20030728Loan Documents.pdf

G I V E &P S LEY
July 18 2003
lAW OFFICES
601 W. Bannock
PO Box 2720, Boise, Idaho 83701
TELEPHONE: [phone]
FACSIMilE: 208 388-1300
WEBSITE: www.givenspursley.com
Gary G. Allen
Christopher J. Beeson
Jessica M. Borup
William C. Cole
Michael C. Creamer
Thomas E. Dvorak
Roy Lewis Eiguren
Timothy P. Feamside
Jeffrey C. Fereday
Steven J. Hippler
Kari T. Klein
Debora K. Kristensen
Anne C. Kunkel
Franklin G. lee
David R. Lombardi
Terri Carlock
Idaho Public Utilities Commission
472 W. Washington
O. Box 83720
Boise, ill 83720-0074
Re:
Dear Terri:
D. David lorello, Jr.
Emily A MacMaster
Kimberly D. Maloney
John M. Marshall
Kenneth R. McClure
Kelly Greene McConnell
Cynthia A. Melillo
Christopher H. Meyer
Kendall L Miller
L Edward Miller
Patrick J. Miller
Judson B. Montgomery
Angela K. Nelson
Deborah E. Nelson
W. Hugh O'Riordan
Columbine Telephone Company, Inc., Case No. COL-03-
Copies of Loan Documents
Our File No. 1534-
Michael C. Ocr
Kenneth L Pursley
Bradley V. Sneed
H. Barton Thomas
Conley E. Ward
Robert B. White
Raymond D. Givens
James A McClure
Stephanie C. Westerrneier
OF COUNSEL
John A. Miller, lLM. .
TAX CONSULTANT
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Pursuant to the Commission s order, enclosed please find copies ofthe following documents
related to the Columbine loan in the amount of$8 333 333.00:
Loan Agreement, dated July 3 2003, by and between the Borrowers and RTFC;
Secured Promissory Note, dated July 3 , 2003, by and between the Borrowers and
RTFC;
Pledge and Security Agreement, dated July 3 , 2003, by and between Silver Star
Telephone Company, Inc. and RTFC;
Pledge and Security Agreement, dated July 3, 2003, by and between Teton
Communications, Inc. and R TFC;
Pledge and Security Agreement, dated July 3rd, 2003 , by and between The Hoopes
Telephone Management Limited Partnership and RTFC;
Certificate as to Resolutions of Board of Directors and Incumbency, dated June 30
2003 , executed by the directors of Silver Star Telephone Company, Inc.
Consent Resolution of the Board of Directors Silver Star Telephone Company, Inc.
dated June 30, 2003 , executed by the directors of Silver Star Telephone Company,
Inc.
Certificate as to Resolutions of Board of Directs and Incumbency, dated June 30
2003 , executed by the directors of Teton Communications, Inc.
Consent Resolution of the Board of Directors Teton Communications, Inc, dated
June 30, 2003 , executed by the directors of Teton Communications, Inc.
Terri Carlock
July 18, 2003
Page 2
10.
11.
Certificate as to Resolutions of General Partner and Incumbency, dated June 30
2003, executed by the general partner of The Hoopes Telephone Management
Limited Partnership; and
Consent Resolution of the General Partner The Hoopes Telephone Management
Limited Partnership, dated June 30, 2003, executed by the general partner of the
Hoopes Telephone Management Limited Partnership.
If you have any questions regarding this matter, please do not hesitate to contact me.
Enclosures
CfA~
Michael C. Creamer
cc:Allen Hoopes (w/o enclosures)
Kimberly Maloney (w/o enclosures)
MCC/ ACK:kdt S:\CLIENTSIIS34\42\IPUC Loan Document Transmittal Letter GPOI.DOC
07/09../2003 10: 51 FAX [phone] SILVER STAR COMM ~002---
LOAN AGREEMENT
LOAN AGREEMENT ("Agreement") made as of 2003 by and
between THE HOOPES TELEPHONE MANAGEMEN 1M! 0 PARTNERSHIP, an
Idaho limited partnership, TETON COMMUNICATIONS, INC., a Wyoming corporation
COLUMBINE TELEPHONE COMPANY, INC., a Colorado corporation, MOUNTAIN
LAND COMMUNICATIONS, LLC, an Idaho limited liability company uointly and severally
II Borrower ), and RURAL TELEPHONE FINANCE COOPERATIVE, a South Dakota
cooperative association ("Lender
RECITALS
WHEREAS, Borrower has requested Lender to make the Loan to Borrower
described in Schedule 1 hereto; and
WHEREAS! Lender is willing to make the Loan upon the terms and conditions
set forth in this Agreement.
NOW THEREFORE, for and in consideration of the mutual covenants contained
herein, Borrower Gointly and severally) and Lender do hereby agree as follows:
CONSTRUCTION AND DEFINITION OF TeRMS
AU accounting terms not specifically defined herein shaH have the meanings
assignep to them as determined by generally accepted accounting principles. in
addition to the terms defined elsewhere in this Agreement, unless the context otherwise
requires , when used herein, the. following terms shall have the following meanings:
Adjustment Date" shall mean a date or dates, determined by the Lender based
on the term (or rate period) of the applicable Fixed Rate, atter the date of th~ initial
Advance to the Maturity Date.
II Advance'l shall mean al1 advance a$ defined in Section 2.l12.
Business Dati shall mean any day that Lender ~s open far business.
Cash Margins" for any year shall mean net income plus depreciation
amortization and any other non-cash charges, less any non-cash credits and principal on
long-term debt payable in such year, as calculated on a consolidated basis for Borrower
and all its Subsidiaries.
Certified" shall mean that the information, statement, schedule, report or other
document required to be "Certified" ShHII contain a representation of a duly authorized
officer of Borrower that sl.lch information, statement, schedule, report or otrler document
is true and correct and complete,
Closing" shall mean the first date on which funds are advanced to Borrower
hereunder.
RIFC LOANAG
WYBO2-9QD1 (YERG1\'~J)
3002tJ.3
09/20(l:) 10: 51 FA:\; 307 ~83 2575 SILVER STAR COMM ~OO3
Coliateral'l shall mean the collateral' as such term is defined in the Pledges, and
all proceeds, cash and non-cash, including insurance proceeds, of the foregoing,
whether in the possession of Borrower or any other person.
Commitment" shall have the meaning set forth in Schedule 1 hereto.
Current Ratio" for any year shan mean the ratio of total current assets to total
current liabilities, as determined by dividing totaL current assets by total current liabilities.
Debt Service Coverage Ratio" or IIDSCII for any year shall mean (a) total net
Income or margins plus depreciation and amortization expense 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 a consolidated basis for the Borrower and all its
Subsidiaries.
Event of Defaultll shan mean any of the events described in Section 8 hereof.
Fixed Rate" shall mean the interest rate per annum provided for in Section 2.
of this Agreement.
Leases" shall mean any lease of property by which Borrower shall be obligated
fer rental or other payments which in the aggregate are in excess of $1001000 other than
such equipment leases which are In form and substance substantially in conformity with
lease agreements in general use in Borrower s industry by companies of siz& and
character similar to Borrower.
"Lienll shall mean any statutory or common law consensual or non-consensual
mortgage, pledge, security interest, encumbrance, lien, right of set-off, claim or charge
any kind, hicluding, withOLJt limitation, any conditional sale or other title retention
transactionv any lease transaction il'l the nature thereof and any secured transaction
under the Uniform Commercial Code of any jurisdiction.
"Loan'. shall mean the loan by the Lender to Borrower, pursuant to this
Agreement and the Note, in an aggregate; principal amount not to exceed the
Commitment.
Mal(~WhClla Premium" shall mean the excess, if any, of (a) the present value
of the amount of. interest that would have accrued during the applicable Fixed Rate
period on that portion of the Loan to be prepaid or converted over (b) -the present value
of the amount of interest Lender would earn if that portion of the Loan to be prepaid ar
converted was reinvested for the ,'emainder of the applicable Fixed Rate period in U.
Treasury obligations with a maturity comparabieto the remaining term of the applicable
Fixed Rate period. For purpose$ of calculating the present value in (a) and (b) abovl?a
the discount rate will be the rate of interest aceruing on the U,S. Treasury obligations in(b) above.
Maturity Datsl! sf'lan mean the maturity date defined in the Note,
FlTFC WANAt.?-
WYBO2-800i ('rERGINJ)
3002.6-3
07/09/2003 10: 52 FAX [phone] SILVER STAR COMM ~004
Minimum Net Worth Testll shall be calculated on a consolidated basis for the
Borrower and all its Subsidiaries, 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 Ratio " shall mean the ratio of equity to the total
amount of equity plus short and long-term indebtedness plus guarantee commitments.
Net Worth" shall be calculated on a consolidated basis for the Borrower and aU
its Subsidiaries taken as a whole and arrived at by subtracting total liabilities from total
assets.
Note" shall mean the Note executed and delivered by Borrower at or prior to
Closing pursuant to Section 5.02(a) hereof, and all renewals, replacements and
extensions thereof.
Obllgations" shall include the full and punctual performance of all present and
future duties, covenants and responsibilities due to the Lender by Borrower under this
Agreement, the Note, the Other Agreements, all present" and future obligations of
Borrower to the Lender for the payment of money under this Agreement, the Note, the
Other Agreements, extending to all principal amounts, interest, late charges and all other
charges and sums, as well as all costs and expenses payable by Borrower under this
Agreement, the Note, the Other Agreements, and any and all other present and future
monetary liabilities of Borrower to the Lender. whether direct or indirect, contingent or
noncontingent, matured or unmatured, accrued or not accrued, related or unrelated to
this Agreement, whether or not of the same character or class as Borrower s obligations
under this Agreement and the Note, whether or not secured under any other document,
instrument or statutory or common law provision, as well as all renewals, refinancings
consolidations, recastings and extensions of any of the foregoing.
Other Agreements II shall mean any and all promissory notes, security
agreements, assignment$, subordination agreements pledge or hypothecation
agreementsv mortgages. deeds of trust, laaees, contracts, guaranties, instruments and
documents now and hereafter existing between the Lender and Borrower, executed
and/or delivered pursuant to this Agreement or guaranteeing, securing or in any other
manner relating to any nf the Obligations, inC!Llding the instruments and documents
referred to in Section 5.02 hereof.
Payment DateH shaH mean the last day of each of the monthS referred to in
Schedule 1 hereto.
Payment Notice" shall mean the notice furnished to the Borrower at least
quarterly indicating the preoise amount of principal and/or interest due an the next
€!ilsuing Payment Datal sueh Ilotice to be sent to the Borrower at least ten (10) days
before such Payment Date.
perscm ll shall include natural persons, corporationsv associations, partnerships,
joint ventures. trust(;j , governments and agencies and departments thereof, and every
other entity of every kind.
RTFO LOANAG
W'(802.A.SOO1 (YEFiGINJ)
30026-
07/09/2003 10: 52 FAX [phone] SILVER STAR COMM ~0(J5
Pledges" shall mean the pledge and security agreements described in
Schedule 1,
Pledgors shall mean The Hoopes Telephone Management Limited
Partnership, Silver Star Telephone Company, and Teton Communications, Ino..
Subordinated Capital Certificate" or Iisec" 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 that is at the time beneficially owned
or controlled directly or indirectly by the Borrower, by one or more of such entities or by
the Borrower and one or more of such entities.
Termination Oate" shall mean that date which is four (4) year(s) irem 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, as measured on a
consolidated basis for the Borrower and all its Subsidiaries.
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
~IOQdwill or plant acquisition adjustments.
Variable Rate" shall mean the variable rate established by 1he Lender from
time to time for loans similarly classified pursuant to Lender's policies and procedures
then in effect.
LOAN
01 Loan. The Lender agrees to make the Loan to Borrower subject to all
trIa terms and conditions of this Agreement and the Other Agre~ments"
0:i! Advances. The Lender awees to make, and the Borrower agrees to
request. Oil 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 shaH give the Lander at least
one Business Day prior written notice of the date on which each Advance is to be made.
On thG Termination Date the Lender may stop advancing funds and reduce the
Commitment tel the aggregate amount theretofore advanced. The obligation of the
Borrower to repay the Advances shall be evidenced by the Note.
Payment~ Amortization and Interest Aate.
(a) Payment.Hie BOirower shall pay on each Payment Date quarterly
ins1allments, in an amount as determined by the Lencler~ O't principal and/or interest as
shown in the Payment Notioe, If not sooner paid, any balance of the principal amount
and interest accrued thereon and aU other amounts due hereunder shaH be due and
FlTFC LOANAG
WYDO2-SOO1 (YERGII\lJ)
::JO026-
----21L0 9/200:t l0: 52 FAX :)07 383 2575 SILVER STAR cm.m 141 006
payable on the Maturity Date. Payment of principal hereunder shall commence after the
first full quarter following the initial Advance 01 funds as set iorth in Schedule 1 and shall
continue to be 'made 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. Payment of interest hereunder is due on each Payment Date in which a
principal balance is outstanding. 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
following interest rates, as applicable:
(i)
(n)
If the Borrower elects the Fixed Rate, the Fixed Rate in effect on the
Adjustment Date; or
If the Borrower elects the Variable Rate, the Variable Rate in effect when
amortization begins; or
If the Borrower elects to convert from one interest rate program to another
pursuant to the provisions hereunder, 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,
as hereinafter provided, then to interest accrued to the date of such payment, and then
to the reduction of principal balance outstanding.
(Hi)
No provision of this Agreement or the Note shall require the payment, or permit the
oollection, of interest in excess of the hig~lest rata permitted by applicable law.
(b) Interest Rate.Eaoh Advance shall be initially made at the Variable Rate.
Interest shall be computed from the actual number of days elapsed on the basis of
year of 365 days until the first Payment Date following the initial Advance. Thereafter,
interest shall continue to be computed for the actual number of days elapsed on the
basis of a year of 365 days unless a Fixed Rate is applicable to the Loan~ 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 apply
until the Maturity Date, except as provided herein below.
