
not 'deemed to have received valuable consideration, fair value or reasonably
equivalent value for its liability hereunder, MCTC's liability hereunder shall
be reduced to that amount which, after giving effect thereto, would not render
MCTC insolvent, or leave MCTC with unreasonably small capital to conduct
business, or cause MCTC to have incurred debts (or intended to have incurred
debts) beyond MCTC's ability to pay such debts as they mature, at the time such
liability is deemed to have been incurred under the Applicable Laws. As used
herein, the terms "insolvent" and "unreasonably small capital" shall be
determined in accordance with the Applicable Laws. This Subsection (D) is
intended solely to preserve the rights of CoBank hereunder to the maximum
extent permitted by the Applicable Laws, and neither MCTC nor any other person
shall have any right or claim under this Subsection (D) that would not
otherwise be available under the Applicable Laws;
(E) MCTC assents to all terms and agreements heretofore or
hereafter made by the Borrower with CoBank;
(F) MCTC hereby consents to the following and agrees, with or
without notice (all notices being hereby waived), that its liability (as
limited in Section 3) will not be affected or impaired by (i) the exchange,
release or surrender of any collateral or any claim against the Borrower or any
other person, or the waiver, release or subordination of any security interest,
in whole or in part; (ii) the waiver or delay in the exercise of any of
CoBank's rights or remedies against the Borrower or any other person; (iii) the
renewal, extension or modification of the terms or amounts of any of the
Obligations, the Loan Documents or any other instrument or agreement evidencing
the same; or (iv) the acceptance by CoBank of other guaranties;
(G) MCTC waives acceptance hereof, notice of acceptance
hereof, and notice of acceleration of and intention to accelerate the
Obligations, and waives presentment, demand, protest, notice of dishonor,
notice of default, notice of nonpayment or protest in relation to any
instrument evidencing any of the Obligations, and any other demands and notices
required by law except as such waiver may be expressly prohibited by law;
(H) This is a limited recourse guaranty (as provided in
Section 3) of payment and performance and not of collection only. The liability
of MCTC under this Guaranty (as limited as provided in Section 3) shall be
absolute, unconditional, direct, irrevocable, complete and immediate and shall
not be contingent upon the pursuit of any
-3-
<PAGE> 4
Limited Recourse Continuing Guaranty/MCTC
Loan No. T0364
remedies against the Borrower or any other person, nor against any security or
lien available to CoBank, its successors, successors-in-title, endorsees or
assigns, and shall be joint and several with the liabilities of all other
guarantors of the Obligations. MCTC waives any right to require that an action
be brought against the Borrower or any other person or to require that resort
be had to any security of the Borrower or any other person (provided that all
remedies hereunder are limited as provided in Section 3). In the event of a
default under any of the Loan Documents, CoBank shall have the right to enforce
its rights, powers and remedies under any of the Loan Documents in any order,
and all rights, powers and remedies available to CoBank in such event shall be
nonexclusive and cumulative of all other rights, powers and remedies provided
thereunder or hereunder or by law or in equity. Accordingly, MCTC hereby
authorizes and empowers CoBank upon acceleration of the maturity of the Note or
any other Obligation, at its sole discretion, and without notice to MCTC, to
exercise any right or remedy which CoBank may have under the MCTC Pledge
Agreement or any right or remedy hereinafter granted under the MCTC Pledge
Agreement which CoBank may have as to the Pledged Collateral. MCTC waives any
right to require any action on the part of CoBank to proceed to collect amounts
due under the Note or any other Obligation;
(I) MCTC hereby subordinates any and all indebtedness of the
Borrower now or hereafter owed to MCTC to all Obligations of the Borrower to
CoBank, and agrees with CoBank that, from and after the occurrence of a default
or event of default under any of the Loan Documents, and for so long as such
default or event of default exists, MCTC shall not demand or accept any payment
of principal or interest from the Borrower, shall not claim any offset or other
reduction of MCTC's liability hereunder because of any such indebtedness and
shall not take any action to obtain any of the security for the Obligations;
provided, however, that, if CoBank so requests, such indebtedness shall be
collected, enforced and received by MCTC as trustee for CoBank and be paid over
to CoBank on account of the Obligations of the Borrower to CoBank, but without
reducing or affecting in any manner the liability of MCTC under the other
provisions of this Guaranty;
(J) MCTC hereby authorizes CoBank, without notice to MCTC, to
apply all payments and credits received from the Borrower or any other person
or realized from any security in such manner and in such priority as CoBank in
its sole judgment shall see fit to the Obligations or to any other liabilities
of the Borrower or any other person to CoBank, and MCTC agrees that any such
application shall not in any way affect its liabilities hereunder;
(K) The liability of MCTC under this Guaranty shall not in any
manner be affected by reason of any action taken or not taken by CoBank, which
action or inaction is hereby consented and agreed to by MCTC, nor by the
partial or complete unenforceability or invalidity of any other guaranty or
surety agreement, pledge, assignment, or other security
-4-
<PAGE> 5
Limited Recourse Continuing Guaranty/MCTC
Loan No. T0364
for any of the Obligations. No delay in making demand on MCTC for satisfaction
of its liability hereunder shall prejudice CoBank's right to enforce such
satisfaction. All of CoBank's rights and remedies shall be cumulative and any
failure of CoBank to exercise any right hereunder shall not be construed as a
waiver of the right to exercise the same or any other right at any time, and
from time to time, thereafter;
(L) This Guaranty shall be a continuing one and shall be
binding upon MCTC regardless of how long before or after the date hereof the
Obligations are incurred. This Guaranty shall remain in full force and effect
until a written instrument of termination shall be executed and delivered by a
duly authorized officer of CoBank. CoBank will only be obligated to execute
such an instrument of termination if: (i) all Obligations have been paid in
full; (ii) CoBank has no further commitment or obligation to extend credit to
the Borrower; and (iii) any preference period applicable to payments made on or
security given for the Obligations has expired under applicable bankruptcy and
insolvency laws; and
(M) MCTC hereby irrevocably waives any and all rights it may
have to enforce any of CoBank's rights or remedies or participate in any
security now or hereafter held by CoBank, and any and all such other rights of
subrogation, reimbursement, contribution or indemnification against the
Borrower or any other person having any manner of liability for the Borrower's
obligations to CoBank, whether or not arising hereunder, by agreement, at law
or in equity.
SECTION 5. REPRESENTATIONS AND WARRANTIES. MCTC represents and warrants
to CoBank, on and as of the date hereof and on and as of each date on which the
Borrower receives an advance under the Loan Agreement, as follows:
(A) ORGANIZATION; POWERS; ETC. MCTC (i) is duly organized,
validly existing, and in good standing under the laws of its state of
incorporation; (ii) is duly qualified to do business and is in good standing in
each jurisdiction in which the character of its properties or the nature of its
business requires such qualification; (iii) has all requisite corporate and
legal power to own and operate its assets and to carry on its business and to
enter into and perform its obligations under the Loan Documents to which it is
a party; and (iv) has duly and lawfully obtained and maintains all licenses,
certificates, permits, authorizations, approvals, and the like which are
material to the conduct of its business or which may be otherwise required by
law.
(B) DUE AUTHORIZATION; NO VIOLATIONS; ETC. The execution and
delivery by MCTC of; and the performance by MCTC of its obligations under, the
Loan Documents to which it is a party have been duly authorized by all
requisite corporate action on the part of MCTC and its shareholders and do not
and will not (i) violate any provision of any law, rule or regulation, any
judgment, order or ruling of any court or governmental agency, the
-5-
<PAGE> 6
Limited Recourse Continuing Guaranty/MCTc
Loan No. T0364
articles of incorporation or bylaws of MCTC, or any agreement, indenture,
mortgage, or other instrument to which MCTC is a party or by which MCTC or any
of its properties are bound, or (ii) be in conflict with, result in a breach
of; or constitute with the giving of notice or lapse of time, or both, a
default under any such agreement, indenture, mortgage, or other instrument.
(C) GOVERNMENTAL APPROVAL. No consent, permission,
authorization, order, or license of any governmental authority is necessary in
connection with the execution, delivery, performance, or enforcement of the
Loan Documents to which MCTC is a party or the creation and perfection of the
liens and security interests granted thereby, except such as have been obtained
and are in full force and effect.
(D) BINDING AGREEMENT. Each of the Loan Documents to which
MCTC is a party is, or when executed and delivered will be, the legal, valid,
and binding obligation of MCTC, enforceable against MCTC in accordance with its
terms, subject only to limitations on enforceability imposed by (i) applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
creditors' rights generally, and (ii) general equitable principles.
(E) COMPLIANCE WITH LAWS. MCTC is in compliance in all
material respects with all Laws, the failure to comply with which could have a
Material Adverse Effect (as hereinafter defined) on MCTC. For purposes of this
Guaranty, the term "Material Adverse Effect" shall mean a material adverse
effect on the condition, financial or otherwise, operations, properties or
business of MCTC or on the ability of MCTC to perform its obligations under the
Loan Documents to which it is a party.
(F) ENVIRONMENTAL COMPLIANCE. Without limiting the provisions
of Subsection (E) above, all property owned or leased by MCTC and all
operations conducted by it are in compliance in all material respects with all
Laws relating to environmental protection, the failure to comply with which
could have a Material Adverse Effect on MCTC.
(G) LITIGATION. There are no pending legal, arbitration, or
governmental actions or proceedings to which MCTC is a party or to which any of
its property is subject which could have a Material Adverse Effect on MCTC, and
to the best of MCTC's knowledge, no such actions or proceedings are threatened
or contemplated.
(H) EMPLOYEE BENEFIT PLANS. To the extent applicable, MCTC is
in compliance in all material respects with the applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder.
-6-
<PAGE> 7
Limited Recourse Continuing Guaranty/MCTC
Loan No. T0364
(I) TAXES. MCTC has filed or caused to be filed all federal,
state and local tax returns that are required to be filed, and has paid all
taxes as shown on said returns or on any assessment received by them to the
extent that such taxes have become due, unless such taxes are being contested
by MCTC in good faith and by appropriate proceedings and then only if and to
the extent reserves required by GAAP have been set aside on MCTC's books
therefor.
(J) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. MCTC is not an "investment company" as that term is defined in, and is
not otherwise subject to regulation under, the Investment Company Act of 1940,
as amended. MCTC is not a "holding company" as that term is defined in, and is
not otherwise subject to regulation under, the Public Utility Holding Company
Act of 1935, as amended.
(K) STOCK OF SUBSIDIARIES. MCTC has no subsidiary other than
as described on Exhibit A hereto. MCTC is the registered and beneficial owner
of the specified percentage of the shares of issued and outstanding capital
stock of each of the subsidiaries as set forth on Exhibit A hereto, which stock
is owned free and clear of all liens, warrants, options, rights to purchase,
rights of first refusal and other interests of any person, except as set forth
on Exhibit A hereto. The stock of each of such subsidiaries has been duly
authorized and validly issued and is fully paid and non-assessable.
(L) FINANCIAL CONDITION. The liability and obligations of MCTC
incurred or arising under this Guaranty and the other Loan Documents to which
it is a party and of the Borrower incurred or arising under the Loan Agreement,
the Note and the other Loan Documents to which it is a party will benefit
substantially MCTC directly and indirectly, and MCTC's board of directors has
made that determination. MCTC has full and complete access to all of the Loan
Documents and other documents relating to the Obligations, has reviewed them
and is fully aware of the meaning and effect of their contents. MCTC is fully
informed of all circumstances that bear upon the risks of executing this
Guaranty which a diligent inquiry would reveal. MCTC has adequate means to
obtain from the Borrower, on a continuing basis, information concerning the
financial condition of the Borrower and is not depending on CoBank to provide
such information, now or in the future. MCTC agrees that CoBank will have no
obligation to advise or notify MCTC of or provide MCTC with any data or
information.
(M) LICENSES; PERMITS; ETC. MCTC is the valid holder of all
licenses, certificates, permits, authorizations, approvals, and the like which
are material to the conduct of its business or which may be required by law,
including, without limitation, all FCC licenses and permits and all licenses
and permits, if any, required by the Commission, and all such licenses,
certificates, permits, authorizations, approvals, and the like are in full
force and effect.
-7-
<PAGE> 8
Limited Recourse Continuing Guaranty/MCTC
Loan No. T0364
SECTION 6. COVENANTS. Unless otherwise agreed to in writing by CoBank,
while this Guaranty remains in effect or any of the Obligations have not been
fully paid or otherwise satisfied, MCTC agrees to cause the Borrower to comply
with the affirmative and negative covenants and agreements contained in
Sections 13 and 14 of the Loan Agreement.
SECTION 7. MISCELLANEOUS.
(A) GOVERNING LAW. Except to the extent governed by applicable
federal law, this Guaranty shall be governed by and construed in accordance
with the laws of the State of Kansas without reference to choice of law
doctrine.
(B) BINDING EFFECT. This Guaranty shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns, including any holder or owner of the Note or any other Loan Document.
(C) SEVERABILITY. If any one or more of the provisions
contained herein shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Guaranty, but this Guaranty shall
be construed as if such invalid, illegal or unenforceable provision had not
been contained herein.
(D) NON-WAIVER; MODIFICATION; ELECTION OF REMEDIES. The
failure of CoBank to insist, in any one or more instances, upon a strict
performance of any of the terms and conditions of this Guaranty, or to exercise
or fail to exercise any option or right contained herein, shall not be
construed as a waiver or a relinquishment for the future of such right or
option, but the same shall continue and remain in full force and effect.
CoBank's knowledge of the breach of any term or condition hereof shall not be
deemed a waiver of such breach, and no waiver by CoBank of any provision hereof
shall be deemed to have been made, or operate as an estoppel, unless expressed
in writing and signed by CoBank. No enforcement of any remedy shall constitute
an election of remedies.
(E) NOTICES. All notices hereunder shall be made, and shall be
deemed to be duly given if made, in the manner provided for notices under
Section 19 of the Loan Agreement, to the parties at the following addresses (or
such other address for a party as shall be specified by like notice):
If to MCTC, as follows: Mercury Cellular Telephone Company
P.O. Drawer 3709
Lake Charles, Louisiana 70602
Attn: Robert Piper; cc: Thomas G. Henning
Fax No.: (318) 439-0769
-8-
<PAGE> 9
Limited Recourse Continuing Guaranty/MCTC
Loan No. T0364
If to CoBank, as follows:
CoBank, ACB
200 Galleria Parkway
Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No.: (404) 618-3202
(F) REGULATORY APPROVALS. Upon any action by CoBank to
commence the exercise of remedies hereunder or under the Mortgage, the Security
Agreement, the Assignment or the MCTC Pledge Agreement, MCTC hereby undertakes
and agrees on behalf of itself and of the Borrower to cooperate and join with
CoBank in any application to the Commission, the FCC, or any other regulatory
body, administrative agency, court or other forum (any such entity, a
"Governmental Authority") with respect thereto and to provide such assistance
in connection therewith as CoBank may request, including, without limitation,
the preparation of filings and appearances of officers and employees of MCTC or
the Borrower before such Governmental Authority, in each case in support of any
such application made by CoBank, and neither MCTC nor the Borrower shall,
directly or indirectly, oppose any such action by CoBank before any such
Governmental Authority.
SECTION 8. CONSENT TO JURISDICTION; REGISTERED AGENT. To the maximum
extent permitted by law, MCTC agrees that any legal action or proceeding with
respect to this Guaranty or any of the other Loan Documents may be brought in
the courts of the State of Kansas or Louisiana or of the United States of
America for the District of Kansas or the Western District of Louisiana, all as
CoBank may elect. By execution of this Guaranty, MCTC hereby irrevocably
submits to such jurisdiction, expressly waiving any objection it may have to
the laying of venue by reason of its present or future domicile. Nothing
contained herein shall affect the right of CoBank to commence legal proceedings
or otherwise proceed against MCTC in any other jurisdiction or to serve process
in any manner permitted or required by law.
[Signatures on next page]
-9-
<PAGE> 10
Limited Recourse Continuing Guaranty/MCTC
Loan No. T0364
IN WITNESS WHEREOF, MCTC has caused this Guaranty to be executed and
attested under seal and delivered, by its duly authorized officers, as of the
date first shown above.
MERCURY CELLULAR TELEPHONE
COMPANY
By: /s/ ROBERT PIPER
---------------------------------------
Name: Robert Piper
Title: President
Attest: /s/ THOMAS G. HENNING
-----------------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
-10-
<PAGE> 11
EXHIBIT A
SECTION 5(M): STOCK OF SUBSIDIARIES
<TABLE>
<CAPTION>
================================================================================
PERCENT OF SUBSIDIARY
SUBSIDIARY OWNED BY MCTC SHARES OUTSTANDING LIENS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Mercury Cellular of Kansas,
Inc. 100% 10 None
================================================================================
</TABLE>
<PAGE> 1
EXHIBIT 4.63
MCK
LOAN NO. T0364
This document prepared by and
after recording return to:
Sutherland, Asbill & Brennan
999 Peachtree Street, N.E.
Atlanta, Georgia 30309-3996
Attention: Carol R. Naughton, Esq.
COLLATERAL ASSIGNMENT OF TENANT'S INTEREST IN LEASES
THIS ASSIGNMENT ("Assignment") is made, entered into and effective as
of April 20, 1995, by and between MERCURY CELLULAR OF KANSAS, INC., as assignor
("Assignor"), and COBANK, ACB, as assignee ("Lender").
Background Statement
Assignor and Lender have entered into that certain Loan Agreement,
dated as of April 20, 1995 (as the same may be amended, supplemented, extended
or restated from time to time, the "Loan Agreement") pursuant to which Lender
has agreed to make a loan of up to $17,100,000 to Assignor. The indebtedness
created by the Loan Agreement is evidenced by a Promissory Note made by
Assignor to Lender, dated April 20, 1995, in the original principal amount of
$17,100,000 (as the same may be amended, supplemented, extended, restated or
replaced from time to time, the "Note"). As a condition to making any advances
under the Loan Agreement, Lender has required that Assignor assign all of its
right, title and interest in and to certain leases and the premises described
therein to Lender. Capitalized terms used in this Assignment, unless otherwise
defined herein, shall have the meanings assigned to them in the Loan Agreement.
NOW, THEREFORE, for and in consideration of the Loan Agreement and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Assignor hereby conveys, sets over, transfers and assigns
unto Lender, and grants to Lender a security interest in, any and all right,
title and interest of every kind and nature of Assignor, as tenant, in, to and
under any and all leases, tenancy agreements or rental contracts concerning
real property located in the States of Kansas and Oklahoma, whether now or
hereafter existing, including, without limitation, the leases described on
Exhibit A hereto and made a part hereof (all of such leases, tenancy agreements
or rental contracts, whether or not included on Exhibit A hereto, collectively,
the "Leases" and each, individually, a "Lease") concerning certain real
property described on Exhibit B hereto and made a part hereof (all of such real
property that is the subject of any Lease, collectively, the "Leased
Property"), together with any and all right, title and interest of Assignor in
and to the Leased Property, and in any and all buildings, appurtenances and
other improvements now existing or hereafter placed thereon, and in any and all
equipment, fixtures and other
<PAGE> 2
LOAN NO. T0364
personal property of every kind and nature whatsoever, now existing or
hereafter placed thereon, all as collateral security for the payment or
performance of all of the following obligations (the "Obligations"): (a) all
payments or performances to be made by Assignor under the Loan Documents,
including, without limitation, the payment of all principal, interest and other
amounts becoming due and payable, whether by acceleration or otherwise, under
the Note; and (b) the payment of all other indebtedness and performance of all
other obligations of Assignor to Lender of every type and description, whether
now existing or hereafter arising, fixed or contingent, as primary obligor or
as guarantor or surety, acquired directly or by assignment or otherwise,
liquidated or unliquidated, regardless of how they arise or by what agreement
or instrument they be evidenced, including without limitation, all loans,
advances and other extensions of credit and all covenants, agreements and
provisions contained in all loan and other agreements between the parties;
PROVIDED, HOWEVER, that if Assignor shall fully pay and discharge the
Obligations, and shall perform and observe all of the covenants, agreements and
conditions herein contained and contained in the Loan Agreement, then this
Assignment shall become void and of no effect and shall thereupon terminate.
1. REPRESENTATIONS AND WARRANTIES IN FAVOR OF LENDER. Assignor
represents and warrants unto Lender that the Leases described on Exhibit A are
now valid and subsisting; that all the rents (if any) reserved and payable
thereunder prior to the date hereof have been paid; that all of the tenant's
covenants and conditions therein contained have been observed and performed by
Assignor; that the Leases described on Exhibit A are now free and clear of all
liens and encumbrances thereon except those liens and encumbrances, if any, in
favor of the landlord under any Lease (which have previously been disclosed to
Lender in writing); that Assignor has good and lawful authority to execute and
deliver this Assignment to Lender and to perform hereunder; and that Lender
shall have the right to cure any defaults under the Leases and to do any and
all other acts required of Assignor as tenant under the Leases to prevent the
forfeiture of the rights of Assignor as tenant and without the necessity of
obtaining any further consent or agreement of any landlord under any Lease.
2. COVENANTS IN FAVOR OF LENDER. Assignor covenants unto Lender
that, at all times from and after the date of the execution of this Agreement,
unless otherwise agreed to in writing by Lender:
(a) It will perform, or cause to be performed, at its
expense all the liabilities of the tenant under the Leases, will strictly
observe all of the covenants and conditions thereof, and will keep the Leases
in effect until all of the Obligations of Assignor owing to Lender have been
paid in full and the Loan Agreement has been terminated.
(b) As required by the terms of the Leases, Assignor will
keep or cause to be kept any buildings, appurtenances, and other improvements
now existing or hereafter
-2-
<PAGE> 3
LOAN NO. T0364
placed upon or in the Leased Property in good order and repair and will make no
changes or alterations in such Leased Property that will materially impair the
Leased Property, except that Assignor will not be required to take any action
to comply with this Subsection with respect to any of the Leased Property which
is prohibited by the terms of the Lease regarding such Leased Property.
Assignor will permit Lender at any time to enter upon and inspect the Leased
Property and upon receiving written notice from Lender of any defect in the
repair or condition of the Leased Property, Assignor agrees to make good such
defect immediately thereafter in a manner satisfactory to Lender, unless
Assignor is prohibited from doing so pursuant to the Lease affecting such
Leased Property.
(c) Assignor will not commit or suffer any waste of the
Leased Property or do or permit to be done anything that may in any way impair
the security interest granted to Lender hereunder.
(d) Assignor will indemnify Lender for and hold Lender
harmless from any and all liability arising from or in connection with the
Leases, or this Assignment, or the management, operation, maintenance or
control of Assignor's activities on the Leased Property, except for liability
arising from the gross negligence or willful misconduct of Lender.
(e) Unless and until all Obligations of Assignor to
Lender have been fully paid and discharged and the Loan Agreement has been
terminated, Assignor will not hereafter cancel, surrender or terminate any of
the Leases, or modify or amend the Leases (other than immaterial modifications
or amendments made in the ordinary course of business) without the prior
written approval of Lender in each instance.
3. DEFAULT.
(a) Events of Default. Any of the following events shall
constitute an "Event of Default" hereunder: (i) the occurrence of an "Event of
Default" as such term is defined in the Loan Agreement; (ii) a default by
Assignor under any term or provision of the Leases, pursuant to which the
landlord under such Lease has the right to accelerate the rental payable under
the Lease or otherwise to exercise its rights and remedies under the Lease,
which remains uncured following the expiration of any cure period provided in
the Lease; (iii) a default by Assignor in the due observance or performance of
any covenant, warranty, condition or agreement herein contained which continues
for 30 days or more after notice thereof by Lender to Assignor; or (iv) the
damage, destruction or condemnation of the whole or any portion of the Leased
Property (Assignor hereby agreeing to give Lender written notice of any such
damage, destruction or condemnation of the Leased Property within 3 days of the
occurrence thereof in the case of any such damage or destruction, and, in the
case of any such condemnation, within 3 days of its receipt of notice thereof)
which materially affects the business of Assignor.
-3-
<PAGE> 4
LOAN NO. T0364
(b) Remedies of Lender Upon Event of Default. Upon the
occurrence of any Event of Default hereunder, and during the continuation
thereof; Lender may, at its option, (i) enter into and take control and
possession of the Leased Property or any part thereof without assuming any
liabilities of Assignor under the Leases (but subject to the rights of the
landlord thereunder) or (ii) assign or sublease all of the rights, title and
interests of Assignor in and to the Leases to any third party who shall assume
all liabilities of Assignor under the Leases. Assignor hereby irrevocably
designates and appoints Lender its true and lawful attorney in the name of
Assignor to do all things necessary or desirable incidental to its remedies
herein, including execution in the name of Assignor of any instruments or
documents in connection therewith. This power of attorney is complied with in
interest and Assignor shall have full power of substitution.
(c) Right to Cure. Upon the occurrence of any Event of
Default under the terms and provisions of Subsection 3(a)(ii), and during the
continuation thereof, Lender may (but shall not be obligated to do so), without
notice to Assignor, cure the default under the Lease constituting such Event of
Default hereunder, thereby reinstating such Lease, and the sum or sums of money
so paid by Lender for any and all such purposes shall be deemed to be part of
the Obligations hereby secured and shall be immediately due and payable and
collectible in the same manner as the Obligations.
(d) Right to Compensation for Damage Destruction or
Condemnation. Upon occurrence of any Event of Default under the terms and
provisions of Subsection 3(a)(iv), and during the continuation thereof; in
addition to the remedies set forth hereinabove, Lender shall also be entitled
to any compensation, awards, and other payments or relief thereof claimed,
received or retained by Assignor and is hereby authorized, at its option, to
commence, appear in and prosecute, in its own name, or in Assignor's name, any
action or proceeding relating to any condemnation, and to settle or compromise
any claim in connection therewith. All such compensation, awards, damages,
claims, rights of action and proceeds and the right thereto are hereby assigned
by Assignor to Lender, who after deducting therefrom all its reasonable
expenses, including attorney's fees, may apply the same towards payment of the
Obligations and any balance of such monies then remaining shall be paid to
Assignor.
(e) Application of Proceeds. All monies received by Lender
under this Assignment from time to time upon the exercise of the remedies
provided for herein (net of any costs or expenses incurred by Lender hereunder
or in connection herewith) shall be applied by Lender to the Obligations secured
hereby, whether due or not due.
4. LIABILITIES OF LENDER. Nothing contained herein shall obligate
or be construed to obligate Lender, its successors or assigns, to perform any
of the terms, covenants or conditions contained in the Leases or otherwise to
impose upon Lender, its
-4-
<PAGE> 5
LOAN NO. T0364
successors or assigns, any responsibility for the operation, control, care,
management or repair of or payment of rent upon the Leased Property.
5. NO FURTHER ASSIGNMENTS. Assignor agrees not to make any
further assignments of the Leases, or any interest therein, or to sublet the
Leased Property, without the prior written approval of Lender in each instance.
6. MISCELLANEOUS.
(a) This Assignment is intended to be, and shall be
regarded as, cumulative of, in addition to, and not in derogation of, any other
rights of Lender in and to any other property of Assignor or of any third party
or parties in which Lender has been granted a security interest as security for
the payment of the Obligations.
(b) This Assignment shall be binding upon the successors
and assigns of Assignor and shall inure to the benefit of Lender, its
successors and assigns.
(c) In the event of conflict between any of the terms and
provisions hereof and the Loan Agreement, the Loan Agreement shall be deemed to
control.
(d) This Assignment, and the rights and liabilities of
the parties hereunder, shall be governed by and construed in accordance with
the laws of the State of Kansas without reference to choice of law doctrine.
(e) All notices hereunder shall be deemed to be duly
delivered upon delivery in the form and manner set forth in Section 19 of the
Loan Agreement to the parties at the following addresses (or such other address
for a party as shall be specified by like notice):
If to Lender, as follows:
CoBank, ACB
200 Galleria Parkway, Suite 1900
Atlanta, Georgia 30339
Attention: Rural Utility Banking Group
Fax No.: (404) 618-3202
-5-
<PAGE> 6
LOAN NO. T0364
If to Assignor, as follows:
Mercury Cellular of Kansas
One Lakeshore Drive, Suite 1495
P.O. Drawer 3104
Lake Charles, Louisiana 70602
Attention: Robert Piper; cc: Thomas G. Henning
Fax No.: (318) 439-0769
If such delivery is refused or cannot be made, such delivery will be deemed to
occur on the date such delivery was attempted.
IN WITNESS WHEREOF, Assignor has executed this Assignment under seal
as of the day and year first above written.
"ASSIGNOR"
MERCURY CELLULAR OF KANSAS, INC.
By: /s/ THOMAS G. HENNING
------------------------------------
Name: Thomas G. Henning
Title: President
[CORPORATE SEAL]
-6-
<PAGE> 7
LOAN NO. T0364
ACKNOWLEDGMENT
STATE OF LOUISIANA )
) SS.
PARISH OF CALCASIEU )
The foregoing instrument was acknowledged before me this 20th day of
April, 1995, by Thomas G. Henning, President of Mercury Cellular of Kansas,
Inc., on behalf of said corporation.
/s/ [ILLEGIBLE]
------------------------------------
Notary Public
My Commission expires:
lifetime commission
[NOTARIAL SEAL]
-7-
<PAGE> 8
EXHIBIT "A"
MERCURY CELLULAR OF KANSAS, INC.
DESCRIPTION OF LEASES
<TABLE>
<CAPTION>
COUNTY SITE LESSOR DATE
- ------ ---- ------ ----
<S> <C> <C> <C>
Barton Great Bend-Tower Cellular Tower Asset Fund, L.P. 12-17-92
Great Bend-Office Tom Harris 11-16-93
Cheyenne St. Francis/Bird City-Tower Wes-Kan Towers 11-28-97
Decatur Oberlin-Tower Wes-Kan Towers 11-28-94
Ellis Hays-Tower Cellular Tower Asset Fund, L.P. 12-17-92
Hays-Vine Street Office Bickle-Aubel Partnership 01-28-93
Hays-11th Street Office Bolero Ventures, L.L.C. 06-01-94
Finney Garden City-Tower Snyder Radio Service 10-01-94
Garden City-Office Gail A. Lee dba Lee Properties 12-15-92
Ford Dodge City-Tower TCI of Kansas, Inc. 08-01-94
Dodge City-Office Fast Foods of Dodge City, Inc. 07-01-92
Grant Ulysses-Tower Turri-Comm, Inc. 06-10-94
Gray Copeland-Tower Meade T.V. & 2-Way, Inc. 11-15-93
Hamilton Syracuse-Tower Cellular Towers Asset Fund L.P. 08-26-91
Ness Ness City-Tower G & K Communications 08-12-92
Norton Norton-Tower Wes-Kan Towers 11-28-94
Pratt Pratt-Tower Wes-Kan Towers 05-03-94
Rawlins Atwood-Tower Wes-Kan Towers 11-28-94
Rooks Stockton-Tower Universal Cable Communications 07-19-94
Russell Russell-Tower Wes-Kan Towers 08-03-94
Scott Scott City-Tower Wes-Kan Towers 05-03-94
</TABLE>
<PAGE> 9
<TABLE>
<S> <C> <C> <C>
Seward Liberal-Tower Hi-Way Tower, Inc. 10-01-94
Liberal-Office Century 21 Ewalt Real Estate, Inc. 09-13-93
Sherman Edson-Tower Eagle Communications, Inc. 06-21-94
Smith Smith Center-Tower Smith Center Co-Op Mill & Elevator 03-10-95
Stevens Hugoton-Tower RECOMCO, Inc. 06-03-94
Texas (OK) Guymon (OK)-Tower Jack D. Eoff 09-14-94
Thomas Colby-Tower Cellular Tower Asset Fund, L.P. 12-17-92
Trego WaKeeney-Tower Wes-Kan Towers 05-03-94
Wallace Sharon Springs-Tower Universal Cable Communications 01-23-95
</TABLE>
<PAGE> 10
LOAN NO. T0364
EXHIBIT "B"
MERCURY CELLULAR OF KANSAS, INC.
LEGAL DESCRIPTIONS OF LEASED PROPERTY
<TABLE>
<CAPTION>
SITE LESSOR LEGAL DESCRIPTION
---- ------ -----------------
<S> <C> <C>
Great Bend-Tower Cellular Tower Asset Fund, L.P. A tract of land situated in the West half of the Northeast
Quarter of Section 12, Township 14 South, Range 19 West of
the Sixth Principal Meridian, Ellis County, Kansas, more
particularly described as follows, to wit:
Beginning at a point on the fence line marking the West
line of said Northeast Quarter of Section 12, a distance
of Two hundred and sixty one (261) feet South of the
Northwest corner of said Northeast Quarter of Section 12;
Thence East at right angles a distance of Six hundred
(600) feet; Thence South at right angles a distance of Six
hundred (600) feet; Thence West a distance of Six hundred
(600) feet, to the fence line marking the West line of
said Northeast Quarter of Section 12, Thence North along
said West line of the Northeast Quarter of Section 12, a
distance of Six hundred (600) feet to the POINT OF
BEGINNING. Said tract contains 8.26 acres more or less
and is subject to any easements or right-of-way of record.
Great Bend-Office Tom Harris 2110 10th Street
Bird City-Tower Wes-Kan Towers 7 miles west and 1.5 miles south of Bird City, Kansas.
Latitude: 39-44-03 North; Longitude: 101-40-19 West.
Oberlin-Tower Wes-Kan Towers 6 miles South, 4.5 miles East of Oberlin, Kansas;
Latitude: 39-44-26 North; Longitude: 100-27-13 West.
Hays-Tower Cellular Tower Asset Fund, L.P. A tract of land situated in the West half of the
</TABLE>
<PAGE> 11
<TABLE>
<S> <C> <C>
Northeast Quarter of Section 12, Township 14 South, Range
19 West of the Sixth Principal Meridian, Ellis County,
Kansas, more particularly described as follows, to wit:
Beginning at a point on the fence line marking the West
line of said Northeast Quarter of Section 12, a distance
of Two hundred and sixty one (261) feet South of the
Northwest corner of said Northeast Quarter of Section 12;
Thence East at right angles a distance of six hundred
(600) feet; Thence South at right angles a distance of six
hundred (600) feet, to the fence line marking the West
line of said Northeast Quarter of Section 12; Thence North
along said West line of the Northeast Quarter of Section
12, a distance of Six hundred (600) feet to the POINT OF
BEGINNING. Said tract contains 8.26 acres more or less and
is subject to any easements or right-of-way of record.
Hays-Vine Street Office Bickle-Aubel Partnership A tract of land in the West Half (W/2) of the Southwest
Quarter (SW/4) of Section Thirty-four (34), Township
thirteen (13) South, Range Eighteen (18) West of the 6th
P.M., Ellis County, Kansas and more particularly described
as follows, to-wit:
Beginning at point on the West Section line of Section
Thirty-four (34), Township Thirteen (13) South, Range
Eighteen (18) West, 617 Feet South of the Northwest Corner
of the southwest Quarter (SW/4) of said Section Thirty-
four (34), this being the point of beginning; thence East
300 feet at right angles; thence South 102 feet parallel
to the West line of said Section 34; thence West 300 feet
to the West line of said Section 34; thence North along
said Section line a distance of 102 feet to the point of
beginning.
Hays-11th Street Office Bolero Ventures, L.L.C. 224 West 11th Street, Hays, Kansas, to-wit: Lots Six (6),
Eight (8) and Ten (10), in Block Seven (7), in the
Original Town of Hays City, now the city of Hays, Kansas.
Garden City-Tower Snyder Radio Service 2307 West Mary Street, Garden City, Kansas; Latitude:
37-59-35; Longitude: 100-54-04
</TABLE>
<PAGE> 12
<TABLE>
<S> <C> <C>
Garden City-Office Gail A. Lee dba Lee Properties 401 Campus Drive, Suite 101, together with the privileges
and appurtenance of the building known more commonly as
401 Campus in the City of Garden City, Kansas
Dodge City-Tower TCI of Kansas, Inc. Starting at the N 1/4 corner, Sec. 21 T 265.R25W. then S
approximately 417.4' then W approximately 417.4' then N
approximately 417.4' then E approximately 417.4' to point
of origination.
Dodge City-Office Fast Foods of Dodge City, Inc. 1509 West Wyatt Earp, Dodge City, Kansas
Ulysses-Tower Turri-Comm, Inc. Ulysses, Grant County Kansas
Copeland-Tower Meade T.V. & 2-Way, Inc. Latitude: 37-30-10 north; Longitude: 100-34-22
Syracuse-Tower Cellular Towers Asset Fund L.P. Syracuse, Hamilton County Kansas
Ness City-Tower G & K Communications One mile east of Ness City, Kansas; Latitude: 38-26-44
North; Longitude: 99-52-32 West
Norton-Tower Wes-Kan Towers 4 miles South, 3.5 miles East of North Kansas; Latitude:
39-46-13 North; Longitude: 99-50-10 West.
Pratt-Tower Wes-Kan Towers SW 5 acres of SW Corner Lot 1, NW/4, Section 2, T28S, R14W
of the 6th P.M., Pratt county, Kansas
Atwood-Tower Wes-Kan Towers 4.5 miles South and 2.5 miles East of Atwood, Kansas;
Latitude: 39-44-42 North; Longitude: 101-01-32 West.
Stockton-Tower Universal Cable Communications, Inc. Latitude: 39-26-56; Longitude: 99-16-18
Russell-Tower Wes-Kan Towers Latitude: 38-53-36 North; Longitude: 98-54-02 West
Scott City-Tower Wes-Kan Towers 9 miles north of Scott City, Kansas; Latitude: 38-36-08
North, Longitude 100-54-20 West.
Liberal-Tower Hi-Way Tower, Inc. South half of the Northwest Quarter of section 19, Township
34 south, Range 32W, Seward County, Kansas.
</TABLE>
<PAGE> 13
<TABLE>
<S> <C> <C>
Liberal-Office Century 21 Ewalt Real Estate, Inc. 192 W. Pancake Blvd., Liberal, Kansas
Edson-Tower Eagle Communications, Inc. A tract of land in the Northeast Quarter (NE/4) of Section
Four (4), in Township Eight (8) South, Range Thirty-eight
(38) West of the Sixth Principal Meridian, in Sherman
County, Kansas, described as follows:
Beginning at the southeast corner of said quarter section;
thence North along the east line of said quarter section
on an assumed bearing of N 0 00' E, a distance of 1500.00
feet; thence N 90 00'W, a distance of 156.13 feet; thence
S 30 00'W, a distance of 808.29 feet; thence N 90 00'W, a
distance of 774.72 feet; thence S 0 00'W, a distance of
100.00 feet; thence N 90 00'E, a distance of 774.72 feet;
thence S 30 00'E, a distance of 809.01 feet; to a point on
the south line of said quarter section; thence N
89 46'10"E along said south line, a distance of 155.77
feet, to the point of beginning, containing 14.58 acres,
more orless.
Hugoton-Tower RECOMCO, Inc. Hugoton, Stevens County Kansas
Guymon (OK)-Tower Jack D. Eoff Real property located in Texas County, Oklahoma--Latitude:
36-40-26, Longitude: 101-28-09
Colby-Tower Cellular Tower Asset Fund, L.P. A tract of land located in the Southwest Quarter (SW 1/4)
of Section Thirty-Five (S35), Township Seven South (T7S),
Range Thirty-three West (R33W) of the Sixth Principal
Meridian (6th P.M.) in Thomas County, Kansas, more
particularly described as follows:
Beginning at the northwest corner of said Quarter, thence,
on an assumed bearing of S88 11'22"E, along the north line
of said Quarter, a distance of six hundred and no
hundredths (600.00) feet, thence S00 11'22"W for a
distance of six hundred and no hundredths (600.00) feet to
the west line of said Section, thence N00 00'00"E, along
the west line of said Section, for a distance of six
hundred an no hundredths (600.00) feet to the point of
beginning, containing 8.26 acres, said tract being subject
to county road right-of-way along the west boundary.
</TABLE>
<PAGE> 14
<TABLE>
<S> <C> <C>
WaKeeney-Tower Wes-Kan Towers 1 mile east of WaKeeney, Kansas; Latitude: 39-00-55
North; Longitude: 99-51-30 West.
Sharon Springs-Tower Universal Cable Communications, Inc. Latitude: 38-54-00; Longitude: 101-44-30
Smith Center-Tower Smith Center Co-Op Mill & Elevator Latitude: 39-46-19; Longitude: 98-47-08
</TABLE>
<PAGE> 1
EXHIBIT 4.64
MCK
LOAN NO. T0364
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is made and
entered into as of April 20, 1995, by and between MERCURY CELLULAR OF KANSAS,
INC. (the "Debtor") having its place of business (or chief executive office if
more than one place of business) located at P.O. Box 3709, Lake Charles,
Louisiana 70602 and whose taxpayer identification number is 72-1282454, and
COBANK, ACB (the "Secured Party"), whose mailing address is 200 Galleria
Parkway, Suite 1900, Atlanta, Georgia 30339.
SECTION 1. GRANT OF SECURITY INTEREST. For valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Debtor hereby grants to the Secured Party a security interest in all of the
following property, wherever located and whether now existing or hereafter
acquired, together with all accessions and additions thereto, and all products
and proceeds thereof:
accounts; inventory (including, without limitation, returned or
repossessed goods); chattel paper; instruments (including, without
limitation, certificated securities); letters of credit; contracts and
contract rights; leases; documents; equipment (including, without
limitation, telecommunications and radio transmitting and receiving
equipment, antennae, towers, microwave communication equipment,
machinery, computers, parts, tools, implements, poles, posts,
cross-arms, conduits, ducts, lines (whether underground or overhead or
otherwise), wires, cables, exchanges, switches (including, without
limitation, host switches and remote switches), desks, testboards,
racks, frames, motors, generators, batteries, items of central office
equipment, pay-stations, protectors, subscriber equipment,
instruments, connections and appliances, office furniture and
equipment and work equipment and any and all other equipment used,
useful or acquired for use in the business of the Debtor or the
operation of the Debtor's properties); fixtures; general intangibles
(including, without limitation, permits, licenses, grants, franchises,
privileges, permissions, certificates and choses or things in action,
litigation rights and resulting judgments, goodwill, patents,
trademarks and other intellectual property, tax refunds, miscellaneous
rights to payment, entitlements, uncertificated investment securities
and investments, margin accounts, computer programs, invoices, books,
records and other information relating to or arising out of the
Debtor's business, and, to the extent permitted by law, all licenses
and permits issued by the Federal Communications Commission (the
"FCC")); and, to the extent not covered by the above, all other
personal property of the Debtor of every type and description,
including, without limitation, interests or claims in or under any
policy of insurance, tort claims, deposit accounts, money, and
judgments; provided, however, that no security
<PAGE> 2
Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
interest is granted in licenses, permits, leases, franchises,
privileges, permissions and grants which by their terms or by reason
of applicable law would become void or voidable if a security interest
therein were granted or if the granting of a security interest therein
would violate any law, rule, regulation or order of any governmental
body or regulatory authority (collectively, the "Collateral").
Where applicable, all terms used herein shall have the same meaning as set
forth in the Uniform Commercial Code as codified at Title 84 of the Kansas
Statutes Annotated, as amended (the "UCC").
SECTION 2. OBLIGATIONS. The security interest granted hereunder
shall secure the following obligations (the "Obligations"): (a) all payments or
performances to be made by the Debtor under the "Loan Documents" as defined in
that certain Loan Agreement, dated as of even date herewith, between the Debtor
and the Secured Party (as the same may be amended, supplemented, extended or
restated from time to time, the "Loan Agreement"), including, without
limitation, the payment of all principal, interest and other amounts becoming
due and payable, whether by acceleration or otherwise, under that certain
Promissory Note, dated of even date herewith, made by the Debtor to the order
of the Secured Party in the original principal amount of $17,100,000 (as the
same may be amended, supplemented, extended, renewed or replaced from time to
time, the "Note"); and (b) the payment of all other indebtedness and the
performance of all other obligations of the Debtor to the Secured Party of
every type and description, whether now existing or hereafter arising, fixed or
contingent, as primary obligor or as a guarantor or surety, acquired directly
or by assignment or otherwise, liquidated or unliquidated, regardless of how
they arise or by what agreement or instrument they may be evidenced, including,
without limitation, all loans, advances and other extensions of credit and all
covenants, agreements, and provisions contained in all loan and other
agreements between the parties. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Loan Agreement.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Debtor
represents, warrants and covenants as follows:
(A) OWNERSHIP OF COLLATERAL. Except for any security
interest in favor of the Secured Party, the Debtor owns and possesses all of
the Collateral free and clear of all adverse claims, interests, liens,
encumbrances, or other defects. Without the prior written consent of the
Secured Party, the Debtor shall not create or permit the existence of any
adverse claim, interest, lien, or other encumbrance against any of the
Collateral, except as expressly permitted by the Loan Documents. The Debtor
shall provide prompt written notice to the Secured Party upon learning of any
future adverse claim, interest, lien, or
-2-
<PAGE> 3
Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
encumbrance against any of the Collateral, and shall defend diligently the
Debtor's and the Secured Party's interests in the Collateral.
(B) VALIDITY OF SECURITY AGREEMENT; CORPORATE AUTHORITY.
This Security Agreement is the legal, valid and binding obligation of the
Debtor, enforceable in accordance with its terms, subject only to limitations
on enforceability imposed by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally and (ii) general equitable principles. The Debtor has the corporate
power to execute, deliver and carry out the terms and provisions of this
Security Agreement and all related documents, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Security Agreement and all related documents.
(C) LOCATION OF THE DEBTOR. The Debtor's place of
business (or chief executive office if more than one place of business) is
located at the address shown above.
(D) LOCATION OF COLLATERAL. All equipment and inventory
are now at the location or locations specified on Schedule A attached hereto
and made a part hereof and, except as otherwise disclosed to the Secured Party
on Schedule A, the Debtor has not maintained any other location or locations of
inventory and equipment within the past 5 years.
(E) NAME, IDENTITY, AND CORPORATE STRUCTURE. Except as
otherwise disclosed to the Secured Party on Schedule A, the Debtor has not
within the past 10 years changed its name, identity or corporate structure
through incorporation, merger, consolidation, joint venture or otherwise.
(F) CHANGE IN NAME, LOCATION OF COLLATERAL, ETC. Without
giving at least 30 days' prior written notice to the Secured Party, the Debtor
shall not change its name, identity or corporate structure, the location of its
place of business (or chief executive office if more than one place of
business), or the location of the Collateral.
(G) FURTHER ASSURANCES. Upon the request of the Secured
Party, the Debtor shall do all acts and things as the Secured Party may from
time to time deem necessary or advisable to enable it to perfect, maintain, and
continue the perfection and priority of the security interest of the Secured
Party in the Collateral, or to facilitate the exercise by the Secured Party of
any rights or remedies granted to the Secured Party hereunder or provided by
law. Without limiting the foregoing, the Debtor agrees to execute, in form and
substance satisfactory to the Secured Party, such financing statements,
continuation statements, amendments thereto, supplemental agreements,
assignments, notices of assignments, and other instruments and documents as the
Secured Party may from
-3-
<PAGE> 4
Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
time to time request. In addition, in the event the Collateral or any part
thereof consists of instruments, documents, chattel paper, or money (whether or
not proceeds of the Collateral), the Debtor shall, upon the request of the
Secured Party, deliver possession thereof to the Secured Party (or to an agent
of the Secured Party retained for that purpose), together with any appropriate
endorsements and/or assignments. Without limiting the generality of the
foregoing, the Debtor shall take such action as the Secured Party may request
from time to time to create and perfect a security interest in favor of the
Secured Party in any and all leases, licenses and permits relating to the
location of antennae and other transmission and receiving equipment on the
towers or other property of third parties, including, without limitation,
amending such leases, licenses or permits to allow the creation and perfection
of such security interest and obtaining the consent of all third parties whose
consents may be necessary to the creation and perfection of such security
interest. The Secured Party shall use reasonable care in the custody and
preservation of any Collateral in its possession, but shall not be required to
take any steps necessary to preserve rights against prior parties. All costs
and expenses incurred by the Secured Party to establish, perfect, maintain,
determine the priority of, or release the security interest granted hereunder
(including the cost of all filings, recordings, and taxes thereon and the
reasonable fees and expenses of any agent retained by the Secured Party) shall
become part of the Obligations secured hereby and be paid by the Debtor on
demand.
(H) INSURANCE. The Debtor shall maintain such property
and casualty insurance with such insurance companies, in such amounts, and
covering such risks, as are at all times reasonably satisfactory to the Secured
Party. All such policies shall provide for loss payable clauses or
endorsements in form and content acceptable to the Secured Party. Upon the
request of the Secured Party, all policies (or such other proof of compliance
with this Section as may be satisfactory to the Secured Party) shall be
delivered to the Secured Party. The Debtor shall pay all insurance premiums
when due. In the event of loss, damage, or injury to any insured Collateral,
the Secured Party shall have full power to collect any and all insurance
proceeds due under any of such policies, and shall apply such proceeds to the
repair or replacement of such Collateral or, if such Collateral is not
repairable or replaceable, to the payment of any of the Obligations secured
hereby.
(I) TAXES, LEVIES, ETC. The Debtor has paid and shall
continue to pay when due all taxes, levies, assessments, or other charges which
may become an enforceable lien against the Collateral, unless such taxes,
levies, assessments, or other charges are being contested by the Debtor in good
faith and by appropriate proceedings and then only to the extent reasonable
reserves required by generally accepted accounting principles have been set
aside on the Debtor's books therefor.
(J) DISPOSITION AND USE OF COLLATERAL BY THE DEBTOR.
Without the prior written consent of the Secured Party, the Debtor shall not at
any time sell, transfer, lease,
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Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
abandon, or otherwise dispose of any Collateral other than in accordance with
the provisions of the Loan Agreement; provided, however, that no dispositions
shall be made if an Event of Default (as defined in Section 4) shall have
occurred and be continuing. The Debtor shall not use any of the Collateral in
any manner which violates any statute, regulation, ordinance, rule, decree,
order, or insurance policy.
(K) RECEIVABLES. The Debtor shall preserve, enforce, and
collect all accounts, chattel paper, instruments, documents and general
intangibles, whether now owned or hereafter acquired or arising (the
"Receivables"), in a commercially reasonable fashion and, if an Event of
Default shall have occurred and be continuing, upon the request of the Secured
Party, the Debtor shall execute an agreement in form and substance satisfactory
to the Secured Party by which the Debtor shall direct all account debtors and
obligors on instruments to make payment to a lock box deposit account under the
exclusive control of the Secured Party.
(L) CONDITION OF COLLATERAL. All tangible Collateral is
now in good repair and condition and the Debtor shall at all times hereafter,
at its own expense, maintain all such Collateral in good repair and condition,
ordinary wear and tear excepted.
(M) CONDITION OF BOOKS AND RECORDS. The Debtor has
maintained and shall maintain complete, accurate and up-to-date books, records,
accounts, and other information relating to all Collateral in the present form
and detail, and shall allow the Secured Party or its representatives to examine
and copy such books, records, accounts, and other information at any reasonable
time, upon reasonable notice from the Secured Party.
(N) RIGHT OF INSPECTION. At all reasonable times and upon
reasonable notice from the Secured Party, the Debtor shall allow the Secured
Party or its representatives to visit any of the Debtor's properties or
locations so that the Secured Party or its representatives may confirm, inspect
and appraise any of the Collateral.
(O) PLEDGE OF STOCK. Upon the acquisition of capital
stock of any subsidiary, the Debtor shall execute and deliver to the Secured
Party a stock pledge agreement in form and substance satisfactory to the
Secured Party, pursuant to which the Debtor shall pledge, on a first-priority
basis, all of its stock in such subsidiary and shall covenant and agree to
pledge to the Secured Party, on a first-priority basis, all capital stock it
may thereafter acquire in that or any other subsidiary.
SECTION 4. DEFAULT. The occurrence of an event of default under
any of the Loan Documents (including, without limitation, the Loan Agreement
and the Note), the breach of or failure to perform any covenant or agreement
contained in this Security Agreement, or any material inaccuracy as of the date
made in any representation or warranty contained
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Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
in this Security Agreement shall constitute an "Event of Default" hereunder;
provided that the Debtor shall have 30 days after notice from the Secured Party
to cure any breach of the covenants set forth in Sections 3(H), (K), (L), (M),
and (N).
SECTION 5. RIGHTS AND REMEDIES. Upon the occurrence of any Event
of Default and at any time during the continuance thereof; the Secured Party
may declare all Obligations to be immediately due and payable and, to the
extent permitted by applicable law and subject to any necessary approval of the
FCC relating to the exercise of remedies hereunder involving any transfer, sale
or disposition of the Debtor's assets, may exercise any and all rights and
remedies of the Secured Party in the enforcement of its security interest under
the UCC, this Security Agreement, or any other applicable law. Without limiting
the foregoing:
(A) DISPOSITION OF COLLATERAL. The Secured Party may
sell, lease, or otherwise dispose of all or any part of the Collateral, in its
then present condition or following any commercially reasonable preparation or
processing thereof, whether by public or private sale or at any brokers' board,
in lots or in bulk, for cash, on credit or otherwise, with or without
representations or warranties, and upon such other terms as may be acceptable
to the Secured Party, and the Secured Party may purchase such Collateral at any
public sale. At any time when advance notice of sale is required, the Debtor
agrees that 10 days' prior written notice shall be reasonable. In connection
with the foregoing, the Secured Party may:
(1) require the Debtor to assemble the Collateral and all
records pertaining thereto and make such Collateral and records
available to the Secured Party at a place to be designated by the
Secured Party which is reasonably convenient to both parties;
(2) enter the premises of the Debtor or premises under
the Debtor's control and take possession of the Collateral;
(3) without charge by the Debtor, use or occupy the
premises of the Debtor or premises under the Debtor's control,
including, without limitation, warehouse and other storage facilities;
(4) without charge by the Debtor, use any patent,
trademark, trade name, or other intellectual property or technical
process used by the Debtor in connection with any of the Collateral;
and
(5) rely conclusively upon the advice or instructions of
any one or more brokers or other experts selected by the Secured Party
to determine the method or
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Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
manner of disposition of any of the Collateral and, in such event, any
disposition of the Collateral by the Secured Party in accordance with
such advice or instructions shall be deemed to be commercially
reasonable.
(B) COLLECTION OF RECEIVABLES. The Secured Party may, but
shall not be obligated to, take all actions reasonable or necessary to
preserve, enforce or collect the Receivables, including, without limitation,
the right to notify account debtors and obligors on instruments to make direct
payment to the Secured Party, to permit any extension, compromise, or
settlement of any of the Receivables for less than face value, or to sue on any
Receivable, all without prior notice to the Debtor.
(C) PROCEEDS. The Secured Party may collect and apply all
proceeds of the Collateral, and may endorse the name of the Debtor in favor of
the Secured Party on any and all checks, drafts, money orders, notes,
acceptances, or other instruments of the same or a different nature,
constituting, evidencing, or relating to the Collateral. The Secured Party may
receive and open all mail addressed to the Debtor and remove therefrom any cash
or non-cash items of payment constituting proceeds of the Collateral.
(D) INSURANCE ADJUSTMENTS. The Secured Party may adjust
and settle any and all insurance covering any Collateral, endorse the name of
the Debtor on any and all checks or drafts drawn by any insurer, whether
representing payment for a loss or a return of unearned premium, and execute
any and all proofs of claim and other documents or instruments of every kind
required by any insurer in connection with any payment by such insurer.
The net proceeds of any disposition of the Collateral shall be applied by the
Secured Party, after deducting its reasonable expenses incurred in such
disposition, to the payment in whole or in part of the Obligations in such
order as the Secured Party may elect. The enumeration of the foregoing rights
and remedies is not intended to be exhaustive, and the exercise of any right
and/or remedy shall not preclude the exercise of any other rights or remedies,
all of which are cumulative and non-exclusive.
SECTION 6. OTHER PROVISIONS.
(A) AMENDMENT AND WAIVER. Without the prior written
consent of the Secured Party, no amendment or waiver of, or consent to any
departure by the Debtor from, any provision hereunder shall be effective. Any
such amendment, waiver, or consent shall be effective only in the specific
instance and for the specific purpose for which given. No delay or failure by
the Secured Party to exercise any remedy hereunder shall be deemed a waiver
thereof or of any other remedy hereunder. A waiver on any one occasion shall not
be construed as a bar to or waiver of any remedy on any subsequent occasion.
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Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
(B) COSTS AND ATTORNEYS' FEES. Except as prohibited by
law, if at any time the Secured Party employs counsel in connection with the
creation, perfection, preservation, or release of the Secured Party's security
interest in the Collateral or the enforcement of any of the Secured Party's
rights or remedies hereunder, all of the Secured Party's reasonable attorneys'
fees arising from such services and all expenses, costs, or charges relating
thereto shall become part of the Obligations secured hereby and be paid by the
Debtor on demand.
(C) REVIVAL OF OBLIGATIONS. To the extent the Debtor or
any third party makes a payment or payments to the Secured Party or the Secured
Party enforces its security interest or exercises any right of setoff, and such
payment or payments or the proceeds thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, and/or required to be
repaid to a trustee, receiver, or any other party under any bankruptcy,
insolvency or other law or in equity, then, to the extent of such recovery, the
Obligations or any part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment or payments
had not been made, or such enforcement or setoff had not occurred.
(D) PERFORMANCE BY THE SECURED PARTY. In the event the
Debtor shall at any time fail to pay or perform punctually any of its duties
hereunder within any grace period provided therefor, the Secured Party may, at
its option and without notice to or demand upon the Debtor, without obligation
and without waiving or diminishing any of its other rights or remedies
hereunder, fully perform or discharge any of such duties. All costs and expenses
incurred by the Secured Party in connection therewith, together with interest
thereon at the Secured Party's National Variable Rate (as defined in the Loan
Agreement) plus 4% per annum, shall become part of the Obligations secured
hereby and be paid by the Debtor upon demand.
(E) INDEMNIFICATION, ETC. The Debtor hereby expressly
indemnifies and holds the Secured Party harmless from any and all claims, causes
of action, or other proceedings, and from any and all liability, loss, damage,
and expense of every nature, arising by reason of the Secured Party's
enforcement of its rights and remedies hereunder, or by reason of the Debtor's
failure to comply with any environmental or other law or regulation, other than
any such claim, cause of action or other proceeding, liability, loss, damage or
expense arising by reason of gross negligence, willful misconduct or violation
of law on the part of the Secured Party.
(F) POWER OF ATTORNEY. The Debtor hereby constitutes and
appoints the Secured Party or the Secured Party's designee during the term of
any Obligations secured by this Security Agreement as its attorney-in-fact,
which appointment is an irrevocable, durable agency, and coupled with an
interest, with full power of substitution. This power of attorney and mandate is
for the purpose of taking, upon an Event of Default, whether
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Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
in the name of the Debtor or in the name of the Secured Party, any action which
the Debtor is obligated to perform hereunder or which the Secured Party may
deem necessary or advisable to accomplish the purposes of this Security
Agreement. In taking any action in accordance with this Section 6(F), the
Secured Party shall not be deemed to be the agent of the Debtor. The powers
conferred upon the Secured Party in this Section are solely to protect its
interest in the Collateral and shall not impose any duty upon the Secured Party
to exercise any such powers.
(G) CONTINUING EFFECT. This Security Agreement,
the Secured Party's security interest in the Collateral, and all other
documents or instruments contemplated hereby shall continue in full force and
effect until all of the Obligations have been satisfied in full, each of the
Loan Agreement and the Note has been terminated in accordance with its
respective terms and the Debtor has sent a valid written demand to the Secured
Party for termination of this Security Agreement.
(H) BINDING EFFECT. This Security Agreement shall
be binding upon and inure to the benefit of the Debtor and the Secured Party
and their respective successors and assigns.
(I) SECURITY AGREEMENT AS FINANCING STATEMENT. A
photographic copy or other reproduction of this Security Agreement may be used
as a financing statement.
(J) GOVERNING LAW. Except to the extent governed
by applicable federal law, this Security Agreement shall be governed by and
construed in accordance with the laws of the State of Kansas without reference
to choice of law doctrine.
(K) NOTICES. All notices hereunder shall be
deemed to be duly given upon delivery in the form and manner set forth in
Section 19 of the Loan Agreement to the parties at the following addresses (or
such other address for a party as shall be specified by like notice):
If to CoBank, as follows: If to the Debtor, as follows:
CoBank, ACB Mercury Cellular of Kansas, Inc.
200 Galleria Parkway One Lakeshore Drive, Suite 1495
Suite 1900 P.O. Box 3709
Atlanta, Georgia 30339 Lake Charles, Louisiana 70602
Attn: Rural Utility Banking Group Attn: Robert Piper; cc: Thomas G. Henning
Fax No.: (404) 618-3202 Fax No.: (318) 439-0769
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Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
(L) SEVERABILITY. The determination that any term
or provision of this Security Agreement is unenforceable or invalid shall not
affect the enforceability or validity of any other term or provision hereof.
SECTION 7. FCC MATTERS. Notwithstanding any other provision of
this Security Agreement:
(A) Any foreclosure on, sale, transfer or other
disposition of any of the Collateral by the Secured Party shall be pursuant to
Section 310(d) of the Communications Act of 1934, as amended, and the
applicable rules and regulations thereunder, and, if and to the extent required
thereby, subject to the prior approval or notice to and non-opposition of the
FCC.
(B) If a Default shall have occurred and be
continuing, the Debtor shall take any action, which the Secured Party may
reasonably request in order to transfer and assign to the Secured Party, or to
such one or more third parties as the Secured Party may designate, or to a
combination of the foregoing, each FCC license or permit held by the Debtor.
The Secured Party is empowered, to the extent permitted by applicable law, to
request the appointment of a receiver from any court of competent jurisdiction.
Such receiver may be instructed by the Secured Party to seek from the FCC an
involuntary transfer of control of each such FCC license or permit for the
purpose of seeking a bona fide purchaser to whom control will ultimately be
transferred. The Debtor hereby agrees to authorize such an involuntary transfer
of control upon the request of the receiver so appointed and, if the Debtor
shall refuse to authorize the transfer, its approval may be required by the
court. Upon the occurrence and during the continuance of a Default, the Debtor
shall further use its best efforts to assist in obtaining approval of the FCC
and any state regulatory bodies, if required, for any action or transactions
contemplated by this Security Agreement, including, without limitation, the
preparation, execution and filing with the FCC and any state regulatory bodies
of the assignor's or transferor's portion of any application or applications
for consent to the assignment of any FCC license or permit or transfer of
control necessary or appropriate under the rules and regulations of the FCC or
any state regulatory body for approval or non-opposition of the transfer or
assignment of any portion of the Collateral, including, without limitation,
with any FCC license or permit.
(C) The Debtor acknowledges that the assignment
or transfer of each FCC license or permit is integral to the Secured Party's
realization of the value of the Collateral, that there is no adequate remedy at
law for failure by the Secured Party to comply with the provisions of this
Section 7 and that such failure would not be adequately compensable in damages,
and therefore agrees, without limiting the right of the Secured Party to seek
and obtain specific performance of other obligations of the Debtor contained in
this Security Agreement, that the agreements contained in this Section 7 may be
specifically enforced.
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Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
(D) In accordance with the requirements of 47
C.F.R. Section 22.917, or any successor provision thereto, the Secured Party
shall notify the Debtor and the FCC in writing at least 10 days prior to the
date on which the Secured Party intends to exercise its rights, pursuant to
this Security Agreement or any of the other Loan Documents, by foreclosing on,
or otherwise disposing of, any Collateral in connection with which such notice
is required pursuant to 47 C.F.R. Section 22.917 or any successor provision
thereto.
[Signatures on next page]
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Security Agreement/Mercury Cellular of Kansas
Loan No. T0364
IN WITNESS WHEREOF, the Debtor has caused this Security Agreement to
be executed, attested and delivered under seal by its duly authorized officers
as of the day and year shown above.
MERCURY CELLULAR OF KANSAS, INC.
By: /s/ THOMAS G. HENNING
-----------------------------
Name: Thomas G. Henning
Title: President
Attest: /s/ ROBERT PIPER
--------------------------
Name: Robert Piper
Title: Secretary
[CORPORATE SEAL]
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<PAGE> 13
SCHEDULE A
TO
SECURITY AGREEMENT
OF
MERCURY CELLULAR OF KANSAS, INC.
1. Set forth below are the present locations (by county or parish and
state) of the Debtor's inventory and equipment:
<TABLE>
<CAPTION>
KANSAS COUNTIES LOCATION TYPE OF PROPERTY
- --------------- -------- ----------------
<S> <C> <C>
Barton Great Bend, KS Tower
Great Bend, KS Retail Store
Cheyenne St. Francis, KS Tower
Decatur Oberlin, KS Tower
Ellis Hays, KS Tower
Hays, KS Retail Store
Hays, KS Office
Finney Garden City, KS Tower
Garden City, KS Retail Store
Ford Dodge City, KS Tower
Dodge City, KS Retail Store
Grant Ulysses, KS Tower
Gray Copeland, KS Tower
Hamilton Syracuse, KS Tower
Ness Ness City, KS Tower
Norton Norton, KS Tower
Pratt Pratt, KS Tower
Rawlins Atwood, KS Tower
Rooks Stockton, KS Tower
</TABLE>
<PAGE> 14
<TABLE>
<S> <C> <C>
Russell Russell, KS Tower
Scott Scott City, KS Tower
Seward Liberal, KS Tower
Liberal, KS Retail Store
Sheridan Grinnel, KS Tower
Sherman Edson, KS Tower
Stevens Hugoton, KS Tower
Texas Guymon, OK Tower
Thomas Colby, KS Tower
Trego WaKeeney, KS Tower
Smith Smith Center, KS Tower
Wallace Sharon Springs, KS Tower
</TABLE>
2. Set forth below are the locations (by county or parish and state) at
which any of the Debtor's inventory and equipment has been located within the
past five years:
See above
3. Set forth below is a description of any exceptions to the
representation made in Section 3(E) of the Security Agreement:
N/A
<PAGE> 1
EXHIBIT 4.65
MCK
Loan No. T0364
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is made as of April 20,
1995, by and between MERCURY CELLULAR TELEPHONE COMPANY, as pledgor (the
"Pledgor"), and COBANK, ACB, as pledgee ("CoBank").
R E C I T A L S:
WHEREAS, the Pledgor owns 100% of the capital stock of Mercury Cellular
of Kansas, Inc. (the "Borrower"); and
WHEREAS, CoBank and the Borrower have entered into that certain Loan
Agreement, dated of even date herewith (as the same may be amended,
supplemented, extended or restated from time to time, the "Loan Agreement"),
providing for a loan of up to $17,100,000 (the "Loan"); and
WHEREAS, as an inducement to CoBank to execute the Loan Agreement and to
make the Loan, the Pledgor has made that certain Limited Recourse Continuing
Guaranty, dated as of even date herewith (as the same may be amended,
supplemented, extended or restated from time to time, the "MCTC Limited
Recourse Guaranty"), for the benefit of CoBank; and
WHEREAS, to secure the Pledgor's obligations to CoBank under the MCTC
Limited Recourse Guaranty and the "Obligations" (as therein defined), the
Pledgor has agreed to pledge to CoBank the hereinafter defined Pledged
Collateral on the terms and conditions set forth in this Pledge Agreement;
NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the Pledgor and CoBank agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used in this Pledge Agreement,
unless otherwise defined herein, shall have the meanings assigned to them in
the Loan Agreement.
SECTION 2. PLEDGE. To secure the payment or performance of the
Obligations, including, without limitation, the payment of all principal,
interest and other amounts becoming due and payable, whether by acceleration or
otherwise, under the Note and the performance by the Pledgor under the MCTC
Limited Recourse Guaranty (collectively, including the Obligations, the
"Secured Obligations"), the Pledgor hereby pledges, hypothecates, assigns,
transfers, sets over and delivers unto CoBank, and grants to CoBank a lien upon
and a security interest in (a) all now owned or hereafter acquired capital
stock of the Borrower; and (b) any cash, additional shares or securities or
other property at any
<PAGE> 2
Pledge Agreement/MCTC
Loan No. T0364
time and from time to time receivable or otherwise distributable in respect of,
in exchange for, or in liquidation of, any and all such stock, together with
the proceeds thereof (all such shares, capital stock, securities, cash,
property and other proceeds thereof, collectively, the "Pledged Collateral").
Upon delivery to CoBank, (i) any securities now or hereafter included in the
Pledged Collateral (the "Pledged Securities") shall be accompanied by duly
executed stock powers in blank and by such other instruments or documents as
CoBank or its counsel may reasonably request and (ii) all other property
comprising part of the Pledged Collateral shall be accompanied by proper
instruments of assignment duly executed by the Pledgor and by such other
instruments or documents as CoBank or its counsel may reasonably request. Each
delivery of certificates for such Pledged Securities shall be accompanied by a
schedule showing the number of shares and the numbers of the certificates
therefor, theretofore and then being pledged hereunder, which schedules shall
be attached hereto as Schedule 1 and made a part hereof. Each schedule so
delivered shall supersede any prior schedules so delivered.
TO HAVE AND TO HOLD the Pledged Collateral, together with all rights,
titles, interests, powers, privileges and preferences pertaining or incidental
thereto, unto CoBank, its successors and assigns, forever, subject, however, to
the terms, covenants and conditions hereinafter set forth.
SECTION 3. REPRESENTATIONS AND WARRANTIES. The Pledgor hereby represents
and warrants that, except for security interests granted to CoBank, including
the interest herein given, the Pledgor is the legal, equitable and beneficial
owner of the Pledged Collateral, holds the same free and clear of all liens,
charges, encumbrances and security interests of every kind and nature, and will
make no voluntary assignment, pledge, mortgage, hypothecation or transfer of
the Pledged Collateral (except as may be permitted under this Pledge Agreement
with respect to cash dividends); that the Pledgor has good right and legal
authority to pledge the Pledged Collateral in the manner hereby done or
contemplated and will defend its title thereto against the claims of all
persons whomsoever; that the execution and delivery of this Pledge Agreement,
and the performance of its terms, will not result in any violation of any
provision of the Pledgor's articles of incorporation or bylaws, or violate or
constitute a default under the terms of any agreement, indenture or other
instrument, license, judgment, decree, order, law, statute, ordinance or other
governmental rule or regulation applicable to the Pledgor or any of the
Pledgor's property; that no approval, consent or authorization of any
governmental or regulatory authority which has not heretofore been obtained is
necessary for the execution or delivery by the Pledgor of this Pledge Agreement
or for the performance by the Pledgor of any of the terms or conditions hereof
or thereof; and that this pledge is effective to vest in CoBank the rights of
the Pledgor in the Pledged Collateral as set forth herein.
SECTION 4. STOCK OF THE BORROWER. The Pledgor represents that it is the
registered and beneficial owner of the shares and percentage of the capital
stock of the Borrower set forth on Schedule 1 hereto, which stock is owned free
and clear of all liens, warrants,
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Pledge Agreement/MCTC
Loan No. T0364
options, rights to purchase, rights of first refusal and other interests of any
person other than CoBank. The outstanding capital stock of the Borrower has
been duly authorized and is validly issued, fully paid and non-assessable.
SECTION 5. ADDITIONAL SHARES OF CAPITAL STOCK; TRANSFER. Without the
prior written consent of CoBank, the Pledgor will not (a) consent to or approve
of the issuance of any additional shares of any class of capital stock by the
Borrower or to any options, subscription rights, warrants or other instruments
in respect thereof, (b) consent to or approve of the establishment of any
additional class or classes of capital stock by the Borrower or the issuance of
any shares thereunder, (c) consent to or approve of any merger, consolidation,
reorganization or any sale or lease of substantially all the assets of the
Borrower, or (d) consent to or approve the repurchase or redemption by the
Borrower of any of its capital stock.
SECTION 6. COVENANTS WITH RESPECT TO COLLATERAL. The Pledgor hereby
covenants and agrees with respect to the Pledged Collateral as follows:
(A) The Pledgor will cause any additional securities issued by
the Borrower or property issued by the Borrower with respect to the
Pledged Collateral, whether for value paid by the Pledgor or otherwise,
to be forthwith deposited and pledged hereunder and delivered to CoBank,
in each case accompanied by proper instruments of assignment duly
executed; and
(B) The Pledgor will defend its title to the Pledged
Collateral against the claims of all persons whomsoever.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(A) In the absence of the occurrence of an Event of Default.
In the absence of the occurrence and continuation of an Event of Default
(as hereinafter defined):
(i) The Pledgor shall be entitled to exercise any and
all voting and/or consensual rights and powers accruing to an
owner of the Pledged Securities or any part thereof for any
purpose not inconsistent with the terms of this Pledge Agreement
(including Section 5) or any agreement giving rise to any of the
Obligations; provided, that the Pledgor shall not exercise, or
refrain from exercising, any such right or power if any such
action would have a material adverse effect on the value of such
Pledged Securities or any part thereof;
(ii) Beyond the exercise of reasonable care to assure
the safe custody of the Pledged Collateral while held hereunder,
CoBank shall have no
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<PAGE> 4
Pledge Agreement/MCTC
Loan No. T0364
duty or liability to preserve rights pertaining thereto and shall
be relieved of all responsibility for the Pledged Collateral upon
surrendering it or tendering surrender of it to the Pledgor;
(iii) The Pledgor shall not be entitled to retain cash
dividends paid on Pledged Securities without the prior written
consent of CoBank if such payment is in violation of the
limitations on dividends set forth in Section 14(J) of the Loan
Agreement. CoBank may require any such cash dividends to be
delivered to CoBank as additional security hereunder or applied
toward the satisfaction of the Secured Obligations;
(iv) Any and all stock and/or liquidating dividends, other
distributions in property, return of capital or other
distributions made on or in respect of Pledged Securities,
whether resulting from an increase or reduction of capital, a
subdivision, combination or reclassification of outstanding
capital stock of any corporation, capital stock of which is
pledged hereunder, or received in exchange for Pledged Securities
or any part thereof or as a result of any merger, consolidation,
acquisition, spin-off, split-off or options, warrants, or
rights, whether as an addition to, or in substitution or in
exchange for, any of the Pledged Collateral, or otherwise, or
dividends or distribution of any sort, or other exchange of
assets or on the liquidation, whether voluntary or involuntary,
of any issuer of the Pledged Securities, or otherwise, shall be
and become part, of the Pledged Collateral pledged hereunder and,
if received by the Pledgor, then the Pledgor shall accept the
same as CoBank's agent, in trust for CoBank, and shall deliver
them forthwith to CoBank in the exact form received with, as
applicable, the Pledgor's endorsement when necessary, or
appropriate stock powers duly executed in blank, to be held by
CoBank, subject to the terms hereof; as part of the Pledged
Collateral; and
(v) CoBank shall execute and deliver to the Pledgor, or
cause to be executed and delivered to the Pledgor, as
appropriate, all such proxies, powers of attorney, dividend
orders and other instruments as the Pledgor reasonably may
request for the purpose of enabling the Pledgor to exercise the
voting and/or consensual rights and powers which the Pledgor is
entitled to exercise pursuant to paragraph (A)(i) above and/or to
receive any dividends which the Pledgor is authorized to retain
pursuant to paragraph (A)(iii) above.
(B) Upon Default. Upon the occurrence of an Event of Default,
all rights of the Pledgor to exercise the voting and/or consensual
rights and powers which the Pledgor is entitled to exercise pursuant to
paragraph (A)(i) above shall become vested in CoBank upon one day's
prior written notice, which shall have the sole and exclusive right and
authority to exercise such voting and/or consensual rights and
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Pledge Agreement/MCTC
Loan No. T0364
powers which the Pledgor shall otherwise be entitled to exercise
pursuant to paragraph (A)(i) above. Upon the occurrence of an Event of
Default, all dividends shall be delivered to CoBank as additional
security hereunder or applied toward satisfaction of the Secured
Obligations.
SECTION 8. REMEDIES UPON DEFAULT. If an Event of Default shall have
occurred and be continuing, CoBank may sell, assign, transfer, endorse and
deliver the whole or, from time to time, any part of the Pledged Collateral at
public or private sale or on any securities exchange, for cash, upon credit or
for other property, for immediate or future delivery, and for such prices and
on such terms as CoBank in its discretion shall deem appropriate. CoBank shall
be authorized at any sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Pledged Collateral for their own account in compliance
with the Securities Act of 1933, and upon consummation of any such sale CoBank
shall have the right to assign, transfer, endorse and deliver to the purchaser
or purchasers thereof the Pledged Collateral so sold. Each such purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of the Pledgor, and the Pledgor hereby waives (to the extent
permitted by law) all rights of redemption, stay and/or appraisal which the
Pledgor now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. CoBank shall give the Pledgor ten
(10) days' written notice (which the Pledgor agrees is reasonable notification
within the meaning of Section 9-504(3) of the Uniform Commercial Code as in
effect in the State of Kansas) of CoBank's intention to make any such public or
private sale or sales on any such securities exchange. Such notice, in case of
public sale, shall state the time and place for such sale, and, in the case of
sale on a securities exchange, shall state the exchange at which such sale is
to be made and the day on which the Pledged Collateral, or portion thereof,
will first be offered for sale at such exchange. Any such public sale shall be
held at such time or times within ordinary business hours and at such place or
places as CoBank may fix and shall state in the notice or publication (if any)
of such sale.
At any such sale, the Pledged Collateral, or portion thereof to be sold,
may be sold in one lot as an entirety or in separate portions, as CoBank in its
sole discretion may determine. CoBank shall not be obligated to make any sale
of the Pledged Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of the Pledged Collateral may have been given. At any
public sale made pursuant to this Pledge Agreement, CoBank may bid for or
purchase, free from any right of redemption, stay and/or appraisal on the part
of the Pledgor (all said rights being also hereby waived and released to the
extent permitted by law), any part of or all the Pledged Collateral offered for
sale and may make payment on account thereof by using any claim then due and
payable to CoBank from the Pledgor as a credit against the purchase price, and
CoBank may, upon compliance with the terms of sale, hold, retain and dispose of
such property without further accountability to the Pledgor therefor. For
purposes hereof, a written agreement to purchase all or any part of the Pledged
Collateral shall be treated as a sale thereof; to the extent permitted by
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Pledge Agreement/MCTC
Loan No. T0364
law, CoBank shall be free to carry out such sale pursuant to such agreement and
the Pledgor shall not be entitled to the return of any Pledged Collateral
subject thereto, notwithstanding the fact that after CoBank shall have entered
into such an agreement all Events of Default may have been remedied or the
Secured Obligations may have been paid in full. As an alternative to exercising
the power of sale herein conferred upon it, CoBank may proceed by suit or suits
at law or in equity to foreclose this Pledge Agreement and may sell the Pledged
Collateral or any portion thereof pursuant to judgment or decree of a court or
courts having competent jurisdiction. Any sale pursuant to this Section 8 shall
be deemed to conform to commercially reasonable standards as provided in
Section 9-504(3) of the Uniform Commercial Code as in effect in the State of
Kansas.
SECTION 9. COBANK APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby
constitutes and appoints CoBank during the term of any of the Secured
Obligations the attorney-in-fact of the Pledgor which appointment is
irrevocable and shall be an agency coupled with an interest. This power of
attorney is for the purpose, upon the occurrence of an Event of Default, of
carrying out the provisions of this Pledge Agreement and taking any action and
executing any instrument which CoBank may deem necessary or advisable to
accomplish the purposes hereof. Without limiting the generality of the
foregoing, CoBank shall have the right, after the occurrence of an Event of
Default, with full power of substitution either in CoBank's name or in the name
of the Pledgor, to ask for, demand, sue for, collect, receive, receipt and give
acquittance for any and all moneys due or to become due under and by virtue of
any Pledged Collateral, to endorse checks, drafts, orders and other instruments
for the payment of money payable to the Pledgor, representing any interest or
dividend or other distribution payable in respect of the Pledged Collateral or
any part thereof or on account thereof and to give full discharge for the same,
to settle, compromise, prosecute, or defend any action, claim or proceeding
with respect thereto, and to sell, assign, endorse, pledge, transfer and make
any agreement respecting, or otherwise deal with, the same; provided, however,
that nothing herein contained shall be construed as requiring or obligating
CoBank to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by it, or to present or file any claim or
notice, or to take any action with respect to the Pledged Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby, and no action taken by CoBank or omitted to be taken
with respect to the Pledged Collateral or any part thereof shall give rise to
any defense, counterclaim or offset in favor of the Pledgor or to any claim or
action against CoBank.
SECTION 10. EVENT OF DEFAULT. For purposes of this Pledge Agreement, an
"Event of Default" shall exist hereunder upon the happening of any of the
following events:
(i) any Event of Default under any of the Loan Documents; or
(ii) any written representation or warranty made in the
MCTC Limited Recourse Guaranty or in connection with this Pledge
Agreement shall
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Pledge Agreement/MCTC
Loan No. T0364
prove to have been false or misleading in any material respect as
of the date made; or
(iii) the Pledgor shall default in the performance or
observance of any provisions of this Pledge Agreement; provided,
however, that in the event any default in the performance or
observance of Section 6(B) has occurred, such default has
continued for a period of thirty (30) days; or
(iv) the Pledgor from and after the date hereof shall, or
shall attempt to, encumber, subject to any further pledge or
security interest, sell, transfer or otherwise dispose of any of
the Pledged Collateral or any interest therein except as
otherwise permitted herein, or any of the Pledged Collateral
shall be attached or levied upon or seized in any legal
proceedings, or held by virtue of any lien; or
(v) this Pledge Agreement shall not or shall no longer
be effective in granting to CoBank a first priority perfected
lien on the Pledged Collateral.
SECTION 11. APPLICATION OF PROCEEDS OF SALE AND CASH. The proceeds of
any sale of the whole or any part of the Pledged Collateral, together with any
other moneys held by CoBank under the provisions of this Pledge Agreement,
shall be applied by CoBank as follows:
First: to the payment of all reasonable costs and expenses
incurred by CoBank in connection herewith, including but not limited to,
all court costs and the fees and disbursements of counsel for CoBank in
connection herewith, and to the repayment of all advances made by CoBank
hereunder for the account of the Pledgor, and the payment of all
reasonable costs and expenses paid or incurred by CoBank in connection
with the exercise of any right or remedy hereunder; and
Second: to the payment in full of the Secured Obligations.
Any amounts remaining after such application shall be promptly remitted to the
Pledgor, its successors, legal representatives or assigns, or as otherwise
provided by law.
SECTION 12. FURTHER ASSURANCES. The Pledgor agrees that it will join
with CoBank in executing and will file or record such notices, financing
statements or other documents as may be necessary to the perfection of the
security interest of CoBank hereunder, and as CoBank or its counsel may
reasonably request, such instruments to be in form and substance satisfactory
to CoBank and its counsel, and that the Pledgor will do such further acts and
things and execute and deliver to CoBank such additional conveyances,
assignments, agreements and instruments as CoBank may at any time reasonably
request in connection with the administration and enforcement of this Pledge
Agreement or relative to the Pledged
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Pledge Agreement/MCTC
Loan No. T0364
Collateral or any part thereof or in order to assure and confirm unto CoBank
its rights, powers and remedies hereunder. The Pledgor shall notify CoBank in
writing promptly upon its acquisition of capital stock of the Borrower and
shall execute and deliver to CoBank, upon request, an amendment to this Pledge
Agreement or such other instruments as CoBank may request together with
certificates evidencing such capital stock accompanied by stock transfer powers
executed in blank, and shall take such other action requested by CoBank to
effectuate the pledge of such capital stock to CoBank in accordance with the
provisions of this Pledge Agreement.
SECTION 13. NO WAIVER; ELECTION OF REMEDIES. No course of dealing
between the Pledgor and CoBank or failure on the part of CoBank to exercise,
and no delay on its part in exercising any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power, or remedy preclude any other or the further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder or under any of the Loan Documents are cumulative and in addition to
and are not exclusive of any other remedies provided by law. No enforcement of
any remedy shall constitute an election of remedies.
SECTION 14. GOVERNING LAW; AMENDMENTS. Except to the extent governed by
applicable federal law, this Pledge Agreement shall be governed by and
construed in accordance with the laws of the State of Kansas without reference
to choice of law doctrine. This Pledge Agreement may not be amended or modified
nor may any of the Pledged Collateral be released, except in writing signed by
the parties hereto.
SECTION 15. CONSENT TO JURISDICTION; REGISTERED AGENT. The Pledgor agrees
that any legal action or proceeding with respect to this Pledge Agreement may
be brought in the courts of the States of Kansas or Louisiana or the United
States of America for the Western District of Louisiana or the District of
Kansas, all as CoBank may elect. By execution of this Pledge Agreement, the
Pledgor hereby submits to each such jurisdiction, hereby expressly waiving any
objection it may have to the laying of venue by reason of its present or future
domicile. Nothing herein shall affect the right of CoBank to commence legal
proceedings or otherwise proceed against the Pledgor in any other jurisdiction
or to serve process in any manner permitted or required by law. The Pledgor
further agrees to maintain a registered agent in the State of Kansas and will
notify CoBank in writing of such registered agent's name and address and of any
changes in such name or address.
SECTION 16. BINDING AGREEMENT; ASSIGNMENT. This Pledge Agreement, and the
terms, covenants and conditions hereof, shall be binding upon and inure to the
benefit of CoBank and to all holders of the indebtedness secured hereby and
their respective successors and assigns and to the Pledgor and its successors,
legal representatives and assigns, except that the Pledgor shall not be
permitted to assign this Pledge Agreement or any interest herein or in the
Pledged Collateral, or any part thereof, or any cash or property held by CoBank
as collateral under this Pledge Agreement. No notice to or demand on the
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<PAGE> 9
Pledge Agreement/MCTC
Loan No. T0364
Pledgor shall entitle the Pledgor to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 17. NOTICES. All notices hereunder shall be deemed to be duly
given upon delivery in the form and manner set forth in Section 7(E) of the
MCTC Limited Recourse Guaranty to the parties at the following addresses (or
such other address for a party as shall be specified by like notice):
If to the Pledgor, as follows: Mercury Cellular Telephone Company
One Lakeshore Drive, Suite 1495
P.O. Drawer 3104
Lake Charles, Louisiana 70602
Attn: Robert Piper; cc: Thomas G. Henning
Fax No.: (318) 439-0769
If to CoBank, as follows: CoBank, ACB
200 Galleria Parkway
Suite 1900
Atlanta, Georgia 30339
Attn: Rural Utility Banking Group
Fax No.: (404) 618-3202
SECTION 18. HEADINGS. Section headings used herein are for convenience
only and are not to affect the construction of or be taken into consideration
in interpreting this Pledge Agreement.
SECTION 19. COUNTERPARTS. This Pledge Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which when taken together constitute but one and the same instrument.
SECTION 20. SEVERABILITY. If any one or more of the provisions contained
herein shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Pledge Agreement, but this Pledge Agreement shall
be construed as if such invalid, illegal or unenforceable provisions had not
been contained herein.
SECTION 21. WAIVER OF SUBROGATION. The Pledgor hereby irrevocably waives
any and all rights it may have to enforce any of CoBank's rights or remedies or
participate in any security now or hereafter held by CoBank, and any and all
such other rights of subrogation, reimbursement, contribution or
indemnification against the Borrower or any other person having any manner of
liability for the Borrower's obligations to CoBank arising under the Loan
Documents.
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Pledge Agreement/MCTC
Loan No. T0364
SECTION 22. TERMINATION; REINSTATEMENT. This Pledge Agreement shall
remain in full force and effect until (i) all Secured Obligations have been
paid in full, (ii) CoBank has no further commitment or obligation to make
advances to be secured hereby, and (iii) any preference period applicable to
payments made on or security given for the Secured Obligations has expired
under applicable bankruptcy and insolvency laws, at which time the Pledgor may
request a written instrument of termination be executed and delivered by a duly
authorized officer of CoBank. If so terminated, this Pledge Agreement and the
Pledgor's obligations hereunder shall be automatically reinstated if at any
time payment in whole or in part of any of the Secured Obligations is rescinded
or restored to the Borrower or other payor or guarantor of the Secured
Obligations, or must be paid to any other person, upon the insolvency,
bankruptcy, liquidation, dissolution or reorganization of the Borrower or other
payor or guarantor of the Secured Obligations, all as though such payment had
not been made.
SECTION 23. FCC MATTERS. Notwithstanding any other provision of this
Pledge Agreement:
(A) Any foreclosure on, sale, transfer or other disposition
of, or the exercise or relinquishment of any right to vote or consent with
respect to, any of the Pledged Collateral by CoBank shall be pursuant to
Section 310(d) of the Communications Act of 1934, as amended, and the
applicable rules and regulations thereunder, and, if and to the extent required
thereby, subject to the prior approval or notice to and non-opposition of the
FCC.
(B) If an Event of Default shall have occurred and be
continuing, the Pledgor shall take any action, and shall cause the Borrower to
take any action, which CoBank may reasonably request in order to transfer and
assign to CoBank, or to such one or more third parties as CoBank may designate,
or to a combination of the foregoing, each FCC license or permit owned by the
Borrower. CoBank is empowered, to the extent permitted by applicable law, to
request the appointment of a receiver from any court of competent jurisdiction.
Such receiver may be instructed by CoBank to seek from the FCC an involuntary
transfer of control of each such FCC license or permit for the purpose of
seeking a bona fide purchaser to whom control will ultimately be transferred.
The Pledgor hereby agrees to authorize such an involuntary transfer of control
upon the request of the receiver so appointed and, if the Pledgor shall refuse
to authorize the transfer, its approval may be required by the court. Upon the
occurrence and during the continuance of an Event of Default, the Pledgor shall
further use its best efforts to assist in obtaining approval of the FCC and any
state regulatory bodies, if required, for any action or transactions
contemplated by this Pledge Agreement, including, without limitation, the
preparation, execution and filing with the FCC and any state regulatory bodies
of the assignor's or transferor's portion of any application or applications
for consent to the assignment of any FCC license or permit or transfer of
control necessary or appropriate under the rules and regulations of the FCC or
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Pledge Agreement/MCTC
Loan No. T0364
any state regulatory body for approval or non-opposition of the transfer or
assignment of any portion of the Pledged Collateral, together with any FCC
license or permit.
(C) The Pledgor acknowledges that the assignment or transfer
of each FCC license or permit is integral to CoBank's realization of the value
of the Pledged Collateral, that there is no adequate remedy at law for failure
by the Pledgor to comply with the provisions of this Section 23 and that such
failure would not be adequately compensable in damages, and therefore agrees,
without limiting the right of CoBank to seek and obtain specific performance of
other obligations of the Pledgor contained in this Pledge Agreement, that the
agreements contained in this Section 23 may be specifically enforced.
(D) In accordance with the requirements of 47 C.F.R. Section
22.917, or any successor provision thereto, CoBank shall notify the Pledgor and
the FCC in writing at least ten (10) days prior to the date on which CoBank
intends to exercise its rights, pursuant to this Pledge Agreement or any of the
other Loan Documents, by foreclosing on, or otherwise disposing of, any Pledged
Collateral in connection with which such notice is required pursuant to 47
C.F.R. Section 22.917 or any successor provision thereto.
IN WITNESS WHEREOF, the Pledgor has caused the Pledge Agreement to be
executed and attested under seal and delivered, and CoBank has caused this
Pledge Agreement to be executed and delivered, each by its duly authorized
officers, as of the date first above shown.
<TABLE>
<S> <C>
COBANK, ACB MERCURY CELLULAR TELEPHONE COMPANY
By:/s/ MARY KAY DEERING By: /s/ ROBERT PIPER
---------------------------- ---------------------------------
Name: Mary Kay Deering Name: Robert Piper
Title: Assistant Vice President Title: President
Attest:/s/ THOMAS G. HENNING
-----------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
</TABLE>
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<PAGE> 12
SCHEDULE 1
TO
PLEDGE AGREEMENT
<TABLE>
<CAPTION>
Number of Percentage of Total
Shares Owned Certificate Outstanding Shares
Entity by the Pledgor Number(s) Owned by the Pledgor
- ------------- --------------- ----------- ---------------------
<S> <C> <C> <C>
Mercury Cellular 10 1 100%
of Kansas, Inc.
