10-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the fiscal year ended December 31, 2005.

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from                    TO                    .

Commission File Number 0-27416

RURAL CELLULAR CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota	41-1693295
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3905 Dakota Street SW
Alexandria, Minnesota 56308
(320) 762-2000

(Address, including zip code, and telephone number, including area code, of registrant’s principal
executive offices)

Securities registered pursuant to Section 12(b) of the Act:
NONE

Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, par value $.01 per share
Series A Preferred Share Purchase Rights
(Title of class)

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o YES þ NO

     Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. o YES            NO þ

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ YES            NO o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.o

     Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a nonaccelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Securities Exchange Act of 1934. (Check One.)

Large Accelerated Filer o Accelerated Filer þ Non-Accelerated Filer o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o YES            NO þ

     Aggregate value of shares of common stock held by nonaffiliates of the Registrant based upon the closing price on June 30, 2005 (only shares held by directors, officers and their affiliates are excluded): $63,051,734

     Number of shares of common stock outstanding as of the close of business on February 24, 2006:

Class A 13,889,560
Class B 427,334

Documents incorporated by reference:

     Portions of the definitive Proxy Statement relating to the 2006 Annual Meeting of Shareholders, which will be held on May 25, 2006 (“Proxy Statement”), are incorporated by reference into Part III of this report.

TABLE OF CONTENTS

	Page
PART I
ITEM 1. BUSINESS	3
ITEM 1A. RISK FACTORS	21
ITEM 1B. UNRESOLVED STAFF COMMENTS	33
ITEM 2. PROPERTIES	33
ITEM 3. LEGAL PROCEEDINGS	34
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	34
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	35
ITEM 6. SELECTED FINANCIAL DATA	36
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	37
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	56
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	57
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	57
ITEM 9A. CONTROLS AND PROCEDURES	57
ITEM 9B. OTHER INFORMATION	57
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT	58
ITEM 11. EXECUTIVE COMPENSATION	58
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	58
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	59
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES	59
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	60
SIGNATURES	61
Indenture dated November 7, 2005
Second Amendment to Key Employee Deferred Compensation Plan
Key Employee Deferred Compensation Plan II
Subsidiaries
Consent of Deloitte & Touche LLP
Consent of Deloitte & Touche LLP
Section 302 Certification
Section 302 Certification
Section 906 Certification

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PART I

ITEM 1. BUSINESS

References in this Form 10-K to “Rural Cellular,” “RCC,” “we,” “our,” and “us” refer to Rural Cellular Corporation and its subsidiaries as a combined entity, except where it is clear that those terms mean only the parent company.

We file with, or furnish to, the Securities and Exchange Commission (the ''SEC’’) annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as various other information. RCC makes these reports and other information available free of charge on the Investor Relations page of our website as soon as reasonably practicable after providing such reports to the SEC. In addition, in the Corporate Governance section of the Investor Relations page of our website, we make available the Financial Code of Ethics and the charters for the Audit, Compensation, and Nominating Committees. The internet address for our website is at www.unicel.com.

Such reports may also be obtained by visiting the Public Reference Room of the SEC at 100 F Street, NE, Washington D.C. 20549 or by calling the SEC at (800) SEC-0330. In addition, the SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically.

Forward-Looking Information

This Form 10-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. All statements regarding us and our expected financial position, business, and financing plans are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking terminology such as “believes,” “expects,” “should,” “seeks,” “anticipates,” “intends,” or the negative or other variations of any such term or comparable terminology, or by discussions of strategy or intentions. Although we believe that the expectations reflected in such forward-looking statements are reasonable, our expectations may prove not to be correct. A number of factors could cause our actual results, performance, and achievements or industry results to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. See risks and uncertainties relating to our business under Item 1A. “Risk Factors” of this document.

In addition, such forward-looking statements are necessarily dependent upon assumptions, estimates, and data that may be incorrect or imprecise and involve known and unknown risks, uncertainties, and other factors. Accordingly, forward-looking statements included in this report do not purport to be predictions of future events or circumstances and may not be realized. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. Given these uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements contained in this report to reflect future events or developments.

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(a) General Development of Business

We are a wireless communications service provider focusing primarily on rural markets in the United States. Our principal operating objective is to increase revenue and achieve profitability through increased penetration in our existing wireless markets.

Our operating territories include portions of five states in the Northeast, three states in the Northwest, four states in the Midwest, and three states in the South. Within each of our four territories, we have deployed a strong local sales and customer service presence in the communities we serve. Our marketed networks covered a total population (“POPs”) of approximately 6.5 million and served approximately 706,000 voice customers as of December 31, 2005.

The following table summarizes our existing wireless systems as of December 31, 2005:

Post and Prepaid Customers (Not including paging and long distance)

						Customers
	Percentage			Service Area		as of December 31,				Square
	Ownership			POPS (1)		2005		2004		Miles		States
Territories
Cellular:
Midwest		100	%		741,000		133,000		124,000		45,000	MN, ND, SD
Northeast		100	%		2,174,000		251,000		267,000		46,000	MA, ME, NH, NY, VT
South		100	%		2,011,000		97,000		118,000		79,000	AL, KS, MS
Northwest		100	%		825,000		118,000		127,000		77,000	ID, OR, WA
Total					5,651,000		599,000		636,000		247,000
PCS:
Wireless Alliance		70	%		754,000		11,000		13,000		19,000	MN, ND, SD, WI
Wholesale					N/A		96,000		81,000		N/A
Total					6,505,000		706,000		730,000		266,000

(1) Reflects 2000 U.S. Census Bureau population data updated for December 2002.

We believe our markets have favorable characteristics for the deployment of wireless networks. Because of the rural demographics of our markets, which typically have lower population densities, we face fewer competitors than more urban markets. Also, in a number of our service areas, we are entitled to federal support funds that subsidize our expansion into high-cost territories that otherwise would not have telephone service, including wireless services.

We believe that our extensive network of local distribution channels and our focus on local customer service provide us with a competitive advantage over larger wireless providers. We have tailored our marketing and distribution strategy to rely on local distributors and agents in areas where locating a direct retail store might not be cost-effective based on the demographic characteristics of those areas.

Our coverage areas have a large number of vacation destinations, substantial highway miles, and long distances between population centers, all of which we believe contribute to frequent roaming on our network by customers of other wireless providers. As a result, we have been able to negotiate long-term roaming agreements with several of the country’s largest wireless carriers that do not have as significant of a presence in our markets. Our roaming agreements with other carriers help to provide us with a base of roaming revenue, which generates higher margins than local service revenue.

Our networks utilize both 850 MHz and 1900 MHz spectrum in our service areas. As of December 31, 2005, approximately 47% of our wireless customers were using either CDMA or GSM handsets with advanced features that can be utilized throughout their respective service areas. With our networks, we are well equipped to offer our customers regional and local wireless coverage, and we manage our networks to

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provide high quality service, with minimal call blocking and dropped calls and seamless call delivery and hand-off.

In July 2005, we centralized and streamlined our business organizational structure in order to redeploy resources to better support our new products and services. Accordingly, RCC’s sales, customer service, network operations, and financial areas are now managed on a functional basis through a centralized management structure. We believe this change will allow us to more efficiently apply best practices company-wide, streamline decision-making, and improve our relationship with customers.

Our 2005 operating results reflect the following:

• Continued construction of our 2.5G networks and, accordingly, improved roaming minutes over the previous year,

• Continued transition of our customers to 2.5G handsets,

• Increased service revenue, primarily reflecting higher Local Service Revenue (“LSR”) and Universal Service Fund (“USF”) support,

• Increased costs required to support and market 2.5G networks, products, and customers, and

• Increased customer churn and declining customers, reflecting increased customer care needs, which we encountered during the commercial introduction of our GSM networks and transition to a new technology billing system.

For the year ended December 31, 2005 as compared to the year ended December 31, 2004, service revenue increased 2.8% to $387.8 million and LSR increased to $50 as compared with $46. Contributing to the increase in LSR were increased levels of USF support and increased access, data, and features revenue. USF support payments increased to $40.8 million for the year ended December 31, 2005 as compared to $28.2 million for the prior year.

During 2005, our total customers decreased by 24,209 to 705,602 at year ended December 31, 2005 as compared to 729,811 at December 31, 2004. We believe the reasons contributing to the decrease include the transitional stage of our networks, migration of customers to 2.5G products and services, and the change in billing systems.

Roaming revenue for the year ended December 31, 2005 was $122.8 million as compared to $105.5 million in the year ended December 31, 2004. The increase in roaming revenue reflects increased roaming outcollect minutes as compared to the comparable period of the prior year partially offset by outcollect roaming yield declining to $0.15 per minute in the year ended December 31, 2005 as compared to $0.16 per minute in the year ended December 31, 2004.

At December 31, 2005, substantially all of our 1,061 cell sites were equipped with 2.5G technology. During the year ended December 31, 2005 and year ended December 31, 2004, 2.5G outcollect minutes accounted for 80% and 35%, respectively, of our total outcollect minutes. As of December 31, 2005, approximately 47% of our postpaid customers were using new technology handsets as compared to 6% at December 31, 2004.

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Our 2005 balance sheet reflects the following:

• Payment of four quarterly dividends. On October 10, 2005, our board declared payment of four quarterly dividends on our outstanding senior exchangeable preferred stock (“Senior Exchangeable Preferred Stock”). These dividends, which were paid on October 26, 2005, represented the quarterly dividends payable on November 15, 2004, February 14, 2005, May 15, 2005 and August 15, 2005, and totaled $118.69 per share, including accrued interest. The aggregate total dividends of approximately $17.8 million reduced the number of unpaid quarterly dividends on the senior exchangeable preferred stock to five, which remedied the then existing “Voting Rights Triggering Event” and removed any uncertainty regarding our ability to incur indebtedness, including under the revolving credit facility. We did not declare or pay the quarterly dividends due in November 2005 or February 2006. Accordingly, there now exists a “Voting Rights Triggering Event.”

• Revolving Credit Facility. Effective October 18, 2005, we received approval from a majority of the banks who are lenders under our revolving credit facility to exclude $17.8 million of senior exchangeable preferred dividends paid on October 26, 2005, from the interest coverage covenant calculation. We also borrowed $58.0 million against the revolving credit facility on November 3, 2005 and were in compliance with all of the credit facility financial covenants as of December 31, 2005. Our failure to pay the cash dividends on our senior exchangeable preferred stock may affect our ability to incur additional debt under the revolving credit facility.

• Conversion of Class T Convertible Preferred Stock into Common Stock. On October 27, 2005, RCC converted all of its outstanding shares of Class T convertible preferred stock into 43,000 shares of Class A and 105,940 shares of Class B common stock. This conversion resulted in a gain of approximately $6.7 million, which partially offset preferred stock dividends in 2005.

• Offering of Senior Subordinated Floating Rate Notes. On November 7, 2005, the Company completed an offering of $175 million of Senior Subordinated Floating Rate Notes due 2012 which were sold at an original issue discount of $2.2 million, or 1.25%. The effective interest rate at December 31, 2005 was 10.30%. Interest is reset quarterly. With the proceeds of this offering, we redeemed all of our outstanding 9 5/8% senior subordinated notes. The total amount for such repurchase was approximately $133.8 million, including $125.0 million aggregate principal, $6.8 million accrued interest to the repurchase date of December 7, 2005, and $2 million premium for early repurchase.

• Exchange of Senior Exchangeable Preferred Stock for Class A Common Stock. In 2005, we exchanged an aggregate of 10,535 shares of our senior exchangeable preferred stock for an aggregate of 1,152,745 shares of our Class A common stock in negotiated transactions. The shares were issued in reliance upon the exemption from registration provided in Section 3(a)(9) of the Securities Act of 1933, as amended.

• Repurchase of Senior Exchangeable Preferred Stock. In 2005, we repurchased 14,932 shares of senior exchangeable preferred stock for $13.4 million.

• Capital Expenditures. Including the cost of our network overlays, our total capital expenditures for 2005 were approximately $95.0 million compared to $94.4 million in 2004.

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(b) Financial Information about Segments

Our business consists of one reportable operating segment, the operation of wireless communication systems in the United States.

(c) Description of Business/Service Areas

Marketing of Products and Services

Local Service

We have developed our marketing strategy on a market-by-market basis and offer service plan options to our customers tailored to address their specific needs and to encourage cellular usage. In general, because our customers typically live in rural areas, they are more likely to purchase plans that provide a regional footprint than a national one. Most of our service plans have a fixed monthly access fee, which includes a specified number of minutes, and incremental fees for enhanced services. As a result of our focus on marketing strategies as well as the upgrade of our networks to digital capability, we are able to offer our customers an array of services on an individual or bundled basis including:

• Short Message Service – allows a customer to receive and send text messages or content messages.

• Voicemail — allows a customer to receive and retrieve voicemail.

• Wireless Imaging Service – allows customers to receive and send pictures to another wireless handset or PC.

• 2.5G Technology Data Services – includes picture phones, BREW and Java service, data cards, and Internet accessibility allowing customers to download ring-tones, games, graphics, entertainment and information.

• Mobile Web – allows customers to access the Internet from a laptop computer through our wireless network.

During the second half of 2006, we anticipate expanding our 2.5G technology data services to include email and calendaring capability.

In addition to tailoring our service plans based on features and minutes of use, we also offer our customers regional calling plans and national plans that allow our customers to pay home usage rates while traveling within specified regional zones, both within and outside of our cellular service areas. We have also established preferred roaming contracts and developed system integration with adjacent cellular carriers, which permit our customers to receive automatic call delivery, call forwarding, voicemail, and call hand-off nationwide.

Roaming

We have roaming agreements in our markets with various carriers. Under most of our roaming agreements, the roaming yield per minute we receive from outcollect calling minutes, in addition to the cost per minute we pay for our customers’ incollect activity, declines over time. We have structured our roaming agreements to enable us to provide expanded network access to our customers both regionally and nationally and provide roaming rates based upon factors such as network coverage, feature functionality, and number of customers. Under our agreements with Cingular and Verizon Wireless, we have been able to attain preferred roaming status by overlaying our existing Northeast, Northwest, and South networks with GSM/GPRS/EDGE and our Midwest territory with CDMA/2000/1XRTT technology.

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A substantial portion of our roaming revenue has been derived from agreements with three national wireless providers, Cingular, T-Mobile, and Verizon Wireless. For the years ended December 31, 2005, 2004, and 2003, Cingular (on a pro forma basis giving effect to its 2004 merger with AT&T Wireless (“AWE”)), Verizon Wireless, and T-Mobile accounted for approximately 92%, 86%, and 89%, respectively, of our total outcollect roaming minutes. For the years ended December 31, 2005, 2004, and 2003, Cingular (on a pro forma basis giving effect to its merger with AWE) accounted for approximately 11.9%, 9.9%, and 14.5%, of our total revenue.

Our agreements with our three most significant roaming partners are as follows:

• Cingular, which is effective through December 2009,

• T-Mobile, which is effective through December 2007, and

• Verizon, which is effective through December 2009.

Customer Equipment

We currently sell handsets manufactured by Audiovox Corporation, LG Electronics, Inc., Motorola, Inc., and Nokia Telecommunications, Inc. and accessories manufactured by a number of sources.

Distribution and Sales

We market our wireless products and services through direct sales distribution channels, which include Company-owned retail stores and account executives. We also utilize indirect sales distribution channels, including independent sales agents. All distribution channels are managed on a territorial basis.

Our distribution channels include the following:

• direct sales through:

o retail stores and kiosks that we operate and staff with our employees. As of December 31, 2005, we had 89 stores, primarily located in our more densely populated markets. In addition, we had 9 stand-alone kiosks. Our retail locations help us establish our local presence and promote customer sales and service;

o account executives who are our employees and focus on business and major account sales and service;

o telesales, which are conducted by customer service representatives, internet, and toll-free phone services; and

• indirect sales through approximately 350 independent sales agents. Our independent sales agents are established businesses in their communities and include retail electronics stores, farm implement dealers, automobile dealers, automotive parts suppliers, college and university bookstores, video and music stores, and local telephone companies. Most of the agents sell our services in conjunction with their principal business. We provide cellular equipment to the agents for sale to customers, and the agents market our services utilizing a cooperative advertising program.

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Customer Base

At December 31, 2005, our customer base consisted of three customer categories: postpaid, wholesale, and prepaid. Postpaid customers accounted for the largest portion of our customer base as of that date, at 85%. These customers pay a monthly access fee for a wireless service plan that generally includes a fixed number of minutes and certain service features. In addition to the monthly access fee, these customers are typically billed in arrears for long-distance charges, data usage, roaming charges, and minutes of use exceeding the rate plans. Our wholesale customers are similar to our postpaid customers in that they pay monthly fees to utilize our network and services; however, the customers are billed by a third party (reseller), who has effectively resold our service to the end user (customer). We in turn bill the third party for the monthly usage of the end user. Wholesale customers accounted for 13% of our total customer base as of December 31, 2005. Our prepaid customers accounted for 2% of our customer base as of December 31, 2005.

Customer Service

To provide consistent customer service in our service centers, we have implemented local monitoring and control systems and maintain customer service departments consisting of trained personnel who are aware of the needs of the customers in our local markets. Our customer service centers are located in Alexandria, Minnesota; Bangor, Maine; Enterprise, Alabama; and Bend, Oregon. Our customer service centers can be accessed 24 hours a day, 365 days a year, and are responsible for processing new service orders and service changes for existing customers and maintaining customer records.

Service Marks

In 2005, all of our territories used the UNICEL^® brand, which we own.

Network Operations

We develop and build our wireless service areas in response to customer demand by adding channels to existing cell sites, building new cell sites to increase coverage and capacity, and upgrading entire networks with advanced technology and services. Where appropriate, we also upgrade acquired properties to enable us to provide similar quality service over our entire network. We expect to continue our wireless system expansion where necessary to add and retain customers, enhance customer usage on our systems, and increase roaming traffic. We also enhance our systems through scalable network equipment, cell site splitting, cell site sectorization, and digital upgrades of our systems. In addition to improving service quality, these enhancements generally provide improved network system performance and efficiency of operations. Our network consisted of 1,061 cell sites as of December 31, 2005.

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Technology

As of December 31, 2005, we had substantially completed our 2.5G network overlay. 2.5G refers to wireless technology and capability usually associated with General Packet Radio Services (“GPRS”), Enhanced Data rates for Global Evolution (“EDGE”), and Code Division Multiple Access / 1x Radio Transmission Technology (“CDMA2000/1XRTT”).

Technology	Territory Deployment	Description
CDMA2000/1XRTT	Midwest – deployed in 2003 and 2004 and commercially launched in August 2004.	CDMA2000/1XRTT is an evolution of CDMA technology and represents a step towards 3G technology and allows data transmission at approximately 50 kilobits per second (“Kbps”).
GSM/GPRS	Northeast, Northwest and South — network deployment is operational and commercially launched throughout the first half of 2005.	GSM/GPRS facilitates certain applications that have not previously been available over GSM networks due to the limitations in speed of Circuit Switched Data and message length of the Short Message Service. Dataspeeds of up to approximately 35 Kbps are expected.
EDGE	Northeast, Northwest, and South — substantially overlaid in the first half of 2005.	EDGE is an evolution of GPRS technology and is a system designed to increase the speed of data transmission via cell phone, creating broadband capability. EDGE technology data speeds are expected to be approximately 70-135 Kbps.

Commercial introduction of CDMA/2000/1XRTT services in our Midwest territory began in August 2004, and commercial introduction of GSM/GPRS/EDGE services began in our Northeast and Northwest territories in January 2005 and in our South territory in the summer of 2005. Our 2.5G technology networks utilize existing 850 MHz and 1900 MHz spectrum. At December 31, 2005, substantially all of our cell sites incorporated 2.5G technology.

In addition to our 2.5G network overlay efforts throughout 2005, we expanded our coverage with the following initiatives:

• Midwest territory CDMA network expansion into the adjacent markets of Hibbing and Virginia, Minnesota and Fargo and Grand Forks, North Dakota,

• Northeast territory GSM network expansion into the adjacent market of Lewiston-Auburn, Maine,

• Northeast territory GSM network expansion into the adjacent Lakes Area territory in east central New Hampshire, and

• Northwest territory GSM network expansion into the adjacent markets of Lewiston-Moscow, Idaho and Madras, Oregon.

We also have PCS networks in our Midwest and Northeast territories that satisfy FCC build-out requirements and allow us to receive outcollect revenue from our national roaming partners and minimize our incollect cost from our existing customers using their phones in those areas. We do not market our wireless service to residents of these areas.

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Licenses

Our reasons for building out our licenses can vary. We build out many of our licenses primarily to market our wireless services directly to that territory’s population and to capture outcollect roaming minutes. We build out other licenses to minimize incollect cost and capture outcollect roaming minutes while not marketing our services to that territory’s population. In some cases, we have chosen not to build out licensed areas, usually because of insufficient current financial incentive.

Our total marketed service areas served 705,602 customers as of December 31, 2005. The following map illustrates the locations of our 850 MHz Cellular and 1.9 GHz PCS licenses as of December 31, 2005.

Suppliers and Equipment Partners

We do not manufacture any customer or network equipment. The high degree of compatibility among different manufacturers’ models of handsets and network facilities equipment allows us to design, supply, and operate our systems without being dependent upon a single source of equipment. Our legacy networks use equipment manufactured by Northern Telecom, Inc., Lucent Technologies Inc., Harris, Inc., Alcatel, Ericsson, Inc., and Motorola, Inc. Our 2.5G networks primarily utilize equipment manufactured by Ericsson, Inc. and Nokia Telecommunications, Inc.

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Competition

We compete against wireless carriers in each of our markets and also compete with a number of enhanced specialized mobile radio service providers. We compete for customers based on numerous factors, including wireless system coverage and quality, service value equation (minutes and features over price), local market presence, digital voice and features, customer service, distribution strength, and brand name recognition. Some competitors also market other services, such as landline local exchange and internet access service, with their wireless service offerings. Many of our competitors have been operating for a number of years, currently serve a substantial customer base, and have significantly greater financial, personnel, technical, marketing, sales, and distribution resources than we do.

The following table lists our major competitors by territory:

			Sprint /		US
Region	Alltel	Cingular	Nextel	T-Mobile	Cellular	Verizon	Other (*)
Midwest	X	X	X	X			Dobson Communications, Qwest
Northeast		X	X	X	X	X
Northwest		X	X	X	X	X	Qwest, Inland Cellular, Snake River Wireless
South	X	X	X	X		X	Southern Linc, Pine Belt Wireless, Public Service Telephone, Westlink Communications, Panhandle Telecommunications, Cellular Telepak, Inc.

(*) National Third Party Resellers. We also compete with national third party resellers including Virgin Mobile USA, LLC. , and TracFone Wireless, Inc. These resellers purchase bulk wireless services from wireless providers and resell through mass-market retail outlets, including Wal-Mart, Target, Radio Shack, and Best Buy. TracFone purchases bulk wireless services from RCC in selected markets.

Continuing industry consolidation has resulted in the increased presence of regional and national wireless operators within our service areas. More recently, some national wireless operators have begun to build small networks in more densely populated or well-traveled portions of our service areas. National advertising and promotional programs by national wireless operators run in our markets are a source of additional competitive and pricing pressures even though these operators may not provide service in those markets.

In the future, we expect to face increased competition from entities holding licenses for PCS spectrum not yet operating in our markets. The FCC has issued licenses for both narrowband and broadband PCS, and six broadband licenses were issued in each of our cellular service areas. Under FCC rules, PCS license holders are allowed to disaggregate the spectrum covered by their license. Accordingly, we may face competition from additional providers of PCS if the FCC approves a disaggregation of spectrum for any PCS license in one of our service areas. In addition, the Omnibus Budget Reconciliation Act of 1993 required, among other things, the allocation to commercial use of a portion of 200 MHz of the spectrum currently reserved for government use. Some portion of this spectrum may be used to create new land-mobile services or to expand existing land-mobile services. Further, the FCC has auctioned or announced plans to auction licenses in the 39 GHz spectrum and 700 MHz spectrum that may be used for wireless communications that would compete with our services.

We also compete to a lesser extent with resellers, landline telephone service providers, fixed wireless services, specialized mobile radio, private radio systems and satellite-based telecommunications systems. A reseller provides wireless services to customers but does not hold an FCC license and might not own facilities. Instead, the reseller buys blocks of wireless telephone numbers and capacity from a licensed carrier and resells service through its own distribution network to the public. Thus, a reseller is both a customer of a wireless licensee’s service and a competitor of that licensee.

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Cable companies are providing telecommunications services to the home, and of these, some carriers are providing local and long distance voice services using Voice over Internet Protocol, or VoIP. In particular circumstances, these carriers may be able to avoid payment of access charges to local exchange carriers for the use of their networks on long distance calls. Cost savings for these carriers could result in lower prices to customers and increased competition for wireless services.

The telecommunications industry is experiencing significant technological changes, as evidenced by the increasing pace of improvements in the capacity and quality of digital technology, shorter cycles for new products and enhancements, and changes in consumer preferences and expectations. Accordingly, with the entry of new competitors and the development of new technologies, products, and services, competition in the wireless telecommunications industry has been dynamic and intense.

Our ability to compete successfully is dependent, in part, on our ability to anticipate and respond to various competitive factors affecting the industry. Our marketing and sales organization monitors and analyzes competitive products and service offerings, changes in consumer preferences, changes in demographic trends and economic conditions, and pricing strategies by competitors that could adversely affect our operations or present strategic opportunities.

We believe that we are strategically positioned to compete with other communications technologies that now exist. Continuing technological advances in telecommunications and FCC policies that encourage the development of new spectrum-based technologies make it difficult, however, to predict the extent of future competition.

Legislation and Regulation

The following summary of regulatory developments and legislation does not purport to describe all present and proposed federal, state, and local regulation and legislation affecting the telecommunications industry. Many existing federal, state, and local laws and regulations are currently the subject of judicial proceedings, legislative hearings, and administrative proposals that could change, in varying degrees, the manner in which the telecommunications industry operates. Neither the outcome of these proceedings nor their impact upon the telecommunications industry or us can be predicted.

Overview

Our business is subject to varying degrees of federal, state, and local regulation. The FCC has jurisdiction over all facilities of, and services offered by, wireless licensees such as us, to the extent those facilities are used to provide, originate, or terminate interstate or international communications. The Communications Act of 1934, as amended (the “Communications Act”), preempts state and local regulation of the entry of, or the rates charged by, any provider of commercial mobile radio service (“CMRS”), which includes our cellular service and broadband personal communications service. Otherwise, state and local regulatory commissions may exercise jurisdiction over most of the same facilities and services to the extent they are used to originate or terminate intrastate or intra-Major Trading Area communications and with respect to zoning and similar matters. The manner in which we are regulated is subject to change in ways we cannot predict.

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Federal Licensing of Wireless Systems

Geographic Market Area Licenses. CMRS providers operate under licenses granted by the FCC within a specified geographic market area. For cellular systems, those market areas are typically Metropolitan Statistical Areas (“MSAs”) or Rural Service Areas (“RSAs”) as defined by the FCC. PCS systems are normally licensed within market areas known as Major Trading Areas (“MTAs”) or Basic Trading Areas (“BTAs”), although it is possible to obtain, and we currently hold, some PCS licenses that are for market areas smaller than an entire MTA or BTA, known as a partitioned area.

While the FCC has used an assortment of methods in the past to grant licenses, most if not all new CMRS licenses granted by the FCC are by auction. The FCC determines the availability of licenses in particular frequency ranges, as well as the terms under which license auctions are conducted. Our ability to secure new licenses that could be used to introduce advanced “third generation” wireless services may depend upon our success in future FCC auctions. For example, in 2006 the FCC is expected to auction and license 90 megahertz of spectrum in six blocks for third generation and advanced wireless services. In the next several years the FCC is also expected to auction additional spectrum below 3 GHz and in the 700 MHz band.

Construction and Operation. Most cellular licensees, including RCC, have substantially constructed their systems and have license rights in their Cellular Geographic Service Areas that cut off rights of others to obtain licenses on the same frequencies in the same areas. We do not need to perform additional construction under our cellular licenses to retain those licenses. If we were to discontinue operation of a cellular system for a period of at least 90 continuous days, our license for such area would be automatically forfeited. However, we have no intention of allowing any discontinuance of service that may occur to last as long as 90 continuous days.

In order to retain licenses, PCS licensees, including RCC, are required by the FCC’s rules to construct facilities in the geographic areas authorized under their PCS licenses. That construction must result in a signal level adequate to permit an offering of services to a certain percentage of the population covered by those licenses within specified periods, based on the date of the grant of the licenses. Our PCS licenses are subject to revocation or nonrenewal by the FCC, as are all similar licenses held by other companies, if these build-out requirements are not satisfied in a timely manner. Build-out requirements apply as to certain PCS licenses we have acquired from other entities. We believe that our construction will progress at a pace that allows for timely compliance with the construction requirements.

Because we hold PCS licenses, we must comply with FCC microwave relocation rules. A block of spectrum licensed for PCS may be encumbered by a previously licensed microwave system. In such a case, if the PCS licensee cannot avoid interference with the microwave system, the FCC requires the PCS licensee to provide six months’ advance notice that interference may occur upon simultaneous operation of the PCS and microwave facilities and direct the microwave licensee to cease operation or move to other, non-interfering frequencies after such period of time. A PCS licensee is also obligated to participate in cost-sharing if a previous relocation of a microwave incumbent benefits more than one PCS licensee. However, a PCS licensee will not trigger any new cost-sharing obligations for sites activated April 5, 2005 or later, due to the termination of the FCC’s cost-sharing plan as of April 4, 2005. We believe that we are in compliance with applicable FCC microwave relocation and cost-sharing rules.

CMRS providers also must satisfy a variety of FCC requirements relating to technical and reporting matters, including coordination of proposed frequency usage with adjacent systems in order to avoid electrical interference between adjacent systems. The FCC also requires licensees to secure FCC consent to system modifications in specified instances.

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Entities such as RCC that own towers used for radio systems are subject to Federal Aviation Administration and FCC regulations respecting the location, marking, lighting, and construction of towers and are subject to the requirements of the National Environmental Policy Act, National Historic Preservation Act, and other environmental statutes enforced by the FCC. The FCC has also adopted guidelines and methods for evaluating human exposure to radio frequency emissions from radio equipment. We believe that all wireless devices we currently provide to our customers, and all our radio systems on towers that we own or occupy, comply with these requirements, guidelines, and methods.

We use, among other facilities, common carrier point-to-point microwave facilities to connect cell sites and to link the cell sites to the main switching office. These facilities are separately licensed by the FCC and are subject to regulation as to technical parameters, frequency protection, and service.

Renewal of Licenses. Near the conclusion of the generally ten-year term of a spectrum license, a licensee must file an application for renewal of the license to obtain authority to operate for up to an additional ten-year term. An application for license renewal may be denied if the FCC determines that the renewal would not serve the public interest, convenience, or necessity. The FCC also may revoke a license prior to the end of its term in extraordinary circumstances. In addition, at license renewal time, other parties may file competing applications for the authorization. The FCC has adopted specific standards stating renewal expectancy will be awarded to a spectrum licensee that has provided substantial service during its license term and has substantially complied with applicable FCC rules and policies and the Communications Act. If the FCC awards the licensee a renewal expectancy, its license renewal application generally is granted and the competing applications are dismissed.

Although we are unaware of any circumstances that would prevent the approval of any future renewal application, no assurance can be given that the FCC will renew any of our licenses. Moreover, the FCC has the authority to restrict the operation of a licensed facility or revoke or modify licenses. None of our licenses has ever been revoked or involuntarily modified.

Assignment of Licenses or Transfer of Control of Licensees. FCC licenses generally may be transferred and assigned, subject to specified limitations prescribed by the Communications Act and the FCC. The FCC’s prior approval is required for the assignment or transfer of control of a license for a wireless system. Before we can complete a purchase or sale, we must file appropriate applications with the FCC, and the public is by law granted a period of time, typically 30 days or less, to oppose or comment on the proposed transaction. In addition, the FCC has established transfer disclosure requirements that require licensees who assign or transfer control of a license acquired through an auction within the first three years of their license terms to file associated sale contracts, option agreements, management agreements, or other documents disclosing the total consideration that the licensee would receive in return for the transfer or assignment of its license. In any instance where a proposed transaction would result in an entity holding attributable ownership interests in both the frequency Block A and frequency Block B cellular carriers in the same MSA or RSA, or where the acquiring entity would add to its own spectrum holdings in the same area, the FCC conducts a case-by-case analysis of the potential effect upon competition and may disapprove of the transaction or issue approval subject to conditions that may or may not be acceptable to the parties. Non-controlling minority interests in an entity that holds a FCC license generally may be bought or sold without FCC approval, subject to any applicable FCC notification requirements.

Limitation on Foreign Ownership. Ownership of our capital stock by non-U.S. citizens is subject to limitations under the Communications Act and FCC regulations. Under existing law, no more than 20% of a licensee’s capital stock may be directly owned or voted by non-U.S. citizens or their representatives, by a foreign government or its representatives, or by a foreign corporation. If an FCC licensee is controlled by another entity, up to 25% of that entity’s capital stock may be owned or voted by non-U.S. citizens or their representatives, by a foreign government or its representatives, or by a foreign corporation. Indirect foreign ownership above the 25% level may be allowed should the FCC find such higher levels not inconsistent with the public interest.

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Regulatory Matters and Developments

Enhanced 911 Services. 850 MHz and 1900 MHz licensees must comply with the FCC’s rules regarding emergency 911 service. There is a staged process for the required deployment of enhanced 911 services, referred to by the FCC as Phase I and Phase II.

Under Phase I, cellular and PCS licensees were required as of April 1, 1998, or within six months of a request from the designated Public Safety Answering Point (“PSAP”), whichever is later, to be able to provide, if available to the serving carrier, the telephone number of the originator of a 911 call and to provide to the designated PSAP the location of the cell site or base station receiving a 911 call from any mobile handset accessing their systems through the use of Automatic Number Identification and Pseudo-Automatic Number Identification. We are in substantial compliance with Phase I requirements.

Under Phase II, cellular and PCS licensees must be able to provide to the designated PSAP the location of all wireless 911 callers, by longitude and latitude, in conformance with particular accuracy requirements. To comply, licensees may elect either network-based or mobile radio handset-based location technologies and thereafter meet, according to a phased-in schedule, the enhanced 911 service standards stated in the FCC’s rules. We notified the FCC of our intention to utilize network-based location technologies to provide Phase II enhanced 911 service and amended the notification to indicate that, where we utilize CDMA network technology, we will rely upon a handset-based Phase II solution. Pursuant to terms and conditions of an FCC “Order to Stay” adopted in July 2002, granting us an extension of the compliance deadlines, we are subject to requirements of the FCC where we have deployed a network-based Phase II solution that we provide Phase II enhanced 911 service to at least 50% of a requesting PSAP’s coverage area or population beginning March 1, 2003, or within six months of a PSAP request, whichever is later, and to 100% of a requesting PSAP’s coverage area or population by March 1, 2004 or within 18 months of such a request, whichever is later. We have received requests from PSAPs for deployment of Phase II enhanced 911 service that relate to various areas where we provide cellular or PCS service and we have met the applicable 50%-coverage benchmark. Nevertheless, if the FCC finds that the accuracy results produced by any of our Phase II deployments are not in compliance with FCC rules, the FCC could issue enforcement orders and impose monetary forfeitures upon us. We have filed with the FCC a request for waiver of the applicable FCC rule concerning field test results in the State of Vermont which may not be compliant with FCC location accuracy requirements if averaged only with results from the State of Vermont. To the extent that we are not meeting the FCC’s E911 Phase II location accuracy requirements in Vermont and other states we may need to file one or more additional petitions with the FCC to request a waiver of those requirements. The FCC has issued notices of apparent liability requiring other CMRS providers to pay fines based upon violations of enhanced 911 service requirements. The implementation of enhanced 911 obligations may have a financial impact on us. We are not yet able to predict the extent of that impact.

Interconnection. FCC rules provide that a local exchange carrier (“LEC”) must provide CMRS providers interconnection within a reasonable time after it is requested, unless such interconnection is not technically feasible or economically reasonable, and that CMRS providers are entitled to compensation from LECs for terminating wireline-to-wireless traffic that originates and terminates within the same MTA. The FCC has a rulemaking proceeding in progress to consider whether, and possibly how, to replace the current system of reciprocal compensation for termination of local telecommunications traffic, and access charges for inter-MTA traffic, with a uniform intercarrier compensation plan. That proceeding could result in changes to compensation arrangements we have with LECs and interexchange carriers for the exchange of telecommunications traffic. Additionally, although key provisions of FCC orders implementing the Communications Act’s interconnection requirements have been affirmed by the courts, certain court challenges to the FCC rules are pending.

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Universal Service. The Communications Act mandates that telecommunications carriers, such as us, contribute to the federal USF, the purpose of which is to ensure that basic telephone services are available and affordable for all citizens and that consumers in rural areas have similar choices in telecommunications services as consumers living in urban areas. The USF is intended to promote telecommunications infrastructure development in high cost areas and to provide subsidies to low income persons, schools, libraries, and rural health care providers. We also are required to contribute to state universal service programs administered by some states. The federal USF is administered jointly by the FCC, the fund administrator, and state regulatory authorities. Because we are a collection agent for customer contributions, we expect that our obligation to remit USF contributions will have a minimal financial impact on us.

1996 amendments to the Communications Act allow wireless carriers such as us to pursue eligibility to receive USF funding for constructing, maintaining and improving our facilities and services in high-cost areas. When declared eligible for USF funding we are also obligated to offer discounts to low-income customers, which amounts are reimbursed to us through the federal Lifeline and Link-up programs. We must be designated as an eligible telecommunications carrier (“ETC”) by the state where we provide service (or, in some cases, the FCC) and the state (or, in some cases, we) must certify our eligibility to the FCC so that we may ultimately receive USF support. We have received ETC designation in the states of Alabama, Kansas, Maine, Minnesota, Mississippi, New Hampshire, Oregon, South Dakota, Vermont and Washington. We are currently receiving USF support, or expect soon to begin receiving USF support, in each of these states. To be eligible from year-to-year to receive USF support, our ETC certifications must be renewed each year. Our ability to receive USF support, and our obligations to pay into state and federal universal service funds, are subject to change based upon pending regulatory proceedings, court challenges, and marketplace conditions.

The federal universal service program is under legislative, regulatory and industry scrutiny as a result of growth in the fund and structural changes within the telecommunications industry. The structural changes include an increase in the number of ETCs receiving support from the USF and a migration of customers from wireline service providers to providers using alternative technologies, like VoIP that, today, are not required to contribute to the universal service program. There are several FCC proceedings underway that are likely to change the way universal service programs are funded and the way these funds are disbursed to program recipients. The specific proceedings are discussed in greater detail below.

On March 17, 2005, the FCC issued an order strengthening the conditions for telecommunications carriers to receive and maintain ETC designation. The new standards are mandatory when the FCC is responsible for evaluating ETC applications and recommended when state regulatory agencies are responsible for evaluating ETC applications. Effective October 1, 2006, the new standards require ETCs to: (1) provide a five-year plan demonstrating how support will be used to improve coverage, service quality or capacity, including annual progress reports; (2) demonstrate the network’s ability to remain functional in emergencies; (3) demonstrate how they will satisfy consumer and quality standards; (4) offer a “local-usage” plan comparable to the ILEC; and (5) acknowledge that they may be required to provide equal access to interexchange carriers in the event they become the sole ETC within a designated service area. The new standards are not expected to affect our universal service receipts. Further, additional certification requirements were imposed on ETC recipients. Some states have adopted, or are considering adopting, the same or similar requirements. The new FCC requirements are subject to both reconsideration requests pending at the FCC and judicial appeals.

On June 14, 2005, the FCC issued a notice of proposed rulemaking initiating a broad inquiry into the management and administration of the universal service programs. The notice of proposed rulemaking seeks comment on ways to streamline the application process for federal support and whether and how to increase audits of fund contributors and fund recipients to deter waste and fraud. The FCC is also considering proposals regarding the contribution methodology, which could change the category of service providers that contribute to the fund and the basis upon which they contribute. At this time, we cannot estimate the impact that the potential changes, if any, would have on our operations.

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Finally, the FCC mandated that, effective October 1, 2004, the Universal Service Administrative Company (“USAC”) begin accounting for the USF program in accordance with generally accepted accounting principles for federal agencies, rather than the accounting rules that USAC formerly used. This change in accounting method subjected USAC to the Anti-Deficiency Act (the “ADA”), the effect of which could have caused delays in payments to USF program recipients and significantly increased the amount of USF regulatory fees charged to wireline and wireless consumers. In December 2004, Congress passed legislation to exempt USAC from the ADA for one year to allow for a more thorough review of the impact the ADA would have on the universal service program. In April 2005, the FCC tentatively concluded that the high-cost and low-income programs of the universal service fund comply with ADA requirements and has asked the Office of Management and Budget (“OMB”) to make a final determination on this issue. In November 2005 Congress extended the exemption for an additional year and is contemplating a permanent solution to alleviate the ADA issues and the related negative impact to the universal service program.

Local Number Portability. The FCC has adopted rules on telephone number portability in an effort to achieve more efficient number utilization. Cellular and PCS licensees are required to provide number portability, which enables customers to change providers and services without changing their telephone number. By November 24, 2003, CMRS providers in the top 100 markets were required to offer number portability without impairment of quality, reliability, or convenience when customers switch wireless service providers, including the ability to support roaming throughout their networks. Providers in other markets were to comply by May 24, 2004 if they received a “bona fide request” to be open for porting-out of customer numbers at least six months prior from another wireless service provider. Where our operations are subject to the FCC mandate we are in compliance. In other areas any failure to comply with this obligation could result in a fine or revocation of our licenses.

In addition, the FCC provided guidance to the wireline and wireless industries in the form of a decision released November 10, 2003 in response to a petition filed by the Cellular Telecommunications & Internet Association requesting that wireline carriers be required to allow their customers to retain their numbers when switching to a wireless carrier. The FCC concluded that, as of November 24, 2003, upon the request of a customer, wireline carriers in the top-100 markets must port numbers to wireless carriers where the wireless carrier’s “coverage area” overlaps the geographic location of the rate center in which the customer’s wireline number is provisioned, provided that the porting-in carrier maintains the number’s original rate center designation following the port. The wireless “coverage area” was defined by the FCC as the area in which wireless service can be received from the wireless carrier. Wireline carriers outside the top-100 markets were given until May 24, 2004 to comply with the same porting obligations. The FCC subsequently granted an extension of time until May 24, 2004 to wireline carriers in the top-100 markets that serve fewer than two percent of the nation’s customer lines if such wireline carriers had not received a request for local number porting from either a wireline carrier prior to May 24, 2003, or a wireless carrier that has a point of interconnection or numbering resources in the rate center where the customer’s wireline number is provisioned. In addition, state public utility commissions have authority under the Communications Act to suspend or extend FCC number portability requirements faced by wireline carriers that serve fewer than two percent of the nation’s customer lines. Several organizations representing wireline carriers petitioned the U.S. Court of Appeals, D.C. Circuit, for review of the FCC’s decision ordering wireline carriers to port numbers to wireless carriers. The court ordered the FCC to conduct a regulatory flexibility analysis concerning the effect of the number portability regulations upon small wireline carriers and, in the meantime, the court suspended the regulations to the extent they would apply to small wireline carriers.

Meanwhile, the FCC invited and has received written comments on issues that bear upon wireless carriers’ obligations to port numbers to wireline carriers upon customer request. We expect to face obligations that will allow our customers to port their numbers to wireline carriers.

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CALEA. Telecommunications carriers also are subject to the Communications Assistance for Law Enforcement Act (“CALEA”), which is administered by the Department of Justice, Federal Bureau of Investigation (“FBI”) and the FCC. CALEA requires carriers to have a specific number of open ports available for law enforcement personnel with the appropriate legal authority to perform wiretaps on each carrier’s network. Full implementation of CALEA’s assistance capability requirements was previously required by June 30, 2000. However, because the FCC found that there was a lack of equipment available to meet these requirements, it accepted petitions for a two-year extension of this deadline on a carrier-by-carrier basis. We submitted such a petition and were granted a two-year extension, until June 30, 2002, to comply with CALEA’s assistance capability requirements. We petitioned the FCC for another two-year extension and received from the FBI a letter of support for our petition for extension. We also petitioned for additional time, through September 30, 2005, to complete final installation of CALEA features on a switch located in Alexandria, Minnesota. We received from the FBI a letter of support for our petition for extension. At this time CALEA features are installed and operational at all but one of our switching facilities. Additional requirements have been adopted to require cellular and PCS licensees to accommodate interception of digital packet mode telecommunications. We will become obligated to comply with these requirements only if and when we commence to offer services that make use of digital packet mode technology. If we are not able to comply with CALEA prior to the applicable deadlines, we could be subject to substantial fines that, under existing law, could be as much as $10,000 per day. We cannot predict yet whether we will be able to comply with CALEA requirements prior to the applicable deadlines.

Other FCC-Mandated Payments. We also are required to contribute annually to the Telecommunications Relay Service Fund and the North American Numbering Plan Administration Fund and to remit regulatory fees to the FCC with respect to our licenses and operations. We do not expect that these financial obligations will have a material impact on us.

Access by the Disabled. The FCC has adopted rules that determine the obligations of telecommunications carriers to make their services accessible to individuals with disabilities. The rules require wireless and other providers to offer equipment and services that are accessible to and useable by persons with disabilities. While the rules exempt telecommunications carriers from meeting general disability access requirements if these results are not readily achievable, it is not clear how the FCC will construe this exemption. Accordingly, the FCC occasionally adopts rules that may require us to make material changes to our network, product line, or services at our expense. By the regulatory deadline of September 15, 2005, we had begun to offer hearing aid compatible CDMA and GSM handsets. By September 16, 2006, we must either suspend all of our offerings of TDMA handsets or begin to offer hearing aid compatible TDMA handsets, which may not exist or be available to us. By February 18, 2008, 50% of all phone models offered must meet the MT3 performance level for acoustic coupling to accommodate hearing aid compatible functions. We are required to file and we do file with the FCC periodic progress reports on our preparation for implementing these offerings.

Health and Safety. Various media reports and plaintiffs’ attorneys in lawsuits not involving us have suggested that radio frequency emissions from wireless handsets may be linked to an assortment of health concerns, including cancer, and may interfere with some electronic medical devices, including hearing aids and pacemakers. The FCC and foreign regulatory agencies have updated and may continue to update the guidelines and methods they use for evaluating radio frequency emissions from radio equipment, including wireless handsets. In addition, interest groups have requested that the FCC investigate claims that wireless technologies pose health concerns and cause interference with airbags, hearing aids, and medical devices. The FDA has issued guidelines for the use of wireless phones by pacemaker wearers. Safety concerns have also been raised with respect to the use of wireless handsets while driving. Federal, state, and local legislation has been proposed and, in some instances, enacted in response to these issues. Concerns over radio frequency emissions may have the effect of discouraging the use of wireless handsets, and thus decrease demand for wireless products and services.

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Regulatory Oversight. The rapid growth and penetration of wireless services has prompted the interest of the FCC, state legislatures, and state public utility commissions to oversee certain practices by the wireless industry, generally in the form of efforts to regulate service quality, customer billing, termination of service arrangements, advertising, filing of “informational” tariffs, certification of operation, and other matters such as deterrence of spam messaging to wireless devices. While the Communications Act generally preempts state and local governments from regulating the entry of, or the rates charged by, wireless carriers, a state has authority to regulate “other terms and conditions” of service offerings by CMRS providers and may petition the FCC to allow it to regulate the rates of CMRS providers. Several states have proposed or imposed consumer protection regulations on CMRS providers. Moreover, in securing ETC status, we may become subject to such rules (as we already are in Maine and Vermont), may be required to offer a specific “universal service” rate plan, as we have in Maine, or may become subject to other state-imposed requirements as a condition of their granting ETC status. In some states, we are or expect to be required annually to demonstrate that funds we collect from the high-cost fund are used for the required purpose of constructing, maintaining, or improving our facilities and services. These additional regulatory obligations can be expected to increase our costs of doing business.

The FCC has rules that require CMRS providers to report to the FCC network outages of at least 30 minutes duration that potentially affect at least 900,000 user minutes.

On August 4, 2004 the FCC adopted a Notice of Proposed Rulemaking to consider how the Emergency Alert System (“EAS”) can become a more effective mechanism for warning the American public of an emergency. The proceeding inquires whether EAS should be extended beyond broadcast and cable TV to other services such as commercial wireless. We may be obligated to purchase additional hardware and/or software to comply with any EAS requirements the FCC ultimately adopts that are applicable to wireless carriers.

At the local level, wireless facilities typically are subject to zoning and land use regulation and may be subject to fees for use of public rights of way. Although local and state governments cannot categorically prohibit the construction of wireless facilities in any community, or take actions that have the effect of prohibiting construction, securing state and local government approvals for new tower sites may become a more difficult and lengthy process.

The FCC has expanded the flexibility of cellular, PCS, and other CMRS providers to provide fixed as well as mobile services. Such fixed services include, but need not be limited to, “wireless local loop” services to apartment and office buildings and wireless backup services to private business exchanges and local area networks to be used in the event of interruptions due to weather or other emergencies. The FCC has determined that fixed services provided as ancillary services to a carrier’s mobile service will be regulated as commercial mobile radio services.

The FCC authorizes spectrum leasing for a variety of wireless services. Such rules may provide us with opportunities to expand our services into new areas, or provide us with access to additional spectrum, without need for us to purchase licenses, but the same rules also have the potential to induce new competitors to enter our markets. In addition, proceedings relating to human exposure to radio frequency emissions, the feasibility of making additional spectrum available for unlicensed devices, and the provision of spectrum-based services in rural areas are pending before the FCC. All of these initiatives could have an effect on the way we do business and the spectrum that is available to us and our competitors.

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The FCC does not currently specify the rates CMRS carriers may charge for their services, nor does it require the filing of tariffs for wireless operations. However, the FCC has the authority to regulate the rates, terms, and conditions under which we provide service because CMRS carriers are statutorily considered to be common carriers and thus are required to charge just and reasonable rates and are not allowed to engage in unreasonable discrimination. The FCC has adopted rules and has proposed further rules relating to the use of customer proprietary network information (“CPNI”) and to require filing with the FCC of certification of carrier compliance with rules that concern CPNI. Additionally, the FCC has adopted rules governing billing practices. While none of these existing requirements has a material impact on our operations, there is no assurance that future regulatory changes will not materially impact us. The FCC has ruled that the Communications Act does not preempt state damages claims as a matter of law, but whether a specific damage award is prohibited would depend upon the facts of a particular case. This ruling may affect the number of class action suits brought against CMRS providers and the amount of damages awarded by courts.

Employees and Sales Agents

As of December 31, 2005, we had 1,011 employees, including 432 in sales and marketing, 276 in customer service, 187 in network and systems operations, 69 in administration, and 47 in finance and accounting. Approximately 23 of our employees were part-time. None of our employees is represented by a labor organization, and we believe we have excellent relations with our employees. In addition, we utilize approximately 350 independent sales agents.

ITEM 1A. RISK FACTORS

We encourage you to read the risk factors below in connection with the other sections of this Annual Report on Form 10-K.

Our future operating results could fluctuate significantly.

We believe that our future operating results and cash flows may fluctuate due to many factors, some of which are outside our control. These factors include the following:

• increased costs we may incur in connection with our networks and the further development, expansion, and upgrading of our wireless systems;

• fluctuations in the demand for our services and equipment and wireless services in general;

• increased competition, including price competition;

• changes in our roaming revenue and expenses due to renegotiation of our roaming agreements and the development of neighboring or competing networks;

• changes in the regulatory environment;

• changes in the level of support provided by the Universal Service Fund (“USF”);

• the cost and availability of equipment components;

• seasonality of roaming revenue;

• changes in travel trends;

• acts of terrorism, political tensions, unforeseen health risks, unusual weather patterns, and other catastrophic occurrences that could affect travel and demand for our services; and

• changes in general economic conditions that may affect, among other things, demand for our services and the creditworthiness of our customers.

We incurred net losses applicable to common shares of approximately $71.3 million, $71.9 million, and $50.1 million in the years ended December 31, 2005, 2004, and 2003, respectively. We may continue to incur significant net losses as we seek to increase our customer base in existing markets. We may not generate profits in the short-term or at all. If we fail to achieve profitability, that failure could have a negative effect on the market value of our common stock.

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Our implementation of 2.5G network technology has resulted in network capacity constraints and heightened customer churn.

We have recently deployed 2.5G technology in all of our territories and have experienced and may continue to experience technical difficulties and network coverage issues. In addition, we have experienced network capacity constraints relating to the initial migration of our TDMA customers to 2.5G. We have incurred, and may continue to incur, costs to address these issues, including costs for engineering, additional equipment, and additional spectrum in certain markets. These costs may be significant. As our customers migrate from TDMA to 2.5G service, some have been dissatisfied with our service and switched to a competitor, resulting in increased churn and reduced revenues and profitability. Continuing problems could damage our reputation and affect our ability to attract new customers. In addition, network quality issues could affect our roaming arrangements. To the extent we are required to spend significant amounts on correcting problems with our network, we will have fewer resources available for marketing and customer acquisition activities, which would affect our customer growth.

We may not be successful in reversing the six quarter trend of declining postpaid customers, which would force us to change our business plan and financial outlook and would likely negatively affect the price of our stock.

Our current business plans assume that we will increase our customer base over time, providing us with increased economies of scale. If we are unable to attract and retain a growing customer base, we would be forced to change our current business plans and financial outlook and there would likely be a material negative affect on the price of our common stock.

As we dedicate more resources to 2.5G technology, our TDMA customers may seek other competitive offerings, resulting in a loss of customers and reduced profitability.

We expect to continue operating our TDMA network for the foreseeable future while current customers migrate to 2.5G technology. However, we will not upgrade our TDMA network with the same features as are available on our 2.5G networks, and we expect manufacturers will not produce innovative TDMA handsets with upgraded functions.

As we dedicate more spectrum to 2.5G networks, our remaining TDMA customers may experience difficulties in using our services. Further, as our TDMA customers attempt to roam while traveling outside of our service areas, their service may be degraded due to the removal of TDMA capability within other carriers’ cell sites. All of these potential developments could drive our TDMA customers to our competitors rather than to our 2.5G product offerings and thereby reduce our market share and revenue.

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We have required and will continue to require substantial amounts of capital to maintain our upgrade to 2.5G technologies and to meet various obligations under our financing arrangements. Our ability to generate the required capital depends on many factors, including some that are beyond our control.

We have required, and will continue to require, substantial capital to maintain our wireless network, to satisfy obligations on our debt and exchangeable preferred stock, and for other operating needs. Including the cost of our 2.5G technology overlays, our total capital expenditures for 2005 were $95.0 million. We believe that we have sufficient funds to finance our planned capital expenditures for network construction, but we may require additional capital in the event of significant departures from our current business plan, unforeseen delays, cost overruns, unanticipated expenses, regulatory changes, engineering design changes, and other technological issues or if we acquire additional licenses.

We will likely need additional financing to repay or refinance our debt at its final maturities and to meet mandatory redemption provisions on our preferred stock. To the extent that we do not generate sufficient cash from operations to satisfy these needs, we will need to explore other sources of capital, which may include public and private equity and debt financings, including vendor financing. The availability of additional financing is dependent on conditions in the capital markets. We may not be able to obtain additional financing on terms acceptable to us and within the limitations contained in the instruments governing our debt and our preferred stock or any future financing arrangements.

If we fail to obtain any required financing, we may need to delay or abandon our development and expansion plans and we may fail to meet regulatory requirements for build-out of our network and not be in compliance with certain regulations, such as CALEA. Any failure to upgrade could also have a negative effect on our roaming revenues, since most of our roaming partners’ customers will likely use the latest technology handsets as our roaming partners upgrade their networks. Our ability to meet our debt service requirements and our customers’ needs may also be impaired, which would have a material adverse effect on our business. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

We have committed a substantial amount of capital to upgrade our wireless networks to offer 2.5G data services. If the demand for wireless data services does not grow, or if we fail to capitalize on such demand, it could have an adverse effect on our growth.

We have committed significant resources to wireless data services and our business plan assumes increasing demand for such services. Although demand for wireless data services is growing, it is currently a small portion of our revenues. Continued growth in demand for wireless data services is dependent on development and availability of popular applications and availability of handsets and other wireless devices with features, functionality, and pricing desired by customers. If applications and devices are not developed or do not become commercially acceptable, our revenues could be adversely affected. Even if such demand does develop, our ability to deploy and deliver wireless data services relies, in many instances, on new and unproven technology. Existing technology may not perform as expected, and we may not be able to obtain new technology to effectively and economically deliver these services. We cannot give assurance that there will be widespread demand for advanced wireless data services, that revenues from data services will constitute a significant portion of our total revenues in the near future, or that we can provide such services on a profitable basis.

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Our business could be materially and adversely affected by our failure to anticipate and react to frequent and significant technological changes.

The telecommunications industry is subject to rapid and significant changes in technology that are evidenced by:

• the introduction of 3.0G digital handsets and applications;

• evolving industry standards;

• the availability of new radio frequency spectrum allocations for wireless services;

• ongoing improvements in the capacity and quality of digital technology;

• shorter development cycles for new products and enhancements;

• developments in emerging wireless transmission technologies; and

• changes in end-user requirements and preferences.

It is possible that we may select a technology that does not achieve widespread commercial success or that is not compatible with the technology selected by one or more of our roaming partners, and as a result, our business, results of operations and financial condition could be materially and adversely affected. Moreover, one or more of the technologies that we currently utilize may become inferior or obsolete at some time in the future.

A significant portion of our revenue is from roaming charges. Outcollect roaming yields have been declining over the last few years and are expected to continue to decline in the future. As a result, our future operating results could be adversely affected if increases in roaming minutes do not offset anticipated decreases in roaming yield.

In 2005, 2004, and 2003, approximately 23%, 21%, and 26%, respectively, of our revenue was derived from roaming charges incurred by other wireless providers for use of our network by their customers who traveled within our coverage areas. A substantial portion of our roaming revenue is derived from Cingular, Verizon Wireless, and T-Mobile. Changes in their operations or a significant decline in the number of their customers could adversely affect our business. For the years ended December 31, 2005, 2004, and 2003, Cingular (on a pro forma basis giving effect to its 2004 merger with AT&T Wireless (“AWE”)), Verizon Wireless, and T-Mobile accounted for approximately 92%, 86%, and 89%, respectively, of our total outcollect roaming minutes. For the years ended December 31, 2005, 2004, and 2003, Cingular (on a pro forma basis giving effect to its 2004 merger with AWE) accounted for approximately 11.9%, 9.9%, and 14.5%, of our total revenue. Changes in the network footprints of these providers could have a material adverse effect on our outcollect revenue and incollect expenses. For example, if a roaming partner from which we derive a significant amount of revenue in one of our service areas were to build its own network in that service area, our outcollect revenue derived from our roaming relationship with that partner in that service area might decrease or even cease altogether, and our ability to negotiate favorable incollect rates in that partner’s other service areas could suffer as well.

Any overbuild of our service areas by our roaming partners would also result in increased competition, which could have a negative impact on our outcollect roaming revenues, business, operating results, and retention.

Our roaming agreements have varying terms, from month-to-month to up to five years, and some are terminable with 30 days’ written notice. When these agreements expire or are terminated, we may be unable to renegotiate these roaming agreements or to obtain roaming agreements with other wireless providers upon acceptable terms. Failure to obtain acceptable roaming agreements could lead to a substantial decline in our revenue and operating income.

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Our roaming revenue is subject to some effects of seasonality, and as a result, our overall revenue and operating income are also subject to seasonal fluctuations.

In 2005, 2004, and 2003, a substantial amount of our revenue was derived from roaming charges incurred by other wireless providers for use of our network by their customers who traveled within our service areas. Our service areas include a number of resort destinations. As a result, our roaming revenue increases during vacation periods, introducing a measure of seasonality to our revenue and operating income. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Other Matters — Seasonality.”

We operate in a very competitive business environment, which can adversely affect our business and
operations. Competitors who offer more services than we do may attract our targeted customers.

We operate in highly competitive markets, and there is substantial and increasing competition in all aspects of the wireless communications business. Some competitors may market services we do not offer, such as cable television, internet access, landline local exchange, or long distance services, which may make their services more attractive to customers. Competition for customers is based primarily upon services and features offered, system coverage, technical quality of wireless systems, price, customer service, capacity, and strength of distribution channels.