Fixed Rate If the Borrower elects a Fixed Rate, such Fixed Rate as is
available and in effect for loans similarly classified pursuant tCJ Lenders
policies and procedures then in effect at the time of the election shall
apply to such Advanoe until the Adjustment Date. Upon notice given by
the Borrower five (5) Business Days prior to such Adjustment Date,
Bormwer may elect to reset the interest rate to such Fixed Rate as is
available and in effect at the time of such Adjustment Date. Such reset
Fixed Rate shall apply to that portion of the outstanding principal balance
of the Loan elected to have a Fixed Rate from the Adjustmer'lt Date until a
!law Adjustment Date or tIlt:=: I\liaturity Date. If Borrower does; not elect to
reset the Fixed Rats\ the Variable F~ate shall apply to the outstanding
principal balance of the Loan that had been bearing interest at the Fixed
(ii)
RTFO \..OANAG
WY802.A.90tJ1 (VEFIGINJ)
30026.
07/09/2003 10: 53 FAX [phone]
(iii)
(A)
(8)
SILVER STAR COMM (OJ 007
Rate prior to such Adjustment Date, from such: Adjustment Date to the
Maturity Oats.
Conversion to Different Interest Proaram
Variable Rate to Fixed Rate, Subject to the conditions set forth herein,
the Borrower may convert from the Variable R~te to the Fixed Rate for
any portion or all of the principal amount of the Commitment then
outstanding at any time provided the Lender off~rs a Fixed Rate at suchtime for similarly classified loans.
Fixed Rate to Variable Rate.The Borrower mky convert from a Fixed
Rate to the Variable Rate: (1) on an Adjustmen~ Date or (2) at any other
time, provided that the Borrower shall pay Lender any applicable Make-Whole Premium.
04 Prepayment. In the event the Borrower prepays all or part of the Loan,
the Borrower shall pay any prepayment fee as the Lender may prescribe pursuant to the
terms of this Section 2.04. AU 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 principal amount of the Loan. If the Loan
bears interest at the Variable Rate the Borrower may prepay the Loan or any portion
thereof, as the case may be, at any time subjec1 to the terms hereof and said
prepayment fee shaH be in an amount equal to fifty (50) basis Ipaints times the amount
being prepaid. If the Loan bears interest at the Fixed Rate, t~e Borrower may prepay
the Loan only on an Adjustment Date or any such other date p~ovided that the Borrower
shall pay a prepayment fee in an amount equal to fifty (50) basis points times the
amount being prepaid plus any applicable Make-Whole Premium.
05 10% Subordinatsd Cc:tpital Certifioates. The Fiorrower shall purchase
sees that in the aggregate shall not exceed the amount speoified in Schedule 1 hereto.
Unless otheIWis9 requested ii! writing by the Borrower prior tq the initial Advanbe and
approved by the Lender) the Borrower agrees to purchase sees either: (a) with each
Advance in the amount of ten percent (10%) of each such Advahce, and each such see
shall be paid for with proceede of such Advance, or (b) b~ making payments with
Borrower s own funds in twenty (20) aqua! quarterly installments, commencing with the
first full quarter following the initial Advance, If the Borrower! elects to pay for sees
other than from Loarl funds, th$ amount of the Col1'lmiimentl will be correspondingly
reduced by said amount when the sees are tully paid. :If the Borrower obtains
Advances hereunder other than for the purpose ot,purchasing sees and fails tD pay fer
the SCC$~ then the Lender rnay make Advances far the ac:c:punt of the Borrower to
purchase the sees. The Lender agrees to deliver the sees Ion or about the date onwhich the SeGs t1ave been paid for in full. The SeGs shall bear no interest and shall
mature in accordance with the terms thereot
:3 ,SECU rHTY
As security for the payment and perfmmance of all of the Obligations, Pledgers
have entered into the Pledges pledging and granting to the Lender a prior and continuing
security interest in the Collateral that may be secured by i the Pledgas that shall
RTFC LOA NAG
'vV'Y802"A-900i lYEI1G.INJ)
30C!2Q.
07/09/200.3 10: 53 FAX 30i 883 2575 SILVER STAR COMM ~OO8
continually exist until all Obligations have been paid in full. If reasonably required by the
lender at any time, Pledgers shall make notations, satisfactory to the Lender, on its
books and records disclosing the existence of the Lender s security interest in the
Collateral. Pledgers agree that, with respect to the Collateral, which is subject to Article
I:) of the Uniform Commercial Cods, the Lender shall have, but not be limited to, all the
rights and remedies of a secured party under the Uniform Commercial Code. The
Lender shall have no liabiiity or duty! either before or after the occurrence of an Event of
Default hereunder, on account of loss of or damage to, or to collect or enforce any of its
rights against, the Collateral . or to preserve any righ1s against account debto~s or other
parties with prior Interests In the Collateral.
REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement, Borrower represents
and warrants to the Lender as of the date of this Agreement that:
01 Good Standing. Each Borrower is duly organized as the entities
described in the first paragraph of this Agreement, validly existing and in good standing
under the laws, of the state of its organization, has the power to own its property and to
carry on its business, is duly qualified to do business, and is in good standing in each
jurisdiction in whioh the tral1saotion Df its business makes such qualiiication necessary.
02 Authority. Each Borrower has the power and authority to enter into this
Agreement, the Pledges and the Note, to make the borrowing hereunder, to execute and
deliver all documents and instruments required hereunder and to incur and perform the
obligations provided for herein and in the Note, all of which have been duly authorized
by all necessary and proper organizational governance action, and no consent ~r
approval of any person, including, as applicable and without limitation, stockholders,
members and partners of Borrower! and any public authority or regulatory body,Wtlich
has not been obtained is required as a corldition to the validity or enforceability hereof or
thereof.
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 eni'orceable against Borrower in accordance with its terms, subject only to
laws affecting the rights of creditors generally, the exercise of judicial discretion In
accordance with general principles of equity or because waivers of statutory or common
law rights or remedies may be limited.
04 No Coniiic:ting Agreaments- ihs execution, delivery of and
performance by Borrower of this Agreement, the Pledges and the Note, and the
transactioriS contemplated hereby or thereby, will nOt: (a) violate any provision of law,
any order, rule or regulation of any court or other agency of government, any award of
any arbitrator, the- charter or by~law$ of Borrower, or any Indenture, tcmtract, agreement
mortgage , deed of trust or other instrument to which Borrower i$ a party or by which it or
any of its property is bound; or (b) be in conflIct with, result in a. breach of or constitute
(with due notice and/or lapse ot time) a default under, any such award, indenturs,
contract! agreementj mortgage, deed of trust or other instrument, or result In the creation
Or' irnposltion or any Lien (other than contemplated hereby) upon any (If the property or
assets of Borrower,
nTFC LON,JAG
WY802-A-900" (YERGINJ)
300'26-3
07/09/2003 10:54 FAX [phone] SILVER STAR COMM !4IO09
05 Litigation. There are no judgments) claims, actions, suits or proceedings
pending or, to the knowledge of Borrower, threatened against or affecting Borrower or its
properties, at law or in equity or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or Instrumentality, which
may result in any material adverse change in the business, operations, prospects,
properties or assets or in the condition, financial or otherwIse, of Borrower, and Borrower
Is not, to its knowledge, in default with respect to any judgment, order, writ, injunctIon,
decree, rule or regulation of any court or federal, state, municipal or other governmental
department, commission, board , bureau, agency or instrumentality, domestic or foreign,
which would have a material adverse effect on Borrower.
06 Financial Condition. The financial statements of Borrower as at the
date set forth in Schedule 1 hereto, heretofore delivered to the Lender, are complete and
correct, fairly present the financial conditIon of Borrower and have been prepared in
accordance with generally accepted accounting prinCiples applied on a consistent basis,
There are no liabilities of Borrower, direct or indirect, fixed or contingent, as of the date
of such statements that are not reflected therein. There has been no material adverse
change in the financial condition or operations of the Borrower from that set forth in said
financial statements except changes previously di,sotosed in writing to the Lender prior to
the date hereof.
07 TElX~S. Borrower has paid or caused to be paid all federal, state and
local taxes to the B),.1ent that such taxes have become due, unless the Borrower is
contesting In good faith any such tax. Borrower has filed or caused to be filed all federal,
state and local tax returns that are required to be filed by Borrower.
08 Title to Prop~rtiesl Borrower has good and marketable title to all of its
real properties and owns or has olher rights in all of its other properties and assets free
and clear of any liens, except (a) the lien of the Pledges and prior mortgages to Lender,
and taxes or assessments not yet due; (b) deposits or pledges to secure payment of
worlcmen s compensation, unemployment insurance, old age pensions or other social
security; (0) deposits or pledges to secure performance of bids, tenders, contracts (etherthan contracts for the payment ot 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; and (d) liens permitted under Section
02(0) of this Agreement atter the date- l1ereof.
09 Licenses arid Permits. Borrower has duly obtained and now holds all
licenses, permits, certifications, approvals and the like necessary to own and operate its
property and business that ar~ requIred by federal, state and local laws of the
jurisdictions in which 8orrc)wer conducts its business and each r~mains valid and in full
torce and effect.
10 Subsidiaries. Borrower has no !:iLlbsidiaries other than Subsidiaries
heretofore disclosed to the Lel1der, or hereafter formed or Mquired with the prior written
consent of the Lender.
4~ 11 Cartain Iru::iebtE\!dness. Ther~ is no indebtedness of Borrower owing to
any employee I officer, stockholder, merT1ber, partner or director of the board of Borrower
other than accrued salaries, commissions and the like and any indebtedness
subordinated to the Obligations pursuant hereto.
RTFC LOAHAG
WYBO2.A.900'1 ('rEFlGINJ)
~-\oO26.3
07/09/2003 10: 54 FAX 30i 883 2575 SILVER STAR COMM 14:1010
12 eorrowai s Legal Status. (a) The Borrower s exact legal name is that
indicated on the signature page hereof, (b) the Borrower is an organization of the type
and organized in the jurisdiction set forth on the first page hereof, (0) Sohedul~ 1 hereto
accurately sets forth the Borrower s organizational identification number or accurately
states that the Borrower has none and (d) Schedule 1 hereto accurately sets forth the
Borrower's place of business or , if more than one, its chief executive office as well as the
Borrower s mailing address if different.
13 Required Approvals. No license, consent, permit or approval of any
governmental agency or authority is required to enable the Borrower to enter into this
Agreement or to perform any of its obligations provided for herein except as disclosed on
Schedule 1 hereto and except with respect to regulatory approvals which may be
required in connection with the lender's enforcement of certain remedies hereunder.
14 ERISA. Eaoh pension pian of Borrower and its Subsidiaries providing
benefits for employees of Borrower or such Subsidiary covered by Title IV of the
Employee Retirement Income Security Aot of 19i 4, as amended, and the regulations
thereto (U EAISA"), is in compliance with ERISA in all material respects, and no material
liability to the Pension Beneftt Guaranty Corporation or to a multiemplayer plan has
been, or is expected by Borrower or its Subsidiaries to be, incurred by Borrower or such
Subsidiary.
CONDITIONS OF LENDING
The Lender shall have no obligation to make Advancee to Borrower
hereunder unless each of the following conditions shall be satisfied as provided below;
01 Legal Matters. All legal matters incident to the consummation of the
transactions hereby contemplated shall be satisfactory to counsel fer the Lender and to
such local counsel as counsel for the Lender may retain.
0:2: Documents. There shall have been delivered to the Lender, fully
completed and duly executed (when appHcable), the following, satisfactory to the Lender
and its counsel:
(a)
(b)
(c)
(d) .
RTFC LOAI~AG
VIfY802..A.9ODi ('iERGINJ)
30026-3
This Agreement and the t\lote.
Certified copies of all such organizational documents and
proceedings of the Borrower authorizing the transactions herein
contemplated.
A written opinicm from Borrower s counsel addressing such legal
matters as the Lender or its counsel shaH reasonably require.
(i) The PledGl6s; (ij) filed financing statements in all jurisdictior\$
necessary to provide Lender a 'first priority I perfected security
intert;'J(~t in all ColiatereJ (as defined in the Pledges) which may be
perfected by the filing ot financing statements; and (Hi) such other
documents as are necessary to create or continue a perfected
security interest in favor of the Lender in the Collateral.
07/(/2003 10 :55 FAX 30i 883 2575 S I L'lTER. STAR c(J~m ~011
03 Landlord. Waiver. If any Collateral is located on real property leased by
the Borrower, Lender shaH have received a landlord's waiver of lien from each landlord
of Borrower, in form and substance satisfactory to Lender.
04 Government Approvals. The Borrower shall have furnished to the
Lender true and correct copies of all certifIcates, authorizations and consents, including
without limitation the consents referred to in Section 4.13 hereof, necessary for the
execution, delivery or performance by the Borrower of this Agreement, the Note and the
Pledges. Borrower and Lender acknowledge that written consent of the Rural Utilities
Service or the Rural Telephone Bank (collectively the 'jUnited States ) may be necessary
for the Pledge by Silver Star Telephone Company, Inc, to be effective. Borrower shall
causa Silver Star Telephone Company, Inc. to obtain such consent as soon as possible
atter closing. Lender acknowledges that such consent need not accommodate or
subordinate the prior lien ofthe Rural UtiJities Service and the Rural Telephone Bank to
the lien of the Pledge.
05 Representations, Warranties and Material Change. The
representations and warranties contained in this Agreement shall be true and correct on
the date of the making of each Advance hereunder with the same effect as though such
representations and warranties had been made on and as of such date; no Event of
Default specified in Section a and no event which, with the lapse of time or the notice
and lapse of time specified in Section a would become such an Event of Default, shall
have occurred and be continuing or will have occurred after giving effect to the Advance
()n the books of the Borrower; there shall have occurred no material adverse change in
the business or condition, financial or otherwise, of the Borrower; and nothing shall have
occurred whk:h in the opinion of the Lender materially and adversely affects the
Borrower's ability to meet its obligations hereunder.