</TABLE>
<PAGE> 1
EXHIBIT 4.66
MCK
Loan No. T0364
PROMISSORY NOTE
MERCURY CELLULAR OF KANSAS, INC.
LAKE CHARLES, LOUISIANA
$17,100,000 DATED: APRIL 20, 1995
FOR VALUE RECEIVED, MERCURY CELLULAR OF KANSAS, INC. (the "Borrower"),
promises to pay to the order of COBANK, ACB (the "Payee"), at the times and in
the manner set forth in that certain Loan Agreement, dated as of even date
herewith, and numbered T0364, by and between the Borrower and the Payee (as
that agreement may be amended, supplemented, extended or restated from time to
time, the "Loan Agreement"), the principal sum of SEVENTEEN MILLION ONE HUNDRED
THOUSAND DOLLARS ($17,100,000) or such lesser amount as may be advanced
hereunder, together with interest on the unpaid principal balance hereof at the
rate or rates provided for in the Loan Agreement.
This Note is given for one or more advances to be made by the Payee to
the Borrower pursuant to the Loan Agreement, all of the terms and provisions of
which are incorporated herein by reference. Advances, accrued interest and
payments shall be posted by the Payee upon an appropriate accounting record,
which record (and all computer printouts thereof) shall constitute prima facie
evidence of the outstanding principal and interest on the advances.
The Borrower hereby waives presentment for payment, demand, protest,
and notice of dishonor and nonpayment of this Note, and all defenses on the
ground of delay or of any extension of time for the payment hereof which may be
hereafter given by the holder or holders hereof to it or to anyone who has
assumed the payment of this Note, and it is specifically agreed that the
obligations of the Borrower shall not be in anywise affected or altered to the
prejudice of the holder or holders hereof by reason of the assumption of payment
of the same by any other person or entity.
Should this Note be placed in the hands of an attorney for collection
or the services of any attorney become necessary in connection with enforcing
its provisions, the Borrower agrees to pay reasonable attorneys' fees, together
with all costs and expenses incident thereto, to the extent allowed by law.
Except to the extent governed by applicable federal law, this Note shall be
governed by and construed in accordance with the laws of the State of Kansas
without reference to choice of law doctrine.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed,
attested and delivered under seal by its duly authorized officers as of the
date first shown above.
MERCURY CELLULAR OF KANSAS, INC.
By: /s/ THOMAS G. HENNING
----------------------------------
[CORPORATE SEAL] Name: Thomas G. Henning
Title: President
Attest: /s/ ROBERT PIPER
------------------------------
Name: Robert Piper
Title: Secretary
<PAGE> 2
CTC
Loan No. T0362
PROMISSORY NOTE
MERCURY CELLULAR TELEPHONE COMPANY
Lake Charles, Louisiana
$18,000,000 DATED: APRIL 20, 1995
FOR VALUE RECEIVED, MERCURY CELLULAR TELEPHONE COMPANY ("MCTC") hereby
promises to pay to the order of CTC FINANCIAL, INC. ("Finance"; Finance or any
subsequent holder of this Note, the "Holder") the principal amount of EIGHTEEN
MILLION DOLLARS ($18,000,000), or so much as may have been advanced under that
certain Promissory Note, dated of even date herewith, made by Finance to the
order of CoBank, ACB ("CoBank"), in the original principal amount of
$18,000,000 (including any amendment, supplement, extension or restatement
thereof, the "Finance Note"), and that certain Loan Agreement, dated as of even
date herewith, by and between Finance and CoBank (including any amendment,
supplement, extension or restatement thereof, the "Loan Agreement") and
reloaned by Finance to MCTC, together with interest as hereinafter provided
from the date hereof until paid in full, plus amounts equal to all other costs,
fees, expenses, premiums, surcharges and all other amounts due under or in
connection with the Finance Note and the Loan Agreement. For purposes of this
Note, the "Finance Loan" shall mean the amounts borrowed by Finance from CoBank
pursuant to the Loan Agreement and evidenced by the Finance Note, and the
"Loan" shall mean the amounts of the Finance Loan reloaned by Finance to MCTC
and evidenced by this Note.
1. INTEREST. The aggregate amount of interest accruing under this
Note shall at all times equal the aggregate amount of interest accruing under
the Finance Note. Accordingly, interest on the principal balance outstanding
hereunder shall accrue as follows:
(a) As to a principal amount equal to the Portion (as
defined in the Loan Agreement) of the Finance Loan, if any, from time to time
accruing interest at the Variable Rate (as defined in the Loan Agreement), at a
rate equal to the Variable Rate applicable from time to time under the Loan
Agreement; and
(b) As to a principal amount equal to each Portion of the
Finance Loan, if any, from time to time accruing interest pursuant to one of
the fixed rate options as provided for in Section 4(A)(2)(a) or (b) of the Loan
Agreement, at a fixed rate equal to the fixed rate so accruing on each such
Portion.
2. REPAYMENT OF PRINCIPAL; INTEREST AND OTHER AMOUNTS PAYABLE.
This Note evidences MCTC's obligations with respect to the Loan. MCTC shall pay
to the Holder an
<PAGE> 3
Promissory Note/MCTC
Loan No. T0362
amount equal to the aggregate principal amount of the Loan, together with
accrued interest thereon, plus all other costs, fees, expenses, premiums,
surcharges and all other amounts due under or in connection with the Finance
Note and the Loan Agreement, in such amounts and at such times as shall be
sufficient to make, when and as due, all payments required under the Finance
Note and the Loan Agreement with respect to the Finance Loan, interest thereon,
and such other amounts due thereunder. Advances, accrued interest and payments
under the Finance Note and the Loan Agreement shall be posted by CoBank upon an
appropriate accounting record, which record (and all computer printouts
thereof) shall constitute prima facie evidence of the outstanding principal and
interest under the Finance Note and the Loan Agreement. So long as CoBank shall
be the Holder hereof, payments received by CoBank pursuant to this Note shall
be deemed to constitute payments made pursuant to the Finance Note.
3. MANNER AND PLACE OF PAYMENT. Payments of all amounts due
hereunder are to be made at such location as the Holder may designate in
writing in accordance with Paragraph 10 hereof, in lawful money of the United
States of America.
4. LOAN DOCUMENTS. This Note is executed pursuant to the terms of
the Loan Agreement. This Note, the Finance Note and the Loan Agreement and any
other agreements, documents or instruments securing the indebtedness or
evidencing or relating to the transactions contemplated in the Loan Agreement
shall sometimes herein be collectively called the "Loan Documents."
5. COST OF COLLECTION. In the event this Note or any amount due
hereunder is not paid promptly when due, MCTC shall pay the reasonable fees and
all other costs and expenses of any attorneys at law who may be employed to
recover the amount overdue, or to protect the interest of the Holder, or to
enforce any Loan Document or to compromise or take other action in regard
hereto or thereto.
6. WAIVER. MCTC hereby waives any right to consent to any
amendment, supplement, extension or restatement of the Finance Note, the Loan
Agreement or any of the other Loan Documents; waives presentment for payment,
demand, protest and notice of dishonor and nonpayment; and agrees that the
payment hereof or of the Finance Note and the Loan Agreement may be extended
one or more times without notice. MCTC hereby waives all defenses on the ground
of delay or of any extension of time for the payment hereof which may be
hereafter given by the Holder hereof to it or to anyone who has assumed the
payment of this Note, and it is specifically agreed that the obligations of
MCTC shall not be in anywise affected or altered to the prejudice of the Holder
hereof by reason of the assumption of payment of the same by any other person
or entity.
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Promissory Note/MCTC
Loan No. T0362
7. PARTIES BOUND. As used herein, the terms "MCTC" and the
"Holder" shall be deemed to include their respective successors and assigns.
8. MISCELLANEOUS. The Holder shall not by any act, delay,
omission or otherwise be deemed to have waived any of its rights or remedies,
and no waiver of any kind shall be valid, unless in writing and signed by the
Holder. All rights and remedies of the Holder under the terms of this Note and
under any statutes or rules of law shall be cumulative and may be exercised
successively or concurrently. Any provision of this Note which may be
unenforceable or invalid under any law shall be ineffective to the extent of
such unenforceability or invalidity without affecting the enforceability or
validity of any other provision hereof. Except to the extent governed by
applicable federal law, this Note shall be governed by and construed in
accordance with the laws of the State of Louisiana without reference to choice
of law doctrine.
9. CONSENT TO JURISDICTION. To the maximum extent permitted by
law, MCTC agrees that any legal action or proceeding with respect to this Note
may be brought in the courts of the State of Louisiana or the United States of
America for the Western District of Louisiana, all as the Holder may elect. By
execution of this Note, MCTC hereby irrevocably submits to such jurisdiction,
expressly waiving any objection it may have to the laying of venue by reason of
its present or future domicile. Nothing contained herein shall affect the right
of the Holder to commence legal proceedings or otherwise proceed against MCTC
in any other jurisdiction or to serve process in any manner permitted or
required by law.
10. NOTICES. All notices herein authorized or required to be given
to MCTC or the Holder shall be given and delivery may be effected in the manner
set forth in the Loan Agreement to the addresses set forth below or to such
other address as the parties may designate from time to time in accordance with
this paragraph:
<TABLE>
<S> <C>
MCTC: Mercury Cellular Holder: CoBank, ACB
Telephone Company 200 Galleria Parkway
P.O. Box 3709 Suite 1900
Lake Charles, Louisiana 70602 Atlanta, Georgia 30339
Attn: Robert Piper; Attn: Rural Utility Banking
cc: Thomas G. Henning Fax No.: (404) 618-3202
Fax No.: (318) 439-0769
</TABLE>
[Signatures on next page]
-3-
<PAGE> 5
Promissory Note/MCTC
Loan No. T0362
WHEREFOR, MCTC has caused this Note to be executed, attested, sealed
and delivered under seal by its duly authorized officers on the day and year
first written above.
MERCURY CELLULAR
TELEPHONE COMPANY
By: /s/ ROBERT PIPER
----------------------------------
Name: Robert Piper
Title: President
Attest: /s/ THOMAS G. HENNING
------------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
-4-
<PAGE> 6
Promissory Note/MCTC
Loan No. T0362
FOR VALUE RECEIVED, CTC FINANCIAL, INC. ("Finance") hereby assigns to the
COBANK, ACB ("CoBank") all of its interest in the instant promissory note to
secure the prompt payment and performance of the Obligations (as hereinafter
defined). As used herein, the term "Obligations" shall mean (i) the principal,
interest and any other charges provided for in the Finance Note (as defined in
the instant promissory note) and the Loan Agreement (as defined in the instant
promissory note); (ii) all payments or performances under any other agreements,
instruments and documents now or hereafter evidencing or relating to the
transactions contemplated in the Loan Agreement; and (iii) all indebtedness,
obligations and liabilities of Finance to CoBank of every kind, character and
description whatsoever, direct or indirect, absolute or contingent, due or to
become due, now existing or hereinafter incurred, contracted or arising, joint
or several, liquidated or unliquidated, regardless of how they arise or by what
agreement or instrument they may be evidenced or whether they are evidenced by
any agreement or instrument, or whether incurred as maker, drawer, endorser,
surety, guarantor or otherwise.
WHEREFOR, Finance has caused this assignment to be executed, attested
and delivered under seal as of April 20, 1995.
CTC FINANCIAL, INC.
By: /s/ WILLIAM L. HENNING, JR.
----------------------------------------
Name: William L. Henning, Jr.
Title: President
Attest: /s/ THOMAS G. HENNING
-----------------------------------
Name: Thomas G. Henning
Title: Secretary
[CORPORATE SEAL]
-5-
<PAGE> 1
EXHIBIT 4.68
Sulphur, Louisiana April 14, 1993
For value received, the undersigned, jointly, severally and in solido
promise to pay to the order of CAMERON TELEPHONE COMPANY at its office at 101
E. Thomas Street, Sulphur, Louisiana, TWO MILLION SEVEN HUNDRED SEVENTY NINE
THOUSAND NINE HUNDRED TWENTY FOUR AND 84/100 ($2,779,924.84) DOLLARS (which
includes accrued interest for two years @ 5.45 per cent on $1,200,000) in 28
equal quarterly installments, the first maturing on the 14th day of April 1995,
and one on the same day of every third month thereafter until paid. Each
installment shall be Ninety Nine Thousand Two Hundred Eighty Three and 03/100
($99,283.03) Dollars, plus interest, except the last, which shall be the unpaid
balance, with interest at the rate of 5.45 per cent per annum from April 14,
1995, until paid.
Failure to pay any of the installments of this note at its maturity shall
mature this note in its entirety, and all the remaining installments shall
immediately become due and payable.
And I, we, the makers, signers and endorsers of this note hereby severally
waive presentment for payment, demand, protest, notice of protest and of
dishonor, and consent that time of payment may be extended without notice or
previous consent of any of them. And, if suit for collection is instituted or
this note is placed in the hands of an attorney for collection, we bind
ourselves to pay the fees of the attorney who may be employed for that purpose,
which fees are hereby fixed at Ten Percent (10%) of the amount due.
MERCURY, INC.
BY /s/ [ILLEGIBLE]
---------------------------------------
<PAGE> 2
INTEREST ACCRUAL
ACCOUNT (1210000)
ANNUAL INTEREST 5.45%
<TABLE>
<CAPTION>
Total
Date Description Interest Accrual Int Balance Balance
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
04/14/95 Balance Forward $279,924.84 $2,779,924.84
06/30/95 JE for April, May & June interest accrual $31,961.52 $311,886.36 $2,811,886.36
07/31/95 JE for interest accrual - July 95 $12,887.62 $324,753.98 $2,824,753.98
08/31/95 JE for interest accrual - August 95 $12,887.62 $337,621.60 $2,837,621.60
09/30/95 JE for interest accrual - September 95 $12,452.54 $350,074.14 $2,850,074.14
10/31/95 JE for interest accrual - October 95 $12,887.62 $362,941.76 $2,862,941.76
11/30/95 JE for interest accrual - November 95 $12,452.54 $375,394.30 $2,875,394.30
12/31/95 JE for interest accrual - December 95 $16,314.84 $391,709.14 $2,891,709.14
01/31/96 JE for interest accrual - January 96 $13,385.05 $405,094.19 $2,905,094.19
02/29/96 JE for interest accrual - February 96 $12,579.46 $417,673.64 $2,917,673.64
03/31/96 JE for interest accrual - March 96 $13,505.23 $431,178.88 $2,931,178.88
04/30/96 JE for interest accrual - April 96 $13,130.08 $444,308.95 $2,944,308.95
05/31/96 JE for interest accrual - May 96 $13,628.52 $457,937.47 $2,957,937.47
06/30/96 JE for interest accrual - June 96 $13,249.94 $471,187.41 $2,971,187.41
</TABLE>
<PAGE> 1
EXHIBIT 10.3
NATIONWIDE MESSAGING
RESELLER AGREEMENT
THIS AGREEMENT ("Agreement") is made this 19th day of December 1994,
by and between MobileComm Nationwide Operations, Inc. (herein referred to as
"MobileComm"), located at 1800 East County Line Road, Suite 300, Ridgeland,
Mississippi 39157, and Mercury Cellular Telephone Company (herein referred to
as "Reseller"), located at One Lakeshore Drive, CM Tower, Suite 1495, P.O.
Drawer 3104, Lake Charles, LA 70602-3104.
WHEREAS, MobileComm provides Nationwide Messaging Services (defined
below), using frequency 931.8875 MHz pursuant to licensing by the FCC (defined
below); and
WHEREAS, Reseller desires to purchase MobileComm's Nationwide
Messaging Services in bulk quantities for resale to the public and desires to
assume certain responsibilities relating to the provision of Nationwide
Messaging Services.
NOW, THEREFORE, in consideration of the mutual agreements and
covenants herein contained, MobileComm and Reseller hereby agree as follows:
ARTICLE I
DEFINITIONS
The following terms when used herein shall have the following
meanings:
(a) "Automated Access System" means the use of a reseller operated data
terminal for the purpose of activating, swapping equipment, or
disconnecting Subscribers on the Service.
(b) "Facilities" shall mean the telecommunications switching,
transmitting and other related equipment maintained by MobileComm
to provide MobileComm's Nationwide Messaging Services on frequency
931.8875 MHZ or such other frequencies as the parties may agree
from time to time.
(c) "FCC" shall mean the Federal Communications Commission.
(d) "Nationwide Messaging Services" or "Services" shall mean the paging
service provided by MobileComm to Reseller on a nationwide or
regional basis on frequency 931.8875 MHz, including voice storage
and/or retrieval in conjunction with such Nationwide Messaging
Service if applicable unless otherwise provided herein.
(e) "PIN" shall mean Personal Identification Number, which number will
identify each paging receiver and permit access to the Nationwide
Messaging Services.
(f) "Subscriber" shall mean any party to whom Reseller sells Nationwide
Messaging Services.
ARTICLE II
COOPERATIVE DISTRIBUTORSHIP
MobileComm and Reseller agree that at all times during the term of
this Agreement, each shall endeavor to maintain prompt, courteous and efficient
dealings with each other and to the public, and will be governed in all
dealings with the public by the highest standards of honesty, integrity and
fair dealings, and will do nothing which
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discredits, reflects adversely upon or in any manner injures the reputation or
goodwill of the other.
ARTICLE III
TERM OF AGREEMENT
The term of this Agreement shall be for a period of two (2) years from
12/19, 1994, the date of execution by MobileComm ("Initial Term"), unless
otherwise terminated pursuant to Article XII hereof. This Agreement shall
automatically renew for two additional one year terms unless notice of
non-renewal is received by either party at least ninety (90) days prior to the
expiration date of this Agreement or any renewals thereof.
Reseller expressly agrees that this Agreement shall be of no effect
until executed by an officer of MobileComm.
ARTICLE IV
PRICES: TERMS OF PAYMENT
(a) Reseller shall pay to MobileComm the charges set forth in Exhibit 1
for the Services. Reseller's obligation to pay Mobilecomm is not in
any way contingent upon Reseller's collection from Subscribers.
(b) MobileComm's charges for Services to Reseller may be modified from
time to time upon sixty (60) days' advance written notice; provided,
however, that MobileComm may not increase the prices on Exhibit 1
during the first six (6) months of the Initial Term except as
provided in Article IV(f) hereof. In the event MobileComm increases
prices pursuant to this Article IV(b) in excess of 20% of the prices
set forth in Exhibit 1 within any two (2) year period, Reseller may
terminate this Agreement upoon thirty (30) days' written notice to
MobileComm; provided, however, Reseller's right to terminate shall not
apply (i) if MobileComm reduces such increase to 20% or less or (ii)
if MobileComm increases the prices pursuant to Article IV(f) hereof.
(c) In addition to the charges set forth in Article IV(a) or IV(b) above,
Reseller shall be required to pay any surcharge, duty, levy, tax or
withholding, including, but not limited to, sales, property, ad
valorem, license and use taxes, or any tax in lieu thereof or in
addition thereto, imposed by any local, state or federal government or
governmental agency with respect to the Nationwide Messaging Services,
or with respect to this Agreement itself, excepting any taxes on the
income of MobileComm.
(d) Charges under Article IV(a) and IV(b) above shall commence with
respect to each PIN assigned to Reseller (which shall be assigned by
MobileComm in accordance with MobileComm's policies) at the time the
PIN is activated. Such charges shall continue until the date such PIN
is canceled or otherwise disconnected. The charges relating to
Services and PINs that are activated during fractional parts of months
will be pro-rated calculated on the basis of the monthly billing amount
times twelve (12) divided by 365, times the number of days Reseller
receives the Services during the month, including the day of sale or
termination, as the case may be. MobileComm reserves the right to
modify this Article IV(d), in its sole discretion upon sixty (60)
days' written notice to Reseller.
(e) Services hereunder shall be billed to Reseller monthly. Billing for
in-service PIN charges and taxes shall be in advance; billing for
usage, overcalls, connect fees, and late-payment charges, pro-rata
billing for additional PINs activated and pro-rata credits for
terminated PINs shall be billed one month in arrears. Reseller agrees
to pay all charges attributable to such Services in United States
Dollars on or before the twentieth (20th) calendar day following the
invoice date. Any amount which is not paid in full by the due date
shall be subject to a late payment charge equal to the maximum rate
permitted by applicable law form the due date until paid, up to 1.5
percent per month. Any amounts required to be paid hereunder will be
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<PAGE> 3
deemed paid when received, subject to collection, at the location
designated by MobileComm from time to time. In the event of a good
faith dispute by Reseller as to any amount charged by MobileComm,
Reseller shall notify MobileComm in writing of the dispute no later
than the sixtieth (60th) day following the date of the invoice in which
the disputed amount is billed to Reseller. In no event, however,
shall Reseller withhold or delay payment. In the event payment is
withheld or delayed, MobileComm may, in addition to all other rights
which it has at law or under this Agreement, suspend all
administrative activities provided to Reseller, including but not
limited to the provision of new PINs, disconnects, swaps, etc.
Nothing contained in this Article (e) shall be construed as in any
way limiting the rights of MobileComm under Article XII hereof to
declare Reseller in default and to terminate this Agreement for
nonpayment. Billing disputes not documented to MobileComm within
sixty (60) days of MobileComm's invoice date shall be forever waived
by Reseller.
(f) MobileComm may, without prior notice to Reseller, increase
its charges to Reseller at any time to the extent MobileComm's costs
are increased by any order of any federal, state or local authority.
In the event MobileComm receives advance notice of any such cost
increases, such notice will be given promptly to Reseller.
ARTICLE V
RESELLER'S OBLIGATIONS
(a) Services provided under this Agreement shall be in accordance
with all applicable rules and regulations of the FCC and the
appropriate state regulatory commissions (if applicable).
(b) Reseller is solely responsible for determination of prices charged
to Subscribers for the Services.
(c) Reseller is responsible for ensuring that any equipment utilized by
Subscribers in connection with the Services and each Subscriber's use
thereof shall at all times meet industry standards for compatibility,
FCC and other applicable regulatory authorities' requirements, and the
reasonable technical requirements and standards set forth by
MobileComm from time to time.
(d) Subject to Article V(e) Reseller shall permit only 1200 Baud POCSAG
paging receivers to be activated on the Facilities unless otherwise
notified in writing by MobileComm and will act immediately to replace
any equipment found to be non-conforming to this requirement.
Reseller will maintain an adequate supply of such paging receivers to
satisfy Subscriber demand for sales and replacement of equipment.
(e) Reseller shall be soley responsible for all risks and expenses
incurred in connection with its actions in the sale or use of the
Services or for any other acts required of Reseller pursuant to this
Agreement. Reseller shall act in all respects on its own account and
shall be solely responsible for any credit verification, deposits,
billing, collection, bad debt, consolidation, Subscriber billing
complaints, sales taxes and similar taxes on the equipment and
Services provided by or through Reseller. Reseller shall use its best
efforts to prevent fraudulent or illegal use by any Subscriber of any
PINs assigned to Reseller and shall act immediately to stop fraudulent
or illegal use by any Subscriber of Reseller as soon as such use is
discovered or made known to Reseller. Reseller shall immediately
report to MobileComm any material complaints received from Subscribers
relating to Services provided hereunder.
(f) Reseller shall not make any warranties, express or implied, with
regard to the Services and specifically agrees it shall make no such
warranties to any Subscriber.
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<PAGE> 4
(g) In the event that Reseller and MobileComm enter into a written
agreement pursuant to which Reseller's authorized agents, subagents
or other resellers are authorized by MobileComm to resell the
Services, Reseller agrees that:
(i) Each such agent, subagent, or reseller shall market
MobileComm products and Services in only the market area(s)
where Reseller maintains its bona fide sales and
administrative office(s); and
(ii) Such agents, subagents or other resellers shall be required
to comply with all of the terms and conditions of this
Agreement; and
(iii) Reseller shall remain primarily liable for compliance with
all terms and conditions of this Agreement, including all
payments due to MobileComm for Subscriber PINs and system
usage of such agents, subagents or other resellers.
(h) Reseller will provide all sales and support activities and pager
equipment to Subscribers at Reseller's expense.
(i) Reseller shall submit to MobileComm documentation regarding each
Subscriber activation, change of equipment, or disconnect associated
with Reseller's account, by facsimile on a form similar to Exhibit 2
attached hereto within three (3) business days of initiation of any of
the foregoing events provided, however, if the agent utilizes the
Automated Access System consistent with MobileComm requirements, such
documentation shall not be required.
ARTICLE VI
ADVERTISING AND PROMOTION
Subject to this paragraph, Reseller shall not use the name MobileComm
or otherwise refer to MobileComm or the Nationwide Messaging Services using the
name "MobileComm" in any advertising or marketing material. To assure such
compliance, Reseller shall submit all advertising or marketing material to
MobileComm and shall not use such materials without MobileComm's prior written
approval. MobileComm reserves the right to prohibit the use of such material in
its sole discretion. MobileComm may withdraw its approval of the use of any
such materials at any time upon fifteen (15) days' notice.
ARTICLE VII
TRADE NAME AND TRADEMARK
(a) Reseller and MobileComm each recognize the right, title and interest
of MobileComm or its affiliated and associated companies to all service
marks, logos, trademarks and trade names used on or in connection
with the MobileComm's business activities and agrees not to
engage in any activities or commit any acts, directly or indirectly,
which may contest, dispute or otherwise impair such right, title and
interest. Reseller hereby agrees that all its uses of such service
marks, logos, trademarks and trade names shall only be according to
standards furnished by MobileComm and shall be in such manner as to
inure at all times to the benefit of MobileComm. Use of MobileComm's
and/or any affiliate of MobileComm's service marks, logos, trademarks,
and trade names in connection with the sale of Nationwide Messaging
Services is expressly prohibited.
(b) This Article shall survive termination of this Agreement, and, in the
event of termination, no service marks, logos, trademarks or trade
names of Reseller shall be registered or used which are the same as, or
confusingly similar to, service marks, logos, trademarks and trade
names of MobileComm. Use or
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<PAGE> 5
ownership of any trade name or style containing any mark or trade name
confusingly similar to that of MobileComm shall be surrendered or
abandoned.
ARTICLE VIII
BILLING ADJUSTMENTS
(a) MobileComm may suspend or reduce, in whole or in part, the provision of
the Services or any of its obligations hereunder, for the time and to
the extent such suspension or reduction is occasioned by an event or an
act of God, war, fire or other casualty, acts of any governmental body
or similar causes or conditions beyond MobileComm's reasonable control
and such event is not due to the negligence or willful act of
MobileComm (any such act is hereinafter referred to as an "Event"). Any
Nationwide Messaging Services not provided by reason of the Article
VIII shall as soon as possible be returned by MobileComm upon the
termination, cessation or elimination of the Event. MobileComm agrees
to use its best efforts to restore, to the extent possible, the
Nationwide Messaging Services reduced or suspended as a result of the
Event.
(b) If an Event has occurred, MobileComm will pro rate the monthly charges
involved for the Services and Facilities rendered useless and
inoperative by reason of the Event during the time the interruption
continues in excess of twelve (12) hours from the time it is reported
to MobileComm. No adjustment shall be made for accumulated periods of
noncontinuous interruption of fewer than twelve (12) hours.
(c) The pro rata adjustment shall be a fraction of the charges specified
in Exhibit 1. The numerator of such fraction shall be the total
number of continuous hours of the interruption to the Service in
excess of 12 hours from the time the interruption is reported to
MobileComm (a period of time less than 30 minutes shall be disregarded
and a period in excess of 30 minutes shall be considered an additional
hour) and the denominator of such fraction shall be 720 hours.
ARTICLE IX
RESTRICTIONS ON USE
(a) Reseller shall not misuse the Services. For purposes of this Article,
misuse of Services includes, but is not limited to, obtaining or
attempting to obtain Services by rearranging, tampering or making
unpermitted connection with any Facilities of MobileComm, or the use
of a PIN for more than one pager unless such PIN is used for a
pre-established group call and Reseller is appropriately billed for
the group call format.
(b) Any attempt to misuse Services by Reseller shall be deemed a material
breach of this Agreement, and failure of Reseller to remedy such breach
within fifteen (15) days of receipt of notice of same shall be deemed
a material breach of this Agreement.
ARTICLE X
PROPRIETARY INFORMATION: CONFIDENTIALITY; NON-SOLICITATION
(a) Each party acknowledges that, during the term of this Agreement, it
will be provided with confidential information relating to the
business policies and procedures and products of the other party.
Each party agrees that it will not use such confidential information
for any purpose except the performance of this Agreement, and that it
will not disclose any such confidential information to any third party
unless such disclosure is authorized in advance by the other party in
writing or is required by Order of the Court or regulatory agency of
competent jurisdiction with notice of same being given to the other
party. Each party agrees that the terms and conditions of this
Agreement are confidential and restricted by this Article X(a)
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<PAGE> 6
as to their disclosure to any third party.
(b) The parties agree that the sales force of Reseller may sell nationwide
messaging services other than those offered by MobileComm; provided
that Reseller complies with the following conditions:
(i) Reseller agrees that, during the term of this Agreement, it
will not directly or indirectly be involved in actions to
induce or solicit any Subscriber to transfer from the
Nationwide Messaging Service to the paging service of any
other company, including but not limited to, transmitting or
causing to be transmitted any page, solicitation or
information, (whether electronic, oral, written, or otherwise)
regarding the paging offering of any other person, company, or
entity which are in any way devised to or reveal to any such
company, entity or person the name, address, telephone number
and/or PINs of any Subscribers utilizing the Facilities.
(ii) Reseller determines to transfer Subscribers hereto to a paging
system of some entity or person other than MobileComm, or
Reseller's own system without first being contacted by
Subscriber expressing a desire to subscribe to another
Nationwide Paging System. MobileComm shall have a Right of
First Refusal as provided in Article XIII(f) to purchase the
Subscriber accounts under this Agreement; provided, however,
this subparagraph (b)iii shall not prohibit Reseller's right
to sell or transfer such Subscriber accounts if MobileComm has
not exercised such Right of First Refusal within the time
provided by this Agreement and such transfer is consistent
with this Agreement.
(c) Reseller's noncompliance with such conditions shall be considered to be
a material breach of this Agreement.
(d) Each party agrees not to knowingly solicit or employ the employees of
the other party without the written consent of the other party to the
extent consistent with applicable state and federal law.
ARTICLE XI
WARRANTY AND LIMITATION OF LIABILITY
(a) MOBILECOMM MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, CONCERNING ITS
FACILITIES OR SERVICES, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE. IT IS
INTENDED BY THE PARTIES THAT THIS SECTION SHALL APPLY TO RESELLER OR
ANY OF RESELLER'S SUBSCRIBERS AND SHALL BE CONSTRUED IN CONFORMITY WITH
THE LAWS OF THE STATE OF GEORGIA.
(b) In recognition that Service interruptions in the telecommunications
industry are frequently due to circumstances beyond a carrier's control
and difficult to assess as to cause or resulting damages, and in
recognition that the Reseller is better positioned to insure against
any such damage, the parties agree that the liability of MobileComm for
damages arising out of mistakes, omissions, interruptions, delays,
errors or defects in transmission shall not exceed the actual resulting
loss and shall in no event exceed an amount equivalent to the
proportionate charge to the Reseller for the period of the Service
disruption or the amount of $500, whichever is lesser.
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<PAGE> 7
(c) MobileComm shall not be liable for any act or omission of Reseller or
any other entity furnishing equipment, software or services to
Reseller or to Subscribers, nor shall MobileComm be liable for any
damages or losses due to the fault or negligence of the Reseller or
Subscriber or for the failure of said equipment, software or services.
(d) All equipment and Services provided by Reseller to Subscribers must be
compatible with the Facilities. MobileComm shall provide at least one
hundred twenty (120) days' written notice of any system change which
is anticipated to affect such compatibility. In no event shall
MobileComm be liable for any incompatibility resulting from such
change.
ARTICLE XII
TERMINATION
(a) This Agreement and the Services provided hereunder may be terminated
as follows:
(i) by the mutual written consent of Reseller and MobileComm:
(ii) by either Reseller, on the one hand, or MobileComm, on the
other hand, in writing, without liability to the terminating
party on account of such termination (provided that the
terminating party is not otherwise in default or in breach of
this Agreement), if the other party shall (a) fail to perform
in any material respect its agreements contained herein, or
(b) materially breach any of its obligations hereunder, or
(c) if an Event or Default has occurred and has not been
cured in accordance with the applicable cure period.
(b) Termination, regardless of cause or nature, shall be without
prejudice to any other rights or remedies of the parties and shall be
without liability for any loss or damage occasioned thereby.
Termination of this Agreement for any cause shall not release either
party from any liability which, at the time of termination, has
already accrued to the other party, or which may acrue in respect of
any act or omission prior to termination or from any obligation
which is expressly stated herein to survive termination. MobileComm
and Reseller agree to cooperate to enable all Subscribers to continue
Services with minimal disruption after termination; provided, that
MobileComm shall be under no obligation to ensure that any Subscriber
is so able to continue to utilize its Services or to arrange for any
transfer of equipment owned or leased by Reseller.
(c) This Agreement shall terminate automatically and without liability or
further obligation on the part of either party if MobileComm's
Nationwide Messaging licenses or other authority to operate the
Nationwide Messaging System are revoked, suspended or not renewed;
provided, however, that if such revocation, suspension or nonrenewal
does not apply to all of the Facilities, this Agreement shall terminate
only as to those Facilities for which licensing or other authority
does not exist.
ARTICLE XIII
DEFAULT; TRANSFER OF SUBSCRIBERS; PURCHASE OF EQUIPMENT
(a) The following shall be deemed to be an Event of Default:
(i) Failure by either party to observe or timely perform in any
material respect any of the covenants of this Agreement and
the failure to cure, as applicable, pursuant to this
Agreement; or
(ii) Breach of a representation or warranty made by either party in
this Agreement or any other
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<PAGE> 8
written agreement, statement, certificate or document executed pursuant to this
Agreement which materially adversely affects the other party; or
(iii) Insolvency by either party or assignment for the
benefit of creditors, or application for, consent to, or
sufferance of the appointment of a trustee, receiver or
similar officer for a significant portion of their respective
property or assets, or commencement of any proceeding by or
against either party seeking reorganization, rehabilitation,
liquidation or other relief under the bankruptcy, insolvency
or similar debtor-relief statutes under the laws of the
United States or any state thereof, as now existing or
hereafter amended.
Upon the occurrence of an Event of Default by Reseller, or MobileComm,
as the case may be, the non-defaulting party shall notify the other in
writing of the Event of Default ("Default Notice"). After receipt of
the Default Notice and the Event of Default is not cured as provided
herein, this Agreement may be terminated by MobileComm or Reseller, as
the case may be; provided, however, that where an Event of Default
(other than with respect to non-payment by Reseller for which the cure
period does not apply) cannot be cured within fifteen (15) calendar
days despite the exercise of due diligence, the period for such cure
shall be extended, but in no event, shall the period allowed for cure
exceed forty-five (45) calendar days. Only upon the occurrence of an
Event of Default by Reseller, MobileComm shall also have the right to
contact Reseller's Subscribers directly in order to notify them of the
imminent termination of Service and of their options with respect to
Nationwide Messaging Services and Reseller shall cooperate fully with
MobileComm to effect this notification.
(i) Upon termination of this Agreement by Reseller, Reseller shall
only have the obligation to make payment to MobileComm in
accordance with Article IV hereof for Services rendered by
MobileComm to the Reseller through the date of termination.
(ii) Upon the termination of this Agreement by MobileComm only
after the occurrence of an Event of Default by Reseller,
MobileComm may either terminate its Services or, after review
of Reseller's account record as provided for below, proceed
to acquire Reseller's Subscriber accounts and associated
leased pagers. SHOULD MOBILECOMM TERMINATE ITS SERVICES, IN
NO EVENT SHALL MOBILECOMM BE LIABLE, EITHER IN TORT, EQUITY,
CONTRACT OR OTHERWISE, FOR (i) LOSS OF USE, REVENUE OR
PROFITS; (ii) COSTS OF CAPITAL OR OF SUBSTITUTE USE OF
PERFORMANCE; (iii) DIRECT, INDIRECT, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES; OR (iv) ANY OTHER LOSS OR CLAIM FOR
ANY SIMILAR TYPE OF DAMAGES TO RESELLER'S SUBSCRIBERS OR TO
ANY OTHER THIRD PARTIES.
(c) In the event MobileComm determines to acquire Reseller's Subscribers
in accordance with Article XIII(b)(ii) above, MobileComm shall acquire
the Subscribers as follows:
(i) The purchase price for Reseller provided pagers leased to
Subscribers whose accounts are purchased by MobileComm
pursuant to Articles (ii) and (iii) below shall be an amount
equal to the net book value of the pagers as of the last day
of the calendar month preceding termination of the Agreement,
applying depreciation to zero dollars on a straight-line
basis over forty-eight (48) months;
(ii) The purchase price for each active PIN in service associated
with an account which is current (i.e., having no past-due
balance on the closing date) exclusive of paging equipment
shall be $100.00. For active PINS in service associated with
an account which has only a balance which is no more than
thirty (30) days past due, the purchase price shall be
$75.00. No payment shall be made for any account which is
more than thirty (30) days past due. Payment under this
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<PAGE> 9
subparagraph (d) and subparagraph (d)(i) above shall be
fifty (50%) in cash on the closing date, with the balance
payable thirty (30) days from the closing date. In no event
shall the purchase price relate to more than one active PIN
per pager in service. There shall be no additional payment
for group calls or other multiple PIN arrangements.
(iii) Reseller and MobileComm shall act to conclude the purchase
as soon as practicable, MobileComm will be provided, within
five (5) days of termination of this Agreement, necessary
access to Reseller's Subscriber and leased paging equipment
records, including accounts receivable and aged balances, in
order to evaluate the value and status of the accounts and
equipment. During the period in which MobileComm considers
whether to purchase the accounts and equipment and during
the transfer period, the parties will continue to provide
Service to the Subscribers in due course and will do nothing
to adversely affect Reseller's Subscriber account base.
(d) In the event a petition for relief in bankruptcy is filed by or
against Reseller, Reseller shall pay MobileComm all post-petition
charges according to the terms of this Agreement. If at any time
prior to assumption of this Agreement by Reseller pursuant to Section
365 or other applicable provisions of the Bankruptcy Code, Reseller
defaults in making any payment when due for post-petition charges,
MobileComm may give notice to Reseller to cure such defaults and to
provide assurance of due performance of Reseller's obligations under
the terms of this Agreement. Such adequate assurance of due
performance shall be the payment by Reseller of a deposit with
MobileComm equal to two months' average charges under this Agreement
based on the charges to Reseller in the preceding six (6) month
period. Reseller and MobileComm agree that upon the expiration of
fifteen (15) days from the receipt of the notice, if Reseller has not
cured such defaults and provided adequate assurance of performance,
MobileComm may suspend and discontinue all administrative activity
otherwise provided to reseller under this Agreement until such time as
the defaults are cured and adequate assurance of performance is
furnished by Reseller. Reseller and MobileComm further agree that if
Reseller defaults in paying any post-petition charge when due and if
the default is not cured within fifteen (15) days from the receipt of
the notice, MobileComm's rights under this Agreement will be
adequately protected only by Reseller's curing such defaults and
providing adequate assurance of due performance as more fully set
forth above. Finally, following assumption of the Agreement by
Reseller, MobileComm shall have all rights and remedies in the Event
of Default as provided by subparagraph (b) above.
(e) To ensure an orderly continuation of Service to the
Subscribers, in the event Reseller desires at any time during the term
of this Agreement to sell or transfer the Subscriber accounts
subscribed hereunder and/or control of Reseller or said accounts
MobileComm shall have a right of first refusal to meet any bona fide
written offer to purchase those assets, accounts, and accompanying
leased pagers, solely related to Nationwide Messaging Services being
provided under this agreement, free and clear of encumbrances ("Right
of First Refusal") and to enter into a transfer arrangement materially
similar to that proposed in the written offer. Within fifteen (15)
days of Reseller's receipt of any bona fide written offer dealing with
the sale or transfer of accounts and/or control of Reseller or said
accounts, Reseller shall provide MobileComm with a true copy of such
offer. MobileComm shall be provided timely access to all pertinent
Subscriber and leased equipment records, including accounts receivable
and aged balances, and other documents and materials which it requests
in order to evaluate its option. Within thirty (30) days of
MobileComm's receipt of the aforesaid documents and materials,
MobileComm shall notify Reseller of its desire to exercise its Right
of First Refusal and the parties will endeavor to conclude the
purchase or transfer as soon as practicable. During the closing
period, the parties will use their best efforts to avoid any
interruption of Service to Subscribers or any action which adversely
affects Reseller's Subscriber account base.
9
<PAGE> 10
(f) In the event Reseller does not obtain a bona fide third party offer
per to purchase Subscriber accounts, and this notice of non-renewal by
Reseller is given in accordance with Article III, MobileComm shall,
within thirty (30) days of notification of such non-renewal, or within
ninety (90) days of expiration of the Agreement, notify Reseller of
its intention to purchase the Subscriber accounts and leased equipment
based on the following formula:
(i) The purchase price for Reseller provided pagers leased to
Subscribers whose accounts are purchased by MobileComm
pursuant to Articles (ii) and (iii) immediately below shall
be an amount equal to the net book value of the pagers as of
the last day of the calendar month preceding the closing
date, applying depreciation to zero dollars on a
straight-line basis over forty-eight (48);
(ii) The purchase price for each active PIN in service associated
with an account which is current (i.e., having no past-due
balance greater than 30 days on the closing date), and for
which no disconnect notice has been either transmitted or
received by Reseller, shall be an amount equal to six (6)
times Reseller's monthly billing to such Subscribers, for
airtime Service charges only, for the month immediately
preceding the closing date. For each active PIN in service
for an account which has a balance which is no more than
sixty (60) days past due, the purchase price shall be an
amount equal to four (4) times Reseller's monthly billing to
such Subscribers, for airtime Service charges only, for the
month immediately preceding the closing date. No payment
shall be made for any other account. Payment under this
subparagraph shall be one hundred percent (100%) in cash on
the closing date. In no event shall the purchase price
relate to more than one active PIN per pager in service
there shall be no additional payment or other multiple PIN
arrangements.
(iii) The parties shall act to conclude the purchase as soon as
practicable. MobileComm will be provided, in timely
fashion, necessary access to Reseller's Subscriber and
leased paging equipment records, including accounts
receivable and aged balances, and other materials it
requests in order to verify the value and status of the
accounts and equipment. During the transfer period, the
parties will continue to provide Service to the Subscribers
in due course, and will do noting to diminish Reseller's
Subscriber account base.
(g) In the event this Agreement shall terminate for reasons not otherwise
provided for in this Article XIII and such termination not be the
result of MobileComm's default or an election of MobileComm,
MobileComm shall within ninety (90) days of such termination notify the
Reseller of its intention to purchase the subscriber accounts and
leased equipment based upon the same terms and conditions as set forth
per Article XIII(b)(i), (ii), and (iii). (iv) Notwithstanding the
above, MobileComm shall not have the right to purchase any subscriber
accounts and leased equipment if notice of non-renewal is given by
MobilComm in accordance with Article III.
(h) In the event of any assumption by, purchase by, or transfer to
MobileComm of Reseller's Subscriber accounts under this Article XIII,
neither Reseller nor any principal, director, owner, employer, agent,
majority stockholder nor any affiliate or successor corporation or
successor entity of Reseller, or employees of same, shall solicit the
Subscriber accounts, for as long as they remain on MobileComm's
system, in an effort to subscribe such accounts to any identical or
similar services for a period of one (1) year from such assumption,
transfer, or purchase.
(i) The terms and provisions of this Article shall survive termination of
this Agreement.
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<PAGE> 11
ARTICLE XIV
MISCELLANEOUS
(a) Tariffs. Subject to the provisions of Article IV(f), in the event that
any of the Services or the charges made therefore are currently
subject, or at any time become subject, to any regulation or tariff,
then the terms and conditions of this Agreement, including the charges
set forth in Exhibit 1, shall be deemed amended to conform to any
conflicting terms and conditions in effect under such regulation or
tariff; provided, however, that all non-conflicting terms and conditions
of this Agreement shall remain valid and effective.
(b) Applicable Law. The validity, construction and performance of this
Agreement shall be governed by and interpreted in accordance with the
laws of the State of Georgia.
(c) Effects of Headings. Headings to articles and paragraphs of this
Agreement are to facilitate reference only, do not form a part of this
Agreement, and shall not in any way affect the interpretation hereof.
(d) Assignment or Transfer. No rights, control, or obligations
hereunder, including Reseller's accounts with its Subscribers, shall be
assigned or transferred, in whole or in part, which shall not be
unreasonably withheld by Reseller to any person, firm, corporation or
entity without the prior written consent of MobileComm: provided,
however, Reseller may so transfer or assign its accounts with its
Subscribers if MobileComm does not exercise any rights it might have to
purchase same within the time provided for herein; and provided further,
that MobileComm may assign, transfer, or transfer control of this
Agreement, its Facilities, Nationwide Messaging Services, business,
accounts and subscribers to any person, partnership, firm, corporation,
or entity without the prior consent of Reseller.
(e) Non-Waiver. The waiver, express or implied, by either party, of any
rights or of any failure to perform or breach by the other party shall
not constitute or be deemed a waiver of any other right hereunder or any
other failure to perform or breach by the other party, whether of a
similar or dissimilar nature.
(f) Parties Status. Reseller is an independent contractor. Neither party
is authorized to act as an agent for, or legal representative of, the
other party nor shall either party have authority to assume or create
any obligation on behalf of, in the name of, or binding upon, the other
party. Reseller shall not represent itself as an agent of MobileComm.
(g) Indemnification. Each party shall indemnify and hold the other
harmless in the event of any claim, lawsuit or damages resulting from
negligence, misconduct or breach by the indemnifying party. The
indemnification shall include attorneys' fees. The indemnified party
shall be able to participate in the defense of any claim or lawsuit.
(h) Notice. Except as otherwise provided in this Agreement, all notices
required or permitted to be given shall be certified mail, postage
prepaid, in any post office in the United States, where receipt thereof
is confirmed and shall be addressed per the introductory paragraph of
this Agreement, or may be sent by
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<PAGE> 12
facsimile or by express courier. Either party may change its address
by a notice given to the other party in the manner set forth above.
All notices shall be effective upon receipt, except as otherwise
provided herein.
If to MobileComm: MobileComm Nationwide Operations, Inc.
1800 East County Line Road
Ridgeland, MS 39157
If to Reseller: Mercury Cellular Telephone Company
One Lakeshore Drive, CM Tower, Suite 1495
P.O. Drawer 3104
Lake Charles, LA 70602-3104
(i) Severability. If any part of this Agreement is for any reason declared
invalid by court order or by order of any regulatory agency, the order
shall not affect the validity of any remaining portion, which shall
remain in force and effect as if this Agreement had been executed with
the invalid portion eliminated, and it is the intention of the parties
that they would have executed the remaining portion of this Agreement
without including any part or portion which may, for any reason, be
declared invalid.
(j) Nonexclusive Arrangement. Reseller recognizes and agrees that
MobileComm and its affiliates will be marketing and providing the
Services to other resellers and/or entities and directly to Subscribers
in the market areas covered herein. MobileComm may, at its sole
discretion, add other Resellers into such market areas and directly
solicit Subscribers in such market areas.
(k) Non-Conflict. Reseller warrants that no obligation provided for herein
is in conflict with any other contractual obligation of Reseller with
any third party.
(l) Force Majeure. MobileComm's performance under this Agreement shall be
excused if non-performance is due to government orders, equipment
failure, inability or delay in securing equipment, civil commotions,
acts of nature, weather disturbances or adverse weather conditions, or
other circumstances beyond MobileComm's reasonable control.
(m) Binding Effect. This Agreement and the rights and obligations of the
parties shall inure to the benefit of and be binding upon any successor
or assignee and any subsidiary, affiliate, agent, reseller or related
entity.
(n) Remedies. Any breach of this Agreement will result in immediate and
irreparable injury and will authorize recourse to injunction or
specific performance; and will further authorize to all other legal or
equitable remedies, subject to the terms of the following paragraph.
(o) Arbitration. If during the term of this Agreement any dispute arises
as to its interpretation or enforcement, the parties shall try to
resolve the dispute in a good faith, expeditious and amicable manner.
If the parties are unsuccessful, however, the parties waive all rights
to litigation and agree to submit the dispute to binding arbitration
under the rules and regulations of the American Arbitration
Association. The site of
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<PAGE> 13
the arbitration shall be MobileComm's offices in Jackson, Mississippi.
Judgment shall be entered upon the arbitrator's award by petition to
the appropriate court should award not be performed by the party against
whom the award is rendered.
(p) Controlling Document. THE TERMS AND CONDITIONS OF THIS AGREEMENT
SUPERSEDE ANY OTHER AGREEMENT BETWEEN THE PARTIES INCLUDING PRIOR OR
CONTEMPORANEOUS REPRESENTATIONS OF SALES REPRESENTATIVES OR OTHER
MOBILECOMM PERSONNEL, WHETHER ORAL OR WRITTEN, LATER-ISSUED PURCHASE
ORDERS, ACCEPTANCES, CORRESPONDENCE AND SIMILAR DOCUMENTS. THE ONLY
EXCEPTIONS ARE SUBSEQUENT AGREEMENTS EXECUTED ON MOBILECOMM-STANDARD
PRINTED FORMS WITHOUT CHANGE, OR SUBSEQUENT AGREEMENTS WHICH ARE AT
VARIANCE WITH THIS AGREEMENT WHICH ARE MADE IN WRITING AND SIGNED BY A
DULY AUTHORIZED OFFICER OF MOBILECOMM AND A DULY AUTHORIZED OFFICER OF
RESELLER AND WHICH ARE SPECIFICALLY DESIGNATED AS AN AMENDMENT HEREOF.
(q) Effective Date. The effective date of this Agreement shall be the date
of execution by MobileComm's authorized officer. This Agreement shall
be of no effect prior to such execution.
(r) Insurance. Both parties will at all times during the term of this
Agreement keep in full force and effect liability insurance, including
but not limited to errors and omissions coverage, applicable to
Subscribers and to Services provided hereunder with limits of no less
than One Hundred Thousand Dollars ($100,000) per occurrence. Within
thirty (30) days of the effective date of this Agreement, Reseller shall
provide MobileComm with a certificate or other acceptable evidence of
such insurance, together with evidence of payment of all premiums.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
RESELLER MOBILECOMM NATIONWIDE OPERATIONS, INC.
Mercury Cellular Telephone Company
- ----------------------------------
Name of Reseller
By: /s/ MIKE CLARK By: /s/ GLYNN INGE
------------------------------- -------------------------------------
Mike Clark
- ---------------------------------- -------------------------------------
Print Name Print Name
Title: V.P./General Manager Title:
---------------------------- ----------------------------------
13
<PAGE> 14
Nationwide Messaging Reseller Amendment
Dated 12-30-92
<PAGE> 15
NATIONWIDE MESSAGING RESELLER
AMENDMENT
For and in consideration of the promises contained herein and other
good and valuable consideration, including the terms and conditions of this
amendment, the Agreement ("Agreement") dated 12/19/94 between Mercury Cellular
Telephone Company ("Reseller") and MobileComm Nationwide Operations, Inc.
("Carrier"), is hereby amended to add the attached Exhibit I to establish rates
to be paid by Reseller for paging utilizing the 931.8875 Mhz frequency
("Nationwide Messaging"). This Exhibit only applies to such Nationwide
messaging.
For purposes of calculation of the quantities associated with the
pricing set forth in the attached exhibit, each in-service local Number
provided to Reseller by Carrier, Carrier's parent (Mobile Communications
Corporation of America), or parent's subsidiaries (collectively "MobileComm"),
by agreement between MobileComm and Reseller and not on 931.8875 Mhz ("local
Number") shall be counted as one-sixth of a PIN, and each in-service PIN under
the Agreement on 931.8875 Mhz ("Nationwide Messaging Services") shall be counted
as one PIN. Provided, however, that subject to the terms and conditions of the
Agreement, through December 31, 1994, Reseller shall be treated as having 1000
PINs in service on the Nationwide Messaging Services, irrespective of the
actual quantity of PINs in service, for purposes of ascertaining pricing
associated with quantities as reflected on the attached exhibit.
After December 31, 1996 1000 PIN promotion referred to above shall
expire and subject to the terms of the Agreement or other agreements between
Reseller and MobileComm, in the event Reseller defaults in its obligations under
such Agreement or agreements, or the number of local Numbers decreases below
the number of local Numbers actually in service as of the date of execution of
this Amendment (______local Numbers), the rates for Nationwide messaging shall
be calculated solely based upon the actual Nationwide PINs in service until
such time that: (1) any applicable default is cured, as permitted under the
Agreement or agreement(s) between MobileComm and Reseller; and, (2) the number
of local Numbers equals or exceeds the number of local Numbers in service at
the time of the execution hereof (_______local Numbers), at which time
Reseller's rates shall
<PAGE> 16
again be calculated based upon one-sixth of a PIN for each local Number in
service and one PIN for each Nationwide PIN in service for purposes of pricing
on the attached exhibit, beginning with the next applicable billing period.
No other amendment is made to the Agreement except as set forth herein.
Executed and Agreed this the 19th day of December, 1994.
RESELLER CARRIER
Mercury Cellular Telephone Company MobileComm Nationwide Operations, Inc.
- ----------------------------------
Name of Reseller
By: /s/ MIKE CLARK By: /s/ [ILLEGIBLE]
------------------------------- -----------------------------------
Signature Signature
MIKE CLARK
- ---------------------------------- --------------------------------------
Print Name Print Name
V.P./General Manager
- ---------------------------------- --------------------------------------
Title Title
<PAGE> 17
EXHIBIT 10.4
[MERCURY CELLULAR & PAGING LETTERHEAD]
April 10, 1995
Mr. Mike Brantley
Arch Nationwide Paging
5725 Buford Highway, Suite 102
Atlanta, GA 30340
RE: Arch Nationwide Paging Reseller Agreement
Dear Mike:
Enclosed is the executed copy of the Reseller Agreement, along with
Mercury's proposed stickers. We are sending a Purchase Order for an initial
purchase of twenty (20) pagers to Eva.
Thank you for your hard work. Let me know when you will be in the
area.
Sincerely,
Stuart Hamilton
Director of Research and Development
JSH/ph
Enclosure
<PAGE> 1
ARCH NATIONWIDE PAGING
RESELLER AGREEMENT
AGREEMENT, dated as of the 7th day of April, 1995 by and between Arch
Nationwide Paging, a Division of Arch Communications Enterprises, Incorporated
("ANP") and Mercury Cellular Telephone Company, a corporation ("Reseller").
W I T N E S S E T H :
WHEREAS, ANP has established an expanded area paging system network for the
purpose of providing nationwide paging services ("Paging Services"); and
WHEREAS, Reseller wishes to obtain from ANP and resell to subscribers
solicited by Reseller ("Reseller's Subscribers") Paging Services in the
Reseller's territory as identified on Attachment A ("Territory") ,
NOW THEREFORE, the parties agree as follows:
1. Purchase and Resale of Paging Service.
1.1 Reseller shall purchase Paging Services from ANP and shall
resell Paging Services to Reseller's Subscribers, upon and
subject to the terms and conditions set forth in this
agreement.
1.2 From time to time Reseller can request from ANP, and ANP shall
assign to Reseller, numbers by which Reseller's Subscribers
can obtain Paging Service ("Paging Numbers"); provided
however, that Paging Numbers are available, as determined
solely by ANP.
2. Term and Termination.
2.1 Unless otherwise terminated in accordance with other
provisions of this agreement, (i) the initial term of this
agreement shall commence on the date set forth on the first
page hereof ("Commencement Date") and shall continue for one
(1) year and (ii) the term shall continue after the initial
term for consecutive renewal terms of (1) year each commencing
on the anniversary of the Commencement Date unless terminated
by either party at the end of the initial term or any renewal
term upon at least ninety (90) days' prior notice.
<PAGE> 2
2.2 If either party commits a breach of this agreement and has not
cured such breach within thirty (30) days after notice thereof,
this agreement shall terminate; provided, however, that a
breach of this agreement by Reseller under 4.1 hereof must be
cured within ten (10) days after notice thereof or this
agreement shall terminate.
2.3 This agreement shall terminate immediately if (i) either party
becomes insolvent, bankrupt or makes an assignment for the
benefit of creditors; or (ii) either party applies for or
consents to the appointment of a trustee or receiver, or a
trustee or receiver is appointed for either party; or (iii)
bankruptcy, insolvency or liquidation or other proceedings are
commenced by or against either party, and such appointment or
proceedings are not dismissed within thirty (30) days after
such appointment or commencement.
2.4 Immediately upon the expiration or termination of this
agreement, pursuant to section 2.1 hereof, Reseller shall (i)
cease reselling new Paging Services from ANP; (ii) cease using
ANP Trademarks; (iii) deliver to ANP advertising and
promotional material utilizing ANP Trademarks and ANP
confidential and proprietary information of any description;
and (iv) immediately begin to negotiate in good faith with ANP
for the purchase of Reseller's Subscriber agreements of the
subscribers who have obtained Paging Services from ANP.
2.5 If this agreement is terminated by ANP because of Reseller's
breach pursuant to Sections 2.2 or 2.3 hereof, Reseller will
immediately assign to ANP all agreements with Resellers'
Subscribers receiving Paging Service, and deliver to ANP a
complete list of all subscribers including names, addresses,
code number, number of paging units and monthly rates and pay
to ANP all sums received from Subscribers for Paging Service
from ANP after termination of this agreement, as a liquidated
settlement of this agreement.
3. Duties of Reseller.
3.1 Either party shall solicit subscribers to the Paging Service
from persons other than persons or entities currently
receiving Paging Service pursuant to arrangements with the
other party or any other reseller for the other party.
However, either party can enter into agreements for and
provide Paging Services to the other party's subscribers if
such subscribers initiate the solicitation. If Reseller
solicits and resells Paging Service to any subscriber already
receiving Paging Service from ANP or another reseller, then,
in addition
2
<PAGE> 3
to any other remedies available to ANP, immediately upon
notice by ANP to Reseller, Reseller will terminate any
agreement with such subscriber and cease providing Paging
Service. Moreover, in the event that ANP, from time to time,
enters into nationwide agreements (a "Corporate Agreement")
with various corporations ("Contract Clients"), Reseller
herewith agrees to resell Paging Service to Contract Clients
under the terms of the applicable Corporate Agreement.
3.2 Reseller shall enter into written contracts with Reseller's
Subscribers only on a form which ANP has previously approved
in writing. The form of contract shall include the following
language:
"Subscriber shall obtain no proprietary interest in
any Paging Number assigned for its use and any Paging
Number can be changed at any time upon notice by
Reseller."
"LIMITATION OF LIABILITY
THE LIABILITY OF MERCURY CELLULAR & PAGING
(RESELLER'S NAME) AND OF ANY SUPPLIER OF PAGING
SERVICE, INCLUDING BUT NOT LIMITED TO ANY FAILURE OF
OR DISRUPTION OF PAGING SERVICE, REGARDLESS OF
WHETHER THE CLAIM IS BASED ON BREACH OF CONTRACT,
TORT LIABILITY OR OTHERWISE, SHALL BE LIMITED TO AN
AMOUNT EQUAL TO THE MONTHLY BILLING PAYABLE BY
SUBSCRIBER IN THE MONTH IN WHICH SUCH CLAIM OR CLAIM
OR ACTION ARISES. IN NO EVENT SHALL MERCURY CELLULAR
AND PAGING (RESELLER'S NAME) OR ANY SUPPLIER OF
PAGING SERVICE,(INCLUDING BUT NOT LIMITED TO ARCH
NATIONWIDE PAGING) BE LIABLE FOR ANY SPECIAL OR
CONSEQUENTIAL DAMAGES."
3.3 Reseller shall be solely responsible for billing and
collecting all sums due from Reseller's Subscribers for
Paging Service and shall collect and pay any and all federal,
state or local taxes of any description imposed upon Paging
Service.
3.4 Reseller shall provide to ANP, not later than January 31 and
June 30 of each calendar year, a good faith estimate of the
quantity and geographic distribution of Paging Numbers
Reseller shall require during the calendar year.
3
<PAGE> 4
3.5 During the term of this Agreement, ANP grants to Reseller, if
Reseller decides to accept, a limited license to advertise and
promote Paging Service and to use the trademarks and trade
names set forth in Attachment B hereto or as ANP may hereafter
deliver to Reseller ("Trademarks"). Prior to any use by
Reseller of a Trademark in any advertising or promotional
materials, Reseller shall submit the same to ANP for its prior
approval. Reseller's license to use ANP Trademarks is limited
as set forth in this agreement and shall terminate upon
expiration or termination of this agreement, or upon notice by
ANP during the term of this agreement.
3.6 In the sole discretion of ANP and for consideration acceptable
to ANP, ANP may from time to time allow Reseller to advertise
and/or promote Paging Services under Reseller's trademarks and
trade names; provided, however, that Reseller is not in
violation of any state or federal law governing the reselling
of another's service under Reseller's trademarks and trade
names. Absent ANP's prior written approval and acceptable
consideration, Reseller shall not market or advertise the
Paging Services under any trade names or trade marks other
than the Trademarks, if the Reseller desires to use the
Trademarks.
3.7 Reseller can sell or lease equipment to Reseller's
Subscribers, provided that the equipment is type-accepted by
the FCC, is compatible with the frequencies and signaling
formats of the Paging Service and is pre-approved by ANP. If
Reseller supplies equipment to Reseller's Subscribers,
Reseller shall keep the equipment in good operating condition.
3.8 Reseller shall be responsible for handling all Reseller's
Subscriber complaints and shall promptly advise ANP of all
Subscriber Paging Service complaints received by reseller.
3.9 In performing its duties hereunder, Reseller shall comply with
all applicable federal, state and local laws, and rules and
regulations of all ANP policies communicated to Reseller which
are now or hereafter in effect. Reseller shall have and
maintain all necessary federal, state or local government
permits or certificates necessary for providing Paging Service
hereunder.
3.10 During the term hereof and after the expiration or termination
of this agreement, Reseller shall maintain at its principal
office for a period of three (3) years complete and accurate
books of accounts and records
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<PAGE> 5
including all documents and correspondence related to (i)
Reseller's Subscribers' names, addresses, assigned Paging
Numbers and billing history; (ii) Paging Service advertising
and publicity and use of ANP Trademark; (iii) subscriber
contacts and solicitations; (iv) Reseller's Subscriber
applications and contracts; (v) Reseller's Subscriber
complaints; (vi) payments by Reseller to ANP; (vii) agreement
with and payments to third parties in connection with this
agreement; (viii) Reseller's licenses, authorizations and
compliance with the requirements of any governmental agency;
and (ix) all other documents or records in connection with
Reseller's performance of its duties hereunder. ANP shall
have the right to inspect and make copies of only Reseller's
books of account and records that specifically are related to
the Paging Services provided by ANP during normal working
hours and upon reasonable notice by ANP.
3.11 During the term hereof and after the expiration or termination
of this agreement, Reseller shall keep confidential and not
disclose, transmit or otherwise disseminate to any third party
and proprietary information concerning ANP obtained by
Reseller. This agreement is proprietary information
concerning ANP. During the term hereof and after the
expiration or termination of this Agreement, ANP shall keep
confidential and not disclose, transmit or otherwise
disseminate to any third party any information concerning
Reseller, its customer base, its books of account and records
and other information received by ANP from Reseller. All such
information shall be considered as proprietary information.
3.12 Reseller and ANP shall conduct its business hereunder and
cause its employees to act in an ethical, responsible and
legal manner; and Reseller and its agents and employee shall
not commit any act or omissions which could adversely affect
ANP's and Reseller's name, reputation or ability to conduct
its business.
4. Paging Service Charges.
4.1 Reseller shall pay to ANP, within fifteen (15) days of
invoicing by ANP, all sums due ("ANP Service Charges") as set
forth in Attachment C hereto.
Time of payment is of the essence.
4.2 ANP can change (i) ANP Service Charges as set forth in
Attachment C hereto; or (ii) policies relating to subscribers
or Paging Service at any time, provided that
5
<PAGE> 6
ANP shall give Reseller at last thirty (30) days' prior
notice thereof.
4.2 (a) If ANP changes any service charges as set forth in
Attachment C hereto or any monetary policies relating
to subscribers or Paging Services, then Reseller has
thirty (30) days from notice of such change in which
to terminate this agreement without any further
obligation.
5. Duties of ANP.
5.1 ANP shall provide Paging Service to Reseller's Subscribers,
provided (i) Paging Service is generally available, (ii)
Reseller's Subscribers use equipment with frequencies and
signaling formats compatible with the Paging Service and (iii)
Reseller is not in breach of this agreement.
5.2 ANP shall not be liable for any interruption or failure of
Paging Services caused by or resulting from (i) any
incompatibility of Reseller's Subscribers' equipment, (ii) the
termination of this agreement by ANP because of Reseller's
breach pursuant to Section 2 hereof or (iii) any act or event
beyond the reasonable control of ANP including but not limited
to wind, fire, flood, act of God, riot, war, strike or labor
dispute, governmental acts or orders or any other similar or
dissimilar act or event not within the reasonable control of
ANP.
5.3 ANP will not solicit for its Paging Se:vice any of Reseller's
Subscribers actually known to ANP; provided, however that ANP
can enter into agreements for and provide Paging Services to
Reseller's Subscribers who initiate the solicitation with ANP.
5. ANP Rights of First Negotiation and Refusal.
6.1 Except as otherwise set forth herein, if during the term of
this agreement and for a period of thirty (30) days after its
expiration or termination Reseller desires to sell Reseller's
Subscriber agreements or lists of Reseller's subscribers that
have Paging Service provided by ANP (together with other
rights related thereto, the "Subscriber Base"), ANP shall have
the right of exclusive negotiation for the purchase of the
Subscriber Base. The parties shall negotiate in good faith for
the purchase of Reseller's Subscriber Base for a period of ten
(10) days from the date of Reseller's notification.
6
<PAGE> 7
7. Indemnity and Insurance.
7.1 Reseller shall indemnify, defend and hold harmless ANP, its
officers, directors, agents, employees, successors and assigns
from and against any and all loss, claim, damage or expense
(including reasonable attorneys fees and costs) arising out of
or resulting from (i) any breach by Reseller of this agreement
or (ii) claims by any of Reseller's Subscribers or any other
third party in connection with Reseller's performance pursuant
to this agreement. ANP shall notify Reseller of any such
claims, action or proceeding and Reseller shall promptly
undertake the defense thereof. ANP can, at its election and
at its own costs, participate in the defense thereof.
7.2 Reseller shall maintain in force, at its sole cost and
expense, (i) public liability insurance with limits of not
less than $3,000,000 in the aggregate for personal injury
(including death); and (ii) errors and omissions, property
damage and contractual liability insurance, each in an amount
not less than $1,000,000 in the aggregate. Any deductible
limits on such insurance shall not exceed one (1%) percent of
the coverage amounts. Reseller shall provide ANP with a
certificate from an insurance carrier acceptable to ANP
evidencing such insurance, which shall name ANP as an
additional insured (provided such additional insured status
does not result in an additional cost to Reseller) and shall
provide that such insurance cannot be modified or cancelled
except on at least ten (10) days' prior notification to
Reseller and ANP. All such insurance shall be primary and
noncontributory as to any other valid and collectible
insurance and shall contain a waiver of subrogation
endorsement.
8. ANP Liability.
8.1 ANP shall have no liability to Reseller or any of Reseller's
Subscribers in connection with Paging Service except as
specifically set forth in this agreement or otherwise in
Paging Service policies communicated to Reseller.
8.2 WHETHER OR NOT LIMITED BY ANP SUBSCRIBER OR PAGING SERVICE
POLICIES, ANP'S LIABILITY TO RESELLER SHALL BE LIMITED TO
ACTUAL DAMAGES DIRECTLY RESULTING FROM BREACH BY AND OF THIS
AGREEMENT AND ANP SHALL HAVE NO LIABILITY TO RESELLER FOR
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY DESCRIPTION ARISING
FROM ANY BREACH, OR FROM ANY ACT OF PROVIDING OR FAILING TO
PROVIDE PAGING SERVICE REGARDLESS OF THE CAUSE THEREOF.
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<PAGE> 8
9. Attorneys Fees.
If either party commences an action against the other party for the
breach or alleged breach of this agreement or for its enforcement, the
prevailing party shall be entitled to recover in addition to damages
its reasonable attorneys' fees and costs from the other party.
10. Nonexclusivity.
ANP can enter into agreements with subscribers or other resellers in
the Service Area for the resale of Paging Service to subscribers.
Reseller can enter into agreements with other providers of Paging
Service in the Service Area.
11. Relationship of the Parties.
The parties hereto are independent contractors. Nothing contained in
this agreement shall constitute the parties as agent and principal,
partners, joint ventures or employer and employee. Reseller and ANP
have no authority to act on behalf of the other or otherwise bind the
other in any manner.
12. Authority.
Each party hereto represents and warrants to the other that it has (i)
all necessary power and authority to enter into and perform this
agreement in accordance with its terms and (ii) all necessary
authorizations from all federal, state and local governmental
entities.
13. Assignment.
13.1 This agreement is not assignable or otherwise transferrable by
Reseller, voluntarily or by operation of law, without ANP's
prior written consent which shall not be unreasonably
withheld. However, Reseller has the right to freely assign or
transfer this agreement to an entity controlled by Reseller
with notice to ANP.
13.2 ANP's rights, obligations, liabilities or duties under this
agreement may be assigned or transferred without Reseller's
consent so long as the assignee or transferee assumes all of
ANP's obligations, liabilities, and duties hereunder and is
capable of performing all such obligations, liabilities, and
duties.
14. Notices.
Any notice or demand given or made hereunder shall be served in the
following manner:
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<PAGE> 9
(a) If given to ANP, notice shall be sent by registered
or certified mail return receipt requested addressed
to ANP at:
1800 West Park Drive Suite 250
Westborough, MA 01581
Attn: President
with a copy addressed to Arch Communications Group, Inc., 1800 West
Park Drive Suite 250, Westborough, MA 01581, Attention: President.
(b) If given to Reseller, notice shall be sent by
registered or certified mail return receipt requested
addressed to:
Mike Clark
1 Lakeshore Drive, Suite 1400
Lake Charles, LA 70601
(c) All notices may be deemed to be given two (2) days
after the date of mailing.
(d) Either party can change its address for notice
purposes by delivery of notice of such change in the
manner provided herein.
15. Entire Agreement, Controlling Law.
15.1 This is the entire agreement of the parties, cancels and
supersedes all prior understandings and agreements, oral or
written, and shall not be modified or amended except by an
instrument executed by the party against whom enforcement is
sought. This is an agreement governed by the laws of the
Commonwealth of Massachusetts.
9
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed on behalf of each by a person with full power and authority to bind
such party.
ARCH NATIONWIDE PAGING, a Division of
Arch Communications Enterprises, Inc.
By: [ILLEGIBLE]
-------------------------------
IT'S Vice President
RESELLER
Mercury Cellular Telephone Company
By: [ILLEGIBLE]
-------------------------------
IT'S Vice President/General Manager
10
<PAGE> 11
ARCH NATIONWIDE PAGING
Attachment A
Reseller may obtain Paging Services from Arch Nationwide Paging and resell
Paging Services to Reseller's Subscribers within the following Territory:
UNLIMITED
<PAGE> 12
ARCH NATIONWIDE PAGING
Attachment B
Arch Nationwide Paging grants to Reseller a limited license to advertise and
promote Paging Service and use trademarks and trade names set forth below:
ARCH NATIONWIDE PAGING
<PAGE> 1
EXHIBIT 10.10
EXECUTION COPY
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made as of March 4,
1996 (the "Execution Date"), by and between West Alabama Cellular Telephone
Company, Inc., an Alabama corporation ("Seller"), acting herein through Tina
Chang, its President, duly authorized by resolution of the Board of Directors
of said corporation, a certified copy of which is attached hereto, and
Mississippi One Cellular Telephone Company, a Louisiana corporation ("Buyer")
acting herein through Thomas G. Henning, its President, duly authorized by
resolution of the Board of Directors of said corporation, a certified copy of
which is attached hereto.
RECITALS
WHEREAS, Seller is the owner of the non-wireline cellular mobile radio
system (the "System") serving the Alabama #3 Rural Service Area #309A--Lamar
(the "RSA") and holds licenses bearing the call sign KNKN-716 granted by the
Federal Communications Commission to provide cellular service within the RSA
and to operate microwave equipment in connection with the operation of the
System; and
WHEREAS, consistent with the terms and subject to the conditions set
forth herein, Seller desires to sell, assign, transfer and deliver to Buyer,
and Buyer desires to purchase and accept from Seller, all of Seller's right,
title and interest in and to such licenses and to certain tangible and
intangible assets, including real property, equipment, leasehold interests,
fixtures and improvements, relating to the operation of the System.
NOW, THEREFORE, in consideration of the premises and the mutual
undertakings contained herein, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Seller and Buyer hereby
agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. When used in this Agreement, the following terms
shall have the meanings set forth below:
"Accounts Receivable" shall mean the rights of Seller to payment
for services billed by the Seller and unpaid prior to the Closing Date as
reflected on the billing records of Seller relating to the System, excluding
delinquent accounts that have been reduced to zero on such billing records and
have been submitted to a credit agency for collection.
<PAGE> 2
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Contract" means any written or oral contract, lease or other
agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder and
published interpretations with respect thereto.
"FCC" shall mean the Federal Communications Commission.
"Governmental Authority" shall mean the United States of America,
any state, commonwealth, territory or possession thereof and any political
subdivision or quasi-governmental authority of any of the same, including,
without limitation, court, tribunals, departments, commissions, boards,
bureaus, agencies, counties, municipalities, provinces, parishes and other
instrumentalities.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Law" shall mean any applicable existing statute, ordinance,
rule, regulation or common law obligation.
"Licenses" shall mean all licenses, certificates, consents,
authorizations and approvals from the FCC and any other Governmental Authority
held by Seller in connection with the operation of the System.
"Lien" shall mean any security agreement, financing statement
filed with any Governmental Authority, conditional sale or other title
retention agreement, any lease, consignment or bailment given for purposes of
security, any lien, mortgage, indenture, pledge, option, encumbrance, adverse
interest, constructive trust or other trust, claim, attachment, exception to or
defect in title or other ownership interest (including, without limitation,
reservations, rights of entry, possibilities of reverter, encroachments,
easements, rights-of-way, restrictive covenants, leases, and licenses) of any
kind, which otherwise constitutes an interest in or claim against property,
whether arising pursuant to any Law, Contract or otherwise.
"Litigation" means any actual or threatened claim, action, suit,
hearing, proceeding, arbitration, investigation or other activity or procedure
that could result in a judgment, and any notice of the foregoing.
"Losses" shall mean any claims, losses, liabilities, damages,
Liens, penalties, costs or out-of-pocket expenses of investigation, reasonable
fees and disbursements of counsel and
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<PAGE> 3
other experts, and the cost to any Person making a claim or seeking
indemnification under this Agreement with respect to funds expended by such
Person by reason of the occurrence of any event with respect to which
indemnification is sought, but excluding consequential damages arising from
loss or interruption of business, lost profits opportunities or goodwill, loss
of use of facilities, claims of customers or any cost or expense related
thereto.
"Operating Assets" shall mean, with respect to the System, all
fixed assets and personal property of every type or description related to the
System, including, without limitation, any transmitters/receivers, towers and
antennas, switching and cell site equipment and all other installed items,
vehicles and similar equipment, and all spare parts, accessories, supplies and
other expendables related thereto.
"Other Assets" shall mean, with respect to the System all
accounting data, books and records, customer lists, supplier lists, customer
account information and other tangible and intangible property related to such
System.
"Permitted Liens" means (i) liens for Taxes, assessments and
governmental charges not yet due and payable; (ii) zoning laws and ordinances
similar to Laws; (iii) rights reserved to any Governmental Authority to
regulate the affected property; (iv) as to leased assets, interests of the
lessors thereof and Liens affecting the interests of the lessors thereof; and
(v) as to any parcel of real property, any Liens that do not in any material
respect, individually or in the aggregate, affect or impair the value,
marketability or use thereof as it is currently being used.
"Person" shall mean any person or entity, whether an individual,
trustee, corporation, general partnership, limited partnership, trust,
unincorporated organization, business association, firm, joint venture or
Governmental Authority.
"Tax" or "Taxes" shall mean all federal, state, local or foreign
income, gross receipts, windfall profits, severance, property, production,
sales, use, license, excise, franchise, employment, withholding, transfer,
payroll, value-added or minimum tax, or any other tax, custom, duty or
governmental fee or assessment of any kind whatsoever, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties.
"Tax Return" shall mean any return, report or similar statement
(including any attached schedules) required to be filed with respect to any
tax, including, without limitation, any consolidated federal income tax return,
declaration of estimated tax, claim for refund and information return.
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<PAGE> 4
1.2 List of Additional Definitions. The following is a list of some
additional terms used in this Agreement and a reference to the Section hereof
in which such term is defined:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Assets 2.1
Assumed Liabilities 2.3
CERCLA 3.14
Closing 7.1
Closing Date 7.1
Current Items Amount 2.6
Disclosing Party 10.2
Eligible Accounts Receivable 2.6
Environmental Obligations 3.14
Excluded Assets 2.2
Execution Date Preamble
Expenses 2.5
Final Adjustment Certificate 2.7
Financial Statements 3.5
Indemnitor 8.3
Indemnitee 8.3
Initial Adjustment Certificate 2.7
Purchase Price 2.4
Recipient Party 10.2
Real Property 3.9
RSA Recitals
System Recitals
</TABLE>
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 Purchase of Licenses and Assets. Subject to the terms and
conditions of this Agreement and in exchange for the consideration set forth in
Section 2.5 below, on the Closing Date, Seller shall sell, transfer, assign,
convey and deliver to Buyer, and Buyer shall purchase and accept from Seller,
all of Seller's right, title and interest in and to the Licenses and other
assets and properties, real and personal, tangible and intangible, used by or
useful to Seller's operation of the System as of the Closing Date, including,
without limitation, the real property leasehold interests listed on Schedule
3.9, the Licenses listed on Schedule 3.10, the Contracts listed on Schedule
3.11, and all Accounts Receivable, inventory, Operating Assets and Other Assets
(collectively, the "Assets").
2.2 Excluded Assets. Notwithstanding the provisions of Section 2.1,
the Assets shall not include the following, which shall be retained by Seller
(the "Excluded Assets"):
(a) Cash and cash equivalents;
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<PAGE> 5
(b) Insurance policies and rights and claims thereunder;
(c) Bonds, letters of credit, surety instruments and other
similar items;
(d) All customer deposits and advanced payments held by Seller
as of the Closing Date in connection with the operation of the System;
(e) All claims, rights and interests in and to any refunds of
taxes or fees of any nature, or other claims against third parties
(including collection claims involving delinquent accounts that are
excluded from Accounts Receivable), relating to the operation of the
System prior to the Closing Date;
(f) The account books of original entry, general ledgers and
financial records used in connection with the System;
(g) The minute books, stock records and similar corporate
records of Seller;
(h) Seller's trademarks, trade names, service marks, service
names, logos and similar proprietary rights, other than its license to
use the Cellular One trade name and the Cellular One trademark in the
RSA; and
(i) Any other items described on Schedule 2.2.
2.3 Assumed Liabilities. From and after the Closing Date, Buyer shall
assume, pay, discharge and perform the following obligations and liabilities
(collectively, the "Assumed Liabilities"):
(a) Those obligations and liabilities attributable to periods
after the Closing Date that arise under or with respect to the Assets or
the operation of the System;
(b) Any and all obligations and liabilities attributable to
periods after the Closing Date and arising out of Buyer's ownership of
the Assets and its operation of the System after the Closing Date; and
(c) The obligations and liabilities pertaining to or arising
under the Assets or the operation of the System arising prior to the
Closing Date, to the extent that such obligations and liabilities have
been specifically assumed in writing by Buyer.
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<PAGE> 6
2.4 Retained Liabilities. Seller shall retain and have full
responsibility and obligation with respect to, and shall timely perform and
discharge all responsibilities, liabilities and obligations of Seller arising
out of, in connection with or relating to the use or ownership of the Assets or
the operation of the System attributable to periods ending on or before the
Closing Date, but excluding the Assumed Liabilities (the "Retained
Liabilities").
2.5 Purchase Price; Closing Escrow. As aggregate consideration for
its purchase of the Assets, Buyer shall (a) pay to Seller Seventeen Million
Four Hundred Thousand United States Dollars ($17,400,000) minus to the extent
applicable the aggregate sum of the credits to Buyer described on Schedule 2.5
(the "Purchase Price"), plus or minus the Current Items Amount as set forth in
the Initial Adjustment Certificate, which shall be payable at Closing by wire
transfer of immediately available funds to a bank account specified by Seller,
and (b) assume the Assumed Liabilities. The parties agree that $1,250,000 of
the Purchase Price paid at Closing shall be deposited directly into a closing
escrow account created by and maintained pursuant to the Closing Escrow
Agreement attached hereto as Exhibit 2.5 to be entered into on or before the
Closing Date by Buyer, Seller and the bank therein named.
2.6 Current Items Amount. The Purchase Price shall be adjusted, plus
or minus, by the net amount of the adjustments and prorations effected pursuant
to paragraphs 2.6(a), (b), (c) and (d) (the "Current Items Amount").
(a) Accounts Receivable. Seller shall be entitled to receive
the book value of the Accounts Receivable net of offsets and credits for
barter accounts and net of an adequate reserve for doubtful accounts,
which reserve shall equal the sum of the following amounts: zero percent
(0%) of Accounts Receivable that are not past due, ten percent (10%) of
Accounts Receivable that are thirty (30) or fewer days past due, fifty
percent (50%) of Accounts Receivable that are thirty-one (31) to sixty
(60) days past due, and one hundred percent (100%) of all Accounts
Receivable that are sixty-one (61) or more days past due. For purposes
of making past due calculations under this Section 2.6(a), an Account
Receivable shall be deemed past due when the amount thereof, as set
forth in the corresponding customer billing statement of Seller, has not
been paid as of the first business day after the payment due date
therefor as set forth in such customer billing statement.
(b) Inventory. Seller shall be entitled to an amount equal to
the book value for all cellular telephone units and related components,
spare parts and accessories owned by Seller and either (i) related
solely to the System and maintained in the inventory for such System, or
(ii) related to such System and in the custody of customers of such
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<PAGE> 7
System (on a rented or leased basis) or repair or service personnel.
(c) Advance Payments and Deposits. Buyer shall be entitled to
an amount equal to the aggregate of (i) all deposits of customers of the
System for cellular telephones and other equipment leased by Seller, and
(ii) all payments for services to be rendered by Buyer to customers of
the System after the Closing Date, or for other services to be rendered
by Buyer to other third parties after the Closing Date, to the extent
all obligations of Seller relating thereto are assumed by Buyer at
Closing.
(d) Expenses. As of the Closing Date, expenses of a recurring
nature, and expenses reflected as accounts payable on the accounting
books and records of Seller as of the Closing Date, that are incurred by
Seller to benefit the System and are incurred in the ordinary course of
business (the "Expenses"), including those set forth below, shall be
prorated, in accordance with generally accepted accounting principles,
so that all such Expenses incurred for periods prior to the Closing Date
shall be for the account of Seller, and all such Expenses incurred for
periods after the Closing Date shall be for the account of the Buyer:
(i) Expenses under the Licenses and the Contracts;
(ii) Taxes levied or assessed against any of the Assets
or payable with respect to cellular services and related sales to
the System's customers; and
(iii) Expenses for utilities, municipal assessments,
rents and service charges and other goods and services furnished
to the System.
2.7 Current Items Amount Calculated. The Current Items Amount shall
be estimated in good faith by Seller, and set forth, together with a reasonably
detailed statement of the calculation thereof, in a certificate (the "Initial
Adjustment Certificate") delivered to Buyer not later than three business days
prior to the Closing Date. The Initial Adjustment Certificate shall constitute
the basis on which the Current Items Amount is calculated, and the amount by
which the Purchase Price is adjusted by the Current Items Amount, at Closing.
On or before sixty (60) days after the Closing Date, Buyer shall deliver to
Seller a final calculation of the Current Items Amount calculated as of the
Closing Date, together with such supporting documentation as Seller may
reasonably request, in a certificate (the "Final Adjustment Certificate"),
which shall evidence in reasonable detail the nature and extent of each
adjustment to the Current Items Amount. Not later than fifteen days after the
Final Adjustment Certificate is delivered, Seller or Buyer, as
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<PAGE> 8
appropriate, shall pay to the other an amount equal to the amount by which the
Current Items Amount as set forth in the Final Adjustment Certificate differs
from the Current Items Amount as estimated in the Initial Adjustment
Certificate.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to the Buyer that the following
are true and accurate as of the date hereof (unless otherwise specifically
indicated):
3.1 Due Organization; Power and Authority. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Alabama. Seller has all requisite power and authority to own and lease
the Assets, including, without limitation the Licenses, and to conduct the
business of operating the System as it is currently being conducted. Schedule
3.1 sets forth the name of, and the number and percentage ownership of
outstanding shares of Common Stock of Seller held by, each shareholder of
Seller.
3.2 Authority. Seller has the requisite power and authority to
execute, deliver and perform this Agreement and all other agreements and
documents to be executed by Seller that are necessary to effectuate and
consummate the transactions contemplated by this Agreement. The execution,
delivery, and performance of this Agreement and the consummation of the
transactions contemplated hereby on the part of Seller have been duly and
validly authorized by all necessary action on the part of Seller. This
Agreement has been duly and validly executed and delivered by Seller and is the
valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting the enforcement of creditors' rights generally and subject to the
qualification that general equitable principles may limit the enforcement of
certain remedies, including the remedy of specific performance.
3.3 No Conflicts. Except as set forth on Schedule 3.3, the execution,
delivery and performance by Seller of this Agreement and all other agreements
and documents to be executed by Seller that are necessary to effectuate and
consummate the transactions contemplated by this Agreement do not (a) conflict
with any provision of Seller's certificate of incorporation or bylaws, (b)
conflict with or violate any Law, (c) constitute a default under (without
regard to requirements of notice, lapse of time, or elections of other Persons,
or any combination thereof), accelerate, or permit the acceleration of the
performance required by any Contract to which Seller is a party or by which the
Assets are bound or affected other than a breach, default or
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<PAGE> 9
acceleration that would not materially impair the ability of Seller to perform
hereunder or that would not have a material adverse effect on the Assets, or
(d) result in the creation or imposition of any Lien on any of the Assets.
3.4 Consents. Except for consents and approvals of the FCC and other
Governmental Authorities and third parties described in Section 5.2 hereof, the
execution and delivery of this Agreement and all other agreements and documents
to be executed by Seller that are necessary to effectuate and consummate the
transactions contemplated by this Agreement will not require any consent,
approval, or authorization of, or the filing of any certificate, notice,
application, report or other document with any Governmental Authority or other
Person, except for such filings and approvals that, if not made or obtained,
would not materially impair the ability of Seller to perform hereunder or that
would not have a material adverse effect on the Assets or the operation of the
System.
3.5 Financial Statements. Seller has delivered to Buyer true and
complete copies of the audited balance sheet and statement of income of Seller
pertaining to the operation of the System as of December 31, 1994, and the
unaudited balance sheet and statement of income of Seller pertaining to the
operation of the System as of September 30, 1995 (the "Financial Statements").
The Financial Statements have been accurately compiled from the books and
records of Seller in accordance with generally accepted accounting principles
and fairly present in all material respects the financial position as of the
dates of, and the results of operations for the periods covered by, such
Financial Statements except for the inclusion of certain accounts receivable in
the accounts receivable balances, the determination of appropriate reserves for
uncollectible accounts receivable and the recognition of revenue related to
such accounts receivable, and subject to the usual and customary year-end
adjustments with respect to the unaudited interim Financial Statements.
3.6 Absence of Adverse Changes. Since September 30, 1995, there has
not been any material adverse change in the condition of the Operating Assets
(taken as a whole) other than normal wear and tear. Since September 30, 1995,
there has been no termination, cancellation, limitation, modification or change
in any Contract listed on Schedule 3.11, and no such change is currently
pending or, to Seller's knowledge, threatened, except for terminations,
cancellations, limitations, modifications or other changes to any such listed
Contract that are described on Schedule 3.6 or that are not, individually or in
the aggregate, material.
3.7 Title and Right to Assets. As of the date hereof, Seller has, and
as of the Closing Date, Seller will have, good title to the Assets, free and
clear of Liens other than Permitted Liens and the Liens described in Schedule
3.7. Upon Closing,
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Buyer will acquire good title and effective possession of the Assets in all
material respects.
3.8 Condition of Operating Assets. All Operating Assets listed in
Schedule 3.8(b) are in good condition and repair, subject to normal wear and
tear. All Operating Assets not listed in Schedule 3.8(b), including those
Operating Assets listed on Schedule 3.8(a) but excluding any Operating Assets
that are Excluded Assets, shall be acquired AS-IS, WHERE-IS, without any
guaranty or warranty as to condition. Except for capacity limitations at the
Demopolis cell site, the Operating Assets are sufficient for the operation of
the System as it is currently operated.
3.9 Real Property. Except as listed in Schedule 3.9, neither Seller
nor any of its shareholders, officers, or directors owns any fee interest in
real property located in Alabama and used in the operation of the System.
Schedule 3.9 contains a list of all non-fee interests in real property owned or
used by Seller in connection with the operation of the System (the "Real
Property"), including, without limitation, leaseholds, easements and rights of
way.
3.10 Licenses. Seller holds all Licenses necessary to operate the
System. Schedule 3.10 lists and identifies (a) all Licenses from the FCC and
(b) all other material Licenses from other Governmental Authorities held by
Seller in connection with the System other than local business permits and
zoning permits. Seller is the exclusive holder of each such License, all of
which are in full force and effect and have not been pledged or otherwise
encumbered, assigned, suspended, modified in any material adverse respect, or
canceled or revoked. Seller has operated the System in compliance with all
terms and conditions of each such License or of any renewals thereof applicable
to it except where the failure to so comply would not have a material adverse
effect on Seller's ownership and use of the Assets or its operation of the
System. There is no proceeding pending or, to the knowledge of Seller,
threatened that affects or could affect the validity of such Licenses. Seller
knows of no impediment (legal, regulatory or otherwise) that could prevent or
preclude transfer of any of such Licenses on the Closing Date pursuant to the
terms of this Agreement.
3.11 Contracts. Schedule 3.11 sets forth a complete list of the
Contracts to which Seller is a party that are material to the operation of the
System, other than Contracts with customers and Contracts that are Excluded
Assets. Except as otherwise identified in Schedule 3.11, (a) each such Contract
is a legal, valid and binding obligation of Seller and is in full force and
effect, (b) Seller has performed in all material respects the obligations
required to be performed by it under each such Contract and is not in, or
alleged to be in, material breach or default under any such Contract, and (c)
no such Contract would
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be violated by consummation or performance of the transactions described herein
without having obtained the prior consent of another party to such Contract.
3.12 Litigation. Except as set forth on Schedule 3.12 hereto, there is
no investigation, claim, proceeding or action pending or, to Seller's
knowledge, threatened against Seller that, if adversely determined, would have
an adverse effect on Seller's ability to perform its obligations hereunder or
have an adverse effect on Seller's ownership of the Assets or its operation of
the System.