In each of our markets we compete with several other wireless licensees. To a lesser extent, we also compete with wireless internet, paging, dispatch services, resellers, and landline telephone service providers in some of our service areas. Increasingly, cellular services have become a viable alternative to landline voice services for certain customers, putting cellular licensees in direct competition with traditional landline telephone service providers.

Cable and other companies are providing telecommunications services to the home, and of these, some carriers are providing local and long distance voice services using Voice over Internet Protocol, or VoIP. In particular circumstances, these carriers may be able to avoid payment of access charges to local exchange carriers for the use of their networks on long distance calls. Cost savings for these carriers could result in lower rates for customers and increased competition for wireless services.

Continuing industry consolidation has resulted in the increased presence of regional and national wireless operators within some of our service areas. Many of these national operators provide services comparable to ours and, because they operate in a wider geographic area, are able to offer no or low cost roaming and toll calls over a wider area. In addition, some national wireless operators have recently begun to build networks in certain of the more densely populated or well-traveled portions of our service areas. National advertising and promotional programs by national wireless operators run in our markets are also a source of additional competitive and pricing pressures, even though these operators may not provide service in those markets. If the wireless communications industry continues to consolidate and we do not participate in that consolidation, even stronger competitors may be created. The FCC has eliminated the spectrum cap and the cellular cross-interest restriction in all markets. These regulatory actions may facilitate the creation of larger and more formidable competitors.

Several of our competitors also operate in multiple segments of the industry. In the future, we expect to face increased competition from entities providing similar services using other communications technologies. Given the rapid advances in the wireless communications industry, it is possible that new technologies will evolve that will compete with our products and services. In addition, a number of our competitors have substantially greater financial, technical, marketing, sales, and distribution resources. With so many companies targeting many of the same customers, we may not be able to successfully attract and retain customers and grow our customer base and revenues, which could have a materially adverse effect on our future business, strategy, operations, and financial condition.

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Market prices for wireless service may decline in the future.

We expect significant price competition among wireless providers that may lead to increasing movement of customers between operators, resulting in reductions in average monthly service revenue per customer. While we will try to maintain or grow our customer base and average monthly service revenue per customer, we cannot assure you that we will be able to do so. A significant decline in the pricing of services could adversely affect our financial condition and results of operations.

Wireless number portability may continue to have a negative impact on our customer retention and increase our marketing costs.

Wireless number portability allows customers to keep their wireless phone number when switching to a different service provider. Wireless number portability has increased and may continue to increase competition and reduce retention. Since implementation of wireless number portability in our markets, we have experienced increased churn. A high rate of churn would adversely affect our results of operations by reducing revenue and increasing the cost of adding new customers. Such costs generally include commission expense and/or significant handset discounts, which are significant factors in income and profitability. We may be required to grant promotional credits, subsidize product upgrades, and/or reduce pricing to match competitors’ initiatives and to retain customers, which could adversely impact our operating results.

If we encounter significant problems, such as delays, inaccuracies, or loss of customer information from our database, in the process of upgrading our billing function, we could experience customer dissatisfaction and increased churn, which could have a material adverse impact on our financial performance.

During the second half of 2005, we transferred our Northeast, Northwest and South territory GSM customers to the VeriSign data processing and billing system. This process has caused disruption in our billing cycles, including delays in mailing of and errors in statements sent to customers, and customers may be dropped from our database. In addition, the transition has caused additional customer service calls to be made to our call center. If such problems are significant or prolonged, our customers may become dissatisfied and decide to switch to a rival carrier. Also, we are dependent on future performance of an outside contractor. Any significant or prolonged problems with our billing function could have a material adverse impact on our business, financial condition, and results of operations.

Regulation or potential litigation relating to the use of wireless phones while driving could adversely affect our results of operations. Further, if wireless handsets are perceived to pose health and safety risks, we may be subject to new regulations, and demand for our services may decrease.

Some studies have indicated that using wireless phones while driving may distract drivers’ attention, making accidents more likely. These concerns could lead to litigation relating to accidents, deaths, or serious bodily injuries, or to new restrictions or regulations on wireless phone use, any of which also could have material adverse effects on our results of operations. A number of U.S. states and local governments are considering or have recently enacted legislation that would restrict or prohibit the use of a wireless handset while driving or, alternatively, require the use of a hands-free telephone. Legislation of this sort, if enacted, would require wireless service providers to provide hands-free enhanced services, such as voice activated dialing and hands-free speaker phones and headsets. If we are unable to provide hands-free services and products to customers in a timely and adequate fashion, our ability to generate revenues could suffer.

It has been suggested that certain radio frequency emissions from wireless handsets may be linked to various health concerns, including cancer, and may interfere with various electronic medical devices, including hearing aids and pacemakers. Concerns over the effect of radio frequency emissions may discourage the use of wireless handsets, which would decrease demand for our services.

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Our business is subject to extensive government regulation, which could adversely affect our business by increasing our expenses. We also may be unable to obtain or retain regulatory approvals necessary to operate our business, which would negatively affect our results of operations.

The FCC regulates many aspects of our business, including the licensing, construction, interconnection, operation, acquisition, and sale of our wireless systems, as well as the number of wireless licenses issued in each of our markets. State and local regulatory authorities, to a lesser extent, also regulate aspects of our business and services. In addition, the Federal Aviation Administration regulates aspects of construction, marking, and lighting of communications towers on which we place our wireless transmitters. Changes in legislation and regulations governing wireless activities, wireless carriers, and availability of USF support, our failure to comply with applicable regulations, or our loss of or failure to obtain any license or licensed area could have a material adverse effect on our operations.

The FCC and state authorities are increasingly looking to the wireless industry to fund various initiatives, including federal and state universal service programs, telephone number administration, services to the hearing-impaired, and emergency 911 services. In addition, many states have imposed significant taxes on providers in the wireless industry and have adopted or are considering adoption of regulatory requirements regarding customer billing and other matters. These initiatives have imposed and will continue to impose increased costs on us and other wireless carriers and may otherwise adversely affect our business. Under Phase II of its emergency 911 service rules, for example, the FCC has mandated that wireless providers supply the geographic coordinates of a customer’s location, by means of network-based or handset-based technologies, to public safety dispatch agencies.

We have received requests from PSAPs for deployment of Phase II enhanced 911 service that relate to various areas where we provide cellular or PCS service and we have met the applicable 50%-coverage benchmark. Nevertheless, if the FCC finds that the accuracy results produced by any of our Phase II deployments are not in compliance with FCC rules, the FCC could issue enforcement orders and impose monetary forfeitures upon us. We have filed with the FCC a request for waiver of the applicable FCC rule concerning field test results in the State of Vermont, which may not be compliant with FCC location accuracy requirements if averaged only with results from the State of Vermont. To the extent that we are not meeting the FCC’s E911 Phase II location accuracy requirements in Vermont and other states we may need to file one or more additional petitions with the FCC to request a waiver of those requirements. The FCC has issued notices of apparent liability requiring other CMRS providers to pay fines based upon violations of enhanced 911 service requirements. The implementation of enhanced 911 obligations may have a financial impact on us. We are not yet able to predict the extent of that impact.

Each of our wireless licenses is subject to renewal upon expiration of its current term, which is generally ten years. Grants of wireless license renewals are governed by FCC rules establishing a presumption in favor of incumbent licensees that have complied with their regulatory obligations during the ten-year license period. However, we cannot provide assurance that the FCC will grant us any future renewal applications or that our applications will be free from challenge. In addition, FCC rules require wireless licensees to meet build-out requirements with respect to particular licenses, and failure to comply with these and other requirements in a given licensed area could result in revocation or nonrenewal of our license for that area or the imposition of fines by the FCC.

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Our designation or certification as an Eligible Telecommunications Carrier (“ETC”) in any state where we conduct business could be refused, conditioned, or revoked due to circumstances beyond our control, thus depriving us of financial support in that state from the Universal Service Fund (“USF”). In addition, we cannot be certain that we will continue to receive payments at the current levels.

In order to receive financial support from the USF in any state, we must receive ETC certification in that state. Currently, we are ETC certified in ten of the states in which we offer wireless services. If designation or certification in any of these states were revoked or conditioned, our financial results could be adversely affected. Further, there are several FCC proceedings underway that are likely to change the way universal service programs are funded and the ways these funds are disbursed to program recipients. At this time, it is not clear what impact changes in the rules, if any, will have on our continued eligibility to receive USF support. Loss of USF revenues could adversely affect our future financial performance.

If we are unable to comply with obligations imposed by the Communications Assistance for Law Enforcement Act (‘‘CALEA’’), our financial results could be adversely affected.

The Communications Assistance for Law Enforcement Act (‘‘CALEA’’) requires us to make services accessible to law enforcement for surveillance purposes. Additional requirements have been adopted to require cellular and PCS licensees to accommodate interception of digital packet mode telecommunications. We will become obligated to comply with these requirements only if and when we commence to offer services that make use of digital packet mode technology. If we are not able to comply with CALEA prior to the applicable deadlines, we could be subject to substantial fines. We cannot predict yet whether we will be able to comply with CALEA requirements prior to the applicable deadlines.

Equipment failure and natural disasters may adversely affect our operations.

A major equipment failure or a natural disaster affecting any of our central switching offices, microwave links, or cell sites could have a material adverse effect on our operations. Our inability to operate any portion of our wireless system for an extended time period could result in a loss of customers or impair our ability to attract new customers, which would have a material adverse effect on our business, results of operations, and financial condition.

Difficulties in the continued upgrade of our wireless systems could increase our planned capital expenditures, delay the continued build-out of our networks, and negatively impact our roaming arrangements.

Whenever we upgrade our networks, we need to:

• select appropriate equipment vendors;

• select and acquire appropriate sites for our transmission equipment, or cell sites;

• purchase and install low-power transmitters, receivers, and control equipment, or base radio equipment;

• build out any required physical infrastructure;

• obtain interconnection services from local telephone service carriers; and

• test cell sites.

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Our ability to perform these necessary steps successfully may be hindered by, among other things, any failure to:

• obtain necessary zoning and other regulatory approvals;

• lease or obtain rights to sites for the location of our base radio equipment;

• obtain any necessary capital;

• acquire any additional necessary spectrum from third parties; and

• commence and complete the construction of sites for our equipment in a timely and satisfactory manner.

In addition, we may experience cost overruns and delays not within our control caused by acts of governmental entities, design changes, material and equipment shortages, delays in delivery, and catastrophic occurrences. Any failure to upgrade our wireless systems on a timely basis may affect our ability to provide the quality of service in our markets consistent with our current business plan, and any significant delays could have a material adverse effect on our business. Failure to meet upgrade milestones or to comply with other requirements under our roaming agreements could have an adverse effect on our roaming revenue.

Our future financial results could be adversely impacted by asset impairments or other charges.

Effective January 1, 2002, we adopted Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”). As a result, we are required to test both goodwill and other indefinite-lived intangible assets, consisting primarily of our spectrum licenses, for impairment on an annual basis based upon a fair value approach, rather than amortizing them over time. We are also required to test goodwill for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce our enterprise fair value below its book value. Additionally, the value of our licenses must be tested between annual tests if events or changes in circumstances indicate that the value might be impaired. The amount of any such annual or interim impairment charge could be significant and could have a material adverse effect on our reported financial results for the period in which the charge is taken. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Goodwill and Other Indefinite-Lived Intangible Assets.”

Effective January 1, 2002, we adopted SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”). As a result, we are required to assess the impairment of our long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable as measured by the sum of the expected future undiscounted cash flows. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Impairment of Long-Lived Assets.”

Any operating losses resulting from impairment charges under SFAS No. 142 or SFAS No. 144 could have an adverse effect on the market price of our securities.

We may not be able to successfully integrate acquired or exchanged properties, which could have an adverse effect on our financial results.

We seek to improve our networks and service areas through selective acquisitions of other providers’ properties and other assets, and in some instances, we may exchange our properties or assets for the properties and assets of another carrier. We will be required to integrate with our operations any properties we acquire, which may have billing systems, customer care systems, and other operational characteristics that differ significantly from those of our networks. We may be unsuccessful in those efforts, and customer retention in acquired properties and surrounding areas may suffer as a result, which could have an adverse effect on our business and results of operations.

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We will continue to incur increased costs as a result of being a public company subject to the Sarbanes-Oxley Act of 2002 (“SOA”), as well as new rules implemented by the Securities and Exchange Commission and The Nasdaq Stock Market.

As a public company, we incur significant legal, accounting, and other expenses. In addition, the SOA, as well as new rules subsequently implemented by the SEC and The Nasdaq Stock Market, have required changes in corporate governance practices of public companies. We expect these new rules and regulations to increase our legal and financial compliance costs and to make certain activities more time-consuming and costly.

In addition, the new rules could make it more difficult for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees, or as executive officers.

If we fail to maintain an effective system of internal and disclosure controls, we may not be able to accurately report our financial results or prevent fraud.

Effective internal and disclosure controls are necessary for us to provide reliable financial reports and effectively prevent fraud and to operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. We may in the future discover material weaknesses in our internal controls as defined under interim standards adopted by the Public Company Accounting Oversight Board (“PCAOB”) and significant deficiencies and deficiencies in certain of our disclosure controls and procedures. Under the PCAOB standards, a “material weakness” is a significant deficiency or combination of significant deficiencies that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. A “significant deficiency” is a control deficiency or combination of control deficiencies that adversely affect a company’s ability to initiate, authorize, record, process, or report external financial data reliably in accordance with generally accepted accounting principles such that there is a more than remote likelihood that a misstatement of a company’s annual or interim financial statements that is more than inconsequential will not be prevented or detected.

While we have taken steps to improve our internal and disclosure controls, we cannot be certain that we will be able to maintain adequate controls over our financial processes and reporting in the future. Any failure to maintain effective controls or timely effect any necessary improvement of our internal and disclosure controls could harm operating results or cause us to fail to meet our reporting obligations, which could affect our ability to remain listed with The Nasdaq National Market. Ineffective internal and disclosure controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our securities.

Our common stock price has been and may continue to be volatile. Litigation instituted against us and our officers and directors as a result of changes in the price of our securities could materially and adversely affect our business, financial condition, and operating results.

The trading price of our Class A common stock has been and is likely to continue to be highly volatile and could be subject to wide fluctuations in response to factors such as:

• actual or anticipated variations in operating results;

• our ability to finance our operations and meet obligations under our financing arrangements

• conditions or trends in the wireless communications industry and changes in the economic performance and/or market valuation of other wireless communications companies;

• our strategic partnerships, joint ventures, or capital commitments; and

• additions or departures of key personnel.

In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the affected companies. These broad market and industry factors may materially and adversely affect the market price of our securities, regardless of our actual operating performance.

Often a drop in a company’s stock price is followed by lawsuits against the company and its officers and directors alleging securities fraud. The defense and eventual settlement of or judgment rendered in any such actions could result in substantial costs. Also, the defense of any such actions could divert management’s attention and resources. Both the costs and the diversion of management could materially and adversely affect our business, financial condition, and operating results. In addition, any material adverse judgment could trigger an event of default under our indebtedness.

We have a significant amount of debt and preferred stock, which may limit our ability to meet our debt service and dividend obligations, obtain future financing, make capital expenditures in support of our business plan, react to a downturn in our business, or otherwise conduct necessary corporate activities.

As of December 31, 2005, we had approximately $1.8 billion of long-term liabilities (which includes $465.3 million of senior and junior exchangeable preferred stock), and approximately $171.0 million of Class M preferred stock, and shareholders’ deficit of approximately $652.0 million. Of the outstanding preferred stock, $514.3 million can be exchanged, at our option, subject to compliance with certain leverage ratios under our credit facility and the indentures related to our outstanding notes, for senior subordinated indebtedness.

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The current levels of our debt and preferred stock entail a number of risks, including the following:

• we must use a substantial portion of our cash flows from operations to make interest payments on our debt, thereby reducing funds that would otherwise be available to us for working capital, capital expenditures, future business opportunities, and other purposes;

• we may not be able to obtain additional financing for working capital, capital expenditures, and other purposes on terms favorable to us or at all;

• borrowings under our floating rate notes and our revolving credit facility are at variable interest rates, making us vulnerable to increases in interest rates;

• we may have more debt than many of our competitors, which may place us at a competitive disadvantage;

• we may have limited flexibility to react to changes in our business; and

• we may not be able to refinance our indebtedness or preferred stock on terms that are commercially reasonable or at all.

Our ability to generate sufficient cash flow from operations to pay the principal or liquidation preference of, and interest or preferred dividends on, our indebtedness and preferred stock is not certain. In particular, if we do not meet our anticipated revenue growth and operating expense targets, our future debt and preferred stock service obligations could exceed the amount of our available cash.

The restrictive covenants in our existing debt and preferred stock instruments and agreements may limit our ability to operate our business.

The instruments governing our debt and the certificates of designation governing our preferred stock impose significant operating and financial restrictions on us. These restrictions limit, among other things, our ability and the ability of certain of our subsidiaries to:

• incur additional debt;

• pay cash dividends on capital stock;

• repay junior debt and preferred stock prior to stated maturities;

• allow the imposition of dividend restrictions on certain subsidiaries;

• sell assets;

• make investments;

• engage in transactions with shareholders and affiliates;

• create liens; and

• engage in some types of mergers or acquisitions.

Our failure to comply with these restrictions could lead to a default under the terms of the relevant debt or a violation of the terms of the preferred stock even if we are able to meet debt service and dividend obligations.

Our revolving credit facility requires us to maintain specified financial ratios if we draw against it. Substantially all our assets are subject to liens securing indebtedness under our revolving credit facility and senior secured notes. These restrictions could limit our ability to obtain future financing, make needed capital expenditures, withstand a downturn in our business, or otherwise conduct necessary corporate activities.

If there were an event of default under our revolving credit facility or other debt, the holders of the affected debt could elect to declare all of that debt to be due and payable, which, in turn, could cause all of our other debt to become due and payable. We might not have sufficient funds available, and we might be unable to obtain sufficient funds from alternative sources on terms favorable to us or at all. If the amounts outstanding under our revolving credit facility were accelerated and we could not obtain sufficient funds to satisfy our obligations, our lenders could proceed against our assets and the stock and assets of our subsidiaries that guarantee our revolving credit facility and senior secured notes.

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Our failure to pay the cash dividends on our senior exchangeable preferred stock may affect our ability to incur additional debt or refinance our existing indebtedness.

We are required to pay dividends on our senior exchangeable preferred stock. Beginning in August 2003, we did not declare or pay cash dividends on our senior exchangeable preferred stock. Because, as of November 15, 2004, we had failed to pay six or more quarterly dividends, a “Voting Rights Triggering Event,” as defined in the certificate of designation for the senior exchangeable preferred stock, existed. While a Voting Rights Triggering Event exists certain terms of our senior exchangeable preferred stock, if enforceable, may prohibit incurrence of additional indebtedness, including borrowing under our revolving credit facility and the refinancing of existing indebtedness.

On October 26, 2005, we paid four quarterly dividends on our outstanding senior exchangeable preferred stock. These quarterly dividends totaled $118.69 per share, including accrued interest. The aggregate total dividends of approximately $17.8 million were paid from existing cash. The payment of these dividends reduced the number of unpaid quarterly dividends to five and eliminated the then existing “Voting Rights Triggering Event” and any uncertainty regarding our ability to incur indebtedness, including under the revolving credit facility, allowing us to draw $58 million under the revolving credit facility and issue $175 million in new senior subordinated floating rate notes. Subsequent to the issuance of the new notes and borrowing under our credit facility, we elected not to pay cash dividends in November 2005 or February 2006 on our senior exchangeable preferred stock and a “Voting Rights Triggering Event” again exists. Management does not anticipate paying additional dividends in the foreseeable future.

Our failure to pay the cash dividends on our junior exchangeable preferred stock may result in changes in our board of directors and affect our ability to incur additional debt.

Since May 2005, we have not declared or paid cash dividends on our junior exchangeable preferred stock. If we do not pay any of the future dividends on our junior exchangeable preferred stock, a “Voting Rights Triggering Event,” as defined in the certificate of designation for the junior exchangeable preferred stock, will occur in August 2006. At that time, the holders of the junior exchangeable preferred stock will be entitled to elect the lesser of two directors or the number of directors equal to 25% of our board of directors. In addition, should a “Voting Rights Triggering Event” exist under the junior exchangeable preferred stock, our ability to incur indebtedness may be impaired.

We have shareholders who could exercise significant influence on management.

The holders of our Class M convertible preferred stock currently are able to elect two members to our board of directors and can vote, on an as-converted basis, approximately 2,181,241 shares of our Class A common stock, which represented, as of December 31, 2005, approximately 10.9% of the voting power of our common stock. Our Board of Directors also includes two directors elected by our senior exchangeable preferred stockholders. If any of these holders were to disagree with decisions made by management or the board of directors about our plans or operations, they might be able to bring significant pressure to change such plans or operations.

The holders of our junior exchangeable preferred stock, under certain circumstances, may also be able to elect members of our board of directors in the future.

Antitakeover provisions could adversely affect the price of our Class A common stock.

Some of the provisions of our Articles of Incorporation, Amended and Restated Bylaws, and Minnesota law could delay or prevent a change of control or a change in management that may be beneficial to shareholders. These provisions include:

• provisions for a classified board of directors;

• provisions for advance notice for director nominations and shareholder proposals;

• provisions allowing holders of our Class B common stock ten votes per share as compared to one vote per share for our Class A common stock;

• provisions for supermajority votes to approve mergers or amend specified provisions of the Articles and Bylaws; and

• statutory limits regarding share acquisitions and business combinations.

We also have adopted a rights plan that could discourage, delay, or prevent someone from acquiring us at a premium price. The rights plan provides that preferred stock purchase rights attached to each share of our common stock become exercisable to purchase shares of common stock at 50% of market value, causing substantial dilution to a person or group acquiring 15% or more of our common stock if the acquisition is not approved by our board of directors.

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In addition, the documents governing our indebtedness contain limitations on our ability to enter into a change of control transaction. Under these documents, the occurrence of a change of control transaction, in some cases after notice and grace periods, would constitute an event of default permitting acceleration of the indebtedness.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not Applicable

ITEM 2. PROPERTIES

Our corporate facilities include the following:

		Leased/	Square
	Address	Owned	Feet
Midwest:
Principal Corporate HQ	3905 Dakota Street SW	Owned		50,000
	Alexandria, Minnesota
Northeast:
Territory Office	302 Mountain View Drive	Leased		10,413
	Colchester, Vermont
Territory Office	6 Telcom Drive	Owned		36,250
	Bangor, Maine
Territory Office	323 North Street	Owned		4,000
	Saco, Maine
Northwest:
Territory Office	300 SE Reed Market Road	Leased		9,272
	Bend, Oregon
South:
Territory Office	621 Boll Weevil Circle, Suite 2	Leased		18,000
	Enterprise, Alabama

Our network consisted of the following cell sites at year end:

	2005		2004
Midwest		232		214
Northeast		327		240
Northwest		169		138
South		333		265
Total		1,061		857

Our leased sites consist of land leases, tower leases or both. We own all the equipment within the leased sites. The leases covering these sites have various expiration dates and are with numerous lessors. These leases generally have renewal options that we would anticipate exercising. Due to our network design, loss of a leased location would not have a material impact on the operations of a territory’s business.

We have 98 retail locations, of which almost all are leased. The leases covering these locations have various expiration dates. We believe that the loss of any one of these retail sites would not have a material impact on our business as we would likely be able to obtain substantially equivalent alternative space.

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ITEM 3. LEGAL PROCEEDINGS

We are involved from time to time in routine legal matters and other claims incidental to our business. We believe that the resolution of such routine matters and other incidental claims, taking into account established reserves and insurance, will not have a material adverse impact on our consolidated financial position or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information with regard to each of our executive officers:

Name	Age		Position
Richard P. Ekstrand		56	President, Chief Executive Officer and Director
Wesley E. Schultz		49	Executive Vice President, Chief Financial Officer and Director
Ann K. Newhall		54	Executive Vice President, Chief Operating Officer and Director
David J. Del Zoppo		50	Senior Vice President, Finance and Accounting

Richard P. Ekstrand has served as our President, Chief Executive Officer, and a director since 1990. He currently serves on the board of directors and executive committee of the Cellular Telecommunications & Internet Association (CTIA) and the Wireless Foundation. Mr. Ekstrand previously served as Chairman of the Board of Directors of both CTIA and the Wireless Foundation. He also was a founding director of the Rural Cellular Association (“RCA”) and served as a director until 2000. He was again elected to the RCA Board in September 2000. In addition, he is past President of the Minnesota Telephone Association, the Association of Minnesota Telephone Utilities, and the Minnesota Telecommunications Association. He currently serves on the board of directors of the Minnesota Zoo Foundation. Mr. Ekstrand is the sole shareholder, president, and a director of North Holdings, Inc. (formerly Lowry Telephone Co., Inc.), which is a shareholder of Rural Cellular. From 1980 through 2000, Mr. Ekstrand had served as vice president and a director of Lowry Telephone Co., Inc. North Holdings, Inc. is a member of Lowry Telephone Company, LLC, of which Mr. Ekstrand is the treasurer and a member of the board of governors.

Wesley E. Schultz has served as Executive Vice President and Chief Financial Officer since 2000 and as a director since 1999. He joined us in 1996 as Vice President of Finance and Chief Financial Officer. In 1999, he was appointed Senior Vice President and Chief Financial Officer and Assistant Secretary. Mr. Schultz is a certified public accountant and served for three years as an auditor with Deloitte & Touche LLP.

Ann K. Newhall has served as Executive Vice President, Chief Operating Officer, and Secretary since 2000 and as a director since 1999. She joined us as Senior Vice President and General Counsel in 1999. Prior to joining us, Ms. Newhall was a shareholder attorney with Moss & Barnett, A Professional Association, most recently serving as President and a director of the firm. Ms. Newhall received her J.D. from the University of Minnesota Law School in 1977. She serves on the board of directors of Alliant Energy Corporation, a gas and electric utility.

David J. Del Zoppo has served as Vice President, Finance and Accounting since 1999 and was appointed Senior Vice President, Finance and Accounting in February 2006. He joined us in 1997 as Controller and was appointed Vice President in 1998. Mr. Del Zoppo is a certified public accountant and served for four years as an auditor with KPMG, LLP.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER REPURCHASE OF EQUITY SECURITIES

Market Price/Holders

The following table indicates the high and low sales price of the Class A Common Stock for each quarter of the 2005 and 2004 fiscal years as quoted on The Nasdaq National Market.

	High		Low
2005
First Quarter	$	8.85	$	5.10
Second Quarter	$	5.77	$	4.20
Third Quarter	$	12.92	$	5.19
Fourth Quarter	$	17.12	$	11.79
2004
First Quarter	$	14.38	$	8.00
Second Quarter	$	10.20	$	6.80
Third Quarter	$	9.71	$	6.66
Fourth Quarter	$	7.18	$	4.70

Our Class B common stock is not publicly traded.

As of February 28, 2006, there were approximately 156 holders of record of our Class A common stock and approximately 12 holders of record of our Class B common stock.

Dividend Policy

RCC has never paid dividends on its Common Stock. The terms of our credit facility, outstanding notes, and exchangeable preferred stock limit our ability to pay dividends on our Common Stock.

Our ability to pay cash dividends on and to redeem for cash our senior exchangeable preferred stock and junior exchangeable preferred stock when required is restricted under various covenants contained in documents governing our outstanding preferred stock and our indebtedness, including the notes. In addition, under Minnesota law, we are permitted to pay dividends on or redeem our capital stock, including the senior exchangeable preferred stock and the junior exchangeable preferred stock, only if our board of directors determines that we will be able to pay our debts in the ordinary course of business after paying the dividends or completing the redemption. In addition, in order to redeem the junior exchangeable preferred stock, our board of directors must determine that we have sufficient assets to satisfy the liquidation preferences of the senior exchangeable preferred stock. As of December 31, 2005, we would have been able to make a total of $73.0 million in restricted payments.

On October 26, 2005, we paid four quarterly dividends on our outstanding senior exchangeable preferred stock. These quarterly dividends totaled $118.69 per share, including accrued interest. The aggregate total dividends of approximately $17.8 million were paid from existing cash. The payment of these dividends reduced the number of unpaid quarterly dividends to five and eliminated the then existing “Voting Rights Triggering Event” and any uncertainty regarding our ability to incur indebtedness, including under the revolving credit facility. Subsequent to the issuance of the floating rate subordinated notes and borrowing under our credit facility, we elected not to pay cash dividends in November 2005 or February 2006 on our senior exchangeable preferred stock and, accordingly a “Voting Rights Triggering Event” currently exists. Management does not anticipate paying additional dividends in the foreseeable future.

Issuance of Common Stock

In October 2005, RCC converted all of the outstanding shares of Class T convertible preferred stock into the 43,000 shares of Class A and 105,940 shares of Class B common stock. Dividends are not payable if the shares are converted. This conversion resulted in a gain of approximately $6.7 million, which reduced preferred stock dividends in 2005.

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ITEM 6. SELECTED FINANCIAL DATA

The following tables set forth certain of our consolidated financial and operating data as of and for each of the five years in the period ended December 31, 2005, which we derived from our consolidated financial statements. The data set forth below should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and accompanying notes included elsewhere in this Form 10-K.

	Years ended December 31,
(In thousands, except per share and other operating data)	2005			2004			2003			2002			2001
Statement of Operations Data:
Revenue:
Service	$	387,848		$	377,219		$	355,038		$	319,933		$	310,520
Roaming		122,774			105,504			131,896			122,703			116,541
Equipment		34,313			22,094			20,455			20,442			18,627
Total revenue		544,935			504,817			507,389			463,078			445,688
Operating expenses:
Network costs, excluding depreciation		120,322			104,071			96,069			97,200			101,509
Cost of equipment sales		58,266			40,372			37,636			29,184			28,415
Selling, general and administrative		152,238			135,129			131,761			119,185			122,387
Stock based compensation — SG&A		680			41			—			—			—
Depreciation and amortization		100,463			76,355			76,429			82,497			112,577
Impairment of assets		7,020			47,136			42,244			—			—
Total operating expenses		438,989			403,104			384,139			328,066			364,888
Operating income		105,946			101,713			123,250			135,012			80,800
Other income (expense):
Interest expense		(171,831	)		(163,977	)		(136,262	)		(114,478	)		(130,432	)
Interest and dividend income		2,221			1,727			916			562			1,172
Other		(876	)		(76	)		891			66			(752	)
Other expense, net		(170,486	)		(162,326	)		(134,455	)		(113,850	)		(130,012	)
Income (loss) before income taxes and cumulative change in accounting principle		(64,540	)		(60,613	)		(11,205	)		21,162			(49,212	)
Income tax benefit		(418	)		(1,672	)		—			—			—
Income (loss) before cumulative change in accounting principle		(64,122	)		(58,941	)		(11,205	)		21,162			(49,212	)
Cumulative change in accounting principle		—			—			—			(417,064	)		1,621
Net loss		(64,122	)		(58,941	)		(11,205	)		(395,902	)		(47,591	)
Preferred stock dividend		(7,174	)		(12,915	)		(38,877	)		(60,556	)		(54,545	)
Net loss applicable to common shares	$	(71,296	)	$	(71,856	)	$	(50,082	)	$	(456,458	)	$	(102,136	)
Weighted average common shares outstanding		12,695			12,239			12,060			11,920			11,865
Net loss applicable to common shares before cumulative change in accounting principle	$	(5.62	)	$	(5.87	)	$	(4.15	)	$	(3.30	)	$	(8.74	)
Cumulative change in accounting principle		—			—			—			(34.99	)		.13
Net loss per basic and diluted share	$	(5.62	)	$	(5.87	)	$	(4.15	)	$	(38.29	)	$	(8.61	)

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	As of December 31,
(In thousands, except other operating data)	2005			2004			2003			2002			2001
Balance Sheet Data:
Working capital (deficit)	$	129,922		$	45,308		$	86,135		$	(55,496	)	$	(18,273	)
Net property and equipment		277,408			276,133			226,202			240,536			244,980
Total assets		1,480,682			1,417,450			1,521,058			1,462,978			1,836,779
Total long-term liabilities		1,847,994			1,733,079			1,764,867			1,211,026			1,286,301
Redeemable preferred stock		170,976			166,296			153,381			569,500			508,836
Total shareholders’ deficit	$	(651,982	)	$	(596,338	)	$	(526,830	)	$	(483,115	)	$	(33,830	)
Other Operating Data:
Customers (not including long distance and paging):
Postpaid		597,769			628,614			656,110			639,221			599,514
Prepaid		11,663			20,391			22,302			27,452			33,255
Wholesale		96,170			80,806			67,104			55,700			29,139
Total customers		705,602			729,811			745,516			722,373			661,908
Marketed POPs (1)		6,405,000			6,279,000			5,962,000			5,893,000			5,893,000
Penetration (2)		9.5	%		10.3	%		11.4	%		11.3	%		10.7	%
Retention (3)		97.3	%		97.9	%		98.1	%		98.2	%		97.8	%
Local monthly service revenue per customer (4)	$	50		$	46		$	43		$	41		$	42
Average monthly revenue per customer (5)	$	67		$	60		$	59		$	57		$	59
Acquisition cost per customer (6)	$	497		$	444		$	422		$	377		$	290
Cell sites / Base stations:		1,061			857			754			732			684

1)	Updated to reflect 2000 U.S. Census Bureau Official Statistics.
2)	Represents the ratio of wireless voice customers, excluding wholesale customers, at the end of the period to population served.
3)	Determined for each period by dividing total postpaid wireless voice customers discontinuing service during such period by the average postpaid wireless voice customers for such period (customers at the beginning of the period plus customers at the end of the period, divided by two), dividing that result by the number of months in the period, and subtracting such result from one.
4)	Determined for each period by dividing service revenue (not including pass-through regulatory fees by the monthly average postpaid customers for such period.
5)	Determined for each period by dividing service revenue (not including pass-through regulatory fees) and roaming revenue by the monthly average postpaid customers for such period.
6)	Determined for each period by dividing selling and marketing expenses, net costs of equipment sales, and depreciation of rental telephone equipment by the gross postpaid and prepaid wireless voice customers added during such period.

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Reconciliations of Non-GAAP Financial Measures

We utilize certain financial measures that are calculated based on industry conventions and are not calculated based on Generally Accepted Accounting Principles (“GAAP”). Certain of these financial measures are considered non-GAAP financial measures within the meaning of Item 10 of Regulation S-K promulgated by the SEC.

		Years Ended December 31,
Retention	2005			2004			2003			2002			2001
Postpaid wireless voice customers discontinuing service (1)		197,471			161,222			150,745			136,237			153,078
Weighted average 12 month aggregate postpaid wireless voice customers (2)		7,362,780			7,667,797			7,780,921			7,409,873			6,954,051
Churn (1) ÷ (2)		2.7	%		2.1	%		1.9	%		1.8	%		2.2	%
Retention (1 minus churn)		97.3	%		97.9	%		98.1	%		98.2	%		97.8	%
(in thousands, except customer gross additions and acquisition cost per customer )
Selling and marketing expense	$	59,201		$	54,077		$	52,150		$	50,563		$	49,808
Net cost of equipment		23,953			18,278			17,181			8,742			9,788
Adjustments to cost of equipment		3,990			2,399			8,549			15,647			7,373
Total costs used in the calculation of Acquisition cost per customer (3)	$	87,144		$	74,754		$	77,880		$	74,952		$	66,969
Customer gross additions (4)		175,324			168,330			184,522			198,923			230,895
Acquisition cost per customer (3) ÷ (4)	$	497		$	444		$	422		$	377		$	290
Local Service Revenue Per Customer (“LSR”)
(in thousands, except weighted average 12 month aggregate postpaid wireless voice customers and LSR)
Revenues (as reported on Consolidated Statements of Operations)
Service revenues	$	387,848		$	377,219		$	355,038		$	319,933		$	310,520
Non postpaid revenue adjustments		(20,253	)		(20,743	)		(24,016	)		(18,395	)		(16,814	)
Service revenues for LSR (5)	$	367,595		$	356,476		$	331,022		$	301,538		$	293,706
Weighted average 12 month aggregate postpaid wireless voice customers (6)		7,362,780			7,667,797			7,780,921			7,409,873			6,954,051
LSR (5) ÷ (6)	$	50		$	46		$	43		$	41		$	42
Average Revenue Per Customer (“ARPU”)
(in thousands, except weighted average 12 month aggregate postpaid wireless voice customers and ARPU)
Revenues (as reported on Consolidated Statements of Operations)
Service revenues	$	387,848		$	377,219		$	355,038		$	319,933		$	310,520
Roaming revenues		122,774			105,504			131,896			122,703			116,541
Total		510,622			482,723			486,934			442,636			427,061
Non postpaid revenue adjustments:		(20,253	)		(20,743	)		(24,016	)		(18,395	)		(16,814	)
Service revenues for ARPU (7)	$	490,369		$	461,980		$	462,918		$	424,241		$	410,247
Weighted average 12 month aggregate postpaid wireless voice customers (8)		7,362,780			7,667,797			7,780,921			7,409,873			6,954,051
ARPU (7) ÷ (8)	$	67		$	60		$	59		$	57		$	59

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Business Overview

We are a wireless communications service provider focusing primarily on rural markets in the United States. Our principal operating objective is to increase revenue and achieve profitability through increased penetration in our existing markets.

Our operating territories include portions of five states in the Northeast, three states in the Northwest, four states in the Midwest, and three states in the South. Within each of our four territories, we have a strong local sales and customer service presence in the communities we serve.

Our marketed networks covered a total population of approximately 6.5 million POPs and served approximately 706,000 voice customers as of December 31, 2005. We have national roaming agreements in our markets with Cingular (effective through December 2009) and Verizon (effective through December 2009). Under these agreements, we are able to attain preferred roaming status by overlaying our existing TDMA networks in our South, Northeast and Northwest networks with GSM/GPRS/EDGE technology and our Midwest network with CDMA technology. We also have various agreements with T-Mobile, which are effective through December 2007.

Operating Revenue

Our revenue primarily consists of service, roaming, and equipment revenue, each of which is described below:

Service revenue includes monthly access charges, charges for airtime used in excess of the time included in the service package purchased, long distance charges derived from calls placed by customers, data related services, as well as wireless and paging equipment lease revenue.

Also included are charges for features such as voicemail, call waiting, call forwarding, and incollect revenue, which consists of charges to our customers when they use their wireless phones in other wireless markets. We do not charge installation or connection fees. We also include in service revenue the USF support funding that we receive as a result of our ETC status in certain states and the USF pass-through fees we charge our customers.

Roaming revenue includes only outcollect revenue, which we receive when other wireless providers’ customers use our network.

Equipment revenue includes sales of wireless equipment and accessories to customers, network equipment reselling, and customer activation fees.

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Operating Expenses

Our operating expenses include network costs, cost of equipment sales, selling, general and administrative expenses, and depreciation and amortization, each of which is described below:

Network costs include switching and transport expenses and expenses associated with the maintenance and operation of our wireless network facilities, including salaries for employees involved in network operations, site costs, charges from other service providers for resold minutes, and the service and expense associated with incollect revenue.

Cost of equipment sales includes costs associated with telephone equipment and accessories sold to customers. In recent years, we and other wireless providers have increased the use of discounts on phone equipment to attract customers as competition between service providers has intensified. As a result, we have incurred, and expect to continue to incur, losses on equipment sales per gross additional and migrated customer. We expect to continue these discounts and promotions because we believe they will increase the number of our wireless customers and, consequently, increase service revenue.

Selling, general and administrative (“SG&A”) expenses include salaries, benefits, and operating expenses such as marketing, commissions, customer support, accounting, administration, and billing. We also include in SG&A contributions payable to the USF.

Depreciation and amortization represents the costs associated with the depreciation of fixed assets and the amortization of customer lists and spectrum relocation.

Other Expenses

In addition to the operating expenses discussed above, RCC also incurs other expenses, primarily interest on debt and dividends on preferred stock.

Interest expense primarily results from the issuance of outstanding notes and exchangeable preferred stock, the proceeds of which were used to finance acquisitions, repay other borrowings, and further develop our wireless network.

Interest expense includes the following:

o Interest expense on our credit facility , senior secured notes, senior notes, and senior subordinated notes,

o Amortization of debt issuance costs,

o Early extinguishment of debt issuance costs,

o Dividends on senior and junior exchangeable preferred stock,

o Amortization of preferred stock issuance costs,

o Gain (loss) on derivative instruments, and

o Gains on repurchase and exchange of preferred stock.

Preferred stock dividends are accrued on our outstanding Class M convertible preferred stock and had been accrued on our Class T convertible preferred stock, which was converted to common stock in October 2005.

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Critical Accounting Policies and Estimates

The following discussion and analysis is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of revenue, expenses, assets, and liabilities during the periods reported. Estimates are used when accounting for certain items such as unbilled revenue, allowance for doubtful accounts, depreciation and amortization periods, income taxes, valuation of intangible assets, and litigation contingencies. We base our estimates on historical experience, where applicable, and other assumptions that we believe are reasonable under the circumstances. We believe that the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Goodwill and Other Indefinite-Lived Intangible Assets

We review goodwill and other indefinite-lived intangible assets for impairment based on the requirements of SFAS No. 142. Goodwill is tested for impairment at the reporting unit level on an annual basis as of October 1st or on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value. These events or circumstances would include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors. In analyzing goodwill for potential impairment, we use projections of future cash flows from the reporting units. These projections are based on our view of growth rates, anticipated future economic conditions, the appropriate discount rates relative to risk, and estimates of residual values. We believe that our estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. If changes in growth rates, future economic conditions, discount rates, or estimates of residual values were to occur, goodwill may become impaired.

Additionally, impairment tests for indefinite-lived intangible assets, consisting of FCC licenses, are required to be performed on an annual basis or on an interim basis if an event occurs or circumstances change that would indicate the asset might be impaired. In accordance with Emerging Issues Task Force (“EITF”) No. 02-7, “Unit of Accounting for Testing of Impairment of Indefinite-Lived Intangible Assets” (“EITF No. 02-7”), impairment tests for FCC licenses are performed on an aggregate basis for each unit of accounting. We utilize a fair value approach, incorporating discounted cash flows, to complete the test. This approach determines the fair value of the FCC licenses, using start-up model assumptions and, accordingly, incorporates cash flow assumptions regarding the investment in a network, the development of distribution channels, and other inputs for making the business operational. These inputs are included in determining free cash flows of each unit of accounting, using assumptions of weighted average costs of capital and the long-term rate of growth for each unit of accounting. We believe that our estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. If any of the assumptions were to change, our FCC licenses may become impaired.

Under SFAS No. 142, we performed annual impairment tests in 2003, 2004, and 2005 for our indefinite lived assets. Based on these tests, we recorded a noncash impairment charge of $47.1 million (included in operating expenses) in the fourth quarter of 2004. There was no impairment charge in 2003 and 2005 related to our annual assessment under SFAS No. 142.

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Revenue Recognition — Service

We recognize service revenue based upon contracted service fees and minutes of use processed. As a result of our billing cycle cut-off times, we are required to make estimates for service revenue earned, but not yet billed, at the end of each month. These estimates are based primarily upon historical minutes of use processed. We follow this method since reasonable, dependable estimates of the revenue can be made. Actual billing cycle results and related revenue may vary from the results estimated at the end of each quarter, depending on customer usage and rate plan mix. For customers who prepay their monthly access fees, we match the recognition of service revenue to their corresponding usage. Revenues are net of credits and adjustments for service.

We receive USF revenue reflecting our ETC status in certain states. We recognize support revenue depending on the level of our collection experience in each ETC qualified state. Where we do not have adequate experience to determine the time required for reimbursement, we recognize revenue upon cash receipt. Where we do have adequate experience as to the amount and timing of the receipt of these funds, we recognize revenue on an accrual basis.

We include the pass-through fees we collect from customers as service revenue with a corresponding charge to SG&A expense. These pass-through fees, which we have the option of passing to our customers, include state and federal USF fees, together with city utility and state gross receipt taxes.

Revenue Recognition — Roaming Revenue and Incollect Cost

Roaming revenue and incollect cost information is provided to us primarily through a third party centralized clearinghouse. From the clearinghouse we receive monthly settlement data. We base our accrual of roaming revenue and incollect expense on these clearinghouse reports. We follow this method since reasonably dependable estimates of roaming revenue and incollect cost can be made based on these reports.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts for estimated losses that will result from failure of our customers to pay amounts owed. We base our estimates on the aging of our accounts receivable balances and our historical write-off experience, net of recoveries. If the financial condition of our customers were to deteriorate, we may be required to maintain higher allowances.

Depreciation of Property and Equipment

We depreciate our wireless communications equipment using the straight-line method over estimated useful lives. We periodically review changes in our technology and industry conditions, asset retirement activity, and salvage to determine adjustments to estimated remaining useful lives and depreciation rates. Total depreciation expense for the years ended December 31, 2005, 2004, and 2003, was $81.5 million, $57.4 million, and $56.2 million, respectively.

During the fourth quarter of 2005, we reviewed the lives of our TDMA assets and reduced the remaining useful life of this equipment from approximately 21 months to 15 months. Accordingly, all TDMA equipment will be fully depreciated by December 31, 2006. The net book value of this equipment as of December 31, 2005, was approximately $47.0 million.

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While we will continue to provide service to existing TDMA customers for the foreseeable future, the amount of future cash flows to be derived from the TDMA network assets is highly dependent upon the rate of transition of existing customers using TDMA equipment to 2.5G capable equipment as well as other competitive and technological factors. We determined that a reduction in the useful lives of these assets was warranted based on the projected transition of network traffic. We will continue to review the useful lives of the TDMA assets throughout the period of transition to 2.5G capable equipment to determine whether further changes are warranted.

Impairment of Long-Lived Assets

We review long-lived assets, consisting primarily of property, plant and equipment and intangible assets with finite lives, for impairment in accordance with SFAS No. 144. In analyzing potential impairment, we use projections of future undiscounted cash flows from the assets. These projections are based on our view of growth rates for the related business, anticipated future economic conditions, the appropriate discount rates relative to risk, and estimates of residual values. We believe that our estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. If changes in growth rates, future economic conditions, discount rates, or estimates of residual values were to occur, long-lived assets may become impaired.

On June 28, 2005, our customer relationship management and billing managed services agreement with Amdocs was mutually terminated. As a result of the termination of the agreement, we recorded a charge to operations during the quarter ended June 30, 2005 of $7.0 million, reflecting the write-down of certain development costs previously capitalized.

Income Taxes

We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes.” As part of the process of preparing the consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. This process involves estimating actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities. We must then assess the likelihood that deferred tax assets will be recovered from future taxable income and, if we believe that recovery is not likely, we must establish an appropriate valuation allowance. To the extent we increase or decrease the valuation allowance in a period, we must include an expense or benefit within the tax provision in the consolidated statement of operations.

Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against net deferred tax assets. As of December 31, 2005, our valuation allowance was $160.5 million due to uncertainties related to our ability to utilize the deferred tax assets. The deferred tax assets consist principally of certain net operating losses (“NOLs”) being carried forward, as well as impairment write-downs of intangible assets not currently deductible for tax purposes. The valuation allowance is based on our historical operations projected forward and our estimate of future taxable income and the period over which deferred tax assets will be recoverable. It is possible that we could be profitable in the future at levels that cause us to conclude that it is more likely than not that we will realize a portion or all of the NOL carryforward. Upon reaching such a conclusion, we would immediately record the estimated net realizable value of the deferred tax asset at that time and would then provide for income taxes at a rate equal to our combined federal and state effective rates, which would be approximately 38% under current tax law. Subsequent revisions to the estimated net realizable value of the deferred tax asset could cause the provision for income taxes to vary significantly from period to period, although our cash tax payments would likely remain unaffected until the benefit of the NOLs is utilized or the NOLs expire unused.

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Litigation and Other Loss Contingencies

In the ordinary course of business, we are subject to litigation and other contingencies. Management must use its best judgment and estimates of probable outcomes when determining the impact of these contingencies. We assess the impact of claims and litigation on a regular basis and update the assumptions and estimates used to prepare the consolidated financial statements.

Recently Issued Accounting Pronouncements

Accounting for Share-Based Compensation

On December 16, 2004, the Financial Accounting Standards Board (“FASB”‘) issued SFAS No. 123(R), “Share-Based Payment,” which is a revision of SFAS No. 123 and supersedes Accounting Principles Board (“APB”) Opinion No. 25. SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be valued at fair value on the date of grant and to be expensed over the applicable vesting period.

Commencing with the quarter ending March 31, 2006, we will adopt SFAS No. 123(R), utilizing the modified prospective method for all share-based awards granted on or after January 1, 2006. Under the modified prospective method SFAS No. 123(R) requires compensation cost to be recognized for all share-based compensation expense arrangements granted after the adoption date and all remaining unvested share-based compensation arrangements granted prior to the adoption date. Prior periods will not be restated.

We use the Black-Scholes model to value our stock option grants. Compensation expense for the unvested awards will be measured based on the fair value of the awards previously calculated in developing the pro forma disclosures in accordance with the provisions of SFAS No. 123.

Through December 31, 2005, we applied APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations to account for our employee and director stock options and did not record compensation expense for share-based payment award transactions since the exercise price had been the fair value of RCC’s common stock at the grant date.

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Results of Operations

Years ended December 31, 2005 and 2004

Revenue

Operating Revenue:

	Years ended December 31,
(In thousands)	2005		2004		$ Increase		% Increase
Service	$	387,848	$	377,219	$	10,629		2.8	%
Roaming		122,774		105,504		17,270		16.4	%
Equipment		34,313		22,094		12,219		55.3	%
Total operating revenue	$	544,935	$	504,817	$	40,118		7.9	%

Service Revenue. Service revenue growth for the year ended December 31, 2005 primarily reflects LSR increasing to $50 compared to $46 for the year ended December 31, 2004, partially offset by declining customers. The LSR increase in 2005 was due to an increase of $2 in USF payments and $2 in access, data and features. LSR includes USF support of $6 for the year ended December 31, 2005 and $4 for the year ended December 31, 2004.

We are currently receiving USF support in the states of Alabama, Kansas, Maine, Minnesota, Mississippi, New Hampshire, Oregon, South Dakota, Vermont, and Washington. Primarily reflecting the full year’s impact of being ETC certified in these states as compared to 2004, USF support payments increased to $40.8 million for the year ended December 31, 2005 as compared to $28.2 million for the year ended December 31, 2004. We expect the amount of USF support in 2006 to be approximately $40 million.

Service Revenue	Years ended December 31,
					$ Increase			% Increase
(In thousands)	2005		2004		(Decrease)			(Decrease)
Local service	$	332,310	$	337,361	$	(5,051	)		(1.5	)%
USF support		40,792		28,154		12,638			44.9	%
Regulatory pass-through		13,891		11,204		2,687			24.0	%
Other		855		500		355			71.0	%
Total service revenue	$	387,848	$	377,219	$	10,629			2.8	%

The decline in local service revenue for the year ended December 31, 2005 reflects the decrease in customers as we have transitioned our TDMA networks to 2.5G technology.

Customers. Primarily reflecting customer retention declining to 97.3% for the year ended December 31, 2005 as compared to 97.9% for the year ended December 31, 2004, our total customers decreased to 705,602 at December 31, 2005 as compared to 729,811 at December 31, 2004. Our decline in customer retention reflects a multitude of technology related issues, including increased customer care needs (which we encountered during the commercial introduction of our GSM networks in the second quarter of 2005), GSM billing system changes, the transitional stage of our networks, and increased national carrier competition. Postpaid customer gross adds for the year ended December 31, 2005 increased to 166,626 as compared to 151,161 for the year ended December 31, 2004.

As of December 31, 2005, approximately 47% of our postpaid customers were using new technology handsets as compared to 6% at December 31, 2004. We believe our new technology customers provide higher retention rates and LSR and therefore plan to aggressively migrate our legacy customer base to new technology products throughout 2006. We anticipate positive net postpaid customer growth in 2006.

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Roaming Revenue. The 16% increase in roaming revenue during the year ended December 31, 2005 primarily reflects a 40% increase in outcollect minutes partially offset by a decline in roaming yield. Our outcollect yield for the year ended December 31, 2005 was $.15 per minute as compared to $.16 per minute in the year ended December 31, 2004. Declines in TDMA outcollect minutes were offset by increases in new technology GSM and CDMA outcollect minutes.

Negatively impacting roaming revenue primarily during 2004 and the first and second quarters of 2005 was the transition by our national roaming partners to 2.5G technology handsets. Because these partners converted their customer base to this new technology before we had fully operational 2.5G networks, we did not capture a portion of available roaming revenue. At December 31, 2005, substantially all of our 1,061 cell sites were equipped with 2.5G technology. For the years ended December 31, 2005 and 2004, 2.5G outcollect minutes accounted for 80% and 35%, respectively, of our total outcollect minutes. For the years ended December 31, 2005 and 2004, Cingular (on a pro forma basis giving effect to its 2004 merger with AWE), Verizon Wireless, and T-Mobile accounted for approximately 92% and 86%, respectively, of our total outcollect roaming minutes. For the years ended December 31, 2005 and 2004, Cingular (on a pro forma basis giving effect to its merger with AWE) accounted for approximately 11.9% and 9.9% of our total revenue.

Roaming revenue has also been affected by the transfer of our Oregon RSA 4 service area to AWE on March 1, 2004.

We anticipate 2006 roaming minute increases to offset anticipated roaming yield declines, which together with the full year operation of our new technology networks, should result in 2006 roaming revenue exceeding 2005 levels.

Equipment Revenue. Equipment revenue increased 55% to $34.3 million for the year ended December 31, 2005 as compared to $22.1 million during the year ended December 31, 2004. Contributing to equipment revenue in 2005 was the 59% increase in customer migrations to 199,248 as compared to 124,925 during the year ended December 31, 2004. Also contributing to equipment revenue for the year ended December 31, 2005 was an increase of gross postpaid customers. In 2005, gross postpaid customer additions increased to 166,626 as compared to 151,161 in 2004.

Operating Expenses

	Years ended December 31,
					$ Increase			% Increase
(In thousands)	2005		2004		(decrease)			(decrease)
Network cost
Incollect cost	$	46,880	$	45,745	$	1,135			2.5	%
Other network cost		73,442		58,326		15,116			25.9	%
		120,322		104,071		16,251			15.6	%
Cost of equipment sales		58,266		40,372		17,894			44.3	%
Selling, general and administrative		152,238		135,129		17,109			12.7	%
Stock-based compensation — SG&A		680		41		639			1,558.5	%
Depreciation and amortization		100,463		76,355		24,108			31.6	%
Impairment of assets		7,020		47,136		(40,116	)		(85.1	)%
Total operating expenses	$	438,989	$	403,104	$	35,885			8.9	%

Network Cost. Network cost, as a percentage of total revenues, increased to 22.1% in the year ended December 31, 2005 as compared to 20.6% in the year ended December 31, 2004. This increase reflects additional costs of operating multiple networks (analog, TDMA and 2.5G networks), increased incollect usage by 2.5G customers, and additional cell site costs related to our network improvement and expansion. Cell sites increased to 1,061 at December 31, 2005 as compared to 857 at December 31, 2004. Per minute incollect cost for the year ended December 31, 2005 was approximately $0.11 per minute as compared to $0.13 in the year ended December 31, 2004. We anticipate continued increases in network costs in 2006 over 2005 levels, reflecting the full year impact of 2.5G network overlay substantially completed in 2005.

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Cost of Equipment Sales. Cost of equipment sales increased 44.3% to $58.3 million for the year ended December 31, 2005, reflecting the cost of increased customer migration to new technology handsets together with increases in gross customer additions. As a percentage of revenue, cost of equipment sales for the year ended December 31, 2005 increased to 10.7% as compared to 8.0% in the year ended December 31, 2004. Postpaid customer gross adds for the year ended December 31, 2005 increased to 166,626 over 151,161 for the year ended December 31, 2004. As of December 31, 2005, approximately 47% of our postpaid customers were using new technology handsets as compared to 6% at December 31, 2004.

Because of the improved retention from new technology customers and the higher LSR that these customers demonstrate, we plan to aggressively pursue migrating our legacy customer base to new technology products throughout 2006. Accordingly, we anticipate cost of equipment sales to increase in 2006 compared to 2005 levels.

Selling, General and Administrative. As a percentage of revenue, SG&A increased to 27.9% in the year ended December 31, 2005 as compared to 26.8% during the year ended December 31, 2004. Primarily contributing to the increase in G&A were increased contract labor and services related to our roll-out of new technology products and billing system conversion costs. Sales and marketing costs increased due to the market launch of 2.5G technology products. We also incurred higher bad debt expense during the year, partially reflecting billing system difficulties and the resulting decline in customer retention. Regulatory pass-through fees increased to $14.2 million in the year ended December 31, 2005 as compared to $11.5 million in the year ended December 31, 2004, reflecting a change in federally managed rates.

Given the stabilization of our billing platforms and the substantial completion of our 2.5G technology overlay, we expect SG&A in 2006 to be comparable to 2005.

Components of SG&A are as follows:

	Years ended December 31,
(in thousands)	2005		2004		$ Increase		% Increase
General and administrative	$	64,887	$	59,853	$	5,034		8.4	%
Sales and marketing		59,376		54,077		5,299		9.8	%
Bad debt		13,769		9,762		4,007		41.0	%
Regulatory pass-through fees		14,206		11,478		2,728		23.8	%
	$	152,238	$	135,170	$	17,068		12.6	%

Stock-based compensation — SG&A. For the year ended December 31, 2005, we recorded $680,000 of non-cash stock compensation expense related to the restricted stock grants to employees compared to $41,000 for the year ended December 31, 2004.

In accordance with our adoption of SFAS No. 123(R), stock-based compensation in future financial statements will include cost to be recognized for all stock-based compensation expense arrangements, including employee and non-employee stock options granted after January 1, 2006 and all remaining unvested stock-based compensation arrangements granted prior to January 1, 2006, commencing with the quarter ending March 31, 2006. Accordingly, we expect stock-based compensation to increase in 2006.

Depreciation and Amortization. Depreciation and amortization expense increased 31.6% during the year ended December 31, 2005 to $100.5 million as compared to $76.4 million for the year ended December 31, 2004. This increase primarily reflects the accelerated depreciation of our legacy TDMA networks and depreciation on the recently activated 2.5G networks in our Northeast, Northwest, and South territories. At December 31, 2005, substantially all of our 1,061 cell sites were equipped with 2.5G technology. For these reasons, we anticipate increased levels of depreciation and amortization in 2006 over 2005 levels.

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Impairment of Assets. Effective June 28, 2005, our agreement with Amdocs was mutually terminated. Reflecting the termination of the agreement, we recorded a charge to operations during the quarter ended June 30, 2005 of $7.0 million, reflecting the write-down of certain development costs previously capitalized.

Other Income (Expense)

Interest Expense. Increased interest expense for the year ended December 31, 2005 reflects the Company’s higher debt level resulting from the November 2005 issuance of $175 million floating rate senior subordinated notes and the borrowing of $58 million under the revolving credit facility.

Partially offsetting the impact of increased debt were gains resulting from repurchases of senior exchangeable preferred stock and gains from exchanges of senior exchangeable preferred stock for common stock. In addition, the write-off of debt issuance costs were lower in the year ended December 31, 2005 than in the year ended December 31, 2004.

Cash interest expense, which included $17.8 million in senior exchangeable preferred stock dividends paid in October 2005, was $133.0 million for all of 2005 as compared to $101.4 million in 2004.

	Years ended
Components of Interest Expense	December 31,
(in thousands)	2005			2004
Interest expense on credit facility	$	691		$	5,135
Interest expense on senior secured notes		41,517			29,753
Interest expense on senior notes		32,095			32,094
Interest expense on senior subordinated notes		45,252			41,281
Amortization of debt issuance costs		4,692			4,674
Write-off of debt issuance costs		1,533			12,605
Senior and junior preferred stock dividends		54,778			55,373
Effect of derivative instruments		(1,997	)		5,208
Gain on repurchase and exchange of senior exchangeable preferred stock		(5,722	)		(22,572	)
Other		(1,008	)		426
	$	171,831		$	163,977

Gain on repurchase of Senior Exchangeable Preferred Stock. During the years ended December 31, 2005 and December 31, 2004, we repurchased 14,932 and 80,500 shares of senior exchangeable preferred stock for $13.4 million and $68.4 million, respectively. The corresponding $5.5 million and $22.6 million gains, not including transaction commissions and other related fees, were recorded as a reduction of interest expense.