06 Special Conditions. 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 1 hereto,
07 Requisitions. The Borrower will request Advances in form and
substance satisfactory to the Lender. Pursuant to the terms and conditions hereof, the
Let1der will wire the proceeds of the requested Advanoe to an account as directed by the
Borrower.
AFFIRMATIVE COVeNANTS
Bmrower covenants and agrees with the Lender that, until all of the
Obligations have been paid In 'full, Borrower will:
01 Membership. RemaIn or an affiliate thereof will remain, a member in
good standing of the Lender.
02, Financial Books; Financia:! Reports and Other Information.
(a) At all times keep, and safely preserve, proper books, reoords and
accounts in Wl1ich Iull and true entries win be made of all 0'1 the dealings, business and
affairs of the Borrower, in accordance with metrloas of accounting prese;ribed by the
RTFC LOANAG
Vv'YBO2-A'9OO1 (YERGlNJ)
30026-
Oi/OfJ/200a 10:55 FA,,~lOi 383 25i5 SILVER STAR COm!~012
state regulatory, body having jurisdiction over the Borrower, or in the absence of such
regulatoiy body or such prescription, by the Federal Communications Commission
FCC") or in accordance with generally accepted accounting principles.
(b) Prepare and furnish Lender not later than sixty (60) days from the six.
month period ending June 30 of each year and the tw~lve-month period ending
December 31 of each year, or at more frequent intervals when reasonably specified by
the Lender, financial and statistical reports on its and any Subsidiaries' condition and
operation. The Deoember year-end reports shall include individual financial statements
for the Borrower and consolidated and consolidating financial statements fOT the
Borrower and each of its Subsidiaries, in such detail as the Lender may reasonably
prescribe.
(c) Cause to be; prepared and furnished to the Lender, not more than one
hundred twenty (120) days after thE! close of each of Borrower s fiscal years, a full and
complete report of its and its Subsidiaries' financial condition as of the end of each such
fiscal year, in form and substance reasonably satisfactory to the Lender, audited and
certified by independent certified public accountants reasonably satisfactory to the
Lender and accompanied by a report of such audit in form and substance reasonably
satisfactory to the Lender.
(d) Furnish to the Lender such other informa1ion, reports or statements
concerning the operations. business affairs and/or financial condition of Borrower as the
Lender may reasonably request from time to time,
(e) Promptly upon becoming available, information. in form and substance
satisfactory to Lender and evidence 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.
03 Lender Right of Inspection. Permit the Lender, through its
representatives, at all times during' normal business hours, to have access to, and the
right to inspect and make copies of, any or all books, records and accounts, and any or
all invoices, 00 ntracts , le€lSeS, payrolls, canoe led checks, statements and other
documents and papers of every kind belonging to or in possession of the Borrower and
its Subsidiaries and pertaining to the Borrower s and Its Subsidiaries' property or
business.
Et04 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, shall 130 operate and manage its business as to achieve an
annual DSC of not less than 1 .25 and an annual TI ER of not less than 1.50.
05 Annual Certificate. Within one hundred twen1y (120) days after the
close of each calendar year, commencing with the year il1 which the Initial Advanoe
hereunder shall have been made, deliver tl) 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 Obiigations under this Agreement, the Note and the Pledges throughout
such year dr , If there has been €I. default in the fulfillment of any such Obligations
specifying each such default known to said person and the nature and status thereof.
RTFC LOA NAG
WyaO:;".A.~IOO1 (YERGINJi
30026-
07/09/2003 10: 56 FAX [phone] SILVER STAR COMM ~013
06 Use of Proceeds. Use Advances made hereunder and under the Note
only for the purpose identified in Schedule 1 hereto and for the payment of the costs,
expenses and fees incident to this Agreement and for no other purpose whatsoever
without the prior written consent of the Lender.
07 Organizational Identification Number. If the Borrower does not have
an organizational identification number and later obtains one, the Borrower will promptly
notify the Lender of such organizational identification number.
09 Landlord Waiver. If any Collateral is at any time located or is to be
located on real property leased by the Borrower, Borrower shall furnish Lender with a
landlord's waiver of lien from each landlord of Borrower, in form and substance
satisfactory to Lender
09 Special Affirmative Covenanis. 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.
NEGA TIV5 COVENANTS.
Borrower covenants and agrees with the Lender that, until all of the
Obligations have been paid in full, Borrower wilt not:
01 Notice. Without giving written notice to the Lender thirty (30) days prior
to the effective date of any change:
(a)
(b)
(0)
(d)
Change the location of Borrower s place of business or, if more
than one, it$ chIef executive office.
Change the name of Borrower.
Change the mailing address of Borrower.
Change the organizational identification number 01 Borrower if it
has 0118.
Consent Without the prior written consent of the Lender~
RT~C LOANAG
wyaO2.A-9om (YERGINJ)
30b26-
(a.)Control.Alter or permit alteration of oentrol of the Borrower.
Control shall be as defined by regulations for telephone
compElnies issued by the FCC, .
(b)Subsidiaries , Form or acquire any Subsidiaries.
(c)Additional Indebtt'Jdness.Borrow or allow any of its Subsidiaries
to borrow money en a secured or unsecured basis from any other
lender or Incur' any additional $€!oured or unsecured indebtedness;
or enteJf into or allow any of its Subsidiaries to enter Into any
Leases, unless at that time Borrower meets the Minimum Net
Wotih Test; provided howe\let , Borrower and its Subsidiaries may
07/09/2003 10: 56 FAX [phone] SILVER STAR cmm 141 014
grant purchase money secured indebtedness or incur unsecured
trade debt or pay other current operating liabilities that arise in the
ordinary course of business so long as the aggregate total of such
debt does not exceed five percent (5%) of Borrower's
consolida1ed total assets. If Borrower meets the Minimum NetWorth Test, then Borrower and its SubsidIarIes may Incur
additional indebtedness or enter into Leases without prior written
approval of Lender J:!rovided the Borrower meets the Minimum Net
Worth Test atter Borrower or its Subsidiaries incur such additional
indebtedness or enter into such Leases; provided further
however, Borrower must give at least thirty (30) days written
notice to Lender prior to Borrower and/or its Subsidiaries incurring
any additional indebtedness or entering into such Leases.
(d)Oraanizat!onal Changes Change iis type of organization,
jurisdiction of organization or legal structure.
03 Dividends and Other Cash Distributions. In anyone calendar yeartwithout the prior written consent of the Lender: (A) declare or pay any dividends or
make any other distribution to its stockholders, members or partners with respect to its
capital stock; membership interests or partnership interests; (B) purchase, redeem or
retire any of its capital stock, membership intere$ts or partnership interests; or (0) pay
any management fees or if already paying a. management fee, 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 1he Minimum Net Worth Test -or- (2) (a) Borrower maintains a Current
Ratio of not (ess than 1.25; (b) Borrower maintains a minimum Net Worth to total assets
of not Jess than twenty-five percent (25%) and (0) the payment of such dividend, the
making of suoh distribution, or the purchase, redemption or retirement of such stock,
membership interest or partnership interest, individually or in the aggregate, does not
exceed twenty-five percent (261)/0) of the prior fiscal year-end Cash Margins in anyone
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 bein material default hereunder as a result of such distribution or payment
Notwithstanding the foragoing, those of the Borrowers that are subsidiaries, may make
dividend/distribution payments to their respectivE! parent company without prior RTFC
approval.
04. limitations on ContraotsJ Deposits of Funds. Without the prior written
consent of the Lender: (a) enter into any contract or contracts (i) for management of its
business or any part thereof, (ii) for the operation or maintenance of all or anysubstantial part of its property, (iii) for th~ U$e by others of any aT the Collateral(a~
defined in the Pledges) in excess of $100,000 or (iv) with other companIes; providad
however, that such approval shan not be requirecJ for any ocmtraot which in form and
substance substantially conforms with contracts in gelleral use in the Borrower ~ industry
by companies of size and character similar to Borrower or which substantially conform to
contracts which are currently in exiBtence that BDrrLiwer is a party to; or (b) deposit any
of its funds, regardles$ of the source thereof, in any account whiDh is not fully insured by
the federal government of the United States.
RTFC LOANAG
ViIY802-A-9001 (YERGIt..JJ)
3002.8.
07/09/2(103 10:57 FAX [phone] SILVER STAR COMM ~015
Limitations on Loans, Investments and Other Obligations.
(a) (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, (Hi) make any loan to, or (iv) guarantee, assume, or otherwisebecome liable for any obligation of, any corporation, association, partnership, jointventure, trust, government or any agency or department thereof, or any other entiiy ofany kind if the aggregate amount of all such purchases, investments, loans andguarantees exceeds the greater of ten percent (10%) of Total Plant or thirty percent(30%) of Net Worth without the prior written consent of the Lender.
(b) The following shall not be included in the limitation on purchases,investments, loans and guarantees in (a) above: (i) bonds, notes, debentures, stock, orother securities or obligations issued by or guaranteed by the United States government
or any agency or instrumentality thereof; (ij) bonds, notes, debentures, stockcommercial paper, subordinated capital certificates, or other ,security or obligation ofinstitutions whose senior unsecured debt obligations are rated by at least 1Wo nationallyrecognized rating organizations in either or its two highest categories; (iii) investmentsincidental to loans made by Lender; (iv) bonds, notes, debentures, commercial paper or
any other security of National Rural Utilities Cooperative Finance Corporation; and (v)
any deposit that is fully insured by tria federal government of the United States.
06 Special Negative Covenants. During the term hereof, Lender and its
counl:iel shall be fully satisfied that the' Borrower has complied and will continue tocomply with any special nsGJative covenants Identified in Schedule "' hereto.
EVENTS OF DEFAULT
The occurrence of any Dne or more of the following events shall constitute anEvant of Default"
(a)
(b)
Rapresentations and Warranties. Any representation or warranty madeherein, in any of the Other Agreements or in any statement, report
certificate, opinion, fin anoia I statement or other document furnished or to
be furnished in connection with this Agreement or the Other Agreements
shall be false or misleading in any material respect.
Payment. Failure of Borrower to mafte any of the payment Obligations,including, without limitation, any sum due the Lender under this
Agreement or any of the Other Agreements, when and as the same shall
become due, whether at the due date thereof, by demand, by
acceleration or otherwise.
( D)Other Cov~n~l!1ts. Failure of Borrower to observe or perform any
warranty, covenant or condition to be observed or parformed by Borrower
under this Agreement or any of the Other Agreements.
( cI)LBgal Existenoe. The Borrower's existence shall terminate under the
!t;tW of the state of it::. organization , or Borrower shall forfeit or otilerwise
nTFC LOANAG
WY802--9001 (YERGINJ)
30026-
ILl
Oi /09/2003 10: 57 FAX [phone]
(e)
(f)
(g)SILVER STAR cmm ~(J16
be deprived of Its franchises, permits, easements, consents or licenses
required to carry on any material portion of its business.
Other Obligations. Default by the Borrower in the payment when due of
any money owed by the Borrower. whether principal, interest, premium or
otherwise, under any other agreement for borrowing money in an amount
in excess of five percent (5%) of total assets, whether or not such
borrowing is secured.
Bankruptcy. (i) A court shall enter a decree or order far relief with
respect to the Borrower, any general partner of Borrower or anysubsidiary or guarantor (if any) in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a. receiver, liquidator, assignee, custodianv 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 (ii) the Borrower, anygeneral partner of 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 trustes, of a substantial part of its
property, or make any general assigrlment for the benefit of creditors,
(h)
Dissolution or liquidation. (i) Other than as provided in subsection (f)above, the dissolution or liquidation of the Borrower, any general partner
of Borrower or any subsidiary or guarantor (if any), or (ii) failure by the
8orrower, any general partller of Borrower or any subsidiary or guarantor
(if any) promptly to forestall or remove any execution, garnishment or
attaohment of such consequence as will impair its ability to continue its
business or "fulfill its obligations and such execution, gamishment or
attaohrneni shall not be vacated within sixty (eO) days,
Final Judgment, A final n(:Jn-appealable judgment in excess of $'100,000shall be entered against Hie Borrower and shall remain unsatisfied or
without a stay for a period of' sixty (60) clays.
RIGHTS AND REMEDieS
01 Rights and Remedies of ina Lender. Upon the occurrence of an Event
ot Default, the Lender may, subject to:
(a)thil1y (30) days prior written notioe to Borrower during which time
Borrower shall have the opportunity to cure said Event of Default, except
with respect to Events of Default pur~uant to Sections 8(a), 8(b), 8(f)(ii)
and 8(g)(i) above which shall require 110 notice or demand and shal! have
no period to cure; provided, howG\ver. that Borrower shall not be entitled
to any sepetrate notioe and opportunity to cure any Event of Default which
specifies its OWIi cure period ai:; tor example , the Event of Default
specmed in Section B(h): aM
flTFC LOAhJAG
WV802-A-900'1 (YERGIN,
30026-
1)7/09/2003 10: 58 FAX [phone] S I L VER STAR COMM ~017
(b)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 rightsand remedies, in addition to all rights and remedies available to the Lender underapplicable law, all such rights and remedies being cumulative and' enforceable
alternatively, successively or concurrently:
(i)
(ii)
(Hi)
Cease making Advances hereunder.
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.
Institute any proceeding or proceedings to enforce the Obligations owed
to, or any Liens in favor of the Lender.
(iv)Pursue all rights and remedies available to the Lender that are
contemplated by the Pledges in the manner, upon the conditions, and
with the effect provided in the Pledges, including but net limited to a suit
for specific performance, injunctive relief or damages.
Pursue any other rights and remedies available to the Lender at law or in
equity.
(v)
02 Cumulative t\iature of Remedies. Nothing herein shall limit the right of
the Lender, subject to notloe and right to cure provisions contained herein , to pllrsue allrights 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 andremedy of the Lender in this Agreement and/or the Other Agreements shall becumulative and concurrent, and recourse to one or more rights or remedies shall not
constitute a waiver of any other rigl'it, power or remedy.
