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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.
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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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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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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:
TOTAL LEVERAGE RATIO NVR MARGIN TREASURY MARGIN
-------------------- ---------- ---------------
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%
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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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:
YEAR PERCENTAGE YEAR PERCENTAGE
---- ---------- ---- ----------
1996 0.417% 2000 1.459%
1997 0.625% 2001 1.667%
1998 0.834% 2002 2.084%
1999 1.250%
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
0000-0000-0 (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, Xxxxxxx,
Xxxxxxx 00000-0000 (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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(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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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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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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(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:
PERIOD RATIO
------ -----
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
(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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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:
MAY 1, 1995 THROUGH OPERATING CASH FLOW
------------------- -------------------
June 30, 1995 $ 300,345
September 30, 1995 $ 796,065
December 31, 1995 $1,332,814
March 31, 1996 $1,865,869
(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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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, 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, or an equivalent rating by a nationally recognized rating
organization.
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Loan Agreement/Mercury Cellular of Kansas
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(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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(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
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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.
000 Xxxxxxxx Xxxxxxx Xxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxx 0000 X.X. Xxxxxx 3709
Xxxxxxx, Xxxxxxx 00000 Xxxx Xxxxxxx, XX 00000
Attn: Rural Utility Banking Group Attn: Xxxxxx Xxxxx;cc:Xxxxxx X. Xxxxxxx
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000
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:
Defined Term Location
------------ --------
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
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Loan Agreement/Mercury Cellular of Kansas
Loan No. T0364
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)
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/ XXXXXX X. XXXXXXX
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
Attest: /s/ XXXXXX XXXXX
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Secretary
(CORPORATE SEAL)
COBANK, ACB
By: /s/ XXXX XXX XXXXXXX
---------------------------------------
Name: Xxxx Xxx Xxxxxxx
Title: Assistant Vice President
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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.
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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.