3.13 System Coverage: Cell Sites. Seller has (a) the exclusive right
to provide cellular service within the Cellular Geographic Service Area shown
on the System Information Update map filed with the FCC for the call sign
KNKN-716, the call sign assigned to the area designated by the FCC as Alabama
RSA 3 (FCC Market No. 309A) on the "A" frequency, and has not expressly
authorized the incursion or extension into that area of the 32 dBu contours of
any adjacent provider of cellular service operating on the same frequency band
except as described on Schedule 3.13, (b) to date constructed the cellular
sites listed in Schedule 3.13 and (c) filed with the FCC the (CGSA) boundary
map as a System Information Update map and the Phase 1 Unserved Area filing,
copies of each of which are attached to Schedule 3.13.
3.14 Environmental Matters.
(a) To the best of Seller's knowledge, Seller is operating and
has operated the System and owned and maintained the Assets in
compliance with, and has not violated in any material respect, Laws
relating to the environment, including, without limitation, applicable
requirements of the Clean Air Act, the Clean Water Act, the Resource
Conservation and Recovery Act (as amended by the Hazardous and Solid
Waste Amendment of 1984), the Safe Drinking Water Act, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended by
the Superfund Amendments and Reauthorization Act of 1986 ("CERCLA"), the
Occupational Health and Safety Act, the Toxic Substances Control Act,
and the state and local counterparts of the foregoing (collectively, the
"Environmental Obligations").
(b) To Seller's knowledge, no condition, circumstance or
activity currently exists or has existed during the period of Seller's
ownership of the Assets and operation of the System, with respect to the
Assets or the System that could result in a claim or recovery by a
Governmental Authority or other Person of damages, costs or expenses
arising from Seller's alleged violation of an Environmental Obligation.
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(c) There are no outstanding orders, decrees or judgments
against Seller or any of the Assets concerning any violation of an
Environmental Obligation or any public health, safety or land use
matter, including, without limitation, the emission, discharge or other
release of a Hazardous Substance into the environment or work place, or
the management of Hazardous Substances. For purposes of this Section
3.14, "Hazardous Substance" shall have meaning ascribed to such term
under CERCLA.
(d) Seller has not generated, manufactured, refined,
transported, treated, stored, handled, disposed, transferred, produced
or processed, and has no knowledge of the actual or potential release,
spill, leakage or discharge of, any Hazardous Substance (including any
petroleum-based or acid-based materials used in generators or batteries
at Seller's cell sites) at any parcel of property used in connection
with the operation of the System that reasonably could be expected to
result in a claim or recovery by a Governmental Authority or other
Person of damages, costs or expenses arising from Seller's alleged
violation of an Environmental Obligation.
3.15 Insurance. Seller maintains insurance policies for the System in
such amounts and against such losses or casualties as are described on Schedule
3.15.
3.16 Finders and Brokers. Except for Seller's engagement of Falkenberg
Capital Corporation, the fees of which shall be paid by Seller, Seller has not
incurred any obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other like payments in connection with
this Agreement or the transactions contemplated hereby, and Seller shall
indemnify and hold Buyer harmless against and with respect to any such
obligation or liability based in any way on any agreement, arrangement or
understanding claimed to have been made by Seller with any broker, finder or
agent.
3.17 Tax Matters. Except as disclosed on Schedule 3.17, Seller has
timely filed all Tax Returns to be filed by it as of the date of this
Agreement, and all such Tax Returns are true, complete and correct in all
material respects and disclose all Taxes required to be paid in respect of the
Assets and in connection with the operation of the System, and, except as set
forth on Schedule 3.17, no audit of any Tax Return and no action, suit,
investigation, claim or assessment by any taxing authority is pending, proposed
or, to Seller's knowledge, threatened against Seller with respect to the
operation of the System. Except as disclosed on Schedule 3.17, all Taxes shown
on such Tax Returns, and all Taxes that have become due pursuant to any
assessment by a Governmental Authority, have been fully paid, or adequate
reserves or allowances have been set up therefor and are reflected on the
Financial Statements referred to in Section 3.5
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hereof. Seller is not a "foreign person," as defined by Section 1445 of the
Code, nor is it subject to backup withholding.
3.18 Employees.
(a) Schedule 3.18 lists all of Seller's employees who provide
services to the System and, for each such employee, his or her title or
job description and annual compensation and rate of pay, and the
applicability to him or her of any collectively bargained or other
employment agreement.
(b) As of the Effective Date, Seller employed fewer than
twenty-five (25) full-time employees. Seller is not required to take
any action under the Workers Adjustment and Retraining Notification Act
in connection with the transactions contemplated by this Agreement.
(c) Seller is not a party to or, to Seller's knowledge,
affected or threatened by any dispute or controversy pertaining to any
collective bargaining agreement or union organizing effort or
representation election.
3.19 Employee Benefits. Seller has not maintained and currently does
not maintain any employee benefit or welfare benefit plan within the meaning of
Sections 401(a) and 501(a) of the Code. Seller does not maintain and is not
required to make contributions to, and has never maintained or been required to
make contributions to, any employee benefit or welfare benefit plan within the
meaning of Section 3(3) of ERISA for the benefit of any of its employees.
Seller is not and has never been obligated to contribute to any "multiemployer
plan" or "multiple employer plan" as such terms are defined in Section 4001(a)
(3) of ERISA.
3.20 Compliance with Laws. Except as set forth on Schedule 3.20,
Seller is in compliance with all Laws applicable to the Assets and the
operation of the System, except where the failure to comply with such Laws
would not, individually or in the aggregate, have a material adverse effect on
the Assets taken as a whole or the operation of the System, and no written
notice or warning from any Governmental Authority with respect to any failure
or alleged failure by Seller to comply with any Law has been received by
Seller.
3.21 Cure. For all purposes under this Agreement, except for
intentional misrepresentations or known omissions, the existence or occurrence
of any events or circumstances that constitute or cause a breach of a
representation or warranty of Seller made in this Agreement (including, without
limitation, the schedules hereto) on the date such representation or warranty
is made shall not constitute a breach of such representation or
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warranty if such event or circumstance is cured on or prior to the Closing
Date.
3.22 FCC Matters. Seller is legally qualified under all applicable FCC
regulations to be the holder of the Licenses issued by the FCC and to receive
the FCC's consent to assign the Licenses. The FCC granted the application to
assign to Buyer (i) the License of Seller for Station KNKN-716 effective
December 15, 1995; and (ii) Seller's microwave Licenses effective January 17,
1996.
3.23 Intellectual Property. Except as set forth on Schedule 3.23,
Seller has no patents, copyrights, trade names, trademarks, service marks, or
other such names, or marks or applications therefor and has not operated the
System under any corporate, trade or fictitious name other than the current
corporate and fictitious names. Except for matters of general applicability to
the telecommunications industry, there are no pending or threatened claims of
infringement by Seller upon the rights of any owner of intellectual property.
3.24 Accounts Receivable. The Accounts Receivable have been validly
obtained in the ordinary course of business and are subject to no offset or
reduction, except as provided under Section 2.6(a).
3.25 Articles of Incorporation and Bylaws. Appended to Schedule 3.25
are true and complete copies of the Articles of Incorporation and Bylaws of
Seller, as the same are currently in effect.
3.26 Full Disclosure. No representation, warranty or statement made by
or on behalf of Seller in this Agreement or the Schedules attached hereto, or
in the certificates or other closing documents to be delivered to Buyer or its
representatives at Closing, contains or will contain any untrue statement of
material fact or omits or will omit to state a material fact required to be
stated herein or therein or necessary to make the statements contained herein
or therein not misleading in any material respect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller that as of the date
hereof (unless otherwise specifically indicated):
4.1 Due Organization; Power and Authority. Buyer is (a) a corporation
duly organized, validly existing and in good standing under the laws of the
State of Louisiana, and (b) at and as of Closing will be duly qualified and in
good standing as a foreign corporation in Alabama and in each other
jurisdiction where the
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properties owned, leased or operated, or the business conducted, by it requires
such qualification, except where a failure to so qualify, either singly or in
the aggregate, would not have a material adverse effect on the financial
condition, assets, business, prospects or results of operations of Buyer.
4.2 Authority. Buyer has the requisite power and authority to
execute, deliver and perform this Agreement and all other agreements and
documents to be executed by Buyer that are necessary to effectuate and
consummate the transactions contemplated by this Agreement. The execution,
delivery, and performance of this Agreement and the consummation of the
transactions contemplated hereby on the part of Buyer have been duly and
validly authorized by all necessary action on the part of Buyer. This Agreement
has been duly and validly executed and delivered by Buyer and is the valid and
binding obligation of Buyer, enforceable against Buyer in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the
enforcement of creditors' rights generally and subject to the qualification
that general equitable principles may limit the enforcement of certain
remedies, including the remedy of specific performance.
4.3 No Conflicts; Required Consents. The execution, delivery and
performance by Buyer of this Agreement and all other agreements and documents
to be executed by Buyer that are necessary to effectuate and consummate the
transactions contemplated by this Agreement do not (a) conflict with any
provision of Buyer's certificate of incorporation or bylaws, (b) conflict with
or violate any Law, (c) constitute a default under (without regard to
requirements of notice, lapse of time, or elections of other Persons, or any
combination thereof), accelerate, or permit the acceleration of, the
performance required by any Contract to which Buyer is a party or by which
Buyer's assets are bound or its business and operations affected other than a
breach, default or acceleration that would not impair the ability of Buyer to
perform hereunder, or (d) require (with the exception of (i) the notifications
and waiting period, if applicable, required under the HSR Act and (ii) the
filings required to be made with, and the approval of, the FCC) any consent,
approval or authorization of, or the filing of any certificate, notice,
application, report or other document with, any Person, except those filings
and approvals that, if not made or obtained, would not impair the ability of
Buyer to perform hereunder.
4.4 Litigation. There is no investigation, claim, proceeding or
action pending or, to Buyer's knowledge, threatened against Buyer that, if
adversely determined, would have an adverse effect on Buyer's ability to
perform its obligations hereunder.
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4.5 Brokers. Buyer has not incurred any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other like payment in connection with this Agreement or the transactions
contemplated hereby, and Buyer shall indemnify and hold Seller harmless against
and with respect to any such obligation or liability based in any way on any
agreement, arrangement or understanding claimed to have been made by Buyer with
any broker, finder or agent.
4.6 Qualification. Buyer will be qualified under the Communications
Act of 1934, as amended, and all FCC rules and regulations, to be the assignee
of the Licenses. Buyer has not taken, and will not take prior to the Closing
Date, any action to disqualify itself under the FCC's rules and regulations
from acquiring control of such Licenses.
4.7 Financial Capability. Buyer has the financial resources available
to close the transactions contemplated by this Agreement without financing that
is subject to any material contingency.
4.8 Effect of Buyer's Due Diligence. Buyer represents that it is a
sophisticated entity that was advised by knowledgeable counsel, and that by the
Closing Date it will have conducted its own independent review and evaluation
of the Assets and the System. Accordingly, Buyer warrants and agrees that (a)
except for the representations and warranties of Seller set forth in this
Agreement and the Schedules hereto and other agreements to be executed by Buyer
and Seller to effectuate and consummate the transactions contemplated by this
Agreement, Buyer has not relied and will not rely upon any document or written
or oral information furnished to or discovered by it or its representatives,
including, without limitation, any financial data other than the Financial
Statements, and (b) there are no representations or warranties by or on behalf
of Seller or its representatives except for those expressly set forth in this
Agreement and in any other written agreement entered into with Seller in
connection with this Agreement.
4.9 HSR Act. The "ultimate parent entity" (as defined in 16 C.F.R.
Section 801.11 (1992)) of Buyer and entities that such ultimate parent entity
controls directly or indirectly do not have, in the aggregate, "annual net
sales" (as defined in 16 C.F.R. Section 801.11 (1992)) or "total assets" (as
defined in 16 C.F.R. Section 801.11 (1992)) of $100,000,000 or more.
ARTICLE V
ACTIONS PRIOR TO CLOSING
5.1 Control of System. Seller and Buyer agree that Buyer shall not,
prior to the Closing Date, directly or indirectly control, supervise or direct
the operation of the System, if the
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effect thereof would be to violate the rules and regulations of the FCC. Seller
will continue at all times prior to the Closing Date to control, supervise and
direct the operation of the System to the fullest extent necessary to avoid any
such violation until the Closing has occurred.
5.2 Required Consents. Seller and Buyer each will use its
commercially reasonable efforts to obtain all consents and approvals of Persons
required to permit the consummation of the transactions contemplated hereby,
including all consents required pursuant to the Contracts listed in Schedule
3.11, the consents and approvals of the FCC, any necessary and timely approval
of the Department of Justice or the Federal Trade Commission pursuant to the
provisions of the HSR Act, if applicable, and any other necessary approval or
consent of any other Person that is required for the consummation of the
transactions contemplated hereby. If not filed prior to the Execution Date,
then as soon as practicable thereafter, Seller and Buyer shall, if required,
prepare and file in compliance with the HSR Act proper pre-merger notification
forms and affidavits in connection with the transactions contemplated hereby.
Seller and Buyer further agree to cooperate in good faith to expeditiously and
diligently prosecute such applications to a favorable conclusion. Each of
Seller and Buyer shall bear its own expenses in preparing any of such filings,
including, without limitation, any fees required to be paid by it in connection
therewith. If any Governmental Authority shall challenge the transactions
contemplated hereby, or request any additional filings or information, then
Seller or Buyer, as appropriate, shall use all commercially reasonable efforts
promptly either to contest such challenge or to make or provide any such filing
or information.
5.3 Cooperation in Obtaining Consents. Seller and Buyer each will
take reasonable steps requested by the other to secure the consents and
approvals referred to in Section 5.2. Each party will afford to the other party
the opportunity to review, approve and revise the form in which such consents
and approvals will be requested prior to the delivery of such request to the
Person whose consent is sought, and neither party shall accept or agree to
accede to any modifications or amendments to, or any conditions to the
assignment of, any of the Licenses, Contracts or Real Property of Seller that
may adversely affect either Seller's or Buyer's ownership, as appropriate, of
the Assets or operation of the System.
5.4 Employee Matters.
(a) Seller shall terminate all of its employees with respect to
the operations of the System upon Closing. Seller shall be responsible
for and shall cause to be discharged and satisfied in full all amounts
owed to any employee through the Closing Date, including wages, salaries
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and any other compensation or payments due on account of such
termination.
(b) Buyer has no obligation to employ any of Seller's
employees, and Seller shall not make any representation to the contrary
to any of its employees. Buyer intends and shall be permitted to
interview or otherwise contact Seller's employees regarding future
employment; provided that Buyer shall not attempt to contact any of
Seller's employees regarding the transactions contemplated by this
Agreement or employment with Buyer without Seller's consent, which
consent shall not be withheld unreasonably, and Seller's contact and
communications with Seller's employees shall not unreasonably interfere
with the operations of the System.
(c) Notwithstanding subsection (a) of this Section 5.4, Buyer
shall recognize the term of service with Seller of any employee of
Seller hired by Buyer in determining such employee's benefits or rights
thereto under any health and life insurance plan, long-term and
short-term disability coverage, and all vacation, retirement and other
employment plans offered by Buyer to its employees.
5.5 Conduct of Business. From the Execution Date until the Closing
Date Seller agrees to operate and manage the business of the System in the
usual and ordinary course consistent with past practice and to act consistent
with the following provisions:
(a) Maintain Assets. Seller will maintain the Operating Assets
in good repair, working order and condition, except for obsolescence,
ordinary wear and tear or casualty loss or damage; provided, that Seller
(x) will use its commercially reasonable efforts to replace or repair
prior to Closing any Operating Asset that is damaged or destroyed on
account of a casualty or provide Buyer with all insurance proceeds, if
any, received by Seller as a result of such damage or destruction, and
(y) shall not otherwise be obligated to make any capital expenditure
from and after the Execution Date except as may be mutually agreed upon
in writing by Buyer and Seller. Seller will (i) use commercially
reasonable efforts to maintain the Licenses in full force and effect,
and (ii) maintain its books, records, and accounts with respect to the
Assets and the operation of the System in the usual, regular, and
ordinary manner on a basis consistent with past practices.
(b) Incurring Obligations. Without the prior written consent
of Buyer, which consent may be withheld at Buyer's sole discretion,
Seller will not (i) amend, supplement, terminate, or otherwise modify in
any material respect any Contract identified in schedule 3.11, (ii)
enter into any new Contract or series of related Contracts that will be
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assigned to and assumed by Buyer at Closing that either creates an
obligation in excess of $10,000 or that cannot be terminated without
penalty within 31 days of providing notice of termination thereof or
(iii) increase any employee's compensation or benefits other than
regular merit review salary increases consistent with past practice and
other than special retention incentive cash bonus compensation and cash
severance benefits.
(c) Outstanding Liabilities. Except as and to the extent
described on Schedule 5.5(c), or as otherwise provided in this
Agreement, all outstanding liabilities and obligations of Seller,
secured or unsecured, including, without limitation, Tax liabilities,
but excluding such liabilities and obligations that Seller is reasonably
challenging the validity of, either will be paid, to the extent
appropriate, on or before the Closing Date if then due or payable or
will be included as Expenses pursuant to Section 2.6(d).
(d) Maintenance of System Relations. Seller shall use
commercially reasonable efforts to preserve the current community
relations and business organization of the System, including the
preservation of existing relationships with suppliers having business
with Seller pertaining to the System and, except as otherwise provided
in Section 5.5(g) and Schedule 5.5(g), roaming partners of the System.
(e) Sale of Assets. Seller shall not sell, assign, transfer,
lease, mortgage, pledge or subject to a Lien (other than a Permitted
Lien or Liens described on Schedule 3.7) or otherwise encumber any of
the Assets other than in the ordinary course of business.
(f) Inventory Management. Seller shall not manage equipment
inventories or other supplies other than in the ordinary course of
business.
(g) Customer Policies. Except as provided in Schedule 5.5(g),
Seller shall not deviate from established policies and practices
concerning credit verification, subscriber disconnects, collections,
agent programs, roaming contracts, sales commissions, billings, and
minimum terms for customer contracts.
(h) Ordinary Course. Seller shall not enter into any
transaction other than in the ordinary course.
5.6 Exclusive Dealing. Prior to the Closing Date or the termination
of this Agreement, Seller shall not, directly or indirectly, through an
investment banker, another representative or otherwise, entertain any proposal
or inquiry from or negotiate with any Person other than Buyer regarding the
following:
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(a) The merger or consolidation of Seller with any Person;
(b) The direct or indirect acquisition of the Assets by; any
Person; or
(c) The acquisition of direct or indirect beneficial ownership
of Seller or any capital stock issued by Seller by any Person.
5.7 Notification of Adverse Changes. During the period from the date
of this Agreement extending until sixty (60) days after the Closing Date,
Seller shall promptly notify Buyer of any matter which any executive officer of
Seller acquires actual knowledge that, if known as of the execution of this
Agreement, would have been required to be disclosed under this Agreement or
included in the Schedules hereto.
5.8 Access to System and Information. In accordance with the purposes
of this Agreement, from the Execution Date until the Closing Date, Seller will
permit Buyer, its counsel, accountants and other representatives, to have
reasonable access, during normal business hours, to the properties and books
and records of the System, and will cause to be furnished to Buyer and its
representatives during such period unaudited quarterly financial statements
with respect to the System.
5.9 Commercially Reasonable Efforts. Buyer and Seller shall each use
its commercially reasonable efforts to facilitate the effective transition of
control of the System as of the Closing Date upon the satisfaction of all
conditions precedent to Closing.
5.10 Conversion of Billing Data. Seller shall provide, and use its
commercially reasonable efforts to cause ITDS (its billing vendor) and EDS (its
roaming clearinghouse) to provide, to Buyer such materials, billing data and
other information, and assistance as may be reasonably necessary for Buyer to
have the opportunity to complete, on a test basis, the March and April 1996,
monthly billing to customers of the System using Buyer's billing system
parallel and in conjunction with the ITDS billing system. The intent of the
parties hereunder is, assuming Closing occurs effective as of May 15, 1996, for
Buyer to be able to complete the May 1996 monthly billing to customers of the
System using Buyer's billing system. If by May 1, 1996, Buyer notifies Seller
and ITDS that Buyer will require ITDS to complete the May 1996 billing cycle
for the System, then Seller will arrange for ITDS to complete such billing
using ITDS' billing system; in such event, Buyer agrees to enter into a
confidentiality agreement with ITDS relating to such billing services. Buyer
shall promptly reimburse Seller for all costs, fees or other charges of ITDS or
EDS incurred by Seller and relating to the extraction of System billing data
from the ITDS billing system, the conversion of the System's billing data to
Buyer's billing system, such parallel trial billing activity, or
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any post-Closing billing services rendered by ITDS to Buyer that are not
covered by the termination fee to be paid by Seller to ITDS. Seller shall pay
all normal billing costs, fees or other charges of ITDS and EDS relating to
billing activity prior to the Closing Time and all termination fees or
penalties arising under Seller's Contract with ITDS.
5.11 Consulting Services. As of the Execution Date, Seller and Buyer
have entered into the Marketing Services Agreement, the form of which is
attached hereto as Exhibit 5.11, pursuant to which Buyer may perform certain
marketing services for the benefit of Seller.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
6.1 Conditions to Obligations of Each Party. The obligations of
Seller and Buyer under Article II of this Agreement are subject to the
satisfaction, or waiver by each party, of the following conditions on or prior
to the Closing Date:
(a) Governmental Consents and Approvals. The FCC and any other
applicable Governmental Authorities shall have issued by final, non-
appealable order, to the extent required, all necessary approvals or
consents required for the assignment and transfer of the Licenses and
the other Assets from Seller to Buyer, without the addition of any
condition that would be materially adverse to Seller or Buyer, and all
conditions to Closing of the transactions hereunder imposed by the FCC
and any other applicable Governmental Authority shall have been
satisfied; provided, however, that Buyer shall have the unfettered right
to waive the requirement of finality regarding such consents and
approvals.
(b) HSR Waiting Period. If applicable, the waiting period
prescribed by the HSR Act shall have lapsed or been terminated, and any
investigation of the transactions contemplated hereby commenced by the
Department of Justice or the Federal Trade Commission pursuant to the
HSR Act shall have been terminated.
6.2 Conditions Precedent to Obligations of Buyer. The obligations of
Buyer under Article II of this Agreement are subject to the satisfaction, or
waiver by Buyer, of the following conditions on or prior to the Closing Date:
(a) Representations and Warranties True on Closing Date. The
representations and warranties of Seller made in this Agreement shall be
true and correct in all material respects on and as of the Closing Date
with the same force and effect as though those representations and
warranties were made on and as of such Closing Date.
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(b) Compliance with Agreements. Seller, in all material
respects, shall have performed and complied with all of Seller's
obligations under this Agreement that are to be performed or complied
with by Seller prior to or on such Closing Date.
(c) Officer's Certificate. Seller shall have delivered to
Buyer a certificate, dated as of the Closing Date and signed by an
authorized officer of Buyer, certifying that the conditions set forth in
Sections 6.2(a) and (b) hereof have been fulfilled.
(d) Documents. Seller shall have delivered the documents
required by Section 7.2 hereof.
(e) Third Party Consents. Seller shall have delivered to Buyer
evidence reasonably satisfactory in form and substance to Buyer that all
required consents of third parties, including consents required of all
third parties to the Contracts identified or referred to on Schedule
3.11 (other than the Pitney Bowes office equipment leases), have been
obtained.
(f) No Litigation. On the Closing Date, (i) no litigation,
proceeding, investigation, or inquiry shall be pending that, if
sustained, would materially and adversely affect the value of the
Assets, Buyer's right to acquire, retain and own the Assets or operate
the System, and (ii) no judgment, decree, injunction, rule or order of
any court of competent jurisdiction or other Governmental Authority
shall be outstanding against Buyer, Seller or any affiliate purporting
to enjoin or otherwise prevent the Closing of the transactions
contemplated in this Agreement.
(g) Opinion of Counsel. Seller shall have delivered to Buyer
an opinion of Fleischman and Walsh, L.L.P., special transaction and FCC
counsel to Seller, dated as of the Closing Date, substantially in the
form of Exhibit 6.2(g) attached hereto.
(h) Subscriber Count. As of the Closing Date, the System shall
have not less than 3,350 subscribers. For purposes of this Section
6.2(h), a subscriber shall mean an individual customer of the System or,
with respect to multiple user accounts of the System, an individual
customer equivalent based on the number of telephones billed under such
account, that
(i) either has paid in full at least one regular
monthly billing statement for cellular telephone service from the
System (a "System Billing Statement"), or is a barter customer of
the System listed on Schedule 6.2(h) and is in good standing
under its barter arrangements with Seller as of the Closing Date;
and
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(ii) on the Closing Date is not in arrears in the
payment of a System Billing Statement by more than 30 days, as
reflected on the billing records of Seller relating to the
System.
To the extent that the number of subscribers as of the Closing Date (the
"Closing Date Subscriber Count") is less than 3,500, Buyer may withhold
payment of a portion of the Purchase Price otherwise payable at Closing
in an amount equal to the sum of (w) $2,750 times the remainder of 3,500
minus the Closing Date Subscriber Count, not to exceed 100, plus (x)
$3,750 times the remainder of 3,400 minus the Closing Date Subscriber
Count.
Notwithstanding the foregoing, on the Closing Date Buyer and
Seller together shall identify by name and account number each
individual customer or individual customer equivalent of the System that
may not properly be included as a subscriber of the System for purposes
of this Section 6.2(h) because it had not paid at least one System
Billing Statement as of the Closing Date (each, an "Excluded
Subscriber"). Within 10 business days after the 60th day following the
Closing Date, Buyer shall determine and certify in a written notice to
Seller which of the Excluded Subscribers have paid in full a System
Billing Statement within 60 days after the Closing Date ("Later
Qualified Subscribers") and which of the Excluded Subscribers have not
paid in full a System Billing Statement within such 60-day period,
together with billing and payment information supporting the
determination of which Excluded Subscribers did not become Later
Qualified Subscribers. Concurrently with the delivery of such notice,
Buyer shall pay to Seller an amount, not to exceed the withheld portion
of the Purchase Price, equal to the sum of (y) $3,750 times the number
of Later Qualified Subscribers up to the remainder calculated pursuant
to clause (x) above plus (z) $2,750 times the remainder of the aggregate
number of the Later Qualified Subscribers minus the number of such Later
Qualified Subscribers included in clause (y) above.
6.3 Conditions Precedent to Obligations of Seller. The obligations of
Seller under Article II of this Agreement are subject to the satisfaction, or
waiver by Seller, of the following conditions on or prior to the Closing Date:
(a) Representations and Warranties True on Closing Date. The
representations and warranties of Buyer made in this Agreement shall be
true and correct in all material respects on and as of the Closing Date
with the same force and effect as though such representations and
warranties were made on and as of the Closing Date.
(b) Compliance with Agreements. Buyer, in all material
respects, shall have performed and complied with all of Buyer's
obligations under this Agreement that are to
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be performed or complied with by Buyer prior to or on the Closing Date.
(c) Officer's Certificate. Buyer shall have delivered to
Seller a certificate, dated as of the Closing Date and signed by an
authorized officer of Buyer, certifying that the conditions set forth in
Sections 6.3(a) and (b) hereof have been fulfilled.
(d) Documents. Buyer shall have delivered to Seller the
documents required under Section 7.3 hereof.
(e) No Litigation. On the Closing Date, (i) no litigation,
proceeding, investigation, or inquiry shall be pending that, if
sustained, would materially and adversely affect the value of the
Assets, Seller's right to retain or convey the Assets or operate the
System, or Buyer's right to acquire, retain and own the Assets or
operate the System, and (ii) no judgment, decree, injunction, rule or
order of any court of competent jurisdiction or other legal authority
shall be outstanding against Buyer, Seller or any Affiliate purporting
to enjoin or otherwise prevent the Closing of the transactions
contemplated hereunder.
ARTICLE VII
THE CLOSING
7.1 Closing. The closing (the "Closing") of the transactions
contemplated under this Agreement shall take place at the offices of Fleischman
and Walsh, L.L.P., 1400 Sixteenth Street, NW, Suite 600, Washington, DC 20036,
at 10:00 a.m. local time on the later of (i) May 15, 1996, or (ii) the third
business day following the date on which the last of the conditions specified
in Article VI hereof is satisfied or waived, or at such other location, date
and time as the parties may mutually agree. The date on which the Closing shall
occur is referred to herein as the "Closing Date." The Closing shall become
effective as of 11:59 p.m. on the Closing Date.
7.2 Obligations of Seller. At Closing, Seller shall deliver or cause
to be delivered to Buyer the following:
(a) Transfer Documents. An executed Bill of Sale and
Assignment and Assumption Agreement, substantially similar in form to
Exhibit 7.2(a), and such other instruments of transfer and assignment,
in form and substance reasonably satisfactory to Buyer, that Buyer
reasonably deems to be necessary to effectuate the transactions
contemplated by this Agreement.
(b) Officer's Certificate. The certificate described in
Section 6.2(c) hereof.
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(c) Vehicle Titles. Properly executed title documents and
additional conveyance documentation for vehicles that are included in
the Operating Assets.
(d) Lien Releases. Evidence satisfactory to Buyer that all
Liens affecting the Assets, other than Permitted Liens but expressly
including the Liens set forth in Schedule 3.7, have been or as of the
Closing Date will be terminated, released or waived, as appropriate, or
original executed instruments effecting such terminations, releases or
waivers.
(e) Evidence of Necessary Actions. Evidence reasonably
satisfactory to Buyer that Seller has taken all actions necessary to
authorize the execution of this Agreement and such other documents to
effect the consummation of the transactions contemplated hereby.
(f) Documents and Records. All (i) existing blueprints,
schematics, working drawings, plans, specifications, projections,
statistics, engineering records, original plant records, system
construction and as-built maps relating to the System; (ii) customer
lists, files and records used by Seller in the operation of the System;
and (iii) personnel files and records relating to the employees of
Seller that render services to the System and who have accepted an offer
of employment after Closing from Buyer. Delivery of the foregoing shall
be deemed made to the extent such lists, files and records are then
located at any of the offices included in the System.
(g) FIRPTA Certificate. A FIRPTA Non-Foreign Seller
Certificate certifying that Seller is not a foreign person within the
meaning of Section 1445 of the Code.
(h) Legal Opinion. The legal opinion of Fleischman and Walsh,
L.L.P., described in Section 6.2(g).
(i) Closing Escrow Agreement. The Closing Escrow Agreement
described in Section 2.5, duly executed by Seller and the escrow agent
named therein.
(j) Certificate of Good Standing. A certificate of good
standing or other similar documentation from the Secretary of State of
the State of Alabama certifying that Seller is a validly existing
corporation formed under the laws of the State of Alabama and is in good
standing.
(k) Noncompete and Confidentiality Agreement. The Noncompete
and Confidentiality Agreement substantially in the form of Exhibit
7.2(k), duly executed by Seller and Seller's directors, Tina Chang and
Arnold Leong.
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(l) Release from Texas 16. A Release and Waiver substantially
in the form of Exhibit 7.2(l), duly executed by Texas 16 Cellular
Telephone Company.
7.3 Obligations of Buyer. At Closing, Buyer shall deliver or cause to
be delivered to Seller the following:
(a) Purchase Price. The Purchase Price, as required by Section
2.4, plus or minus, as appropriate, the Current Items Amount, as
calculated in the Initial Adjustment Certificate.
(b) Transfer Documents. An executed Bill of Sale and
Assignment and Assumption Agreement, substantially similar in form to
Exhibit 7.2(a), and such other instruments of transfer and assignment,
in form and substance reasonably satisfactory to Seller, that Seller
reasonably deems to be necessary to effectuate the transactions
contemplated by this Agreement.
(c) Officer's Certificate. The certificate described in
Section 6.3(c) hereof.
(d) Evidence of Necessary Actions. Evidence reasonably
satisfactory to Seller that Buyer has taken all actions necessary to
authorize the execution of this Agreement and such other documents to
effect the consummation of the transactions contemplated hereby.
(e) Closing Escrow Agreement. The Closing Escrow Agreement
described in Section 2.5, duly executed by Buyer.
(f) Certificates of Good Standing and Authority. A certificate
of good standing or other similar document from the Secretary of State
of Louisiana certifying that Buyer is a validly existing corporation
formed under the laws of the State of Louisiana and is in good standing,
and a certificate or other similar document from the Secretary of State
for the State of Alabama certifying that Buyer is a foreign corporation
authorized to conduct business in the State of Alabama and is in good
standing.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by Seller. From and after Closing, Seller shall
indemnify and hold harmless Buyer, its shareholders, officers, directors,
employees, agents and legal representatives, and any Person claiming by or
through any of them, as the case may be, from and against any and all Losses
arising out of or resulting from:
(a) Any representation or warranty made by Seller in this
Agreement or in any closing document executed by Seller
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not being true and accurate in all material respects when made or at
Closing, as appropriate, provided that such breach is not deemed to have
been waived as a result of Closing pursuant to the proviso set forth
below in this Section, and provided further that indemnification under
this paragraph is sought within the time periods and in the manner set
forth in Section 8.5;
(b) Subject to the proviso set forth below in this Section,
any failure by Seller to perform in all material respects any of its
covenants, agreements or obligations under this Agreement to be
performed at or prior to Closing; and
(c) All liabilities of Seller relating to the System that are
not Assumed Liabilities, including all Retained Liabilities.
Provided that no claim for indemnification may be made after Closing with
respect to any breach of any representation, warranty, covenant or agreement by
Seller that was disclosed in the Closing certificate from Seller referred to in
Section 6.2(c) hereof. If, by reason of a claim of any third party relating to
any of the matters subject to such indemnification, a Lien is placed or made
upon any of the properties or assets owned or leased by Buyer or any other
Indemnitee under this Section, in addition to any indemnity obligation of
Seller under this Section, Seller shall furnish a bond sufficient to obtain the
prompt release thereof within ten days after receipt from Buyer of written
notice thereof.
8.2 Indemnification by Buyer. From and after Closing, Buyer shall
indemnify and hold harmless Seller, its shareholders, officers, directors,
employees, agents and legal representatives and any Person claiming by or
through any of them, as the case may be, from and against any and all Losses
arising out of or resulting from:
(a) Any representation or warranty made by Buyer in this
Agreement or in any closing document executed by Buyer not being true
and accurate in all material respects when made or at Closing, as
appropriate, provided that such breach is not deemed to have been waived
as a result of Closing pursuant to the proviso set forth below in this
Section, and provided further that indemnification under this paragraph
is sought within the time periods and in the manner stated in Section
8.5;
(b) Subject to the proviso set forth below in this Section,
any failure by Buyer to perform in all material respects any of its
covenants, agreements or obligations under this Agreement to be
performed at or prior to Closing; and
(c) The Assumed Liabilities.
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Provided that no claim for indemnification may be made after Closing with
respect to any breach of any representation, warranty, covenant or agreement by
Buyer that was disclosed in the Closing certificate from Buyer referred to in
Section 6.3(c) hereof. If, by reason of a claim of any third party relating to
any of the matters subject to such indemnification, a Lien is placed or made
upon any of the properties or assets owned or leased by Seller or any other
Indemnitee under this Section, in addition to any indemnity obligation of Buyer
under this Section, Buyer shall furnish a bond sufficient to obtain the prompt
release thereof within ten days after receipt from Seller of written notice
thereof.
8.3 Procedure for Indemnified Third Party Claim. Promptly after
receipt by a party entitled to indemnification hereunder (the "Indemnitee") of
written notice of the assertion or the commencement of any Litigation with
respect to any matter referred to in Sections 8.1 and 8.2, the Indemnitee shall
give written notice thereof to the party from whom indemnification is sought
pursuant hereto (the "Indemnitor") and thereafter shall keep the Indemnitor
reasonably informed with respect thereto if the Indemnitor does not assume the
defense of such claim; provided, however, that failure of the Indemnitee to
give the Indemnitor notice as provided herein shall not relieve the Indemnitor
of its obligations hereunder, except to the extent that such failure to give
notice shall prejudice any defense or claim available to the Indemnitor. In
case any Litigation shall be brought against the Indemnitee, the Indemnitor
shall be entitled to assume the defense thereof with counsel reasonably
satisfactory to the Indemnitee, at the Indemnitor's sole expense. If the
Indemnitor shall assume the defense of any Litigation, it shall not settle the
Litigation unless the settlement shall include as an unconditional term thereof
the giving by the claimant or the plaintiff of a release of the Indemnitee,
satisfactory to the Indemnitee, from all liability with respect to such
Litigation. If the Indemnitor does not assume the defense of any Litigation,
the Indemnitor shall nevertheless provide reasonable cooperation to the
Indemnitee in the defense of such Litigation, and any settlement of such
Litigation shall be on terms reasonably satisfactory to the Indemnitor.
8.4 Limitation on Indemnification Obligations. Neither Seller nor
Buyer shall have any liability under Section 8.1(a) or 8.2(a), respectively,
unless, and only to the extent that, the aggregate amount of Losses incurred by
the other party that are subject to its indemnification obligations pursuant to
such provision exceeds $20,000.
8.5 Survival Periods: Time and Manner of Certain Claims. Subject
to the provisions of Section 11.3, the indemnification obligations and remedies
set forth in this Article VIII are intended to be the sole and exclusive remedy
of the parties with respect to the matters for which indemnification may be
sought pursuant to Sections 8.1 and 8.2 or elsewhere in this Agreement. For
purposes of this Article VIII, the representations and
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warranties made herein by Buyer and Seller (except for Sections 3.5, 3.6, 3.7,
the first sentence of Section 3.11, and Section 3.26) shall be deemed not to
contain the qualifying phrases "material," "material adverse effect," "to the
knowledge of," and other phrases of similar meaning. The representations and
warranties of Seller and Buyer in this Agreement or in and any closing document
shall survive Closing for a period of one year, except that (i) the liability
of the parties shall extend beyond such one-year period with respect to any
claim that has been asserted in a written notice properly delivered before the
expiration of such one-year period, (ii) all such representations and
warranties with respect to any Taxes and with respect to any FCC matters will
survive until the expiration of the applicable statute of limitations, and
(iii) all such representations and warranties with respect to good title to the
Assets and the covenants and agreements of the parties in this Agreement or in
any closing document shall survive the Closing and shall continue in full force
and effect without limitation.
ARTICLE IX
CERTAIN TAX MATTERS
9.1 Liability for Taxes. Seller shall be liable for and shall pay all
Taxes (whether assessed or unassessed) attributable to taxable periods (or
portions thereof) ending on or prior to the Closing Date. Buyer shall be liable
for and shall pay all Taxes (whether assessed or unassessed) that are
attributable to taxable periods (or portions thereof) beginning after the
Closing Date. For purposes of this Article IX, any taxable period beginning
before and ending after the Closing Date shall be treated as two partial
taxable periods, one ending on the Closing Date and the other beginning after
the Closing Date, except that Taxes (such as property Taxes) imposed on a
periodic basis shall be allocated on a daily basis.
9.2 Payment of Sales, Use and Transfer Taxes. Each of Seller and
Buyer shall pay all sales, use, transfer and similar Taxes or assessments in
accordance with applicable Laws, including, but not limited to, transfer fees
and similar assessments for Licenses, Contracts, and Real Property, arising
from or payable by reason of the transactions contemplated hereby. In the event
that any applicable Law is silent as to which party is liable for the payment
of such Taxes or assessments, the parties shall share equally such Tax or
assessment. Except as expressly set forth in this Agreement, nothing herein
shall in any way modify the obligation of either party to this Agreement to pay
Taxes as provided by statute or code. The parties agree to take whatever
actions are necessary or appropriate to establish an exemption from (or
otherwise reduce) such Taxes.
9.3 Reimbursement of Taxes. Seller or Buyer, as the case may be,
shall provide reimbursement for any Tax paid by the other, all or a portion of
which is its responsibility in
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accordance with the terms of this Article IX. Within a reasonable time prior to
the payment of any such Tax, the party paying such Tax shall give notice to the
other party of the Tax payable and the portion that is the liability of such
party, although failure to do so will not relieve the other party from its
liability hereunder.
9.4 Allocation of Purchase Price. Prior to the Closing Date, Buyer
and Seller shall each use its best efforts to agree upon the allocation (the
"Allocation") of the Purchase Price and the Assumed Liabilities to the
individual assets or classes of assets (within the meaning of Section 1060 of
the Code). Buyer, Seller, and their respective affiliates, shall file all Tax
returns and schedules thereto, including, without limitation, those returns and
forms required by Section 1060 of the Code, consistent with the Allocation
unless otherwise required by the applicable Legal Requirements.
9.5 Survival of Tax Obligations. Notwithstanding anything to the
contrary contained in this Agreement, the obligations of the parties set forth
in this Article IX shall be unconditional and absolute and shall remain in
effect until the expiration of the applicable statutes of limitations relating
to such obligations.
ARTICLE X
OTHER COVENANTS
10.1 Further Assurances. Seller and Buyer shall, from time to time
after the Closing, at the other's reasonable request and without further
consideration, execute and deliver or cause to be executed and delivered such
other instruments of conveyance, assignment and transfer and take such other
action as the other reasonably may require in order more effectively to convey,
transfer to and vest in the other, and to put the other in possession of the
consideration to be received by the other hereunder.
10.2 Confidentiality. Any non-public information of either party that
such party may disclose (the "Disclosing Party") to the other party (the
"Recipient Party") in connection with this Agreement shall be maintained as
confidential by the Recipient Party and, unless and until Closing shall occur
and for a two year period thereafter, Recipient Party shall not disclose any
such information to any other Person (other than its directors, officers and
employees, and representatives of its advisers and lenders whose knowledge
thereof is necessary in order to facilitate the consummation of the
transactions contemplated hereby) or use such information to the detriment of
the Disclosing Party; provided that (i) the Recipient Party may use and
disclose any such information once it has been publicly disclosed (other than
by the Recipient Party in breach of its obligations under this Section) or that
rightfully has come into the possession of the Recipient Party (other than from
the
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Disclosing Party), and (ii) to the extent that the Recipient Party may, in the
reasonable judgment of its counsel, be compelled by Law to disclose any of such
information, the Recipient Party may disclose such information if it shall have
used all reasonable efforts, and shall have afforded the Disclosing Party the
opportunity, to obtain an appropriate protective order, or other satisfactory
assurance of confidential treatment, for the information compelled to be
disclosed. In the event of termination of this Agreement, the Recipient Party
shall use all reasonable efforts to cause to be delivered to the Disclosing
Party, and retain no copies of, any documents, work papers and other materials
obtained by the Recipient Party or on its behalf from the Disclosing Party,
whether so obtained before or after the execution hereof.
ARTICLE XI
MISCELLANEOUS
11.1 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given and
effective (i) upon receipt if delivered in person, (ii) the next business day
if delivered by facsimile, (iii) one business day after deposit prepaid with a
national overnight express delivery service (e.g., Federal Express, UPS or
Airborne) or (iv) three business days after deposit in the United States mail
(registered or certified mail, postage prepaid, return receipt requested)
If to Seller, to:
West Alabama Cellular Telephone Company, Inc.
c/o Tina Chang
1359 Ada Street
Berkeley, California 94702
Fax No.: (510) 528-8945
with copies to:
Fleischman and Walsh, L.L.P.
1400 Sixteenth Street, N.W.
Washington, D.C. 20036
Attn: Jeffry L. Hardin
Fax No.: (202) 265-5706
and if to Buyer, to:
Mississippi One Cellular Telephone Company
CM Tower, Suite 1495
One Lakeshore Drive
Lake Charles, Louisiana 70629
Attn: Robert Piper
Fax No.: (318) 439-0769
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with a copy to:
Lukas, McGowan, Nace & Gutierrez
1111 Nineteenth Street, N.W.
Suite 1200
Washington, D.C. 20036
Attn: Thomas Gutierrez
Fax No.: (202) 842-4485
or such other address as specified by the parties in writing from time to time.
11.2 Termination of the Agreement.
(a) Notwithstanding anything in this Agreement to the
contrary, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time on or prior to the Closing
Date:
(i) By mutual agreement of Seller and Buyer in writing;
(ii) By either party, if the other party is in material
breach or default of its respective covenants, agreements, or
other obligations herein, or if any of its representations herein
is not true and accurate in all material respects when made or
when otherwise required by this Agreement to be true and
accurate, so long as the terminating party is not in material
breach or default of its respective covenants, agreements or
other obligations hereunder; provided, however, that (A) the
breaching party is given prompt written notice providing a
reasonably detailed explanation of the facts and circumstances
surrounding such breach, and (B) subject to Section 3.21, the
breaching party fails to cure such breach to the reasonable
satisfaction of the non-breaching party within thirty (30) days
of receiving such notice of its breach or, if such breach cannot
be cured, to agree to fairly compensate the non-breaching party
for such breach to the reasonable satisfaction of the non-
breaching party.
(iii) By Seller, upon fifteen (15) days written notice to
Buyer, in the event that a judgment, decree, injunction, rule or
order of any court of competent jurisdiction or other legal
authority has been entered against Seller purporting to enjoin or
otherwise prevent the Closing of the transactions contemplated by
this Agreement, and, notwithstanding the reasonable best efforts
of Seller to dissolve such judgment, decree, injunction, rule or
order by appeal, such judgment, decree, injunction, rule or order
remains in effect; or
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(iv) By Buyer, upon fifteen (15) days written notice to
Seller, in the event that a judgment, decree, injunction, rule or
order of any court of competent jurisdiction or other legal
authority has been entered against Buyer purporting to enjoin or
otherwise prevent the Closing of the transactions contemplated by
this Agreement, notwithstanding the reasonable best efforts of
Buyer to dissolve such judgment, decree, injunction, rule or
order by appeal, such judgment, decree, injunction, rule or order
remains in effect.
(b) If this Agreement is terminated and the transactions
contemplated hereby are not concluded as described above, this Agreement
will become void and of no further force and effect, except for the
provisions of this Section 11.2, Section 10.2 and Article XI.
Termination of this Agreement pursuant to Section 11.2(a) (ii) shall not
limit or impair any remedies that Seller or Buyer may have with respect
to a breach or default by the other of its covenants, agreements or
obligations hereunder.
11.3 Specific Performance; Remedies Cumulative. Seller and Buyer each
acknowledges that, if it is in material breach or default of its covenants,
agreements or obligations hereunder, the other party would be irreparably
damaged by such breach or default and that, in addition to the other remedies
that may be available in law or equity, such party shall be entitled to
specific performance of this Agreement and injunctive relief. Subject only to
the express provisions of Sections 8.4 and 8.5 and the proviso set forth at the
end of Sections 8.1 and 8.2, all rights and remedies under this Agreement are
cumulative of, and not exclusive of, any rights or remedies otherwise
available, and the exercise of such rights or remedies shall not bar the
exercise of any other rights or remedies.
11.4 Bulk Transfer Law. The consummation of the transactions
contemplated by this Agreement are not subject to the provisions of any bulk
transfer law, bulk transfer tax law or any similar law of any jurisdiction.
However, if subsequent to the Closing and during the term of the Escrow
Agreement it is determined that payments are due under a bulk transfer law or
tax, such payment shall be deducted from the closing escrow amount provided for
in Section 2.5.
11.5 Press Release. Neither Buyer nor Seller shall make any public
announcement nor issue any press release regarding the transactions set forth
herein without the prior approval of the other, which approval shall not be
withheld unreasonably.
11.6 Amendments. This Agreement may be amended or modified only by a
written instrument executed by the parties hereto.
11.7 Expenses. Except as otherwise expressly provided herein, each
party to this Agreement shall pay its own expenses
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(including, without limitation, the fees and expenses of its agents,
representatives, counsel and accountants) incidental to the negotiation,
preparation, execution and performance of this Agreement.
11.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.9 Parties in Interest: No Assignment.
(a) This Agreement shall inure to the benefit of and be
binding upon Seller and Buyer and their respective successors and
assigns. Nothing in this Agreement, express or implied, is intended to
confer upon any other Person any rights or remedies under or by reason
of this Agreement. Notwithstanding the foregoing, the rights and
responsibilities of Seller and Buyer under this Agreement may not be
assigned (by operation of law or otherwise), except as otherwise
provided by paragraph (b) below, without the prior written consent of
the other party hereto.
(b) Buyer may assign its rights and obligations under this
Agreement to an affiliate without the prior written consent of Seller if
Buyer makes application with the FCC for pro forma assignment of the
Licenses to such affiliate and the assignment is approved by the FCC
prior to the Closing Date; provided that no such assignment shall in any
way operate to relieve the assigning party of its obligations under this
Agreement, and provided further that the assigning party agrees to cause
such affiliate to specifically assume and perform the Assumed
Liabilities, and shall be jointly and severally liable for any
non-performance thereof.
(c) Upon the sale, assignment or transfer by Buyer of the
Assets to a non-affiliated party other than in the ordinary course of
business, Seller's representations and warranties and indemnification
obligation for breach thereof shall terminate.
11.10 Applicable Law. The rights and obligations of the parties hereto
shall be construed under and governed by the laws of the State of Delaware,
without giving effect to the principles of conflicts of law of such state. In
accordance with Title 6, Section 2708 of the Delaware Code Annotated, each
party hereby submits to the jurisdiction of the courts of Delaware and agrees
to be served with legal process from any of such courts. Each party hereby
irrevocably waives, to the fullest extent permitted by law, any objection that
it may have, whether now or in the future, to the laying of venue in, or to the
jurisdiction of, any of such courts for the purpose of any such suit, action,
proceeding or judgment and further waives any claim that such
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suit, action, proceeding or judgment has been brought in an inconvenient forum.
11.11 Waiver. Except as otherwise provided in the provisos set forth in
Sections 8.1 and 8.2, no provision in this Agreement shall be deemed waived by
course of conduct, unless such waiver is in writing signed by the parties and
stating specifically that it was intended to modify this Agreement. Any waiver
by either party hereto of any term, provision, or condition of this Agreement
shall be effective only if and to the extent specified in writing by such
party, and no single waiver of any right or obligation hereunder shall be
construed to constitute a voluntary waiver unless expressly provided as such.
11.12 Interpretation. Each party has reviewed and been represented by
counsel in the negotiation of this Agreement, and no question of construction
shall be resolved by any rule of interpretation providing for interpretation
against the drafting party. Section headings contained herein are descriptive
only and shall have no legal effect.
11.13 Entire Agreement. This Agreement and the exhibits and schedules
attached hereto constitute the entire agreement between the parties governing
the matters addressed herein. No prior agreement or representation, whether
oral or written, shall have any force or effect thereon.
[This space intentionally left blank].
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
WEST ALABAMA CELLULAR TELEPHONE COMPANY,
INC.
By:
-----------------------------------
Name: Tina Chang
Title: President
MISSISSIPPI ONE CELLULAR TELEPHONE COMPANY
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
[Signature Page to
Asset Purchase Agreement for Alabama #3 RSA]
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULES:
- ----------
Schedule 2.2 Other Excluded Assets
Schedule 2.5 Buyer Credits
Schedule 3.1 Shareholders of Seller
Schedule 3.3 Conflicts
Schedule 3.6 Absence of Adverse Changes
Schedule 3.7 Liens and Title Exceptions
Schedule 3.8(a) Operating Assets to be Acquired "As-Is"
Schedule 3.8(b) Operating Assets in Good Condition
Schedule 3.9 Real Property
Schedule 3.10 Licenses
Schedule 3.11 Contracts; Third Party Consents
Schedule 3.12 Litigation
Schedule 3.13 System Coverage; Cell Sites
Schedule 3.15 Insurance
Schedule 3.17 Tax Matters
Schedule 3.18 Employee Information
Schedule 3.20 Compliance with Laws
Schedule 3.23 Intellectual Property
Schedule 3.25 Articles of Incorporation and Bylaws of Seller
Schedule 5.5(c) Outstanding Liabilities
Schedule 5.5(g) Permitted Changes in Customer Policies
Schedule 6.2(g) Permitted Barter Customers
EXHIBITS:
- ---------
Exhibit 2.5 Closing Escrow Agreement
Exhibit 5.11 Marketing Services Agreement
Exhibit 6.2(g) Opinion of Seller's Counsel
Exhibit 7.2(a) Bill of Sale and Assignment and Assumption Agreement
Exhibit 7.2(k) Noncompete and Confidentiality Agreement
Exhibit 7.2(l) Release and Waiver from Texas 16
<PAGE> 38
WEST ALABAMA CELLULAR TELEPHONE COMPANY
[MAP]
<PAGE> 39
PHASE 1 UNSERVED AREA FILING
<PAGE> 40
Approved by OMS FOR
3060-0438 USE 309-A
Expires 10/31/94 Only
------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
Transmittal Sheet for Cellular Applications for Unserved Areas
(Read Instructions on Back Before Completing: Also See Notice for Information
Regarding Public Burden Estimate)
- --------------------------------------------------------------------------------
1(a) Legal Name of Applicant (If person list last name first. Name must be
same as it appears on FCC Form 49_.
WEST ALABAMA CELLULAR TELEPHONE COMPANY
- --------------------------------------------------------------------------------
(b) Mailing Street Address or P.O. Box Number Line 1 - Maximum 35
characters. Continue on Line 2 below if required.
2114 Hillcrest Road
- --------------------------------------------------------------------------------
(c) Mailing Street Address or P.O. Box Number (continued) Line 2
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(d) City (e) State (f) Zip Code (g) Call Sign (if applicable) (h) (Area Code) Telephone No.
SAN PABLO CA 94806 KNKN716 (510) 235-0632
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
2. Fee Data. Refer to the Common Carrier Services Fee Filing Guide for fee
information.
<TABLE>
<Caption
(A) (B) (C)
<S> <C> <C> <C> <C>
- --------------- -------------- ---------------------- ------------------
FEE TYPE CODE FEE MULTIPLE FEE DUE FOR FEE TYPE FOR FCC USE ONLY
CODE IN COLUMN (A) REMIT ------------------
- --------------- -------------- ---------------------- THIS
c m c 1 $265.00 <<AMOUNT
- --------------- -------------- ---------------------- ------------------
</TABLE>
- --------------------------------------------------------------------------------
3. Markets In Which Calls for Proposed Unserved Areas Are Located (Only One
System Per Application)
- --------------------------------------------------------------------------------
(a) Market No. and Block (c) Market Name
- --------------------------------------------------------------------------------
(1) 309 A ALABAMA 03 - LAMAR
- --------------------------------------------------------------------------------
(2)
- --------------------------------------------------------------------------------
(3)
- --------------------------------------------------------------------------------
(4)
- --------------------------------------------------------------------------------
4. Certification
I hereby certify that this application for a cellular authorization is
complete in every respect and contains all of the information required by FCC
Form 401 and the Commission's cellular application rules. I acknowledge that,
if upon Commission Inspection, this certification is shown to be incorrect,
this application shall be dismissed without further consideration.
I also certify that the applicant is the real party in interest in this
application and there are no agreements or understandings, other than those
specified in this application, which provide that someone other than the
applicant shall have an interest or direct interest. It is also certified
that the applicant intends to construct and operate the station as proposed
and that there are no agreements or understandings that are inconsistent with
that intent.
I declare, under penalties of perjury, that I am the authorized representative
of the above-named applicant in the above entitled matter, that I have read
the foregoing certificates, and the matter and things therein signed are true
and correct.
- --------------------------------------------------------------------------------
Date Signed Typed/Printed Name Signature
07/24/95 TINA CHANG /S/ TINA CHANG
- --------------------------------------------------------------------------------
Typed/Printed Title
PRESIDENT
- --------------------------------------------------------------------------------
5. Contact Representative. Indicate the name, mailing address, and telephone
number of person to contact, if other than applicant.
- --------------------------------------------------------------------------------
Name (Last name, first)
BARNETT, CLIFFE
- --------------------------------------------------------------------------------
Firm or Company Name, if any
THE RICHARD L. VEGA GROUP
- --------------------------------------------------------------------------------
Mailing Street Address or P.O. Box, City, State and ZIP Code
235 HUNT CLUB BLVD., LONGWOOD, FL 32779
(Area Code) Telephone Number
(407) 682-7104
- --------------------------------------------------------------------------------
FCC 464
January 199?
<PAGE> 41
FCC ? ? FCC Use Only
? ? (File Number)
Main Form FEDERAL COMMUNICATIONS COMMISSION ? ?
? ?
? ?
=============
Application for Mobile Radio Service Authorization
or Rural Radiotelephone Service Authorization
- ---------------------------------------------------- =============
FILING FEE
<TABLE>
===========================================================================================================================
<S> <C> <C> <C> <C>
(a) Fee Type (b) Fee Multiple (c) Fee Data for Fee Type Code ? (?) (d) Total Amount Due FEE Use Only
Code
- ---------------------------------------------------------------------------------------------------------------------------
CMC $265.00 $265.00
===========================================================================================================================
APPLICANT
- ---------------------------------------------------------------------------------------------------------------------------
1. Legal Name of applicant 2. Voice Telephone Number
WEST ALABAMA CELLULAR TELEPHONE COMPANY (510) 235-0632
- ---------------------------------------------------------------------------------------------------------------------------
3. Assumed Name Used for Doing Business (if any) 4. Fax Telephone Number
(510) 236-7183
- ---------------------------------------------------------------------------------------------------------------------------
5. Mailing Street Address or P.O. Box 2114 HILLCREST ROAD
Attention: Arnold Leong
- ---------------------------------------------------------------------------------------------------------------------------
6. City 7. State 8. Zip Code
San Pablo CA 94806
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
9. Name of Contact Representative (if other than applicant) 10. Voice Telephone Number
CLIFFE BARNETT (407) 682-7104
- ---------------------------------------------------------------------------------------------------------------------------
11. Firm or Company Name 12. Fax Telephone Number
RICHARD L. VEGA GROUP (407) 682-7144
- ---------------------------------------------------------------------------------------------------------------------------
13. Mailing Street Address or P.O. Box
235 HUNT CLUB BOULEVARD, SUITE 101
- ---------------------------------------------------------------------------------------------------------------------------
14. City 15. State 16. Zip Code
LONGWOOD FL 32779
- ---------------------------------------------------------------------------------------------------------------------------
CLASSIFICATION OF FILING
- ---------------------------------------------------------------------------------------------------------------------------
17. This filing is a (??) (N) New Application Amendment to a pending application
- ---------------------------------------------------------------------------------------------------------------------------
18. Does the applicant believe that this filing should be described as ??MOOR under 47 U.S.C. Sec 308? (N)
Yes No Does not apply
- ---------------------------------------------------------------------------------------------------------------------------
19. If not ?? under 47 U.S.C. Sec. 308, classification for purposes of competitive bidding (I) ? ? ?
- ---------------------------------------------------------------------------------------------------------------------------
20. If this filing is in reference to an existing station: 21. If this filing is an amendment to a pending application:
Call sign of File number of
existing station: KNKN716 Pending application Date Filed:
- ---------------------------------------------------------------------------------------------------------------------------
NATURE OF SERVICE
- ---------------------------------------------------------------------------------------------------------------------------
22. This filing is for authorization to provide or use the ?? ?? of radio services:
(C) Commercial mobile Private mobile Both Commercial and Private mobile ?
- ---------------------------------------------------------------------------------------------------------------------------
23. Users are or will be: (P) Public ? ? 24. Status (P) Profit Not for profit
- ---------------------------------------------------------------------------------------------------------------------------
25. Interconnected services? (Y) Yes No 26. Radio Service code: (CL) 27. Type of corporation code: (TT)
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
FCC 600 - ?
January
<PAGE> 42
ENVIRONMENTAL POLICY
- --------------------------------------------------------------------------------
28. Would a Commission grant of any proposal in this application
or amendment have a significant environmental effect as
defined by 47 CFR 1.13077 (N) Yes No
* If "yes", attach environmental ___as reported by 47 CFR - -
1.13077 and 47 CFR 1.1311.
- --------------------------------------------------------------------------------
ALIEN OWNERSHIP
- --------------------------------------------------------------------------------
29. Is the applicant a foreign government or the representative
of any foreign government? (N) Yes No
- -
- --------------------------------------------------------------------------------
30. Is the applicant an alien or the representative of an alien? (N) Yes No
- -
- --------------------------------------------------------------------------------
31. Is the applicant a corporation organized under the laws of
any foreign government? (N) Yes No
- -
- --------------------------------------------------------------------------------
32. Is the applicant a corporation of which any officer or
director is an alien or of which more than one-fifth of the
capital stock is owned of record or voted by aliens or their
representatives or by a foreign government or representative
thereof or by any corporation organized under the laws of a
foreign country? (N) Yes No
- -
- --------------------------------------------------------------------------------
33. Is the applicant a corporation directly or indirectly
controlled by any other corporation of which any officer or
more than one-fourth of the directors are aliens, or of which
more than one-fourth of the capital stock is owned of record
or vested by aliens, their representatives, or by a foreign
government or representative thereof, or by any corporation
organized under the laws of a foreign country? (N) Yes No
* If "yes", attach ____ and ____ of other or foreign - -
ownership or ____.
- --------------------------------------------------------------------------------
BASIC QUALIFICATIONS
- --------------------------------------------------------------------------------
34. Has the applicant or any party to this application or
amendment had any FCC station authorization, license or
construction permit revoked or had any application for an
___, modification or renewal of FCC station authorization,
license, construction permit denied by the Commission? (N) Yes No
* If "yes", attach exhibit ____ - -
- --------------------------------------------------------------------------------
35. Has the applicant, or any party to this application or
amendment, or any party directly or indirectly controlling
the applicant ever been convicted of a felony by any state or
federal court? (N) Yes No
- -
- --------------------------------------------------------------------------------
36. Has any court finally adjudged the applicant, or any person
directly or indirectly controlling the applicant, guilty of
unlawfully monopolizing or attempting unlawfully to
monopolize ____ communication, directly or indirectly,
through control of manufacture or sale of ____ or any other
means or unfair methods of competition? (N) Yes No
- -
- --------------------------------------------------------------------------------
37. Is the applicant, or any person directly or indirectly
controlling the applicant, currently a party in any pending
matter referred to in the preceding two items? (N) Yes No
- -
- --------------------------------------------------------------------------------
38. Does the undersigned certify (by responding "Y" to this
question), that neither the applicant nor any other party to
the application is subject to a denial of Federal benefits
that includes FCC benefits pursuant to Section 6301 of the
Anti-Drug Abuse Act of 1986, 21 U.S.C. Section 862, because
of a conviction for possession or distribution of a
controlled substance? (Y) Yes No
*See 47 CFR 1.3__ for the meaning of "party to the - -
application" for these purposes.
- --------------------------------------------------------------------------------
CERTIFICATION
- --------------------------------------------------------------------------------
The APPLICANT waives any claim to the use of any particular ___ of the
electromagnetic spectrum as ___ the regulatory power of the United States
because of the previous use of the same, whether by license or otherwise,
and requests an authorization to ___with this application. The applicant
certifies that grant of this application would not cause the applicant to
___violation of the spectrum aggregation limit in 47 CFR Part 20. All
statements made ____ for the applicant, hereby certifies that all statements
made in this application and in all attached exhibits are true, complete and
correct to the best of his or her knowledge and belief, and are made in good
faith.
- --------------------------------------------------------------------------------
38. Applicant is a (an) (C) Individual Unincorporated Association
- -
Partnership Corporation
- -
Governmental Entity
-
- --------------------------------------------------------------------------------
40. Typed Name of Person Signing 41. Title
TINA CHANG PRESIDENT
- --------------------------------------------------------------------------------
42. Signature 43. Date
/s/ TINA CHANG 07/24/95
- --------------------------------------------------------------------------------
WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE PUNISHABLE BY FINE AND/OR
IMPRISONMENT (U.S. Code, Title 18, Section 1001), AND/OR REVOCATION OF ANY
STATION LICENSE OR CONSTRUCTION PERMIT (U.S. Code, Title 47, Section 312(a)(1)),
AND/OR FORFEITURE (U.S. Code, Title 47, Section 683).
- --------------------------------------------------------------------------------
<PAGE> 43
[MAP]
<PAGE> 44
ENGINEERING AND COVERAGE STATEMENT
FOR AL03 RSA #309A
PHASE I APPLICATION
Herein is a proposed modification of an existing cell site for a Phase I
application for the Alabama 03 non-wireline cellular market. The proposed
modification consists of an additional antenna at an existing cell site near
Vernon, Alabama. This additional antenna creates a SAB that extends into area
that was previously unserved within the AL03A market. The remainder of the
cell site SAB is within previously authorized AL03A CGSA. This Phase I
application is made by West Alabama Cellular Telephone Co., the existing
non-wireline operator in the Alabama 03 market, therefore, in accordance with
22.951 of the Rules, the minimum coverage requirement of 50 square miles is
waived.
The SAB of the cell site was derived from the formula contained in 47 CFR
22.911(a)(1) of the Rules. A 1:500,000 scale full sized map is included as
Exhibit I with this notification along with a 8.5" x 11" reduced copy of this
map is included as Exhibit II of this notification. A contour calculation sheet
are included as page 2 of this Exhibit. Page 3 of this Exhibit is the
antenna pattern for the cell site. Included as Page 4 of this Exhibit is a
tower profile. In accordance with 22.953(b) of the Rules, because West Alabama
Cellular Telephone Company is an existing operator, Exhibits IV through X are
excluded from this filing.
The frequencies for this cell site has been previously coordinated with those
operators within 75 miles of the cell site in accordance with the Commission's
Rules.
<PAGE> 45
CELLULAR TRANSMIT & CONTOUR ANALYSIS PROGRAM
CLIENT NAME: WEST ALABAMA CELLULAR
MSA/RSA NAME: AL-03
CELL NUMBER: CELL 9 REF. NO.: AL03C9.151
CELL LOCATION: VERNON File No.: AL3VERNON
SITE ELEVATION (ft. AMSL): 405 LATITUDE: 33-45-37
SITE ELEVATION (in. AMSL): 123.4 LONGITUDE: 66-2-46
TRANSMIT ANALYSIS
Watts ???
PA OUTPUT: 26.4 -15.786
LOSSES
ATTENUATOR 0.000
COMBINER 14.8 2.500
FILTER 0.800
COUPLER 0.100
LOWER JUMPER 0.530 10' F8J4-60B
TRANSMITTER COAX 2.232 360 Degrees HJ7-60A
UPPER JUMPER 0.530 10' F8J4-60B
GAINS
ANTENNA GAIN 16.00
-------------------
TRANSMIT ERP 225.0 -6.476
ANTENNA DATA
ANTENNA TYPE: KATHREIN 740-215
BEAM WIDTH: 46
MAIN LOBE: 355
AGL AMSL
ANTENNA C/R(ft): 350 755
ANTENNA T/P(ft): 353.3 758.3
ANTENNA C/R(m): 106.7 230.1
ANTENNA T/P(m): 107.7 231.1
PREDICTED COVERAGE
<TABLE>
<Capion>
2-10 MI 3-16 SAB SAB
AZIMUTH AVG ELEV AVG ELEV HAAT HAAT TX ERP TX ERP DIST. DIST.
(Degrees) (ft) (m) (ft) (m) (W) (??) (ml) (?)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 461 140.5 294 89.6 219.6 -6.58 18.1 29.2
45 513 156.4 242 73.8 10.0 -19.56 10.0 16.2
90 470 143.3 265 86.9 2.8 -25.58 8.5 13.7
135 404 123.1 351 107.0 0.5 -33.47 6.7 10.8
180 362 116.4 373 113.7 0.5 -33.47 6.9 11.0
225 341 103.9 414 126.2 0.7 -31.78 7.6 12.2
270 333 101.5 422 126.6 2.7 -25.08 9.7 15.6
318 409 124.7 346 105.5 17.5 -17.58 12.5 20.1
--------------------------------------------
AVERAGES 414 124.2 341 103.9
</TABLE>
<PAGE> 46
[GRAPH]
- --------------------------------------------------------------------------------
MAJOR LOBE ORIENTATION KATHREIN
ANTENNA MODEL 740 215
355 degrees TRUE
- --------------------------------------------------------------------------------
MAXIMUM ANTENNA GAIN 16 dB
<PAGE> 47
[DIAGRAM]
GROUND ELEVATION: 123.4 m AMSL
-------
<PAGE> 48
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
FEDERAL COMMUNICATIONS COMMISSION
FCC Administrative Information
600 Personal Communications Service
Cellular Radiotelephone Service
Paging and Radiotelephone Service
Schedule A Rural Radiotelephone Service FCC USE ONLY
Offshore Radiotelephone Service
Air-ground Radiotelephone Service
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PURPOSE OF FILING
- -------------------------------------------------------------------------------
MAJOR
-----
A request an initial authorization for a new
system or station; additional channels or
spectrum (all)
B request authorization or amend a pending
application to change a channel or channel
block (all)
C request a partial assignment of a radio
station authorization (all)
D request authorization for facilities for
which environmental assessment is required
(all)
E request authorization for facilities for
A1. The purpose of this which international coordination is
filing is to: required (all)
F request a developmental authorization (CD,
CL, CR)
G request regular authorization for
( A ) facilities operating under developmental
authority (CD, CL, CR)
H amend a pending application to
Enter one or more letters substantially change the technical proposal
that correctly describe the (CD, CR)
purpose of this filing. I request authorization for a cellular
facility that would produce a de minimis
SAB extension (CL)
J amend a pending application to modify a
CGSA to include area not previously
proposed (CL)
K request that a CGSA boundary be determined
using an alternative method (CL)
L request authorization for a new or expanded
service area on a requested channel (CD)
M request authorization for one or more new
or relocated fixed stations (CD)
N request authorization to increase the ERP
and/or antenna height AAT of a fixed station
(CD)
O request authority to provide commercial
paging service using a broadcast station
subcarrier (CD)
P request authorization for a Commercial
Aviation ground station location to be
established (CG)
Q request authorization for a new or
relocated General Aviation ground station
(CG)
R request authorization for a new/relocated
rural/offshore central office-inter-office
station (CR, CO)
MINOR
-----
S request authorization for one or more minor
change(s) to an existing system or station
(all)
T effect a minor amendment of a pending
application (all)
U request an extension of time to complete
construction of one or more facilities (all)
V request authorization for a new or
relocated rural or offshore subscriber
station (CR, CO)
W request to consolidate separately authorized
facilities (all)
- -------------------------------------------------------------------------------
MARKET/CHANNEL BLOCK
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
A2. Market Designator A3. Channel Block A4. Sub-market Designator A5. Market Name
309 A 1 ALABAMA 03 - LAMAR
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
CONTROL POINTS
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
A6. A7. A8. A9.
Control Point Location Telephone Number Action Requested
Number Street Address, City or Town, State Add Delete
- -
- ------------------------------------------------------------------------------------------------------------------------------
( )
- ------------------------------------------------------------------------------------------------------------------------------
( )
- ------------------------------------------------------------------------------------------------------------------------------
( )
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 49
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FCC FEDERAL COMMUNICATIONS COMMISSION
600
Schedule C Technical Data
(Block Channel Assignment)
Cellular Radiotelephone Service FCC Use Only
Personal Communications Service (???)
Air-ground Radiotelephone Service (Commercial ??)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
LOCATION
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
C1. Action Requested (M) Add Delete Modify C2. FCC Location Number (Key to Schedule P) 009
- ------------------------------------------------------------------------------------------------------------------------------------
C3. Street Address or other Description of Location
3.6 MILES @ 87 DEGREES FROM VERNON
- ------------------------------------------------------------------------------------------------------------------------------------
C4. City
VERNON
- ------------------------------------------------------------------------------------------------------------------------------------
C5. County C6. State
LAMAR AL
- ------------------------------------------------------------------------------------------------------------------------------------
C7. NAD 27 North Latitude C8. NAD 27 West Longitude FCC Use Only
(DD-MM-SS) (DDD-MM-SS)
33 degrees 45 feet 37 inches 088 degrees 02 feet 48 inches
- --------------------------------------------------------------------------------------------
C9. NAD 83 North Latitude C10. NAD 83 West Longitude
(DO-MM-SS) (DDD-MM-SS)
degrees feet inches degrees feet inches
----- --- --- ---- --- ----
- ------------------------------------------------------------------------------------------------------------------------------------
???? changing antenna location, provide coordinates, FCC location number and datum for old location:
- ------------------------------------------------------------------------------------------------------------------------------------
C11. North Latitude C12. West Longitude C13. FCC Location Number
(DD-MM-SS) (DDD-MM-SS)
-------------------------------------------
degrees feet inches degrees feet inches C14. Datum (HAO 27 or NAD 83)
----- --- --- ---- --- ----
- ------------------------------------------------------------------------------------------------------------------------------------
TECHNICAL PARAMETERS
- ------------------------------------------------------------------------------------------------------------------------------------
C15. Height of Antenna Center of Radiation AAT (metered) C16. Height to Top of Antenna AGL C17. Maximum ERP
106.7 107.7 225.0
- ------------------------------------------------------------------------------------------------------------------------------------
RADIAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Azimuth C18. Antenna Height C19. Transmitting ERP C20. Distance to SAB C21. Distance to CGSA
(degrees from (AAT (metered) (??) (??) (??)
true North)
- ------------------------------------------------------------------------------------------------------------------------------------
0 89.6 219.8 29.2 29.2
- ------------------------------------------------------------------------------------------------------------------------------------
45 degrees 73.8 10.0 16.2 25.1
- ------------------------------------------------------------------------------------------------------------------------------------
90 degrees 86.9 2.8 13.7 44.7
- ------------------------------------------------------------------------------------------------------------------------------------
135 degrees 107.0 0.5 10.8 45.2
- ------------------------------------------------------------------------------------------------------------------------------------
180 degrees 113.7 0.5 11.0 213.8
- ------------------------------------------------------------------------------------------------------------------------------------
225 degrees 126.6 0.7 12.2 42.1
- ------------------------------------------------------------------------------------------------------------------------------------
270 degrees 128.6 2.7 15.6 15.6
- ------------------------------------------------------------------------------------------------------------------------------------
315 degrees 105.5 17.5 20.1 20.1
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 50
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FCC FEDERAL COMMUNICATIONS COMMISSION
600 SCHEDULE F
Antenna Structure Data
(ALL SERVICES)
-----------------------
FCC Use Only
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Licensee Name Radio Service Call Sign or Station Location (City, State)
WEST ALABAMA CELLULAR TELEPHONE CO. CL KNKN716
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
STATUS AND IDENTIFYING INFORMATION
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
F1 F2 F3 F4 F5
LOC Location New Call Sign of Radio Tower Owner's Name and Telephone Number
Number or Existing Station Service
Existing
- ------------------------------------------------------------------------------------------------------------------------------------
A 009 E KNKN716 CL WEST ALABAMA CELLULAR TELEPHONE (510) 235-0632
- ------------------------------------------------------------------------------------------------------------------------------------
B
- ------------------------------------------------------------------------------------------------------------------------------------
C
- ------------------------------------------------------------------------------------------------------------------------------------
D
- ------------------------------------------------------------------------------------------------------------------------------------
E
- ------------------------------------------------------------------------------------------------------------------------------------
F
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
STRUCTURE TYPE AND HEIGHT
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
F6. F8. F9 F10.
LOC Figure F7. Height of Support Overall Height of FCC
Number Structure Type Structure (b) Structure (d) Tower Number
(see reverse) (metered) (metered)
- ------------------------------------------------------------------------------------------------------------------------------------
A 003 TOWER SITE ELEV.: 123.4m 147.8 149.8
- ------------------------------------------------------------------------------------------------------------------------------------
B
- ------------------------------------------------------------------------------------------------------------------------------------
C
- ------------------------------------------------------------------------------------------------------------------------------------
D
- ------------------------------------------------------------------------------------------------------------------------------------
E
- ------------------------------------------------------------------------------------------------------------------------------------
F
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
FAA NOTIFICATION
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LOC F11. F12.
FAA Date FAA F13. F14.
notified? Notification Filed FAA Regional Office Notified FAA Study Number
Yes No
- ------------------------------------------------------------------------------------------------------------------------------------
A N
- ------------------------------------------------------------------------------------------------------------------------------------
B
- ------------------------------------------------------------------------------------------------------------------------------------
C
- ------------------------------------------------------------------------------------------------------------------------------------
D
- ------------------------------------------------------------------------------------------------------------------------------------
E
- ------------------------------------------------------------------------------------------------------------------------------------
F
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 51
SCHEDULE 3.15
INSURANCE
[SUMMARY ATTACHED]
<PAGE> 52
ARTICLES OF INCORPORATION
OF
WEST ALABAMA CELLULAR TELEPHONE COMPANY, INC.
The undersigned, acting as incorporator of a corporation under the Code
of Alabama, adopt the following Articles of Incorporation for such corporation:
FIRST: The name of the corporation is West Alabama Cellular Telephone
Company, Inc.
SECOND: The period of its duration is perpetual.
THIRD: The purpose or purposes for which the corporation is organized
are: To engage in the cellular telephone business.
FOURTH: The aggregate number of shares which the corporation shall have
authority to issue is: Five Thousand (5,000) shares of One Dollar ($1.00) par
value common stock.
FIFTH: The address of the initial registered office of the corporation
is: 2024 Myrtlewood Drive, Montgomery, Alabama 26111, and the case of the
initial registered agent at such address is Dede Harbin.
SIXTH: The number of directors constituting the initial board of
directors of the corporation is Two (2), and the names and addresses of the
persons who are to serve as directors until the first annual meeting of
shareholders or until their successors are elected and shall qualify are:
Name Address
---- -------
John Lee 214 Overhill Road, Orinda, California 94563
Tina Chang E1 Carrito Plaza Professional Building,
Suite 115, El Carrito, California 74330
SEVENTH: The name and address of each incorporator is:
Name Address
---- -------
Dede Harbin 2094 Myrtlewood Drive, Montgomery, Alabama
24111
DATED: January 30, 1991.
/s/ DEDE HARBIN
-------------------------------
Dede Harbin, Incorporator
The State of Alabama )
) Probate Court
Montgomery County )
I, Walker Hobbin, Jr., Judge of Probate in and for the said County, in said
State, hereby certify that the wishes and foregoing pages are a full, true and
complete copy of ARTICLES OF INCORPORATION, WEST ALABAMA CELLULAR TELEPHONE
COMPANY, INC. as fully and completely as the same appears of record is this
office in Bank No. 168 of Corporation at page 152.
Given under my hand and official seal this
7th day of February, AD 1991
[ILLEGIBLE]
<PAGE> 53
Exhibit 7.2(1)
to Asset Purchase Agreement
dated as of March 4, 1996
between
West Alabama Cellular Telephone Company, Inc.
and
Mississippi One Cellular Telephone Company
RELEASE AND WAIVER OF CLAIMS
Texas 16 Cellular Telephone Company, a Texas corporation ("Texas 16"), by
and through the undersigned, its duly authorized officer, hereby releases,
relinquishes and waives any and all rights, title and interest in and to any
and all properties or assets of West Alabama Cellular Telephone Company, Inc.
("West Alabama Cellular"), except for the tangible personal property described
on Schedule A hereto. Further, Texas 16 hereby waives any and all claims and
rights of action that it may have as of the date hereof against Mississippi One
Cellular Telephone Company, as the purchaser of substantially all of West
Alabama Cellular's properties and assets.
This instrument shall be governed by and construed in accordance with
the laws of the State of Delaware, without giving effect to the principles of
conflicts of law of such state.
IN WITNESS WHEREOF, Texas 16 has caused its duly authorized
representative to execute this Release and Waiver of Claims below.
Dated: , 1996 TEXAS 16 CELLULAR TELEPHONE COMPANY
---------------
By:
-------------------------------
<PAGE> 1
EXHIBIT 10.11
CELLULAR ONE(R) LICENSE AGREEMENT
between
Cellular One Group
and
Mercury, Inc.
<PAGE> 2
CELLULAR ONE LICENSE AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION TITLE PAGE
NO. NO.
<S> <C> <C>
I. GRANT 2
II. TERM AND RENEWAL 3
III. DUTIES OF LICENSOR 4
IV. DUTIES OF LICENSEE 6
V. FEES AND REPORTING 8
VI. MARKS 9
VII. CONFIDENTIAL INFORMATION 12
VIII. ADVERTISING 14
IX. INSURANCE 17
X. TRANSFER OF INTEREST 18
XI. DEFAULT AND TERMINATION 20
XII. OBLIGATIONS UPON TERMINATION OR EXPIRATION 24
XIII. INDEPENDENT STATUS AND INDEMNIFICATION 25
XIV. APPROVALS AND WAIVERS 26
XV. NOTICES 27
XVI. ENTIRE AGREEMENT 27
XVII. SEVERABILITY AND CONSTRUCTION 28
XVIII. APPLICABLE LAW 28
XIX. ACKNOWLEDGMENTS 29
</TABLE>
-i-
Cellular One Group
License Agreement
<PAGE> 3
CELLULAR ONE(R) LICENSE AGREEMENT
THIS AGREEMENT is entered by and between Cellular One Group, a Delaware
general partnership ("Licensor"), and Mercury Inc., a corporation/partnership
organized under the laws of [ILLEGIBLE] ("Licensee").
PREAMBLE
Licensor is a general partnership (the "Partnership") of Cellular One
Marketing, Inc. ("COMI"), a subsidiary of Southwestern Bell Mobile Systems,
Inc. ("SBMS"), and Cellular One Development, Inc., a subsidiary of McCaw
Cellular Communications, Inc. ("McCaw"). Additional partners may be admitted
to the Partnership from time to time. (The Partnership partners as they may
exist from time to time are referred to as the "Partnership Partners").
SBMS previously owned and licensed the service mark "Cellular One" and
certain related trademarks, service marks and designs, which marks SBMS
assigned to the Partnership following formation of the Partnership. Licensee
already may be using one or more versions of the Cellular One mark pursuant to
a previous license agreement with SBMS, which agreement was assigned to
Licensor as of December 31, 1990.
Licensor intends to use and license these marks, the earlier/other
versions thereof, the marks designated on Exhibit A hereto and such other marks
as it may hereafter designate in writing (collectively referred to as the
"Marks") for use in connection with the business of providing public cellular
radio telecommunications service ("Cellular Telephone Service") and equipment
("Cellular Telephone Equipment"). Licensor's goal is to build nationwide
recognition of the Marks as synonymous with dependable, high quality Cellular
Telephone Service through the licensing of independent Cellular Telephone
Service providers on the Block A or non-wireline frequencies ("Providers") who
meet the qualifications established by Licensor. Licensees will operate in the
various markets ("market(s)") recognized and defined by the Federal
Communications Commission ("FCC").
Toward this end, Licensor desires to grant licenses to use the Marks to
Providers who agree to conduct their businesses in full accordance with FCC
directives, interconnection guidelines, protocols, and other technical industry
standards issued from time to time by the Telecommunications Industries
Association, the Electronics Industries Association and comparable industry
groups, as well as other standards of service, quality and customer
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satisfaction specified from time to time by Licensor (collectively referred to
as "Service Standards").
Licensee currently provides or, prior to the acceptance of this License
Agreement by Licensor, will provide Cellular Telephone Service as a Provider
pursuant to an FCC license for the market(s) described in Exhibit B (the
"Licensed Territory").
Licensee desires to receive a license from Licensor to use the Marks to
identify and promote its Cellular Telephone Service in the Licensed Territory
and is willing to provide such service in accordance with the Service
Standards, pursuant to the provisions of this License Agreement.
The parties therefore agree as follows:
I. GRANT
Licensor grants to Licensee, upon the terms and conditions of this
License Agreement, the right, license and privilege to use the Marks only in
the Licensed Territory and only to identify and promote its Cellular Telephone
Service, which shall include ancillary support services such as voice mail on
the telephone switch, extended service and warranty provisions for cellular
telephones and the like. This License Agreement does not give Licensee any
right to use the Marks in connection with Cellular Telephone Equipment or any
rights to use the trademark (as opposed to the service mark) Cellular One. As
long as this License Agreement is in effect, Licensee agrees to use the Marks
in connection with the provision of Cellular Telephone Service in the Licensed
Territory. If this License Agreement grants a license to Licensee with respect
to multiple markets, then in the event that Licensee's rights under this
License Agreement are terminated with respect to one or more of such markets in
accordance with the provisions of this License Agreement, this License
Agreement and specifically the term "Licensed Territory" shall thereafter be
deemed to apply only to the remaining market(s) as to which Licensee's rights
under this License Agreement continue. During the term of this License
Agreement or any renewal term, Licensor agrees that it will not license any
other Provider or other mobile communications service to use the Marks in the
Licensed Territory, provided Licensee is actively using the Marks to identify
itself as a Cellular One Provider in the Licensed Territory. Subject to the
foregoing grant to Licensee of the right to use the Cellular One service mark
for Cellular Telephone Service in the Licensed Territory, Licensee acknowledges
that Licensor has the right to use and license the Marks in other territories
anywhere in the world and to use and license the Marks and Cellular One
trademark
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License Agreement
<PAGE> 5
or any other trademarks or service marks within or outside of the Licensed
Territory.
II. TERM AND RENEWAL
A. Except as otherwise provided in this License Agreement,
the term of this License Agreement is five (5) years, beginning on the date on
which Licensor signs this License Agreement (the "Effective Date").
B. Licensee may, at its option, renew the license granted by
this License Agreement for three (3) additional terms of five (5) years each
provided that:
1. Licensee gives Licensor written notice of its
election to renew not less than six (6) months nor more than twelve (12) months
before the end of the expiring term;
2. Licensee continues to hold its FCC license(s) to
provide Cellular Telephone Service in the market(s) with respect to which a
renewal is being requested;
3. No later than ninety (90) days before the end of
the expiring term, Licensee executes Licensor's then-current form of license
renewal agreement, which agreement will supersede this License Agreement in all
respects, provided that such license renewal agreement shall not contain any
terms, provisions or conditions which differ materially from the terms,
provisions or conditions of this License Agreement, except terms, provisions
and conditions (i) which in the good faith judgment of Licensor are not
materially adverse to Licensee, (ii) which are appropriate, in the good faith
judgment of Licensor, to accommodate any material economic or market changes
occurring during the prior five (5) year term, (iii) which Licensor determines
in good faith are necessary to protect the Marks, or (iv) which relate to
charges and fees (including increases) which Licensor believes in good faith
are necessary to provide adequate support for the Cellular One license program
generally;
4. The most recent customer satisfaction survey with
respect to Licensee's Cellular Telephone Service (as described in Section
III.C. of this License Agreement) conducted before the end of the expiring
term indicates a rating of at least 65%, and, if such survey produces a rating
below 85% (or such increased level as may be required pursuant to the
provisions of Section IV.A. below), then Licensee shall have agreed in writing
to use its best efforts to improve its customer satisfaction rating to at least
85% (or such increased level as may be required pursuant to the provisions of
Section IV.A. below) by a certain
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<PAGE> 6
time as reasonably established by Licensor (if the time prescribed by Licensor
for such improvement extends beyond the expiring term of this License
Agreement, such timely improvement will become a condition of effective
renewal); and
5. At the end of the expiring term, Licensee has
satisfied all monetary obligations owed by Licensee to Licensor, and has timely
met such obligations throughout the term of this License Agreement, and shall
not be in default under this License Agreement.
III. DUTIES OF LICENSOR
All duties of Licensor under this License Agreement are to Licensee, and
no other party is entitled to rely on, enforce or obtain relief for breach of
any such obligation, either directly or by subrogation. Licensor shall
undertake the following duties:
A. Marks Usage Guidelines
Licensor will provide Licensee with written and graphic
guidelines for the correct reproduction, application and presentation of the
Marks, which may include Mark specimens, samples of advertisements and clip art
indicating color, proportion, and format.
B. Technical Guidelines
Licensor will provide Licensee with a Guide to Quality Operations
containing suggestions for providing customers with high quality Cellular
Telephone Service, and other materials as Licensor deems appropriate.
C. Customer Satisfaction Surveys
Licensor will, at its own expense, commission an independent
survey company ("Survey Company") to conduct a customer satisfaction survey of
Licensee's customers on a yearly basis for purposes of assessing the quality of
Licensee's Cellular Telephone Service. The methodology of the survey will be
determined by the Survey Company and Licensor. An outline of current survey
methodology, which may change from time to time, is attached as Exhibit C. The
results of all surveys of Licensee's customers will be shared with Licensee to
assist Licensee in improving its business. The first of these surveys, which
will be conducted in Licensee's first year of operation as a licensee
hereunder, is for advisory purposes only; the results of subsequent surveys
will be used to evaluate the general level of customer satisfaction and to
assist Licensor in determining
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<PAGE> 7
whether or not Licensee is meeting the Service Standards. Licensor will
instruct the Survey Company to obtain all required survey information directly
from the Licensee and not through or in conjunction with Licensor. The Survey
Company will be required to execute an appropriate confidentiality agreement
for the benefit of Licensee and the other Cellular One licensees which shall
provide that the Survey Company will not disclose any Confidential Information
of Licensee to Licensor, the Partnership Partners or affiliates, or their
employees or to any other party (except that the results of the survey for each
market and other survey information which is applicable generally to all
licensees may be disclosed to Licensor).
D. Licensee Advisory Council
On or before June 30, 1992, Licensor will establish, and will
thereafter maintain, during the term of this License Agreement, an elected
council of licensees ("Advisory Council") comprised of non-partner licensees
from a broad cross-section of markets, MSA's and RSA's, throughout the United
States to advise and consult with Licensor regarding material Cellular One
license matters such as advertising, marketing and customer service
standards and to act as a liaison organization between the Licensor and the
Cellular One licensees. The procedure for selecting Advisory Council members
and the charter of responsibility for the Advisory Council will be established
by Licensor in time to meet the June 30, 1992 anticipated effective date and
will be communicated in writing by Licensor to Licensee as soon as practicable.
Such procedures and responsibilities will be subject to change, from time to
time, as may be appropriate in the judgment of Licensor to provide the most
effective organization for performing the contemplated functions of the
Advisory Council. The charter of responsibility shall provide that all members
of the Advisory Council will be informed of applicable antitrust laws and shall
abide by any decisions of Licensor's antitrust counsel in such regard.
E. National and Regional Advertising
Licensor will establish and maintain, whenever Licensor shall
determine that to do so would be in the best interests of its licensees
generally, the Cellular One Promotional Fund, as described in Section VIII.C.
of this License Agreement. Licensor plans to administer such Fund with the
goal of enhancing the image of the Marks.
F. National/Regional Account Programs
Licensor may, in its discretion, offer a national and/or one or
more regional account programs under which, through the
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<PAGE> 8
voluntary cooperation of its licensees in various markets, client companies
with multiple market operations could enter into a single contract arrangement
for Cellular Telephone Service for their employees located in such markets.
Licensor or its designee shall administer any such national or regional
accounts program(s).
IV. DUTIES OF LICENSEE
Licensee understands and acknowledges that the high quality operation of
its Cellular Telephone Service business under the Marks is important to
Licensee, Licensor and other licensees of the Marks in order to maintain high
operating standards and to protect the reputation of, and goodwill associated
with, the Marks. Toward that end, Licensee acknowledges and accepts the
following duties:
A. Quality of Service
Licensee agrees to provide high quality Cellular Telephone
Service to its customers by complying with the Service Standards. Furthermore,
Licensee shall attain and maintain an overall customer satisfaction rating of
at least 85%, or such increased level as may be required pursuant to the
provisions of this Section IV.A. Licensor reserves the right to increase the
minimum acceptable customer satisfaction rating to a percentage greater than
85% if Licensor, in its reasonable discretion, determines that such higher
percentage is appropriate given the technical state of the Cellular Telephone
Service industry at such time; provided, however, that the Advisory Council
must approve any such increase in the minimum acceptable customer satisfaction
rating, and such increase shall not be effective until the beginning of the
next calendar year following the Advisory Council's approval. In the event
that a customer satisfaction survey conducted by Licensor pursuant to Section
III.C. of this License Agreement results in an overall customer satisfaction
rating below 85% (or below any higher percentage established by Licensor as
described above) in any market in the Licensed Territory, then Licensee will be
assigned probation status under Section XI.E. of this License Agreement and
surveys will be commissioned every six (6) months in that market until Licensee
has achieved an overall customer satisfaction rating of at least 85% (or any
higher percentage established by Licensor as described above) and the probation
status is removed, or until this License Agreement is terminated, as herein
provided, whichever shall first occur. Licensee agrees to pay the reasonable
direct costs of conducting such additional customer satisfaction survey(s).