03 Costs and Expenses. The Bormwer shall pay to the Lender on demand
any and all expenses, includil1g reasonable attorneys' fees and disbursements incurred
or paid by the Lender in protecting, preseNing or enforcing the Lender's rightshereunder or under the Otl1er Agreements, together with interest thereon at the rate and
determined in the manher provided in the Mortgage. Subject to the Mortgage and
applicable law, the Lender may apply alJ Collateral and proceeds of all Collateral to the
Obligations in any manner that the Lender, in its sole discretion ) deems appropriate, and
Borrower will continue to be Hable 'for any deficiency.
04 Late ~ayment Charges. It 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 rna.y otherwise designate to the Borrower, within such time
period as the Lender may pr'esr:xibe 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 be~linniflg after such due date until
RTFO LOANAG
WY802.A-9om (YERGINJ)
300.26-
07/09/200.10:58 FAX [phone] SILVER STAR COmI ~(J18
payment of the delinquent amount being herein called the "Iate-payment period"), the
Borrower will pay to the Lender, in addition to all other amounts due under the terms of
the Note, the Pledges, 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.
05 Lender s Setoff. The Lender shall have the right, in addition to all otherrights 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 and counterclaim.
10.MISCELLANEOUS
10.01 Performance for Sorrower. Borrower agrees and hereby authorizesthat 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 insureBorrower'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
Linder 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 judgment or any Lien upon the Collateral or other property or assets of
Borrower; provided, however, that the making of any slIch advance by the Lender shall
not constitute s. waiver by the Lender af 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 lZlll such advances made by the Lender with interest thereon
at the rate and determined in the manner provided in the Note. All 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 transactionscontemplated 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, (ir
subsequent to, the execution of this Agreement, including, without limitation, all
documentary stamps, recordation and transfer taxes and other costs and taxes incident
to reoordaticm of any document or instrument in connection herewith. Borrower agrees
to save harmless and indemnify the lender from and against any liability resulting fromthe failure to pay any required documentary stamps, recordation and transfer taxesv
recording cost(;;, or any other expenses incurred by the Lender in connection with this
Agreement. The provisions of this Section 'j 0.02 shall survive the execution and delivery
of this Agreement and the pEiyment of all 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 repossessany or all of the Collateral by judicial proceedings, any bond(SJ or demand(s) for
pogsession which otherwise rnay be necessary or required; (b) presentment, demanq for
payment, protest and notice af t1on~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
FITFC LOAI\lAG
WY802..Mlo(rl (YERGINJ)
~(OO26-~(
i '1
. ,
07/09/2003 10:58 FAX [phone] SILVER STAR COMM 141019
hereunder and under the Other Agreemen1s 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 (10) Business Days atter 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
c:it'CLlmstances.
1CtO7 Notices. All notices, requests and other communications provided for
herein including, without limitation, any modificattons of, or waivers, requests or
consents under, this Agreement shall be given or made in writing (inoluding, without
limitation, by telecopy) and delivered to the intended recipient at the IIAddress for
Notices" specified below; Ofv as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except as otherwise provided
in this Agreement, all such communications shaH be deemed to have been duly given
when personally delivered Of, in the case of a. mailed or telecopied notio~, upon receipt,
in each case given Dr addressed as provided for herein. The Address for I-.Jotioes of the
respective parties is as follows:
The Lender:
Rural Telephone Finance Cooperative
Woodland Park
2201 Cooperative Way
Herndon, Virginia 2Qi7-SO25
l\ttention: Loan Officer
Fax: 703- 709w6780
The Borrower:
The addres8 set forth in
Schedule 1 t'U3:reic)
10,08 GOVERNING LAW; SUBMISSION TO JURISmCTIOII!; WAIVER DIP
JURY TRlp.I....
RTFC LOANAG
WYBO2-A-9001 (1'Er-lGINJ)
30026-
Oi/OQ/2003 10: 59 FAX [phone] SILVER STAR COMM 141020
(a) THE PERFORMANCE AND CONSTRUCTION OF THIS AGREEMENT
AND THE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
(b) BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES COURTS LOCATED IN VIRGINIA AND OF
ANY STATE COURT SO LOCATED FOR PURPOSES OF ALL LEGAL PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. BORROWER IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE ESTABLISHING OF THE VENUE OF ANY
SUCH PROOEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY
SUCH PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(0) EACH OF THE BORROWER AND THE LENDER HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW , ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
10.09 Holiday Payments. If any payment to be made by the Borrower
hereunder shall become due on a day that is not a Business Day, such payment shall be
made on the next sucoeeding Busines$ Day and such extension of time shall be
included in computing any interest in respect of such payment.
10. i 0 Consent to Patronage Capital Distributions. The Borrower hereby
consents that the amount of any distributions with respect to Borrower s patronage which
are made in written notices of allocation (as defined in Section 1388 of the Internal
Revenue Code of 1986, as amended (Ii Code ) including any other comparable
successor proviSion) and which are received from Lender will be taken into account by
Borrower at their stated dollar amounts in the manner provided in Section 1385(a) of the
Oode in the taxable year in which such written notices of allocation are received.
i 0.11 Right to inspect. The Borrower shall permit representatives of the
Lender at any time during normal business hours to iMpact and make abstracts from the
books and records pertaining to the Collateral, and permit representatives of the lender
to be prasent at Borrower s place of business to receive copies of all communications
and remittances relating to the Collateral, all in such manner as the Lender may
reasonably require.
10,12 Survival; Successors and p.ssigns. All covenants, agreements,
representations and warranties made herein and in the Other Agreements GhaH survive
Ciosing and the execution and delivery to the lender of the Note, and shall continue il1
full force and effect until all of the Obligations have been paid in full. Whenever in this
Agreement any of the parties hereto is referred to~ such reference shall be deemed to
include the successors and assigns of suoh party. All covenants, agreements,
representations and warranties by or (In be\lalf of Borrower that are contained in this
Agreement and the Other Agreements srlall inure to the benefit of the successors andassigns of the Lender.
ATFC LOANAG
WYBO2,A-9001 (YERGINJ)
30026.3
.D7/09/200.3 10: 59 FAX 30i 883 2575
(SEAL)
Attest:
" .
(SEAL)
Attest:
SILVER STAR COMM I4J (121
MOUNTAIN LAND COMMUNICATI
By:
Title:
~~~...
;Jlr- ~P-
6ecrsu:i.TY
RURAL TELEPHONE FINANCE COOPERATIVE
By:
rsr
RTFO LOANAG
WY80~.900' (YERGII\lJ)
30026-
I 22
Oi /(19/2003 11: 00 FAX 30i 883 25i5 S I L VER STAR COMM 141022
; .
SCHEDULE 1
The j'Commitment~ shall mean $8,333,333.00.
The "Pledges" are the pledge and security agreements by and between:
..:1.
The Hoopes Telephone Management Limited Partnership and Lender
dated as of even date herewith;
Teton Communications, Inc. and Lender dated as of even date herewith;
and
Silver Star Telephone Company) Inc. and Lender dated as of even date
herewith. Lender agrees that, even though prior to closing, Silver Star
Telephone Company, Inc. will be required to deliver to Lender the
executed Pledge, stock powers, and the stock certificates being pledged,
Silver Star Telephone Company, Inc.'s Pledge shall provide that it will not
become effective until Silver Star Telephone Company, Inc. obtains any
required written consent from the Rural Utilities Service or the Rural
Telephone Bank, that the consent may be obtained after closing of the
Loan, and that if such consent is denied or is not granted within twelve
("12) months of the date of this Agreement (whichever comes first), Lender
has the option, bLlt not the obligation, to require Silver Star Telephone
Company, Inc. to refinance with Lender the subject Rural Utilities Service
or the AuraJ Telephone Bank loan(s) on the same terms and conditions
Lender offers on comparable loans.
The months relating to the Payment Date are January~ April, July, and October.
The method of amortization raferrad to in Section 2.03 shall be based upon either
of the t\I\IO methods indicated below (to be selected by Borrower prior to the first
Advance):
level principal
level debt service
The amount referred to in Section 2.05 is $833,333.00.
The date of Borrower's financial statement re'erred to irl Section 4,06 \s 12/31/02.
7, The place of business or, if more than one, Its chief executive otHes as well as the
Borrower s mailing B.ddres~ if different ref'erred to in Section 4. i 2 is i 04101 Highway
89/P.O. Box 2261 Freedom, WY 83120.
The;, organizational identlffoatioit numbers oT the Borrower re"ferred to in Section
12 are:
The Hoopes Telephcme Management Limited Partnership (10); None
FlTFC WANAt?!
WY802.A.9001 (YERGII-JJ)
30026-
07/09/2003 11: 00 FAX [phone] SILVER STAR cmm i4JO23
Teton Communications, Inc. fWY): OlD 199400294311
Silver Star Telephone Company, Inc. 0NY): CID 198000053541
Columbine Telephone Company, Inc. (CO): 19871176888
Mountain Land Communications, LLC (10): CID 199700328397
The government authority referred to in Section 4.13 is: Idaho Public Utility
Commission. '
11.
The special conditions referred to in Section 5.06 are as follows: None.
The purpose referred to in Section 6.06 is to provide funds to serve as cash
collateral for a Welis Fargo premium loan and to purchase sees.
10.
12.The special affirmative covenants referred to in Section 6.10 are as Tollows:
Columbine Telephone Company, inc. shall so operate and manage Its business
as to achieve, on an unconsolidated basis, an annual DSC of not less than 1.
and an annual TIER of not less than 1.50.
13.The special negative covenants referred to in Section 7.06 are as follows:
(a) Columbine Telephol1e Company, Inc. shall not borrow money on a
secured or unsecured basis from any other lender or incur any additional secured,
or unsecured indebtedness; or enter into any Leases, unless at that time
Columbine Telephone Company, Inc. meets, on an unconsolidated basis, the
Minimum Net Worth Test; QLOvided however, Columbine Telephone Company,
Inc. may grant purchase money secured indebtedness or incur unsecured trade
debt or pay other current operating Uabilities that arise in the ordinary course of
business so long as the aggregate total of such debt does not exceed five
percent (5%..) of Columbine Telephone Company, Ino.'a total assets.
Columbine Telephone Company, Ino. meats I on an unconsolidated basis, the
Minimum Net Worth Test, then Columbine Telephone Company, Inc. may incur
additional indebtedness or enter into Leases without prior written approval of
Lender provided Columbine Telephone Company, Ino. maets, on an
unconsolidated basis, the Minimum Net Worth Test after Columbine Telephone
Company, Inc. iI"lours ~ut:h additional indebtedness or enter into such Leases;
provided further hCJweverj Columbine Telephone Company, Ino. must give at
least thirty (30) days written notice to Lender prior to Columbine Telephone
OomrJany, Ino. incurring any additional indebtedness or entering into such
Leases.
(b) 'Borrower shall not allow Silver Star Telephone Company, Inc. to borrow
money on 8. secured or unsecured basis from any other lender or incur any
additional secured or unsecured indebtedness; or enter into any Leases, unless
at that time Silver Star Telephone Company, Inc. meets, on an unconsolidated
basis , the Minimum Net Worth Test; l'ovided however, Silver Star TelephoM
Company, Inc. may ~lrant 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 tbe aggregate total of such debt does nat
exceed five percent (5%) of Silver Star T!~lephone Company, Inc.'s total assets.
If Columbine Te(ephone Company, Ino. meets, on an unconsolidated ba(;)is, the
RTFC lOAhlAG
wvaOZ-A-9OOl (VEFiGINJ)
30026--3
Oi/09/2003 11:00 FAX 30i 883 25i5 SILVER STAR COMM 141024
, Minimum Net Worth Tast, then Silver Star Telephone Company, inc. may incur
additional indebtedness or enter into Leases without prior written approval of
Lender Rrovided Silver Star Telephone Company, Inc. meets, on
unconsolidated basis, the Minimum Net Worth Test after Silver Star Telephone
Company, Inc. incurs such additional indebtedness or enter into such Leases;
provided further however" Silver Star Telephone Company, Inc. must give at
least thirty (30) days written notice to Lender prior to Silver Star Telephone
Company, Inc. incurring any additional indebtedness or entering into such
Leases.
14.The address for notices to the Borrower referred to in Section 10.07 is 104101
Highway 89/P.O. Box 226, Freedom, WY 831.20, Attention: General Manager,
Fax: [phone].
RTPC LOANAG
WV8Q2.A-90D1 (VERGINJ)
~mO26-
07/09/2003 11: 01 FAX [phone] SILVER STAR COMM 141025
10.13 Assignment. The Lender may assign its rights and obligations under this
Agreement and the Other Agreements without the consent of the Borrower; provided
however, that no such assignment shall result in terms or conditions less favorable to
Borrower. The Borrower may not assign any of its rights or obligations under this
Agreement or the Other Agreements without the prior written consent of the Lender.
10.14 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 by any court or governmental agency of competent jurisdiction,
such invalidity or un enforceability shall not affect the remainder of such term, provision
or condition nor any other term, provision or condition, and this Agreement, the Note,and the Other Agreements shall survive and be construed as if such invalid or
unenforceable term, prov1sian or condition had not been contained therein.
10.15 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 and delivered, shall be an original, but all such counterparts shall
together constitute one and the same instrument.
10.16 Headings/Use of Terms. The headings and sub-headings contained in
this Agreement are intended to be used for convenience only and do not constitute part
of this Agreement. The use of any gender or the neuter herein shall also refer to the
other gender or the neuter and the use of the plural shall also refer to the singular, andvice versa.
10.17 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 ancVor any other instruments and conveyances as may
reasonably requested by the Lender tD effectuate the intention of this Agreement and to
provide fer the securing and payment of the principal of and interest on the Note
according to the terms thereof.
10.18 I..e.l"lder Approva1. Wherever prior written approval of Lender is
required under the terms and conditions of this Agreement, Lender hereby agrees to not
unreasonably withhold said approval.