Gain on exchange of Senior Exchangeable Preferred Stock for Class A Common Stock. During the year ended December 31, 2005, we exchanged an aggregate of 10,535 shares of our senior exchangeable preferred stock for an aggregate of 1,152,745 shares of our Class A common stock in negotiated transactions, resulting in a gain of $168,241. The shares were issued in reliance upon the exemption from registration provided in Section 3(a)(9) of the Securities Act of 1933, as amended.

Preferred Stock Dividends

Preferred stock dividends for the year ended December 31, 2005 decreased by 44.5% to $7.2 million as compared to $12.9 million in the year ended December 31, 2004, primarily reflecting the $6.7 million gain resulting from the October 2005 conversion of our outstanding shares of Class T convertible preferred stock into the 43,000 shares of Class A and 105,940 shares of Class B common stock.

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Years ended December 31, 2004 and 2003

Revenue

Operating Revenue:

	Years Ended December 31,
					$ Increase			% Increase
(In thousands)	2004		2003		(Decrease)			(Decrease)
Service	$	377,219	$	355,038	$	22,181			6.2	%
Roaming		105,504		131,896		(26,392	)		(20.0	)%
Equipment		22,094		20,455		1,639			8.0	%
Total revenue	$	504,817	$	507,389	$	(2,572	)		(0.5	)%

Service Revenue. Service revenue growth for the year ended December 31, 2004 reflects USF support payments increasing to $28.2 million as compared to $8.8 million for the year ended December 31, 2003. During 2004, we received USF support in the states of Alabama, Kansas, Maine, Minnesota, Mississippi, Oregon, Vermont, and Washington. LSR increased to $46 for the year ended December 31, 2004, as compared to $43 for the year ended December 31, 2003. Contributing to the increase in LSR were increased levels of USF of approximately $2 and increased access and features revenue of approximately $1.

Reflecting FCC changes to the USF rate structure, our customer pass-through charges were $11.2 million during the year ended December 31, 2004 as compared to $8.9 million for the year ended December 31, 2003.

Service revenue was negatively impacted by a decrease in customers resulting from the AWE property exchange completed on March 1, 2004 and customers lost due to the transition of our TDMA networks to 2.5G technology.

Customers. Our total customers decreased to 729,811 at December 31, 2004 as compared to 745,516 at December 31, 2003, primarily due to the transfer of approximately 35,000 Oregon RSA 4 customers to AWE on March 1, 2004. As part of the property exchange, we received from AWE operations in Alabama and Mississippi, including approximately 14,000 customers.

Customer reconciliation giving effect to the AWE property exchange:
(not including long distance and paging)

	Postpaid			Prepaid			Wholesale			Total
Customers at December 31, 2003		656,110			22,302			67,104			745,516
Net customer adds (loss)		(5,487	)		(2,710	)		13,746			5,549
AWE Property Exchange:
South territory customers acquired		12,858			979			—			13,837
Oregon RSA 4 customers transferred		(34,867	)		(180	)		(44	)		(35,091	)
Net customer change		(22,009	)		799			(44	)		(21,254	)
Customers at December 31, 2004		628,614			20,391			80,806			729,811

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During the year ended December 31, 2004, postpaid retention declined to 97.9% as compared to 98.1% in the year ended December 31, 2003. A primary contributor to the decline in retention was the transition stage of our networks from TDMA to 2.5G technology throughout 2004. We believe TDMA technology is not as attractive to customers as newer technologies. Accordingly, total customer net additions decreased to 5,549 in 2004 as compared to 23,143 in 2003.

Roaming Revenue. The 20.0% decrease in roaming revenue during the year ended December 31, 2004 primarily reflects the effect of the transfer of our Northwest Territory Oregon 4 (“Oregon 4”) service area to AWE on March 1, 2004. For the year ended December 31, 2004, the Oregon 4 service area provided approximately $3.6 million of roaming revenue compared to approximately $14.9 million for the year ended December 31, 2003. In addition, our outcollect yield for the year ended December 31, 2004 was $0.16 per minute as compared to $0.21 per minute in 2003.

Also impacting roaming revenue during the year ended December 31, 2004 was the accelerated transition by our national roaming partners to 2.5G technology handsets. Our most significant roaming partners are performing overlays of their existing networks with 2.5G technology at an accelerated pace. We believe that during 2004 these partners converted their customer base to this new technology before our 2.5G networks became operational. As a result, we believe we did not capture a portion of available roaming revenue. At December 31, 2004, approximately 67% of our 857 cell sites had been overlaid with 2.5G technology.

For the years ended December 31, 2004 and 2003, Cingular (on a pro forma basis giving effect to its merger with AWE), Verizon Wireless, and T-Mobile accounted for approximately 86% and 89%, respectively, of our total outcollect roaming minutes. For the years ended December 31, 2004 and 2003, Cingular (on a pro forma basis giving effect to its merger with AWE) accounted for approximately 9.9% and 14.5% of our total revenue.

Equipment Revenue. Equipment revenue increased 8.0% to $22.1 million during the year ended December 31, 2004 as compared to $20.5 million during the year ended December 31, 2003. Primarily contributing to increased equipment revenue was our adoption of EITF No. 00-21, which was effective for us, prospectively, on July 1, 2003 and resulted in our classifying activation fees as equipment revenue rather than as service revenue. Revenue reflecting EITF No. 00-21 was $3.0 million for the year ended December 31, 2004, as compared to $1.8 million for the year ended December 31, 2003. Partially offsetting increased equipment revenue was a decline in equipment reselling during the year ended December 31, 2004 to $735,000 as compared to $1.5 million during the year ended December 31, 2003.

Operating Expenses

	Years Ended December 31,
					$ Increase			% Increase
(In thousands)	2004		2003		(Decrease)			(Decrease)
Network cost
Incollect cost	$	45,745	$	44,055	$	1,690			3.8	%
Other network cost		58,326		52,014		6,312			12.1	%
		104,071		96,069		8,002			8.3	%
Cost of equipment sales		40,372		37,636		2,736			7.3	%
Selling, general and administrative		135,170		131,761		3,409			2.6	%
Depreciation and amortization		76,355		76,429		(74	)		(0.1	)%
Loss on impairment of assets		47,136		42,244		4,892			11.6	%
Total operating expenses	$	403,104	$	384,139	$	18,965			4.9	%

Network Cost. Network cost, as a percentage of total revenues, increased to 20.6% in the year ended December 31, 2004 as compared to 18.9% in the year ended December 31, 2003. Our increased network cost reflects the additional costs of operating multiple networks (TDMA and 2.5G networks), increased incollect expense, additional cell sites and additional costs resulting from the AWE property exchange. Per minute incollect cost for 2004 was approximately $0.12 per minute as compared to $0.15 in 2003.

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Cost of Equipment Sales. Cost of equipment sales increased 7.3% to $40.4 million in the year ended December 31, 2004, reflecting the increased cost of customer migration. As a percentage of revenue, cost of equipment sales for 2004 increased to 8.0% as compared to 7.4% in 2003. Post and prepaid gross customer additions in 2004 were approximately 169,000 as compared to 185,000 in 2003.

Selling, General and Administrative. Contributing to the increase in SG&A was an increase in regulatory pass-through fees to $11.5 million in the year ended December 31, 2004 as compared to $9.3 million in the year ended December 31, 2003. Additionally, sales and marketing costs increased by 3.7% as a result of the market launch of 2.5G technology products and costs relating to brand name change activities. As a percentage of revenue, SG&A increased to 26.8% in the year ended December 31, 2004 as compared to 26.0% during the year ended December 31, 2003.

Components of SG&A are as follows:

(in thousands)	Years Ended December 31,
					$ Increase			% Increase
	2004		2003		(Decrease)			(Decrease)
General and administrative	$	59,853	$	60,860	$	(1,007	)		(1.7	%)
Sales and marketing		54,077		52,150		1,927			3.7	%
Bad debt		9,762		9,412		350			3.7	%
Regulatory pass-through fees		11,478		9,339		2,139			22.9	%
	$	135,170	$	131,761	$	3,409			2.6	%

Depreciation and Amortization. Depreciation expense was unchanged at $76.4 million for both 2004 and 2003. A $7.2 million decline in phone service depreciation in 2004 as compared to 2003 was offset by an increase in depreciation resulting from the 2.5G technology overlay and the accelerated depreciation of TDMA equipment. As of December 31, 2004, our network had 857 cell sites.

Loss on Impairment of Assets

Under SFAS No. 142, we performed our annual impairment test for our indefinite lived assets. Based on this analysis, we recorded a noncash impairment charge of $47.1 million (included in operating expenses) in the fourth quarter of 2004. There was no impairment charge in 2003 related to our annual assessment under SFAS No. 142.

In October 2003, we entered into an agreement with AWE to exchange certain wireless properties. In connection with this transaction, we recorded a non-cash impairment charge on assets held for sale, in accordance with SFAS No. 144, of $42.2 million effective in the third quarter of 2003. This transaction was completed on March 1, 2004.

Other Income (Expense)

Interest Expense. Interest expense for the year ended December 31, 2004, including the effect of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”), and SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity” (“SFAS No. 150”), increased 20.3% to $164.0 million as compared to $136.3 million in the year ended December 31, 2003. This increase reflects a full year’s effect of the adoption of SFAS No. 150, effective July 1, 2003. Pursuant to SFAS No. 150, our 11 3/8% senior exchangeable and 12 ¹/4 % junior exchangeable preferred securities were reclassified to Long-Term Liabilities, and dividend expense related to these instruments is reported as interest expense in our Consolidated Statements of Operations. Prior to July 1, 2003, dividends on our 11 3/8% senior exchangeable and 12 ¹/4 % junior exchangeable preferred securities were reported as a component of “Preferred Stock Dividend” in our Consolidated Statements of Operations. SFAS No. 150 does not permit reclassification of prior year amounts to conform to the current year presentation.

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Also contributing to the increase in interest expense were $12.6 million in the write-off of debt issuance costs related to the repayment of our previous credit facility in March 2004 as compared to $6.1 million in 2003 and an increase in the effective rate of interest on our debt (excluding senior and junior exchangeable preferred stock) to 8.97% in 2004 as compared to 8.03% in 2003. Partially offsetting these increases were gains on repurchase of senior exchangeable preferred stock.

	Years Ended December 31,
(in thousands)	2004			2003
Interest expense on credit facility	$	5,135		$	44,574
Interest expense on senior secured notes		29,753			—
Interest expense on senior notes		32,094			13,372
Interest expense on senior subordinated notes		41,281			41,281
Amortization of debt issuance costs		4,674			4,773
Write-off of debt issuance costs		12,605			6,134
Senior and junior preferred stock dividends		55,373			27,973
Effect of derivative instruments		5,208			(3,502	)
Gain on repurchase of senior exchangeable preferred stock		(22,572	)		—
Other		426			1,657
	$	163,977		$	136,262

Gain on repurchase of senior exchangeable preferred stock. During the year ended December 31, 2004, we repurchased 80,500 shares of our 11 3/8% senior exchangeable preferred stock for $68.4 million. The corresponding $22.6 million gain on repurchase of preferred shares was recorded as a reduction of interest expense.

Preferred Stock Dividends

Preferred stock dividends for the year ended December 31, 2004 decreased by 66.8% to $12.9 million as compared to $38.9 million in the year ended December 31, 2003. The decline in preferred stock dividends results from the adoption of SFAS No. 150, as described above, which requires that dividends on certain preferred stock be treated as interest expense.

Liquidity and Capital Resources

We need cash primarily for working capital, capital expenditures primarily related to our network construction efforts, debt service, customer growth, and purchases of additional spectrum. In past years, we have met these requirements though cash flow from operations, borrowings under our credit facility, sales of common and preferred stock, and issuance of debt.

Our cell site count has increased from approximately 800 TDMA sites in early 2004 to 1,061 new technology sites at the end of 2005, resulting in expansion of our network capability and coverage in all of our territories. Our 2.5G equipment purchases and installation commitments to our equipment vendors and roaming partners are largely met. Capital expenditures for the year ended December 31, 2005 were approximately $95.0 million compared to approximately $94.4 million for the year ended December 31, 2004.

We believe our network overlay and expansion efforts will improve our ability to attract customers in addition to providing customers of our roaming partners greater access to our networks. Although we do not anticipate adding as many cell sites in 2006 as we did in 2005, we plan to add capacity within our networks, allowing them to carry increased roaming traffic and to accommodate the new technology customer migration. We anticipate our total expenditures for 2006 will be in the $70 million range. We expect to fund these capital expenditures primarily from cash on hand and operating cash flow.

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Senior and Junior Exchangeable Preferred Stock. Until August 2003, we paid the dividends on our senior exchangeable preferred stock by issuing additional shares of exchangeable preferred stock and until February 15, 2005, we paid the dividends on our junior exchangeable preferred stock by issuing additional shares of junior preferred stock. Because we had failed to pay six or more quarterly dividends on our senior exchangeable preferred stock, a “Voting Rights Triggering Event,” as defined in the terms of our senior preferred stock, existed as of November 15, 2004. Accordingly, the holders of senior exchangeable preferred stock exercised their right to elect two directors. Additionally, while a “Voting Rights Triggering Event” exists, certain terms of our senior preferred stock, if enforceable, may prohibit incurrence of additional indebtedness, including borrowings under our revolving credit facility.

On October 26, 2005, we paid four quarterly dividends on our outstanding senior exchangeable preferred stock. These quarterly dividends totaled $118.69 per share, including accrued interest. The aggregate total dividends of approximately $17.8 million were paid from existing cash. The payment of these dividends reduced the number of unpaid quarterly dividends to five and eliminated the then existing “Voting Rights Triggering Event” and any uncertainty regarding our ability to incur indebtedness, including under the revolving credit facility, allowing us to draw $58 million under the revolving credit facility and issue $175 million in new senior subordinated floating rate notes. Subsequent to the issuance of the new notes and borrowing under our credit facility, we elected not to pay cash dividends in November 2005 or February 2006 on our senior exchangeable preferred stock and a “Voting Rights Triggering Event” again exists. Management does not anticipate paying additional dividends in the foreseeable future.

Beginning in May 2005 our junior exchangeable preferred stock dividends are to be paid in cash. We did not declare or pay the quarterly dividends payable in May 2005, August 2005, November 2005, or February 2006 on the junior exchangeable preferred stock. If we elect not to pay the required cash dividends on our junior exchangeable preferred stock for six or more quarters, the holders will have right to elect directors and our ability to incur debt may be limited.

Total accrued dividends in arrears for both the junior and senior exchangeable preferred securities, through December 31, 2005, were approximately $61.0 million.

Senior Subordinated Floating Rate Notes. On November 7, 2005, the Company completed an offering of $175 million of Senior Subordinated Floating Rate Notes due 2012, which were sold at an original issue discount of $2.2 million, or 1.25%. The effective interest rate at December 31, 2005 was 10.30%. With the proceeds of this offering, we redeemed all of our outstanding Senior Subordinated 9 5/8% notes. The total amount for such repurchase was approximately $133.8 million, including $125.0 million aggregate principal, $6.8 million accrued interest to the repurchase date of December 7, 2005, and a $2.0 million premium for early repurchase.

Credit Facility. The credit facility is subject to various covenants, including the ratio of senior secured indebtedness to annualized operating cash flow (as defined in the credit facility ), the ratio of total indebtedness to annualized operating cash flow, and the ratio of annualized operating cash flow to interest expense. Effective October 18, 2005, we received approval from a majority of the banks who are lenders under the revolving credit facility to exclude $17.8 million of senior exchangeable preferred dividends paid on October 26, 2005, from the interest coverage covenant calculation. As of December 31, 2005, we had borrowed $58.0 million against the revolving credit facility. We were in compliance with the covenants as of December 31, 2005.

Our borrowings under the revolving credit facility bear interest at rates based on, at our option, either (i) the one, two, three, six, or, if made available by the lender, nine or twelve month Eurodollar rate, which is determined by reference to the Adjusted LIBOR rate, or (ii) the Alternate Base Rate, which is the higher of the prime lending rate on page 5 of the Telerate Service and the Federal Funds Effective Rate plus 1/2 of 1 percent. In each case, we are required to pay an additional margin of interest above the Eurodollar rate or the Alternate Base Rate. The margin is based on the ratio of our senior secured debt to our adjusted cash flow. The margin above the Alternate Base Rate ranges from 1.50% to 2.00%. The margin above the Eurodollar rate fluctuates from 2.50% to 3.00%.

53

Liquidity. Primarily reflecting the borrowing of $58.0 million against the revolving credit facility and the issuance of the senior subordinated floating rate notes, RCC’s cash and cash equivalents and short-term investments increased to $153.6 million as compared to $85.3 million at December 31, 2004. As of December 31, 2005, we would have been able to make a total of $73.0 million in restricted payments. Cash interest payments during the year ended December 31, 2005 were $133.0 million as compared to $101.4 million during the year ended December 31, 2004. We expect to fund our anticipated cash requirements primarily from cash on hand and operating cash flow and anticipate that we will be in compliance with our revolving credit facility covenants in 2006.

Cash flows for the year ended December 31, 2005, compared with the year ended December 31, 2004

	December 31,			December 31,
	2005			2004			Change
Net cash provided by operating activities	$	72,937		$	130,277		$	(57,340	)
Net cash used in investing activities		(161,585	)		(81,459	)		(80,126	)
Net cash provided by (used in) financing activities		90,131			(106,026	)		196,157
Net decrease in cash and cash equivalents		1,483			(57,208	)		58,691
Cash and cash equivalents, at beginning of year		85,339			142,547			(57,208	)
Cash and cash equivalents, at end of year	$	86,822		$	85,339		$	1,483

Net cash provided by operating activities was $72.9 million for the year ended December 31, 2005. Adjustments to the $64.1 million net loss to reconcile to net cash provided by operating activities include $100.5 million in depreciation and amortization, a $7.0 million impairment of assets, and a $33.2 million increase in accrued preferred stock dividends. Partially offsetting these items were increases of $14.3 million in accounts receivable, $5.2 million in inventory, and $5.7 million in gains on repurchase and exchange of preferred stock.

Net cash used in investing activities for the year ended December 31, 2005 was $161.6 million. This amount included $95.0 million for purchases of property and equipment and $66.8 million in net short-term investment purchases. The majority of property and equipment purchases are related to our 2.5G network overlay. Our 2.5G network construction commitments to our roaming partners and to equipment vendors were substantially met as of December 31, 2005.

Net cash provided by financing activities for the year ended December 31, 2005 was $90.1 million, primarily reflecting the completed offering of $175 million aggregate principal amount of our floating rate senior subordinated notes and the borrowing of $58 million under our credit facility, partially offset by the payment of $125.0 million to redeem our 9 5/8% senior subordinated notes and $13.4 million to repurchase of senior exchangeable preferred stock.

Under the documents governing our indebtedness, we are able to make limited restricted payments, including the repurchase of senior subordinated notes or preferred stock and the payment of dividends to holders of our equity securities. As of December 31, 2005, we had approximately $73.0 million of restricted payments capacity. During 2005 and 2004, we repurchased 14,932 and 80,500 shares of senior exchangeable preferred stock for $13.4 million and $68.4 million, respectively.

Based upon existing market conditions and our present capital structure, we believe that cash flows from operations, cash, cash equivalents, and short term investments will be sufficient to enable us to meet required cash commitments through the next twelve-month period.

54

Contractual Obligations Summary

The following table summarizes our contractual commitments, including dividends, interest, and principal amounts that are payable in cash, as of December 31, 2005 through the mandatory redemption dates (in thousands) for the securities listed below.

							Senior
							Subordinated								Senior and
							Floating Rate		93/4% Senior						Junior
					Line of Credit		Notes		Subordinated		9 7/8% Senior		Senior		Exchangeable		Class M
	Operating		Purchase		(due 3/25/2010)		(due 11/1/2012)		Notes		Notes		Secured		Preferred		Preferred
	Leases		Commitments (1)		(2)		(3)		(due 1/15/2010)		(due 2/1/2010)		Notes (4)		Securities (5)		Securities (6)		Total
2006	$	17,140	$	7,200	$	4,217	$	17,571	$	29,250	$	32,094	$	43,261	$	55,411	$	—	$	206,144
2007		15,065		—		4,217		17,571		29,250		32,094		43,261		55,411		—		196,869
2008		12,746		—		4,217		17,571		29,250		32,094		43,261		55,411		—		194,550
2009		10,242		—		4,217		17,571		29,250		32,094		43,261		55,411		—		192,046
2010		5,172		—		58,970		17,571		301,219		327,674		191,792		226,331		—		1,128,729
Thereafter		4,551		—		—		207,254		—		—		384,729		292,747		284,487		1,173,768
Total	$	64,916	$	7,200	$	75,838	$	295,109	$	418,219	$	456,050	$	749,565	$	740,722	$	284,487	$	3,092,106

(1)	In 2003, we entered into a five-year $56.6 million purchase commitment with a vendor to install 2.5G network equipment. Through December 31, 2005, we have incurred $49.4 million in equipment purchases related to this agreement.
(2)	The Line of Credit matures March 25, 2010. The Line of Credit interest rate obligations are reflected at December 31, 2005 rate level of 7.3%. Increases or decreases in LIBOR will impact interest expense in future years.
(3)	The floating rate notes mature November 1, 2012. Floating interest rate obligations are reflected at December 31, 2005 rate level of 10.2%. Increases or decreases in LIBOR will impact interest expense in future years.
(4)	The senior secured notes consist of two notes, one fixed rate 8 1/4% and one floating rate. The floating rate notes mature March 15, 2010 and the 8 1/4% notes mature March 15, 2012. Floating interest rate obligations are reflected at December 31, 2005 rate level of 9.0%. Increases or decreases in LIBOR will impact interest expense in future years.
(5)	This table assumes cash dividends are paid each year. If dividends are not paid in cash, they accrue and compound until paid. If senior exchangeable preferred cash dividends are not declared and paid at any time prior to the mandatory redemption date of May 15, 2010, and the junior exchangeable preferred cash dividends are not declared and paid at any time prior to the mandatory redemption date of February 15, 2011, the total liquidation preference plus accumulated and unpaid dividends will be $829.7 million.
(6)	Dividends on the Class M convertible preferred stock are compounded quarterly, accrue at 8% per annum and are payable upon redemption. The scheduled redemption date for Class M preferred stock is April 3, 2012. Dividends are not payable if the preferred stock is converted into equity.

Off-Balance Sheet Financings and Liabilities.    We do not have any off-balance sheet financing arrangements or liabilities. We do not have any majority-owned subsidiaries or any interests in, or relationships with, an material special-purpose entities that are not included in the consolidated financial statements.

Other Matters

Inflation

The impact of inflation on our operations has not been significant.

55

Seasonality

We experience seasonal fluctuations in revenue and operating income. Our average monthly roaming revenue per cellular customer increases during the second and third calendar quarters. This increase reflects greater usage by our roaming customers who travel in our cellular service area for weekend and vacation recreation or work in seasonal industries. Because our cellular service area includes many seasonal recreational areas, we expect that roaming revenue will continue to fluctuate seasonally more than service revenue.

Certain quarterly results for 2005 and 2004 are set forth below (in thousands, except per share data):

	2005 Quarter Ended												2004 Quarter Ended
	Mar			Jun			Sep			Dec			Mar			Jun		Sep		Dec
Revenue:
Service	$	94,695		$	98,865		$	98,287		$	96,001		$	88,585		$	94,979	$	97,093	$	96,562
Roaming		19,622			25,112			41,785			36,255			25,740			26,266		29,739		23,759
Equipment		9,054			9,420			8,220			7,619			5,523			5,338		5,589		5,644
Total Revenue	$	123,371		$	133,397		$	148,292		$	139,875		$	119,848		$	126,583	$	132,421	$	125,965
Operating income (loss)	$	23,814		$	21,033		$	35,931			25,168		$	38,831		$	38,291	$	40,156	$	(15,565	)
Net income (loss) before income tax benefit	$	(18,574	)	$	(16,269	)	$	(7,721	)	$	(21,976	)	$	(15,348	)	$	6,597	$	5,437	$	(57,299	)
Net income (loss) applicable to common shares	$	(21,804	)	$	(19,597	)	$	(11,151	)	$	(18,744	)	$	(18,482	)	$	3,403	$	2,184	$	(58,961	)
Net income (loss) per basic share	$	(1.77	)	$	(1.59	)	$	(0.89	)	$	(1.38	)	$	(1.51	)	$	0.28	$	0.18	$	(4.81	)
Net income (loss) per diluted share	$	(1.77	)	$	(1.59	)	$	(0.89	)	$	(1.38	)	$	(1.51	)	$	0.27	$	0.17	$	(4.81	)

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We have used senior secured notes, senior notes, senior subordinated notes, preferred securities, and bank credit facilities to finance, in part, capital requirements and operations. These financial instruments, to the extent they provide for variable rates of interest, expose us to interest rate risk. One percentage point of an interest rate adjustment would have changed our cash interest payments on an annual basis by approximately $3.9 million in 2005.

Financial Instruments

We have invested in short term investment securities which have maturities of six months or less and are comprised primarily of obligations of the U.S. Treasury, including bills, notes and bonds or obligations issued or guaranteed by agencies of the U.S. government. These securities are recorded at cost.

At December 31, 2005, the carrying value of our short-term investments was approximately $66.8 million. Based on available market quotations, the carrying value of the short-term investments at December 31, 2005, was less than their fair value by approximately $141,000, which is comprised of gross unrecognized holding gains. We did not have any short-term investments at December 31, 2004.

In connection with the issuance of $175 million of senior subordinated floating rate notes in November 2005, the Company entered into a collar to manage interest rates. This collar effectively limits interest from exceeding 5.87% and from being less than 4.25% on a $175 million notional amount, through its termination date of November 1, 2008.

56

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Consolidated Financial Statements and Notes included in this report on page 63.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

RCC maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. As of December 31, 2005, based on an evaluation carried out under the supervision and with the participation of RCC’s management, including the chief executive officer (CEO) and the chief financial officer (CFO), of the effectiveness of our disclosure controls and procedures, the CEO and CFO have concluded that RCC’s disclosure controls and procedures are effective.

Management’s Report on Internal Control Over Financial Reporting

The management of RCC is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). RCC’s internal control system was designed to provide reasonable assurance to the company’s management and board of directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

RCC’s management assessed the effectiveness of the company’s internal control over financial reporting as of December 31, 2005. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework. Based on our assessment, we believe that, as of December 31, 2005, the company’s internal controls over financial reporting were effective.

Management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, 2005 has been audited by Deloitte and Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Changes to Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2005 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None

57

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information regarding directors of Rural Cellular is set forth in the Proxy Statement under the heading “Item No. 1 — Election of Directors” and is incorporated herein by reference. Information regarding our executive officers is contained in Part I of this Form 10-K. Information required by Item 401(h) and (i) and Item 405 of Regulation S-K is included in the Proxy Statement under the headings “Item No. 1 – Election of Directors” and “Item No. 2 – Ratification of Appointment of Independent Auditors.”

We have adopted a financial code of ethics that applies to our directors, Chief Executive Officer, Chief Financial Officer, Corporate Controller and other employees involved in preparation of our financial statements. This financial code of ethics, which is one of several policies within our Code of Business Conduct, is posted on our website. Also included on our website are all of our SEC filings, including our Form 10-K. The internet address for our website is http:/unicel.com.

We intend to satisfy the disclosure requirement under Item 10 of Form 8-K regarding an amendment to, or waiver from, a provision of this code of ethics by posting such information on our website, at the address and location specified above.

ITEM 11. EXECUTIVE COMPENSATION

Information required by this item is set forth in the Proxy Statement under the headings “Item No. 1 — Election of Directors” and “Executive Compensation” and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes share and exercise price information about our equity compensation plans as of December 31, 2005.

					Number of securities
					remaining available for future
	Number of Securities to		Weighted-average		issuance under equity
	be issued upon exercise		exercise price of		compensation plans (excluding
	of outstanding options,		outstanding options,		securities reflected in the first
Plan Category	warrants,and rights		warrants,and rights		column)
Equity compensation plans approved by security holders (1)		1,863,029	$	15.09		379,605
Equity compensation plans not approved by security holders (2)		—		—		—
TOTAL		1,863,029	$	15.09		379,605

(1)	Includes stock subject to outstanding options and stock available for issuance under our 1995 Stock Compensation Plan, Stock Option Plan for Nonemployee Directors, and Employee Stock Purchase Plan.
(2)	We have not adopted any equity compensation plans that have not been approved by our shareholders.

The remaining information required by this Item 12 is set forth in the Proxy Statement under the heading “Ownership of Voting Securities” and is incorporated herein by reference.

58

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information required by this item is set forth in the Proxy Statement under the heading “Certain Transactions” and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information required by this item is set forth in the Proxy Statement under the heading “Item No. 2 – Ratification of Appointment of Independent Auditors.”

59

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

						Page Number
						In this
						Form 10-K
(a	)		(1	)	Financial Statements
					Rural Cellular Corporation
					REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		63
					Consolidated Balance Sheets as of December 31, 2005 and 2004		65
					Consolidated Statements of Operations for the Years Ended December 31, 2005, 2004, and 2003		67
					Consolidated Statements of Shareholders’ Deficit for the Years Ended December 31, 2005, 2004, and 2003		68
					Consolidated Statements of Cash Flows for the Years Ended December 31, 2005, 2004, and 2003		70
					Notes to Consolidated Financial Statements		71
					RCC Minnesota, Inc,
					REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		103
					Balance Sheets as of December 31, 2005 and 2004		104
					Statements of Operations for the Years Ended December 31, 2005, 2004, and 2003		105
					Statements of Shareholder’s Equity (Deficit) for the Years Ended December 31, 2005, 2004, and 2003		106
					Statements of Cash Flows for the Years Ended December 31, 2005, 2004, and 2003		107
					Notes to Financial Statements		108
			(2	)	Financial Statement Schedules
					The following financial statement schedule is filed as part of this Form 10-K:
					Schedule II — Valuation and Qualifying Accounts		101
					All schedules not included are omitted either because they are not applicable or because the information required therein is included in Notes to Consolidated Financial Statements.
			(3	)	Exhibits
					See Exhibit Index on page 113.
(b	)	Exhibits
		See Exhibit Index.
(c	)	Financial Statement Schedules
		See Item 15 (a) (2), above.

60

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Rural Cellular Corporation
Dated: March 14, 2006	By:                /s/ Richard P. Ekstrand
	Richard P. Ekstrand
	President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Richard P. Ekstrand    Richard P. Ekstrand	President and Chief Executive Officer(Principal Executive Officer) and Director	March 14, 2006
/s/ Wesley E. Schultz    Wesley E. Schultz	Executive Vice President, Chief Financial Officer and Director	March 14, 2006
/s/ David J. Del Zoppo    David J. Del Zoppo	Senior Vice President, Finance and Accounting (Principal Accounting Officer)	March 14, 2006
/s/ Ann K. Newhall	Executive Vice President, Chief Operating Officer and Director	March 14, 2006
Ann K. Newhall
/s/ George W. Wikstrom	Director	March 14, 2006
George W. Wikstrom
/s/ Don C. Swenson	Director	March 14, 2006
Don C. Swenson
/s/ George M. Revering	Director	March 14, 2006
George M. Revering
/s/ Anthony J. Bolland	Director	March 14, 2006
Anthony J. Bolland
/s/ Paul J. Finnegan	Director	March 14, 2006
Paul J. Finnegan
/s/ Jacques Leduc	Director	March 14, 2006
Jacques Leduc
/s/ James V. Continenza	Director	March 14, 2006
James V. Continenza

61

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Rural Cellular Corporation and Subsidiaries
Alexandria, Minnesota

We have audited the accompanying consolidated balance sheets of Rural Cellular Corporation and subsidiaries (the “Company”) as of December 31, 2005 and 2004, and the related consolidated statements of operations, shareholders’ deficit and comprehensive loss, and cash flows for each of the three years in the period ended December 31, 2005. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Rural Cellular Corporation and subsidiaries at December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 10, 2006, expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
March 10, 2006

62

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Rural Cellular Corporation and Subsidiaries
Alexandria, Minnesota

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that Rural Cellular Corporation and subsidiaries (the “Company”) maintained effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s Board of Directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations on the Treadway Commission. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations on the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2005, the related consolidated statements of operations, shareholders’ deficit and comprehensive loss, and cash flows, and the financial statement schedule listed in the Index at Item 15 for the year ended December 31, 2005, of the Company and our report dated March 10, 2006, which expressed an unqualified opinion on those financial statements and financial statement schedule.

/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
March 10, 2006

63

RURAL CELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In thousands)

ASSETS

	December 31,
	2005		2004
CURRENT ASSETS:
Cash and cash equivalents	$	86,822	$	85,339
Short-term investments		66,778		—
Accounts receivable, less allowance for doubtful accounts of $3,567 and $2,456		72,887		62,549
Inventories		12,849		7,658
Other current assets		4,280		4,175
Total current assets		243,616		159,721
PROPERTY AND EQUIPMENT, net		277,408		276,133
LICENSES AND OTHER ASSETS:
Licenses, net		548,513		548,513
Goodwill, net		348,684		348,682
Customer lists, net		29,301		47,868
Deferred debt issuance costs, net		27,022		30,228
Other assets, net		6,138		6,305
Total licenses and other assets		959,658		981,596
	$	1,480,682	$	1,417,450

The accompanying notes are an integral part of these consolidated balance sheets.

64

RURAL CELLULAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)

LIABILITIES AND SHAREHOLDERS’ DEFICIT

	December 31,
	2005			2004
CURRENT LIABILITIES:
Accounts payable	$	53,492		$	52,465
Current portion of long-term debt		—			81
Advance billings and customer deposits		11,885			11,076
Accrued interest		39,336			41,112
Other accrued expenses		8,981			9,679
Total current liabilities		113,694			114,413
LONG-TERM LIABILITIES		1,847,994			1,733,079
Total liabilities		1,961,688			1,847,492
COMMITMENTS AND CONTINGENCIES (Note 9)
REDEEMABLE PREFERRED STOCK		170,976			166,296
SHAREHOLDERS’ DEFICIT:
Class A common stock; $.01 par value; 200,000 shares authorized, 13,530 and 11,836 outstanding		135			118
Class B common stock; $.01 par value; 10,000 shares authorized, 427 and 540 outstanding		4			5
Additional paid-in capital		212,420			193,347
Accumulated deficit		(862,742	)		(791,446	)
Unearned compensation		(1,799	)		(698	)
Accumulated other comprehensive income		—			2,336
Total shareholders’ deficit		(651,982	)		(596,338	)
	$	1,480,682		$	1,417,450

The accompanying notes are an integral part of these consolidated financial statements.

65

RURAL CELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

	For the Years Ended
	December 31,
	2005			2004			2003
REVENUE:
Service	$	387,848		$	377,219		$	355,038
Roaming		122,774			105,504			131,896
Equipment		34,313			22,094			20,455
Total revenue		544,935			504,817			507,389
OPERATING EXPENSES:
Network costs, excluding depreciation		120,322			104,071			96,069
Cost of equipment sales		58,266			40,372			37,636
Selling, general and administrative		152,238			135,129			131,761
Stock based compensation — SG&A		680			41			—
Depreciation and amortization		100,463			76,355			76,429
Impairment of assets		7,020			47,136			42,244
Total operating expenses		438,989			403,104			384,139
OPERATING INCOME		105,946			101,713			123,250
OTHER INCOME (EXPENSE):
Interest expense		(171,831	)		(163,977	)		(136,262	)
Interest and dividend income		2,221			1,727			916
Other		(876	)		(76	)		891
Other expense, net		(170,486	)		(162,326	)		(134,455	)
LOSS BEFORE INCOME TAX BENEFIT		(64,540	)		(60,613	)		(11,205	)
INCOME TAX BENEFIT		(418	)		(1,672	)		—
NET LOSS		(64,122	)		(58,941	)		(11,205	)
PREFERRED STOCK DIVIDEND		(7,174	)		(12,915	)		(38,877	)
LOSS APPLICABLE TO COMMON SHARES	$	(71,296	)	$	(71,856	)	$	(50,082	)
BASIC AND DILUTED WEIGHTED AVERAGE SHARES USED TO COMPUTE LOSS PER SHARE:		12,695			12,239			12,060
NET LOSS PER BASIC AND DILUTED SHARE	$	(5.62	)	$	(5.87	)	$	(4.15	)

The accompanying notes are an integral part of these consolidated financial statements.

66

RURAL CELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT
AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
(In thousands)

	Class A		Class A		Class B			Class B											Accumulated
	Common		Common		Common			Common			Additional								Other			Total
	Stock		Stock		Stock			Stock			Paid-In		Accumulated			Unearned			Comprehensive			Shareholders’			Comprehensive
	Shares		Amount		Shares			Amount			Capital		Deficit			Compensation			Income (Loss)			Deficit			Loss
BALANCE,
December 31, 2002		11,229	$	112		693		$	7		$	192,294	$	(669,508	)	$	—		$	(6,020	)	$	(483,115	)
Conversion of Class B common stock to Class A common stock		141		1		(141	)		(1	)		0		—			—			—			—			—
Stock issued through employee stock purchase plan		147		2		—			—			112		—			—			—			114			—
Stock options exercised		5		0		—			—			17		—			—			—			17			—
COMPONENTS OF COMPREHENSIVE LOSS
Net loss applicable to common shares		—		—		—			—			—		(50,082	)		—			—			(50,082	)	$	(50,082	)
Current year effect of SFAS No. 133		—		—		—			—			—		—			—			6,236			6,236			6,236
Total comprehensive loss		—		—		—			—			—		—			—			—					$	(43,846	)
BALANCE,
December 31, 2003		11,522		115		552			6			192,423		(719,590	)		—			216			(526,830	)
Conversion of Class B common stock to Class A common stock		12		1		(12	)		(1	)		—		—			—			—			—			—
Stock issued through employee stock purchase plan		166		1		—			—			145		—			—			—			146			—
Stock options exercised		15		0		—			—			41		—			—			—			41			—
Restricted Stock Issuances		121		1		—			—			738		—			(739	)		—			—			—
Amortization of unearned compensation		—		—		—			—			—		—			41			—			41			—
COMPONENTS OF COMPREHENSIVE LOSS
Net loss applicable to common shares		—		—		—			—			—		(71,856	)		—			—			(71,856	)	$	(71,856	)
Current year effect of SFAS No. 133		—		—		—			—			—		—			—			2,120			2,120			2,120
Total comprehensive loss																									$	(69,736	)
BALANCE,
December 31, 2004		11,836		118		540			5			193,347		(791,446	)		(698	)		2,336			(596,338	)

67

	Class A		Class A		Class B			Class B											Accumulated
	Common		Common		Common			Common			Additional								Other			Total
	Stock		Stock		Stock			Stock			Paid-In		Accumulated			Unearned			Comprehensive			Shareholders’			Comprehensive
	Shares		Amount		Shares			Amount			Capital		Deficit			Compensation			Income (Loss)			Deficit			Loss
BALANCE,
December 31, 2004		11,836		118		540			5			193,347		(791,446	)		(698	)		2,336			(596,338	)
Stock issued through employee stock purchase plan		71		1		—			—			378		—			—			—		$	379			—
Stock options exercised		169		2		—			—			1,189		—			—			—			1,191			—
Class A common issued in exchange for senior exchangeable preferred stock		1,153		12		—			—			13,423		—			—			—			13,435			—
Conversion of Class B common stock to Class A common stock		218		2		(218	)		(2	)		—		—			—			—			—			—
Conversion of Class T preferred Stock to Class A and Class B common stock		43		—		105			1			2,476		—			—			—			2,477			—
Restricted stock activity		40		—		—			—			1,607		—			(1,599	)		—			8			—
Amortization of unearned compensation		—		—		—			—			—		—			498			—			498			—
COMPONENTS OF COMPREHENSIVE LOSS
Net loss applicable to common shares		—		—		—			—			—		(71,296	)		—			—			(71,296	)	$	(71,296	)
Current year effect of derivative financial instruments		—		—		—			—			—		—			—			(2,336	)		(2,336	)		(2,336	)
Total comprehensive loss																									$	(73,632	)
BALANCE,
December 31, 2005		13,530	$	135		427		$	4		$	212,420	$	(862,742	)	$	(1,799	)	$	—		$	(651,982	)

The accompanying notes are an integral part of these consolidated financial statements.

68

RURAL CELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Years Ended
	December 31,
	2005			2004			2003
OPERATING ACTIVITIES:
Net loss	$	(64,122	)	$	(58,941	)	$	(11,205	)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and customer list amortization		100,463			76,355			76,429
Loss on write-off of debt and preferred stock issuance costs		1,533			12,605			6,134
Mark-to-market adjustments – financial instruments		339			4,339			(2,225	)
Gain on repurchase and exchange of senior exchangeable preferred stock		(5,722	)		(22,573	)		—
Non—cash senior and junior exchangeable preferred stock dividends		3,797			28,626			13,074
Impairment of assets		7,020			47,136			42,244
Stock based compensation		680			41			—
Deferred income taxes		(418	)		(1,672	)		—
Other		6,825			7,693			4,013
Change in other operating elements:
Accounts receivable		(14,262	)		(1,821	)		(14,286	)
Inventories		(5,191	)		547			(1,581	)
Other current assets		(105	)		89			(1,076	)
Accounts payable		6,757			6,153			4,678
Advance billings and customer deposits		809			482			146
Accrued senior and junior exchangeable preferred stock dividends		33,211			26,747			14,899
Accrued interest		2,021			6,598			12,188
Other accrued expenses		(698	)		(2,127	)		1,089
Net cash provided by operating activities		72,937			130,277			144,521
INVESTING ACTIVITIES:
Purchases of property and equipment		(94,951	)		(94,417	)		(53,704	)
Purchases of short-term investments		(66,778	)		—			—
Purchases of wireless properties		—			(725	)		(7,200	)
Net proceeds from property exchange		—			13,567			—
Proceeds from sale of property and equipment		247			92			624
Other		(103	)		24			(174	)
Net cash used in investing activities		(161,585	)		(81,459	)		(60,454	)
FINANCING ACTIVITIES:
Proceeds from issuance of common stock related to employee stock purchase plan and stock options		1,570			188			131
Proceeds from issuance of long-term debt under the credit facility		58,000			—			120,000
Repayments of long-term debt under the credit facility		—			(525,724	)		(394,628	)
Proceeds from issuance of senior subordinated floating rate notes		172,816			—			—
Proceeds from issuance of 9 7/8% senior notes		—			—			325,000
Proceeds from issuance of 8 1/4% senior secured notes		—			350,000			—
Proceeds from issuance of senior secured floating rate notes		—			160,000			—
Redemption of 9 5/8% senior subordinated notes		(125,000	)		—
Repurchases of senior exchangeable preferred stock		(13,355	)		(68,351	)		—
Payments to settle interest rate swaps		—			(7,645	)		—
Payments of debt issuance costs		(3,798	)		(14,293	)		(13,374	)
Repayment of swaption		—			—			(34,184	)
Proceeds from unwinding hedge agreements		—			—			2,632
Other		(102	)		(201	)		(885	)
Net cash provided by (used in) financing activities		90,131			(106,026	)		4,692
NET (DECREASE) INCREASE IN CASH		1,483			(57,208	)		88,759
CASH AND CASH EQUIVALENTS, at beginning of year		85,339			142,547			53,788
CASH AND CASH EQUIVALENTS, at end of year	$	86,822		$	85,339		$	142,547

The accompanying notes are an integral part of these consolidated financial statements.

69

RURAL CELLULAR CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2005, 2004, and 2003

1. Organization and Nature of Business:

Rural Cellular Corporation (“RCC” or the “Company”) is a wireless communications service provider focusing primarily on rural markets in the United States. The Company’s principal operating objective is to increase revenue and achieve profitability through increased penetration in existing wireless markets.

RCC’s operating territories include portions of five states in the Northeast, three states in the Northwest, four states in the Midwest, and three states in the South. Within each of its four territories, RCC has deployed a strong local sales and customer service presence in the communities it serves. RCC’s marketed networks covered a total population of approximately 6.5 million POPs and served approximately 706,000 voice customers as of December 31, 2005.

The Company has preferred roaming relationships with Cingular Wireless, T-Mobile, and Verizon Wireless in its various territories.

RCC began a 2.5G network overlay and expansion process in late 2003. As of December 31, 2005, RCC’s network has grown from approximately 800 cell sites in early 2004 to 1,061 and its 2.5G networks are operational in all of its four territories.

2. Summary of Significant Accounting Policies:

Principles of Consolidation

The consolidated financial statements include the accounts of RCC and its wholly-owned subsidiaries and its majority-owned joint venture, Wireless Alliance, LLC (“Wireless Alliance”). All significant intercompany balances and transactions have been eliminated.

Revenue Recognition – Service

The Company recognizes service revenue based upon contracted service fees and minutes of use processed. As a result of its billing cycle cut-off times, the Company is required to make estimates for service revenue earned, but not yet billed, at the end of each month. These estimates are based primarily upon historical minutes of use processed. The Company follows this method since reasonable, dependable estimates of the revenue can be made. Actual billing cycle results and related revenue may vary from the results estimated at the end of each quarter, depending on customer usage and rate plan mix. For customers who prepay their monthly access fees, the Company matches the recognition of service revenue to their corresponding usage. Revenues are net of credits and adjustments for service. The Company adopted Emerging Issues Task Force (“EITF”) No. 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables” (“EITF No. 00-21”) effective July 1, 2003 on a prospective basis. The adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.

The Company receives Universal Service Fund (“USF”) revenue reflecting its eligible telecommunications carrier (“ETC”) status in certain states. The Company recognizes support revenue depending on the level of its collection experience in each ETC qualified state. Where the Company does not have adequate experience to determine the time required for reimbursement, it recognizes revenue upon cash receipt. Where the Company does have adequate experience as to the amount and timing of the receipt of these funds, it recognizes revenue as earned.

70

The Company includes the pass-through fees it collects from customers as service revenue with a corresponding charge to selling, general and administrative expense. These pass-through fees, which the Company has the option of passing to customers, include state and federal USF fees, together with city utility and state gross receipt taxes.

Revenue Recognition — Roaming Revenue and Incollect Cost

Roaming revenue and incollect cost information is provided to the Company primarily through a third party centralized clearinghouse. From the clearinghouse the Company receives monthly settlement data. The Company bases its accrual of roaming revenue and incollect expense on these clearinghouse reports. The Company follows this method since reasonably dependable estimates of roaming revenue and incollect cost can be made based on these reports.

Revenue Recognition – Equipment

Equipment revenue includes sales of wireless and paging equipment and accessories to customers, network equipment reselling, and customer activation fees, which are recognized at the time of sale to the customer.

Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts for estimated losses that will result from failure of its customers to pay amounts owed. The Company bases its estimates on the aging of accounts receivable balances and its historical write-off experience, net of recoveries. If the financial condition of the Company’s customers were to deteriorate, the Company may be required to maintain higher allowances.

Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Short-term Investments

The Company considers all debt securities with maturities of more than three months but less than one year as short-term investments and classifies these investments as held to maturity. Short-term Investments primarily consist of direct obligations of the U.S. Treasury, including bills, notes and bonds or obligations issued or guaranteed by agencies of the U.S. government and are recorded at cost. At December 31, 2005, the carrying value of our short-term investments was approximately $66.8 million. Based on available market quotations, the carrying value of the short-term investments at December 31, 2005, was less than their fair value by approximately $141,000, which is comprised of gross unrecognized holding gains. The Company did not have any short-term investments at December 31, 2004.

Inventories

Inventories consist of cellular telephone equipment, pagers, and accessories and are stated at the lower of cost, determined using the average cost method, or market. Market value is determined using replacement cost.

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Property and Equipment

Property and equipment are recorded at cost. Additions, improvements, or major renewals are capitalized, while expenditures that do not enhance or extend the asset’s useful life are charged to operating expense as incurred.

The components of property and equipment and the useful lives of the Company’s assets are as follows as of December 31 (in thousands):

	2005			2004			Useful Lives
Land	$	7,214		$	7,200			N/A
Building and towers		101,110			98,367		15-39 Years
Equipment (1)		443,406			350,385		2-7 Years
Phone service equipment		1,217			2,938		19 Months
Furniture and fixtures (2)		28,928			29,759		3-7 Years
Assets under construction		15,449			37,232			N/A
		597,324			525,881
Less—accumulated depreciation		(319,916	)		(249,748	)
Property and equipment – net	$	277,408		$	276,133

(1)	Includes the cost of cell site radio equipment, switch equipment, billing hardware and related software.
(2)	Includes the cost of furniture, in-house computer hardware/software, and phone system equipment.

The Company’s network construction expenditures are recorded as assets under construction until the system or assets are placed in service and ready for their intended use, at which time the assets are transferred to the appropriate property and equipment category. During the years ended December 31, 2005, 2004, and 2003, the Company capitalized $3.7 million, $4.2 million, and $1.9 million, respectively, in salaries of the Company’s employees. The Company capitalized interest cost in 2005, 2004, and 2003 of $1.8 million, $1.9 million, and $204,000, respectively.

The Company depreciates its wireless communications equipment using the straight-line method over estimated useful lives. RCC periodically reviews changes in its technology and industry conditions, asset retirement activity, and salvage to determine adjustments to estimated remaining useful lives and depreciation rates. Total depreciation expense for the years ended December 31, 2005, 2004, and 2003 was $81.5 million, $57.4 million, and $56.2 million, respectively.

During the fourth quarter of 2005, the Company reviewed the lives of its TDMA assets and reduced the remaining useful life of this equipment from 21 months to 15 months. As a result, all TDMA equipment will be fully depreciated by December 31, 2006. The net book value of this equipment as of December 31, 2005, was approximately $47.0 million. Reflecting the shortened useful lives of TDMA equipment, the Company recorded an additional $2.9 million of depreciation expense during the fourth quarter of 2005.

While the Company will continue to sell and market TDMA services for the foreseeable future, the amount of future cash flows to be derived from the TDMA network assets is highly dependent upon the rate of transition of existing customers using TDMA equipment to 2.5G capable equipment, as well as other competitive and technological factors. The Company determined that a reduction in the useful lives of these assets was warranted based on its projected transition of network traffic. The Company will continue to review the useful lives of the TDMA assets throughout the period of transition to 2.5G capable equipment to determine whether further changes are warranted.

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Licenses and Other Intangible Assets

Licenses consist of the value assigned to the Company’s personal communications services (“PCS”) licenses and cellular licenses. Other intangibles, resulting primarily from acquisitions, include the value assigned to customer lists and goodwill. Amortization is computed using the straight-line method based on the estimated useful life of the asset. Customer lists are the only intangible asset with a finite useful life; all others are considered to have indefinite useful lives.

The components of licenses and other intangible assets are as follows:

				Year Ended
	As of			December 31, 2005								As of
	December 31,					Impairment			Amortization			December 31,
(in thousands)	2004			Acquisition		of Assets			Expense			2005
Licenses, net	$	548,513		$	—	$	—		$	—		$	548,513
Goodwill, net		348,682			2		—			—			348,684
Customer lists										—
Gross Valuation		144,415			—		—			—			144,415
Accumulated amortization		(96,547	)		—		—			(18,567	)		(115,114	)
		47,868			—		—			—			29,301
Total	$	945,063		$	2	$	—		$	(18,567	)	$	926,498
				Year Ended
	As of			December 31, 2004								As of
	December 31,					Impairment			Amortization			December 31,
(in thousands)	2003			Acquisition		of Assets			Expense			2004
Licenses, net	$	563,283		$	16,582	$	(31,352	)	$	—		$	548,513
Goodwill, net		360,796			3,670		(15,784	)		—			348,682
Customer lists										—
Gross Valuation		142,616			1,799		—			—			144,415
Accumulated amortization		(78,041	)		—		—			(18,506	)		(96,547	)
		64,575			1,799		—			(18,506	)		47,868
Total	$	988,654		$	22,051	$	(47,136	)	$	(18,506	)	$	945,063

Customer list amortization expense for the years ended December 31, 2005, 2004, and 2003 was approximately $18.6 million, $18.5 million, and $20.0 million, respectively. Customer list amortization expense is estimated to be approximately $18.6 million in 2006, $8.2 million in 2007, $2.4 million in 2008, and $86,000 in 2009. The Company does not anticipate customer list amortization expense in 2010.

The Company reviews goodwill and other indefinite-lived intangible assets for impairment based on the requirements of Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”). In accordance with this statement, goodwill is tested for impairment at the reporting unit level on an annual basis as of October 1st or on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value. These events or circumstances would include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors. In analyzing goodwill for potential impairment, the Company uses projections of future cash flows from the reporting units. These projections are based on its view of growth rates, anticipated future economic conditions, the appropriate discount rates relative to risk, and estimates of residual values. The Company believes that its estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. If changes in growth rates, future economic conditions, discount rates, or estimates of residual values were to occur, goodwill may become impaired.

73

Additionally, impairment tests for indefinite-lived intangible assets, including FCC licenses, are required to be performed on an annual basis or on an interim basis if an event occurs or circumstances change that would indicate the asset might be impaired. In accordance with EITF No. 02-7 (“EITF 02-7”), Unit of Accounting for Testing of Impairment of Indefinite-Lived Intangible Assets, impairment tests for FCC licenses are performed on an aggregate basis for each unit of accounting. The Company utilizes a fair value approach, incorporating discounted cash flows, to complete the test. This approach determines the fair value of the FCC licenses, using start-up model assumptions and, accordingly, incorporates cash flow assumptions regarding the investment in a network, the development of distribution channels, and other inputs for making the business operational. These inputs are included in determining free cash flows of the unit of accounting, using assumptions of weighted average costs of capital and the long-term rate of growth for each unit of accounting. The Company believes that its estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. If any of the assumptions were to change, the Company’s FCC licenses may become impaired.

Following adoption of SFAS No. 142 on January 1, 2002, the Company completed a transitional impairment test for both its goodwill and licenses and determined that there were impairments of $5.0 million and $412.0 million, respectively. The Company used a fair value approach, using primarily discounted cash flows, to complete the transitional impairment tests. In accordance with SFAS No. 142, the impairment charges were recorded as a cumulative change in accounting principle in its consolidated financial statements for the first quarter of 2002. Under SFAS No. 142, we performed annual impairment tests in 2003, 2004, and 2005 for our indefinite lived assets. Based on these tests, we recorded a noncash impairment charge of $47.1 million (included in operating expenses) in the fourth quarter of 2004. There was no impairment charge in 2003 or 2005 related to our annual assessment under SFAS No. 142.

Deferred Debt Issuance Costs

Deferred debt issuance costs relate to the credit facility, senior secured notes, senior notes, senior subordinated notes and certain preferred stock issuances. These costs are being amortized over the respective instruments’ terms. If the related debt issuance is extinguished prior to maturity, the debt issuance costs are immediately expensed.

The Company adopted SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections (“SFAS No. 145”), effective January 1, 2003. Accordingly, the Company’s financial statements have been revised to reflect the reclassification requirements of SFAS No. 145, requiring it to present losses on extinguishment of debt within continuing operations. The Company has recorded within interest expense $1.5 million, $12.6 million, and $6.1 million, of deferred debt issuance costs related to debt extinguishments in 2005, 2004, and 2003, respectively.

The gross valuation and accumulated amortization of deferred debt issuance costs are as follows:

	As of December 31,
(in thousands)	2005			2004
Gross valuation	$	39,005		$	40,331
Accumulated amortization		(11,983	)		(10,103	)
	$	27,022		$	30,228

Other Assets

Other assets primarily consist of costs related to spectrum relocation and restricted investments. Restricted investments represent the Company’s investments in the stock of CoBank and are stated at cost, which approximates fair value. The restricted investments were purchased pursuant to the terms of a loan agreement and are restricted as to withdrawal.

74

The gross valuation and accumulated amortization of other assets are as follows:

	As of December 31,
(in thousands)	2005			2004
Gross valuation	$	8,561		$	8,375
Accumulated Amortization		(2,423	)		(2,070	)
	$	6,138		$	6,305

Income Taxes

The income and expenses of all consolidated subsidiaries are included in the consolidated federal income tax return of Rural Cellular Corporation and Subsidiaries. For financial reporting purposes, any tax benefit or provision generated by a consolidated subsidiary is accounted for in its separate taxes payable and deferred income tax accounts, computed as if it had filed separate federal and state income tax returns.

RCC uses the asset and liability approach to account for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change.

Net Loss Per Common Share

Basic net loss per share (“EPS”) is computed by dividing net loss by the weighted average number of shares outstanding during the year. Potential common shares of 1,863,029, 2,044,037, and 2,084,770, related to the Company’s outstanding stock options, were excluded from the computation of the diluted EPS for the years ended December 31, 2005, 2004, and 2003, respectively, together with 160,167 shares and 118,667 shares of restricted stock granted in 2005 and 2004, respectively, as the impact had an antidilutive effect on earnings per share.

Comprehensive Loss

The Company follows the provisions of SFAS No. 130, “Reporting Comprehensive Income” (“SFAS No. 130”), which established standards for reporting and display of comprehensive income and its components. Comprehensive income (loss) reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. For the Company, comprehensive loss represents net losses and the deferred gains on derivative instruments. In accordance with SFAS No. 130, the Company has chosen to disclose comprehensive loss in the accompanying consolidated statement of shareholders’ deficit and comprehensive income (loss).

Business and Credit Concentrations

RCC operates in one business segment, the operation of wireless communication systems in the United States.

For the years ended December 31, 2005, 2004, and 2003, roaming revenue from Cingular (on a pro forma basis giving effect to its 2004 merger with AT&T Wireless) accounted for approximately 11.9%, 9.9%, and 14.5%, respectively, of the Company’s total revenue.

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Impairment of Long-lived Assets

The Company reviews long-lived assets, consisting primarily of property, plant and equipment and intangible assets with finite lives, for recoverability accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” In analyzing potential impairment, the Company uses projections of future undiscounted cash flows from the assets. These projections are based on its view of growth rates for the related business, anticipated future economic conditions, the appropriate discount rates relative to risk, and estimates of residual values. The Company believes that its estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. If changes in growth rates, future economic conditions, discount rates, or estimates of residual values were to occur, long-lived assets may become impaired.

Reflecting the termination of the Company’s agreement with Amdocs in June 2005, RCC recorded a charge to operations of $7.0 million, in accordance with SFAS No. 144, reflecting the write-down of certain development costs previously capitalized.

In October 2003, the Company entered into an agreement with AT&T Wireless to exchange certain wireless properties. In connection with this transaction, RCC recorded a non-cash impairment charge on assets held for sale, in accordance with SFAS No. 144, of $42.2 million effective in the third quarter of 2003. This transaction was completed on March 1, 2004.

Derivative Financial Instruments

The Company recognizes all derivatives as either assets or liabilities in its consolidated balance sheets and measures those instruments at fair value. The Company uses derivative instruments to manage interest rate risk. Changes in the fair values of those derivative instruments are recorded as “Other Comprehensive Income” when they qualify for hedge accounting and “Interest Expense” when they do not qualify for hedge accounting.

The Company formally documents all relationships between hedging instruments and hedged items as well as the risk management objectives and strategies for undertaking various hedge transactions. The Company also assesses, both at inception and on an on-going basis, whether the derivatives that are used in hedging transactions are effective. Should it be determined that a derivative is not effective as a hedge, the Company would discontinue the hedge accounting prospectively.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Ultimate results could differ from those estimates.

Recently Issued Accounting Pronouncements

Accounting for Share-Based Compensation

On December 16, 2004, the Financial Accounting Standards Board (“FASB”’) issued SFAS No. 123(R), “Share-Based Payment” (“SFAS No. 123(R)”), which is a revision of SFAS No. 123 and supersedes Accounting Principles Board (“APB”) Opinion No. 25. SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be valued at fair value on the date of grant and to be expensed over the applicable vesting period.

Commencing with the quarter ending March 31, 2006, we will adopt SFAS No. 123(R), utilizing the modified prospective method for all share-based awards granted on or after January 1, 2006. Under the modified prospective, compensation cost must be recognized for all share-based compensation expense arrangements granted after the adoption date and all remaining unvested share-based compensation arrangements granted prior to the adoption date. Prior periods will not be restated.

We use the Black-Scholes model to value our stock option grants. Compensation expense for the unvested awards will be measured based on the fair value of the awards previously calculated in developing the pro forma disclosures in accordance with the provisions of SFAS No. 123(R).