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Cellular One
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B. Legal Compliance
Licensee agrees to comply, at its own expense, with all
applicable laws, ordinances and regulations of federal, state, county or
municipal authorities. Licensee will also obtain and maintain, at its own
expense, all governmental licenses, permits and approvals, including without
limitation, an FCC construction permit and an FCC license to provide Cellular
Telephone Service in each market in the Licensed Territory. In the event that
Licensee's FCC construction permit or FCC license to provide Cellular Telephone
Service in one or more of the market(s) in the Licensed Territory is scheduled
to expire during the term of this License Agreement, including any renewal
term, Licensee agrees to comply with all requirements for extension of said
license(s) and permit(s) and to use its best efforts to obtain the extension(s)
for the maximum possible period(s). Licensee shall furnish to Licensor,
promptly following Licensee's receipt thereof, a copy of any FCC notice
regarding an actual or threatened termination or revocation of Licensee's FCC
license or FCC construction permit for any market in the Licensed Territory.
Licensee agrees to notify Licensor in writing within five (5) days after
Licensee shall become aware of the commencement of any action, suit or
proceeding, and of the issuance of any order, writ, injunction, award or decree
of any court, agency or other governmental instrumentality, which could have a
material adverse effect on the operation or financial condition of Licensee's
Cellular Telephone Service business.
C. Business Practices
Licensee shall maintain a competent, conscientious, trained
staff. Neither Licensor nor Licensee shall engage in any trade practice or
other activity which is harmful to the goodwill or reflects unfavorably on the
Marks or on the reputation of Licensee or Licensor or Licensee's Cellular
Telephone Service business, or which constitutes deceptive or unfair
competition, consumer fraud or misrepresentation.
D. Information to Licensor
Upon Licensor's request, subject to the confidentiality
requirements described in Section III.C. above, Licensee must promptly furnish
to a Survey Company designated by Licensor a complete and accurate customer
list of its Cellular Telephone Service subscribers in a format reasonably
prescribed by the Licensor, including computerized magnetic media, together
with such reasonable information which the Survey Company shall require in
connection with the performance of its duties. Licensee hereby gives the
Survey Company permission to contact any and all of its subscribers in
conducting a customer survey to ascertain the
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<PAGE> 10
quality level of Licensee's Cellular Telephone Service and related market
research data in accordance with the methodology set forth in Exhibit C, or as
Licensor may reasonably deem appropriate. Licensee shall provide Licensor with
additional information reasonably requested by Licensor regarding matters such
as Licensee's legal status (for example, change in control, affiliated
companies, etc.), Licensee's use of the Marks, and other matters which Licensor
may reasonably determine are relevant to Licensee's performance under this
License Agreement.
V. FEES AND REPORTING
A. Application Fee
Upon execution of this License Agreement, Licensee shall pay to
Licensor a nonrefundable application fee of Five Hundred Dollars ($500.00). If
Licensee has been using one or more of the Marks in connection with its
Cellular Telephone Service business pursuant to a valid license with
SBMS/Licensor and previously paid an initial license fee of $2,250, then the
entire amount of $2,250 shall be credited to Licensee's account, to be applied
first towards the $500 application fee and the balance towards the initial
annual license fee described in Section V.B. below.
B. Annual License Fee
Licensee agrees to pay to Licensor an annual license fee equal to
two cents ($0.02) per person in the Licensed Territory based on the total
population of each of the market(s) in the Licensed Territory as determined by
the most recent population estimates produced by Donnelly Marketing Company or
another independent company selected in good faith by Licensor, with a minimum
annual license fee of three thousand dollars ($3,000.00) per market in the
Licensed Territory for the initial year of the license. The annual license fee
shall be paid on or before January 31 of each year, for that full calendar
year. The first annual license fee shall be paid upon execution of this
License Agreement for a full year; the second annual fee shall be paid on or
before the next following January 31 and the license fee equal to two cents
($0.02) per person in the Licensed Territory will be pro rated to reflect the
portion of that calendar year covered by the first payment, if any. The annual
license fee will not be refunded in whole or in part under any circumstances;
provided, however, that upon expiration of this License Agreement at the end of
the initial term or any renewal term, Licensor agrees to refund a pro rated
portion of the annual license fee reflecting that portion of that year's
calendar year remaining after the date of expiration, less any set off for any
other fees owing to Licensor. All annual license fees shall be payable in good
funds at
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<PAGE> 11
Licensor's address specified herein, or at such other address as Licensor shall
from time to time designate in writing.
C. Advertising Fees
Upon Licensor's establishment of the Cellular One Promotional
Fund described in Section VIII.C. of this License Agreement, Licensee agrees to
pay to Licensor an annual advertising fee not to exceed 5.0 cents ($0.05) per
person in the Licensed Territory, based upon the population estimates described
in Section V.B. above. The annual advertising fee shall be payable in
approximately equal, twice yearly, payments, with the first such payment being
due on February 15 and the second such payment being due on July 31 in each
year during the term of this License Agreement, including any renewal term, in
which Licensor shall determine that such advertising fees shall be payable to
establish or maintain the Promotional Fund, as contemplated by Section VIII.C.
Advertising fees shall not be refundable under any circumstances.
Notwithstanding the foregoing, if Licensee can demonstrate to the satisfaction
of Licensor that Licensee has less than three hundred thousand (300,000)
billable minutes of air time per month in any market in the Licensed Territory,
Licensee shall not be obligated to pay any advertising fee with respect to such
market until the calendar year following the year in which Licensee shall first
obtain, in any single calendar month, three hundred thousand (300,000) billable
minutes of air time in such market. For purposes of this Section V.C.,
Licensor agrees to accept the bona fide report of Licensee's independent
auditing firm as appropriate confirmation that Licensee has less than three
hundred thousand (300,000) billable minutes of air time per month in any market
in the Licensed Territory.
D. Interest on Late Payments
If any payment of the annual license fee or the payment of any
advertising fee is overdue, Licensee shall pay Licensor, in addition to the
overdue amount, interest on such overdue amount from the date it was due until
paid at the rate which is two (2) points above the prime rate published by the
Wall Street Journal on the date payment was due, or the maximum rate permitted
by applicable law, whichever is less. Entitlement to such interest shall be in
addition to any other remedies Licensor may have.
VI. MARKS
A. Licensor is the owner of all right, title and interest in
and to the Marks.
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B. With respect to Licensee's use of the Marks pursuant
to this License Agreement, Licensee acknowledges and agrees to the following:
1. Licensee shall use only the Marks designated by
Licensor and shall use them only in the manner authorized and permitted by
Licensor, and only in accordance with the written and graphic guidelines
provided for the correct reproduction, application, and presentation of the
Marks. If Licensee is currently using earlier or modified versions of the
Marks pursuant to a valid license agreement with Licensor, then the following
additional provisions shall be applicable:
(i) all advertising and promotional materials
utilized by Licensee for the first time on or after July 1, 1992 shall use only
the Marks designated by Licensor;
(ii) by July 1, 1992, Licensee shall cease all
use of tag lines, logos and bugs in connection with the Marks in all outdoor or
public media (including, without limitation, vehicles, building signs,
billboards and shopping mall displays), all print media (including, without
limitation, newspaper advertisements, magazine advertisements and listings in
yellow pages and other telephone directories), and all broadcast media
(including, without limitation, radio and television advertising); provided,
however, that Licensee may continue to use previously approved tag lines, logos
and bugs in connection with the Marks on business cards, stationery, customer
contracts and invoices used for customer purposes (and other purposes expressly
authorized by Licensor from time to time in the written graphic guidelines
referred to in Section VI.B.1. above) and may permit any authorized agent or
similar dealer designations which may be approved from time to time by
Licensor; and
(iii) by January 31, 1994, Licensee shall cease
all use of earlier or modified versions of the Marks, and shall use only the
Marks designated for use by Licensor, except for the limited use permitted by
Section VI.B.l.(ii) above.
2. Licensee shall use the Marks only in
connection with providing Cellular Telephone Service in the Licensed Territory.
3. Licensee shall identify the Licensor as the
registered owner of the Marks in conjunction with the operation of Licensee's
Cellular Telephone Service business, including but not limited to the
identification of Licensor as such on Licensee's invoices, order forms,
receipts and contracts.
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4. Except as provided in Section X.C. below, Licensee
shall have no right to sublicense the Marks to any other person or entity;
except that Licensee may permit authorized dealers or agents of Licensee who
market the services provided by Licensee in the conduct of its Cellular
Telephone Service business to have limited use of the Marks. Such use by a
dealer or agent shall be consistent with Licensee's rights and responsibilities
hereunder with respect to the use of the Marks and, in no event, shall any such
permitted use exceed or extend beyond Licensee's rights hereunder to use the
Marks. Licensee agrees to monitor and be responsible for the use of the Marks
by its agents and dealers and to provide or cause to be provided to Licensor,
from time to time, such reasonable information concerning the use of the Marks
by such dealers and agents to permit Licensor to ascertain Licensee's
compliance hereunder.
5. Licensee's right to use the Marks is limited to the
uses authorized under this License Agreement.
6. Licensee shall not use the Marks as part of its
corporate or other legal name. Licensee shall file and maintain trade name or
fictitious name registrations in the appropriate jurisdictions within the
Licensed Territory, and shall execute any documents deemed necessary or
desirable by Licensor or its counsel to obtain protection for or registration
of Licensor's ownership of the Marks or to maintain or defend Licensor's title
thereto or their continued validity and enforceability.
7. Licensee shall promptly notify Licensor of any
suspected infringement of, or challenge to the validity, registration, or
Licensor's ownership of the Marks, which occurs in the Licensed Territory, or
elsewhere, should the Licensee become aware. Licensor agrees, at its sole cost
and expense, to institute or otherwise defend proceedings as may be appropriate
to protect the Marks, including, to the extent necessary, defense of such
proceedings following the termination of this License Agreement. In connection
with any such proceedings, Licensee agrees to execute any and all documents and
to do whatever reasonable acts and things as may, in the opinion of counsel for
Licensor, be necessary or advisable to assist Licensor in carrying out the
prosecution or defense, and Licensor agrees to reimburse Licensee for all
direct costs incurred by Licensee in doing these acts and things, except that
Licensee shall bear the salary costs of its employees. Notwithstanding the
foregoing, and whether or not Licensor undertakes the prosecution or defense of
a legal proceeding relating to one or more of the Marks, Licensor's liability
for damages to Licensee for any loss of the use of one or more of the Marks
(including any loss resulting from Licensor's loss of title or ownership of the
Marks or the rights thereto)
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shall be limited to the amount of the application fee plus the annual license
fee paid by Licensee under this License Agreement for the year during which
such liability is determined in the Licensed Territory.
8. The Marks are valid and serve to identify the
Cellular Telephone Service provided by those who are authorized to operate
under the Marks. Licensee shall not directly or indirectly contest the
validity, registration or Licensor's ownership of the Marks.
9. Licensee's use of the Marks pursuant to this
License Agreement does not give Licensee any ownership interest or other
interest in or to the Marks, except the license granted in this License
Agreement. Any and all goodwill arising from Licensee's use of the Marks shall
inure solely and exclusively to the benefit of Licensor, and upon expiration or
termination of this License Agreement and the license granted by it, no
monetary amount shall be assigned as attributable to any goodwill associated
with Licensee's use of the Marks.
10. Licensor has and retains the following rights,
among others:
(a) To use the Marks itself, in connection with
regional and national advertising, and, subject to the provisions of Section I
hereof, with selling products and services both within and outside the Licensed
Territory;
(b) To grant licenses for use of the Marks in
addition to those licenses already granted to existing licensees of the Marks;
and
(c) To use the Marks in any manner reserved for
Licensor pursuant to Section I.
11. In the event that any of the Marks, including any
trademarks, service marks and design logos adopted after execution of this
License Agreement which become Marks, can no longer be used, Licensor reserves
the right to provide a substitute mark or design.
VII. CONFIDENTIAL INFORMATION
A. Definition
Any and all information, knowledge, know-how, and techniques
which Licensor or Licensee designates as confidential
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shall be deemed Confidential Information for purposes of this License
Agreement, except:
1. Information which either party can demonstrate was
known to it prior to disclosure thereof by the other party; or
2. Information which, at or after the time of
disclosure by one party to the other, had become or later becomes a part of the
public domain, through publication or communication by others through no fault
of the party receiving the information.
B. Prohibitions
Licensor and Licensee each agrees that it will use its best
efforts, during the term of this License Agreement and for one year following
expiration or termination of this License Agreement, to prevent the
communication or divulgence, to any other person, partnership, association,
corporation or business enterprise of any Confidential Information which may be
communicated to it or of which it may be apprised pursuant to this License
Agreement. Licensor shall be deemed to have used its best efforts to prevent
such communication or divulgence if it has distributed guidelines to its
employees in an effort to maintain an information separation between Licensor
and the Partnership Partners and their affiliates, and, specifically, it has
instructed its employees not to divulge any Confidential Information, including
customer information, to the Partnership Partners or their affiliates, and
shall have obtained the executed confidentiality agreements referred to in
Section VII.C. from those persons designated in such Section. In circumstances
where Licensee is in direct competition with one of the Partnership Partners or
their affiliates in any one or more of the market(s) in the Licensed Territory,
Licensor will instruct its employees that no information regarding Licensee's
Cellular Telephone Service business in that market should be disclosed to that
Partnership Partner or its affiliates. The parties agree that statistical
performance information regarding all licensees of the Marks which does not
identify individual markets may be reported to the Partnership Partners and
their affiliates and shall not be considered Confidential Information.
Notwithstanding the foregoing, either party to this License Agreement and the
Partnership Partners and their affiliates may disclose any Confidential
Information which any such party may be legally required to disclose to a
government agency or in the context of litigation or arbitration.
C. Licensor Confidentiality Agreements
Licensor will execute, and will cause its employees, agents and
representatives, who are reasonably expected to have
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<PAGE> 16
access to Confidential Information of Licensee to execute, an appropriate
confidentiality agreement, which shall provide that any Confidential
Information of Licensee made available to Licensor, Licensor's employees,
agents or representatives, pursuant to this License Agreement, will be kept
confidential by all such persons.
D. Consequences of Breach
Licensor and Licensee each acknowledges that any failure to
comply with this Section VII will cause the other party irreparable injury, and
each party agrees to pay all court costs and reasonable attorneys' fees
incurred by the other party in obtaining specific performance of, or an
injunction against violation of, this Section VII.
VIII. ADVERTISING
Recognizing the value of advertising and the importance of the
standardization of advertising programs to the furtherance of the goodwill and
public image of the Marks, the parties agree as follows:
A. Licensee's Advertising
All advertising and promotion by Licensee in any manner or medium
must be conducted in a dignified manner and must conform to the written and
graphic guidelines specified by Licensor. Licensee shall display the Marks in
the manner prescribed by Licensor on all signs and all other advertising and
promotional materials used in connection with Licensee's Cellular Telephone
Service business. If requested by Licensor, Licensee at its own expense shall
promptly provide to Licensor photocopies of all print advertisements and
promotional materials and audio/video cassettes of radio/television advertising
using the Marks which Licensee has used at any time during the six months
preceding Licensor's request.
B. Materials Provided by Licensor
Licensor may provide from time to time, in its sole discretion,
advertising and promotional plans and materials, including without limitation,
newspaper mats, television and radio tapes, promotional brochures and sales
aids. Licensee may use all or any of these materials in its sole discretion.
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C. Cellular One Promotional Fund
Licensee agrees that Licensor shall have the right, in its sole
discretion, to establish a fund for national and/or regional advertising and
promotional programs and activities (the "Cellular One Promotional Fund" or the
"Fund") for licensees of the Marks and to determine, subject to the maximum
limits provided in Section V.C., the amount of contributions to be made by
Licensee with respect thereto for any year or years during the term hereof,
including any renewal term, commencing on or after January 1, 1993. Upon
establishment of the Cellular One Promotional Fund, Licensee agrees to make
contributions as required hereunder and under Section V.C. hereof, and agrees
that the Fund is to be maintained and administered by Licensor or its designee
as follows:
1. Licensor or its designee shall direct all
advertising and/or promotional programs with sole discretion over the concepts,
materials, and media used in such programs and the placement and allocation
thereof. Licensee agrees and acknowledges that the Cellular One Promotional
Fund is intended to maximize general public recognition, acceptance, and use of
the Marks for the benefit of all licensees of the Marks, and that Licensor or
its designee are not obligated, in administering the Fund, to undertake
expenditures for Licensee which are equivalent or proportionate to Licensee's
contribution, or to ensure that any particular licensee benefits directly or
pro rata from expenditures by the Fund. Notwithstanding the foregoing,
Licensor agrees that approximately twenty percent (20%) of the advertising fees
paid by Licensee with respect to any market in the Licensed Territory which
receives a customer survey satisfaction rating (determined pursuant to Section
III.C. hereof) of more than 90% for two (2) consecutive annual survey periods
shall be spent in such market solely to promote the Marks, utilizing, in each
case, the advertising materials developed by Licensor. The special allocation
of advertising fees contemplated by this paragraph shall be based upon the
amount of fees paid for the year in which the second consecutive required
customer survey rating is achieved, but will generally be expended or allocated
during the following year. Any advertising fees which are to be specially
allocated pursuant to the provisions of this Section VIII.C.1. and which are
not expended during the year following the year in which such fees become
subject to the special allocation provisions of this Section VIII.C.1. shall
not be used or otherwise made available for any special allocation in the
future.
2. The Cellular One Promotional Fund, all
contributions thereto, and any interest earnings thereon, shall be used for the
purpose of meeting any and all costs of administering, researching, directing,
and preparing advertising
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and/or promotional activities including the cost of preparing and conducting
television, radio, magazine, and newspaper advertising campaigns; direct mail
and outdoor billboard advertising; marketing surveys and other public relations
activities; use of advertising agencies to assist therein; promotional
brochures and other marketing materials for licensees of the Marks; and
indirect costs associated with the implementation of advertising programs, such
as equipment costs and similar costs relating to special national or regional
programs or other similar programs contemplated by Section III.F. All
reasonable costs incurred by Licensor or charged to Licensor by third parties
for the production and dissemination of such advertising and promotional
materials may be charged to the Fund.
3. Each of Licensor's company-owned Cellular Telephone
Service businesses operating under the Marks, if any, and each Cellular
Telephone Service business operating under the Marks owned by a Partnership
Partner or its affiliate, if any, will be required to make contributions to the
Cellular One Promotional Fund on the same basis as assessments required of
other licensees of the Marks.
4. Licensee shall contribute to the Cellular One
Promotional Fund by separate check made payable to the Fund. All sums paid by
licensees of the Marks to the Fund shall be maintained in an account separate
from the other monies of Licensor and shall not be used to defray any of
Licensor's administrative expenses, except for such reasonable administrative
costs and overhead as Licensor may incur in activities reasonably related to
the administration or direction of the Fund and advertising programs for
licensees of the Marks. Except as set forth in this Section VIII.C., the Fund
and any incidental earnings shall not otherwise inure to the benefit of
Licensor. Licensor or its designee shall maintain separate bookkeeping
accounts for the Fund.
5. It is anticipated that all Licensee contributions
to, and incidental interest earned by, the Cellular One Promotional Fund shall
be expended for advertising and/or promotional purposes during the taxable year
within which the contributions and earnings are received. If, however, excess
amounts remain in the Fund at the end of such taxable year, all expenditures in
the following taxable year(s) shall be made first out of accumulated interest
earnings from previous years, next out of interest earnings in the current
year, and finally from contributions.
6. The Cellular One Promotional Fund is not and shall
not be an asset of Licensor or its designee. A statement of the operations of
the Fund as shown on the books of the Fund shall
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be prepared annually by an independent certified public accountant selected by
Licensor and shall be made available to Licensee upon written request.
7. Although the Fund is intended to be of perpetual
duration, Licensor maintains the right to terminate the Fund. The Fund shall
not be terminated, however, until all monies in the Fund have been expended for
advertising and/or promotional purposes or returned to contributors on the
basis of their respective contributions.
D. Price Discretion
Licensee shall have the right to sell its products and offer
services at any price Licensee may determine, and shall in no way be bound by
any price which may be recommended or suggested by Licensor.
IX. INSURANCE
A. Requirement
Licensee shall promptly procure, and shall maintain in full force
and effect at all times during the term of this License Agreement, at
Licensee's expense, an insurance policy or policies protecting Licensee,
Licensor, and the Partnership Partners, and their respective affiliates,
officers, directors, shareholders, and employees, against any demand or claim
with respect to personal injury, death, or property damage or any loss,
liability, or expense whatsoever arising or occurring upon or in connection
with Licensee's Cellular Telephone Service business. Licensor and the
Partnership Partners, and their respective officers, directors, shareholders,
and employees, shall be named additional insureds in each such policy.
B. Minimum Coverage
The policy or policies shall be written by an insurance company
with an Alfred M. Best rating of A or A+, or such other insurance company as
Licensor may reasonably approve, and shall include, at a minimum, such
coverages and policy limits as may reasonably be specified by Licensor from
time to time, which coverages may include, without limitation, comprehensive
general liability insurance, including personal injury, as well as
comprehensive automobile liability coverage for both owned and non-owned
vehicles, and property damage liability coverage, naming Licensor and the
Partnership Partners, and their respective officers, directors, shareholders
and employees, as additional insureds in each such policy or policies. Until
such time as
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Licensor shall in good faith determine that economic or other circumstances
affecting the Cellular One license program require increased insurance
coverage, the following minimum insurance requirements shall be applicable.
1. General liability: $1,000,000 per occurrence or
$2,000,000 in the aggregate;
2. Personal liability: $1,000,000;
3. Property damage: $1,000,000;
4. Automobile liability: $1,000,000 per occurrence for
owned and operated vehicles;
5. Workers' compensation/Employers' liability:
$500,000 policy limit;
6. Disease: $500,000; and
7. Accident: $500,000
C. Certificates of Insurance
Within 30 days after this License Agreement is executed, and
thereafter at least 30 days prior to the expiration of any such policy,
Licensee shall deliver to Licensor Certificates of Insurance evidencing the
proper coverage with limits not less than those required hereunder. All
Certificates shall expressly provide that not less than 30 days, prior written
notice shall be given Licensor in the event of material alteration to, or
cancellation of, the coverages evidenced by such Certificates.
X. TRANSFER OF INTEREST
A. Transfer by Licensor
Licensor shall have the right to transfer or assign all or any
part of its rights or obligations herein to any person or legal entity. If
Licensor's assignee assumes all of the obligations of Licensor under this
License Agreement and sends written notice of the assignment so attesting,
Licensee shall promptly execute a general release of Licensor, and any
subsidiaries, partners and affiliates of Licensor, from claims against or
liabilities of Licensor or such subsidiaries, partners or affiliates of
Licensor arising under this License Agreement.
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B. Transfer and Pledge by Licensee
Except as hereinafter provided, Licensee may not assign or
transfer any of its rights under this License Agreement. Licensee may transfer
its rights under this License Agreement in connection with a transfer of its
Cellular Telephone Service business for one or more of the market(s) in the
Licensed Territory to an affiliate transferee in a pro forma assignment as
recognized by FCC regulations currently at 47 CFR Section 22.39. If Licensee
desires in the Licensed Territory (i) to sell its Cellular Telephone Service
business for one or more markets and assign its rights under this License
Agreement with respect to such market(s) other than in connection with such a
pro forma assignment, or (ii) to pledge or assign its rights under this License
Agreement to a financial institution or other party in connection with a
financing transaction involving Licensee, Licensee shall notify Licensor in
writing, and Licensee shall be entitled to transfer, assign, or pledge its
rights under this License Agreement, as the case may be, provided:
1. Licensee shall not be in default under this License
Agreement.
2. The transferee shall enter into a written
assignment, in a form satisfactory to Licensor, assuming and agreeing to comply
with this License Agreement (except that in the case of a pledge or collateral
assignment to a financial institution referred to in Section X.B.(ii), such
pledge or collateral assignment need only be made subject to all of the terms
and conditions of this License Agreement).
3. Licensee shall remain liable for all of the
obligations to Licensor under this License Agreement prior to the effective
date of transfer and shall execute any and all instruments reasonably requested
by Licensor to evidence such liability.
4. Where Licensee provides Cellular Telephone Service
in more than one market and the transfer involves market(s) comprising less
than all of the markets in the Licensed Territory, the transferee shall enter
into Licensor's then current form of license agreement for the market(s) being
transferred. This License Agreement shall remain in full force and effect with
respect to Licensee's remaining market(s), if any, following the transfer.
5. The transferee shall pay Licensor any transfer fees
or charges then being charged generally by Licensor to transferees of licenses
to use the Marks.
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C. Right to Add Affiliate as Party
If Licensee desires, in the Licensed Territory, to authorize an
affiliate (which for purposes hereof shall be an entity controlled by, under
common control with or controlling the Licensee) to use the Marks in connection
with the separation of Licensee's wholesale and retail operations or to take
advantage of tariff differentials affecting Licensee and its affiliates,
Licensee shall notify Licensor and Licensee shall be entitled to add its
affiliate as a party to this Agreement, provided:
1. Licensee shall not be in default under this License
Agreement.
2. Licensee's affiliate enters into a written
amendment to this License Agreement in which the affiliate agrees to be bound
by all of the terms and conditions of the License Agreement and to be subject
to all of the rights and obligations of the Licensee under the License
Agreement, arising on or after the date of the amendment.
XI. DEFAULT AND TERMINATION
A. Termination by Licensee
Licensee shall have the right to terminate this License Agreement
without cause at any time upon at least one hundred twenty (120) days advance
written notice to Licensor.
B. Termination by Licensor -- Without Notice
Licensee shall be deemed to be in default under this License
Agreement, and all rights granted herein shall automatically terminate without
notice to Licensee, if Licensee becomes insolvent or makes a general assignment
for the benefit of creditors; or if a petition in bankruptcy is filed by
Licensee or against Licensee and not opposed by Licensee; or if Licensee is
adjudicated as bankrupt or insolvent; or if a bill in equity or other
proceeding for the appointment of a receiver of Licensee or other custodian for
Licensee's business or assets is filed and consented to by Licensee; or if a
receiver or other permanent or temporary custodian of Licensee's assets or
property, or any part thereof, is appointed by any court of competent
jurisdiction; or if proceedings for a composition with creditors under any
state or federal law should be instituted by Licensee or against Licensee and
not actively opposed by Licensee; or if a final judgment remains unsatisfied or
of record for thirty (30) days or longer (unless supersedeas bond is filed); or
if Licensee is dissolved except where the Licensee is a limited partnership
and, promptly
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following dissolution, such limited partnership is reconstituted with the same
general partners; or if a suit to foreclose any lien or mortgage against real
or personal property used in the operation of Licensee's Cellular Telephone
Service business is instituted against Licensee and not dismissed within thirty
(30) days or, if actively being opposed by Licensee, within one hundred eighty
(180) days; or if execution is levied against Licensee's Cellular Telephone
Service business or property; or if any material real or personal property of
Licensee used in its Cellular Telephone Service business shall be sold after
levy thereupon by any sheriff, marshal, or constable; or if Licensee at any
time ceases to operate or otherwise abandons its Cellular Telephone Service
business or otherwise forfeits the right to do or transact business in any
market(s) in the Licensed Territory; or if Licensee loses its FCC license or
FCC construction permit for one or more market(s) or otherwise forfeits the
right to do or transact business in one or more market(s), in which event
Licensee's rights under this License Agreement with respect to such market(s)
shall automatically terminate and this License Agreement shall continue with
respect to the remaining market(s) for which Licensee continues to hold FCC
license(s).
C. Termination by Licensor -- Upon Notice
Upon the occurrence of any of the following events, Licensee
shall be deemed to be in default and Licensor may, at its option, terminate
this License Agreement and all rights granted hereunder without affording
Licensee any opportunity to cure the default. Said termination shall be
effective immediately upon receipt of notice by Licensee:
1. If Licensee has been advised of its probation
status pursuant to Section XI.E. and Licensee does not make a good faith effort
to formulate and implement a Licensor-approved plan during the term of
probation, or, at the end of the term of probation, Licensee fails to meet the
85% customer satisfaction rating (or the higher percentage established by
Licensor under Section IV.A.) required by the Service Standards;
2. If Licensee fails in any customer satisfaction
survey conducted pursuant to Section III.C. (except for the initial advisory
survey) to attain an overall satisfaction rating of at least 65%, regardless of
the terms of any probation;
3. If any principal stockholder or officer of Licensee
is convicted of a felony, a fraud, or any other crime or offense that Licensor
believes is reasonably likely to have an adverse effect on the Marks, the
goodwill associated therewith, or Licensor's interest therein;
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4. If a threat or danger to public health or safety
results from the operation of the Licensee's Cellular Telephone Service
business;
5. If Licensee purports to transfer any rights or
obligations under this License Agreement to any third party, contrary to the
terms of Sections VI.B.4. or X.B. of this License Agreement;
6. If, contrary to the terms of Section VII. hereof,
Licensee discloses or divulges Confidential Information provided to Licensee by
Licensor;
7. If Licensee knowingly submits any false reports or
information to Licensor or any entity conducting a customer satisfaction survey
either during the application process or subsequent to the execution of this
License Agreement;
8. If Licensee contests in any court or proceeding
the validity or registration of, or Licensor's ownership of, any of the Marks
or other rights licensed hereunder.
D. Termination By Licensor --
After Notice and Opportunity to Cure
Except as provided in Sections XI.B. and XI.C. of this License
Agreement, Licensee shall have thirty (30) days after its receipt from Licensor
of a written notice of termination within which to remedy any default hereunder
(or, if the default cannot reasonably be cured within such thirty (30) days, to
initiate within that time substantial and continuing action to cure the
default), and to provide evidence thereof to Licensor. If any such default is
not cured within that time (or, if appropriate, substantial and continuing
action to cure the default is not initiated within that time), or such longer
period as applicable law may require, this License Agreement shall terminate
without further notice to Licensee effective immediately upon expiration of the
thirty (30) day period or such longer period as applicable law may require.
Licensee shall be in default hereunder for any failure to comply substantially
with any of the requirements imposed by this License Agreement or to carry out
the terms of this License Agreement in good faith. Such defaults shall
include, without limitation, the occurrence of any of the following events:
1. If Licensee fails, refuses or neglects promptly to
pay when due any monies owing to Licensor or to the Cellular One Promotional
Fund; or fails, refuses or neglects promptly to submit information as required
under this License Agreement, or makes any false statements in connection
therewith;
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2. If Licensee fails to comply, in any material
respect, with the Service Standards;
3. If Licensee misuses or makes any unauthorized use
of the Marks or otherwise materially impairs the goodwill associated therewith
or Licensor's rights therein;
4. If Licensee engages in any business or markets any
service or product under a name or mark which, in Licensor's opinion, is
confusingly similar to the Marks; or
5. If Licensee, by act or omission, permits a
continued violation in connection with the operation of its Cellular Telephone
Service business of any law, ordinance, rule or regulation of a governmental
agency, in the absence of a good faith dispute over its application or legality
and without promptly resorting to an appropriate administrative or judicial
forum for relief therefrom.
E. Probation
In the event that a customer satisfaction survey, conducted
pursuant to Section III.C., reveals an overall customer satisfaction rating of
less than 85% (or such higher percentage established by Licensor under Section
IV.A.), but more than 65%, Licensor shall advise Licensee of an imposition of
probation status for a stated period of time, typically one year. Promptly on
receipt of this written notice, Licensee agrees to formulate and implement a
plan, acceptable to Licensor, to improve the quality of Licensee's Cellular
Telephone Service so that a subsequent customer satisfaction survey indicates
compliance with the provisions of this License Agreement. The technical
guidelines contained in the Guide to Quality Operations provided to Licensee by
Licensor are designed to assist Licensee in improving its customer satisfaction
rating. If Licensor determines, in its sole discretion, that Licensee is not
making a good faith effort to formulate and implement such a plan, or after a
reasonable probation period the goals of the plan are not achieved, then
Licensor may elect to extend the term of the probation or terminate this
License Agreement effective upon written notice to Licensee, pursuant to
Section XI.C.
F. Force Majeure
Neither Licensor nor Licensee shall be liable or deemed to be in
default for a delay in or failure of performance that results from any of the
following causes beyond the reasonable control of such party: strikes, work
stoppages, shortages of equipment, supplies or energy, war, insurrection, or
acts of God
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or the public enemy. Any delay resulting from any such cause shall extend
performance accordingly or excuse performance, in whole or in part, as may be
reasonable; provided however, that (i) said causes shall not excuse payment of
any amounts due or owed at the time of such occurrence or payment of license
fees, advertising fees or other amounts due thereafter, (ii) the party
asserting any such cause shall promptly commence and diligently pursue action
to remedy its inability or failure to perform hereunder, and (iii) in no event
shall said causes extend or excuse performance for more than one hundred twenty
(120) days from the time of performance set forth in this License Agreement.
The party asserting this Section XI.F. shall promptly notify the other party of
the occurrence and nature of any such cause and shall thereafter regularly
inform the other party of the progress of actions to remedy the inability or
failure to perform hereunder.
XII. OBLIGATIONS UPON TERMINATION OR EXPIRATION
Upon termination or expiration of this License Agreement with respect to
one or more of the market(s) in the Licensed Territory (the "Terminated
Market(s)"), all rights granted hereunder to Licensee with respect to each
Terminated Market shall forthwith terminate, and:
A. Deidentification
1. Licensee shall immediately cease to hold itself out
as a present or former licensee of Licensor with respect to the Terminated
Market(s).
2. Licensee shall immediately and permanently cease to
use in the Terminated Market(s), in any manner whatsoever, any of the Marks;
and all other Marks and distinctive forms, slogans, signs, symbols, monograms
and devices associated with the Marks; in particular, Licensee shall cease to
use, without limitation, all signs, advertising materials, displays,
stationery, forms, and any other articles or clothing which display the Marks.
3. Licensee shall take such action as may be necessary
to cancel in the Terminated Market(s) any trade name, fictitious name or
equivalent registration which contains any of the Marks or any other service
mark or trademark of Licensor, and Licensee shall furnish Licensor with proof
of compliance with this obligation within thirty (30) days after termination
or expiration of this License Agreement with respect to the Terminated
Market(s).
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4. Licensee agrees, in the event it continues to
operate a Cellular Telephone Service business in the Terminated Market(s), not
to use any reproduction, counterfeit, copy, or colorable imitation of the
Marks, either in connection with such other business or the promotion thereof,
which is likely to cause confusion, mistake, or deception, or which is likely
to dilute Licensor's rights in and to the Marks. Further, Licensee agrees not
to utilize any designation of origin or description or representation which
falsely suggests or represents an association or connection with Licensor or
any of the Marks in the Terminated Market(s).
B. Payment of Monies Due
1. Licensee shall promptly pay all sums owing to
Licensor and the Cellular One Promotional Fund. If and when this License
Agreement is terminated as a result of any default of Licensee, such sums shall
include all damages, costs and expenses, including reasonable attorney's fees,
incurred by Licensor as a result of the default.
2. Licensee shall pay to Licensor all damages, costs
and expenses, including reasonable attorney's fees, incurred by Licensor
subsequent to the termination or expiration of this License Agreement in
obtaining injunctive or other relief for the enforcement of any provisions of
this Section XII.
C. Return of Certain Confidential Documents
If this License Agreement has expired or been terminated with
respect to all of the market(s) in the Licensed Territory, then Licensor and
Licensee shall immediately deliver to the other all documents which contain
Confidential Information of the other as defined in Section VII. hereof.
XIII. INDEPENDENT STATUS AND INDEMNIFICATION
A. It is understood and agreed by the parties hereto that
this License Agreement does not create a fiduciary relationship between them;
that Licensee shall remain an independent business; and that nothing in this
License Agreement is intended to constitute either party as an agent, legal
representative, subsidiary, joint venturer, partner, employee or servant of the
other for any purpose whatsoever.
B. During the term of this License Agreement and any renewal
hereof, Licensee shall hold itself out to the public as an
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independent business using the Marks pursuant to a license from Licensor.
Licensee agrees to take such action as may be necessary to so notify the
public.
C. It is understood and agreed that nothing in this License
Agreement authorizes Licensee to make any contract, agreement, warranty or
representation on Licensor's behalf, or to incur any debt or other obligation
in Licensor's name. Licensor shall in no event assume liability for, or be
deemed liable hereunder as a result of, any such action; nor shall Licensor be
liable by reason of any act or omission of Licensee in its conduct of its
Cellular Telephone Service business or for any claim or judgment arising
therefrom against Licensee or Licensor. Licensee shall indemnify and hold
Licensor, Licensor's employees, the Partnership Partners and their affiliates,
and their respective officers, directors, employees and stockholders, harmless
from and against any and all claims arising directly or indirectly from, as a
result of, or in connection with, Licensee's operation of its Cellular
Telephone Service business, as well as the costs, including attorney's fees, of
defending against them.
XIV. APPROVALS AND WAIVERS
A. Whenever this License Agreement requires the prior
approval or consent of Licensor, Licensee shall make a timely written request
to Licensor therefor, and such approval or consent shall be obtained in
writing. Licensor will process all requests for approvals and consents in a
reasonable and timely manner.
B. Licensor makes no warranties or guarantees upon which
Licensee may rely, and assumes no liability or obligation to Licensee, by
providing any waiver, approval, consent or suggestion to Licensee in connection
with this License Agreement, or by reason of any neglect, delay or denial of
any request therefor.
C. No failure of Licensor or Licensee to exercise any power
reserved to it in this License Agreement, or to insist upon compliance by the
other with any obligation or condition in this Agreement, and no custom or
practice of the parties at variance with the terms hereof, shall constitute a
waiver of either party's rights to demand exact compliance with any of the
terms of this License Agreement. Waiver by Licensor or Licensee of any
particular default on the part of the other shall not affect or impair the
non-defaulting party's right with respect to any subsequent default of the same
or of a different nature; nor shall any delay, forbearance or omission, by
Licensor or Licensee to exercise any power or right arising out of any breach
or default by the other of any of the terms, provisions or covenants of this
License Agreement affect or impair such party's rights; nor shall
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such constitute a waiver by Licensor or Licensee, as the case may be, of any
rights hereunder or rights to declare any subsequent breach or default.
D. Subsequent acceptance by Licensor of any payments due to
it shall not be deemed to be a waiver by Licensor of any preceding breach by
Licensee of any terms, covenants or conditions of this License Agreement.
XV. NOTICES
Any and all notices required or permitted under this License Agreement
shall be in writing and shall be personally delivered or mailed by certified or
registered mail, return receipt requested, to the respective parties at the
following addresses unless and until a different address has been designated by
written notice to the other party:
Notices to Licensor: CELLULAR ONE GROUP
5001 LBJ Freeway
Suite 700
Dallas, Texas 75244
Attn: Executive Director
cc: Johnson, Bromberg & Leeds
2600 Lincoln Plaza
Dallas, Texas 75201
Attn: Cellular One Group
Notices to Licensee: At the address shown on the signature page
hereof.
Any notice by certified or registered mail shall be deemed to have been
given at the date and time of receipt.
XVI. ENTIRE AGREEMENT
This License Agreement, the documents referred to herein, and the
attachments hereto, if any, constitute the entire, full and complete License
Agreement between Licensor and Licensee concerning the subject matter hereof,
and supersede all prior agreements. Without limiting the foregoing, this
License Agreement shall be deemed to amend and restate in its entirety and to
supersede, for all purposes, any prior license agreement between the parties
hereto which contemplates or has as its primary purpose the grant of a license
to use any of the Marks. Except for those permitted to be made unilaterally by
Licensor
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hereunder, no amendment, change or variance from this License Agreement shall
be binding on either party unless mutually agreed to by the parties and
executed by their authorized officers or agents in writing.
XVII. SEVERABILITY AND CONSTRUCTION
A. Except as expressly provided to the contrary herein, each
portion, section, part, term and/or provision of this License Agreement shall
be considered severable; and if, for any reason, a portion, section, part, term
and/or provision herein is determined to be invalid and contrary to, or in
conflict with, any existing or future law or regulation by a court or agency
having valid jurisdiction, such shall not impair the operation of, or have any
other effect upon, such other portions, sections, parts, terms and/or
provisions of this License Agreement as may remain otherwise intelligible; and
the latter shall continue to be given full force and effect and bind the
parties hereof; and said invalid portions, sections, parts and/or provisions
shall be deemed not to be a part of this License Agreement.
B. Nothing in this License Agreement is intended, nor shall
be deemed, to confer any rights or remedies upon any person or legal entity
other than Licensor or Licensee, and their respective successors and assigns as
permitted by this License Agreement.
C. In the event a court in a final decision rules that any
provision of this License Agreement or portion thereof is unenforceable,
Licensee agrees to be bound by the maximum duty ruled enforceable by the court.
D. All captions in this License Agreement are intended solely
for the convenience of the parties, and none shall be deemed to affect the
meaning or construction of any provision hereof.
E. All references herein to the masculine, neuter or singular
shall be construed to include the masculine, feminine, neuter or plural, where
applicable.
F. This License Agreement may be executed in several parts,
and each copy so executed shall be deemed an original.
XVIII. APPLICABLE LAW
A. THIS LICENSE AGREEMENT TAKES EFFECT UPON ITS
ACCEPTANCE AND EXECUTION BY LICENSOR IN THE STATE OF TEXAS AND
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SHALL BE GOVERNED BY, AND INTERPRETED AND CONSTRUED UNDER THE LAWS THEREOF,
WHICH LAWS SHALL PREVAIL IN THE EVENT OF ANY CONFLICT OF LAW; PROVIDED,
HOWEVER, THAT IF ANY OF THE PROVISIONS OF THIS LICENSE AGREEMENT WOULD NOT BE
ENFORCEABLE UNDER THE LAWS OF THE STATE OF TEXAS, THEN SUCH PROVISIONS SHALL BE
GOVERNED BY, AND INTERPRETED AND CONSTRUED UNDER THE LAWS OF THE STATE IN WHICH
THE LICENSED TERRITORY IS LOCATED (IF THE LICENSED TERRITORY CONTAINS PORTIONS
OF MORE THAN ONE STATE OR THE DISTRICT OF COLUMBIA, THEN THE APPLICABLE LAW
SHALL BE THAT OF THE STATE IN WHICH THE LARGEST PORTION OF THE LICENSED
TERRITORY IS LOCATED).
B. No right or remedy conferred upon or reserved to Licensor
or Licensee by this License Agreement is intended to be, nor shall be deemed,
exclusive of any other right or remedy herein or by law or equity provided or
permitted, but each shall be cumulative of every other right or remedy.
C. Nothing herein contained shall bar Licensor's right to
apply for injunctive relief against threatened conduct that will cause it loss
or damages, under applicable equity rules, including the applicable rules for
obtaining restraining orders and preliminary injunctions.
XIX. ACKNOWLEDGMENTS
A. Licensee acknowledges that it is currently engaged in the
Cellular Telephone Service business and that such business involves substantial
investment and risks and that its success is largely dependent upon the ability
of Licensee's management and technical personnel. Licensor expressly disclaims
the making of, and Licensee acknowledges that it has not received, any warranty
or guarantee, express or implied, as to the potential volume, profits, or
success resulting from the utilization of the Marks by Licensee in its Cellular
Telephone Service business.
B. Licensee acknowledges that it received a copy of the
complete Cellular One License Agreement and the attachments thereto at least
five (5) business days prior to the date on which this License Agreement is
signed by Licensee. Licensee further acknowledges that it received the
disclosure document required by the Trade Regulation Rule of the Federal Trade
Commission entitled "Disclosure Requirements and Prohibitions Concerning
Franchising and Business Opportunity Ventures" at least ten (10) business days
prior to the date on which this License Agreement is signed by Licensee.
C. Licensee acknowledges that it has read and understood this
License Agreement and the attachments hereto, and that Licensor has accorded
Licensee ample time and opportunity to
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consult with advisors of Licensee's own choosing about the potential benefits
and risks of entering into this License Agreement on the effective date set
forth below.
IN WITNESS WHEREOF, the parties hereto have duly executed this License
Agreement on the day and year first above written.
ATTEST: CELLULAR ONE GROUP
/s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
- -------------------------- -----------------------------------
Title: Executive Director
--------------------------------
Effective Date: April 13, 1993
------------------------
Primary Contact in Ordinary
Course of Business:
Executive Director
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ATTEST: LICENSEE: Mercury, Inc.
/s/ Carolyn Nunez By: /s/ Robert Piper
- -------------------- ---------------------------------
Robert Piper
Title: Vice President
-------------------------------
Date of Signature: 4/6/93
Primary Contact in Ordinary Course of
Business:
Joe Whitbeck, Director of Marketing
--------------------------------------
--------------------------------------
Address for Notice Purposes:
One Lakeshore Drive/P. O. Box 3709
--------------------------------------
Lake Charles, LA 70602
--------------------------------------
-31-
Cellular One
License Agreement
<PAGE> 34
EXHIBIT A
Cellular One License Agreement
The Mark(s) currently designated by the Licensor for use hereunder are
as follows:
Registration or
Mark Serial Number
---- -------------
Cellular One (shown below) 74/223493
[CELLULARONE LOGO]
-32-
Cellular One
License Agreement
<PAGE> 35
EXHIBIT B
Cellular One License Agreement
Licensed Territory
The Market(s) covered by the License Agreement is/are the following:
Market Name MSA/RSA FCC Market No. Recent Population
- --------------------------------------------------------------------------------
Mississippi 01 RSA 493 164,324
Total Population 164,324
X .02
-------
3286.48
+500.00
-------
3786.48
-33-
Cellular One
License Agreement
<PAGE> 36
EXHIBIT C
Cellular One License Agreement
Survey Methodology
The methodology currently being employed by the Licensor and its
designated Survey Company will be a telephone survey conducted from random
probability samples of cellular customers provided by the Licensee.
Survey samples will be provided to the Survey Company in magnetic tape
or disk medium in a common format as specified by the Partnership. (If the
Licensee is unable to comply, a half-size, high income probability sample will
be ordered at the Licensee's expense).
A random probability sample will be required of the Licensee, sufficient
in number for economic completion of the satisfaction survey. The size of the
completed samples will be between approximately 50 and 200 depending on the
size of the market being surveyed.
-34-
Cellular One
License Agreement
<PAGE> 1
EXHIBIT 10.12
MANAGEMENT AND ACCOUNTING SERVICES AGREEMENT
This Agreement by and between Mercury Information Technologies, Inc. and
Mercury, Inc, is for the provision of management and accounting services by
Mercury, Inc. to Mercury Information Technologies, Inc. The term of this
Agreement shall be from 10/1/95 until 12/31/95 with an option to renew for one
(1) year at the expiration date of the Agreement. Mercury Information
Technologies, Inc. will pay to Mercury, Inc. a monthly fee, inclusive of
employee benefits costs, of $2,300.00 for accounting services as follows:
1. One full time accountant
2. Twelve hours clerical for payroll and accounts payable services
3. Twelve hours accounting supervision services
Mercury Information Technologies, Inc. will pay to Mercury, Inc. a
monthly fee of $3,218.00 for management services inclusive of employee benefits
costs.
The undersigned authorized representatives of Mercury Information
Technologies, Inc. and Mercury, Inc. agree to the terms and conditions of this
Agreement.
DATE: 11-7-95 MERCURY INFORMATION
---------------------------- TECHNOLOGIES, INC.
BY: /s/ BRENDA S. McELVEEN
------------------------------
TITLE: V P OPERATIONS
------------------------------
MERCURY, INC.
BY: /s/ ILLEGIBLE
------------------------------
TITLE: CFO
------------------------------
<PAGE> 1
EXHIBIT 10.13
MIS SERVICES AGREEMENT
This Agreement by and between Mercury, Inc. and Maas.net, LLC, is for
the provision of general MIS services by Maas.net, LLC to Mercury, Inc. The
term of this Agreement shall be month to month. Mercury, Inc. will pay to
Maas.net, LLC a monthly fee, inclusive of employee benefits costs, of $2,000.00
for general MIS services as follows:
1. General Network Administration.
2. General Equipment Installations, Upgrades, and Updates.
3. General Preventative Maintenance.
4. General Network Inventory, Diagramming, and Record Keeping.
5. General Help Desk Services for Normal Applications
(Excluding Accounting)
6. Computer Supplies Management.
All above services will be conducted in a professional and timely
fashion within the following parameters of operation:
1. Normal Weekly Service Schedule from 7AM to 7PM.
2. Normal Weekend Service Schedule from 10AM to 2PM Saturday
3. 1 Hour Response Time to Emergencies in the CM Tower
4. 2 Hour Response Time to Emergencies at Area Remote Offices
5. 4 Hour Problem Resolution for Problem at CM Tower
6. Same Day Problem Resolution at Area Remote Offices
7. Normal Service Orders will be scheduled for Next Business Day
8. General Website Management and Minor Updates Included.
All additional services shall be billed at a rate of $50.00 per hour. The
undersigned authorized representatives of Mercury, Inc. and Maas.net, LLC agree
to the terms and conditions of this Agreement.
<TABLE>
<S> <C>
DATE: 6/6/96 MERCURY, INC.
------------------------
BY: /s/ MIKE CLARK
-----------------------------
TITLE: V.P. / General Manager
-----------------------------
MAAS.NET, LLC
BY: /s/ ILLEGIBLE
-----------------------------
TITLE: President
-----------------------------
</TABLE>
<PAGE> 1
EXHIBIT 10.14
SULPHUR SITE
STATE OF LOUISIANA
PARISH OF CALCASIEU
This agreement entered into by and between WILLIAM L. HENNING and LENA
B. HENNING hereinafter referred to as Lessor, and MERCURY CELLULAR TELEPHONE
COMPANY, INC., a Louisiana Corporation, domiciled in Calcasieu Parish,
Louisiana, herein represented by its President, John A. Henning, hereinafter
referred to as Lessee:
WITNESSETH
That Lessor does hereby lease, grant and rent unto Lessee the following
described property situated in the Parish of Calcasieu, State of Louisiana,
to-wit:
Commencing 175 feet West of the Northeast Corner of the
Northwest Quarter of the Southwest Quarter (NW-1/4 of SW-1/4) Section
35, Township Nine (9) South, Range Ten (10) West, thence South 275
feet, thence East 300 feet, thence North 151 feet; thence West 145
feet, thence North to the North line of the Northwest Quarter of
Southwest Quarter (NW-1/4 of SW-1/4) of Section 35, Township Nine (9)
South, Range Ten (10) West, being 124 feet more or less, thence West
155 feet to the point of beginning.
That Lessee shall have the right to use the servitude and right of way
to said leased premises described as follows:
Commencing 10 feet South and 202 feet East of the Northeast
Corner of the Northwest Quarter of Southwest Quarter, Section 35,
Township Nine (9) South, Range Ten (10) West, thence West 30 feet,
thence South 58.5 feet, thence West 92.2 feet, thence South 59 feet,
thence East 34.4 feet, thence North 24 feet, thence East 77 feet,
thence North 90 feet to the point of beginning.
2.
Subject to all the provisions herein, this lease shall be for a term of
Fifteen (15) years commencing on January 1, 1990.
3.
This lease is made for and in consideration of the covenants herein
contained and a monthly rental (subject to change every year as hereinafter
provided) of $500.00 payable in advance on the 1st day of each month.
4.
The monthly rental shall change every year during the term of this
lease to conform to the change in the cost of living average for
<PAGE> 2
the period of the preceding year as reflected by the "Consumer Price Index
(urban all items (1967-100)" of the U.S. Department of Labor's Bureau of Labor
Statistics, or if said index shall no longer be published, then another index
generally recognized as authoritative to reflect the cost of living average.
5.
Said leased premises may be used for the erection, maintenance and
operation of a communication tower and support wires, with the necessary
foundations, housing, fencing and equipment and appurtenances necessary for the
operation and maintenance thereof.
6.
In the event the leased premises are not adjacent to a public road
right of way, Lessor gives and grants unto Lessee the right of ingress and
egress to said leased premises and the right to build electrical and
communication lines and cables to said site.
7.
Lessee shall have the right to terminate this lease at any rental
paying date by giving Lessor 90 days notice in writing of its intentions to do
so and paying 2 months rental on date of termination.
8.
Lessee shall pay all taxes on the improvements owned by Lessee placed
on the leased premises.
9.
Lessor covenants that Lessee on paying the rent and performing Lessee's
obligation in this lease shall peacefully and quietly have, hold and enjoy the
leased premises throughout the term hereof or until it is terminated.
10.
Lessor will not be responsible for damages caused to Lessee or other
parties on the leased premises however occasioned; and Lessee shall hold Lessor
harmless from any claim by or liability to third
<PAGE> 3
persons, however arising, and for these purposes, Lessee shall maintain
liability insurance of not less than $300,000 for each individual, and $500,000
for each accident, it being understood that such insurance may be included in
blanket coverage policies maintained by Lessee.
11.
Lessee may clear the property of any debris, weeds, or trees that could
possibly cause damage to any of its facilities, and continue to do so during
the term of this lease. Lessor, however, may use any portion of the leased
premises not occupied by Lessee's facilities so long as use could not possibly
cause damage to any of the Lessee's facilities during the term of this lease.
12.
At the termination of this lease lessee shall have the right to remove
all of its facilities.
IN EVIDENCE WHEREOF, witness the execution of this instrument on the
1st day of January, 1990, in the presence of Sandra Britnell and Raymond
Henagan, competent witnesses.
WITNESSES:
/s/ SANDRA BRITNELL /s/ WILLIAM L. HENNING
- ---------------------------- ----------------------------------
WILLIAM L. HENNING
/s/ LENA B. HENNING
----------------------------------
/s/ RAYMOND HENAGAN LENA B. HENNING
- ----------------------------
MERCURY CELLULAR TELEPHONE COMPANY, INC.
/s/ JOHN A. HENNING
----------------------------------
John A. Henning, President
<PAGE> 1
EXHIBIT 10.15
STATE OF LOUISIANA
LEASE
PARISH OF CALCASIEU
BE IT KNOWN, that on this 1st day of March, 1992, before me, the
undersigned Notary Public, and in the presence of the undersigned competent
witnesses, came and appeared
MERCURY, INC. hereinafter referred to as "Lessor", a Louisiana
Corporation, domiciled in Calcasieu Parish, Louisiana, herein
represented by Robert Piper, Vice President of said corporation, duly
authorized,
and
MERCURY CELLULAR TELEPHONE COMPANY, hereinafter referred to as
"Lessee", a Louisiana Corporation, domiciled in Calcasieu Parish,
Louisiana, herein represented by John A. Henning, President of said
company, duly authorized,
who declared,
Lessor hereby leases to Lessee the following described property
situated in Calcasieu Parish, Louisiana:
Lot Thirty-five (35) of Block One (1) of Plat No. 2
of Southton, a subdivision of the Northwest Quarter
of the Northeast Quarter (NW 1/4 of NE 1/4) and the
Northeast Quarter of the Northwest Quarter (NE 1/4 of
NW 1/4) of Section 18, Township 10 South, Range 8
West, as per plat recorded in Plat Book 3, page 174,
records of Calcasieu Parish, Louisiana, together with
all buildings and other improvements located thereon,
but subject to all rights, title and interest
conveyed to the State of Louisiana, Department of
Highways, as per act of sale dated January 7, 1969,
recorded under Clerk's File No. 1126518, in
Conveyance Book 1064, page 600.
This lease is made subject to all rights of way and
restrictions of record, if any.
1. TERM. This lease is for a primary term of 5 years, commencing on the
lst day of April, 1992. At the option of Lessee, this lease may be extended
for two additional five (5) year terms on the terms and conditions set forth
hereinafter. Each option may be exercised by written notice to Lessor at least
30 days prior to the expiration of this lease.
2. RENT. This lease is made for and in consideration of the covenants
herein contained and a minimum monthly net rental (subject to increase every
five years as hereafter provided) of $2,000.00,
<PAGE> 2
payable in advance on the first day of each and every month during the term of
this lease, with interest at the rate of ten per cent (10%) per annum from due
date until paid.
2.1 Net Rental is defined as the rental (increased as hereafter provided)
due by lessee after payment by Lessee of: (a) all taxes and special assessments
and other charges of every kind or description levied by the State and all
political subdivisions on the leased property during this lease; and (b) all
premiums on such policies of the fire and extended coverage insurance as Lessee
may be required by this lease to carry against the leased property during the
period covered by this lease.
2.2 Redetermination of Net Rental. Monthly net rental shall not be
decreased at any time during the term of this lease, but it shall be increased
every five years to conform to the increase in the cost of living average for
the period of the preceding five (5) calendar years as reflected by the
"Consumer Price Index (Urban), All Items (1967 = 100)" of the U. S. Department
of Labor's Bureau of Labor Statistics, or if said index shall no longer be
published, then another Index generally recognized as authoritative to reflect
the cost of living average.
3. INSPECTION AND REPAIRS. The leased property is delivered in good
order, inspected by and acceptable to Lessee, and Lessee will make all
necessary repairs, including without limitation, repairs to the walls, roof,
flooring, glass and plate glass, mechanical plumbing and electrical equipment,
appliances and facilities, to keep the leased property in as good order as it
now is, ordinary wear and tear excepted. At the end of this lease, Lessee shall
return possession of the premises broom-cleaned and free of trash, in like good
order as received, excepting only the usual decay, wear and tear. No repair
shall be due Lessee except such as may be rendered necessary by the fire or
other casualty and covered
<PAGE> 3
by the insurance policies maintained by Lessee, provided however that Lessor
will make necessary repairs to support walls, foundation, and rafters, at
Lessor's expense. Lessor shall at all times have the right to enter the
premises for the purpose of inspection.
4. QUIET ENJOYMENT. Lessor covenants that Lessee on paying the rent and
performing Lessee's obligations in this lease shall peacefully and quietly
have, hold and enjoy the leased property throughout the term hereof or until it
is terminated as provided herein.
5. INSURANCE. Lessee shall at all times maintain fire and extended
coverage insurance on the leased property, at Lessee's expense, in amounts
equal to the full insurable value of the improvements on the leased property.
In all such policies Lessor shall be the named insured, and Lessee shall upon
request furnish Lessor the original policies, certificates and premium
receipts. Lessee is bound not to do or permit any act to be done or omitted
which would forfeit the insurance on the leased property. Should Lessee fail to
pay promptly any insurance premiums, Lessors may, but need not, pay same and
recover repayment thereof at once from Lessee with interest at the rate of
twelve per cent (12%) per annum from date of payment by Lessors.
6. TAXES. Lessee shall pay, in addition to monthly net rental, all
property taxes and special assessments which may be levied against the leased
property by any governmental authority. Should Lessee fail to pay promptly any
taxes or special assessments, Lessors may, but need not, pay same and recover
repayment thereof at once from Lessee with interest at the rate of twelve per
cent (12%) per annum from date of payment.
7. LIABILITY & INDEMNITY. Lessor will not be responsible for damage caused
to Lessee or other parties by any vices or defects
<PAGE> 4
of the leased property, or the consequences thereof. Lessor will not be
responsible for damages of any sort to any persons or property, however
occasioned; and Lessee shall hold Lessor harmless from any claims by or
liability to third persons however arising, including on streets and sidewalks
adjoining the premises, and for these purposes, Lessee shall maintain liability
insurance of not less than $300,000 for each individual and $500,000 for each
accident, if being understood that such insurance may be included in blanket
coverage policies maintained by Lessee.
8. UTILITIES. Lessee shall pay all bills for water, light and similar
charges.
9. CASUALTY DAMAGE. In the event the leased property is damaged by fire,
explosion or any other casualty to an extent which is less than 50% of the cost
of replacement of the leased property, the damage shall promptly be repaired by
Lessor at Lessor's expense and the leased property shall be rendered tenantable
within ninety days or Lessee shall have the right to terminate this lease,
provided that Lessor shall not be obligated to expend for such repair an amount
in excess of the insurance proceeds recovered or recoverable as a result of
such damage and that in no event shall Lessor be required to repair or replace
Lessee's fixtures, furniture, equipment, furnishings, or floor coverings. In
the event of such damage and (a) Lessor is not required to repair as provided
above, or (b) the leased property shall be damaged to the extent of more than
50% of the cost of replacement, Lessor may elect either to repair or rebuild
the leased property or to terminate this lease upon giving notice of such
election in writing to Lessee within ninety days after the occurrence of the
event causing the damage. If Lessor elects to repair the leased property,
Lessor shall render the leased property tenantable within ninety days of such
election or Lessee shall have the right to terminate this lease. If the
casualty, repairing or rebuilding shall render
<PAGE> 5
the leased property untenantable, in whole or in part, a proportionate
abatement of the rent shall be allowed from the date when the damage occurred
until the date Lessor completes restoration of the premises, said proportion to
be computed on the basis of the relation which the gross square foot area of
the space rendered untenantable bears to the floor space of the leased
premises. The term "Tenantable" shall mean usable for the purpose of
Lessee's business.
10. SUBLEASE OR ASSIGNMENT. Lessee shall not sublease, assign or transfer
this lease in whole or in part, without the prior written consent of Lessor
which shall not be unreasonably withheld.
11. ALTERATIONS. Lessee is obligated not to make any additions or
alterations whatever to the premises without written permission of Lessor. All
additions, alterations or improvements made by Lessee with or without consent
of Lessor, no matter how attached (except movable trade fixtures), shall remain
the property of Lessor, at the termination of this lease for any reason and
Lessee expressly waives all right to compensation therefor.
12. COMPLIANCE WITH LAWS. Lessee shall comply with all laws and ordinances
of the State, City, Board of Health and other public bodies, now in force or
which may hereafter be enacted of whatever character, at Lessee's own expense.
Lessee shall comply in every respect at Lessee's own expense, with the rules
and regulations of the Louisiana Fire Prevention Bureau, or those of any
similar bureau or association in existence at the time.
13. DEFAULT. Lessee shall not be considered in default as to any
obligation or condition of this lease, and the lease shall not be considered as
violated in any degree unless the status claimed to be a default or violation
shall continue for fifteen (15) days after written notice thereof if delivered
by registered
<PAGE> 6
or certified mail to Lessee at the leased premises by or on behalf of Lessor.
Should Lessee at any time violate any of the conditions of this lease, or fail
to comply with any of its obligations hereunder, or upon the filing of a
bankruptcy, receivership or respite petition by or against Lessee, or upon
Lessee's suspension, failure or insolvency, the rent for the whole unexpired
term of this lease shall, without putting Lessee in default, at once become due
and exigible, and in any such event, Lessor shall have the option either at
once to demand the entire rent for the whole term or to immediately cancel this
lease without putting Lessee in default; Lessee to remain responsible for all
damages or losses suffered by Lessors; Lessee hereby assenting thereto and
expressly waiving the legal notice to vacate the premises. Should Lessor
elect to demand the entire rent for the whole term, Lessor shall then have the
option to re-enter and let the premises for such price and on such terms as may
be immediately obtainable and apply the net amount realized (after deductions
of all usual expenses) to the payment of the rent. Failure to comply with any
condition or obligation of this lease will make Lessee liable for any loss or
damage sustained by Lessor.
14. ATTORNEYS FEES. Should any claim in favor of either party upon this
lease be placed in the hands of an attorney to give special attention to the
enforcement of such claim, the defaulting party shall pay reasonable attorney's
fees for such services.
15. NOTICES. Notices required or permitted under this lease, unless
subsequently changed by either party in writing, shall be:
LESSOR: Mercury, Inc.
P.O. Box 3709
Lake Charles, LA 70602
LESSEE: Mercury Cellular Telephone Company
P.O. Box 3709
Lake Charles, LA 70602
<PAGE> 7
THUS DONE AND PASSED by LESSOR and LESSEE, in my office in Sulphur,
Louisiana, in the presence of the undersigned competent witnesses, and me,
Notary Public, on this 1st day of March, 1992.
WITNESSES:
/s/ BRENDA MASHBURN MERCURY, INC.
- ---------------------
By: /s/ ILLEGIBLE
---------------------
/s/ BARBARA C. GEORGE
- ---------------------
MERCURY CELLULAR TELEPHONE
COMPANY
By: /s/ JOHN A. HENNING
--------------------------
/s/ SANDRA L. DALLY
------------------------------
Sandra L. Dally, Notary Public
My commission is for life.
<PAGE> 1
EXHIBIT 10.17
PURCHASE AGREEMENT
by and between
MISCELLCO COMMUNICATIONS, INC.
and
MERCURY CELLULAR OF KANSAS, INC.
Entered into April 19, 1995
<PAGE> 2
PURCHASE AGREEMENT
Table of Contents
<TABLE>
<S> <C> <C>
ARTICLE I: SALE AND PURCHASE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Purchase Price for Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3 Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II: DEPOSIT ESCROW DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 Escrow Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 Delivery of Escrow Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III: REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Organization and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Due Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.5 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6 Title and Right to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.8 Seller's Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.10 Articles of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.11 Financial Statements and Absence of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.12 Title To and Condition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.13 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.14 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.15 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.16 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.17 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.18 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.19 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.20 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.21 Taxes and Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.22 Changes Since March 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.23 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.24 No Adverse Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.25 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.26 Bulk Transfer Applicability and
Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.27 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.28 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.2 Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.3 Due Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
<PAGE> 3
-2-
<TABLE>
<S> <C>
4.5 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.6 Buyer's Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.7 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.8 Articles of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.9 Litigation and Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.10 Acknowledgement of Receipt of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.11 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.12 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE V: ADDITIONAL AGREEMENTS OF THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.1 Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Access Prior to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.3 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.4 Ad Valorem Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.5 Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.6 Due Diligence Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.7 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.8 Continued Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.9 Billing Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.10 Noncompete Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.11 Waiver of Any Claim of Conflict of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.12 Seller's Additional Construction Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.13 Post-Closing Roaming Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.14 Further Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VI: CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.1 Seller's Conditions to Close . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.2 Buyer's Conditions to Close . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VII: THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.1 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.2 Buyer's Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.3 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VIII: TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE IX: INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.1 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Notice of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.3 Indemnification Threshold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE X: MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.3 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
<PAGE> 4
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<TABLE>
<S> <C> <C>
10.5 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.6 Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.7 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(a) Escrow Funds Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(b) Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.8 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.9 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.10 Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.11 Assignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
<PAGE> 5
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is made as of this 19th day
of April, 1995 between MISCELLCO COMMUNICATIONS, INC., a Mississippi
corporation ("Seller") acting herein through J. Stacy Davidson, its President,
duly authorized by resolutions of the Board of Directors of said corporation, a
certified copy of which is provided as Schedule 1 hereto, and MERCURY CELLULAR
OF KANSAS, INC., a Louisiana corporation ("Buyer") acting herein through Thomas
G. Henning, its President, duly authorized by resolutions of the Board of
Directors of said corporation, a certified copy of which is provided as
Schedule 2 annexed hereto.
W I T N E S S E T H:
WHEREAS, Seller holds the Federal Communications Commission (the
"FCC") authorizations, including those issued pursuant to Parts 21 and 22 of
the FCC's rules, to operate the non-wireline cellular telephone system,
including the associated point-to-point microwave system (the "Licenses"), in
the Rural Service Areas ("RSAs") known as Kansas 1, 2, 6, 7, 11, 12, and 13 and
the FCC Interim Operating Authority for Oklahoma RSA 1 (the "System"), and
WHEREAS, Seller desires to sell and Buyer desires to purchase the
Assets (as hereinafter defined) upon the terms and conditions set forth herein,
NOW, THEREFORE, in consideration of the mutual covenants,
representations and warranties contained in this Agreement, the parties agree
as follows:
ARTICLE I.
SALE AND PURCHASE OF ASSETS
1.1 SALE OF ASSETS.
(a) Subject to the terms and conditions set forth in this
Agreement, Seller agrees to sell, transfer, assign and deliver to Buyer at the
Closing (as hereinafter defined), and Buyer agrees to then purchase from
Seller, free and clear of all liens, claims and encumbrances (except as set
forth below), all legal and beneficial right, title and interest in and to all
of the Licenses, properties, assets, rights, choses, equipment, accounts and
business of the Seller of every kind and description, tangible and intangible,
real, personal or mixed, wherever located, related to or used or acquired for
use or generated in connection with the ownership or operation of the System,
including, without limitation the following:
<PAGE> 6
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(1) System subscribers subject to the provisions
of subsection 1.2;
(2) the Licenses and all other licenses, permits
and/or authorizations currently owned by Seller, or hereafter obtained by the
Seller, used in connection with the operation of the System;
(3) the personal property listed on Schedule
1.1(a) hereto, all of which shall be in good working order at Closing, ordinary
wear and tear excepted;
(4) Seller's rights in those contracts listed on
Schedule 4.5 hereto, dated March 31, 1995, relating to the operation and
ownership of the System, provided that such contract rights are assigned to
and assumed by Buyer pursuant to assignment and assumption agreements
consistent with industry standards for agreements of that nature;
(5) files, books and records which relate to the
operation of the System, including, but not limited to, all subscriber lists
and information and all records required by the FCC to be maintained by the
Seller;
(6) accounts receivable trade; and
(7) inventory.
The foregoing items are hereinafter collectively referred to as the "Assets".
(b) Notwithstanding the foregoing, the following items
are specifically excluded from the definition of Assets and are not among the
items to be conveyed pursuant to this transaction:
(1) any right to the benefit of any net operating
loss carry forward of Seller;
(2) Accounts receivable other than subscriber
receivables, and other current assets of the Seller, excluding inventory but
including without limitation any cash, checks, chattel paper, instruments,
marketable securities, prepaid expenses or deposits, prepaid taxes and any
other items that constitute current assets pursuant to generally accepted
accounting principles consistently applied;
(3) those items of personal property listed in
Schedule 1.1(b), which include all personal property in Jackson, MS;
<PAGE> 7
-3-
(4) contract rights other than those to be
assigned and assumed pursuant to Schedule 4.5 hereto, as supplemented on or
before March 31, 1995 as herein provided; and
(5) any and all rights to FCC applications and
authorizations for 931 MHz facilities governed by Part 22 of the FCC's rules,
and Specialized Mobile Radio ("SMR") applications governed by Part 90 of the
FCC's rules.
(c) Except as otherwise expressly provided herein, Buyer
is not assuming any liabilities or obligations of Seller, whether incurred
before or after the Closing, including but not limited to those which may arise
in connection with or as a result of the transactions contemplated by this
Agreement or any other transactions of Seller, provided, however, that Buyer
shall assume those payables that constitute a deduction from the Purchase
Price.
(d) It is understood that Buyer and Seller agree that the
above described items will effectively constitute the sale/purchase of all of
the ownership interest of Seller in same. Further, as a result of the
sale/purchase, the Seller shall not have or retain any asset or ownership
interest related to Seller of any value whatsoever. Buyer and Seller agree
that the purpose hereof is for Seller to sell and Buyer to purchase all
property and business, and all ownership interest of Seller.
1.2 PURCHASE PRICE FOR ASSETS. In full payment for the
Assets, and also in consideration of the representations, covenants,
warranties, agreements and indemnities of Seller contained in this Agreement,
Buyer will pay and Seller will accept the following (the "Purchase Price"):
(a) The sum of Thirty Four Million Two Hundred Seventy
Nine Thousand Six Hundred and No/100 Dollars
($34,279,600), payable and subject to adjustment as
provided in this Section 1.2, as follows:
(1) One Million Seven Hundred
Twenty Three Thousand Eight
Hundred Forty and No/100
Dollars ($1,723,840.00) as a
deposit to be held in escrow
by the Calcasieu Marine
National Bank of Lake
Charles, Lake Charles,
Louisiana ("Calcasieu") or
another escrow agent
acceptable to Buyer and
Seller, under the terms of
the Deposit Escrow Agreement
and as otherwise provided in
Article II. If the
acquisition is closed, the
Escrow Funds as hereinafter
defined shall be applied to
the Purchase Price.
<PAGE> 8
-4-
(2) Except for funds placed in
escrow pursuant to Section
1.2(a)(3) and except as
otherwise provided in this
Section 1.2, the balance
after application of Escrow
Funds shall be paid by wire
transfer at the Closing,
subject to the following
adjustments to the Purchase
Price as set forth in this
Section 1.2(a)(2). The
Purchase Price shall be:
(i) Increased by an amount equal
to the book value of the
accounts receivable of Seller
being acquired pursuant to
Section 1.1, net of an
adequate reserve for doubtful
accounts, which shall be the
amount equal to the sum of
the following percentages of
the accounts receivable
falling within the designated
ranges: 2% for zero to
fifty-nine (0-59) days; 25%
for sixty to eighty-nine
(60-89) days; and 100% for 90
days and older;
(ii) Increased by an amount equal
to Seller's cost of
Inventory -- Phone Equipment;
(iii) Increased by an amount of (a)
$200.00 per Subscriber, as
defined below, between 8,500
and 10,000 Subscribers, and
(b) $275.00 per Subscriber on
the System as of the Closing
in excess of 10,000
Subscribers; provided, that
(a) all payments for
Subscribers shall be due on
the third business day
following receipt of the
appropriate Subscriber data,
and (b) in the event there
are Subscribers on the System
for less than ninety (90)
days, or who are not current
within thirty (30) days, the
amount that would otherwise
be paid for all such
Subscribers shall be placed
in escrow at Closing and be
governed by the terms of the
Subscriber Escrow Agreement,
in general form and substance
consistent with the Deposit
Escrow Agreement and
<PAGE> 9
-5-
Schedule 1.2 (a) (2) (iii).
It shall (a) call for
bimonthly distribution to
Seller for those Subscribers
who meet the thirty (30) day
and ninety (90) day criteria
set forth in this subsection
after Closing and (b) provide
that, with respect to any
Subscriber on the System at
the 120th day following
Closing for whom Buyer has not
yet paid the applicable
$200/$275 solely by virtue of
not being "current" in its
payments within thirty (30)
days Buyer must then either
disconnect such Subscribers
immediately or pay to Seller
the applicable $200/$275 for
such Subscriber. For purposes
of this subsection a
"Subscriber" defined as a
customer on the System (a) at
the time of Closing and for at
least ninety (90) days
immediately prior to the date
when the calculation is made
and one who shall have made
full or partial payment on his
account within ninety (90)
days.
(iv) Decreased by Accounts Payable
-- Trade and Advanced
Billings and Customer
Deposits.
(3) The sum of $200,000 shall be
placed in the Payables Escrow
Account and governed by the
Payables Escrow Agreement.
Such funds shall be deducted
from the amount otherwise to
be paid by wire transfer at
Closing under Section
1.2(a)(2). The Payables
Escrow Agreement shall in
general form and substance be
consistent with the model
included in Schedule 1.2 (a)
(4) hereto. The Agreement
shall provide for
distributions as may be
appropriate to assure timely
payment of accounts payable
as herein provided and that
any surplus be distributed to
Seller as soon as is
reasonable, but in no event
later than seventy-five (75)
days after funding, unless
identifiable payables or
other obligations remain.
<PAGE> 10
-6-
(4) The sum of $60,000 shall be
placed in the Tax Escrow
Account and governed by the
Tax Escrow Agreement. Such
funds shall be deducted from
the amount otherwise to be
paid by wire transfer at
Closing under Section
1.2(a)(4). The Tax Escrow
Agreement shall in general
form and substance be
consistent with the model
included in Schedule 1.2(a)
(4) hereto. The Agreement
shall provide for
distributions as may be
appropriate to assure timely
payment of all taxes.
(5) The above adjustments shall
initially be as determined
from Seller's most recently
available balance sheet (the
"Preliminary Balance Sheet"),
provided that such
Preliminary Balance Sheet
shall be dated not more than
one calendar month prior to
Closing and be delivered to
Buyer not less than ten (10)
calendar days prior to
Closing. Because the
Preliminary Balance Sheet
will reflect financial
information with respect to
the assets and liabilities of
Seller at a date prior to
Closing, and therefore may
not accurately reflect such
financial information as of
the Closing date, within
forty-five (45) days after
the Closing Date Seller shall
provide a completed balance
sheet (the "Final Balance
Sheet") for Seller dated as
of the Closing Date. Buyer
shall have fifteen (15) days
to review the proposed Final
Balance Sheet and to bring to
Seller's attention any
disagreements it may have
with it. if such Final
Balance Sheet reflects an
adjustment to the Purchase
Price ("Final Purchase
Price") which differs from
the adjusted Purchase Price
as reflected by the
Preliminary Balance Sheet
("Preliminary Purchase
Price") by more than $5,000,
then Buyer shall pay to
Seller (if the Final Purchase
Price exceeds the Preliminary
Purchase Price) or the Seller
shall pay to Buyer (if the
Preliminary Purchase Price
exceeds the Final Purchase
Price) the entire amount of
such difference in cash
within fifteen (15) days
after the
<PAGE> 11
-7-
due date for the Final
Balance Sheet from which such
adjustments will be calculated
and agreed upon by the
parties.
(6) For purposes of calculating
both the Preliminary and
Final Purchase Price, Buyer
and Seller shall utilize the
methodology set forth in
Schedule 1.2 (a) (6) hereto,
and utilize terms in the same
manner used in the Financial
Statements.
1.3 ALLOCATION. The Purchase Price shall be allocated as follows:
Of the Purchase Price an amount equal to the net book value will be allocated
to those Assets representing plant, property and equipment based on the Final
Balance Sheet; an amount of $1 will be allocated to all non-compete agreements;
and the remainder will be allocated to other intangible assets as determined by
Buyer. The values of adjustment items as determined in Section 1.2 will be
allocated based upon the amounts attributable thereto as so determined with
reference to the Final Balance Sheet.
Both the Preliminary Balance Sheet and the Final Balance Sheet shall be
prepared in accordance with generally accepted accounting principles
consistently applied, provided that they shall be prepared in a form consistent
with Financial Statements previously provided to Buyer and included in Schedule
3.11 hereto, and shall be certified on behalf of Seller as having been prepared
in accordance with this Agreement at the time they are delivered to Buyer and
shall be subject to verification and approval by or on behalf of Buyer.
ARTICLE II.
DEPOSIT ESCROW DEPOSIT
2.1 ESCROW DEPOSIT. As security for the performance by Buyer of its
obligations hereunder, Buyer has deposited with Calcasieu, as escrow agent (the
"Escrow Agent") the sum of $1,723.480.00 (together with earnings thereon the
"Escrow Funds") pursuant to an escrow agreement among Seller, Buyer and the
Escrow Agent in the form of Schedule 1.2(a) hereto (the "Deposit Escrow
Agreement").
2.2 DELIVERY OF ESCROW FUNDS. The Escrow Funds have been
delivered to the Escrow Agent, and the provisions of this Section 2.2 supersede
any conflicting provisions of the Escrow Agreement as between Buyer and Seller:
<PAGE> 12
-8-
(a) If the purchase of the Assets contemplated herein is
consummated, Seller and Buyer shall instruct the Escrow Agent to wire the
Escrow Funds to Seller at the Closing for application in full to the Purchase
Price;
(b) If the purchase by Buyer of the Assets from Seller is not
consummated for any reason other than the default by Buyer, and Buyer provides
unopposed instruction to the Escrow Agent to deliver the Escrow Funds to Buyer,
Escrow Agent shall so deliver the Escrow Funds;
(c) If the purchase by Buyer of the Assets from Seller is not
consummated because of the default by Buyer, and Seller provides unopposed
instruction to the Escrow Agent to deliver the Escrow Funds to Seller, Escrow
Agent shall so deliver the Escrow Funds; or
(d) In the event of a dispute between Buyer and Seller with respect
to who is entitled to the Escrow Funds, the parties' rights shall be governed by
the terms of the Deposit Escrow Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
3.1 ORGANIZATION AND AUTHORITY. On the date hereof and on
the Closing date Seller is and will be a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Mississippi; has
and will have the proper authorization to do business in the states of Kansas
and Oklahoma; has and will have full power and authority to execute, deliver
and perform this Agreement and all other agreements necessary to effectuate the
transactions contemplated hereby (collectively, "the Agreements") ; and has and
will have all requisite power to hold and transfer the Licenses and to execute,
deliver and perform its obligations under the Agreements.
3.2 POWER. Seller has, and on the Closing Date will have, all
requisite power and authority to (a) execute, deliver and perform the
Agreements to which it is a party, and (b) own, lease and operate its
properties and assets and to carry on its business as presently conducted and
as contemplated by this Agreement.
3.3 DUE EXECUTION. Each of the Agreements to which it is a party
has been and on the Closing Date each of the Agreements to which it is a party
will be duly executed, authorized and delivered by Seller as its legal, valid
and binding obligation enforceable against Seller in accordance with its terms.
<PAGE> 13
-9-
3.4 NON-CONTRAVENTION. The execution, delivery and performance of
the Agreements and the consummation of the transactions contemplated thereby or
the compliance with or fulfillment of the terms, conditions and provisions
thereof will not (a) violate in any material respect any federal, state or local
law, statute, ordinance, rule or regulation which is or may be applicable to
Seller, (b) violate in any material respect any agreement, indenture,
instrument, note, mortgage, lease, license, franchise, permit or other
authorization, right, restriction or obligation to which Seller is a party or by
which Seller or the Assets are bound, (c) violate any order, injunction,
judgment or decree of any court or any governmental authority or arbitrator by
which Seller or the Assets are bound, (d) conflict with or violate any
provision of the articles of incorporation or by-laws of Seller, or (e) create
or impose any lien, claim or encumbrance on the Assets, except as expressly
provided by this Agreement. Seller and the Assets are and on the Closing Date
will be in all material respects in compliance with all federal, state and local
laws and regulations and administrative orders applicable thereto.
3.5 CONSENTS. All consents, authorizations, orders or approvals
of, and filings or registrations with, any court or administrative or
governmental authority and any other person or entity, required to be made or
obtained by Seller for or in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby,
including the consents to the assumption and assignment of those contracts set
forth in Schedule 4.5, have been obtained.
3.6 TITLE AND RIGHT TO ASSETS. Seller is the sole owner of the
Assets and upon consummation of the Closing, Seller will convey to Buyer, good
and marketable title to the Assets, free and clear of any lien, claim or
encumbrance, except as (a) approved or created by or on behalf of or at the
request of Buyer or (b) contemplated or permitted by or pursuant to this
Agreement.
3.7 LITIGATION. Except as set forth in Schedule 3.7, there is
no investigation, claim, proceeding or action pending or, to Seller's
knowledge, threatened against Seller with respect to the transactions
contemplated by this Agreement which, if adversely determined, would (a) result
in the revocation, cancellation, suspension or material adverse modification of
the Licenses or (b) affect the Assets or the authority or ability of Seller to
execute and deliver this Agreement and consummate the transactions contemplated
hereby.
3.8 SELLER'S QUALIFICATIONS. Seller is legally qualified under
all applicable FCC regulations to assign the Licenses from Seller to Buyer.
<PAGE> 14
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3.9 BROKERS. Seller is responsible for all costs, fees and
expenses due to Columbia Cellular Corporation, the only broker or finder which
acted on Seller's behalf in connection with the transactions contemplated by
this Agreement. Seller agrees to indemnify, defend and hold Buyer harmless
from and against all costs or liabilities resulting from any other person
asserting a claim for any broker's commission for acting on behalf of Seller in
connection with the transactions contemplated hereby.
3.10 ARTICLES OF INCORPORATION AND BYLAWS. A true and correct
copy of the Articles of Incorporation and Bylaws of Seller, together with all
amendments thereto, are set forth as Schedule 3.10.
3.11 FINANCIAL STATEMENTS AND ABSENCE OF CHANGES. The audited
financial statements and supplemental data for calendar year 1993 and the
unaudited interim income statements and balance sheets without disclosures (the
"Unaudited Interim Statements") for the months of January, 1994 through March,
1995 (collectively, the "Financial Statements") are set forth as Schedule 3.11
hereto. The Financial Statements present fairly in all material respects, and
in conformity with GAAP procedures for preparation of accrual basis financial
statements, consistently applied but, in the case of the Unaudited Interim
Statements, are in the format used by Seller historically in preparation of its
internally generated financial statements, the financial condition and results
of operations as of the dates and for the periods indicated therein, and both
the Preliminary Balance Sheet and the Final Balance Sheet will present fairly
in all material respects, and in conformity with GAAP procedures for
preparation of accrual basis financial statements consistently applied, but in
the format used by Seller historically in preparation of internally generated
financial statements, the financial condition and results of operations of
Seller as of the dates thereof. Except as reflected in the Financial
Statements, or in this Agreement, Seller has no debts, obligations or
liabilities (contingent or otherwise) that would be required to be disclosed in
financial statements prepared in accordance with GAAP. Since September 30,
1994, there has been no material adverse change in the business, financial
condition, or results of operations of Seller from that described and reflected
in the Unaudited Interim Statements as of that date. Any financial statements
prepared by or at the direction of Seller subsequent to the date hereof shall
be promptly provided to Buyer and shall constitute Financial Statements for
purposes hereof.
3.12 TITLE TO AND CONDITION OF ASSETS. Except as set forth
in Schedule 3.12, Seller has good and marketable title to the Assets, free and
clear of all liens, claims, charges, security interests, options, or other
title defects or encumbrances, and full right to transfer the same to Buyer as
contemplated by this
<PAGE> 15
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Agreement. Each of the Assets is in good operating condition and repair, normal
wear and tear excepted, is suitable for the use to which the same is
customarily put by Seller, and neither the Assets nor the purchase, sale,
operation or maintenance thereof or with respect thereto violates any
applicable material ordinance, regulation, covenant, restriction, rule or
provision of law (including but not limited to those relating to zoning,
environmental protection and occupational safety). Upon consummation of the
transactions at the Closing as contemplated by this Agreement, Buyer will
acquire title to the Assets free and clear of any liens, claims, charges,
security interests, options or other title defects or encumbrances (except as
otherwise provided for herein).
3.13 REAL PROPERTY. Except as set forth in Schedule 3.13, neither
Seller nor any of its officers or directors own or have an ownership interest
in any real estate that Seller occupies or utilizes in any manner in connection
with its business or otherwise in connection with the ownership, use, operation
or maintenance of any of the Assets.
3.14 INTELLECTUAL PROPERTY. Except as set forth on Schedule
3.14, Seller has no patents, copyrights, trade names, trademarks, service
marks, other such names or marks or applications therefor and has not conducted
business under any corporate, trade or fictitious name other than its current
corporate name. No other intellectual property is required in the operation of
the business of Seller. Except for matters of general applicability in the
industry there are no pending or threatened claims of infringements by Seller
upon the rights to any intellectual property of others.
3.15 LIABILITIES. Except as and to the extent described on
Schedule 3.15, or as expressly provided for in this Agreement or the
Agreements, all liabilities and obligations of Seller, secured or unsecured
(whether absolute, contingent or otherwise), including but not limited to tax
liabilities, have been paid or will be paid when due, unless properly
challenged, and Seller will incur no liabilities or obligations prior to the
Closing Date other than in the ordinary course of business. Seller does not
have any obligations or liabilities, whether direct or indirect, joint or
several, absolute or contingent, matured or unmatured, secured or unsecured,
which could be affected by the execution and delivery of this Agreement or
consummation of the transactions contemplated by this Agreement or which could
affect the same or the Assets.
3.16 CONTRACTS.
(a) Except as set forth in Schedule 3.16, or otherwise
expressly provided herein, Seller is not a party to or bound by any contracts,
instruments, agreements, plans, leases, licenses or
<PAGE> 16
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other obligations which could affect the execution, delivery and performance of
this Agreement, the consummation of the transactions contemplated hereby, the
Assets or operations with respect to the Assets following the Closing. True
and correct copies of all contracts listed in Schedule 3.16 have been delivered
to Buyer.
(b) Except as set forth in Schedule 3.16 neither Seller
nor, to Seller's knowledge, any other party to any contract, instrument,
agreement, plan, lease, license or other obligation to which Seller is a party
or by which it is bound has breached any provision of, or is in violation or
default under the terms of, or has caused or permitted to exist any event that
with or without due notice or lapse of time or both would constitute a default
or event of default, under any such contract, instrument, agreement, plan,
lease, license or other obligation. All such contracts, instruments,
agreements, plans, leases, licenses and other obligations are valid, binding
and in full force and effect and will continue in full force and effect to the
benefit of Buyer, to the extent that the Buyer has pursuant to this Agreement
elected to assume such agreements, and the execution and delivery of this
Agreement by Seller and the consummation of the transactions contemplated by
this Agreement will not violate any provision of, or result in the acceleration
of any obligation under, or the termination of, any such contract, instrument,
agreement, plan, lease, license or other obligation.
3.17 COMPLIANCE WITH LAWS. Seller and the Assets are in
material compliance with all federal, state and local laws and regulations and
administrative orders applicable thereto. There is no order, writ, injunction
or decree relating to or affecting the operations of the business of Seller,
the Assets or the transactions contemplated by this Agreement.
3.18 LICENSES. To the knowledge and belief of Seller, after
due inquiry, Seller has all Licenses and other federal, state and local
franchises, orders, licenses, ordinances, certifications, approvals,
authorizations and permits necessary to conduct the business of Seller as
currently conducted. Copies of the Licenses or, in the case of microwave
authorizations, FCC Public Notices announcing their grant, are set forth on
Schedule 3.18, and true, correct and complete copies of all other of the above
authorizations have previously been delivered to Buyer. To the knowledge and
belief of Seller, after due inquiry, all franchises, orders, licenses,
ordinances, certifications, approvals, authorizations and permits relating to
the business of Seller are in full force and effect, no violations have been
made in respect thereof, and no proceeding is pending or threatened which could
have the effect of revoking or limiting any such franchises, orders, licenses,
ordinances, certifications, approvals, authorizations or permits.
<PAGE> 17
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3.19 INSURANCE. Schedule 3.19 sets forth a list of all
policies of insurance which insure the Assets, together with true, correct and
complete copies of the policies that have previously been delivered to Buyer.
Such insurance is adequate and Seller will keep all current insurance policies
in effect until the Closing Date, except that nothing herein shall prevent
Seller from obtaining, and substituting for existing contracts, new policies
that are functionally equivalent or superior to those now in effect. Seller has
not been refused any insurance by an insurance carrier to which it has applied
for insurance. Seller shall bear the risk of loss of, or damage to, the Assets
through the Closing Date.
3.20 EMPLOYEE BENEFIT PLANS. Buyer will incur no liability or
obligation as a result of the transactions contemplated by this Agreement with
respect to or arising out of any pension or welfare benefit plan or program
maintained by or on behalf of Seller, its employees or any multi-employer
pension or welfare plan or program.
3.21 TAXES AND RETURNS. All federal, state, county and
local, and all foreign and other, income, franchise, excise, tariff, gross
receipts, sales and use, payroll, real and personal property and other taxes
and governmental charges, assessments and contributions of Seller, including
interest and penalties ("Taxes"), required to have been paid, collected or
withheld with respect to all open years have been paid or collected or withheld
and remitted to the appropriate governmental agency, except for Taxes not yet
payable or reasonably contested which are described on Schedule 3.21 attached
hereto. True, complete and correct returns have been or will be, as the case
may be, timely filed with respect to all Taxes which are due and payable and
the copies thereof that have been or will be, as the case may be, provided to
Buyer are true, accurate and complete. Seller has not filed or entered into
any election, consent or extension agreement that extends any applicable
statute of limitations. Seller is not a party to any action or proceeding
pending or, to the best of Seller's knowledge, threatened by any governmental
authority for assessment or collection of Taxes, no unresolved claim or
assessment or collection of Taxes has been asserted against it and no audit or
investigation by any governmental authority is pending or threatened.
