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EXHIBIT 4.74
LOAN NO. S0441
COBANK, ACB
LOAN AGREEMENT
STATE OF LOUISIANA )
)
PARISH OF CALCASIEU )
STATE OF GEORGIA )
)
COUNTY OF XXXX )
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
November 25, 1996, by and between COBANK, ACB ("CoBank") and CTC FINANCIAL,
INC., a Louisiana corporation (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, in an aggregate
principal amount not to exceed $4,000,000, during the period commencing on the
date hereof and ending on but not including the earlier date (the "Termination
Date") of (i) November 24, 1997 or (ii) such later date as CoBank in its sole
discretion may authorize in writing. 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 reloaned by the Borrower to Mercury Cellular Telephone Company
("MCTC") to be applied by MCTC (a) in an amount not to exceed $1,000,000, for
reloan to Mississippi One Cellular Telephone Company ("Mississippi One"), an
affiliate of MCTC, for the repayment by Mississippi One of its outstanding
indebtedness to Cameron Telephone Company, (b) for MCTC's capital expenditures
and working capital needs and (c) to pay the costs and fees associated with
closing the Loan. 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
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on which Federal Reserve Banks are closed, within one Business Day of receipt
by CoBank of a written or telephonic request of an authorized employee of the
Borrower. Unless otherwise agreed, the Loan 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.
SECTION 4. INTEREST AND FEES.
(A) RATE OPTIONS; ETC. The unpaid principal balance of
the Loan shall accrue interest at the rate or rates to be 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 (any such portion, and any portion
selected pursuant to Subsection (A)(2), a "Portion" of the Loan) not bearing
interest at a fixed rate pursuant to Subsection (A)(2), interest shall accrue
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) QUOTED RATE. As to any Portion of the
Loan selected by the Borrower, interest shall accrue 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 Portion of the Loan is to be so fixed for
the interest period selected by the Borrower for such Portion. 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 (5) days to
the stated Termination Date; provided, however, that interest periods may
expire only on a Business Day.
(B) SELECTION AND CHANGE OF RATES. The Borrower shall
select the initial interest rate or rates at the time it gives CoBank a request
for an advance pursuant to Section 3. The Borrower may, on any Business Day,
elect to have a Quoted Rate 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 a Quoted Rate, 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 the Quoted Rate option. In the absence of any such
election, interest shall automatically accrue on such Portion
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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 the Quoted Rate option to accrue interest at the
Variable Rate or pursuant to another Quoted Rate(s) 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.
(C) ACCRUAL OF INTEREST. Interest shall accrue pursuant
to the Quoted Rate option from and including the first day of the applicable
interest period to but excluding the last day of the applicable interest
period. If the Borrower elects to refix the interest rate on any Portion of
the Loan pursuant to Subsection (A)(2), 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 the Quoted Rate option to the Variable Rate option upon
payment of the Surcharge as provided in Subsection (B), interest at the
applicable Quoted 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.
(D) PAYMENT AND CALCULATION. Interest shall be payable
monthly in arrears by the 20th day of the following month, upon any prepayment
and at maturity, and shall be calculated on the actual number of days during
the prior month 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.
(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 (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 (E)
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 loan origination fee for the Loan in the amount of $20,000.
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SECTION 5. PRINCIPAL REPAYMENT AND MATURITY. The unpaid
principal balance of the Loan shall be repaid in full on the Termination Date.
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 a Quoted Rate. For
purposes of calculating the surcharge provided in this Section 6, conversion of
a Portion of the Loan accruing interest pursuant to a Quoted Rate to a
different Quoted Rate(s) pursuant to Section 4(B) 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 a Quoted
Rate, 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).
(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 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
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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 XxXxxx xx Xxxxxxxxxx 000, Xxxxxx,
Xxxxxxxx 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 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 by the Borrower to CoBank of that certain Promissory Note, dated of
even date herewith, made by MCTC to the order of the Borrower, in the original
principal face amount of $4,000,000 (as the same may be amended, modified,
supplemented, extended or restated from time to time
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and any promissory note or notes that may be issued from time to time in
substitution, renewal, extension, replacement or exchange therefor, the "MCTC
Note").
The Loan and the Note are 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 July 1, 1996, and as amended by that certain Second
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").
SECTION 11. CONDITIONS PRECEDENT.
(A) INITIAL ADVANCE. CoBank's obligation to make the
initial advance under the Loan 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 MCTC Note, duly
assigned to CoBank, the MCTC Guaranty and all other 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 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.
(4) OPINIONS OF COUNSEL. That CoBank receive
opinions of counsel for the Borrower, Mississippi One and MCTC (who
shall be 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(F) 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 and MCTC possesses all necessary
operating permits, authorizations,
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approvals, and the like which are material to the conduct of the
Borrower's and MCTC's business or which may otherwise be required by
law.
