20030527Additional Information.pdf

GIVENS URSLEY LLP
LAW OFFICES Gary G.Alen Franklin G.Lee Michael C.Orr
277 North 6th Street.Suite 200 Christopher J.Beeson David R.Lombardi KennethL.Pursley
PO Box 2720,Boise,Idaho83701 Jessica M.Borup D.David Lorello,Jr.BradleyV,Sneed
TELEPHONE:[phone] William C.Cole Kimberly D.Maloney H.BartonThomas
FACSIMlLE:208 388-1300 Michael C.Creamer John M.Marshall Conley E Ward
WEBSlTE:www.givenspursley.com Emily MacMaster Durkee Kenneth R.McClure Robert B.White
Thomas E.Dvorak Keíly Greene McConnet
Roy Lewis Eiguren Cynthia A.Melillo RaymondD.Givens
Timothy P.Fearnside Christopher H.Meyer James A.McClure
Jeffrey C.Fereday Kendall L.Miller StephanieC.Westermeier
Steven J.Hippler L.EdwardMiller OFCOUNSEL
Karl T.Klein PatrickJ.Miller
Debora K.Kristensen Judson B.Montgomery John A.Miller,LL.M.*
AnneC.Kunkel Angela K.Nelson TAXCONSULTANT
May 27,2003 Deborah E.Nelson W.Hugh O'Riordan OcensedinKentuckyonly
VIA HAND DELIVERY
Terry Carlock
Public Utilities Commission rn
472 W.Washington
Boise,Idaho 83702
Re:P.U.C.Docket No.COL-T-03-1 ,9
Columbine Telephone Company
Dear Terry:
Your Decision Memorandum in the above docket suggests that the company should file
additional information for the Commission's consideration.Attached please find information
responsive to your request,as follows:
1.18 CFR 34-10 does not appear to apply to Columbine.Accordingly,no "Report
of Securities Issued"has been filed and none is enclosed;
2.Executed Loan Agreement dated June 1,2001;January 19,2001 RUS RTFC
accommodation letter;November 16,1998 RTFC loan approval letter (also,
November 9,1998 RTFC loan terms letter);
3.No report of due diligence on the part of RTFC has ever been provided to the
company or,to my knowledge,is available;
4.Executed Secured Promissory Note,Restated Mortgage,Security Agreement and
Financing Statement and Certificate of Resolutions of Board of Directors;
Resolution AuthorizingBorrowing;
5.Completed Officer's Certificate of Compliance and Worksheets (RTFC Long-
Term Borrower)fot he years 2002 and 2003;and
6.No assignment to any subsidiary have been made for such loan.
We are informed that Silver Star Communications invested $1,473,684of the loan
proceeds in the Afton CLEC.The rest of the afton CLEC has been funded with retained earnings
Terry Carlock
May 27,2003
Page 2
of Silver Star.To date,$2,631,579 of the loan has been drawn down.The remaining $1,157,895
has been invested in the regulated operations of Silver Star Communications.There is aremainingbalanceof$631,579 on the loan which has not been drawn down.
Conley Ward will attend tomorrow's decision meeting to present argument to the
Commission.If you need additional information today please call me at your convenience.Thank you for your assistance in this matter.
Sincerely,
Kenneth R.McClure
KRM/krj
Encls.
USDA
United States Department of Agricuñure Ñ ECE I VED
Rural Business-Cooperative Serv Ru
ae nng
Service Rural Utilities Sæe 0 5 2001Washington,DC 20250
Mr.Melvin R.Hoopes dÃN \9 2001
Sileserd
ar Telephone
Company,Inc.
P.O.Box 226
Freedom,Wyoming 83120
Dear Mr.Hoopes:
We are pleased to advise you that a Lien Accommodation in the amount of $3,263,000 hasbeenapprovedtoallowtheRuralTelephoneFinanceCooperative(RTFC)to share in theGovernment's and Rural Telephone Bank's first lien on your company.This approval iscontingentupontheRura!Utilities Service receiving:
1.An executed security instrument,in form and substance satisfactory to theAdministrator;and
2.An executed loan agreement with RTFC,in form and substance satisfactory totheAdministrator.
Please submit an executed copy of the loan agreement with RTFC as soon as possible sopreparationofthedocumentswillnotbedelayed.
Please note that Article ll,Section 15 of the Security Agreement will contain revised financial
controls in accordance with 7 CFR Part 1735.46(b).
Tha you or your cooperation.
incerely,
JER H.BRENT,Director
Nort est Area
Tel ommunications Program
Rur i Utilities Service
cc:Mr.Allen R.Hoopes,Manager
Rural Development is an Equal Opportunity LenderComplaintsofdiscriminationshouldbesentto:Secretary of Agriculture.Washington,DC 20250
usoA
United States Department of Agricultun'ED
Rural Business-Cooperative Serv
RDwm
o
senng
Service Rural Utilities S rvice QgWashington,DC 20250
Mr.Melvin R.Hoopes dþl 9 2Ü01
President
Silver Star Telephone if
Company,Inc.A
P.O.Box 226
Freedom,Wyoming 83120
Dear Mr.Hoopes:
We are pleased to advise you that a Lien Accommodation in the amount of $3,263,000 has
been approved to allow the Rural Telephone Finance Cooperative (RTFC)to share in theGovernment's and Rural Telephone Bank's first lien on your company.This approval iscontingentupontheRuralUtilitiesServicereceiving:
1.An executed security instrument,in form and substance satisfactory to the
Administrator;and
2.An executed loan agreement with RTFC,in form and substance satisfactory to
the Administrator.
Please submit an executed copy of the loan agreement with RTFC as soon as possible sopreparationofthedocumentswillnotbedelayed.
Please note that Article ll,Section 15 of the Security Agreement will contain revised financialcontrolsinaccordancewith7CFRPart1735.46(b).
Tha you or your cooperation.
incerely,
JER H.BRENT,Director
Nort est Area
Tel ommunications Program
Rur i Utilities Service
cc:Mr.Allen R.Hoopes,Manager
Rural Development is an Equal Opportunity LenderComplaintsofdiscriminationshouldbesentto:
Secretary ofAgriculture,Washington,DC 20250
C PY
LOAN AGREEMENT
LOAN AGREEMENT ("Agreement")made as of June 1,2001 by and between SILVERSTARTELEPHONECOMPANY,INC.,a Wyoming corporation ("Borrower"),and RURALTELEPHONEFINANCECOOPERATIVE,a South Dakota cooperative association ("Lender").
RECITALS
WHEREAS,Borrower has requested Lender to make the Loan to Borrower described inScheduleihereto;and
WHEREAS,Lender is willing to make the Loan upon the terms and conditions set forth in thisAgreement;
NOW,THEREFORE,for and in consideration of the mutual covenants contained herein,Borrower and Lender do hereby agree as follows:
L CONSTRUCTION AND DEFINITION OF TERMS
Ali accounting terms not specifically defined herein shall have the meanings assigned tothemasdeterminedbygenerallyacceptedaccountingprinciples.In addition to the terms definedelsewhereinthisAgreement,unless the context othenvise requires,when used herein,the followingtermsshallhavethefollowingmeanings:
"AdjustmentDate"shall mean a date or dates,determined by the Lender based on the term(or rate period)of the applicable Fixed Rate,after the date of the initial Advance to the MaturityDate.
"Advance"shall mean an advance as defined in Section 2.02,
"Business Day"shall mean any day that Lender is open for business.
"Cash Margins"for any year shall mean net income plus depreciation,amortization and anyothernon-cash charges,less any non-cash credits and principal on long-term debt payable in suchyear,as calculated on a consolidated basis for Borrower and all its Subsidiaries.
"Certified".sha!!mean that the information,statement,schedule,report or other documentrequiredtobe"Certified"shall contain a representation of a duly authorized officer of Borrower thatsuchinformation,statement,schedule,report or other document is true and correct and complete.
RTFC-D2 1100%RTFC Long-Term Loan
RUS/RTE Borrower
Joint Mortgage
Rev.07/201/98
WY 501 -9001 (rap)
"Closing"shall mean the first date on which funds are advanced to Borrower hereunder.
"Collateral"shall mean the Mortgaged Property,as such term is defined in the Mortgage,and all proceeds,cash and non-cash,including insurance proceeds,of the foregoing,whether in thepossessionofBorroweroranyotherperson.
"Commitment"shall have the meaning set forth in Schedule 1 hereto.
"Current Ratio"for any year shall mean the ratio of total current assets to total currentliabilities,as determined by dividing total current assets by total current liabilities.
"Debt Service Coverage Ratio"or "DSC"for any year shall mean (a)total net income ormarginsplusdepreciationandamortizationexpense,and interest on long-term debt for such year,divided by (b)principal and interest on long-term debt payable in such year,as calculated on aconsolidatedbasisfortheBorrowerandallitsSubsidiaries.
"Event of Default"shall mean any of.the events described in Section 8 hereof.
"Fixed Rate"shall mean the interest rate per annum provided for in Section 2.03 of thisAgreement.
"Leases"sha!!mean any lease of property by which Borrower shall be obligated for rental orotherpaymentswhichintheaggregateareinexcessof$100,000 other than such equipment leaseswhichareinformandsubstancesubstantiallyinconformitywithleaseagreementsingeneraluseinBorrower's industry by companies of size and character similar to Borrower.
"Lien"shall mean any statutory or common law consensual or non-consensual mortgage,pledge,security interest,encumbrance,lien,right of set-off,claim or charge of any kind,including,without limitation,any conditional sale or other title retention transaction,any lease transaction in thenaturethereofandanysecuredtransactionundertheUniformCommercialCodeofanyjurisdiction.
"Loan"shall mean the loan by the Lender to Borrower,pursuant to this Agreement and theNote,in an aggregate principal amount not to exceed the Commitment.
"Make-Whole Premium"shall mean the excess,if any,of (i)the present value of theamountofinterestthatwouldhaveaccruedduringtheapplicableFixedRateperiodonthatportionoftheLoantobeprepaidorconvertedover(ii)the present value of the amount of interest LenderwouldearnifthatportionoftheLoantobeprepaidorconvertedwasreinvestedfortheremainderoftheapplicableFixedRateperiodinU.S.Treasury obligations with a maturity comparable to theremainingtermoftheapplicableFixedRateperiod.For purposes of calculating the present value in(i)and (ii)above,the discount rate will be the rate of interest accruing on the U.S.Treasuryobligationsin(ii)above.
"Maturity Date"shall mean the maturitydate defined in the Note.
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"Minimum Net Worth Test"shall be calculated on a consolidated basis for the BorrowerandallitsSubsidiaries,and shall mean an equity to total asset ratio of at least forty percent (40%).Equity shall be determined by subtracting total liabilities from total assets.
"Modified Capitalization"shall mean the sum of Borrower's (i)equity,(ii)short and long-term indebtedness and (iii)guarantycommitments.
"Modified Capitalization Ratio"shall mean the ratio of (a)equity to (b)ModifiedCapitalization.
"Mortgage"shall mean the mortgage and security agreement described in Schedule 1.
"Net Worth"shall be calculated on a consolidated basis for the Borrower and all itsSubsidiariestakenasawholeandarrivedatbysubtractingtotalliabilitiesfromtotalassets.
"Note"shall mean the Note executed and delivered by Borrower at or prior to ClosingpursuanttoSubsection5.02(a)hereof,and all renewals,replacements and extensions thereof.
"Obligations"shall include the full and punctual performance of all present and futureduties,covenants and responsibilities due to the Lender by Borrower under this Agreement,theNote,the Other Agreements,all present and future obligations of Borrower to the Lender for thepaymentofmoneyunderthisAgreement,the Note,the Other Agreements,extending to all principalamounts,interest,late charges and a!!other charges and sums,as well as all costs and expensespayablebyBorrowerunderthisAgreement,the Note,the Other Agreementsand-anyand all otherpresentandfuturemonetaryliabilitiesofBorrowertotheLender,whether direct or indirect,contingent or noncontingent,matured or unmatured,accrued or not accrued,related or unrelated tothisAgreement,whether or not of the same character or class as Borrower's obligations under thisAgreementandtheNote,whether or not secured under any other document,instrument or statutoryorcommonlawprovision,as well as all renewals,refinancings,consolidations,recastings andextensionsofanyoftheforegoing.
"Other Agreements"shall mean any and all promissory notes,security agreements,assignments,subordination agreements,pledge or hypothecation agreements,mortgages,deeds oftrust,leases,contracts,guaranties,instruments and documents now and hereafter existing betweentheLenderandBorrower,executed and/or delivered pursuant to this Agreement or guaranteeing,securing or in any other manner relating to any of the Obligations,including,the instruments anddocumentsreferredtoinSubsection5.02 hereof.
"Payment Date"shall mean the last day of each of the months referred to in Schedule ihereto.
"Payment Notice"shall mean the notice furnished to the Borrower at least quarterlyindicatingthepreciseamountofprincipaland/or interest due on the next ensuing Payment Date,such notice to be sent to the Borrower at least ten (10)days before such Payment Date.
"Person"shall include natural persons,corporations,associations,partnerships,jointventures,trusts,governments and agencies and departments thereof,and every other entity ofeverykind.
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"RUS"shall mean the Rural Utilities Service of the United States of America,Department of
Agriculture.
"Subordinated Capital Certificate"or "SCC"shall mean a subordinated certificate
representing an investment in the Lender purchased by the Borrower in connection with the Loan.
"Subsidiary"at any time means any entity which is at the time beneficially owned or
controlled directly or indirectly by the Borrower,by one or more such entities or by the Borrower and
one or more such entities.
"Termination Date"shall mean that date which is four (4)years from the date hereof.
"Times Interest Earned Ratio"or "TIER"for any year shall mean (a)total net income or
margins plus income taxes plus interest payable on long-term debt for such year,divided by (b)
interest on long-term debt payable in such year.
"Total Plant"shall be calculated on a consolidated basis for the Borrower and all its
Subsidiaries and shall mean the total of all assets included in property,plant and equipment
pursuant to generally accepted accounting principles and shall exclude any goodwill or plant
acquisition adjustments.
"Variable Rate"shall mean the variable rate established by the Lender from time to time for
loans similarly classified pursuant to Lender's policies and procedures then in effect.
2.LOAN
2.01 Loan.The Lender agrees to make the Loan to Borrower subject to all of the terms and
conditions of this Agreement and the Other Agreements.
2.02 Advances.The Lender agrees to make,and the Borrower agrees to request,on the
terms and conditions of this Agreement,Advances from time to time at the office of the Lender in
Herndon,Virginia,or at such other place as the Lender may designate,not to exceed the
Commitment.The Borrower shall give the Lender at least one Business Day prior written notice of
the date on which each Advance is to be made.On the Termination Date the Lender may stop
advancing funds and reduce the Commitment to the aggregate amount theretofore advanced.The
obligation of the Borrower to repay the Advances shall be evidenced by the Note.
2.03 Payment,Amortization and Interest Rate.
(a)Pavment.The Borrower shall pay on each Payment Date quarterly installments,in an
amount as determined by the Lender,of principal and/or interest as shown in the Payment Notice,
except that,if not sooner paid,any balance of the principal amount and interest accrued thereon and
all other amounts due hereunder shall be due and payable on the Maturity Date.Payment of
principal hereunder shall commence after the first full quarter following the initla!Advance of funds
as set forth in Schedule 1 and on each subsequent Payment Date until the Maturity Date or such
earlier date as all amounts due hereunder and on account of the Note shall have been paid in full.
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Payment of interest hereunder is due on each Payment Date in which a principal balance isoutstanding.Principal will be amortized in accordance with the.method stated in Schedule 1 hereto.
The Lender will use,for purposes of calculating the amortization of principal,one of the followinginterestrates,as applicable:
(i)If the Borrower elects the Fixed Rate,the Fixed Rate in effect on the Adjustment Date;or
(ii)If the Borrower elects the Variable Rate,the Variable Rate in effect when amortizationbegins;or
(iii)If the Borrower elects to convert from one interest rate program to another pursuant to theprovisionshereunder,the interest rate then in effect for the elected program.
At the Lender's option,all payments shall be applied first to late payment charges due,ashereinafterprovided,then to interest accrued to the date of such payment,and then to the reductionofprincipalbalanceoutstanding.
No provision of this Agreement or the Note shall require the payment,or permit the collection,ofinterestinexcessofthehighestratepermittedbyapplicablelaw.
(b)Interest Rate.Each Advance shall be initially made at the Variable Rate.Interest shall be computed from the actual number of days elapsed on the basis of a year of 365daysuntilthefirstPaymentDatefollowingtheinitialAdvance.Thereafter,interest shall continue tobecomputedfortheactualnumberofdayselapsedonthebasisofayearof365daysunlessaFixedRateisapplicabletotheLoan,in which case interest shall be computed on the basis of a 30-day month and 360-day year.
(i)Variable Rate.If Advances are made at the Variable Rate,it shall applyuntiltheMaturityDate,except as provided hereinbelow.
(li)Fixed Rate.If the Borrower elects a Fixed Rate,such Fixed Rate as is available and ineffectforloanssimilarlyclassifiedpursuanttoLender's policies and procedures then ineffectatthetimeoftheelectionshallapplytosuchAdvanceuntiltheAdjustmentDate.Upon notice given by the Borrower five Business Days prior to such Adjustment Date,Borrower may elect to reset the interest rate to such Fixed Rate as is available and ineffectatthetimeofsuchAdjustmentDate.Such reset Fixed Rate shall apply to thatportionoftheoutstandingprincipalbalanceoftheLoanelectedtohavea.Fixed Rate fromtheAdjustmentDateuntilanewAdjustmentDateortheMaturityDate.If Borrower doesnotelecttoresettheFixedRate,the Variable Rate shall apply to the outstanding principalbalanceoftheLoanthathadbeenbearinginterestattheFixedRatepriortosuchAdjustmentDate,from such Adjustment Date to the Maturity Date.
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(lii)Conversion to Different Interest Proaram.
(A)Variable Rate to Fixed Rate.Subject to the conditions set forth herein,the
Borrower may convert from the Variable Rate to the Fixed Rate for any portion or all
of the principal amount of the Commitment then outstanding at any time provided
the Lender offers a Fixed Rate at such time.
(B)Fixed Rate to Variable Rate The Borrower may convert from a Fixed Rate to theVariableRate:(1)on an Adjustment Date or (2)at any other time,provided that the
Borrower shall pay Lender any applicable Make-Whole Premium.
2.04 Prepayment.In the event the Borrower prepays all or part of the Loan,the BorrowershallpaysuchprepaymentfeeastheLendermayprescribepursuanttothetermsofthisSection2.04.All prepayments shall be accompanied by payment of accrued and unpaid interest on the
amount of and to the date of the prepayment.All prepayments shall be applied first to fees,second
to the payment of accrued and unpaid interest,and then to the unpaid balance of the principalamountoftheLoan.If the Loan bears interest at the Variable Rate the Borrower may prepay theLoanoranyportionthereof,as the case may be,at any time .subject to the terms hereof and saidprepaymentfeeshallbeinanamountequaltofifty(50)basis points times the amount beingprepaid.If the Loan bears interest at the Fixed Rate the Borrower may prepay the Loan,only on anAdjustmentDateoranysuchotherdateprovidedthattheBorrowershallpayaprepaymentfeeinan
amount equal to fifty (50)basis points times the amount being prepaid plus any applicable Make-Whole Premium.
2.05 5%Subordinated Capital Certificates.The Borrower shall purchase SCCs which intheaggregateshallnotexceedtheamountspecifiedinSchedule1hereto.Unless otherwiserequestedinwritingbytheBorrowerpriortotheinitialAdvanceandapprovedbytheLender,the
Borrower agrees to purchase SCCs either (1)with each Advance in the amount of five percent (5%)of each such Advance,and each such SCC shall be paid for with proceeds of such Advance,or (2)by making payments with Borrower's own funds in twenty equal quarterlyinstallments,commencingwiththefirstfullquarterfollowingtheinitialAdvance.If the Borrower elects to pay for SCCs other
than from Loan funds,the amount of the Commitment will be correspondingly reduced by saidamountwhentheSCCsarefullypaid.If the Borrower obtains Advances hereunder other than for
the purpose of purchasing SCCs and falls to pay for the SCCs,then the Lender may makeAdvancesfortheaccountoftheBorrowertopurchasetheSCCs.The Lender agrees to deliver the
SCCs on or about the date on which the SCCs have been paid for in full.The SCCs shall bear nointerestandshallmatureinaccordancewiththetermsthereof.
3.SECURITY
As security for the payment and performance of all of the Obligations,Borrower has enteredintotheMortgagepledgingandgrantingtotheLenderapriorandcontinuingsecurityinterestintheCollateralthatmaybeSecuredbytheMortgagethatshallcontinuallyexistuntilallObligationshavebeenpaidinfull.If reasonably required by the Lender at any time,Borrower shall make notations,satisfactory to the Lender,on its books and records disclosing the existence of the Lender's securityinterestintheCollateral.Borrower agrees that,with respect to the Collateral,which is subject toArticle9oftheUniformCommercialCode,the Lender shall have,but not be limited to,all the rightsandremediesofasecuredpartyundertheUniformCommercialCode.The Lender shall have no
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Iiability or duty,either before or after the occurrence of an Event of Default hereunder,on account oflossofordamageto,or to collect or enforce any of its rights against,the Collateral,or to preserveanyrightsagainstaccountdebtorsorotherpartieswithpriorinterestsintheCollateraL
4.REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement,Borrower represents and warrants to theLenderasofthedateofthisAgreementthat:
4.01 Good Standing.Borrower is a corporation duly.organized validly existing and in goodstandingunderthelawsofthestateofitsincorporation,has the power to own its property and tocarryonitsbusiness,is duly qualified to do business,and is in good standing in each jurisdiction inwhichthetransactionofitsbusinessmakessuchqualificationnecessary.
4.02 Authority.Borrower has corporate power and authority to enter into this AgreementandtheMortgage,to make the borrowing hereunder,to execute and deliver all documents andinstrumentsrequiredhereunderandtoincurandperformtheobligationsprovidedforherein,in theMortgage,and in the Note,all of which have been duly authorized by all necessary and propercorporateandotheraction,and no consent or approval of any person,including,without limitation,stockholders and members of Borrower and any public authority or regulatory body,which has notbeenobtainedisrequiredasaconditiontothevalidityorenforceabilityhereoforthereof.
4.03 Binding Agreement.This Agreement has been duly and properly executed by
Borrower,constitutes the valid and legally binding obligation of Borrower and is fully enforceableagainstBorrowerinaccordancewithitsterms,subject only to laws affecting the rights of creditorsgenerally,the exercise of judicial discretion in accordance with general principles of equity orbecausewaiversofstatutoryorcommonlawrightsorremediesmaybelimited.