3.22 CHANGES SINCE MARCH 31, 1995 Except as otherwise
expressly disclosed on the Schedules hereto, since March 31, 1995, there has
not been:
1. any damage, destruction, other casualty loss or other
occurrence that could, individually or in the aggregate, have a material
adverse effect on the value of the Assets or the business or condition of
Seller;
<PAGE> 18
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2. any disposition of any material assets of Seller
other than in the ordinary course of business;
3. any amendment, modification or termination of any
existing, or entering into any new, contract, agreement, lease, license,
certificate, permit, franchise or other obligation that could, individually or
in the aggregate, have a material adverse effect on the value of the Assets or
the business, condition of Seller; or
4. any other material adverse change in the business,
assets (including but not limited to the Assets), condition or business of
Seller, except for matters of general applicability throughout the industry.
3.23 ACCOUNTS RECEIVABLE. The accounts receivable which are
reflected in the Financial Statements and those which will be reflected in the
Preliminary Balance sheet and the Final Balance Sheet were or will have been,
respectively, validly obtained in the ordinary course of business. The
reserves for doubtful accounts reflected on the Financial Statements and those
which will be reflected in the Preliminary Balance Sheet and the Final Balance
Sheet were or will be, respectively, determined in accordance with generally
accepted accounting principles and past practice consistently applied, and
adequately provide or will adequately provide, as the case may be, for all
uncollectible accounts receivable.
3.24 NO ADVERSE ACTIONS. There is no existing, pending or, to
the knowledge and belief of Seller after due inquiry, threatened termination,
cancellation, limitation, modification or change in Seller's business
relationship with any supplier, customer or other person or entity except as is
not material individually and in the aggregate and which is in the ordinary
course of business.
3.25 LABOR MATTERS. Seller does not have any obligation,
contingent or otherwise, under any employment or consulting agreement,
collective bargaining agreement or other contract with a labor union or other
labor or employee group. There are not efforts presently being made or, to the
knowledge and belief of Seller after due inquiry, threatened by or on behalf of
any labor union with respect to employees of Seller.
3.26 BULK TRANSFER APPLICABILITY AND PAYMENT OF OBLIGATIONS.
The consummation of the transactions contemplated by this Agreement is not
subject to the provision of the bulk transfer law, bulk transfer tax law or any
similar law of any jurisdiction. Seller will pay all its obligations and
liabilities as and when the same become due and payable.
<PAGE> 19
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3.27 AUTHORIZATION. The execution and delivery of this Agreement
have been duly authorized by Seller, including by its Board of Directors and,
if required by law, its shareholders, and upon execution and delivery by
Seller, this Agreement will constitute the valid and binding agreement of
Seller and will be enforceable in accordance with its terms.
3.28 DISCLOSURE. No representation, warranty or statement made
by or on behalf of Seller in this Agreement or the Schedules attached hereto or
in the certificates or other documents furnished or to be furnished to Buyer or
its representatives in connection with this Agreement, the Agreements or the
transactions contemplated hereby or thereby, contains or will contain any
untrue statement of fact or omits or will omit to state a fact required to be
stated herein or therein or necessary to make the statements contained herein
or therein not misleading. Prior to the Closing, full disclosure shall have
been made to Buyer of all material facts with respect to Seller, the Assets,
and the transactions contemplated by this Agreement, which a reasonable
purchaser would deem relevant. For a period extending until sixty (60) days
after Closing, Seller shall promptly notify Buyer of any change or event
of which it has knowledge, which could adversely affect the Assets or its
operations, business or prospects.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that:
4.1 ORGANIZATION. On the date hereof and on the Closing Date
Buyer is and will be a corporation duly organized, validly existing and in good
standing under the laws of the State of Louisiana; will have proper
authorization to do business in the states of Kansas and Oklahoma; has and will
have full power and authority to execute and perform the Agreements; and has
and will have all requisite power to hold and receive the Licenses and to
execute, deliver and perform its obligations under the Agreements.
4.2 POWER. Buyer has, and on the Closing Date will have, all
requisite power and authority to (a) execute, deliver and perform the
Agreements to which it is a party, and (b) own, lease and operate its
properties and assets and to carry on its business as presently conducted and
as contemplated by this Agreement.
4.3 DUE EXECUTION. Each of the Agreements to which it is a party
has been and on the Closing Date each of the Agreements to which it is a party
will be duly authorized, executed and delivered by Buyer as its legal, valid
and binding obligation enforceable against Buyer in accordance with its terms.
<PAGE> 20
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4.4 NON-CONTRAVENTION. The execution, delivery and
performance by Buyer of the Agreements to which it is a party and the
consummation of the transactions contemplated thereby or the compliance with or
fulfillment of the terms, conditions and provisions hereof will not (a) violate
in any material respect any federal, state or local law, statute, ordinance,
rule or regulation which is or may be applicable to Buyer (b) violate in any
material respect any agreement, indenture, instrument, note, mortgage, lease,
license, franchise, permit or other authorization, right, restriction or
obligation to which Buyer is a party or is bound, (c) violate any order,
injunction, judgment or decree of any court or other governmental authority or
arbitrator by which Buyer is bound, or (d) conflict with or violate any
provision of Buyer's articles of incorporation or by-laws.
4.5 CONSENTS. All consents, authorizations, orders or
approvals of, and filings or registrations with, any court or administrative or
governmental authority and any other person or entity required to be made or
obtained by Buyer for or in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, have
been obtained. Schedule 4.5 hereto lists 13 cell sites and six office leases
which Buyer identifies as locations for which its ability to assume existing
lease obligations is a condition to Closing, and for which it will utilize best
efforts to assume; and an additional 11 cell site leases that Buyer seeks to
assume, 9 of which must be assumable as a condition to Closing. Buyer's ability
to assume 9 of 11 cell site leases not considered in the 13 "must have" list
and the remaining contracts is a condition to Closing.
4.6 BUYER'S QUALIFICATIONS. Buyer is, and at the time of Closing
shall be, legally, and otherwise qualified to obtain and own the Licenses. At
the Closing, Buyer shall be financially qualified to consummate the
transactions contemplated by this Agreement. There are no pending or, to the
best of Buyer's knowledge, threatened pleadings or proceedings before the FCC,
initiated either by private parties or the FCC, which question the legal,
financial or technical qualifications of Buyer to hold the Licenses.
4.7 BROKERS. Buyer agrees to indemnify, defend and hold
Seller harmless from and against all costs or liabilities resulting from any
other person asserting a claim for any broker's commission for acting on behalf
of Buyer in connection with the transactions contemplated hereby.
4.8 ARTICLES OF INCORPORATION AND BYLAWS. A true and correct
copy of the Articles of Incorporation of Buyer, together with all amendments
thereto, is provided as Schedule 4.8. Buyer has no bylaws.
<PAGE> 21
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4.9 LITIGATION AND COMPLIANCE WITH LAWS. There is no pending
or, to Buyer's knowledge, threatened claim, investigation, lawsuit or
administrative proceeding against Buyer in any way relating to the subject
transaction. Buyer is in compliance with all federal, state and local laws and
regulation and administrative orders applicable to the subject transaction.
There is no order, writ, injunction or decree relating to or affecting Buyer's
ability to consummate the transactions contemplated by this Agreement.
4.10 ACKNOWLEDGEMENT OF RECEIPT OF DOCUMENTS. Buyer hereby
acknowledges receipt of those documents listed in Schedules 3.16, provided,
however, that Buyer makes no representation regarding the accuracy or
completeness of those documents.
4.11 AUTHORIZATION. The execution and delivery of this Agreement
have been duly authorized by Buyer, including by its Board of Directors, and
upon execution and delivery by Buyer, this Agreement will constitute the valid
and binding agreement of Buyer and will be enforceable in accordance with its
terms.
4.12 DISCLOSURE. No representation, warranty or statement made
by or on behalf of Buyer in this Agreement or the Schedules attached hereto or
in the certificates or other documents furnished or to be furnished to Seller
or its representatives in connection with this Agreement and the transactions
contemplated hereby or thereby, contains or will contain any untrue statement
of fact or omits or will omit to state a fact required to be stated herein or
therein or necessary to make the statements contained herein or therein not
misleading. Prior to the Closing, full disclosure shall have been made to
Seller of all material facts with respect to Buyer, and the transactions
contemplated by this Agreement, which a reasonable seller would deem relevant.
Through Closing, Buyer shall promptly notify Seller of any change or event
which could adversely affect the subject transaction.
ARTICLE V.
ADDITIONAL AGREEMENTS OF THE PARTIES
5.1 ORDINARY COURSE. Subject to the terms and conditions of this
Agreement, from and after the date of this Agreement, without the written
consent of the Buyer, Seller covenants, represents and warrants that Seller
shall, through the Closing Date, not have,
(a) sold, assigned, transferred, leased, mortgaged,
pledged or subjected to lien, or otherwise encumbered, any of the Assets other
than in the ordinary course of business and for those Assets having an
aggregate value of $1,000 or less;
<PAGE> 22
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(b) managed customer accounts, equipment, inventories and
other supplies other than in the ordinary course of business;
(c) directly or indirectly through any investment banker
or other representative or otherwise, solicited, entertained or negotiated with
respect to any inquiries or proposals from any person relating to: (1) the
merger or consolidation of Seller with any person or entity, (2) the direct or
indirect acquisition by any person of any of the Assets, or (3) the acquisition
of direct or indirect beneficial ownership of Seller or any capital stock
thereof by any person. Seller shall promptly notify Buyer of any inquiries or
proposals it may receive relating to any such matters including in such
notification the relevant details of the inquiry or proposal;
(d) borrowed any sums or entered into any financial
guaranties or otherwise incurred any indebtedness or liability other than in
the ordinary course of business consistent with Seller's past practices;
(e) entered into any agreement or transaction which is
not terminable by Seller without penalty upon no more than thirty (30) days
notice except as provided for in subsection (f) below;
(f) deviated from established policies and practices
concerning credit verification, subscriber disconnects, collections, agent
programs, roaming contracts, sales commissions, billings, and customer
contracts (one year minimum); or
(g) otherwise entered into any transaction not in the
ordinary course of business.
5.2 ACCESS PRIOR TO CLOSING. Upon reasonable notice, Seller shall
afford ]Buyer and its representatives (including, without limitation, its
independent public accountants, bank or other lender's representatives and
attorneys) reasonable access during regular business hours from this date
(except as otherwise provided herein) through the Closing Date to any and all
of the premises, properties, financial information, contracts, books, records,
data, reports, personnel, customers and vendors of or relating to Seller and
the Assets. Moreover, Seller shall generally keep Buyer appraised of all
material developments regarding the above matters, provided, however, that
Seller shall at all times until Closing retain both de facto and de jure
control of the System and nothing in this section shall provide any pre-closing
control rights to Buyer.
5.3 FURTHER ASSURANCES. At any time and from time to time at
or after the Closing, the parties agree to cooperate with each other, to
execute and deliver such other documents, instruments of
<PAGE> 23
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transfer or assignment, files, books and records and do all such further acts
and things as may be reasonably required to carry out the transactions
contemplated hereby.
5.4 AD VALOREM TAXES.
(a) Except as set forth expressly in this Agreement,
nothing herein shall in any way modify the obligations of the various parties
to this agreement to pay taxes as provided by statute or code.
(b) The parties covenant to use best efforts to negotiate
a dollar specific amount that Seller shall convey to Buyer in consideration for
Buyer assuming all of Seller's liabilities for unpaid ad valorem taxes
associated with the System through Closing. In so negotiating, the parties' aim
shall be to obtain a reasonable estimate of unpaid ad valorem tax obligations
(for tax years 1993, 1994 and 1995) attributable to the System through Closing
to be borne by Seller ("Seller's Taxes").
(c) In an effort to negotiate an appropriate price for
Buyer to assume Seller's Taxes as set forth in subsection (b) above: (i) Buyer
and Seller have agreed upon Kansas tax counsel to serve as a facilitator
between the parties; (ii) the facilitator has been retained jointly by the
parties with the cost of such facilitator being split evenly between the
parties; and (iii) in the event that this issue cannot be resolved amicably,
the parties shall submit this matter to binding arbitration through and
pursuant to applicable rules of the American Arbitration Association (or such
other arbitrator as the parties may mutually agree), it being understood that
the arbitrator shall be instructed to render a decision on an expedited basis,
with there being no basis for appeal other than fraud on the part of the
arbitrator.
(d) The Purchase Price shall be decreased by the Seller's
Taxes as determined under subsections (b) or (c) above. In the event an
arbitration decision is not made under any arbitration proceeding under
subsection (c) above on or before the Closing, the sum of $60,000 be placed in
an Ad Valorem Tax Escrow Account in general form and substance consistent with
the Deposit Escrow Agreement and Schedule 5.4(d) hereto, with the same Escrow
Agent if possible, and shall provide for distribution of the Escrowed Funds
upon entry of an arbitration award, including distribution to Seller of all or
a portion thereof not to exceed the amount of Seller's Taxes, provided that
Seller shall remain liable for any shortfall in payment of Seller's Taxes after
application of the Escrowed Funds (and accrued interest) as distributed to
Buyer.
<PAGE> 24
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5.5 DELIVERY. The parties shall cause the delivery of the
respective documents required to be delivered or caused to be delivered by them
pursuant to Article VII below.
5.6 DUE DILIGENCE REVIEW.
(a) Buyer has completed its due diligence review of the
Assets and the System, and has found all to be in order.
(b) Throughout the course of Buyer's due diligence review
Seller afforded Buyer with reasonable access to the System, the Assets and
relevant books and records of the System and the Assets, provided, however,
that the due diligence review was conducted without interfering materially with
the operation of the System.
5.7 EMPLOYEES. Buyer has no obligation to employ any of the
employees of Seller. Seller shall not make any representation to the contrary
to any of such employees, provided, however, Buyer intends and shall be
permitted, following a general announcement by Seller to its employees
regarding the proposed sale or notice to Buyer from Seller, to interview or
otherwise contact such employees regarding any future employment.
Seller shall use best efforts to maintain, through Closing; staffing
at its Kansas operations at current levels, and with existing employees. Seller
shall maintain at least three customer service personnel in its Jackson,
Mississippi office through Closing.
5.8 CONTINUED RELATIONSHIP. Seller will use its best efforts to
preserve intact the business of Seller; to maintain good relationships with
suppliers, customers and others having business relations with Seller; to cause
to be taken no change in the business, financial condition or results of
operations of Seller which may have a material adverse effect on the Assets or
the business, financial condition or of Seller; and to facilitate a smooth
transition of ownership of the Assets, including but not limited to, there
being no interruption in interconnected service. Notwithstanding the
foregoing, Seller does not represent or warrant any continued business
relationship on the part of the Buyer with suppliers, customers or others
unless explicitly specified elsewhere in this Agreement, and Seller is under no
obligation to the Buyer to maintain any business relationship based on Seller's
financial backing unless otherwise specified in this Agreement.
5.9 BILLING SERVICES. Seller provides to Buyer the option
of obtaining post-Closing billing services from Seller. The services to be
rendered include calculating invoices, submitting and receiving CIBER records
to and from the appropriate clearinghouse,
<PAGE> 25
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printing and mailing bills, making collections, deposits and posting payments.
Buyer shall have the option of obtaining billing services on a month-by-month
basis for a period not to exceed six months past Closing, provided that Buyer
provides Seller with at least 30 days notice, and further provided that Buyer
shall pay to Seller the amount of $3.35 per bill, which payments shall be due
within twenty (20) days of being invoiced for such service. The billing
services discussed herein shall include billing inquiries but not other
customer-service related services.
5.10 NONCOMPETE AGREEMENTS. As of the Closing, Seller and those
persons identified on Schedule 5.10, which persons constitute all of Seller's
corporate officers, directors, and other key employees as of this date, shall
have executed, without further consideration, noncompete and confidentiality
agreements in form and substance as set forth in Schedule 5.10, prohibiting
their involvement in wireless competitive activities in those RSAs in which the
System operates, for a two-year period after the Closing, with exceptions being
provided for involvement with a system (the "Competitive System") having a far
larger geographic scope, of which the total pops within the RSAs subject to
this Agreement as to which the Competitive System is competitive with the
System shall not exceed 5%, and with the further restriction that the
restricted party may not engage, directly or indirectly, in business activities
being specifically focused upon the RSAs within the System.
5.11 WAIVER OF ANY CLAIM OF CONFLICT OF INTEREST. The parties
to this Agreement recognize that each party has utilized the services of the
law firm of Lukas, McGowan, Nace & Gutierrez, Chartered (the "Firm"), for
various communications-related legal and engineering matters. The parties
further acknowledge that the Firm has been retained to represent Seller solely
in conjunction with the subject Agreement and the transactions contemplated
thereby, and waive any claim of conflict of interest resulting therefrom.
5.12 SELLER'S ADDITIONAL CONSTRUCTION OBLIGATIONS. The
"five-year fill-in" period set forth in Part 22 of the FCC's rules expires, or
has expired, in various of the RSAs as early as February 6, 1995. On or before
that date Seller has taken or shall have taken the following actions in order
to maintain exclusive filing rights for the System for a total of 24 cell
sites, 17 of which shall be full cell sites and 7 shall be extenders: (a) For
those sites where only an FCC Form 489 filing is applicable, Seller shall have
constructed and commenced operation of such cells, and submitted timely an FCC
Form 489, in accordance with usual and customary requirements of the industry,
and consistent with the site-specific listing of assets set forth in Schedule
1.1(a) hereto; and (b) where an FCC Form 401 filing is applicable, Seller
<PAGE> 26
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shall have filed an acceptable Form 401 application. Additionally, Seller shall
incorporate into the System two (2) Plexsys P-1000 cellular switches prior to
Closing, provided, however, that in the event such equipment has not been
properly incorporated into the System as of that date, the provisions of the
Agreement set forth on Schedule 5.12 shall apply.
5.13 POST-CLOSING ROAMING FEES AND EXPENSES. Notwithstanding
anything in this Agreement to the contrary, Buyer and Seller agree that all
roaming fees and expenses relating to the period up to and including Closing,
but that come to Seller's attention only after Closing, shall be split such
that Seller is entitled to fees and responsible for expenses only to the extent
that they relate to the period ending at Closing, and all other fees/expenses
are those of Buyer.
5.14 FURTHER DOCUMENTS. The parties shall negotiate in good
faith and finalize on or before closing such other agreements addressed
herein but not yet drafted.
ARTICLE VI.
CONDITIONS TO CLOSING
6.1 SELLER'S CONDITIONS TO CLOSE. The obligations of Seller to
close under this Agreement are subject to the satisfaction at or prior to the
Closing of each of the following conditions, provided that compliance with any
or all of such conditions may be waived, in writing, by Seller:
(a) The representations and warranties of Buyer contained
in this Agreement shall be true and correct in all material respects on the
date hereof and on the Closing Date;
(b) Buyer shall have performed and complied with all of
the covenants and agreements in all material respects and satisfied all of the
conditions required by this Agreement to be performed or complied with or
satisfied by Buyer at or prior to the Closing;
(c) All required governmental and regulatory approvals,
consents and/or waiting periods shall have been obtained or shall have expired;
and
(d) On the Closing Date, no action, suit or proceeding
shall have been instituted by any person or entity, or threatened by any
governmental agency or body, before a court or governmental body, to restrain
or prevent the carrying out of the transactions contemplated by this Agreement
or to seek other material relief with respect to any of such transactions or
that could, individually or in the aggregate, have a material adverse effect on
<PAGE> 27
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the Buyer, and there shall be no injunction, restraining order or decree of any
nature of any court or governmental agency or body in effect that restrains or
prohibits the consummation of the transactions contemplated by this Agreement.
6.2 BUYER'S CONDITIONS TO CLOSE. The obligations of Buyer to
close under this Agreement are subject to the satisfaction at or prior to the
Closing of each of the following conditions, but compliance with any or all of
any such conditions may be waived, in writing, by Buyer:
(a) The representations and warranties of Seller
contained in this Agreement shall be true and correct in all material respects
on the date hereof and on the Closing Date;
(b) Seller shall have performed and complied with all the
covenants and agreements in all material respects and satisfied all the
conditions required by this Agreement to be performed or complied with or
satisfied by it at or prior to the closing;
(c) All required governmental, regulatory and third-party
approvals, consents and/or waiting periods shall have been obtained or have
expired;
(d) No action, suit or proceeding shall have been
instituted by any person or entity, or threatened by any governmental agency or
body, before a court or governmental body, to restrain or prevent the carrying
out of the transactions contemplated by this Agreement or to seek other
material relief with respect to any of such transactions or that could,
individually or in the aggregate, have a material adverse effect on the
business or prospects of Seller and on the Closing Date, there shall be no
injunction, restraining order or decree of any nature of any court or
governmental agency or body in effect that restrains or prohibits the
consummation of the transactions contemplated by this Agreement;
(e) There shall not have occurred any material adverse
change in the Assets or in the business condition or prospects of Seller,
except for matters effecting the cellular industry generally; and
(g) Buyer shall have been able to assume all leases
identified in Section 4.5 and Schedule 4.5 as being "must have" sites, and
Buyer shall have been able to assume nine of eleven additional cell sites.
<PAGE> 28
-24-
ARTICLE VII.
THE CLOSING
7.1 DELIVERIES BY SELLER. At the Closing, Buyer shall receive
from Seller the following:
(a) Certificate of good standing from the Secretary of
State of the State of Mississippi stating that Seller is a validly existing
corporation in good standing and a certificate of good standing from the
Secretary of State of the states of Kansas and Oklahoma or other appropriate
documentation stating that Seller is authorized to do business in the states of
Kansas and Oklahoma;
(b) Opinions from counsel of Seller in form and substance
consistent with Schedules 7.1(b) and 7.1(b)(2);
(c) Copies of duly adopted resolutions of the board of
directors and to the extent necessary, the consent of the shareholders of
Seller approving the execution, delivery and performance of this Agreement and
the other instruments contemplated hereby certified by the Secretary of Seller;
(d) Duly executed Noncompete Agreements as provided in
Section 5.10;
(e) Instruments of transfer and assignment, consents,
certificates, regulatory approvals and all other documents and agreements in
form and substance satisfactory to Buyer which Buyer may reasonably deem
necessary to transfer to and vest in Buyer title to and ownership of the Assets
as provided in this Agreement and to otherwise fulfill the purpose and intent
of this Agreement;
(f) Possession of all the Assets;
(g) Copies of all applications required to be filed with
the FCC pursuant to Schedule 5.12 of this Agreement, together with an FCC date
stamp demonstrating timely filing; and
(h) A listing of subscribers, together with sufficient
information to calculate Purchase Price adjustments as set forth in Section
1.2.
7.2 BUYER'S DELIVERIES. At the Closing, Seller shall receive
from Buyer the following:
(a) Certificate of good standing from the Secretary of
State of the State of Louisiana stating the Buyer is a validly existing
corporation in good standing;
<PAGE> 29
-25-
(b) An opinion from counsel of Buyer in form and
substance consistent with Schedule 7.2(b);
(c) Certificate of good standing or other appropriate
documentation from the Secretary of State of the states of Kansas and Oklahoma
stating the Buyer is authorized to do business in the states of Kansas and
Oklahoma;
(d) Payment of the amount of the Purchase Price payable
at the Closing pursuant to Section 1.2 above, and evidence of payment into
appropriate escrow accounts as provided in that section; and
(e) Copies of duly adopted resolutions of the board of
directors of Buyer approving the execution, delivery and performance of this
Agreement and the other instruments contemplated hereby certified by the
Secretary of Buyer.
7.3 CLOSING DATE. The Closing of the purchase and sale of the
Assets contemplated hereby (the "Closing") shall take place at the offices of
the Buyer at One Lakeshore Drive, CM Tower Suite 1495, Lake Charles, Louisiana,
or such other place as the parties shall mutually agree, or by mail, on April
30, 1995, (the "Closing Date"). For purposes of this Agreement, "Final Order"
means a written action or order issued by the FCC consenting to the assignment
of the Licenses from Seller to Buyer: (i) which has not been reversed, stayed,
enjoined, set aside, annulled or suspended, and remains outstanding; and (ii)
with respect to which (A) no requests have been filed for administrative or
judicial review, reconsideration, appeal or stay and the periods provided by
statute or FCC regulations for filing any such requests and for the FCC to set
aside the action on its own motion have expired; and (B) in the event of
review, reconsideration or appeal, the period provided by statute or FCC
regulation for further review, reconsideration or appeal has expired.
ARTICLE VIII.
TERMINATION
This Agreement may be terminated: (a) by mutual agreement of Buyer and
Seller at any time prior to the Closing, (b) by Buyer or Seller if a material
condition to its respective obligations under this Agreement or a material
covenant of the other contained in this Agreement is not fulfilled at the time
of the Closing, (c) by Buyer or Seller if the other party materially defaults
under or materially breaches this Agreement, or (d) by Buyer or Seller if prior
to September 1, 1995, the Closing shall not have occurred, provided, however,
that the party so terminating under (b), (c) or (d) above is not in default
hereunder. The termination of this
<PAGE> 30
-26-
Agreement shall not terminate any party's right to indemnification pursuant to
Article IX, below.
ARTICLE IX.
INDEMNIFICATION
9.1 INDEMNITY. Each of Buyer and Seller covenants that it
will indemnify, defend and hold harmless the other party, its affiliates,
officers, directors, agents, attorneys and employees from all actions, suits,
proceedings, demands, liabilities, claims, losses, damages, assessments,
judgements, costs and expenses (including without limitation reasonable
attorneys' fees) resulting or arising from any of the following: (a) any
misrepresentation or breach of any representation or warranty of an
indemnifying party contained in this Agreement; (b) any failure of an
indemnifying party to perform or observe or to have performed or observed in
full, any covenant or agreement to be performed or observed by such
indemnifying party under this Agreement; or (c) any act or omission of the
indemnifying party, or any of its agents, servants or employees in connection
with any services performed, any products sold, delivered or furnished or any
contracts or claimed contracts with third parties. Seller further agrees to
indemnify, defend and hold harmless each of Buyer, its affiliates, officers,
directors, agents, attorneys and employees from all actions, suits,
proceedings, demands, claims, losses, costs or expenses (including without
limitation reasonable attorneys' fees) resulting or arising from any
liabilities or obligations of Seller other than those which are to be assumed
by Buyer pursuant to this Agreement. Buyer further agrees to indemnify, defend
and hold harmless each of Seller, its affiliates, officers, directors, agents,
attorneys and employees from all actions, suits, proceedings, demands, claims,
losses, costs or expenses (including without limitation reasonable attorneys'
fees) resulting or arising from any liabilities or obligations of Buyer other
than those which are to be assumed by Seller pursuant to this Agreement.
9.2 NOTICE OF CLAIM. Any party seeking indemnity hereunder shall
give the other party hereto prompt written notice in the event any claim,
demand, action, suit, assessment or proceeding shall be made, threatened or
instituted against the party seeking indemnification with respect to which such
party intends to assert a claim against the other party hereunder. The
indemnifying party shall notify the party seeking indemnity within thirty (30)
days of such notice as to whether or not the indemnifying party desires to
participate in the defense of such matter. If the indemnifying party elects to
participate in the defense of such matter, all decisions relating thereto shall
be decided jointly by Buyer and Seller, including but not limited to settlements
and appeals; provided, however, that in the event of any disagreement between
<PAGE> 31
-27-
Buyer and Seller, the indemnifying party shall make the final decision relating
to the defense of such matter. In the event the indemnifying party elects to
participate in the defense of any such matter, each party will allow the other
reasonable access to such books, information and records of the party as is
necessary to that defense. The parties shall use all reasonable efforts to
minimize the amount of any loss resulting from any such matter, including the
party seeking indemnity contesting or defending against any such demand or
claim. In the event an indemnifying party elects not to participate in the
defense thereof, it shall fully cooperate with the other party in regard
thereto, including, without limitation, delivering copies of all pleadings,
documents, reports and correspondence to the other party.
9.3 INDEMNIFICATION THRESHOLD. Notwithstanding anything in
this Article IX to the contrary, neither party shall have any liability
pursuant to this Article IX unless and until the aggregate amount of damages
subject to indemnification exceeds $5,000.
ARTICLE X.
MISCELLANEOUS
10.1 EXPENSES. Expenses incurred by or on behalf of the
parties hereto in connection with the authorization, preparation and
consummation of the Agreements and the transactions contemplated hereby,
including, without limitation, all fees and expenses of agents, brokers,
representatives, counsel and accountants employed by the parties hereto in
connection herewith, and all required regulatory filing fees shall be borne
solely by the party who shall have incurred, or have responsibility for the
same.
10.2 NOTICES. All notices and communications hereunder
shall be deemed to have been received upon actual receipt of such notice, if
delivered in writing and shall be valid and effective if given by certified
letter or recognize overnight carrier, postage prepaid or, if given personally,
or by telecopy with record of receipt, addressed as follows:
if to Buyer:
Mercury Cellular of Kansas, Inc.
C M Tower, Suite 1495, One Lakeshore Drive
Lake Charles, Louisiana 70629
Attention: Robert Piper
Telephone: (318) 436-9000
Facsimile: (318) 439-0769
<PAGE> 32
-28-
with a copy (which shall not constitute notice) to:
Thomas G. Henning, Esquire
101 East Thomas Street
Sulphur, Louisiana 70663
Telephone: (318) 436-9000
Facsimile: (318) 433-0587
or to such other address as Buyer may hereafter designate in
writing;
and if to Seller:
Miscellco Communications, Inc.
Suite 125
Eastover Bank Building
125 North Congress
Jackson, Mississippi 39201
Attention: J. Stacy Davidson
Telephone: (601) 948-1212
Facsimile: (601) 948-1211
with a copy (which shall not constitute notice) to:
Lukas, McGowan, Nace & Gutierrez, Chartered
1111 Nineteenth Street, N.W., Suite 1200
Washington, D.C. 20036
Attention: Thomas Gutierrez, Esquire
Telephone: (202) 857-3500
Facsimile: (202) 842-4485
or to such other address as Seller may hereafter designate in
writing.
10.3 WAIVER. Any waiver by any party hereto of any term, provision
or condition of this Agreement shall be effective only if and to the extent
specified in writing by such party, and no single waiver of any rights shall be
construed to constitute a continuing waiver unless so expressly provided.
10.4 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which will be deemed an original, but all of which
together shall constitute one and the same instrument.
10.5 ENTIRE AGREEMENT. This Agreement and the Schedules
hereto represent the entire understanding of the parties hereto, supersede all
other and prior memoranda and agreements between the parties hereto and their
affiliates, and may not be modified or amended, except by a written instrument
executed by each of the
<PAGE> 33
-29-
parties hereto designating specifically the terms and provisions so modified
and amended.
10.6 CHOICE OF LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Kansas.
10.7 REMEDIES.
(a) ESCROW FUNDS NOT EXCLUSIVE. The Escrow Funds do not
constitute liquidated damages. In the event of default by Seller or Buyer
hereunder, Seller may seek to recover all or part of the Escrow Funds and
additional damages from Buyer, and Buyer may seek to recoup all or any portion
of the Escrow Funds as well as any additional damages necessary and appropriate
as a result of Seller's default. The parties' remedies herein are in addition
to those remedies set forth in Section 10.7(b) or as otherwise provided herein
or available under the applicable law. In the event Seller or Buyer
successfully maintains an action to recover additional damages, or recoupment,
as the case may be, the prevailing party shall be entitled to interest and
attorneys' fees.
(b) SPECIFIC PERFORMANCE. The parties acknowledge that
the subject matter of this Agreement is unique and that no adequate remedy of
law would be available for breach of this Agreement. Accordingly, each party
agrees that each other party will be entitled to an appropriate decree of
specific performance or other equitable remedies to enforce this Agreement, and
each party waives the defense in any action or proceeding brought to enforce
this Agreement that there exists an adequate remedy at law.
10.8 CONFIDENTIALITY.
(a) Whether or not the transactions contemplated hereby
are consummated, Seller and Buyer each agree to use its best efforts (a) to
keep the existence and terms of this Agreement confidential, including, but not
limited to, the nature and amount of the consideration and any and all
information with respect to Buyer or Seller which it has received as a result
of any investigation made in connection with this Agreement which is not
otherwise available to the public (collectively, the "Disclosures"), and (b) to
keep confidential any and all information with respect to Buyer, Seller, Assets
and System which is not otherwise available to the public, unless, in the case
of any information described in subsection (a) or (b) of this section 10.8,
such information (i) is required to be filed or furnished to the FCC or other
regulatory agencies, or is otherwise required by law or administrative rule to
be disclosed to any person or to the public (whether pursuant to Federal or
state securities laws or otherwise), or (ii) is disclosed only to those
attorneys, accountants, bankers and other retained professionals necessary or
<PAGE> 34
-30-
appropriate to facilitate the transactions contemplated by this Agreement and
related financing. In the event that either party believes that disclosure is
required by law or administrative rule, such party shall provide the other
party with reasonable advance notice of its position and afford the other party
reasonable opportunity to contest disclosure.
(b) No public announcement by any party hereto (or any
representative of such a party) with regard to the transactions contemplated
hereby or the material terms hereof (including, without limitation, the dollar
amount of consideration for the subject transaction) without the prior consent
of the other parties shall be made.
(c) This Agreement shall not restrict any party hereto
from using information already known to it, to which it is entitled under
existing agreements, or information generally in the public domain or any
information coming into its possession after it becomes public knowledge unless
it became public knowledge through a breach of this Agreement.
(d) If the Closing does not occur (1) Disclosures shall
be maintained by each party, (2) each party shall cause such other parties to
whom Disclosures were communicated to maintain Disclosures in strict
confidence, unless such information enters the public domain through no fault
of a party hereto or any party to whom a party hereto released or disclosed
such information, and (3) upon the request of a party hereto, the other party
shall immediately return any Disclosures received from such requesting party.
10.9 CAPTIONS. Article and Section captions used herein are
for reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
10.10 THIRD PARTY BENEFICIARIES. Each party hereto intends that
this Agreement shall not benefit or create any right or cause of action in
or on behalf of any party not a signatory hereto or referenced herein.
10.11 ASSIGNABILITY. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided that no assignment of rights hereunder shall relieve the
assigning party of its obligations hereunder. Neither Seller nor Buyer shall
have the right to assign this Agreement or any of their rights or obligations
hereunder to any third party.
<PAGE> 35
-31-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
MISCELLCO COMMUNICATIONS, INC.
By:
-------------------------------------
Its:
-------------------------------------
MERCURY CELLULAR OF KANSAS, INC.
By:
-------------------------------------
Its:
-------------------------------------
<PAGE> 36
LISTING OF SCHEDULES
<TABLE>
<S> <C>
Schedule 1 Certified copy of Seller resolution
Schedule 2 Certified copy of Buyer resolution
Schedule 1.1(a) List of personal property
Schedule 1.1(b) Excluded items of personal property
Schedule 1.2(a)(1) Deposit Escrow Agreement
Schedule 1.2(a)(2)(iii) Subscriber Escrow Agreement
Schedule 1.2(a)(3) Payable Escrow Agreement
Schedule 1.2(a)(5) Balance sheet adjustment formula
Schedule 3.7 Seller's litigation
Schedule 3.10 Seller's Articles of Incorporation and Bylaws
Schedule 3.11 Seller's Financial Statements
Schedule 3.12 Seller's exception to title of assets
Schedule 3.13 Seller's interest of real property
Schedule 3.14 Seller's intellectual property
Schedule 3.15 Seller's liabilities
Schedule 3.16 Seller's contracts
Schedule 3.18 Seller's Licenses
Schedule 3.19 Seller's lists of all policies of insurance
Schedule 3.21 Seller's taxes payable
Schedule 4.5 Contracts to be assigned to Mercury
Schedule 4.8 Buyer's Articles of Incorporation
Schedule 5.4(d) Tax Escrow Agreement
Schedule 5.10 List of persons to execute Non-Compete
Agreements
Schedule 5.12 Seller's additional construction obligations
Schedule 7.1(b) Seller's FCC opinion
Schedule 7.1(b)(2) Seller's corporate opinion
Schedule 7.2(b) Buyer's corporate opinion
</TABLE>
<PAGE> 37
SCHEDULE 1
Certified Copy of Seller Resolution
<PAGE> 38
CERTIFIED COPY
OF RESOLUTIONS OF THE
BOARD OF DIRECTOR OF
MISCELLCO COMMUNICATIONS, INC.
The undersigned, being all of the directors of MISCELLCO
COMMUNICATIONS, INC., a corporation organized and existing under the laws of the
State of Mississippi (the "Corporation"), adopts the following resolutions:
WHEREAS, there has been submitted to the Corporation the Asset Purchase
Agreement dated April 19, 1995, (the "Agreement"), pursuant to which the
Corporation agrees to sell all of the assets associated with operation of its
cellular system in the state of Kansas to Mercury Cellular of Kansas, Inc., a
Louisiana Corporation ("Buyer").
WHEREAS, on the basis of a review of the principal terms and
provisions of the transactions contemplated by the Agreement, it is advisable
and in the best interest of the Corporation that the transactions be
consummated substantially in accordance with the provisions of the Agreement,
and that the Corporation be authorized to take all actions and to execute and
deliver all certificates, instruments, agreements, and other documents
necessary to effect and carry out all acts and transactions contemplated by the
Agreement;
THEREFORE, it is hereby
RESOLVED, that the form of, and each of the terms and provisions
contained in the Agreement are hereby ratified, authorized and approved in each
and every respect; and each and every transaction effected or to be effected
pursuant to and substantially in accordance with the terms of such Agreement,
including, but not limited to, those specific transactions which are described,
authorized and approved in these Resolutions, is hereby authorized and approved
in each and every respect; and
RESOLVED, that the Corporation is hereby authorized by any officer to
execute and deliver for and on behalf of the Corporation any other documents,
agreements, instruments or certificates requiring to effectuate the
transactions contemplated by these Resolutions; and
RESOLVED, that the Corporation and each of its officers is hereby
authorized and directed to do and perform or cause to be done and performed, in
the name and on behalf of the Corporation, all other acts, to pay or cause to
be paid on behalf of the Corporation all related costs and expenses and to
execute and deliver or cause to be executed and delivered such other notices,
requests, demands, directions, consents, approvals, orders, applications,
agreements, instruments, certificates, undertakings, supplements, amendments,
further assurances or other communications of any kind in the name and on
behalf of the Corporation or otherwise, as he or they may deem necessary,
<PAGE> 39
-2-
advisable or appropriate to effect the intent of the foregoing Resolutions or
to comply with the requirements of the instruments approved and authorized by
the foregoing Resolutions; and
RESOLVED, that any acts of the Corporation and of any person or
persons designated and authorized to act by the Corporation, which acts would
have been authorized by the foregoing Resolutions except that such acts were
taken prior to the adoption of such Resolutions, are hereby severally ratified,
confirmed, approved and adopted as the acts of the Company; and
RESOLVED, that the foregoing consent to and adoption of resolutions
may be executed by the undersigned in counterparts, each of which shall be
original and all of which shall constitute but one and the same document; and
RESOLVED, that the Corporation is hereby authorized and empowered to
certify to the passage of the foregoing resolutions.
IN WITNESS WHEREOF, the undersigned have executed this Unanimous
Written Consent of the Board of Directors of Miscellco, Inc., as of the 19th
day of April, 1995.
/s/ J. STACY DAVIDSON
----------------------------------------
J. Stacy Davidson
/s/ WILLIAM C. MATHEWS
----------------------------------------
William C. Mathews
/s/ WILLIAM CHARLES ARTMANN
----------------------------------------
William Charles Artmann
I, William C. Mathews, the undersigned Secretary of Miscellco
Communications, Inc. (the "Corporation"), hereby certify that the foregoing
preamble and resolutions were duly adopted by the unanimous written consent of
all of the members of the Board of Directors of Corporation dated as of the
19th day of April, 1995, and that such resolutions remain in full force and
effect and has not been modified or rescinded as of the 19th day of April,
1995.
/s/ WILLIAM C. MATHEWS
----------------------------------------
William C. Mathews
<PAGE> 40
SCHEDULE 2
Certified Copy of Buyer Resolution
<PAGE> 41
SCHEDULE 1.1(a)
List of Personal Property
<PAGE> 42
SCHEDULE 1.1(a)
ASSET LIST
TABLE OF CONTENTS
<TABLE>
<S> <C>
Communications Equipment Assets: Hays Cell Site
Great Bend Cell Site
Colby Cell Site
Dodge City Cell Site
Pratt Cell Site
Edson Cell Site
Wakeeney Cell Site
Scott City Cell Site
Ulysses Cell Site
Garden City Cell Site
Liberal Cell Site
Stockton Cell Site
Ness City Cell Site
Guymon Cell Site
Copeland Cell Site
Syracuse Cell Site
Hugoton Cell Site
Russell Cell Site
Grinnel Cell Site
St. Francis Cell Site
Atwood Cell Site
Oberlin Cell Site
Norton Cell Site
Office Assets: Hays, KS
Vine Street
llth street
Great Bend, KS
Garden City, KS
Dodge City, KS
Liberal, KS
Vehicles
Test Equipment
Leased Equipment: Jackson, MS
Downtown
Ridgeland
Hays
Spare Parts
</TABLE>
<PAGE> 43
SCHEDULE 1.1
HAYS CELL SITE
LATITUDE 38 51 16; LONGITUDE 99 22 55
<TABLE>
<S> <C> <C>
Cell Site Bldg. 1
D-400 1
Cell Site 1
Expansion Rack 1
Voice Channels 11
Power Supply 1
Battery Backup 1
DACS 1
Generator 1
Microwave 800 1
Microwave Radio 2
Grid Dish 10" 3
Dish Coax 745 ft.
Cellular Antennas 3
Antenna Coax 1,089 ft.
Satellite Link 1
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 44
SCHEDULE 1.1
GREAT BEND CELL SITE
LATITUDE 38 24 25; LONGITUDE 98 52 51
<TABLE>
<S> <C> <C>
Cell Site Bldg. 1
D-200 1
Cell Site 1
Expansion Rack I
Voice Channels 15
Power Supply 1
Battery Backup 1
Microwave Radio 1
Grid Dish 10" I
Dish Coax 335 ft.
Cellular Antennas 3
Antenna Coax 1,089 ft.
T-Coder 1
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 45
SCHEDULE 1.1
COLBY CELL SITE
LATITUDE 39 24 02; LONGITUDE 100 58 44
<TABLE>
<S> <C>
Cell Site Bldg. 1
D-200 1
Cell Site 1
Expansion Rack 1
Voice Channels 11
Power Supply 1
Battery Backup 1
DACS 1
Microwave 800 1
Microwave Radio 1
Grid Dish 8" 1
Grid Dish 10" 1
Dish Coax 345 ft.
Cellular Antennas 3
Ant Coax 1,089 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 46
SCHEDULE 1.1
DODGE CITY CELL SITE
LATITUDE 37 46 47; LONGITUDE 100 03 37
<TABLE>
<S> <C>
Cell Site Bldg. 1
D-400 1
Cell Site 1
Expansion Rack 1
Voice Channels 13
Power Supply 1
Battery Backup 1
DACS 1
Voicemail 1
Cellular Antennas 3
Antenna Coax 1,074 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 47
SCHEDULE 1.1
PRATT CELL SITE
LATITUDE 37 38 08; LONGITUDE 98 50 24
<TABLE>
<S> <C>
Cell Site Bldg. 1
Cell Site 1
Expansion Rack 0
Voice Channels 7
Power Supply 1
Cellular Antennas 3
Antenna Coax 1,206 ft.
T-Coder 1
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 48
SCHEDULE 1.1
EDSON CELL SITE
LATITUDE 39 23 19; LONGITUDE 101 33 34
<TABLE>
<S> <C>
Cell Site Bldg. 1
Cell Site 1
Expansion Rack 1
Voice Channels 13
Power Supply 1
Microwave 800 1
Microwave Radio 1
Grid Dish 8" 1
Grid Dish 10" 1
Dish Coax 308 ft.
Cellular Antennas 3
Antenna Coax 1,296 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 49
SCHEDULE 1.1
WAKEENEY CELL SITE
LATITUDE 39 00 56; LONGITUDE 99 51 30
<TABLE>
<S> <C>
Cell Site Bldg. 1
Cell Site 1
Voice Channels 7
Power Supply 1
Microwave Radio 1
Grid Dish 10" 1
Dish Coax 220 ft.
Cellular Antennas 3
Ant Coax 1,281 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 50
SCHEDULE 1.1
SCOTT CITY CELL SITE
LATITUDE 38 36 08; LONGITUDE 100 54 20
<TABLE>
<S> <C>
Cell Site Bldg. 1
Cell Site 1
Expansion Rack 1
Voice Channels 15
Power Supply 1
Cellular Antennas 3
Ant Coax 1,323 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 51
SCHEDULE 1.1
ULYSSES CELL SITE
LATITUDE 37 34 32; LONGITUDE 101 19 10
<TABLE>
<S> <C>
Cell Site Bldg. 1
D-200 1
Cell Site 1
Expansion Rack 2
Voice Channels 22
Power Supply 1
Microwave 800 1
Grid Dish 8" 1
Dish Coax 180 ft.
Cell Ant 3
Ant Coax 1,221 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 52
SCHEDULE 1.1
GARDEN CITY CELL SITE
LATITUDE 37 59 35; LONGITUDE 100 54 04
<TABLE>
<S> <C>
Cell Site Bldg. 1
Cell Site 1
Expansion Rack 2
Voice Channels 23
Power Supply 1
Cellular Antennas 3
Ant Coax 894 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 53
SCHEDULE 1.1
LIBERAL CELL SITE
LATITUDE 37 04 38; LONGITUDE 100 50 35
<TABLE>
<S> <C>
Cell Site Bldg. 1
Cell Site 1
Expansion Rack 2
Voice Channels 21
Power Supply 1
Cellular Antennas 3
Antenna Coax 1,221 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 54
SCHEDULE 1.1
STOCKTON CELL SITE
LATITUDE 39 26 56; LONGITUDE 099 16 18
<TABLE>
<S> <C>
Cell Site Bldg. 1
Cell Site 1
Voice Channels 7
Power Supply 1
Microwave 800 1
Grid Dish 10" 1
Dish Coax 392 ft.
Cellular Antennas 3
Ant Coax 1,011 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 55
SCHEDULE 1.1
NESS CITY CELL SITE
LATITUDE 38 26 44; LONGITUDE 99 52 32
<TABLE>
<S> <C>
Repeaters 1
Grid Dish 6" 1
Dish Coax 336 ft.
Cellular Antennas 2
Ant Coax 784 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 56
SCHEDULE 1.1
GUYMON CELL SITE
LATITUDE 36 40 26; LONGITUDE 101 28 09
<TABLE>
<S> <C>
Repeaters 1
Grid Dish 6" 1
Dish Coax 170 ft.
Cellular Antennas 2
Ant Coax 814 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 57
SCHEDULE 1.1
COPELAND CELL SITE
LATITUDE 37 30 10; LONGITUDE 100 34 22
<TABLE>
<S> <C>
Repeaters 1
Repeater Exp. 1
Grid Dish 6" 1
Grid Dish 8" 8
Dish Coax 195 ft.
Cellular Antennas 2
Ant Coax 748 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 58
SCHEDULE 1.1
SYRACUSE CELL SITE
LATITUDE 38 10 24; LONGITUDE 101 45 38
<TABLE>
<S> <C>
Repeaters 1
Repeater Exp. 1
Grid Dish 6" 1
Dish Coax 390 ft.
Cellular Antenna 2
Ant Coax 854 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 59
SCHEDULE 1.1
HUGOTON CELL SITE
LATITUDE 37 11 32; LONGITUDE 101 19 37
<TABLE>
<S> <C>
Cell Site Bldg. 1
Cell Site 1
Expansion Rack 1
Voice Channels 15
Power Supply 1
Microwave 800 1
Grid Dish 10" 1
Dish Coax 180 ft.
Cellular Antennas 3
Antenna Coax 1,485 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 60
SCHEDULE 1.1
RUSSELL CELL SITE
LATITUDE 38 53 36; LONGITUDE 98 54 02
<TABLE>
<S> <C>
Cell Site Building 1
Cell Site 1
Voice Channels 7
Power Supply 1
Microwave Radio 2
Grid Dish 10' 2
Dish Coax 500 ft.
Cellular Antennas 3
Antenna Coax 1230 ft.
Battery Back Up 1
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 61
SCHEDULE 1.1
GRINNEL CELL SITE
LATITUDE 39 09 20; LONGITUDE 100 40 21
<TABLE>
<S> <C>
Cell Site Bldg. 1
Cell Site 1
Voice Channels 7
Power Supply 1
Microwave Radio 1
Grid Dish 10' 1
Dish Coax 180 ft.
Cellular Antennas 3
Tower 1
Antenna Coax 1230 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 62
SCHEDULE 1.1
ST. FRANCIS CELL SITE
LATITUDE 39 44 03; LONGITUDE 101 40 19
<TABLE>
<S> <C>
Repeater 1
Grid Dish 6' 1
Dish Coax 120 ft.
Cellular Antennas 2
Ant Coax 880 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 63
SCHEDULE 1.1
ATWOOD CELL SITE
LATITUDE 39 44 42; LONGITUDE 101 01 32
<TABLE>
<S> <C>
Repeater 1
Grid Dish 1
Dish Coax 160 ft.
Cellular Antennas 2
Ant Coax 820'
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 64
SCHEDULE 1.1
OBERLIN CELL SITE
LATITUDE 39 44 26; LONGITUDE 100 27 11
<TABLE>
<S> <C>
Repeater 1
Grid Dish 6' 1
Dish Coax 335 ft.
Cellular Antennas 2
Ant Coax 820 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit, to/from
or in for repair".
<PAGE> 65
SCHEDULE 1.1
NORTON CELL SITE
LATITUDE 39 46 13; LONGITUDE 099 50 10
<TABLE>
<S> <C>
Cell Site Bldg. 1
Cell Site 1
Voice Channels 7
Power Supply 1
Cellular Antennas 3
Ant Coax 1230 ft.
</TABLE>
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 66
SCHEDULE 1.1
HAYS (VINE) OFFICE
2000 VINE STREET
HAYS, KS
<TABLE>
<S> <C>
Desk 6
Swivel Desk Chair 5
Side Chair 6
Computer 1
Printer 1
Printer Stand 1
Fax 1
Paper Shredder 1
Copier 1
File Cabinet 6
Bookcase 3
Metal Shelves 8
Refrigerator 1
Phone System 1
Phone Handsets 6
Vacuum Sweeper 1
Stereo Cassette Player 1
Typewriter 1
Billboard 1
Illuminated Sign 1
</TABLE>
<PAGE> 67
SCHEDULE 1.1
HAYS (WEST 11TH) OFFICE
224 W. 11TH STREET
HAYS, KS
<TABLE>
<S> <C>
Desk 3
Credenza 1
Swivel Desk Chair 2*
Side Chair 6
Computer 10 - 1 without monitor
Printer 3
Printer Stand 1
Fax 1
Paper Shredder 1
Copier 1
File Cabinet 4
Bookcase 1
Metal Shelves 5
Pictures 1
Refrigerator 1
Microwave Oven 1
Conference Room Table 1
Conference Room Chair 6
Television 1
VCR 1
Stereo 1
Phone System 1
Phone Handsets 15
Vacuum Sweeper 1
D-200 1
D-400 1
Cell Site 1
Expansion Rack 1
Voice Channels 12
Repeaters 0
Grid Dish 4' 2
Grid Dish 6' 0
Dish Coax 600 ft.
Cellular Antennas 5
Antenna Coax 1000 ft.
</TABLE>
*Ergonomic desk chair 1
Note: There are enough voice channel components to fully populate all
available RF racks - any discrepancy is a matter of "in transit,
to/from or in for repair".
<PAGE> 68
SCHEDULE 1.1
GREAT BEND OFFICE
2110 E. 10TH STREET
GREAT BEND, KS
<TABLE>
<S> <C>
Desk 3
Swivel Desk Chair 4
Side Chair 3
Computer 1
Printer 1
Printer Stand 1
Fax 1
Paper Shredder 1
Copier 1
File Cabinet 4
Bookcase 2
Refrigerator 1
Phone System 1
Phone Handsets 4
Illuminated Sign 1
</TABLE>
<PAGE> 69
SCHEDULE 1.1
GARDEN CITY OFFICE
401 N. CAMPUS, SUITE 101
GARDEN CITY, KS
<TABLE>
<S> <C>
Desk 4
Swivel Desk Chair 3
Side Chair 4
Computer 2
Printer 1
Printer Stand 1
Fax 1
Paper Shredder 1
Copier 1
File Cabinet 5
Metal Shelves 1
Refrigerator 1
Phone System 1
Phone Handsets 3
Illuminated Sign 1
</TABLE>
<PAGE> 70
SCHEDULE 1.1
DODGE CITY OFFICE
1509 W. WYATT EARP, SUITE 2
DODGE CITY, KS
<TABLE>
<S> <C>
Desk 5
Swivel Desk Chair 4
Side Chair 2
Computer 2
Printer 1
Printer Stand 1
Fax 1
Paper Shredder 1
Copier 1
File Cabinet 3
Metal Shelves 1
Refrigerator 1
Phone System 1
Phone Handsets 4
</TABLE>
<PAGE> 71
SCHEDULE 1.1
LIBERAL OFFICE
192 W. PANCAKE
LIBERAL, KS
<TABLE>
<S> <C>
Desk 3
Swivel Desk Chair 3
Side Chair 8
Computer 1
Printer 1
Printer Stand 1
Fax 1
Paper Shredder 1
Copier 1
File Cabinet 6
Metal Shelves 1
Refrigerator 1
Phone System 1
Phone Handsets 4
Vacuum Sweeper 1
Illuminated Sign 1
</TABLE>
<PAGE> 72
MISCELLCO COMMUNICATIONS, INC.
SCHEDULE OF VEHICLES
OCTOBER 21, 1994
<TABLE>
<CAPTION>
REGISTERED IN
VEHICLE CITY/COUNTY DRIVER VIN
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1989 Olds 98 Hays, Ellis Co. Steve Cecil 1G3CW54C9K4309040
1992 Ford F150 4x4 Pick Up Hays, Ellis Co. Scott Princ 1FTEX14N1NKA41603
1992 Toyota 4x4 Pick Up Dodge City, Ford Co. Cliff Gallington 4TARN01P1NZ020101
1993 Toyota 4x4 Pick Up Garden City, Finney Co. Carl Smith 4TARN01PXPZ098931
1994 Chevy Suburban Hays, Ellis Co. Pat Leihy IGNFK16K5RJ377800
1994 Ford Escort Hays, Ellis Co. Chris Appelhans IFARP15J9RW251108
1994 Ford Escort Wagon Garden City, Finney Co. Roger Nash 1FARP15J3RW105786
1988 Chevy Pick Up Dodge City, Ford Co. Scott Rohleder (Hays) IGCDC14H3JZ154617
1990 Helder Trailer Hays, Ellis Co. N/A 1H9TU42A2L1033590
1991 LM 16' Flatbed Trailer Hays, Ellis Co. N/A 91LM0075
</TABLE>
<PAGE> 73
TEST EQUIPMENT AND TOOL ASSETS
<TABLE>
<S> <C>
Triplett 5OOOE w/case & accessories 3
Fluke Multimeter 6
Bird 43 Watt Meter w/case & Elements 6
25 W 50 Ohm load 1
100 W 50 Ohm load 1
Marconi 2955A w/2957 Option 1
Exbert T1 Tester 1
Hats II - Tone Generator 1
IFR 1200S 1
Miscellaneous Tools 1
</TABLE>
<PAGE> 74
Equipment Rental (Mississippi)
<TABLE>
<CAPTION>
Location Description Lessor
- -------- ----------- ------
<S> <C> <C>
Ridgeland Canon Copier General Electric
Capital
Jackson Postage Meter Pitney Bowes
Jackson Mailing machine Pitney Bowes
Ridgeland 2-Fuji Fax General Electric
Capital
Jackson Fuji DEX760 Fax General Electric
Capital
Jackson Canon Copier Alco Capital
Jackson 7406+ Phone Sys. AT&T
</TABLE>
<PAGE> 75
SCHEDULE 1.1
SPARE PARTS
All Plexys spare parts and equipment.
<PAGE> 76
SCHEDULE 1.1(b)
Excluded Items of Personal Property
<PAGE> 77
EXCLUDED ASSETS --
MISCELLCO COMMUNICATION, INC.
NORTH OFFICE
OWNED
<TABLE>
<S> <C>
1 CONFERENCE PHONE WORK ROOM
2 2 DRAWER FIRE PROOF FILE CABINETS WORK ROOM
MISCELLANEOUS MAGAZINES WORK ROOM
UPS AND FED EX MAILING MATERIALS WORK ROOM
PAPER CUTER WORK ROOM
BACK ISSUE MAGAZINES FOR REFERENCE MATERIAL WORK ROOM
PLASTIC WASTE BASKETS WORK ROOM
MISCELLANEOUS FOOD ITEMS WORK ROOM
COFFEE MACHINE WORK ROOM
2 FIVE SHELF METAL FILE WORK ROOM
FOLDER, ENVELOPE, PA TABLETS, POST IT NOTES AND MISC WORK ROOM
1 WASTE BASKET LOBBY
ROLLED UP MAPS WORK ROOM
PERSONAL BOXES WORK ROOM
1 IBM LASER 4019 PRINTER LOBBY
1 CREDENZA LOBBY
1 DELL PRECISION 486/25S AND ASSOCIATED SOFTWARE LOBBY
BULLETIN BOARD WORK ROOM
1 XEROX 6010 MEMORYWRITER LOBBY
1 FISHER FIRE EXTINGUISHER WORK ROOM
MISCELLANEOUS, HOLE AND LETTER SCALES WORK ROOM
1 IBICO BINDING MACHINE WORK ROOM
1 4 FT. BOOK CASE WITH MISCELLANEOUS REFERENCE MATERIAL WORK ROOM
1 SECRETARIAL DESK LOBBY
2 (3) ATT SPEAKER PHONES - SINGLE LINE WORK ROOM
1 ROYAL 2100 PD CALCULATOR LOBBY
1 CHAIR LOBBY
1 DROP LEAF END TABLE - STACY PERSONAL STACY'S OFFICE
MISCELLANEOUS REFERENCE BOOKS LOBBY
REFERENCE MATERIALS, ATLAS ETC. STACY'S OFFICE
1 SHREDDER - CROCODILE C-2000 CROSS CUT WORK ROOM
MISCELLANEOUS PICTURES - STACY PERSONAL STACY'S OFFICE
1 LATERAL FILE CABINET STACY'S OFFICE
1 CONFERENCE TABLE WITH 6 CHAIRS LOBBY
HP 550C PRINTER
EPSON 1500 PRINTER
CTX COMPUTER, ASSOCIATED PERIPHERALS AND SOFTWARE
STACY'S DESK AND MATCHING CREDENZA
PS/2 COMPUTER AND PROPRINTER
</TABLE>
<PAGE> 78
EXCLUDED ASSETS --
MISCELLCO COMMUNICATIONS
DOWNTOWN
Owned
<TABLE>
<S> <C>
1 2-drawer legal file cabinet putty color Room 4
1 chair lightweight with arms Room 4
PS1 and associated software and peripheral including jet 4072 Room 4
1 lamp Room 4
1 sec chair with arms Room 4
Refinished laminated sec desk Room 4
Rolodex Room 4
10 ft of grey partition Room 4
1 Sharp EL1197G calculator Room 4
1 space heater Room 4
Desk organizer Room 4
Office suppli stamps stickers Room 4
1 EPS computer and assoc peripheral and software including exec Room 4
Assoc reference materials Room 4
1 upholstered arm chair Room 4
1 refrigerator Room 2
Printer stand Room 3
Canon 775 plain paper fax with stand - Rental Room 4
Sec desk of same type Room 4
1 Brother P Touch XL labeling system Room 3
Xerox 6010 memory writer Room 2
1 Epson DSX 8000 printer Room 11
Materials ph etc. Room 2
1 lamp Room 2
Misc food ite cups Room 2
1 waste basket Room 2
1 8 shelf open face filing shelf Room 3
Canon MT21D adding machine Room 3
1 IBM P2 2 Model 50C and associated peripherals Room 3
1 wooden sec desk with computer stand Room 3
1 green lamp Room 3
1 paper cutter Room 2
Plant Room 3
Picture of brandy snifter Room 3
Stool Room 3
Map stand with roll-up maps Room 2
Office suppli etc. Room 5
EPS - PC and assoc peripheral including HP deskjet 500 Room 5
1 Sharp EL 1197G calculator Room 8
1 sec chair Room 8
1 KS map on wall Room 8
1 AT&T ASCII terminal Room 8
</TABLE>
<PAGE> 79
<TABLE>
<S> <C>
1 DTK computer and assoc peripherals and software Room 8
1 used exec desk Room 8
2 uphol arm chairs with a small marble top table Room 8
1 HP desk jet 310 printer Room 8
Trash can Room 7
Elec pencil sharpener Room 7
1 Canon Bubble jet printer and associated office supplies Room 8
Set of four pictures of urns in the hallways Room 9
Several reams of paper Room 7
1 DTK perso exec jet 4072 printer on a lightweight metal Stand Room 9
1 trash can Room 9
1 space heater Room 9
1 EL 1197G calculator Room 9
Reference materials Room 9
Picture of creek Room 9
Forest scene picture Room 9
1 sec desk w/matching credenza Room 9
1 Laptop computer Room 9
Phone books Room 9
Envelopes rubberbands Room 7
Office supplies Room 7
2 drawer fireproof file cabinet Room 5
1 4001 shredding machine Room 5
1 EPS monitor (in box) Room 5
4 drawer fireproof file cab Room 5
1 calculator Room 1
1 monitor for system 36 Room 5
Desk top org etc. Room 5
Desk top org plant Room 6
1 Sentry fireproof lock box Room 5
1 system 36 5363 Room 5
Epson DFX 8000 matrix printer for bills Room 5
1 Casio FR 5100 adding machine associated software manuals pri Room 5
Bulletin board Room 6
Single line panasonic phone Room 7
Trash can Room 6
1EPS computer and associated peripheral including 1 IBM exec jet Room 6
1 4 drawer lateral file cab Room 6
1 IBM correcting selectric III Room 6
1 Sharp el 1197 calculator Room 6
1 space heater Room 6
Associated notebooks and reference materials Room 6
1 sec desk laminated refinished and chipped Room 6
1 report holder Room 6
1 uphol arm chair Room 6
1 Telular fixed cellular unit Room 10
Notebooks a guides etc. Room 1
Misc maps Room 1
1 exec desk and credenza
3-shelf bookcase
</TABLE>
<PAGE> 80
1 2-door storage cab
1 5-drawer lat cab
Several offic hanging fold report binders
Panasonic KXT 262424 printer
4 balloon pictures
1 5-drawer let size lat file cab
1 metal 2-drawer file cab letter size
Hole punche staplers desk top organizer
1 inexpen metal chair
PS2 pers compu with IBM pro printer / Jim's house
Casio FR2650 calculator
PS1 personal compu and assoc per with action laser Epson 1500
1 waste basket
Hole punche stapler and associated office stuff
Lamp - fan
I gray sec w/armed sec chair
1 DTK computer and assoc peripheral
1 Texas Instruments T15033SB calculator
1 TV and VCR
Assoc desk top stuff
3-drawer let file cab
1 2-drawer inexpensive file cabinet
Desktop lamp
I sec desk with credenza
1 small stand
1 2-drawer cab
1 space heater
Desk top lamp
1 PS50 shredder (small)
1 sec chair w/arms
PS286 Computer
1 sharp EL1197G calculator
1 folding and banquet table
Uphol arm chair
4 leather chairs
Conference Table
1 stereo
1 sec chair w/arms
Boxes of old records
DTC pers computer and assoc peripheral
1 4-foot partition
1 sm exec desk with credenza
1 Epson DFX8000 printer
1 4-drawer file cab letter size
1 sec chair w/o arms
Hole punch tape stapler
Organizers
Envelopes and office supplies
10 feet of gray partition
2-drawer file cab
<PAGE> 81
<TABLE>
<S> <C>
2 lap top computers
1 quail picture
1 sharp calculator
I desk jet 550C
1 PS2 pers compu and assoc per and software
1 8-shelf cabinet for bill history
5-drawer lat cab
1 refinished gray sec desk
1 5-draw lat file cab
5-drawer lat cab
Office suppli file folders staples etc.
Rolling report stand
2 dictaphones
Fan Room 1
1 executive desk with credenza Room 1
File cabinet Room 1
Arm swivel tilt chair Room 1
DTK computer and associated peripheral and software Room 1
Sharp CS 2850 Calculator Room 1
Desk jet 560C Room 1
Desk top lamp and organizer
1 armless sec chair
1 plant stand
1 Remington Buffalo Horse
2 folding metal chairs
Map
I DTK personal computer and associated peripheral
1 rolling report holder
2 monitor and stand
HRPL 1197G calculator
Table and upholstered chair
1 picture on wall
Canon ES 32 lightweight personal typewriter
1 Texas Instrument TI50332 calculator
Misc. supplies
2 drawer file cab let size
</TABLE>
<PAGE> 82
SCHEDULE 1.2(a)(1)
Deposit Escrow Agreement
<PAGE> 83
DEPOSIT ESCROW AGREEMENT
This Escrow Agreement (the "Escrow Agreement") is entered into as of
November 9, 1994 by and among MERCURY, INC., a Louisiana corporation ("Buyer"),
MISCELLCO COMMUNICATIONS, INC., a Mississippi corporation ("Seller"), and THE
CALCASIEU MARINE NATIONAL BANK OF LAKE CHARLES of Lake Charles, Louisiana (the
"Escrow Agent").
WHEREAS, Seller and Buyer have entered into that certain Asset
Purchase Agreement dated as of November 9, 1994 (the "Purchase Agreement"),
wherein Seller has agreed to sell to Buyer the Assets (as defined therein), a
copy of which Purchase Agreement has been furnished to the Escrow Agent; and
WHEREAS, Buyer has agreed to deposit with the Escrow Agent the sum of
One Million Seven Hundred Twenty Three Thousand Eight Hundred Forty and No/100
($1,723,840.00) Dollars, as security for the performance of the obligations
of Buyer under the Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereto agree as follows:
1. Appointment of Escrow Agent. Buyer and Seller designate and
appoint the Escrow Agent to act as escrow agent hereunder and the Escrow Agent
accepts such appointment on the terms and conditions hereinafter set forth.
2. Deposit of Funds with Escrow Agent. Simultaneously with the
execution of this Escrow Agreement by Buyer, Seller and the Escrow Agent, Buyer
has deposited with the Escrow Agent as security for the performance of its
obligations under the Purchase Agreement, the sum of One Million Seven Hundred
Twenty Three Thousand Eight Hundred Forty and No/100 ($1,723,840.00) Dollars.
Such amount, together with the earnings thereon from time to time held by the
Escrow Agent are herein called the "Escrow Funds". The Escrow Agent hereby
agrees to invest the Escrow Funds in the investments listed in Attachment One.
3. Delivery of the Escrow Funds.
(a) It is the understanding of Seller and Buyer that
(i) if the purchase of the Assets by Buyer from Seller is consummated, Seller
and Buyer will instruct the Escrow Agent to wire the Escrow Funds to Seller at
the Closing under the Purchase Agreement with the Escrow Funds being applied to
the Purchase Price then payable, (ii) if the purchase of the Assets by Buyer
from Seller is not consummated either because of the default of Seller or the
termination of Purchase Agreement by Buyer pursuant to the terms thereof at a
time when Buyer is not in default thereunder, the Escrow Funds shall be
delivered to Buyer, and (iii) if the purchase of the Assets by Buyer from
Seller is not consummated because of the default of Buyer, the Escrow Funds
shall be delivered to Seller.
(b) The Escrow Agent shall have no responsibility for
determining which of Buyer or Seller is entitled to the Escrow Funds but
shall deliver the Escrow Funds in accordance with joint written instructions
of Seller and Buyer or a final court order.
<PAGE> 84
- 2 -
(c) Notwithstanding any other provision of this Escrow
Agreement, in the event the Escrow Agent has not distributed the Escrow Funds by
September 15, 1995 or at any time thereafter, the Escrow Agent shall be
entitled, at its election and after ten (10) days' written notice to Seller and
Buyer, to tender the Escrow Funds into the registry or custody of any court of
competent jurisdiction the Escrow Agent may deem appropriate, and thereupon the
Escrow Agent shall be discharged from all further duties and liabilities under
this Escrow Agreement with respect to the Escrow Funds, unless, prior to the
expiration of such ten (10) day period, Seller and Buyer by written direction
instruct the Escrow Agent to transfer the Escrow Funds to a successor to the
Escrow Agent, in which case the Escrow Agent shall transfer the Escrow Funds to
such successor. If the Escrow Agent should receive or become aware of any
conflicting demands or claims with respect to the Escrow Funds or the rights of
any of the parties hereto, the Escrow Agent shall have the right in its sole
discretion, without liability for interest or damages, to discontinue any or all
further acts on its part until such conflict is resolved to its satisfaction
and/or to commence or defend any action or proceeding for the determination of
such conflict.
4. Responsibility of Escrow Agent. The Escrow Agent shall be
obligated only for the performance of such duties as are specifically set forth
herein and may rely on and shall be protected in acting or refraining from
acting on any instrument believed by it to be genuine and to have been signed
or presented by Buyer and Seller. The Escrow Agent shall not be liable for any
action taken or omitted by it in good faith and believed by it to be authorized
herein. The Escrow Agent shall not be subject to, nor be under any obligation
to ascertain or construe the terms and conditions of any other instrument,
whether or not now or hereafter deposited with or delivered to the Escrow Agent
or referred to in the escrow instructions, nor shall the Escrow Agent be
obliged to inquire as to the form, execution, sufficiency or validity of any
such instrument nor to inquire as to the identity, authority, or rights of the
person or persons executing or delivering the same.
The Escrow Agent shall not be liable for any act performed by
it or any omission by it or pursuant to the terms of this Agreement unless
such act is done in bad faith, or the Escrow Agent is grossly negligent in the
performance thereof. Any act done or omitted by the Escrow Agent pursuant to
the advice of its attorneys shall be deemed conclusively to have been performed
or omitted in good faith by the Escrow Agent.
5. Escrow Agent Expenses. Any fees and out of pocket costs and
expenses, including attorneys' fees, incurred by the Escrow Agent in connection
with the provisions of this Agreement shall be borne one-half by Buyer and
one-half by Seller.
6. Notices. All notices, certificates, requests, demands, and
other communications hereunder shall be in writing and shall be deemed to have
been duly given and delivered if mailed, by certified mail, first class postage
prepaid, or delivered personally, or sent by telecopier:
<PAGE> 85
- 3 -
If to Seller:
Miscellco Communications, Inc.
Suite 125
Eastover Bank Building
125 North Congress
Jackson, Mississippi 39201
Attention: J. Stacy Davidson
Telephone: (601) 948-1212
Facsimile: (601) 948-1211
with a copy to:
Lukas, McGowan, Nace & Gutierrez, Chartered
1111 Nineteenth Street, N.W., Suite 1200
Washington, D.C. 20036
Attention: Thomas Gutierrez, Esquire
Telephone: (202) 857-3500
Facsimile: (202) 842-4485
If to Buyer:
Mercury, Inc.
CM Tower, Suite 1495
One Lakeshore Drive
Lake Charles, LA 70629
Attention: Robert Piper
Telephone: (318) 436-9000
Facsimile: (318) 439-0769
with a copy to:
Thomas G. Henning, Esquire
101 East Thomas Street
Sulphur, LA 70663
Telephone: (318) 436-9000
Facsimile: (318) 433-0587
If to the Escrow Agent:
The Calcasieu Marine National Bank of Lake Charles
CM Tower
One Lakeshore Drive
Lake Charles, LA 70601
Attention: Trust Department
or to such other address or addresses as may hereafter be specified by notice
given by any of the above to the others.
Notices given by overnight delivery shall be effective when received. Notices
delivered in person shall be effective upon delivery. Notices given by
telecopier shall be effective when transmitted provided telecopier notice is
confirmed by
<PAGE> 86
- 4 -
telephone and is transmitted on a business day during regular business hours.
All notices sent via telecopier shall be followed up by the delivery of
originally executed copies of such notice to the pertinent party within five
(5) business days.
7. Indemnification. Buyer and Seller shall indemnify, defend and
hold the Escrow Agent harmless from and against any claim, demand, damage,
loss, expense, obligation or liability which arises from or relates to the
Escrow Agent's execution or performance of this Escrow Agreement and to pay to
the Escrow Agent on demand the amount of all such costs, damages, judgments,
attorney's fees, expenses, obligations, and liabilities; provided, however,
that such indemnification shall not cover any act or omission of the Escrow
Agent which constitutes gross negligence or willful misconduct.
8. Counterparts. This Escrow Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
9. Governing Law. The validity and effectiveness of this Escrow
Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of Louisiana without giving effect to the provisions,
policies, or principles thereof relating to choice or conflict of laws.
10. Amendment. This Escrow Agreement may only be amended or modified
by an instrument executed by the parties hereto.
11. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto or to their respective successors
and assigns. Nothing contained herein is intended to confer upon any person
other than the parties hereto and their respective successors and assigns as
aforesaid, any rights or remedies under or by reason of this Escrow Agreement.
12. Interpretation. Captions herein are inserted for convenience of
reference only and are not intended to be part of or to affect the meanings or
interpretation of this Escrow Agreement. All capitalized terms used herein
shall have the meaning ascribed to them in the Purchase Agreement, unless
otherwise defined herein.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be duly executed as of the day and year first above written.
MERCURY, INC. MISCELLCO COMMUNICATIONS, INC.
By: [ILLEGIBLE] By: [ILLEGIBLE]
------------------------------ -----------------------------
THE CALCASIEU MARINE NATIONAL BANK OF LAKE CHARLES
BY: [ILLEGIBLE]
------------------------------
ASSISTANT VICE PRESIDENT
& TRUST OFFICER
<PAGE> 87
ATTACHMENT 1
TO
ESCROW AGREEMENT
Escrow Funds are to be invested in U.S. Treasury Bills not exceeding a
maturity of 90 days.
Funds are not so invested in U.S. Treasury Bills should be invested in
a money market mutual fund consisting primarily of U.S. Treasury securities.
<PAGE> 88
SCHEDULE 1.2(a)(2)(iii)
Subscriber Escrow Agreement
<PAGE> 89
SUBSCRIBER ESCROW AGREEMENT
This Escrow Agreement (the "Escrow Agreement") is entered into as of
this ______ day of _________, 1995, by and among MERCURY CELLULAR OF KANSAS,
INC., a Louisiana corporation ("Buyer"), MISCELLCO COMMUNICATIONS, INC., a
Mississippi corporation ("Seller"), and THE CALCASIEU MARINE NATIONAL BANK OF
LAKE CHARLES of Lake Charles, Louisiana (the "Escrow Agent").
WHEREAS, Seller and Buyer have entered into that certain Asset Purchase
Agreement dated as of November 9, 1994 (the "Agreement"), wherein Seller has
agreed to sell to Buyer the Assets (as defined therein), a copy of which
Agreement has been furnished to the Escrow Agent and to which the Escrow Agent
is not a party and to the terms of which Escrow Agent is not bound, and
WHEREAS, Section 1.2(a)(2)(iii) provides for the establishment of
this Subscriber Escrow Agreement in the event that certain System Subscribers
(as defined in the Agreement) have been on the System for less than ninety
(90) days or are not current within thirty (30) days as of Closing ("Escrow
Subscribers");
NOW THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereto agree as follows:
1. Appointment of Escrow Agent. Buyer and Seller designate and
appoint the Escrow Agent to act as escrow agent hereunder and the Escrow Agent
accepts such appointment on the terms and conditions hereinafter set forth.
2. Deposit of Funds with Escrow Agent. Simultaneously with the
execution of this Escrow Agreement by Buyer, Seller and the Escrow Agent, Buyer
has deposited with the Escrow Agent as security for the performance of its
obligations under Section 1.2(a)(2)(iii) of the Agreement, the sum of
_____________________ ($____________) Dollars. Such amount, together with the
earnings thereon from time to time held by the Escrow Agent are herein called
the Escrow Funds. The Escrow Agent hereby agrees to invest the Escrow Funds in
the investments listed in Attachment One.
3. Delivery of the Escrow Funds.
(a) Upon the joint written request of Buyer and Seller
to Escrow Agent, distributions as hereinafter provided shall be made on the
fifteenth and last day of each calendar month except where such days are legal
holidays, in which case distributions shall be made on the next business day
(each a "Distribution Date"). Distributions in the amount of $200 or $275 (as
the case may be) shall be made for each Subscriber, other than those for which
such distributions shall have already been made, who are current within 30 days
and have been on the System for at least 90 days, both as calculated on each
Distribution Date. Moreover, on the 120th day following Closing, upon joint
written request by
<PAGE> 90
- 2 -
Seller and Buyer, Escrow Agent shall (i) distribute to Seller $200 or $275 (as
the case may be) per Escrow Subscriber remaining on the System as of that date
for which a distribution has not yet been forthcoming and due; (ii) distribute
the remainder of the principal portion of the Escrow Funds to Buyer; and (iii)
distribute interest to Seller and Buyer attributable to their respective
principal distributions as prescribed in such joint request.
(b) The Escrow Agent shall have no responsibility for
determining which of Buyer or Seller is entitled to the Escrow Funds but shall
deliver the Escrow Funds in accordance with joint written instructions of
Seller and Buyer or a final court order.
(c) Notwithstanding any other provision of this Escrow
Agreement, in the event the Escrow Agent has not distributed the Escrow Funds
by September 15, 1995 or at any time thereafter, the Escrow Agent shall be
entitled, at its election and after ten (10) days' written notice to Seller and
Buyer, to tender the Escrow Funds into the registry or custody of any court of
competent jurisdiction the Escrow Agent may deem appropriate, and thereupon the
Escrow Agent shall be discharged from all further duties and liabilities under
this Escrow Agreement with respect to the Escrow Funds, unless, prior to the
expiration of such ten (10) day period, Seller and Buyer by written direction
instruct the Escrow Agent to transfer the Escrow Funds to a successor to the
Escrow Agent, in which case the Escrow Agent shall transfer the Escrow Funds to
such successor. If the Escrow Agent should receive or become aware of any
conflicting demands or claims with respect to the Escrow Funds or the rights of
any of the parties hereto, the Escrow Agent shall have the right in its sole
discretion, without liability for interest or damages, to discontinue any or
all further acts on its part until such conflict is resolved to its
satisfaction and/or to commence or defend any action or proceeding for the
determination of such conflict.
4. Responsibility of Escrow Agent. The Escrow Agent shall be
obligated only for the performance of such duties as are specifically set forth
herein and may rely on and shall be protected in acting or refraining from
acting on any instrument believed by it to be genuine and to have been signed
or presented by Buyer and Seller. The Escrow Agent shall not be liable for any
action taken or omitted by it in good faith and believed by it to be authorized
herein. The Escrow Agent shall not be subject to, nor be under any obligation
to ascertain or construe the terms and conditions of any other instrument,
whether or not now or hereafter deposited with or delivered to the Escrow Agent
or referred to in the escrow instructions, nor shall the Escrow Agent be
obliged to inquire as to the form, execution, sufficiency or validity of any
such instrument nor to inquire as to the identity, authority, or rights of the
person or persons executing or delivering the same.
<PAGE> 91
- 3 -
The Escrow Agent shall not be liable for any act performed by it or
any omission by it or pursuant to the terms of this Agreement unless such act
is done in bad faith, or the Escrow Agent is grossly negligent in the
performance thereof. Any act done or omitted by the Escrow Agent pursuant to
the advice of its attorneys shall be deemed conclusively to have been performed
or omitted in good faith by the Escrow Agent.
5. Escrow Agent Expenses. Any fees and out of pocket costs and
expenses, including attorneys' fees, incurred by the Escrow Agent in connection
with the provisions of this Agreement shall be borne one-half by Buyer and
one-half by Seller.
6. Notices. All notices, certificates, requests, demands, and
other communications hereunder shall be in writing and shall be deemed to have
been duly given and delivered if mailed, by certified mail, first class postage
prepaid, or delivered personally, or sent by telecopier:
If to Seller:
Miscellco Communications, Inc.
Suite 125
Eastover Bank Building
125 North Congress
Jackson, Mississippi 39201
Attention: J. Stacy Davidson
Telephone: (601) 948-1212
Facsimile: (601) 948-1211
with a copy to:
Lukas, McGowan, Nace & Gutierrez, Chartered
1111 Nineteenth Street, N.W., Suite 1200
Washington, D.C. 20036
Attention: Thomas Gutierrez, Esquire
Telephone: (202) 857-3500
Facsimile: (202) 842-4485
If to Buyer:
Mercury Cellular of Kansas, Inc.
CM Tower, Suite 1495
One Lakeshore Drive
Lake Charles, LA 70629
Attention: Robert Piper
Telephone: (318) 436-9000
Facsimile: (318) 439-0769
<PAGE> 92
- 4 -
with a copy to:
Thomas G. Henning, Esquire
101 East Thomas Street
Sulphur, LA 70663
Telephone: (318) 436-9000
Facsimile: (318) 433-0587
If to the Escrow Agent:
The Calcasieu Marine National Bank of Lake Charles
CM Tower
One Lakeshore Drive
Lake Charles, LA 70601
Attention: Trust Department
or to such other address or addresses as may hereafter be specified by notice
given by any of the above to the others.
Notices given by overnight delivery shall be effective when
received. Notices delivered in person shall be effective upon delivery.
Notices given by telecopier shall be effective when transmitted provided
telecopier notice is confirmed by telephone and is transmitted on a business
day during regular business hours. All notices sent via telecopier should be
followed up by the delivery of originally executed copies of such notices to
the pertinent party within five (5) business days.
7. Indemnification. Buyer and Seller shall indemnify, defend and
hold the Escrow Agent harmless from and against any claim, demand, damage,
loss, expense, obligation or liability which arises from or relates to the
Escrow Agent's execution or performance of this Escrow Agreement and to pay to
the Escrow Agent on demand the amount of all such costs, damages, judgments,
attorney's fees, expenses, obligations, and liabilities; provided, however,
that such indemnification shall not cover any act or omission of the Escrow
Agent which constitutes gross negligence or willful misconduct.
8. Counterparts. This Escrow Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
9. Governing Law. The validity and effectiveness of this Escrow
Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of Louisiana without giving effect to the provisions,
policies or principles thereof relating to choice or conflict of laws.
<PAGE> 93
- 5 -
10. Amendment. This Escrow Agreement may only be amended or
modified by an instrument executed by the parties hereto.
11. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto or to their respective
successors and assigns. Nothing contained herein is intended to confer upon
any person other than the parties hereto and their respective successors and
assigns as aforesaid, any rights or remedies under or by reason of this Escrow
Agreement.
12. Interpretation. Captions herein are inserted for convenience
of reference only and are not intended to be part of or to affect the meanings
or interpretation of this Escrow Agreement. All capitalized terms used herein
shall have the meaning ascribed to them in the Purchase Agreement, unless
otherwise defined herein.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be duly executed as of the day and year first above written.
MERCURY CELLULAR OF KANSAS, INC. MISCELLCO COMMUNICATIONS, INC.
By: By:
--------------------------------- ----------------------------------
THE CALCASIEU MARINE NATIONAL BANK OF LAKE CHARLES
By:
---------------------------------
ASSISTANT VICE PRESIDENT
& TRUST OFFICER
<PAGE> 94
ATTACHMENT 1
TO
ESCROW AGREEMENT
Escrow Funds are to be invested in U.S. Treasury Bills not exceeding a
maturity of 90 days.
Funds not so invested in U.S. Treasury Bills should be invested in a
money market mutual fund consisting primarily of U.S. Treasury securities.
<PAGE> 95
SCHEDULE 1.2(a)(3)
Payables Escrow Agreement
<PAGE> 96
PAYABLES ESCROW AGREEMENT
This Escrow Agreement (the "Payables Escrow Agreement") is
entered into as of this day of , 1995, by and among MERCURY CELLULAR
OF KANSAS, INC., a Louisiana corporation ("Buyer"), MISCELLCO COMMUNICATIONS,
INC., a Mississippi corporation ("Seller"), and THE CALCASIEU MARINE NATIONAL
BANK OF LAKE CHARLES of Lake Charles, Louisiana (the "Escrow Agent").
WHEREAS, Seller and Buyer have entered into that certain Asset Purchase
Agreement dated as of November 9, 1994 (the "Agreement") , wherein Seller has
agreed to sell to Buyer the Assets (as defined therein) , a copy of which
Agreement has been furnished to the Escrow Agent and to which the Escrow Agent
is not a party and to the terms of which the Escrow Agent is not bound; and
WHEREAS, Section 1.2(a)(3) provides for the establishment of this
Payables Escrow Agreement in order to assure that sufficient funds are
available to make payment on all System Accounts Payable (Trade and Advanced
Billings and Customer Deposits) and all payables or other obligations
attributable to the cost of the System build-out required by Section 5.14 not
paid as of Closing;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereto agree as follows:
1. Appointment of Escrow Agent. Buyer and Seller designate and
appoint the Escrow Agent to act as escrow agent hereunder and the Escrow Agent
accepts such appointment on the terms and conditions hereinafter set forth.
2. Deposit of Funds with Escrow Agent. Simultaneously with the
execution of this Escrow Agreement by Buyer, Seller and the Escrow Agent, Buyer
has deposited with the Escrow Agent as security for the performance of its
obligations under Section 1.2(a)(3) of the Agreement, the sum of Two Hundred
Thousand ($200,000.00) Dollars. Such amount, together with the earnings
thereon from time to time held by the Escrow Agent are herein called the Escrow
Funds. The Escrow Agent hereby agrees to invest the Escrow Funds in the
investments listed in Attachment One.
3. Delivery of the Escrow Funds.
(a) Distributions shall be made upon the joint written
request of Buyer and Seller (a) as necessary and appropriate to assure timely
payment of all payables or other obligations as described in Section 2 above
and (b) to Seller on the seventy-fifth (75th) day following Closing, except
to the extent that any such identified payables or other obligations remain.
<PAGE> 97
- 2 -
(b) The Escrow Agent shall have no responsibility for
determining which of Buyer or Seller is entitled to the Escrow Funds but shall
deliver the Escrow Funds in accordance with joint written instructions of
Seller and Buyer or a final court order.
(c) Notwithstanding any other provision of this Escrow
Agreement, in the event the Escrow Agent has not distributed the Escrow Funds by
September 15, 1995 or at any time thereafter, the Escrow Agent shall be
entitled, at its election and after ten (10) days' written notice to Seller and
Buyer, to tender the Escrow Funds into the registry or custody of any court of
competent jurisdiction the Escrow Agent may deem appropriate, and thereupon the
Escrow Agent shall be discharged from all further duties and liabilities under
this Escrow Agreement with respect to the Escrow Funds, unless, prior to the
expiration of such ten (10) day period, Seller and Buyer by written direction
instruct the Escrow Agent to transfer the Escrow Funds to a successor to the
Escrow Agent, in which case the Escrow Agent shall transfer the Escrow Funds to
such successor. If the Escrow Agent should receive or become aware of any
conflicting demands or claims with respect to the Escrow Funds or the rights of
any of the parties hereto, the Escrow Agent shall have the right in its sole
discretion, without liability for interest or damages, to discontinue any or all
further acts on its part until such conflict is resolved to its satisfaction
and/or to commence or defend any action or proceeding for the determination of
such conflict.
4. Responsibility of Escrow Agent. The Escrow Agent shall be
obligated only for the performance of such duties as are specifically set forth
herein and may rely on and shall be protected in acting or refraining from
acting on any instrument believed by it to be genuine and to have been signed
or presented by Buyer and Seller. The Escrow Agent shall not be liable for any
action taken or omitted by it in good faith and believed by it to be authorized
herein. The Escrow Agent shall not be subject to, nor be under any obligation
to ascertain or construe the terms and conditions of any other instrument,
whether or not now or hereafter deposited with or delivered to the Escrow Agent
or referred to in the escrow instructions, nor shall the Escrow Agent be
obliged to inquire as to the form, execution, sufficiency or validity of any
such instrument nor to inquire as to the identity, authority, or rights of the
person or persons executing or delivering the same.
The Escrow Agent shall not be liable for any act performed by
it or any omission by it or pursuant to the terms of this Agreement unless such
act is done in bad faith, or the Escrow Agent is grossly negligent in the
performance thereof. Any act done or omitted by the Escrow Agent pursuant to
the advice of its attorneys shall be deemed conclusively to have been performed
or omitted in good faith by the Escrow Agent.
<PAGE> 98
- 3 -
5. Escrow Agent Expenses. Any fees and out of pocket costs and
expenses, including attorneys, fees, incurred by the Escrow Agent in connection
with the provisions of this Agreement shall be borne one-half by Buyer and
one-half by Seller.
6. Notices. All notices, certificates, requests, demands, and
other communications hereunder shall be in writing and shall be deemed to have
been duly given and delivered if mailed, by certified mail, first class postage
prepaid, or delivered personally, or sent by telecopier:
If to Seller:
Miscellco Communications, Inc.
Suite 125
Eastover Bank Building
125 North Congress
Jackson, Mississippi 39201
Attention: J. Stacy Davidson
Telephone: (601) 948-1212
Facsimile: (601) 948-1211
with a copy to:
Lukas, McGowan, Nace & Gutierrez, Chartered
1111 Nineteenth Street, N.W., Suite 1200
Washington, D.C. 20036
Attention: Thomas Gutierrez, Esquire
Telephone: (202) 857-3500
Facsimile: (202) 842-4485
If to Buyer:
Mercury Cellular of Kansas, Inc.
CM Tower, Suite 1495
One Lakeshore Drive
Lake Charles, LA 70629
Attention: Robert Piper
Telephone: (318) 436-9000
Facsimile: (318) 439-0769
with a copy to:
Thomas G. Henning, Esquire
101 East Thomas Street
Sulphur, LA 70663
Telephone: (318) 436-9000
Facsimile: (318) 433-0587
<PAGE> 99
- 4 -
If to the Escrow Agent:
The Calcasieu Marine National Bank of Lake Charles
CM Tower
One Lakeshore Drive
Lake Charles, LA 70601
Attention: Trust Department
or to such other address or addresses as may hereafter be specified by notice
given by any of the above to the others.
Notices given by overnight delivery shall be effective when
received. Notices delivered in person shall be effective upon delivery.
Notices given by telecopier shall be effective when transmitted provided
telecopier notice is confirmed by telephone and is transmitted on a business
day during regular business hours. All notices sent via telecopier should be
followed up by the delivery of originally executed copies of such notices to
the pertinent party within five (5) business days.
7. Indemnification. Buyer and Seller shall indemnify, defend and
hold the Escrow Agent harmless from and against any claim, demand, damage,
loss, expense, obligation or liability which arises from or relates to the
Escrow Agent's execution or performance of this Escrow Agreement and to pay to
the Escrow Agent on demand the amount of all such costs, damages, judgments,
attorney's fees, expenses, obligations, and liabilities; provided, however,
that such indemnification shall not cover any act or omission of the Escrow
Agent which constitutes gross negligence or willful misconduct.
8. Counterparts. This Escrow Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
9. Governing Law. The validity and effectiveness of this Escrow
Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of Louisiana without giving effect to the provisions,
policies or principles thereof relating to choice or conflict of laws.