10.19 Merger and Integli'a.ticm. This Agreement and the attached e)(hibits and
matters incorporated by reference contain the entire agreement of the parties hereto with
respect to the matters covered and the transactions contemplated hereby, and no other
agreement. Btatement or prbl11ise made by any party hereto, or by any employee, officer
agent or attorney af any party rlsreto , which is not contained herein, shall be valid or
binding.
10.20 SchsdulEl i.
Agreement.
Schedule 1 attached hereto i(;j an integral part of tl1is
HTFC LOAf\JAG
Wi802"A-9001 (YEA6INJ)
30026.
07/09/2003 11: 01 FAX 30i 383 2575 SILVER STAR COMM ~0213
IN WiTNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement under seal as of the date first above written.
(SEA9
;/; fl
THE HOOPES TELEPHONE MANAGEMENT
LIMITED PARTNERS~IP
, .
" . LJ
BY:~).R.~~
Title: As Operating Manager of A&M Management, LC.,
general partner of T oopes one
Management L imi ted Partnershi p
Attest:
Secretary
Title: f)2(J".J"1 PeNr
(SE.A.L)
t0lh~ r ,~l$-,
Secreta!)'
"", ~
COLUrv1B TELEPHO~ CO,
By:
~~~
Title: pf2€.:.r I/) €'"N
~- '' '- - - -" ~ ..... '--:'
- ~ . ~(SEfi,
::-: ~:
ed(?)~ r, &t"'7i5!c,-
Secretary
, -
RTFCi LOAI~AG
WVStJ2.A.90D'l (YERGINJ)
30026-3
2.1
07/09/2003 11: 01 FAX [phone] SILVER STAR C(J~!M ~O27
SECURED PROMISSORY NOTE
THE HOOPES TELEPHONE MANAGEMENT LIMITED PARTNERSHIP, an Idaho Limited
PartnershIp. TETON COMMUNICATIONS, INC., a Wyoming corporation , COLUMBINE
TELEPHONE COMPANY, INC., a Colorado corporation, and MOUNTAIN LAND
COMMUNICATIONS. LLC, an Idaho limited liability company Oointly and severally theII Borrower ), for value received, hereby, jointly and severally, promise to pay, without setoff
deduction, recoupment or counterclaim, to the order of RURAL TELEPHONE FINANCE
COOPERATIVE (the "Payee ), at its office in Herndon, Virginia. or such other location as the
Payee may designate to the Borrower, in lawful money of the United States, the principal sum of
EIGHT MILLION THREE HUNDRED THIRTY~THREE THOUSAND THREE HUNDRED
THIRTY-THREE DOLLARS ($8,333,333,00), or slich lesser 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 by and between the Borrower and the Payee, as it may be
amended from time to time (lierein called the "Loan Agreement"), and to pay interest on all
amounts remaining unpaid hereunder from the date of each advance in like money, at said
office, at the rate and in amounts and payable on the dates pro'Jided in the Loan Agreement
together with any other amount payable LInder the Loan Agreement. If not sooner paid, any
balance of the principal amount and interest accrued thereon shall be due and payable fifteen
(15) years from the date hereof (such date herein called the "Maturity Date
$8,333,333.2003
This Note is secured under a Pledge and Security Agreement dated as of even date herewith,
by and between The Hoopes Telephone Management Limited Partnership and the Payee, a
Pledge and Security Agreement dated as of even date herewith, by and between Teton
C(lmrnunioatjol1s, Inc. and the Payee, and a Pledge and Security Agreement dated as of even
date herewith, by and between Silver Star Telephone Company, Inc., a Wyoming corporation,
and the Payee, This Note is the Note referred to In, and has been executed and delivered
pursuant to, the Loan Agreement. The principal hereof and accrued interest thereon and any
other amount due under the Loan Agreement may be declared to be forthwith due and payable
in the manner, upon the conditions, and with the effect provided in the Loan Agreement.
Tt1e Borrower waives demand, presentment for payment, notice of dishonor, protest, notice of
protest and notice of non-payment of this Note and waives the defense of usury.
IN WITNESS WHEREOF, 'the Borrower has cau(~ed this t\Jote to be signed in its
corporate/company name and its corporate/company seal to be: hereunto affixed and to be
attested by its duly authorized officers, all as of the day and year first above written,
(SEAL)
Secretary
THE HOOPES TELEPHONE MANAGEMENT LIMITED
PARTNERSHIP
II
' "
r-" By: .cl7Jtv~rn.-
,-
t, ~~ ,
'..-'
Title:
As OpeY'ati ng Manager 0 . I-\&M Management.
general partner of The Hoopes Telephone
Management L i mi ted Pa rtners hi
LC.
AttHst
(')7/09/2003 11: 02 FAX [phone], " -SILVER STAR COMM , f4L0 28
:~O A::TI
Title: P /2E:J" i e: tJ
(SEAL)
Attest: 19~~
~ -
Secretary
.' - -... '.;.,, ,
:t$EAL) '
.. .' -:;. '
AtteSt
~:;~ ,
1:
" ' '.. ... ~ " -
Secretary
, "' .....' ,- ~
:;LU ~f? ~c,
Title: fJl2e.JIII?J~Alr
" -
MOUNTAIN LAND COMMUNICAT-ONS, LLC
""" I"'i Ii,
/:"?
By~
~-"\.. ~: ~
Title: /h~~
(SEAL)
,..
/V It-A't.----stW.o;t
FlTFC Loan No.: WY802w9001
In/lIt!/~lIU3 115:36 FAX :)07 883 2575 SILVER STAR COMM ~(J12
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT (this "Agre~ment") elated as of
2003, between. SILVER STAR TELEPHONE COMPANY. INC., a corporation d thrg nized and
validly existing under the laws of the State of Wyoming (the ('Pledgor ), and RUAAL!TELEPHONE
FINANCE COOPERATIVE, a South Dakota cooperative association (the "Lender
WHEREAS, Pledgor is a wholly~owned subsidiary of The Hoopes Telephone Management
Limited Partnership, an Idaho limited partnership ("Borrower
WHEREAS, Borrower and the Lender are parties to a Loan Agreement dat~d as of even
date herewith (as modified and supplemented and in effect from time to time, the "Loan
Agreement"), providing, subject to the terms and conditions thereof, for an extension I of credit to be
made by the Lender to Borrower and others in the principal amount of up to $B,333,S$.OQ;
WHEREAS, to induce ' Lender to enter into the Loan Agreement, Pledgor has agreed to
pledge and grant a security interest in the Collateral (as hereinafter defined) to Lender to secure the
payment of the obligations under the Loan Agreement.
NOW, THEREFORE, in consideration of the premises, and for other good! and valuable
consideration, the receipt and sufficiency of which are hereby aol(nowledged, the! parties hereto
ag rea as follows:
SECTION 1. Definitions. To the extent not inconsistent herewith, capitalized terms
definad in the Loan Agreement are used herein as defined therein. In addition, as used herein:
Basio Documents shal!' mea.n tria Loan Agreement and tile promissory notes issued
thereunder.
Collateral" shall have the meaning a$cribed thereto in Seotidn 2 hereof.
Secured Oblioatlons shall mean collective~y, all obligations to the Lender hereunder and
under the Basic Documents.
Uniform Commercial Code shall mean the Uniform Commercial Code as in :effect from time
to time in the applicable jurisdiction.
S~CTION 2. Thl:!: Pledge and $eeurlty interest. As collateral security for the prompt
payrnent in full when due (whether at stated maturity, by acceleration or otherwise) of the Secured
Obligations, Pledgor hereby pledges, grants, assigns, transfers, conveys and sets over to the
Lender a security interest in aU o'f Pledgor's right , title and interest in the property described in
paragraph 1 of Schedule A hereto, whether now owned by Pledgor or hereafter acquired and
whether now existing or hereafter coming into existence (all baing collectively referred to herein as
Collateral ). Sct1edule A attacfled hereto is an integral part of this Agreement andl oollta,ins both a
desoriptkm of and certain representations regardin9 the Collateral. Pledgor coven~nts and agrees
RTfC S~CIN$
WY802-9t'.101 (YEAGINJ)
306"
07/0 8/2003 16: 36 FAX [phone] SILVER STAR COMM ~013
with Lender that Pledgor will not, directly or indirectly, without prior written consent or the Lender,
transfer, issue or sell any of the Collateral, or enter Into any agreement whi9h may: result in the
transfer, issuance or sale of any ot the Collateral. Pledgor and Pledgee agree and acknowledge that
this Pledge shall not become eHective and that no lien shall attach until Pledgor obtains, any required
written consent to this Pledge from Rural Utilities Service or the Rural Telephone Bank. Pledgor is
obligated to maKe a good faith effort to obtain such consent as soon as possible arid, IT needed,
Pledgee shall assist Pledgor in its efforts. Lender acknowledges that such cons~nt need not
accommodate or subordinate the prior lien of the Rural Utilities Service and the Rural Telephone
Bank to the lien of the Pledge. If such consent is denied or is not granted withil;\ twelve (12)
months of the date of this Pledge (whichever comes first), Pledgee has the option, but not the
obligation, to require Pledgor to refinance with Pledgee the subject Rural Utilities SaNiee or Rural
Telephone Bank loan(s) on the same terms and conditions that Pledgee offers on comparable
loans.
SECTION 3. Further Assurances; Remedies. In furtherance of the grant lof the pledge
and security interest pursuant to Section 2 hereof, Pledgor hereby agrees with the Lender as follows;
01 Delivery and Other Perfection. Pledgor shall:
(a) deliver to the Lender, endorsed in blank for transfer or accompbnied by duly
executed stock powers or other instruments of assignment and transfers in such form and
substance as the Lender may request, and all stock certificates or other securities
representing any of the Collateral;
(b) give, exeoLlte, deliver, file and/or record any financing statement, notice,
instrument, document, agreement or othar papers that may be necessary or desirable (in the
judgment of the Lender) to create, preserve, perfect or validate the security interest granted
pursuant hereto or to enable the Lender to exercise and enforce its rights Hereunder with
respect to such pladge and security interest; and
(0) permit representatives of the Lender, upon reasonable notice, at a!ny time during
normal business hours to inspect and mal(e abstracts from the books and rec0rds pertaining
to the Collateral, and permit representatives of the Lender to be present at Pledgor s place of
business to receive copies of all communications and remittances relating to the Collateral,
an in such manner as the Lender ma.y require.
O2 Othsr Finanoing Statements. Without the prior written consent of the Lender,
Pledgor shaH not file or suffer to be on file, or authorize Dr permit to be filed or to be on file, in any
jurisdiction, any' financing statement or like instrument with respect to the Collateral in which the
Lende!" is not named as the sale secured party for the benefit of the Lender.
03 praservation of Rights. The Lender shall not be required to take steps necessary
to enforce or preserve any rights under any contract, instrument, or agreement included in the
Collateral.
04 Rights Regarding CollateraL So long as no Event of Default under thE:) Loal1
Agreement shall ~Iave ocourrt:td and be c:ontinul1191 Pled~10t. shall have the right to e~ercise all of itsRTFO SEOINS
WVBO2-900t (YE:~GI~JJ)
30G'19-:~
07/08/200.'3 16:37 FAX .'307 883 2575 SILVER STAR COUM 19! 014
voting, consensual and other powers af ownership pertaining to the Collateral for all purposes not
inconsistent wrth the terms of this Agreement or any of the Basic Doouments, and shall be entitled to
receive, spend and otherwise utilize all dividends and other distributions with: respect to the
Collateral; r:!rovided however, that PledgOT agrees that it will not vote the Collateral, in any manner
that is inconsistent with the terms of this Agreement or any of the Basic Doouments. The Lender
shall execLIte and deliver to Pledgor or cause to be executed and delivered to Pledgor. all such
proxies, powers' of attorney, dividend checks (duly endorsed to Pledgor), and other orders , and all
such instruments, without recourse, as Pledgor may reasonably request for the purpose of enabling
it to exercIse its rights and powers which it is entitled to exercise pursuant to this Section 3.04.
05 Events of Default, etc. Upon the occurrence of an Event 01 Default; under the Loan
Agreement which has continued beyond any applicable grace period, then, subject to applicable law
and approvals, if necessary, of regulatory agencies:
(a) the lender shall have all of the rights and remedies with' respect to the
Collateral of a secured party under the Uniform Commercial Code (and to the extent
permitted by applicable law, whether or not said Code is in effect in the jurisdiction where the
rights and remedies are assarted);
(b) the Lender in its discretion may, in its name or in the na~e of Pledgor or
otherwise, demand, sue for, collect or receive any money or property at anyltime payable or
receivable on account of or in exchange for any of the Collateral, but shkJl. be under no
obligation to do so; and
(0) the Lender may, upon fifteen (15) business days prior written notice to
Pledgor of the time and place, with respect to the Collateral or any part thereof which shall
then be or shall thereafter come into the possession, custody or control of the lender or any
of its agents, sell or otherwise dispose of aU or any part of such Collateral, at such place or
places as the Lender deems best, and for cash or on credit or for future calivery (without
thereby assuming any credit risk), at public or prIvate sals, without demand of performance
or notice of intention to effect any such disposition or of time or place of sale (exoept such
notice as is reqLlired above, or as is required by applicable statute and cannot be waived)
and the Lender or anyone else may be the purchaser or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the extent permitted by law, at any private
sale), and thereafter hold the same Etb$Olutely, trae from any claim or right of whatsoever
kind, including any right. or equity of redemption (statutory or otherwise) of Pledgor any such
demand, notice or right or equity being hereby expressly waived and: released. Tha
proceeds of each collection, sale or other disposition under this Section 3,015 shall be applied
in accordance with Section 3.09,
06 Deficiency. If the proceeds of sale, collection or other realization of or upon the
CoUateral are insufficient tccover the costs and expenses of such realization and the payment in full
of the Secured Obligations, Pledgor shaH remain liable for any and all deficielicy for which Pledgor is
obHgated under this Agreement
07 PI'!vate Sate. In exercising its rights and remedies hereunder in the event of default
hereunder, the Lender shall incur no liability as C1 result of the sale of the collat' ral ~ or any part
RTFC SECII\lS
WYBO2.A.9001 (YEFtGI~IJ)
30619~f,
)7/(J8/20(J.~ 16: 37 FAX ~83 2575 S I L VER STAR COMM ~(J15
thereof, at any private sale conducted in a oommerciaUy reasonable manner in accordance w;th
applicable law. Pledgor hereby waives any claims against the Lender arising by r8a~on of the fact
the: the ~rice at which the Col!ateral may ha.~e been sold at such private sale was ,less ~han the price
which might have been obtaIned at a. public sale or was less than the aggregate ~mount OT the
Secured Obligations, unless the related sa1e was not conducted in a commerciallY reasonable
manner in accordance with applicable law.