4.04 No ConflictingAgreements.The execution,delivery of and performance by BorrowerofthisAgreement,the Mortgage and the Note,and the transactions contemplated hereby orthereby,will not:(a)violate any provision of law,any order,rule or regulation of any court or otheragencyofgovernment,any award of any arbitrator,the charter or by-laws of Borrower,or anyindenture,contract,agreement,mortgage,deed of trust or other instrument to which Borrower is apartyorbywhichitoranyofitspropertyisbound;or (b)be in conflict with,result in a breach of orconstitute(with due notice and/or lapse .of time)a default under,any such award,indenture,contract,agreement,mortgage,deed of trust or other instrument,or result in the creation orimpositionofanyLien(other than contemplated hereby)upon any of the property or assets ofBorrower.
4.05 Litigation.There are no judgments,claims,actions,suits or proceedings pending or,totheknowledgeofBorrower,threatened against or affecting Borrower or its properties,at law or inequityorbeforeorbyanyfederal,state,municipal or other governmental department,commission,
board,bureau,agency or instrumentality,which may resuÏt in any material adverse change in the
business,operations,prospects,properties or assets or in the condition,financial or otherwise,ofBorrower,and Borrower is not,to its knowledge,in default with respect to any judgment,order,writ,injunction,decree,rule or regulatiori of any court or federal,state,municipal or other governmentaldepartment,commission,board,bureau,agency or instrumentality,domestic or foreign,which wouldhaveamaterialadverseeffectonBorrower.
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4.06 Financial Condition.The financial statements of Borrower as at the date set forth inSchedule1hereto,heretofore delivered to the Lender,are complete and correct,fairly present thefinancialconditionofBorrowerandhavebeenpreparedinaccordancewithgenerallyacceptedaccounfingprinciplesappliedonaconsistentbasis.There are no liabilities of Borrower,direct orindirect,fixed or contingent,as of the date of such statements which are not reflected therein.There
has been no material adverse change in the financial condition or operations of the Borrower fromthatsetforthinsaidfinancialstatementsexceptchangespreviouslydisclosedinwritingtotheLenderpriortothedatehereof.
4.07 Taxes.Borrower has paid or caused to be paid all federal,state and local taxes to theextentthatsuchtaxeshavebecomedue,unless the Borrower is contesting in good faith any suchtax.Borrower has filed or caused to be filed all federal,state and local tax returns which arerequiredtobefiledbvBorrower.
4.08 Title to Properties.Borrower has good and marketable title to all of its real properties
and owns all of its other properties and assets free and clear of any liens,except (a)the lien of thisMortgageandtaxesorassessmentsnotyetdue;(b)deposits or pledges to secure payment ofworkmen's compensation,unemployment insurance,old age pensions or other social security;and(c)deposits or pledges to secure performance of bids,tenders,contracts (other than contracts forthepaymentofborrowedmoney),leases,public or statutory obligations,surety or appeal bonds,orotherdepositsorpledgesforpurposesoflikegeneralnatureintheordinarycourseofbusiness.
4.09 Licenses and Permits.Borrower has duly obtained and now holds all licenses,permits,certifications,approvals and the like necessary to own and operate its property andbusinessthatarerequiredbyfederal,state and local laws of the jurisdictions in which Borrowerconductsitsbusinessandeachremainsvalidandinfullforceandeffect.
4.10 Subsidiaries.Borrower has no Subsidiaries other than Subsidiaries heretoforedisclosedtotheLender,or hereafter formed or acquired with the prior written consent of the Lender.
4.11 Certain Indebtedness.There is no indebtedness of Borrower owing to any employee,officer,stockholder or director of the.board of Borrower other than accrued salaries,commissionsandthelikeandanyindebtednesssubordinatedtotheObligationspursuanthereto.
4.12 Location of Office.The chief place of business of the Borrower and the office where itsrecordsconcerningaccountaandcontractrightsarekeptisidentifiedinScheduleihereto.
4.13 Required Approvals.No license,consent,permit or approval of any governmentalagencyorauthorityisrequiredtoenabletheBorrowertoenterintothisAgreementortoperformanyofitsobligationsprovidedforhereinexcepttheRUSandasdisclosedonSchedule1heretoandexceptwithrespecttoregulatoryapprovalswhichmayberequiredinconnectionwiththeLender'senforcementofcertainremedieshereunder.
4.14 ERISA.Each pension plan of Borrower and its Subsidiaries providing benefits forempioyeesofBorrowerorsuchSubsidiarycoveredbyTitleIVoftheEmployeeRetirementIncomeSecurityActof1974,as arnended,and the regulations thereto ("ERISA"),is in compliance withERISAinallmaterialrespects,no material liability to the Pension Benefit Guaranty Corporation
("PBGC")or to a multiemployer plan has been,or is expected by Borrower or its Subsidiaries to be,incurred by Borrower or such Subsidiary.
5.CONDITIONS OF LENDING
The Lender shall have no obligation to make the initial Advance to Borrower hereunderunless,as of the date of Closing,each of the following conditions precedent shall be satisfied asprovidedbelow:
5.01 Legal Matters.All legal matters incident to the consummation of the transactionsherebycontemplatedshallbesatisfactorytocounselfortheLenderandtosuchlocalcounselascounselfortheLendermayretain.
5.02 Documents.There shall have been delivered to the Lender,fully completed and dulyexecuted(when applicable),the following,satisfactoryto the Lender and its counsel:
(a)This Agreement and the Note.
(b)Certified copies,satisfactory to the Lender,of all such corporate documentsandproceedingsoftheBorrowerauthorizingthe-transactions hereincontemplated.
(c)A written opinion from Borrower's counsel addressing such legal matters astheLenderoritscounselshallreasonablyrequire.
(d)The Borrower shall have (i)executed the Mortgage;(li)if any real property isownedbyBorrower,recorded a valid and binding Mortgage granting Lender afirstlieninallrealpropertyownedbyBorrower;(lii)filed financing statements
in all jurisdictions necessary to provide Lender a.first priority,perfectedsecurityinterestinallCollateralwhichmaybeperfectedbythefilingoffinancingstatements;and (iv)delivered such other documents as arenecessarytocreateorcontinueaperfectedsecurityinterestinfavoroftheLenderintheCollateral.
5.03 Government Approvals.The Borrower shall have furnished to the Lender true andcorrectcopiesofallcertificates,authorizations and consents,including without limitation theconsentsreferredtoinSection4.13 hereof,necessary for the execution,delivery or performance bytheBorrowerofthisAgreement,the Note and the Mortgage.
5.04 Representations Warranties and Material Change.At Closing and at the date ofeverysubsequentAdvancehereunder,all covenants,representations and warranties set forth in thisAgreementshallbetrueandcorrectonandasofsuchtimewiththesameeffectasthoughsuchcovenants,representations and warranties had been made on and as of such date;no Event ofDefaultspecifiedinSection8andnoeventwhich,with the lapse of time or the notice and.lapse oftimespecifiedinSection8wouldbecomesuchanEventofDefault,shall have occurred and becontinuingorwillhaveoccurredaftergivingeffecttotheAdvanceonthebooksoftheBorrower;there shall have occurred no material adverse change in the business or condition,financial or
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otherwise,of the Borrower;and nothing shall have occurred which in the opinion of the Lender
materially and adversely affects the Borrower's ability to meet its obligations hereunder.
5.05 Special Conditions.At Closing and at the time of every subsequent .Advance
hereunder,the Lender and its counsel shall be fully satisfied that the Borrower has complied and will
continue to comply with any special conditions identified in Schedule i hereto.
5.06 Requisitions.The Borrower will requisition all Advances by submitting its requisition toLenderinformandsubstancesatisfactorytoLender.Pursuant to the terms and conditions hereof,the Lender will wire the proceeds of the requested Advance to an account as directed by theBorrower.
6.AFFIRMATIVE COVENANTS
Borrower covenants and agrees with the Lender that,until all of the Obligations have beenpaidinfull,Borrower will:
6.01 Membership.Remain,or an affiliate thereof will remain,a member in good standing oftheLender.
6.02 Financial Statements and Other Information.Furnish to the Lender:(a)financial
statements as required by the Mortgage;(b)such other information,reports or statementsconcerningtheoperations,business affairs and/or financial condition of Borrower as the Lender mayreasonablyrequestfromtimetotime;and (c)promptly upon their becoming available information,informandsubstancesatisfactorytoLender,of any and all changes or modification of licenses,
permits,certifications,approvals and the like necessary for Borrower to own or operate its business
or a substantial part of its business.
6.03 Financial Ratios.Subject to applicable laws and rules and orders of regulatory bodies,and to events which in the judgment of the Lender are beyond the control of the Borrower,sooperateandmanageitsbusinessastoachieveanannualDSCofnotlessthan1.25 and an annualTIERofnotlessthan1.50.
6.04 Annual Certificate.Within one hundred twenty (120)days after the close of eachcalendaryear,commencing with the year in which the initial Advance hereunder shall have been
made,deliver to the Lender a written statement signed by the general manager stating that to the
best of said person's knowledge,the Borrower has fulfilled all of its Obligations under thisAgreement,the Note,and the Mortgage throughout such year or,if there has been a default in thefulfillmentofanysuchObligations,specifying each such default known to said person and the nature
and status thereof.
6.05 Use of Proceeds.Use Advances made hereunder and under the Note only for thepurposeidentifiedinSchedule1heretoandforthepaymentofthecosts,expenses and feesincidenttothisAgreementandfornootherpurposewhatsoeverwithoutthepriorwrittenconsentoftheLender.
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6.06 Special Affirmative Covenants.During the term hereof,Lender and its counsel shall
be fully satisfied that the Borrower has complied and will continue to comply with any special
affirmative covenants identified in Schedule 1 hereto.
6.07 Mortgage Filing.Within ten (10)days of acquiring any real property,the Borrower shall
cause the Mortgage to be duly recorded as a first mortgage on all real property and the Mortgage or
other appropriate documentation shall have been duly filed,recorded or indexed as a securityinterestinpersonalpropertywherevertheLendershallhavereasonablyrequested,all in accordance
with applicable law,and the Borrower shall have caused satisfactory evidence thereof to be
furnished to the Lender.
6.08 Modified Capitalization Ratio.Borrower shall maintain as of the last day of each fiscalyearaModifiedCapitalizationRatiooftwentypercent(20%)as measured on a consolidated basis
for Borrower and all of its Subsidiaries.
7.NEGATIVE COVENANTS.
7.01 Notice.Borrower covenants and agrees with the Lender that Borrower will not,directly
or indirectly,without giving written notice to the Lender thirty (30)days prior to the effective date of
any change:
(a)Chance Location of Chief Place of Business.Change location of the Borrower's
chief place of business.
(b)Change of Name.Change the name of Borrower.
7.02 Consent.Borrower covenants and agrees with the Lender that Borrower will not,
directly or indirectly,without the prior written consent of the Lender:
(a)Control.Alter or permit alteration of control of the Borrower.Control shall be
as defined by regulations for telephone companies issued by the Federal
Communications Commission ("FCC").
(b)Subsidiaries.Form or acquire any Subsidiaries.
(c)Additional Indebtedness.Except for indebtedness to the Rural Utilities Service
(RUS),Rural Telephone Bank (RTB),or the Federal Financing Bank (FFB),
borrow money on a secured or unsecured basis from any other lender or incur
any additional secured or unsecured indebtedness;or enter into or allow any
of its Subsidiaries to enter into any Leases,unless at that time Borrower
meets the Minimum Net Worth Test;provided,however,Borrower and its
Subsidiaries,may grant purchase money secured indebtedness or incur
unsecured trade debt or pay other current operating liabilities that arise in the
ordinary course of business so long as the aggregate total of such debt does
not exceed five percent (5%)of Borrower's consolidated total assets.If
Borrower meets the Minimum Net Worth Test,then Borrower and its
Subsidiaries may incur additional indebtedness or enter into Leases without
prior written approval of Lender provided the Borrower meets the Minimum
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Net Worth Test after incurring such additional indebtedness or entering into
such Leases;provided,further,however,Borrower must give at least thirty
(30)days written notice to Lender prior to incurring any additional
indebtedness or entering into such Leases.
7.03 Dividends and Other Cash Distributions.The Borrower will not,in any one
calendar year,without the prior approval in writing of the Lender (i)declare or pay any dividends or
make any other distribution to its stockholders with respect to.its capital stock;(ii)purchase or
redeem or retire any of its capital stock;or (iii)pay any management fees or if already paying amanagementfee,pay an increase in management fees unless with respect to any of the foregoing
(after giving effect to such transaction)(1)(a)Borrower maintains a Current Ratio of not less than
1.25;and (b)Borrower meets the Minimum Net Worth Test -or-(2)(a)Borrower maintains a Current
Ratio of not less than 1.25;(b)Borrower maintains a minimum Net Worth to total assets of not less
than twenty-five percent (25%)and (c)the payment of such dividend,the making of such
distribution,or the purchase,redemption or retirement of such stock,individually or in the aggregate,
does not exceed twenty-five percent (25%)of the prior fiscal year-end Cash Margins in any one
fiscal year.In no event may the Borrower make any such distribution or payment when there is
unpaid any due installment of principal and/or interest on the Note or if the Borrower is otherwise in
material default of any provision of this Agreement or would be in material default hereunder as a
result of such distribution or payment.
7.04 Sale of Capital Assets.The Borrower will not,without the approval in writing of
Lender,sell,lease or transfer (or make any agreement therefor)any capital asset,unless the
proceeds received from the sale,lease,or transfer of such asset,or to be received under an
agreement therefor,are not in excess of the lesser of $50,000 or one percent (1%)of Total
Telecommunications Plant (defined in Exhibit One of the Mortgage)and the aggregate proceeds
received from assets so sold,leased or transferred in any twelve-month period is not in excess of
the lesser of $200,000 or one percent (1%)of Total Telecommunications Plant and the proceeds of
such sale,lease or transfer,less ordinary and reasonable expenses incident to such transaction,are
immediately (i)applied as a prepayment of the notes secured under the Mortgage,p_r_o mt_a
according to the aggregate unpaid principal amount of such notes,to such installments thereof and
prepayment premiums as may be designated by the respective noteholders at the time of any such
prepayment,or (ii)deposited in a restricted bank account as referred to in Article ll,Section 4(c)(3)
of the Mortgage to be applied to the purchase of other property useful in the Borrower's business,
not necessarily of the same kind as the property disposed of,which shall forthwith become subject to
the lien of the Mortgage.
7.05 Limitations on Loans,Investments and Other Obligations:
(a)The Borrower shall not,without first obtaining the written approval of Lender,(i)purchase or
make any commitment to purchase any stock,bonds,notes,debentures or other securities or
obligations of or beneficial interest in,(ii)make any other investment in,(iii)make any loan to,or (iv)
guarantee,assume,or otherwise become liable for any obligation of,any corporation,association,
partnership,joint venture,trust,government or any agency or department thereof,.orany other entity
of any kind if the aggregate amount of all such purchases,investments,loans and guarantees
exceeds the greater of ten percent (10%)of Total Plant or thirty percent (30%)of Net Worth.
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(b)The following shall not be included in the limitation on purchases investments,loans andguaranteesin(a)above:(i)bonds,notes,debentures,stock,or other securities or obligationsissuedbyorguaranteedbytheUnitedStatesgovernmentoranyagencyorinstrumentalitythereof;(ii)bonds,notes,debentures,stock,commercial paper,subordinated capital certificates,or othersecurityorobligationofinstitutionswhoseseniorunsecureddebtobligationsareratedbyatleasttwonationallyrecognizedratingorganizationsineitheroritstwohighestcategories;(iii)investmentsincidentaltoloansmadebyRTFC;(iv)bonds,notes,debentures,commercial paper or any othersecurityoftheNationà!Rural Utilities Cooperative Finance Corporation;and (v)any deposit that isfullyinsuredbytheFederalGovernment.
7.06 Special Negative Covenants.During the term hereof,Lender and its Counsel shall befullysatisfiedthattheBorrowerhascompiledandwillcontinuetocomplywithanyspecialnegativecovenantsidentifiedinSchedule1hereto.
8.EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall constitute an "Event ofDefault":
(a)Representation and Warranties.Any representation or warranty madeherein,in any of the Other Agreements or in any statement,report,certificate,opinion,financial statement or other document furnished or to be furnished inconnectionwiththisAgreementortheOtherAgreementsshallbefalseormisleadinginanymaterialrespect.
(b)Payment.Failure of Borrower to make any of the payment Obligations,including,without limitation,any sum due the Lender under this Agreement oranyoftheOtherAgreements,when and as the same shall become due,whether at the due date thereof,by demand,by acceleration or otherwise.
(c)Other Covenants.Failure of Borrower to observe or perform any warranty,covenant or condition to be observed or performed by Borrower under thisAgreementoranyoftheOtherAgreements.
(d)Corporate Existence.The Borrower shall forfeit or otherwise be deprived ofitscorporatecharter,franchises,permits,easements,consents or licensesrequiredtocarryonanymaterialportionofitsbusiness.
(e)Other Obligations.Default by the Borrower in the payment when due of anymoneyowedbytheBorrower,whether principal,interest,premium orotherwise,under any other agreement for borrowing money in an amount inexcessoffivepercent(5%)of total assets,whether or not such borrowing issecured.
(f)Bankruptcy.A court shall enter a decree or order for relief with respect totheBorroweroranySubsidiaryorguarantor(if any)in an involuntary caseunderanyapplicablebankruptcy,insolvency or other similar law now orhereafterineffect,or appointing a receiver,liquidator,assignee,custodian,
13
trustee,sequestrator or similar official,or ordering the winding up or
liquidation of its affairs,and such decree or order shall remain unstayed and
in effect for a period of sixty (60)consecutive days or the Borrower or any
Subsidiary or guarantor (if any)shall commence a voluntary case under any
applicable bankruptcy,insolvency or other similar law now or hereafter in
effect,or under any such law,or consent to the appointment or taking of
possession by a receiver,liquidator,assignee,custodian or trustee,of a
substantial part of its property,or make any general assignment for the
benefit of creditors.
(g)Dissolution or Liquidation.Other than as provided in subsection (f)above,
the dissolution or liquidation of the Borrower or any Subsidiary or guarantor (if
any),or failure by the Borrower or any Subsidiary or guarantor (if any)promptly to forestall or remove any execution,garnishment or attachment of
such consequence as will impair its ability to continue its business or fulfill its
obligations and such execution,garnishment or attachment shall not be
vacated within thirty (30)days.
(h)Final Judgment.A final non-appealable judgment in excess of $100,000
shall be entered against the Borrower and shall remain unsatisfied or without
a stay for a period of sixty (60)days.
9.RIGHTS AND REMEDIES
9.01 Rights and Remedies of the Lender.Upon the occurrence of an Event of Default,the
Lender may,subject to:
(i)thirty (30)days prior written notice during which time Borrower shall have the
.opportunity to cure said Event of Default except with respect to Obligations pursuant
to 8(b),8(f)and 8(g)above which shall require no notice or demand and shall have no
period to cure;and
(ii)compliance,if required,with the rules and regulations of the FCC and any state public
service or utilities commission having jurisdiction;
exercise in any jurisdiction in which enforcement hereof is sought,the following rights and remedies,
in addition to all rights and rernedies available to the Lender under applicable law,all such rights and
remedies being cumulative and enforceable alternatively,successively or concurrently:
(a)Declare all unpaid principal outstanding on the Note,all accrued and unpaid interest
thereon,and all other Obligations to be immediately due and payable and the same
shall thereupon become immediately due and payable without presentment,
demand,protest or notice of any kind,all of which are hereby expressly waived.
(b)Institute any proceeding or proceedings to enforce the Obligations owed to,or any
Liens in favor of the Lender.
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(c)Pursue all rights and remedies available to the Lender that are contemplated by the
Mortgage in the manner,upon the conditions,and with the effect provided in the
Mortgage,including but not limited to a suit for specific performance,injunctive relief
or damages.
(d)Pursue any other rights and remedies available to the Lender at law or in equity.
9.02 Cumulative Nature of Remedies.Nothing herein shall limit the right of the Lender,
subject to notice and right to cure provisions contained herein,to pursue all rights and remedies
available to a creditor following the occurrence of an Event of Default subject to compliance,if
required,with the rules and regulations of the FCC and any state public service or utilities
commission having jurisdiction.Each right,power and remedy of the Lender in this Agreement
and/or the Other Agreements shall be cumulative and concurrent,and recourse to one or more
rights or remedies shall not constitute a waiver of any other right,power or remedy.
9.03 Costs and Expenses.Borrower agrees to pay and to be liable for any and all
reasonable expenses,including attorney's fees and court costs,incurred by the Lender in exercising
or enforcing any of its rights hereunder or under the Other Agreements,together with interest
thereon at the rate and determined in the manner provided in the Mortgage.Subject to the
Mortgage and applicable law,the Lender may apply all Collateral and proceeds of all Collateral to
the Obligations in any manner which the Lender,in its sole discretion,deems appropriate,and
Borrower will continue to be liable for any deficiency.
9.04 Late Payment Charges.If payment of any principal and/or interest due under the
terms of the Note is not received at the office of the Lender in Herndon,Virginia,or as the Lender
may otherwise designate to the Borrower,within such time period as the Lender may prescribe from
time to time in its policies in connection with any late payment charges (such unpaid amount of
principal and/or interest being herein called the "delinquent amount"and the period beginning after
such due date until payment of the delinquent amount being herein called the "late-payment
period"),the Borrower will pay to the Lender,in addition to all other amounts due under the terms of
the Note,the Mortgage,and this Agreement,any late-payment charge as may be fixed by the
Lender from time to time,on the delinquent amount for the late-payment period.
9.05 Lender's Setoff.The Lender shall have the right,in addition to all other rights and
remedies available to it,to setoff and to recover against any or all of the Obligations due to Lender,
any monies now and hereafter owing to Borrower by the Lender.Borrower waives all rights of setoff,
deduction,recoupment or counterclaim.
10.MISCELLANEOUS
10.01 Performance for Borrower.Borrower agrees and hereby authorizes that the Lender
may,in its sole discretion,but the Lender shall not be obligated to,advance funds on behalf of
Borrower without prior notice to Borrower,in order to insure Borrower's compliance with any material
covenant,warranty,representation or agreement of Borrower made in or pursuant to this Agreement
or any of the Other Agreements,to preserve or protect any right or interest of the Lender in the
Collateral or under or pursuant to this Agreement or any of the Other Agreements,including without
limitation,the payment of any insurance premiums or taxes and the satisfaction or discharge of any
15
judgment or any Lien upon the Collateral or other property or assets of Borrower;provided,however,
that the making of any such advance by the Lender shall not constitute a waiver by the Lender of
any Event of Default with respect to which such advance is made nor relieve Borrower of any such
Event or Default.Borrower shall pay to the Lender upon demand all such advances made by the
Lender with interest thereon at the rate and determined in the manner provided in the Note.Aff such
advances shall be deemed to be included in the Obligations and secured by the security interest
granted the Lender hereunder to the extent permitted by law.