10. Amendment. This Escrow Agreement may only be amended or
modified by an instrument executed by the parties hereto.
11. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto or to their respective
successors and assigns. Nothing contained herein is intended to confer upon
any person other than the parties hereto and their respective successors and
assigns as aforesaid, any rights or remedies under or by reason of this Escrow
Agreement.
<PAGE> 100
- 5 -
12. Interpretation. Captions herein are inserted for convenience
of reference only and are not intended to be part of or to affect the meanings
or interpretation of this Escrow Agreement. All capitalized terms used herein
shall have the meaning ascribed to them in the Purchase Agreement, unless
otherwise defined herein.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be duly executed as of the day and year first above written.
MERCURY CELLULAR OF KANSAS, INC. MISCELLCO COMMUNICATIONS, INC.
By: By:
----------------------------- ---------------------------
THE CALCASIEU MARINE NATIONAL BANK OF LAKE CHARLES
By:
----------------------------------
ASSISTANT VICE PRESIDENT
& TRUST OFFICER
<PAGE> 101
ATTACHMENT 1
TO
ESCROW AGREEMENT
Escrow Funds are to be invested in U.S. Treasury Bills not exceeding
a maturity of 90 days.
Funds not so invested in U.S. Treasury Bills should be invested in a
money market mutual fund consisting primarily of U.S. Treasury securities.
<PAGE> 102
SCHEDULE 1.2(a)(5)
Balance Sheet Adjustment Formula
<PAGE> 103
Schedule 1.2(a)(5)
MERCURY, INC.
ACQUISITION OF KANSAS RSA'S
<TABLE>
<S> <C> <C> <C> <C>
Pro Forma Purchase Price & Allocation at 9/30/94
Purchase price per asset
Purchase Agreement $34,279,600
Adjustment to purchase price
Accounts receivable xxx,xxx
trade
AR discount rate
(0-59 days, 98%) xxx,xxx
(60-89 days, 75%) xxx,xxx
Cost of Inventory (phone xxx,xxx
equipment)
Other assets - deposits xxx,xxx
-------
xxx,xxx
Accounts payable - trade (xxx,xxx)
Accounts payable - advance (xxx,xxx)
billings
Customer deposits (xxx,xxx)
--------
xxx,xxx
-------
Net increase (decrease) xxx,xxx
Purchase Price (subject to
adjustment for subscribers) $xx,xxx,xxx
-----------
</TABLE>
<PAGE> 104
SCHEDULE 3.7
Seller's Litigation
(None)
<PAGE> 105
SCHEDULE 3.10
Seller's Articles of Incorporation and Bylaws
<PAGE> 106
[SEAL]
ARTICLES OF INCORPORATION
Profit Corporation
The undersigned person, pursuant to Section 79-4-2.02 of the
Mississippi Code of 1972, hereby executes the following document and sets forth:
1. The name of the corporation is Miscellco Communications, Inc.
2. Domicile address is 118 Hillcroft Place, Jackson, Hinds County,
Mississippi 39211.
3. The period of duration is ninety-nine (99) years.
4. The corporation is authorized to issue a single class of shares which
shall be common one dollar ($1.00) par value and the number of authorized
shares shall be one hundred thousand (100,000).
4. The address of its initial registered office is Suite 201, 14 Northtown
Drive, Jackson, Mississippi 39211, and the name of its initial registered
agent at such address is R. Barry Vickery.
5. The name and address of the single incorporator is R. Barry Vickery,
Suite 201, 14 Northtown Drive, Jackson, Mississippi 39211.
6. (a) The corporation elects to have preemptive rights.
(b) As restrictions on transfer of shares, (1.) for a period of one
(1) year from date of organization, the number of shareholders shall not exceed
ten (10) persons who shall all be residents of the State of Mississippi, and
(2.) shareholders shall be obligated first to offer to the corporation and next
to offer to the other shareholders (based on their respective percentage of
ownership) such previously issued and outstanding shares offered for sale.
Incorporator: This page conforms with the duplicate
original filed with Secretary of State.
/s/ R. BARRY VICKERY /s/ DICK MOLPUS
- ------------------------------ -------------------------------------
R. Barry Vickery Secretary of State
Suite 201 State of Mississippi
14 Northtown Drive
Jackson, Mississippi 39211
Telephone: (601) 957-0808
<PAGE> 107
BYLAWS
MISCELLCO COMMUNICATIONS, INC.
ARTICLE I. - OFFICES
1. The principal office shall be in the City of Jackson, County of
Hinds, State of Mississippi, and the name of the resident agent for process
upon the corporation is R. Barry Vickery, whose mailing address is Post Office
Box 13468, Jackson, Mississippi 39236-3468. (Telephone 957-0808)
2. The corporation may also have offices at such other place as
the Board of Directors may from time to time appoint, or as the business of the
corporation may require.
ARTICLE II. - STOCKHOLDERS' MEETINGS
1. The place of all meetings of the stockholders shall be the
principal office of the corporation in the City of Jackson, Mississippi or such
other place as shall be determined, from time to time, by the Board of
Directors, and the place at which such meeting shall be held shall be stated in
the notice and call of meeting. A change in the place of meeting shall not be
made within sixty (60) days next before the day on which an election of
Directors is to be held, and a notice of any change shall be given to each
stockholder twenty (20) days before the election is to be held.
2. The annual meeting of the stockholders of the corporation for
the election of Directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held each year on the second Tuesday of October in each year, if not a
legal holiday, and if a legal holiday, then on the day following at ten o'clock
a.m. If the annual meeting of the stockholders be not held as herein
prescribed, the election of Directors may be held at any meeting thereafter
called pursuant to these Bylaws.
The voting at all meetings of stockholders may be viva voce, but any
qualified voter may demand a stock vote whereupon such stock vote shall be
taken by ballot, each of which shall state the name of the stockholder voting
and the number of shares voted by him, and if such ballot be cast by a proxy,
it shall also state the name of such proxy.
At any meeting of the stockholders, every stockholder having the right
to vote shall be entitled to vote in person, or by proxy appointed by an
instrument in writing subscribed by such stockholder. No proxy shall be valid
after eleven (11) months from the date of its execution, unless otherwise
provided in the proxy. Each stockholder shall have one vote for each share of
stock having voting power, registered in his name on the books of the
corporation, and except where the transfer books of the corporation shall have
been closed or a date shall have been fixed as a record date for the
determination of its stockholders entitled to vote, no share of stock shall be
voted on which shall have been transferred on the books of the corporation
within twenty (20) days next preceding such election of Directors.
<PAGE> 108
A complete list of stockholders entitled to vote at the ensuing
election, arranged in alphabetical order, and the number of voting shares held
by each, shall be prepared by the Secretary, who shall have charge of the stock
ledger, and filed in the office where the election is to be held, at least ten
(10) days before every election, and shall, during the usual hours for
business, and during the whole time of said election, be open to the
examination of any stockholder.
3. The order of business at the annual meeting of stockholders
shall be as follows:
(a) Calling meeting to order;
(b) Invocation;
(c) Proof of notice of meeting;
(d) Reading of Minutes of last previous annual meeting;
(e) Reports of Officers;
(f) Reports of Committees;
(g) Election of Directors;
(h) Miscellaneous business.
4. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute, may be called by the
President or by a majority of the Board of Directors, and shall be called at
any time by the Chairman of the Board of Directors, upon the request of
stockholders owning ten (10) percent of the outstanding stock of the
corporation entitled to vote at such meeting. Business transacted at all
special meetings shall be confined to the objects stated in the call.
5. Notice of the time and place of the annual meeting of
stockholders shall be given by mailing written or printed notice of the same at
least ten (10) days, and not more than fifty (50) days, prior to the meeting,
and notice of the time and place of special meetings shall be given by written
or printed notice of the same at least ten (10) days, and not more than fifty
(50) days, prior to the meeting, with postage prepaid, to each stockholder of
record of the corporation entitled to vote at such meeting, and addressed to
the stockholder's last known post office address, or to the address appearing
on the corporate books of the corporation. The Board of Directors may fix in
advance a date, not exceeding fifty (50) days preceding the date of any meeting
of stockholders; as a record date for the determination of the stockholders
entitled to notice of and to vote at any such meeting.
6. A quorum at any annual or special meeting of stockholders shall
consist of stockholders representing, either in person or by proxy, a majority
of the shares of the corporation entitled to vote at such meeting, except as
otherwise specially provided by law or in the Certificate of Incorporation, but
in no event shall a quorum consist of less than one-third (1/3) of the shares
entitled to vote at the meeting.
ARTICLE III. - BOARD OF DIRECTORS
1. The management of all the affairs, property and business of
<PAGE> 109
the corporation shall be vested in a Board of Directors, consisting of three
persons, designated as the initial Board of Directors and who shall hold office
until the first annual meeting of the stockholders. Thereafter, all Directors
shall be elected at the annual meeting of the stockholders by a majority vote,
for a term of one (1) year, and shall hold office until their successors are
elected and qualify. Directors need not be stockholders. In addition to the
powers and authorities by these Bylaws and the Certificate of Incorporation
expressly conferred upon it, the Board of Directors may exercise all such
powers of the corporation and do all such lawful acts and things as are not by
stature or by the Certificate of Incorporation or by these Bylaws directed or
required to be exercised or done by the stockholders.
2. The number of Directors may at any time be increased or
decreased by vote of a majority of the stockholders entitled to vote, at any
regular or special meeting, if the notice of such meeting contains a statement
of the proposed increase and decrease, and in case of any such increase, the
stockholders at any general or special meeting shall have power to elect such
additional Directors to hold office until the next annual meeting of the
stockholders, and until their successors are elected and qualify. The number of
Directors shall never be less than three (3) and no decrease shall ever have
the effect of shortening the term of any incumbent Director.
3. All vacancies in the Board of Directors, whether caused by
resignation, death, or otherwise, shall be filled by the shareholders at an
annual meeting or attending a stated or special meeting called for that
purpose, even though less than a quorum be present. A Director thus elected to
fill any vacancy shall hold office for the unexpired term of his predecessor,
and until his successor is elected and qualifies.
4. The first meeting of each newly elected Board shall be held at
such time and place, either within or without the State of Mississippi, as
shall be fixed by the vote of the stockholders at the annual meeting, and no
notice of such meeting shall be necessary to the newly elected Directors in
order legally to constitute the meeting, provided a majority of the whole
Board shall be present; or they may meet at such place and time as shall be
fixed by the consent in writing of all the Directors. The Board of Directors,
at its first meeting and thereafter annually, shall organize itself, shall
elect from its members a Chairman and a Secretary, which Chairman shall preside
over its meetings and which Secretary shall cause a record to be made of its
actions.
5. Regular meetings of the Board of Directors may be held without
notice at the principal office of the corporation or at such other place or
places within or without the State of Mississippi as the Board of Directors may
from time to time designate.
6. Special meetings of the Board of Directors may be called at any
time by the Chairman, or in his absence, by a majority of the Directors, to be
held at the principal office of the corporation or at such other place or
places within or without the State of Mississippi, as the Directors may from
time to time designate.
<PAGE> 110
Notice of all special meetings of the Board of Directors shall be given
to each Director by two (2) days service of the same by telegram, letter, or
personally.
7. A quorum at all meetings of the Board of Directors shall
consist of a majority of the whole Board; but less than a quorum may adjourn
any meeting which may be held on a subsequent date without further notice,
provided a quorum be present at such deferred meeting.
8. Standing or temporary committees may be appointed from its own
number by the Board of Directors from time to time, and the Board of Directors
may from time to time vest such committees with such powers as it may see fit,
subject to such conditions as may be prescribed by such Board and by statute.
An Executive Committee may be appointed by Resolution passed by a majority of
the whole Board; it shall have all the powers provided by statute, except as
specially limited by the Board. All committees so appointed shall keep regular
minutes of the transactions of their meetings, and shall cause them to be
recorded in books kept for that purpose in the office of the corporation, and
shall report the same to the Board of Directors at its next meeting.
9. No stated salary shall be paid Directors, as such, for their
services, but by Resolution of the Board of Directors, a fixed sum and expenses
of attendance, if any, may be allowed for attendance at each regular or special
meeting of such Board; provided that nothing herein contained shall be
construed to preclude any Director from serving the corporation in any other
capacity and receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for attending committee meetings.
ARTICLE IV. - OFFICERS
1. The Officers of the corporation shall be a President, one or
more Vice-Presidents, a Secretary, and a Treasurer, who shall be elected for
one (1) year by the Board of Directors at their first meeting after the annual
meeting of stockholders, and who shall hold office until their successors are
elected and qualify. The Board of Directors may also choose additional
Assistant Secretaries and Assistant Treasurers. The President and
Vice-Presidents must be members of the Board of Directors. Any two or more
offices may be held by the same person, except the offices of President and
Secretary.
2. The President shall preside at all meetings of stockholders and
Directors, shall have general supervision of the affairs of the corporation,
shall sign or countersign all certificates, contracts and other instruments of
the corporation as authorized by the Board of Directors and stockholders, and
shall perform all such other duties as are incident to his office, or are
properly required of him by the Board of Directors.
3. The Vice-Presidents, in the order designated by the Board of
Directors, shall exercise the functions of the President during the absence or
disability of the President. Each Vice-President shall have such powers and
discharge such duties as may be assigned to him from time to time by the Board
of Directors.
<PAGE> 111
4. The Secretary shall issue notices for all meetings, except that
notice for special meetings of Directors called at the request of a majority of
Directors as provided in Section 6 of Article III of the Bylaws, may be issued
by such Directors, shall keep minutes of all meetings, shall have charge of the
seal and the corporate books, and shall make such reports and perform such
other duties as are incident to this office, or are properly required of him by
the Board of Directors.
5. Should any officer or Director receive any remuneration, salary
or stipend from the corporation which such remuneration, salary or stipend
shall be challenged or adjudged unreasonable by the Internal Revenue Services
of a State or Federal Government or as a result of any law, ruling or
adjudication thereof, then such officers or Directors shall immediately repay
to the corporation such sum or sums as are determined to be unreasonable.
6. The Assistant Secretaries, in the order of their seniority,
shall, in the absence or disability of the Secretary, perform the duties and
exercise the powers of the Secretary, and shall perform such other duties as
the Board of Directors shall prescribe.
7. The Treasurer shall have the custody of all monies and
securities of the corporation and shall keep regular books of account. He shall
disburse the funds of the corporation in payment of the just demands against
the corporation, or as may be ordered by the Board of Directors taking proper
vouchers for such disbursements, and shall render to the Board of Directors
from time to time as may be required of him, an account of all his transactions
as Treasurer and of the financial condition of the corporation. He shall
perform all duties incident to his office of which are properly required of him
by the Board of Directors.
8. The Assistant Treasurers, in the order of their seniority,
shall in the absence or disability of the Treasurer, perform the duties and
exercise the powers of the Treasurer, and shall perform such other duties as
the Board of Directors shall prescribe.
9. In case of absence or inability to act of any officer of the
corporation and of any person herein authorized to act in his place, the Board
of Directors may from time to time delegate the powers or duties of such
officer to any other officer, or any Director, or other person whom it may
select.
10. Vacancies in any office arising from any cause may be filled by
the Directors at any regular or special meeting.
11. The Board of Directors may appoint such other officers and
agents as it shall deem necessary or expedient, who shall hold their offices
for such terms and shall exercise such powers and perform such duties as shall
be determined from time to time by the Board of Directors.
12. The salaries of all officers and agents of the corporation
shall be fixed by the Board of Directors.
<PAGE> 112
13. The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the
Board of Directors may be removed at any time, with or without cause, by the
affirmative vote of a majority of the whole Board of Directors whenever, in its
judgment the best interests of the corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the
person so removed.
14. The Board of Directors may, by Resolution, require any and all
of the officers to give bond to the corporation, with sufficient surety or
sureties, conditioned for the faithful performance of the duties of their
respective offices, and to comply with such other conditions as may from time
to time be required by the Board of Directors.
ARTICLE V. -- STOCK
1. Certificates of stock shall be issued in numerical order, and
each stockholder shall be entitled to a certificate signed by the President,
or a Vice-President, and the Secretary, or an Assistant Secretary, of the
corporation, and may be sealed with the seal of the corporation or a facsimile
thereof. The signatures of the President or Vice-President and the Secretary or
Assistant Secretary upon a certificate may be facsimiles, if the certificate
is countersigned by a transfer agent, or registered by a Registrar, other
than the corporation itself or an employee of the corporation. In case any
officer who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer at the date of its issue.
Each certificate representing shares shall state upon the face thereof:
(a) That the corporation is organized under the laws of this state.
(b) The name of the person to whom issued.
(c) The number and class of shares, and the designation of the
series, if any, which such certificate represents.
(d) The par value of each share represented by such certificate, or
a statement that the shares are without par value.
No certificate shall be issued for any share until such share is fully
paid.
2. Registered stockholders only shall be entitled to be treated by
the corporation as the holders in fact of the stock standing in their
respective names and the corporation shall not be bound to recognize any
equitable or other claim to or interest in any share on any part of any other
person, whether or not it shall have express or other notice thereof, except as
expressly provided by the laws of Mississippi.
<PAGE> 113
3. In case of loss or destruction of any certificate of stock,
another may be issued in its place upon proof of such loss or destruction, and
upon the giving of a satisfactory bond of indemnity to the corporation and/or
to the transfer agent and registrar of such stock, in such sum as the Board of
Directors may provide.
4. The Board of Directors shall have power and authority to make
all such rules and regulations as it may deem expedient concerning the issue,
transfer, conversion, and registration of certificates for shares of the
capital stock of the corporation, not inconsistent with the laws of
Mississippi, the Certificate of Incorporation of the corporation, and these
Bylaws.
5. The Board of Directors shall have power to close the stock
transfer books of the corporation for a period not exceeding fifty (50) days
preceding the date of any meeting of stockholders, or the date for payment of
any dividend, or the date for the allotment of rights, or the date when any
change or conversion or exchange of capital stock shall go into effect, or for
a period of not exceeding fifty (50) days in connection with obtaining the
consent of stockholders for any purpose; PROVIDED, HOWEVER, that in lieu of
closing the stock transfer books as aforesaid, the Board of Directors may fix
in advance a date, not exceeding fifty (50) days preceding the date of any
meeting of stockholders, or the date for the payment of any dividend, or the
date for the allotment of rights or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection with
obtaining such consent, as a record date for the determination of the
stockholders entitled to notice of and to vote at any such meeting, and any
adjournment thereof, or entitled to receive payment of any such dividend, or to
any such change, conversion, or exchange of capital stock or to give such
consent, and in such case such stockholders, and only such stockholders as
shall be stockholders of record on the date so fixed, shall be entitled to
such notice of and to vote at such meeting, and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.
6. The stock issued by the corporation shall be qualified under
the provisions of Section 1244 of the Internal Revenue Code of 1954. Such
qualification with respect to the tax treatment of the stock shall be
incorporated in the stock certificates of the corporation by a statement to
that effect on the face of the certificates.
7. All transfers of stock of the corporation shall be made upon
the books of the corporation by the holder of such shares in person, or by his
legal representative, executor or administrator, only upon surrender of the
certificate or certificates of stock for cancellation, properly endorsed.
8. Any stockholder desiring to sell or transfer his shares or
stock in the corporation shall first offer same to the corporation on the same
terms and conditions as is contained in any bona fide acceptable offer
received by said stockholder desiring to sell, which offer to the
<PAGE> 114
corporation shall be in writing and shall set forth the name of the prospective
purchaser and the price offered by said prospective purchaser. The corporation
shall have thirty (30) days after receipt of said notice within which to
exercise its right to buy said shares on said terms. In the event the
corporation determines not to purchase said shares, the corporation shall then
give to all stockholders of the corporation, except the stockholder desiring to
sell, notice of the terms and conditions of the bona fide acceptable offer
received by the stockholder desiring to sell and said stockholders shall then
have thirty (30) days within which to exercise their right to purchase the
shares of the stockholder desiring to sell on said same terms and conditions,
said shares to be divided among the stockholders or stockholder desiring to
purchase in the proportion of the stock held by them to the total stock owned by
the purchasing stockholders. This provision shall be incorporated in each
certificate of stock by reference to this Article V, Section 8 of these Bylaws.
ARTICLE VI. - DIVIDENDS AND FINANCE
1. Dividends may be declared by the Board of Directors and paid
out of the annual net profits of the corporation or out of its net assets in
excess of its capital, subject to the conditions and limitations imposed by
the Certificate of Incorporation of the corporation and the laws of
Mississippi.
2. Before making any distribution of profits there may be set
aside out of the net profits of the corporation, such sum or sums as the
Directors from time to time, in their absolute discretion, may deem expedient,
as a reserve fund to meet contingencies, or for equalizing dividends, or for
maintaining any property of the corporation, or for any other purpose, and any
profits of any year not distributed as dividends shall be deemed to have been
thus set apart until otherwise disposed of by the Board of Directors.
3. The monies of the corporation shall be deposited in the name of
the corporation in such bank or banks as the Board of Directors shall
designate, and shall be drawn out only by check signed by persons designated by
Resolution by the Board of Directors.
4. The fiscal year of the corporation shall begin on the first day
of January in each year, unless otherwise provided by the Board of Directors.
ARTICLE VII. - BOOKS AND RECORDS
1. The books, accounts, and records of the corporation except as
may be otherwise required by the Laws of the State of Mississippi, be
maintained at such place or places as the Board of Directors may from time to
time appoint. The Board of Directors shall determine the extent to which the
accounts and books for the corporation, or any of them other than the stock
ledger, shall be open to the inspection of the stockholders. Every stockholder
shall have the right to inspect any account or book or document of the
corporation as conferred by law.
<PAGE> 115
ARTICLE VIII. -- NOTICES
1. Whenever the provisions of a statute or these Bylaws require
notice to be given to any Director, officer, or stockholder, they shall not be
construed to mean personal notice; such notice may be given in writing by
depositing the same in a post office or letter box, in a postpaid, sealed
wrapper, addressed to such Director, officer or stockholder at his or her
address as the same appears in the books of the corporation, and the time of
the giving of such notice. Place, day, and hour of all meetings must be given
by any such notices.
2. A waiver of any notice in writing, signed by a stockholder,
Director, or officer, whether before or after the time stated in said waiver
for holding a meeting, shall be deemed equivalent to a notice required to be
given to any Director, officer or stockholder.
ARTICLE IX. -- SEAL
1. The corporate seal of the corporation shall be an imprinted
seal in the following form:
ARTICLE X. -- AMENDMENT OF BYLAWS
1. Alterations, amendments, or repeals of the Bylaws may be made
by a majority of the stockholders entitled to vote at any meeting, if the
notice of such meeting contains a statement of the proposed alteration,
amendment, or repeal, or by the Board of Directors by a majority vote of the
whole Board of Directors at any regular or special meeting, provided notice of
such alteration, amendment or repeal has been given to each Director in writing
at least three (3) days prior to said meeting.
<PAGE> 116
SCHEDULE 3.11
Seller's Financial Statements
<PAGE> 117
SCHEDULE 3.12
Seller's Exception to Title of Assets
(None)
<PAGE> 118
SCHEDULE 3.13
SELLER'S INTEREST OF REAL PROPERTY
1) J. Stacy Davidson, Seller's CEO, President, Chairman of the Board and
largest shareholder has a limited partner ownership interest of less than one
percent in Cellular Towers Asset Fund, Ltd. ("TAF"). TAF is the lessor of four
sites within the System for which Seller is the lessee.
2) Seller owns Grinnell Cell Site.
<PAGE> 119
SCHEDULE 3.14
Seller's Intellectual Property
(None)
<PAGE> 120
SCHEDULE 3.15
Seller's Liabilities
No liabilities other than those listed on the Financial
Statement
<PAGE> 121
SCHEDULE 3.16
Seller's Contracts
<PAGE> 122
SCHEDULE 3.16
I. Tower Leases
Location Lessor
Syracuse CTAF-MS Properties
Dodge City TCI of Kansas, Inc.
Edson Eagle Communications
Colby CTAF-MS Properties
Wakeeney Wes Kan Tower
Ness City G & K Communications
Pratt Wes Kan Tower
Scott City Wes Kan Tower
Garden City Snyder Radio Service
Hays CTAF-MS Properties
Great Bend CTAF-MS Properties
Guymon Jack Eoff
Stockton Classic Cable
Ulysses Turri-Comm, Inc.
Liberal Hi-Way Tower Co., Inc.
Copeland SWK
Hugoton Recomco
St. Francis Wes-Kan Tower
Atwood Wes-Kan Tower
Oberlin Wes-Kan Tower
Norton Wes-Kan Tower
Russell Wes-Kan Tower
II. Offices (Kansas)
Location Lessor
Hays (11th Street) Bolero
Dodge City Fast Foods of Dodge City
Garden City Gail Lee
Hays (Vine Street) Bickel Aubel
Great Bend Tom Harris
Liberal Century 21 Ewalt Real Estate
III. Offices (Mississippi)
Location Lessor
Jackson MS Properties
Ridgeland Royal Maccabees
IV. Equipment Rental (Kansas)
Location Description Lesser
Hays Mailing Machine Pitney Bowes
Hays Fax Machine Northwest Office Supply
Dodge City Copier Xerox Corp.
Liberal Copier Xerox Corp.
Garden City Copier Xerox Corp.
Great Bend DK16 Phone Sys. Toshiba Easy Lease
<PAGE> 123
-2-
V. Equipment Rental (Mississippi)
Location Description Lessor
Ridgeland Canon Copier General Electric Capital
Jackson Postage Meter Pitney Bowes
Jackson Mailing Machine Pitney Bowes
Ridgeland 2-Fuji Fax General Electric Capital
Jackson Fuji DEX760 Fax General Electric Capital
Jackson Canon Copier Alco Capital
Jackson 7406+ Phone Sys. AT&T
VI. Agent Agreements
All-Comm, Inc.
Bar-K Electronics
Caraway Enterprises DEA Custom Sound & Video
GK Electronics
Gavons Electronics
Gene's Electronics
Great Western Tire
Hays Communications
Howards Electronics & TV
Miller's Electronics
Mobile Radio Service, Inc.
Liberal Communications/Radio Shack
Service Electronics
Strecker TV
Team Electronics
Two-Way Radio Communications
Mac Wise
VII. Auto Dealer Agreements
Anderson Motor
Ralph Baird Ford
Brent Magourik Chev-Olds-Geo
Burtis Motor Co., Inc.
Dove Buick, Olds, Cadillac, Inc.
Gagnon Motors/Grainfield
Gasden City Auto Plaza
Goff Motor Company
Great Plains Chrysler
D.L. Hanken Buick, Olds, Pontiac, Cadillac, GMC
Hays For/Toyota-Paul Larsen
Helmers Motors, Inc.
Bill Hopper Ford
James Lincoln, Mercury/Hays
James Motor Company
<PAGE> 124
-3-
M & R Ford/Kinsley
Paul MacDonald Chevrolet, Inc.
Lloyd Nusser Chevrolet/Jetmore
Skaggs Motor Inc.
R.A.G. Motor Company
Spangler Motor Co./Scott City
Western Motor Co.,Inc.
Western Motor Co./Leoti
Whalen Ford
VIII. Radio Trade Agreements
STATION LOCATION
KULY/KFXX Ulysses
KIUL/KWKR Garden City
KKJQ Garden City
KOLS/KGNO Dodge City
KSLS Liberal
KJLS Hays
KANS/KQDF Larned
KHOK Great Bend
LS Network
IX. Confidentiality Agreements
Glenna Alm
Angela Alton
James P. Angle
Chris Appelhans
Susan Bennett
Anita Blakeney
Phyllis Bledsoe
Frank Buchanan
Jeannine Byers
Steve Cecil
Becky Colclazier
Ann Cook
J. Stacy Davidson
Lisa Dirks
Tracie Ferguson
Clifford Gallington
Judy Garner
Brandi Hake
Christine A. Hamann
Dale Hardy
Sherry Helmke
Shelly Hinton
Cynthia Hopkins
Carol Killgore
Pat Leihy
William C. Mathews
<PAGE> 125
-4-
Tonya Myers
Glen A. O'Dell
Phan thi Binh
Ronald Scott Rohleder
Jan Rushing
Becky Schaffer
Davon Schuler
Teresa Shelley
Carl E. Smith
Brad Spinks
Dorothy Stieben
Virginia Sullivan
Mikaela Switzer
Vickie Williamson
X. Covenant Not To Compete Agreements
Glenna Alm
Angela Alton
James P. Angle
Chris Appelhans
Susan Bennett
Anita Blakeney
Phyllis Bledsoe
Frank Buchanan
Jeannine Byers
Steve Cecil
Ann Cook
Beck Colclazier
J. Stacy Davidson
Lisa Dirks
Tracie Ferguson
Clifford Gallington
Judy Garner
Brandi Hake
Christine A. Hamann
Sherry Helmke
Shelly Hinton
Cynthia Hopkins
Pat Leihy
William C. Mathews
Glen A. O'Dell
Phan thi Binh
Ronald Scott Rohleder
Jan Rushing
Becky Schaffer
Davon Schuler
Teresa Shelley
Carl E. Smith
Brad Spinks
Dorothy Stieben
<PAGE> 126
-5-
Virginia Sullivan
Mikaela Switzer
Vickie Williamson
XI. Other Agreements
EDS
Boston Communications Credit Card Roaming
Cellular One Group (licensing agreements
KINNET T-1 Agreements
Southwestern Bell T-1 Agreements
NACN
Advantis
Highway Master
Cellular Mobile Data Communications Agent Agreement
Dunn & Bradstreet
CMI
CUI
KCI
IBM
Systems Solutions
Cibernet Corp.
AMSC (SkyCell)
KIN Network, Inc.
<PAGE> 127
SCHEDULE 3.18
Seller's Licenses
<PAGE> 128
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
MOBILE RADIO AUTHORIZATION MISCELLCO COMMUNICATIONS, INC.
FCC FORM 463 120 W. CONGRESS STREET, SUITE 500
JACKSON, MS 39225
COMMON CARRIER
DOMESTIC PUBLIC CELLULAR RADIO
TELECOMMUNICATIONS SERVICE
CALL SIGN: KWKN516 Page 01
SYSTEM IDENTIFICATION NUMBER: 1255
FILE NO: 04216-CL-L-94 OPERATOR:
MARKET: 0428 KANSAS 1 - CHEYENNE
ORIGINAL GRANT DATE: NOVEMBER 7, 1991
DATE OF ISSUE: AUGUST 1, 1994
EXPIRATION DATE: OCTOBER 1, 2001
AUTHORIZATION IS GRANTED FOR CELLULAR FREQUENCY BLOCK A 1
BASE: 879.990 THROUGH 889.980 MHZ
MOBILE: 834.990 THROUGH 844.980 MHZ
LOCATION NO. 002: LATITUDE: 39 24 02 N LONGITUDE: 100 58 44 W
APPROX. 3.0 MILES EAST OF
CITY: COLBY COUNTY: THOMAS
STATE: KANSAS
ANTENNA MARKINGS: A,H,I
THERE ARE MULTIPLE ANTENNAS ASSOCIATED WITH THIS
LOCATION.
PARAGRAPH A MODIFIED TO REQUIRE USE OF L-865 MEDIUM
INTENSITY LIGHTS IN LIEU OF L-856. LIGHTS SHALL EMIT A
PEAK INTENSITY OF APPROXIMATELY 2030 CANDELAS AT NIGHT
IN LIEU OF 4000.
LOCATION NO. 003: LATITUDE: 39 23 19 N LONGITUDE: 101 33 34 W
APPROX. 5.8 MILES NNW OF
CITY: EDSON COUNTY: SHERMAN
STATE: KANSAS
ANTENNA MARKINGS: 1,3,6,15,21
THERE ARE MULTIPLE ANTENNAS ASSOCIATED WITH THIS
LOCATION.
[SEAL]
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 129
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
CALL SIGN: KMKN516 Page 02
FILE NO: 04216-CL-L-94 OPERATOR:
LOCATION NO. 004: LATITUDE: 39 22 19 N LONGITUDE: 101 02 23 W
1.5 MILES SSE OF
CITY: COLBY COUNTY: THOMAS
STATE: KANSAS
ANTENNA MARKINGS: 1,3,12,21,22
THERE ARE MULTIPLE ANTENNAS ASSOCIATED WITH THIS
LOCATION.
LOCATION NO. 005: LATITUDE: 39 23 19 N LONGITUDE: 101 33 34 W
APPROX. 5.8 MILES NNW OF
CITY: EDSON COUNTY: SHERMAN
STATE: KANSAS
ANTENNA MARKINGS: 1,3,6,15,21
THERE ARE MULTIPLE ANTENNAS ASSOCIATED WITH THIS
LOCATION.
WAIVERS AND CONDITIONS
THIS AUTHORIZATION DOES NOT CONVEY TO THE LICENSEE THE
RIGHT TO RECEIVE PROTECTION FROM THE CAPTURE OF
SUBSCRIBER TRAFFIC, CO-CHANNEL INTERFERENCE OR
FIRST-ADJACENT-CHANNEL INTERFERENCE IN ANY AREA OUTSIDE
OF THE AUTHORIZED CELLULAR GEOGRAPHIC SERVICE AREA
(CGSA) OF THE SYSTEM. MOREOVER, ANY FACILITY AUTHORIZED
HEREIN WITH A SERVICE AREA BOUNDARY (SAB) EXTENDING INTO
THE CGSA OF ANY OTHER OPERATING CELLULAR SYSTEM ON THE
SAME CHANNEL BLOCK, REGARDLESS OF WHEN SUCH OTHER
CELLULAR SYSTEM WAS/IS AUTHORIZED, IS SUBJECT TO THE
FOLLOWING CONDITION: IN THE EVENT THAT THE LICENSEE OF
THE OTHER CELLULAR SYSTEM REQUESTS THAT THE SAB OF THE
FACILITIES AUTHORIZED HEREIN BE REMOVED FROM ITS CGSA,
THE LICENSEE HEREIN MUST REDUCE TRANSMITTING POWER OR
ANTENNA HEIGHT (OR BOTH) AS NECESSARY TO REMOVE THE SAB
FROM THE CGSA, UNLESS WRITTEN CONSENT FROM THE LICENSEE
OF THE OTHER CELLULAR SYSTEM, ALLOWING THE SAB
EXTENSION, IS OBTAINED.
[SEAL]
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 130
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
MOBILE RADIO AUTHORIZATION MISCELLCO COMMUNICATIONS, INC.
FCC FORM 463 120 W. CONGRESS STREET, SUITE 500
JACKSON, MS 39201
COMMON CARRIER
DOMESTIC PUBLIC CELLULAR RADIO
TELECOMMUNICATIONS SERVICE
CALL SIGN: KMKN514 PAGE 01
SYSTEM IDENTIFICATION NUMBER: 1255
FILE NO: 01292-CL-L-94 OPERATOR:
MARKET: 0429 KANSAS 2 -- NORTON
ORIGINAL GRANT DATE: SEPTEMBER 19, 1991
DATE OF ISSUE: AUGUST 1, 1994
EXPIRATION DATE: OCTOBER 1, 2000
AUTHORIZATION IS GRANTED FOR CELLULAR FREQUENCY BLOCK A 1
BASE: 879.990 THROUGH 889.980 MHZ
MOBILE: 834.990 THROUGH 844.980 MHZ
LOCATION NO. 001: LATITUDE: 39 26 56 N LONGITUDE: 099 16 18 W
0.2 MILES EAST OF US-183 & 0.8 MILES NORTH OF US-24
CITY: STOCKTON COUNTY: ROOKS
STATE: KANSAS
ANTENNA MARKINGS: 1,3,12,21
WAIVERS AND CONDITIONS
THIS AUTHORIZATION DOES NOT CONVEY TO THE LICENSEE THE
RIGHT TO RECEIVE PROTECTION FROM THE CAPTURE OF
SUBSCRIBER TRAFFIC, CO-CHANNEL INTERFERENCE OR
FIRST-ADJACENT-CHANNEL INTERFERENCE IN ANY AREA OUTSIDE
OF THE AUTHORIZED CELLULAR GEOGRAPHIC SERVICE AREA
(CGSA) OF THE SYSTEM. MOREOVER, ANY FACILITY AUTHORIZED
HEREIN WITH A SERVICE AREA BOUNDARY (SAB) EXTENDING INTO
THE CGSA OF ANY OTHER OPERATING CELLULAR SYSTEM ON THE
SAME CHANNEL BLOCK, REGARDLESS OF WHEN SUCH OTHER
CELLULAR SYSTEM WAS/IS AUTHORIZED, IS SUBJECT TO THE
FOLLOWING CONDITION: IN THE EVENT THAT THE LICENSEE OF
THE OTHER CELLULAR SYSTEM REQUESTS THAT THE SAB OF THE
FACILITIES AUTHORIZED HEREIN BE REMOVED FROM ITS CGSA,
THE LICENSEE HEREIN MUST REDUCE TRANSMITTING POWER OR
ANTENNA HEIGHT (OR BOTH) AS NECESSARY TO REMOVE THE SAB
FROM THE CGSA, UNLESS WRITTEN CONSENT FROM THE LICENSEE
OF THE OTHER CELLULAR SYSTEM, ALLOWING THE SAB
EXTENSION, IS OBTAINED.
[SEAL]
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 131
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSIONS
RADIO STATION AUTHORIZATION
MISCELLCO COMMUNICATIONS, INC.
MOBILE RADIO AUTHORIZATION 120 N. CONGRESS STREET, SUITE 910
FCC FORM 463 JACKSON, MS 39201
COMMON CARRIER
DOMESTIC PUBLIC CELLULAR RADIO
TELECOMMUNICATIONS SERVICE
CALL SIGN: KWKW469 PAGE 01
SYSTEM IDENTIFICATION NUMBER: 1255
FILE NO: 01286-CL-L-94 OPERATOR:
MARKET: 0433 KANSAS 6 - WALLACE
ORIGINAL GRANT DATE: AUGUST 5, 1991
DATE OF ISSUE: JUNE 30, 1994
EXPIRATION DATE: OCTOBER 1, 2000
AUTHORIZATION IS GRANTED FOR CELLULAR FREQUENCY BLOCK A 1
BASE: 879.990 THROUGH 889.980 MHZ
MOBILE: 834.990 THROUGH 844.980 MHZ
LOCATION NO. 001: LATITUDE: 38 36 08 W LONGITUDE: 100 54 20 W
OFF OF US-83, 8.0 MI. N OF
CITY: SCOTT CITY COUNTY: SCOTT
STATE: KANSAS
ANTENNA MARKINGS: 1,3,4,13,21
LOCATION NO. 002: LATITUDE: 39 07 07 W LONGITUDE: 100 51 10 W
JUNCTION OF US-4 AND US-83 1 MILE SSE OF
CITY: OAKLEY COUNTY: LOGAN
STATE: KANSAS
ANTENNA MARKINGS: 1,3,12,21
WAIVERS AND CONDITIONS
THIS AUTHORIZATION DOES NOT CONVEY TO THE LICENSEE THE
RIGHT TO RECEIVE PROTECTION FROM THE CAPTURE OF SUBSCRIBER
TRAFFIC, CO-CHANNEL INTERFERENCE OR FIRST-ADJACENT-CHANNEL
INTERFERENCE IN ANY AREA OUTSIDE OF THE AUTHORIZED CELLULAR
GEOGRAPHIC SERVICE AREA (CGSA) OF THE SYSTEM. MOREOVER, ANY
FACILITY AUTHORIZED HEREIN WITHIN A SERVICE AREA BOUNDARY
(SAB) EXTENDING INTO THE CGSA OF ANY OTHER OPERATING
CELLULAR SYSTEM ON THE SAME CHANNEL BLOCK, REGARDLESS OF
WHEN SUCH OTHER CELLULAR SYSTEM WAS/IS AUTHORIZED, IS
SUBJECT TO THE FOLLOWING CONDITION: IN THE EVENT THAT THE
LICENSEE OF THE OTHER CELLULAR SYSTEM REQUESTS THAT THE SAB
OF THE FACILITIES AUTHORIZED HEREIN BE REMOVED FROM ITS
CGSA, THE LICENSEE HEREIN MUST REDUCE TRANSMITTING POWER OR
ANTENNA HEIGHT (OR BOTH) AS
[SEAL]
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 132
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
CALL SIGN: KMKH465 Page 02
FILE NO: 01286-CL-L-94 OPERATOR:
NECESSARY TO REMOVE THE SAB FROM THE CGSA, UNLESS WRITTEN CONSENT FROM THE
LICENSEE OF THE OTHER CELLULAR SYSTEM, ALLOWING THE SAB EXTENSION, IS OBTAINED.
[SEAL]
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 133
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
MOBILE RADIO AUTHORIZATION MISCELLCO COMMUNICATIONS, INC.
FCC FORM 463 120 NORTH CONGRESS ST., SUITE 910
JACKSON, MS 39225
COMMON CARRIER
DOMESTIC PUBLIC CELLULAR RADIO
TELECOMMUNICATIONS SERVICE
CALL SIGN: KMKH465 Page 01
SYSTEM IDENTIFICATION NUMBER: 1253
FILE NO: 01283-CL-L-94 Operator:
MARKET: 0434 KANSAS 7-TREGO
ORIGINAL GRANT DATE: JUNE 11, 1990
DATE OF ISSUE: JUNE 30, 1994
EXPIRATION DATE: OCTOBER 1, 1999
AUTHORIZATION IS GRANTED FOR CELLULAR FREQUENCY BLOCK A1
BASE: 879.990 THROUGH 889.980 MHZ
MOBILE: 834.990 THROUGH 844.980 MHZ
CONTROL POINT NO. 001 2.2 MILES NORTHWEST OF HAYES
HAYES KS
LOCATION NO. 001: LATITUDE: 38 51 16 N LONGITUDE: 099 22 55 W
APPROX. 2.6 MILES SW OF
CITY: HAYS COUNTY: ELLIS
STATE: KANSAS
ANTENNA MARKINGS: 1,3,11,21
THERE ARE MULTIPLE ANTENNAS ASSOCIATED WITH THIS
LOCATION.
LOCATION NO. 002: LATITUDE: 38 46 16 N LONGITUDE: 098 44 17 W
7 MI. SSW OF BUNKER HILL
CITY: BUNKER HILL COUNTY: RUSSELL
STATE: KANSAS
ANTENNA MARKINGS: A,B,E,H,I
[SEAL]
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 134
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
CALL SIGN: KWKR465 PAGE 02
FILE NO: 01283-CL-L-96 OPERATOR:
LOCATION NO. 003: LATITUDE: 38 24 25 W LONGITUDE: 098 52 51 W
APPROX. ONE MILE SOUTH OF
CITY: HEIZER COUNTY: BARTON
STATE: KANSAS
ANTENNA MARKINGS: 1,3,11,21,22
THERE ARE MULTIPLE ANTENNAS ASSOCIATED WITH THIS
LOCATION.
LOCATION NO. 004: LATITUDE: 39 00 56 N LONGITUDE: 099 51 30 W
APPROX. ONE MILE ESE OF
CITY: WAKEENEY COUNTY: TREGO
STATE: KANSAS
ANTENNA MARKINGS: 1,3,12,21
THERE ARE MULTIPLE ANTENNAS ASSOCIATED WITH THIS
LOCATION
LOCATION NO. 006: LATITUDE: 38 26 44 W LONGITUDE: 099 52 32 W
1.0 MILE EAST OF
CITY: WESS COUNTY: WESS
STATE: KANSAS
ANTENNA MARKINGS: 1,3,12,21
LOCATION NO. 007: LATITUDE: 38 31 02 W LONGITUDE: 099 18 36 W
1.0 MILE SOUTH OF
CITY: LA CROSSE COUNTY: RUSH
STATE: KANSAS
ANTENNA MARKINGS: 1,3,4,13,21
LOCATION NO. 008: LATITUDE: 38 53 36 W LONGITUDE: 098 54 02 W
APPROX. 1.3 MILES WEST OF
CITY: RUSSELL COUNTY: RUSSELL
STATE: KANSAS
ANTENNA MARKINGS: 1,3,4,13,21
[SEAL)
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 135
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
CALL SIGN: KNKN465 Page 03
FILE NO: 01283-CL-L-94 OPERATORS
WAIVERS AND CONDITIONS
THIS AUTHORIZATION DOES NOT CONVEY TO THE LICENSEE THE RIGHT TO RECEIVE
PROTECTION FROM THE CAPTURE OF SUBSCRIBER TRAFFIC, CO-CHANNEL INTERFERENCE OR
FIRST-ADJACENT-CHANNEL INTERFERENCE IN ANY AREA OUTSIDE OF THE AUTHORIZED
CELLULAR GEOGRAPHIC SERVICE AREA (CGSA) OF THE SYSTEM. MOREOVER, ANY FACILITY
AUTHORIZED HEREIN WITH A SERVICE AREA BOUNDARY (SAB) EXTENDING INTO THE CGSA OF
ANY OTHER OPERATING CELLULAR SYSTEM ON THE SAME CHANNEL BLOCK, REGARDLESS OF
WHEN SUCH OTHER CELLULAR SYSTEM WAS/IS AUTHORIZED, IS SUBJECT TO THE FOLLOWING
CONDITION: IN THE EVENT THAT THE LICENSEE OF THE OTHER CELLULAR SYSTEM REQUESTS
THAT THE SAB OF THE FACILITIES AUTHORIZED HEREIN BE REMOVED FROM ITS CGSA, THE
LICENSEE HEREIN MUST REDUCE TRANSMITTING POWER OR ANTENNA HEIGHT (OR BOTH) AS
NECESSARY TO REMOVE THE SAB FROM THE CGSA, UNLESS WRITTEN CONSENT FROM THE
LICENSEE OF THE OTHER CELLULAR SYSTEM, ALLOWING THE SAB EXTENSION, IS OBTAINED.
[SEAL]
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 136
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
MOBILE RADIO AUTHORIZATION MISCELLCO COMMUNICATIONS, INC.
FCC FORM 463 120 N. CONGRESS STREET, SUITE 500
JACKSON, MS 39201
COMMON CARRIER
DOMESTIC PUBLIC CELLULAR RADIO
TELECOMMUNICATIONS SERVICE
CALL SIGN: KNKN51B Page 01
SYSTEM IDENTIFICATION NUMBER: 1255 OPERATOR:
FILE NO: 02012-CL-L-94
MARKET: 043B KANSAS 11 - HAMILTON
ORIGINAL GRANT DATE: SEPTEMBER 19, 1991
DATE OF ISSUE: AUGUST 1, 1994
EXPIRATION DATE: OCTOBER 1, 2000
AUTHORIZATION IS GRANTED FOR CELLULAR FREQUENCY BLOCK A 1
BASE: 879.990 THROUGH 889.980 MHZ
MOBILE: 834.990 THROUGH 844.980 MHZ
LOCATION NO. 001: LATITUDE: 37 59 35 N LONGITUDE: 100 54 04 W
ONE MILE WEST US-83 &
0.7 MILES NORTH US-50
CITY: GARDEN CITY COUNTY: FINNEY
STATE: KANSAS
ANTENNA MARKINGS: 1, 3, 12, 21
THERE ARE MULTIPLE ANTENNAS ASSOCIATED
WITH THIS LOCATION.
LOCATION NO. 003: LATITUDE: 37 04 38 N LONGITUDE: 100 50 35 W
OFF OF US-54, 4.5 MILES NE OF
CITY: LIBERAL COUNTY: SEWARD
STATE: KANSAS
ANTENNA MARKINGS: 1, 3, 4, 13, 21
THERE ARE MULTIPLE ANTENNAS ASSOCIATED
WITH THIS LOCATION.
[SEAL]
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 137
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
CALL SIGN: KMKN518 Page 02
FILE NO: 02012-DL-L-94 OPERATORS
LOCATION NO. 004: LATITUDE: 37 34 32 N LONGITUDE: 101 19 10 W
O.5 MILES NORTH OF US-160 & 0.8 MILES
WEST OF COUNTY: GRANT
CITY: ULYSSES
STATE: KANSAS
ANTENNA MARKINGS: 1,3,4,13,21
THERE ARE MULTIPLE ANTENNAS ASSOCIATED WITH THIS LOCATION.
LOCATION NO. 005: LATITUDE: 37 07 21 W LONGITUDE: 101 37 41 W
200' NW OF INTERSECTION OF SR-51
& US-56
CITY: ROLLA COUNTY: NORTON
STATE: KANSAS
ANTENNA MARKINGS: NONE
THERE ARE MULTIPLE ANTENNAS ASSOCIATED WITH THIS LOCATION.
LOCATION NO. 006: LATITUDE: 38 10 24 N LONGITUDE: 101 45 38 W
DFP OF SR-27, 12.5 MILES N OF
CITY: SYRACUSE COUNTY: HAMILTON
STATE: KANSAS
ANTENNA MARKINGS: 3,4,5,13
PARAGRAPH A MODIFIED TO REQUIRE USE OF L-865 MEDIUM INTENSITY
LIGHTS IN LIEU OF L-856. LIGHTS SHALL EXIT A PEAK INTENSITY
OF APPROXIMATELY 2000 CANDELAS AT NIGHT IN LIEU OF 4000.
WAIVERS AND CONDITIONS
THIS AUTHORIZATION DOES NOT CONVEY TO THE LICENSEE THE RIGHT
TO RECEIVE PROTECTION FROM THE CAPTURE OF SUBSCRIBER TRAFFIC,
CO-CHANNEL INTERFERENCE OR FIRST-ADJACENT-CHANNEL
INTERFERENCE IN ANY AREA OUTSIDE OF THE AUTHORIZED CELLULAR
GEOGRAPHIC SERVICE AREA (DGSA) OF THE SYSTEM. MOREOVER, ANY
FACILITY AUTHORIZED HEREIN WITH A SERVICE AREA BOUNDARY (SAB)
EXTENDING INTO THE OGSA OF ANY OTHER OPERATING CELLULAR
SYSTEM ON THE SAME CHANNEL BLOCK, REGARDLESS OF WHEN SUCH
OTHER CELLULAR SYSTEM WAS/IS AUTHORIZED, IS SUBJECT TO THE
FOLLOWING CONDITION: IN THE EVENT THAT THE LICENSEE OF THE
OTHER CELLULAR SYSTEM REQUESTS THAT THE SAB OF THE FACILITIES
AUTHORIZED HEREIN BE REMOVED FROM ITS OGSA, THE LICENSEE
HEREIN MUST REDUCE TRANSMITTING POWER OR ANTENNA HEIGHT (OR
BOTH) AS
[SEAL]
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 138
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
CALL SIGN: KWKW4510 Page 03
FILE NO: 02012-CL-L-94 OPERATOR:
NECESSARY TO REMOVE THE SAB FROM THE DGSA, UNLESS WRITTEN CONSENT FROM THE
LICENSEE OF THE OTHER CELLULAR SYSTEM, ALLOWING THE SAB EXTENSION, IS OBTAINED.
[SEAL]
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 139
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
MOBILE RADIO AUTHORIZATION MISCELLCO COMMUNICATIONS, INC.
FCC FORM 463 120 NORTH CONGRESS STREET, SUITE 910
JACKSON, MS 39201
COMMON CARRIER
DOMESTIC PUBLIC CELLULAR RADIO
TELECOMMUNICATIONS SERVICE
CALL SIGN: KNKW741 PAGE 01
SYSTEM IDENTIFICATION NUMBER: 1255
FILE NO: 01332-CL-L-94 OPERATOR:
MARKET: 0439 KANSAS 12 - HODGEMAN
ORIGINAL GRANT DATE: OCTOBER 29, 1991
DATE OF ISSUE: FEBRUARY, 10, 1994
EXPIRATION DATE: OCTOBER 1, 1994
AUTHORIZATION IS GRANTED FOR CELLULAR FREQUENCY BLOCK A 1
BASE: 879.990 THROUGH 889.980 MHZ
MOBILE: 834.990 THROUGH 844.980 MHZ
LOCATION NO. 001: LATITUDE: 37 46 47 N LONGITUDE: 100 03 37 W
1.5 MILES NW OF
CITY: DODGE CITY COUNTY: FORD
STATE: KANSAS
ANTENNA MARKINGS: 1,3,12,21
THERE ARE MULTIPLE ANTENNAS ASSOCIATED WITH THIS
LOCATION.
LOCATION NO. 003: LATITUDE: 37 49 30 N LONGITUDE: 100 10 36 W
APPROX. 8.4 MILES NW OF
CITY: DODGE COUNTY: FORD
STATE: KANSAS
ANTENNA MARKINGS: 1,3,11,21
THERE ARE MULTIPLE ANTENNAS ASSOCIATED WITH THIS
LOCATION.
LOCATION NO. 004: LATITUDE: 37 30 10 N LONGITUDE: 100 34 22 W
3.5 MILES SOUTH OF
CITY: COPELAND COUNTY: GRAY
STATE: KANSAS
ANTENNA MARKINGS: 1,3,12,21
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 140
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
CALL SIGN: KMKN741 PAGE: 02
FILE NO: 01332-CL-L-94 OPERATOR:
WAIVERS AND CONDITIONS
THIS AUTHORIZATION DOES NOT CONVEY TO THE LICENSEE THE RIGHT TO RECEIVE
PROTECTION FROM THE CAPTURE OF SUBSCRIBER TRAFFIC, CO-CHANNEL INTERFERENCE OR
FIRST-ADJACENT-CHANNEL INTERFERENCE IN ANY AREA OUTSIDE OF THE AUTHORIZED
CELLULAR GEOGRAPHIC SERVICE AREA (CGSA) OF THE SYSTEM. MOREOVER, ANY FACILITY
AUTHORIZED HEREIN WITH A SERVICE AREA BOUNDARY (SAB) EXTENDING INTO THE DGSA OF
ANY OTHER OPERATING CELLULAR SYSTEM ON THE SAME CHANNEL BLOCK, REGARDLESS OF
WHEN SUCH OTHER CELLULAR SYSTEM WAS/IS AUTHORIZED, IS SUBJECT TO THE FOLLOWING
CONDITION: IN THE EVENT THAT THE LICENSEE OF THE OTHER CELLULAR SYSTEM REQUESTS
THAT THE SAB OF THE FACILITIES AUTHORIZED HEREIN BE REMOVED FROM ITS CGSA, THE
LICENSEE HEREIN MUST REDUCE TRANSMITTING POWER OR ANTENNA HEIGHT (OR BOTH) AS
NECESSARY TO REMOVE THE SAB FROM THE CGSA, UNLESS WRITTEN CONSENT FROM THE
LICENSEE OF THE OTHER CELLULAR SYSTEM, ALLOWING THE SAB EXTENSION,
IS OBTAINED.
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 141
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
MOBILE RADIO AUTHORIZATION MISCELLCO COMMUNICATIONS, INC.
FCC FOR 463 120 W. CONGRESS ST. SUITE 500
JACKSON, MS 39201
COMMON CARRIER
DOMESTIC PUBLIC CELLULAR RADIO
TELECOMMUNICATIONS SERVICE
CALL SIGN: KWKQ212 Page 01
SYSTEM IDENTIFICATION NUMBER 1267
FILE NO: 01285-CL-L-94 OPERATOR:
MARKET: 0440 KANSAS 13 - EDWARDS
ORIGINAL GRANT DATE: NOVEMBER 15, 1991
DATE OF ISSUE: FEBRUARY 14, 1994
EXPIRATION DATE: OCTOBER 1, 2001
AUTHORIZATION IS GRANTED FOR CELLULAR FREQUENCY BLOCK A 1
BASE: 879.990 THROUGH 889.980 MHZ
MOBILE: 834.990 THROUGH 844.980 MHZ
LOCATION NO. 001: LATITUDE: 37 38 08 N LONGITUDE: 098 50 24 W
0.5 MILES SOUTH OF US-54 &
4.0 MILES WEST OF COUNTY: PRATT
CITY: PRATT
STATE: KANSAS
ANTENNA MARKINGS: 1,3,4,13,21
SEE THE ATTACHED CONDITIONS TO THIS AUTHORIZATION
WAIVERS AND CONDITIONS
THIS AUTHORIZATION DOES NOT CONVEY TO THE LICENSEE THE
RIGHT TO RECEIVE PROTECTION FROM THE CAPTURE OF
SUBSCRIBER TRAFFIC, CO-CHANNEL INTERFERENCE OR
FIRST-ADJACENT-CHANNEL INTERFERENCE IN ANY AREA OUTSIDE
OF THE AUTHORIZED CELLULAR GEOGRAPHIC SERVICE AREA (CGSA)
OF THE SYSTEM. MOREOVER, ANY FACILITY AUTHORIZED HEREIN
WITH A SERVICE AREA BOUNDARY (SAB) EXTENDING INTO THE
CGSA OF ANY OTHER OPERATING CELLULAR SYSTEM ON THE SAME
CHANNEL BLOCK, REGARDLESS OF WHEN SUCH OTHER CELLULAR
SYSTEM WAS/IS AUTHORIZED, IS SUBJECT TO THE FOLLOWING
CONDITION: IN THE EVENT THAT THE LICENSEE OF THE OTHER
CELLULAR SYSTEM REQUESTS THAT THE SAB OF THE FACILITIES
AUTHORIZED HEREIN BE REMOVED FROM ITS CGSA, THE LICENSEE
HEREIN MUST REDUCE TRANSMITTING POWER OR ANTENNA HEIGHT
(OR BOTH) AS NECESSARY TO REMOVE THE SAB FROM THE CGSA,
UNLESS WRITTEN CONSENT FROM THE LICENSEE OF THE OTHER
CELLULAR SYSTEM, ALLOWING THE SAB EXTENSION, IS
OBTAINED.
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 142
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
RADIO STATION AUTHORIZATION
MOBILE RADIO AUTHORIZATION MISCELLCO COMMUNICATIONS, INC.
FCC FORM 463 120 W. CONGRESS ST. SUITE 500
JACKSON, MS 39201
COMMON CARRIER
DOMESTIC PUBLIC CELLULAR RADIO
TELECOMMUNICATIONS SERVICE
CALL SIGN: KWKQ226 Page 01
SYSTEM IDENTIFICATION NUMBER 1255
FILE NO: 01290-CL-L-94 OPERATOR:
MARKET: 0596 OKLAHOMA 1 - CIMARRON
ORIGINAL GRANT DATE: NOVEMBER 24, 1992
DATE OF ISSUE: FEBRUARY 8, 1994
EXPIRATION DATE: OCTOBER 1, 2002
AUTHORIZATION IS GRANTED FOR CELLULAR FREQUENCY BLOCK A 1
BASE: 879.990 THROUGH 889.980 MHZ
MOBILE: 834.990 THROUGH 844.980 MHZ
LOCATION NO. 001: LATITUDE: 36 40 26 N LONGITUDE: 101 28 09 W
OFF SR-3, 0.4 MILES E OF SR-136
CITY: GUYMON COUNTY: TEXAS
STATE: OKLAHOMA
ANTENNA MARKINGS: 1,3,12,21
WAIVERS AND CONDITIONS
THIS AUTHORIZATION DOES NOT CONVEY TO THE LICENSEE THE
RIGHT TO RECEIVE PROTECTION FROM THE CAPTURE OF
SUBSCRIBER TRAFFIC, CO-CHANNEL INTERFERENCE OR
FIRST-ADJACENT-CHANNEL INTERFERENCE IN ANY AREA OUTSIDE
OF THE AUTHORIZED CELLULAR GEOGRAPHIC SERVICE AREA (CGSA)
OF THE SYSTEM. MOREOVER, ANY FACILITY AUTHORIZED HEREIN
WITH A SERVICE AREA BOUNDARY (SAB) EXTENDING INTO THE
CGSA OF ANY OTHER OPERATING CELLULAR SYSTEM ON THE SAME
CHANNEL BLOCK, REGARDLESS OF WHEN SUCH OTHER CELLULAR
SYSTEM WAS/IS AUTHORIZED, IS SUBJECT TO THE FOLLOWING
CONDITION: IN THE EVENT THAT THE LICENSEE OF THE OTHER
CELLULAR SYSTEM REQUESTS THAT THE SAB OF THE FACILITIES
AUTHORIZED HEREIN BE REMOVED FROM ITS CGSA, THE LICENSEE
HEREIN MUST REDUCE TRANSMITTING POWER OR ANTENNA HEIGHT
(OR BOTH) AS NECESSARY TO REMOVE THE SAB FROM THE CGSA,
UNLESS WRITTEN CONSENT FROM THE LICENSEE OF THE OTHER
CELLULAR SYSTEM, ALLOWING THE SAB EXTENSION, IS
OBTAINED.
FEDERAL
COMMUNICATIONS
COMMISSION
<PAGE> 143
FCC Form 702
Exhibit 1
MISCELLCO COMMUNICATIONS, INC.
POINT-TO-POINT MICROWAVE FACILITIES IN KANSAS
<TABLE>
<CAPTION>
Call Exp.
Sign Location Date Service
---- -------- ---- -------
<S> <C> <C> <C>
WLW521 HAYS, KS 2/1/2001 CF
WLW522 RUSSELL, KS 2/1/2001 CF
(Bunker Hill - Old Name)
WLW523 GREAT BEND, KS 2/1/2001 CF
WML263 COLBY, KS 2/1/2001 CF
WML264 EDSON, KS 2/1/2001 CF
WML487 WAKEENEY, KS 2/1/2001 CF
WML276 TEMPORARY FIXED 2/1/2001 CF
</TABLE>
Blanket Special Temporary Authority - Granted May 17, 1994 and valid through
November 17, 1994. Call Sign - WMM600.
<PAGE> 144
-14-
APPLICATIONS ACCEPTED FOR FILING SEPTEMBER 5, 1990
POINT-TO-POINT MICROWAVE RADIO SERVICE:
PA 17449-CF-P-90 WILLIAMSPORT CELLULAR TELEPHONE COMPANY (WLW517)
HUGHESVILLE. LAT. 41 13 09 North -- LONG. 76 41 43 West. License for new
station - 6226.89H toward Berwick.
NY 17450-CF-P-90 ORANGE COUNTY CELLULAR TELEPHONE CORP (WLW518)
MIDDLETOWN. LAT. 41 26 33 North -- LONG. 74 24 31 West. License for new
station - 2174.8H toward Mt Lodge.
NY 17451-CF-P-90 SAME (WLW519) MT LODGE. LAT. 41 22 40 North -- LONG. 74
08 06 West. License for new station - 2124.8H toward Middletown.
KS 17452-CF-P-90 MISCELLCO COMMUNICATIONS, INC. (WLW520) KJLS. LAT. 38
55 20 North -- LONG. 99 21 11 West. License for new station - 2126.4V
toward Hays.
KS 17453-CF-P-90 SAME (WLW521) HAYS. LAT. 38 51 16 North -- LONG. 99 22
55 West. License for new station - 2176.4V toward KJLS and 2162.0H
Russell.
KS 17454-CF-P-90 SAME (WLW522) RUSSELL. LAT. 38 49 26 North -- LONG. 98
46 53 West. License for new station - 2115.2V toward Great Bend and
2112.0H toward Hays.
KS 17455-CF-P-90 SAME (WLW523) GREAT BEND. LAT. 38 24 25 North -- LONG.
98 52 51 West. License for new station - 2165.2V toward Russell.
LA 17456-CF-P-90 SHREVEPORT CELLULAR TELEPHONE COMPANY (WLW524) STONER.
LAT. 32 29 58 North -- LONG. 93 45 05 West. License for new station -
11265.0V toward HTSO and 11225.0V toward Blanchard.
LA 17457-CF-P-90 SAME (WLW525) MTSO. LAT. 32 27 41 North -- LONG. 93 49
31 West. License for new station - 10775.0V toward Stoner.
LA 17458-CF-P-90 SAME (WLW526) BLANCHARD. LAT. 32 34 32 North -- LONG.
93 52 07 West. License for new station - 10735.0V toward Stoner,
2128.0H toward Marshall, 2112.0H toward Fillmore, and 2115.20V toward
Mira.
LA 17459-CF-P-90 LONGVIEW CELLULAR, INC. (WLW527) MARSHALL. LAT. 32 31
18 North - LONG. 94 23 55 West. License for new station - 2178.0H toward
Blanchard and 2176.4V toward Longview.
<PAGE> 145
September 26, 1990
APPLICATIONS ACCEPTED FOR FILING:
POINT-TO-POINT MICROWAVE RADIO SERVICE:
AMENDMENT
KS 17454-CF-P-90 Hiscellco Communications, Inc. (WLW522). Bunker Hill,
Kansas, Lat. 38 46 16 North - Long. 98 44 17 West: Application amended
-- (a) to relocate station to foregoing geographic coordinate; (b) to
change station name; and (c) to change to new azimuths toward stations
at Great Bend (WLW523) and Hays (WLW521), Kansas. See public notice of
9-5-90.
KS 17455-CF-P-90 Hiscellco Communications, Inc. (WLW523). Great Bend,
Kansas, Lat. 38 24 25 North - Long. 98 52 51 West: Application amended
-- (a) to change receive station location from Russell to Bunker Hill
(WLW522), Kansas and (b) to change to new azimuth toward Bunker Hill
(WLW522), Kansas. See public notice of 9-5-90.
KS 17453-CF-P-90 Hiscellco Communications, Inc. (WLW521). Hays, Kansas,
Lat. 38 51 16 North - Long. 99 22 55 West: Application amended -- (a) to
change receive station location from Russell to Bunker Hill (WLW522),
Kansas and (b) to change to new azimuth toward Bunker Hill (WLW522),
Kansas. See public notice of 9-5-90.
<PAGE> 146
-5-
ACTIONS TAKEN DECEMBER 12, 1990
POINT-TO-POINT MICROWAVE RADIO SERVICE:
<TABLE>
<CAPTION>
FILE NUMBER CARRIER GRANT DATE INITIAL PN
----------- ------- ---------- ----------
<S> <C> <C> <C>
17147-CT-P/L-90 VILLAGE VIDEO PRODUCTION 12/06/90 10/31/90
17454/17456-CF-P-90 MISCELLCO COMMUNICATIONS 11/01/90 09/26/90
17499/17503-CF-P-90 UNION TELEPHONE COMPANY 10/24/90 09/19/90
15003/15004-CF-P-91 NEW MEXICO RSA 6 12/06/90 10/31/90
15005/15006-CF-P-91 MICRONET, INC. 12/06/90 10/31/90
15007/15008-CF-P-91 YOUNGSTOWN-WARREN 12/06/90 10/31/90
LIMITED PARTNERSHIP
15009/15010-CF-P-91 SOUTH BEND/HISHAWAKA HSA 12/06/90 10/31/90
15011/15012-CF-P-91 NORFOLK-VIRGINIA BEACH 12/06/90 10/31/90
PORTSMOUTH HSA LTD
15013/15028-CF-P-91 PACTEL CELLULAR, INC. 12/06/90 10/31/90
15029/15033-CF-P-91 SOUTHWESTERN BELL MOBILE 12/06/90 10/31/90
SYSTEMS, INC.
15034/15035-CF-P-91 U S WEST NEWVECTOR GROUP 12/06/90 10/31/90
15036/15037-CF-P-91 PACTEL CELLULAR 12/06/90 10/31/90
15041/15045-CF-P-91 WESTERN FLORIDA CELLULAR 12/06/90 10/31/90
15046-CF-P-91 MIDWESTERN RELAY CO. 12/06/90 10/31/90
15047/15050-CFF-P-91 RCI NETWORK SERVICES 12/06/90 10/31/90
15051/15052-CF-P-91 U S WEST NEWVECTOR GROUP 12/06/90 10/31/90
15053/15071-CF-P-91 NEW YORK CELLULAR GEO- 12/06/90 10/31/90
GRAPHIC SERVICE AREA
</TABLE>
<PAGE> 147
- 11 -
APPLICATIONS ACCEPTED FOR FILING OCTOBER 31, 1990
POINT-TO-POINT MICROWAVE RADIO SERVICE:
KS 15000-CF-P-91 HISCELLCO COMMUNICATIONS, INC. (WLW522) BUNKER HILL
License to change transmit station location from Russell, Kansas to
Bunker Hill, Kansas.
KS 15001-CF-P-91 SAME (WLW523) GREAT BEND. License to change transmit
station location on frequency 2165.20V to Bunker Hill.
KS 15002-CF-P-91 SAME (WLW521) HAYS. License to change transmit location
on frequency 2162.OH to Bunker Hill.
NM 15003-CF-P-91 NEW MEXICO RSA 6 PARTNERSHIP (WLW615) ALAMOGORDO. LAT. 32
49 47 NORTH -- LONG. 105 53 10 WEST. License for new station -- 2128.OV
toward Downtown, NM.
NM 15004-CF-P-91 SAME (WLW616) DOWNTOWN. LAT. 32 54 46 NORTH -- LONG. 105
56 41 WEST. License for new station -- 2178.OV toward Alamogordo, NM.
TX 15005-CF-P-91 HICRONET, INC. (WLV858) AUSTIN. License to add
frequencies; 17710.OV, 17830.OV, 17950.OV, and 18070.OV toward Dobie
Center.
TX 15006-CF-P-91 SAME (WPE49) License to add frequency 22475.OV toward 1005
Congress.
PA 15007-CF-P-91 YOUNGSTOWN-WARREN LIMITED PARTNERSHIP (WLW617) GREENVILLE.
LAT. 41 23 35 NORTH -- LONG. 80 19 28 WEST. License for new station --
2162.OH toward Mercer, PA.
PA 15008-CF-P-91 SAME (WLM662) MERCER. License to add point -- 2112.OH
toward Greenville, PA.
IN 15009-CF-P-91 SOUTH BEND/KHISHAWAKA HSA, LIMITED PARTNERSHIP (WLW618)
LAKEVILLE. LAT. 41 32 18 NORTH -- LONG 86 16 40 WEST. License for new
station -- 2112.OV toward N. Liberty, IN.
IN 15010-CF-P-91 SAME (WLN521) N. LIBERTY. License to add point -- 2162.OV
toward Lakeville, IN.
LOCAL TELEVISION TRANSMISSION SERVICE:
17147-CT-P/L-90 VILLAGE VIDEO PRODUCTION, INC. (KA86231) Any temporary
location in the United States. License for new temporary location --
1990-2110 MHz, 2450-248.3 MHz, 6425-6525 MHz, and 6875-7125 MHz.
<PAGE> 148
-58-
APPLICATIONS ACCEPTED FOR FILING Mar 20, 1991
POINT TO POINT MICROWAVE RADIO SERVICE:
THE FOLLOWING RENEWAL APPLICATIONS HAVE BEEN RECEIVED FOR THE TERM:
2/1/1991 THRU 2/1/2001:
<TABLE>
<S> <C>
TF 28595-CF-R-91 WLT450 MICROWAVE TELECOMMUNICATIONS, INC.
CA 28596-CF-R-91 KNK45 MICROWAVE SERVICE COMPANY/FRANK K. SPAIN D/B/A
CA 28597-CF-R-91 KNM56 MICROWAVE SERVICE COMPANY/FRANK K. SPAIN D/B/A
CA 28598-CF-R-91 WCU215 MICROWAVE SERVICE COMPANY/FRANK K. SPAIN D/B/A
CA 28599-CF-R-91 WHQ550 MICROWAVE SERVICE COMPANY/FRANK K. SPAIN D/B/A
CA 28600-CF-R-91 WLK878 MICROWAVE SERVICE COMPANY/FRANK K. SPAIN D/B/A
ID 28601-CF-R-91 WHD976 MIDVALE TELEPHONE EXCHANGE, INC.
ID 28602-CF-R-91 WHD977 MIDVALE TELEPHONE EXCHANGE, INC.
WI 28503-CF-R-91 WLJ69 MIDWESTERN RELAY COMPANY, A DIVISION OF [ILLEGIBLE]
WI 28604-CF-R-91 WHT379 MILWAUKEE TELEPHONE COMPANY
WI 28605-CF-R-91 WHT380 MILWAUKEE TELEPHONE COMPANY
WI 28606-CF-R-91 WHT381 MILWAUKEE TELEPHONE COMPANY
WI 28607-CF-R-91 WHT382 MILWAUKEE TELEPHONE COMPANY
WI 28608-CF-R-91 WHT383 MILWAUKEE TELEPHONE COMPANY
WI 28609-CF-R-91 WHT384 MILWAUKEE TELEPHONE COMPANY
WI 28610-CF-R-91 WHT385 MILWAUKEE TELEPHONE COMPANY
WI 28611-CF-R-91 WLK617 MILWAUKEE TELEPHONE COMPANY
WI 28612-CF-R-91 WLL742 MILWAUKEE TELEPHONE COMPANY
WI 28613-CF-R-91 WLM659 MILWAUKEE TELEPHONE COMPANY
WI 28614-CF-R-91 WLT482 MILWAUKEE TELEPHONE COMPANY
WI 28615-CF-R-91 WLU628 MILWAUKEE TELEPHONE COMPANY
WI 28616-CF-R-91 WLW436 MILWAUKEE TELEPHONE COMPANY
KS 28617-CF-R-91 WLW520 MISCELLCO COMMUNICATIONS, INC.
KS 28618-CF-R-91 WLW521 MISCELLCO COMMUNICATIONS, INC.
KS 28619-CF-R-91 WLW522 MISCELLCO COMMUNICATIONS, INC.
KS 28620-CF-R-91 WLW523 MISCELLCO COMMUNICATIONS, INC.
IA 28621-CF-R-91 WLM726 MISSISSIPPI VALLEY TRADING CO., INC
IA 28622-CF-R-91 WLM727 MISSISSIPPI VALLEY TRADING CO., INC
IA 28623-CF-R-91 WLM728 MISSISSIPPI VALLEY TRADING CO., INC
IA 28624-CF-R-91 WLM729 MISSISSIPPI VALLEY TRADING CO., INC
TX 28625-CF-R-91 WLK679 CARLTON L. HOLLAND D/B/A MOBAPHONE DISPATCH SERVICE CO.
TX 28626-CF-R-91 WLK680 CARLTON L. HOLLAND D/B/A MOBAPHONE DISPATCH SERVICE CO.
NM 28627-CF-R-91 WLL907 CARLTON L. HOLLAND D/B/A MOBAPHONE DISPATCH SERVICE CO.
NM 28628-CF-R-91 WLL908 CARLTON L. HOLLAND D/B/A MOBAPHONE DISPATCH SERVICE CO.
NM 28629-CF-R-91 WLL927 CARLTON L. HOLLAND D/B/A MOBAPHONE DISPATCH SERVICE CO.
</TABLE>
<PAGE> 149
- 6 -
MAY 15, 1991
ACTIONS TAKEN
POINT-TO-POINT MICROWAVE RADIO SERVICE:
THE FOLLOWING APPLICATIONS APPEARING ON PUBLIC NOTICE DATED MARCH 13, 1991
ARE GRANTED 4/18/91. EFFECTIVE DATE: 2/1/1991 THROUGH 2/1/2001
<TABLE>
<S> <C>
25777 THROUGH 25789-CF-R-91 MOBILE COMMUNICATIONS CORP OF AMERICA
23012 THROUGH 23015-CF-R-91 STANDARD TELEPHONE COMPANY
22409 THROUGH 22423-CF-R-91 SYRACUSE TELEPHONE COMPANY
22305 THROUGH 22312-CF-R-91 UNITED TELEPHONE COMPANY OF THE CAROLINAS
22870 THROUGH 22877-CF-R-91 UTIGA TELEPHONE COMPANY
22840 THROUGH 22845-CF-R-91 THE ST. THOMAS & SAN JUAN TELEPHONE CO. INC.
25509 THROUGH 25598-CF-R-91 MIDWESTERN RELAY COMPANY
22348 THROUGH 22376-CF-R-91 UNITED TELEPHONE COMPANY OF MISSOURI
22915 THROUGH 22928-CF-R-91 SOUTHERN OHIO TELEPHONE COMPANY
22929 THROUGH 22961-CF-R-91 NORTHERN OHIO TELEPHONE COMPANY
21779 THROUGH 21953-CF-R-91 MICRONET, INC.
25072 THROUGH 25081-CF-R-91 TELSTAR COMMUNICATIONS, INC.
</TABLE>
THE FOLLOWING APPLICATIONS APPEARING ON PUBLIC NOTICE DATED MARCH 20 1991
ARE GRANTED 4/24/91. EFFECTIVE DATE: 2/1/1991 THROUGH 2/1/2001
<TABLE>
<S> <C>
28517 THROUGH 28538-CF-R-91 TELECOM RELAY
28539 THROUGH 28542-CF-R-91 TELCOM NETWORK CORP.
28543 THROUGH 28546-CF-R-91 MARSHALL 431 CP, INC.
28547 THROUGH 28551-CF-R-91 MAX BANGERTER/MICROWAVE TELECOMMUNICATIONS
28552 THROUGH 28556-CF-R-91 HCCELLULAR CORPORATION
28557-CF-R-91 MEGA COMM, INC.
28558 THROUGH 28564-CF-R-91 MEMPHIS SMSA LIMITED PARTNERSHIP
28565 THROUGH 28573-CF-R-91 METROMEDIA PAGING SERVICES, INC.
28574 THROUGH 28575-CF-R-91 MEGASTAR INC.
28576 THROUGH 28578-CF-R-91 METROPLEX TELEPHONE COMPANY
28579 THROUGH 28584-CF-R-91 MICROBAND CORPORATION OF AMERICA
28585-CF-R-91 MICRO RELAY, INC.
28586 THROUGH 28595-CF-R-91 MICROWAVE TELECOMMUNICATIONS, INC.
28596 THROUGH 28600-CF-R-91 MICROWAVE SERVICE CO/FRANK K. SPAIN
28601 THROUGH 28602-CF-R-91 MIDVALE TELEPHONE EXCHANGE, INC.
28603-CF-R-91 MIDWESTERN RELAY CO.
28604 THROUGH 28616-CF-R-91 MILWAUKEE TELEPHONE COMPANY
28617 THROUGH 28620-CF-R-91 MISCELLCO COMMUNICATIONS, INC.
28621 THROUGH 28624-CF-R-91 MISSISSIPPI VALLEY TRADING CO, INC.
28625 THROUGH 28629-CF-R-91 CARLTON L. HOLLAND/MOBAPHONE DISPATCH SERVICE
28630 THROUGH 28635-CF-R-91 MOBILE MARINE RADIO, INC.
28636 THROUGH 28639-CF-R-91 MOBILE SATELLITE COMMUNICATIONS, INC.
28640-CF-R-91 MONROE COUNTY TELEPHONE CO.
28641-CF-R-91 MONROEVILLE TELEPHONE COMPANY, INC.
28642-CF-R-91 MOAPA VALLEY TELEPHONE COMPANY
28643-CF-R-91 MOUNDRIDGE TELEPHONE COMPANY
28644-CF-R-91 MOUNTAIN HOME TELEPHONE COMPANY
</TABLE>
<PAGE> 150
-13-
APPLICATIONS ACCEPTED FOR FILING Dec 11, 1991
POINT TO POINT MICROWAVE RADIO SERVICE:
THE FOLLOWING APPLICATIONS HAVE BEEN RECEIVED FOR CONDITIONAL LICENSES:
OK 15148-CF-P-92 DAIL257 OKLAHOMA WESTERN TELEPHONE COMPANY
Station Location: TALIHINA, OK Lat. 34 45 01 N. - Long. 95 10 42 W.
Application Purpose is to construct new station
2185.2V toward Clayton.
OK 15149-CF-P-92 DAIL258 OKLAHOMA WESTERN TELEPHONE COMPANY
Station Location: CLAYTON, OK Lat. 34 35 13 N. - Long. 95 21 14 W.
Application Purpose is to construct new station
2185.2V toward Buffalo Mtn.
TX 15150-CF-P-92 DAIL259 ROY TARTAGLIA
Station Location: ARLINGTON, TX Lat. 32 44 22 N. - Long. 97 06 43 W.
Application Purpose is to construct new station
station transmitting to various points in Ft. Worth PMSA on
frequency band 27.5 - 28.5 GHz (H & V).
VA 13151-CF-P-92 DAIL260 WILLIAM P. TAVOULAREAS, JR.
Station Location: NORFOLK, VA Lat. 35 48 38 N. - Long. 96 18 57 W.
Application Purpose is to construct new station
transmitting to various points in Norfolk PMSA on frequency
band 27.5 - 28.5 GHz (H & V).
WI 15152-CF-P-92 DAIL261 CLAY MARSTON
Station Location: MILWAUKEE, WI Lat. 43 02 18 N. - Long. 97 54 05 W.
Application Purpose is to construct new station
transmitting to various points in Milwaukee PMSA on frequency
bands 27.5 - 28.5 GHz (H & V).
CT 15153-CF-P-92 DAIL262 BRUCE G. MCNEILL
Station Location: AVON, CT Lat. 41 45 30 N. - Long. 72 48 04 W.
Application Purpose is to construct new station
transmitting to various points in Hartford, CT on frequency
bands 27.5 - 28.5 GHz (H & V).
KS 15154-CF-P-92 DAIL263 MISCELLCO COMMUNICATIONS, INC.
Station Location: COLBY, KS Lat. 39 24 02 N. - Long. 100 58 44 W.
Application Purpose is to construct new station
2165.2V toward Edson.
KS 15155-CF-P-92 DAIL264 MISCELLCO COMMUNICATIONS, INC.
Station Location: EDSON, KS Lat. 39 23 19 N. - Long. 101 33 34 W.
Application Purpose is to construct new station
2115.2V toward Colby.
PR 15156-CF-P-92 DAIL265 SAN JUAN CELLULAR TELEPHONE CO.
Station Location: AGUAS BUENAS, PR Lat. 18 16 51 N. - Long. 85 08 38 W.
Application Purpose is to construct new station
10616.25V toward 192 El Leberinto.
<PAGE> 151
9
APPLICATIONS ACCEPTED FOR FILING Dec 28, 1991
POINT TO POINT MICROWAVE RADIO SERVICE:
THE FOLLOWING APPLICATIONS HAVE BEEN RECEIVED FOR CONDITIONAL LICENSES:
TN 15190-CF-MP-92 WLB812 UNITED STATES CELLULAR TELEPHONE COMPANY
(GREATER KNOXVILLE)
Station Location: KNOXVILLE, TN Lat. 35 08 41 N. - Long. 83 55 45 W.
Application Purpose is to add new point of communication
2171.6V toward Pigeon Forge.
TN 15191-CF-P-92 WLM274 UNITED STATES CELLULAR TELEPHONE COMPANY
(GREATER KNOXVILLE)
Station Location: PIGEON FORGE, TN Lat. 35 48 24 N. - Long. 83 29 25 W.
Application Purpose is to construct new station
2171.6V toward Sharps Ridge and 2112.DH toward Danridge.
TN 15192-CF-P-92 WHL275 UNITED STATES CELLULAR TELEPHONE COMPANY
(GREATER KNOXVILLE)
Station Location: DANDRIDGE, TN Lat. 35 02 52 N. - Long. 83 26 18 W.
Application Purpose is to construct new station
2152.OH toward Pigeon Forge.
TN 15193-CF-P-92 WLM897 MICHIANA METRONET, INC.
Station Location: FORT WAYNE, IN Lat. 41 09 58 N. - Long. 85 05 59 W.
Application Purpose is to add new point of communication
2171.6V toward Auburn.
TN 15194-CF-P-92 WLM943 MICHIANA METRONET, INC.
Station Location: AUBURN, IN Lat. 41 21 31 N. - Long. 85 07 12 W.
Application Purpose is to add new point of communication
2121.6V toward Litel Pep.
OH 15251-CF-L-92 WLL436 TOLEDO CELLULAR TELEPHONE COMPANY
Station Location: TOLEDO, OH Lat. 41 38 35 N. - Long. 83 35 15 W.
Application Purpose is to
OH 15252-CF-L-92 WLL437 TOLEDO CELLULAR TELEPHONE COMPANY
Station Location: WHITEHOUSE, OH Lat. 41 31 53 N. - Long. 83 51 24 W.
Application Purpose is to
VA 15511-CF-P-92 WGM846 OVERSEAS TELECOMMUNICATIONS, INC.
Station Location: TYSONS CORNER, VA Lat. 38 54 58 N. - Long. 77 13 37 W.
Application Purpose is to add frequency(ies)
KS 15312-CF-P/L-92 WML276 MISCELLCO COMMUNICATIONS, INC.
Station Location: NOME, KS Lat. 00 00 00 N. - Long. 00 00 00 W.
Application Purpose is to construct new station
For temporary Main station in the state of Kansas -- 2118-2130 MHz;
2160-2180 MHz; 5925-6425 MHz; 10550-10585 MHz; 10615-10630 MHz;
17700-18820 MHz; 18820-19150 MHz; 21200-21800 MHz; 22500-23000 MHz.
CA 15315-CF-P-92 WOW578 PACTEL OF CALIFORNIA
Station Location: RAFAEL, CA Lat. 37 55 44 N. - Long. 122 35 11 W.
Application Purpose is to decrease transmitting antenna structure height
on frequencies 2170.8DH toward Hayward and 2163.60V toward Mt. Vaca.
<PAGE> 152
-6-
<TABLE>
<CAPTION>
POINT TO POINT MICROWAVE RADIO SERVICE Jan 22, 1992
ACTIONS TAKEN:
State-File Number-Call Sign-Applicant Station Name Station Coordinates
<S> <C> <C>
CT 15147-CF-P/L-92 (KAB6231) VILLAGE VIDEO PRODUCTIONS, INC. TEMPORARY FIXED Lat. CO 00 N. - Long. 00 00 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
OK 15148-CF-P-92 (WML257) OKLAHOMA WESTERN TELEPHONE COMPANY BUFFALO MTN Lat. 34 45 01 N. - Long. 95 10 42 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
OK 15149-CF-P-92 (WML258) OKLAHOMA WESTERN TELEPHONE COMPANY CLAYTON Lat. 34 35 13 N. - Long. 95 21 14 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
KS 15154-CF-P-92 (WML263) MISCELLCO COMMUNICATIONS, INC. COLBY Lat. 39 24 02 N. - Long. 100 58 44 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
KS 15155-CF-P-92 (WML264) MISCELLCO COMMUNICATIONS, INC. EDSON Lat. 39 23 19 N. - Long. 101 33 34 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
PR 15156-CF-P-92 (WML080) SAN JUAN CELLULAR TELEPHONE CO. 1D2T-WXAQ Lat. 18 13 51 N. - Long. 88 06 38 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
PR 15157-CF-P-92 (WML285) SAN JUAN CELLULAR TELEPHONE CO. 192-EL LABERINTO Lat. 18 13 51 N. - Long. 88 06 03 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
OH 15158-CF-P-92 (WLB916) ODOM CORPORATION CLEVELAND TE Lat. 41 28 83 N. - Long. 81 41 39 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
OH 15159-CF-P-92 (WLB917) ODOM CORPORATION WARRENSVILLE Lat. 41 28 83 N. - Long. 81 30 18 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
NC 15160-CF-P-92 (WLW514) RALEIGH-DURHAM USA LIMITED PARTNERSHIP., INGARNER Lat. 35 35 21 N. - Long. 78 34 35 W.
C/O UNITED TELESPECTRUM,
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
OH 15161-CF-P-92 (WLM229) ODOM CORPORATION BROOKSVILLE Lat. 39 50 53 N. - Long. 84 22 35 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
OH 15162-CF-P-92 (WLA234) ODOM CORPORATION LEWISBURG Lat. 39 49 45 N. - Long. 84 35 49 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
OH 15163-CF-P-92 (WLK879) ODOM CORPORATION LORAIN 1A Lat. 41 28 11 N. - Long. 81 59 28 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
OH 15164-CF-P-92 (WML268) ODOM CORPORATION BAY VILLAGE Lat. 41 36 42 N. - Long. 81 65 11 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
OH 15165-CF-P-92 (WML702) ODOM CORPORATION OREGONIA Lat. 39 25 41 N. - Long. 84 05 06 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
OH 15166-CF-P-92 (WML287) ODOM CORPORATION LEBANON Lat. 37 24 09 N. - Long. 84 10 30 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
OH 15167-CF-P-92 (WLT288) ODOM CORPORATION SPRINGFIELD Lat. 39 57 03 N. - Long. 83 42 05 W.
GRANTED: 01/16/1992 application appearing on public notice dated
12/11/1991.
</TABLE>
<PAGE> 153
-7-
<TABLE>
<CAPTION>
POINT TO POINT MICROWAVE RADIO SERVICE Feb 05, 1992
ACTIONS TAKEN:
State-File Number-Call Sign-Applicant Station Name Station Coordinates
<S> <C> <C>
IN 15194-CF-P-92 (WLK943) MICHIANA METRONET, INC. AUBURN Lat. 41 21 31 N. - Long. 85 07 12 W.
GRANTED: 01/30/1992 application appearing on public notice dated
12/26/1991.
VA 15311-CF-P-92 (WGW846) OVERSEAS TELECOMMUNICATIONS, INC. TYSSON, VA Lat. 38 54 58 N. - Long. 77 13 37 W.
GRANTED: 01/30/1992 application appearing on public notice dated
12/26/1991.
MS 15312-CF-P/L-92 (WML270) MISCELLCO COMMUNICATIONS, INC.
GRANTED: 01/30/1992 application appearing on public notice dated
12/26/1991.
CA 15315-CF-P-92 (WGW578) PACTEL PAGING OF CALIFORNIA MT TAMALPAS Lat. 37 55 44 N. - Long. 122 35 11 W.
GRANTED: 01/30/1992 application appearing on public notice dated
12/26/1991.
</TABLE>
<PAGE> 154
-2-
<TABLE>
<CAPTION>
POINT TO POINT MICROWAVE RADIO SERVICE Jun 10, 1992
ACTIONS TAKEN:
State-File Number-Call Sign-Applicant Station Name Station Coordinates
<S> <C> <C>
VA 15808-CF-P-92 (WML485) SOUTHWEST VIRGINIA CELLULAR TELEPHONE INC. MARION Lat. 38 54 06 N. - Long. 81 32 34 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
KS 15809-CF-P-92 (WLW521) MISCELLCO COMMUNICATIONS, INC. HAYS Lat. 38 51 16 N. - Long. 98 22 65 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
KS 15810-CF-P-92 (WML487) MISCELLCO COMMUNICATIONS, INC. MCWEENEY Lat. 39 00 58 N. - Long. 99 51 30 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
OH 15815-CF-P-92 (WLS710) TOLEDO USA LIMITED PARTNERSHIP A W TRAIL Lat. 41 39 34 N. - Long. 83 32 29 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
OH 15816-CF-P-92 (WLB942) TOLEDO USA LIMITED PARTNERSHIP MUNEE Lat. 41 35 50 N. - Long. 83 39 20 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
WA 15817-CF-P-92 (WML492) WESTERN SUB-RSA LIMITED PARTNERSHIP
OF RICHLAND WHISKEY RIDGE Lat. 47 08 12 N.- Long. 120 11 17 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
WA 15818-CF-P-92 (WLS689) UNITED STATES CELLULAR OPERATING COMPANY
OF RICHLAND DENVER Lat. 48 51 00 N.- Long. 120 34 31 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
OH 15819-CF-P-92 (WML493) MINFORD CELLULAR TELEPHONE COMPANY CHIILLICOTHE Lat. 39 20 49 N. - Long. 82 85 39 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
OH 15820-CF-P-92 (WML494) MINFORD CELLULAR TELEPHONE COMPANY PIKETON Lat. 39 04 02 N. - Long. 83 00 10 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
TX 15821-CF-P-92 (WML495) TEXAS RSA NO. 1581 LIMITED PARTNERSHIP LAMPASAS Lat. 31 02 32 N. - Long. 83 09 23 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
TX 15822-CF-P-92 (WML496) TEXAS RSA NO. 1581 LIMITED PARTNERSHIP BURNET Lat. 30 49 41 N. - Long. 38 15 47 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
TX 15823-CF-P-92 (WML497) TEXAS RSA NO. 1581 LIMITED PARTNERSHIP HOG MTN. Lat. 31 07 50 N. - Long. 97 54 17 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
OK 15824-CF-P-92 (WML498) STILLWATER CELLULAR TELEPHONE COMPANY STILLWATER Lat. 36 07 11 N. - Long. 96 57 35 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
OK 15825-CF-P-92 (WML499) STILLWATER CELLULAR TELEPHONE COMPANY GUTHRIE Lat. 35 53 58 N. - Long. 97 20 45 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
OK 15826-CF-P-92 (WML500) STILLWATER CELLULAR TELEPHONE COMPANY CHANDLER Lat. 35 45 89 N. - Long. 96 52 36 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
OK 15827-CF-P-92 (WML501) STILLWATER CELLULAR TELEPHONE COMPANY PERRY Lat. 38 19 20 N. - Long. 97 16 01 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
OK 15828-CF-P-92 (WML502) STILLWATER CELLULAR TELEPHONE COMPANY TOMKAWA Lat. 38 41 23 N. - Long. 97 12 41 W.