08 Removals, Etc. Pledgor shall not maintain any of its books and records with respect
to the Collateral at any office other than its office as provided on the last page of this lA.greement as
of the date hereof or maintain its office or its principal place of business at any other place other than
at such location without giving thirty (30) days prior written notice to the Lender.
09 Application of Proceeds. Except as otherwise herein expressly ' providedl the
proceeds of any collection, sale or other realization of all or any part of the Collateral,: and any other
cash at the time hald by the Lender Linder this Section 3. shall be applied by the Lender:
Fir , to the payment of the costs and expenses of such collection! sale or other
realization, including reasonable compensation to the Lender and its agents and counsel,
and all expenses, .and advances made Or' incurred by the Lender in connection therewith;
Second, to the payment in full of the Secured Obligations described in Section 1hereof; and
Finally, to the payment to Pledgor, or its successors or assigns, or as So court of
competent jurisdiction may direct, of any surplus then remaining.
As used in this Section $. QIoceeds" of Collateral shall mean cash, securities and other property
realized with respect to, and distributions in kind of, Collateral, including any thereof! received under
any reorganization, liquidation or adjustment of debt of Pledgor or any issuer of or obligor.on any of
the Collateral.
1 0 Attorney..ln~Fact. Subject to the Lender having first obtained any required approval
from regulatory agencies, without Umiting any rights or powers granted by this AIJreement to the
Lender, upon the occurrence and during the continuance of an Event of Default lunder the Loan
Agreement, the Lender is hereby appo;l1ted the attorney~irj-faot of Pledgor for Ithe purpose of
carrying out the provisions of this Section :3 and taking any action and executing any instruments
which tha Lender may deem lIecessary or advisable to accomplish the purposes hereof, which
appointment as attorney~in-fact is irrevocable and coupled with an interest, provided that the Lender
shall not take any action pursuant to the authority granted tel it in this Section 3.10 without first
notifying Pledgor ill writing thereof. Without limiting thr:-. generality of the foregoing! so long as the
Lender shall be entitled under this Section a to make collections in respect of the Collateral, the
Lender shall hav€: the right and power to receiva, endorse and collect all checks made payable to the
. order of Pledgor representing any dividend, payment or other distribution in respect of the Collateral
or any part thereO"f and to give iuH discharge fot' the samE:.
SECTION 4.IVi!scsllarU30l!S.
FtTFC SECH-lS
WY60:;:-A-9DO1 (VERGINJ)
30619-3
07 /O /2003 16: FAX [phone] S I L VER STAR COMM 141016
01 Initial Financing Statements. Prior to or concurrently with the ~xecution and
delivery of this Agreement, Pledgor shall file such financing statements and other docutnents in such
offices as the Lender may request to perfect the pledge and security interest granted by thisAgreement.
02 Further Assurances. Pledgor agrees that, from time to time upqn the written
request of the Lender, Pledgor will execute and deliver such further documents and do such other
aots and things as the Lender may reasonably request in order fully to effect the purposes of this
Agreement.
03 No Waiver. No failure on the part of the Lender or any of its agents to! exercise, and
no course of dealing with respect to, and no delay in exercising, any right, poW,er or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial exercise b~ the Lender or
any of its agents of any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedIes herein ~re cumulative
and are not exclusive of any remedies provided by law.
04 Expenses. Pledgor agrees to pay to the Lender all out-of-podket expenses
(including reasonable expenses for legal services of every kind) of, or incident to, the enforcement of
any of the provisions of this Agreement, or performance by the Lender of any obligations of Pledgor
with respect to the Collateral which Pledgor has failsd or refused to perform, or : any actual
attempted sale, or any exchange, enforcement, coUection, compromise or settlement with respect to
any af the Collateral, and for the care of the Collateral and defending or asserting rights and claims
of the Lender in respect thereof, by litigation or otherwise and all such expenses shaH be Secured
ObUgations to the Lender secured under Section 2 hereof.
05 Taxes. Pledgor agrees to pay before delinquency any tax or othei governmenml
charge which is or can become through assessment, distraint or otherwise a lien o~ the Collateral
and to pay any tax or other governmental charge which may be levied on tHe transactions
hereunder, provided that nothing herein shall require Pledgor to pay any such tax or other
governmental charge with respect to which Pledgor is prosecuting in good faith or appeal or ather
proceedings shall have been tully bonded or otherwise effectively stayed.
05 Termination. When all Secured Obligations have been paid irl flili and the Loan
Agreement shall have termirmted, this Agreement shall terminate, and the Lende~ shall forthwith
cause to be assigned, transferred and delivered~ against receipt but without any recourse, warranty
or representation whatsoever, any remaining Collateral and money received in respect thereof, to or
(In the order of Pledgor.
01 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERI\lED BY AND
CONSTRUED 11\1 ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH' OF' VIRGINIA,
PROVIDED THAT AS TO COLLATERAL LOCATED IN AI'-1Y JURISDICTION OTHiER THAN THE
COMMONWEALTH OF VIRGINIA, TI-IE LEI\lDER SHALL HAVE ALL THE RIGHTS TO WHICH A
SEGURED PARTY UNDER THE LAWS OF SUCH JURISDICTION IS EI-.JTITLED.
08 Noticl.'::s, All noticesv requests and other communications provided for herein
including, without limitation, any modificatiom. of, or waivers, requests or c:ons~l1ts under, this
RTFC SECIl'JS
WYaO2-900"1 (YERGIN,
'3()G19.
07/08/2003 16: 38 FAX 3G7 88.3 2575 S I L VER STAR COMM ~017
Agreement shall be given or made in writing (including, without limitation, by telecopy) ~nd delivered
to the intended recipient at the "Address for Noticesll specified below; or, as to any jparty, at suchother address as shall be designated by such party In a notIce to each other pa~. Except asotherwJsa provided in this Agreement, all such communications shall be deemed to have been dulygiven when personally delivered or, In the case of a te~eoopied or mailed notice, upbn receipt, ineach case given or addressed as, provided for herein. The Address for Notioes of the respective
parties are on the last page of this Agreement.
09 Waivers, etc. The terms of this Agreement may be waived, altered or amended only
by an instrument in writing duly executed by Pledgor and the Lender.
10 Headings. The headings and subwheadings contained in this Agreement are
intended to be used for convenience only and do not constitute part of this Agreement. '
11 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of Pledgor, the Lender and each subsequent
holder of the Secured Obligations (provided, however, that Pledgor shall not assign or transfer itsrights hereunder without the prior written consent of the Lender).
12 Counterparts. This Agreement may be executed in one or mora counterparts and
all of such counterparts taken together shall constitute one and the same instrument.
ATFC SEOII\fS
WYBO2.A-9001 ('I'ERGINJ)
306"'9-
07/08/2003 16:39 FAX .30i 883 2575 S I L VER STAR CClMM ~O18
iN WITNESS WHEREOF; the parties hereto have caused this
Agr~~q1ent to be duly exeouted as of the day and year first above written.
- ", - ,- ,,:" . - :-'- ~ ~ -. :_;~-:..::~ /:';;.
i f3
,/ ~. , .. ~':: ;::
(SEA!,):::- : ,
- =~.....~ ....:::-' :-:';. ,;..-.', ;;:;; - ~\::.' ~ ~': -~ -.. -- -
;;~l-'
..." ~ '-' . . .: ...." ,;;;~~
G3 Secretary
Pledge land Security
" /)
SILVER STAR TELEPHONE COMPANY, INC.
8y:A~~-
Title~ ~e..r(neH7
Address:104101 Highway 89
O. Box 226
Freedom, WY 831eo
Attention: Generali Manager
' ",- - -. .- -' ,~~,
Teleoopy:307/883~2575
" /, _
($EAL)
Telecopy:
Woodland Park
2201 CDoperative 'way
Herndon, VA 20171-3025
703.709-6775
Address~
RTFe SECINS
WYIJO2-I'AIOO'j (YEAGIN,
30619,3
07/08/2003 16: .'39 FAX :)07 883 2575 S I L VER STAR COMM IgjO19
SCHEDULE A TO PLEDGE AND SECURITY AGREEMENT
Coliateratll, as defined and described in Section 2 of the Pledge and Security
Agreement, shall be:
(2) 1,483 non-voting Shares of Common Stock of Columbine telephone
Company, Inc., a Colorado corporation. As of the'date hereof, G)olumbine
Telephone Company, Inc. has issued and outstanding 11,483 Shares 01 Common
Stock and Zero Shares of Preferred Stock;
(b) without affecting any provision prohibiting such action hereunder or
under the Basic Documents. in the event of any consolidation or merger in which
the pledged company identITied in 1 (a) above is not the surviving company, all
shares of each class of the capital stock of the successor corporation formed by or
resu!1ing from such consolidation or merger distributed in respect of tria pledged
stock described above;
(0) all proceeds of and to any of the property described in clauses (a)
and (b) above and, to the extent related to any property described in said clauses
or above in this clause (c). all books, correspondence, credit files, records, invoicesand other papers; and
(d) all dividends on 1he stock described in clauses (a) and ,(b) above,
and any other distributions to their stockholders relating to said stock; provided
however, that prior to the occurrence of an Event of Default under the Loan
Agreement and so long as such Event of Default is not continuing, the Pledgor
shall be entitled to receive, spend and otherwise utilize free of the s8cuhty interest
granted hereby any and all cash dividends and other distributions with: respect to
the pledged stock to thE! extent permitted by the terms and conditions set forth
herein and in the Loan Agreement.
The Pledgor represents and warrants that the Collateral is owned by the Pledgor
free and clear of any perfected lien and that such Collateral is not subject to any
restrictions as to transfer, except those specifically disclosed in Seatjon 2 01' this
Agreement or as otherwise disclosed in writing to Lander or such as may be
imposed by applicable law affecting transfers generally.
Pledgor'ofiice, as referred to in Section 3.08 of the Pledge and Security
Agreement, i$ looaterj at i 041 01 Highway 89/P .0. Box 226, Freedom,
83120.
RTFC SECING
WY802..900"i (Yt:RGINJ)
306'19-
.' "VI """,.J "'V.'J'J rn."~ .)ll/ 00.) ':;0/0 ::ilLV.t;1( ::i'l'AR COMM ~ 015/022
PI-EDGE AND SECURITY AGREEMENT
PLEDGE AND SeCURITY AGREEMENT (this "Agreement") dated as of CY~.3....JL
2003, between TETON COMMUNICATIONS, INC., a corporation duly organized~
under the laws of the State of Wyoming (the II Pledgor ), and RURAL TELEPHO~E FINANCE
COOPERATIVE, a South Dakota coope:rative association (the "Lender'I
).
WHEREAS, Pladgor and the Lender are parties to a Loan Agreement dated a of even date
herewith (as modified and supplemented and in effect from time to time, the "Loan IAgreement"
providing, subject to the terms and conditions thereof, for an extension of credit to be made by the
Lender to Pledgor in the principal amount of up to $8,333,333.00;
WHEREAS, to induce Lender to enter into the Loan Agreement, Pledgor ~as ' agreed to
pledge and grant a securitv interest in the COllatara! (as hereinafter defined) to Lende to secure t
payment of the obligations of Pledgor under the Loan Agreement.
NOW~ THEREFORE, in consideration of the premises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties heretoagree as follows;
SECTION 1" Definitions, To the extent not inconsistent herewith, capitalized terms
defined in the Loan Agreement are used herein as defined therein. In addition, as use~ herein:
Basic Documents'! shall mearl the Loan Agreement and the promissory notes issued
thereu nder.
Collateral" shall have the meaning ascribed thereto in Section :2 hereof.
Seoured Oblioations" shall mean, oollectivelyv all obligations of Pledgor ~b the LenderhereLlnder and under the Basic Documents,
Uniform Commercial Code shaH mean the Uniform Commercial Code as in ekact from time
to time in the applicable jurisdiction.
S~CTION 2. The Pledge and Security Interest. As c?lIatera.! seou rity f~r the prompt
payment In full when due (whether at stated maturity, by acceleration or otherwise) at the Secured
Obligations, Pledgor hereby pledges, grantsj assigns, transfers, conveys and se~s over to the
lender a security interest in all of Pledgor $: right, title and interest in the propertY described in
paragraph 1 of Schedule A h6'reto, whether now owned by Pledgor or hereafter I acquired and
whether now existing or hereafter coming into existence (all being collectively referr~d to herein as
ColiateraV ). Schedule A attached hereto is an integral part of this J\greement and sontains both a
d~scription of and certain r~present~t'ions re ~ar~lng the ~ollatera!' (fledgor c::ovena~ts and agrees
With Len~er that Pledg~r will not, d,reo IY Of Indirectly,. without prior written c~ns8nt f th6 l~nder,
transfer, Issue or sell any of the Collateral, or enter Into any agri:'!ement WhiCh m result In the
transter, issuance or sale of any of tile Collateral.FC SECINS
wVaO2-9001 (YERGINJ)
30082-
1.J1/~'Oi'::lIll;j 1.0;1)1) .I\..:jl17 ~~:.s 2575 S I L VER STAR COM~I 141 016/022
SECTION 3, FurJ;her Assurances; Remedies. In furtherance of the grant of the pledge
and security interest pursuant to Section 2 hereof, Pledgor hereby agr~es with the Lender as follows:
Delivery and Other Periection. Pledgor shall:
(a) deliver to the Lender, endorsed in blank for transfer or accompanied by dUly
executed stock powers or other instruments of assignment and transfers in such form and
substance as the Lender may request, and all stock certificates or other securities
representing any of the Collateral;
(b) give, execute, deliver, file and/or record any financing statement, notice
instrument, document, agreement or other papers that may be necessary or desirable (in the
judgment of the Lender) to create, preserve, perfect or validate the security interest granted
pursuant hereto or to enable the Lender to exercise and enforce its rights hereunder with
respect to such pledge and security interest: and
(c) permit representatives of the Lender, upon reasonable notice, at any time during
normal business hours to inspect and make abstracts from the books and records partainlng
to the Collateral, and permit representatives of the Lender to b$ present at Pledgers place of
business to receive copies of all communications and remittat:Jces relating to the Collateral,
all in such manner as the Lender may require.