10.02 Expenses and Filing Fees.Whether or not any of the transactions contemplated
hereby shall be consummated,Borrower agrees to pay to the Lender at Closing or thirty (30)days
after the execution and delivery hereof,whichever is earlier,all expenses of the Lender in connection
with the filing or recordation of all financing statements and instruments as may be required by the
Lender at the time of,or subsequent to,the execution of this Agreement,including,without
limitation,all documentary stamps,recordation and transfer taxes and other costs and taxes incident
to recordation of any document or instrument in connection herewith.Borrower agrees to save
harmless and indemnify the Lender from and against any liability resulting from the failure to pay any
required documentary stamps,recordation and transfer taxes,recording costs,or any other
expenses incurred by the Lender in connection with this Agreement.The provisions of this
Subsection 10.02 shall survive the execution and delivery of this Agreement and the payment of aff
other Obligations.
10.03 Waivers by Borrower.Borrower hereby waives,to the extent the same may be
waived under applicable law:(a)in the event the Lender seeks to repossess any or all of the
Collateral by judicial proceedings,any bond(s)or demand(s)for possession which otherwise may be
necessary or required;(b)presentment,demand for payment,protest and notice of non-payment
and all exemptions;and (c)substitution,impairment,exchange or release of any collateral security
for any of the Obligations.Borrower agrees that the Lender may exercise any or all of its rights
and/or remedies hereunder and under the Other Agreements without resorting to and without regard
to security or sources of liability with respect to any of the Obligations.
10.04 Waivers by the Lender.Neither any failure nor any delay on the part of the Lender in
exercising any right,power or remedy hereunder or under any of the Other Agreements shall
operate as a waiver thereof,nor shall a single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right,power or remedy.
10.05 Lender's Records.Every statement of account or reconciliation rendered by the
Lender to Borrower with respect to any of the Obligations shall be presumed conclusively to be
correct and shall constitute an account stated between the Lender and Borrower unless,within ten
Business Days after such statement or reconciliation shall have been mailed,postage prepaid,to
Borrower,the Lender shall receive written notice of specific objection thereto.
10.06 Modifications.No modification or waiver of any provision of this Agreement,the Note
or any of the Other Agreements,and no consent to any departure by Borrower therefrom shall in any
event be effective unless the same shall be in writing,and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.No notice to or demand
upon Borrower in any case shall entitle Borrower to any other or further notice or demand in the
same,similar or other circumstances.
16
10.10 Survival;Successors and Assigns.All covenants,agreements,representations andwarrantiesmadehereinandintheOtherAgreementsshallsurviveClosingandtheexecutionanddeliverytotheLenderoftheNote,and shall continue in full force and effect until all of theObligations.have been paid in full.Whenever in this Agreement ariy of the parties hereto is referred
to,such reference shall be deemed to include the successors and assigns of such party.Allcovenants,agreements,representations and warranties by or on behalf of Borrower which arecontainedinthisAgreementandtheOtherAgreementsshallinuretothebenefitofthesuccessorsandassignsoftheLender.
10.11 Severability.If any term,provision or condition,or any part thereof,of this Agreement
or any of the Other Agreements shall for any reason be found or held invalid or unenforceable byanycourtorgovernmentalagencyofcornpetentjurisdiction,such invalidity or unenforceability shallnotaffecttheremainderofsuchterm,provision or condition nor any other term,provision orcondition,and this Agreement,the Note,and the Other Agreements shall survive and be construed
as if such invalid or unenforceable term,provision or condition had not been contained therein.
10.12 Merger and Integration.This Agreernent and the attached exhibits and mattersincorporatedbyreferervoecontaintheentireagreementofthepartiesheretowithrespecttothematterscoveredandthetransactionscontemplatedhereby,and no other agreement,statement orpromisemadebyanypartyhereto,or by any employee,officer,agent or attorney of any party
hereto,which is not contained herein,shall be valid or binding.
10.13 Counterparts.This Agreement may be executed in any number of counterparts and
by different parties hereto on separate counterparts,each of which,when so executed anddelivered,shall be an original,but all such counter-parts shall together constitute one and the sameinstrument.
10.14 Headings/Use of Terms.The headings and sub-headings contained in thisAgreementareintendedtobeusedforconvenienceonlyanddonotconstitutepartofthisAgreement.The use of any gender or the neuter herein shall also refer to the other gender or theneuterandtheuseofthepluralshallalsorefertothesingular,and vice versa.
10.15 Assignment.The Lender may assign its rights and obligations under this AgreementandtheOtherAgreementswithouttheconsentoftheBorrower;provided,however,that.no suchassignmentshallresultintermsorconditionslessfavorabletoBorrower.The Borrower may notassignanyofitsrightsofobligationsunderthisAgreementortheOtherAgreementswithoutthepriorwrittenconsentoftheLender.
10.16 Rightto Inspect.The Borrower shall permit representatives of the Lender at any timeduringnormalbusinesshourstoinspectandmakeabstractsfromthebooksandrecordspertaining
to the Collateral,and permit representatives of the Lender to be present at Borrower's place ofbusinesstoreceivecopiesofallcommunicationsandremittancesrelatingtotheCollateral,all in
such manner as the Lender may reasonably require.
18
10.17 Consent to Patronage Capital Distributions.Borrower hereby consents that theamountofanydistributionswithrespecttoBorrower's patronage which are made in written noticesofallocation(as defined in Section 1388 of the Internal Revenue Code of 1986,as amended("Code")including any other comparable successor provision)and which are received from LenderwillbetakenintoaccountbyBorrowerattheirstateddollaramountsinthemannerprovidedinSection1385(a)of the Code in the taxable year in which such written notices of allocation arereceived.
10.18 Further Assurances.The Borrower will,upon demand of the Lender,make,execute,acknowledge and deliver all such further and supplemental indentures of mortgage,deeds of trust,mortgages,financing statements,continuation statements,security agreements and/or any otherinstrumentsandconveyancesasmaybereasonablyrequestedbytheLendertoeffectuatetheintentionofthisAgreementandtoprovideforthesecuringandpaymentoftheprincipalofandinterestontheNoteaccordingtothetermsthereof.
10.19 Lender's Approval.Wherever prior written approval of Lender is required under thetermsandconditionsofthisAgreement,Lender hereby agrees to not unreasonably withhold saidapprovaL
10.20 Schedule 1.Schedule 1 attached hereto is an integral part of this Agreement.
19
IN WITNESS WHEREOF,the parties hereto have executed or caused to be executed thisAgreernentundersealasofthedatefirstabovewritten.
SILVER STAR TELEPHONE COMPANY,INC.
By:
Title:
(SEAL)
Attest:
Secretary
RURAL TELEPHONE FINANCE COOPERATIVE
By:(SEAL)Assistant Secpfary-Treasurer
Attest:
Assistant Secretary-Treasurer
20
SCHEDULE 1
1.The."Commitment"shall mean $3,263,158.
2.The Mortgage is the Restated Mortgage,Security Agreement and Financing Statement by and
between Borrower,United States of America acting through the Administrator of the Rural
Utilities Service,Rural Telephone Bank and Lender dated as of even date herewith,as it may
be supplemented,amended,restated or consolidated from time to time.
3.The months relating to the Payment Date are January,April,July &October.
4.The method of amortization referred to in Section 2.03 shall be based upon levet debt service.
5.The amount referred to in Section 2.05 is $163,158.
6.The date of Borrower's financial statement referred to in Section 4.06 is December 31,1997.
7.The chief place of business referred to in Section 4.12 and address of Borrower referred to in
Section 10.07 is 104101 Highway 89,PO Box 226 Freedom,Wyoming 83120.
8.The government authorities referred to in Section 4.13 are not applicable.
9.The special condition referred to in Section 5.05 is:
The initial Advance of funds hereunder shall be used by Borrower to refinance any outstanding
balance under Borrower's interim financing facility with Lender,designated WY 501 -9905.
10.The purpose referred to in Section 6.05 is to finance construction of central office and outside
plant for the Afton local exchange,and to purchase SCCs.
11.The special affirmative covenants referred to in Section 6.06 are not applicable.
12.The special negative covenants referred to in Section 7.06 are not applicable.
RTFC
RURAL TELEPHONE FlNANCE COOPERATivE
2201 Cooperative Way Herndon,Virginia 20171-3025
703-709-6700
November 16,1998
Mr.Allen R Hoopes
President
Silver Star Telephone Company,Inc.
104101 Highway 89
Freedom,WY 83120
Dear Allen:
Re:Long-Term Loan Application#:WY 501-A-01
We are pleased to advise you that the Rural Telephone Finance Cooperative (RTFC)has approved your
organization's long-term loan application in the amount of $3,263,158,including $163,158 for a
Subordinated Capital Certificate (SCC)equal to 5%of the total loan amount,for a term of fifteen years.
Loan proceeds will be used to finance the purchase of equipment and construction of outside plant for the
Afton local exchange.The terms and conditions associated with this loan will be reflected in the RTFC loan
and security documents which will be sent to you under separate cover.
In addition,I've enclosed a line of credit application to serve as interim financing until Silver Star's lien
accommodated is approved by RUS.For your convenience,I've entered some of the information to include a
loan amount of $1.5 million to be repaid at the earlier of 12 months from the approval date or when funding
becomes available under the term loan.Please complete and execute the borrowers resolution and line of
credit,then remit back to me at your earliest convenience.
We are pleased to be able to serve your organization.If we can be of further assistance,please let us know.
Sine
.Fried '
Ass ate Vice President
And Account Manager
Enclosure (1)
JAA i NOV 1 3 1998RTFC
RURAL TELEPHONE FINANCE COOPERATNE -UUD2201CooperativeWay·Herndon,Virginia20171-3025 ...-------------November9,1998 703-709-6700
esAllenR.Hoopes
SilverStar Telephone Company
Post Ofñee Box 226
Freedom,M 83120
Dear Mr.Hoopes:
Re:Long-TermLoanApplication #WY 501-A-01
I am pleased to advise you that the staff of Rural Telephone Finance Cooperative has completed its preliminary analysis ofyourloanapplicationandispreparedtoproceedwitharecommendationforapprovalbyRTFCofyourrequest.Some of the
specifics of our recommendation are as follows:
Loan Amount:$3,263,158 (including 5%SCC)
Purpose:To finance the construction of central office and outside plant for the Afton local exchange.
InterestRate:RTFC'sfixedor variable rate as selected at the time of the initial advance.You may choose to
convert all or any portion of the loan from a variable rate to a fixed rate withouta conversion
fee.Conversion from a fixed rate to a variable rate may involve fees.
Term:The loan will have a term of 15 years.
Amortization:Either level debt service or level principal plus interest to be determined by the borrower.Principal and interest payments will be due quarterly.
Security:The loan will be secured by a shared first mortgage lien on all of the assets and revenue ofSilverStarTelephoneCompanyandapledgeofstockforeachoftheCompany's whollyownedsubsidiaries.
Financial
Covenants:
a)The Company will be required to maintain a consolidated minimum annual Debt Service
Coverage (DSC)of 1.25 and annual Times Interest Eamed Ratio (TIER)of 1.5.
b)RTFC's prior written consent will be required to incur additional indebtedness (with theexceptionofadvancesunderexistingloancommitments)when the Company's consolidatedequityislessthan40%of total assets.
c)The Company will be requiredto maintain a Modified Capitalization Ratio of 20%as measured
on a consolidated basis.The Modified Capitalization Ratio is defined by the ratio of equity to
the total amount of equity plus short and long-termindebtedness plus guarantee committnents.
d)The Company may make unlimited distributions provided that the consolidated subsidiariesmaintainapercentageofequitytototalassetsofnolessthan40%and a current ratio of no lessthan1.25.Distributionswill be limited to 25%of the prior year's cash margins when net worth
is between 25%and 40%of total assets and the current ratio is no less than 1.25.
Mr.Allen R.Hoopes
Silver Star Telephone Company
Page 2
Other appropriate financialtests may be established upon the completion of RTFC'sfinal duediligencereviewoftheborrower.Financial covenants will reflect reasonable expectations of
the financialperformance of the borrower.
Equity
Requirements:Purchase of an equity certificate equal to 5%of the loan amount borrowed.The certificate will
be amortized annually to maintain a 5%certificate-to-outstanding loan ratio.There is no
amortization of the equity certificate until the loan principal has been fullydrawn down and thefullequitycertificatehasbeenpurchased.
The borrower may purchase equity certificates by using loan funds or by purchasing equity
certificates with general funds in twenty equal quarterly installments.
Prepayments:Allowable in either the fixed or variable interest rate mode.Prepayments on both variable andfixedrateloansaresubjecttoafifty(50)basis point fee on the outstanding balance of the loan.Fixed rate loans may also be subject to additional fees which will determined prior to theprepayment.
Patronage
Capital:Seventy percent of the patronage capital allocation will be retired in cash shortly after the endoftheyearinwhichitisallocated.The balance of the allocation will be retired on RTFC'sBoard-approvedrotation cycle,currently set at 15 years.
Condition
Of Closing:Includedbut not limited to:
(a)Satisfactory completion ofRTFC's due diligence investigation.
(b)Final approval by authorized officers of RTFC.
(c)BorrowerprovidingRTFC,in a formsatisfactory to RTFC,the following:
(1)An executed Loan Agreement and-Promissory Note evidencing the specific terms.of
the Loan together with terms of repayment thereof;
(2)Executed collateral documentation deemed necessary by Lender;
(3)Opinion(s)of counsel;and
(4)Evidence of any necessary regulatoryapprovals.
(d)No material adverse change or misrepresentation shall have occurred or have been
made by or on behalf of Borrowerto Lender with respect to the Borrower's business,fmancial condition or the financingtransaction contemplated herein.
Assignment:This commitment cannot be assigned without the written consent of RTFC.RTFC will
consider after further review,the assignment of this commitment to a subsidiaryformedbySilverStartooperatetheAftonExchange.
GoverningLaw:This commitment and the Loan to be evidenced thereby will be governedby the lawsoftheCommonwealthofVirginia.
Mr.Allen R.Hoopes
Silver Star Telephone Company
Page 3
Should you agree to each of the terms as set forth above,please indicate by signmg in the space providedbelow and returning
a copy of this letter with an originalsignature to RTFC along with a commitment fee of $6,526 equal to 20 basis points of thelong-termcredit facility.In the event that these loans are not approved the commitment fee will be refunded in full.ThecommitmentfeewillalsoberefundedwhenRTFCloanfundsareadvancedforthepurposecontemplatedherein.UnderallothercircumstancesthecommitmentfeewillberetainedbyRTFC.
Please sign and retum the original of this letter along with your commitment fee.Further processing of the loan requiresreceiptbyRTFCofthefee.We may stop our loan reviewprocess if the fee is not received within 30-days of the date of thisletter.If you have any questions,please contact me at either [phone] or directly at [phone]
Associate Vice President
Account Manager
AGREED TO AND ACCEPTED:
Silver Star Telephone Company
By:Date:
Mr.Allen R.Hoopes
President
SOPY
SECURED PROMISSORY NOTE
$3,263,158 June 1,2001
SILVER STAR TELEPHONE COMPANY,INC.,a Wyoming corporation (herein called the
"Borrower"),for value received hereby promises to pay,without setoff,deduction,recoupment or
counterclaim,to the order of RURAL TELEPHONE FINANCE COOPERATIVE (herein called the
"Payee")at the Payee's office in Herndon,Virginia,or such other location as the Payee may
designate,in lawful money of the United States,the sum of the aggregate unpaid principal amount of
all Advances made by the Payee pursuant to that certain Loan Agreement dated as of even date
herewith,between the Borrower and the Payee as may be amended from time to time (herein called
the "Loan Agreement"),on the dates provided for in the Loan Agreement (except that if not sooner
paid,any balance shall be due and payable on a date fifteen (15)years after the date hereof,such
date being the Maturity Date),with interest thereon in like money from the respective dates of each
Advance (as defined in the Loan Agreement)hereunder,at the rate or rates and payable at the
times provided in said Loan Agreement together with any other amount payable under the Loan
Agreement.
This Note is secured under a Restated Mortgage,Security Agreement and Financing Statement
dated as of even date herewith by and between the Borrower,United States of America acting
through the Administrator of the Rural Utilities Service,Rural Telephone Bank and the Payee,as it
may have been or shall be supplemented,amended,restated or consolidated from time to time
(herein called the "Mortgage").This Note is the Note referred to in,and has been executed and
delivered pursuantto,the Loan Agreement.
The principal hereof and interest accrued thereon and any other amount due under the Loan
Agreement may be declared to be forthwith due and payable in the manner,upon the conditions,
and with the effect provided in the Mortgage or Loan Agreement.
The Borrower waives demand,presentment for payment,notice of dishonor,protest,notice of
protest,and notice of non-payment of this Note.
IN WITNESS WHEREOF the Borrower has caused this Note to be signed in its corporate name and
its corporate seal to be hereunto affixed and to be attested by its authorized officers,all as of the day
and year first above written.
SILVER STAR TELEPHONE COMPANY,INC.
By:
(SEAL)
(Secretary)
Loan No.:WY 501 -900i
COPY
RUS PROJECT DESIGNATION:
WTOMING 501-LA1 SILVER STAR
RESTATED MORTGAGE,
SECURITY AGREEMENT
AND
FINANC1NG STATEMENT
made by and among
SILVER STAR TELEPHONECOMPANY,INC.
104101 Highway 89
Freedom,Wyoming 83120,as mortgagor and debtor,
and
UNITED STATES OF AMERICA
Rural Utilities Service
Washington,D.C.20250-1500,as mortgagee and secured party,
and
RURAL TELEPHONEBANK
Rural Telephone Bank
clo Rural Utilities Service
Washington,D.C.20250-1500,as mortgagee and secured party,
and
RURAL TELEPHONEFINANCECOOPERATIVE
2201 Cooperative Way
Herndon,Virginia 20171-3025 as mortgagee and secured party.
Dated as of June 1,2001
THISINSTRUMENT GRANTSA SECURITYINTERESTIN A TRANSMUTING UTILITY.
THE DEBTORAS MORTGAGOR IS A TRANSMITITNG UTILITY.
THIS INSTRUMENT CONTAINS PROVISIONSTHAT COVERREAL AND PERSONALPROPERTY,AFTER-ACQUIREDPROPERTY,
PROCEEDS,FUTUREADVANCES AND FUTUREOBLIGATIONS.
No.Generated:May 24,2001 5.63
RESTATEDMORTGAGE,SECURITYAGREEMENTAND FINANCINGSTATEMENT,dated as of June 1,2001,made by and among SILVER STARTELEPHONECOMPANY,INC.(hereinafter called the "Mortgagor"),a corporationexistingunderthelawsoftheStateofWyoming,UNITEDSTATES OF AMERICA(hereinafter called the "Government"),acting through the Administrator of the RuralUtilitiesService(hereinafter called "the Administrator"),RURALTELEPHONE BANK(hereinafter called the "Bank"),a corporation existing under the laws of the Government,and RURAL TELEPHONEFINANCE COOPERATIVE(hereinafter called "RTFC"),aSouthDakotaCooperativeAssociation(the Government,the Bank and RTFCbeinghereinaftersometimescollectivelycaBedthe"Mortgagees").
WHEREAS,pursuant to Public Law 103-354,the Rural Utilities Service (hereinafter sometimescalled"RUS")is the successor to the Rural ElectrificationAdministration (hereinafter sometimes called "REA")andtheAdministratoroftheRuralUtilitiesServiceisthesuccessortotheAdministratoroftheRuralElectrificationAdministrationandforpurposesofthe"UnderlyingMortgage"(as hereiiiafter defmed)identifiedin Schedule A of"this Mortgage"(as hereinafter defined)the terms "REA"and "Administrator"shall be deemed to mean respectively"RUS"and the "Administrator of the RUS";and
WHEREAS,the Mortgagorhas heretofore borrowed funds from one or more of the Mortgagees orfrom"FFB "(as hereinafter defined)whose loans are guaranteed by the Government and to secure such indebtednesshasexecutedanddeliveredtosuchMortgagee(s)the "Outstanding Notes"(as hereinafter defined)identifiedinScheduleAheretoand/or in Schedule B hereto.
WEEREAS,the Mortgagordeems it necessary to borrow additional funds from one or more of theMortgageesand/or fromFFB whose loans are guaranteed by the Government and to evidence such additionalindebtednesshasexecutedanddeliveredtosuchMortgagee(s)the "Current Notes"(as hereinafter defined)identifiedinScheduleAheretoandtosecureandpledgeitspropertyhereunderdescribedormentionedtosecurethesame;and
MŒIEREAS,the Outstanding Notes are secured by the Underlying Mortgage;and
WHEREAS,the Mortgagordesires to enter into this Mortgage pursuant to which all mortgagenotesshallbesecuredonparity;and
WHEREAS,this Mortgageconsolidates and restates the Underlying Mortgage in its entirety;and
WHEREAS,all acts necessary to make this Mortgage a valid and binding legal instrument for thesecurityoftheOutstandingNotes,the Current Notes and other indebtedness of the Mortgagor hereunder,subject tothetermsofthisMortgage,have been in all respects duly authorized;and
WHEREAS,to the extent that any of the propertydescribed or referred to in this Mortgage isgovernedbytheprovisionsoftheUniformCommercialCodeofanystate(hereinafter called the "UniformCommercialCode"),the parties hereto desire that this Mortgage be regarded as a "security agreement"and as a"financing statement"for said security agreement under the UniformCommercial Code;
NOW,THEREFORE,THIS MORTGAGE WITNESSETHthat,in order to secure the payment oftheprincipalofandinterestonthe"notes"(as hereinafter defined),according to their tenor and effect,and furthertosecurethedueperformanceofthecovenants,agreements and provisions contained in this Mortgage and the"Consolidated Loan Agreement"(as hereinafterdefined)and the "RTFCLoan Agreement"(as hereinafterdefined)and to declare the terms and conditions upon which the notes are to be secured,the Mortgagor,in consideration ofthepremises,has executed and deliveredthis Mortgage,and has granted,bargained,sold,conveyed,warranted,assigned,transferred,mortgaged,pledged,and set over,and by these presents does hereby grant,bargain,sell,convey,warrant,assign,transfer,mortgage,pledge and set over,unto the Mortgagees,and their respective assigns,all and singular the following-describedproperty (hereinafiersometimes called the "Mortgaged Property"):
TMAG-03-08-003-WY Page 1
I
All right,title and interest of the Mortgagorin and to the "Existing Facilities"(as hereinafterdefined)and buildings,plants,works,improvements,structures,estates,grants,franchises,easements,rights,privilegesand properties real,personal and mixed,tangible or intangible,of every kind or description,now owned orleasedbytheMortgagororwhichmayhereafterbeownedorleased,constructed or acquired by the Mortgagor,whereverlocated,and in and to all extensions and improvements thereof and additions thereto,including allbuildings,plants,works,structures,improvements,fixtures,apparatus,materials,supplies,machinery,tools,implements,poles,posts,crossarms,conduits,ducts,lines,whether underground or overhead or otherwise,wires,cables,exchanges,switches,including,without limitation,host switches and remote switches,desks,testboards,frames,racks,motors,generators,batteries and other items of central office equipment,pay-stations,protectors,instruments,connections and appliances,of5ce furnitureand equipment,work equipment and any and all otherpropertyofeverykind,nature and description,used,useful or acquired for use by the Mortgagor in connectiontherewithandincluding,without Iîlnitation,the real property described in the followingpropery schedule:
PROPERTYSCHEDULE
(a)The Existing Facilities are located in the Counties of Bonneville and Caribou in the State ofIdaho,and the County of Lincolnin the State of Wyoming.