Through December 31, 2005, the Company applied APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations to account for its employee and director stock options and did not record compensation expense for share-based payment award transactions because the exercise price is equal to or greater than the fair value of RCC’s common stock at the date of grant.

If the Company had included the cost of employee stock option compensation in our financial statements included herein, its net loss for both the year ended December 31, 2005 and 2004 would have increased by approximately $2.9 million and would have increased by $4.3 million for the year ended December 31, 2003.

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3. Stock Compensation Plans:

The following table summarizes plan activity under the Company’s various stock compensation plans through December 31, 2005:

	Nonemployee			Stock			Employee Stock
	Directors Plan			Compensation Plan			Purchase Plan (1)
Available for issuance at December 31, 2004		174,250			61,844			262,312
Options granted		(36,750	)		(20,000	)		(88,116	)
Restricted stock awarded		—			(47,500	)		—
Options cancelled		26,250			47,315			—
Available for issuance at December 31, 2005		163,750			41,659			174,196

(1) Employee Stock Purchase Plan options granted of 88,116 shares reflect contributions made in 2005 with corresponding shares being awarded in January 2006.

Nonemployee Directors Plan. The stock option plan for nonemployee directors authorizes the issuance of up to 400,000 shares of Class A common stock. The stock option plan provides that the option price shall not be less than the fair market value of the Class A common stock on the date of grant. The options vest and become exercisable one year following the date of grant and expire five years thereafter.

Stock Compensation Plan. The stock compensation plan for employees authorizes the issuance of up to 2,400,000 shares of Class A common stock in the form of restricted stock awards, stock options, stock appreciation rights, or other stock-based awards. The stock compensation plan provides that the exercise price of any option shall not be less than 85% of the fair market value of the Class A common stock as of the date of the grant (100% in the case of incentive stock options). Options and other awards granted under the stock compensation plan vest and become exercisable as determined by the Board of Directors or a stock option committee.

Under the Stock Compensation Plan, the Company has entered into restricted stock agreements with certain key employees, covering the issuance of Class A common stock (“Restricted Stock”). The Restricted Stock will be released to the key employees after a five-year waiting period if the employees are still employed by the Company and the Company achieves certain financial goals, which management anticipates achieving as of December 31, 2005. Deferred compensation equivalent to the market value of these shares as of December 31, 2005 is reflected in shareholders’ equity and is being amortized to operating expense over five years. Deferred compensation expense included in the accompanying consolidated statement of operations amounted to $680,000 for the year ended December 31, 2005. Shares of Restricted Stock have full voting rights and are entitled to any dividends paid on the Class A common stock. The restricted shares were granted to the recipients at no cost.

For the year, transactions in restricted stock were as follows:

	2005			2004
	Shares			Shares
Restricted Stock Awards, beginning of year		118,667			—
Issued		47,500			120,667
Released to employee		(676	)		—
Cancelled		(5,324	)		(2,000	)
Restricted Stock Awards, outstanding, end of year		160,167			118,667

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Employee Stock Purchase Plan. Under the employee stock purchase plan, employees who satisfy certain length of service and other criteria are permitted to purchase shares of Class A common stock at 85% of the fair market value of the Class A common stock on the first business day of January or the last business day of December of each year, whichever is lower. The number of shares authorized to be issued under the employee stock purchase plan is 750,000. The Company issued 88,116, 71,398, and 166,329, shares, at an exercise price of $5.32, $5.30, and $0.88, respectively, for the years ended December 31, 2005, 2004, and 2003. Compensation cost is recognized for the fair value of the shares issued under the Employee Stock Purchase Plan, which was estimated using the Black-Scholes model with the following assumptions for 2005, 2004, and 2003, respectively: an expected life of one year for all years; expected volatility of 85.94%, 88.54%, and 94.72%, and risk-free interest rates of 7.25%, 5.25%, and 4.39%.

Stock options outstanding under the Company’s Nonemployee Directors Plan and Stock Compensation Plan as of December 31, 2005 have exercise prices ranging between $0.76 and $79.25. Information related to stock options is as follows:

	2005					2004					2003
				Weighted					Weighted					Weighted
				Average					Average					Average
	Shares			Exercise Price		Shares			Exercise Price		Shares			Exercise Price
Outstanding, beginning of period		2,044,037		$	14.61		2,084,770		$	14.64		1,908,084		$	17.40
Granted		56,750		$	6.30		31,500		$	7.62		369,500			1.23
Exercised		(169,517	)	$	7.02		(14,760	)	$	2.80		(5,120	)		3.37
Cancelled		(68,241	)	$	13.30		(57,473	)	$	15.17		(187,694	)		16.72
Outstanding, end of period		1,863,029		$	15.09		2,044,037		$	14.61		2,084,770		$	14.64
Exercisable, end of period		1,409,119		$	17.91		1,392,617		$	17.46		1,143,970		$	18.92
Weighted average fair value of options granted				$	5.18				$	5.82				$	1.09

The following table summarizes certain information concerning currently outstanding and exercisable options:

			Weighted Average
	Number		Remaining		Weighted Average		Number		Weighted Average
Exercise Price Range	Outstanding		Contractual Life		Exercise Price		Exercisable		Exercise Price
$00.00  –  $9.99		957,515		5	$	4.00		567,825	$	4.85
$10.00 – $19.99		382,325		3	$	13.40		382,325	$	13.40
$20.00 – $29.99		274,100		5	$	27.12		216,460	$	27.18
$30.00 - $39.99		153,939		4	$	35.00		147,359	$	34.88
$40.00 – $49.99		14,500		4	$	43.25		14,500	$	43.25
$50.00 - $59.99		8,500		4	$	56.59		8,500	$	56.59
$60.00 - $69.99		36,750		0	$	68.25		36,750	$	68.25
$70.00 - $79.25		35,400		4	$	76.91		35,400	$	76.91
$00.00 - $79.25		1,863,029		5	$	15.09		1,409,119	$	17.91

The Company accounts for stock options under APB Opinion No. 25, “Accounting for Stock Issued to Employees,” under which no compensation expense is recognized, as the exercise price has been the fair value of RCC’s common stock as of date of grant. The following schedule shows net loss and net loss per share for the years ended December 31, 2005, 2004, and 2003, had compensation expense been determined consistent with SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure,” and SFAS No. 123, “Accounting for Stock-Based Compensation.”

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The pro forma information presented is based on several assumptions and should not be viewed as indicative of future periods. The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following assumptions used for grants in 2005, 2004, and 2003: expected volatility of 85.94%, 88.54%, and 94.72%, respectively; risk-free interest rates of 7.25%, 5.25%, and 4.39%, respectively. The per share weighted average fair value of options granted in 2005, 2004, and 2003, was $5.18, $5.82, and $1.09, respectively.

	Years Ended December 31,
(in thousands, except for per share data)	2005			2004			2003
Net loss applicable to common shares:
As reported	$	(71,296	)	$	(71,856	)	$	(50,082	)
Fair value compensation expense		(2,921	)		(2,909	)		(4,304	)
Pro forma	$	(74,217	)	$	(74,765	)	$	(54,386	)
Net loss per basic and diluted share:
As reported	$	(5.62	)	$	(5.87	)	$	(4.15	)
Fair value compensation expense		(0.23	)		(0.24	)		(0.36	)
Pro forma	$	(5.85	)	$	(6.11	)	$	(4.51	)

On December 16, 2004, the FASB issued SFAS No. 123(R), which is a revision of SFAS No. 123 and supersedes APB Opinion No. 25. SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be valued at fair value on the date of grant and to be expensed over the applicable vesting period. Pro forma disclosure of the income statement effects of share-based payments is no longer an alternative.

Commencing with the quarter ending March 31, 2006, the Company will adopt SFAS No. 123(R) utilizing the modified prospective method for all share-based awards granted on or after January 1, 2006. Under the modified prospective method, SFAS No. 123(R) requires compensation cost to be recognized for all share-based compensation expense arrangements granted after the adoption date and all remaining unvested share-based compensation arrangements granted prior to the adoption date.

4. Long-term Liabilities:

The Company had the following long-term liabilities outstanding as of December 31 (in thousands):

	December 31,			December 31,
	2005			2004
Line of Credit	$	58,000		$	—
Senior subordinated floating rate notes (1)		175,000			—
8 1/4% senior secured notes		350,000			350,000
Senior secured floating rate notes		160,000			160,000
9 7/8% senior notes		325,000			325,000
9 3/4% senior subordinated notes		300,000			300,000
9 5/8% senior subordinated notes (1)		—			125,000
11 3/8% senior exchangeable preferred stock		148,708			174,176
Accrued dividends on 11 3/8% senior exchangeable preferred stock		32,520			34,844
12 1/4% junior exchangeable preferred stock		255,558			247,984
Accrued dividends on 12 1/4% junior exchangeable preferred stock		28,490			—
Deferred tax liability		13,561			13,979
Discount on senior subordinated floating rate notes		(2,132	)		—
Other		3,289			2,096
Long-term liabilities	$	1,847,994		$	1,733,079

(1) Net proceeds from the Senior Subordinated Floating Rate Notes offering of $172.8 million were used to redeem the 9 5/8% Senior Subordinated Notes due 2008, to pay fees and expenses associated with the offering and repayment, and for general corporate purposes.

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Credit Facility – As of December 31, 2005, the Company has drawn $58 million under its revolving credit facility at a rate of LIBOR plus 3.0% (7.27% as of December 31, 2005). The credit facility is subject to various covenants, including the ratio of senior secured indebtedness to annualized operating cash flow (as defined in the credit facility), the ratio of total indebtedness to annualized operating cash flow, and the ratio of annualized operating cash flow to interest expense. RCC was in compliance with all financial covenants at December 31, 2005.

In October 2005, the Company amended its revolving credit facility in connection with the payment of the dividends on the senior exchangeable preferred stock as described below under “– 11 3/8% Senior Exchangeable Preferred Stock”:

• to exclude those dividends from the calculation of cash interest expense, which is used in various financial ratio tests in its revolving credit facility and

• to permit the incurrence of up to $50.0 million of senior indebtedness that matures on the same date as our senior notes (out of a total of $200.0 million of additional senior indebtedness that is permitted).

Subsequent to the issuance of the floating rate subordinated notes and borrowing under the credit facility, the Company elected not to pay cash dividends in November 2005 or February 2006 on its senior exchangeable preferred stock and, accordingly a “Voting Rights Triggering Event” currently exists. While a Voting Rights Triggering Event exists certain terms of the Company’s senior exchangeable preferred stock, if enforceable, may prohibit incurrence of additional indebtedness, including borrowing under the revolving credit facility.

Offering of Senior Subordinated Floating Rate Notes. On November 7, 2005, the Company completed an offering of $175 million of Senior Subordinated Floating Rate Notes due 2012, which were sold at an original issue discount of $2.2 million, or 1.25%. The effective interest rate at December 31, 2005 was 10.30%. Interest is reset quarterly. With the proceeds of this offering, the Company redeemed all of its outstanding 9 5/8% Senior Subordinated Notes due 2008. The total amount for such repurchase was approximately $133.8 million, including $125.0 million aggregate principal, $6.8 million accrued interest, and a $2.0 million premium for early repurchase.

The Company may redeem any of the Senior Subordinated Floating Rate Notes at any time on or after November 1, 2007, in whole or in part, at prices starting at 102.000% at November 1, 2007, and declining to 101.000% at November 1, 2008 and 100.000% at November 1, 2009, plus accrued and unpaid interest and liquidated damages, if any, up to, but excluding, the date of redemption. In addition, on or before November 1, 2007, the Company may redeem up to 35% of the aggregate principal amount of notes issued under the indenture at a redemption price of 100% of the principal amount plus a premium equal to the interest rate per annum on the notes applicable on the date on which notice of redemption is given, plus accrued and unpaid interest and liquidated damages, if any, up to, but excluding, the date of redemption, with the proceeds of certain equity offerings. The Company may make that redemption only if, after that redemption, at least 65% of the aggregate principal amount of notes issued under the indenture remain outstanding.

Senior Secured Notes – In March 2004, the Company issued $350 million aggregate principal amount of 8 1/4% senior secured notes due March 15, 2012 (“2012 notes”) and $160 million aggregate principal amount of senior secured floating rate notes due March 15, 2010 (“2010 notes”). The effective interest rate on the 2010 notes was 9.0% and 7.00% at December 31, 2005 and December 31, 2004, respectively. Interest on the 2010 notes is reset quarterly and payable on March 15, June 15, September 15, and December 15 of each year. Interest on the 2012 notes is payable on March 15 and September 15 of each year.

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After March 15, 2006, the Company may redeem the 2010 notes, in whole or in part, at prices starting at 102.000% of the principal amount at March 15, 2006, and declining to 101.000% at March 15, 2007 and to 100.000% at March 15, 2008, plus accrued and unpaid interest to but excluding the date fixed for redemption. At any time, which may be more than once, before March 15, 2006, the Company can choose to redeem up to 35% of the 2010 notes with money that it raises in certain equity offerings for 100% of the aggregate principal amount of the 2010 notes redeemed plus a premium equal to the interest rate per annum on the 2010 notes applicable on the date on which notice of redemption is given, plus accrued and unpaid interest to, but excluding, the date of redemption.

After March 15, 2008, the Company may redeem the 2012 notes, in whole or in part, at prices starting at 104.125% of the principal amount at March 15, 2008, and declining to 102.063% at March 15, 2009 and 100.000% at March 15, 2010, plus accrued and unpaid interest to but excluding the date fixed for redemption. At any time, which may be more than once, before March 15, 2007, the Company can choose to redeem up to 35% of the 2012 notes with money that its raises in certain equity offerings, as long as it pays 108.250% of the aggregate principal amount of the 2012 notes redeemed, plus accrued and unpaid interest to, but excluding, the date of redemption.

9 7/8 % Senior Notes - In 2003, RCC issued $325 million principal amount of 9 7/8% senior notes due 2010. Interest is payable on February 1 and August 1 of each year. The notes will mature on February 1, 2010. After August 1, 2007, at its option, the Company may redeem the 9 7/8% notes at prices starting at 104.938% of the principal amount at August 1, 2007, declining to 102.469% at August 1, 2008 and 100% at August 1, 2009, plus accrued and unpaid interest to but excluding the date fixed for redemption. Prior to August 1, 2006, the Company may redeem up to 35% of the outstanding principal amount of the 9 7/8% notes at 109.875% of the principal amount plus accrued and unpaid interest to but excluding the date fixed for redemption with the net cash proceeds of certain equity offerings.

9 3/4 % Senior Subordinated Notes - In 2002, the Company issued $300 million principal amount of 9 ³/4% senior subordinated notes due 2010. Interest on the 9 ³/4% senior subordinated notes is payable semi-annually on January 15 and July 15. The 9³/4% senior subordinated notes will mature on January 15, 2010. After January 15, 2006, at its option, the Company may redeem the 9 3/4% notes at prices starting at 104.875% of the principal amount at January 15, 2006, declining to 103.250%, 101.625%, and 100.000% at January 15, 2007, 2008, and 2009, respectively, plus accrued and unpaid interest to but excluding the date fixed for redemption.

11 3/8% Senior Exchangeable Preferred Stock – Due May 15, 2010. Dividends on the senior exchangeable preferred stock are cumulative, are payable quarterly, and were payable, until May 15, 2003, at the Company’s option either in cash or by the issuance of additional shares of senior exchangeable preferred stock having an aggregate liquidation preference equal to the amount of such dividends. The Company did not declare or pay the cash dividends due between August 2003 and August 2005.

Because the Company had failed to pay at least six quarterly dividends on its senior exchangeable preferred stock, a “Voting Rights Triggering Event” occurred and the holders of senior exchangeable preferred stock had the right to elect two directors to the Company’s board, which they exercised at the Company’s annual meeting on May 24, 2005.

In October 2005, the Company paid four quarterly dividends on its outstanding senior exchangeable preferred stock. These dividends represented the quarterly dividends payable on November 15, 2004, February 14, 2005, May 15, 2005 and August 15, 2005, and totaled $118.69 per share, including accrued interest. The aggregate total dividends of approximately $17.8 million reduced the number of unpaid quarterly dividends to five, which remedied the then existing “Voting Rights Triggering Event” and removed any uncertainty regarding the Company’s ability to incur indebtedness, including under the revolving credit facility.

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Subsequent to the Company’s draw against its credit facility and its issuance of $175 million in senior subordinated floating rate notes, the Company chose not to declare a cash dividend due in November 2005 and February 2006. Accordingly, a “Voting Rights Triggering Event” again exists. The Company does not anticipate paying additional cash dividends on the senior exchangeable preferred stock in the foreseeable future.

The Company has accrued the undeclared dividends by increasing the carrying amount of the senior exchangeable preferred stock. At December 31, 2005, RCC had accrued $32.5 million in undeclared dividends with respect to the Company’s senior exchangeable preferred stock, which will be payable at the preferred mandatory redemption date, if not sooner declared and paid.

The Company may redeem the senior exchangeable preferred stock, in whole or in part, at any time at a redemption price equal to 102.844% of the liquidation preference at May 15, 2005, declining to 101.422% at May 15, 2006 and 100.000% at May 15, 2007, plus accumulated and unpaid dividends, if any, to but excluding the redemption date.

Gain on repurchase of Senior Exchangeable Preferred Stock. During the year ended December 31, 2005 and 2004, the Company repurchased 14,932 and 80,500 shares of senior exchangeable preferred stock for $13.4 million and $68.4 million, respectively. The corresponding $5.5 million and $22.6 million gains, not including transaction commissions and other related fees, were recorded as a reduction of interest expense within the consolidated statement of operations.

Gain on exchange of Senior Exchangeable Preferred Stock for Class A Common Stock. During the year ended December 31, 2005, the Company exchanged an aggregate of 10,535 shares of our senior exchangeable preferred stock for an aggregate of 1,152,745 shares of Class A common stock in negotiated transactions, resulting in a gain of $168,241. The shares were issued in reliance upon the exemption from registration provided in Section 3(a)(9) of the Securities Act of 1933, as amended.

12 1/4% Junior Exchangeable Preferred Stock – Due February 15, 2011. Dividends on the junior exchangeable preferred stock are cumulative, are payable quarterly, and are to be paid on any dividend payment date occurring after February 15, 2005 in cash. The Company has not declared or paid the cash dividends due since May 2005.

The Company may redeem the junior exchangeable preferred stock, in whole or in part, at any time, at a redemption price equal to 104.594% of the liquidation preference at February 15, 2006, declining to 103.063% at February 15, 2007, 101.531% at February 15, 2008, and 100.000% at February 15, 2009, plus accumulated and unpaid dividends, if any, to but excluding the redemption date.

The shares of the senior and junior exchangeable preferred stock are non-voting, except as otherwise required by law and as provided in their respective Certificates of Designation. Each Certificate of Designation provides that at any time dividends on the outstanding exchangeable preferred stock are in arrears and unpaid for six or more quarterly dividend periods (whether or not consecutive), the holders of a majority of the outstanding shares of the affected exchangeable preferred stock, voting as a class, will be entitled to elect the lesser of two directors or that number of directors constituting 25% of the members of the Company’s Board of Directors. The voting rights continue until such time as all dividends in arrears on the affected class of exchangeable preferred stock are paid in full (and, in the case of the senior exchangeable preferred stock after May 15, 2003, or in the case of the junior exchangeable preferred stock after February 15, 2005, are paid in cash), at which time the terms of any directors elected pursuant to such voting rights will terminate. Voting rights may also be triggered by other events described in the Certificates of Designation.

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Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity. The Company’s 11 3/8% Senior Exchangeable and 12 ¹/4 % Junior Exchangeable Preferred securities, as a result of adopting SFAS No. 150 effective July 1, 2003, have been reclassified into Long-Term Liabilities, because the securities are exchangeable at the Company’s option for debentures of like terms. The dividend expense related to these instruments, which was previously reported as a component of Preferred Stock Dividend in the Company’s Consolidated Statements of Operations, is now classified as interest expense. For the year ended December 31, 2005 and 2004, dividends on these instruments were $54.8 million and $55.4 million, respectively.

Accrued dividends payable for the junior exchangeable preferred securities of $28.5 million and for the senior exchangeable preferred securities of $32.5 million as of December 31, 2005 are included in long-term liabilities. In addition, $7.1 million of unamortized stock issuance costs related to these instruments was reclassified as “Deferred debt issuance costs” upon adoption. SFAS No. 150 does not permit reclassification of prior year amounts to conform to the current year presentation. Based on SFAS No. 150 guidelines, the Company’s Class M Preferred Stock does not meet the characteristics of a liability and will continue to be presented between liability and equity on the Company’s balance sheet.

Current portion of long-term debt – There was no current portion of the Company’s long-term debt as of December 31, 2005 as compared to $81,000 as of December 31, 2004.

5. Financial Instruments:

The Company recognizes all derivatives as either assets or liabilities in its consolidated balance sheets and measures those instruments at fair value. The Company uses derivative instruments to manage interest rate risk. Changes in the fair values of those derivative instruments are recorded as “Other Comprehensive Income” when they qualify for hedge accounting and “Interest Expense” when they do not qualify for hedge accounting. At December 31, 2005, the Company has no derivatives that are designated as a hedge.

The Company formally documents all relationships between hedging instruments and hedged items as well as the risk management objectives and strategies for undertaking various hedge transactions. The Company also assesses, both at inception and on an on-going basis, whether the derivatives that are used in hedging transactions are effective. Should it be determined that a derivative is not effective as a hedge, the Company would discontinue the hedge accounting prospectively.

In connection with the issuance of $175 million of senior subordinated floating rate notes in November 2005, the Company entered into a collar to manage interest rates. This collar effectively limits interest from exceeding 5.87% and from being less than 4.25% on a $175 million notional amount, through its termination date of November 1, 2008. This collar is recorded on the Company’s balance sheet at fair market value, with related changes in fair market value included in the statement of operations, within interest expense, and not accounted for as a hedge under SFAS No. 133.

In connection with the repayment of the Company’s former credit facility in March 2004, the Company terminated its two remaining interest rate swaps, which had an aggregate notional amount of $284.0 million, for aggregate cash consideration of $7.6 million. Amounts previously recognized as unrealized losses in other comprehensive income, when hedge accounting was applied, were charged to interest expense in the first quarter of 2004.

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The notional and estimated fair market values and carrying amounts of RCC’s financial instruments are set forth in the table below. Fair market values are based on quoted market prices, if available.

	Carrying Value				Estimated Fair Market Value
	December 31,		December 31,		December 31,		December 31,
(Dollars in thousands)	2005		2004		2005		2004
Financial liabilities
Credit facility	$	58,000	$	—	$	57,130	$	—
8 1/4% senior secured notes		350,000		350,000		370,125		370,125
Senior secured floating rate notes		160,000		160,000		164,400		165,600
9 7/8 % senior notes		325,000		325,000		342,875		330,688
9 5/8 % senior subordinated notes		—		125,000		—		118,750
9 3/4 % senior subordinated notes		300,000		300,000		303,000		271,500
Senior subordinated floating rate notes		172,868		—		176,313		—
11 3/8% senior exchangeable preferred stock		148,708		174,176		138,495		140,212
12 1/4% junior exchangeable preferred stock		255,558		247,984		223,235		131,432
Class M convertible preferred stock (1)		173,403		160,198		173,403		160,198
Class T convertible preferred stock (1)		—		8,973		—		8,973
		1,943,537		1,851,331		1,948,976		1,697,478
Derivative financial instrument
Interest rate collar agreement		339		—		339		—
Morgan Stanley (terminates November 1, 2008)
Other
Accrued 11 3/8% senior exchangeable preferred stock dividends		32,520		34,844		32,520		34,844
Accrued 12 1/4% junior exchangeable preferred stock dividends		28,490		—		28,490		—
Other long-term liabilities		2,950		2,096		2,950		2,096
Total financial liabilities	$	2,007,836	$	1,888,271	$	2,013,275	$	1,734,418

(1) These financial instruments are not actively traded and, therefore, the estimated fair market value is stated at the carrying value.

6. Redeemable Convertible Preferred Stock:

In April 2000, the Company issued 110,000 shares of Class M Voting Convertible Preferred stock. The security has a liquidation preference of $1,000 per share and is to be redeemed on April 3, 2012.

Class M Voting Convertible Preferred security balance sheet reconciliation (in thousands):

	As of
	December 31, 2005
Preferred securities originally issued	$	110,000
Accrued dividends		63,403
Unamortized issuance costs		(2,427	)
	$	170,976

Dividends on the Class M convertible preferred stock are compounded quarterly, accrue at 8% per annum, and are payable upon redemption of the stock or upon liquidation of RCC. The Class M convertible preferred stock was originally convertible into the Company’s Class A common stock at $53.00 per share, and subsequently adjusted to $50.43 per share in 2005. Dividends are not payable if the shares are converted. The holders of the Class M convertible preferred stock are entitled to vote on all matters submitted to the holders of the common stock on an as-converted basis. The Class M convertible preferred stock is senior to the Company’s common stock with respect to dividend rights and rights on liquidation, winding-up and dissolution of RCC.

The Class M convertible preferred stock, is redeemable at 100% of its total liquidation preference plus accumulated and unpaid dividends at April 3, 2012.

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In order to comply with the FCC rules regarding cross-ownership of cellular licensees within a given market, the Company issued 7,541 shares of Class T convertible preferred stock with a liquidation preference of $1,000 per share to affiliates of Telephone & Data Systems, Inc. (“TDS”) on March 31, 2000 in exchange for 43,000 shares of Class A common stock and 105,940 shares of Class B common stock owned by these affiliates.

TDS or RCC could convert the convertible preferred stock into the original number of shares of Class A or Class B common stock at any time that ownership by TDS of the common stock would then be permissible under FCC rules. Accordingly, on October 27, 2005, RCC converted all of the outstanding shares of Class T convertible preferred stock into the 43,000 shares of Class A and 105,940 shares of Class B common stock at a conversion price of $50.63 per share. Dividends were not payable because the shares were converted into equity. This conversion resulted in a gain of approximately $6.7 million, which reduced preferred stock dividends in the fourth quarter of 2005.

7. Shareholders’ Deficit:

Authorized Shares

The Company has 300,000,000 shares of authorized capital stock consisting of 200,000,000 shares of Class A common stock, 10,000,000 shares of Class B common stock, and 90,000,000 undesignated shares.

Common Stock Rights

Holders of Class A common stock are entitled to one vote for each share owned while holders of Class B common stock are entitled to ten votes for each share owned. Each share of Class B common stock may at any time be converted into one share of Class A common stock at the option of the holder. All issued Class B common shares may also be converted into an equivalent number of Class A common shares upon the affirmative vote of not less than 66 2/3% of the then outstanding Class B common shares. Further, Class B common shares are automatically converted to an equal number of Class A common shares if they are transferred to anyone who is not an affiliate of the transferring shareholder.

RCC has shareholder rights plans for its Class A common stock and Class B common stock. The rights plans give each holder of Class A common stock the right to purchase 1/100^th of a newly authorized preferred share that is essentially equivalent to one share of Class A common stock and each holder of Class B common stock the right to purchase 1/100^th of a newly authorized preferred share, essentially equivalent to one share of Class B common stock. The exercise price for both the Class A rights and the Class B rights is $120 per right.

The rights become exercisable by existing shareholders only following the acquisition by a buyer, without prior approval of the Company’s board of directors, of 15% or more of the outstanding Common Stock, Class A and Class B, or following the announcement of a tender offer for 15% of the outstanding Common Stock. If a person acquires 15% or more of the Company’s Common Stock, each right (except those held by the acquiring person) will entitle the holder to purchase shares of the Company’s Class A or Class B common stock, as appropriate, having a market value of twice the right’s exercise price, or, in effect, at a 50% discount from the then current market value. If the Company were acquired in a merger or similar transaction after a person acquires 15% of the Company’s outstanding Common Stock, without prior approval of the board of directors, each right would entitle the holder (other than the acquirer) to purchase shares of the acquiring company having a market value of twice the exercise price of the right, or, in effect, at a discount of 50%. Until the acquisition by any person of 15% or more of the Company’s Common Stock, the rights can be redeemed by the board of directors for $.001 per right.

85

8. Income Taxes:

For the years ended December 31, 2005 and 2004 the Company recorded a benefit for income taxes related to the amortization of intangibles. The Company incurred losses for the year ended December 31, 2003 and recorded no provision for income taxes.

The reconciliation of income tax computed at the U.S. federal statutory rate to income tax benefit recorded in the consolidated financial statements was as follows:

	Years Ended December 31,
	2005			2004			2003
Tax at statutory rate		(35.0	)%		(35.0	)%		(35.0	)%
State taxes		(3.0	)		(3.0	)		(3.0	)
Nondeductible item – amortization		(0.6	)		(2.8	)		2.0
Adjustment for valuation allowance		38.0			38.0			36.0
		(0.6	)%		(2.8	)%		0.0	%

The components of the Company’s current year income tax benefit consist of the following (in thousands):

	Years Ended December 31,
	2005			2004			2003
Current
Federal	$	—		$	—		$	—
State		—			—			—
		—			—			—
Deferred
Federal		(385	)		(1,540	)		—
State		(33	)		(132	)		—
		(418	)		(1,672	)		—
Total	$	(418	)	$	(1,672	)	$	0

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The income tax effect of the items that create deferred income tax assets and liabilities is as follows (in thousands):

	December 31,
	2005			2004
Deferred income tax assets:
Operating loss carryforwards	$	167,191		$	159,954
Temporary differences:
Allowance for doubtful accounts		1,358			925
Intangible assets		—			27,654
Other		2,885			2,440
Valuation allowance		(160,513	)		(178,819	)
Total deferred income tax assets		10,921			12,154
Deferred income tax liabilities:
Depreciation		(21,111	)		(24,950	)
Intangible assets		(2,158	)		—
Other		(1,213	)		(1,183	)
Net deferred income tax liability	$	(13,561	)	$	(13,979	)

As of December 31, 2005, the Company had tax operating loss carryforwards of approximately $439 million available to offset future income tax liabilities. These carryforwards expire in the years 2007 through 2025. Internal Revenue Code Section 382 limits the availability and timing of the use of net operating loss carryforwards in the event of certain changes in the ownership of the Company’s common stock.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management has considered the scheduled reversal of deferred tax liabilities, the limitations under Internal Revenue Code Section 382 following a change in ownership and tax planning strategies in making this assessment. Based upon the assessment, management has established a valuation allowance for net deferred income tax assets currently not expected to be realized.

9. Commitments and Contingencies:

Employment Agreements

The Company has employment agreements with certain executive officers with terms of three years. These agreements provide for payment of amounts up to 2.99 times their average annual compensation for the three preceding fiscal years if there is a termination of their employment as a result of a change in control of the Company, as defined in the agreements. The maximum contingent liability under these agreements was $9.9 million at December 31, 2005.

Related Party Transactions

The Company has entered into various arrangements with its shareholders or their affiliates. Arrangements involving shareholders or their affiliates that beneficially own more than 5% of any class of the Company’s stock and in which total payments or receipts for these arrangements exceeded $60,000 are described below.

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Agreements with Affiliates. The Company has arrangements with several of its shareholders for cell site leases, interconnection service agreements and agent sales agreements. During 2005, 2004, and 2003, the Company paid $1,504,401, $1,259,834, and $1,328,618, respectively, to related parties for these services net of amounts received from these shareholders for similar services provided by the Company. In addition, several of the Company’s shareholders are customers for its cellular and paging services and, in connection therewith, also purchase or lease cellular telephones from the Company. During 2005, 2004, and 2003, the Company received $249,387, $310,485, and $296,445, respectively, from related parties for these services.

Roaming Arrangements. The Company has roaming agreements with United States Cellular Corporation, a subsidiary of Telephone & Data Systems, Inc. Affiliates of Telephone & Data Systems, Inc. beneficially own, in the aggregate, more than 5% of the Company’s Class A and Class B Common Stock. Under the roaming agreements, the Company pays for service provided to its customers in areas served by United States Cellular Corporation and receives payment for service provided to customers of United States Cellular Corporation in the Company’s cellular service areas. RCC negotiated the rates of reimbursement with United States Cellular Corporation, and the rates reflect those charged by all carriers. During 2005, 2004, and 2003, charges to the Company for services provided by United States Cellular Corporation totaled $1,933,176, $2,555,246, and $1,923,274, and charges by the Company to United States Cellular Corporation totaled $3,358,774, $4,123,699, and $5,530,672, respectively.

Legal and Regulatory Matters

The Company is involved from time to time in routine legal matters and other claims incidental to the Company’s business. RCC believes that the resolution of such routine matters and other incidental claims, taking into account established reserves and insurance, will not have a material adverse impact on its consolidated financial position or results of operations.

Regulatory Matters. In the normal course of business, the Company is subject to various regulatory requirements associated with its networks. The Company currently does not meet all of the requirements imposed by regulatory agencies. In some cases, the Company has received a waiver from such requirements or is in the process of applying for a waiver. However, management does not believe such non-compliance will have a material adverse effect on the Company, although the ultimate outcome of these matters cannot be determined based on available information.

Leases

The Company leases office space, cellular towers (including land leases on which the Company’s owned towers reside), and real estate under noncancelable operating leases. These leases typically include renewal options and escalation clauses. Future minimum payments under these leases as of December 31, 2005 are as follows (in thousands):

Year	Amount
2006	$	17,140
2007		15,065
2008		12,746
2009		10,242
2010		5,172
Thereafter		4,551
Total	$	64,916

88

Under the terms of the lease agreements, the Company also is responsible for certain operating expenses and taxes. Total rent expense of $17.7 million, $13.6 million, and $10.6 million, was charged to operations for the years ended December 31, 2005, 2004, and 2003, respectively.

For the Company’s leases, rent expense is recognized in accordance with FASB Technical Bulletin 85-3 (Accounting for Operating Leases with Scheduled Rent Increases) using the straight-line method over the term of the leases.

The Company adopted SFAS No. 143, Accounting for Asset Retirement Obligations (“SFAS No. 143”), effective January 1, 2003. Pursuant to SFAS No. 143, the Company records the fair value of a legal liability for contractual obligations related to costs associated with removing equipment from cell sites that reside on leased property. This liability is reviewed and adjusted quarterly and is recorded in other long-term liabilities. The asset retirement obligation (“ARO”) liability totaled $1,098,610 and $984,924 at December 31, 2005 and 2004, respectively. There were no material additions, deletions or changes to the ARO liability during 2005, other than normal accretion expense.

Purchase Commitments

The Company has made commitments to its roaming partners and to equipment vendors to further expand its 2.5G networks in 2006.

In 2003, the Company entered into a five-year $56.6 million purchase commitment with a vendor to install 2.5G network equipment. As of December 31, 2005, the Company had incurred $49.4 million in equipment purchases under this commitment.

Off-Balance Sheet Financings and Liabilities

The Company does not have any off-balance sheet financing arrangements or liabilities. The Company does not have any majority-owned subsidiaries or any interests in, or relationships with, any material special-purpose entities that are not included in the consolidated financial statements.

10. Defined Contribution Plan:

The Company has a defined contribution savings and profit-sharing plan for employees who meet certain age and service requirements. Under the savings portion of the plan, employees may elect to contribute a percentage of their salaries to the plan, with the Company contributing a matching percentage of the employees’ contributions. Under the profit-sharing portion of the plan, the Company contributes a percentage of employees’ salaries. Contributions charged to operations for the years ended December 31, 2005, 2004, and 2003, were approximately $732,000, $781,000, and $599,000, respectively. The percentages the Company matches under the savings portion of the plan and contributes under the profit-sharing portion of the plan are determined annually by the Company’s Board of Directors.

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11. Supplemental Cash Flow Information (in thousands):

	Years ended December 31,
	2005		2004		2003
Cash paid for:
Interest, net of amounts capitalized (1)	$	132,966	$	101,405	$	86,801
Noncash financing transactions:
Class M and T preferred stock dividends	$	13,865	$	12,915	$	38,877
Conversion of Class T preferred stock into common stock	$	7,540		—		—
Reversal of Class T preferred stock accrued dividends	$	1,681		—		—
Exchange of Senior Exchangeable Preferred Stock for Class A Common Stock	$	13,435		—		—

(1) Includes four Senior Exchangeable Preferred Stock quarterly dividends totaling approximately $17.8 million paid in cash.

12. Quarterly Results of Operations (Unaudited):

The Company experiences seasonal fluctuations in revenue and operating income. RCC’s average monthly roaming revenue per cellular customer increases during the second and third calendar quarters. This increase reflects greater usage by its roaming customers who travel in the Company’s cellular service area for weekend and vacation recreation or work in seasonal industries. Because RCC’s cellular service area includes many seasonal recreational areas, it expects that roaming revenue will continue to fluctuate seasonally more than service revenue.

Certain unaudited quarterly results for 2005 and 2004 are set forth below (in thousands, except per share data):

	2005 Quarter Ended												2004 Quarter Ended
	Mar			Jun			Sep			Dec			Mar			Jun		Sep		Dec
Revenue:
Service	$	94,695		$	98,865		$	98,287		$	96,001		$	88,585		$	94,979	$	97,093	$	96,562
Roaming		19,622			25,112			41,785			36,255			25,740			26,266		29,739		23,759
Equipment		9,054			9,420			8,220			7,619			5,523			5,338		5,589		5,644
Total Revenue		123,371			133,397			148,292			139,875		$	119,848		$	126,583	$	132,421	$	125,965
Operating income (loss)		23,814			21,033			35,931			25,168		$	38,831		$	38,291	$	40,156	$	(15,565	)
Income (loss) before income tax benefit		(18,574	)		(16,269	)		(7,721	)		(21,976	)	$	(15,348	)	$	6,597	$	5,437	$	(57,299	)
Net income (loss) applicable to common shares	$	(21,804	)	$	(19,597	)	$	(11,151	)	$	(18,744	)	$	(18,482	)	$	3,403	$	2,184	$	(58,961	)
Net income (loss) per basic share	$	(1.77	)	$	(1.59	)	$	(0.89	)	$	(1.38	)	$	(1.51	)	$	0.28	$	0.18	$	(4.81	)
Net income (loss) per diluted share	$	(1.77	)	$	(1.59	)	$	(0.89	)	$	(1.38	)	$	(1.51	)	$	0.27	$	0.17	$	(4.81	)

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13. Guarantor/Non-Guarantor Condensed Consolidating Financial Information

RCC’s obligations under the Senior Secured Floating Rate Notes due 2010 and 8 1/4% Senior Secured Notes due 2012 are senior secured obligations and are fully and unconditionally guaranteed on a senior, secured, second-priority basis by certain of its subsidiaries. Wireless Alliance, LLC is not a guarantor of the notes.

The Company accounts for its investment in subsidiaries using the equity method for purposes of the supplemental consolidating presentation. The principal eliminating entries eliminate investments in subsidiaries and inter-company balances and transactions.

The financial accounting records of RGI Group, Inc. (“RGI”), a guarantor subsidiary, are not maintained on a stand-alone basis and, accordingly, are included in the parent company financial presentation. RGI’s assets were approximately $7 million as of December 31, 2005 and 2004.

The following consolidating financial information as of the dates and for the periods indicated of Rural Cellular Corporation (the Parent), its guarantor subsidiaries, and its non-guarantor subsidiaries reflects all inter-company revenue and expense.

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Balance Sheet Information as of December 31, 2005 (in thousands, except per share data):

				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	84,136		$	2,639		$	47		$	—		$	86,822
Short-term investments		66,778			—			—			—			66,778
Accounts receivable, less allowance for doubtful accounts		25,166			45,486			2,235			—			72,887
Inventories		3,721			8,945			183			—			12,849
Other current assets		1,590			2,606			84			—			4,280
Current intercompany receivable		40,778			11,460			—			(52,238	)		—
Total current assets		222,169			71,136			2,549			(52,238	)		243,616
PROPERTY AND EQUIPMENT, net		53,423			214,960			9,025			—			277,408
LICENSES AND OTHER ASSETS:
Licenses, net		—			539,834			8,679			—			548,513
Goodwill, net		3,151			345,533			—			—			348,684
Customer lists, net		956			28,345			—			—			29,301
Deferred debt issuance costs, net		27,022			—			—			—			27,022
Investment in consolidated subsidiaries		1,145,748			—			—			(1,145,748	)		—
Other assets, net		3,569			5,624			2,218			(5,273	)		6,138
Total licenses and other assets		1,180,446			919,336			10,897			(1,151,021	)		959,658
	$	1,456,038		$	1,205,432		$	22,471		$	(1,203,259	)	$	1,480,682
CURRENT LIABILITIES:
Accounts payable	$	26,894		$	25,989		$	609		$	—		$	53,492
Advance billings and customer deposits		2,395			9,239			251			—			11,885
Accrued interest		39,336			—			—			—			39,336
Other accrued expenses		34,936			49,676			39			(75,670	)		8,981
Current intercompany payable		—			105,672			(4,435	)		(101,237	)		—
Total current liabilities		103,561			190,576			(3,536	)		(176,907	)		113,694
LONG-TERM LIABILITIES		1,833,483			1,037,347			41,027			(1,063,863	)		1,847,994
Total liabilities		1,937,044			1,227,923			37,491			(1,240,770	)		1,961,688
REDEEMABLE PREFERRED STOCK		170,976			—			—			—			170,976
SHAREHOLDERS’ EQUITY (DEFICIT):
Class A common stock; $.01 par value; 200,000 shares authorized, 13,530 outstanding		135			918			—			(918	)		135
Class B common stock; $.01 par value; 10,000 shares authorized, 427 outstanding		4			—			—			—			4
Additional paid-in capital		212,420			760,152			31,679			(791,831	)		212,420
Accumulated earnings (deficit)		(862,742	)		(783,561	)		(46,699	)		830,260			(862,742	)
Unearned compensation		(1,799	)		—			—			—			(1,799	)
Total shareholders’ equity (deficit)		(651,982	)		(22,491	)		(15,020	)		37,511			(651,982	)
	$	1,456,038		$	1,205,432		$	22,471		$	(1,203,259	)	$	1,480,682

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Statement of Operations Information for the year ended December 31, 2005 (in thousands):

				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
REVENUE:
Service	$	95,620		$	285,681		$	7,555		$	(1,008	)	$	387,848
Roaming		25,061			88,877			8,839			(3	)		122,774
Equipment		6,733			26,914			666			—			34,313
Total revenue		127,414			401,472			17,060			(1,011	)		544,935
OPERATING EXPENSES:
Network costs, excluding depreciation		23,270			94,688			3,117			(753	)		120,322
Cost of equipment sales		11,744			45,472			1,050			—			58,266
Selling, general and administrative		39,021			108,517			4,958			(258	)		152,238
Stock based compensation — SG&A		680			—			—			—			680
Depreciation and amortization		18,128			78,779			3,556			—			100,463
Impairment of assets		7,020			—			—			—			7,020
Total operating expenses		99,863			327,456			12,681			(1,011	)		438,989
OPERATING INCOME		27,551			74,016			4,379			—			105,946
OTHER INCOME (EXPENSE):
Interest expense		(171,745	)		(105,133	)		(2,990	)		108,037			(171,831	)
Interest and dividend income		110,222			34			2			(108,037	)		2,221
Inter-company charges		10,140			(10,140	)		—			—			—
Equity in subsidiaries		(39,134	)		—			—			39,126			(8	)
Other		18			(884	)		(2	)		—			(868	)
Other expense, net		(90,499	)		(116,123	)		(2,990	)		39,126			(170,486	)
INCOME (LOSS) BEFORE INCOME TAXES		(62,948	)		(42,107	)		1,389			39,126			(64,540	)
INCOME TAX PROVISION (BENEFIT)		1,174			(1,649	)		—			57			(418	)
NET INCOME (LOSS)		(64,122	)		(40,458	)		1,389			39,069			(64,122	)
PREFERRED STOCK DIVIDEND		(7,174	)		—			—			—			(7,174	)
NET INCOME (LOSS) APPLICABLE TO COMMON SHARES	$	(71,296	)	$	(40,458	)	$	1,389		$	39,069		$	(71,296	)

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Statement of Cash Flows Information for the year ended December 31, 2005 (in thousands):

				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
OPERATING ACTIVITIES:
Net income (loss)	$	(64,122	)	$	(40,458	)	$	1,389		$	39,069		$	(64,122	)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and customer list amortization		18,128			78,779			3,556			—			100,463
Loss on write-off of debt and preferred stock issuance costs		1,533			—			—			—			1,533
Mark-to-market adjustments — financial instruments		339			—			—			—			339
Gain on repurchase of preferred stock		(5,722	)		—			—			—			(5,722	)
Non-cash preferred stock dividends		3,797			—			—			—			3,797
Impairment of assets		7,020			—			—			—			7,020
Stock-based compensation		680			—			—			—			680
Deferred income taxes		1,174			(1,649	)		—			57			(418	)
Other		5,627			1,196			2			—			6,825
Change in other operating elements:
Accounts receivable		(9,175	)		(5,241	)		154			—			(14,262	)
Inventories		(1,817	)		(3,510	)		136			—			(5,191	)
Other current assets		78			(180	)		(3	)		—			(105	)
Accounts payable		5,086			1,952			(281	)		—			6,757
Advance billings and customer deposits		248			620			(59	)		—			809
Accrued preferred stock dividends		33,211			—			—			—			33,211
Accrued interest		2,021			—			—			—			2,021
Other accrued expenses		(681	)		(14	)		(3	)		—			(698	)
Net cash provided by (used in) operating activities		(2,575	)		31,495			4,891			39,126			72,937
INVESTING ACTIVITIES:
Purchases of property and equipment		(18,920	)		(75,604	)		(427	)		—			(94,951	)
Purchases of short-term investments		(66,778	)		—			—			—			(66,778	)
Proceeds from sale of property and equipment		34			213			—			—			247
Other		(103	)		—			—			—			(103	)
Net cash used in investing activities		(85,767	)		(75,391	)		(427	)		—			(161,585	)
FINANCING ACTIVITIES:
Change in parent company receivable and payable		(1,721	)		45,282			(4,435	)		(39,126	)		—
Proceeds from issuance of common stock related to employee stock purchase plan and stock options		1,570			—			—			—			1,570
Proceeds from issuance of long-term debt under the credit facility		58,000			—			—			—			58,000
Proceeds from issuance of senior subordinated floating rate notes		172,816			—			—			—			172,816
Redemption of 9 5/8% senior subordinated notes		(125,000	)		—			—			—			(125,000	)
Repurchases of preferred stock		(13,355	)		—			—			—			(13,355	)
Payments of debt issuance costs		(3,798	)		—			—			—			(3,798	)
Other		(102	)		—			—			—			(102	)
Net cash (used in) provided by financing activities		88,410			45,282			(4,435	)		(39,126	)		90,131
NET INCREASE IN CASH		68			1,386			29			—			1,483
CASH AND CASH EQUIVALENTS, at beginning of year		84,068			1,253			18			—			85,339
CASH AND CASH EQUIVALENTS, at end of year	$	84,136		$	2,639		$	47			—		$	86,822

94

Balance Sheet Information as of December 31, 2004 (in thousands, except per share data):

				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
CURRENT ASSETS:
Cash and cash equivalents	$	84,068		$	1,253		$	18		$	—		$	85,339
Accounts receivable, less allowance for doubtful accounts		17,047			43,252			2,250			—			62,549
Inventories		1,905			5,435			318			—			7,658
Other current assets		1,669			2,425			81			—			4,175
Total current assets		104,689			52,365			2,667			—			159,721
PROPERTY AND EQUIPMENT, net		61,016			203,148			11,969			—			276,133
LICENSES AND OTHER ASSETS:
Licenses, net		—			539,834			8,679			—			548,513
Goodwill, net		3,149			345,533			—			—			348,682
Customer lists, net		1,268			46,600			—			—			47,868
Deferred debt issuance costs, net		30,228			—			—			—			30,228
Investment in consolidated subsidiaries		1,184,801			—			—			(1,184,801	)		—
Other assets, net		3,453			10,245			2,518			(9,911	)		6,305
Total licenses and other assets		1,222,899			942,212			11,197			(1,194,712	)		981,596
	$	1,388,604		$	1,197,725		$	25,833		$	(1,194,712	)	$	1,417,450
CURRENT LIABILITIES:
Accounts payable	$	22,609		$	28,991		$	865		$	—		$	52,465
Current portion of long-term debt		81			—			—			—			81
Advance billings and customer deposits		2,147			8,619			310			—			11,076
Accrued interest		41,112			—			—			—			41,112
Other accrued expenses		34,442			49,248			42			(74,053	)		9,679
Total current liabilities		100,391			86,858			1,217			(74,053	)		114,413
LONG-TERM LIABILITIES		1,718,255			1,852,703			41,025			(1,878,904	)		1,733,079
Total liabilities		1,818,646			1,939,561			42,242			(1,952,957	)		1,847,492
REDEEMABLE PREFERRED STOCK		166,296			—			—			—			166,296
SHAREHOLDERS’ EQUITY (DEFICIT):
Class A common stock; $.01 par value; 200,000 shares authorized, 11,836 outstanding		118			918			—			(918	)		118
Class B common stock; $.01 par value; 10,000 shares authorized, 540 outstanding		5			—			—			—			5
Additional paid-in capital		193,347			349			31,679			(32,028	)		193,347
Accumulated earnings (deficit)		(791,446	)		(743,103	)		(48,088	)		791,191			(791,446	)
Unearned compensation		(698	)		—			—			—			(698	)
Accumulated other comprehensive income		2,336			—			—			—			2,336
Total shareholders’ equity (deficit)		(596,338	)		(741,836	)		(16,409	)		758,245			(596,338	)
	$	1,388,604		$	1,197,725		$	25,833		$	(1,194,712	)	$	1,417,450

95

Statement of Operations Information for the year ended December 31, 2004 (in thousands):

				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
REVENUE:
Service	$	86,138		$	282,453		$	8,944		$	(316	)	$	377,219
Roaming		15,555			82,727			7,230			(8	)		105,504
Equipment		5,667			15,652			775			—			22,094
Total revenue		107,360			380,832			16,949			(324	)		504,817
OPERATING EXPENSES:
Network costs, excluding depreciation		18,298			82,602			3,435			(264	)		104,071
Cost of equipment sales		8,671			30,627			1,074			—			40,372
Selling, general and administrative		33,657			96,341			5,232			(60	)		135,170
Depreciation and amortization		15,630			57,188			3,537			—			76,355
Impairment of assets		—			47,136			—			—			47,136
Total operating expenses		76,256			313,894			13,278			(324	)		403,104
OPERATING INCOME		31,104			66,938			3,671			—			101,713
OTHER INCOME (EXPENSE):
Interest expense		(163,870	)		(166,004	)		(2,438	)		168,335			(163,977	)
Interest and dividend income		170,044			18			—			(168,335	)		1,727
Inter-company charges		(26,971	)		26,971			—			—			—
Equity in subsidiaries		(69,242	)		—			—			69,239			(3	)
Other		(6	)		(67	)		—			—			(73	)
Other expense, net		(90,045	)		(139,082	)		(2,438	)		69,239			(162,326	)
INCOME (LOSS) BEFORE INCOME TAXES		(58,941	)		(72,144	)		1,233			69,239			(60,613	)
INCOME TAX PROVISION (BENEFIT)		—			13,742			—			(15,414	)		(1,672	)
NET INCOME (LOSS)		(58,941	)		(85,886	)		1,233			84,653			(58,941	)
PREFERRED STOCK DIVIDEND		(12,915	)		—			—			—			(12,915	)
NET INCOME (LOSS) APPLICABLE TO COMMON SHARES	$	(71,856	)	$	(85,886	)	$	1,233		$	84,653		$	(71,856	)

96

Statements of Cash Flows Information for the year ended December 31, 2004 (in thousands):

				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
OPERATING ACTIVITIES:
Net income (loss)	$	(58,941	)	$	(85,886	)	$	1,233		$	84,653		$	(58,941	)
Adjustments to reconcile to net cash provided by (used in) operating activities:
Depreciation and customer list amortization		15,630			57,188			3,537			—			76,355
Loss on write-off of debt and preferred stock issuance costs		12,605			—			—			—			12,605
Mark-to-market adjustments – financial instruments		4,339			—			—			—			4,339
Gain on repurchase of preferred stock		(22,573	)		—			—			—			(22,573	)
Non-cash preferred stock dividends		28,626			—			—			—			28,626
Impairment of assets		—			47,136			—			—			47,136
Stock based compensation		41			—			—			—			41
Deferred income taxes		—			13,741			—			(15,413	)		(1,672	)
Other		5,594			2,143			(44	)		—			7,693
Change in other operating elements:
Accounts receivable		2,425			(3,690	)		(556	)		—			(1,821	)
Inventories		(131	)		704			(26	)		—			547
Other current assets		600			(511	)		—			—			89
Accounts payable		(4,877	)		11,276			(246	)		—			6,153
Advance billings and customer deposits		(115	)		558			39			—			482
Accrued preferred stock dividends		26,747			—			—			—			26,747
Accrued interest		6,598			—			—			—			6,598
Other accrued expenses		(1,376	)		(680	)		(71	)		—			(2,127	)
Net cash provided by (used in) operating activities		15,192			41,979			3,866			69,240			130,277
INVESTING ACTIVITIES:
Purchases of property and equipment		(24,768	)		(66,956	)		(2,693	)		—			(94,417	)
Purchases of wireless properties, net		—			(725	)		—			—			(725	)
Net proceeds from property exchange		—			13,567			—			—			13,567
Proceeds from sale of property and equipment		25			67			—			—			92
Other		231			(207	)		—			—			24
Net cash used in investing activities		(24,512	)		(54,254	)		(2,693	)		—			(81,459	)
FINANCING ACTIVITIES:
Change in parent company receivable and payable		58,151			12,262			(1,173	)		(69,240	)		—
Proceeds from issuance of common stock related to employee stock purchase plan and stock options		188			—			—			—			188
Repayments of long-term debt under the credit facility		(525,724	)		—			—			—			(525,724	)
Proceeds from issuance of 8 1/4% senior secured notes		350,000			—			—			—			350,000
Proceeds from issuance of senior secured floating rate notes		160,000			—			—			—			160,000
Repurchase of preferred stock		(68,351	)		—			—			—			(68,351	)
Payments to settle interest rate swaps		(7,645	)		—			—			—			(7,645	)
Payments of debt issuance costs		(14,293	)		—			—			—			(14,293	)
Other		(201	)		—			—			—			(201	)
Net cash (used in) provided by financing activities		(48,875	)		12,262			(1,173	)		(69,240	)		(106,026	)
NET DECREASE IN CASH		(57,195	)		(13	)		—			—			(57,208	)
CASH AND CASH EQUIVALENTS, at beginning of year		141,263			1,266			18			—			142,547
CASH AND CASH EQUIVALENTS, at end of year	$	84,068		$	1,253		$	18		$	—		$	85,339

97

Statement of Operations information for the year ended December 31, 2003 (in thousands):

				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
REVENUE:
Service	$	71,073		$	275,224		$	8,893		$	(152	)	$	355,038
Roaming		15,410			112,300			4,199			(13	)		131,896
Equipment		4,433			15,101			921			—			20,455
Total revenue		90,916			404,625			14,013			(165	)		507,389
OPERATING EXPENSES:
Network costs, excluding depreciation		16,922			76,037			3,275			(165	)		96,069
Cost of equipment sales		6,661			29,548			1,427			—			37,636
Selling, general and administrative		30,670			95,564			5,527			—			131,761
Depreciation and amortization		15,290			57,868			3,271			—			76,429
Loss on assets held for sale		—			42,244			—			—			42,244
Total operating expenses		69,543			301,261			13,500			(165	)		384,139
OPERATING INCOME		21,373			101,364			513			—			123,250
OTHER INCOME (EXPENSE):
Interest expense		(135,590	)		(143,975	)		(2,330	)		145,633			(136,262	)
Interest and dividend income		146,522			25			2			(145,633	)		916
Inter-company charges		(15,815	)		16,297			(482	)		—			—
Equity in subsidiaries		(14,388	)		—			—			14,385			(3	)
Other		1,001			(107	)		—			—			894
Other expense, net		(18,270	)		(127,760	)		(2,810	)		14,385			(134,455	)
NET INCOME (LOSS) BEFORE INCOME TAXES		(3,103	)		(26,396	)		(2,297	)		14,385			(11,205	)
INCOME TAX PROVISION (BENEFIT)		14,308			22,279			—			(36,587	)		—
NET INCOME (LOSS)		(11,205	)		(48,675	)		(2,297	)		50,972			(11,205	)
PREFERRED STOCK DIVIDEND		(38,877	)		—			—			—			(38,877	)
NET INCOME (LOSS) APPLICABLE TO COMMON SHARES	$	(50,082	)	$	(48,675	)	$	(2,297	)	$	50,972		$	(50,082	)

98

Statements of cash flows information for the year ended December 31, 2003 (in thousands):

				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
OPERATING ACTIVITIES:
Net income (loss)	$	(11,205	)	$	(48,675	)	$	(2,297	)	$	50,972		$	(11,205	)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization		15,290			57,868			3,271			—			76,429
Loss on write-off of debt and preferred stock issuance costs		6,134			—			—			—			6,134
Adjustments of interest rate derivatives to fair market value		(2,225	)		—			—			—			(2,225	)
Non-cash preferred stock dividends		13,074			—			—			—			13,074
Tax adjustments		14,308			22,279			—			(36,587	)		—
Loss on assets held for sale		—			42,244			—			—			42,244
Other		3,596			401			16			—			4,013
Change in other operating elements:
Accounts receivable		(6,483	)		(7,597	)		(206	)		—			(14,286	)
Inventories		(889	)		(704	)		12			—			(1,581	)
Other current assets		(1,249	)		174			(1	)		—			(1,076	)
Accounts payable		4,428			248			2			—			4,678
Advance billings and customer deposits		(219	)		729			(364	)		—			146
Accrued preferred stock dividends		14,899			—			—			—			14,899
Accrued interest		12,188			—			—			—			12,188
Other accrued liabilities		1,578			(338	)		(151	)		—			1,089
Net cash provided by operating activities		63,225			66,629			282			14,385			144,521
INVESTING ACTIVITIES:
Purchases of property and equipment		(17,496	)		(33,625	)		(2,583	)		—			(53,704	)
Proceeds from property exchange, net		121			503			—			—			624
Proceeds from sale of property and equipment		—			(7,200	)		—			—			(7,200	)
Other		(176	)		2			—			—			(174	)
Net cash used in investing activities		(17,551	)		(40,320	)		(2,583	)		—			(60,454	)
FINANCING ACTIVITIES:
Change in parent company receivable and payable		32,135			(20,035	)		2,285			(14,385	)		—
Proceeds from issuance of common stock related to employee stock purchase plan and stock options		131			—			—			—			131
Proceeds from issuance of long-term debt under the credit agreement		120,000			—			—			—			120,000
Repayments of long-term debt under the credit agreement		(388,128	)		(6,500	)		—			—			(394,628	)
Proceeds from issuance of 8 1/4% senior secured notes		325,000			—			—			—			325,000
Proceeds from issuance of variable rate notes
Repayment of swaption		(34,184	)		—			—			—			(34,184	)
Proceeds from unwinding derivative hedge agreements		2,632			—			—			—			2,632
Payments of debt issuance costs		(13,374	)		—			—			—			(13,374	)
Other		(885	)		—			—			—			(885	)
Net cash provided by (used in) financing activities		43,327			(26,535	)		2,285			(14,385	)		4,692
NET (DECREASE) INCREASE IN CASH		89,001			(226	)		(16	)		—			88,759
CASH AND CASH EQUIVALENTS, at beginning of year		52,262			1,492			34			—			53,788
CASH AND CASH EQUIVALENTS, at end of year	$	141,263		$	1,266		$	18		$	—		$	142,547

99

RURAL CELLULAR CORPORATION AND SUBSIDIARIES
Schedule II — Valuation and Qualifying Accounts

Allowance for Doubtful Accounts:

	Years Ended December 31,
(in thousands)	2005			2004			2003
Balance, at beginning of year	$	2,456		$	3,333		$	3,096
Additions charged to income		20,112			12,584			12,784
Write-offs		(19,001	)		(13,461	)		(12,547	)
Balance, at end of year	$	3,567		$	2,456		$	3,333

100

Included on the following pages are the financial statements for RCC Minnesota, Inc., a wholly-owned subsidiary of Rural Cellular Corporation. Rural Cellular Corporation is required to provide these financial statements under Regulation S-X Rule No. 3-16, “Financial Statements of Affiliates Whose Securities Collateralize an Issue Registered or Being Registered.” The securities of RCC Minnesota, Inc. collateralize RCC’s Senior Secured Floating Rate Notes due 2010 and 8¹/4% Senior Secured Notes due 2012.