(7) INSURANCE. That CoBank receive evidence
of insurance by the Borrower and MCTC in such amounts and covering
such risks as are usually carried by companies in the same or similar
business.
(8) 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, which subordination shall provide that no
interest or principal payments may be made on the Mercury Cellular
Debt without the consent of CoBank.
(9) 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 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 person or on the ability of such entity or person to
perform its or his obligations under the Loan Documents to which it is
a party.
(10) 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.
(11) 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 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").
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(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 and (b)
MCTC contained in the MCTC 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 date of such advance, as though made on and as of the
date of such advance.
(3) OFFICER'S CERTIFICATE. That CoBank
receive, if it so requests, a certificate from appropriate officers of
the Borrower and MCTC as to the continuing truth and accuracy of the
representations and warranties of the Borrower and MCTC under the Loan
Documents to which each is a party and the satisfaction of each of the
conditions applicable to the making of the such advance.
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, on and as of the date hereof and on and as of the date
of each advance under the Loan, 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 maintained 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, 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.
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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 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 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
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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 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.
(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.
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(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 generally accepted accounting principles ("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) 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 (for the three months immediately preceding such fiscal
quarter end) and year-to-date financial statements of MCTC prepared in
accordance with GAAP
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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 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 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
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Loan Agreement/CTC Financial
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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
Federal Communications Commission (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 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 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 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, 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.
(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 exe-
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Loan No. S0441
cution), 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 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.
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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 or MCTC to observe, keep or perform any
covenant or agreement contained in (a) any Loan Document other than this
Agreement, (b) 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, (c)
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 July 1, 1996, each by and between the Borrower and
CoBank, providing for a loan of up to $32,400,000, (d) 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, (e) that certain Loan Agreement,
dated as of July 1, 1996, by and between the Borrower and CoBank, providing for
a loan of up to $13,000,000, or (f) the terms of any other agreement (other
than the Loan Documents) between the Borrower, MCTC, Mississippi One or
Mercury, Inc. 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.
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Loan Agreement/CTC Financial
Loan No. S0441
(H) INSOLVENCY, ETC. 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) BINDING OBLIGATIONS. Any of the MCTC Note and the
MCTC Guaranty shall fail for any reason to be the valid and binding obligations
of MCTC or MCTC shall in any way contest or dispute the validity and binding
effect of the MCTC Note or the MCTC 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
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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, the Borrower hereby undertakes and
agrees to cooperate and join with CoBank in any application to the LPSC, 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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Loan Agreement/CTC Financial
Loan No. S0441
If to CoBank, as follows: If to the Borrower, as follows:
CoBank, ACB CTC Financial, Inc.
000 Xxxxxxxx Xxxxxxx X.X. Xxx 0000
Xxxxx 0000 Xxxx Xxxxxxx, Xxxxxxxxx 00000
Xxxxxxx, Xxxxxxx 00000 Attn: Xxxxx Xxxxx;
Attn: Rural Utility Banking Group 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 (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.
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.
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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 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
------------ --------
Agreement Introductory Paragraph
Borrower Introductory Paragraph
Business Day Section 3
Capital Lease Section 14(A)
CoBank Introductory Paragraph
Default Section 11(B)(1)
Event of Default Section 15
FCC Section 13(I)(7)
GAAP Section 13(G)
Governmental Authority Section 16(E)
Laws Section 12(E)
LPSC Section 13(I)(7)
Loan Section 1
Loan Documents Section 11(A)(1)
Material Adverse Effect Section 11(A)(9)
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MCTC Section 2
MCTC Guaranty Section 10
MCTC Note Section 10
Mercury Cellular Debt Section 11(A)(8)
Mississippi One Section 2
Note Section 7
Quoted Rate Section 4(A)(2)
SEC Section 13(I)(7)
Surcharge Section 6
Termination Date Section 1
Variable Rate Section 4(A)(1)
(Signatures follow on the next page.)
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Loan No. S0441
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 ________________ ___, 1996.
CTC FINANCIAL, INC.
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
Attest:
-----------------------------
Name:
-----------------------
Title:
----------------------
[CORPORATE SEAL]
Witnesses to both signatures:
--------------------------------
Witness
--------------------------------
Witness
--------------------------------
Notary Public
My commission expires:
---------
[NOTARIAL SEAL]
(Signatures continued on next page.)
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Loan No. S0441
(Signatures continued from previous page.)
At Atlanta, Georgia, on _____________ ___, 1996.
COBANK, ACB
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
Witnesses to signature:
----------------------------------------
Witness
----------------------------------------
Witness
----------------------------------------
Notary Public
My commission expires:
-----------------
[NOTARIAL SEAL]
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