Granted: 06/04/1992 application appearing on public notice dated
04/29/1992.
</TABLE>
<PAGE> 155
PART 21 RECEIPTS (continued)
<TABLE>
<CAPTION>
Page 14
- -----------------------------------------------------------------------------------------------------------------
File No. Applicant City State
Call Sign Action Latitude (W) Longitude (W)
Receive Station Transmit Frequency (WHz)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
20450-CF-L-92 Southwestern Bell Telephone Co Jessieville AR
WMI200 CON 34 43 47 93 13 30
20451-CF-L-92 Southwestern Bell Telephone Co Pine Ridge AR
WMI201 CON 34 35 03 93 56 11
20453-CF-HL-92 U S West Communications Inc Ogden UT
KPR77 CON 41 13 04 111 58 07
10855.00 11015.00
20454-CF-NL-92 U S West Communications Inc Plain City UT
KPS98 CON 41 16 25 112 14 13
11465.00 11625.00
20435-CF-L-92 South 5 RSA Limited Partnership dba Br New Castle TX
CON 33 10 52 98 51 13
20456-CF-L-92 Miscellco Communications Inc Wakeany KS
WNL487 CON 39 00 56 99 51 30
20457-CF-L-92 Miscellco Communications Inc Hays KS
WLW521 CON 38 51 16 99 22 55
20458-CF-L-92 U S West NewVector Group Inc Glendale AZ
WLW210 CON 33 38 23 112 11 29
20459-CF-L-92 U S West NewVector Group Inc Waddell AZ
WLA990 CON 33 36 09 112 26 04
20460-CF-L-92 U S West NewVector Group Inc Phoenix AZ
WLW465 CON 33 35 40 112 05 10
20461-CF-L-92 U S West NewVector Group Inc General P Tucson AZ
WLC868 CON 32 18 43 110 58 45
20462-CF-L-92 U S West NewVector Group Inc General P Tucson AZ
WMK539 CON 32 13 22 110 58 36
20463-CF-L-92 GTE Hawaiian Telephone Company Incorpo Kahului HI
MOD 20 54 13 156 25 45
KUP41 10558.750
20464-CF-P-92 GTE Hawaiian Telephone Company Incorpo Wailuku HI
KUP41 MOD 20 53 24 156 30 21
10623.750
</TABLE>
<PAGE> 156
PART 21 RECEIPTS (continued)
<TABLE>
<CAPTION>
Page 24
-------------------------------------------------------------------------------------------------------------
File No. Applicant City State
Call Sign Action (Conditional File # Covered) Latitude (W) Longitude (W)
Receive Station Transmit Frequency (WHz)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
00514-CF-P-93 AT&T Communications of the South Centr LA
NEW 32 30 34 93 44 53
5974.8 6004.8
6063.8 6123.1
00615-CF-P-93 Miscellco Communications Inc Russell KS
WLW522 HOD 38 53 36 98 54 02
WLW523 WLW521 2115.2 2112
00616-CF-P-93 Miscellco Communications Inc Hoiser KS
WLW523 HOD 38 24 25 98 52 51
WLW522 2165.2
00617-CF-P-93 Miscellco Communications Inc Hays KS
WLW521 HOD 38 51 16 09 22 55
WLW522 2162.
00622-CF-P-93 Georgia 8 Cellular Limited Partnership Statesboro GA
NEW 32 22 53 81 46 27
Metter GA 2162
00623-CF-P-93 Georgia 8 Cellular Limited Partnership Metter GA
NEW 32 30 07 82 08 36
Statesboro GA Swainesboro GA 2112 3128
2121.6
00624-CF-P-93 Georgia 8 Cellular Limited Partnership Swainesboro GA
NEW 32 32 37 82 18 08
Metter GA 2178
00625-CF-P-93 Georgia 8 Cellular Limited Partnership Morristown GA
NEW Junction 82 29 21
32 32 05
Metter GA 2171.6
00626-CF-P-93 PC Cellular of Kentucky LP Paducah KY
WHL638 HOD 37 01 48 88 38 91
WHL639 WHL640 Ganntown KY 2171.6 2174.8
2168.4
00627-CF-P-93 PC Cellular of Kentucky LP Draffenville KY
WHL639 HOD 36 54 37 88 21 25
WHL638 2171.6
00628-CF-P-93 PC Cellular of Kentucky LP Hayfield KY
HOD 36 46 18 88 39 36
WHL638 2124.8
</TABLE>
<PAGE> 157
PART 21 DISPOSALS (continued)
<TABLE>
<CAPTION>
Page 4
----------------------------------------------------------------------------------------------------------
File No. Applicant Status Statusdate Call Sign
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
9300277 Cellular Inc Network Corporation G 09/01/93 WMN228
9300278 Cellular Inc Network Corporation G 09/01/93 WMN229
9300554 Dutchess County Cellular Telephone Compa G 08/31/93 WLX733
9300555 Dutchess County Cellular Telephone Compa G 08/31/93 WLT508
9300560 Great Seal Cellular Limited Partnership G 08/31/93 WMJ862
9300561 Great Seal Cellular Limited Partnership G 08/31/93 WMN203
9300563 GTE Mobilnet of Santa Barbara Limited Pa G 08/31/93 WMI718
9300575 McCaw Communications of the Mid South In G 08/31/93 WMN205
9300576 McCaw Communications of the Mid South In G 08/31/93 WMN206
9300577 McCaw Communications of the Mid South In G 08/31/93 WMN207
9300578 McCaw Communications of the Mid South In G 08/31/93 WMN208
9300581 EMI Communications Corporation G 08/31/93 WLN464
9300582 EMI Communications Corporation G 08/31/93 WHD941
9300585 Microwave Service Company G 08/31/93 KNX45
9300615 Miscellco Communications Inc G 08/31/93 WLW522
9300616 Miscellco Communications Inc G 08/31/93 WLW523
9300617 Miscellco Communications Inc G 08/31/93 WLW521
9300626 PC Cellular of Kentucky LP G 08/31/93 WHN220
9300627 PC Cellular of Kentucky LP G 08/31/93 WHN221
9300628 PC Cellular of Kentucky LP G 08/31/93 WHN222
9300629 PC Cellular of Kentucky LP G 08/31/93 WHN223
9300648 Florida Cellular Service Inc G 09/01/93 WLU653
9300649 Florida Cellular Service Inc G 09/01/93 WLL957
9300650 Florida Cellular Service Inc G 09/01/93 WLL960
9300655 EMI Communications Corporation G 09/01/93 WHQ676
9300656 EMI Communications Corporation G 09/01/93 KGJ35
9300657 EMI Communications Corporation G 09/01/93 KGO28
9300658 EMI Communications Corporation G 09/01/93 KGO27
</TABLE>
<PAGE> 158
PARTS 21 RECEIPTS (continued)
<TABLE>
<CAPTION>
Page 10
-------------------------------------------------------------------------------------------------------------
File No. Applicant City State
Call Sign Action (Conditional File # Covered) Latitude (N) Longitude (W)
Receive Station Transmit Frequency (MHz)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
9401720 Kansas RSA 5 Inc Leavenworth KS
WHM914 MOD 39 17 52 94 56 15
ATCHISON MO 2162
9401721 Kansas RSA 5 Inc Baker KS
NEW 39 45 10 95 33 46
ATCHISON MO 2174.8
9401722 Dallas Forth Worth Teleport Limited Dallas TX
NEW 32 55 17 96 46 22
CENTRAL II TX MCNEEL TX 22575.0 22875.0
11095.0 10975.0
9401723 Dallas Forth Worth Teleport Limited Dallas TX
NEW 32 55 23 96 46 32
PARK CENTRAL TX 21375.0 21675.0
9401724 MCI Telecommunications Corporation McAllen TX
WHS982 CON (03043-CF-P-93) 26 12 04 98 13 53
9401725 MCI Telecommunications Corporation Edcouch TX
WHS920 CON (03044-CF-P-93) 26 18 41 97 57 42
9401726 MCI Telecommunications Corporation Sadieville KY
WHA459 CON (03969-CF-P-93) 38 33 20 84 27 50
9401727 MCI Telecommunications Corporation Paris KY
WHA460 CON (03970-CF-P-93) 38 14 33 84 11 41
9401728 MCI Telecommunications Corporation Lexington KY
WHA461 CON (03971-CF-P-93) 38 02 22 84 34 11
9401729 MCI Telecommunications Corporation Lexington KY
WHO559 CON (03972-CF-P-93) 38 02 35 84 29 36
9401730 Bay Area Cellular Telephone Company
WMN721 CON
9401731 Bay Area Cellular Telephone Company
WMN722 CON
9401732 Miscellco Communications Inc Colby KS
WML263 MOD 39 22 19 101 02 23
WML264 2165.2
940133 Miscellco Communications Inc Edson KS
WML264 MOD 39 23 19 101 33 34
WML273 2115.2
</TABLE>
<PAGE> 159
Part 21 DISPOSALS (continued)
Rpt. No. 1072
<TABLE>
<CAPTION>
3/2/94 Page 17
---------------------------------------------------------------------------------------------------------
File No. Applicant Status Statusdate Call Sign
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
9401531 GTE Southwest Incorporated G 02/16/94 WAD96
9401532 GTE Southwest Incorporated G 02/16/94 WAD97
9401533 GTE Southwest Incorporated G 02/16/94 WAD98
9401534 GTE Southwest Incorporated G 02/16/94 WAD99
9401557 Commden Limited G 02/17/94 WHQ838
9401558 Commden Limited G 02/17/94 WHQ839
9401616 Syracuse Telephone Company G 02/17/94 WLC592
9401617 Syracuse Telephone Company G 02/17/94 WLX618
9401618 Syracuse Telephone Company G 02/17/94 WHK958
9401619 Syracuse Telephone Company G 02/17/94 WLH330
9401631 Nevada 2 Cellular Corporation G 02/17/94 WHQ842
9401632 Nevada 2 Cellular Corporation G 02/17/94 WWN558
9401633 Nevada 2 Cellular Corporation G 02/17/94 WHQ843
9401634 Nevada 2 Cellular Corporation G 02/17/94 WHQ844
9401635 Nevada 2 Cellular Corporation G 02/17/94 WHN565
9401660 Atlantic Cellular Telephone Corporation G 02/17/94 WHQ845
9401661 Atlantic Cellular Telephone Corporation G 02/17/94 WHN727
9401711 United Utilities Inc G 02/18/94 WHQ860
9401732 Miscellco Communications Inc G 02/18/94 WHL263
9401733 Miscellco Communications Inc G 02/18/94 WHL264
9401739 Nevada Bell G 02/18/94 WWQ852
9401740 Nevada Bell G 02/18/94 WWQ853
9401752 RFB Cellular Incorporated G 02/18/94 WWQ284
9401753 RFB Cellular Incorporated G 02/18/94 WWQ855
9401754 RFB Cellular Incorporated KIL 02/18/94
9401815 PA 3 Wireline Settlement Partnership G 02/17/94 WHK647
9401816 C Tec Cellular Centre County Incorporato G 02/17/94 WLL417
9401817 C Tec Cellular Centre County Incorporato G 02/17/94 WHQ849
</TABLE>
<PAGE> 160
SCHEDULE 3.19
Seller's Lists of All Policies of Insurance
<PAGE> 161
SCHEDULE 3.19
INSURANCE POLICIES
TABLE OF CONTENTS
1. Commercial Coverage
2. Business Auto Coverage
3. Garage Keepers Coverage
4. Commercial General Liability
5. Installation Floater
6. Sign Coverage
7. Transit Coverage
8. Communication Towers and Equipment
9. Worker's Compensation
10. Umbrella Policy
<PAGE> 162
PAGE 1
[CNA LOGO] DECLARATIONS
YOUR SERVICE INDUSTRY PACKAGE
RENEWAL DECLARATION
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A4 07779983 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 037906310
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMERCIAL PROPERTY COVERAGE PART - DECLARATIONS
( X ) "X" IF SUPPLEMENTAL DECLARATIONS IS ATTACHED
- --------------------------------------------------------------------------------
NAMED INSURED IS: ( ) INDIVIDUAL ( ) PARTNERSHIP ( X ) CORPORATION
( ) JOINT VENTURE ( ) OTHER:
- --------------------------------------------------------------------------------
POLICY PERIOD: THIS POLICY BECOMES EFFECTIVE AND EXPIRES AT 12:01 A.M.
STANDARD TIME AT YOUR MAILING ADDRESS SHOWN ABOVE.
- --------------------------------------------------------------------------------
IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS
CONTAINED HEREIN, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATED.
- --------------------------------------------------------------------------------
DESCRIPTION OF PREMISES
- --------------------------------------------------------------------------------
PREM. BLDG. LOCATION, CONSTRUCTION AND OCCUPANCY
NO. NO.
001 001 2000 VINE; HAYS, KS 67601
JOISTED MASONRY COMMUNICATION EQUIPMENT INST/SERV/REPAIR
002 001 2110 EAST 10TH STREET; GREAT BEND, KS 67530
FRAME OFFICE
007 001 1509 W. WYATT EARP, SUITE 2; DODGE CITY, KS 67801
FRAME OFFICE
- --------------------------------------------------------------------------------
COVERAGES PROVIDED -- INSURANCE AT THE DESCRIBED PREMISES APPLIES ONLY FOR
COVERAGES FOR WHICH A LIMIT OF INSURANCE IS SHOWN.
- --------------------------------------------------------------------------------
PREM. BLDG. COVERAGE LIMIT OF COVERED CAUSES +COINSURANCE
NO. NO. INSURANCE OF LOSS
001 001 BUILDING 125,000 SPECIAL 90%
PERS PROP INSURED 30,000 SPECIAL 90%
002 001 PERS PROP INSURED 5,000 SPECIAL 90%
007 001 PERS PROP INSURED 5,000 SPECIAL 90%
+ IF EXTRA EXPENSE COVERAGE, LIMITS AT LOSS PAYMENT
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 163
[CNA LOGO]
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A4 07779483 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 037906310
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CHANGE ENDORSEMENT
*** THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ***
THIS ENDORSEMENT IS A PART OF YOUR POLICY AND TAKES EFFECT ON THE EFFECTIVE
DATE OF YOUR POLICY, UNLESS ANOTHER EFFECTIVE DATE IS SHOWN BELOW.
- --------------------------------------------------------------------------------
**** PROPERTY ****
LOC BLDG COVERAGE LIMIT OF COVERED CLAUSE COINSURANCE
INSURANCE OF LOSS
001 001 PERS PROP INSURED 30000 SPECIAL 90%
OPTIONAL COVERAGES: -- NONE --
REASON: CHANGED COVERAGE CHANGE DATE: 09/13/94
LOC BLDG COVERAGE LIMIT OF COVERED CLAUSE COINSURANCE
INSURANCE OF LOSS
032 001 PERS PROP INSURED 400000 SPECIAL 90%
OPTIONAL COVERAGES: -- NONE --
REASON: CHANGED COVERAGE CHANGE DATE: 09/13/94
- --------------------------------------------------------------------------------
POLICY CHANGE NO. EFFECTIVE DATE OF THIS POLICY CHANGE
- ---------------------------- ------------------------------------------------
COUNTERSIGNED BY:
------------------------ -------------------------------------
DATE AUTHORIZED REPRESENTATIVE
P-56015-B (11/91 ED.)
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 164
[CNA LOGO] DECLARATIONS
YOUR SERVICE INDUSTRY PACKAGE
RENEWAL DECLARATION
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A4 07779983 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 037906310
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMERCIAL PROPERTY COVERAGE PART SUPPLEMENTAL DECLARATIONS
DESCRIPTION OF PREMISES
- --------------------------------------------------------------------------------
PREM. BLDG. LOCATION, CONSTRUCTION AND OCCUPANCY
NO. NO.
- ----- ------- ----------------------------------------------------------------
012 001 401 N. CAMPUS, SUITE 103; GARDEN CITY, KS 67846
FRAME OFFICE
013 001 192 W. PANCAKE BLVD; LIBERAL, KS 67905
FRAME OFFICE
- --------------------------------------------------------------------------------
COVERAGES PROVIDED
- --------------------------------------------------------------------------------
PREM. BLDG. COVERAGE LIMIT OF COVERED CAUSES +COINSURANCE
NO. NO. INSURANCE OF LOSS
- ----- ------ -------------------- --------- -------------- -------------
012 001 PERS PROP INSURED 5,000 SPECIAL 9
013 001 PERS PROP INSURED 5,000 SPECIAL 9
- ----------------------------------------------- +IF EXTRA EXPENSE COVE
OPTIONAL COVERAGES LIMITS ON LOSS PAYMEN
- ----------------------------------------------- -------------------------------
AGREED VALUE
---------------------------------------------------------------
PREM. BLDG. EXPIRATION
NO. NO. DATE COVERAGE AMOUNT
- ----- ------ ---------- ---------------------- ---------
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 165
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A6 07779982 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 0379063
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CHANGE ENDORSEMENT
*** THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ***
THIS ENDORSEMENT IS A PART OF YOUR POLICY AND TAKES EFFECT ON THE EFFECTIVE
DATE OF YOUR POLICY, UNLESS ANOTHER EFFECTIVE DATE IS SHOWN BELOW.
- --------------------------------------------------------------------------------
**** THE FOLLOWING LOCATIONS(S) HAVE BEEN ADDED, CHANGED, OR DELETED: ****
LCC BLDG LOCATION, CONSTRUCTION, OCCUPANCY ** ADDED **
032 001 224 W 14TH HAYS, KS 67601
JOISTED MASONRY
- --------------------------------------------------------------------------------
POLICY CHANGE NO. : EFFECTIVE DATE OF THIS POLICY CHANGE
- --------------------------------- ---------------------------------------------
COUNTERSIGNED BY:
-------------------- --------------------------------------
DATE AUTHORIZED REPRESENTATIVE
P-56015-B (11/91 ED.)
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 166
POLICY NUMBER: COMMERCIAL PROPERTY
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
LOSS PAYABLE PROVISIONS
This endorsement modifies insurance provided under the following:
BUILDING AND PERSONAL PROPERTY COVERAGE FORM
BUILDER'S RISK COVERAGE FORM
CONDOMINIUM ASSOCIATION COVERAGE FORM
CONDOMINIUM COMMERCIAL UNIT-OWNERS COVERAGE FORM
STANDARD PROPERTY POLICY
SCHEDULE
<TABLE>
<CAPTION>
Provisions Applicable
-----------------------------------------------
Prem. Bldg. Description Loss Payee Loss Lender's Contract
No. No. of Property (Name & Address) Payable Loss Payable Of Sale
<S> <C> <C> <C> <C> <C> <C>
CONTENTS NATIONAL BANK X
FOR COOPERATIVES
GALLERIA COMPLEX
200 GALLERIA PARKWAY NW #1900
ATLANTA, GA 30339
</TABLE>
<TABLE>
<S> <C>
A. When this endorsement is attached to the B. LOSS PAYABLE
STANDARD PROPERTY POLICY CP 00 99 the For Covered Property in which both you and
term Coverage Part in this endorsement is re- a Loss Payee shown in the Schedule or in the
placed by the term Policy. Declarations have an insurable interest, we
will:
The following is added to the LOSS PAYMENT Loss
Condition, as indicated in the Declarations or by an 1. Adjust losses with you; and
"X" in the Schedule:
</TABLE>
CP 12 18 07 88 Page 1 of 2
Copyright, ISO Commercial Risk Services, Inc., 1983, 1987
<PAGE> 167
POLICY NUMBER: COMMERCIAL PROPERTY
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
LOSS PAYABLE PROVISIONS
This endorsement modifies insurance provided under the following:
BUILDING AND PERSONAL PROPERTY COVERAGE FORM
BUILDER'S RISK COVERAGE FORM
CONDOMINIUM ASSOCIATION COVERAGE FORM
CONDOMINIUM COMMERCIAL UNIT-OWNERS COVERAGE FORM
STANDARD PROPERTY POLICY
SCHEDULE
<TABLE>
<CAPTION>
Provisions Applicable
-----------------------------------------------
Prem. Bldg. Description Loss Payee Loss Lender's Contract
No. No. of Property (Name & Address) Payable Loss Payable Of Sale
<S> <C> <C> <C> <C> <C> <C>
OFFICE PITNEY BOWES X
EQUIPMENT CREDIT CORPORATION
P.O. BOX 96095
BELLEVUE, WA 98009
NATIONAL BANK FOR COOPERATIVES
GALLERIA COMPLEX
200 GALLERIA PARKWAY NW
SUITE 1900
ATLANTAM, GA 30339
</TABLE>
<TABLE>
<S> <C>
A. When this endorsement is attached to the B. LOSS PAYABLE
STANDARD PROPERTY POLICY CP 00 99 the For Covered Property in which both you and
term Coverage Part in this endorsement is re- a Loss Payee shown in the Schedule or in the
placed by the term Policy. Declarations have an insurable interest, we
will:
The following is added to the LOSS PAYMENT Loss 1. Adjust losses with you; and
Condition, as indicated in the Declarations or by an
"X" in the Schedule:
</TABLE>
CP 12 18 07 88 Page 1 of 2
Copyright, ISO Commercial Risk Services, Inc., 1983, 1987
<PAGE> 168
[CNA LOGO] DECLARATIONS
BUSINESS AUTO COVERAGE FORM
RENEWAL DECLARATION RENEWAL OF POLICY
LIEN DATE 6 0777998
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A6 07779982 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 0379063
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
POLICY PERIOD - BECOMES EFFECTIVE AND EXPIRES AT 12:01 AM STANDARD TIME AT THE
NAMED INSUREDS ADDRESS STATED ABOVE.
FORM OF NAMED INSURED BUSINESS - CORPORATION
IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS
POLICY, WE AGREE WITH YOU TO PROVIDE INSURANCE AS STATED IN THIS POLICY.
ITEM TWO- SCHEDULE OF COVERAGES AND COVERED AUTOS
EACH OF THESE COVERAGES WILL APPLY ONLY TO THOSE AUTOS SHOWN AS COVERED AUTOS.
AUTOS ARE SHOWN AS COVERED AUTOS FOR A PARTICULAR COVERAGE BY THE ENTRY OF ONE
OR MORE OF THE SYMBOLS FROM THE COVERED AUTO SECTION OF THE BUSINESS AUTO
COVERAGE FORM NEXT TO THE NAME OF THE COVERAGE.
COVERAGES COVERED LIMIT- THE MOST WE WILL PAY FOR PREMIUM
AUTO SYMBOL ANY ONE ACCIDENT OR LOSS
LIABILITY INSURANCE 01 $1,000,000 $3,00
PERS. INJURY PROT 05 SEPARATELY STATED IN EACH PIP ENDORSEMENT $6
UNINSURED MOTORISTS 06 $1,000,000 $37
PHYSICAL DAMAGE INS. ACV OR COST OR REPAIR WHICHEVER IS LESS,
MINUS DEDUCTIBLE SHOWN
COMPREHENSIVE 07 ACV OR COST OR REPAIR WHICHEVER IS LESS, $1,89
MINUS DEDUCTIBLE STATED IN ITEM THREE,
FOR EACH COVERED AUTO FOR ALL LOSSES
BUT NO DEDUCTIBLE APPLIES TO LOSS CAUSED
BY FIRE OR LIGHTNING. SEE ITEM FOUR FOR
HIRED OR BORROWED AUTOS
SPECIFIED CAUSES OF 07 ACV OR COST OR REPAIR WHICHEVER IS LESS, $2
MINUS $25 DEDUCTIBLE FOR EACH COVERED AUTO
FOR LOSS CAUSED BY MISCHIEF OR VANDALISM
COLLISION 07 ACV OR COST OR REPAIR WHICHEVER IS LESS, $2,26
MINUS DEDUCTIBLE STATED IN ITEM THREE,
FOR EACH COVERED AUTO
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 169
[CNA LOGO] PAGE 1
BUSINESS AUTO COVERAGE FORM
AUTOMOBILE CHANGE ENDORSEMENT
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A6 07779982 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 0379063
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY
VEH DESCRIPTION OF CHANGE CHANGE DATE
023 CHANGED VEHICLE INFORMATION 08/01/
027 ADDED VEHICLE 08/01/
SCHEDULE OF COVERED AUTOS YOU OWN
COST STATED CHANGE
VEH ST TER YR DESCRIPTION SERIAL NUMBER AGE NEW CLASS AMOUNT DATE
023 KS 016 94 FORD ESCORT 15J3RW105786 1 12600 7398 08/01/
027 KS 017 94 FORD ESCORT W 1FARP15J9RW261108 1 13000 7398 08/01/
POLICY TERM PREMIUM- SPECIFIED TOWING
ADDED MED CAUSE OF & DEDUCTIBLE TOTAL
VEH LIAB PIP PIP PAY UM UIM COMP LOSS COLL LABOR OTHER COMP COLL PREMIUM
023 $378 $11 $81 $291 $347 100 250 $1108
027 $392 $14 $81 $202 $324 100 250 $1013
ISSUE DATE 10/19/94
-------------------------
AUTHORIZED REPRESENTATIVE
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
P-56279-A (ED. 2/87)
<PAGE> 170
RENEWAL DECLARATION RENEWAL OF POLICY
ITEM ONE-- 6 07779982
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A6 07779982 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 0379063
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ITEM THREE-- SCHEDULE OF COVERED AUTOS YOU OWN
COST STATED CHANGE
VEH ST TER YR DESCRIPTION SERIAL NUMBER AGE NEW CLASS AMOUNT DATE
017 KS 017 92 TOYOTA 4X4 PU 4TARN01P1R2020101 3 13700 01499 08/01
018 KS 017 90 HELDER TRLR IH9PU42A2L1033599 5 500 68499 08/01
019 KS 017 89 OLDS 98 1G3CW54C9K4309040 6 14000 7398 08/01
020 KS 017 88 GMC PU TBU 6 01499 08/01
021 KS 016 93 TOYOTA 4X4 PU 4TARN01PXP2098931 2 15400 01499 08/01
022 KS 017 94 CHEV SUBURBAN 1GNFK16K5RJ377800 1 28000 01499 08/01
023 KS 016 94 FORD ESCORT 1FARP1SJ3RW105786 1 12600 7398 08/01
024 KS 017 88 DODGE CARAVAN 284FK41K6JR631027 6 16000 01499 08/01
025 KS 017 91 L M 16' FLATB LM910075 4 900 68499 08/01
026 KS 017 92 FORD F150 4X4 1FTEX14NINKA41603 3 14500 01499 08/01
8-1 94 FORD ESC. WGN 1FARP15J9RW261108 13000
PREMIUMS- SPECIFIED TOWING
ADDED MED CAUSE OF & DEDUCTIBLE TOTAL
VEH LIAB PIP PIP PAY UM UIM COMP LOSS COLL LABOR OTHER COMP COLL PREMIUM
017 $333 $7 $36 $209 $254 100 250 $
018 $50 $1 $12 XXXX XXXX
019 $392 $14 $81 $112 $178 100 250
020 $333 $7 $36 $34 $60 100 250
021 $359 $7 $36 $295 $341 100 250
022 $333 $7 $36 $553 $610 100 250
023 $378 $11 $81 $291 $347 100 250
024 $333 $7 $36 $191 $222 100 250
025 $50 $1 $14 XXXX XXXX
026 $333 $7 $36 $209 $254 100 250
100 250
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
P-55740-8 (ED. 12/90)
<PAGE> 171
[CNA LOGO]
RENEWAL DECLARATION RENEWAL OF POLICY
ITEM ONE- 6 0777998
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A6 07779982 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 0379063
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ITEM FOUR- SCHEDULE OF HIRED OR BORROWED COVERED AUTO COVERAGE AND PREMIUMS
LIABILITY INSURANCE-RATING BASIS, COST OF HIRE
ESTIMATED RATE PER $100
VEHICLE STATE COST OF HIRE COST OF HIRE FACTOR # PREMIUM
ID LIABILITY KS IF ANY .626 $
$
TOTAL PREMIUM
*IF LIABILITY COVERAGE IS PRIMARY
COST OF HIRE MEANS THE TOTAL AMOUNT YOU INCUR FOR THE HIRE OF AUTOS YOU DO NOT
OWN (NOT INCLUDING AUTOS YOU BORROW OR RENT FROM YOUR PARTNERS OR EMPLOYEES OR
THEIR FAMILY MEMBERS). COST OF HIRE DOES NOT INCLUDE CHARGES FOR SERVICES
PERFORMED BY _____________ FOR CARRIERS OF PROPERTY OR PASSENGERS.
P-55748-D (ED. 12/90)
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 172
[CNA LOGO] DECLARATIONS
BUSINESS AUTO COVERAGE FORM
RENEWAL DECLARATION RENEWAL OF POLICY
ITEM ONE- 6 0777998
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A6 07779982 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 0379063
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ITEM FIVE - SCHEDULE FOR NON-OWNERSHIP LIABILITY
COVERED AUTOS BORROWED FROM YOUR EMPLOYEES OR MEMBERS OF THEIR HOUSEHOLD
RATING BASIS NUMBER PREMIUM
NUMBER OF EMPLOYEES - LIABILITY 25
TOTAL PREMIUM
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 173
[CNA LOGO] DECLARATIONS
BUSINESS AUTO COVERAGE FORM
RENEWAL DECLARATION RENEWAL OF POLICY
ITEM ONE 6 0777998
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A6 07779982 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 03790631
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXCEPT FOR TOWING, ALL PHYSICAL DAMAGE LOSS IS PAYABLE TO YOU AND THE LOSS
PAYEE NAMED BELOW AS INTERESTS MAY APPEAR AT THE TIME OF LOSS --
AUTO LOSS PAYEE AUTO LOSS PAYEE
021 NATIONAL BANK FOR COOPERATIVES 022 NATIONAL BANK FOR COOPERATIVES
GALLERIA COMPLEX GALLERIA COMPLEX
200 GALLERIA PKWY NW, STE 1900 200 GALLERIA PKWY NW, STE 1900
ATLANTA, GA 030339 ATLANTA, GA 03033
023 NATIONAL BANK FOR COOPERATIVES
GALLERIA COMPLEX
200 GALLERIA PKWY NW, STE 1900
ATLANTA, GA 030339
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 174
COMMERCIAL AUTO
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
GARAGEKEEPERS COVERAGE
This endorsement modifies insurance provided under the following:
BUSINESS AUTO COVERAGE FORM
TRUCKERS COVERAGE FORM
This endorsement changes the policy effective on the inception date of the
policy unless another date is indicated below.
Endorsement effective
Named Insured Countersigned by
(Authorized Representative)
SCHEDULE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
LOCATION
NO. COVERAGES LIMIT OF INSURANCE FOR EACH LOCATION
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Comprehensive $125,000 MINUS $100. DEDUCTIBLE FOR EACH "AUTO" FOR "LOSS" CAUSED BY THEFT OR
4 Specified MISCHIEF OR VANDALISM SUBJECT TO $500. MAXIMUM DEDUCTIBLE FOR ALL SUCH "LOSS"
Causes of Loss IN ANY ONE EVENT.
------------------------------------------------------------------------------------------------
Collision $125,000 MINUS $250. DEDUCTIBLE FOR EACH "AUTO"
- --------------------------------------------------------------------------------------------------------------
Comprehensive $125,000 MINUS $100. DEDUCTIBLE FOR EACH "AUTO" FOR "LOSS" CAUSED BY THEFT OR
5 Specified MISCHIEF OR VANDALISM SUBJECT TO $500. MAXIMUM DEDUCTIBLE FOR ALL SUCH "LOSS"
Causes of Loss IN ANY ONE EVENT.
------------------------------------------------------------------------------------------------
Collision $125,000 MINUS $250. DEDUCTIBLE FOR EACH "AUTO"
- --------------------------------------------------------------------------------------------------------------
Comprehensive $ MINUS $ DEDUCTIBLE FOR EACH "AUTO" FOR "LOSS" CAUSED BY THEFT OR
3 Specified MISCHIEF OR VANDALISM SUBJECT TO $ . MAXIMUM DEDUCTIBLE FOR ALL SUCH "LOSS"
Causes of Loss IN ANY ONE EVENT.
------------------------------------------------------------------------------------------------
Collision $ MINUS $ . DEDUCTIBLE FOR EACH "AUTO"
- --------------------------------------------------------------------------------------------------------------
</TABLE>
LOCATIONS WHERE YOU CONDUCT "GARAGE OPERATIONS"
LOCATION ADDRESS
NO. STATE YOU MAIN BUSINESS LOCATION AT LOCATION NO. 1
4 192 W. PANCAKE BLVD.; LIBERAL, KS
5 401 N. CAMPUS DR., STE 301; GARDEN CITY, KS
3
Premium for all locations
Comprehensive $3450.
Specified Causes of Loss $
Collision $1150.
(If no entry appears above, information required to complete this endorsement
will be shown in the Declaration as applicable to this endorsement.)
CA 99 37 12 90 Copyright Insurance Services Office, Inc. 1990 Page 1 of 3
<PAGE> 175
COMMERCIAL AUTO
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
GARAGEKEEPERS COVERAGE
This endorsement modifies insurance provided under the following:
BUSINESS AUTO COVERAGE FORM
TRUCKERS COVERAGE FORM
This endorsement changes the policy effective on the inception date of the
policy unless another date is indicated below.
- --------------------------------------------------------------------------------
Endorsement effective
- --------------------------------------------------------------------------------
Named Insured Countersigned by
- --------------------------------------------------------------------------------
(Authorized Representative)
SCHEDULE
- --------------------------------------------------------------------------------
Location
No. Coverages Limit of Insurance For Each Location
- --------------------------------------------------------------------------------
Comprehensive $125,000 MINUS $100. DEDUCTIBLE FOR EACH "AUTO"
------------- FOR "LOSS" CAUSED BY THEFT OR MISCHIEF OR
Specified VANDALISM SUBJECT TO $500. MAXIMUM DEDUCTIBLE FOR
1 Causes of Loss ALL SUCH "LOSS" IN ANY ONE EVENT.
----------------------------------------------------------------------
Collision $125,000 MINUS $250. DEDUCTIBLE FOR EACH "AUTO"
- --------------------------------------------------------------------------------
Comprehensive $125,000 MINUS $100. DEDUCTIBLE FOR EACH "AUTO"
------------- FOR "LOSS" CAUSED BY THEFT OR MISCHIEF OR VANDALISM
Specified SUBJECT TO $500. MAXIMUM DEDUCTIBLE FOR ALL SUCH
2 Causes of Loss "LOSS" IN ANY ONE EVENT.
----------------------------------------------------------------------
Collision $125,000 MINUS $250. DEDUCTIBLE FOR EACH "AUTO"
- --------------------------------------------------------------------------------
Comprehensive $125,000 MINUS $100. DEDUCTIBLE FOR EACH "AUTO"
------------- FOR "LOSS" CAUSED BY THEFT OR MISCHIEF OR VANDALISM
Specified SUBJECT TO $500. MAXIMUM DEDUCTIBLE FOR ALL SUCH
3 Causes of Loss "LOSS" IN ANY ONE EVENT.
----------------------------------------------------------------------
Collision $125,000 MINUS $250. DEDUCTIBLE FOR EACH "AUTO"
- --------------------------------------------------------------------------------
LOCATIONS WHERE YOU CONDUCT "GARAGE OPERATIONS".
- --------------------------------------------------------------------------------
Location Address
No. state your main business location as Location No. 1
- --------------------------------------------------------------------------------
1 2000 VINE; HAYS, KS
- --------------------------------------------------------------------------------
2 2110 E. 10TH ST.; GREAT BEND, KS
- --------------------------------------------------------------------------------
3 1509 W. WYATT EARP, STE 2; DODGE CITY, KS
- --------------------------------------------------------------------------------
Premium for all locations
- --------------------------------------------------------------------------------
Comprehensive $ SEE
- --------------------------------------------------------------------------------
Specified Causes of Loss $ NEXT
- --------------------------------------------------------------------------------
Collision $ PAGE
- --------------------------------------------------------------------------------
(If no entry appears above, information required to complete this endorsement
will be shown in the Declarations as applicable to this endorsement.)
CA 99 37 06 92 Copyright, Insurance Services Office, Inc., 1991 Page 1 of 3 [ ]
<PAGE> 176
[CNA LOGO] DECLARATIONS
YOUR SERVICE INDUSTRY PACKAGE
RENEWAL DECLARATION RENEWAL OF POLICY
6 0777998
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A6 07779983 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 0379063
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMERCIAL GENERAL LIABILITY COVERAGE PART DECLARATIONS
ITEM
- --------------------------------------------------------------------------------
2. POLICY PERIOD: THIS POLICY BECOMES EFFECTIVE AND EXPIRES AT 12:01
A.M. STANDARD TIME AT YOUR MAILING ADDRESS SHOWN ABOVE.
IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL TERMS
CONTAINED HEREIN, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATED.
- --------------------------------------------------------------------------------
3. AUDIT PERIOD IS ANNUAL, UNLESS OTHERWISE STATED.
- --------------------------------------------------------------------------------
4. LIMITS OF INSURANCE
EACH OCCURRENCE LIMIT $1000000
PERSONAL AND ADVERTISING INJURY LIMIT $1000000
MEDICAL EXPENSE LIMIT $ 5000 ANY ONE PERSON
FIRE DAMAGE LIMIT $ 50000 ANY ONE FIRE
PRODUCTS - COMPLETED OPERATIONS $1000000
AGGREGATE LIMIT
GENERAL AGGREGATE LIMIT (OTHER THAN
PRODUCTS-COMPLETED OPERATIONS) $2000000
- --------------------------------------------------------------------------------
5. NAMED INSURED IS
( ) INDIVIDUAL ( ) JOINT VENTURE ( ) PARTNERSHIP
( X ) CORPORATION
( ) OTHER
BUSINESS DESCRIPTION:
COMMUNICATION EQUIPMENT INST/SERV/REPAIR
- --------------------------------------------------------------------------------
LOCATION OF ALL PREMISES YOU OWN, RENT OR OCCUPY:
001 2000 VINE ; HAYS, KS 67601
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 177
[CNA LOGO]
RENEWAL DECLARATION
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A6 07779983 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 03790631
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GENERAL LIABILITY SCHEDULE
THE ADDITIONAL DECLARATIONS AND SCHEDULE BELOW ARE AN EXTENSION OF THOSE ISSUED
IN CONNECTION WITH COMMERCIAL GENERAL LIABILITY INSURANCE.
- --------------------------------------------------------------------------------
LIMITS OF INSURANCE
EACH OCCURRENCE LIMIT $ REFER TO *
PERSONAL & ADVERTISING INJURY LIMIT $ DECLARATION
MEDICAL EXPENSE LIMIT $ ANY ONE PERSON
FIRE DAMAGE LIMIT $ ANY ONE FIRE
PRODUCTS - COMPLETED OPERATIONS AGGREGATE LIMIT $
GENERAL AGGREGATE LIMIT $
(OTHER THAN PRODUCTS - COMPLETED OPERATIONS)
- --------------------------------------------------------------------------------
SCHEDULE
- --------------------------------------------------------------------------------
DESCRIPTION OF HAZARDS CODE PREMIUM RATES ADVANCE PREMIUMS
(AND LOCATION IF DIFFERENT NO. BASES AS -----------------------------
FROM ADDRESS SHOWN IN ITEM DESCRIBED PROPERTY PROPERTY
1 OF DECLARATIONS) IN THE DAMAGE DAMAGE
SCHEDULE & BODILY & BODILY
INJURY INJURY
- --------------------------------------------------------------------------------
PREMISES OPERATIONS *(A) **(A)
*(P) **(P)
*(S) **(S)
LOCATION 001
TELEPHONE OR TELEGRAPH 99612 500,000 6,712 3,356
COMPANIES INCLUDING PRODUCTS (P)
AND/OR COMPLETED OPERATIONS
BUILDINGS OR PREMISES - BANK 61219 2,340 45,716 107
OR OFFICE INCLUDING PRODUCTS (A)
AND/OR COMPLETED OPERATIONS
- -------------------------------------------------------------------------------
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 178
[CNA LOGO]
RENEWAL DECLARATION
*
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A4 07779982 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 0379063
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DESCRIPTION OF HAZARDS CODE PREMIUM RATES ADVANCE PREMIUM
(AND LOCATION IF DIFFERENT NO. BASES AS --------------------------
FROM ADDRESS SHOWN IN ITEM DESCRIBED PROPERTY PROPERTY
1 OF DECLARATIONS) IN THE DAMAGE DAMAGE
SCHEDULE & BODILY & BODILY
INJURY INJURY
- --------------------------------------------------------------------------------
PRODUCTS/COMPLETED OPERATIONS * (P) **(P)
* (S) **(S)
- --------------------------------------------------------------------------------
TOTAL 3,463
----------
* **
PREMIUM BASES RATES
- -------------------- ------------------------------------
(A) = AREA (A) - PER 1,000 SQUARE FEET OF AREA
(P) = PAYROLL (P) = PER $1,000 OF PAYROLL
(S) = GROSS SALES (S) = PER $1,000 OF GROSS SALES
P-59172-A (1/86 ED.)
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 179
COMMERCIAL GENERAL LIABILITY
THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY.
ADDITIONAL INSURED -- OWNERS, LESSEES OR
CONTRACTORS (FORM B)
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART.
SCHEDULE
Name of Person or Organization: UNIVERSAL CABLE COMMUNICATIONS, INC.
c/o MULTIVISION CABLE TV
1703 INDUSTRIAL DR.
P.O. BOX 249
EXCELSIOR SPRINGS, MO 64024
(If no entry appears above, information required to complete this endorsement
will be shown in the Declarations as applicable to this endorsement)
WHO IS AN INSURED (Section II) is amended to include as an insured the person
or organization shown in the Schedule, but only with respect to liability
arising out of "your work" for that insured by or for you.
CG 20 10 11 85 Copyright, Insurance Services office, Inc. 1984
<PAGE> 180
COMMERCIAL GENERAL LIABILITY
THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY.
ADDITIONAL INSURED -- MANAGERS OR LESSORS OF PREMISES
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART.
SCHEDULE
1. Designation of Premises (Part Leased to You):
2. Name of Person or Organization (Additional Insured):
BICKLE-AUBEL PARTNERSHIP
3. Additional Premium:
(If no entry appears above, the information required to complete this
endorsement will be shown in the Declarations as applicable to this
endorsement.)
<TABLE>
<S> <C>
WHO IS INSURED (Section II) is amended to include as This insurance does not apply to:
an insured the person or organization shown in the
Schedule but only with respect to liability arising out 1. Any "occurrence" which takes place after you
of the ownership, maintenance or use of that part of cease to be a tenant in that premises.
the premises leased to you and shown in the Schedule
and subject to the following additional exclusions: 2. Structural alterations, new construction or
demolition operations performed by or on
behalf of the person or organization shown
in the Schedule.
</TABLE>
CG 20 11 11 85 Copyright, Insurance Services Office, Inc., 1984 [ ]
<PAGE> 181
COMMERCIAL GENERAL LIABILITY
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ADDITIONAL INSURED -- GRANTOR OF FRANCHISE
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART.
SCHEDULE
Name of Person or Organization: CELLULAR ONE GROUP
5001 LBJ FREEWAY, STE 700
DALLAS, TX 75244
(If no entry appears above, information required to complete this endorsement
will be shown in the Declarations as applicable to this endorsement.)
WHO IS AN INSURED (Section II) is amended to include as an insured the
person(s) or organization(s) shown in the Schedule, but only with respect to
their liability as grantor of a franchise to you.
CG 20 29 11 85 Copyright, Insurance Services Offices, Inc., 1984 [ ]
<PAGE> 182
RENEWAL DECLARATION
<TABLE>
<CAPTION>
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- ------------- ----------------------------- -------------------------------------- ---------
<S> <C> <C> <C>
A4 07779983 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 037906310
</TABLE>
<TABLE>
<CAPTION>
NAMED INSURED AND ADDRESS AGENT
- ------------------------------------------------------------ ---------------------------------------------
<S> <C>
MISCELLCO COMMUNICATIONS , INC. INSURANCE PLANNING INC.
DBA. CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, KS 39226
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INSTALLATION FLOATER
SCHEDULE OF COVERAGES
LIMITS OF INSURANCE
- --------------------------------------------------------------------------------
COVERAGE SHALL APPLY AT THE FOLLOWING LOCATION(S) FOR THE LIMIT(S) OF INSURANCE
SPECIFIED:
LIMITS OF
LOCATION INSURANCE
ANY ONE JOBSITE $335,910.
$
$
$ N/C IN ANY ONE "LOSS" CAUSED BY "EARTH MOVEMENT".
$ N/C IN ANY ONE "LOSS" CAUSED BY "FLOOD".
$ 335,910. IN ANY ONE "LOSS" TO COVERED PROPERTY WHILE IN DUE COURSE
OF TRANSIT ($5,000 LIMIT OF INSURANCE UNLESS SPECIFIED).
$ 335,910. AT ANY ONE STORAGE LOCATION.
DEDUCTIBLES
- --------------------------------------------------------------------------------
$ 1000. FOR ALL COVERAGE CAUSES OF LOSS UNLESS A DIFFERENT DEDUCTIBLE
IS SPECIFIED BELOW.
$ N/C FOR "EARTH MOVEMENT".
N/C 1 OF INSURED VALUE FOR "EARTH MOVEMENT".
$ N/C FOR "FLOOD".
COINSURANCE
- --------------------------------------------------------------------------------
100 % COINSURANCE AMOUNT
P-44804-d (ED. 10/90)
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 183
RENEWAL DECLARATION
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
POLICY COVERAGE IS
NUMBER FROM POLICY PERIOD TO PROVIDED BY AGENCY
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
A4.07779983 08/01/94 08/10/95 TRANSPORTATION INSURANCE CO. 037906310
- ---------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
NAMED AND INSURED ADDRESS AGENT
- ---------------------------------------------------------------------------------------------------
<S> <C>
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC.
USA CELLULAR ON 3006 BROADWAY PO BOX 100
P.O. BOX 24328 MAYS KS 67601
JACKSON, MS 39225
====================================================================================================
</TABLE>
SIGNS SCHEDULE
PREMIUM FOR THIS COVERAGE FORM $ INCL. RATE $ INCL.
LIMITS OF INSURANCE
- --------------------------------------------------------------------------------
A. TYPE OF SIGN LETTERING LIMIT OF
INSURANCE
LOCATION 1
BILLBOARD $7,500
LOCATION 1-2 ILLUMINATED $2,500
LOCATION 2 ILLUMINATED $1,100
B. ALL COVERED PROPERTY AT ALL LOCATIONS $_____
DEDUCTIBLE
- --------------------------------------------------------------------------------
A DEDUCTIBLE AMOUNT OF 5% OF THE LIMIT OF INSURANCE FOR
EACH SIGN X APPLIES.
DOES NOT APPLY
SPECIAL PROVISIONS (IF ANY)
- --------------------------------------------------------------------------------
P-5521t-8 (ED. 7/87)
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 184
RENEWAL DECLARATION
- --------------------------------------------------------------------------------
POLICY
NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
AW 07779583 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 037906310
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNS SCHEDULE
PREMIUM FOR THIS COVERAGE FORM $ INCL RATE $ INCL
LIMITS OF INSURANCE
- --------------------------------------------------------------------------------
A. TYPE OF SIGN LETTERING LIMIT OF
INSURANCE
LOCATION 7 ILLUMINATED $1,000.
LOCATION 13 ILLUMINATED $2,500.
LOCATION 12 ILLUMINATED $1,500.
B. ALL COVERED PROPERTY AT ALL LOCATIONS $
DEDUCTIBLE
- --------------------------------------------------------------------------------
A DEDUCTIBLE AMOUNT OF 5% OF THE LIMIT OF INSURANCE
FOR EACH SIGN X APPLIES.
DOES NOT APPLY.
SPECIAL PROVISIONS (IF ANY)
- --------------------------------------------------------------------------------
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 185
TRANSIT SCHEDULE OF COVERAGES
- --------------------------------------------------------------------------------
Coverage Form (check one).
- --------------------------------------------------------------------------------
/ / Motor Carriers' Cargo Liability Coverage Form
/x/ Owners' Cargo Special Causes of Loss Coverage Form
/ / Transportation Special Causes of Loss Coverage Form
- --------------------------------------------------------------------------------
DESCRIPTION OF COVERED PROPERTY
- --------------------------------------------------------------------------------
COMMUNICATION EQUIPMENT
- --------------------------------------------------------------------------------
LIMITS OF INSURANCE
- --------------------------------------------------------------------------------
Modes of Transportation
$ 250,000. Any One Motor Vehicle
$ Any One Railroad Car
$ Any One Aircraft
Terminal Locations
Location No. Address of Terminal Limit of Insurance
- ------------ $
- ------------ $
- ------------ $
Catastrophe Limit of Insurance
$ 250,000. Any One Catastrophe
- --------------------------------------------------------------------------------
DEDUCTIBLE
- --------------------------------------------------------------------------------
Deductible Amount $ 1,000.
G-16221-A
(ED.05/92)
<PAGE> 186
[CNA LOGO] 1 OF 5
COMMUNICATION TOWERS AND EQUIPMENT
SCHEDULE OF COVERAGES
Coverages apply only to those items where a limit of insurance is shown.
LOCATION NUMBER ADDRESS
001 HAYS - LAT. N38.51-16. LON. W099-22-55, ELLIS CNTY, KS
002 GREAT BEND - LAT. N38-24-25. LON. W98-52-51, BARTON CNTY, KS
003 COLBY - LAT. N39-22-19, LON. W101-02-23, THOMAS CNTY, KS
004 BUNKER HILL - LAT. N23-46-16, LON. W98-44-17, RUSSELL CNTY, KS
<TABLE>
<CAPTION>
Covered Property: Replacement Cost ________ ACV _X_
a. Towers/Satellite Dishes b. Communication Equipment
Loc. No. Limit of Insurance Deductible Loc. No. Limit of Insurance Deductible
<S> <C> <C> <C> <C> <C>
001 $320,650 $1000 001 $250,285 $1000
002 $ 78,650 $1000 002 $412,375 $1000
003 $231,000 $1000 003 $204,100 $1000
004 $ 78,650 $1000 004 $114,645 $1000
</TABLE>
<TABLE>
<CAPTION>
c. Communication Software d. Mobile Communication Equipment
Loc. No. Limit of Insurance Deductible Limit of Insurance Deductible
<S> <C> <C> <C> <C>
001 $ 13,000 $1000 $ 42,500 $ 250
002 $ 13,000 $1000 e. Coinsurance:
003 $ 13,000 $1000 Covered Property 90%
004 $ 13,000 $1000 Loss of Income %
</TABLE>
<TABLE>
<CAPTION>
LOSS OF INCOME:
Loc. No. Limit of Insurance Deductible
<S> <C> <C> <C> <C> <C> <C> <C>
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
</TABLE>
G-18631-A
(ED. 01/93)
<PAGE> 187
[CNA LOGO] 2 OF 5
COMMUNICATION TOWERS AND EQUIPMENT
SCHEDULE OF COVERAGES
Coverages apply only to those items where a limit of insurance is shown.
LOCATION NUMBER ADDRESS
005 EDSON - LAT. N39-23-19, LON. W101-33-34, SHERMAN CNTY, KS
006 PRATT - LAT. N37-38-08. LON. W98-50-24, PRATT CNTY, KS
007 DODGE CITY - LAT. N37-46-47, LON. W100-03-37, FORD CNTY, KS
008 STOCKSON - LAT. N39-26-56, LON. W99-16-18, ROOKS CNTY, KS
<TABLE>
<CAPTION>
Covered Property: Replacement Cost ________ ACV _X_
a. Towers/Satellite Dishes b. Communication Equipment
Loc. No. Limit of Insurance Deductible Loc. No. Limit of Insurance Deductible
<S> <C> <C> <C> <C> <C>
005 $ 78,650 $1000 005 $107,989 $1000
006 $ 78,650 $1000 006 $ 65,265 $1000
007 $320,650 $1000 007 $142,445 $1000
008 $ N/C $ N/C 008 $101,400 $1000
</TABLE>
<TABLE>
<CAPTION>
c. Buildings d. Mobile Communication Equipment
Loc. No. Limit of Insurance Deductible Limit of Insurance Deductible
<S> <C> <C> <C> <C>
$ $
005 $ 13,000 $1000 e. Coinsurance:
006 $ 13,000 $1000 Covered Property 90%
007 $ 13,000 $1000 Loss of Income %
008 $ N/C $ N/C
</TABLE>
<TABLE>
<CAPTION>
LOSS OF INCOME:
Loc. No. Limit of Insurance Deductible
<S> <C> <C> <C> <C> <C> <C> <C>
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
</TABLE>
G-18631-A
(ED. 01/93)
<PAGE> 188
[CNA LOGO] 3 OF 5
COMMUNICATION TOWERS AND EQUIPMENT
SCHEDULE OF COVERAGES
Coverages apply only to those items where a limit of insurance is shown.
LOCATION NUMBER ADDRESS
009 SCOTT CITY - LAT. N38-36-08, LON.W100-54-20, SCOTT CNTY, KS
010 NESS CITY - LAT.N 38-26-44, LON.W 99-52-32, NESS CNTY, KS
011 ULYSSES - LAT.N 37-33-42, LON.W 101-19-10, GRANT CNTY, KS
012 GARDEN CITY - LAT.N 37-59-35, LON.W 100-33-34, FINNEY CNTY, KS
<TABLE>
<CAPTION>
Covered Property: Replacement Cost ________ ACV _X_
a. Towers/Satellite Dishes b. Communication Equipment
Loc. No. Limit of Insurance Deductible Loc. No. Limit of Insurance Deductible
<S> <C> <C> <C> <C> <C>
009 $ 78,650 $1000 009 $ 65,365 $1000
010 $ N/C $ N/C 010 $104,850 $1000
011 $ 78,650 $1000 011 $249,965 $1000
012 $ 78,650 $1000 012 $141,825 $1000
</TABLE>
<TABLE>
<CAPTION>
c. BUILDINGS d. Mobile Communication Equipment
Loc. No. Limit of Insurance Deductible Limit of Insurance Deductible
<S> <C> <C> <C> <C>
009 $ 13,000 $1000 $ $
010 $ N/C $ N/C e. Coinsurance:
011 $ 13,000 $1000 Covered Property 90%
012 $ 13,000 $1000 Loss of Income %
</TABLE>
<TABLE>
<CAPTION>
LOSS OF INCOME:
Loc. No. Limit of Insurance Deductible
<S> <C> <C> <C> <C> <C> <C> <C>
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
</TABLE>
G-18631-A
(ED. 01/93)
<PAGE> 189
[CNA LOGO] 4 OF 5
COMMUNICATION TOWERS AND EQUIPMENT
SCHEDULE OF COVERAGES
Coverages apply only to those items where a limit of insurance is shown.
LOCATION NUMBER ADDRESS
013 LIBERAL - LAT. N37-04-38, LON. W100-50-35, SEWARD CNTY, KS
014 CUYMON - LAT. N36-40-26, LON. W101-28-09, TEXAS CNTY, KS
015 ROLLA - LAT. N37-07-30, LON. W101-34-00, MORTON CNTY, KS
016 WAKEENEY - LAT. N39-00-56, LON. W99-51-30, TREGO CNTY, KS
<TABLE>
<CAPTION>
Covered Property: Replacement Cost ________ ACV _X_
a. Towers/Satellite Dishes b. Communication Equipment
Loc. No. Limit of Insurance Deductible Loc. No. Limit of Insurance Deductible
<S> <C> <C> <C> <C> <C>
013 $ 78,650 $1000 013 $124,048 $1000
014 $ N/C $ N/C 014 $102,390 $1000
015 $ N/C $ N/C 015 $ 88,200 $1000
016 $ 78,650 $1000 016 $ 85,615 $1000
</TABLE>
<TABLE>
<CAPTION>
c. BUILDINGS d. Mobile Communication Equipment
Loc. No. Limit of Insurance Deductible Limit of Insurance Deductible
<S> <C> <C> <C> <C>
013 $ 13,000 $1000 $ $
014 $ N/C $ N/C e. Coinsurance:
015 $ N/C $ N/C Covered Property 90%
016 $ 13,000 $1000 Loss of Income %
</TABLE>
<TABLE>
<CAPTION>
LOSS OF INCOME:
Loc. No. Limit of Insurance Deductible
<S> <C> <C> <C> <C> <C> <C> <C>
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
</TABLE>
G-18631-A
(ED. 01/93)
<PAGE> 190
[CNA LOGO] 5 OF 5
COMMUNICATION TOWERS AND EQUIPMENT
SCHEDULE OF COVERAGES
Coverages apply only to those items where a limit of insurance is shown.
LOCATION NUMBER ADDRESS
017 SYRACUSE - LAT.N38-10-24, LON. W101-45-38, HAMILTON CNTY, KS
018 COPELAND - LAT.N37-30-10, LON. W100-34-22, GRAY CNTY, KS
---
---
<TABLE>
<CAPTION>
Covered Property: Replacement Cost ________ ACV ________
a. Towers/Satellite Dishes b. Communication Equipment
Loc. No. Limit of Insurance Deductible Loc. No. Limit of Insurance Deductible
<S> <C> <C> <C> <C> <C>
017 $62,000 $1000 017 $107,550 $1000
018 $ N/C $1000 018 $102,790 $1000
--- $ $ --- $ $
--- $ $ --- $ $
</TABLE>
<TABLE>
<CAPTION>
c. Buildings d. Mobile Communication Equipment
Loc. No. Limit of Insurance Deductible Limit of Insurance Deductible
<S> <C> <C> <C> <C>
017 $ N/C $ N/C $ $
018 $ N/C $ N/C e. Coinsurance:
--- $ $ Covered Property 90%
--- $ $ Loss of Income %
</TABLE>
<TABLE>
<CAPTION>
LOSS OF INCOME:
Loc. No. Limit of Insurance Deductible
<S> <C> <C> <C> <C> <C> <C> <C>
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
___ $ or $ per day for days $ or hrs.
</TABLE>
G-18631-A
(ED. 01/93)
<PAGE> 191
[CNA LOGO] STANDARD WORKERS COMPENSATION
AND EMPLOYERS LIABILITY POLICY
INFORMATION PAGE -- RENEWAL OF WC 2 07779984
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
WC 2 07779984 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 0379063
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
ITEM MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
1. DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEIN NUMBER: 640761334 WCCI CARRIER CODE NO: 12406
INTERSTATE ID NO: 917541892
OTHER WORK PLACES NOT SHOWN ABOVE: SEE ATTACHED SCHEDULE(S)
YOU ARE A -- CORPORATION/S
2. POLICY PERIOD -- 08/01/94 TO 08/01/95 12:01 AM STANDARD TIME AT THE
INSUREDS MAILING ADDRESS.
3A. PART ONE OF THIS POLICY APPLIES TO THE WORKERS COMPENSATION LAW AND
ANY OCCUPATIONAL DISEASE LAW OF EACH OF THE STATES LISTED HERE:
KS, MS.
3B. PART TWO OF THIS POLICY APPLIES TO EMPLOYERS LIABILITY INSURANCE FOR
WORK IN EACH STATE LISTED IN ITEM 3A: THE LIMITS OF LIABILITY ARE:
BODILY INJURY BY ACCIDENT $1,000,000 EACH ACCIDENT
BODILY INJURY BY DISEASE $1,000,000 POLICY LIMIT
BODILY INJURY BY DISEASE $1,000,000 EACH EMPLOYEE
3C. PART THREE OF THIS POLICY APPLIES TO OTHER STATES, IF ANY, LISTED HERE:
ALL STATES EXCEPT AK, ME, NV, ND, OH, WA, WV AND STATES DESIGNATED IN
ITEM 3A OF THE INFORMATION PAGE.
3D. THIS POLICY INCLUDES THESE ENDORSEMENTS AND SCHEDULES: SEE ATTACHED
SCHEDULE.
- --------------------------------------------------------------------------------
4. THE PREMIUM FOR THIS POLICY WILL BE DETERMINED BY OUR MANUAL OF RULES,
CLASSIFICATIONS, RATES, AND RATING PLANS. ALL INFORMATION REQUIRED
BELOW IS SUBJECT TO VERIFICATION AND CHANGE BY AUDIT.
ADJUSTMENT OF PREMIUM SHALL BE MADE: AT POLICY EXPIRATION
CLASSIFICATION OF OPERATIONS
EST ANNUAL
PREMIUM
SEE ATTACHED $4,3
PREMIUM DISCOUNT
EXPENSE CONSTANT
MINIMUM PREMIUM $702 TOTAL ESTIMATED ANNUAL PREMIUM $4,5
DEPOSIT PREMIUM $4,442
DATE OF ISSUE: 08/25/94
POLICY ISSUING OFFICE: KANSAS CITY
COUNTERSIGNED BY
---------------------------- ------------------------------------
DATE AUTHORIZED AGENT
WC000001 P-33398-E (ED. 6/87)
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 192
[CNA LOGO] STANDARD WORKERS COMPENSATION
AND EMPLOYERS LIABILITY POLICY
AMENDED INFORMATION PAGE EFFECTIVE 08/01/94
DUE TO RATE CHANGE FOR THE STATE OF
KS
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
WC 2 07779984 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 0379063
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
** SCHEDULE OF OPERATIONS ** SCHEDULE
STATE: KANSAS PAGE
4.
LOC CLASS CLASSIFICATION OF OPERATIONS EST TOTAL RATE PER EST ANNUAL
NO. CODE ANN REMUN $100 REMUN PREM
001 8742 SALESPERSONS, COLLECTORS OR 160,000 .69 1,
MESSENGERS - OUTSIDE
7605 INTERCOMMUNICATION SYSTEMS - 40,000 2.83 1,
INSTALLATION OR REPAIR & O
8810 CLERICAL OFFICE EMPLOYEES NOC 100,000 .40 4
SUBTOTAL FOR LOCATION 001 $2,6
9037 RATE DEVIATION PREMIUM ADJ - CREDIT .9000 2
+ 9832 EMPLOYERS LIABILITY INCREASED LIMITS .0330
9848 INC. LIM. BALANCE TO MINIMUM PREMIUM
TOTAL PREMIUM SUBJECT TO EXPERIENCE MODIFICATION 2,4
9898 TENTATIVE EXPERIENCE MOD USING FACTOR 1.1600 3
INTERSTATE ID. NO: 917541892
TOTAL ESTIMATED STANDARD PREMIUM $2,8
0900 EXPENSE CONSTANT NCCI REVISED PROGRAM 1
TOTAL ESTIMATED PREMIUM $3,0
DATE OF ISSUE: 09/17/94
POLICY ISSUING OFFICE: KANSAS CITY
WC000001 P-33398-E (ED. 6/87)
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 193
[CNA LOGO] STANDARD WORKERS COMPENSATION
AND EMPLOYERS LIABILITY POLICY
AMENDED INFORMATION PAGE EFFECTIVE 08/01/94
DUE TO RATE CHANGE FOR THE STATE OF
KS
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
WC 2 0777984 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 0379063
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
** SCHEDULE OF OPERATIONS ** SCHEDULE
STATE: MISSISSIPPI PAGE
4.
LOC CLASS CLASSIFICATION OF OPERATIONS EST TOTAL RATE PER EST ANA
NO. CODE ANN REMUN $100 REMUN PREM
002 8810 CLERICAL OFFICE EMPLOYEES NOC 200,000 .46
SUBTOTAL FOR LOCATION 002
9812 EMPLOYERS LIABILITY INCREASED LIMITS .0330
TOTAL PREMIUM SUBJECT TO EXPERIENCE
MODIFICATION
9898 TENTATIVE EXPERIENCE MOD USING FACTOR 1.1600
INTERSTATE ID. NO: 917541892
TOTAL ESTIMATED STANDARD PREMIUM $1,
TOTAL ESTIMATED PREMIUM $1,
***** POLICY TOTALS *****
ESTIMATED STANDARD PREMIUM $3,
PREMIUM DISCOUNT
EXPENSE CONSTANT
ESTIMATED PREMIUM $4,
DATE OF ISSUE: 09/17/94
POLICY ISSUING OFFICE: KANSAS CITY
WC000001 P-33398-E (ED. 6/87)
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 194
[CNA LOGO] STANDARD WORKERS COMPENSATION
AND EMPLOYERS LIABILITY POLICY
AMENDED INFORMATION PAGE EFFECTIVE 08/01/94
DUE TO RATE CHANGE FOR THE STATE OF
KS
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
WC 2 07779984 08/01/94 08/01/95 TRANSPORTATION INSURANCE CO. 03790631
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
** ADDITIONAL LOCATIONS ** SCHEDULE
PAGE
LOCATION ADDRESS
NUMBER
001 2000 VINE
HAYS, KS
67601
002 OPERATIONS IN THE STATE OF
MISSISSIPPI
99999
DATE OF ISSUE: 09/17/94
POLICY ISSUING OFFICE: KANSAS CITY
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
Chairman of the Board Secretary
WC000001 P-33398-E (ED. 6/87)
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 195
[CNA LOGO] DECLARATIONS
RENEWAL DECLARATION
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A1 12723243 08/01/94 08/01/95 CONTINENTAL CASUALTY CO. 037906310
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMERCIAL UMBRELLA PLUS COVERAGE PART
DECLARATIONS
-------------------------------------------------------------------------
THE BUSINESS OF THE NAMED INSURED IS: COMM EQUIP INSTALLATION
-------------------------------------------------------------------------
NAMED INSURED IS: ( ) INDIVIDUAL (X) CORPORATION ( ) PARTNERSHIP
ITEM ( ) JOINT VENTURE ( ) OTHER:
- --------------------------------------------------------------------------------
2. POLICY PERIOD. THIS POLICY BECOMES EFFECTIVE AND EXPIRES AT 12:01 A.M.
STANDARD TIME AT THE ADDRESS SHOWN ABOVE.
- --------------------------------------------------------------------------------
3. LIMIT OF LIABILITY: $5,000,000 EACH INCIDENT $5,000,000 AGGREGATE
- --------------------------------------------------------------------------------
4. RETAINED LIMIT $10,000
- --------------------------------------------------------------------------------
5. SCHEDULE OF UNDERLYING INSURANCE
-------------------------------------------------------------------------
UNDERLYING INSURER UNDERLYING INSURANCE LIMIT OF LIABILITY
POLICY NUMBER AND COVERAGES
POLICY PERIOD
-------------------------------------------------------------------------
GENERAL LIABILITY
-----------------------
TRANSPORTATION INS. GENERAL AGGREGATE LIMIT $2,000,000
SE 40 777 99 83
PER PROJECT AGGREGATE LIMIT
C8-C1-94/95 PER LOCATION AGGREGATE LIMIT
- --------------------------------------------------------------------------------
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 196
[CNA LOGO] DECLARATIONS
RENEWAL DECLARATION
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A1 12723243 08/01/94 08/01/95 CONTINENTAL CASUALTY CO. 037906310
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ITEM: SCHEDULE OF UNDERLYING INSURANCE (CONTINUED)
- --------------------------------------------------------------------------------
5. UNDERLYING INSURER UNDERLYING INSURANCE LIMIT OF LIABILITY
POLICY NUMBER AND COVERAGES
POLICY PERIOD
-------------------------------------------------------------------------
TRANSPORTATION INS. PRODUCTS/COMPLETED $1,000,000
OPERATIONS AGGREGATE LIMIT
-------------------------------------------------
SE 40 777 99 83 EACH OCCURRENCE LIMIT $1,000,000
-------------------------------------------------
PERSONAL & ADVERTISING $1,000,000
C8-C1-94/95 INJURY LIMIT
-------------------------------------------------------------------------
AUTOMOBILE LIABILITY EACH EACH
PERSON ACCIDENT
-------------------------------------------------
TRANSPORTATION INS. COMBINED BODILY INJURY AND XXXXXXX $1,000,000
PROPERTY DAMAGE LIABILITY XXXXXXX
-------------------------------------------------
SUA 60 777 99 82 BODILY INJURY LIABILITY $ $
-------------------------------------------------
08-01-94/95 PROPERTY DAMAGE LIABILITY XXXXXXX $
-------------------------------------------------------------------------
EMPLOYERS' LIABILITY EACH POLICY
ACCIDENT LIMIT
-------------------------------------------------
TRANSPORTATION INS. BODILY INJURY BY ACCIDENT $1,000,000 XXXXXXX
-------------------------------------------------
AC 20 777 99 84 BODILY INJURY BY DISEASE XXXXXXX $1,000,000
-------------------------------------------------
EACH XXXXXXX
EMPLOYEE XXXXXXX
----------- XXXXXXX
08-01-94/95 BODILY INJURY BY DISEASE $1,000,000 XXXXXXX
- --------------------------------------------------------------------------------
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 197
PAGE 3
[CNA LOGO] DECLARATIONS
RENEWAL DECLARATION
- --------------------------------------------------------------------------------
POLICY NUMBER FROM POLICY PERIOD TO COVERAGE IS PROVIDED BY AGENCY
- --------------------------------------------------------------------------------
A1 12723243 08/01/94 08/01/95 CONTINENTAL CASUALTY CO. 037906310
- --------------------------------------------------------------------------------
NAMED INSURED AND ADDRESS AGENT
- --------------------------------------------------------------------------------
MISCELLCO COMMUNICATIONS, INC. INSURANCE PLANNING INC
DBA CELLULAR ONE 3006 BROADWAY PO BOX 100
P.O. BOX 24328 HAYS KS 67601
JACKSON, MS 39225
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ITEM PREMIUM
- --------------------------------------------------------------------------------
6. PREMIUM ESTIMATED RATE ESTIMATED
BASIS EXPOSURE PREMIUM
-------------------------------------------------------------------------
FLAT CHARGE -- -- $1400.
-------------------------------------------------------------------------
ADVANCE MINIMUM AUDIT PERIOD IS ANNUAL
PERIOD PREMIUM UNLESS NOTED
-------------------------------------------------------------------------
$1400. ON EFFECTIVE DATE $1400. ANNUAL N/A
$ $1400. POLICY
TERM
$
- --------------------------------------------------------------------------------
2. FORMS AND ENDORSEMENTS MADE PART OF THIS POLICY AT TIME OF ISSUE INCLUDE
(INSERT NUMBER AND SUFFIX)
SEE ENDORSEMENT INDEX
- --------------------------------------------------------------------------------
COUNTERSIGNED BY:
------------------------ -------------------------------------
DATE AUTHORIZED AGENT
P-43770-B 110/87 ED.1
/s/ D. H. Chookaojian /s/ D. M. Lowery
Chairman of the Board Secretary
<PAGE> 198
SCHEDULE 3.21
Seller's Taxes Payable
*Ad Valorem Taxes to be due for calendar year 1995
Accrued/Sales use tax on equipment
<PAGE> 199
SCHEDULE 4.5
Contracts to be Assigned to Mercury
<PAGE> 200
SCHEDULE 4.5
CELL SITE -- MUST HAVE CONSENT
Hayes
Russell
Great Bend
Colby
Dodge City
Pratt
Edson
Wakeeney
Scott City
Ulysses
Garden City
Liberal
Stockton
OFFICE LEASE -- MUST HAVE CONSENT
Hayes (2 offices)
Great Bend
Dodge City
Garden City
Liberal
OTHER AGREEMENT TO BE ASSIGNED TO MERCURY, INC.
I. Tower Leases
Location Lessor
Syracuse CTAF-MS Properties
Ness City G & K Communications
Guymon Jack Eoff
Copeland SWK
Hugoton Recomco
*St. Francis Wes-Kan Tower
*Atwood Wes-Kan Tower
*Oberlin Wes-Kan Tower
*Norton Wes-Kan Tower
*Grinnel Wes-Kan Tower
* Mercury's desire to assume future leases will depend upon whether the
terms and conditions of the future leases will be acceptable to
Mercury.
<PAGE> 201
II. Equipment Rental (Kansas)
Location Description Lessor
Dodge City Copier Xerox Corp
Liberal Copier Xerox Corp
Garden City Copier Xerox Corp
Hays Copier Xerox Corp
Great Bend DK16 Phone Sys Toshiba Easy Lease
III. Agent Agreements
Bar-K Electronics
Caraway Enterprises DBA Custom Sound & Video
GK Electronics
Gavon's Electronics
Gene's Electronics
Great Western Tire
Hays Communications
Howard's Electronics & TV
Liberal Communications/Radio Shack
Strecker TV
Team Electronics
Two-Way Radio Communications
Modern Radio & TV
IV. Auto Dealer Agreements
Anderson Motor
Ralph Baird Ford
Brent Magourik Chev-Olds-Geo
Burtis Motor Co., Inc.
Dove Buick, Olds, Cadillac, Inc.
Gagnon Motors/Grainfield
Gasden City Auto Plaza
Goff Motor Company
Great Plains Chrysler
D.L. Hanken Buick, Olds, Pontiac, Cadillac, GMC
Hays for/Toyota-Paul Larsen
Helmers Motors, Inc.
Bill Hopper Ford
James Lincoln, Mercury/Hays
James Motor Company
M & R Ford/Kinsley
<PAGE> 202
Paul MacDonald Chevrolet, Inc.
Lloyd Nusser Chevrolet/Jetmore
Skaggs Motor, Inc.
R.A.G. Motor Company
Spangler Motor Co./Scott City
Western Motor Co., Inc.
Western Motor Co./Leoti
Whalen Ford
V. Radio Trade Agreements
Station Location
KULY/KFXX Ulysses
KIUL/KWKR Garden City
KKJQ Garden City
KOLS/KGNO Dodge City
KSLS Liberal
KJLS HAYS
KANS/KQDF Larned
KHOK Great Bend
LS Network
VI. Confidentiality Agreements -- To the Extent the Contract Terms and
Kansas Law will allow Assignment
Glenna Alm
Angela Alton
James P. Angle
Chris Appelhans
Susan Bennett
Anita Blankeney
Phyllis Bledsoe
Frank Buchanan
Jeannine Byers
Steve Cecil
Becky Colclazier
Ann Cook
J. Stacy Davidson
Lisa Dirks
Tracie Ferguson
Clifford Gallington
Judy Garner
Brandi Hake
Christine A. Hamann
<PAGE> 203
Dale Hardy
Sherry Helmke
Shelly Hinton
Cynthia Hopkins
Carol Killgore
Pat Leihy
William C. Mathews
Tonya Myers
Glen A. O'Dell
Phan thi Binh
Ronald Scott Rohleder
Jan Rushing
Becky Schaffer
Davon Schuler
Teresa Shelley
Carl E. Smith
Brad Spinks
Dorothy Stieben
Virginia Sullivan
Mikaela Switzer
Vikie Williamson
VII. Covenant Not to Compete Agreements - To the Extent the Contract Terms
and Kansas law will allow Assignment
Glenna Alm
Angela Alton
James P. Angle
Chris Appelhans
Susant Bennett
Anita Blankeney
Phyllis Bledsoe
Frank Buchanan
Jeannine Byers
Steve Cecil
Becky Colclazier
Ann Cook
J. Stacy Davidson
Lisa Dirks
Tracie Ferguson
Clifford Gallington
Judy Garner
Brandi Hake
Christine A. Hamann
Sherry Helmke
<PAGE> 204
Shelly Hinton
Cynthia Hopkins
Pat Leihy
William C. Mathews
Glen A. O'Dell
Phan thi Binh
Ronald Scott Rohleder
Jan Rushing
Becky Schaffer
Davon Schuler
Teresa Shelley
Carl E. Smith
Brad Spinks
Dorothy Stieben
Virginia Sullivan
Mikaela Switzer
Vickie Williamson
VIII. Other Agreements
EDS (Only the "Roam America" part of the Agreement. Mercury will not
assume any other Sections of the Agreement.)
Boston Communications Credit Card Roaming
Cellular One Group (licensing agreements)
KINNET T-1 Agreements
Southwestern Bell T-1 Agreements
NACN
Advantis
Highway Master
Cellular Mobile Data Communications Agent Agreement
AMSC (SkyCell)
Kin Network, Inc.
<PAGE> 205
SCHEDULE 4.8
Buyer's Articles of Incorporation
<PAGE> 206
UNITED STATES OF AMERICA
STATE OF LOUISIANA
DUPLICATE
WADE O. MARTIN, JR.
I, the undersigned Secretary of State, of the State of Louisiana DO HEREBY
CERTIFY that a certified copy of the Articles of Incorporation of
MERCURY, INC.,
Domiciled at Sulphur, Louisiana, Parish of Calcasieu,
A corporation organized under the provisions of R. S. 1950, Title 12, Chapter
1, as amended,
By Act before a Notary Public in and for the Parish of Calcasieu, State of
Louisiana, on March 3, 1967, and recorded in the corporation records of the
Recorder of Mortgages for the Parish of Calcasieu, File No. 1053072, on March
3, 1967, at 3:42 P.M., the date and hour when corporate existence began,
Was filed and recorded in this Office on March 8, 1967, in the Record of
Charters Book 277,
And the incorporation tax and all other fees having been paid as required by
law, the corporation is authorized to transact business in this State, subject
to the restrictions imposed by law, including the provisions of R. S. 1950,
Title 12, Chapter 1, as amended.
In testimony whereof, I have hereunto set my
[SEAL] hand and caused the Seal of my Office to be
affixed at the City of Baton Rouge on, March 8,
1967.
Wade O. Martin, Jr.
Secretary of State
<PAGE> 207
UNITED STATES OF AMERICA
STATE OF LOUISIANA
WADE O. MARTIN, JR.
I, the undersigned, Secretary of State, of the State of Louisiana
DO HEREBY CERTIFY that a copy of an Amendment to the Articles of Incorporation
of
MERCURY, INC.,
A Louisiana corporation domiciled at Sulphur, amending
Article II,
Said Amendment executed on February 4, 1974, and acknowledged on February 4,
1974,
Was recorded in this Office on February 21, 1974, the date amendment became
effective, and filed in Record of Charters Book 305.
In testimony whereof I have hereunto set
my hand and caused the Seal of my Office
to be affixed at the City of Baton Rouge
on February 21, 1974.
[SEAL]
Wade O. Martin, Jr.
Secretary of State
<PAGE> 208
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
MERCURY, INC.
On January 23, 1973, the shareholders of Mercury, Inc., a Louisiana
Corporation, amended ARTICLE II of its Articles of Incorporation by adding
Paragraphs (e) and (f) to Article II, to read as follows:
(e) To engage in farming, ranching and other related business in
connection therewith.
(f) To engage in any lawful activity for which corporations may be
formed under the Business Corporation Law of Louisiana.
Common Shares is the only series of stock outstanding and there are 100
shares outstanding.
At the annual meeting of shareholders held, after due notice of said
meeting was given to each shareholder and further notice given of the proposed
amendment to be voted on, 96 of the 100 shares were represented at the meeting,
and 96 shares voted for the above amendment. There were no votes against the
amendment.
MERCURY, INC.
By: DWIGHT C. SPATES
----------------------------------
Dwight C. Spates, President
By: H. F. CHAMBLEE
----------------------------------
H. F. Chamblee, Secretary
STATE OF LOUISIANA
PARISH OF CALCASIEU
On February 4, 1974, before me, personally appeared DWIGHT C. SPATES,
to me personally known, who, being by me duly sworn, did say that he is the
president of MERCURY, INC., and that the above instrument was signed by him and
H. F. Chamblee, Secretary, in behalf of said corporation by authority of its
<PAGE> 209
*****************************
*
ARTICLES OF INCORPORATION * UNITED STATES OF AMERICA
*
OF * STATE OF LOUISIANA
*
MERCURY, INC. * PARISH OF CALCASIEU
*
*****************************
BE IT KNOWN: That on this 3rd day or March, 1967, before me, Arthur J.
Planchard, a Notary Public, duly commissioned and qualified in and for the
Parish of Calcasieu, State of Louisiana, and in the presence of the witnesses
hereinafter named and undersigned, personally appeared WILLIAM L. HENNING,
DWIGHT C. SPATES, and JOHN T. HENNING, residents of Calcasieu Parish,
Louisiana, all of the full age of majority, who declared that, availing
themselves of the laws of the State of Louisiana governing the creation and
formations of corporations, they have contracted and agreed, and by these
presents do contract and agree and bind themselves, as well as other persons as
may hereafter become associated with them, to form and constitute a corporation
for the objects and purposes hereinafter set forth under the following articles
and stipulations, to-wit:
ARTICLE I - NAME
The name of this corporation is MERCURY, INC.
ARTICLE II - PURPOSES
To acquire by purchase, lease or otherwise, construct, maintain, lease
and operate telephone exchange systems, public and private telephone and
telegraph lines, to receive and transmit intelligence by electricity for all
purposes, including methods now used, or may be used, and generally to carry on
a communication business within and without the state.
(a) To construct, own, operate and maintain lines, cables, wires,
towers, radio equipment, and all other [ILLEGIBLE COPY]
<PAGE> 210
(b) To buy, sell, lease, acquire or own and to alienate real estate
and movable property.
(c) To borrow money, issue notes and other evidences of indebtedness
and to mortgage any property, both real and personal, which may be owned by
this corporation.
(d) And generally to do any and all things necessary and proper that
may be required in order to engage in the business of transmitting video and
audio television signals and programs and the transmitting and receiving of
intelligence.
ARTICLE III - TERM OF EXISTENCE
The term for which this corporation is to exist is ninety-nine (99)
years from the date hereof.
ARTICLE IV - REGISTERED OFFICE
The location and post office address of the registered office of this
corporation shall be 101 East Thomas Street, Sulphur, Louisiana.
ARTICLE V - REGISTERED AGENTS
The full names and addresses of the registered agents are as follows:
Arthur J. Planchard William L. Henning
101 East Thomas Street 101 East Thomas Street
Sulphur, Louisiana Sulphur, Louisiana
ARTICLE VI - AUTHORIZED SHARES
The total authorized number of shares is Two Thousand (2,000) shares of
a par value of FIFTY AND NO/100 ($50.00) DOLLARS each.
ARTICLE VII - PAID-IN CAPITAL
The amount of paid-in capital with which the corporation shall begin
business is ONE THOUSAND AND NO/100 ($1,000.00) DOLLARS, which has been paid in
cash.
ARTICLE VIII - DIRECTORS
(a) Unless and until otherwise provided in the by-laws,
<PAGE> 211
managed by a board of not less than three (3) directors or more than five (5)
directors.
(b) The names of the first directors and their post office address are
as follows:
William L. Henning -- 101 East Thomas Street
Sulphur, Louisiana
Dwight C. Spates -- 322 Tamarack Street
Sulphur, Louisiana
John T. Henning -- 114 East Elizabeth Street
Sulphur, Louisiana
(c) The Board of Directors shall have authority to make and alter
by-laws, including the right to make or alter by-laws, fixing their
qualifications, classification or terms of office, or fixing or increasing
their compensation, subject to the power of the shareholders to change or
repeal the by-laws so made.
The directors shall be elected annually and directors above named shall
hold office until the next annual meeting or until their successors have been
duly elected and qualified.
Any director absent from a meeting may be represented by any other
director or shareholder, who may cast the vote of the absent director according
to the written instructions, general or special, of said absent director, filed
with the secretary.
(d) The first officers of the corporation are named as follows:
William L. Henning, President
Dwight C. Spates, Vice President
John T. Henning, Secretary-Treasurer
ARTICLE IX -- INCORPORATIONS
The names and post office addresses of the incorporators and a
statement of the number of shares subscribed by each are as follows:
(1) William L. Henning,
101 East Thomas Street,
Sulphur, Louisiana;
Fourteen (14) Shares
<PAGE> 212
ARTICLE X - STOCKHOLDERS LIABILITY
No stockholder shall ever be liable for the contracts or faults of the
corporation in any further sum than the unpaid balance due on the shares of
stock subscribed by him; nor shall any informality in organization have the
effect of rendering this charter null or of exposing a stockholder to any
liability beyond the amount due on his subscription for stock.
ARTICLE XI - ANNUAL MEETING
That annual meeting of the shareholders of this corporation for the
election of directors and for such other matters as may properly come before
the meeting shall be held on the fourth Monday of January of each year,
beginning the 22nd day of January, 1968.
ARTICLE XII - RIGHT TO PURCHASE
AND REDEEM SHARES
The corporation may purchase and/or redeem its own shares in the manner
and under the conditions provided in Sections 23 and 45 of the Business
Corporation Law (R.S. 12:23 and 12:45), such shares so purchased shall be
considered treasury shares and may be re-issued and disposed of as authorized
by law, or may be cancelled and the capital stock reduced, as the board of
directors may from time to time determine.
ARTICLE XIII - COMPROMISE AGREEMENT
This corporation shall have the benefit of the provisions of Section
63 of the Business Corporation Law (R.S. 12:63).
ARTICLE XIV - WASTING ASSETS
If at any time this corporation should own wasting assets intended for
sale in the ordinary cause of business or shall own property having limited
life, it may pay dividends from the net profit arising from such assets without
deductions from depreciation and depletion of the assets thereby sustained.
<PAGE> 213
THUS DONE AND SIGNED, at my office in the State, Parish, and City
aforesaid on the day, month, and year hereinabove set forth, in the presence of
the undersigned competent witnesses and me, Notary Public, after due reading of
the whole.
WITNESSES:
BETSY ANN JACOBSEN WILLIAM L. HENNING
- ----------------------------------- --------------------------------------
William L. Henning
SANDRA BRITWELL DWIGHT C. SPATES
- ----------------------------------- --------------------------------------
Dwight C. Spates
JOHN T. HENNING
--------------------------------------
John T. Henning
ARTHUR BLANCHARD
----------------------------------
Notary Public
<PAGE> 214
SCHEDULE 5.4(d)
Tax Escrow Agreement
<PAGE> 215
TAX ESCROW AGREEMENT
This Escrow Agreement (the "Tax Escrow Agreement") is entered into as
of this ___day of _______, 1995, by and among MERCURY CELLULAR OF KANSAS, INC.,
a Louisiana corporation ("Buyer"), MISCELLCO COMMUNICATIONS, INC., a
Mississippi corporation ("Seller"), and THE CALCASIEU MARINE NATIONAL BANK OF
LAKE CHARLES of Lake Charles, Louisiana (the "Escrow Agent").
WHEREAS, Seller and Buyer have entered into that certain Purchase
Agreement dated as of April 19, 1995 (the "Agreement"), wherein Seller has
agreed to sell to Buyer the Assets (as defined therein), a copy of which
Agreement has been furnished to the Escrow Agent, and
WHEREAS, Section 5.4 provides for the establishment of this Tax Escrow
Agreement in order to assure that sufficient funds are available to make
payment on all taxes that are Seller's responsibility pursuant to this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereto agree as follows:
1. Appointment of Escrow Agent. Buyer and Seller designate and
appoint the Escrow Agent to act as escrow agent hereunder and the Escrow Agent
accepts such appointment on the terms and conditions hereinafter set forth.
2. Deposit of Funds with Escrow Agent. Simultaneously with the
execution of this Escrow Agreement by Buyer, Seller and the Escrow Agent, Buyer
has deposited with the Escrow Agent as security for the performance of its
obligations under Section 1.2(a)(3) of the Agreement, the sum of Sixty Thousand
Dollars ($60,000.00). Such amount, together with the earnings thereon from time
to time held by the Escrow Agent are herein called the Escrow Funds. The Escrow
Agent hereby agrees to invest the Escrow Funds in the investments listed in
Attachment One.
3. Delivery of the Escrow Funds.
(a) Distributions shall be made (a) as necessary and
appropriate to assure timely payment of all taxes that are Seller's
responsibility pursuant to this Agreement.
(b) The Escrow Agent shall have no responsibility for
determining which of Buyer or Seller is entitled to the Escrow Funds but shall
deliver the Escrow Funds in accordance with joint written instructions of
Seller and Buyer or a final court order.
(c) Notwithstanding any other provision of this Escrow
Agreement, in the event the Escrow Agent has not distributed the Escrow Funds
by September 15, 1995 or at any time thereafter, the Escrow Agent shall be
entitled, at its election and after ten (10)
<PAGE> 216
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days' written notice to Seller and Buyer, to tender the Escrow Funds into the
registry or custody of any court of competent jurisdiction the Escrow Agent may
deem appropriate, and thereupon the Escrow Agent shall be discharged from all
further duties and liabilities under this Escrow Agreement with respect to the
Escrow Funds, unless, prior to the expiration of such ten (10) day period,
Seller and Buyer by written direction instruct the Escrow Agent to transfer the
Escrow Funds to a successor to the Escrow Agent, in which case the Escrow Agent
shall transfer the Escrow Funds to such successor. If the Escrow Agent should
receive or become aware of any conflicting demands or claims with respect to
the Escrow Funds or the rights of any of the parties hereto, the Escrow Agent
shall have the right in its sole discretion, without liability for interest or
damages, to discontinue any or all further acts on its part until such conflict
is resolved to its satisfaction and/or to commence or defend any action or
proceeding for the determination of such conflict.
4. Responsibility of Escrow Accent. The Escrow Agent shall be
obligated only for the performance of such duties as are specifically set
forth herein and may rely on and shall be protected in acting or refraining
from acting on any instrument believed by it to be genuine and to have been
signed or presented by Buyer and Seller. The Escrow Agent shall not be liable
for any action taken or omitted by it in good faith and believed by it to be
authorized herein. The Escrow Agent shall not be subject to, nor be under any
obligation to ascertain or construe the terms and conditions of any other
instrument, whether or not now or hereafter deposited with or delivered to the
Escrow Agent or referred to in the escrow instructions, nor shall the Escrow
Agent be obliged to inquire as to the form, execution, sufficiency or validity
of any such instrument nor to inquire as to the identity, authority, or rights
of the person or persons executing or delivering the same.
The Escrow Agent shall not be liable for any act performed by
it or any omission by it or pursuant to the terms of this Agreement unless such
act is done in bad faith, or the Escrow Agent is grossly negligent in the
performance thereof. Any act done or omitted by the Escrow Agent pursuant to
the advice of its attorneys shall be deemed conclusively to have been performed
or omitted in good faith by the Escrow Agent.
5. Escrow Agent Expenses. Any fees and out of pocket costs and
expenses, including attorneys' fees, incurred by the Escrow Agent in connection
with the provisions of this Agreement shall be borne one-half by Buyer and
one-half by Seller.
6. Notices. All notices, certificates, requests, demands, and
other communications hereunder shall be in writing and shall be deemed to have
been duly given and delivered if mailed, by
<PAGE> 217
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certified mail, first class postage prepaid, or delivered personally, or sent
by telecopier:
If to Seller:
Miscellco Communications, Inc.
Suite 125
Eastover Bank Building
125 North Congress
Jackson, Mississippi 39201
Attention: J. Stacy Davidson
Telephone: (601) 948-1212
Facsimile: (601) 948-1211
with a copy to:
Lukas, McGowan, Nace & Gutierrez, Chartered
1111 Nineteenth Street, N.W., Suite 1200
Washington, D.C. 20036
Attention: Thomas Gutierrez, Esquire
Telephone: (202) 857-3500
Facsimile: (202) 842-4485
If to Buyer:
Mercury Cellular of Kansas, Inc.