02 Other Financing Statements. Without the prior written consent of the Lender,
Pledgor shall not file or suffer to be on file, or authorize or permit to be filed or to be on file, in any
, jLlrisdiction, any financing statement or like instrument with respect to the Collateral in which the
Lender is not named as the sole secured party for the benefit of the Lender.
03 Preservation of Rights. The Lender shall not be req'uired to tal(e steps necessary
to enforce or preserve any rights under any contract, instrument, or agreement included in the
Collateral.
O4 Rights Regarding conat~ra.1. So long as no Event of Default under the Loan
Agreement shall have occurred and be continuing, Pledgor shall have the right to exercise all of it$
voting, consensual and other powers of ownership pertaintng to the Collateral for all purposes not
inconsistent with the terme of this Agreement or any of the Basic Documents, and shall be entitled
receive, spend and othelWise utii1ze all dividends and other distributions with respect to the
Collateral; provided however, that Pledgor agrees that it will not vote the Collateral in any manner
that is inconsistent with the terms of this Agreement or any of the Basic Documents. The lender
shall execute and deliver to Pledgor or cause to be executed and Idelivered to Pledgor all such
proxies, powers of attorney, dividend checks (duly endorsed to Plsdgor), and other orders, and all
such instruments, without recourse , as Pledgor may reasonably request for the purpose of enabling
it to exercisEI its rights and powers which it is entitled to exercise pursuant tCI this Section 3.04.
05 Events of Defaultj etc, Upon the occurrence of an Event of Default under the Loan
Agreement which has continul?d beyond any applicable grace period, then , subject tD applicable law
and approvals, if necessary, of regulatory agencies:
RTFC BECINS
WY602.A.QOO1 (YERGINJ)
300B;',~.
I'/'I""';ll~I.) ..0;;:1;:1 rh.'!. ;JlI'c\/j;J ;:1570 SILVER STAR COMM 141 (117/022
(a) the Lender shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (and to the extentpermitted by applicable law, whether or not said Code is in effect in the jurisdiction where the
rights and remedies are asserted);
(b) the Lender in its discretion may, in its name or in the name of Pledgor orotherwise, demand, sue for, collect or receive any money or property Cilt any time payable orreceivable on account of or in exchange for any of the Collateral, but shall be under noobligation to do so; and
(0) the Lender may. upon fifteen (15) business days prior written notice toPledgor of the time and place, with respect to the Collateral or any part thereof which shall
then be or shall thereafter come into the possession, custody dr control of the lender or anyof its agents, sell or otherwise dispose of all or any part of such Collateral, at such place or
places as the Lender deems best, and for cash or on credit or for future delivery (withoutthereby assuming any credit risk), at public or private sals, without demand of performance
or notice of intention to effect any such disposition or of time or place of sale (except such
notice as is required above, or as is required by applicable statute and cannot be waived)
and the Lender or anyone else may be the purchaser or recipient of any or all of theCollateral so disposed of at any public sale (or, to the extent permITted by law, at any privatesale), and thereafter hold the same absolutely, fl'sefrom any' claim or right of whatsoever
kind, including any right or equity of redemption (statutory or otherwise) of Pledgor any such
demand, notice or right or equity being hereby expressly waived and r~leased. Theproceeds of each collection, sale or other disposition under this, Section 3,05 shall be appliedin accordance with Section 3.09.
06 Defiolency. If the proceeds of sale, collection or other realization of or upon theCollateral are insufficient to cover iha costs and expenses of such reali~a.tion and the payment in fullof the Secured Obligations. Pledgor shalt remain liable for any and all deficiency for which Pledgor isobligated under this Agreement.
07 Private Sale. In exercising its rights and remedies hereunder in the event of defaulthereunder; the Lender shall incur no liability as a result of the sate of the Collateral, or any partthereof, at any private sale conducted in a commercially reasonable, manner in accordance withapplicabJe law. Pledgor hereby waives any claims against the lender; arising by reaSOn of the factthat the price at which the Collateral may have been sold at such private sale was less than the price
which might have been obtained at a public sale or was less than the aggregate amount of theSecured Obligations, unless the ralated sale was not conducted in a commercially reasonablemanner in accordance with applicable law.
08 . Removs.Is~ Etc. Pledgor shall not maintain any of its books and records with respect
to the Collateral at any office other than its office as provided on the last page of this Agreement as
01 the date hereof or maintain its office or its principal place of business at any other place other than
at such location without giving thirty (30) days ptior written notice to the Lender.
RTFC SECING
WY802-A-9001 (YERGtNJ)
80032.-1
.n r ,...... .. ,. "'J .L U . ;JIJ r!\.~ oj ~II 00;; ;::) ::i 1 L VER STAR COMM 141 018/022
09 Application of Proceeds. Except as otherwise herein expressly provided, theproceeds of any collection, sale or other realization of all or any part of the Collateral, and any othercash at the time held by the Lender under this Section 3, shall be applied by the Lender:
First, to the payment of the costs and expenses of such collection, sale or otherrealization, including reasonable compensation to the Lender ,and its agents and counsel,and all eXpenses, and advances made or incurred by the lender in connection therewith;
Second, to the payment in full of the Secured Obligations described in Section 1hereof; and
Finallv, to the payment to Pledgor, or its successors or assigns, or as a court ofcompetent jurisdiction may direct. of any surplus then remaining.
As used in this Section 3, proceeds" of Collateral shall mean cash, securities and other propertyrealized with respect to, and distributions in kind of, Collateral, including any thereof received underany reorganization , liquidation or adjustment of debt of Pledgor or any issuer of or obligor on any of
the Collateral.
10 Attorney"in-Fact. Subject to the Lender having first ob,tained any required approvalfrom regulatory agencies, without limiting any rights or powers granted by this Agreement to theLender, upon the occurrence and during the continuance of an Event of Default under the LoanAgreement, the Lender is hereby appointed the attorney-in-fact of Pledgor for the purpose ofcarrying out the provisions of this Section 3 and taking any action and executing any instrumentswhich the Lender may deem necessary or advisable to accomplish !the purposes hereof, whichappointment as attomey-in-faot is irrevocable and coupled with an interest, provided that the Lender
shall not take any action pursuant to the authority granted to it in this Section 3.10 without fjrstnotifying Pledgor in writing thereof. Without limiting the generality of the foregoing, so long as theLender shall be entitled under this Section 3 to make collections in respect of the Collateral, theLender shall have the right and power to receive, endorse and collect all checks made payable to the
order of Pledgor representing any dividend, payment or other distribution in respect of the Collateralor any part thereof and to give full discharge for the same.
SECTION 4. Miscellaneous.
01 Initial Financing Statements. Prior to or concurrently with the execution anddelivery of this Agreement, Pledgor shall file such financing statements and other documents in such
officet~ as the Lender may request to perfsct the pledge and security interest granted by thisAgreement.
02 Further Assuranaes. Pledgor agrees that, from time to time Llpon the writtenrequest of the Lender, Pledgor will execute and deliver such further dooLiments and do such otheracts and things as the Lender may reasotlably request in order fully to effect the purposes of this
Agreement.
03 No Waiver. No failure on trle part of the Lender or any of its agents to exercise, andne course of dealing with respect to, and no delay in exercising. any right, power or remedy
ATFO SECING
WY802-A-9001 (YERGINJ)
3009:2-
.. 1)1" ~IC' ..\'~J.) .LO;;;IO !"i\A ;JlU .'j.'j;j ;':::570 SILVER STAR cmm ~ 019/022
hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Lender
any of its agents of any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative
and are not exclusive of any remedies provided by law.
04 Expenses. Pledgor agrees to pay to the Lender all out-at-pocket expenses
(including reasonable expenses for legal services of every kind) of, or incident to, the enforcement of
any of the provisions of this Agreement, or performance by the Lender of any obligations of Pledgor
with respect to the Collateral which Pledgor has failed or refused to perform, or any actual or
attempted sale, or any exchange, enforcement, collection, compromise or settlement with respect to
any of the Collateral, and tor the care of the Collateral and defending or asserting rights and claims
of the Lender in . respect thereof, by litigation or otherwise and all such expenses shall be Secured
Obliaations to the Lender secured under Section 2 hereof.
....
05 Taxes.. Pledgor agrees to pay before delinquency any tax or other governmental
charge which is or can become 1hrcugh assessment, distraint or otherwise a lien on the Collateral
and to pay any tax or other governmental charge which may be levied on the transactions
hereunder, provided that nothing herein shall require Pledgor to pay any such tax or other
governmental charge with respect to which Pledgor is prosecuting in good faith or appeal or other
proceedings shall have been fully bonded or otherwise effectively stayed.
06 Termination. When all Secured Obligations have been paid in full and the Loan
Agreement shall have terminated, this Agreement shall terminate, and the Lender shall forthwith
cause to be assigned, transferred and delivered, against receipt but withoLit any recourse. warranty
or representation whatsoever, any remaining Collateral and money received in respect thereof, to or
on the order of Pledgor.
07 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA,
PROVIDED THAT AS TO COLLATERAL LOCATED IN ANY JURISDICTION OTHER THAN THE
COMMONWEALTH OF VIRGINIA, THE LENDER SHALL HAVE ALL THE RIGHTS TO WHICH A
SECURED PARTY UNDER THE LAWS OF SUCH JURISDICTION IS ENTITLED.
08 Notioes. All notices, requests and other communications provided for herein
including, without limitation, any modifications of, or waivers, requests or consents under, this
Agreement shall be given or made in writing (ir'~cluding, without lirnitation, by telecopy) and delivered
to the intended recipient at the "Address for Notices" specified below; or, as to any party, at such
other address as shall be designated by such party in a notice to each other party, Except as
otherwise provided in this Agreement, all such communications shall be deemed to have been duly
given when personally delivered or, in the case of a telecopied or mailed notice, upon receipt, in
each case given or addressed as provided tor herein. The Address for Notioes of the respecrtive
parties are on tht=! last page of this Agreement.
09 Waiver's, etc. The terms of this Agreement may be waived, altered or amended only
by an instrument in writing duly executed by Pladgor and the Lender.
ATFC SECING
WYSO2.p,-90(rl (YEAGINJ)
30082-
",-".""..,.".~ "'U.'JI r!1.. ,JI,II OOJ ;:;:)"11:1 ~ILVER STAR COMM 020/022
10 Headings. The headings and sub-headings contained in this Agreement are
intended to be used for convenience only and do not constitute part of this Agreement.
11 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of Pledgor, the Lender and each subsequent
holder of the Secured Obligations (provided, however, that Pledgor shall not assign or transfer its
rights hereunder without the prior written consent of the Lender).
12 Counterparts. This Agreement may be executed in one or more counterparts and
all of such counterparts taken together shall constitute one and the same Instrument.
Ana SECII\lS
WYBO2.9001 (YERGINJ)
30062.1
U I! VOl ~UU J ~O: 01 ~Al 3U7 ~~3 2575 SILVER STAR COMM I4J 021/022
SCHEDULE Ii. TO PLEDGE AND SECURITY AGREEMENT
ColiateraP , as defined and described in Section 2 of "the Pledge and Security
Agreement, shall be:
(a) 2,500 voting Shares of Common Stock of Columbine Telephone
Company, Inc., a Colorado corporation. As of the jdata hereof, Columbine
Telephone Company, Inc. has Issued and outstanding 11,483 Shares of Common
Stock and Zero Shares of Preferred Stock;
(b) 7,500 non-voting Shares of Common Stock lof Columbine Telephone
Company, Inc., a Colorado corporation. As of 1he ,date hereof, Columbine
Telephone Company, Inc. has issued and outstanding 11,483 Shares of Common
Stock and Zero Shares of Preferred Stock;
(0) without affecting any provision prohibiting such action hereunder or
under the Basic Doouments, in the event of any consolidation or merger in which
the pledged company identified in 1 (a) above IS not the surviving company, all
shares of each class of the capital stock of the successor corporation formed by or
resulting from such consolidation or merger distributed in respect of the pledged
stock described above;
(d) all proceeds of and to any of the propertY described in clauses (a),
(b) and (0) above and, to the s)..1;ent related to any property described in said
clauses or above in this clause (d). all books, correspondence. credit files, records,
invoices and other papers; and
(e) all dividends on the stock described in clauses (a), (b) and (0)
above, and any other distributions to their stocl(holders relating to said stock;
0 r,evided Ijowaver that prior to the occurrence of an Event of Default under the
Loan Agreement and so long as such Event of Default is not continuing, the
Pledgor shall be entitled to receive, spend and othelWise utilize free of the security
interest granted hereby any and all cash dividends and other distributions wIth
respect to the pledged stock to the extent permitted by the terms and conditions
set forth herein and in the Loan Agreement.
The Pledgor represents and warrants that the Collateral is owned by the Pledgor
frae and clear of any lien or encumbrance and that such Collateral is not subject
any restrictions as to traI1$fer, excl3pt those specifically disclosed in writing to
Lender or suc~ as may be imposed by applicable law affecting transfers generally,
Pledgor s office, as referred to in Section 3.08 of i the Pledge and Security
Agreement, is located at 104101 Highway B9/P.' Box 226, Freedom , WY
83120.