(b)The property referredto in the last line of paragraph I of the Granting Clause includes the realestatedescribedinExhibitAattachedhereto,and by this reference made a part hereof,as if fully set forth atlengthatthispoint.
(c)If the real estate described in Exhibit A is by reference to deeds,grantor(s),grantee,etc.,thenthedescriptionofeachofthepropertiesconveyedbyandthroughsuchdeedsisbyreferencemadeapartofExhibitAasthoughfullysetforthatlengththerein.
(d)The real estate described in Exhibit A shall also include all plants,works,stmctures,erections,reservoirs,dams,buildings,fixtures and improvements now or hereafter located on such real estate,and alltenements,hereditaments and appurtenances now or hereafter thereunto belonging or in any wiseappertaining.
II
All right,title and interest of the Mortgagorin,to and under any and all grants,privileges,rights ofwayandeasementsnowowned,held,leased,enjoyed or exercised,or which may hereafter be owned,held,leased,acquired,enjoyed or exercised,by the Mortgagorfor the purposes of,or in connection with,the construction oroperationbyoronbehalfoftheMortgagoroftelephoneproperties,facilities,systems or businesses,whetherundergroundoroverheadorotherwise,whereverlocated;
III
All right,title and interest of the Mortgagorin,to and under any and all licenses,franchises,ordinances,privilegesand permits heretofore granted,issued or executed,or which may hereafter be granted,issuedorexecuted,to it or to its assignors by the United States of America,or by any state,or by any county,township,municipahty,villageor other political subdivision thereof,or by any agency,board,commission or department ofanyoftheforegoing,authorizing the construction,acquisition,or operation of telephone properties,facilities,systems or businesses,insofar as the same may by law be assigned,granted,bargained,sold,conveyed,transferred,mortgaged,or pledged;
TMAG-03-08-003-WY Page 2
IV
All right,title and interest,whether presently owned or hereafter acquired,of the Mortgagor in,toandunderanyandallcontractsheretoforeorhereafterexecutedbyandbetweentheMortgagorandanyperson,firm,or corporation relating to the Mortgaged Property together with any and all other accounts,chattel paper,contractrightsandgeneralintangibles(as such terms are defined in the applicable Uniform Commercial Code),and all stock,bonds,notes,debentures,commercial paper,subordinated capital certificates,securities,obligations of or beneficialinterestorinvestmentsinanycorporation,association,partnership,joint venture,trust,government or any agency ordepartmentthereof,or any other entity of any kind;
V
Also,all right,title and interest of the Mortgagorin and to all other property,real or personal,tangible or intangible,of every kind,nature and description,and wheresoever situated,now owned or leased orhereafteracquiredbytheMortgagor,it being the intentionhereofthat all such property now owned or leased but notspeciñcallydescribedhereinoracquiredorheldbytheMortgagorafterthedatehereofshallbeasfullyembracedwithinandsubjectedtothelienhereofasifthesamewerenowownedbytheMortgagorandwerespecificallydescribedhereintotheextentonly,however,that the subjection of such property to the lien hereof shall not becontrarytolaw;
TOGETHERWITH all rents,income,revenues,profits,proceeds and benefits at any time derived,received or had from any and all of the above-described propertyof the Mortgagor.
Provided,however,that except as hereinafterprovidedin Section 12(b)ofArticle II hereof,noautomobiles,trucks,trailers,tractors or other vehicles (includingwithout limitation aircraft or ships,if any)owned orusedbytheMortgagorshallbeincludedintheMortgagedProperty.
TO HAVE AND TO HOLD all and singular the Mortgaged Property unto the Mortgagees andtheirrespectiveassignsforever,to secure equally and ratably the payment of the principal of and interest on thenotes,according to their tenor and effect,without preference,priority or distinction as to interest or principal (except
as otherwise specifically providedherein)or as to lien or otherwise of any note over any other note by reason of thepriorityintimeoftheexecution,deliveryor maturity thereofor of the assignment or negotiation thereof,orotherwise,and to secure the due performance of the c:ovenants,agreements and provisions herein and in theConsolidatedLoanAgreementandintheRTFCLoanAgreementcontained,and for the uses and purposes and upontheterms,conditions,provisos and agreements hereinafterexpressed and declared.
ARTICLE I
DEFINITIONS AND ADDITIONALNOTES
SECTIONL (a)The parties to this Mortgageare hereby deemed to be parties to the UnderlyingMortgage.
(b)In additionto the terms defined elsewhere in this Mortgage,the termsdefinedinthissubsection.(b)shall have the meanings speciñed herein.The terms defined herein include the pluralasweUasthesingularandthesingularaswellastheplural.
"Act"shall mean the Rural Electrification Act of 1936,as amended (7 U.S.C.901 gsea-)·
"AdditionalNotes"shall mean the Additional Bank Notes,the AdditionalRTFC Notes
and the AdditionalRUS Notes conectively.
TMAG-03-08-003-WY Page 3
"Additional Bank Notes"shall mean any notes issued by the Mortgagor to the Bank pursuant toArticleI,Section 1,of this Mortgage including any refunding,renewal,or substitute notes which may fromtimetotimebeexecutedanddeliveredbytheMortgagortotheBankpursuanttothetermsofArticleI,Section 1.
"Additional RTFCNotes"shall mean any notes.issued by the Mortgagor to RTFC pursuant toArticleI,Section 1 of this Mortgage including any refunding,renewal or substitute notes which may fromtimetotimebeexecutedanddeliveredbytheMortgagortoRTFCpursuanttothetermsofArticleI,Section 1
"Additional RUS Notes"shall mean any notes issued by the Mortgagor to the Government or FFB,and guaranteed by the Government,pursuant to Article I,Section 1 of this Mortgage.including anyrefunding,renewal,or substitute notes which may from time to time be executed and delivered by theMortgagortotheGovernmentpursuanttothetermsofArticleI,Section 1.
"Bank Notes"means the Outstanding Notes payable to the order ofthe Bank,the Current NotespayabletotheorderoftheBankandtheAdditionalBankNotes.
"Consolidated Loan Agreement"shall mean the loan agreement between the Mortgagor and theGovernment,or between the Mortgagorand the Bank,or among the Mortgagor,the Government and theBank,under the heading "Telephone Loan Contract"in Schedule A hereto,as the same may have beenpreviouslyamended,and any futureamendments thereto,together with any agreements among theMortgagor,the Government,acting through the Administrator,and FFB,pursuant to which the GovernmentguaranteestheloansmadebyFFBtotheMortgagor,pursuant to the Act,and any amendments thereto.
"Current Notes"shall mean the notes issued by the Mortgagor to secure the loans to the MortgagormadeinconjunctionwiththisMortgagepayabletotheorderoftheGovernmentundertheheading"CurrentRUSNote(s)"in Schedule A hereto,payable to the order of RTFC under the heading "Current RTFC Note"in Schedule B hereto,payable to FFB under the heading "Current FFB Note"in Schedule A hereto andpayabletotheorderoftheGovernmenttoreimbursetheGovernmentforcertainamountspaidfromtime totimebytheGovernmenttoFFBundertheheading"Current Reimbursement Note"in Schedule A hereto.
"Existing Facilities"shall mean the telephone system and other facilities presently owned by theMortgagoridentifiedintheGrantingClauseofthisMortgage.
"FFB"shall mean the Federal FinancingBank.
"this Mortgage"shall mean this Restated Mortgage,Security Agreement and Financing Statement,including any amendments or supplements thereto from time to time.
"notes"shall mean collectivelythe Bank Notes,the RTFC Notes and the RUS Notes.
"Outstanding Notes"shall mean the notes evidencing outstanding indebtedness of the MortgagortotheGovernmentundertheheading"Outstanding RUS Notes"in Schedule A hereto,to the Bank under theheading"Outstanding Bank Notes"in Schedule A hereto,to RTFC under the heading "Outstanding RTFCNotes"in Schedule B hereto and to FFB under the heading "Outstanding FFB Notes"in Schedule A hereto.
"RTFCLoan Agreement"shall mean the loan agreement (s)between the Mortgagor and RTFC
listed in Schedule B hereto under the heading "Prior RTFC Loan Agreement(s)"and any amendmentsthereto,the loan agreement under the heading "CurrentRTFC Loan Agreement"in Schedule B hereto withrespecttoanyCurrentNotepayabletoRTFClistedinScheduleBheretoandanyloanagreementswithrespecttoAdditionalRTFCNotesandanyamendmentsthereto.
TMAG-03-08-003-WY Page 4
"RTFCNotes"means the Outstanding Notes payable to RTFC,the Current Notes payable to
RTFC and the AdditionalRTFC Notes.
"RUS Notes"shall mean the Outstanding Notes payable to the order ož the Government and
payable to FFB,the Current Notes payable to the order of the Government and payable to FFB and theAdditionalRUSNotes.
"UnderlyingMortgage"shall mean the instruments identified as such in Schedule A hereto and
Schedule B hereto.
Where in these definitions there is a reference to an instrument as being listed under a particular
heading in Schedules A and B and no such heading is included in Schedules A and B then such definition shall be
read as though there were no such reference.
(c)The Mortgagor,when authorized by resolution or resolutions of its board of
directors,may from time to time (1)execute and deliverto the Government one or more Additional RUS Notes to
evidence loans made or guaranteed by the Governmentto the Mortgagorpursuant to the Act,or to evidence
indebtedness of the Mortgagor incurred by the assumption by the Mortgagor of the indebtedness of a third party or
parties to the Government created by a loan or loans theretofore made or guaranteed by the Government to such third
party or parties pursuant to the Act,(2)execute and deliver to the Bank one or more AdditionalBank Notes to
evidence loans made by the Bank to the Mortgagorpursuant to the Act,or to evidence indebtedness of the
Mortgagorincurredby the assumption by the Mortgagorof the indebtedness of a third party or parties to the Bank
created by a loan or loans theretofore made by the Bank to such thirdparty or parties pursuant to the Act,and (3)
execute and deliverto RTFCone or more Additional RTFC Notes to evidence loans made by RTFC to theMortgagor,or to evidence indebtedness of the Mortgagorincurred by the assumption by the Mortgagor,of the
indebtedness of a third party or parties to RTFC created by a loan or loans theretofore made by RTFC to such party
or parties.The Mortgagor,when authorized by resolution or resolutions of its board of directors,may also kom time
to time execute and deliverone or more Additional Notes to refund any note or notes at the time outstanding and
secured hereby,or to renew or in substitution for,any such outstanding note or notes.Additional Notes shall contain
such provisionsand shall be executed and deliveredupon such terms and conditions as the board of directors of the
Mortgagorin the resolution or resolutions authorizingthe execution and delivery thereof and the relevant lender
shall prescribe;.provided,however,that the outstanding principalbalances owing on the notes shall not at any one
time exceed twenty-fivemillion dollars and no cents ($25,000,000.00)and no note shall mature more than fifty (50)
years after the date hereof.AdditionalNotes,including refunding,renewal and substitute notes,when and as
executed and delivered,shall be secured by this Mortgage,equally and ratably with all other notes at the time
outstanding,without preference,priority,or distinction of any of the notes over any other of the notes by reason of
the priority of the time of the execution,delivery or maturity thereofor of the assignment or negotiation thereof.
Except as hereinafterprovided,however,no Additiona1RTFCNotes shall be secured by this Mortgage without thepriorwrittenapprovalthereofbytheGovernmentandtheBank,and no Additional RUS Notes or Additional Bank
Notes shall be secured by this Mortgage without the prior written approval thereofby RTFC.No such prior written
approvalshall be required with respect to the execution and delivery by the Mortgagorof (1)notes issued to refund,
renew or substitute for any outstanding note or notes,and (2)the Outstanding Notes,and (3)Additional Notes issued
to the Governmentin accordance with Subsection (d)of this Section 1.
(d)The Mortgagormay execute and deliverAdditional RUS Notes to evidence
a loan or loans from the Government to the Mortgagor and/or a loan or loans fromFFB to the Mortgagor and
Additional BankNotes to evidence a loan or loans from the Bank to the Mortgagor providedthat the following
condition precedent is met with respect to each such loan:
Written acknowledgment is obtained from RUS,the Bank and RTFCindicating that RUS's,the
Bank's and RTFC'spro forma financial analysis of the Mortgagor,for the test year used by RUS in establishing the
economic feasibility of such loan shows that the Mortgagorshall have a Times Interest Earned Ratio ("TIER")of not
less than 1.5;a Debt Service Coverage ("DSC")of not less than 1.25;and an Equity to Assets Ratio equal to or
TMAG-03-08-003-WY Page 5
greater than 40%,as the above are deñned in Article II,Section 20 hereof,taking into account the interest to bechargedontheAdditionalRUSNotesproposedtobeexecutedanddeliveredtoevidencesuchloan.
(e)As used in this Mortgage,the term "directors"includes trustees.
SECTION2.The Mortgagor,when authorized by resolution or resolutions of its board of
directors,may from time to time execute,acknowledge,deliver,record and file mortgages supplemental to thisMortgagewhichthereaftershallformaparthereof,for the purpose of formallyconfirming this Mortgage as securityforthenotes.Nothingherein contained shall require the execution and delivery by the Mortgagor of a supplemental
mortgage in connection with the issuance hereunder or the securing hereby of notes except as hereinafter provided inSection12ofArticleIIhereof.
ARTICLE II
PARTICULAR COVENANTS OF THEMORTGAGOR
The Mortgagor covenants with the Mortgagees and the holders ofnotes secured hereby
(hereinafter sometimes collectivelycalled the "noteholders")and each of them as follows:
SECTION1.The Mortgagoris duly authorized under its articles of incorporation and by-laws andthelawsoftheStateofitsincorporationandallotherapplicableprovisionsoflawtoexecuteanddeliverthe
Outstanding Notes,the Current Notes and this Mortgage and to execute and deliverAdditional Notes;and all
corporate action on its part for the execution and deliveryof the Outstanding Notes,the Current Notes and thisMortgagehasbeendulyandeffectivelytaken;and the Outstanding Notes,the Current Notes and this Mortgage are,
or when executed and delivered will be,the valid and enforceable obligations of the Mortgagor in accordance withtheirrespectiveterms.
SECTI0N 2.The Mortgagorwarrants that it has good,right and lawfulauthority to mortgage thepropertydescribedinthegrantingclauseofthisMortgageforthepurposeshereinexpressed,and that the saidpropertyisfreeandclearofanydeedoftrust,mortgage,Iien,charge or encumbrance thereon or affecting the title
thereto,except (i)the lien of this Mortgage and taxes or assessments not yet due;(ii)deposits or pledges to secure
payment of worker's compensation,unemployment insurance,old age pensions or other social security;and (iii)deposits or pledges to secure performance of bids,tenders,contracts (other than contracts for the payment of
borrowed money),leases,public or statutory obligations,surety or appeal bonds,or other deposits or pledges for
purposes of like general nature in the ordinary course of business.The Mortgagor will,so long as any ofthe notes
shall be outstanding,maintain and preserve the lien of this Mortgage superior to all other liens affecting the
Mortgaged Property,and will foreverwarrant and defend the title to the property described as being mortgaged
hereby to the Mortgagees against any and all claims and demands whatsoever.The Mortgagor will promptly pay or
discharge any and all obligations for or on account of which any such lien or charge might exist or could be created
and any and all lawful taxes,rates,levies,assessments,liens,claims or other charges imposed upon or accruing upon
any of the Mortgagor'sproperty (whether taxed to the Mortgagoror to any noteholder),or the franchises,earnings or
business of the Mortgagor,as and when the same shall become due and payable;and whenever called upon so to do
the Mortgagorwill furnish to the Mortgagees or to any noteholder adequate proof of such payment or discharge.
SECTION3.The Mortgagorwill duly and punctually pay the principal of and interest on the
notes at the dates and places and in the manner providedtherein,according to the true intent and meaning thereof,
and all other sums becoming due hereunder.The Mortgagormay at any time make prepayments on account of all orpartoftheprincipalofthenotestotheextentandinthemannerthereinprovidedandassetforthintheConsolidated
Loan Agreement and the RTFC Loan Agreement;providedthat any such prepayment shall be applied pro rata to the
RUS Notes,the Bank Notes and the RTFCNotes,according to the proportions that the aggregate unpaid principal
amount of the RUS Notes,the aggregate unpaid principal amount of the Bank Notes and the aggregate unpaidprincipalamountoftheRTFCNotes,respectively,bear to the aggregate unpaid principal amount of the RUS Notes,
the Bank Notes and the RTFC Notes,collectively,on the date of prepayment and shall be applied to such notes and
TMAG-03-08-003-WY Page 6
installments thereofas may be designated by the respective noteholders at the time of any such prepayment.For
purposes of this Section 3,deliveryby the Mortgagor of any note which renews or is in substitution for an
outstanding note shall not be considered a prepayment hereunder and deliveryof a refunding note shall not be
considered a prepayment providedthat,the refunding note will result in (1)an economic benefit defined as a present
value sayings when comparing the cash flows of the refunding note with the cash flows of the note being refunded;
(2)will not cause the TIER as of the most recent December 31 RUS Form 479,when recalculated by substituting the
actual interest expense of the note to be refunded with the projected interest expense of the refunding note,to be less
than the greater of the.TIER before such recalculation or 1.5;and (3)will not cause the DSC as of the most recent
December 31 RUS Form 479,when recalculated by substituting the scheduled principalpayments of the note to be
refunded with the scheduled principalrepayments of the refundingnote,to be less than 1.25.Additionally,themajotityRUSnoteholdersandthemajorityBanknoteholdersandthemajorityRTFCnoteholders(as such terms aredefinedinSection4ofArticleIIhereof)may agree that such noteholder shall not be paid the pro rata prepayment to
which such noteholder may be entitled under this Section 3.
SECTION4.(a)The Mortgagorwill,at all times,so long as any of the notes shall be outstanding,
take or cause to be taken all such action as from time to time may be necessary to preserve its corporate existence
and to preserve and renew all franchises,rights of way,easements,permits and licenses now or hereafter to it granted
or upon it conferred,and will comply with all valid laws,ordinances,regulations and requirements applicable to it or
its property.The Mortgagor will not,without the approval in writingof the holder or holders ofnot less than amajorityinprincipalamountoftheRUSNotesatthetimeoutstanding(hereinafter called the "majority RUS
noteholders")and of the holder or holders of not less than a majority in principal amount of the Bank Notes at the
time outstanding (hereinaftercalled the "majority Bank noteholders")and of the holder or holders of not less than amajorityoftheRTFCnoteholdersatthetimeoutstanding(hereinafter called the "majority RTFC noteholders"),take
or suffer to be taken any steps to reorganize,or to consolidate with or merge into any other corporation or to permit
any other corporadon to merge into the Mortgagoror acquire all or substantially all of the business or assets of
another corporation if such acquisition is analogous in purpose or effect to a merger or consolidation or to sell,lease
or transfer,mortgage,convey by deed to secure debt,pledge or encumber other than under the lien hereof (or make
any agreement therefor)the Mortgaged Property,or any part thereof.
(b)Nothingherein contained shall preventany such reorganization,
consolidation or merger providedthat the lien and security of this Mortgage and the rights or powers of the
Mortgagees and the noteholders hereunder shall not thereby be impaired or adversely affected,and providedthat
upon such reorganization,consolidation or merger,the due and punctual payment of the principal of and interest on
the notes according to their tenor and the due and punctual performance of all covenants and conditions of thisMortgageshallbeassumedbythecorporationformedbysuchreorganization,consolidation or merger,and the lienofthisMortgageshallremainasuperiorlienuponthepropertyownedbytheMortgagoratthetimeofsuch
reorganization,consolidation or merger and upon any improvements or additions to such property,either prior to or
subsequent to such reorganization,consolidation or merger.
(c)The Mortgagormay,however,without obtaining the approval of the holder
or holders of any of the notes at the time outstanding,at any time or from time to time so long as the Mortgagor is
not in default hereunder,sell or otherwise dispose of,free from the lien hereof,any of its property which is neither
necessary to nor useful for the operation of the Mortgagor's business,or which has become obsolete,worn out or
damaged or otherwise unsuitable for the purposes of the Mortgagor;provided,however,that the Mortgagor shall:
(1)to the extent necessary,replace the same by,or substitute therefor,other property of the same kind and nature,which shall be subject to the lien hereof,free and clear of all prior liens,and apply any proceeds derived främ such
sale or other disposition of such property and not needed for the replacement thereofto the payment of the
indebtedness evidenced by the RUS Notes,the Bank Notes and the RTFC Notes in the proportions which the
aggregate principal balances then owing on the RUS Notes,the aggregate principalbalances then owing on the Bank
Notes and the aggregate principal balances then owing on the RTFCNotes,respectively,bear to the aggregateprincipalbalancesthenowingontheRUSNotes,the Bank Notes and the RTFC Notes,collectively,and shall be
applied to such notes and installments thereofas may be designated by the respective noteholders at the time of any
such receipt;or (2)immediately upon the receipt of the proceeds of any sale or other disposition of said property,
TMAG-03-08-003-WY Page 7
apply the entire amount of such proceeds to the payment of the indebtedness evidenced by the RUS Notes,the IÍank
Notes and the RTFCNotes in the proportions and in the manner provided for in (1)above;or (S)deposit all or such
part of the proceeds derived from the sale or other disposition of said property as the majority RUS noteholders and
the majority Bank noteholders and the majority RTFC noteholders shall specify in such restricted bank accounts as
such holder or holders shall designate,and shall use the same only for such additions to or improvements of the
Mortgaged Property and on such terms and conditions as such holder or holders shall specify.