101

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholder and Board of Directors
Rural Cellular Corporation Minnesota
Alexandria, Minnesota

We have audited the accompanying balance sheets of RCC Minnesota, Inc. (“RCCM”), a wholly owned subsidiary of Rural Cellular Corporation (“RCC”), as of December 31, 2005 and 2004, and the related statements of operations, shareholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2005. These financial statements are the responsibility of RCCM’s management. Our responsibility is to express an opinion on the financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of RCCM at December 31, 2005 and 2004, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared from the separate records maintained by Rural Cellular Corporation and may not necessarily be indicative of the conditions that would have existed or the results of operations if RCCM had been operated as an unaffiliated company. Portions of certain income and expenses represent allocations made to and from RCCM, as discussed in Note 2 to the financial statements.

/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
March 10, 2006

102

RCC MINNESOTA, INC.
(A WHOLLY-OWNED SUBSIDIARY OF RURAL CELLULAR CORPORATION)

BALANCE SHEETS

	As of December 31,
	2005		2004
	(In thousands,
	except shares and per share data)
ASSETS
INTERCOMPANY RECEIVABLE	$	11,460	$	—
LICENSES AND OTHER ASSETS:
Licenses, net		445,098		445,098
Deferred tax asset		5,266		9,905
Total assets	$	461,824	$	455,003
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of inter-company long-term debt	$	49,000	$	—
Inter-company taxes payable		20,940		20,940
Total current liabilities		69,940		20,940
LONG-TERM LIABILITIES:
Inter-company long-term debt		301,000		418,529
Total liabilities		370,940		439,469
SHAREHOLDERS’ EQUITY:
Common stock; $0.01 par value; 200,000 shares authorized; 1,000 issued and outstanding		—		—
Additional paid-in capital		68,530		1
Accumulated equity		22,354		15,533
Total shareholders’ equity		90,884		15,534
	$	461,824	$	455,003

The accompanying notes are an integral part of these financial statements.

103

RCC MINNESOTA, INC.
(A WHOLLY-OWNED SUBSIDIARY OF RURAL CELLULAR CORPORATION)

STATEMENTS OF OPERATIONS

	Years Ended December 31,
	2005		2004		2003
(In thousands)
REVENUE:
License management revenue	$	49,797	$	99,058	$	108,349
Total revenue		49,797		99,058		108,349
OPERATING EXPENSES:
Corporate management expense		2,939		3,775		3,714
Other operating		693		407		280
Impairment of assets		—		24,307		28,318
Total operating expenses		3,632		28,489		32,312
OPERATING INCOME		46,165		70,569		76,037
OTHER EXPENSE:
Inter-company interest		34,705		37,942		34,206
INCOME BEFORE INCOME TAX PROVISION		11,460		32,627		41,831
INCOME TAX PROVISION		4,639		13,051		16,732
NET INCOME	$	6,821	$	19,576	$	25,099

The accompanying notes are an integral part of these financial statements.

104

RCC MINNESOTA, INC.
(A WHOLLY-OWNED SUBSIDIARY OF RURAL CELLULAR CORPORATION)

STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)
For the years ended December 31, 2005, 2004, and 2003

	Additional		Accumulated			Total
	Paid-In		Earnings			Shareholders’
	Capital		(Deficit)			Equity (Deficit)
	(In thousands)
BALANCE, December 31, 2002	$	1	$	(29,142	)	$	(29,141	)
Net income		—		25,099			25,099
BALANCE, December 31, 2003		1		(4,043	)		(4,042	)
Net income		—		19,576			19,576
BALANCE, December 31, 2004		1		15,533			15,534
Net income		—		6,821			6,821
Parent company capital contribution		68,529		—			68,529
BALANCE, December 31, 2005	$	68,530	$	22,354		$	90,884

The accompanying notes are an integral part of these financial statements.

105

RCC MINNESOTA, INC.
(A WHOLLY-OWNED SUBSIDIARY OF RURAL CELLULAR CORPORATION)

STATEMENTS OF CASH FLOWS

	Years ended December 31,
	2005			2004			2003
	(In thousands)
OPERATING ACTIVITIES:
Net income	$	6,821		$	19,576		$	25,099
Adjustments to reconcile to net cash provided by operating activities:
Impairment of assets		—			24,307			28,318
Income taxes		4,639			13,051			16,732
Net cash provided by operating activities		11,460			56,934			70,149
INVESTING ACTIVITIES:
Assignment of licenses from wholly-owned subsidiaries of RCC		—			(98,804	)		—
Acquisition of licenses		—			(14,526	)		(7,200	)
Disposition of licenses		—			34,175			—
Net cash used in investing activities		—			(79,155	)		(7,200	)
FINANCING ACTIVITIES:
Net change in inter-company (receivable)/long-term debt		(11,460	)		22,221			(62,949	)
Net cash provided by (used in) financing activities		(11,460	)		22,221			(62,949	)
NET CHANGE IN CASH		—			—			—
CASH AND CASH EQUIVALENTS, at beginning of year		—			—			—
CASH AND CASH EQUIVALENTS, at end of year	$	—		$	—		$	—

The accompanying notes are an integral part of these financial statements.

106

RCC MINNESOTA, INC.
(A WHOLLY-OWNED SUBSIDIARY OF RURAL CELLULAR CORPORATION)

NOTES TO FINANCIAL STATEMENTS

Background and Basis of Presentation:

RCC Licenses, Inc., a wholly-owned subsidiary of Rural Cellular Corporation (“RCC”), was incorporated in 1997. In July 1998, RCC Licenses, Inc. changed its name to RCC Minnesota, Inc. (“RCCM”). RCCM’s operations are subject to the applicable rules and regulations of the Federal Communications Commission (“FCC”). Since inception, this subsidiary has not engaged in any business activity other than acquiring and holding FCC licenses and conducting business activities incidental to holding and acquiring FCC licenses.

The financial statements of RCCM are presented to comply with the requirement under Rule 3-16 of Regulation S-X of the Securities and Exchange Commission to provide financial statements of affiliates whose securities collateralize registered securities if certain significance tests are met.

History of RCC Minnesota, Inc.

The following reflects the history of RCC Licenses, Inc. founded in 1997 and renamed RCC Minnesota, Inc. in 1998:

• October 1997, RCC assigned its cellular licenses in its Midwest territory to RCC Licenses, Inc.

• July 1998, RCC Licenses, Inc. changed its name to RCC Minnesota, Inc.

• December 2000, RGI Group, Inc., Western Maine Cellular, Inc., RCC Holdings, Inc., and MRCC, Inc., wholly-owned subsidiaries of RCC, assigned certain licenses to RCCM. Management agreements between RCCM and RCC operating subsidiaries commenced on December 1, 2000.

• January 2001, Star Cellular, a wholly-owned subsidiary of RCC, was acquired by RCC and assigned certain licenses to RCCM.

• February 2001, RCCM entered into an agreement to sell its 10MHz PCS licenses in its Northwest territory.

• October 2003, RCCM acquired 1900 MHz spectrum from AT&T Wireless Services, Inc. (“AWE”) and one of its affiliates.

• March 2004, RCCM exchanged certain wireless properties with AWE. Under the agreement, RCCM sold to AWE its Oregon RSA 4 license. RCCM received from AWE licenses in Alabama and Mississippi. In addition, RCCM received from AWE unbuilt PCS licenses covering portions of RCC’s South, Midwest, and Northwest territories.

• May 2004, RCC Holdings, a wholly-owned subsidiary of RCC, assigned licenses in its Alabama and Mississippi markets to RCCM.

• November 2004, RCCM acquired additional 1900 MHz PCS licenses, which cover selected areas in its Midwest and Northwest territories.

107

Principles of Presentation

The financial statements include all of the accounts of RCC Minnesota, Inc., a wholly-owned, license-only subsidiary of Rural Cellular Corporation.

The financial information included herein may not necessarily be indicative of the financial position, results of operations or cash flows of RCCM in the future or what the financial position, results of operations or cash flows would have been if RCCM had been a separate, independent company during the periods presented.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Ultimate results could differ from those estimates.

2) Summary of Significant Accounting Policies:

Revenue Recognition — License management revenue

RCCM recognizes inter-company management revenue based upon agreements with RCC’s other operating subsidiaries, which have assigned all or a portion of their licenses to RCCM. This allocation is based on 85% of the respective subsidiary’s operating income (excluding impairment charges) relating to such assigned licenses.

Effective January 1, 2005, RCCM entered into new agreements with RCC’s other operating subsidiaries to amend the method used by RCCM to charge license management fees. Pursuant to the new agreements, RCCM charges each of the other operating subsidiaries a fixed monthly amount for the use of the licenses based on a detailed transfer pricing analysis conducted by RCC.

Expense Recognition

Corporate management expense. RCCM recognizes an inter-company corporate management charge in accordance with an agreement with RCC’s other operating subsidiaries reflecting a proportionate share of RCC’s operating expenses. The allocation to RCCM is based on relative revenues.

Other operating expenses. RCCM recognizes other operating expenses, including costs directly related to legal and FCC license renewal fees.

Interest expense. In the year ended December 31, 2005 and 2004, RCCM recognized inter-company interest expense using a rate equal to the weighted average rate of RCC’s total external debt, including preferred securities.

108

Income Tax Provision

The income and expenses of RCCM are included in the consolidated federal income tax return of Rural Cellular Corporation and Subsidiaries. Any tax benefit or provision generated by RCCM from such Inclusion in Rural Cellular Corporation and Subsidiaries consolidated federal income tax return is accounted for in taxes payable and deferred tax accounts. For financial reporting purposes, the income tax provision or benefit of RCCM has been computed as if it had filed separate federal and state income tax returns.

RCCM uses the asset and liability approach to account for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in our tax provision in the period of change.

Licenses

RCCM holds licenses either granted to it by the FCC, received through acquisition, or assigned to it from Rural Cellular Corporation’s other subsidiaries. The valuation of RCCM’s licenses reflects their original acquisition cost adjusted by subsequent impairment adjustments as determined by the application of Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets”(“SFAS No. 142”).

The changes in carrying amount of licenses are as follows (in thousands):

	Years Ended December 31,
	2005		2004
Beginning of year	$	445,098	$	356,075
Acquisitions		—		14,526
Impairment of assets		—		(24,307	)
License held for sale		—		—
Assigned from RCC wholly-owned subsidiary		—		98,804
End of year	$	445,098	$	445,098

RCCM is a wholly-owned subsidiary of RCC and applies SFAS No. 142 in evaluating license impairment. Impairment tests for indefinite-lived intangible assets, consisting of FCC licenses, are required to be performed on an annual basis or on an interim basis if an event occurs or circumstances change that would indicate the asset might be impaired. In accordance with Emerging Issues Task Force (“EITF”) No. 02-7, Unit of Accounting for Testing of Impairment of Indefinite-Lived Intangible Assets, impairment tests for FCC licenses are performed on an aggregate basis by unit of accounting. RCCM utilizes a fair value approach, incorporating discounted cash flows, to complete the test. This approach determines the fair value of the FCC licenses, using start-up model assumptions and, accordingly, incorporates cash flow assumptions regarding the investment in a network, the development of distribution channels, and other inputs for making the business operational. These inputs are included in determining free cash flows of the unit of accounting, using assumptions of weighted average costs of capital and the long-term rate of growth for the unit of accounting. RCCM believes that its estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. If any of the assumptions were to change, RCCM’s FCC licenses may become impaired.

109

RCC as a consolidated entity also tests for impairment as required under SFAS No. 142. This is done at the lowest reporting level for which identifiable cash flows exist. Under this guidance RCC has identified four separate units of accounting in 2005, however due to a reorganization going forward, the Company expects to have one unit of accounting. The testing required by SFAS No. 142 at the RCC level resulted in no license impairments in 2005 and 2003 and a $24.3 million impairment in 2004.

In connection with the property exchange with AWE, RCCM recorded a $28.3 million non-cash impairment charge on assets held for sale in the third quarter of 2003.

Inter-company receivable:

RCC funds RCCM through an inter-company account. The receivable balance as of December 31, 2005 was $11.5 million. The balance adjusts as RCCM earns revenue and recognizes expense or as licenses are acquired or sold. This account is settled with the parent company on a periodic basis.

Inter-company long term debt:

RCCM has a $350 million long-term inter-company note with the parent company which matures on March 15, 2011. As of December 31, 2005, the current portion of the note is $49.0 million and the long-term portion is $301.0 million. The note bears an interest rate which is equal to the weighted average cost of indebtedness of the parent company and is adjusted annually. At December 31, 2005, the weighted average cost of indebtedness was 9.78%. The note requires annual payments of $24.6 million.

During 2005, the parent company made a capital contribution of $68.5 million to RCCM, which was used by RCCM to reduce inter-company debt. The parent company anticipates it will continue to fund the operations of RCCM as needed.

3) Income Taxes:

RCCM’s reconciliation of income tax computed at the U.S. federal statutory rate to income tax benefit recorded in the consolidated financial statements was as follows:

	Year Ended December 31,
	2005			2004			2003
Tax at statutory rate		35.0	%		35.0	%		35.0	%
State taxes		5.0			5.0			5.0
		40.0	%		40.0	%		40.0	%

The components of the Company’s income tax provision consists of the following:

	Year Ended December 31,
(in thousands)	2005		2004		2003
Current
Federal	$	—	$	1,919	$	13,703
State		—		281		1,958
		—		2,200		15,661
Deferred
Federal		4,059		9,495		986
State		580		1,356		85
		4,639		10,851		1,071
Total	$	4,639	$	13,051	$	16,732

The income tax effect of the items that create deferred income tax assets are as follows:

110

	As of December 31,
	2005			2004
Deferred income tax assets:
Operating loss carryforwards	$	14,304		$	—
Temporary differences:
Intangible assets		—			9,905
Total deferred income tax assets		14,304			—
Deferred income tax liabilities:
Intangible assets		(9,038	)		—
Net deferred income tax asset	$	5,266		$	9,905

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

111

EXHIBIT INDEX

Exhibit No.	Document
3.1(a)	Articles of Incorporation	[1]
3.1(b)	Amendment to Articles of Incorporation effective March 24, 2000	[1]
3.2(a)	Amended and Restated Bylaws	[1]
3.2(b)	Amendment to Amended and Restated Bylaws effective March 22, 2000	[1]
4.1(a)	Indenture dated March 25, 2004, between Rural Cellular Corporation, as Issuer, and U.S. Bank National Association, as trustee, with respect to the senior secured notes, including the forms of Senior Secured Notes.	[2]
4.1(b)	Collateral Agreement dated as of March 25, 2004, made by Rural Cellular Corporation and each of its subsidiaries that are signatories in favor of U.S. Bank National Association, as Collateral Trustee.	[2]
4.2	Indenture dated August 1, 2003 between Rural Cellular Corporation, as Issuer, and U.S. Bank National Association, as Trustee, with respect to the 9 7/8% Senior Notes Due 2010, including the form of 9 7/8% Senior Notes Due 2010	[3]
4.3	Indenture dated January 16, 2002 between Rural Cellular Corporation, as Issuer, and Wells Fargo Bank, N.A., as Trustee, with respect to the 9 3/4% Senior Subordinated Notes Due 2010, including form of 9 3/4% Senior Subordinated Notes Due 2010	[4]
4.4	Indenture dated November 7, 2005 between Rural Cellular Corporation, as Issuer, and Wells Fargo Bank National Association, as Trustee, with respect to the Senior Subordinated Floating Rate Notes Due 2012, including form of Senior Subordinated Notes Due 2012	***
4.5	Certificate of Designation of 11 3/8% Senior Exchangeable Preferred Stock	[5]
4.6	Certificate of Designation of 12 1/4% Junior Exchangeable Preferred Stock	[1]
4.7(a)	Class A Share Rights Agreement dated April 30, 1999	[6]
4.7(b)	Amendment to the Class A Share Rights Agreement dated March 31, 2000	[7]
4.8(a)	Registration Rights Agreement dated March 31, 2000 by and between Rural Cellular Corporation and Telephone and Data Systems, Inc.	[8]
4.8(b)	Certificate of Designation of Voting Power, Preferences and Relative Participating, Optional and Other Special Rights, Qualifications and Restrictions of Class T Convertible Preferred Stock of Rural Cellular Corporation	[8]
4.9(a)	Preferred Stock Purchase Agreement dated April 3, 2000 among Rural Cellular Corporation, Madison Dearborn Capital Partners III, L.P., Madison Dearborn Special Equity III, L.P., Special Advisors Fund I, LLC, Boston Ventures Limited Partnership V and Toronto Dominion Investment, Inc. (collectively “Class M Investors”)	[8]
4.9(b)	Certificate of Designation of Voting Power, Preferences and Relative Participating, Optional and Other Special Rights, Qualifications and Restrictions of Class M Redeemable Voting Convertible Preferred Stock of Rural Cellular Corporation	[8]
4.9(c)	Registration Rights Agreement dated April 3, 2000 among Rural Cellular Corporation and Class M Investors	[8]
10.1(a)	Credit facility dated as of March 25, 2004 among Rural Cellular Corporation, Lehman Commercial Paper, Inc., as Administrative Agent, and Bank of America, N.A., as Documentation Agent.	[2]
10.1(b)	Guarantee and Collateral Agreement dated as of March 25, 2004 among Rural Cellular Corporation, Lehman Commercial Paper Inc., as Administrative Agent, and Bank of America, N.A., as Documentation Agent.	[2]
10.1(c)	Intercreditor Agreement, dated as of March 25, 2004, among Lehman Commercial Paper Inc., as Senior Agent and Account Agent, U.S. Bank National Association, as Indenture Trustee and Collateral Trustee, Rural Cellular Corporation, a Minnesota corporation, and the Guarantors.	[2]
*10.2	1995 Stock Compensation Plan, as amended to date	[9]
*10.2(a)	Form of Restricted Stock Award Agreement pursuant to 1995 Stock Compensation Plan.	[2]
*10.3	Stock Option Plan for Nonemployee Directors, as amended to date	[10]
*10.4(a)	Employment Agreement with Richard P. Ekstrand effective January 22, 1999	[11]
*10.4(b)	Amendment to Employment Agreement with Richard P. Ekstrand effective January 1, 2001	[12]
*10.4(c)	Second Amendment to Employment Agreement with Richard P. Ekstrand effective July 24, 2001	[13]
*10.4(d)	Third Amendment to Employment Agreement with Richard P. Ekstrand effective August 23, 2001	[13]
*10.4(e)	Fourth Amendment to Employment with Richard P. Ekstrand effective February 27, 2003	[19]
*10.4(f)	Fifth Amendment to Employment with Richard P. Ekstrand effective February 17, 2005	[20]
*10.5(a)	Employment Agreement with Wesley E. Schultz effective January 22, 1999	[11]
*10.5(b)	Amendment to Employment Agreement with Wesley E. Schultz effective January 1, 2001	[12]
*10.5(c)	Second Amendment to Employment Agreement with Wesley E. Schultz effective July 24, 2001	[13]
*10.5(d)	Third Amendment to Employment Agreement with Wesley E. Schultz effective August 23, 2001	[13]
*10.5(e)	Fourth Amendment to Employment Agreement with Wesley E. Schultz effective February 17, 2005	[20]
*10.6(a)	Employment Agreement with Ann K. Newhall effective February 6, 1999	[14]
*10.6(b)	Amendment to Employment Agreement with Ann K. Newhall effective January 1, 2001	[12]
*10.6(c)	Second Amendment to Employment Agreement with Ann K. Newhall effective July 24, 2001	[13]
*10.6(d)	Third Amendment to Employment Agreement with Ann K. Newhall effective August 23, 2001	[13]
*10.6(e)	Fourth Amendment to Employment Agreement with Ann K. Newhall effective February 17, 2005	[20]
*10.7(a)	Change of Control Agreement with David Del Zoppo effective January 2, 2001	[12]
*10.7(b)	Amendment to Change of Control Agreement with David Del Zoppo effective July 24, 2001	[13]
*10.8(a)	Key Employee Deferred Compensation Plan	[15]
*10.8(b)	Amendment to Key Employee Deferred Compensation Plan	[16]
*10.8(c)	Second Amendment to Key Employee Deferred Compensation Plan	***
*10.9	Key Employee Deferred Compensation Plan II	***
*10.10	Management Incentive Plan	[17]
**10.11(a)	Master Purchase Agreement dated March 14, 2002 by and between Rural Cellular Corporation and Ericsson Inc.	[18]
**10.11(b)	Addendum dated August 4, 2003 to Master Purchase Agreement	[18]

112

Exhibit No.	Document
**10.12(a)	Intercarrier Multi-Standard Roaming and Colocation Agreement by and between Cingular Wireless LLC and Rural Cellular Corporation effective June 6, 2003 (“Roaming Agreement”)	[19]
**10.12(b)	Amendment No. 1 to Roaming Agreement	[19]
**10.13	Billing Services and License Agreement between VeriSign, Inc and Rural Cellular Corporation.	[21]
21	Subsidiaries of Registrant	***
23.1	Consent of Deloitte & Touche LLP regarding financial statements of Rural Cellular Corporation	***
23.2	Consent of Deloitte & Touche LLP regarding financial statements of RCC Minnesota, Inc.	***
31.1	Section 302 Certification Sarbanes-Oxley Act of 2002	***
31.2	Section 302 Certification Sarbanes-Oxley Act of 2002	***
32.1	Certification of principal executive officer and principal financial officer pursuant to Section 906 of Sarbanes Oxley Act	***

[1]	Filed as an exhibit to Report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference.
[2]	Filed as an exhibit to Report on Form 10-Q for the quarter ended March 31, 2004 and incorporated herein by reference.
[3]	Filed with Report on Form 10-Q for quarter ended June 30, 2003, and incorporated herein by reference
[4]	Filed as an Exhibit to Report on Form 10-K for year ended December 31, 2001, and incorporated herein by reference
[5]	Filed as an exhibit to Registration Statement on Form S-4 (SEC No. 333-57677), filed June 25, 1998, and incorporated herein by reference.
[6]	Filed as an exhibit to Registration Statement on Form 8-A filed May 19, 1999 and incorporated herein by reference.
[7]	Filed as an exhibit to Registration Statement on Form 8-A/A-1 filed April 18, 2000 and incorporated herein by reference.
[8]	Filed as an exhibit to Report on Form 8-K dated April 1, 2000 and incorporated herein by reference.
[9]	Filed with definitive Proxy Statement for 2000 Annual Meeting on April 7, 2000 and incorporated herein by reference.
[10]	Filed with definitive Proxy Statement for 2002 Annual Meeting on April 8, 2002 and incorporated herein by reference.
[11]	Filed as an exhibit to Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference.
[12]	Filed as an exhibit to Report on Form 10-K for the year ended December 31, 2000, and incorporated herein by reference.
[13]	Filed as an exhibit to Report on Form 10-Q/A for the quarter ended September 30, 2001, and incorporated herein by reference.
[14]	Filed as an exhibit to Report on Form 10-Q for the quarter ended March 31, 1999 and incorporated herein by reference.
[15]	Filed as an exhibit to Report on Form 10-Q/A for the quarter ended June 30, 2001, and incorporated herein by reference.
[16]	Filed as an exhibit to Report on Form 10-K for year ended December 31, 2002, and incorporated herein by reference
[17]	Filed with definitive Proxy Statement for 2001 Annual Meeting on April 9, 2001, and incorporated herein by reference.
[18]	Filed as an exhibit to Report on Form 10-K/A for the year ended December 31, 2003, and incorporated herein by reference.
[19]	Filed as an exhibit to Report on Form 10-K for the year ended December 31, 2004, and incorporated herein by reference.
[20]	Filed as an exhibit to Report on Form 10-Q for the quarter ended March 31, 2005, and incorporated herein by reference.
[21]	Filed as an exhibit to Report on Form 10-Q for the quarter ended September 30, 2005, and incorporated herein by reference.
*	Management contract or compensation plan or arrangement required to be filed as an exhibit to this Form.
**	Portions of this exhibit have been omitted and filed separately with the Secretary of the Securities and Exchange Commission pursuant to Registrant’s request for confidential treatment of such information under Rule 24b-2 of the Securities Exchange Act of 1934.
***	Filed herewith.

113

EX-4.4

Exhibit 4.4

RURAL CELLULAR CORPORATION

TO

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee

INDENTURE

Dated as of November 7, 2005

$175,000,000

Senior Subordinated Floating Rate Notes due 2012

Senior Subordinated Floating Rate Series B Notes due 2012

TABLE OF CONTENTS

	Page
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION		1
Section 1.01 Definitions		1
Section 1.02 Compliance Certificates and Opinions		32
Section 1.03 Form of Documents Delivered to Trustee		33
Section 1.04 Acts of Holders; Record Date		33
Section 1.05 Notices, Etc., to Trustee and Company		35
Section 1.06 Notice to Holders; Waiver		35
Section 1.07 Conflict with Trust Indenture Act		35
Section 1.08 Effect of Headings and Table of Contents		36
Section 1.09 Successors and Assigns		36
Section 1.10 Separability Clause		36
Section 1.11 Benefits of Indenture and Securities		36
Section 1.12 Governing Law		36
Section 1.13 Legal Holidays		36
Section 1.14 No Personal Liability of Directors, Officers, Employees, and Shareholders		37
Section 1.15 Counterparts		37
ARTICLE II SECURITY FORMS		37
Section 2.01 Forms Generally		37
Section 2.02 Form of Face of Security		38
Section 2.03 Form of Reverse of Security		41
Section 2.04 Form of Trustee’s Certificate of Authentication		46
ARTICLE III THE SECURITIES		47
Section 3.01 Title and Terms		47
Section 3.02 Denominations		48
Section 3.03 Execution, Authentication, Delivery and Dating		48
Section 3.04 Temporary Securities		49
Section 3.05 Global Securities		50
Section 3.06 Registration; Registration of Transfer and Exchange Generally; Certain Transfers and Exchanges; Securities              Act Legends		51
Section 3.07 Mutilated, Destroyed, Lost and Stolen Securities		55
Section 3.08 Payment of Interest; Interest Rights Preserved		56
Section 3.09 Persons Deemed Owners		57
Section 3.10 Cancellation		58
Section 3.11 Computation of Interest		58
ARTICLE IV SATISFACTION AND DISCHARGE		59
Section 4.01 Satisfaction and Discharge of Indenture		59

i

	Page
Section 4.02 Application of Trust Money		60
ARTICLE V REMEDIES		60
Section 5.01 Events of Default		60
Section 5.02 Acceleration of Maturity; Rescission and Annulment		62
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Trustee		63
Section 5.04 Trustee May File Proofs of Claim		64
Section 5.05 Trustee May Enforce Claims Without Possession of Securities		64
Section 5.06 Application of Money Collected		64
Section 5.07 Limitation on Suits		65
Section 5.08 Unconditional Right of Holders to Receive Principal, Premium, Interest and Liquidated Damages		65
Section 5.09 Restoration of Rights and Remedies		66
Section 5.10 Rights and Remedies Cumulative		66
Section 5.11 Delay or Omission Not Waiver		66
Section 5.12 Control by Holders		66
Section 5.13 Waiver of Past Defaults		67
Section 5.14 Undertaking for Costs		67
Section 5.15 Waiver of Stay or Extension Laws		67
ARTICLE VI THE TRUSTEE		68
Section 6.01 Certain Duties and Responsibilities		68
Section 6.02 Notice of Defaults		68
Section 6.03 Certain Rights of Trustee		69
Section 6.04 Not Responsible for Recitals or Issuance of Securities		70
Section 6.05 May Hold Securities		70
Section 6.06 Money Held in Trust		71
Section 6.07 Compensation and Reimbursement		71
Section 6.08 Disqualification; Conflicting Interests		72
Section 6.09 Corporate Trustee Required; Eligibility		72
Section 6.10 Resignation and Removal; Appointment of Successor		72
Section 6.11 Acceptance of Appointment by Successor		73
Section 6.12 Merger, Conversion, Consolidation or Succession to Business		74
Section 6.13 Preferential Collection of Claims Against Company		74
Section 6.14 Appointment of Authenticating Agent		74
ARTICLE VII HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY		76
Section 7.01 Company to Furnish Trustee Names and Addresses of Holders		76
Section 7.02 Preservation of Information; Communications to Holders		76
Section 7.03 Reports by Trustee		77
Section 7.04 Reports by Company		77

ii

	Page
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE		78
Section 8.01 Company May Consolidate, Etc. Only on Certain Terms		78
Section 8.02 Successor Substituted		79
ARTICLE IX SUPPLEMENTAL INDENTURES		80
Section 9.01 Supplemental Indentures Without Consent of Holders		80
Section 9.02 Supplemental Indentures with Consent of Holders		80
Section 9.03 Execution of Supplemental Indentures		82
Section 9.04 Effect of Supplemental Indentures		82
Section 9.05 Conformity with Trust Indenture Act		82
Section 9.06 Reference in Securities to Supplemental Indentures		82
Section 9.07 Notice of Supplemental Indenture		82
Section 9.08 Revocation and Effect of Consents		82
ARTICLE X COVENANTS		83
Section 10.01 Payment of Principal, Premium and Interest		83
Section 10.02 Maintenance of Office or Agency		83
Section 10.03 Money for Security Payments to be Held in Trust		84
Section 10.04 Existence		85
Section 10.05 Maintenance of Properties		85
Section 10.06 Payment of Taxes		85
Section 10.07 Maintenance of Insurance		86
Section 10.08 Limitation on Consolidated Indebtedness		86
Section 10.09 Limitation on Preferred Stock of Restricted Subsidiaries		89
Section 10.10 Limitation on Restricted Payments		90
Section 10.11 Limitations Concerning Distributions and Transfers By Restricted Subsidiaries		92
Section 10.12 Limitations on Liens		94
Section 10.13 Limitation on Transactions with Affiliates		95
Section 10.14 Limitation on Asset Sales and Sales of Subsidiary Stock		96
Section 10.15 Limitation on Activities of the Company and its Restricted Subsidiaries		99
Section 10.16 Change of Control		99
Section 10.17 Limitation on Certain Indebtedness		100
Section 10.18 Statement by Officers as to Default; Compliance Certificates		101
Section 10.19 Waiver of Certain Covenants		101
Section 10.20 Payments for Consent		102
Section 10.21 Covenants upon Attainment and Maintenance of an Investment Grade Rating		102
Section 10.22 Notification of Failure to Make an Asset Sale Offer or Change of Control Offer		103
ARTICLE XI REDEMPTION OF SECURITIES		103
Section 11.01 Right of Redemption		103
Section 11.02 Applicability of Article XI		103

iii

	Page
Section 11.03 Election to Redeem; Notice to Trustee		103
Section 11.04 Selection by Trustee of Securities to Be Redeemed		104
Section 11.05 Notice of Redemption		104
Section 11.06 Deposit of Redemption Price		105
Section 11.07 Securities Payable on Redemption Date		105
Section 11.08 Securities Redeemed in Part		105
ARTICLE XII SUBORDINATION OF SECURITIES		106
Section 12.01 Securities Subordinate to Senior Indebtedness		106
Section 12.02 Payment Over of Proceeds Upon Dissolution, Etc		106
Section 12.03 No Payment When Senior Indebtedness in Default		107
Section 12.04 Payment Permitted If No Default		108
Section 12.05 Subrogation to Rights of Holders of Senior Indebtedness		108
Section 12.06 Provisions Solely to Define Relative Rights		108
Section 12.07 Trustee to Effectuate Subordination		109
Section 12.08 No Waiver of Subordination Provisions		109
Section 12.09 Notice to Trustee		109
Section 12.10 Reliance on Judicial Order or Certificate of Liquidating Agent		110
Section 12.11 Trustee Not Fiduciary for Holders of Senior Indebtedness		110
Section 12.12 Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee’s Rights		111
Section 12.13 Article XII Applicable to Paying Agents		111
Section 12.14 Defeasance of this Article XII		111
ARTICLE XIII DEFEASANCE AND COVENANT DEFEASANCE		111
Section 13.01 Company’s Option to Effect Defeasance or Covenant Defeasance		111
Section 13.02 Defeasance and Discharge		111
Section 13.03 Covenant Defeasance		112
Section 13.04 Conditions to Defeasance or Covenant Defeasance		112
Section 13.05 Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions		114
Section 13.06 Reinstatement		115

iv

          INDENTURE, dated as of November 7, 2005 (this “Indenture”), between Rural Cellular Corporation, a corporation organized and existing under the laws of the State of Minnesota (herein called the “Company”), having its principal office at 3905 Dakota Street S.W., Alexandria, MN 56308, and Wells Fargo Bank, National Association, as trustee (herein called the “Trustee”).

RECITALS OF THE COMPANY

          The Company has duly authorized the creation of an issue of its Senior Subordinated Floating Rate Notes due 2012 (the “Original Securities”), and Senior Subordinated Floating Rate Series B Notes due 2012 (the “Exchange Securities,” and together with the Original Securities, the “Securities”) of substantially the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture.

          All things necessary to make the Securities, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the Company, and to make this Indenture a valid agreement of the Company, in accordance with their and its terms, have been done.

          NOW, THEREFORE, THIS INDENTURE WITNESSETH:

          For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows:

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION

          Section 1.01 Definitions.

          For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

          (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

          (2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

          (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP (whether or not such is indicated herein);

          (4) unless otherwise specifically set forth herein, all calculations or determinations of a Person shall be performed or made on a consolidated basis in accordance with GAAP but shall not include the assets and liabilities of Unrestricted Subsidiaries, except to the extent of dividends and distributions actually paid to the Company or one of its Wholly Owned Restricted Subsidiaries; and

          (5) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; and

          (6) the term “on a pro forma basis” means on a pro forma basis as calculated in accordance with Regulation S-X, as amended, under the Securities Act.

          “Acquired Indebtedness” means Indebtedness of a Person (including an Unrestricted Subsidiary) (1) existing at the time such Person becomes a Restricted Subsidiary or (2) assumed in connection with the acquisition of assets from such Person, in the case of both of the preceding clause (1) and clause (2), other than Indebtedness incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary or such acquisition. Acquired Indebtedness shall be deemed to be Incurred on the date of the related acquisition of assets from any Person or the date the acquired Person becomes a Restricted Subsidiary.

          “Acquired Person” has the meaning specified in the definition of Permitted Investments.

          “Act” when used with respect to any Holder, has the meaning specified in Section 1.04.

          “Additional Securities” has the meaning specified in Section 3.01.

          “Additional Senior Subordinated Exchange Debentures” means the senior subordinated debentures that may be issued by the Company in accordance with the terms of the Junior Exchangeable Preferred Stock in effect on the Issue Date.

          “Adjusted Operating Cash Flow Ratio” of any Person means the Operating Cash Flow Ratio of such Person as adjusted to treat all Preferred Stock of such Person as Redeemable Stock.

          “Administrative Agent” means the Person or Persons designated as such under the Credit Agreement.

          “Affiliate” of any Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person. For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract, or otherwise; provided, that beneficial ownership of 10% or more of the Voting Power of a Person will

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be deemed to be control. The terms “controlling” and “controlled” have meanings correlative to the foregoing.

          “Affiliate Transaction” has the meaning specified in Section 10.13.

          “Agent Member” means any member of, or participant in, the Depositary.

          “Applicable Procedures” means, with respect to any transfer or transaction involving a Global Security or beneficial interest therein, the rules and procedures of the Depositary for such Security, Euroclear and Clearstream, in each case to the extent applicable to such transaction and as in effect from time to time.

          “Asset Sale” means, in any one transaction or a series of related transactions, the conveyance, sale, transfer, assignment or other disposition, directly or indirectly, of any of the Company’s or a Restricted Subsidiary’s property, business or assets, including any sale or other transfer or issuance of any Capital Stock of any Restricted Subsidiary of the Company, whether owned on the Issue Date or thereafter acquired.

          Notwithstanding the foregoing, none of the following items will be deemed an Asset Sale:

          (1) an issuance of Capital Stock by a Restricted Subsidiary of the Company to the Company or to a Wholly Owned Restricted Subsidiary of the Company;

          (2) the sale or other disposition of cash or Cash Equivalents;

          (3) the surrender or waiver of contract rights or settlement, release or surrender of a contract, tort or other litigation claim in the ordinary course of business;

          (4) the lease, sublease or licensing of any property in the ordinary course of business;

          (5) a Restricted Payment (other than a Permitted Investment) that is not prohibited by Section 10.10 or a Permitted Investment pursuant to clauses (9), (11) and (12) of the definition thereof;

          (6) the sale of inventory in the ordinary course of business;

          (7) any issuance of employee stock options or stock awards by the Company pursuant to benefit plans in existence on the Issue Date; and

          (8) the granting of Liens not prohibited by this Indenture.

          “Asset Sale Offer” has the meaning specified in Section 10.14.

          “Asset Sale Offer Amount” has the meaning specified in Section 10.14.

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          “Asset Sale Offer Period” has the meaning specified in Section 10.14.

          “Asset Sale Purchase Date” has the meaning specified in Section 10.14.

          “Attributable Debt” in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value of the total obligations of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such Sale and Leaseback Transaction, determined in accordance with GAAP.

          “Authenticating Agent” means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Securities.

          “Average Life” means, as of any date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by dividing:

          (1) the sum of the product of (x) the number of years from such date of determination to the date of each successive scheduled amortization, redemption or principal payment of such Indebtedness (or similar payment with respect to such Preferred Stock), times (y) the amount of such payment; by

          (2) the sum of all such payments.

          “Bankruptcy Law” has the meaning specified in Section 5.01(h).

          “Board of Directors” of a Person which is a corporation, means either the board of directors of that Person or any duly authorized committee of that board.

          “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors of the Company, to be in full force and effect on the date of such certification and delivered to the Trustee.

          “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York City or the State of Minnesota are authorized or obligated by law or executive order to close.

          “Calculation Agent” means any Calculation Agent appointed from time to time by the Company in accordance with the terms of this Indenture. A Calculation Agent must be a commercial banking institution with offices in London, England or New York City with at least $500 million in capital. The initial Calculation Agent will be Wells Fargo Bank, National Association.

          “Capital Lease Obligation” means that portion of any obligation of a Person as lessee under a lease which is required to be capitalized on the balance sheet of such lessee in accordance with GAAP.

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          “Capital Stock” means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, including voting and non-voting) of equity of such Person; provided, that in no event shall “Capital Stock” of any Person include any debt security convertible or exchangeable into equity of such Person until conversion or exchange, as applicable.

          “Cash Equivalents” means:

          (1) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof), in each case, maturing within one year after the date of acquisition;

          (2) time deposits, certificates of deposit, banker’s acceptances, money market deposits and commercial paper issued by, or deposited with, any domestic bank or trust company of recognized standing having capital and surplus in excess of $200 million and commercial paper issued by others rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s and in each case maturing within one year after the date of acquisition;

          (3) repurchase obligations with a term of not more than seven days for underlying securities of the types described in (1) and (2) above entered into with any financial institution meeting the qualifications specified in clause (2) above; and

          (4) investments in money market funds substantially all of whose assets comprise securities of the types described in clauses (2) and (3) above.

          “Change of Control” means:

          (1) directly or indirectly a merger, sale, transfer or other conveyance of all or substantially all the assets of the Company, on a consolidated basis, to any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable), excluding transfers or conveyances to or among the Company’s current or newly-formed Wholly Owned Restricted Subsidiaries, as an entirety or substantially as an entirety in one transaction or series of related transactions, in each case with the effect that any Person or group of Persons beneficially owns more than 50% of the total Voting Power entitled to vote in the election of directors, managers or trustees of the transferee entity immediately after such transaction;

          (2) any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable) is or becomes the beneficial owner, directly or indirectly, of more than 50% of the total Voting Power of the Company;

          (3) during any period of 24 consecutive months, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new directors whose election by such Board or whose nomination for election

5

by the shareholders of the Company was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved), cease for any reason to constitute a majority of the Board of Directors of the Company then in office;

          (4) the adoption of a plan relating to the liquidation or dissolution of the Company; or

          (5) any transaction constituting a “change of control” under the instruments governing any Subordinated Indebtedness or Preferred Stock of the Company, if such “change of control” would provide a holder of such Subordinated Indebtedness or Preferred Stock with a right to require the Company to repurchase or redeem such Subordinated Indebtedness or Preferred Stock in an aggregate principal amount (or liquidation value, in the case of Preferred Stock) in excess of $20.0 million and such right has not been waived pursuant to the terms thereof.

          For purposes of this definition, the terms “beneficially own,” “beneficial owner” and “beneficial ownership” shall have the meanings used in Rules 13d-3 and 13d-5 under the Exchange Act, whether or not applicable, except that a Person shall be deemed to have “beneficial ownership” of all shares that any such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time.

          Notwithstanding the foregoing, any Change of Domicile transaction will not be deemed a Change of Control. In addition, the creation of, or the merger, amalgamation, combination, or consolidation of the Company with or into a Wholly Owned Restricted Subsidiary for the purpose of forming a holding company whose only substantial asset is the Capital Stock of the Company will not be deemed a Change of Control under the Indenture, and any such holding company structure will be disregarded.

          “Change of Control Offer” has the meaning specified in Section 10.16.

          “Change of Control Offer Period” has the meaning specified in Section 10.16.

          “Change of Control Purchase Date” has the meaning specified in Section 10.16.

          “Change of Domicile” means a transaction or series of related transactions, including without limitation (1) a merger, amalgamation, combination or consolidation of the Company with or into another Person, (2) the acquisition of all the Capital Stock of the Company or (3) the sale, transfer or other conveyance of all or substantially all the assets of the Company on a consolidated basis to another Person, the sole purpose of which is to reincorporate the Company under the laws of the United States, in another State of the United States or in the District of Columbia.

          “Class M Preferred Stock” means the Class M Redeemable Voting Convertible Preferred Stock of the Company.

6

          “Clearstream” means Clearstream Banking, a société anonyme (or any successor securities clearing agency).

          “Commission” means the United States Securities and Exchange Commission.

          “Company” means the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture and thereafter “Company” shall mean such successor Person.

          “Company Request” or “Company Order” means a written request or order signed in the name of the Company by its Chief Executive Officer, its President or any Vice President, and by its Chief Financial Officer, Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.

          “Consolidated Indebtedness” of any Person means at any date of determination, the Indebtedness of such Person and its Restricted Subsidiaries at such date, on a consolidated basis.

          “Consolidated Interest Expense” of any Person means for any period the interest expense included in an income statement of such Person and its Restricted Subsidiaries, on a consolidated basis, for such period, including without limitation or duplication (or, to the extent not so included, with the addition of),

          (1) the portion of any rental obligation in respect of any Capital Lease Obligation allocable to interest expense in accordance with GAAP;

          (2) the amortization of Indebtedness discounts;

          (3) any payments or fees, other than reimbursement or similar obligations, with respect to letters of credit, bankers’ acceptances or similar facilities;

          (4) net payment obligations under Hedge Agreements;

          (5) the portion other than Attributable Debt of any rental obligations in respect of any Sale and Leaseback Transaction; and

          (6) Preferred Stock dividends accrued or payable other than dividends on Qualified Capital Stock of such Person.

               Notwithstanding the foregoing:

          (a) in the event that any of the Company’s Qualified Capital Stock is classified as indebtedness because of a change in GAAP occurring after the Issue Date or SFAS 150, dividend payments on such Qualified Capital Stock will not be included in “Consolidated Interest Expense;” and

7

          (b) for purposes of Section 10.10, “Consolidated Interest Expense” shall exclude any non-cash charges resulting from the write-down of unamortized security issuance costs, to the extent included in “Consolidated Interest Expense.”

          “Consolidated Net Income” of any Person means for any period the net income (or loss) of such Person and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded therefrom (to the extent included and without duplication):

          (1) the net income (or loss) of any Person, other than such Person, that is not a Restricted Subsidiary of such Person except to the extent of the amount of dividends or other distributions actually paid to such Person or a Restricted Subsidiary of such Person by such other Person during such period,

          (2) gains or losses from sales of assets other than sales of inventory in the ordinary course of business,

          (3) in the event that any of the Company’s Qualified Capital Stock is classified as indebtedness because of a change in GAAP occurring after the Issue Date or SFAS 150, dividend payments thereon, to the extent they are treated as interest expense under GAAP,

          (4) for purposes of Section 10.10, the net income, if positive, of any Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of such net income is not at that time permitted by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulations applicable to such Restricted Subsidiary, except to the extent such restrictions with respect to the payment of dividends or similar distributions have been validly waived, and

          (5) all extraordinary gains and extraordinary losses.

          “Consolidated Net Worth” of any Person means the consolidated shareholders’ equity of such Person, determined on a consolidated basis in accordance with GAAP; provided, that such computation shall exclude (1) any amounts attributable to Redeemable Stock or any equity security convertible into or exchangeable for Indebtedness, the cost of treasury stock and the principal amount of any promissory notes receivable from the sale of the Capital Stock of the Company or any of its Restricted Subsidiaries and (2) Unrestricted Subsidiaries.

          “Cooperative Bank Equity” means non-voting equity interests in Cooperative Banks.

          “Cooperative Banks” means lenders under the Credit Agreement which are cooperative banks.

8

          “Corporate Trust Office” means the principal office of the Trustee at Sixth & Marquette; N9303-120, Minneapolis, MN 55479, at which at any particular time its corporate trust business shall be administered or such other location designated by the Trustee in a report pursuant to Section 7.03(a) or other notice delivered to the Holders by the Trustee.

          “covenant defeasance” has the meaning specified in Section 13.03.

          “Covenant Suspension” has the meaning specified in Section 10.21(a).

          “Credit Agreement” means the Credit Agreement, dated as of March 25, 2004 and amended as of October 18, 2005, among the Company, the lenders party thereto, Lehman Commercial Paper Inc., as Administrative Agent, and Bank of America, N.A., as Documentation Agent, as such agreement may be amended, supplemented, restated, refunded, replaced, renewed, extended, refinanced, increased or otherwise modified, in whole or in part, from time to time (whether or not any of the foregoing (1) occurs simultaneously with or occurs at any time after, the termination or repayment of a prior Credit Agreement, (2) occurs pursuant to one or more separate instruments or agreements, which may include indentures and debt securities, (3) occurs on one or more separate occasions, (4) occurs with the same or different lenders or (5) results in an increase or decrease in the aggregate principal amount of loans made or to be made thereunder or any other change in terms thereunder).

          “Cumulative Interest Expense” means the total amount of Consolidated Interest Expense of the Company and its Restricted Subsidiaries for the period beginning on the first day of the completed fiscal quarter immediately preceding January 16, 2002, through and including the end of the last completed fiscal quarter preceding the date of any proposed Restricted Payment; provided, however, that Cumulative Interest Expense shall not include (1) any dividends paid or accrued on Exchangeable Preferred Stock, (2) any dividends paid or accrued on Junior Exchangeable Preferred Stock or (3) any dividends paid or accrued on Class M Preferred Stock.

          “Cumulative Operating Cash Flow” means Operating Cash Flow of the Company and its Restricted Subsidiaries for the period beginning on the first day of the completed fiscal quarter immediately preceding January 16, 2002, through and including the end of the last completed fiscal quarter preceding the date of any proposed Restricted Payment.

          “Daily Interest Amount” has the meaning specified in Section 3.11.

          “Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

          “Defaulted Interest” has the meaning specified in Section 3.08.

          “defeasance” has the meaning specified in Section 13.02.

9

          “Depositary” means a clearing agency registered under the Exchange Act that is designated to act as Depositary for the Securities until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Depositary” shall mean such successor Depositary. The Depositary shall initially be DTC.

          “Designated Senior Indebtedness” means the Indebtedness under the Credit Agreement, the Senior Secured Notes and the Senior Unsecured Notes.

          “Determination Date,” with respect to an Interest Period, will be the second London Banking Day preceding the first day of the Interest Period.

          “Distribution Compliance Period” means, with respect to the Regulation S Securities, the “distribution compliance period” required by Rule 903(b)(2) of Regulation S applicable to such Securities.

          “DTC” means The Depository Trust Company, a New York corporation.

          “DWAC” has the meaning specified in Section 3.06(b)(i)(E).

          “Equity Offering” means any public or private sale of Qualified Capital Stock by the Company for the account of the Company.

          “Euroclear” means the Euroclear Clearance System (or any successor securities clearing agency).

          “Event of Default” has the meaning specified in Section 5.01.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          “Exchange Indentures” means the indentures under which the Senior Subordinated Exchange Debentures and the Additional Senior Subordinated Exchange Debentures may be issued.

          “Exchange Offer” means an offer made pursuant to an effective registration statement under the Securities Act by the Company to exchange all or a portion of the Outstanding Securities (except for the differences provided for herein) for Exchange Securities.

          “Exchange Registration Statement” means a registration statement of the Company under the Securities Act registering Exchange Securities for distribution pursuant to an Exchange Offer.

          “Exchange Securities” means the Securities designated as such in the first paragraph of the recitals of the Company, all of which are to be issued pursuant to an Exchange Offer or sold pursuant to a Shelf Registration Statement and their Successor Securities.

10

          “Exchangeable Preferred Stock” means the 11 ³/8% Senior Exchangeable Preferred Stock of the Company.

          “Existing Indebtedness” has the meaning specified in Section 10.08(f).

          “Existing Liens” has the meaning specified in Section 10.12.

          “Existing Preferred Stock” has the meaning specified in Section 10.09(a).

          “Existing Senior Subordinated Notes” means the 9³/4% Senior Subordinated Notes due 2010 of the Company

          “Expiration Date” has the meaning specified in the definition of “Offer to Purchase.”

          “FCC” has the meaning specified in the definition of Wireless Communications Business.

          “Fair Market Value” means, with respect to any assets or Person, the price which could be negotiated in an arm’s-length free market transaction, between a willing seller and a willing buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value will be determined (1) if such Person or assets have a Fair Market Value of up to $2.5 million, by any executive officer of the Company and evidenced by an Officers’ Certificate, dated within 30 days of the relevant transaction, (2) if such Person or assets have a Fair Market Value equal to or in excess of $2.5 million but not in excess of $10 million, by a majority of the Board of Directors of the Company and evidenced by a Board Resolution, dated within 30 days of the relevant transaction or (3) if such Person or assets have a Fair Market Value in excess of $10 million, by a majority of the Board of Directors of the Company and evidenced by a Board Resolution, dated within 30 days of the relevant transaction, based on an appraisal of an independent appraiser of national reputation.

          “GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity or entities as have been approved by a significant segment of the accounting profession in the United States, which are in effect from time to time.

          “Global Securities” has the meaning specified in Section 2.01.

          “Hedge Agreements” means any interest rate or currency exchange rate swap, cap, collar, floor, caption or swaption agreements, or any similar arrangements arising at any time between the Company or any Restricted Subsidiary, on the one hand, and any Person, on the other hand, as such agreement or arrangement may be modified, supplemented and in effect from time to time.

11

          “Holder” means a Person in whose name a Security is registered in the Security Register.

          “Incur” means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (by conversion, exchange or otherwise), assume, guarantee or otherwise become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such Person (and “Incurrence,” “Incurred,” “Incurrable” and “Incurring” shall have meanings correlative to the foregoing).

          “Indebtedness” means (without duplication), with respect to any Person:

          (1) every obligation of such Person for money borrowed;

          (2) every obligation of such Person evidenced by bonds, debentures, notes, or similar instruments, including obligations Incurred in connection with the acquisition of property, assets or businesses;

          (3) every reimbursement or similar obligation of such Person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person;

          (4) every obligation of such Person issued or assumed as the deferred and unpaid purchase price of property or services (but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business);

          (5) every Capital Lease Obligation of such Person;

          (6) the maximum fixed redemption or repurchase price of Redeemable Stock of such Person at the time of determination;

          (7) Attributable Debt of such Person with respect to any Sale and Leaseback Transaction to which such Person is a party;

          (8) all obligations under Hedge Agreements;

          (9) every obligation of the type referred to in clauses (1) through (8) of another Person and all dividends of another Person the payment of which, in either case, such Person has guaranteed or is responsible or liable, directly or indirectly, as obligor, guarantor, or otherwise or for which such Person provides any form of credit support, and if such credit support takes the form of a Lien on any assets of the specified Person (which Lien is permitted to be Incurred by this Indenture) where such Indebtedness is without recourse to such Person, the amount of such Indebtedness will be the lesser of (A) the Fair Market Value of such assets as of the date of determination and (B) the amount of such Indebtedness; and

12

          (10) the liquidation value of Preferred Stock of a Subsidiary of such Person issued and outstanding, except for Preferred Stock held by such Person (or one of its Wholly Owned Restricted Subsidiaries);

          provided, that for all purposes of this Indenture;

          (A) the amount outstanding at any time of any Indebtedness issued with original issue discount is the face amount of such Indebtedness less the unamortized portion of the original issue discount of such Indebtedness at the time of its issuance as determined in conformity with GAAP,

          (B) Indebtedness shall not include any liability for federal, state, local, or other taxes, and

          (C) in the event that any of the Company’s Qualified Capital Stock is classified as indebtedness because of a change in GAAP occurring after the Issue Date or SFAS 150, such Qualified Capital Stock shall not be included in “Indebtedness.”

          For purposes of this Indenture, the amount of any Indebtedness under any Hedge Agreement shall be the amount determined in respect thereof as of the end of the then most recently ended fiscal quarter of such Person, based on the assumption that such Hedge Agreement had terminated at the end of such fiscal quarter, and in making such determination, if such Hedge Agreement or any related agreement provides for the netting of amounts payable by and to such Person thereunder or if any such agreement provides for the simultaneous payment of amounts by and to such Person, then in each such case, the amount of such obligations shall be the net amount so determined, unless the counterparty under such agreement is in default under such agreement or defaults in making the corresponding payment to such Person.

          “Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof or restated.

          “Initial Purchasers” means (1) with respect to the Original Securities issued on the Issue Date, Lehman Brothers Inc. and Morgan Stanley & Co. Incorporated and (2) with respect to Original Securities issued after the Issue Date, the initial purchasers of such Securities from the Company in connection with an exempt offering of Securities to “qualified institutional buyers” (as such term is defined in Rule 144A) and to other persons.

          “Intercompany Indebtedness” has the meaning specified in Section 10.08.

          “Interest Payment Date” means each February 1, May 1, August 1 and November 1, commencing on February 1, 2006.

          “Interest Period” means the period commencing on and including an Interest Payment Date and ending on and including the day immediately preceding the

13

next succeeding Interest Payment Date, with the exception that the first Interest Period shall commence on and include the Issue Date and end on and include January 31, 2006.

          “Investment” by any Person in any other Person means (without duplication):

          (1) the acquisition (whether by purchase, merger, consolidation, or otherwise) by such Person (whether for cash, property, services, securities, or otherwise) of Capital Stock, bonds, notes, debentures, partnership or other ownership interests or other securities of such other Person;

          (2) the making by such Person of any deposit with, or advance, loan or other extension of credit to, such other Person or any commitment to make any such advance, loan or extension;

          (3) the entering into by such Person of any guarantee of, or other contingent obligation with respect to, Indebtedness or other liability of such other Person;

          (4) the making of any capital contribution by such Person to such other Person; and

          (5) the designation by the Board of Directors of the Company of any Person to be an Unrestricted Subsidiary.

          For purposes of Section 10.10:

          (A) “Investment” shall include and be valued at the Fair Market Value of such Person’s pro rata interest in the net assets of any Restricted Subsidiary at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary and shall exclude the lesser of (x) the Fair Market Value of such Person’s pro rata interest in the net assets of any Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is designated a Restricted Subsidiary and (y) the Fair Market Value of the amount of such Person’s Investments (other than Permitted Investments) made in (net of cash distributions received from) such Unrestricted Subsidiary since the Issue Date, and

          (B) the amount of any Investment shall be the Fair Market Value of such Investment at the time any such Investment is made.

          “Investment Grade” means a rating of the relevant debt obligation of a Person by both S&P and Moody’s, any such rating being in one of such agency’s four highest generic rating categories that signifies investment grade (i.e., currently BBB- (or the equivalent) or higher by S&P and Baa3 (or the equivalent) or higher by Moody’s); provided in each case such ratings are publicly available; provided that in the event either S&P or Moody’s is no longer in existence for purposes of determining whether such debt obligations are rated “Investment Grade,” such organization may be replaced by a nationally recognized statistical rating organization (as defined in Rule 436 under the

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Securities Act) designated by the Company, written notice of which shall be given to the Trustee.

          “Issue Date” means the time and date of the first issuance of the Original Securities.

          “Junior Exchangeable Preferred Stock” means the 12¹/4% Junior Exchangeable Preferred Stock of the Company.

          “LIBOR,” with respect to an Interest Period, will be the rate (expressed as a percentage per annum) for deposits in United States dollars for three-month periods beginning on the first day of such Interest Period that appears on Telerate Page 3750 or Bloomberg page BBAM 1 as of 11:00 a.m., London time, on the Determination Date. If Telerate Page 3750 and Bloomberg page BBAM 1 do not include such a rate or are unavailable on a Determination Date, the Calculation Agent will request the principal London office of each of four major banks in the London interbank market, as selected by the Calculation Agent, to provide such bank’s offered quotation (expressed as a percentage per annum), as of approximately 11:00 a.m., London time, on such Determination Date, to prime banks in the London interbank market for deposits in a Representative Amount in United States dollars for a three-month period beginning on the first day of such Interest Period. If at least two such offered quotations are so provided, LIBOR for the Interest Period will be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, the Calculation Agent will request each of three major banks in New York City, as selected by the Calculation Agent, to provide such bank’s rate (expressed as a percentage per annum), as of approximately 11:00 a.m., New York City time, on such Determination Date, for loans in a Representative Amount in United States dollars to leading European banks for a three-month period beginning on the first day of such Interest Period. If at least two such rates are so provided, LIBOR for the Interest Period will be the arithmetic mean of such rates. If fewer than two such rates are so provided, then LIBOR for the Interest Period will be LIBOR in effect with respect to the immediately preceding Interest Period.

          “Lien” means, with respect to any property or assets, any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, security interest, lien, charge, easement (other than an easement not materially impairing usefulness or marketability), encumbrance, preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever on or with respect to such property or assets (including, without limitation, any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing).

          “Liquidated Damages” means the liquidated damages payable under the Registration Rights Agreement.

          “London Banking Day” is any day in which dealings in United States dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market.

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          “Marketable Securities” has the meaning specified in Section 10.14.

          “Maturity” means, when used with respect to any Security, the date on which the principal of such Security becomes due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

          “Moody’s” means Moody’s Investors Service, Inc. and its successors.

          “Net Cash Proceeds” means the aggregate amount of cash and Cash Equivalents received by the Company and its Restricted Subsidiaries in respect of an Asset Sale (including upon the conversion to cash or Cash Equivalents of (a) any note or installment receivable at any time or (b) any other property as and when any cash and Cash Equivalents are received in respect of any property received in an Asset Sale but only to the extent such cash or Cash Equivalents are received within one year after such Asset Sale), less the sum of (1) all out-of-pocket fees, commissions, and other expenses incurred in connection with such Asset Sale, including the amount (estimated in good faith by the Board of Directors of the Company) of income, franchise, sales, and other applicable taxes required to be paid by the Company or any Restricted Subsidiary of the Company in connection with such Asset Sale and (2) the aggregate amount of cash so received which is used to retire any then existing Senior Indebtedness of the Company or Indebtedness of any Restricted Subsidiary; provided, that Indebtedness ranking pari passu in right of payment with the Securities which is issued pursuant to documentation providing for the making of an offer to repurchase or repay such Indebtedness in connection with an Asset Sale shall be treated as provided in Section 10.14.

          “Non-Recourse Debt” means Indebtedness:

          (1) as to which neither the Company nor any of its Restricted Subsidiaries:

               (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness);

               (b) is directly or indirectly liable, as a guarantor or otherwise; or

               (c) constitutes the lender, other than with respect to amounts that are lent by the Company or one of its Restricted Subsidiaries to an Unrestricted Subsidiary in compliance with Sections 10.10 and 10.13 hereof and are otherwise permitted by this Indenture;

          (2) no default with respect to which, including any rights that the holders of such Indebtedness may have to take enforcement action against an Unrestricted Subsidiary, would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of the Company or any of its Restricted Subsidiaries to declare a default on that other Indebtedness or cause the payment of that other Indebtedness to be accelerated or payable prior to its stated maturity; and

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          (3) as to which the lenders will not have any recourse to the assets of the Company or the stock or assets of any of its Restricted Subsidiaries.