CM Tower, Suite 1495
One Lakeshore Drive
Lake Charles, LA 70629
Attention: Robert Piper
Telephone: (318) 436-9000
Facsimile: (318) 439-0769
with a copy to:
Thomas G. Henning, Esquire
101 East Thomas Street
Sulphur, LA 70663
Telephone: (318) 436-9000
Facsimile: (318) 433-0587
If to the Escrow Agent:
The Calcasieu Marine National Bank of Lake Charles
CM Tower
One Lakeshore Drive
Lake Charles, LA 70601
Attention: Trust Department
or to such other address or addresses as may hereafter be specified by notice
given by any of the above to the others.
<PAGE> 218
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Notices given by overnight delivery shall be effective when
received. Notices delivered in person shall be effective upon delivery. Notices
given by telecopier shall be effective when transmitted provided telecopier
notice is confirmed by telephone and is transmitted on a business day during
regular business hours. All notices sent via telecopier should be followed up
by the delivery of originally executed copies of such notices to the pertinent
party within five (5) business days.
7. Indemnification. Buyer and Seller shall indemnify, defend and
hold the Escrow Agent harmless from and against any claim, demand, damage,
loss, expense, obligation or liability which arises from or relates to the
Escrow Agent's execution or performance of this Escrow Agreement and to pay to
the Escrow Agent on demand the amount of all such costs, damages, judgments,
attorney's fees, expenses, obligations, and liabilities; provided, however,
that such indemnification shall not cover any act or omission of the Escrow
Agent which constitutes gross negligence or willful misconduct.
8. Counterparts. This Escrow Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed
an original, but all of which shall constitute one and the same instrument.
9. Governing Law. The validity and effectiveness of this Escrow
Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of Louisiana without giving effect to the provisions,
policies or principles thereof relating to choice or conflict of laws.
10. Amendment. This Escrow Agreement may only be amended or
modified by an instrument executed by the parties hereto.
11. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto or to their respective
successors and assigns. Nothing contained herein is intended to confer upon any
person other than the parties hereto and their respective successors and
assigns as aforesaid, any rights or remedies under or by reason of this Escrow
Agreement.
12. Interpretation. Captions herein are inserted for convenience
of reference only and are not intended to be part of or to affect the meanings
or interpretation of this Escrow Agreement. All capitalized terms used herein
shall have the meaning ascribed to them in the Purchase Agreement, unless
otherwise defined herein.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be duly executed as of the day and year first above written.
<PAGE> 219
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MERCURY CELLULAR OF KANSAS, INC. MISCELLCO COMMUNICATIONS, INC.
By: By:
-------------------------- ----------------------------
THE CALCASIEU MARINE NATIONAL BANK OF LAKE CHARLES
By:
---------------------------
ASSISTANT VICE PRESIDENT
& TRUST OFFICER
<PAGE> 220
ATTACHMENT 1
TO
ESCROW AGREEMENT
Escrow Funds are to be invested in U.S. Treasury Bills not exceeding a
maturity of 90 days.
Funds not so invested in U.S. Treasury Bills should be invested in a
money market mutual fund consisting primarily of U.S. Treasury securities.
<PAGE> 221
SCHEDULE 5.10
List of Persons to Execute Non-Compete and Confidentiality
Agreements
And
Form of Non-Compete and Confidentiality
Agreement
<PAGE> 222
NON-COMPETE LIST
BOARD OF DIRECTORS
J. Stacy Davidson - Chairman
William C. Mathews - Director
William Charles Artmann - Director
OFFICERS
J. Stacy Davidson - President
William C. Mathews - Secretary/Treasurer
OTHER KEY EMPLOYEES
James P. Angle - Chief Operating Officer
L. Stacy Davidson, Jr. - Shareholder
Friley S. Davidson - Shareholder
<PAGE> 223
NONCOMPETE AND CONFIDENTIALITY AGREEMENT
THIS AGREEMENT made and entered into this 30th day of April, 1995, by
and between Mercury Cellular of Kansas, Inc., a Louisiana corporation (which,
together with its parent corporation and its affiliates and their respective
successors and assigns, is hereinafter referred to as "Mercury"), and Miscellco
Communications, Inc., a Mississippi corporation and its undersigned officers,
directors, and key shareholders (collectively "Miscellco").
RECITALS:
Pursuant to that certain Asset Purchase Agreement dated April 19, 1995
(the "Asset Purchase Agreement"), relating to the acquisition by Mercury of
certain assets (the "Assets") of Miscellco, a condition to Mercury's
obligations to close said acquisition is that Mercury has received this
Agreement.
NOW, THEREFORE, as an inducement for Mercury to acquire the Assets, as
provided in the Asset Purchase Agreement, and for other valuable consideration,
the receipt of which is hereby acknowledged, the parties do hereby agree as
follows:
1. Defined Terms. As used in this Agreement, the following terms
shall, unless expressly provided otherwise and whether or not capitalized, have
the meanings specified in this Section 1. Said terms also shall have the said
meanings when used in any Exhibit, Schedule, Attachment or Addendum hereto or
in any document made or otherwise entered into pursuant to this Agreement,
unless otherwise expressly provided. Such terms shall be deemed to refer to the
singular, plural, masculine, feminine or neuter, as the context requires.
1.1 "Agreement" means this Agreement, as originally
executed on the date hereof and as the same may be amended, modified and
supplemented from time to time. Words such as "herein," "hereinafter,"
"hereof," "hereto," "hereby," and "hereunder," when used with reference in
this Agreement, refer to this Agreement as a whole, unless the context
otherwise requires.
1.2 "Affiliate" means, when used with reference to a
specific Person (or when not referring to a specific Person shall mean an
Affiliate of a party), any Person that, directly or indirectly, through one or
more intermediaries, controls, is controlled by or is under common control with
such specific Person. This term shall also include any Person who, directly or
indirectly, through one or more intermediaries, has the contractual right or
option to acquire or vote more than 5% of the voting interest of a specific
Person.
1.3 "Business." The Business subject hereof is that of
wireless communication.
<PAGE> 224
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1.4 "Control" (or the verb form "Controlled"). A Person
shall be deemed to control another Person when such controlling Person has the
power, directly or indirectly, to cause the direction of the management or
policies of such other Person, whether through the ownership of voting
securities, by contract, agency or otherwise.
1.5 "Person" means any general partnership, limited
partnership, corporation, joint venture, trust, business trust, governmental
agency, cooperative, association, individual or other entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of
such person as the context may require.
2. Nondisclosure. Miscellco has delivered, or is delivering to
Mercury concurrently herewith, all documents, records, tapes or other items
containing proprietary information relating to the Business including, but not
limited to, all customer lists, and technical, marketing and financial
information which are in the possession or control of Miscellco or its
Affiliates. Except as set forth in paragraph 6, hereto, Miscellco agrees that
neither it nor its shareholders, employees representatives, agents, Affiliates,
parents or subsidiaries; nor officers, directors, shareholders, employees
representatives or agents of Affiliates, parents or subsidiaries will, without
first obtaining Mercury's written consent, disclose to any person, firm or
enterprise, or use for its or their benefit, any information relating to the
pricing, methods, processes, financial data, lists, apparatus, statistics,
programs, research, development or related information of the Business, or of
Miscellco's parents, subsidiaries or Affiliates or customers, concerning past,
present or future business activities or operations of Miscellco, or the
results of the provision of services performed by Miscellco.
3. Trade Secrets. Miscellco covenants and warrants that neither
it nor its shareholders, representatives, employees agents, nor officers,
directors will give, transfer or otherwise disclose any of Miscellco's
proprietary information to any third party directly or indirectly, at any time
in the future. Miscellco covenants and warrants further that neither it nor its
shareholders, representatives, employees agents have appropriated or will
appropriate the said proprietary information, including but not limited to
Miscellco's customer lists, for their benefit.
4. Noncompete. Miscellco hereby agrees that, except as set forth
in paragraph 6 hereto, neither Miscellco nor its shareholders, representatives,
employees agents will (a) directly or indirectly, own, manage, operate,
control, be employed by or otherwise engage, participate or have any interest
in any Person which is engaged in the Business within the RSAs set forth in the
Asset Purchase Agreement for a period of two (2) years following
<PAGE> 225
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the date hereof or (b) solicit, divert, take away to attempt to divert or take
away, without the prior written consent of Mercury, any customer, employee,
independent contractor, agent or representative, other than signatories to this
Agreement, of Mercury or any of its respective Affiliates for a period of two
(2) years following the date hereof.
5. Injunction and Expenses. Upon breach of this Agreement, in
addition to any and all other rights and remedies it may have, Mercury shall be
entitled to injunctive relief, both pendente lite and permanent, against the
breaching party, as the parties recognize that a remedy at law would be
inadequate and insufficient. In the event of litigation, the prevailing party
shall be entitled to recover all costs and expenses, including but not limited
to attorney's fees and court costs, incurred by it as a result or arising out
of any litigation involving a breach or alleged breach under or pursuant to
this Agreement in addition to such other rights or remedies as Mercury may have
under this Agreement, at law or in equity.
6. Permissible Activity and Investment. Nothing contained in this
Agreement above shall limit the right of Miscellco to (a) be an investor, or to
make and hold passive investments, in investment securities aggregating not
more than 1% of the issued and outstanding securities of any corporation which
is registered on a national securities exchange or admitted to trading
privileges thereon or actively traded on a generally recognized
over-the-counter market; (b) own, manage or participate with, in any way, any
entity that provides service (the "Service Provider") to a wide geographic area
such that (i) the RSAs constitute less than 5% of the area served by the
Service Provider, and (ii) management or other participation is on a
system-wide basis and without any focus being directed particularly to the
RSAs. Moreover, nothing in this Agreement shall prevent Miscellco from
disclosing to third parties the results of System performance, to the extent
that such results (i) do not work to the detriment of Mercury and (ii) are
necessary to provide third parties with an accurate understanding of
Miscellco's accomplishments and thereby demonstrate Miscellco's qualifications
to own and operate other properties.
7. Binding Effect. This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto, their respective heirs, personal
representatives, successors and assigns.
8. Severability and Other Restrictions. It is the intention of
the parties that activities be restricted only to the extent necessary for the
protection of legitimate business interests of Mercury. Thus, the provisions of
this Agreement shall, to the fullest extent permissible under the law and
public policy, be enforced by the courts of each state and jurisdiction in
which enforcement is sought, and the unenforceability (or the
<PAGE> 226
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modification necessary to conform the covenants contained herein with such law
and public policy) of any part hereof shall not be deemed to render
unenforceable any other part hereof. Accordingly, if any part of this Agreement
shall be adjudicated to be invalid or unenforceable, whether in its entirety or
as modified as to duration, territory, or otherwise, then such part shall be
deemed deleted or amended, as the case may be, in order to render the remainder
hereof valid and enforceable. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof. This Agreement shall not supersede or be in lieu of any other agreement
restricting activities referenced herein but shall be in addition to any such
other restrictions.
9. Acknowledgment. Miscellco hereby acknowledges and recognizes
the following:
a. This Agreement is necessary for the protection of the
legitimate business interests of Mercury in purchasing the Assets of Miscellco;
b. The scope of this Agreement in time, geography and
types and limitations of activities restricted is reasonable;
c. Neither Miscellco nor its representatives, agents,
etc., individually or jointly, has any intention of competing with Mercury
within the area and the time limits set forth herein; and
d. Breach of this Agreement will be such that Mercury
will not have an adequate remedy at law because of the unique nature of the
Assets being conveyed and the confusion to subscribers and the public which a
breach would create.
10. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Kansas
without regard to its conflicts of laws provisions.
11. No Waiver or Modification. No waiver or modification of this
Agreement shall be valid unless in writing and duly authorized and signed by
the party to be charged.
12. Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
13. Authority. The individuals executing this Agreement on behalf
of Miscellco, which shall be deemed to include its Affiliates, further
represent and warrant that (a) they have the full power and authority to bind
both Miscellco and the Affiliates to the terms hereof and have been duly
authorized to do so in accordance with such entities' corporate or other
organizational
<PAGE> 227
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documents; and (b) they include all Miscellco's officers and directors.
Certified copies of such authorizations are provided herewith.
DATED as of the day and year first above written.
MERCURY CELLULAR OF KANSAS, INC. MISCELLCO COMMUNICATIONS, INC.
By: By:
---------------------------- ---------------------------------
Thomas G. Henning, President J. Stacy Davidson, President
J. STACY DAVIDSON
By:
-----------------------------------
J. Stacy Davidson, Chairman
of the Board and President
WILLIAM C. MATHEWS
By:
-----------------------------------
William C. Mathews, Director
and Secretary/Treasurer
JAMES P. ANGLE
By:
-----------------------------------
James P. Angle, Chief
Operating Officer
WILLIAM CHARLES ARTMANN
By:
-----------------------------------
William Charles Artmann,
Director
L. STACY DAVIDSON JR.
By:
-----------------------------------
L. Stacy Davidson Jr.,
Shareholder
FRILEY S. DAVIDSON
By:
-----------------------------------
Friley S. Davidson,
Shareholder
<PAGE> 228
SCHEDULE 5.12
SELLERS'S ADDITIONAL CONSTRUCTION OBLIGATIONS--
P-1000 AGREEMENT
<PAGE> 229
ASSUMPTION AGREEMENT
This Assumption Agreement is made and entered into as of this 30th day
of April, 1995, (this "Assumption Agreement") by MERCURY CELLULAR OF KANSAS,
INC. (the "Buyer"), for the benefit of MISCELLCO COMMUNICATIONS, INC.
("Seller").
W I T N E S S E T H:
WHEREAS, pursuant to the Purchase Agreement dated April 19, 1995 (the
"Agreement") between Buyer and Seller, on the date hereof Seller is assigning
and Buyer is receiving all of Seller's rights under those contracts, licenses
and leases listed in Schedule 4.5 of the Agreement;
WHEREAS, under the Agreement, Buyer has agreed to assume certain
obligations of the Seller as specified in Schedule 4.5 of the Agreement.
NOW, THEREFORE, in consideration of the premises, on and after the
date hereof, Buyer hereby assumes and agrees to pay, observe, perform,
discharge, as and when due, and hold Seller harmless from all of the assumed
obligations (as specified in Schedule 4.5 of the Agreement) arising from and
after the date hereof and Buyer hereby releases Seller from all obligations of
Seller with respect to the assumed obligations. Except as specified in Schedule
4.5 of the Agreement, Buyer shall not assume any liabilities or contractual
obligations of the Seller including, but not limited to, any termination
penalties which may be owed to any of Seller's lenders or any lease or other
obligation of Seller relating to or arising from Seller's construction of the
System.
IN WITNESS WHEREOF, Buyer has caused this Assumption Agreement to be
duly executed in its name as of the day and year first above written.
MERCURY CELLULAR OF KANSAS, INC.
By:
------------------------------
Thomas G. Henning, President
<PAGE> 230
AGREEMENT
PLEXSYS P-1000 SWITCHES
This Agreement is entered into between Miscellco Communications, Inc.,
Mercury Cellular of Kansas, Inc. and Plexsys International.
On this, the 22nd day of March, 1995 the parties concerned agree to
the following:
1. The parties will finalize an Agreement for the transition and
close pursuant to that Agreement effective April 30, 1995
transferring ownership of several Kansas RSAs now licensed to
Miscellco, to Mercury Cellular.
2. The timely and proper deployment of two P-1000 switches is
crucial to finalizing the Miscellco/Mercury agreement
effective April 30, 1995. If the two P-1000 switches are
properly incorporated into the system by that date, and in
accordance with the Plexcell (P-1000 Implementation Schedule,
and all other conditions precedent to full payment for those
switches have been met, Miscellco will make complete payment
for those switches at that time. For the purposes of this
Agreement, proper deployment consists of two P-1000 switches,
each having 44 port capacity, 22 ports in place, and all racks,
software and other materials being in place so that 22
additional ports can be readily added to each switch as the
carrier desires, at the carrier's expense, all being
incorporated in the system so that IS-41 and all call
delivery/transfer and other "standard" cellular functions can
be accomplished consistently. These standard functions should
include all cellular functions currently present in the D-400
switches.
3. If the two P-1000 switches are not properly incorporated into
the system by that date, payment will be deferred until
incorporation has been made properly. The remaining payment
due on the two P-1000 switches is $187,500.
4. In the event that two P-1000 switches are properly
incorporated into the system on or before June 30, 1995,
Plexsys need not take any action for which it is not already
contractually obligated regarding the provision of replacement
switches pending completion of proper incorporation.
5. In the event that the two P-1000 switches are not properly
incorporated by June 30, 1995, Plexsys agrees to make four
additional D-400 switches (fully loaded, including but not
limited to, software, DS-1 interface cards and racks as
required) available to Mercury, on an interim basis pending
completion of proper P-1000 incorporation into the system, as
follows: (a) One additional switch would be made available,
upon Mercury's demand, effective June 30, 1995; (b) a
second additional switch would be made available, upon
<PAGE> 231
- 2 -
Mercury's demand, effective September 30, 1995; (c) a third
additional switch would be made available, upon Mercury's
demand, effective February 28, 1996; and (d) a fourth
additional switch would be made available, upon Mercury's
demand, effective June 30, 1996.
6. Neither Miscellco nor Mercury will be responsible for any
additional payment in order to obtain and install the interim
replacement switches. Plexsys will have the option of removing
the replacement D-400 switches and reinstalling the existing
D-200 switches when the P-1000s are incorporated into the
system at their own expense, or leaving the replacement D-400
switches in place.
The undersigned request that you confirm your acceptance of the
subject proposal by acknowledging your agreement below.
MISCELLCO COMMUNICATIONS, MERCURY CELLULAR OF
INC. KANSAS, INC.
By: /s/ J. STACY DAVIDSON By: /s/ THOMAS HENNING
------------------------------- ---------------------------------
J. Stacy Davidson Thomas Henning
Miscellco Communications, Inc. Mercury Cellular of
d/b/a Cellular One Kansas, Inc.
Suite 500 Suite 1495
120 North Congress Street One Lakeshore Drive
Jackson, MS 39201 Lake Charles, LA 70602
Accepted and Acknowledged
this 22 day of March, 1995:
PLEXSYS INTERNATIONAL
By /s/ JOHN VARGO
--------------------------------
John Vargo, President
<PAGE> 232
SCHEDULE 7.1(b)
Seller's FCC Opinion
<PAGE> 233
[LUKAS, MCGOWAN, NACE & GUTIERREZ LETTERHEAD]
APRIL 30, 1995
Mercury Cellular of Kansas, Inc.
C M Tower, Suite 1495
One Lakeshore Drive
Lake Charles, Louisiana 70629
Gentlemen:
We have acted as special communications counsel to Miscellco
Communications, Inc. ("Miscellco") in connection with the Asset Purchase
Agreement dated April 19, 1995 (the "Agreement") between Miscellco and Mercury
Cellular of Kansas, Inc. ("Mercury"). This opinion is being furnished to you at
the request of Miscellco pursuant to section 7.1(b) of the Agreement. Unless
otherwise defined herein, the definitions or terms used in this opinion shall
be the same as those in the Agreement.
As special communications counsel for Miscellco, we address only
matters within the jurisdiction of the Federal Communications Commission
("FCC"). The following opinions are based upon and concern only the effect of
the Communications Act of 1934, as amended, and the published rules,
regulations and opinions of the FCC (collectively, the "Act").
In rendering this opinion, we have reviewed the Agreement and the
public records of the FCC (the "Public File"), including Miscellco's FCC
Authorizations listed on Attachment A hereto.
Whenever our opinion herein with respect to the existence or
nonexistence of facts is qualified by the phrase "to the best of our
knowledge," it is intended to indicate that no information has come to the
attention of the attorneys who have spent significant time on the Agreement
that would give us actual knowledge that our opinion with respect to the
existence of nonexistence of such facts is accurate.
<PAGE> 234
- 2 -
In rendering the opinions expressed herein, we have assumed (i) the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of any copies hereof submitted to us as certified,
conformed or photostatic copies for our examination, (ii) that the signatures
on all documents examined by us are genuine and that where any such signature
purports to have been made in a corporate, governmental, fiduciary or other
capacity, the person who affixed such signature to such documents had authority
to do so, and (iii) the correctness of public files, records and certificates
of, or furnished by, governmental or regulatory agencies or authorities. We
have made no independent factual investigation of Miscellco, its assets, or the
assets to be conveyed. Our opinion, therefore, does not encompass any matter
which would be apparent only as a result of such an investigation.
Based upon our examination of the foregoing documents, records, the
Act and subject to the qualifications, assumptions and limitations set forth
herein we are of the opinion that:
1. Miscellco is the duly authorized holder of the Licenses for
the Kansas, 1, 2, 6, 7, 11, 12 and 13 and the FCC Interim operating Authority
for Oklahoma RSA 1. The Licenses are in full force and effect. The Licenses are
the only licenses, permits or authorizations required under the Act for the
construction and operation of the System as it is being operated. To the best
of our knowledge, and other than events which affect the cellular industry
generally, no event has occurred that permits, or after notice or lapse of time
or both would permit, revocation or termination of the Licenses or would
materially adversely affect any of the rights of Miscellco thereunder.
2. To the best of our knowledge after due inquiry and review of
the Public File, there is no outstanding adverse decree, order or other ruling
that has been issued by the FCC against Miscellco, or with respect to the
Licenses, and there is no complaint, investigation, proceeding, petition,
notice of violation, notice of apparent liability or mutually exclusive
application pending or, to the best of our knowledge, threatened, by or before
the FCC against Miscellco or with respect to the Licenses, other than
rulemaking proceedings of general applicability to the cellular industry.
3. The FCC consents to the applications to assign the FCC
Licenses from Seller to Buyer in FCC File Nos.01300-CL-AL-1-95,
01301-CL-AL-1-95, 01302-CL-AL-1-95, 01303-CL-AL-1-95, 01304-CL-AL-1-95,
01305-CL-AL-1-95, 01306-CL-AL-1-95, 01307-CL-AL-1-95, and 9413531 (microwave),
respectively, have become Final orders and do not impose any restrictions or
conditions which would have a materially adverse effect upon the operations of
the System and are in full force and effect.
<PAGE> 235
- 3 -
Buyer acknowledges that this firm has performed legal and engineering
services for both Miscellco and Buyer, acknowledges that the firm has brought
to Buyer's attention the possibility of a conflict of interest, and Buyer has
affirmatively agreed to waive any claim of conflict based upon such
representation.
This opinion is effective only as of the date hereof, and we take no
professional responsibility to advise you as to any subsequent event as to
which we may become aware. This opinion is being delivered by us as special
communications counsel for Miscellco solely for the benefit of Buyer pursuant
to the Agreement and is not to be quoted in whole or in part, or otherwise
referred to, nor is it to be filed with any governmental agency or otherwise
circulated without our prior written consent.
Very truly yours,
LUKAS, McGOWAN, NACE & GUTIERREZ
---------------------------------------------------
Thomas Gutierrez
Counsel for Miscellco Communications,
Inc.
<PAGE> 236
SCHEDULE 7.1(b)(2)
Seller's Corporate Opinion
<PAGE> 237
April 30, 1995
Mercury Cellular of Kansas, Inc.
C M Tower, Suite 1495
One Lakeshore Drive
Lake Charles, Louisiana 70629
Gentlemen:
I have acted as counsel to Miscellco Communications, Inc.
("Miscellco") in connection with the Agreement dated April 19, 1995 (the
"Agreement"), by and between Miscellco Communications, Inc. and Mercury
Cellular of Kansas, Inc. This opinion is being furnished to you pursuant to
Section 7.1(b) of the Agreement. All capitalized terms used but not defined in
this opinion which are defined in the Agreement shall have the meanings
assigned to them in the Agreement.
In connection with this opinion, I have examined originals or copies
of the Agreement and such other agreements, documents, certificates and/or
instruments as I have deemed necessary as a basis for the opinion herein set
forth. I have assumed the authenticity of all documents submitted to me as
originals, the genuineness of all signatures, the legal capacity of natural
persons, the conformity to the originals of all documents submitted to us as
copies and the due organization, existence and capacity of such persons and
entities, the right, power and authority of such persons and entities to enter
into all agreements to which they are parties and the valid execution and
delivery of the Agreement by them.
I call your attention to the fact that I am a member of the Bar of the
state of Mississippi and do not purport to be an expert on, or generally
familiar with or qualified to express legal conclusions based upon, the laws of
any other state or jurisdiction other than the federal laws of the United
States of America. I express no opinion with respect to federal or state law
relating to the ownership, operation or regulation of non-wireline cellular
communication systems, including, without limitation, the need to obtain or
make any consents, applications, licenses, approvals or the like upon or prior
to the execution of the Agreement or the exercise of any rights or remedies
under the Agreement.
Based upon and subject to the foregoing, I am of the opinion that:
<PAGE> 238
- 2 -
1. Miscellco is a corporation duly organized, validly existing
and in good standing under the laws of the state of Mississippi. In rendering
the opinion of good standing set forth herein, I have relied solely upon a good
standing certificate of the Secretary of State of the State of Mississippi
dated _____________.
2. Miscellco has all requisite corporate power to execute,
deliver and perform the Agreement. The execution, delivery and performance
by Miscellco of the Agreement have been duly authorized by all necessary
corporate actions on the part of Miscellco.
3. The Agreement has been duly authorized, executed and delivered
by or on behalf of Miscellco and is the legal, valid and binding obligation of
Miscellco enforceable against Miscellco in accordance with its terms. Further,
my opinions set forth in this paragraph are qualified to the extent that
enforcement may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
limiting the enforcement of creditors, rights generally; (ii) general
principles of equity, whether applied by a court of law or equity; (iii) the
availability of particular remedies; and (iv) limitations based upon statutes
or public policy limiting a person's right to waive the benefits of statutory
provisions or common law rights.
4. The execution, delivery and performance of the Agreement will
not, with or without the giving of notice or the passage of time, or both,
conflict with or result in a default or loss of rights (or give rise to any
right of termination, cancellation or acceleration) under (i) the Certificate
or Articles of Incorporation of Miscellco, or (ii), to my knowledge, any order,
judgment, injunction, award or decree of any governmental body, administrative
agency or court, or any agreement lease or commitment to which Miscellco is a
party or by which Miscellco is bound.
This opinion is delivered to you for your benefit in connection with
the transactions described herein and may not be used or relied upon by any
other person or entity for any purpose whatsoever without my prior written
consent.
Very truly yours,
-----------------
----------------------------------------
<PAGE> 239
SCHEDULE 7.2(b)(2)
Buyer's Corporate Opinion
<PAGE> 240
April , 1995
Miscellco Communications, Inc.
Suite 125
Eastover Bank Building
125 North Congress
Jackson, Mississippi 39201
Gentlemen:
I have acted as counsel to Mercury Cellular of Kansas ("Mercury") in
connection with the Agreement dated April (the "Agreement"), by and between
Miscellco Communications, Inc. and Mercury Cellular of Kansas, Inc. This
opinion is being furnished to you pursuant to Section 7.2(b) of the Agreement.
All capitalized terms 1 not defined in this opinion which are defined in the
Agreement, shall have the meanings assigned to them in the Agreement
In connection with this opinion, I have examined orig copies of the
Agreement and such other agreements, do certificates and/or instruments as I
have deemed necessary basis for the opinion herein set forth. I have assess
authenticity of all documents submitted to me as origin genuineness of all
signatures, the legal capacity of natural persons, the conformity to the
originals of all documents submitted to us as copies and the due organization,
existence and capacity of such persons and entities, the right, power and
authority of such persons and entities to enter into all agreements to which
they are parties and the valid execution and delivery of the Agreement by them.
I call your attention to the fact that I am a member of the Bar of the
state of Louisiana and do not purport to be an expert on, or generally familiar
with or qualified to express legal conclusions based upon, the laws of any
other state or jurisdiction other than the federal laws of the United States of
America. express no opinion with respect to federal or state law relating to
the ownership, operation or regulation of non-wireline cellular communication
systems, including, without limitation, the need to obtain or make any
consents, applications, licenses, approvals or the like upon or prior to the
execution of the Agreement or the exercise of any rights or remedies under the
Agreement.
Based upon and subject to the foregoing, I am of the opinion that:
<PAGE> 241
- 2 -
1. Mercury is a corporation duly organized, validly existing and
in good standing under the laws of the state of Louisiana. In rendering the
opinion of good standing set forth herein, I have relied solely upon a good
standing certificate of the Secretary of State of the State of Louisiana dated
__________.
2. Mercury has all requisite corporate power to execute, deliver
and perform the Agreement. The execution, delivery and performance by Mercury
of the Agreement have been duly authorized by all necessary corporate actions
on the part of Mercury.
3. The Agreement has been duly authorized, executed and delivered
by or on behalf of Mercury and is the legal, valid and binding obligation of
Mercury enforceable against Mercury in accordance with its terms. Further, my
opinions set forth in this paragraph are qualified to the extent that
enforcement may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
limiting the enforcement of creditors' rights generally; (ii) general
principles of equity, whether applied by a court of law or equity; (iii) the
availability of particular remedies; and (iv) limitations based upon statutes
or public policy limiting a person's right to waive the benefits of statutory
provisions or common law rights.
4. The execution, delivery and performance of the Agreement will
not, with or without the giving of notice or the passage of time, or both,
conflict with or result in a default or loss of rights (or give rise to any
right of termination, cancellation or acceleration) under (i) the Certificate
or Articles of Incorporation of Mercury, or (ii), to my knowledge, any order,
judgment, injunction, award or decree of any governmental body, administrative
agency or court, or any agreement lease or commitment to which Mercury is a
party or by which Mercury is bound.
This opinion is delivered to you for your benefit in connection with
the transactions described herein and may not be used or relied upon by any
other person or entity for any purpose whatsoever without my prior written
consent.
Very truly yours,
THE GRAY LAW FIRM
--------------------------------------
David L. Sigler
Counsel for Mercury Cellular of Kansas,
Inc.
<PAGE> 242
April 30, 1995
The Calcasieu Marine National Bank of Lake Charles
CM Tower
One Lakeshore Drive
Lake Charles, LA 70601
Attention: Trust Department
Re: Deposit Escrow Agreement entered into among Miscellco
Communications, Inc. ("Miscellco"), Mercury, Inc. ("Mercury")
and The Calcasieu Marine National Bank of Lake Charles
Dear Sir or Madam:
By this jointly executed letter, and pursuant to the referenced
Deposit Escrow Agreement, we write to request that you deliver to Miscellco all
funds in the Escrow Account, including all interest accumulated thereon. Such
funds are to be delivered to Miscellco in immediately available funds, on May
1, 1995 via wire transfer as follows:
Bank:
-------------------------------
Address:
-----------------------------------
-----------------------------------
ABA No.:
----------------------------
Account No.:
-------------------------------
Miscellco and Mercury acknowledge that upon making the distribution as
set forth herein, the Escrow Agent will have fully performed all of its
obligations under the Escrow Agreement and with respect to the Escrow Account.
Accordingly, we urge that the escrow account be closed immediately following
such distribution.
On behalf of Miscellco and Mercury, we thank you for your cooperation
and efforts throughout this matter.
Very truly yours,
MISCELLCO COMMUNICATIONS, INC. MERCURY, INC.
By: By:
--------------------------- ---------------------------
Name: Name:
Title: Title:
<PAGE> 243
BILL OF SALE
THIS BILL OF SALE is made as of the 30th day of April, 1995, by and
between Miscellco Communications, Inc., a Mississippi corporation ("Seller"),
and Mercury Cellular of Kansas, Inc., a Louisiana corporation ("Buyer").
WITNESSETH:
WHEREAS, Seller and Buyer are parties to a "Purchase Agreement", dated
as of April 19, 1995, (the "Agreement"), pursuant to which Seller has agreed to
sell, assign and transfer to Buyer on the Closing Date provided for in the
Agreement, the Assets as defined in Section 1.1(a) of the Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, as well as other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby mutually covenant and agree as follows:
1. Sale and Transfer. Seller hereby sells, assigns, transfers,
conveys and delivers to Buyer all of Seller's right, title and interest in and
to:
(a) System subscribers subject to the provisions of subsection 1.2;
(b) the Licenses and all other licenses, permits and/or
authorizations currently owned by Seller, or hereafter obtained by the Seller,
used in connection with the operation of the System;
(c) the personal property listed on Schedule 1.1(a) to the
Agreement, all of which shall be in good working order at Closing, ordinary
wear and tear excepted;
(d) Seller's rights in those contracts listed on Schedule 4.5 to
the Agreement, dated March 31, 1995, relating to the operation and ownership of
the System, provided that such contract rights are assigned to and assumed by
Buyer pursuant to assignment and assumption agreements consistent with industry
standards for agreements of that nature;
(e) files, books and records which relate to the operation of the
System, including, but not limited to, all subscriber lists and information and
all records required by the FCC to be maintained by the Seller;
(f) accounts receivable trade; and
(g) inventory.
<PAGE> 244
2. Exceptions. Notwithstanding the Assets to be conveyed in
Section 1 above, the items set forth in Section 1.1(b) of the Agreement are
specifically excluded from the definition of Assets and are not among the items
to be conveyed pursuant to his transaction.
3. Representations and Warranties. Seller and Buyer each confirm
to the other that the representations and warranties made by each of them,
respectively, in the Agreement are true and correct on the date hereof.
4. Counterparts. This Instrument may be executed in any number of
counterparts, all of which shall constitute an original Bill of Sale binding on
all of the parties hereto, notwithstanding that all parties did not execute the
same counterpart, and all of which together shall constitute one and the same
instrument.
5. Construction. This Bill of Sale represents obligations
contemplated by the terms of the Agreement, shall be deemed to be a part of the
Agreement and shall be governed by each of the provisions of the Agreement.
Capitalized terms not otherwise defined herein shall have the definitions given
them in the Agreement.
IN WITNESS WHEREOF, the Seller has executed this instrument as of the
date first written above.
SELLER:
MISCELLCO COMMUNICATIONS, INC.
By:
------------------------------------
J. Stacy Davidson, President
BUYER:
MERCURY CELLULAR OF KANSAS, INC.
By:
------------------------------------
Thomas G. Henning, President
<PAGE> 245
ASSIGNMENT
This Assignment is made by Miscellco Communications, Inc., a
Mississippi corporation having a principle address at Suite 125, Eastover Bank
Building, 125 North Congress, Jackson, Mississippi 39201 ("Miscellco" or
"Assignor") to Mercury Cellular of Kansas, Inc., a Louisiana corporation having
a principle address at C M Tower, Suite 1495, One Lakeshore Drive, Lake
Charles, Louisiana 70629 ("Mercury" or "Assignee"), from and after the "Closing
Date" as set forth in that certain Asset Purchase Agreement entered into
between Assignor and Assignee on April 19, 1995 (the "Agreement").
Pursuant to the Agreement, the Assignor hereby assigns to the Assignee
all its right, title and interest in and to each of the agreements entitled (a)
Agreement Regarding Confidential Information and Intellectual Property Rights
and (b) Confidentiality Agreement and Covenant Not to Compete entered into by
those parties listed on Attachment A hereto, form copies of which are provided
in Attachments B and C hereto.
To have and to hold the same unto the Assignee, its successors and
assigns from and after the Closing Date for the rest of said Lease, subject to
the rents, covenants, conditions, terms and provisions therein with respect to
the period from and after the Closing Date but not prior thereto.
This Assignment shall be governed by and construed in accordance with
the laws of the State of Kansas.
This Agreement cannot be altered, modified or amended except by
written agreement between the parties hereto.
This Assignment shall be binding upon the successors and assigns of
the parties. The parties shall execute and deliver such further or additional
instruments, agreements and other documents that may be necessary to evidence
or carry out the provisions of this Assignment.
<PAGE> 246
- 2 -
IN WITNESS WHEREOF, the parties have caused this Assignment to be
executed by their duly authorized representatives as of _______ day of April,
1995.
MISCELLCO COMMUNICATIONS, INC.
By:
---------------------------------------
J. Stacy Davidson
MERCURY CELLULAR OF KANSAS, INC.
By:
---------------------------------------
<PAGE> 247
Attachment A
PARTIES WHO HAVE ENTERED INTO
CONFIDENTIALITY AGREEMENTS AND
COVENANTS NOT TO COMPETE
I. Confidentiality Agreements
Glenna Alm
Angela Alton
James P. Angle
Chris Appelhans
Susan Bennett
Anita Blakeney
Phyllis Bledsoe
Frank Buchanan
Jeannine Byers
Steve Cecil
Becky Colclazier
Ann Cook
J. Stacy Davidson
Lisa Dirks
Tracie Ferguson
Clifford Gallington
Judy Garner
Brandi Hake
Christine A. Hamann
Dale Hardy
Sherry Helmke
Shelly Hinton
Cynthia Hopkins
Carol Killgore
Pat Leihy
William C. Mathews
Tonya Myers
Glen A. O'Dell
Phan thi Binh
Ronald Scott Rohleder
Jan Rushing
Becky Schaffer
Davon Schuler
Teresa Shelley
Carl E. Smith
Brad Spinks
Dorothy Stieben
Virginia Sullivan
Mikaela Switzer
Vickie Williamson
<PAGE> 248
Attachment A Page 2
II. Covenants Not To Compete
Glenna Alm
Angela Alton
James P. Angle
Chris Appelhans
Susan Bennett
Anita Blakeney
Phyllis Bledsoe
Frank Buchanan
Jeannine Byers
Steve Cecil
Ann Cook
Beck Colclazier
J. Stacy Davidson
Lisa Dirks
Tracie Ferguson
Clifford Gallington
Judy Garner
Brandi Hake
Christine A. Hamann
Sherry Helmke
Shelly Hinton
Cynthia Hopkins
Pat Leihy
William C. Mathews
Glen A. O'Dell
Phan thi Binh
Ronald Scott Rohleder
Jan Rushing
Becky Schaffer
Davon Schuler
Teresa Shelley
Carl E. Smith
Brad Spinks
Dorothy Stieben
Virginia Sullivan
Mikaela Switzer
Vickie Williamson
<PAGE> 249
Attachment B
FORM AGREEMENT REGARDING CONFIDENTIAL
INFORMATION AND INTELLECTUAL PROPERTY RIGHTS
<PAGE> 250
[MISCELLCO COMMUNICATIONS, INC. LETTERHEAD]
AGREEMENT REGARDING CONFIDENTIAL
INFORMATION AND INTELLECTUAL PROPERTY RIGHTS
1. Both during and after my employment by Miscellco Communications, Inc.,
I will not, without prior permission of the Corporate Management
Committee (CMC), disclose to anyone outside of Miscellco
Communications, Inc., or use for purposes other than Miscellco
business, or permit any person to examine or make copies of any
documents that contain or are derived from, any confidential
information as defined below.
"Confidential Information" includes any information or materials
concerning Miscellco affairs, whether business, technical, or
otherwise, which are not known to the public at large. It includes,
but is not limited to, information and materials developed, collected,
or used by Miscellco personnel; information disclosed to Miscellco by
clients or potential clients in the course of engagements or proposed
engagements; and information disclosed by third parties with which
Miscellco has or may have a business relationship. Confidential
information may relate to the past, present, or future and may concern,
but is not limited to, business strategies, financial data, business
plans, technology, contract provisions, client lists, or personnel
data. It may be contained on paper records, computer printouts and
disks, or other forms of documentation or media. However, it need
not necessarily be reduced to a tangible form.
2. In consideration of my employment with Miscellco Communications, Inc.,
I agree to promptly disclose in writing all discoveries, inventions,
and improvements conceived by me or with others during the course of my
work at Miscellco Communications, Inc. Miscellco Communications, Inc.
shall be free to use any such discoveries, inventions, or ideas without
obligation of any sort to me as an employee. If patents or other
intangible rights should result therefrom, I agree that all such rights
shall be the sole property of Miscellco Communications, Inc. I will
cooperate fully in signing documents to transfer and perfect full
rights, title, and interest to and for Miscellco Communications, Inc.
<PAGE> 251
Employee and employer understand that this agreement only applies to
discoveries, inventions, and improvements conceived or developed
during my working hours, or while I was using Miscellco
Communications, Inc. equipment, supplies, facilities, or trade secret
information of Miscellco Communications, Inc. was used, or that relate
to the business of Miscellco Communications, Inc. or to Miscellco
Communications, Inc. actual or demonstrably anticipated research and
development, or that result from any work performed by the employee
for Miscellco Communications, Inc.
3. I agree that, as an employee of Miscellco Communications, Inc., I will
abide by the applicable policies, and practices of the company.
Furthermore, I will not accept favors, direct or indirect, from
clients of Miscellco or associate with client personnel in a manner
that would impair the performance or objectivity of Miscellco
Communications, Inc.
Date: Employee Signature:
------------ -------------------------------
Witness:
-----------------------------------
<PAGE> 252
Attachment C
FORM CONFIDENTIALITY AGREEMENT AND
COVENANT NOT TO COMPETE
<PAGE> 253
CONFIDENTIALITY AGREEMENT AND COVENANT NOT TO COMPETE
THIS AGREEMENT is made this 9th day of July, 1990, Miscelleco
Communications, Inc., d/b/a Cellular One (hereinafter called the "Employer"),
and William C. Mathews (hereinafter called the "Employee").
W I T N E S S E T H:
WHEREAS, the Employer is engaged in the cellular telephone business in
the Kansas #7 - Trego RSA and is desirous of hiring the Employee to perform
certain services with respect to such business, subject to the understandings
and agreements as set forth herein; and
WHEREAS, the Employee desires to accept employment with the Employer
for such compensation and upon such terms and conditions as may be mutually
agreeable to the Employer and the Employee, including but not limited to the
covenants and conditions as set forth herein; and
WHEREAS, the Employer and Employee have acknowledged, each to the
other, that this Agreement and each of the respective terms and provisions
hereof constitute a condition precedent to the Employer's agreement to enter
into any employment relationship with the Employer;
NOW, THEREFORE, in consideration of the employment of the Employee to
perform services for an on behalf of the Employer, and of the wages or salary
to be paid to the Employee in respect thereof, it is agreed as follows:
1. The Employee agrees to perform to the best of the Employee's ability all
duties required of Employees employment. The Employer and Employee mutually
acknowledge and agree that, in the absence of a separate written agreement to
the effect between the parties, this Agreement is not intended and shall not be
construed to bind either party to an employment relationship of any fixed or
minimum duration such that, in the absence of an express agreement to the
contrary, either party shall have the right to terminate the employment
relationship for any reason and at any time.
2. The Employee expressly acknowledges that the business of
<PAGE> 254
the Employer and the Employee's duties with respect thereto are such that the
Employee, during the course of employment with the Employer, may obtain or be
given access to certain information, documents and records of a confidential or
proprietary nature with respect to the Employer and/or its business, prospects,
customers, competitors, suppliers and so forth. The Employee further
understands and acknowledges that the unauthorized use of disclosure of any
such information, (including specifically, but not limited to, the Employer's
customer lists and customer account information) could seriously damage and
interfere with the Employer's business and business prospects. Accordingly, the
Employee hereby expressly covenants and agrees with the Employer that Employee
will not directly or indirectly use in any unauthorized manner or disclose to
any third parties any information, written or oral, of a confidential or
proprietary nature of or pertaining to the Employer and obtained during the
course of the Employee's employment. For purposes of this paragraph, it shall
be presumed that any information about the Employer or the Employer's business,
or which is a part of the Employers business records, is of a confidential or
proprietary nature and within the intended coverage of this Agreement, unless
such information is readily accessible to the general public. The provisions of
this paragraph and the covenants of the Employee contained herein shall survive
any termination of the Employee's employment with the Employer.
3. The Employee further agrees that Employee will not, at any time during
Employee's employment with the Employer and for a two-year period following
any termination of such employment, directly or indirectly own, manage,
operate, control, be employed by or otherwise engage or participate in any
cellular telephone business including the sale or rental of cellular mobile
telephones within a five hundred (500) mile radius of Kansas #7 -- Trego RSA.
In the event the term of the Employee's employment covers a period of less
than 12 months, then the Employee's covenant not to compete as set forth in the
preceding sentence shall be binding upon the Employee for only one (1) year
following the termination of such employment.
The Employee hereby represents to the Employer that Employee's education,
training and experience are such that Employee's agreement not to engage for a
temporary period of time in a business activity similar to that conducted by
the Employer will not jeopardize or significantly interfere with Employer's
ability to secure other gainful employment either within or without the
geographical area to which the above restrictions lies.
<PAGE> 255
4. The Employee agrees that, upon the termination of Employee's
employment with the Employer, Employee shall immediately return to the Employer
all records, documents and other property belonging to the Employer or
pertaining to the Employer's business. The preceding sentence shall apply
equally with respect to all copies, extracts, reproductions or notes as may
have been made by or provided to the Employee.
5. In the event of an actual or threatened breach by the Employee of the
provisions of this Agreement, the Employer shall be entitled to an injunction
restraining the Employee from engaging or continuing to engage in any conduct
prescribed herein. The preceding sentence shall not, however, be construed as
prohibiting the Employer from pursuing any other remedies available to it for
such breach or threatened breach, including recovery of money damages from the
Employee.
6. This Agreement shall be governed and construed in accordance with the
laws of the State of Kansas.
7. It is agreed that if any term or provision of this Agreement or the
application thereof to any person or circumstance shall to any extent, be
declared void or unenforceable by a court of competent jurisdiction, the
remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be effected thereby, and each term and provision of
this Agreement shall be valid and be enforced to the fullest extent permitted
by law.
IN WITNESS WHEREOF, the Employer and Employee have each executed this
Agreement on the date first above written.
---------------------------------------
Employer
---------------------------------------
Employee
<PAGE> 1
EXHIBIT 10.18
[CAMERON COMMUNICATIONS CORPORATION LETTERHEAD]
October 18, 1995
TO: Shelby Hoffpauir Raymond Henagan George Mack
C. J. LeJeune Brenda McElveen
FROM: Dub Henning, President
SUBJECT: CCC Service to MIT
CCC will render technical, engineering, purchasing, warehousing and provide
walk-in payment capability services to MIT on a monthly basis. CCC will be
compensated $6,000 per month for these services rendered.
These services will include, but not limited to, all personnel, vehicles and
tool's necessary for around the clock maintenance and installation of:
1. Voice mail equipment, circuits and associated hardware and
software to provide voice mail services.
2. CATV outside plant and head end equipment.
3. Engineering services such as drawings, staking, right of way
procurement and surveying.
4. All outside construction such as drop plowing, cut cables and
any other outside construction services.
5. Utilization of CCC Purchasing Department and use of the
Carlyss warehouse.
6. Collection of walk-in payments received at the Carlyss office
and the deposit of these payments.
MIT will receive ONLY two bills per month from CCC:
1. $6,000 per month for above services.
2. Subscriber billing services agreement.
THERE WILL BE NO PER HOUR LABOR BILLS GOING TO MIT. However, all CCC
personnel's time that was spent on MIT will be detailed monthly as to what they
did and how much time was spent. These reports will be reviewed monthly at the
MIT Special Committee meeting for evaluation.
<PAGE> 1
EXHIBIT 10.19
STATE OF LOUISIANA ACT OF SALE
PARISH OF CALCASIEU
KNOW ALL MEN BY THESE PRESENTS:
That Mercury, Inc., a Louisiana corporation, herein represented by
William L. Henning, Jr., its President, duly authorized to execute this
document by resolution of the Board of Directors and made a part hereof,
hereinafter referred to as "Vendor", for and in consideration of Three Million
Six Hundred Seventy Six Thousand Four Hundred Eighty and No/100 ($3,676,480.00)
Dollars represented by Three Hundred Sixty Seven Thousand Six Hundred Forty
Eight (367,648) shares of Mississippi One Cellular Telephone Company non-par
value, common stock, recorded on the stockholders' ledger of Mississippi One
Cellular Telephone Company as issuing to Vendor, receipt of said stock, valued
at $10.00 a share, is acknowledged by Vendor, does by these presents, grant,
sell, transfer and convey unto Mississippi One Cellular Telephone Company,
herein represented by Thomas G. Henning, its President, duly authorized to
execute this document by resolution of the Board of Directors and made a part
hereof, hereinafter referred to as "Vendee" all assets, including all property,
licenses, right of ways, permits, cash, inventories, leases, contracts and
authorizations of Mercury in connection with its cellular operations in
Mississippi RSA #1 and all the liabilities of Mercury, Inc. as the result of
said cellular operations in Mississippi RSA #1 including all notes payable,
particularly the notes payable to Cameron Telephone Company (and the assumption
of the Collateral Note and Mortgage). The description of the assets and
liabilities connected with Mercury, Inc.'s cellular operations in Mississippi
RSA #1 includes, but is not limited to, the items on the attached lists.
<PAGE> 2
The transfer is made at the value of $3,676,480.00 and is effective as
of September 1, 1994.
That this sale is made subject to approval of the Federal
Communication Commission and the Mississippi Public Service Commission.
To have and to hold the above described property unto the Vendee, its
successors and assigns forever.
Witness the hands of Vendor and Vendee at Lake Charles, Louisiana in
the presence of the undersigned competent witnesses on this 31st day of August,
1994.
Witnesses: MERCURY, INC.
/s/ TAMALYN HOWELL By: /s/ WILLIAM L. HENNING, JR.
- ------------------------- -------------------------------
WILLIAM L. HENNING, JR.
MISSISSIPPI ONE CELLULAR TELEPHONE
COMPANY
/s/ SHEILA KING By: /s/ THOMAS G. HENNING
- ------------------------- -------------------------------
THOMAS G. HENNING
STATE OF LOUISIANA
PARISH OF CALCASIEU
On this 31st day of August, 1994, before me personally appeared
William L. Henning, Jr. who being duly sworn, did say that he is the President
of Mercury, Inc. and that the foregoing sale was executed in behalf of the
corporation by authority of its Board of Directors, and William L. Henning, Jr.
acknowledged said instrument to be the free act and deed of the corporation.
<PAGE> 3
ASSETS
Federal Communications Commission authorization to operate Mississippi RSA #1
call sign.
Mississippi Public Service Commission authorization and license to act as a
cellular operator in Mississippi.
Cash in following bank accounts:
<TABLE>
<CAPTION>
Bank Account No.
---- -----------
<S> <C>
Calcasieu Marine National Bank 01-095145-01
01-095145-02
01-095145-03
Sunburst of Oxford 11446077605
</TABLE>
Inventories of miscellaneous cellular telephone equipment and accessories and
other miscellaneous movables located at Oxford, Mississippi.
Cellular system equipment and radio:
<TABLE>
<CAPTION>
Cell Site Item
--------- ----
<S> <C> <C>
Batesville 1 Central 348' Guyed Tower
4 Celwave PD10017 Antenna
4 370' COAX 1 5/8" Runs
1 AT&T Series II E Cell With 16 Transceiver
1 AT&T 24 Volt Power Plant
1 Fiberbond Concrete Shelter with Generator
1 Site Fencing
Oxford 1 Central 210' Self Support Tower
5 Celwave PD10017 Antenna
5 230' COAX 1 5/8" Runs
1 AT&T Series II E Cell with 24 Transceiver
1 AT&T 24 Volt Power Plant
2 Kentrox T-Serv Units
1 Fiberbond Concrete Shelter with Generator
1 Site Fencing
Tunica 1 180' Central Self Support Tower
2 Bogner BCR 10 Antenna
1 Sinclair 410C Antenna
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
1 AT&T Series II E Cell with 15 Transceiver
1 AT&T 24 Volt Power Plant
2 Kentrox T-Serv Units
1 Fiberbond Concrete Shelter with Generator
1 Site Fencing
Senatobia 1 Stellar 250' Guyed Tower
3 Bogner BCR10 Antenna
3 270' COAX 1 5/8" Runs
1 AT&T Series II E Cell with 14 Transceiver
1 AT&T 24 Volt Power Plant
1 Lorian Converter Shelf
2 Lorian Converter Units
1 Wescom Channel Bank
10 4W E&M Channel Units
2 Kentrox T-Serv Units
1 Dupont Fiberglass Equipment Shelter with
Generator
1 Site Fencing
Clarksdale 1 Central 370' Guyed Tower
4 Bogner BCR10 Antenna
4 390' COAX 1 5/8" Runs
1 AT&T Series II E Cell with 15 Transceiver
1 AT&T 24 Volt Power Plant
1 Lorian Converter shelf
2 Lorian Converter Units
1 Wescom Channel Bank
10 4W E&M Channel Units
2 Kentrox T-Serv Units
1 Dupont Fiberglass Equipment Shelter with
Generator
1 Site Fencing
Holly Springs 1 Central 348' Guyed Tower
4 Celwave Antenna
4 370' COAX 1 5/8" Runs
1 AT&T Series II E Cell with 15 Transceiver
1 AT&T 24 Volt Power Plant
2 Kentrox T-Serv Units
1 Fiberbond Concrete Shelter with Generator
1 Site Fencing
</TABLE>
Leases - See attached Assignment of Lease.
Contracts - See attached Assignment of Contract.
<PAGE> 5
Accounts Receivables.
LIABILITIES
Accounts Payable.
Accrued Expenses.
LIABILITIES - continued
Customer Deposits.
Notes payable as follows:
(1) Open note to Cameron Telephone Company dated May 31, 1994 in
the amount of $309,265.17, with interest at the rate of 5.44%.
(2) Open note to Cameron Telephone Company dated May 31, 1994 in
the amount of $305,771.00, with interest at the rate of 5.44%.
(3) Open note to Cameron Telephone Company dated June 30, 1994 in
the amount of $1,027,000.00, with interest at the rate of
5.44%.
(4) Open note to Cameron Telephone Company dated April 14, 1993 in
the amount of $2,729,924.84, with interest at the rate of
5.45%.
(5) Collateral Note in the amount of $5,000,000.00 with interest
at the rate of 10%, payable on demand.
(6) Collateral Mortgage to secure Collateral Note in (4) above.
<PAGE> 6
COLLATERAL MORTGAGE NOTE
Amount: $5,000,000 Lake Charles, Louisiana
April 14, 1993
ON DEMAND AFTER DATE, THE UNDERSIGNED PROMISE TO PAY TO THE ORDER OF
BEARER THE SUM OF $5,000,000.00, for value received, negotiable and payable
without defalcation or discount, with interest from maturity at the rate of ten
per cent (10%) Interest per annum, at 101 East Thomas Street, P.O. Box 167,
Sulphur, Louisiana 70663.
The makers, endorsers, guarantors, and sureties hereby severally waive
presentment for payment, demand, protest and notice of protest and non-payment,
and also all pleas of division and discussion. This note may be extended
without notice and without affecting the liabilities of any of the parties
hereto. If the maker or makers should fail in business or become bankrupt, or
should have filed against them or any of them, proceedings in involuntary
bankruptcy or for the appointment of a receiver, this note and all other debts
and obligations of the maker, direct or contingent, shall, at the option of the
holder or holders of this note, immediately become due and payable. In case
this note should be placed in the hands of any attorney at law for collection,
there shall be due attorney's fees hereby fixed at ten per cent (10%) on the
amount due or sued for or claimed or sought to be protected, preserved or
enforced.
It is hereby agreed that if default be made in the payment of the
principal sum hereinabove mentioned, or any installment thereof, or any
interest thereon, as above described, or if default be made in any obligation
secured by this note, then, in any or all such events, the entire amount of the
principal of this note with all interest then accrued, shall, at the option of
the holder or holders of this note, become and be due and collectible on the
conditions as provided expressly in said mortgage, time being of the essence of
this agreement. The makers, endorsers, guarantors and sureties hereby
specifically agree that they are liable jointly, severally and in solido unto
the bearer of this note for the full amount of principal, interest, attorney's
fees and costs.
/s/ WILLIAM L. HENNING, JR.
-------------------------------
Mercury, Inc.
by William L. Henning, Jr. President
"Ne Varietur" to identify with an Act of
Collateral Mortgage passed before me on
April 14, 1993.
/s/ [ILLEGIBLE]
- -----------------------------------
Notary Public
<PAGE> 7
Sulphur, Louisiana April 14, 1993
For value received, the undersigned, jointly, severally and in solido
promise to pay to the order of CAMERON TELEPHONE COMPANY at its office at 101
E. Thomas Street, Sulphur, Louisiana, TWO MILLION SEVEN HUNDRED SEVENTY NINE
THOUSAND NINE HUNDRED TWENTY FOUR AND 84/100 ($2,779,924.84) DOLLARS (which
includes accrued interest for two years @ 5.45 per cent on $2,500,000) in 28
equal quarterly installments, the first maturing on the 14th day of April 1995,
and one on the same day of every third month thereafter until paid. Each
installment shall be Ninety Nine Thousand Two Hundred Eighty Three and 03/100
($99,283.03) Dollars, plus interest, except the last, which shall be the unpaid
balance, with interest at the rate of 5.45 per cent per annum from April 14,
1995, until paid.
Failure to pay any of the installments of this note at its maturity
shall mature this note in its entirety, and all the remaining installments
shall immediately become due and payable.
And I, we, the makers, signers and endorsers of this note hereby
severally waive presentment for payment, demand, protest, notice of protest and
of dishonor, and consent that time of payment may be extended without notice or
previous consent of any of them. And, if suit for collection is instituted or
this note is placed in the hands of an attorney for collection, we bind
ourselves to pay the fees of the attorney who may be employed for that purpose,
which fees are hereby fixed at Ten Percent (10%) of the amount due.
MERCURY, INC.
BY /s/ WILLIAM L. HENNING, JR.
----------------------------
<PAGE> 8
DEED OF TRUST, SECURITY AGREEMENT
AND FIXTURE FILING
This Deed of Trust, Security Agreement and Fixture Filing (hereinafter
called the "Mortgage") is executed by Mercury, Inc., a Louisiana corporation
(hereinafter called the "Mortgagor"), to Thomas G. Henning, Trustee
(hereinafter called the "Trustee"), for the benefit of Cameron Telephone
Company, a Louisiana corporation (hereinafter called the "Mortgagee").
WHEREAS, Mortgagor is indebted to Mortgagee in the original principal
amount of Five Million and No/100 ($5,000,000) Dollars evidenced by a
promissory note of even date herewith in favor of Mortgagee, bearing interest
from date at the rate specified therein and providing for payment of
Mortgagee's attorneys' fees after default and being due and payable on demand
(hereinafter called the "Note"); and
WHEREAS, Mortgagor desires to secure prompt payment of the Note,
together with any renewals, amendments and extensions, together with the due
performance by Mortgagor of the covenants, agreements and provisions contained
in the Mortgage (all being herein referred to as the "Indebtedness");
NOW, THEREFORE, in consideration of the Indebtedness, Mortgagor grants
to Mortgagee a security interest in the following described property, rights
and interests to the extent that such property, rights and interests are
personal property; and Mortgagor conveys and warrants to Trustee for the
benefit of Mortgagee and its successor sand assigns the following described
property, rights and interests are real property (all of said real and personal
property being sometimes called the "Mortgaged Property"):
I.
All right, title and interest of the Mortgagor in and to the existing
facilities and buildings, plants, works, improvements, structures, estates,
grants, franchises, easements, rights, privileges and properties, real,
personal, and mixed, tangible or intangible, of every kind or description, now
owned by the Mortgagor or which may hereafter be owned, constructed or acquired
by the Mortgagor, wherever located, and in and to all extensions and
improvements thereof and additions thereto, including all buildings, plants,
works, structures, improvements.
II.
All right, title and interest of the Mortgagor in, to and under any
and all licenses, franchises, ordinances, privileges and permits heretofore
granted, issued or executed, or which may hereafter be granted, issued or
executed, to it or to its assignors by the United States of America, or by any
state, or by any county, municipality, village or other political subdivision
thereof, or by any agency, board, commission or department of any of the
foregoing, authorizing the construction, acquisition or operation of Cellular
Radio Telephone properties, facilities, systems or businesses, relating to
Cellular Radio Telephone, insofar as the same may by law be assigned, granted,
bargained, sold, conveyed, transferred, mortgaged, or pledged including but not
exclusively that particular construction permit grant by the Federal
Communication Commission to Mortgagee to construct a cellular radio telephone
system in Mississippi RSA #1.
III.
All right, title and interest of the Mortgagor in, to and under any
and all contracts heretofore or hereafter executed by and between Mortgaged
Property together with any and all other accounts, contracts, rights and
general intangibles (as such terms are defined in the applicable Uniform
Commercial Code) heretofore or hereafter acquired by Mortgagor.
<PAGE> 9
IV.
(1) Also, all right, title and interest of the Mortgagor in and to
all other property, real or personal, tangible or intangible, of every kind,
nature and description, and wheresoever situated, now owned or hereafter
acquired by the Mortgagor, it being the intention hereof that all such property
now owned but not specifically described herein or acquired or held by the
Mortgagor, after the date hereof shall be as fully embraced within and
subjected to the lien hereof as if the same were now owned by the Mortgagor and
were specifically described herein to the extent only, however, that the
subjection of such property to the lien hereof shall not be contrary to law;
(2) All of the real property presently owned by Mortgagor is
described on Attachment A hereto and made a part hereof.
V.
Together with all rents, income, revenues, profits and benefits at any
time derived, received or had from any and all of the above described property
of the Mortgagor.
TO HAVE AND TO HOLD all and singular the Mortgaged Property unto the
Mortgagee and its assigns forever, to secure equally and ratably the payment of
the principal of and interest on the note, according to its tenor and effect,
without preference, priority or distinction as to interest or principal, or as
to any lien or otherwise of any note over any other note by reason of the
priority in time of the execution, delivery or maturity thereof or of the
assignment or negotiations thereof, or otherwise, and to secure the due
performance of the covenants, agreements Section 14 and provisions herein
continued, and for the uses and purposes and upon the terms, conditions,
provisos and agreements hereinafter expressed and declared.
This conveyance is in trust to secure the payment and performance of
the Indebtedness. If Mortgagor shall pay and perform said Indebtedness
promptly, then this conveyance shall be void and of no effect.
ARTICLE I
CONFESSION OF JUDGMENT
SECTION 1. The Mortgagor is duly authorized under its articles or
certificate of incorporation and bylaws and the laws of the state of its
incorporation and all other applicable provisions of law to execute and deliver
the Note and this Mortgage and to execute and deliver additional notes and
notes to refund, or in renewal of, or in substitution for, outstanding notes;
and all corporate action on its part for the execution and delivery of the Note
and of this Mortgage has been duly and effectively taken; and the Note and this
Mortgage are the valid and enforceable obligations of the Mortgagor in
accordance with their respective terms.
SECTION 2. The Mortgagor warrants that it has good right and lawful
authority to mortgage the property described in the granting clauses of this
Mortgage for the purposes herein expressed, and that the said property is free
and clear of any deed of trust, mortgage, lien, charge or encumbrance thereon
or affecting the title thereto or any cloud on the title thereto.
The Mortgagor will, so long as the note shall be outstanding, maintain
and preserve the lien of this Mortgage superior to all other liens affecting
the Mortgaged Property, and will forever warrant and defend the title to the
property described as being mortgaged hereby to the Mortgagee, against any and
all claims and demands whatsoever. The Mortgagor will promptly pay or discharge
any and all obligations for or on account of which any such lien or charge
might exist or could be created, and any and all taxes,
-2-
<PAGE> 10
rates, levies, assessments, liens, claims or other charges imposed upon or
accruing upon the Mortgaged Property, or any part thereof (whether taxed to the
Mortgagor or to the Mortgagee), or the franchises, earnings or business of the
Mortgagor, as and when the same shall become due and payable; and whenever
called upon so to do the Mortgagor will furnish to the Mortgagee adequate proof
of such payments or discharge.
SECTION 3. The Mortgagor will duly and punctually pay the principal of
and interest on the Note at the dates and places and in the manner provided
therein, according to the true intent and meaning thereof, and all other sums
becoming due hereunder.
SECTION 4. The Mortgagor will at all times, so long as the Note shall
be outstanding, take or cause to be taken all such action as from time to time
may be necessary to preserve its corporate existence and to preserve and renew
all franchises, rights or way, easements, permits and licenses now or hereafter
to it granted or upon it conferred, and will comply with all valid laws,
ordinances, regulations and requirements applicable to it or its property. The
Mortgagor will not, without the approval in writing of the Mortgagee, sell,
lease or transfer (or make any agreement therefor) the Mortgaged Property, or
any part thereof, or reorganize, consolidate with or merge into any other
corporation.
The Mortgagor may, however, without obtaining the approval of the
Mortgagee, at any time or from time to time so long as the Mortgagor is not in
default hereunder, sell or otherwise dispose of, free from the lien hereof, any
of its property which is neither necessary to nor useful for the operation of
the Mortgagor's business, or which has become obsolete, worn out or damaged
or otherwise unsuitable, for the purposes of the Mortgagor; provided, however,
that the Mortgagor shall: (a) to the extent necessary, replace the same by, or
substitute therefor, other property of the same kind and nature, which shall be
subject to the lien hereof, free and clear of all prior liens, and apply any
proceeds derived from such sale or other disposition of such property and not
needed for the replacement thereof to the payment of the indebtedness evidenced
by the Note; or (b) immediately upon the receipt of the proceeds of any sale or
other disposition of said property, apply the entire amount of such proceeds to
the payment of the indebtedness evidenced by the Note; or (c) deposit all or
such part of the proceeds derived from the sale or other disposition of said
property as Mortgagee shall specify in such restricted bank accounts as
Mortgagee shall designate, and shall use the same only for such additions to or
improvements of the Mortgaged Property and on such terms and conditions as
Mortgagee shall specify.
SECTION 5. (a) The Mortgagor will at all times maintain and preserve
the Mortgaged Property in good repair, working order and condition, and will
from time to time make all needful and proper repairs, renewals and
replacements, and useful and proper alterations, additions, betterment and
improvements, and will, subject to contingencies beyond its reasonable control,
at all times keep its plant and properties in continuous operation and use all
reasonable diligence to furnish the customers served by it through the
Mortgaged Property with adequate cellular telephone service.
(b) The Mortgagor will, within ninety (90) days after the end of
each fiscal year, furnish Mortgagee, as a part of the annual reports required
to be furnished pursuant to Section 11 of Article II hereof, with a statement
of the Mortgagor's expense for maintenance, and amounts transferred to or from,
and balances remaining in, the Unappropriated Earned Surplus Account and the
Earned Surplus Maintenance Reserve.
-3-
<PAGE> 11
SECTION 6. Except as specifically authorized in writing in advance by
the Mortgagee, the Mortgagor will purchase all materials, equipment, supplies
and replacements to be incorporated in or used in connection with the Mortgaged
Property outright, and not subject to any conditional sales agreement, chattel
mortgage, bailment lease, or other agreement reserving to the seller any right,
title or lien.
SECTION 7. (a) The Mortgagor will take out, as the respective risks
are incurred, and maintain the following classes and amounts of insurance: (1)
Fidelity bonds covering all officers, employees and collection agents of the
Mortgagor, in a minimum amount of $20,000 for each such officer, employee or
collection agent if annual gross revenues received from the Mortgaged Property
are less than $50,000 with an increase in such minimum coverage of $5,000 for
each multiple of $50,000 by which the annual gross revenues received from the
Mortgaged Property exceed $50,000; provided, however, that no more than
$550,000 coverage shall be required: (2) Fire, and either windstorm or extended
coverage insurance, in amounts not less that 80% of the actual current cash
value of the property insured, on the Mortgaged Property, including all
buildings, towers, equipment, supplies and materials, exclusive of material
stored in the open and not within 100 feet of any building; (3) Public
liability and property damage liability insurance, covering ownership
liability, and all operations of the Mortgagor, with limits for bodily injury
or death of not less than $1,000,000 for one person and $2,000,000 for each
accident, and with limits for property damage of not less than $500,000 for
each accident and $1,000,000 aggregate for the policy period; (5) Liability
insurance on all motor vehicles, trailers and semi-trailers used in the conduct
of the Mortgagor's business, whether owned, non-owned or hired by the
Mortgagor, with public liability limits of not less than $100,000 for one
person and $50,000 for each accident, and with property damage limits of
$300,000 for each accident; and (6) Workmen's compensation insurance covering
all employees of the Mortgagor, in such amounts as may be required by law, or
if the Mortgagor or any of its employees are not subject to the workmen's
compensation laws of the State of States in which the Mortgagor conducts its
operations, then its workmen's compensation policy shall provide voluntary
compensation coverage to the same extent as though the Mortgagor and such
employees were subject to such laws; and including "extra legal" medical aid
coverage, and, in all cases where occupational disease liability coverage, in
limits of not less than $500,000 for any one employee and $1,000,000 aggregate
for the policy period.
The Mortgagor will also, from time to time, increase or supplement the
classes and amounts of insurance specified above to the extent required to
conform to the accepted practice of the cellular telephone industry for
companies of the size and character of the Mortgagor. The Mortgagor will, up
request of Mortgagee,, submit to the Mortgagee a schedule of its insurance in
effect on the date specified in such request and also originals or duplicate
originals of such insurance policies or bonds as may be requested. If the
Mortgagor shall at any time fail or refuse to take out or maintain insurance or
to make changes in respect thereof upon appropriate request by Mortgagee,
Mortgagee may take out such insurance on behalf and in the name of the
Mortgagor, and the Mortgagor will pay the cost thereof.
(b) In the event of damage to or the destruction or loss of any
portion of the Mortgaged Property which shall be covered by insurance, unless
Mortgagee shall otherwise agree, the Mortgagor shall replace or restore such
damaged, destroyed or lost portion of the Mortgaged Property shall be in
substantially the same condition as it was in prior to such damage, destruction
or loss, and shall apply the proceeds of the insurance for that purpose. The
Mortgagor shall replace the loss or shall commence such restoration promptly
after such damage, destruction or loss shall have occurred and shall complete
such replacement or restoration as expeditiously
-4-
<PAGE> 12
as practicable, and shall pay or cause to be paid out of the proceeds of such
insurance all costs and expenses in connection therewith so that such
replacement or restoration shall be so completed that the portion of the
Mortgaged Property so replaced shall be free and clear of all mechanic's liens
and other claims.
SECTION 8. In the event of the failure of the Mortgagor in any respect
to comply with the covenants and conditions herein contained with respect to
the procuring of insurance, the payment of taxes, assessments and other
charges, or the keeping of the Mortgaged Property in repair and free of liens
and other claims, Mortgagee shall have the right (without prejudice to any
other rights arising by reason of such default) to advance or expend moneys for
the purpose of procuring such insurance, or for the payment of insurance
premiums, taxes, assessments or other charges,or to save the Mortgaged Property
from sale or forfeiture for any unpaid tax or assessment, or otherwise, or to
redeem the same from any tax or other sale, or to purchase any tax title
thereon, or to remove or purchase any mechanics' liens or other encumbrance
thereon, or to make repairs thereon, or to prosecute or defend any suit in
relation to the Mortgaged Property, or in any manner to protect the Mortgaged
Property and the title thereto, and all sums so advanced for any of the
aforesaid purposes with interest thereon at the rate of Ten percent (10%) per
annum shall be deemed a charge upon the Mortgaged Property in the same manner
as the note at the time outstanding is secured and shall be forthwith paid to
the Mortgagee making such advance or advances upon demand. It shall not be
obligatory for Mortgagee in making any such advances or expenditures to inquire
into the validity of any such tax title, or of any of such taxes or assessments
for sales therefor, or of any such mechanics' liens or other encumbrance.
SECTION 9. The Mortgagor will not, without the approval in writing of
Mortgagee: (a) enter into any contract or contracts for the operation or
maintenance of all or any part of its property, for the use by others of any of
the Mortgaged Property: or (b) deposit any of its funds, regardless of the
source thereof, in any bank which is not insured by the Federal Deposit
Insurance Corporation, or the successor thereof.
SECTION 10. Salaries, wages and other compensation paid by the
Mortgagor for services, and directors' fees shall be reasonable and in
conformity with the usual practice of corporations of the size and nature of
the Mortgagor.
SECTION 11. The Mortgagor will at all times keep, and safely preserve,
proper books, records and accounts in which full and true entries will be made
of all of the dealings, business and affairs of the Mortgagor, in accordance
with methods of accounting described by the state regulatory body having
jurisdiction over the Mortgagor, or in the absence of such regulatory body or
such prescription, by the Federal Communications Commission. The Mortgagor will
furnish Mortgagee (a) not later than the thirtieth day of January, April, July
and October in each year, a statement of operations for the three calendar
months preceding said months, including, without limitation, an analysis of the
Mortgagor's revenues, expenses and customer accounts for such preceding three
months, and, if requested by the Mortgagee, such statement shall be in such
form and include therein such other information as may be specified in such
request; and (b) within ninety (90) days after the close of each fiscal year,
full and complete reports, certified by its Treasurer, of its financial
condition as of the end of such fiscal year and of its operations for such
period, and, if requested by the Mortgagee, such reports shall be audited and
certified by independent public accountants satisfactory to such mortgagee.
Mortgagee, through its representatives, shall at all times during reasonable
business hours have access to, and the right to inspect and make copies of any
or all books, records and accounts, and any or all invoices, contracts, leases,
payrolls,
-5-
<PAGE> 13
canceled checks, statements and other documents and papers of every kind
pertaining to the Mortgagor's property or business.
SECTION 12. The Mortgagor will from time to time upon written demand
of the Mortgagee, make, execute, acknowledge and deliver or cause to be made,
executed, acknowledged and delivered all such further and supplemental
mortgages, instruments and conveyances, and take or cause to be taken all such
further action, as may reasonably be requested by Mortgagee to effectuate the
intention of these presents and to provide for the securing and payment of the
principal of and interest on the note and for the purpose of fully conveying,
transferring and confirming unto the Mortgagee the property hereby conveyed,
mortgaged and pledged, or intended to be, whether now owned by the Mortgagor or
hereafter acquired by it. The Mortgagor will cause this Mortgage and any and
all supplemental mortgages and every additional instrument which shall be
executed pursuant to this section forthwith upon execution to be recorded and
filed and re-recorded and refiled as conveyances and mortgages of real and
personal property in such manner and in such places as may be required by law
in order fully to preserve the security for the note and to perfect and
maintain the superior lien of this Mortgage and all supplemental mortgages and
the rights and remedies of the Mortgagee.
SECTION 13. The Mortgagor will not declare or pay any dividends
on the common stock or purchase or redeem any of its capital stock without
consent of Mortgagee during the time the note is unpaid.
REMEDIES OF THE MORTGAGEE
SECTION 1. If one or more of the following events (hereinafter called
"events of default") shall happen, that is to say:
(a) default shall be made in the payment of the Note or on account
of interest on or principal of any note or notes when and as the same shall be
required to be made and such default shall continue for thirty (30) days;
(b) default shall be made in the due observance or performance of
any other of the covenants, conditions or agreements on the part of the
Mortgagor in this Mortgage contained; and such default shall continue for a
period of thirty (30) days after written notice specifying such default and
requiring the same to be remedied shall have been given to the Mortgagor by any
Mortgagee;
(c) The Mortgagor shall file a petition in bankruptcy or be
adjudicated a bankrupt or insolvent, or shall make an assignment for the
benefit of its creditors or shall consent to the appointment of a receiver of
itself or of its property, or shall institute proceedings for its
reorganization or proceedings instituted by others for its reorganization shall
not be dismissed within thirty (30) days after the institution thereof;
(d) a receiver or liquidator of the Mortgagor or of any
substantial portion of its property shall be appointed and the order appointing
such receiver or liquidator shall not be vacated within thirty (30) days after
the entry thereof;
(e) the Mortgagor shall forfeit or otherwise be deprived of its
corporate charter or franchises, permits or licenses required to carry on any
material portion of its business; or
(f) a final judgment shall be entered against the Mortgagor and
shall remain unsatisfied or without a stay in respect thereof for a period of
thirty (30) days.
-6-
<PAGE> 14
SECTION 2. If one or more of the events of default shall happen, the
Mortgagee may, insofar as not prohibited by law;
(a) take immediate possession of the Mortgaged Property, collect
and receive all credits, outstanding accounts and bills receivable of the
Mortgagor and all rents, income, revenues and profits pertaining to or arising
from the Mortgaged Property, or any part thereof, and issue binding receipts
therefor; and manage, control and operate the Mortgaged Property as fully as
the Mortgagor might do if in possession thereof, including, without limitation,
the making of all repairs or replacements deemed necessary or advisable;
(b) proceed to protect and enforce the rights of the Mortgagee and
or actions in equity or at law in any court or courts of competent
jurisdiction, whether for specific performance of any covenant or any agreement
contained herein or in aid of the execution of any power herein granted or for
the foreclosure hereof or hereunder or for the sale of the Mortgaged Property
or any part thereof, or to collect the debts hereby secured or for the
enforcement of such other or additional appropriate legal or equitable remedies
as may be deemed most effectual to protect and enforce the rights and remedies
herein granted or conferred, and in the event of the institution of any such
action or suit the Mortgagee instituting such action or suit shall have the
right to have appointed a receiver of its choice of the Mortgaged Property and
of all rents, income, revenues and profits pertaining thereto or arising
therefrom derived, received or had from the time of the commencement of such
suit or action and such receiver shall have all the usual powers and duties of
receivers, in like and similar cases, to the fullest extent permitted by law,
and if application shall be made for the appointment of a receiver the
Mortgagor hereby expressly consents that the court to which such application
shall be made may make said appointment without the necessity of the Mortgagor
or receiver posting bond; and
(c) Instruct the Trustee to foreclose under the power of sale, in
which case Trustee shall offer for sale all or part of the Mortgaged Property
at public auction to the highest and best bidder after having advertised and
given notice of said sale as required by Section 89-1-55 of the Mississippi
Code, as amended or superseded from time to time. If the Mortgaged Property
being sold be situated in two or more counties or in two judicial districts of
the same county, then the Trustee shall have power to select in which county or
judicial district the sale of the Mortgaged Property shall be made, and the
selection shall be binding upon Mortgagor and all persons claiming through or
under it, whether by contract or by law. Trustee shall have the discretion to
determine all terms of sale not otherwise specified herein, including the place
and terms of sale. Trustee shall have full power to post any notice or conduct
any sale through an agent duly appointed by him for this purpose, but said
appointment need not be in writing or recorded. Trustee may, from time to time,
adjourn said sale to a later time or date without re-advertising, by giving
notice of the time and place of such continued sale at the time when and where
Trustee shall make such adjournment. Each and every recital contained in any
instrument of conveyance made by Trustee shall conclusively establish the truth
and accuracy of the matters recited therein, including, without limitation, the
occurrence of an event of default and conduct of such sale in the manner
provided herein, and any and all prerequisites to the validity of such sale
shall be conclusively presumed to have been performed. The power of sale
provided for by this Mortgage shall not be exhausted until all of the Mortgaged
Property has been sold or released from the Mortgage, or the Indebtedness has
been satisfied, whichever occurs first. The Mortgagor waives the provisions of
Section 89-1-55 of the Mississippi Code and Section 111 of the Mississippi
Constitution, as the same may be amended, so far as they restrict the Trustees
from offering at sale more than 160 acres at a time,
-7-
<PAGE> 15
and the Trustee may offer the land conveyed herein as a whole, regardless of
the manner in which it may be described,
SECTION 3. At any sale hereunder the Mortgagee shall have the right to
bid for and purchase the Mortgaged Property, or such part thereof as shall be
offered for sale, and the Mortgagee may apply in settlement of the purchase
price of the property so purchased the portion of the net proceeds of such sale
which would be applicable to the payment of account of the principal of and
interest on the note held by Mortgagee, and such amount so applied shall be
credited as a payment on account of principal of and interest on the note held
by the Mortgagee.
SECTION 4. Every right or remedy herein conferred upon or reserved to
the Mortgagee shall be cumulative and shall be in addition to every other right
and remedy given hereunder or now or hereafter existing at law, or in equity,
or by statute. The pursuit of any right or remedy shall not be construed as an
election.
SECTION 5. Mortgagor, for itself and all who may claim through or
under it, covenants that it will not at any time insist upon or plead, or in
any manner whatever claim, or take the benefit or advantage of, any
appraisement, valuation, stay, extension or redemption laws now or hereafter
in force in any locality where any of the Mortgaged Property may be situated,
in order to prevent, delay or hinder the enforcement or foreclosure of this
Mortgage, or the absolute sale of the Mortgaged Property, or any part thereof,
or the final and absolute putting into possession thereof, immediately after
such sale, of the purchaser or purchasers thereat, and the Mortgagor, for
itself and all who may claim through or under it, hereby waives the benefit of
all such laws unless such waiver shall be forbidden by law.
SECTION 6. This Mortgage shall constitute a "security agreement"
within the meaning of the Uniform Commercial Code of the State of Mississippi
with respect to the Mortgagor's interest in the portion of the Mortgaged
Property which is personal property. Upon an event of default the Mortgagee
shall have all of the right of a secured party and may proceed against all of
the Mortgaged Property in accordance with its rights under real property law.
If the Mortgagee elects to proceed against the personal property separately
from the real property, fifteen days notice of the sale of the Mortgagor's
interest in the personal property shall be reasonable notice. Upon demand by
Mortgagee, Mortgagor shall assemble the personal property and make it available
to Mortgagee at a place to be designated by Mortgagee.
ARTICLE IV
POSSESSION UNTIL DEFAULT-DEFEASANCE CLAUSE
SECTION 1. Until some one or more of the events of default shall have
happened, the Mortgagor shall be suffered and permitted to retain actual
possession of the Mortgaged Property, and to manage, operate and use the same
and any part thereof, with the rights and franchises appertaining thereto, all
to collect, receive, take, use and enjoy the rents, revenues, issues, earnings,
income, products and profits thereof or therefrom, subject to the provisions of
this Mortgage.
ARTICLE V
TRUSTEE
SECTION 1. Trustee shall not be liable for any error of judgment or
act done or omission by Trustee in good faith, or be otherwise responsible or
accountable to mortgagor under any circumstances whatsoever, nor shall Trustee
be personally liable in case of entry by him, or anyone entering by virtue of
the powers herein grated, upon the Property for debts contracted or liability
for damages incurred in the management or operation of the
-8-
<PAGE> 16
Mortgaged Property. Trustee shall have the right to rely on any instrument,
document or signature authorizing or supporting any action taken or proposed to
be taken by him hereunder, believed by him in good faith to be genuine.
Trustee shall be entitled to reimbursement for expenses incurred by him in the
performance of his duties hereunder and to reasonable compensation for such of
his services hereunder as shall be rendered. Mortgagor will, from time to time,
pay the compensation due to Trustee hereunder and reimburse Trustee for, and
save him harmless against, any and all liability and expenses which may be
incurred by him in the performance of his duties.
SECTION 2. All moneys received by Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received, but need not be segregated in any manner from any other moneys
(except to the extent required by law), and Trustee shall be under no liability
for interest on any money received by him hereunder.
SECTION 3. Trustee may resign at any time with or without notice. If
Trustee shall die, resign or become disqualified from acting in the execution
of this trust or shall fail or refuse to execute the same when requested by
Mortgagee so to do, or if, for any reason, Mortgagee shall prefer to appoint a
substitute trustee to act instead of the aforenamed Trustee, Mortgagee shall
have full power to appoint a substitute trustee and, if preferred, several
substitute trustees in succession who shall succeed to all the estates, rights,
powers and duties of the aforenamed Trustee. Any substitution may be executed
by any duly authorized officer of Mortgagee or by any agent or attorney-in-
fact on behalf of Mortgagee.
SECTION 4. Any new Trustee appointed pursuant to any of the provisions
hereof shall, without any further act, deed or conveyance, become vested with
all the estates, properties, rights, powers and trust of its or his predecessor
in the rights hereunder with like effect as if originally named as Trustee
herein, but nevertheless, upon the written request of Mortgagee or of the
successor Trustee, the Trustee ceasing to act shall execute and deliver and
instrument transferring to such successor Trustee, upon the trusts herein
express, all the estates, properties, rights, powers and trusts of the Trustee
so ceasing to act, and shall duly assign, transfer and deliver any of the
property and money held by such Trustee to the successor Trustee so appointed
in his place.
ARTICLE VI
MISCELLANEOUS
SECTION 1. All acts and obligations of the Mortgagor hereunder shall
be subject to all applicable orders, rules and regulations, now or hereafter
in effect, of all regulatory bodies having jurisdiction in the premises, to the
end that no act or omission to act on the part of the Mortgagor shall
constitute a default hereunder insofar as such act or omission shall have been
required by reason of any order, rule or regulation of any such regulatory
body.
SECTION 2. All of the covenants, stipulations, promises, undertakings
and agreements herein contained by or on behalf of the Mortgagor shall bind its
successors and assigns, whether so specified or not, and all titles, rights and
remedies hereby granted to or conferred upon the Mortgagee shall pass to and
inure to the benefit of the successors and assigns of the Mortgagee and shall
be deemed to be granted or conferred for the ratable benefit and security of
all who shall from time to time be the holders of notes executed and delivered
as herein provided.
SECTION 3. The descriptive headings of the various articles of this
Mortgage where formulated and inserted for convenience only
-9-
<PAGE> 17
and shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
SECTION 4. All demands, notices, reports, approvals, designations, or
directions required or permitted to given hereunder shall be in writing and
shall be deemed to be properly given if mailed by registered mail addressed to
the proper party or parties at the following addresses:
As to the Mortgagor: Mercury, Inc.
Post Office Box 3709
Lake Charles, LA 70602
As to the Mortgagee: Cameron Telephone Company
Post Office Box 167
Sulphur, LA 70664-0167
SECTION 5. The invalidity of any one or more phrases, clauses,
sentences, paragraphs or provisions shall not affect the remaining portions of
this Mortgage.
SECTION 6. This Mortgage may be simultaneously done and passed in any
number of counterparts, and all said counterparts done and passed and
delivered, each as an original, shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, Mortgagor, acting by and through its duly
authorized officer, has executed this instrument on April 14, 1993.
WITNESSES: MERCURY, INC.
/s/ DEBRA B. VINSAND By:/s/ WILLIAM L. HENNING, JR.
- ----------------------------- -------------------------------
President-William L. Henning, Jr.
/s/ ILLEGIBLE
- -----------------------------
CERTIFICATE OF SECRETARY
I, Lena B. Henning, do hereby certify that I am the duly elected,
qualified and acting Secretary of Mercury, Inc., (hereinafter called the
"Mortgagor") and the keeper of its records; that the following is a true and
correct copy of a resolution duly adopted at a special meeting of the Board of
Directors of the Mortgagor convened and held pursuant to and in accordance with
the laws of the State of Louisiana and the articles of incorporation and bylaws
of the Mortgagor on the 14th day of April, 1993.
RESOLVED, that the President is authorized on behalf of
Mercury, Inc. to execute or pass as an authentic act and
deliver as many counterparts as shall be deemed advisable of a
mortgage to Cameron Telephone Company, substantially in the
form of the mortgage presented to this meeting, with such
changes in the form of the mortgage as the president shall
deem advisable.
that the foregoing resolution of the Board of Directors has not been rescinded
or modified and that the same is at the date hereof in full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the seal of Mercury, Inc., this 14th day of April, 1993.
/s/ LENA B. HENNING
-------------------
SECRETARY
-10-
<PAGE> 18
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF CALCASIEU
Personally appeared before me, the undersigned authority in and for
said county and state, on this 14th day of April, 1993 within my jurisdiction,
the within-named William L. Henning, Jr., who acknowledged to me that he is
president of Mercury, Inc., a Louisiana corporation, and the for an on behalf
of said corporation, and as its act and deed, he executed the above and
foregoing Deed of Trust, Security Agreement and Fixture Filing, after first
having been duly authorized so to do.
ILLEGIBLE
------------------------
(Seal) Notary Public
My commission expires:
Death
- ----------------------
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES
1. Mercury Cellular Telephone Company, a Louisiana corporation.
2. Mississippi One Cellular Telephone, a Louisiana corporation.
3. Mississippi-34 Cellular Corporation, a Mississippi corporation.
4. Mercury Cellular of Kansas, Inc., a Louisiana corporation.
5. Mercury Mobility, L.L.C., a Louisiana limited liability company.
Mercury Cellular Telephone Company does business as Mercury Cellular and
Paging.
Mississippi One Cellular Telephone Company, Mississippi-34 Cellular
Corporation, and Mercury Cellular of Kansas, Inc. all do business as
CellularOne(R).
<PAGE> 1
When the transactions referred to in note 15 of the Notes to Consolidated
Financial Statements have been consummated, we will be in a position to render
the following report.
KPMG Peat Marwick LLP
November 6, 1996
EXHIBIT 23.1
INDEPENDENT AUDITORS' REPORT ON
FINANCIAL STATEMENT SCHEDULE AND CONSENT
The Board of Directors
US Unwired Inc.:
The audits referred to in our report dated October 31, 1996, except as to
note 15 which is as of , included the related financial statement
schedule for each of the years in the three-year period ended December 31, 1995,
included in the registration statement. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement schedule based on our audits. In our
opinion, such financial statement schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
We consent to the use of our reports included herein and to the references
to our firm under the headings "Selected Consolidated Financial Data" and
"Experts" in the prospectus.
New Orleans, Louisiana
November , 1996
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Miscellco Communications, Inc.
We consent to the use of our report included herein and to the reference to
our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
New Orleans, Louisiana
November 5, 1996
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
West Alabama Cellular Telephone Company, Inc.:
We consent to the use of our report included herein and to the reference to
our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
New Orleans, Louisiana
November 5, 1996
<PAGE> 1
EXHIBIT 23.4
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Alabama 4 System
We consent to the use of our report included herein and to the reference to
our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
New Orleans, Louisiana
November 5, 1996
<PAGE> 1
EXHIBIT 23.5
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
US Unwired Inc.
We consent to the use in this Registration Statement of Mercury, Inc. on
Form S-1 of our report dated March 3, 1994, appearing in the Prospectus, which
is part of the Registration Statement.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
SMITH, TURNER & REEVES, APA
November 5, 1996
Jackson, Mississippi
<PAGE> 1
EXHIBIT 23.6
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Alabama 4 System
We consent to the reference to our firm under the caption "Experts" and to
the use, in the Form S-1 Registration Statement to be filed by Mercury, Inc. on
or about November 5, 1996, for the registration of 2,750,000 shares of the
Company's Class A Common Stock, of our report dated December 16, 1995 relating
to the financial statements of Dominion Cellular Inc. (Alabama 4 System) for the
years ended September 30, 1995, and 1994.
ELLIOT H. GOLDBERG, CPA, P.C.
Rockville Centre, New York
November 5, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MERCURY INC.
AND SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> SEP-30-1996 DEC-31-1995
<CASH> 8,166,407 5,101,601
<SECURITIES> 0 0
<RECEIVABLES> 7,889,946 5,831,179
<ALLOWANCES> 0 0
<INVENTORY> 1,683,137 1,600,570
<CURRENT-ASSETS> 19,717,556 12,902,304
<PP&E> 26,407,022 20,911,272
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 128,769,903 78,522,851
<CURRENT-LIABILITIES> 14,786,228 7,056,300
<BONDS> 0 0
0 0
0 0
<COMMON> 112,500 112,500
<OTHER-SE> 26,049,841 21,636,727
<TOTAL-LIABILITY-AND-EQUITY> 128,769,903 78,522,851
<SALES> 1,286,595 1,403,425
<TOTAL-REVENUES> 44,176,120 44,176,120
<CGS> 3,376,837 3,372,820
<TOTAL-COSTS> 33,823,077 32,058,733
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 4,510,445 3,401,424
<INCOME-PRETAX> 6,280,624 4,666,979
<INCOME-TAX> 2,350,556 2,381,857
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 4,233,114 2,739,043
<EPS-PRIMARY> 0.38 0.24
<EPS-DILUTED> 0.38 0.24
</TABLE>