SECTION5.The Mortgagorwill at all times maintain and preserve the Mortgaged Property in
good repair,working order and condition,and will from time to time make all needful and proper repairs,renewals,
and replacements and useful and proper alterations,additions,betterments and improvements,and will,subject to
contingencies beyond its reasonable control,at all times keep its plant and properties in continuous operation and use
all reasonable diligence to furnish the subscribers served by it through the Mortgaged Property with adequate
telephone service.
SECTION6.Except as speciñcally authorized in writing in advance by the majority RUS
noteholders and the majority Bank noteholders and the majority RTFC noteholders,the Mortgagor will purchase all
materials,equipment,supplies and replacements to be incorporated in or used in connection with the Mortgaged
Property outright,and not subject to any conditional sales agreement,chattel mortgage,bailment lease,or other
agreement reservingto the seller any right,title or lien.
SECTION7.(a)The Mortgagorshall take out,as the respective risks are incurred,
and maintain the classes and amounts of insurance in conformance with generally accepted utility industry standards
for such classes and amounts of coverage for utilities of the size and character of the Mortgagor and consistent with
"Prudent UtilityPractice."Prudent UtilityPractice shall mean any of the practices,methods,and acts which,in the
exercise of reasonable judgement,in light of the facts,including but not limited to,the practices,methods,and acts
engaged in or approved by a significant portion of the telecommunications indust·y prior thereto,known at the time
the decision was made,would have been expected to accomplish the desired result consistent with cost-effectiveness,
reliability,safety,and expedition.It is recognized that Prudent Utility Practice is not intended to be limited to
optimum practice,method,or act to the exclusion of all others,but rather is a spectrum of possible practices,
methods,or acts which could have been expected to accomplish the desired result at the lowest reasonable cost
consistent with cost-effectiveness,reliability,safety,and expedition.
(b)The foregoinginsurance coverage shall be obtained by means of
bond and policy forms approved by regulatory authorities having jurisdiction,and,with respect to insurance upon
any part of the Mortgaged Property,shall providethat the insurance shall be payable to Mortgagees as their interests
may appear by means of the standard mortgagee clause without contribution.Each policy or other contract for such
insurance shall contain an agreement by the insurer that,notwithstanding any right of cancellation reserved to such
insurer,such policy or contract shall continue in force for at least 30 days after written notice to each Mortgagee of
suspension,cancellation,or termination.
(c)In the event of damage to or the destruction of any portionof the
Mortgaged Property which is used or useful in the Mortgagor'sbusiness and which shall be covered by insurance,
unless each Mortgagee shall otherwise agree,the Mortgagorshall replace or restore such damaged,destroyed,or lost
portion so that such Mortgaged Property shall be in substantially the same condition as it was in priorto such
damage,destruction,or loss and shall apply the proceeds of the insurance for that purpose.:The Mortgagor shall
replace the lost portion of such Mortgaged Property or shall commence such restoration promptly after such damage,
destruction,or loss shall have occurred and shall complete such replacement or restoration as expeditiously as
practicable,and shall pay or cause to be paid out of the proceeds of such insurance form all costs and expenses in
connection therewith.
(d)Sums recovered under any policy or fidelity bond by the Mortgagor
for a loss ofžunds advanced under the notes or recovered by any Mortgagor or any noteholder for any loss under
such policy or bond shall,unless applied as providedin the preceding paragraph,be used to finance construction of
TMAG-03-08-003-WY Page 8
utility plant secured or to be secured by this Mortgage,or unless otherwise directed by the Mortgagees,be applied to
the prepayment of the notes pro rata according to the unpaid principal amounts thereof (such prepayments to be
applied to such notes and installments thereofas may be designated by the respective Mortgagee at the time of any
such prepayment),or be used to construct or acquire utility plant which will become part of the Mortgaged Property.At the request of any Mortgagee,the Mortgagorshall exercise such rights and remedies which they may have under
such policy or ñdelity bond and which may be designated by such Mortgagee,and the Mortgagor hereby irrevocably
appoints each Mortgagee as its agent to exercise such rights and remedies under such policy or bond as suchMortgageemaychoose,and the Mortgagor shall pay all costs and reasonable expenses incurred by the Mortgagee in
connection with such exercise.
SECTION8.In the event of the failure of the Mortgagor in any respect to comply with the
covenants and conditions herein contained with respect to the procuring of insurance,the payment of taxes,
assessments and other charges,the keeping of the Mortgaged Property in repair and free of liens and other claims or
to comply with any other covenant contained in this Mortgage,any noteholder or noteholders shall have the right(without prejudice to any other rights arising by reason of such default)to advance or expend moneys for the purpose
of procuringsuch insurance,or for the payment of insurance premiums,taxes,assessments or other charges,or to
save the Mortgaged Property from sale or forfeiturefor any unpaid tax or assessment,or otherwise,or to redeem the
same from any tax or other sale,or to purchase any tax title thereon,or to remove or purchase any mechanics'liens
or other encumbrance thereon,or to make repairs thereon or to comply with any other covenant herein contained or
to prosecute or defend any suit in relation to the Mortgaged Property or in any manner to protect the Mortgaged
Property and the title thereto,and all sums so advanced for any of the aforesaid purposes with interest thereon at the
highest legal rate but not in excess of Chase Manhattan Prime plus 400 Basis Points per annum shall be deemed a
charge upon the Mortgaged Property in the same manner as the notes at the time outstanding are secured and shall beforthwithpaidtothenoteholderornoteholdersmakingsuchadvanceoradvancesupondemand.It shall not be
obligatory for any noteholder in making any such advances or expenditures to inquire into the validityof any such
tax title,or of any of such taxes or assessments or sales therefor,or of any such mechanics'liens or other
encumbrance.
SECTION9.The Mortgagorwill not,without the approval in writingof the majority RUS
noteholders,the majority Bank noteholders and the majority RTFC noteholders:(a)enter into any contract or
contracts for the operation or maintenance of all or any part of its property,for the use by others of any of the
Mortgaged Property,or for toll traffic,operator assistance,extended scope or switching services to be furnished by
or for connecting or other companies;provided,however,that such approval shall not be required for any toll traffic
or operator assistance contract which in form and substance conforms with contracts in general use in the telephone
industry;or (b)deposit any of its fands,regardless of the source thereof,in any bank,institution or other depository
which is not insured by the Federal Government.
SECTION10.Salaries,wages and other compensation paid by the Mortgagor for services,and
directors'or trustees'fees,shall be reasonable and in conformity with the usual practice of corporations of the size
and nature of the Mortgagor.Except as specifically authorized in writingin advance by the majority RUS
noteholders and the majority Bank noteholders and the majority RTFCnoteholders,the Mortgagor will make no
advance payments or loans,or in any manner extend its credit,either directly or indirectly,with or without interest,
to any of itrdirectors,trustees,officers,employees,stockholders,members or affiliatedcompanies,provided,
however,the Mortgagor may make an investment for any purpose described in section 607(c)(2)of the Rural
Development Act of 1972 (including any investment in,or extension of credit,guarantee or advance made to,anaffiliatedcompanyoftheMortgagorthatisusedbystichcompanyforsuchpurpose)to the extent that,immediately
after such investment,(1)the aggregate of such investments does not exceed one-third of the net worth (defined in
Exhibit One hereto)of the Mortgagor and (2)the Mortgagor's net worth is at least twenty percent of its total assets
(defined in Exhibit One hereto).As used herein,the term "affiliated companies"shall have the meaning prescribed
for this term by the Federal Communications Commission in its prevailinguniformsystem of accounts for Class A
telephone companies.
TMAG-03-08-003-WY Page 9
SECTION11.The Mortgagor will at all times keep,and safely preserve,proper books,recordsandaccountsinwhichfullandtrueentrieswillbemadeofallofthedealings,business and affairs of the Mortgagor,in accordance with methods of accounting prescribed by the state regulatory body having jurisdiction over theMortgagor,or in the absence of such regulatorybody or such prescription,by the Federal CommunicationsCommissioninitsuniformsystemofaccountsfortelecommunicationscompaniesasthosemethodsandprinciples ofaccountingmaybesupplementedfromtimetotimebyRUSortheBank.The Mortgagor will prepare and furnisheachnoteholdernotlaterthanthethirtiethdayofJanuary,April,July and October in each year,or at such more orlessfrequentintervalswhenspecifiedbythemajorityRUSnoteholders,the majority Bank noteholders and themajorityRTFCnoteholders,financial and statistical reports on its condition and operations.Such reports shall be ontheRUSForm479andincludesuchinformationasmaybespecifiedbythemajorityRUSnoteholders,the majorityBanknoteholdersandthemajorityRTFCnoteholders,including without limitation an analysis of the Mortgagor'srevenues,expenses and subscriber accounts.The Mortgagor will cause to be prepared and furnished to eachnoteholderatleastonceduringeach12-month period during the term hereof,a full and complete report of itsfinancialconditionandcashflowasofadate(hereinafter called the "Fiscal Date")not more than 90 days prior to thedatesuchreportisfurnishedtothenoteholdershereunder,and of its operations for the 12-month period ended on theFiscalDate,in form and substance satisfactory to the majority RUS noteholders,the majority Bank noteholders andthemajorityRTFCnoteholders,audited and certified by independent certified public accountants satisfactory to saidnoteholders,and accompanied by a report of such audit in form and substance satisfactory to said noteholders.EachofthemajorityRUSnoteholders,the majority Bank noteholders or the majority RTFCnoteholders,through its or.their representatives,shall at all times duringreasonable business hours have access to,and the right to inspect andmakecopiesof,any or all books,records and accounts,and any or all invoices,contracts,leases,payrolls,cancelledchecks,statements and other documents and papers of every kind belonging to or in the possession of the Mortgagororinanywisepertainingtoitspropertyorbusiness.The Mortgagor shall enter into an audit agreement with anindependentcertifiedpublicaccountantinformandsubstancesatisfactorytothemajorityRUSnoteholders,themajorityBanknoteholdersandthemajorityRTFCnoteholders.
SECTION12.(a)The Mortgagorwill from time to time upon written demand of the majorityRUSnoteholders,the majority Bank noteholders or the majority RTFC noteholders make,execute,acknowledge anddeliverorcausetobemade,executed,acknowledged and delivered all such further and supplemental indentures ofmortgage,deeds of trust,mortgages,financingstatements,continuation statements,security agreements,instrumentsandconveyancesasmayreasonablyberequestedbythemajorityRUSnoteholders,the majority Bank noteholders orthemajorityRTFCnoteholdersandtakeorcausetobetakenallsuchfurtheractionasmayreasonablyberequested
by the majority RUS noteholders,the majority Bank noteholders or the majority RTFC noteholders to effectuate theintentionofthesepresentsandtoprovideforthesecuringandpaymentoftheprincipalofandinterestonthenotesequallyandratablyaccordingtothetermsthereofandforthepurposeoffullyconveying,transferring andconfirminguntotheMortgageesthepropertyherebyconveyed,mortgaged and pledged,or intended so to be,whether now owned by the Mortgagoror hereafter acquired by it and to reflectthe assignment of the rights orinterestsofanyoftheMortgageesorofanynoteholderhereunderorunderanynote.The Mortgagor will cause thisMortgageandanyandallsupplementalindenturesofmortgage,mortgages and deeds of trust.and every securityagreement,financingstatement,continuation statement and every additional instrument which shall be executedpursuanttotheforegoingprovisionsforthwithuponexecutiontoberecordedandfiledandrerecordedandrefiled asconveyancesandmortgagesanddeedsoftrustofandsecurityinterestsinrealandpersonalpropertyinsuchmannerandinsuchplacesasmayberequiredbylaworreasonablyrequestedbythemajorityRUSnoteholders,the majorityBanknoteholdersorthemajorityRTFCnoteholdersinorderfullytopreservethesecurityforthenotesandtoperfectandmaintainthesuperiorlienofthisMortgageandallsupplementalindenturesofmortgage,mortgages anddeedsoftrustandtherightsandremediesoftheMortgageesandthenoteholders.
(b)In the event that the Mortgagor has had or suffers a deñcit in net income ornetmargins,as determined in accordance with methods of accounting prescribed in Section 11 of Article II hereof,for any of the five (5)fiscal years immediately preceding the date hereof or for any fiscal year while any of the notesareoutstanding,the Mortgagorwill at any time or times upon written demand of the majority RUS noteholders,themajorityBanknoteholdersorthemajorityRTFCnoteholders,make,execute,acknowledge and deliveror cause tobemade,executed,acknowledged and deliveredall such furtherand supplemental indentures of mortgage,
TMAG-03-08-003-WY Page 10
mortgages,security agreements,fmancing statements,instruments and conveyances,and take or cause to be taken all
such further action,as may reasonably be requested by the majority RUS noteholders,the majority Bank noteholders
or the majority RTFCnoteholders in order to include in this Mortgage,as Mortgaged Property,and to subject to all
the terms and conditions of this Mortgage,all right,title and interest of the Mortgagor in and to,all and singular,the
automobiles,trucks,trailers,tractors,aircraft,ships and other vehicles then owned by the Mortgagor,or which may
thereafter be owned or acquired by the Mortgagor.From and after the time of such written demand of the majority
RUS noteholders,the majority Bank noteholders or the majority RTFCnoteholders such vellicles shall be deemed to
be part of the Mortgaged Property for all purposes hereof.
SECTION13.Any noteholder may,at any time or times in succession without notice to or the
consent of the Mortgagoror any other noteholder and upon such terms as such noteholder may prescribe,grant to
any person,firm or corporation who shall have become obligated to pay all or any part of the.principal of or interest
on any note held by or indebtedness owed to such noteholder or who may be affected by the lien hereby created,an
extension of the time for the payment of such principal or interest,and afterany such extension the Mortgagor will
remain liable for the payment of such note or indebtedness to the same extent as though it had at the time of such
extension consented thereto in writing.
SECTION14.The Mortgagor,subject to applicable laws and rules and orders ofregulatory
bodies,shall charge rates for its telephone service and other services furnished which shall yield revenues at leastsufficientto(1)pay and discharge all taxes,maintenance expenses,operating expenses,and other expenses of its
telephone system when due,(2)pay all obligations of the Mortgagor and make all payments of principal of and
interest on the notes when due,(3)provideand maintain reasonable capital for the Mortgagor,(4)maintain an
AverageTIER on all of the notes of not less than 1.50 but in no year shall the TIER be less than 1.00,and (5)
maintaina DSC of not less than 1.25.Not less than 90 days prior to the effectivedate of any proposed change in its
rate,the Mortgagorshall give to the holder or holders of the notes written notice of such change and a copy of the
schedule showing the then existing rates and the proposed changes therein.
SECTION 15.(a)The Mortgagormay make a distribution (hereinafter called a "distribution"),in
the nature of an investment,guarantee,extension of credit,advance,loan,non-affiliatedcompany joint venture,affiliated company investment,or dividend or capital credit distribution only if the majority RUS noteholders and the
majority Bank noteholders have given prior written approval to the distribution or if,after such distribution,
(1)the Mortgagor's net worth is equal to at least one percent ofits total assets and the amount of all
such distributions during the calendar year does not exceed twenty-fivepercent of the Mortgagor's
net income or net margins for the prior calendar year;
(2)the Mortgagor's net worth is equal to at least twenty percent of its total assets and the amount of all
such distributions during the calendar year does not exceed fifty percent of the Mortgagor's net
income or net margins for the prior calendar year;
(3)the Mortgagor's net worth is equal to at least thirty percent of its total assets and the amount of all
such distributions during the calendar year does not exceed seventy-ñve percent of its net income
or net margins for the prior calendar year;or
(4)the Mortgagor's net worth is equal to at least forty percent of its total assets,regardless of the
aggregate amount of such distributions.
The terms "net worth","total assets",and "net income or net margins"are determined in accordance with Exhibit
One.
(b)In addition to the distributions authorized under the preceding subsection (a),the Mortgagor
may make any distributionor investment providedin 7 CFR 1744 Subpart D.
TMAG-03-08-003-M Page 11
SECTION 16.In the event that the Mortgaged Property,or any part thereof,shall be taken under
the power of eminent domain,all proceeds and avails therefrom,except to the extent that all noteholders shall
consent to other use and application thereofby the Mortgagor,shall forthwith be applied by the Mortgagor:first,to
the ratable payment of any indebtedness by this Mortgage secured other than principal of or interest on the notes;
second,to the ratable payment of interest which shall have accrued on the notes and be unpaid;third,to the ratable
payment of or on account of the unpaid principal of the notes and to such installments thereof as may be designated
by the respective noteholders at the time of any such payment;and fourth,the balance,if any,shall be paid to
whosoever shall be entitled thereto.
SECTION17.The Mortgagorwill weE and truly observe and performall of the covenants,
agreements,terms and conditions contained in the Consolidated Loan Agreement and the RTFC Loan Agreement,on
its part to be observed or performed.The Mortgagorwill promptly furnish each Mortgagee with written notice of
any amendment or modificationof any agreement under which a note or other obligation of the Mortgagor secured
by the lien of this Mortgage has been or will be issued,including,without limitation,the Consolidated Loan
Agreement and the RTFCLoan Agreement,and the occurrence of any default or event of default of which theMortgagorhasknowledgeunderanysuchagreement.In the event of any inconsistency between the terms and
conditions of the Mortgage and the Consolidated Loan Agreement and the RTFCLoan Agreement,the terms of the
Mortgage shall apply to the Mortgagor.
SECTION 18.If all of the notes in any one of the three groups of notes secured hereby (RUS
Notes,Bank Notes and RTFC Notes)are paid and discharged while notes of the other group of notes remain
outstanding,all rights and powers of the Mortgagee associated with the paid and discharged group of notes shall vest
in the Mortgagee associated with the groups of notes remaining outstanding,and the rights and powers of the
holder(s)of the paid and discharged group of notes shall vest in the holder(s)of the group of notes remaining
outstanding.The Government is the "Mortgagee associated with"the RUS Notes;the Bank is the "Mortgagee
associated with"the Bank Notes;and RTFC is the "Mortgagee associated with"the RTFCNotes.The Bank,the
Government,the Mortgagor,RTFC and the noteholders shall execute and deliver such instruments,assignments,
releases or other documents as shall be reasonably required to carry out the intention of this section.
SECTION 19.At all times when any note is held by the Government,or in the event the
Government shall assign a note without having insured the payment of such note,this Mortgage shall secure payment
of such note for the benefit of the Government or such uninsured holder thereof,as the case may be.Whenever any
note may be sold to an insured purchaser,it shall continue to be considered a "note"as defmed herein,but as to any
such insured note the Government,and not such insured purchaser,shall be considered to be,and shall have the
rights of,the noteholder for purposes of this Mortgage.Notice of the rights of the Government under the preceding
sentence shall be set forth in all such insured notes.As to any note which evidences a loan made by FFB to theMortgagor,and guaranteed by the Government,acting through the Administrator,pursuant to the Act,the
Government and not FFB shall be considered to be,and shall have the rights of the noteholder for purposes of this
Mortgage.
SECTION20.As used in Article I,Section 1(d),Article II,Section 3,and Article E,Section 14
hereof and in this Section,TIER shall mean the Mortgagor's net income or net margins (determined in accordancewithExhibitOnehereto)plus interest-expense (determined in accordance with Exhibit One hereto),divided by
interest expense,
For purposes of Article II,Section 14 hereof,Average T1ER shall be determined as of January 1 of
each year duringwhich any obligation secured by this Mortgage remains unsatisñed and shall mean the average of
the two highest TIER ratios achieved by the Mortgagorduring each of the three calendar years last preceding the
various dates of its determination.
As used in Article I,Section 1(d),Article II,Section 3 and Article E,Section 14 hereof,DSC shall
mean the sum of net income,plus interest,plus depreciation,plus amortization,all divided by the sum of interest
plus scheduled principalpayments and capital lease obligations due in the test year.
TMAG-03-08-003-M Page 12
As used in Article I,Section 1(d),Equity to Asset Ratio shall mean all equity divided by the total
assets of the Mortgagor.
SECTION21.(a)Net worth,net income or net margins,interest expense,total assets,
depreciation,amortization and equity,as used in Sections 10,15 or 20 of this Article II,are defined in Exhibit One
of this Mortgage.Net plant and secured debt,if referred to in this Mortgage,are also determined in accordance with
Exhibit One hereto.
(b)Accounting terms used iii this Mortgage shall also apply to accounts or
groups of accounts of the Mortgagor,regardless of the account title or the system of accounts used,if such accounts
have substantially the same meaning as those prescribed by the Federal Communications Commission in its
prevailinguniformsystem of accounts for telee.ommunications companies (47 CFR Part 32).
SECTION22.¯If the UnderlyingMortgage contains provisionsrequiring the Mortgagor to
maintain a net plant to secured debt ratio or a funded reserve,then such provisionsare incorporated in and made a
part of this Mortgage as though fully set forth herein at this point.
SECTION23.Schedule A,Schedule B,.Exhibit A and Exhibit One,attached hereto,are made
part of this Mortgage.
ARTICLE III
REMEDIES OF THE MORTGAGEES AND NOTEHOLDERS
SECTION1.If one or more of the following events (hereinaftercalled "events of default")shall
happen,that is to say:
(a)default shall be made in the payment of any installment of or on account of interest on or
principal of any note or notes when and as the same shall be requiredto be made whether by acceleration or
otherwise and such default shall continue for thirty (30)days;
(b)default shall be made in the due observance or performance of any other of the representations,
warranties,covenants,conditions or agreements on the part of the Mortgagorin any of the notes,this
Mortgage,the Consolidated Loan Agreement or the RTFC Loan Agreement contained;and such default
shall continue for a period of thirty (30)days after written notice specifying such default and requiring the
same to be remedied shall have been givento the Mortgagor by any noteholder;
(c)the Mortgagor shall ñle a petition in bankruptcy or be adjudicated a bankrupt or insölvent,or
shall make an assignment for the benefitof its creditors,or shall consent to the appointment of a receiver of
itself or of its property,or shall institute proceedings for its reorganization or proceedings instituted by
others for its reorganization shall not be dismissed within thirty (30)days after the institution thereof;
(d)a receiveror liquidator of the Mortgagoror of any substantial portion of its property shall be
appointed and the order appointing such receiveror liquidatorshall not be vacated within thirty (30)days
after the entry thereof;
(e)the Mortgagor shall forfeit or otherwise be deprivedof its corporate charter or franchises,
permits or licenses required to carry on any material portion of its business;or
(f)a final judgment in an amount of two thousand five hundred dollars ($2,500)or more shall be
entered against the Mortgagor and shall remain unsatisfied or without a stay in respect thereoffor a period
of thirty (30)days;
TMAG-03-OS-003-WY Page 13
then in each and every such case any noteholder may,by notice in writing to the Mortgagor and delivery of a copy
thereof to the other noteholders,without protest,presentment or demand declare all unpaid principal of and accrued
interest on any or all notes held by such noteholder to be due and payable immediately;and upon any such
declaration all such unpaid principaland accrued interest so declared to be due and payable shall become and be due
and payable,immediately,anything contained herein or in any note or notes to the contrary notwithstanding;provided,however,that if at any time after the unpaid príncipal of and accrued interest on any of the notes shall have
been so declared to be due and payable.all payments in respect of principal and interest which shall have become
due and payable by the terms of such note or notes shall be paid to the respective noteholders,and all other defaults
hereunder and under the notes shal have been made good or secured to the satisfaction of all of the noteholders,
together with reimbursement for any resulting expenses or damage and together with interest at the highest rate
legally permissible,then and in every such case,the noteholder or noteholders who shall have declared the principalofandinterestonnotesheldbysuchnoteholderornoteholderstobedueandpayablemay,by written notice to the
Mortgagorand delivery of a copy thereof to the other noteholders,annul such declaration or declarations and waive
such default or defaults and the consequences thereof,but no such waivershall extend to or affect any subsequent
default or impair any right consequent thereon.