          “Notice of Default” has the meaning specified in Section 5.01(e).

          “Offer” has the meaning specified in the definition of Offer to Purchase.

          “Offer to Purchase” means a written offer (the “Offer”) sent by the Company to each Holder at his address appearing in the Security Register on the date of the Offer offering to purchase up to the principal amount of Securities specified in such Offer at the purchase price specified in such Offer. Unless otherwise required by applicable law, the Offer shall specify an expiration date (the “Expiration Date”) of the Offer to Purchase which, subject to any contrary requirements of applicable law, shall be not less than 30 days nor more than 60 days after the date of such Offer to Purchase (or, in the case of any Offer to Purchase made prior to the occurrence of the Change of Control and contingent upon such occurrence, the later of (x) 60 days after the date of such Offer to Purchase and (y) the date of occurrence of such Change of Control) and a settlement date (the “Purchase Date”) for purchase of Securities within five Business Days after the Expiration Date.

          The Offer shall also state:

          (1) the Section of this Indenture pursuant to which the Offer to Purchase is being made;

          (2) the Expiration Date and the Purchase Date;

          (3) the aggregate principal amount of the Outstanding Securities offered to be purchased by the Company pursuant to the Offer to Purchase (including, if less than 100%, the manner by which such has been determined pursuant to the Section hereof requiring the Offer to Purchase) (the “Purchase Amount”);

          (4) the purchase price to be paid by the Company for each $1,000 aggregate principal amount of Securities accepted for payment (as specified pursuant to this Indenture) (the “Purchase Price”);

          (5) that the Holder may tender all or any portion of the Securities registered in the name of such Holder and that any portion of a Security tendered must be tendered in an integral multiple of $1,000 principal amount;

          (6) the place or places where Securities are to be surrendered for tender pursuant to the Offer to Purchase;

          (7) that on the Purchase Date the Purchase Price will become due and payable upon each Security accepted for payment pursuant to the Offer to Purchase and that interest thereon shall cease to accrue on and after the Purchase Date;

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          (8) that each Holder electing to tender a Security pursuant to the Offer to Purchase will be required to surrender such Security at the place or places specified in the Offer prior to the close of business on the Expiration Date (such Security being, if the Company or the Trustee so requires, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing);

          (9) that Holders will be entitled to withdraw all or any portion of Securities tendered if the Company (or its Paying Agent) receives, not later than the close of business on the Expiration Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder tendered, the certificate number of the Security the Holder tendered and a statement that such Holder is withdrawing all or a portion of his tender;

          (10) that (a) if Securities in an aggregate principal amount less than or equal to the Purchase Amount are duly tendered and not withdrawn pursuant to the Offer to Purchase, the Company shall purchase all such Securities and (b) if Securities in an aggregate principal amount in excess of the Purchase Amount are tendered and not withdrawn pursuant to the Offer to Purchase, the Company shall purchase Securities having an aggregate principal amount equal to the Purchase Amount on a pro rata basis (with such adjustments as may be deemed appropriate so that only Securities in denominations of $1,000 or integral multiples thereof shall be purchased); and

          (11) that in the case of any Holder whose Security is purchased only in part, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unpurchased portion of the Security so tendered.

          “Offering Memorandum” means the Offering Memorandum, dated November 1, 2005, with respect to the offering of the Original Securities to be issued on the Issue Date.

          “Officers’ Certificate” means a certificate signed by two officers at least one of whom shall be the principal executive officer, principal accounting officer or principal financial officer of the Company and delivered to the Trustee.

          “Operating Cash Flow” for any Person for any period means:

          (1) the Consolidated Net Income of such Person for such period, plus

          (2) the sum, without duplication (and only to the extent such amounts are deducted in determining such Consolidated Net Income), of:

          (a) the provisions for income taxes for such period for such Person and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP,

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          (b) depreciation, amortization and other non-cash charges of such Person and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, and

          (c) Consolidated Interest Expense, to the extent that any such expense was deducted in computing such Consolidated Net Income, of such Person for such period,

          less the amount of all cash payments made during such period by such Person and its Restricted Subsidiaries to the extent such payments relate to non-cash charges that were added back in determining Operating Cash Flow for such period or for any prior period (and only to the extent such amounts are included in determining such Consolidated Net Income).

          In the case of a Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary, the determination of the percentage of the Operating Cash Flow of such Restricted Subsidiary that is to be included in the calculation of the Company’s Operating Cash Flow shall be made on a pro forma basis on the assumption that the percentage of the Company’s common equity interest in such Restricted Subsidiary throughout the applicable Reference Period was equivalent to its common equity interest on the date of the determination.

          “Operating Cash Flow Ratio” means, on any date (the “Transaction Date”), with respect to any Person, the ratio of

          (1) Consolidated Indebtedness of such Person and its Restricted Subsidiaries on the Transaction Date (after giving pro forma effect to the Incurrence of any Indebtedness and the application of the proceeds thereof on such Transaction Date) divided by

          (2) the aggregate amount of Operating Cash Flow of such Person;

          provided, that for purposes of such computation, in calculating Operating Cash Flow and Consolidated Indebtedness:

          (A) the transaction giving rise to the need to calculate the Operating Cash Flow Ratio will be assumed to have occurred (on a pro forma basis) on the first day of the Reference Period;

          (B) acquisitions that have been made by such Person or any of its Restricted Subsidiaries, including through consolidations, amalgamations, combinations or mergers during the Reference Period or subsequent thereto and on or prior to the Transaction Date will be given effect (on a pro forma basis) as if they had occurred on the first day of the Reference Period;

          (C) businesses disposed of by such Person or any of its Restricted Subsidiaries during the Reference Period or subsequent thereto and on or prior to the

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Transaction Date will be given effect (on a pro forma basis) as if they had occurred on the first day of the Reference Period;

          (D) the Indebtedness of any Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary shall be determined in accordance with the actual percentage of the Person’s common equity interest in such Restricted Subsidiary on the date of determination of the Operating Cash Flow Ratio (thus, for example, in the case of a Restricted Subsidiary in which such Person owns a 51% common equity interest, 51% of such Subsidiary’s Indebtedness would be included in the calculation of such Person’s aggregate Indebtedness); and

          (E) except as provided in clause (7) of the second paragraph of Section 10.10, the Exchangeable Preferred Stock, the Junior Exchangeable Preferred Stock and the Class M Preferred Stock outstanding on the Issue Date shall be excluded from Consolidated Indebtedness. For the avoidance of doubt, any accrued but unpaid dividends on such Preferred Stock shall be similarly excluded.

          “Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Company, and who shall be reasonably acceptable to the Trustee, delivered to the Trustee.

          “Original Securities” means the Securities designated in the first paragraph of the recitals of the Company.

          “Outstanding,” when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:

                    (i) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;

                    (ii) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and

                    (iii) Securities which have been replaced pursuant to Section 3.07 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;

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provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

          “pari passu,” when used with respect to the ranking of any Indebtedness of any Person in relation to other Indebtedness of such Person, means that each such Indebtedness (a) either (i) is not subordinated in right of payment to any other Indebtedness of such Person or (ii) is subordinate in right of payment to the same Indebtedness of such Person as is the other and is so subordinate to the same extent and (b) is not subordinate in right of payment to the other or to any Indebtedness of such Person as to which the other is not so subordinate.

          “Paying Agent” means any Person authorized by the Company to pay the principal of (and premium, if any), interest (and Liquidated Damages, if any), on any Securities on behalf of the Company.

          “Payment Blockage Period” has the meaning specified in Section 12.03.

          “Payment Default” has the meaning specified in Section 5.01(f).

          “Permitted Investments” means:

          (1) Investments in Cash Equivalents;

          (2) Investments in the Company or a Restricted Subsidiary;

          (3) Investments in a Person substantially all of whose assets are of a type generally used in a Wireless Communications Business (an “Acquired Person”) if, as a result of such Investments, (A) the Acquired Person immediately thereupon becomes a Restricted Subsidiary or (B) the Acquired Person immediately thereupon either (a) is merged or consolidated with or into the Company or any Restricted Subsidiary or (b) transfers or conveys all or substantially all of its assets to, or is liquidated into, the Company or any of its Restricted Subsidiaries;

          (4) Investments in accounts and notes receivable acquired in the ordinary course of business;

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          (5) any securities received in connection with an Asset Sale and any Investment with the Net Cash Proceeds from any Asset Sale in Capital Stock of a Person, all or substantially all of whose assets are of a type used in a Wireless Communications Business, that complies with Section 10.14;

          (6) advances and prepayments for asset purchases in the ordinary course of business in a Wireless Communications Business of the Company or a Restricted Subsidiary;

          (7) customary loans or advances made in the ordinary course of business to officers, directors, or employees of the Company or any of its Restricted Subsidiaries for travel, entertainment, and moving and other relocation expenses not to exceed $5.0 million at any one time outstanding;

          (8) the purchase of Cooperative Bank Equity in Cooperative Banks to the extent required by the charter documents of such Cooperative Banks in connection with the Incurrence of any Indebtedness which is provided by such Cooperative Banks under the Credit Agreement, provided that such Incurrence is permitted under the terms of this Indenture;

          (9) Investments in Wireless Alliance not exceeding $10.0 million in the aggregate made after January 16, 2002;

          (10) Investments received in satisfaction of judgments, settlements of debt or compromises of obligations incurred in the ordinary course of business, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer;

          (11) Investments arising from Hedge Agreements permitted to be Incurred pursuant to clause (e) of the second paragraph under Section 10.08;

          (12) Investments in any Person, which Investments have an aggregate Fair Market Value, measured on the date each such Investment is made and without giving effect to subsequent changes in value, when taken together with all other Investments made pursuant to this clause (12) since the Issue Date not exceeding $15.0 million;

          (13) receivables owing to the Company or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;

          (14) Investments that are deemed to have been made as a result of the acquisition of a Person that at the time of such acquisition held instruments constituting Investments that were not acquired in contemplation of the acquisition of such Person (only to the extent that the making of such Investment through the acquisition of such Person was already deemed to be a Restricted Payment made pursuant to Section 10.10 as of the date of such acquisition); and

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          (15) Investments in prepaid expenses and lease, utility and workers’ compensation performance and other similar deposits.

          “Permitted Junior Securities” means (1) common equity interests in the Company or (2) debt or preferred equity securities of the Company issued pursuant to a plan of reorganization consented to by each class of Senior Indebtedness; provided that all such securities are subordinated to all Senior Indebtedness and any debt securities issued in exchange for Senior Indebtedness to substantially the same extent as, or to a greater extent than, the Securities are subordinated to Senior Indebtedness under this Indenture.

          “Person” means any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.

          “Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.07 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

          “Preferred Stock” means, with respect to any Person, any and all shares of Capital Stock of such Person that have preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation.

          “Proceeding” has the meaning specified in Section 12.02.

          “Purchase Agreement” means (1) with respect to the Original Securities issued on the Issue Date, the Purchase Agreement, dated as of November 1, 2005, among the Company and the Initial Purchasers, as such agreement may be amended from time to time and (2) with respect to the Original Securities issued after the Issue Date, the purchase agreement relating to the issuance of such Securities among the Company and the Initial Purchasers, as such agreement may be amended from time to time.

          “Purchase Amount” has the meaning specified in the definition of Offer to Purchase.

          “Purchase Date” has the meaning specified in the definition of Offer to Purchase.

          “Purchase Price” has the meaning specified in the definition of Offer to Purchase.

          “Qualified Capital Stock” means, with respect to any Person, any and all shares of Capital Stock other than Redeemable Stock.

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          “Qualified Capital Stock Proceeds” means, with respect to any Person,

          (1) in the case of any sale of Qualified Capital Stock, the aggregate net cash proceeds received by such Person (plus 70% of the Fair Market Value of long-term assets that are used or usable in a Wireless Communications Business), after payment of expenses, commissions, and the like incurred by such Person in connection therewith, and net of Indebtedness that such Person Incurred, guaranteed or otherwise became liable for in connection with the issuance or acquisition of such Capital Stock; and

          (2) in the case of any exchange, exercise, conversion, or surrender of any Redeemable Stock or Indebtedness of such Person issued (other than to any Subsidiary) for cash after January 16, 2002 for or into shares of Qualified Capital Stock of such Person, the liquidation value of the Redeemable Stock or the net book value of such Indebtedness as adjusted on the books of such Person to the date of such exchange, exercise, conversion, or surrender, plus any additional amount paid by the securityholders to such Person upon such exchange, exercise, conversion, or surrender and less any and all payments made to the securityholders, and all other expenses, commissions and the like incurred by such Person or any Subsidiary in connection therewith.

          “Redeemable Stock” of any Person means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable pursuant to a sinking fund obligation, is required to be redeemed prior to the 91st day after the final Stated Maturity of the Securities or is redeemable at the option of the holder thereof at any time prior to the 91st day after the final Stated Maturity of the Securities, except to the extent such Capital Stock is solely redeemable with any Capital Stock that is not Redeemable Stock; provided that:

          (1) only the portion of the Capital Stock which is mandatorily redeemable or is so redeemable at the option of the holder prior to such date shall be deemed Redeemable Stock;

          (2) if such Capital Stock is issued in the ordinary course of business to any employee or to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Redeemable Stock solely because it may be required to be repurchased by the Company or any of its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability; and

          (3) any Capital Stock that would not constitute Redeemable Stock but for provisions in it giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of a “change of control” or “asset sale” occurring prior to the final Stated Maturity of the Securities shall not constitute Redeemable Stock if the “change of control” or “asset sale” provisions applicable to such Capital Stock are no more favorable to the holders of such Capital Stock than the provisions of Sections 10.14 or 10.16, as applicable, in this Indenture and such Capital Stock specifically provides that such Person will not repurchase or redeem any such Capital

24

Stock specifically provides that such Person will not repurchase or redeem any such Capital Stock pursuant to such provision prior to the Company’s repurchase of the Securities as required pursuant to Sections 10.14 or 10.16, as applicable.

          “Redemption Date,” when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.

          “Redemption Price,” when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to the terms of the Securities or this Indenture.

          “Reference Period” with regard to any Person means the last four completed fiscal quarters of such Person immediately preceding any date upon which any determination is to be made pursuant to the terms of the Securities or this Indenture.

          “Registered Securities” means the Exchange Securities and all other Securities sold or otherwise disposed of pursuant to an effective registration statement under the Securities Act, together with their respective Successor Securities.

          “Registration Rights Agreement” means (1) with respect to the Original Securities issued on the Issue Date, the Registration Rights Agreement, dated as of November 7, 2005, by and among the Company and the Initial Purchasers, as such agreement may be amended from time to time, and (2) with respect to Original Securities issued after the Issue Date, any Registration Rights Agreement among the Company and the Initial Purchasers providing for the issuance of Exchange Securities in an Exchange Offer registered on an Exchange Registration Statement and the registration of the resale of Securities under a Shelf Registration Statement, as each such agreement may be amended from time to time.

          “Regular Record Date” for the interest payable on any Interest Payment Date means the January 15, April 15, July 15 or October 15 (whether or not a Business Day), as the case may be, immediately preceding such Interest Payment Date.

          “Regulation S” means Regulation S under the Securities Act (or any successor provision), as it may be amended from time to time.

          “Regulation S Global Security” has the meaning specified in Section 2.01.

          “Regulation S Securities” means the Securities, if any, issued in reliance on Regulation S.

          “Representative Amount” means a principal amount of not less than U.S.$1,000,000 for a single transaction in the relevant market at the relevant time.

          “Restricted Global Security” has the meaning specified in Section 2.01.

          “Restricted Payment” means, with respect to any Person:

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          (1) any declaration or payment of a dividend or making any other payment or other distribution (including, without limitation, any payment in connection with any merger or consolidation involving such Person or any Restricted Subsidiary of such Person) on or on account of any shares of Capital Stock of such Person or any Restricted Subsidiary of such Person (other than a dividend payable solely in shares of the Qualified Capital Stock of such Person or options, warrants, or other rights to acquire the Qualified Capital Stock of such Person and other than any declaration or payment of a dividend or other distribution by a Restricted Subsidiary to the Company or another Wholly Owned Restricted Subsidiary of the Company);

          (2) any payment on account of the purchase, redemption, retirement, or acquisition (including by way of issuing any Indebtedness or Redeemable Stock in exchange for Qualified Capital Stock) of (A) any shares of Capital Stock (including, without limitation, the Exchangeable Preferred Stock, the Junior Exchangeable Preferred Stock and the Class M Preferred Stock) of such Person or any Subsidiary of such Person held by Persons other than such Person or any of its Restricted Subsidiaries or any shares of Capital Stock of the direct or indirect parent of such Person or (B) any option, warrant, or other right to acquire shares of Capital Stock of such Person or any Restricted Subsidiary of such Person or any of its Restricted Subsidiaries, in each case, other than pursuant to the cashless exercise of options, warrants or other rights to acquire Capital Stock of such Person;

          (3) any Investment (other than a Permitted Investment) made by such Person; and

          (4) any payment on or with respect to any Subordinated Indebtedness of such Person, or any redemption, defeasance, repurchase, or other acquisition or retirement for value prior to any scheduled maturity, repayment, or sinking fund payment, of any Subordinated Indebtedness of such Person, except a payment of interest or principal at the stated maturity thereof;

          provided, that the term “Restricted Payment” does not include the payment of a dividend or other distribution by any Restricted Subsidiary on shares of its Capital Stock that is paid pro rata to all holders of such Capital Stock.

          “Restricted Subsidiary” of any Person means any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person.

          “Rule 144” means Rule 144 under the Securities Act (or any successor provision) as it may be amended from time to time.

          “Rule 144A” means Rule 144A under the Securities Act (or any successor provision), as it may be amended from time to time.

          “Rule 144A Securities” means the Securities purchased by the Initial Purchasers from the Company pursuant to the Purchase Agreement, other than the Regulation S Securities.

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          “S&P” means Standard & Poor’s Ratings Services and its successors.

          “Sale and Leaseback Transaction” of any Person means an arrangement with any lender or investor or to which such lender or investor is a party providing for the leasing by such Person of any property or asset of such Person which has been or is being sold or transferred by such Person more than 270 days after the acquisition thereof or the completion of construction or commencement of operation thereof to such lender or investor or to any Person to whom funds have been or are to be advanced by such lender or investor on the security of such property or asset. The stated maturity of such arrangement shall be the date of the last payment of rent or any other amount due under such arrangement prior to the first date on which such arrangement may be terminated by the lessee without payment of a penalty.

          “Securities” means securities designated in the first paragraph of the recitals of the Company and includes the Exchange Securities.

          “Securities Act” means the Securities Act of 1933, as amended.

          “Securities Act Legend” means a legend substantially in the form of the legend required in the form of Security set forth in Section 2.02 to be placed upon a Rule 144A Security or an Regulation S Security.

          “Securities Payment” means any payment or distribution of any kind or character, whether in cash, property, or securities, on account of principal of (or premium, if any) or interest on or other obligations in respect of the Securities or on account of any purchase or other acquisition of the Securities by the Company or any Subsidiary of the Company (in each case, other than a payment in the form of Permitted Junior Securities). For purposes of this definition, the words “any payment or distribution of any kind or character, whether in cash, property or securities” shall not be deemed to include a payment or distribution of stock or securities of the Company provided for by a plan of reorganization or readjustment authorized by an order or decree of a court of competent jurisdiction in a reorganization proceeding under any applicable bankruptcy law or of any other corporation provided for by such plan of reorganization or readjustment which stock or securities are subordinated in right of payment to all then outstanding Senior Indebtedness to substantially the same extent as the Securities are so subordinated as provided in Article XII hereof.

          “Security Registrar” and “Security Register” have the respective meanings specified in Section 3.06.

          “Senior Indebtedness” means the principal of (and premium, if any) and interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company, whether or not a claim for post-petition interest is allowed in such proceeding) on

          (1) Indebtedness of the Company created pursuant to the Credit Agreement and all other obligations thereunder or under the notes, security documents,

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pledge agreements, Hedge Agreements, or other agreements or instruments executed in connection therewith;

          (2) the Senior Secured Notes and the Senior Unsecured Notes;

          (3) Indebtedness of the Company created pursuant to any vendor financing Incurred for the acquisition, construction, or improvement by the Company or any Restricted Subsidiary of assets in the Wireless Communications Business;

          (4) all other Indebtedness of the Company for borrowed money referred to in the definition of Indebtedness other than clauses (4), (6), and (10) thereof (and clause (9) thereof to the extent applicable to Indebtedness Incurred under clauses (4) and (6) thereof), whether Incurred on or prior to the Issue Date, other than the Securities; and

          (5) amendments, renewals, extensions, modifications, refinancings and refundings of any such Indebtedness;

          provided, however, that the following shall not constitute Senior Indebtedness:

          (A) any Indebtedness owed to a Person when such Person is a Restricted Subsidiary of the Company,

          (B) any Indebtedness which by the terms of the instrument creating or evidencing the same is expressly made equal or subordinate in right of payment to the Securities,

          (C) any Indebtedness Incurred in violation of the Indenture (but, as to any such Indebtedness, no such violation shall be deemed to exist for purposes of this clause (C) if the holder(s) of such Indebtedness or their representative and the Trustee shall have received an Officers’ Certificate of the Company to the effect that the Incurrence of such Indebtedness does not (or in the case of revolving credit Indebtedness, that the Incurrence of the entire committed amount thereof at the date on which the initial borrowing thereunder is made would not) violate the Indenture; provided that the holder(s) of such Indebtedness or their representative shall not have received prior to the Incurrence of such Indebtedness a written notice from the trustee advising them that such Incurrence violates the terms of the Indenture), or

          (D) any Indebtedness which is subordinated in right of payment to any other Indebtedness of the Company, including, without limitation, the Existing Senior Subordinated Notes, the Senior Subordinated Exchange Debentures, and the Additional Senior Subordinated Exchange Debentures.

          “Senior Nonmonetary Default” means the occurrence or existence and continuance of any event of default, or of any event which, after notice or lapse of time (or both), would become an event of default, under the terms of any instrument pursuant to which any Senior Indebtedness is outstanding, permitting (after notice or lapse of time

28

or both) one or more holders of such Senior Indebtedness (or an administrative agent on behalf of the holders thereof) to declare such Senior Indebtedness due and payable prior to the date on which it would otherwise become due and payable, other than a Senior Payment Default.

          “Senior Payment Default” means any default in the payment of principal of (or premium, if any) or interest on any Senior Indebtedness when due, whether at the stated maturity of any such payment or by declaration of acceleration, call for redemption, or otherwise.

          “Senior Secured Notes” means the Senior Secured Floating Rate Notes due 2010 and the 8¹/4% Senior Secured Notes due 2012 of the Company.

          “Senior Unsecured Notes” means the 9 ⁷/8% Senior Notes due 2010 of the Company.

          “Senior Subordinated Exchange Debentures” means the senior subordinated debentures that may be issued by the Company in accordance with the terms of the Exchangeable Preferred Stock in effect on the Issue Date.

          “SFAS 150” means Statement No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” of the Financial Accounting Standards Board.

          “Shelf Registration Statement” means a “shelf” registration statement under which resales of Securities by the holders thereof are registered under the Securities Act pursuant to a Registration Rights Agreement.

          “Significant Subsidiary” means any Restricted Subsidiary of the Company that is a “significant subsidiary” as defined in Article 1-02(w) of Regulation S-X under the Securities Act.

          “Special Record Date” has the meaning specified in Section 3.08(a).

          “Stated Maturity,” when used with respect to any Security or any installment of interest or Liquidated Damages thereon, means the date specified in such Security as the date on which the principal of such Security or such installment of interest or Liquidated Damages is due and payable.

          “Subordinated Indebtedness” means Indebtedness of the Company or any Restricted Subsidiary of the Company, whether outstanding on the date hereof or hereafter Incurred, which is by its terms expressly subordinate or junior in right of payment to the Securities.

          “Subsidiary” means, as applied to any Person, (1) any corporation of which more than fifty percent (50%) of the outstanding Capital Stock (other than directors’ qualifying shares) having ordinary Voting Power to elect its board of directors,

29

regardless of the existence at the time of a right of the holders of any class or classes of securities of such corporation to exercise such Voting Power by reason of the happening of any contingency, or any entity other than a corporation of which more than fifty percent (50%) of the outstanding ownership interests, is at the time owned directly or indirectly by such Person, or by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person, or (2) any other entity which is directly or indirectly controlled by such Person, or by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person.

          “Successor Company” has the meaning specified in Section 8.01(b).

          “Successor Security” of any particular Security means every Security issued after, and evidencing all or a portion of the same debt as that evidenced by, such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.07 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

          “Telecommunications Business” means the business of (1) transmitting, or providing services relating to the transmission of, voice, video or data through owned or leased wireline or wireless transmission facilities, (2) creating, developing, constructing, installing, repairing, maintaining or marketing communications-related systems, network equipment and facilities, software and other products, or (3) evaluating, owning, operating, participating in or pursuing any other business that is primarily related to those identified in clauses (1) or (2) above (in the case of this clause (3), however, in a manner consistent with the Company’s manner of business on the Issue Date), and shall, in any event, include all businesses in which the Company or any of its Subsidiaries is engaged on the Issue Date or has entered into agreements to engage in or to acquire a company to engage in or contemplate engaging in, as expressly set forth in the Offering Memorandum; provided that the determination of what constitutes a Telecommunications Business shall be made in good faith by the Company’s Board of Directors.

          “Telerate Page 3750” means the display designated as “Page 3750” on the Moneyline Telerate service (or such other page as may replace Page 3750 on that service).

          “Total Assets” means the total assets of the Company and its Restricted Subsidiaries on a consolidated basis determined in accordance with GAAP, as shown on the most recently available consolidated balance sheet of the Company.

          “Transaction Date” has the meaning specified in the definition of Operating Cash Flow Ratio.

          “Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed, except as provided in Section 9.05; provided, however, that in the event the Trust Indenture Act of 1939 is amended after

30

such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

          “Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean such successor Trustee.

          “U.S. Government Obligations” has the meaning specified in Section 13.04(a).

          “Unrestricted Subsidiary” of any Person means (1) any Subsidiary of such Person that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of such Person in the manner provided below and (2) any Subsidiary of an Unrestricted Subsidiary. Any Subsidiary of the Company may be designated by the Board of Directors of the Company as an Unrestricted Subsidiary by a Board Resolution, but only if the Subsidiary:

                    (1) has no Indebtedness other than Non-Recourse Debt;

                    (2) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company, unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or the Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company;

                    (3) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation

                         (a) to subscribe for additional Capital Stock or

                         (b) to maintain or preserve that Person’s financial condition or to cause that Person to achieve any specified levels of operating results; and

                    (4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company that does not constitute Senior Indebtedness.

Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to that designation and an Officers’ Certificate certifying that that designation complied with the preceding conditions and was permitted by Section 10.10. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it shall, after that time, cease to be an Unrestricted Subsidiary for purposes of this Indenture, and any Indebtedness of that Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of that date (and, if that Indebtedness is not permitted to be incurred as of that date under Section 10.08, the Company shall be in

31

default of that covenant). The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that the designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary, and that designation shall only be permitted if:

               (A) the Indebtedness is permitted under Section 10.08 of this Indenture, calculated on a pro forma basis as if that designation had occurred at the beginning of the Reference Period, and

               (B) no Default or Event of Default would occur or be in existence following that designation.

Wireless Alliance shall be deemed an Unrestricted Subsidiary as of the Issue Date and shall thereafter remain an Unrestricted Subsidiary unless and until designated by the Board of Directors as a Restricted Subsidiary in accordance with the terms of this Indenture.

          “Voting Power” of any Person means the aggregate number of votes of all classes of Capital Stock of such Person which ordinarily have voting power for the election of directors of such Person.

          “Wholly Owned Restricted Subsidiary” of any Person means a Restricted Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares) shall at the time be owned by such Person or by one or more Wholly Owned Restricted Subsidiaries of such Person or by such Person and one or more Wholly Owned Restricted Subsidiaries of such Person.

          “Wireless Alliance” means Wireless Alliance LLC, a Minnesota limited liability company.

          “Wireless Communications Business” means any business substantially related to the ownership, development, operation or acquisition of wireless communications services permitted under the Federal Communications Commission’s (the “FCC”) Commercial Mobile Radio Services rules (and the related provisions of the FCC’s Public Mobile Services and Personal Communications Services rules), and other related telecommunications business services.

          Section 1.02 Compliance Certificates and Opinions.

          Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers’ Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirement set forth in this Indenture.

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          Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

          (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

          (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

          (3) a statement that, in the opinion of each such individual, he or she has made such examination or investigation as in his or her reasonable judgment is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

          (4) a statement as to whether or not, in the opinion of each such individual, such condition or covenant has been complied with.

          Section 1.03 Form of Documents Delivered to Trustee.

          In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

          Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous.

          Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

          Section 1.04 Acts of Holders; Record Date.

               (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar

33

tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are received by the Trustee and, where it is hereby expressly required, by the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section 1.04.

               (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee reasonably deems sufficient.

               (c) The Company may, in the circumstances permitted by the Trust Indenture Act, fix any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted to be given or taken by Holders. If not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 7.01) prior to such first solicitation or vote, as the case may be. With regard to any record date, only the Holders on such date (or their duly designated proxies) shall be entitled to give or take, or vote on, the relevant action.

               (d) The ownership of Securities shall be proved by the Security Register.

               (e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.

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          Section 1.05 Notices, Etc., to Trustee and Company.

          Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

          (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention: Trust Officer, or

          (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company, Attention: Chief Executive Officer, addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company.

          Section 1.06 Notice to Holders; Waiver.

          Where this Indenture provides for communication with or notice to Holders, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder, at his address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

          In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

          Section 1.07 Conflict with Trust Indenture Act.

          If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such act to be part of and govern this Indenture, the provisions of the Trust Indenture Act shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the provision of this Indenture shall be deemed to apply.

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          Section 1.08 Effect of Headings and Table of Contents.

          The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

          Section 1.09 Successors and Assigns.

          All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

          Section 1.10 Separability Clause.

          In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

          Section 1.11 Benefits of Indenture and Securities.

          Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the holders of Senior Indebtedness (subject to Article XII and XIII hereof) and the Holders of Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture.

          Section 1.12 Governing Law.

          THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS THEREUNDER THAT WOULD INDICATE THE APPLICABILITY OF THE LAWS OF ANY OTHER JURISDICTION.

          Section 1.13 Legal Holidays.

          In any case where any Interest Payment Date, Redemption Date, Purchase Date or Stated Maturity of any Security is not a Business Day, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest, Liquidated Damages, if any, or principal (and premium, if any) need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date, Redemption Date or Purchase Date, or at the Stated Maturity, provided, that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date, Purchase Date or Stated Maturity, as the case may be, if such payment is made on such next succeeding Business Day.

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          Section 1.14 No Personal Liability of Directors, Officers, Employees, and Shareholders

          No director, officer, employee, incorporator, or shareholder of the Company or its Subsidiaries, as such, shall have any liability for any obligations of the Company under the Securities or this Indenture or for any claim based on, in respect of, or by reason of, those obligations or their creation. Each Holder of Securities, by accepting a Security, waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities.

          Section 1.15 Counterparts

          This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, and all of which counterparts shall together constitute but one and the same instrument.

ARTICLE II

SECURITY FORMS

          Section 2.01 Forms Generally.

          The Securities and the Trustee’s certificates of authentication shall be in substantially the forms set forth in this Article II, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities.

          The definitive Securities shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner permitted by the rules of any securities exchange on which the Securities may be listed, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.

          The Rule 144A Securities shall initially be represented by one or more Securities in registered, global form without coupons (collectively, the “Restricted Global Security”). The Regulation S Securities shall be represented by one or more Securities in registered, global form without interest coupons (collectively, the “Regulation S Global Security” and, together with the Restricted Global Security, the “Global Securities”). The Global Securities shall be deposited upon issuance with the Trustee as custodian for DTC and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant in DTC as described below.

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          Section 2.02 Form of Face of Security

          Rule 144A Securities and the Regulation S Securities (including beneficial interests in the Global Securities and, subject to Section 3.06(c), their Successor Securities) shall be subject to certain restrictions on transfer and shall bear a legend in substantially the following form:

          “THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR ITS SUBSIDIARIES, OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.”

          [If the Security is a Global Security, then insert — THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]

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          [If the Security is a Global Security and The Depository Trust Company is to be the Depositary therefor, then insert — UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

     SENIOR SUBORDINATED FLOATING RATE [SERIES B]¹ NOTES DUE 2012

No.                      $                     

[If Restricted Global Security — CUSIP Number 781904 AN 7]
[If Regulation S Global Security — CUSIP Number U74991 AF 4]
[If Exchange Security — CUSIP Number 781904 AP 2]

          Rural Cellular Corporation, a corporation duly organized and existing under the laws of Minnesota (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to ___, or its registered assigns, the principal sum of ___ Dollars [if the Security is a Global Security, then insert — , or such other principal amount as may be set forth in the records of the Trustee hereinafter referred to in accordance with the Indenture,] on November 1, 2012.

          The Company shall pay interest in cash on the principal amount hereof from November 7, 2005 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, at a floating rate per annum, reset quarterly on each Interest Payment Date, equal to LIBOR (as defined) plus 5.75% per annum, until the principal amount hereof is paid or made available for payment. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) in cash (to the extent that the payment of such interest shall be legally enforceable) at a at a floating rate per annum, reset quarterly on each Interest Payment Date, equal to LIBOR (as defined) plus 5.75% on any overdue principal and premium, if any, and on any overdue installment of interest and Liquidated Damages (without regard to any applicable grace periods), if any, until paid. The Company shall pay Liquidated Damages, if any, in cash as provided in the Registration Rights Agreement. The Company shall pay interest

¹ Include only for Exchange Securities.

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and Liquidated Damages, if any, quarterly on February 1, May 1, August 1 and November 1 in each year, commencing February 1, 2006.

     The interest [if the Security is an Original Security, then insert —, or Liquidated Damages, if any,] so payable, and punctually paid or duly provided for, on any Interest Payment Date shall, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the January 15, April 15, July 15 or October 15 (whether or not a Business Day), as the case may be, immediately preceding such Interest Payment Date [if the Security is an Original Security, then insert —, provided that any accrued and unpaid interest (and Liquidated Damages, if any) on this Security upon the issuance of an Exchange Security in exchange for this Security shall cease to be payable to the Holder hereof and shall be payable on the next Interest Payment Date for such Exchange Security to the Holder thereof on the related Regular Record Date]. Any such interest or Liquidated Damages not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice of which shall be given to Holders of Securities not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

          Payment of the principal of (and premium, if any) and interest (and Liquidated Damages, if any), on this Security shall be made at the Corporate Trust Office or at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, New York City, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest or Liquidated Damages, if any, may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Notwithstanding the foregoing, if a Holder has given wire transfer instructions to the Company, the Company shall pay all principal, interest, premium, if any, or Liquidated Damages, if any, on that Holder’s Securities in accordance with those instructions.

          Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

          Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

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               IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

     Dated:

RURAL CELLULAR CORPORATION
By:
	Name:
	Title:

          Section 2.03 Form of Reverse of Security.

          This Security is one of a duly authorized issue of securities of the Company designated as its Senior Subordinated Floating Rate [Series B]² Notes due 2012 (herein called the “Securities”) issued and to be issued under an Indenture, dated as of November 7, 2005 (herein called the “Indenture”), between the Company and Wells Fargo Bank, National Association, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the holders of Senior Indebtedness and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.

          Initially, Wells Fargo Bank, National Association will act as Paying Agent, Calculation Agent and Registrar. The Company may change any Paying Agent, Calculation Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

          On or after November 1, 2007, the Securities may be redeemed at any time at the option of the Company, in whole or from time to time in part, at the following Redemption Prices (expressed as percentages of the principal amount thereof), if redeemed during the 12-month period beginning November 1 of the years indicated,

Year	Redemption Price
2007		102.000	%
2008		101.000	%
2009 and thereafter		100.000	%

² Include only for Exchange Securities.

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together in the case of any such redemption with accrued and unpaid interest and Liquidated Damages, if any, to but excluding the Redemption Date, but any interest installment whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.

          Notwithstanding the foregoing, at any time prior to November 1, 2007, the Company may, in one or more transactions, redeem up to a total of 35% of the aggregate principal amount of Securities actually issued under the Indenture (including Additional Securities, if any) from the net cash proceeds of an Equity Offering at a Redemption Price of 100% of the principal amount thereof plus a premium equal to the interest payable on such Securities for one year (based on the interest rate in effect at the time the Company gives notice of redemption pursuant to Section 11.05 of the Indenture), together with accrued and unpaid interest and Liquidated Damages, if any, on the Securities redeemed to but excluding the Redemption Date; provided, that at least 65% in aggregate principal amount of Securities issued under the Indenture (including Additional Securities, if any) remains outstanding immediately following such redemption. Any such redemption must be made within 45 days after the related Equity Offering. Securities held by the Company or any of its Subsidiaries will not be deemed to be “outstanding.”

          Notice of any optional redemption of the Securities (or portion thereof) will be given by first-class mail to the Holders at their addresses appearing in the Security Register not less than 30 nor more than 60 days prior to the Redemption Date. The notice of redemption shall state the Redemption Date, the Redemption Price, if less than all the Outstanding Securities are to be redeemed, principal amounts of the particular Securities to be redeemed, that on the Redemption Date the Redemption Price will become due and payable upon each Security to be redeemed and the place or places where such Securities are to be surrendered for payment of the Redemption Price.

          If less than all the Securities are to be redeemed at any time, the Trustee, subject to the rules of the Depositary, will select Securities for redemption as follows:

          (1) if the Securities are listed on any securities exchange, in compliance with the requirements of the principal securities exchange on which the Securities are listed; or

          (2) if the Securities are not listed on any securities exchange, on a pro rata basis, by lot or by such method as the Trustee deems fair and appropriate.

          The Securities do not have the benefit of any sinking fund obligations.

          In the event of redemption or purchase pursuant to an Offer to Purchase of this Security in part only, a new Security or Securities for the unredeemed or unpurchased portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

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          The Indebtedness evidenced by this Security is, to the extent provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness, and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee his attorney-in-fact for any and all such purposes.

          If an Event of Default shall occur and be continuing, the principal of all the Securities may be declared, or may automatically become, due and payable in the manner and with the effect provided in the Indenture.

          The Indenture provides that, subject to certain conditions, if (i) certain Net Cash Proceeds are available to the Company as a result of Asset Sales or (ii) a Change of Control occurs, the Company shall be required to make an Offer to Purchase for the Securities.

          The Indenture contains provisions for defeasance at any time of (i) the entire indebtedness of this Security or (ii) certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain conditions set forth therein.

          The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

          No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any), interest (and Liquidated Damages, if any), on this Security at the time, place and rate, and in the coin or currency, herein prescribed.

          As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the Corporate Trust Office or at the office or agency of the Company in the Borough of Manhattan, New York City, duly endorsed by,

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or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

          The Securities are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Securities are exchangeable for a like aggregate principal amount of Securities of a different authorized denomination, as requested by the Holder surrendering the same.

          No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charges or fees required by law payable in connection therewith.

          Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

          Interest on the Securities shall be computed by the Company as follows:

                    (i) The amount of interest for each day that the Securities are outstanding (the “Daily Interest Amount”) will be calculated by dividing the interest rate in effect for such day by 360 and multiplying the result by the principal amount of the Securities. The amount of interest to be paid on the Securities for each Interest Period will be calculated by adding the Daily Interest Amounts for each day in the Interest Period.

                    (ii) All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point being rounded upwards (e.g., 9.876545% (or 0.09876545) being rounded to 9.87655% (or 0.0987655)) and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent being rounded upwards).

                    (iii) The interest rate on the Securities will in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application.

The Calculation Agent will, upon the request of the Holder of any Security, provide the interest rate then in effect with respect to the Securities. All calculations made by the Calculation Agent in the absence of manifest error will be conclusive for all purposes and binding on the Company, its Restricted Subsidiaries and the Holders of the Securities.

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          [if the Security is an Original Security, then insert—Liquidated Damages on Original Securities shall be computed on the basis of a seven-day week, and the number of days actually elapsed.]

          All terms used in this Security which are not defined herein but which are defined in the Indenture shall have the meanings assigned to them in the Indenture. In the event that any provision in this Security conflicts with any provision in the Indenture, the provision contained in the Indenture shall control.

          The Indenture and this Security shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws thereunder that would indicate the applicability of the laws of any other jurisdiction.

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OPTION OF HOLDER TO ELECT PURCHASE

Choose one:

          If you want to elect to have this Security purchased in its entirety by the Company pursuant to Section 10.14 or 10.16 of the Indenture, check the box: ¨

          If you want to elect to have only a part of this Security purchased by the Company pursuant to Section 10.14 or 10.16 of the Indenture, state the amount: $___

Dated:	Your Signature:
		(Sign exactly as name appears on
		the other side of this Security)

Signature Guarantee:
	(Signature must be guaranteed
	by a member firm of the New York
	Stock Exchange or a commercial
	bank or trust company)

          Section 2.04 Form of Trustee’s Certificate of Authentication.

This is one of the Securities referred to in the within-mentioned Indenture.

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
By:
	Authorized Officer

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ARTICLE III

THE SECURITIES

          Section 3.01 Title and Terms.

          Subject to Section 3.03, the Trustee shall authenticate Original Securities for original issue on the date of this Indenture in the aggregate principal amount of $175,000,000. With respect to any securities issued after the date of this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, Original Securities pursuant to this Indenture), there shall be established in or pursuant to a resolution of the Board of Directors of the Company, and subject to Section 3.03, set forth, or determined in the manner provided in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of such Securities (“Additional Securities”):

          (1) the aggregate principal amount of such Additional Securities that may be authenticated and delivered under this Indenture;

          (2) the issue price and issuance date of such Additional Securities that may be authenticated and delivered under this Indenture; and

          (3) that such Additional Securities shall be issuable in the same form as the then Outstanding Securities and having the same terms (other than with respect to transfer restrictions and registration rights) as the then Outstanding Securities and the same depositaries.

          The Original Securities shall be known and designated as the “Senior Subordinated Floating Rate Notes due 2012” and the Exchange Securities shall be known and designated as the “Senior Subordinated Floating Rate Series B Notes due 2012,” in each case, of the Company. Their Stated Maturity shall be November 1, 2012 and they shall bear interest at a floating rate per annum, reset quarterly on each Interest Payment Date, equal to LIBOR (as defined) plus 5.75% per annum, from November 7, 2005 or from the most recent Interest Payment Date to which interest has been paid in cash or duly provided for, as the case may be, payable quarterly on each Interest Payment Date commencing on February 1, 2006, to the Holders of record on the immediately preceding Regular Record Date until the principal thereof is paid or made available for payment; provided, however, that the Original Securities shall be subject to the payment of Liquidated Damages, if any, as set forth in the Registration Rights Agreement. The Liquidated Damages, if any, so payable, and punctually paid or duly provided for in respect of any Security, on any Interest Payment Date shall, as provided in this Indenture and the Registration Rights Agreement, be paid to the Person in whose name such Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, immediately preceding such Interest Payment Date. Accrued Liquidated Damages, if any, shall be paid in cash in arrears quarterly on each Interest Payment Date, in each year and the amount of accrued Liquidated Damages

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shall be determined on the basis of a seven-day week, and the number of days actually elapsed and computed as provided in Section 3.11.

          The principal of (and premium, if any) and interest (and Liquidated Damages, if any), on the Securities shall be payable at the Corporate Trust Office or at the office or agency of the Company in the City and State of New York maintained for such purpose; provided, however, that at the option of the Company payment of interest and Liquidated Damages, if any, may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Notwithstanding the foregoing, if a Holder has given wire transfer instructions to the Company, the Company shall pay all principal, interest, premium, if any, and Liquidated Damages, if any, on that Holder’s Securities in accordance with those instructions.

          The Securities shall be subject to repurchase by the Company pursuant to an offer to purchase the securities as provided in Sections 10.14 and 10.16.

          The Securities shall be redeemable as provided in Article XI.

          The Securities shall be subordinated in right of payment to Senior Indebtedness as provided in Article XII.

          The Securities shall be subject to defeasance at the option of the Company as provided in Article XIII.

          Section 3.02 Denominations.

          The Securities issued pursuant to this Indenture shall be treated as a single class for all purposes of the Indenture. The Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 and any integral multiples thereof.

          Section 3.03 Execution, Authentication, Delivery and Dating.

          The Securities shall be executed on behalf of the Company by its Chief Executive Officer, its President or one of its Vice Presidents. The signature of any of these officers on the Securities may be manual or facsimile.

          Securities bearing the manual or facsimile signatures of individuals who were at any time the proper Officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

          At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of

48

such Securities; and the Trustee in accordance with such Company Order shall authenticate and deliver such Securities as provided in this Indenture and not otherwise.

          At any time and from time to time after the execution and delivery of this Indenture and after the effectiveness of a registration statement under the Securities Act with respect thereto, the Company may deliver Exchange Securities executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Exchange Securities and a like principal amount of Original Securities for cancellation in accordance with Section 3.10 of this Indenture, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities. Prior to authenticating such Exchange Securities, and accepting any additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, if requested, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating in substance:

               (a) that all conditions hereunder precedent to the authentication and delivery of such Exchange Securities have been complied with and that such Exchange Securities, when such Securities have been duly authenticated and delivered by the Trustee (and subject to any other conditions specified in such Opinion of Counsel), have been duly issued and delivered and will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and

               (b) that the issuance of the Exchange Securities in exchange for Original Securities has been effected in compliance with the Securities Act.

          Each Security shall be dated the date of its authentication.

          No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.

          Section 3.04 Temporary Securities.

          Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.

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          If temporary Securities are issued, the Company will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at any office or agency of the Company designated pursuant to Section 10.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of authorized denominations. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities.

          Section 3.05 Global Securities.

               (a) Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary designated by the Company for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture.

               (b) Notwithstanding any other provision in this Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (i) such Depositary (A) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or (B) has ceased to be a clearing agency registered as such under the Exchange Act and, in either case, a successor Depository is not appointed by the Company within 90 days, (ii) there shall have occurred and be continuing a Default or Event of Default with respect to such Global Security or (iii) the Company executes and delivers to the Trustee a Company Order stating that it elects to cause the issuance of the Securities in certificated form and that all Global Securities shall be exchanged in whole for Securities that are not Global Securities (in which case such exchange shall be effected by the Trustee, pursuant to instructions received from the Depositary).

               (c) If any Global Security is to be exchanged for other Securities or canceled in whole, it shall be surrendered by or on behalf of the Depositary or its nominee to the Trustee, as Security Registrar, for exchange or cancellation as provided in this Article III. If any Global Security is to be exchanged for other Securities or canceled in part, or if another Security is to be exchanged in whole or in part for a beneficial interest in any Global Security, then either (i) such Global Security shall be so surrendered for exchange or cancellation as provided in this Article III or (ii) the principal amount thereof shall be reduced or increased by an amount equal to the portion thereof to be so exchanged or canceled, or equal to the principal amount of such other Security to be exchanged for a beneficial interest therein, as the case may be, by means of an appropriate adjustment made on the records of the Trustee, as Security Registrar, whereupon the Trustee, in accordance with the Applicable Procedures, shall instruct the Depositary or its authorized representative to make a corresponding adjustment to its records. Upon any such surrender or adjustment of a Global Security, the Trustee shall, subject to Section 3.05(b) and as otherwise provided in this Article III, authenticate and deliver any Securities issuable in exchange for such Global Security (or any portion thereof) to or upon the order of, and registered in such names as may be directed by, the Depositary or its

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authorized representative to make a corresponding adjustment to its records. Upon any such surrender or adjustment of a Global Security, the Trustee shall, subject to Section 3.05(b) and as otherwise provided in this Article III, authenticate and deliver any Securities issuable in exchange for such Global Security (or any portion thereof) to or upon the order of, and registered in such names as may be directed by, the Depositary or its authorized representative. Upon the request of the Trustee in connection with the occurrence of any of the events specified in the preceding paragraph, the Company shall promptly make available to the Trustee a reasonable supply of Securities that are not in the form of Global Securities. The Trustee shall be entitled to rely upon any order, direction or request of the Depositary or its authorized representative which is given or made pursuant to this Article III if such order, direction or request is given or made in accordance with the Applicable Procedures.

               (d) Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Article III, Section 9.06, 10.14, 10.16 or 11.08 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.

               (e) The Depositary or its nominee, as registered owner of a Global Security, shall be the Holder of such Global Security for all purposes under this Indenture and the Securities, and owners of beneficial interests in a Global Security shall hold such interests pursuant to the Applicable Procedures. Accordingly, any such owner’s beneficial interest in a Global Security shall be shown only on, and the transfer of such interest shall be effected only through, records maintained by the Depositary or its nominee or its Agent Members.

          Section 3.06 Registration; Registration of Transfer and Exchange Generally; Certain Transfers and Exchanges; Securities Act Legends.

               (a) Registration; Registration of Transfer and Exchange Generally. The Company shall cause to be kept at the Corporate Trust Office a register (the register maintained in such office and in any other office or agency designated pursuant to Section 10.02 being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers and exchanges of Securities. The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers and exchanges of Securities as herein provided. Such Security Register shall distinguish between Original Securities and Exchange Securities.

          Upon surrender for registration of transfer of any Security at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of any authorized

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denominations, of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture.

          At the option of the Holder, Securities may be exchanged for new Securities of any authorized denominations, of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities that the Holder making the exchange is entitled to receive.

          All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and (except for the differences between Original Securities and Exchange Securities provided for herein) entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

          Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.

          No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charges or fees required by law that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.04, 3.05, 3.06, 9.06, 10.14, 10.16 or 11.08 not involving any transfer.

          The Company shall not be required (i) to issue, register the transfer of or exchange (x) any Security during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities selected for redemption under Section 11.04 and ending at the close of business on the day of such mailing or (y) any Security tendered by the Holder thereof (and not withdrawn) in connection with any Offer to Purchase as provided in Sections 10.14 and 10.16, or (ii) to register the transfer of or exchange any Security so selected for redemption, in whole or in part, except the unredeemed portion of any Security being redeemed in part.

          The provisions of the “Operating Procedures of the Euroclear System,” the “Terms and Conditions Governing Use of Euroclear,” the “General Terms and Conditions of Clearstream Banking” and the “Customer Handbook” of Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Global Securities that are held through Euroclear or Clearstream.

               (b) Certain Transfers and Exchanges. Notwithstanding any other provision of this Indenture or the Securities, transfers and exchanges of Securities

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and beneficial interests in a Global Security of the kinds specified in this Section 3.06(b) shall be made only in accordance with this Section 3.06(b).

                    (i) Exchanges Between the Restricted Global Security and the Regulation S Global Security.

                    (A) Beneficial interests in the Restricted Global Security may be exchanged for beneficial interests in the Regulation S Global Security and vice versa only in connection with a transfer of such interest. Such transfers are subject to compliance with the certification requirements described below.

                    (B) A beneficial interest in the Restricted Global Security may be transferred to a Person who takes delivery in the form of an interest in the Regulation S Global Security, whether before or after the expiration of the Distribution Compliance Period, only upon receipt by the Trustee of a written certification on behalf of the transferor to the effect that such transfer is being made in accordance with Rule 904 of Regulation S or (if available) Rule 144 under the Securities Act.

                    (C) Prior to the expiration of the Distribution Compliance Period, a beneficial interest in the Regulation S Global Security may be transferred to a person who takes delivery in the form of an interest in the Restricted Global Security only if such transfer is made pursuant to Rule 144A and the transferor first delivers to the Trustee a written certification on behalf of the transferor to the effect that such transfer is being made to a person who the transferor reasonably believes is a qualified institutional buyer acquiring for its own account or the account of a qualified institutional buyer in a transaction complying with Rule 144A and any applicable securities laws of the states of the United States and other jurisdictions. After the expiration of the Distribution Compliance Period, this certification requirement shall no longer apply to such transfers.

                    (D) Any beneficial interest in one of the Global Securities that is exchanged for an interest in the other Global Security shall cease to be an interest in such Global Security and shall become an interest in the other Global Security. Accordingly, such interest shall thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interests in such other Global Security for as long as it remains such an interest.

                    (E) Any exchange of a beneficial interest in the Regulation S Global Security for a beneficial interest in the Restricted Global Security or vice versa will be effected in DTC by means of an instruction originated by the Trustee through the DTC Deposit/Withdrawal at Custodian (“DWAC”) system.

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                    (ii) Exchanges of Global Securities for Certificated Securities. A beneficial interest in a Global Security may not be exchanged for a Security in certificated form except as provided in Section 3.05(b). Any certificated Security issued in exchange for an interest in a Global Security shall bear the legend restricting transfers that is borne by such Global Security. Any such exchange shall be effected only through the DWAC System, and an appropriate adjustment shall be made in the records of the Security Register to reflect a decrease in the principal amount of the relevant Global Security.

               (c) Securities Act Legends. Rule 144A Securities and their respective Successor Securities shall bear a Securities Act Legend, and Regulation S Securities and their Successor Securities shall bear a Securities Act Legend, subject to the following:

                    (i) subject to the following clauses of this Section 3.06(c), a Security or any portion thereof which is exchanged, upon transfer or otherwise, for a Global Security or any portion thereof shall bear the Securities Act Legend borne by such Global Security while represented thereby;

                    (ii) subject to the following clauses of this Section 3.06(c), a new Security which is not a Global Security and is issued in exchange for another Security (including a Global Security) or any portion thereof, upon transfer or otherwise, shall bear the Securities Act Legend borne by such other Security;

                    (iii) Registered Securities shall not bear a Securities Act Legend;

                    (iv) in connection with a transfer or exchange of Securities or beneficial interests therein, (1) a new Security not bearing a Securities Act Legend may be issued in exchange for or in lieu of a Security (other than a Global Security) or any portion thereof bearing such a legend and (2) beneficial interests in a Security bearing a Securities Act Legend may be exchanged for beneficial interests in a Security not bearing such a legend, in each case, only if:

                    (A) such transfer or exchange is effected pursuant to an Exchange Offer in accordance with a Registration Rights Agreement, and the recipient of such Securities or beneficial interests certifies that it is not (1) a broker-dealer, (2) a Person participating in a distribution of the Exchange Securities or (3) a Person who is an affiliate (as defined in Rule 144) of the Company;

                    (B) such transfer or exchange is effected pursuant to a Shelf Registration Statement in accordance with a Registration Rights Agreement;

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                    (C) such transfer or exchange is effected by a broker-dealer registered under the Exchange Act pursuant to an Exchange Registration Statement;

                    (D) in the case of a transfer of a Security or beneficial interest therein, (1) the transferor certifies in writing to the Security Registrar that (I) the restrictions on transfer contained in the Securities Act Legend are not required to maintain compliance with the Securities Act, (II) such transfer is being effected pursuant to (x) Rule 144, (y) Rule 903 or 904 of Regulation S or (z) another exemption from registration under the Securities Act and (III) such transfer is in compliance with all applicable state securities laws, and (2) if the Security Registrar so requests (or if required by any Applicable Procedures), the Security Registrar has received an Opinion of Counsel in form reasonably acceptable to the Security Registrar that such transfer is in compliance with the Securities Act, and the restrictions on transfer contained in the Securities Act Legend are not required to maintain compliance with the Securities Act; or

                    (E) in the case of an exchange by an owner of a Security with a Securities Act Legend (or beneficial interest therein) for a Security without a Securities Act Legend (or beneficial interest therein), (1) such owner certifies in writing to the Security Registrar that (I) the restrictions on transfer contained in the Securities Act Legend are not required to maintain compliance with the Securities Act, (II) the Security (or beneficial interest therein) being received in the exchange by such owner is being acquired for such owner’s own account without transfer, (III) such exchange is being effected in compliance with the Securities Act and with all transfer restrictions applicable to the Security (or beneficial interest therein) contained in this Indenture, and (IV) such transfer is in compliance with all applicable state securities laws, and (2) if the Security Registrar so requests (or if required by any Applicable Procedures), the Security Registrar has received an Opinion of Counsel in form reasonably acceptable to the Security Registrar that such transfer is in compliance with the Securities Act, and the restrictions on transfer contained in the Securities Act Legend are not required to maintain compliance with the Securities Act; and

                    (v) notwithstanding the foregoing provisions of this Section 3.06(c), a Successor Security of a Security that does not bear a particular form of Securities Act Legend shall bear a Securities Act Legend if the Company has reasonable cause to believe that such Successor Security is a “restricted security” within the meaning of Rule 144, in which case the Trustee, at the direction of the Company, shall authenticate and deliver a new Security bearing a Securities Act Legend in exchange for such Successor Security as provided in this Article III.

          Section 3.07 Mutilated, Destroyed, Lost and Stolen Securities.

          If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security

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of like tenor and principal amount and bearing a number not contemporaneously outstanding.

          If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding.

          In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

          Upon the issuance of any new Security under this Section 3.07, the Company may require the payment of a sum sufficient to cover any tax or other governmental charges or fees required by law that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

          Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security is at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.

          The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

          Section 3.08 Payment of Interest; Interest Rights Preserved.

          Interest or Liquidated Damages, if any, on any Security that are payable, and are punctually paid or duly provided for, on an Interest Payment Date, shall be paid to the Person in whose name such Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest or Liquidated Damages, if any.

          Any interest or Liquidated Damages on any Security that are payable, but are not punctually paid or duly provided for, on an Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been held by such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (a) or (b) below:

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               (a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a date (a “Special Record Date”) for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as provided in this clause. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).

               (b) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

          Subject to the foregoing provisions of this Section 3.08, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest or Liquidated Damages, if any, accrued and unpaid, and to accrue interest and Liquidated Damages, if any, which were carried by such other Security.

          Section 3.09 Persons Deemed Owners.

          Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.08) interest (and Liquidated Damages, if any), on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the

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Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

          None of the Company, the Trustee, any Paying Agent or the Security Registrar will have any responsibility or liability for (i) any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Security, (ii) for maintaining, supervising or reviewing any records relating to such beneficial ownership interests or (iii) for any other matters relating to the actions or practices of the Depository.

          Section 3.10 Cancellation.

          All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any Offer to Purchase, pursuant to Section 10.14 or 10.16, shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section 3.10, except as expressly permitted by this Indenture. All canceled Securities held by the Trustee shall (subject to the record-retention requirements of the Exchange Act) be disposed of as directed by a Company Order.

          Section 3.11 Computation of Interest.

               (a) Interest on the Securities shall be computed by the Company as follows:

                    (i) The amount of interest for each day that the Securities are outstanding (the ‘‘Daily Interest Amount’’) will be calculated by dividing the interest rate in effect for such day by 360 and multiplying the result by the principal amount of the Securities. The amount of interest to be paid on the Securities for each Interest Period will be calculated by adding the Daily Interest Amounts for each day in the Interest Period;

                    (ii) All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point being rounded upwards (e.g., 9.876545% (or 0.09876545) being rounded to 9.87655% (or 0.0987655)) and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent being rounded upwards); and

                    (iii) The interest rate on the Securities will in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application.

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                    The Calculation Agent will, upon the request of the Holder of any Security, provide the interest rate then in effect with respect to the Securities. All calculations made by the Company in the absence of manifest error will be conclusive for all purposes and binding on the Company, its Restricted Subsidiaries and the Holders of the Securities.

               (b) Liquidated Damages on Original Securities shall be computed on the basis of a seven-day week, and the number of days actually elapsed.

ARTICLE IV

SATISFACTION AND DISCHARGE

           Section 4.01 Satisfaction and Discharge of Indenture.

          This Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture (including, but not limited to, Article XII hereof), when

               (a) either

                    (i) all Securities theretofore authenticated and delivered (other than (A) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.07 and (B) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.03) have been delivered to the Trustee for cancellation; or

                    (ii) all such Securities not theretofore delivered to the Trustee for cancellation have become due and payable,

and the Company, in the case of (i) or (ii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest (and Liquidated Damages, if any), to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;

               (b) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

               (c) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided that relate to the satisfaction and discharge of this Indenture have been satisfied.

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          Notwithstanding the satisfaction and discharge of this Indenture pursuant to this Article IV, the obligations of the Company to the Trustee under Section 6.07, the obligations of the Trustee to any Authenticating Agent under Section 6.14 and, if money has been deposited with the Trustee pursuant to subclause (ii) of clause (a) of this Section, the obligations of the Trustee under Section 4.02 and the last paragraph of Section 10.03 shall survive.

