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letter of credit. In addition, in 1990, NITCO loaned BMCT
$500,000 to use as a downpayment on BMCT's purchase of the
cellular telephone license and other assets.
On or about April 22, 1991, NITCO loaned BMCT another $3.1
million, so that the principal amount of NITCO's outstanding
loans to BMCT totaled in excess of $3.6 million. With this
additional $3.1 million loan from NITCO, BMCT was then able to
conclude its purchase of the cable telephone license and other
assets from WKBN on April 22, 1991.3 As a result, the above
letter of credit issued by the local Indiana bank was canceled.
At about the time of its April 22, 1991, acquisition of the
Washington rural statistical area number eight cellular telephone
business, BMCT arranged to borrow another $2.8 million from an
unrelated third party, to finance further construction of the
Washington cellular telephone system. To help BMCT obtain the
$2.8 million loan from this third party, NITCO agreed to
subordinate its prior loans to BMCT to the third party's loan.
3An explanatory note to the Dec. 31, 1991, financial
statements of BMCT, L.P., the limited partnership that BMCT,
FiberComm, and NITCO subsequently formed, reflects that the
$3,615,771 purchase price paid by BMCT was allocated to the
license and other assets that were acquired as follows:
Land and buildings $151,143
Cellular license 2,217,265
Equipment 147,363
Warranties 500,000
Consulting agreement 100,000
Noncompete agreement 500,000
Total $3,615,771
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