SECTION2.If one or more of the events of defaultshall happen,the holder or holders of not less
than a majority of the total amount of principal outstanding on the notes,hereinafter called the "majority
noteholders",(forpurposes of definingand calculating the majority noteholders the Government and the Bank shall
be determined to be one noteholder with their balances combined and also,such Government and Bank combination
shall be determined to be the majority noteholders if they together hold 50%or more of the outstanding principal
balance)for itself or themselves,and as the agent or agents of the other noteholders,personally or by attorney,in its
or their discretion,may,insofaras not prohibitedby law:
(a)take immediate possession of the Mortgaged Property,collect and receive all credits,
outstanding accounts and bills receivable of the Mortgagorand all rents,income,revenues and proñts
pertaining to or arising from the Mortgaged Property,or any part thereof,and issue binding receipts
therefor;and manage,control and operate the Mortgaged Property as fully as the Mortgagor might do if in
possession thereof,including,without limitation,the making of all repairs or replacements deemed
necessary or advisable;
(b)proceed to protect and enforce the rights of the Mortgagees and the rights of the noteholder or
noteholders under this Mortgage by suits or actions in equity or at law in any court or courts of competent
jurisdiction,whether for specific performance of any covenant or any agreement contained herein or in aid
of the execution of any power herein granted or for the foreclosure hereofor hereunder or for the sale of the
Mortgaged Property,or any part thereof,or to collect the debts hereby secured or for the enforcement of
such other or additional appropriate legal or equitable remedies as may be deemed most effectual to protect
and enforce the rights and remedies herein granted or conferred,and in the event of the institution of any
such action or suit the noteholder or noteholders instituting such action or suit shall have the right to have
appointed a receiver of the Mortgaged Property and of all rents,income,revenues and profits pertaining
thereto or arising therefromderived,received or had from the time of the commencement of such suit or
action,and such receivershall have all the usual powers and duties of receivers,in like and similar cases,to
the fullest extent permitted by law,and if application shall be made for the appointment of a receiver theMortgagorherebyexpresslyconsentsthatthecourttowhichsuchapplicationshallbemademaymakesaid
appointment;and
(c)sell or cause to be sold all and singular the Mortgaged Property or any part thereof,and all
right,title,interest,claim and demand of the Mortgagor therein or thereto,at public auction at such place in
any county in which the property to be sold,or any part thereofis located,at such time and upon such terms
as may be speciñed in a notice of sale,which shall state the time when and the place where the sale is to be
held,shall contain a brief general description of the propertyto be sold,and shall be given by mailing a
copy thereof to the Mortgagorat least fifteen (15)days prior to the date fixed for such sale and by
publishing the same once in each week for two successive calendar weeks prior to the date of such sale in a
TMAG-03-08-003-WY Page 14
newspaper of general circulation published in said county,or if no such newspaper is published in such
county,in a newspaper of general circulation in such county,the first such publication to be not less that
fifteen(15)days nor more than thirty (30)days prior to the date fixed for such sale.Any sale to be made
under this subparagraph (c)of this Section 2 may be adjourned from time to time by announcement at the
time and place appointed for such sale or for such adjourned sale or sales,and without furthernotice or
publicationthe sale may be had at the time and place to which the same shall be adjourned,provided,
however,that in the event another or differentnotice of sale or another or different manner of conducting
the same shall be required by law the notice of sale shall be given or the sale shall be conducted,as the case
may be,in accordance with the applicable provisions of law.
SECTION3.If,within thirty (30)days after the majority noteholders shall have had knowledge of
the happening of an event or events of default,the majority noteholders shall not have proceeded to exercise the
rights and enforce each of the remedies herein or by law conferred upon or reserved to the Mortgagees or to said
majority noteholders,then,and only then,any noteholder,includingthe majority noteholders,may proceed to
exercise any such right or rights and remedy or remedies not being enforced by the majority noteholders.Nothing
contained in this Mortgage shall affect or impair the right,which is absolute and unconditional,of any holder of any
note which may be secured hereby to enforce the payment of the principal of or interest on such note on the date or
dates any such interest or principal shall become due and payable in accordance with the terms of such note.
SECTION4.At any sale hereunder any noteholder or noteholders shall have the right to bid for
and purchase the Mortgaged Property,or such part thereof as shall be offered for sale,and any noteholder or
noteholders may apply in settlement of the purchase price of the property so purchased the portion of the net
proceeds of such sale which would be applicable to the payment on account of the principal of and interest on the
note or notes held by such noteholder or noteholders,and such amount so applied shall be credited as a payment on
account of principalof and interest on the note or notes held by such noteholder or noteholders.
SECTION5.Any proceeds or funds arising from the exercise of any rights or the enforcement of
any remedies herein providedafter the payment or provisionfor the payment of any and all costs and expenses in
connection with the exercise of such rights or the enforcement of such remedies shall be applied first,to the payment
of indebtedness hereby secured other than the principalof or interest on the notes;second,to the ratable payment of
interest which shall have accrued on the notes and which shall be unpaid;third,to the ratable payment of or on
account of the unpaid principal of the notes;and fourth,the balance,if any,shall be paid to whosoever shall be
entitled thereto.
SECTION6.The Mortgagorcovenants that it will give immediate written notice to each of the
Mortgagees and to all of the noteholders of the occurrence of an event of default or in the event that any right or
remedy described in clauses (a)through (c)of Section 2 of this Article III is exercised or enforced,or any action is
taken to exercise or enforce any such right or remedy.
SECTION7.Every right or remedy herein conferred upon or reserved to the Mortgagees or to the
noteholders shall be cumulative and shall be in addition to every other rightand remedy given hereunder or now or
hereafter existing at law,or in equity,or by statute.The pursuit of any right or remedy shall not be constmed as an
election and shall not preclude the pursuit of any other right or remedy.
SECTION8.The Mortgagor,for itself and all who may claim through or under it,covenants that
it will not at any time insist upon or plead,or in any manner whatever clam or take the benefit or advantage of,-any
appraisement,valuation,stay,extension or redemption laws now or hereafter in force in any locality where any of the
Mortgaged Property may be situated,in order to prevent,delay or hinder the enžorcement of foreclosure of this
Mortgage,or the absolute sale of the Mortgaged Property,or any part thereof,or the final and absolute putting into
possession thereof,immediately after such sale,of the purchaser or purchasers thereat,and the Mortgagor,for itself
and all who may claim through or under it,hereby waives the benefit of all such laws unless such waivershall be
forbidden by law.
TMAG-03-08-003-WY Page 15
SECTION9.For purposes of this Article III,to the extent permitted by applicable state law,each
noteholder appoints the Mortgagee or Mortgagees exercising any remedy as above provided as its attorney(s)-in-fact
for such purpose.
SECTION 10.Nothing herein contained shall be deemed to authorize the Mortgagees to authorize
or consent to or accept or adopt on behalfof any noteholder any plan of reorganization,arrangement,adjustment or
composition affectingthe notes or the rights of any holder thereof,or to authorize the Mortgagees to vote in respectoftheclaimofanynoteholderinanysuchproceeding.
SECTION11.Any rights of action and claims under this Mortgage or the notes may be
prosecuted and enforced by the noteholder or notebolders prosecuting and enforcing the same without the possessionofanyofthenotesortheproductionthereofinanyproceedingrelatingthereto,and,to the extent permitted by
applicable state law,any such proceeding instituted by any noteholder shall be brought in its own name as
attorney-in-fact for the noteholderš,and any recovery ofjudgment shall,after provision for the payment of the
reasonable compensation,expenses,disbursements and advances of the noteholders,their agents and counsel (but
only to the extent actually incurred),be for the ratable benefit of the noteholders in respect of which such judgment
had been recovered.
ARTICLEIV
POSSESSION UNTIL DEFAULT-DEFEASANCECLAUSE
SECTION1.Until some one or more of the events of default shall have happened,the Mortgagor
shall be suffered and permitted to retain actual possession of the Mortgaged Property,and to manage,operate and
use the same and any part thereof,with the rights and franchises appertaining thereto,and to collect,receive,take,
use and enjoy the rents,revenues,issues,earnings,income,products and proñts thereof or therefrom,subject to the
provisions of this Mortgage.
SECTION2.The assignments to the Mortgagees of all of the Mortgagor's right,title and interest
in,to and under contracts,licenses,franchises,ordinances,privileges,permits,chattel paper,contract rights,leases,
subleases,(hereinafter collectively referredto in this Section 2 as the "assigned items"),to the extent set forth in the
granting clauses of this Mortgage,constitutes an assignment for security purposes.Notwithstanding any other
provisions of this Mortgage to the contrary,the Mortgagor shall at all times remain liable under each of the assigned
items to performall of its duties and obligations thereunder to the same extent as if there had been no assignment
contained in this Mortgage.Furthermore,(i)neither the assignment under this Mortgage nor the exercise by the
Mortgagees of the rights assigned hereunder shall cause the Mortgagees to become subject to any obligation orliabilityunderanyoftheassigneditems,or release the Mortgagor from any of its duties or obligations under any of
the assigned items,or any instrument or document relating thereto,except to the extent such exercise by any
Mortgagee shall constitute performance of such duties or obligations,and (ii)no Mortgagee shall have any
obligationby reason of the assignment under this Mortgage to make any inquiry as to the sufficiency or authorization
for any payments received by it or take any other action to collect or enforce any claim forpayment assigned
hereunder.
SECTION3.If the Mortgagor shall well and truly pay or cause to be paid the whole amount of the
principal of and the interest on the notes at the time and in the manner therein provided,according to the true intent
and meaning thereof,and shall also pay or cause to be paid all other sums payable hereunder by the Morthragor and
shall well and truly keep and performaccording to the true intent and meaning of this Mortgage,all covenants herein
requiredto be kept and performed by it,then and in that case,all property,rights and interests hereby conveyed or
assigned or pledged shall revert to the Mort.gagor and the estate,right,title and interest of the Mortgagees and the
noteholders shall thereupon cease,determine and become voidand the Mortgagees and the noteholders,in such case,
on written demand of the Mortgagorbut at the Mortgagor's cost and expense,shall enter satisfaction ofthis
Mortgage upon the record.In any event,each noteholder,upon payment in full to him by the Mortgagor of'all
principal of and interest on any note held by him and the payment and discharge by the Mortgagor of all charges due
TMAG-03-08-003-Y Page 16
to such noteholder hereunder.shall execute and deliverto the Mortgagor such instrument of satisfaction,discharge
or release as shall be required by law in the circumstances.
ARTICLEV
MISCELLANEOUS
SECTION 1.It is hereby declared to be the intention of the Mortgagor that all lines,or systems,
embraced in the Mortgaged Property,including,without limitation,all rights of way and easements granted or given
to the Mortgagoror obtained by it to use real property in connection with the construction,operation or maintenance
of such lines,or systems.and all service and connecting lines,poles,posts,crossarms,wires,cables,conduits,ducts,
connections and fixtures formingpart of,or used in connection with,such lines,or systems,and all other property
physically attached to any of the foregoing-described property,shall be deemed to be real property.
SECTION2.All acts and obligations of the Mortgagorhereunder shall be subject to all applicable
orders,mles and regulations,now or hereafter in effect,of all regulatory bodies having jurisdiction in the premises,
to the end that no act or omission to act on the part of the Mortgagor shall constitute a default hereunder insofar as
such act or omission shall have been requiredby reason of any order,rule or regulation of any such regulatory body.
SECTION3.All of the covenants,stipulations,promises,undertakings and agreements herein
contained by or on behalf of the Mortgagorshall bind its successors and assigns,whether so speciñed or not,and all
titles,rights and remedies hereby granted to or conferred upon the Mortgagees shall pass to and inure to the benefit
of the successors and assigns of the Mortgagees and shall be deemed to be granted or conferred for the ratable
benefit and security of all who shall from time to time be the holders of notes executed and delivered as herein
provided.The Mortgagorand each of the Mortgagees hereby agree to execute and deliversuch consents,
acknowledgments and other instruments as may be reasonably requested by any of the Mortgagees or any noteholder
in connection with any assignment of the rights or interests of any Mortgagee or noteholder hereunder or under the
notes.
SECTION4.The descriptive headings ofthe various articles of this Mortgage were formulated
and inserted for convenience only and shall not be deemed to affect the meaning or construction of any of the
provisionshereof.
SECTION 5.All demands,notices,reports,approvals,designations,or directions required or
permitted to be given hereunder shall be in writing and shall be deemed to be properly given if mailed by registered
mail addressed to the proper party or parties at the following addresses:
As to the Mortgagor:As stated in the testimonium clause hereof.
As to the Mortgagees The Government:
Rural Utilities Service
U.S.Department of Agriculture
Washington,D.C.20250-1500
The Banlc
Rural Telephone Bank
c/o Rural Utilities.Service
U.S.Department of Agriculture
Washington,D.C.20250-1500
TMAG-03-08-003-WY Page 17
RTFC:
Rural Telephone Finance
Cooperative
Woodland Park
2201 Cooperative Way
Herndon,Virginia 22071-3025
and as to any other person,firm,corporation or governmental body or agency having an interest herein by reason of
being the holderof any note or otherwise,at the last address designated by such person,firm,corporation,
governmental body or agency to the Mortgagorand the Mortgagees.The Mortgagor or the Mortgagees may from
time to time designate to one another a new address to which demands,notices,reports,approvals,designations or
directions may be addressed and from and afterany such designation the address designated shall be deemed to be
the address of such party in lieu of the address hereinabove given.The Mortgagor will promptly notify the
Mortgagees in writingof any change in location of its chiefplace of business or the office where its records
concerning accounts and contract rights are kept.
SECTION6.The invalidity of any one or more phrases,clauses,sentences,paragraphs or
provisions shall not effect the remaining portions of this Mortgage,nor shall any such invalidity as to any Mortgagee
or as to any holder of notes hereunder affect the rights hereunder of the other Mortgagee or any other holder or
holders of notes.
SECTION 7.To the extent that any of the property described or referred to in this Mortgage is
governed by the provisions of the Uniform Commercial Code this Mortgage is hereby deemed a "security
agreement"under the Uniform Commercial Code,and a "financing statement"under the UniformCommercial Code
for said security agreement.The mailing addresses of the Mortgagor as debtor,and of the Mortgagees as secured
parties,are as set forth in Section 5 of this Article V.
SECTION8.The Mortgagoragrees to indemnify and save harmless the Mortgagees against any
liability or damages which any such Mortgagee may incur or sustain in the exercise and performance of its powers
and duties hereunder.For such reimbursement-and indemnity,such Mortgagee shall be secured under this Mortgage
in the same manner as the notes and all such reimbursements for expense or damage shall be paid to such Mortgagee
with interest at the rate specified in Article II,Section 8 hereof.
SECTION 9.This Mortgage may be simultaneously executed in any number of counterparts,and
all said counterparts executed and delivered,each as an original,shall constitute but one and the same instrument.
IN WITNESS WHEREOF,SILVER STAR TELEPHONECOMPANY,INC.,P.O.Box 226,
Freedom,Wyoming 83120,as Mortgagor,has caused this Mortgage to be signed in its name and its corporate seal to
be hereunto affixed and attested by its officers thereunto duly authorized,RURALTELEPHONE BANK,as
Mortgagee,has caused this Mortgage to be signed in its name and its corporate seal to be hereunto affixed and
attested by its officers thereunto duly authorized,RURAL TELEPHONEFINANCE COOPERATIVE,as
Mortgagee,has caused this Mortgage to be signed in its name and its corporate seal to be hereunto affixed and
attested by its officers thereunto duly authorized,and UNITED STATES OF AMERICA,as Mortgagee,has caused
this Mortgage to be duly executed in its behalf,all as of this day and year first above written.
TMAG-03-08-003-WY Page 18
SILVE ONE MPAN ,INC
President
(Seal)
Attest:
Secretary
Witnesses
TMAG-03-08-003-M Page 19
UNITED STATES OF AMERICA,and
RURAL TELEPHONE BANK,respectively
by
as
Director,Northwest Area
Telecommunications Program
of the
Rural Utilities Service
and for the
Rural Telephone Bank
t
teeal)
Assistant Secretary
of the
Rural Telephone Bank
Executed by United States of America,
Mortgagee,and Rural Telephone Bank,
Mortgagee,in the prese of:
Witnesses
(SEAQ
BR NE FN OP ATIVE
Attest:
Assist/ant SpáËetary-TreÁurer
Assistant Secretary-Treasurer
Executed by RTFC,Morgagee,
Witnesses
TMAG-03-08-003-WY Page 20
STATE OF WYOMING )
)SS
COUNTY OFa C,/)
The foregoinginstrument was acknowiecig d 'oefore me byÑ /President of
SILVER STAR TELEPHONECOMPANY,INC.,this //''day of -,20g.
Notary Public '
MICHELLE MOTäüíÑ6TiRŸÑBL(Notarial Seal)
COUWTY OF STATE OFUNCOLNWYOMINGMycommissionexpires:
MY COMMiSSiON EXPIRES /
TMAG-03-08-003-WY Page 21
DISTRICT OF COLUMBIA )SS
This instrument was acknowledged before me on Mg..,20 O Ì ,bypvyEgEMT,Director,Northwest Ar a -T e ommunications Program of the
Rural Utilities Service of the United States of America an forthe R al ele ho Bank.
Notary Public '
(NotarialSeal)
M Lisa A.Johnson
y commission expires
My Commission Expires:October 14.2001
TMAG-03-08-003-WY Page 22
COMMONWE!ALTHOF VIRGINIA )
)SS
COUNTYOF FAIRFAX )
BE IT REMEMBERED,that on this day of M ,20f,
before me,the undersigned,a notary ublic in and for the Commonwealth of Virginia,aforesaid,came
ya A Ñ·FA ,signing as an Assistant Secretary-Treasurer of the RURAL
TELEPHONE FINANCE COOPERATIVE,a corporation,who is personally known to me to be the person who
executed the within instrument of writing on behalfof such corporation and such person duly acknowledged the
execution of the same as the act and deed of said corporation.
IN TESTIMONTY WHEREOF,I have hereunto set my hand and afñxed my notarial seal the day and year
above written.
Notary Public
(Notarial Seal)
My commission expires:/*''
TMAG-03-08-003-WY Page 23
SCREDULE A
"TelephoneLoan Contract"(exclusive of any amendments)dated as of June 15,1960
"Outstandmg RUS Notes":
Five (5)certain mortgage notes payable to the order of the Government,in the aggregate principal amountof$5,553,000.00,of all of which will finally mature on or before March 4,2018.
"Outstanding Bank Note":
One (1)certain mortgage note payable to the order of the Bank in the principal amount of $820,050.00,which will fmally mature on or beforeDecember 1,2009.
"Underlying Mortgage"
Instrument Date
Restated Mortgage.Security Agreement,and Financing Statement Rember 25,1990
Supplement to Restated Mortgage,Security Agreement and Financing December 01,1995
Statement
SCHEDULE B
1."Current RTFC Loan Agreement"designated WY 501 -9001,dated as of
June 1,2001 by and between Rural Telephone Finance Cooperative and Silver
Star Telephone Company.
2."Current RTFC Note"designated WY 501 -9001,dated as of June 1,2001
payable to RTFC in the principal amount of $3,263,158with a ñnal maturitydate
of June 1,2016.
3."UnderlyingMortgage"
Instrument Date
Restated Mortgage,Security Agreement
and Financing Statement December 25,1990
Supplement to Restated Mortgage,
Security Agreement and Financing Statement December 01,1995
Exhibit One (Exhibit to Mortgage)
UNIFORM SYSTElŸI OF ACCOUNTSACCOUNTNUMBERSUSEDINCERTAINPROVISIONS
All references regarding account numbers are to 47 CFR Part 32.
ACCOUNT NUMBERSACCOUNTNAMESCLASSACLASSB
NET INCOME OR NET MARGINS:the sum of the balances of the followingaccounts of the Mortgagor:
Local NetworkServices Revenues )Network Access Services Revenues )Long Distance NetworkServices Revenues )5000s thru 5300s
Miscellaneous Revenues )LESS:Uncollectible Revenues )
Other Operating Income and Expense 7100*7100NonoperatingIncomeandExpense7300*7300IncomeEffectofJurisdictional
Rate-making Difference -Net 7910 7910NonregulatedNetIncome79907990
Other Nonregulated Revenues 7991 7991
LESS:balances of the followingaccounts:
Plant Specific Operations Expense )
Plant Nonspeciñc Operations Expense )6100s thru 6700s
Customer Operations )CorporateOperations )Operating Taxes 7200*7200NonoperatingTaxes7400*7400
Interest and Related Items 7500*7500ExtraordinaryItems7600*7600
INTEREST EXPENSE:the sum of the balances of the followingaccounts of the Mortgagor:
Interest and Related Items 7500*-7500
Interest on Funded Debt 7510
Interest Expense -Capital Leases 7520AmortizationofDebtIssuanceExpense7530
Other Interest Deductions 7540
LESS:Allowance for Funds Used
During Construction 7340 7300.4
*Summary Accounts
TEX1-03-08-003-WY Page 1
TOTAL TELECOMMUNICATIONS PLANT:the sum of the balances ofthe followingaccounts of the
Mortgagor:
Telecommunications Plant in Service 2001 2001
Property Held for Future
Telecommunications Use 2002 2002
Telecommunications Plant Under
Construction -Short Term 2003 2003
Telecommunications Plant Under
Construction -Long Term 2004 2004
Telecommunications Plant Adjustment 2005 2005
NonoperatingPlant 2006 2006
Goodwill '2007 2007
NET WORTH OREQUITY:the sum of the balances of the following accounts of the Mortgagor:
Capital Stock 4510
Additional Paid-InCapital 4520
Treasury Stock 4530
Other Capital 4540
Retained Earnings 4550
NOTE:FOR NONPROFITORGANI2ATIONS-OWNER'S EQUITY SHALL BE SHOWN IN
SUBACCOUNTSOF 4540 AND 4550.