           Section 4.02 Application of Trust Money.

          Subject to the provisions of the last paragraph of Section 10.03, all money deposited with the Trustee pursuant to Section 4.01 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest (and Liquidated Damages, if any), for whose payment such money has been deposited with the Trustee.

ARTICLE V

REMEDIES

           Section 5.01 Events of Default.

          “Event of Default,” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be occasioned by the provisions of Article XII or be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

               (a) failure to pay the principal of (or premium, if any, on) any Security at its Maturity;

               (b) failure to pay any interest or Liquidated Damages, if any, upon any Security for a period of 30 consecutive days or more after any such amounts become due and payable;

               (c) failure to offer to purchase or to purchase Securities, in the time periods required by this Indenture, required to be purchased by the Company pursuant to Section 10.14 or 10.16;

               (d) failure to perform or comply with, or breach of, Article VIII;

               (e) failure to perform, or breach of, any covenant or agreement of the Company in this Indenture (other than a covenant or agreement a default in whose performance or whose breach is elsewhere in this Section 5.01 specifically addressed), and continuance of such failure or breach for a period of 30 days after there has been

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given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Securities a written notice specifying such failure or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder;

               (f) a default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the Issue Date, if that default: (A) is caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”); or (B) results in the acceleration of such Indebtedness prior to its express maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $20.0 million or more;

               (g) a final judgment or final judgments for the payment of money are entered against the Company or any Restricted Subsidiary of the Company in an aggregate amount in excess of $20.0 million, excluding amounts covered by insurance, which judgments remain undischarged, unstayed or unbonded for a period (during which execution shall not be effectively stayed) of 60 days after the right to appeal has expired;

               (h) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company or any Significant Subsidiary of the Company in an involuntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization or other similar law (a “Bankruptcy Law”) or (B) a decree or order adjudging the Company or any such Significant Subsidiary bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or any such Significant Subsidiary under any applicable Federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any such Significant Subsidiary or of any substantial part of the property of the Company or any such Significant Subsidiary, or ordering the winding up or liquidation of the affairs of the Company or any such Significant Subsidiary, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or

               (i) the commencement by the Company or any Significant Subsidiary of a voluntary case or proceeding under any applicable Bankruptcy Law or of any other case or proceeding to be adjudicated bankrupt or insolvent, or the consent by the Company or any such Significant Subsidiary to the entry of a decree or order for relief in respect of the Company or any Significant Subsidiary in an involuntary case or proceeding under any applicable Bankruptcy Law, or to the commencement of any bankruptcy or insolvency case or proceeding against the Company or any Significant

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Subsidiary, or the filing by the Company or any such Significant Subsidiary of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by the Company or any such Significant Subsidiary to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or any Significant Subsidiary or of any substantial part of the property of the Company or any Significant Subsidiary, or the making by the Company or any Significant Subsidiary of the Company of an assignment for the benefit of creditors, or the admission by the Company or any such Significant Subsidiary in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company or any such Significant Subsidiary in furtherance of any such action.

           Section 5.02 Acceleration of Maturity; Rescission and Annulment.

          If an Event of Default (other than an Event of Default specified in Section 5.01(h) or (i)) occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities may declare the principal of all the Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal (and premium, if any), any accrued interest and Liquidated Damages, if any, shall become immediately due and payable. If an Event of Default specified in Section 5.01(h) or (i) occurs, the principal of (and premium, if any), any accrued interest and Liquidated Damages, if any, on the Securities then Outstanding shall ipso facto become immediately due and payable without any declaration or other Act on the part of the Trustee or any Holder.

          At any time after such a declaration of acceleration has been made and before a judgment or decree based on acceleration for payment of the money due has been obtained by the Trustee as hereinafter provided in this Article V, the Holders of a majority in aggregate principal amount of the Outstanding Securities, by written notice to the Company and the Trustee, may rescind and annul such declaration of acceleration and its consequences if:

               (a) the Company has paid or deposited with the Trustee a sum sufficient to pay:

                    (i) all Defaulted Interest on all Securities;

                    (ii) the principal of (and premium, if any, on) any Securities which have become due otherwise than by such declaration of acceleration (including any Securities required to have been purchased on the Purchase Date pursuant to an Offer to Purchase made by the Company) and, to the extent that payment of such interest is lawful, interest thereon at the rate provided by the Securities;

                    (iii) to the extent that payment of such interest is lawful, interest upon Defaulted Interest, at the rate provided by the Securities; and

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                    (iv) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel;

          and

               (b) all Defaults and Events of Default, other than the non-payment of the principal of Securities which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 5.13.

No such rescission shall affect any subsequent default or impair any right consequent thereon.

          In the case of any Event of Default occurring by reason of any willful action or inaction taken or not taken by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if it then had elected to redeem the Securities pursuant to the optional redemption provisions of this Indenture, an equivalent premium will also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Securities. If an Event of Default occurs prior to November 1, 2007 by reason of any willful action or inaction taken or not taken by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Securities prior to November 1, 2007, then, upon acceleration of the Securities, an additional premium shall also become and be immediately due and payable at an amount, for each of the years beginning November 1 of each of the years set forth below, as set forth below (expressed as a percentage of the principal amount of each Security):

Year	Percentage
2005		4.000	%
2006		3.000	%

          Section 5.03 Collection of Indebtedness and Suits for Enforcement by Trustee.

          If an Event of Default specified in Section 5.01(a), (b) or (c) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as Trustee of an express trust against the Company for the whole amount of principal of, premium and Liquidated Damages, if any, and interest remaining unpaid on the Securities and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

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           Section 5.04 Trustee May File Proofs of Claim.

          In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and, subject to Article XII, to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.07.

          No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and may be a member of the creditors committee.

          Section 5.05 Trustee May Enforce Claims Without Possession of Securities.

          All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

          Section 5.06 Application of Money Collected.

          Subject to Article XII, any money and property collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money and property on account of principal (or premium, if any) or interest (or Liquidated Damages, if any), upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

          FIRST: To the payment of all amounts due the Trustee under Section 6.07;

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          SECOND: To the extent provided in Article XII, to the holders of Senior Indebtedness in accordance with Article XII;

          THIRD: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest (and Liquidated Damages, if any), on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and interest (and Liquidated Damages, if any), respectively; and

          FOURTH: To the Company or to such party as a court of competent jurisdiction shall direct.

           Section 5.07 Limitation on Suits.

          No Holder of any Security shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

               (a) such Holder has previously given written notice to the Trustee of an Event of Default;

               (b) the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

               (c) if requested by the Trustee, such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and

               (d) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the Outstanding Securities;

it being understood and intended that no one or more Holders shall have any right in any manner whatever, by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders.

          Section 5.08 Unconditional Right of Holders to Receive Principal, Premium, Interest and Liquidated Damages.

          Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of

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the principal of (and premium, if any), (subject to Section 3.08) interest and Liquidated Damages, if any, on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date or, in the case of an Offer to Purchase made by the Company and required to be accepted as to such Security, on the Purchase Date) and to institute suit for the enforcement of any such payment, on or after such respective dates and such rights shall not be impaired without the consent of such Holder.

           Section 5.09 Restoration of Rights and Remedies.

          If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

           Section 5.10 Rights and Remedies Cumulative.

          Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 3.07, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

           Section 5.11 Delay or Omission Not Waiver.

          No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article V or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

          Section 5.12 Control by Holders.

          The Holders of a majority in aggregate principal amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee; provided that:

               (a) such direction shall not be in conflict with any rule of law or with this Indenture;

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               (b) the Trustee may take any other action deemed proper by the Trustee in furtherance of or consistent with, such direction; and

               (c) subject to the provisions of Section 6.01, the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, determines that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith determines that the action or proceedings so directed might involve the Trustee in personal liability or if the Trustee in good faith shall so determine that the actions or forbearances specified in or pursuant to such direction shall be unduly prejudicial to the interest of Holders of the Securities not joining in the giving of said direction, it being understood that the Trustee shall have no duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders.

          Section 5.13 Waiver of Past Defaults.

          The Holders of not less than a majority in aggregate principal amount of the Outstanding Securities may on behalf of the Holders of all the Securities waive any past default hereunder and its consequences, except a default:

               (a) in the payment of the principal of (or premium, if any) or interest (or Liquidated Damages, if any), on any Security (including any Security which is required to have been purchased pursuant to an Offer to Purchase which has been made by the Company); or

               (b) in respect of a covenant or provision hereof which under Article IX cannot be modified or amended without the consent of the Holder of each Outstanding Security affected.

          Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

          Section 5.14 Undertaking for Costs.

          In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act. This Section 5.14 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 5.08 or a suit by the Holders of more than 10% in aggregate principal amount of the Securities.

          Section 5.15 Waiver of Stay or Extension Laws.

          The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the

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benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

ARTICLE VI

THE TRUSTEE

           Section 6.01 Certain Duties and Responsibilities.

               (a) The duties and responsibilities of the Trustee shall be as provided in this Indenture and by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.01.

               (b) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

                    (i) this Section 6.01(b) does not limit the effect of Section 6.03;

                    (ii) the Trustee shall not be liable for any error of judgment made in good faith by a trust officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

                    (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.12.

           Section 6.02 Notice of Defaults.

          The Trustee shall give the Holders notice of any Event of Default hereunder within 90 days after the occurrence thereof as and to the extent provided by the Trust Indenture Act. Except in the case of a Default or an Event of Default in payment of

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principal of (and premium, if any, on) or interest (or Liquidated Damages, if any), on any Securities, the Trustee may withhold the notice to the Holders if and so long as a committee of its trust officers in good faith determines that withholding such notice is in the interests of the Holders.

           Section 6.03 Certain Rights of Trustee.

          Subject to the provisions of Section 6.01:

               (a) except during the continuance of an Event of Default the Trustee shall undertake to perform such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee;

               (b) except during the continuance of a Default or an Event of Default, in the absence of bad faith in its part, the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, Officers’ Certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of Indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; provided that the Trustee shall examine all Officers’ Certificates, opinions and other documents produced pursuant to the requirements of this Indenture to determine whether or not they conform to the requirements of this Indenture;

               (c) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution;

               (d) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers’ Certificate; provided that the Trustee shall examine such Officer’s Certificate to determine whether or not it conforms to the requirements of this Indenture;

               (e) before the Trustee acts or refrains from acting, the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

               (f) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

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               (g) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document unless requested to do so by the Holders of not less than a 10% of the aggregate principal amount of the Securities then Outstanding, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company;

               (h) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

               (i) the Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder;

               (j) the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any covenants, conditions or agreements on the part of the Company, except as otherwise provided herein, but the Trustee may require of the Company full information and advice as to the performance of the covenants, conditions and agreements contained herein and shall be entitled in connection herewith to examine the books, records and premises of the Company; and

               (k) except for (i) a Default under Sections 5.01(a), (b) or (c) hereof, or (ii) any other Default or Event of Default of which the Trustee has “actual knowledge” the Trustee shall not be deemed to have notice of any Default or Event of Default unless specifically notified in writing of such Default or Event of Default in accordance with this Indenture. As used herein, the term “actual knowledge” means the actual fact or statement of knowing, without any duty to make any investigation with regard thereto.

          Section 6.04 Not Responsible for Recitals or Issuance of Securities.

          The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof.

          Section 6.05 May Hold Securities.

          The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 6.08 and 6.13, may

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otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

          Section 6.06 Money Held in Trust.

          Money held by the Trustee in trust hereunder need not be segregated from other funds, except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder, except as otherwise agreed with the Company.

          Section 6.07 Compensation and Reimbursement.

          The Company agrees:

               (a) to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

               (b) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture, including costs of collection (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or willful misconduct; and

               (c) to indemnify the Trustee and any predecessor Trustee in any capacity under this Indenture and its agents for, and to hold them harmless against, any loss, liability or expense incurred without negligence or willful misconduct on the part of the Trustee or such agents, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending themselves against or investigating any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

          The obligations of the Company under this Section 6.07 shall survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee. As security for the performance of such obligations of the Company, the Trustee shall have a claim prior to the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (and premium, if any) and interest (and Liquidated Damages, if any), on particular Securities. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Article V hereof, the expenses (including reasonable fees and expenses of its counsel) and the compensation for the services in connection therewith are intended to constitute expense of administration under any applicable bankruptcy law.

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          Section 6.08 Disqualification; Conflicting Interests.

          If the Trustee has or acquires a “conflicting interest” within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such conflicting interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. Neither the Company nor any Affiliate of the Company shall serve as the Trustee. The Trustee is subject to Section 310(b) of the Trust Indenture Act.

          Section 6.09 Corporate Trustee Required; Eligibility.

          There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act (including, without limitation, Sections 310(a)(1), (2) and (5) thereof) to act as such and has (or in the case of a Person included in a bank holding company system, the related bank holding company shall have) a combined capital and surplus of at least $100.0 million and its Corporate Trust Office in New York City or Minneapolis. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section 6.09, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee ceases to be eligible in accordance with the provisions of this Section 6.09, it shall resign immediately in the manner and with the effect hereinafter specified in this Article VI.

          Section 6.10 Resignation and Removal; Appointment of Successor.

               (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article VI shall become effective until the acceptance of appointment by the successor Trustee under Section 6.11.

               (b) The Trustee may resign at any time by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.

               (c) The Trustee may be removed at any time by Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee and to the Company.

               (d) If at any time:

                    (i) the Trustee fails to comply with Section 6.08 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six (6) months, or

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                    (ii) the Trustee ceases to be eligible under Section 6.09 and fails to resign after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six (6) months, or

                    (iii) the Trustee becomes incapable of acting or is adjudged bankrupt or insolvent or a receiver of the Trustee or of its property is appointed or any public officer takes charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

then, in any such case, (A) the Company by a Board Resolution may remove the Trustee, or (B) subject to Section 5.14, any Holder who has been a bona fide Holder of a Security for at least six (6) months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

               (e) If the Trustee resigns, is removed or becomes incapable of acting, or if a vacancy occurs in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee is appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee has been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a bona fide Holder of a Security for at least six (6) months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.

               (f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to all Holders in the manner provided in Section 1.06. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.

           Section 6.11 Acceptance of Appointment by Successor.

          Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the

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Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.

          No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee is qualified and eligible under this Article VI.

           Section 6.12 Merger, Conversion, Consolidation or Succession to Business.

          Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder; provided such corporation shall be otherwise qualified and eligible under this Article VI, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

          Section 6.13 Preferential Collection of Claims Against Company.

          If and when the Trustee shall be or become a creditor, directly or indirectly, secured or unsecured, of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor). The Trustee is subject to Section 311(a) of the Trust Indenture Act, excluding any creditor relationship listed in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been replaced shall be subject to Section 311(a) of the Trust Indenture Act to the extent indicated therein.

           Section 6.14 Appointment of Authenticating Agent.

          The Trustee may appoint an Authenticating Agent or Agents which shall be authorized to act on behalf of the Trustee to authenticate Securities issued upon original issue and upon exchange, registration of transfer or partial redemption or pursuant to Section 3.07, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any state thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having (or in the

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case of a corporation included in a bank holding company system, the related bank holding company having) a combined capital and surplus of not less than $100.0 million and subject to supervision or examination by Federal or state authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent ceases to be eligible in accordance with the provisions of this Section 6.14, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section 6.14.

          Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent is a party, or any corporation succeeding to the Corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent; provided such corporation shall be otherwise eligible under this Section 6.14, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

          An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent ceases to be eligible in accordance with the provisions of this Section 6.14, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders as their names and addresses appear in the Security Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless it is eligible under the provisions of this Section 6.14.

          The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section 6.14, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 6.07.

          If an appointment is made pursuant to this Section 6.14, the Securities may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:

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          This is one of the Securities described in the within-mentioned Indenture.

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
By:
	As Authenticating Agent
By:
	Authorized Officer

ARTICLE VII

HOLDERS’ LISTS AND REPORTS
BY TRUSTEE AND COMPANY

          Section 7.01 Company to Furnish Trustee Names and Addresses of Holders.

          The Company shall furnish or cause to be furnished to the Trustee

               (a) quarterly, not more than 15 days after each Regular Record Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of such Regular Record Date, and

               (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;

excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar.

          Section 7.02 Preservation of Information; Communications to Holders.

               (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 7.01 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished.

               (b) The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities and the

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corresponding rights and duties of the Trustee, shall be as provided by the Trust Indenture Act.

               (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to the names and addresses of Holders made pursuant to the Trust Indenture Act.

          Section 7.03 Reports by Trustee.

               (a) The Trustee shall transmit to the Holders such reports required pursuant to the Trust Indenture Act as promptly as practicable after each May 15 and beginning on May 15, 2004, or at such other time as may be provided in the Trust Indenture Act, in the manner provided in the Trust Indenture Act.

               (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which the Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when the Securities are listed on any stock exchange.

          Section 7.04 Reports by Company.

               (a) The Company shall file with the Commission, and provide to the Trustee and the Holders, annual reports and such other information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to the Trust Indenture Act.

               (b) Whether or not required by the rules and regulations of the Exchange Act or the Commission, so long as any of the Securities remain outstanding, the Company shall:

                    (i) furnish to the Holders and the Trustee

                    (A) all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Form 10-Q and Form 10-K if the Company were required to file such reports, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the Company’s certified independent accountants; and

                    (B) all current reports that would be required to be filed with the Commission on Form 8-K of the Exchange Act if the Company were required to file such reports; and

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                    (ii) file a copy of all such information and reports referred to in (i)(A) and (i)(B) above with the Commission for public availability within the time periods specified in the Commission’s rules and regulations, unless the Commission does not accept such filings, and make such information and reports available to securities analysts and prospective investors upon request.

               (c) If the Company at any time is not subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act (or any successor provisions) at any time while any Security constitutes a “restricted security” within the meaning of Rule 144, the Company shall take all actions necessary to permit resales of the Original Securities (or any Successor Securities) to be made pursuant to Rule 144A, including furnishing to any holder of such a Security (or a beneficial interest therein), or to any prospective purchaser designated by such holder, upon the request of such holder, such financial and other information as may be required to be delivered under paragraph (d)(4) of Rule 144A to permit such resales and such information that would be required if the Company were subject to the informational requirements of Sections 13 or 15(d) of the Exchange Act.

ARTICLE VIII

CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE

           Section 8.01 Company May Consolidate, Etc. Only on Certain Terms.

          The Company shall not, directly or indirectly, consolidate with or merge into any other Person, shall not permit any other Person to consolidate with or merge into the Company, and shall not, directly or indirectly, transfer, sell, convey, lease or otherwise dispose of all or substantially all of its properties and assets to any Person (in one transaction or a series of related transactions); unless:

               (a) immediately after giving effect to such transaction and treating any Indebtedness Incurred by the Company or a Restricted Subsidiary as a result of such transaction as having been Incurred by the Company or such Restricted Subsidiary at the time of such transaction, no Default or Event of Default shall have occurred and be continuing;

               (b) (i) the Company is the surviving entity or (ii) the Person formed by such consolidation or into which the Company is merged or the Person which acquires by transfer, conveyance, sale, lease or other disposition all or substantially all of the properties and assets of the Company as an entirety (a “Successor Company”) is a corporation that is organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia and, by an indenture supplemental hereto executed and delivered to the Trustee, in form satisfactory to the Trustee, expressly assumes the due and punctual payment of the principal of (and premium, if any) and

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interest on all the Securities and the performance of every covenant of this Indenture on the part of the Company to be performed or observed;

               (c) immediately after giving effect to such transaction, the Consolidated Net Worth of the Company or, if applicable, the Successor Company shall be not less than 100% of the Consolidated Net Worth of the Company immediately prior to such transaction;

               (d) (1) immediately after giving effect to such transaction, and treating any Indebtedness Incurred by the Company or any Restricted Subsidiary as a result of such transaction as having been Incurred at the time of such transaction, the Company or the Successor Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of Section 10.08 or (2) the Operating Cash Flow Ratio for the Company, or the Successor Company, will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the Reference Period, not be greater than such Operating Cash Flow Ratio for the Company immediately prior to such transaction; and

               (e) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer, lease or disposition and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, complies with this Article VIII and that all conditions precedent herein provided for relating to such transaction have been complied with, and, with respect to such Officers’ Certificate, setting forth the manner of determination of the Company’s (or the Successor Company’s, as the case may be) Consolidated Net Worth in accordance with clause (c) of this Section 8.01 and ability to Incur Indebtedness in accordance with clause (d) of this Section 8.01, except as provided below.

          Notwithstanding the foregoing, the Company may do the following without complying with clause (d) above: (1) any Change of Domicile transaction or (2) the creation of, or the merger, amalgamation, combination or consolidation of the Company with or into a Wholly Owned Restricted Subsidiary for the purpose of forming, a holding company whose only substantial asset is the Capital Stock of the Company, with any such holding company structure being disregarded.

          Section 8.02 Successor Substituted.

          Upon any consolidation of the Company with, or merger of the Company into, any other Person or any transfer, conveyance, sale, lease or other disposition of all or substantially all of the properties and assets of the Company as an entirety in accordance with Section 8.01, the Successor Company shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such Successor Company had been named as the Company herein, and

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thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

ARTICLE IX

SUPPLEMENTAL INDENTURES

          Section 9.01 Supplemental Indentures Without Consent of Holders.

          Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

          (1) to cure any ambiguity, defect or inconsistency;

          (2) to provide for uncertificated Securities in addition to or in place of certificated Securities;

          (3) to provide for the assumption of the Company’s obligations to Holders of Securities in the case of a consolidation, amalgamation, combination or merger or sale of all or substantially all of the Company’s assets in accordance with the provisions described in Article VIII;

          (4) to make any change that would provide any additional rights or benefits to the Holders of Securities or that does not adversely affect the legal rights under this Indenture of any such Holder;

          (5) to comply with requirements of the Commission in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act;

          (6) to evidence and provide for the acceptance of appointment of a successor Trustee; or

          (7) to provide for the issuance of Additional Securities in accordance with this Indenture.

          Section 9.02 Supplemental Indentures with Consent of Holders.

          With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby:

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               (a) change the Stated Maturity of the principal of, or any installment of interest or Liquidated Damages, if any, on, any Security;

               (b) reduce the principal amount of, or premium, if any, or interest or Liquidated Damages, if any, on any Security;

               (c) change the place or currency of payment of principal of, or premium, if any, or interest or Liquidated Damages, if any, on any Security;

               (d) impair the right to institute suit for the enforcement of any payment on or with respect to any Security, except a rescission of acceleration of the Securities pursuant to Section 5.02;

               (e) reduce the percentage in aggregate principal amount of the Outstanding Securities, the consent of whose Holders is required to amend this Indenture or for any such supplemental indenture, or the consent of whose Holders is required for any waiver provided for in this Indenture;

               (f) modify any of the provisions of this Section 9.02, Section 5.13 or Section 10.19, except to increase any percentage specified in any such provision or to provide that additional provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby;

               (g) modify or add any provision of this Indenture affecting the ranking of the Securities in a manner that adversely affects the Holders of the Securities; or

               (h) following the mailing of an Offer to Purchase Securities pursuant to Sections 10.14 or 10.16, modify the provisions of this Indenture with respect to such Offer to Purchase in a manner adverse to such Holder; or

               (i) alter the Redemption Price or other provisions regarding optional redemption of the Securities specified in the form of Security set forth in Article II or waive a redemption payment with respect to any Security thereunder.

          The modification of a definition in this Indenture or a Security, to the extent such modification affects the interpretation of any provision whose modification is restricted as provided in clauses (a) through (i) above, shall be deemed to be a modification of such provision.

          It shall not be necessary for any Act of Holders under this Section 9.02 to approve the particular form of any proposed amendment or supplement, but it shall be sufficient if such Act shall approve the substance thereof.

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          Section 9.03 Execution of Supplemental Indentures.

          In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized pursuant to, is permitted by, and that all conditions precedent have been met under, this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

           Section 9.04 Effect of Supplemental Indentures.

          Upon the execution of any supplemental indenture under this Article IX, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. No such supplemental indenture shall directly or indirectly modify the provisions of Article XII in any manner which might terminate or impair the rights of the Senior Indebtedness pursuant to such subordination provisions without prior written consent of all of the holders of Senior Indebtedness.

          Section 9.05 Conformity with Trust Indenture Act.

          Every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the Trust Indenture Act.

          Section 9.06 Reference in Securities to Supplemental Indentures.

          Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities.

          Section 9.07 Notice of Supplemental Indenture.

          Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to Section 9.02, the Company shall transmit to the Holders a notice setting forth the substance of such supplemental indenture.

          Section 9.08 Revocation and Effect of Consents.

          Until a supplemental indenture or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder of a Security, and every

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subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent is not made on any Security. However, any such Holder of a Security or subsequent Holder of a Security may revoke the consent as to its Security if the Trustee receives written notice of revocation before the date the supplemental indenture or waiver becomes effective. A supplemental indenture or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

ARTICLE X

COVENANTS

          Section 10.01 Payment of Principal, Premium and Interest.

          The Company shall duly and punctually pay the principal of (and premium, if any), and interest (and Liquidated Damages, if any) on the Securities in accordance with the terms of the Securities, this Indenture and the Registration Rights Agreement.

          The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the Securities, to the extent lawful. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on Defaulted Interest (without regard to any applicable grace period) at the same rate, to the extent lawful.

          Section 10.02 Maintenance of Office or Agency.

          The Company shall maintain in the Borough of Manhattan, New York City, an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

          The Company may also from time to time designate one or more other offices or agencies (in or outside the Borough of Manhattan, New York City) where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, New York City, for such purposes. The

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Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

          Section 10.03 Money for Security Payments to be Held in Trust.

          If the Company at any time acts as its own Paying Agent, it shall, on or before each due date of the principal of (or premium, if any) or interest (or Liquidated Damages, if any) on any of the Securities segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay such amounts so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and shall promptly notify the Trustee of its action or failure so to act. The Company hereby appoints the Trustee as the Paying Agent as of the Issue Date.

          Whenever the Company has one or more Paying Agents, other than the Company, it shall, prior to each due date of the principal of (and premium, if any), or interest (and Liquidated Damages, if any) on any Securities, deposit to such Paying Agent a sum sufficient to pay such amounts so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium, interest or Liquidated Damages, and (unless such Paying Agent is the Trustee) the Company shall promptly notify the Trustee of its action or failure so to act.

          The Company shall cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent agrees with the Trustee, subject to the provisions of this Section 10.03, that such Paying Agent shall:

               (a) hold all sums held by it for the payment of the principal of (or premium, if any) or interest (or Liquidated Damages, if any) on Securities in trust for the benefit of the Persons entitled thereto until such sums are paid to such Persons or otherwise disposed of as herein provided;

               (b) give the Trustee prompt written notice of any default by the Company (or any other obligor upon the Securities) in the making of any payment of principal, if any, Liquidated Damages, if any, or interest; and

               (c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

          The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such sums.

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          Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any), Liquidated Damages, if any, or interest on any Security and remaining unclaimed for two years after such principal (and premium, if any), Liquidated Damages, if any, or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be publicly disseminated notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining shall be repaid to the Company.

          Section 10.04 Existence.

          The Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any such right or franchise if the preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole, and the loss thereof is not materially adverse to the Holders of the Securities; provided further, that this Section 10.04 does not prohibit any transaction permitted by Section 10.14 or Article VIII.

          Section 10.05 Maintenance of Properties.

          The Company shall cause all properties used or useful in the conduct of its business or the business of any Restricted Subsidiary of the Company to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and shall cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section shall prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance is, as determined by the Board of Directors of the Company in good faith, desirable in the conduct of its business or the business of any such Restricted Subsidiary and not disadvantageous in any material respect to the Holders.

          Section 10.06 Payment of Taxes.

          The Company shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (l) all material taxes, assessments and governmental charges levied or imposed upon the Company or any of its Restricted Subsidiaries or upon the income, profits or property of the Company or any of its Restricted Subsidiaries, and (2) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of the Company or any of its

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Restricted Subsidiaries; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings.

          Section 10.07 Maintenance of Insurance.

          The Company shall, and shall cause its Restricted Subsidiaries to, keep at all times all of their properties which are of an insurable nature insured against loss or damage with insurers believed by the Company to be responsible to the extent that property of similar character is usually so insured by corporations similarly situated and owning like properties in accordance with good business practice.

          Section 10.08 Limitation on Consolidated Indebtedness.

          The Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, Incur any Indebtedness, including Acquired Indebtedness, except that the Company may Incur Indebtedness, if, after giving effect thereto, the Company’s Operating Cash Flow Ratio would have been less than 7.5 to 1.0.

          Notwithstanding the above, the Company and its Restricted Subsidiaries may Incur the following Indebtedness without regard to the above limitations:

               (a) Indebtedness evidenced by the Securities on the Issue Date and a like principal amount of Exchange Securities to be issued pursuant to the terms of the Registration Rights Agreement;

               (b) Indebtedness, letters of credit and bankers’ acceptances Incurred by the Company under the Credit Agreement in an aggregate principal amount not to exceed $125,000,000 at any time outstanding, reduced by the amount of repayments and permanent reductions of Indebtedness Incurred under this clause (b) due to the application of Net Cash Proceeds after the Issue Date pursuant to Section 10.14;

               (c) Indebtedness of the Company or any of its Restricted Subsidiaries owing to the Company or any of its Restricted Subsidiaries (“Intercompany Indebtedness”); provided that (A) in the case of any such Indebtedness of the Company, such obligations will be unsecured and subordinated by their terms in all respects to the Holders’ rights pursuant to the Securities, and (B) if any event occurs that causes a Person that is a Restricted Subsidiary to no longer be a Restricted Subsidiary, then this clause (c) will no longer be applicable to such Indebtedness of that Person;

               (d) Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or to renew, replace, extend, refinance or refund, any Indebtedness of the Company or such Restricted Subsidiary Incurred pursuant to clauses (a), (d), (f), (h), (k), (n) or (o) of this Section 10.08 or pursuant to the first paragraph of

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this Section 10.08, which Indebtedness was outstanding or committed on the date of exchange, renewal, replacement, extension, refinancing or refunding; provided, however, that:

                    (A) such Indebtedness does not exceed the principal amount (or in the case of Redeemable Stock or Preferred Stock that constitutes Indebtedness, the aggregate redemption or repurchase price or liquidation value) of outstanding or committed Indebtedness so exchanged, renewed, replaced, extended, refinanced or refunded plus all accrued interest, dividends and premiums on the Indebtedness and all fees, expenses, penalties and premiums incurred in connection therewith;

                    (B) such exchanging, renewing, replacing, extending, refinancing or refunding Indebtedness has (x) a final maturity that is later than the final maturity of the Indebtedness being so exchanged, renewed, replaced, extended, refinanced or refunded, and (y) an Average Life, at the time of such exchange, renewal, replacement, extension, refinancing or refunding of such Indebtedness, that is equal to or greater than the Average Life of the Indebtedness being so exchanged, renewed, replaced, extended, refinanced or refunded;

                    (C) in the case of any exchanging, renewing, replacing, extending, refinancing or refunding of Indebtedness subordinated to the Securities, the exchanging, renewing, replacing, extending, refinancing or refunding Indebtedness ranks subordinate in right of payment to the Securities to substantially the same extent as, or to a greater extent than, the Indebtedness so exchanged, renewed, replaced, extended, refinanced or refunded;

                    (D) the Exchangeable Preferred Stock, the Junior Exchangeable Preferred Stock and the Class M Preferred Stock (and any Preferred Stock that is Redeemable Stock issued to exchange, renew, replace, extend, refinance or refund any of the foregoing) (collectively, the “Refinanced Preferred Stock”) may be exchanged, renewed, replaced, extended, refinanced or refunded pursuant to this clause (D) only by the incurrence of Qualified Stock that ranks equally with or junior to the Refinanced Preferred Stock; and

                    (E) no Indebtedness of the Company may be exchanged, renewed, replaced, extended, refinanced or refunded by the Incurrence of Indebtedness or the issuance of Capital Stock by any Restricted Subsidiary;

          (e) Indebtedness Incurred by the Company or any of its Restricted Subsidiaries under Hedge Agreements to protect the Company or any of its Restricted Subsidiaries from interest or foreign currency risk on Indebtedness permitted to be Incurred by this Indenture or to manage such risk; provided, that the notional principal amount of any such Hedge Agreements does not exceed the principal amount of Indebtedness to which such Hedge Agreements relate, and such Hedge Agreements are not for speculative purposes;

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               (f) Indebtedness of the Company and its Restricted Subsidiaries existing on the Issue Date (other than Indebtedness Incurred under clause (c) of this Section 10.08) (“Existing Indebtedness”);

               (g) any guarantee by any Restricted Subsidiary of any Indebtedness Incurred under the Credit Agreement in accordance with this Section 10.08;

               (h) Acquired Indebtedness of the Company; provided that, on a pro forma basis after giving effect to the Incurrence of such Acquired Indebtedness, the Company would be able to Incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of this Section 10.08;

               (i) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of performance, bid, surety, appeal or similar bonds or completion or performance guarantees provided in the ordinary course of business;

               (j) Indebtedness of the Company or any of its Restricted Subsidiaries arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in any case Incurred in connection with the disposition of any business, assets or Subsidiary of the Company (other than guarantees of, or similar obligations under, Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary of the Company for the purpose of financing such acquisition), in an amount not to exceed the gross proceeds actually received by the Company or any Restricted Subsidiary in connection with such disposition;

               (k) Indebtedness of the Company or any of its Restricted Subsidiaries represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, Incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Indebtedness Incurred pursuant to clause (d) of this Section 10.08 above in exchange for, or to renew, replace, extend, refinance or refund any Indebtedness Incurred pursuant to this clause (k), not to exceed the greater of 1.0% of Total Assets at any time outstanding and $12.0 million;

               (l) Indebtedness of the Company or any of its Restricted Subsidiaries owed to, including obligations in respect of letters of credit for the benefit of, any Person in connection with workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance provided by such Person to the Company or any of its Restricted Subsidiaries, in each case Incurred in the ordinary course of business;

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               (m) Indebtedness of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, that such Indebtedness is extinguished within two Business Days after its Incurrence;

               (n) Indebtedness of any Restricted Subsidiary of the Company which does not exceed $50 million in the aggregate for all such Restricted Subsidiaries at any time outstanding under this clause (n) (excluding any Intercompany Indebtedness or Acquired Indebtedness that is otherwise permitted to be Incurred under this Indenture); provided that a Restricted Subsidiary may not Incur any Indebtedness under this clause (n), unless the Company’s Operating Cash Flow Ratio is less than 7.5 to 1.0 and the Adjusted Operating Cash Flow Ratio of such Restricted Subsidiary is less than 6.0 to 1.0; and

               (o) Indebtedness of the Company or any of its Restricted Subsidiaries, other than Indebtedness permitted pursuant to clauses (a) through (n) of this Section 10.08, which does not exceed $35 million at any time outstanding including all Indebtedness Incurred pursuant to clause (d) of this Section 10.08 in exchange for, or to renew, replace, extend, refinance or refund any such Indebtedness.

          For the avoidance of doubt, all Indebtedness outstanding under the Credit Agreement on the Issue Date shall be deemed to have been Incurred under clause (b) of this Section 10.08. For purposes of determining compliance with this Section 10.08, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories described in clause (a) and clauses (c) through (o) of this Section 10.08, or is entitled to be Incurred pursuant to the first paragraph of this Section 10.08, the Company, in its sole discretion, will be permitted to classify such item of Indebtedness on the date of its Incurrence, or later reclassify such item of Indebtedness, in any manner that complies with this Section 10.08.

          The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and payments of dividends on Redeemable Stock or Preferred Stock in the form of additional shares of the same class of Redeemable Stock or Preferred Stock will not be deemed to be an Incurrence of Indebtedness or an issuance of Redeemable Stock or Preferred Stock for the purposes of this Section 10.08.

          Section 10.09 Limitation on Preferred Stock of Restricted Subsidiaries.

          The Company shall not permit any Restricted Subsidiary of the Company to create or issue any Preferred Stock except:

               (a) Preferred Stock outstanding on the Issue Date (“Existing Preferred Stock”);

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               (b) Preferred Stock issued to and held by the Company or any Wholly Owned Restricted Subsidiary of the Company;

               (c) Preferred Stock issued by a Person prior to the time such Person became a Restricted Subsidiary of the Company; and

               (d) Preferred Stock issued by a Restricted Subsidiary in exchange for, or the proceeds of which are used to refinance outstanding Preferred Stock of a Restricted Subsidiary; provided that (i) the liquidation value of the refinancing Preferred Stock does not exceed the liquidation value so refinanced plus financing fees and other expenses, penalties and premiums associated with such refinancing and all accrued dividends on such Preferred Stock and (ii) such refinancing Preferred Stock has no mandatory redemptions prior to (and in no greater amounts than) the Preferred Stock being refinanced.

          The payment of dividends on Preferred Stock in the form of additional shares of the same class of Preferred Stock shall not be deemed to be a creation or issuance of Preferred Stock for purposes of this Section 10.09.

          Section 10.10 Limitation on Restricted Payments.

          The Company shall not, and shall not permit any Restricted Subsidiary of the Company to make, directly or indirectly, any Restricted Payment, unless after giving effect to the Restricted Payment:

               (a) no Default or Event of Default has occurred and is continuing;

               (b) the Company would be permitted to Incur an additional $1.00 of Indebtedness pursuant to the Operating Cash Flow Ratio test set forth in the first paragraph of Section 10.08; and

               (c) the total of all Restricted Payments made on or after January 16, 2002 does not exceed the sum, without duplication, of (1) Cumulative Operating Cash Flow less 1.60 times Cumulative Interest Expense, (2) 100% of the aggregate Qualified Capital Stock Proceeds of the Company after January 16, 2002, (3) 100% of the cash proceeds received from an Unrestricted Subsidiary to the extent of Investments (other than Permitted Investments) made in such Unrestricted Subsidiary since January 16, 2002, and (4) to the extent that any Investment, other than a Permitted Investment, that was made after the Issue Date is sold or otherwise liquidated or repaid, or the Person in whom such Investment was made subsequently becomes a Restricted Subsidiary of the Company, the lesser of (x) the cash or Cash Equivalents received upon the sale, liquidation or repayment of such Investment, less the cost of disposition, if any, or the cash plus the Fair Market Value of any assets other than cash held by such Person on the date it becomes a Restricted Subsidiary of the Company, as applicable, and (y) the initial amount of such Investment.

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          The foregoing provision shall not be violated by reason of:

          (1) the payment of any dividend within 60 days after declaration thereof if at the declaration date such payment would have complied with the preceding provision;

          (2) any refinancing of any Indebtedness otherwise permitted under clauses (b) or (d) of Section 10.08;

          (3) (a) the issuance of the Senior Subordinated Exchange Debentures in exchange for the Exchangeable Preferred Stock in accordance with the terms of the Exchangeable Preferred Stock in effect on the Issue Date; provided, that after giving effect thereto, the Company’s Operating Cash Flow Ratio, would have been less than 6.5 to 1.0, or (b) the issuance of Additional Senior Subordinated Exchange Debentures in exchange for the Junior Exchangeable Preferred Stock in accordance with the terms of the Junior Exchangeable Preferred Stock in effect on the Issue Date; provided, that after giving effect thereto, the Company’s Operating Cash Flow Ratio would have been less than 6.5 to 1.0;

          (4) the purchase, redemption or other acquisition or retirement for value of Capital Stock of any Restricted Subsidiary held by Persons other than the Company or any of its Restricted Subsidiaries;

          (5) the making of any Investment other than a Permitted Investment or the payment, redemption, defeasance, repurchase or other acquisition or retirement of any Capital Stock of the Company or any Subordinated Indebtedness prior to its scheduled maturity or the payment of dividends on any Capital Stock of the Company either in exchange for or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of Qualified Capital Stock of the Company; provided, that the amount of any such net cash proceeds that are utilized for any such Investment, payment, redemption, defeasance, repurchase or other acquisition, retirement or dividend will be excluded from clause (c)(2) of this Section 10.10;

          (6) the repurchase, redemption, acquisition or other retirement for value of any Capital Stock of the Company or any of its Restricted Subsidiaries held by any employee benefit plans of the Company or any of its Restricted Subsidiaries, any current or former employees or directors of the Company or any of its Restricted Subsidiaries or pursuant to any management equity subscription agreement or stock option agreement of the Company or any of its Restricted Subsidiaries; provided, that the aggregate price paid for all such repurchased, redeemed, acquired or retired Capital Stock shall not exceed $1.0 million in any 12-month period;

          (7) the payment of dividends on either the Exchangeable Preferred Stock or on the Junior Exchangeable Preferred Stock after February 15, 2005, which dividends do not exceed $30.0 million in the aggregate since January 16, 2002; provided, that in no event may any such payment be made unless the Operating Cash Flow Ratio of

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the Company, calculated on the basis that the Preferred Stock on which such dividends are proposed to be paid constitutes Indebtedness, is less than 7.0 to 1.0;

          (8) the distribution, as a dividend or otherwise, of Capital Stock of, or Indebtedness owed to the Company or a Restricted Subsidiary by, any Unrestricted Subsidiary;

          (9) any purchase, redemption, retirement, defeasance or other acquisition for value of any Subordinated Indebtedness pursuant to the provisions of such Subordinated Indebtedness upon an Asset Sale or a Change of Control after the Company shall have complied with the provisions of this Indenture as set forth in Section 10.14 or Section 10.16, as the case may be; or

          (10) Restricted Payments, in addition to Restricted Payments permitted pursuant to clauses (1) through (9) of this paragraph, not in excess of $35 million in the aggregate after the Issue Date;

provided, that with respect to clauses (3) through (10) above, no Default or Event of Default shall have occurred and be continuing, and the payments described in clauses (1), (6), (7), (9) and (10) of this paragraph shall constitute Restricted Payments for the calculation under the first paragraph of this Section 10.10.

          In determining whether any Restricted Payment is permitted by this Section 10.10, the Company may allocate all or any portion of such Restricted Payment among the categories described in clauses (1) through (10) of the immediately preceding paragraph or among such categories and the types of Restricted Payments described in the first paragraph of this Section 10.10; provided, that at the time of such allocation, all such Restricted Payments, or allocated portions thereof, would be permitted under the various provisions of this Section 10.10.

          Section 10.11 Limitations Concerning Distributions and Transfers By Restricted Subsidiaries.

          The Company shall not, and shall not permit any Restricted Subsidiary of the Company to, create or otherwise cause or suffer to exist or become effective any consensual restriction or prohibition on the ability of any Restricted Subsidiary of the Company to:

               (a) pay dividends on, or make other distributions in respect of, its Capital Stock, or any other ownership interest or participation in, or measured by, its profits, to the Company or any Restricted Subsidiary or pay any Indebtedness or other obligation owed to the Company or any Restricted Subsidiary;

               (b) make any loans or advances to the Company or any Restricted Subsidiary; or

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               (c) transfer any of its property or assets to the Company or any Restricted Subsidiary.

          Notwithstanding the foregoing, the Company may, and may permit any Restricted Subsidiary to, suffer to exist any such restriction or prohibition:

          (1) pursuant to this Indenture, the Securities, the Exchange Securities to be issued pursuant to the terms of the Registration Rights Agreement, the Credit Agreement, the Senior Secured Notes, the Senior Unsecured Notes, the Existing Senior Subordinated Notes, any other agreement in effect on the Issue Date and, if executed and delivered, an Exchange Indenture; provided, that any such restriction or prohibition in the Exchange Indenture is no more restrictive than that contained in this Indenture;

          (2) pursuant to an agreement relating to any Indebtedness or Capital Stock of such Restricted Subsidiary which was outstanding or committed prior to the date on which such Restricted Subsidiary became a Restricted Subsidiary of the Company other than restrictions or prohibitions adopted in anticipation of becoming a Restricted Subsidiary; provided, that such restriction or prohibition shall not apply to any property or assets of the Company or any Restricted Subsidiary other than the property or assets of such Restricted Subsidiary and its Subsidiaries;

          (3) existing under or by reason of applicable law, rule, regulation or order;

          (4) pursuant to customary provisions restricting subletting or assignment of any lease governing any leasehold interest of any Restricted Subsidiary;

          (5) pursuant to purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the type referred to in clause (c) of this Section 10.11;

          (6) pursuant to restrictions of the type referred to in clause (c) of this Section 10.11 contained in security agreements securing Indebtedness of a Restricted Subsidiary to the extent that such Liens were otherwise Incurred in accordance with Section 10.12 and restrict the transfer of property subject to such agreements;

          (7) pursuant to any agreement for the sale or other disposition of all or substantially all of the Capital Stock or assets of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending its sale or disposition;

          (8) pursuant to other agreements in effect on the Issue Date;

          (9) pursuant to customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business; and

          (10) pursuant to an agreement effecting an amendment, modification, restatement, supplement, renewal, increase, extension, refinancing, replacement or

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refunding of any agreement described in clauses (1), (2) and (8) above; provided, that the provisions contained in such amendment, modification, restatement, supplement, renewal, increase, extension, refinancing, replacement or refunding agreement relating to such restriction or prohibition are not materially more restrictive, taken as a whole, than the provisions contained in the agreement which is the subject thereof.

           Section 10.12 Limitations on Liens.

          The Company shall not, and shall not permit any Restricted Subsidiary of the Company to, Incur or suffer to exist any Lien on or with respect to any property or assets now owned or hereafter acquired securing any Indebtedness that ranks equally or subordinate in right of payment to the Securities without making, or causing such Restricted Subsidiary to make, effective provision for securing the Securities:

               (a) equally and ratably with such obligation as to such property for so long as such obligation will be so secured; or

               (b) in the event such obligation is Indebtedness of the Company or a Restricted Subsidiary which is subordinate by its terms in right of payment to the Securities, prior to such obligation as to such property for so long as such obligation will be so secured.

          The foregoing restrictions shall not apply to:

          (1) Liens existing in respect of any Indebtedness that exists on the Issue Date (“Existing Liens”);

          (2) Liens in favor of the Company or Liens in favor of a Wholly Owned Restricted Subsidiary of the Company on the assets or Capital Stock of another Wholly Owned Restricted Subsidiary of the Company;

          (3) Liens to secure Indebtedness outstanding or committed for the purpose of financing all or any part of the purchase price or the cost of construction or improvement of the equipment or other property subject to such Liens; provided, however, that (a) the principal amount of any Indebtedness secured by such a Lien does not exceed 100% of such purchase price or cost, (b) such Lien does not extend to or cover any property other than such item of property or any improvements on such item, and (c) the Incurrence of such Indebtedness is otherwise permitted by this Indenture;

          (4) (a) Liens on property existing immediately prior to the time of acquisition thereof by the Company or a Restricted Subsidiary (and not Incurred in anticipation of the financing of such acquisition) and (b) Liens in respect of Acquired Indebtedness existing at the time of the acquisition of the related assets by the Company or any of its Restricted Subsidiaries (provided that such Liens do not extend to any assets of the Company or any of its Restricted Subsidiaries other than the assets being acquired (and as long as such Liens were not Incurred in anticipation of the financing of such asset acquisition));

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          (5) Liens to secure Indebtedness to extend, renew, refinance, or refund (or successive extensions, renewals, refinancings, or refundings), in whole or in part, Indebtedness secured by any Lien referred to in the foregoing clauses (1), (3) and (4) so long as such Lien does not extend to any other property and the principal amount of Indebtedness so secured is not increased except as otherwise permitted under clauses (b) or (d) of the second paragraph of Section 10.08;

          (6) Liens on any Permitted Investment in Cooperative Bank Equity in favor of any Cooperative Banks; or

          (7) any other Liens in respect of any Indebtedness, which Indebtedness does not exceed $500,000 in the aggregate.

           Section 10.13 Limitation on Transactions with Affiliates.

          The Company shall not, and shall not permit any Restricted Subsidiary to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate, other than the Company or a Restricted Subsidiary (each of the foregoing transactions, an “Affiliate Transaction”), unless:

               (a) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and

               (b) the Company delivers to the Trustee:

          (1) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $7.5 million, a determination by the Board of Directors of the Company set forth in a Board Resolution and an Officers’ Certificate certifying that each such Affiliate Transaction complies with clause (a) above and that each such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors of the Company; and

          (2) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $15.0 million, an opinion as to the fairness to the Company of the financial terms of such Affiliate Transaction or series or related Affiliate Transactions from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

          This Section 10.13 shall not limit, or be applicable to, any agreement in effect on the Issue Date, and any amendments, extensions or renewals of any such agreement, so long as any such amendment, extension or renewal is not materially more disadvantageous, taken as a whole, to the Company or to any Restricted Subsidiary as the

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original agreement in effect on the Issue Date. In addition, the following items will not be deemed to be Affiliate Transactions:

          (1) any employment, service or termination agreement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

          (2) transactions between or among the Company and/or its Restricted Subsidiaries;

          (3) transactions with a Person that is an Affiliate of the Company solely because the Company owns Capital Stock in, or controls, such Person;

          (4) reasonable and customary fees and compensation paid to, and indemnity provided on behalf of, officers, directors and employees of the Company or any Restricted Subsidiary of the Company, as determined by the Board of Directors of the Company;

          (5) sales or issuances of Qualified Capital Stock to Affiliates or employees of the Company and its Subsidiaries at Fair Market Value; and

          (6) Restricted Payments that are not prohibited by Section 10.10 and Permitted Investments.

          Section 10.14 Limitation on Asset Sales and Sales of Subsidiary Stock.

          Following the Issue Date, the Company shall not, and shall not permit any Restricted Subsidiary of the Company to engage in an Asset Sale unless (a) such Asset Sale is for Fair Market Value, (b) at least 75% of the value of the consideration for such Asset Sale consists of (1) cash or Cash Equivalents, (2) the assumption by the transferee (and release of the Company or the relevant Restricted Subsidiary, as the case may be) of Senior Indebtedness of the Company or Indebtedness of any Restricted Subsidiary, or (3) notes, obligations or other marketable securities (collectively “Marketable Securities”) that are converted within 30 days after the consummation of such Asset Sale into cash or Cash Equivalents and (c) the Net Cash Proceeds therefrom are, at the Company’s option and, to the extent it so elects, applied on or prior to the date that is 365 days after the date of such Asset Sale: (1) to the repayment of any Senior Indebtedness (which payment permanently reduces the commitment thereunder); (2) to the repurchase of the Securities or other Indebtedness of the Company ranking equal in right of payment to the Securities or Indebtedness of any Restricted Subsidiary containing similar provisions with respect to the repurchase of such Indebtedness with the net proceeds of asset sales, pursuant to an offer to purchase (an “Asset Sale Offer”) described below; (3) to the making of capital expenditures or other acquisitions of long-term assets (other than Capital Stock) that are used or useful in a Wireless Communications Business that is owned wholly by the Company or any of its Restricted Subsidiaries; (4) to the acquisition of all or substantially all of the assets of, or Capital Stock representing a majority of the Voting Power of, an entity engaged primarily in a Wireless Communications Business; or (5) any combination of the foregoing.

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          Notwithstanding the foregoing paragraph:

          (1) the conveyance, sale, transfer or other disposition of all or substantially all the assets of the Company on a consolidated basis will be governed by the provisions of Section 10.16 and/or the provisions of Article VIII and not by this Section 10.14;

          (2) any Restricted Subsidiary of the Company may convey, sell, lease, transfer or otherwise dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Company or any of its Wholly Owned Restricted Subsidiaries;

          (3) the Company and its Restricted Subsidiaries may, in the ordinary course of business, (A) convey, sell, lease, transfer, assign or otherwise dispose of assets; provided that if such conveyance, sale, lease, transfer, assignment or other disposition is to a Person other than a Restricted Subsidiary, the consideration received reflects the Fair Market Value of such assets and (B) exchange assets for either assets or equity interests in Wireless Communications Businesses; provided that (a) the assets or equity interests received have a Fair Market Value substantially equal to the assets exchanged and (b) the assets received by the Company are controlled by the Company with respect to voting rights and day-to-day operations, or the equity interests received by the Company represent a controlling interest in the total Voting Power and day-to-day operations of a Person that is the issuer of such equity interests;

          (4) the Company and its Restricted Subsidiaries may make an exchange of assets where the Company and/or its Restricted Subsidiaries receive consideration for such assets at least 75% of which consists of (a) cash, (b) long-term assets (other than Capital Stock) at Fair Market Value that are used or useful in a Wireless Communications Business or (c) any combination thereof (it being understood that any net cash proceeds shall be treated as Net Cash Proceeds under clause (c) of the preceding paragraph of this Section 10.14);

          (5) the Company and its Restricted Subsidiaries may sell, exchange or dispose of damaged, worn out or other obsolete property in the ordinary course of business or other property no longer necessary for the proper conduct of the business of the Company or any of its Restricted Subsidiaries; and

          (6) in addition to Asset Sales permitted by the foregoing clauses (1) through (5), without compliance with the restrictions set forth in the immediately preceding paragraph, the Company may consummate any single Asset Sale or series of related Asset Sales with respect to assets the Fair Market Value of which does not exceed $10.0 million in the aggregate after the Issue Date.

The Company may defer an Asset Sale Offer until the accumulated Net Cash Proceeds not applied to the uses set forth in Subsections (c)(1) through (c)(5) in the first paragraph of this Section 10.14, exceed $10.0 million. Pending the final application of any such Net Cash Proceeds, the Company may temporarily reduce revolving credit borrowings or

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otherwise invest such Net Cash Proceeds in any manner that is not prohibited by this Indenture.

          An Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “Asset Sale Offer Period”). To the extent that any Senior Indebtedness of the Company or Indebtedness of any Restricted Subsidiary requires the Company or that Subsidiary to make an offer similar to an Asset Sale Offer, the Company and each such Restricted Subsidiary may make simultaneous offers, with such offer to the Holders being limited to proceeds not used in such Asset Sale offer to repurchase such Senior Indebtedness of the Company or Indebtedness of such Restricted Subsidiary. In addition, the Company shall not make an asset sale offer for the Existing Senior Subordinated Notes, the Senior Subordinated Exchange Debentures or the Additional Senior Subordinated Exchange Debentures, unless it also makes an Asset Sale Offer for the Securities. No later than five Business Days after the termination of the Asset Sale Offer Period (the “Asset Sale Purchase Date”), the Company shall purchase the principal amount of Securities required to be purchased pursuant to this Section 10.14 (the “Asset Sale Offer Amount”) at a purchase price equal to 100% of the principal amount of the Securities plus accrued and unpaid interest and Liquidated Damages, if any, to but excluding the date of the purchase or, if less than the Asset Sale Offer Amount has been tendered, all Securities tendered in response to the Asset Sale Offer.

          If the Asset Sale Purchase Date is on or after a Regular Record Date and on or before the related Interest Payment Date, any accrued and unpaid interest will be paid to the Person in whose name a Security is registered at the close of business on such Regular Record Date, and no additional interest will be payable to Holders who tender Securities pursuant to the Asset Sale Offer.

          On or before the Asset Sale Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Asset Sale Offer Amount of Securities or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Asset Sale Offer Amount has been tendered, all Securities tendered, and shall deliver to the Trustee an Officers’ Certificate stating that such Securities or portions thereof were accepted for payment by the Company in accordance with the terms of this covenant. The Company, the Depositary or the Paying Agent, as the case may be, will promptly (but in any case not later than five days after the Asset Sale Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Securities tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue new Securities, and the Trustee, upon written request from the Company, shall authenticate and mail or deliver such new Securities to such Holder, in a principal amount equal to any unpurchased portion of the Securities surrendered. Any Securities not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on the Asset Sale Purchase Date. Upon completion of each Asset Sale Offer, the amount of accumulated Net Cash Proceeds not applied to the uses set forth in subsections (c)(1) through (c)(5) in the first paragraph of this

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Section 10.14 shall be reset to zero, and the Company and its Restricted Subsidiaries may use such amount not applied for any purpose not otherwise prohibited by this Indenture.

          The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any applicable other securities laws or regulations applicable to any Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 10.14, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the provisions of this Section 10.14 by virtue of such conflict; provided, that the Company shall not be relieved of its obligation to make an offer to repurchase the Securities pursuant to this Section 10.14 by reason of such conflict.

          Section 10.15 Limitation on Activities of the Company and its Restricted Subsidiaries.

          The Company shall not, and shall not permit any Restricted Subsidiary to, engage in any business other than the Telecommunications Business, except to the extent such business is not material to the Company and its Restricted Subsidiaries, taken as a whole.

           Section 10.16 Change of Control.

               (a) Upon the occurrence of a Change in Control, each Holder of a Security shall have the right to request to have such Security repurchased by the Company on the terms and conditions set forth in this Section 10.16 and this Indenture. The Company shall, within 30 days following the date of the consummation of a transaction resulting in a Change of Control, mail to each Holder an Offer to Purchase all Outstanding Securities at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to but excluding the Purchase Date (a “Change of Control Offer”).

          The Company or a third party on its behalf may, but shall not be required to, satisfy the Company’s obligations under this Section 10.16 by mailing such an Offer to Purchase prior to, and contingent upon, the anticipated consummation of a transaction resulting in a Change of Control; provided that the Company and any such third party shall comply with all applicable laws and regulations, including Rule 14e-1 under the Exchange Act, and the Offer to Purchase shall not close unless the transaction resulting in a Change of Control also occurs. A Change of Control Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “Change of Control Offer Period”). No later than five Business Days after the termination of the Change of Control Offer Period (the “Change of Control Purchase Date”), the Company shall purchase all Securities tendered in response to the Change of Control Offer. Payment for any Securities so purchased shall be made in the same manner as interest payments are made.

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          If the Change of Control Purchase Date is on or after a Regular Record Date and on or before the related Interest Payment Date, any accrued and unpaid interest, and Liquidated Damages, if any, shall be paid to the Person in whose name a Security is registered at the close of business on such Regular Record Date, and no additional interest or Liquidated Damages will be payable to Holders who tender Securities pursuant to the Change of Control Offer.

          On or before the Change of Control Purchase Date, the Company shall, to the extent lawful, accept for payment all Securities or portions thereof tendered, and shall deliver to the Trustee an Officers’ Certificate stating that such Securities or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 10.16. The Company, the Depositary or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Change of Control Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Securities tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue new Securities, and the Trustee, upon written request from the Company shall authenticate and mail or deliver such new Securities to such Holder, in a principal amount equal to any unpurchased portion of the Securities surrendered. Any Securities not so accepted will be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Change of Control Offer on the Change of Control Purchase Date.

               (b) The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations applicable to any Offer to Purchase. To the extent that the provisions of any applicable securities laws or regulations conflict with the provisions of this Section 10.16, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the provisions of this Section 10.16 by virtue of such conflict; provided, that the Company shall not be relieved of its obligation to make an offer to repurchase the Securities pursuant to this Section 10.16 by reason of such conflict.

               (c) The Company will not be required to make an Offer to Purchase upon a Change of Control if a third party makes the Offer to Purchase in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to an Offer to Purchase made by the Company and purchases all Securities validly tendered and not withdrawn under such Offer to Purchase.

          Section 10.17 Limitation on Certain Indebtedness.

          The Company shall not Incur any Indebtedness that is subordinate in right of payment to any other Indebtedness of the Company unless the Indebtedness so Incurred is either pari passu with, or subordinate in right of payment to, the Securities.

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Section 10.18 Statement by Officers as to Default; Compliance Certificates.

               (a) The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the Company, the Restricted Subsidiaries and their respective Subsidiaries, as applicable, during the preceding fiscal year has been made under the supervision of the signing officers with a view to determining whether the Company and its Restricted Subsidiaries have kept, observed, performed and fulfilled their obligations under this Indenture, and further stating, as to each such officer signing such certificate, that to the best of his or her knowledge the Company and its Restricted Subsidiaries have kept, observed, performed and fulfilled each and every covenant contained in this Indenture and are not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company and its Restricted Subsidiaries are taking or propose to take with respect thereto).

               (b) So long such practice is not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to Section 7.04(b)(i)(A) above shall be accompanied by a written statement of the Company’s independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that the Company or any Restricted Subsidiary has violated any provisions of Article VIII or Article X hereof or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation.

               (c) The Company shall, so long as any of the Securities are outstanding, upon any officer of the Company becoming aware of any Default or Event of Default, deliver to the Trustee, no later than 10 days after such officer becomes aware of such Default or Event of Default, an Officers’ Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.

Section 10.19 Waiver of Certain Covenants.

          The Company and its Restricted Subsidiaries may omit in any particular instance to comply with any covenant or condition set forth in Sections 8.01, 10.14 and 10.16, if before the time for such compliance the Holders of at least a majority in aggregate principal amount of the Outstanding Securities, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition, except to the extent expressly waived, and, until such waiver becomes

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effective, the obligations of the Company and its Restricted Subsidiaries and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect; provided, however, with respect to an Offer to Purchase as to which an Offer has been mailed, no such waiver may be made or shall be effective against any Holders tendering Securities pursuant to such Offer, and the Company may not omit to comply with the terms of such Offer as to such Holder.

Section 10.20 Payments for Consent.

          The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Securities for or as an inducement to, any consent, waiver or amendment of any of the terms or provisions of this Indenture unless such consideration is offered to be paid and is paid to all Holders of the Securities that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

Section 10.21 Covenants upon Attainment and Maintenance of an Investment Grade Rating.

               (a) The provisions of Sections 10.08, 10.09, 10.10, 10.11, 10.12, 10.13 and 10.14 (including, to the extent applicable, those portions of such other sections in this Indenture which make reference to provisions contained in Sections 10.08, 10.09, 10.10, 10.11, 10.12, 10.13 and 10.14) shall not be applicable in the event, and only for so long as, the Securities are rated Investment Grade and no Default or Event of Default has occurred and is continuing (a “Covenant Suspension”).

               (b) In the event the Company’s obligations under this Indenture have been assumed or fully and unconditionally guaranteed on a senior subordinated basis by a Person whose senior, unsecured Indebtedness is rated Investment Grade, Section 7.04(b) shall not be applicable.

          In addition to the foregoing and notwithstanding any other provision of this Indenture, in the event of a Covenant Suspension, whose duration is not less than six consecutive months, shall have occurred but terminates because the Securities cease to be rated Investment Grade then:

          (1) All Indebtedness Incurred by the Company and its Restricted Subsidiaries during the Covenant Suspension that would not have been permitted to be Incurred pursuant to Section 10.08, had Section 10.08 been applicable during the Covenant Suspension, shall be deemed to be “Existing Indebtedness.”

          (2) All Liens incurred by the Company and its Restricted Subsidiaries during the Covenant Suspension that would not have been permitted to be incurred pursuant to Section 10.12, had Section 10.12 been applicable during the Covenant Suspension, shall be deemed to be “Existing Liens.”

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          (3) All Preferred Stock issued by the Company’s Restricted Subsidiaries during the Covenant Suspension that would not have been permitted to be issued pursuant to Section 10.09, had such section been applicable during the Covenant Suspension, shall be deemed to be “Existing Preferred Stock.”

          (4) All Restricted Payments made by the Company or any of its Restricted Subsidiaries during the Covenant Suspension that would not have been permitted to be Incurred pursuant to Section 10.10, had such section been applicable during the Covenant Suspension, shall not be deemed to cause a Default or Event of Default pursuant to Section 10.10; provided, however, that all Restricted Payments made during the Covenant Suspension shall count as Restricted Payments for the calculation made under the first paragraph of Section 10.10.

          Section 10.22 Notification of Failure to Make an Asset Sale Offer or Change of Control Offer.

          The Company shall promptly notify the Trustee in writing of any failure on its part to make or consummate (i) an Asset Sale Offer in respect of the Securities as required by Section 10.14 or (ii) a Change of Control Offer in respect of the Securities as required by Section 10.16.

ARTICLE XI

REDEMPTION OF SECURITIES

          Section 11.01 Right of Redemption.

          The Securities may be redeemed at the election of the Company, as a whole or from time to time in part, at the Redemption Prices specified in the form of Security set forth in Article II together with accrued and unpaid interest, and Liquidated Damages, if any, to but excluding the Redemption Date.

          Section 11.02 Applicability of Article XI.

          Redemption of Securities at the election of the Company, as permitted by any provision of this Indenture, shall be made in accordance with such provision and this Article XI.

          Section 11.03 Election to Redeem; Notice to Trustee.

          The election of the Company to redeem any Securities pursuant to Section 11.01 shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company of less than all the Securities, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the aggregate principal amount of Securities to be redeemed.

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          Section 11.04 Selection by Trustee of Securities to Be Redeemed.

          If less than all the Securities are to be redeemed at any time, the Trustee will select Securities for redemption as follows: (1) if the Securities are listed on any securities exchange, in compliance with the requirements of the principal securities exchange on which the Securities are listed; or (2) if the Securities are not listed on any securities exchange, on a pro rata basis, by lot or by such method as the Trustee deems fair and appropriate. In any proration pursuant to this Section 11.04, the Trustee, subject to the rules of the Depositary, shall make such adjustments, reallocations and eliminations as it shall deem proper (and in compliance with the requirements of the principal national securities exchange, if any, on which the Securities are listed) to the end that the principal amount of Securities so prorated shall be $1,000 or a multiple thereof, by increasing or decreasing or eliminating the amount which would be allocable to any Holder on the basis of exact proportion by an amount not exceeding $1,000.

          The Trustee shall promptly notify the Company and each Security Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.

          For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.

          Section 11.05 Notice of Redemption.

          Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to the Trustee and to each Holder of securities to be redeemed, at his or her address appearing in the Security Register.

          All notices of redemption shall state:

          (1) the Redemption Date;

          (2) the Redemption Price;

          (3) if less than all the Outstanding Securities are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the particular Securities to be redeemed;

          (4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and that interest, and Liquidated Damages, if any, thereon will cease to accrue on and after said date; and

          (5) the place or places where such Securities are to be surrendered for payment of the Redemption Price.

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          Notice of redemption of Securities to be redeemed at the election of the Company shall be given (i) by the Company or, (ii) at the Company’s request, by the Trustee in the name and at the expense of the Company; provided however, that in the case of clause (ii), the Company shall have delivered to the Trustee, at least five Business Days prior to the date notice of redemption is to be sent to the Holders, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

          Section 11.06 Deposit of Redemption Price.

          On or before any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.03) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date is an Interest Payment Date) accrued and unpaid interest, and Liquidated Damages, if any, on, all the Securities which are to be redeemed on that date.

          Section 11.07 Securities Payable on Redemption Date.

          If a notice of redemption has been given as aforesaid, the Securities to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company defaults in the payment of the Redemption Price, accrued interest, and Liquidated Damages) such Securities shall cease to bear interest or Liquidated Damages. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest, and Liquidated Damages, if any, to, but excluding the Redemption Date; provided, however, that installments of interest or Liquidated Damages, whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 3.08.

          If any Security called for redemption is not so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest and Liquidated Damages, if any, from the Redemption Date at the rate provided by the Security.

          Section 11.08 Securities Redeemed in Part.

          Any Security which is to be redeemed only in part shall be surrendered at any office or agency of the Company designated for that purpose pursuant to Section 10.02 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities, of any authorized

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denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

ARTICLE XII

SUBORDINATION OF SECURITIES

          Section 12.01 Securities Subordinate to Senior Indebtedness.

          The Company covenants and agrees, and each Holder of a Security, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article XII (subject to the provisions of Article IV and Article XIII), the payment of the principal of (and premium, if any) and interest (and Liquidated Damages, if any), on each and all of the Securities are hereby expressly made subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness.

          Section 12.02 Payment Over of Proceeds Upon Dissolution, Etc.

          In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to the Company or to its creditors, as such, or to its assets, or (b) any liquidation, dissolution or other winding-up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or any other marshaling of assets and liabilities of the Company, then and in any such event specified in (a), (b) or (c) above (each such event, if any, herein sometimes referred to as a “Proceeding”) the holders of Senior Indebtedness shall be entitled to receive payment in full of all amounts due or to become due on or in respect of all Senior Indebtedness, or provision shall be made for such payment in cash or Cash Equivalents or otherwise in a manner satisfactory to the holders of Senior Indebtedness, before the holders of the Securities are entitled to receive any Securities Payment, and to that end the holders of Senior Indebtedness shall be entitled to receive, for application to the payment thereof, any Securities Payment which may be payable or deliverable in respect of the Securities in any such Proceeding.

          In the event that, notwithstanding the foregoing provisions of this Section 12.02, the Trustee or the Holder of any Security shall have received any Securities Payment before all Senior Indebtedness is paid in full or payment thereof has been provided for in cash or Cash Equivalents or otherwise in a manner satisfactory to the holders of Senior Indebtedness, and if such fact shall, at or prior to the time of such Securities Payment, have been made known to the Trustee by delivery to the Trustee of any notice set forth in Section 12.09 or, as the case may be, such Holder, then and in such event such Securities Payment shall be paid over or delivered forthwith by the Trustee (if any notice set forth in Section 12.09 has been delivered to the Trustee) or by the Holder to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person making payment or distribution of assets of the Company (which may be the

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Administrative Agent) for application to the payment of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness.

          The consolidation of the Company with, or the merger of the Company into, another Person or the liquidation or dissolution of the Company following the conveyance or transfer of all or substantially all of its properties and assets as an entirety to another Person upon the terms and conditions set forth in Article VIII shall not be deemed a Proceeding for the purposes of this Section 12.02 if the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer such properties and assets as an entirety, as the case may be, shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions set forth in Article VIII.

          Section 12.03 No Payment When Senior Indebtedness in Default.

               (a) In the event that any Senior Payment Default shall have occurred and be continuing, or the maturity of any Senior Indebtedness shall have been accelerated, then no Securities Payment shall be made unless and until such Senior Payment Default shall have been cured or waived or shall have ceased to exist and any acceleration of Senior Indebtedness shall have been rescinded or annulled.

               (b) In the event that any Senior Nonmonetary Default shall have occurred and be continuing, then, upon the receipt by the Company and the Trustee of written notice of such Senior Nonmonetary Default from a Person designated as a representative for the Designated Senior Indebtedness or, if there is no outstanding Designated Senior Indebtedness, any holder of Senior Indebtedness, no Securities Payment shall be made during the period (the “Payment Blockage Period”) commencing on the date of such receipt of such written notice and ending on the earlier of (i) the date on which such Senior Nonmonetary Default is cured or waived or has ceased to exist and any acceleration of Senior Indebtedness is rescinded or annulled or the Senior Indebtedness to which such Senior Nonmonetary Default relates is discharged or (ii) the 179th day after the date of such receipt of such written notice. No more than one Payment Blockage Period may be commenced with respect to the Securities during any 360-day period, and there shall be a period of at least 181 consecutive days in each 360-day period when no Payment Blockage Period is in effect. For all purposes of this Section 12.03, no Senior Nonmonetary Default that was known to the holders of Senior Indebtedness to exist or be continuing on the date of commencement of any Payment Blockage Period shall be, or be made, the basis for the commencement of a subsequent Payment Blockage Period by a representative for the Designated Senior Indebtedness or a holder of Senior Indebtedness unless such Senior Nonmonetary Default shall have been cured for a period of not less than 90 consecutive days.

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          Section 12.04 Payment Permitted If No Default.

          Nothing contained in this Article XII or elsewhere in this Indenture or in any of the Securities shall prevent (a) the Company, at any time except during the pendency of any Proceeding referred to in Section 12.02 or under the conditions described in Section 12.03, from making Securities Payments, or (b) the application by the Trustee of any money deposited with it hereunder to Securities Payments or the retention of such Securities Payments by the Holders, if, at the time of such application by the Trustee, it had not received any notice set forth in Section 12.09.

          Section 12.05 Subrogation to Rights of Holders of Senior Indebtedness.

          Subject to the payment in full of all amounts due or to become due on or in respect of Senior Indebtedness, or the provision for such payment in cash or Cash Equivalents or otherwise in a manner satisfactory to the holders of Senior Indebtedness, the Holders of the Securities shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness until the principal of (and premium, if any) and interest (and Liquidated Damages, if any), on the Securities is paid in full. For purposes of such subrogation, no payments or distributions to the holders of the Senior Indebtedness of any cash, property or securities to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article XII, and no payments pursuant to the provisions of this Article XII to the holders of Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Securities, be deemed to be a payment or distribution by the Company to or on account of the Securities.

          Section 12.06 Provisions Solely to Define Relative Rights.

          The provisions of this Article XII are and are intended solely for the purpose of defining the relative rights of the Holders on the one hand and the holders of Senior Indebtedness on the other hand. Nothing contained in this Article XII or elsewhere in this Indenture or in the Securities is intended to or shall (a) impair, as among the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Securities, the obligation of the Company, which is absolute and unconditional (and which, subject to the rights under this Article XII of the holders of Senior Indebtedness, is intended to rank equally with all other general obligations of the Company), to pay to the Holders of the Securities the principal of (and premium, if any), and interest and Liquidated Damages, if any, on the Securities as and when the same become due and payable in accordance with their terms; or (b) affect the relative rights against the Company of the Holders of the Securities and creditors of the Company other than the holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article XII of the holders of Senior

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Indebtedness to receive cash, property and securities otherwise payable or deliverable to the Trustee or such Holder.

          Section 12.07 Trustee to Effectuate Subordination.

          Each Holder of a Security by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article XII and appoints the Trustee his attorney-in-fact for any and all such purposes.

          Section 12.08 No Waiver of Subordination Provisions.

          No right of any present or future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with.

          Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of the Securities, without incurring responsibility to the Holders of the Securities and without impairing or releasing the subordination provided in this Article XII or the obligations hereunder of the Holders of the Securities to the holders of Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii) release any Person liable in any manner for the collection of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights against the Company and any other Person.

          Section 12.09 Notice to Trustee.

          The Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the making of any payment to or by the Trustee in respect of the Securities. Notwithstanding the provisions of this Article XII or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Securities, unless and until the Trustee shall have received written notice thereof from the Company or a holder of Senior Indebtedness or from any trustee, representative or Administrative Agent therefor; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 6.01, shall be entitled in all respects to assume that no such facts exist; provided, however, that if the Trustee has not received the notice provided for in this Section 12.09 at least five Business Days

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prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of or premium, interest or Liquidated Damages on, any Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within five Business Days prior to such date.

          Subject to the provisions of Section 6.01, the Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness (or a trustee or Administrative Agent therefor) to establish that such notice has been given by a holder of Senior Indebtedness (or a trustee or Administrative Agent therefor). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article XII, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article XII, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

          Section 12.10 Reliance on Judicial Order or Certificate of Liquidating Agent.

          Upon any payment or distribution of assets of the Company referred to in this Article XII, the Trustee, subject to the provisions of Section 6.01, and the Holders of the Securities shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which a Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article XII.

          Section 12.11 Trustee Not Fiduciary for Holders of Senior Indebtedness.

          The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness, and it undertakes to perform and observe only such of its covenants and obligations with respect to the Senior Indebtedness as are specifically set forth in this Indenture. No implied covenants or obligations with respect to the Senior Indebtedness shall be read into this Indenture against the Trustee and the Trustee shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders of Securities or to the Company or to any other Person cash, property or

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securities to which any holders of Senior Indebtedness shall be entitled by virtue of this Article XII or otherwise.

Section 12.12 Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee’s Rights.

          The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article XII with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder.

          Nothing in this Article XII shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.07.

Section 12.13 Article XII Applicable to Paying Agents.

          In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term “Trustee” as used in this Article XII shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article XII in addition to or in place of the Trustee; provided, however, that Section 12.12 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.

Section 12.14 Defeasance of this Article XII.

          The subordination of the Securities provided by this Article XII is expressly made subject to the provisions for defeasance or covenant defeasance in Article XIII hereof and, anything herein to the contrary notwithstanding, upon the effectiveness of any such defeasance or covenant defeasance, the Securities then Outstanding shall thereupon cease to be subordinated pursuant to this Article XII.

ARTICLE XIII

DEFEASANCE AND COVENANT DEFEASANCE

Section 13.01 Company’s Option to Effect Defeasance or Covenant Defeasance.

          The Company may at its option by Board Resolution, at any time, elect to have either Section 13.02 or Section 13.03 applied to the Outstanding Securities upon compliance with the conditions set forth below in this Article XIII.

Section 13.02 Defeasance and Discharge.

          Upon the Company’s exercise of the option provided in Section 13.01 applicable to this Section 13.02, the Company shall be deemed to have been discharged

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from its obligations with respect to the Outstanding Securities, and the provisions of Article XII hereof shall cease to be effective on the date the conditions set forth below are satisfied (hereinafter, “defeasance”). For this purpose, such defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Securities, which shall thereafter be deemed to be “Outstanding” only for the purposes of Section 13.05 and the other Sections of this Indenture referred to in clauses (A) and (B) below, and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 13.04 and as more fully set forth in such Section, payments in respect of the principal of (and premium, if any) Liquidated Damages, if any, and interest on such Securities when such payments are due, (B) the Company’s obligations with respect to such Securities under Sections 3.04, 3.05, 3.06, 3.07, 10.02 and 10.03, (C) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (D) this Article XIII. Subject to compliance with this Article XIII, the Company may exercise its option under this Section 13.02 notwithstanding the prior exercise of its option under Section 13.03.

          Section 13.03 Covenant Defeasance.

          Upon the Company’s exercise of the option provided in Section 13.01 applicable to this Section, (i) the Company shall be released from its obligations under Sections 10.05 through 10.16, inclusive and clauses (c), (d) and (e) of Section 8.01 hereof and (ii) the occurrence of an event specified in Sections 5.01(c), 5.01(d) (with respect to clauses (a), (c), (d) or (e) of Section 8.01), 5.01(e) (with respect to any of Sections 10.05 through 10.16, inclusive), 5.01(f) and 5.01(g) shall not be deemed to be an Event of Default and (iii) the provisions of Article XII hereof shall cease to be effective on and after the date all conditions set forth below are satisfied (hereinafter, “covenant defeasance”). For this purpose, such covenant defeasance means that the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such Section, clause or Article or by reason of any reference in any such Section, clause or Article to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.

          Section 13.04 Conditions to Defeasance or Covenant Defeasance.

          The following shall be the conditions to application of either Section 13.02 or Section 13.03 to the then Outstanding Securities:

               (a) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 6.09 who shall agree to comply with the provisions of this Article XIII applicable to it) as trust funds in trust for the purpose of making the following payments, specifically

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pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities, (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms, without the need for reinvestment, will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, the principal of (and premium, if any) and each installment of interest, if any, and Liquidated Damages, if any, on the Outstanding Securities on the Stated Maturity of such principal or installment of interest or Liquidated Damages in accordance with the terms of this Indenture and of such Securities. For this purpose, “U.S. Government Obligations” means securities that are (x) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt.

               (b) In the case of an election under Section 13.02, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (y) since the date of this Indenture there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of the Outstanding Securities will not recognize gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to federal income tax on the same amount, in the same manner and at the same times as would have been the case if such deposit, defeasance and discharge had not occurred.

               (c) In the case of an election under Section 13.03, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the Outstanding Securities will not recognize gain or loss for federal income tax purposes as a result of such deposit and covenant defeasance and will be subject to federal income tax on the same amount, in the same manner and at the same times as would have been the case if such deposit, covenant defeasance and discharge had not occurred.

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               (d) The Company shall have delivered to the Trustee an Officers’ Certificate to the effect that the Securities, if then listed on any securities exchange, will not be delisted as a result of such deposit.

               (e) Such defeasance or covenant defeasance shall not cause the Trustee to have a conflicting interest as defined in Section 6.08 and for purposes of the Trust Indenture Act with respect to any securities of the Company.

               (f) No Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than an Event of Default resulting from the borrowing of funds to be applied to such deposit) or, insofar as Section 5.01(h) is concerned, at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period).

               (g) Such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company is a party or by which it is bound.

               (h) The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to either the defeasance under Section 13.02 or the covenant defeasance under Section 13.03 (as the case may be) have been satisfied.

               (i) Such defeasance or covenant defeasance shall not result in the trust arising from such deposit constituting an investment company as defined in the Investment Company Act of 1940, as amended, or such trust shall be qualified under such act or exempt from regulation thereunder.

Section 13.05 Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions.

              Subject to the provisions of the last paragraph of Section 10.03, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee — collectively, for purposes of this Section 13.05, the “Trustee”) pursuant to Section 13.04 in respect of the Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal (and premium, if any) or Liquidated Damages, if any, and interest, but such money need not be segregated from other funds except to the extent required by law. Money so held in trust shall not be subject to the provisions of Article XII.

              The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 13.04 or the principal and interest received in respect thereof other

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than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Securities.

          Anything in this Article XIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 13.04 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent defeasance or covenant defeasance.

          Section 13.06 Reinstatement.

          If the Trustee or the Paying Agent is unable to apply any money in accordance with Section 13.02 or 13.03 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article XIII until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 13.02 or 13.03; provided, however, that if the Company makes any payment of principal of (and premium, if any) or Liquidated Damages, if any, or interest on any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or the Paying Agent.

115

          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the day and year first above written.

RURAL CELLULAR CORPORATION
By:
Name:	Wesley E. Schultz
Title:	Executive Vice President & Chief Financial Officer
WELLS FARGO BANK,
NATIONAL ASSOCIATION
By:
Name:
Title:
	(Authorized Officer)

[Signature Page to Indenture]

116

Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of November 7, 2005.

Trust Indenture	Indenture
Act Section	Section
§310(a)(1)	6.09
(a)(2)	6.09
(a)(3)	Not applicable
(a)(4)	Not applicable
(a)(5)	6.08
	6.09
(b)	6.08
	6.10
(c)	Not applicable
§311(a)	6.13
(b)	6.13
(c)	Not applicable
§312(a)	7.01
	7.02(a)
(b)	7.02(b)
(c)	7.02(c)
§313(a)	7.03(a)
(b)(1)	Not applicable
(b)(2)	7.03(a)
(c)	7.03(a)
	1.06
(d)	7.03(b)
§314(a)	7.04
	10.18
(b)	Not applicable
(c)(1)	1.02
(c)(2)	1.02
(c)(3)	Not applicable
(d)	Not applicable
(e)	1.02
§315(a)	6.01
	6.03
(b)	6.02
	1.06
(c)	6.01(a)
(d)	6.01(b)
(e)	5.14
§316(a)(last sentence)	1.01
(a)(1)(A)	5.12

A-1

Trust Indenture	Indenture
Act Section	Section
(a)(1)(B)	5.13
(a)(2)	Not applicable
(b)	5.08
§317(a)(1)	5.03
(a)(2)	5.04
(b)	10.03
§318(a)	1.07

          This Reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.

A-2

EX-10.8(C)

Exhibit 10.8(c)

AMENDMENT No. 2 TO
RURAL CELLULAR CORPORATION
KEY EMPLOYEE
DEFERRED COMPENSATION PLAN

This Amendment No. 2 (the “Amendment”) is made effective as of the 31st day of December, 2004 to the Rural Cellular Corporation Key Employee Deferred Compensation Plan dated June 1, 2001, as amended effective January 1, 2002 (the “Plan”).

WITNESSETH:

WHEREAS, the Board of Directors of Rural Cellular Corporation (the “Company”) wishes to restrict the application of the Plan as currently in effect to deferrals of compensation for Plan Years beginning prior to January 1, 2005; and

WHEREAS, the amendment and restatement of the Plan in the form of the Rural Cellular Corporation Key Employee Deferred Compensation Plan II will apply to deferrals of compensation for Plan Years beginning on and after January 1, 2005;

NOW THEREFORE, the Company hereby amends the Plan as follows:

1. Section 3.1 of the Plan (“Elections to Defer Compensation”) is amended by adding a new paragraph (c) at the end thereof, to read as follows:

     “(c) Notwithstanding the foregoing, no deferrals of Compensation shall be permitted hereunder for any Plan Year commencing after December 31, 2004.”

2. Section 3.2 of the Plan (“Employer Contributions”) is amended by adding a new paragraph (c) at the end thereof, to read as follows:

     “(c) Notwithstanding the foregoing, no Employer Matching or Profit Sharing Contributions shall be made hereunder with respect to Compensation earned in any payroll period ending after December 31, 2004.”

3. All other terms and provisions of the Plan remain in full force and effect with respect to Compensation deferred for Plan Years ending prior to January 1, 2005.

* * * * *

1

To record the adoption of the Amendment as set forth above, the undersigned has executed this document this 16th day of February, 2006, for and on behalf of the Company.

RURAL CELLULAR CORPORATION  

By

As its

2

EX-10.9

Exhibit 10.9

RURAL CELLULAR CORPORATION
KEY EMPLOYEE
DEFERRED COMPENSATION PLAN II

Table of Contents

	Page
BACKGROUND		1
ARTICLE 1 DEFINITIONS		1
1.1 Account		1
1.2 Affiliate		1
1.3 Beneficiary		1
1.4 Change in Control		1
1.5 Code		3
1.6 Company		3
1.7 Compensation		3
1.8 Deferred Compensation		4
1.9 Effective Date		4
1.10 Eligible Employee		4
1.11 Employer		4
1.12 ERISA		4
1.13 Matching Contribution Percentage		4
1.14 Matching Contribution Compensation Percentage		4
1.15 Participant		4
1.16 Plan		4
1.17 Plan Administrator		4
1.18 Plan Year		4
1.19 Profit Sharing Contribution Percentage		4
1.20 Savings and Profit Sharing Plan		5
1.21 Specified Employee		5
1.22 Termination of Employment		5
1.23 Unforeseeable Emergency		5
ARTICLE 2 ADMINISTRATION		6
2.1 Powers and Duties		6
2.2 Delegation		6
ARTICLE 3 DEFERRED COMPENSATION		6
3.1 Elections to Defer Compensation		6
3.2 Employer Contributions		7
3.3 Deferred Compensation Accounts		8
3.4 Deemed Investments		9
ARTICLE 4 PAYMENT OF DEFERRED COMPENSATION		9

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	Page
4.1 Payment of Deferred Compensation		9
4.2 Commencement of Payments		9
4.3 Method of Payment		10
4.4 Amount of Payments		10
4.5 Participant Elections		10
4.6 Acceleration of Payments		10
4.7 Facility of Payment		13
ARTICLE 5 CLAIMS PROCEDURE		13
5.1 Decisions on Claims		13
5.2 Review of Denied Claims		13
ARTICLE 6 FUNDING		14
ARTICLE 7 AMENDMENT AND TERMINATION		14
7.1 Amendment		14
7.2 Termination		14
ARTICLE 8 GENERAL PROVISIONS		15
8.1 Status of Participants		15
8.2 No Guaranty of Employment		15
8.3 Delegation of Authority		15
8.4 Legal Actions		15
8.5 Applicable Law		15
8.6 Rules of Construction		15
8.7 Expenses of Administration		15
8.8 Indemnification		15
8.9 Code Section 409A		16

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BACKGROUND

The Rural Cellular Corporation Key Employee Deferred Compensation Plan II (“Plan”), as hereinafter set forth, has been adopted by Rural Cellular Corporation for the purpose of providing deferred compensation to a select group of its management and highly compensated employees. This Plan constitutes an amendment and restatement of the Rural Cellular Corporation Key Employee Deferred Compensation Plan (“Original Plan”) with respect to all compensation deferred by or on behalf of its Participants on and after January 1, 2005. The Original Plan remains in effect and governs all compensation deferred by or on behalf of its Participants prior to January 1, 2005.

ARTICLE 1
DEFINITIONS

When the following words or phrases are used in this Plan, they shall have the meanings set forth below unless otherwise specifically provided:

1.1 Account. An account that has been established for a Participant pursuant to Section 3.3.

1.2 Affiliate. A corporation in which the Company is a majority shareholder, or a corporation in a chain of corporations beginning with the Company and ending with the Affiliate, in which each corporation is a majority shareholder of another corporation in the chain.

1.3 Beneficiary. The person or persons (including a trustee or trustees) designated as a Participant’s Beneficiary in the last written instrument signed by the Participant for the purposes of this Plan and received by the Company prior to the Participant’s death. If no such person has been designated, the Participant’s Beneficiary shall be the person or persons who constitute the Participant’s beneficiary for the purposes of the Savings and Profit Sharing Plan.

1.4 Change in Control. For the purposes of Article 7 a Change in Control shall occur upon the occurrence of a Change in the Ownership of the Company, a Change in Effective Control of the Company, or a Change in Ownership of the Company’s Assets. Each of these terms shall have the meanings set forth as follows:

(a) Change in Ownership. A Change in Ownership shall occur on the date that any one person, or more than one person acting as a group, acquires ownership of stock of the Company that, together with the stock of the Company owned by such person or group, constitutes more than 50% of the total fair market value, or 50% of the total voting power, of the stock of the Company. An increase in the percentage of stock owned by any one person, or by persons acting as a group, as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock for the purposes of this paragraph. Notwithstanding the foregoing:

     (i) if any one person, or more than one person acting as a group, is considered to own more than 50% of the total fair market value or total voting

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power of the stock of the Company immediately prior to an acquisition, the acquisition of additional stock by the same person or persons will not cause a Change in Ownership of the Company; and

     (ii) a Change in Ownership of the Company will not occur unless there has been a transfer or issuance of stock of the Company, and stock in the Company remains outstanding after such transfer or issuance.

(b) Change in Effective Control. A Change in Effective Control of the Company will occur on the date that:

     (i) any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 35% or more of the total voting power of the Company’s stock; or

     (ii) a majority of the members of the Company’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s board of directors prior to the date of the appointment or election.

Notwithstanding the foregoing, if any one person, or more than one person acting as a group, effectively controls the Company (within the meaning of this paragraph (b)) immediately prior to an acquisition of additional control, the acquisition of additional control of the Company by the same person or persons will not cause a Change in Effective Control of the Company.

(c) Change in Ownership of the Company’s Assets. A Change in Ownership of the Company’s Assets will occur on the date that any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company having a total gross fair market value that equals or exceeds 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, “gross fair market value” means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. Notwithstanding the foregoing, a transfer of the Company’s Assets to;

     (i) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock;

     (ii) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company;

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     (iii) a person, or more than one person acting as a group, that owns, directly or indirectly, 50% or more of the total value or voting power of all of the Company’s outstanding stock; or

     (iv) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in clause (iii);

will not treated as a Change in Ownership of the Company’s Assets. For the purposes of subparagraphs (ii) through (iv), a person’s status is determined immediately after the transfer of the assets.

(d) Special Rules. The following rules shall apply in determining whether a Change in Control of the Company has occurred:

     (i) Persons Acting as a Group. Persons will not be considered to be acting as a group solely because they purchase or own stock, or purchase assets, of the Company at the same time or as a result of the same public offering. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock or assets, or similar business transaction with the Company. If a person, including an entity shareholder, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder will be considered to be acting as a group with other shareholders in a corporation only to the extent of their ownership interest in that corporation prior to the transaction giving rise to the change, and not with respect to their ownership interest in the other corporation.

     (ii) Attribution of Stock Ownership. Section 318(a) of the Code will be applied in determining stock ownership. Stock underlying a vested option will be treated as owned by the individual who holds the vested option, and stock underlying an unvested option will not be treated as owned by the individual who holds the unvested option. However, if a vested option is exercisable for stock that is not substantially vested (as defined by Sections 1.83-3(b) and (j) of the Income Tax Regulations), the stock underlying the option will not treated as owned by the individual who holds the option.

1.5 Code. The Internal Revenue Code of 1986, as from time to time amended.

1.6 Company. Rural Cellular Corporation, a Minnesota corporation, and any successor corporation.

1.7 Compensation.

               (a) For the purposes of Section 3.2, Compensation means compensation that is taken into account in determining the amount of a Participant’s contributions under the Savings and Profit Sharing Plan, but without regard to any limitations that are imposed by the Savings and Profit Sharing Plan to effectuate the requirements of Section 401(a)(17) of the Code.

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               (b) For all other purposes, Compensation means a Participant’s base salary, and any incentive compensation that is payable to the Participant in cash.

1.8 Deferred Compensation. The balance credited to a Participant’s Accounts.

1.9 Effective Date. January 1, 2005.

1.10 Eligible Employee. An employee of an Employer who is a member of a select group of management or highly compensated employees within the meaning of Section 201(2) of ERISA, and who has been designated by the Plan Administrator as being eligible to participate in the Plan. The employees listed in Appendix A hereto have been designated by the Plan Administrator as being eligible to participate in the Plan as of the Effective Date.

1.11 Employer. The Company, and each Affiliate that has been designated by the Plan Administrator.

1.12 ERISA. The Employee Retirement Income Security Act of 1974, as from time to time amended.

1.13 Matching Contribution Percentage. The percentage, if any, that will be used in determining the amount of matching contributions to be made on behalf of a Participant pursuant to Section 3.2(a). The Matching Contribution Percentage for a payroll period will be established by the Plan Administrator, acting in its sole and exclusive discretion. If the Plan Administrator does not establish a Matching Contribution Percentage for any such payroll period, the Matching Contribution Percentage for that payroll period will be 0%.

1.14 Matching Contribution Compensation Percentage. The maximum percentage of a Participant’s Compensation that may be contributed to the Plan and to the Savings and Profit Sharing Plan as matching contributions for any payroll period. The Matching Contribution Compensation Percentage for a payroll period will be established by the Plan Administrator, acting in its sole and exclusive discretion. If the Plan Administrator does not establish a Matching Contribution Compensation Percentage for any such payroll period, the Matching Contribution Percentage for that payroll period will be 3%.

1.15 Participant. An Eligible Employee for whom an Account has been established pursuant to Section 3.3.

1.16 Plan. The Rural Cellular Corporation Key Employee Deferred Compensation Plan, as set forth herein, and as from time to time amended.

1.17 Plan Administrator. The Compensation Committee of the Company’s Board of Directors.

1.18 Plan Year. The calendar year.

1.19 Profit Sharing Contribution Percentage. The percentage, if any, that will be used in determining the amount of profit sharing contributions to be made on behalf of a Participant pursuant to Section 3.2(b). The Profit Sharing Contribution Percentage for a payroll period will

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be established by the Plan Administrator, acting in its sole and exclusive discretion. If the Plan Administrator does not establish a Profit Sharing Contribution Percentage for any such payroll period, the Profit Sharing Contribution Percentage for that payroll period will be 0%.

1.20 Savings and Profit Sharing Plan. The Rural Cellular Corporation Savings and Profit Sharing Plan, as from time to time in effect.

1.21 Specified Employee An individual who is a “key employee” (as defined in Section 416(i)(1)(A)(i), (ii) or (iii) of the Code, without regard to paragraph (5) thereof) of the Company. Specified Employees shall be identified in accordance with the requirements of Section 409A of the Code and the regulations thereunder, with December 31^st of each calendar year being the “identification date”.

1.22 Termination of Employment. Severance of a Participant’s employment relationship with all of the Employers and their Affiliates. A transfer of employment among Employers or their Affiliates will not constitute a Termination of Employment. The employment relationship will also be treated as continuing and no Termination of Employment will be deemed to have occurred while the Participant is on military leave, sick leave, or other bona fide leave of absence (such as temporary employment by the government) if the period of such leave does not exceed six months, or any longer period during which the Employee’s right to reemployment is provided for by statute or by contract. If the period of a leave exceeds six months and the Employee’s right to reemployment is not provided for by statute or by contract, a Termination of Employment will be deemed to have occurred on the first date immediately following the expiration of such six month period. A Participant will not be deemed to have a Termination of Employment for this purpose unless the termination constitutes a “separation from service” according to the meaning given to that term by Treas. Reg.1.409A-1(h) (“Separation From Service”). In the event that the Participant ceases to be an employee with any of the Employers or their Affiliates, but continues to perform services for one or more of the Employers or their Affiliates in a capacity other than as an employee (such as an independent contractor, director or consultant) that would be sufficient to cause the termination of employment not to constitute a Separation From Service, the later date on which a Separation from Service actually does occur shall be deemed to be the date the Participant’s Termination of Employment occurs for purposes of the Agreement.

1.23 Unforeseeable Emergency. A severe financial hardship of a Participant or Beneficiary resulting from an illness or accident of the Participant or Beneficiary, the Participant’s or Beneficiary’s spouse, or the Participant’s or Beneficiary’s dependent (as defined in Section 152(a) of the Code), or the loss of the Participant’s or Beneficiary’s property due to casualty, or other similar extraordinary and unforeseeable circumstance arising as a result of events beyond the control of the Participant or Beneficiary. Unforeseeable Emergencies will include, for example: the imminent foreclosure or eviction from the Participant’s or Beneficiary’s home; the need to pay for medical expenses, medical insurance deductibles, or prescription drug costs; or the need to pay for funeral costs of a spouse or dependent. As set forth in Treas. Reg. §1.409A-3(g)(3)(i), whether an Unforeseeable Emergency exists shall be determined by the Plan Administrator on the relevant facts and circumstances of each particular case.

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ARTICLE 2
ADMINISTRATION

2.1 Powers and Duties. Full power and authority to construe, interpret, and administer this Plan is vested in the Plan Administrator. In particular, the Plan Administrator shall make each determination provided for in this Plan and may adopt such rules, regulations, and procedures as it deems necessary or desirable to the efficient administration of the Plan. The Plan Administrator’s determinations need not be uniform, and may be made by it selectively among persons who may be eligible to participate in the Plan. The Plan Administrator shall have sole and exclusive discretion in the exercise of its powers and duties hereunder, and all determinations made by the Plan Administrator shall be final, conclusive, and binding unless they are found by a court of competent jurisdiction to have been arbitrary and capricious.

2.2 Delegation. The Plan Administrator may delegate part or all of its duties to any person or persons, and may from time to time revoke any such delegation and delegate its duties to another person or persons. Each such delegation to a person who is not an employee of the Company or an Affiliate shall be in writing, a copy will be furnished to the person to whom the duty is delegated, and the person to whom the duty is delegated shall file a written acceptance with the Plan Administrator. A delegate’s duty will terminate upon revocation of the delegation by the Plan Administrator, upon withdrawal of such person’s acceptance, or, in the case of a delegate who is an employee of the Company or an Affiliate, upon termination of the delegate’s employment. A person to whom administrative duties are delegated may not, unless the delegation provides otherwise, delegate such duties to another person.

ARTICLE 3
DEFERRED COMPENSATION

3.1 Elections to Defer Compensation.

          (a) An Eligible Employee may elect to defer up to 100% of his or her Compensation for any Plan Year. An election to defer Compensation shall be in writing and it must be received by the Plan Administrator prior to the first day of the Plan Year in which the services for which the Compensation is payable are to be performed; provided, that, in the case of an individual who first becomes an Eligible Employee after the first day of a Plan Year, an election to defer Compensation for services to be performed subsequent to the date of the election and during the Plan Year in which the individual first becomes an Eligible Employee may be made on or before the date that is 30 days after the individual first becomes an Eligible Employee. In the case of incentive compensation, such an election during the first year of eligibility shall apply to a portion of the incentive compensation equal to the total incentive compensation paid to the Eligible Employee for that first year of eligibility multiplied by the ratio of the number of days remaining in that first year of eligibility subsequent to the date of the election over the total number of days for which the incentive compensation for that first year of eligibility was paid.

          (b) Amounts deferred from base salary shall reduce the Participant’s base salary in equal installments for each pay period during the portion of the Plan Year to which the

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election applies. Amounts deferred from incentive compensation shall reduce the Participant’s incentive compensation on the date such incentive compensation would otherwise be paid to the Participant.

          (c) An election to defer Compensation shall be subject to the following requirements:

(i)	The election may defer a percentage (which shall not be less than 5%) of the Participant’s base salary, and/or a percentage (which shall not be less than 5%) of the Participant’s incentive compensation.
(ii)	The election shall be irrevocable, and it shall apply to all Compensation payable for services performed by the Participant during the portion of the Plan Year to which it applies, except that a Participant may terminate an election to defer Compensation if the Plan Administrator determines that this is necessary as a result of an Unforeseeable Emergency.

3.2 Employer Contributions.

          (a) Matching Contributions. For each payroll period during which a Participant is eligible to receive matching contributions under the Savings and Profit Sharing Plan, the Participant’s Employer shall credit to the Participant’s Account an amount equal to:

 (i) the lesser of:

(A)	the Matching Contribution Percentage times the sum of: (1) the amounts contributed by the Participant to the Savings and Profit Sharing Plan during the payroll period that are eligible for matching contributions; plus (2) the Compensation deferred by the Participant during the payroll period pursuant to Section 3.1; or
(B)	the Matching Contribution Compensation Percentage times the Participant’s Compensation for the payroll period;

          minus

 (ii) the matching contributions that are made to the Savings and Profit Sharing Plan on behalf of the Participant for the payroll period.

          (b) Profit Sharing Contributions. For each Plan Year during which a Participant is eligible to receive a profit sharing contribution under the Savings and Profit Sharing Plan, the Participant’s Employer shall also credit to the Participant’s Account an amount equal to:

 (i) The Profit Sharing Contribution Percentage times the Participant’s Compensation for the Plan Year; minus

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(ii) the profit sharing contributions that are made to the Savings and Profit Sharing Plan on behalf of the Participant for the Plan Year.

3.3 Deferred Compensation Accounts. The Plan Administrator shall establish one or more Accounts in the name of each Participant to record the Deferred Compensation payable to that Participant. Such Accounts shall be for bookkeeping purposes only, and shall not be deemed to create a fund or trust for the benefit of the Participant. Each Participant’s Accounts shall be established, maintained, and periodically adjusted as follows:

(a)

Separate Accounts. Separate Accounts shall be maintained for the portion of a Participant’s Deferred Compensation (if any) that is distributable in a lump sum, and for the portion of a Participant’s Deferred Compensation (if any) that is distributable in installments. Separate Accounts shall also be maintained for each portion of a Participant’s Deferred Compensation that is distributable at a different time.

(b)

Credits. The Plan Administrator shall credit the following amounts to a Participant’s Account:

(i)	Amounts deferred by the Participant pursuant to Section 3.1 shall be credited to the Participant’s Account as of the dates on which they are applied to reduce the Participant’s current Compensation.
(ii)	Amounts contributed on behalf of the Participant pursuant to Section 3.2 shall be credited to the Participant’s Account on the dates as of which the corresponding contributions are credited to the Participant’s account under the Savings and Profit Sharing Plan.
(iii)	Investment earnings (including unrealized appreciation) attributable to the Participant’s deemed investments shall be credited to the Participant’s Account as of such dates during each Plan Year as the Plan Administrator shall reasonably determine in accordance with rules that are uniformly applied to all similarly situated Participants.

(c) Charges. The Plan Administrator shall charge the following amounts to a Participant’s Account:

(i)	The amount of any payment made to or on behalf of the Participant shall be charged to the Participant’s Account as of the date on which the payment is made.
(ii)	Investment losses (including unrealized depreciation) attributable to the Participant’s deemed investments shall be charged to the Participant’s Account as of such dates during each Plan Year as the Plan Administrator shall reasonably determine in accordance with rules that are uniformly applied to all similarly situated Participants.

-8-

3.4 Deemed Investments.

          (a) Prior to its payment to the Participant, a Participant’s Deferred Compensation shall be deemed to be invested in such investments as shall be permitted by the Plan Administrator and selected by the Participant, in accordance with rules that are adopted by the Plan Administrator and uniformly applied to all similarly situated Participants.

          (b) Although the amount of a Participant’s Deferred Compensation is measured by the value of and earnings on certain deemed investments, the Employers need not actually make such investments. Rather, the value of and earnings on such investments are merely a measuring device to determine the amounts to be paid to the Participant pursuant to Article 4. If an Employer should actually purchase any of the investments that are deemed to have been made for a Participant’s Account, they shall be subject to the claims of the Employer’s general creditors in the event of its insolvency.

ARTICLE 4
PAYMENT OF DEFERRED COMPENSATION

4.1 Payment of Deferred Compensation. In the event of a Participant’s Termination of Employment for reasons other than the Participant’s death, the balance credited to the Participant’s Accounts shall be paid to the Participant. In the event of a Participant’s death, the balance credited to the Participant’s Accounts shall be paid to the Participant’s Beneficiary.

4.2 Commencement of Payments. Payment of a Participant’s Deferred Compensation shall commence as follows:

(a)	Death. In the case of a Participant’s death, payment shall commence within 30 days after the date the Participant’s Beneficiary is identified and located by the Employer.
(b)	Termination of Employment. In the case of a Participant’s Termination of Employment for reasons other than the Participant’s death, payment shall commence within 30 days after:

(i)	the Participant’s Termination of Employment; or
(ii)	the last day of any Plan Year ending subsequent to the Participant’s Termination of Employment and prior to the Participant’s 66th birthday;

as elected by the Participant pursuant to Section 4.5; provided, that in the case of a Participant who is a Specified Employee, payment shall not commence prior to the date that is six months after the date of the Participant’s Termination of Employment.

If payment of the Participant’s Deferred Compensation is to be made in annual installments, the second installment shall be paid within 30 days after the last day of the Plan Year following the Plan Year in which the first installment is paid, and each subsequent installment shall be paid within 30 days after the last day of the Plan Year for which that installment is paid.

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4.3 Method of Payment. A Participant’s Deferred Compensation will be paid in a lump sum or in up to ten annual installments, as elected by the Participant pursuant to Section 4.5.

4.4 Amount of Payments. The amount of a lump sum payment shall be the balance credited to the Participant’s Accounts as of a date selected by the Plan Administrator, which date shall not be more than 30 days prior to the date the lump sum is paid. The amount of an installment payment shall be equal to the balance credited to the Participant’s Accounts as of a date selected by the Plan Administrator (which date shall not be more than 30 days prior to the date the installment is paid), divided by the number of installments (including the current installment) remaining to be paid.

4.5 Participant Elections.

               (a) When a Participant elects to defer Compensation pursuant to Section 3.1, the Participant may also make an election as to the time at which payment of such Deferred Compensation will commence following the Participant’s Termination of Employment for reasons other than the Participant’s death, and as to the method (lump sum or installments) in which such Deferred Compensation will be paid following the Participant’s death or Termination of Employment. Each such election shall be due by the due date for the election under Section 3.1, and it shall apply to all Deferred Compensation that is attributable to the Plan Year to which the election under Section 3.1 applies. If a Participant fails to make an election for any Plan Year, the election that was in effect for the previous Plan Year shall remain in effect for such Plan Year. If no election was in effect for the previous Plan Year, Deferred Compensation that is attributable to such Plan Year will, subject to the provisions of Section 4.2 relating to Specified Employees, be distributed in a lump sum within 30 days after the date of the Participant’s death or Termination of Employment.

               (b) A Participant (or, in the event of a Participant’s death, the Participant’s Beneficiary) may change an election as to the method of payment of the Deferred Compensation credited to any of the Participant’s Accounts at any time by giving written notice of such changed election to the Plan Administrator; provided, however, that (i) any such change in election shall not be effective until the first anniversary of the receipt of the notice by the Plan Administrator; (ii) except in the case of a change in election related to a payment on account of death or an Unforeseeable Emergency, the payment with respect to such change in election is deferred for a period of not less than five (5) years from the date such payment would otherwise have been paid; and (iii) any such change in election may not be made less than twelve (12) months prior to the date the payment is scheduled to be paid.

4.6 Acceleration of Payments. The Company may, in its discretion, pay part or all of the Participant’s Deferred Compensation prior to the time provided in Section 4.2 for any of the following reasons:

(a) Domestic Relations Order. The Company may pay part or all of the Participant’s Deferred Compensation to an individual other than the Participant to the extent necessary to fulfill the requirements of a domestic relations order (as defined in Section 414(p)(1)(B) of the Code).

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(b) Unforeseeable Emergency. The Company may pay part or all of the Participant’s Deferred Compensation to the Participant if the Company determines that the payment is necessary to alleviate a severe financial hardship resulting from an Unforeseeable Emergency. Such action shall be taken only if the Participant submits a written application describing the circumstances that are deemed to justify the payment and the amount necessary to prevent severe financial hardship, together with such supporting evidence as the Plan Administrator may reasonably require. The amount distributed to the Participant pursuant to this paragraph may not exceed the amount necessary to satisfy the emergency, plus amounts necessary to pay taxes reasonably anticipated as a result of the payment. Payment may not be made pursuant to this section to the extent the Participant’s hardship is or may be relieved:

     (i) through reimbursement or compensation by insurance or otherwise;

     (ii) by liquidation of the Participant’s assets, to the extent this would not in itself cause severe financial hardship, or

     (iii) by the termination of the Participant’s election to defer Compensation.

(c)	Conflicts of interest. The Company may pay part or all of the Participant’s Deferred Compensation to the Participant if the Company determines that such payments are necessary to comply with a certificate of divestiture (as defined in Section 1043(b)(2) of the Code).
(d)	Taxes. The Company may pay part or all of the Participant’s Deferred Compensation to the Participant if the Company determines that such payments are necessary to pay the Federal Insurance Contributions Act (FICA) tax imposed under Sections 3101, 3121(a), or 3121(v)(2) of the Code on the Deferred Compensation (the “FICA Amount”); to pay the income tax at source on wages imposed under Section 3401 of the Code or the corresponding withholding provisions of applicable state, local, or foreign tax laws as a result of the payment of the FICA Amount; and to pay the additional income tax at source on wages attributable to the pyramiding Section 3401 wages and taxes; provided, that the total payment under this subparagraph (ii) may not exceed the aggregate of the FICA Amount, and the income tax withholding related to the FICA Amount.
(e)	Payments Upon Income Inclusion Under Section 409A. The Company may pay part or all of the Participant’s Deferred Compensation to the Participant if there is a final determination that the Deferred Compensation is subject to, and fails to meet the requirements of, Section 409A of the Code and the regulations thereunder. Such payment may not exceed the amount required to be included in the Participant’s income as a result of the failure to comply with the requirements of Section 409A. For the purposes of this paragraph (d), a “final determination” means a determination by the Internal Revenue Service or a court of competent

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	jurisdiction from which no further appeal may be taken, either because there is no further appeal available or because the time to take such appeal has expired.
(f)	Plan Termination. The Company shall pay part or all of the Participant’s Deferred Compensation to the Participant if the Plan is terminated due to:

(i) the Employer’s exercise of its discretion under Article 7 to terminate the Plan within 12 months of a corporate dissolution taxed under Section 331 of the Code, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A). In such event, all of the Participants’ Deferred Compensation shall be paid to and included in the Participants’ gross incomes no later than:

     (A) the calendar year in which the Plan is terminated;

     (B) the calendar year in which the Deferred Compensation is no longer subject to a substantial risk of forfeiture; or

     (C) the first calendar year in which payment of the Deferred Compensation is administratively practicable;

whichever last occurs.

(ii) the Employer’s exercise of its discretion under Article 7 to terminate the Plan within 30 days preceding, or within 12 months after, a Change in Control; provided, that:

     (A) all substantially similar arrangements sponsored by the Company are also terminated; and

     (B) the Participants, and all participants under any such substantially similar arrangements, receive all amounts of compensation deferred under the terminated arrangements within 12 months after the date of termination.

(iii) the Employer’s exercise of its discretion under Article 7 to terminate the Plan for any other reason, provided, that:

     (A) all arrangements sponsored by the Employer that would be aggregated with Plan under Proposed Treasury Regulation Section 1.409A-1(c) if any Participant participated in all of the arrangements (“Arrangements”) are also terminated;

     (B) no payments, other than payments that would be payable under the terms of the Arrangements if the termination had not occurred, are made within 12 months after the termination of all Arrangements;

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     (C) all payments are made within 24 months after the termination of all such Arrangements; and

     (D) the Employer does not adopt a new Arrangement that would be aggregated with any terminated Arrangement under Proposed Treasury Regulation Section 1.409A-1(c), if any Participant participated in both arrangements, at any time within five years following the termination of all Arrangements.

(iv) Such other events and conditions as the Commissioner of Internal Revenue may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.

4.7 Facility of Payment. An Employer may make payments due to a legally incompetent person in such of the following ways as the Plan Administrator shall determine:

          (a) directly to such person;

          (b) to the legal representative of such person; or

          (c) to a near relative of such person to be used for the person’s benefit.

Any payment made in accordance with the provisions of this section shall be a complete discharge of the Employer’s liability for the making of such payment.

ARTICLE 5
CLAIMS PROCEDURE

5.1 Decisions on Claims. If a claim for benefits is denied, the Plan Administrator shall furnish to the claimant within 90 days after its receipt of the claim (or within 180 days after such receipt if special circumstances require an extension of time) a written notice that:

          (a) specifies the reasons for the denial;

          (b) refers to the pertinent provisions of the Plan on which the denial is based;

          (c) describes any additional material or information necessary for the perfection of the claim and explains why such material or information is necessary; and

          (d) explains the claim review procedures.

5.2 Review of Denied Claims. Upon the written request of the claimant submitted within 60 days after his or her receipt of such written notice, the Plan Administrator shall afford the claimant a full and fair review of the decision denying the claim and, if so requested, permit the claimant to review and obtain copies of any documents that are pertinent to the claim, permit the claimant to submit issues and comments in writing, and afford the claimant an opportunity to meet with appropriate representatives of the Plan Administrator as a part of the review procedure. Within

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60 days after its receipt of a request for review (or within 120 days after such receipt if special circumstances, such as the need to hold a hearing, require an extension of time) the Plan Administrator shall notify the claimant in writing of its decision and the reasons for its decision and shall refer the claimant to the provisions of the Plan that form the basis for its decision.

ARTICLE 6
FUNDING

This Plan is intended to be “unfunded” for the purposes of the Code and Title I of ERISA; however, nothing herein shall prevent an Employer, in its sole discretion, from establishing one or more trusts, of the type commonly known as “rabbi trusts,” to assist it in meeting its obligations under the Plan; provided, however, that neither the assets set aside in such rabbi trust nor the trust itself shall be located outside the United States.

ARTICLE 7
AMENDMENT AND TERMINATION

7.1 Amendment. The Plan Administrator may amend this Plan at any time and for any reason, including without limitation, the cessation of deferrals under the Plan; provided, however, that no amendment of the Plan shall alter a Participant’s right to receive payment of amounts previously credited to the Participant’s Accounts.

7.2 Termination. No termination of the Plan shall be permitted, except as follows:

(a) within the 30 days preceding or the 12 months following a Change in Control of the Company, provided, that the Company complies
      with Section 4.6(f)(ii);

(b) in the event of a dissolution of the Company that is taxed under section 331 of the Code, provided, that the Company complies with
     Section 4.6(f)(i);

(c) with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided, that the Company complies with Section 4.6
     (f)(i); or

(d) for any other reason, provided, that the Company complies with Section 4.6(f)(iii).

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ARTICLE 8
GENERAL PROVISIONS

8.1 Status of Participants. Each Participant and Beneficiary shall be a general unsecured creditor of his or her Employer with respect to amounts payable hereunder, this Plan constituting a mere promise by the Employers to make benefit payments in the future. A Participant’s or Beneficiary’s right to receive payments under the Plan are not subject in any manner to anticipation, alienation, sale, assignment, pledge, encumbrance, attachment, or garnishment by the creditors of the Participant or the Participant’s Beneficiaries.

8.2 No Guaranty of Employment. The establishment of this Plan shall not give a Participant any legal or equitable right to be continued in the employ of an Employer, nor shall it interfere with an Employer’s right to terminate the employment of any of its employees, with or without cause.

8.3 Delegation of Authority. Whenever, under the terms of this Plan, an Employer is permitted or required to do or perform any act, it shall be done or performed by the Board of Directors of the Employer, by any duly authorized committee thereof, or by any officer of the Employer duly authorized by the articles of incorporation, bylaws, or Board of Directors of the Employer.

8.4 Legal Actions. No Participant, Beneficiary, or other person having or claiming to have an interest in this Plan shall be a necessary party to any action or proceeding involving the Plan, and no such person shall be entitled to any notice or process, except to the extent required by applicable law. Any final judgment that is not appealed or appealable that may be entered in any such action or proceeding shall be binding and conclusive on all persons having or claiming to have any interest in this Plan.

8.5 Applicable Law. This Plan shall be construed and interpreted in accordance with the laws of the State of Minnesota, except to the extent the same are preempted by ERISA or other federal law.

8.6 Rules of Construction. Wherever any words are used herein in the masculine gender, they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and wherever any words are used herein in the singular form they shall be construed as though they were also used in the plural form in all cases where they would so apply. Headings of sections and subsections of this Plan are inserted for convenience of reference, are not a part of this Plan, and are not to be considered in the construction hereof. The words “hereof,” “herein,” “hereunder,” and other similar compounds of the word “here” shall mean and refer to the entire Plan, and not to any particular provision or section.

8.7 Expenses of Administration. All expenses and costs incurred in connection with the administration or operation of the Plan shall be paid by the Employers and/or any trust of the type described in Article 6.

8.8 Indemnification. Each Employer shall, to the extent permitted by its articles of incorporation and bylaws, and by the laws of the state in which it is incorporated, indemnify any employee or director of an Employer or an Affiliate providing services to the Plan against any and all liabilities arising by reason of any act or omission, made in good faith pursuant to the provisions of the Plan, including expenses reasonably incurred in the defense of any claim relating thereto.

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8.9 Code Section 409A. The Plan is intended to satisfy the requirements for nonqualified deferred compensation plans set forth in Section 409A of the Code, and it is shall be interpreted, administered and construed consistent with said intent. If any provision of the Plan is or becomes or is deemed to be inconsistent with such requirements, such provision shall be construed or deemed amended to conform to such requirements; provided, that if such a provision cannot be so construed or deemed amended without, in the determination of the Company, materially altering the purpose or intent of the Plan, such provision shall be stricken and the remainder of the Plan shall remain in full force and effect.

* * * * *

To record the adoption of the Plan as set forth above, the undersigned has executed this document this ___day of ___, 2006, for and on behalf of the Company.

RURAL CELLULAR CORPORATION  

By

As its

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APPENDIX A
TO THE
RURAL CELLULAR CORPORATION
KEY EMPLOYEE DEFERRED COMPENSATION PLAN

The following individuals have been designated by the Plan Administrator as being eligible to participate in the Plan as of the Effective Date:

Richard P. Ekstrand

Ann K. Newhall

Wesley E. Schultz

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EX-21

Exhibit 21

SUBSIDIARIES OF THE REGISTRANT

Note: Unless otherwise noted, the Registrant owns 100% of the equity interest in each of the subsidiaries.

INCORPORATED OR ORGANIZED IN MINNESOTA

RCC Atlantic, Inc.
RCC Atlantic Licenses, LLC
RCC Minnesota, Inc.
RCC Transport, Inc.
Wireless Alliance, LLC (Registrant has a 70% interest in this entity)
TLA Spectrum, LLC

INCORPORATED OR ORGANIZED IN VERMONT

Alexandria Indemnity, Inc.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in this Registration Statement No. 333-105866, No. 333-10815, No. 333-10817, No. 333-28269, No. 333-57653, and No. 332-89448 on Form S-8 of our reports dated March 10, 2006, relating to the financial statements and financial statement schedule of Rural Cellular Corporation and Subsidiaries (the “Company”), and management’s report of the effectiveness of internal control over financial reporting, appearing in this Annual Report on Form 10-K of the Company for the year ended December 31, 2005.

/s/ Deloitte & Touche LLP

Minneapolis, Minnesota
March 15, 2006

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in this Registration Statement No. 333-105866, No. 333 10815, No. 333-10817, No. 333-28269, No. 333-57653, and No. 332-89448 on Form S-8 of our report dated March 10, 2006, relating to the financial statements of RCC Minnesota, Inc. (“RCCM”) (which includes an explanatory paragraph related to the preparation of such financial statements that includes allocations to and from RCCM), appearing in this Annual Report on Form 10-K of Rural Cellular Corporation for the year ended December 31, 2005.

/s/ Deloitte & Touche LLP

Minneapolis, Minnesota
March 15, 2006

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Richard P. Ekstrand, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Rural Cellular Corporation, a Minnesota corporation (the “registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 14, 2006	/s/ Richard P. Ekstrand
	Richard P. Ekstrand
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Wesley E. Schultz, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Rural Cellular Corporation, a Minnesota corporation (the “registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure control and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal controls over financial reporting or caused such internal control over financial reporting to be designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 14, 2006	/s/ Wesley E. Schultz
	Wesley E. Schultz
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
AND PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Form 10-K of Rural Cellular Corporation for the year ended December 31, 2005, we, Richard P. Ekstrand, President and Chief Executive Officer of Rural Cellular Corporation, and Wesley E. Schultz, Executive Vice President and Chief Financial Officer of Rural Cellular Corporation, hereby certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 that:

(1)	such Form 10-K for the year ended December 31, 2005, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in such Form 10-K for the year ended December 31, 2005, fairly presents, in all material respects, the financial condition and results of operations of Rural Cellular Corporation.

Date: March 14, 2006	/s/ Richard P. Ekstrand
	Richard P. Ekstrand
	President and Chief Executive Officer

Date: March 14, 2006	/s/ Wesley E. Schultz
	Wesley E. Schultz
	Executive Vice President and Chief Financial Officer