TOTAL ASSETS:the sum of the balances of the following accounts of the Mortgagor:
Current Assets 1100s thru 1300s
Noncurrent Assets 1400s thru 1500s
Total Telecommunications Plant 2001 thru 2007
LESS:Accumulated Depreciation 3100 thru 3300s
LESS:Accumulated Amortization 3400 thru 3600s
DEPRECIATION AND AMORTIZATION:the sum of the balances of the following accounts of the Mortgagor:
Depreciation and
AmortizationExpenses 6560*
Depreciation Expense-
Telecommunications Plant in Service 6561
Depreciation Expense-
Property Held for Future
Telecommunications Use 6562
AmortizationExpense-Tangible 6563
AmortizationExpense-Intangible 6564
AmortizationExpense-Other 6565
TEX1-03-08-003-WY Page 2
BONNEiiLECOUNTY,IDABO
Parcel10
AcertaintractoflandsituatedinBannevilleCounty,StateofIdaho,describedinthatcertain
deeddatedJanuary30,1961andexecutedbyHarry0.MizeandJanet0.Mize,Grantorsto
SilverStarTelephoneCompany,Inc.,whoacquiredtitleasSilverStarTelephoneCo.,Inc.
Grantee,andrecordedonJanuary31,1961,inBook132ofDeedsatPage417,Official
recordsofBonnevilleCounty,StateofIdaha;moreparticularlydescribedasfollows:
AllthatportionoftheNE¼oftheNE¼aftheSection20,Township1North,Range
44EastoftheBoiseMeridianinBonnevilleCounty,Idahn,boundedasfollows:
Commencinga±apointtwoRadsSouthfromtheNorthwestcorneroftheNortheast
QuatteroftheNortheastQuarterofSection20,Township1North,Range44Eastof
theBoiseMeridianandrtmningthenceEast8Rods,thenceSouth20Rods,thence
West8Rods,thenceNorth20Rodstotheplaceofbeginning
LEGALDESCRIPTIONSFINALPage7of7
All that certain lot,piece or parcel ofland lying and being in the Countyof Caribou,
State of Idaho and more particularlydescribed as follows,to-wit:
Township6 South,Range 42 East of the Boise,Meridian;Section 10:
Beginning at a point on the Northline of Section 10,South 89°49'45"West 192.50feetoftheNortheastcornerofsaidSection10,said pointbeing also on the WesterlyrightofwayfenceofStateHighwayNo.34,and running thence South 44°58'59"
West 147.11 feet alongsaid right of way fenc=to a point;thence South 89°46'19"
West 104.24 feet to a point,thence North 00°09'36"West 104.24 feet,to a point on
said North line;thence North 89°49'45"East 208.52 feet along saidNorthline,to thepointofbeginning.
Parcel 9
A certaintract ofland situated in Caribou County,State ofIdaho,described in that certain
deed dated April 28,1992 and executedby Max B.Weaver and Lilo Weaver,GrantorstoSilverStarTelephoneCompany,Inc.,Grantee,andrecorded on April30,1992,as InstrumentNo.143447 and corrected by Corrective QuitelaimDeed dated November 24,1992 andrecordedDecember8,1992 as InstrumentNo.144721,Official records of Caribou County,State of Idaho;more particularlydescribed as follows:
All that portion of Section 23,Township5 South,Range 43 East,Boise Meridian,Caribou County,State of Idaho,boundedas follows:
Beginning at the Northeastcomer of said Section 23;thence South 1,342.18 feetalongtheEastlineofsaidSection;thence West 992.49 feet to the Tme Point ofBegirmingwhichis15/8"rebar with cap labeled "AA HUDSONPLS 4735"set at theintersectionoftheWesterlyright-of-wayof the Wayan Loop Road and the acceptedboundaryfencebetweenMaxWeaverandLeithltSomsen;
Thence North 39°30'55"West 89.39 feet alongsaid fence to a 5/8"rebar with cap set
at a fence comer·thence North34°31'27"East 77.39 feet along a fence lineto a 5/8"rebar with cap set at a fence corner on westerly right-of-way of said road;thenceSouth35°12'20"East 78.96 feet along said line to the True Point of Beginning.
LEGAL DESCRIPTIONS FINAL Page 6 ci7
A pottionofBlock 1,Van NoyPark Additionto the Town ofTrayne,Wyoming,also
located within the SW ¼,NE ¼,Section 23,T 34 N,R 119 W,6*P.M.,more
particularly described as follows:Beginningat apointon the EastR/Wline of Moser
Street,also known as Lincoln Street,225.75 feet N 00°323'from the SW comer of
said Black 1,Van Noy Park Addition,which is.also the SW comer of Lot 9;and
running thence N 00°32.3'W,75.00 feet;thence S 89°54.4'E,105.00 feet thence 500°32.3'E,75,00 feet;to an existing fence,thence N 89°54.4'W,105.00 feet to the
point of beginning.
Parcel 7
A certain tract of land situated in Lincoln County,State af Wyoming,described in that
certain deed dated August 6,1990 and executed by Arvel Wolfley and Clarice Wolfley,
Grantors to 5ilver Star Telephone Company,Inc.,who acquired title as Silver Star
Telephone,Inc.,Grantee,and recorded on August 13,1990,as InstrmnentNo.721646,
Official records of Lincoln County,.State of Wyoming;more particulady described as
follows:
All that portion of the Southeast Quarter af Section 29,T 34 N,R 118 W,6*P.M.,
in Lincoln County,Wyoming,bounded as follows:
A portion ofLot3,Block6,Town ofBedford,being the Southeast Quarter of Section
29,T 34 N,R118 W,6*PX,Lincoln County,Wyoming,described as follows:
Beginning at the Southeast corner of said Lot 3,amningthenceN89°51'54"W,75.00
feet;thence North 75.00;thence S 89°51'54"E,75.00 feet,thence South 75.00 féet
to the point ofbeginning.
CA1UROU COUNTY,IDAHO
Parcel 8
A certain tract of land situated in Caribou County,State of Idaho,desedbed in that certain
deed executed by Lewis Bros.,Inc.,Grantors to SilverStar Telephone Company,Inc.who
acquired title as Silver Star Communications,Grantee,and recorded on June 7,2000,asInstrumentNo.161511,Official records of Catibau County,State ofIdahe;more patticularly
described as follows:
LEGAL DESCRIPTIONS FINAL .Page 5 of 7
thence N 70°-11.7 W,79.47 feet along an existing fence to a point·
thence N 78°-01.2 W,199.38 feet along an existing fence to a point;
thence N 58°-28.3'W,432.12 feet along an existing fence to a point,S 28°-07.5'W,
1,507,15 feet from the said northeast comer;
thence S 89°-56.0'E,658.56 feet along an existing fence to the POINT OF
BEGINNING.
Parcel 5
A certain tract of land situated in Lincoln County,State of Wyoming,described in that
certain deed dated September 13,1971,and executed by Bordean W.Clinger,Grantors to
Silver Star Telephone Company,Inc.,who acquired title as Silver Star Telephone Ca.,Inc.
Grantee,and recorded on September 16,1971,as InstrumentNo.433423,Ofñeial records
of Lincoln County,State of Wyoming;more particularlydescribed as follows:
Al thatportion of the SE ¼of the SW ¼of Section 20,Township 37 North,Range
118 West in Lincoln County,Wyoming,bounded as follows:
BeginningS 45°06'E,28.30 feet from the NorthwestComer SE K SW ¼,Section
20,T 37 N,R 118 W,and runningthence N 89°53'E,160 feet,thence S 0°04'E,100
feet,thence S 89°53'W,160 feet,thenceN 0°04'W,100 feet to point ofbeginning.
Parce!6 '
A certain tract of land situated in Lincoln County,State of Wyoming,described in that
certain deed dated June 13,1990 and executed by Glenn W.Moser and Blanch Moser,
Grantors to Silver Star Telephone Company,Inc.,who acquired title as Silver StarTelephone,Grantee,and recorded on June 15.1990,as InstrumentNo.719167,Official
records of Lincoln County,State of Wyoming;more particularlydescribed as follows:
All thatportion of the SW ¼of the NE ¼of Section 23,T 34 N,R 119 W,6*P.M.
in Lincoln County,Wyoming,bounded as follows:
LEGAL DESCRIPTIONSFINAL Page 4 of7
Parcel 4
A certain tract of land situated in Lincoln County,State of Wyoming,descrioed in twocertainCorrectiveWarrantyDeedsdatedApril27,1992 andApril28,1992,respectively;thefirstdeedbyWilmaH.Hale,formerly Wilma H.Jenkins,a widow,Kendall Evan JenkinsandEileenJeanetteJokinshusbandandwife,as Grantors to Silver Star TelephoneCompany,Inc.,who acquiredtitle as SilverStar Telephone Company,as Grantee;the seconddeedbyStevenH.Jenkins andU11a T Mi Jenkins,husband and wife,as Grantors to SilverStarTelephoneCompany,Inc.,who acquired title as Silver Star Telephone Company,Grantee;both deeds being recorded May4,1992 in the Office of the CountyClerk and Ex-officio Registerof Deeds of Lincoln County,State of Wyoming,the ñrstdeed in Book309PRofDeeds,Page 552,as InstrumentNo.747652,the second deed in Book 309 of Deeds,Page 550,as InstrumentNo.747651.Both deeds correct the description contained in aWarrantyDeedrecordedinBook105PR,Page 545,on July 19,1973,as InstrumentNo.448892 which tract ofland is more particularly described as follows:
Thatpart oftheE ½ofthe NE ¼,of Section 34,T 35 N,R 119 W,Lincoln County,Wyoming,being part of those tracts of record in the Ofñee of the Clerk of LincolnCountyinBook120ofPhotostaticRecordsonPage193andinBook199ofPhotostaticRecordsonpage420,described as follows:
BEGINNINGat apoint on the west right-of-wayline ofU.S.Eighway 89,S 02°-14.1'
W,1,330.97 feet from the northeastcomer of said Section 34,foundas described intheCertiñedLandCornerRecordationCertificatefiledinthesaidOf5ce,said pointbeing500°-05.7 W,122.81 feet from a marker at station 1648+00;
thence S 00°-05.F W,277.19 feet,along said west right-of-way line to a marker atstation1644+00;
thence N 89°-54.9'W,20.00 feet,along said west right-of-way line to a marker atstation1644+00;
thence 5 00°-04.7 W,16.35 feet,along said west rightof-way noe to a point;
LEGAL DE5CRIPTIONS FINAL Page 3 of7
thence N 00°-03'-19"E,376.61 feet,along said southerlyextension,to the southeast
corner of said tract,marked by a brass cap;
thence N 89°-54'-34"W,221.26 feet,along the south line of said tract,to thesouthwestpointofsaidtract.common to the northeast pointoftbattract of record insaidoficeinBook406ofPhotostaticRecordsonpage774;
thence SOUTH,165.63 feet,along the east line of said tract in book 406,to thesoutheastpointofsaidtract;
thenceN 89°-54'-34"W,220.00 feet,along the south line of said tract,to a point onthewestlineofsaidS½,NW ¼;
thence continuing N 89°-54'-34"W,41.82 feet,to a point on the easterly right-of-way line of D.S.Highway89;
thenceS 00°-49'-12"E,213.00 feet,along said easterly right-of-way line,to a point
on the south line of said SE ¼,NE ¼;
thence N 89°-57 -06"E,38.77 feet,to the CORNER OF BEGINNING.
Parcel 3
A certain tract of land situated in Lincoln County,State of Wyoming,described in thatcertaindeeddatedJuly28,.1950 and executed by William E.Jenkins and Lena JenIdas,Grantors to Silver Star Telephone Company,Inc.,who acquired title as SilverStar Tel.Co.,Inc.,Grantee,and recorded on August24,1950,in Book 27ofDeedsat Page 505,Or~icial
records of Lincoln County,State of Wyoming;more particularly described as follows:
All thatportionof the NW ¼of the NW ¼of Section 35 Township 35 North,Range119WestoftheSixthP.M.in LincolnCounty,Wyoming,bounded as follows:
Beginningat a point 115 feet South of the Northwestcorner of the NW ¼of the NW
¼of Section 35 Township35,Range 119 West of the SixthP.M.,Wyoming,thenceSouth54feet,thence East 114 feet,thence North 54 feet,thetice West 114 feet to aplaceofbeginning,containing6,156 square feet,more or less,
LEGAL DESCRIPTIONS FiNAL Page 2 of 7
LINCOLN COUNTY,WYOMING-
Parcel 1
A certain tract of land situated in Lincoln County,State of Wyoming,described in thatcertaindeeddatedJuly31,1998 and executed by Ted.R.Miller and Peggy Anne Miller,Grantors to SilverStar Telephone Company,Inc.,Grantee,andrecorded on August 11,1998,as Instrument No.852401,Official records of Lincoln County,State of Wyoming;moreparticularlydescribedasfollows:
The East 127 feet of the South half of Lot 4 Block 29 of the Afton,Wyoming,TownsitePlat.
Parcel 2
A certain tract of land situated in Lincoln County,State of Wyoming,described in thatcertaindeeddatedDecember16,1998,and executed by Ted C.Frome and Betty B.Frome,Grantorsto SilverStar Telephone Company,Inc.who acquired title as SilverStar TelephoneCo.,Inc.,Grantee,and recorded on December 17,1998,as InstrumentNo.0855501,OfficialrecordsofLincolnCounty,State of Wyoming;more particularlydescribed as follows.
That part of the S ½of the NW ¼of Section 31,T 32 N,R 118 W,and that part oftheSE¼,NE ¼of Section 36,T 32 N,R 119 W,within the Southeast AftonAnnexationtotheTownofAfton,Lincoln Cototy,Wyoming,being part of thattractofrecordintheOf5ceoftheClerkofLincolnCountyinBook54ofPhotostaticRecordsonpage238,and Civil No.9915,of record in the Office of the Clerk of theDistrictCourt,Third Judicial District,Lincoln County,Wyoming,described asfollows:
BEGINNINGat the southwest corner of said S ½,NW ¼;
thence N 89°-51'-06"E,440.90 feet,along the south line of said S ½,NW ¼,to apointattheintersectionofasoutherlyextensionoftheeastlineofthattractofrecordinBook358ofPhotostaticRecordsonpage425;
LEGAL DESCRPTIONS RNAL Page 1 of 7
EXHIBIT A
Certificate as to Resolutions of Board of
Directors and Incumbency
The undersigned do hereby certify as follows:
We are duly elected,qualified and serving as the President and Corporate Secretary of
SILVER STAR TELEPHONE COMPANY,INC.,a Wyoming corporation (the "Corporation"),and the
undersigned Corporate Secretary is the custodian of the Corporation's records and,as such,is
authorized and empowered to authorize,execute and deliver this Certificate ("Certificate")as to
Consent Resolution of Silver Star Telephone Company,Inc.(RUS Lien Accommodation)and
Resolutions of Board of Directors and Incumbency on behalf of the Corporation.
We do hereby further certify as follows:
(a)The Company is duly incorporated,validly existing and in good standing under the
laws of the state of its incorporation and there is no .pending or contemplated
proceeding for the merger,consolidation,sale of assets or business or dissolution of
the Company;
(b)Attached hereto as Attachments 1 and 2 are true,complete and correct copies of the
Consent Resolution of Silver Star Telephone Company,Inc.(RUS Lien
Accommodation)dated effective July 18,2000 and Resolutíons of Board of Directors
and Incumbency adopted effective June 1,2001;
(c)Such action for the Cornpany was duly,regularlyand legally taken in accordance with
law and the Bylaws of the Company;and said resolutions have not been modified,
altered or rescinded and the same are still in full force and effect;
(d)The following persons are duly qualified and acting officers or authorized
representatives of the Company,duly elected or appointed to the offices or authorized
to represent the Company in the capacities set forth opposite their respective names,
and the signature appearing opposite the name of each person is the genuine
signature:
ANER.
Hoopes
sLEdent E
Ron B.McCue Vice President A-
Chad Turner Vice President
Bonnie E.Hoopes Secretary O 4 m
IN WITNESS WHEREOF,I have executed this Certificate on behalf oithe Company this
day of July,2001.
Allen R.Hoopes,President
ATTEST:
Bonnie E.Hoopes,Secreta'
ORIGiNAL
CONSENT RESOLUTION
OF
SILVER STAR TELEPHONECOMPANY.INC.
(RUS Lien Accomrnadation)
The undersigned,being the all of the directors of Silver Star Telephone
Company,Inc.,a Wyoming corcoration ("Silver Star"or the "Cornpany"),do hereby
take the following corporate action without a meeting in accordance with the general
corporation laws of the State of Wyoming and the constituent documents of the
corporation:.-
WHEREAS,Silver Star has constructed certain telecommunications faciiities
to provide new and improved telecommunications services to de customers,
including a central office and outside plant to pr¤vide local exchange and
other telecommunication services in Afton,Wyoming.(the "Project")and has
heretofore financed such constructían with short-term financing from the Rural
TelephoneFinance Cooperative ("RTFC");and
WHEREAS Siiver Star now.wishes to refinance the Project with long-term
financing from RTFC in the amount of up to Three Million Two Hundred Sixty-
Three Thousand One Hundred Fifty-Eight Dollars ($3,2,63,158.00)(the "RTFC
Loan"),according to the terms described in the RTFC loan commitment dated
October 15,1998 ("Loan Commitment"),with the exception that the Company
will not be reauired by RTFC to pledge,and will not pledge,the stock of any
of the .Company's wholly owned subsidiaries as security far the RTFC Loan;
and
WHEREAS,Silver Star is a borrower from the Rural LJtilities Service ("RUS"),
and the assets of the Campany are subject to the lien of RUS as set forth in
the mortgage and security agreement,as heretofore sµpplemented from time
to time,between Silver Star as mortgag¤rand the United States of America
as Mortgagee(the "RUS Mortgage");and
WHEREAS,as RTFC requires Silver Star to obtain a lien accommodation
from RUS pursuant to the regulations promulgated under 7 OFR Part 174,
Subpart B,Section 1744.20 et seq.,before RTFC will make the RTFC Loan;
and
WHEREAS,RUS policies and regulations authorize RUS to consider
accommodation-ofthe govemment'slien on the borrower's system to facilitate
Siiver Star obtaining financing upon request and application by Silver Star;
and
WHEREAS,the Board ai Directors of Siiver Star believe that the security .for
CONSENT RESOLUTION-1
1534\34\Rasolution.wod
the Company's existing indebtedness to RUS is reasonably adequate and will
not be adverselyafected by such lien accommodation from RUS,
"NOW,THEREFORE,BE IT RESOLVED,that the officers and directors of
Silver.Star are hereby authorized and directed t¤seek a lien accommodation
from RUS,pursuant to the reguistions promulgated under 7 CFR Part 1744,
Subpart 8,to facilitate the RTFC Loan;and it is
"FURTHER RESOLVED that the board of direct¤rs of Silver Star have
determined that the desired financing and lien accommodation authorized
herein are specifically in furtherance of the Company's corporate purposes,
are necessary and convenient to the conduct,promotion and attainment of its
business and will be to its benefit,and that request for lien accommodation,
and the execution of the documents consummating the RTFC Loan and other
agreements mentioned above do not constitute ari ultra vires act on the part
of the Company,and such execution is authorized by the corporate laws of the
State of Wyoming and not otheavise prohibited by the Campany's Certificate
of incorporation or Bylaws;
"FURTHER RESOLVED that for action of RTFC and RUS in reliance hereon,
the Secretary cif the Company be and hereby is authorized and empowered
to certify to RTFC and RUS a copy of these resolutions and any other form of
resciutions substantiallyin the same effect which may be required by RTFC
or RUS,and that RTFC and RUS may consider such officers and directors
to continue in office and these resolutions to remain in full force and effect
until written notice to the contrary shall be received by an officer of RTFC or
RUS;
FURTHER RESOLVED that Allen R.Hoopes,as President of the Campany,
is hereby authorized and directed on behalf of tiie Company to negotiale,
enter into,execute and deliver all contracts,assignments,closing documents,
affidavits,agreements,promissary notes guaranties,deeds of trust.
mortgages,collateral assignments,security.agreements,financing statements
and all other documents as said President 'shall deem necessary,desirable
or appropriate,and to take all such other and further actions as he shall deem
necessary,desirable,appropriate or expedient to close the RTFC Loan and
to obtain the Uen Accommodationfrom RUS:and it is
"FURTHER RESOLVED,that the President of the Company is hereby
authorized.to (a)sign,execute,certify to,verify,acknowledge,deliver,accept,
file,and record any and all instruments and documents,and (b)take,or cause
to be taken,any and all such action in the name and on behalf of the
Campany as in such officer's judgment.is necessary,desirable.or appropriate
in order to consummate the RTFC Loan,or otherwise expedientto effect the
purposes of the foregoing resolutions.
CONSENT RESQLUTION -2
1534\34\Resciution.wpd
Executed effective this day of ,2000.
MeMn R.Hoopes Ardell C.Hoopes
annie E.Hoopes |Stephe .Hoopes
Allen R Hoopes ''Ërad E.¾pes
P day sen nnis Saliderson
Being all of the Directors of Silver Star TelephoneCompany,Inc.
CONSENT RESOLUTION-3
153404\Resolution.wpd
WAJVER OF NOTlCE
We,the directors of Silver Star Telephone Campany,Inc.waive all notice of
the time,place and purpose of a special meeting of the Board of Directors and añter
into the foregoing consent resolution in place of a meeting.
The undersigned have executed this Waiver of Notice effective the y
of ,2000.
Me n R.Hoopes (/Ardell C.Hoopes
connie E.Hoopes Stephen R aopes
A len R.Hoopes rad Hoo s /
oduzy de n mii SÃnd s a
CONSENTRESOLUT10N -4
isamadownintinn.wad
SILVER STAR TELEPHONE COMPANY,INC.
RESOLUTlONS AUTHORIZING BORROWING
The undersigned being all of the directors of SILVER STAR TELEPHONE COMPANY,
INC.,a Wyoming corporation (the "Carporatíon")do hereby take the following corporate actions
without a meeting in accordance with the general corporation laws of the State of Wyoming and
the constituent documents of the Corporation:
"RESOLVED,that the Corporation borrow from the Rural Telephone Finance
Cooperative ("RTFC"),and that the Board of Dírectors hereby authoríze borrowings from RTFC,
from time to time in amounts which shall not at any one time exceed $3,263,158 in the
aggregate,five percent (5%)of which amount shall be used for the purchase of Subordinated
Capital Certificates if the Corporation does not pay for such purchase out of its general funds;
and
RESOLVED,that the proceeds of such borrowings shall be used by the Corporation
solely as specified in said Loan Agreement;and
RESOLVED,that Allen Hoopes,as president of the Corporation is hereby authorized on
behalf of the Corporation to execute and deliver the following:
(a)as many counterparts as shall be deemed advisable of a Loan Agreement with
RTFC (the "Loan Agreement"),substantially in the form presented to the Board of
Directors;
(b)a Secured Promissory Note payable to the order of RTFC in the aggregate
principal amount of $3,263,158 bearing such interest as provided for therein and
providing for the payment of the indebtedness evidenced thereby within fifteen
(15)years after the date thereof (the "Note"),substantially in the form presented
to the Board of Directors;
(c)as many counterparts as shall be deemed advisable of a Restated Mortgage,
Security Agreement and Financing Statement with the United States of America
acting through the Administrator of the Rural Utilities Service,Rural Telephone
Bank and RTFC as a mortgagees,substantially in the form presented to the
Board of Directors;
RESOLVED,that said officer be,and hereby is,authorized and directed to execute and
deliver in the name of and on behalf of the Corporation such other documents and to take such
other actions as in his sole discretion,shall deem necessary or advisable to carry out the intent
and purpose of the foregoing resolutions or the transactions contemplated thereby;and
RESOLVED,that Allen Hoopes,as president of the Corporation or Chad Tumer as Vice-
President,are each authorized on behalf of the Corporation to request and receive funds on
account of the Note from time to time,to repay such funds in accordance with the Loan
CONSENT RESOLLITION -SILVER STAR TELEPHONE COMPANY,INC.-1
D:\intemet\eudera\allen@ss\attach\RESOLUTIONSAUTHORI7JNG BORROWING (rev).doe
Agreement and Note,and are directed to deposit such funds in a special bank account used to
receive advances from the Lender;and
RESOLVED,that all actions heretofore taken by the authorized agents of the
Corporation,in connection with and in furtherance of entering into and carrying out the terms of
the Loan Agreement are hereby ratified and confirmed in all respects as acts of the
Corporation."
(end of text]
CONSENT RESOLUTION -SILVER STAR TELEPHONE COMPANY,INC.-2
D:\intemet\eudara\allen@ss\attach\RESOLUTIONSAUTHORIZING BORROWING (rev).doc
Dated effective the 1st day of June,2001.
MeMil R.Hoopes Di
radfor E.Ho ios irep or
Rod B.Jensen,Director
Allen Hoopes,Directo '
'Ecrinfe E.Hoopes,Director
Being all of the Directors of Silver Star Telephone Company,Inc.
CONSENT RESOLUTION -SILVER STAR TELEPHONE COMPANY,INC.-3
D:Sntemet\eudara\allen@ss\attach\RESOLUTIONSAUTHORIZING BORROW1NG (rev).do:
Dated effective the 1st day of June,2001.
Melvin R.Hoopes,Director
Stephen R.Hoopes,Director
Bradfor .-,'ctor
.Jens',Director
Allen R.Hoopes,Director
Bonnie E.Hoopes,Director
Being all of the Directors of Silver Star Telephone Company,Inc.
CONSENT RESOLUTION -SILVER STAR TELEPHONE COMPANY,INC.-3
C:\windows\TEMP\RESOLUTIONS AUTHORIZING BORROWING (rev)(1).doc
WAWER OF NOTICE
We,the directors of Silver Star Telephone Company,Inc.,waive all notice of the
time,place and purpose of a special meeting of the Board of Directors and enter into the
foregoing consent resolution in place of a meeting.
The undersigned have executed this Waiver of Notice effective the 1*day of
June,2001.
Mel n R.Hoopes Director/
Efradford 'dþb irector
Rod B.Jensen,Director
Allen Hoopes,Director!
knie E.Hoopes,Director
CONSENT RESOLUTION -SILVER STAR TELEPHONE COMPANY,INC.-4
D:Untemet\eudora\allen@ss\attacinRESOLUTIONSAUTHORIZING BORROWING (rev).doc
WAIVER OF NOTlCE
We,the directors of Silver Star Telephone Company,Inc.,waive all notice of the
time,place and purpose of a special meeting of the Board of Directors and enter into the
foregoing consent resolution in place of a rneeting.
The undersigned have executed this Waiver of Notice effective the 1*day of
June,2001.
Melvin R.Hoopes,Director
Stephen R.Hoopes,Director
Bradfo E.Hoop ,tre
a R.Jensen.Ofrector
Allen R.Hoopes,Director
Bonnie E.Hoopes,Director
CONSENT RESOLUTION -SILVER STAR TELEPHONE COMPANY,INC.-4
C:\windows\TEMP\RESQLUTIONS AUTHORIZING BORROWING (rev).dae
C Py
SILVER STAR TELEPHONE COMPANY,INC.
RESOLUTIONS AUTHORIZINGBORROWING
The undersigned being all of the directors of SILVER STAR TELEPHONE COMPANY,
INC.,a Wyoming corporation (the "Corporation")do hereby take the following corporate actions
without a meeting in accordance with the general corporation laws of the State of Wyoming and
the constituent documents of the Corporation:
"RESOLVED,that the Corporation borrow from the Rural Telephone Finance
Cooperative ("RTFC"),and that the Board of Directors hereby authorize borrowings from RTFC,
from time to time in amounts which shall not at any one time exceed $3,263,158 in the
aggregate,five percent (5%)of which amount shall be used for the purchase of Subordinated
Capital Certificates if the Corporation does not pay for such purchase out of its general funds;
and
RESOLVED,that the proceeds of such borrowings shall be used by the Corporation
solely as specified in said Loan Agreement;and
RESOLVED,that Allen Hoopes,as president of the Corporation is hereby authorized on
behalf of the Corporation to execute and deliver the following:
(a)as many counterparts as shall be deemed advisable of a Loan Agreement with
RTFC (the "Loan Agreement"),substantially in the form presented to the Board of
Directors;
(b)a Secured Promissory Note payable to the order of RTFC in the aggregate
principal amount of $3,263,158 bearing such interest as provided for therein and
providing for the payment of the indebtedness evidenced thereby within fifteen
(15)years after the date thereof (the "Note"),substantially in the form presented
to the Board of Directors;
(c)as many counterparts as shall be deemed advisable of a Restated Mortgage,
Security Agreement and Financing Statement with the United States of America
acting through the Administrator of the Rural Utilities Service,Rural Telephone
Bank and RTFC as a mortgagees,substantially in the form presented to the
Board of Directors;
RESOLVED,that said officer be,and hereby is,authorized and directed to execute and
deliver in the name of and on behalf of the Corporation such other documents and to take such
other actions as in his sole discretion,shall deem necessary or advisable to carry out the intent
and purpose of the foregoing resolutions or the transactions contemplated thereby;and
RESOLVED,that Allen Hoopes,as president of the Corporation or Chad Turner as Vice-
President,are each authorized on behalf of the Corporation to request and receive funds on
account of the Note from time to time,to repay such funds in accordance with the Loan
CONSENT RESOLUTION -SILVER STAR TELEPHONE COMPANY,INC.-1
D:\internet\eudara\allen@ss\attach\RESOLUTIONS AUTHORIZING BORROWING (rev).doc
Agreement and Note,and are directed to deposit such funds in a special bank account used to
receive advances from the Lender;and
RESOLVED,that all actions heretofore taken by the authorized agents of the
Corporation,in connection with and in furtherance of entering into and carrying out the terms of
the Loan Agreement are hereby ratified and confirmed in all respects as acts of the
Corporation."
[end of text]
CONSENT RESOLUTION -SILVER STAR TELEPHONE COMPANY,INC.-2
D:\intemet\eudora\allen@ss\attach\RESOLUTIONSAUTHORIZING BORROWING (rev).doc
Dated effective the ist day of June,2001.
Mel in R Hoopes,Director
Steplen Hoopei ,D tor
radford E.ópe D ector
Rod B.Jensen,Director
A en Hoopes,Directdr
B Ei Hoopes,Director
Being all of the Directors of Silver Star Telephone Company,Inc.
CONSENT RESOLUTION -SILVER STAR TELEPHONE COMPANY,INC.-3
D:\intemet\eudora\allen@ss\attach\RESOLUTIONS AUTHORIZING BORROWING (rev).doc
Dated effective the 1st day of June,2001.
Melvin R.Hoopes,Director
Stephen R.Hoopes,Director
Bradfo o ,ctor
Nd 4.Jense DÏrecto
Allen R.Hoopes,Director
Bonnie E.Hoopes,Director
Being all of the Directors of Silver Star Telephone Company,Inc.
CONSENT RESOLUTION -SILVER STAR TELEPHONE COMPANY,INC.-3
C:\Program Files\Qualcomm\Eudara Pro\Attach\RESOLUTIONS AUTHORIZING BORROWING (rev).doc
WAIVER OF NOTICE
We,the directors of Silver Star Telephone Company,Inc.,waive all notice of the
tirne,place and purpose of a special meeting of the Board of Directors and enter into the
foregoing consent resolution in place of a rneeting.
The undersigned have executed this Waiver of Notice effective the 16 day of
June,2001.
/lelv n R.Hoopes,Director
te he Hoopes tor
Allen Hoopes,Direc or
ble E.Hoopes,Director
CONSENT RESOLUTION -SILVER STAR TELEPHONE COMPANY,INC.-4
D:\internet\eudora\allen@ss\attach\RESOLLTTIONSAUTHORIZING BORROWING (rev).doc
WAIVER OF NOTICE
We,the directors of Silver Star Telephone Company,Inc.,waive all notice of the
time,place and purpose of a special meeting of the Board of Directors and enter into the
foregoing consent resolution in place of a meeting.
The undersigned have executed this Walver of Notice effective the 16 day of
June,2001.
Melvin R.Hoopes,Director
Stephen R.Hoopes,Director
Bradfo .oope Director
Allen R.Hoopes,Director
Bonnie E.Hoopes,Director
CONSENT RESOLUTION -SILVER STAR TELEPHONE COMPANY,INC.-4
C:\Program Files\Qualcomm\Eudora Pro\Attach\RESOLUTIONS AUTHORIZING BORROWING (rev).doc
BorrowerID#:WY501
Borrower Name:Silver Star Telephone company,Inc.
Loan #:9001
F ER'S CERTIFICATE OF COMPLIANCE
RTFC LONG-TERM BORROWER
The undersigned,as Vice Pres.Finance of Silver Star Teleohone Co.,Inc,
(title)(Company Name)
(the "Company"),hereby certifies that:
(1)To the best of my knowledge,the Company has fulfilled all its obligations under
these documents throughout the year (except as indicated below and more fully
described on an attachment to this Certificate and/or worksheet*).
(2)To the best of my knowledge,the inforrnation and responses on the attached
Worksheet are true and correct as of December 31,2001.
Name Date
*Exceptions to Certificate (check one)
There are no exceptions to this report.
Exceptions have been fully described on an attachment to this Certificate and/or
the Worksheet.
F:users/crompt/individual/tara/forms/yearend/covcertitb2000.doc
Borrower ID#:WY501
BorrowerName:Silver Star Telephone company,Inc.
Loan #:9001
Officer's Certificate of Compliance Worksheet
RTFC Long-term Borrower
Unless otherwise specified,all requested information relates to the 12 month period from 1/1/01
to 12/31/01.Please use additional sheets if necessary.
Organization and Operations
1.What was your annual TIER?1,79(Calculatedfrom audited financials as defined in Loan Agreement -Construction and DefinitionofTerrns)
2.What was your annual DSC?3.09
(Calculated from audited financials as defined in Loan Agreement -Construction and Definition ofTerms)
3.What is your Net Worth as a %of total assets?34%(Calculated from audited financials as defined in Loan Agreement -Construction and Definition ofTerms)
4.Total long term debt service payments made by the Company to any lender for calendaryears2000and2001areasfollows:
2000 2001-
Total Principal:348,723 364,868
(RTFC/RUS/RTB and Other)Total Interest:454,079 579,887
Grand Total:802 ,802 944,75 5
5.Income taxes paid for calendaryear 2001 totaled 235,427
6.Services (as applicable)have been providedby the Company for calendar years 2000 and
2001 as follows:
2000 Penetration%2001 Penetration%
Access Lines:3358 n/a 3538
Cellular Subscribers:%%
Basic CATV Subscribers:%%
Premium CATV Subs:%%'
PCS SDbscribers:%%
lnternet Subscribers:1865 .y 2012
BorrowerID#:WY501
Borrower Name:Silver Star Telephone company,Inc.
Loan #:9001
7.Have you changed your company name or address?
OYes à No If yes,please provide the new name and/or address.
8.Have you maintained property and casualty insurance (including fidelity bonds),namingRTFCasco-insured or loss payee?
ŒYes O No lf no,please have RTFC named on all such policies as required
by your mortgage,and attach proof hereto.
9.Please provide the state in which the Company was organized or incorporated (please note
that the state of organization and the state of the principal place of business may not be thesarne):
Wvoming
10.Please provide the organizational identification number of the Company,if any (this number
is assigned by the state and should appear on the filed copy of your articles of incorporation,articles of organization or certificate of limited partnership):
11.Have you changed your ownershipstructure in any manner?
OYes jQ No lf yes,please explain.
12.Taxes:
a.Have you paid all federal,state and local taxes,to the extent due?
UYes O No lf no,please explain.
b.Are you currently contesting in good faith any such tax?
OYes L No If yes,please explain.
13.Have you acquired or forfeited any frarichises,licenses or permits?
OYes O No If yes,please explain.
14.Have you updated your articles and bylaws since the later of 12/31/00 or the last time youborrowedfromus?
OYes No If yes,please provide us with updated copies.
Borrower ID#:WY501
Borrower Name:Silver Star Telephone company,Inc.
Loan #:9001
Transactions
15.Have you formed or acquired any subsidiaries or investedin any other entities?
OYes $No lf yes,please provide details along with an organization chart
which shows all affiliated entities.
16.Have you made any investments beyond those permitted under your loan and security
documents?
OYes KI No If yes,please explain.
17.Have you paid any management fees,increased any management fees,paid any dividends
or made any other distributions to shareholders?
OYes Kl No if yes,how much and when?
18.Have you sold Mortgaged Property beyond the amount permitted under your loan and
security documents (Loan Agreement and/or Mortgage -Sale of Assets)?
OYes No lf yes,please explain.
19.Have you acquired any real property?
OYes Œl No .If yes,please provide legal description,purchase price and
explanation of intended use.
20.Have you entered into any contracts beyond those permitted under your loan and security
documents (Mortgage -Limitations on Contracts)?
OYes Ö No lf yes,please explain.
Borrower ID#:WY501
Borrower Name:Silver Star Telephone company,Inc.
Loan #:9001
21.Have ang Events of Default (as defined under your loan and security documents)occurred?
OYes No If yes,please explain.
Financial
22.Haveyou been involved in any litigation that has/or may have a material impact on your
business or operations?
OYes CR No If yes,please explain.
21.Haveyou borrowed any money on a secured or unsecuredbasis,from any other
lenders?
OYes ΠNo lf yes,please explain.
22.Have you entered into any leases in excess.of $100,000?
OYes No if yes,please explain.
23.Almost all of RTFC Borrowers are required to provideaudited financial statements as outlined
in the Loan Agreement.The deadline for submission is 120 days after the close of the
Company's fiscal year,unless otherwise stated.Failure to do so is a violation of theAffirmativeCovenantoftheLoanAgreementregardingFinancialStatementsandOther
Information.
Is the Company providing with this certificate a full and complete report of its financial
condition and statement of its operations as of the end of the Company's most recent fiscal
year,audited by an independent certified public accountant?ges O No O N/A
If no,please estimate the date when the Company will deliver the report:
If the Company wi/I not be able to meet the deadline for submission as outlined in theLoanAgreement,please provide explanationbelow.
Borrower ID#:WY501
Borrower Name:Silver Star TelephoneCompany,Inc.
Loan #:9001
OFFICER'S CERTIFICATE OF COMPLIANCE
RTFC LONG-TERM BORROWER
The undersigned,as Vice Pres,Finance-Of Silver Star Tol nhrmo on ,T,o
(title)(Company Name)
(the "Company"),hereby certifies that:
(1)To the best of my knowledge,the Company has fulfilled all its .obligations under
these documents throughoutthe year (except as indicated below and more fully
described on an attachment to this Certificate and/or worksheet*).
(2)To the best of my knowledge,the information and responses on the attached
Worksheet are true and correct as of December 31,2002.
Name Date
*Exceptions to Cedificate (check one)
There are no exceptions to this report.
Exceptions have been fully described on an attachment to this Certificate and/or
the Worksheet.
BorrowerID#:M 501
BorrowerName:Silver Star Telephone Company,Inc.
Loan Number:9001
Officer's Certificate of Compliance Worksheet
RTFC Long-term Borrower
Unless otherwise specified,all requested information relates to the 12-month period from 1/1/02
to 12/31/02.Please use additional sheets if necessary.
Organization and Operations
1.What was annual TlER?1 ,3n
(Calculatedfrom audited financials as defined in Loan Agreement -Construction and Definition of
Terms)
2.What was annual DSC?3.17
(Calculated from audited financials as defined in Loan Agreement -Constructionand Definition of
Terms)
3.What was Net Worth as a °/o of total assets?31%
(Calculated from audited financials as defined in Loan Agreement -Construction and Definition of
Terms)
4.Total long-term debt service payments made by the Company to a!!lenders for calendar
years 2001 and 2002 are as follows:
2001 2002
Total Principal:364,868 359 ,713
Total Interest:579,887 516,1 56
Grand Total:94.755 875,869
5.Income taxes paid for calendaryear 2002 totaled 360,835
6.Services (as applicable)have been providedby the Companyfor calendar years 2001 and
2002 as follows:
2001 Penetration%2002 Penetration%
Access Lines:3538 n/a 3612 n/a
Cellular Subscribers:%%
Basic CATV Subscribers:%%
Premium CATV Subs:%%
PCS Subscribers:%°/o
Internet Subscribers:71 Al %9990 °A
Borrower ID#:WY501
Borrower Name:Silver Star Telephone Company,Inc.
Loan Number:9001
7.Has the Company changed its company name or address?
OYes UNo if yes,please provide the new name and/or address.
8.Has the Company maintained property and casualty insurance (including fidelitybonds),
naming RTFC as co-insured or loss payee?
WYes O No lf no,please have RTFC named on all such policies as required
by your mortgage,and attach proof hereto.
9.Please provide the state in which the Company was organized or incorporated (pleasenote
that the state of organization and the state of the principal place of business may not be the
same):
Woming
10.Please provide the organizational identification number of the Company,if any (this number
is assigned by the state and should appear on the filed copy of your articles of incorporation,
articles of organization or certificate of limited partnership):
11.Has the Company changed its ownership structure in any manner?
OYes gNo If yes,please explain.
12.Taxes:
a.Has the Company paid all federal,state and local taxes,to the extent due?
Yes O No If no,please explain.
b.Is the Company currently contesting in good faith any such tax?
OYes 01No If yes,please explain.
13.Has the Company acquired or forfeited any franchises,licenses or permits?
OYes No If yes,please explain.
14.Has the Company updated its articles and bylaws since the later of 12/31/01 or the last time it
borrowed from RTFC?
OYes No If yes,please provide us with -updatedcopies.
BorrowerID#:WY501
BorrowerName:SilverStar Telephone Company,Inc.
Loan Number:9001
Transactions
15.Has the Company formed or acquired any subsidiaries or invested in any other entities?
OYes ERNo if yes,please provide details along with an organization chart,
which shows all affiliated entities.
16.Has the Company made any investments beyond those permitted under its loan and security
documents?
OYes EXNo if yes,please explain.
17.Has the Company paid any management fees,increased any management fees,paid anydividendsormadeanyotherdistributionstoshareholders?
OYes Il No lf yes,how much and when?
18.Has the Company sold Mortgaged Property beyond the amount permitted under its loan andsecuritydocuments(Loan Agreement and/or Mortgage -Sale of Assets)?
OYes y)No .If yes,please explain.
19.Has the Company acquired any real property?
OYes gl No If yes,please provide legal description,purchase price and
explanation of intended use.
20.Has the Company entered into any contracts beyond those permitted under its loan and
security documents (Mortgage -Limitations on Contracts)?
OYes 1¯\No If yes,please explain.
.BorrowerID#:WY501
BorrowerName:Silver Star Telephone Company,Inc.
Loan Number:9001
2L Have any Events of Default (as defined under the loan and security documents)occurred?
OYes Xl No lf yes,please explain.
Financial
22.Has the Company been involved in any litigation that has/or may have a material impact on
your business or operations?
OYes X]No If yes,please explain.
23.Has the Company borrowed any money on a secured or unsecured basis,from any other
lenders?
OYes 9 No If yes,please explain.
24.Has the Company entered into any leases in excess of $100,000?
OYes p No If yes,please explain.
25.Has the Mortgagor opened or does the Mortgagor maintain any deposit accounts with banks?
OYes j No
If yes,please provide type of account,account number and name and address of the bank:
26.Does the Mortgagor hold or has the Mortgagor acquired any certificated or uncertificated
securities?
OYes ΠNo
If yes,please provide date of issuance of security,type of security,number of shares or units
issued to Mortgagor,and name of issuer of security:
BorrowerID#:WY501
Borrower Name:Silver Star Telephone Company,Inc.
Loan Number:9001
27.Does the mortgagor hold,or had the Mortgagor acquired any promissory notes:
OYes 4 No
lf yes,please provide date of promissory note,amount,maturity date,names of maker and
payee and indicate whether note is secured or unsecured:
28.Is any of the Mortgaged Property evidenced by a certificate of title?
OYes §No
if yes,please provide description of Mortgaged Property evidenced by a certiíicate of title:
29.Is any of the Mortgaged Property located on real property that is leased by the Mortgagor?
OYes No
lf yes,please provide description of Mortgaged Propedy located on leased real property,a
copy of the lease and the name and address of the landlord:
30.Borrowers are required to submit audited financial statements as outlined in the Loan
Agreement.within 120 days after the close of the Company's fiscal year,unless otherwisestated.Failure to do so is a violation of the Affirmative Covenant of the Loan Agreement
regarding Financial Statements and Other Information.
RTFC respectfullyrequests that the Company submit two (2)copies of the Audit report.
Is the Company providing with this certificate a full and complete report of its financial
condition and statement of its operations as of the end of the Company's most recent fiscal
year,audited by an independent certified public accountant?
Yes O No O N/A
If no,please estimate the date when the Company will deliver the report:
If the Company wi/I not be able to meet the deadline for submiss¡on as outlined in the
Loan Agreement,please provide explanation below.