RTFC BEGINS
WY802-A-90di (VERGINJ)
30082-
_..~~_.I.I). ::10 rf\.~ ;JU'~1:S;j ':075 SILVER STAR emu!I4J 022/022
IN WITNESS WHEREOF, the parties hereto have caused this Pledge and Security
Agreement to be duly executed as of the day and year first above written,
Atte
~~
7:
Secretary
TETON COMMUNICATIONS, INC.
By.
Title: ~.J' fib
€.~
(SEAL)
Address:104101 Highway 89
O. Box 226
Freedom, WY 83120
Attention: General Manager
, .. '
Telecopy:307/883-2575
RURAL TELEPHONE
FINANCE COOPERATIVE
By:
"'.
(~EAL)
Tslecopy:
Woodland Park
2201 Cooperative Way
Herndon, VA 20171-3025
703-709-6776
Address:
RTr=C SECINS
802.A-9001 (YERGINJ)
300B2-
~/09/2003 10: 25 FAX [phone] SILVER STAR cmm ~OO7
PleDGE AND SECURITY AGREEMENi
PLEDGE AND SeCURI1Y AGREEMENT (thil! "Agreement") dated as of
2003, between THE HOOPES TELEPHONE MANAGEMENT LIMITED PART~
partnership duly organized and valJdly existing under the laws of the State of Idaho (the "Pledgor
and RURAL TELEPHONE FINANCE COOPERATIVE, a South Dakota cooperative association (the
Lender"
WHEREAS, Pledgor and the Lender are parties to a Loan Agreement dated as of even date
herewith (as modified and supplemented and in effect from time to time, the "Loan AgreementU
) ,
providingl subject to the terms and conditions thereof, for an extension of credit to be made by the
lender to Pledgor in the principal amount of up to $8,333 333.00;
. W~IEREAS, to induce Lender to enter into the Loan Agreement, Pledgor has agreed to
pledge and grant a security interest in the Qollateral (as hereinafter defined) to Lender to secure the
payment of the obligations of Pledgor Linder the Loan Agreement.
NOW, THEREFORE, in consideration of the premises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. Definitions. To the extent not inconsistent herewith, capitalized terms
defined in the Loan Agreement are used herein as defined therein. In addition, as used herein:
Basic Documents" shall mean the Loan Agreement and the promissory notes issued
thereunder.
Collateral" shall have the meaning ascribed thereto in Section 2 hereof.
.$ecured Obligations" shall mean, collectively, all obligations of Pledgor to the Lender
hereunder and under the Basic Documents.
Uniform Commercial Code" shall mean th$ Uniform Commarcial Cede as in effect from time
to time in the applicable jurisdiction,
seCTION 2.. ThE:!! Pledge and ~ecurity Interest. As collateral security for the prompt
payment in full when due (whether at stated maturity, by acceleration or otherwise) of the Secured
Obligations, Pledgor hereby pledges, grants, assigns, transfers, conveys and sets over to the
Lender a -security interest in all o.r Pledgors right, title and interest in the property described in
paragraph 1 of Schedule A hereto, whether now owned by Pledgor or hereafter acquired and
whether now existing or hereafter coming into existence (all being collectively referred to herein as
Coliateral ). Schedule A attached t'leretc;) is an integral part of thiB Agreement and contains both a
desol'lption of and certain representations regarding the Collateral. Pledgor covenants and agrees
with Lender that Pledgor will not, directly or indirectly, without prior written consent of the Lender,
RTFO SEeiNG
WY802wA.9OO1 (VERGINJ)
3DO6B-
Oi/09/2003 10: 26 FAX 30i 883 25i5-'-SILVER STAR COMM I4I 008
transfer, issue or sell any of the Collateral, or enter into any agreement which may result in the
transfer, issuance or sale of any of the Collateral.
SECTION 3. Further Assurances; Remedies. In furtherance of the grant of the pledge
and security interest pursuant to Section 2 hereof, Pledgor hereby agrees with the Lender as follows:
Delivery and Other Perfection. Pledgor shall:
(8) deliver to the Lender, endorsed in blank for transfer or accompanied by duly
executed stock powers or other instruments of assignment and transfers in such form and
substance as the Lender may request, and all stock certificates or other securities
representing any of the Collateral;
(b) give, execute, deliver, file and/or record any financing statement, notice,
instrument, document, agreement or other papers that may be necessary or desirable (in the
judgment of the Lender) to oreate, preserve, perfect or validate the security interest granted
pursuant hereto or to enable the Lender to exercise arid enforce its rights hereunder with
respect to such pledge and security interest; and
(0) permit representatives of the Lender, upon reasonable notice, at any time during
normal business hours to inspect and make abstracts from the books and records pertaining
to the Collateral, and permit representatives of the Lender to be present at Pledgor s place of
business to receive copies of all communications and remittances relating to the Collateral
all in such manner as the Lender may require.
02 Other Financjng Statements. Without the prior written consent of the Lender,
P1edgor shall not fila or suffer to be on fHe, or authorize or permit to be filed or to be on fils, in any
jurisdiction, any financing statement or like instrument with respect to the Collateral in which the
Lander is not named as the sola secured party for the benefit of the Lender.
03 Preservation of Rights. The Lender shall not be required to take steps necessary
to enforce or preserve any rights under any contract, instrument, or agreement included in the
Collateral.
04 Rights FlagardiTl9 Collateral. So long as no Event of Default under the Loan
Agreemeht shall have occurred and be continuing, Pledgor shall have the right to exercise all of its
votIng, consensual and otrler powers of ownership pertaining to the Collateral for all purposes not
inconsistent with the terms of this ,Ji.greement or any aT ihe Basic Documents, and shall be entitled to
receive, spend and otherwise utilize all divldehds and ether distributions with respect to the
Collateral; provided however, that Pledgor agrees that it will not vote the Collateral in any manner
that is inconsistent with the term:; of this Agreement or any cf the Basic Documents. Tt1e Lender
shall execute and deliver to Pledgor or calise to be executed and delivered to Pledgor all such
proyjes, powers of attorney, dividend checks (duly endorsed to Pled9ar), and other ordersv and all
such instruments, without recourse~ as Pledgor may reasonably request Jar the purpose of enabling
it to exercise its rights and powers which it is entitled to exerolss pursuant to this Section 3.04.
RTFC SEeiNg
wYaO~"A-9001 (VEFIGINJ)
SOQt;M
07/:09/2003 10: 26 FA.:\ 307 883 2575 S I L VER STAR COMM ~OO9
05 Events of Default, etc. Upon the occurrence of an Event of Default under the Loan
Agreement which has continued beyond any applicable grace period, then, subject to ,applicable law
and approvals, if necessary, of regulatory agencies:
(a) the Lender shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (and to the extent
permitted by applicable law, whether or not said Code is in sHeet in the jurisdiction where the
rights and remedies are asserted)j
(b) the Lender in its discretion may. in its name or in the name of Pledgor or
otherwise, demand, sue for, collect or receive any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral, but shall be under no
obligation to do 80; and
(0) the Lender may, upon fifteen (15) business days prior written notice to
Pledgor of the time and place, with respect to the Collateral or any part thereof which shall
then be or shaH thereafter come into the possession, custody or control of the lender or any
of its agents, sell or otherwise dispose of all or any part of such Collateral, at such place or
places as the Lender deems best, and for cash or on credit or for future delivery (without
thereby assuming any credit risk), at public or private sale, without demand of performance
or notice of intention to eHect any such dispOSition or of time or place of sale (except such
notice as is required above, or as is required by applicable statute and cannot be waived)
and the Lender or anyone else may be the purchaser or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the extent permITted by law, at any private
sale), and thereafter hold the same absolutelY, free from any claim or right of whatsoever
kind, including any right or equity of redemption (statutory or otherwise) of Pledgor any such
demand, notice or right or equity being hereby expressly waived and released, The
proceeds of each collection, sale or other disposition under this Section 3.05 shall be applied
in accordance with Section 3.09.
06 Deficiency- If the proceeds of sale, collection or other realization of or upon the
Collateral are insufficient tD cover the costs and expenses of such realization and the payment in full
of the Secured Obligations, Pledgor shall remain liable far any and all deficiency for which Pledgor is
obligated under this Agreement.
07 Privat~ Sale. In exercising its rights and remedies hereunder in the event of default
hereunder, the Lender shall incur no liability as a result of the sale of the Collateral. or any part
1hereofj at any private sale conducted in a commercially reasonable manner in accordance with
applicable law. Pledgor hereby waives any claims against the Lender arising by reason of the fact
that the price at which the Collateral may have been sold at such private sale was le$$ than the price-
which might have been obtained at a public sale or was less than the aggregate amount oi the
Secured Obligations, unless the related saie was not conducted in a commercially reasonable
manner in accordance with applicable law.
08 Rsmovals~ e=tc- Pledgor shall not rnaJntaln any of its bOOKS and records with respect
to the Collateral at any office other thal'\ its office as provided on the last page at this Agreement as
Fr1'FC SECINS
WYOO2-A-!;1O0" (YEHGINJ)
30068-
--- Oi/09/2003 10: 27 FAX 30i 88 3 25i1-.._-SILVER STAR COMM ~O10
of the date hereof or maintain its office or its principal place of business at any other place other than
at such location without giving thirty (30) days prior written notice to the Lender.
09 Application of Proceeds. Except as otherwise herein expressly provided, the
proceeds of any collection, sale or other realization of all or any part of the Collateral, and any other
cash at the time held by the Lender under this Section 3, shalt be applied by the Lender.
FIrst, to the payment of the costs and expenses of such collection, sale or other
realization, including reasonable compensation to the Lender and its agents and counsel,
and all expenses, and advances made or incurred by the Lender in connection therewith:
Second to the payment in full of the Secured Obligations described in Section
hereof; and
FinallV, to the payment to Pledgor, or its successors or assigns, or as a court of
competent jurisdiction may direct, of any surplus then remaining.
As used in this Section 3, "proceeds of Collateral shall mean cash, securities and other property
realized with respect to, and distributions in kind of. Collateral, including any thereof received under
any reorganization, liquidation or adjustment of debt of Pledgor or any issuer of or obligor on any of
the Collateral.
10 Attorney-iri.Fabt. Subject to the Lender having first obtained any required approval
from regulatory agencies, without limiting any rights or powers granted by this Agreement to the
Lender, upon the occurrence and during the continuance of an Event of Default under the Loan
Agreement~ the Lender is hereby appointed the attorneYMin-fact of Pledgor for the purpose
carrying out the provisions of this Section 3 and taking any action and e)(ecuting any instruments
which the Lender may deem necessary or advisable to accomplish the purposes hereof, which
appointment as attorney~in~fact is irrevocable and coupled with an interest, provided that the Lender
shall not take any action pursuant to the authority granted to it in this Section 3.10 without first
notifying Pledgor in writing thereot. Without limiting the generality of the foregoing, so long as the
Lender shall be al1titled under this Section 3 to make collectioM in respect of the Collateral, the
Lender shall have the right and power to receivet endorse and collect all checks made payable to the
order of Pledgor representing any' dividend, payment or ether distribution in respect of the Collateral
or any part thereof and to give full discharge for the same.
seCTION 4. Miscellaneous.
01 Initial Financir'lg Statements. Prior to or concurrently with the execution and
delivery of this Agreement. Pledgor shall tHe such financing statements and otrlsr documents in such
offices as the Lender may request to perfect the pledge and security interest granted by this
Agreement
4-,02 Further Assurances:. Pledgor agrees that, from time to time upon the written
fl'!quest of the Lender , Pled~ICJr will execute and deliver such further documents and do such other
act(;~ and things as the Lender may reasonably request in order fully to effect the purposes of this
Agreement.
RTFG SEon\JS
WV802..GOO1 (VeRGlNJ)
3(1068-
-- 07/09-.::200 27 FAX [phone] SILVER STAR C(l~!?rf I4J 011
03 No Waiver. No faIlure on the part of the Lender or any of its agents to exercise, and
no course of dealing with respect tol and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereaf; nor shall any single or partial exercise by the Lender or
any of its agents of any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative
and are not exclusive of any remedies provided by law,
04 Expenses. Pledgor agrees to pay to the Lender all out-of-pocket expenses
(including reasonable expenses for legal services of every kind) of, or incident to, the enforcement of
any of the provisions of this Agreement, or performarice by the Lender of any obligations of Pledgor
with respect to the Collateral which Pledgor has failed or refused to perform, or any actual or
attempted sale, or any exchange, enforcement, collec1ion, compromise or settlement with respect to
any of the Collateral, and for the care of the Collateral and defending or asserting rights and claims
of the Lender in respect thereof, by litigation or otherwise and allsuoh expenses shall be Secured
Obligations to the Lender secured under Section 2 hereof.
05 Taxes. Pledgor agrees to pay before delinquency any tax or other governmental
charge which is or can become through assessment, distraint or otherwise a lien on the Collateral
and to pay any tax or othergovemmental charge which may be levied on the transactions
hereunder, provided that nothing herein shall require Pledgor to pay any such tax or other
governmental charge with respect to which Pledgor is prosecuting in good faith or appeal or other
proceedings shall have been fully bonded or othsawise effectively stayed.
06 Termination. When all Secured Obligations have been paid in full and the Loan
Agreement shall have terminated, this Agreement shall terminate, and the Lender shall forthwITh
cause to be assigned, transferred and delivered, against receipt but without any recourse, warranty
or representatiol'\ whatsoever, any remaining Collateral and money received in respect thereof, to or
on the order of Pledgor.
07 GOVeRNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA,
PROVIDED THAT AS TO COLLATERAL LOCATED IN ANY JURISDICTION OTHER THAN THE
COMMONWEALTH OF VIRGINIA, THE LENDER SHALL HAVE ALL THE RIGHTS TO WHICH A
SECURED PART'r' UNDER THE LAWS OF SUCH ~IURISDICTION IS ENTITLED.
08 Notioes. All notices , requests and other communications provided for herein
including, without limitation, any modifications of, or waivers, requests or consents under, this
Agreement shall be given or made in writing (including, without limitation, by teleoopy) and delivered
to the intended recipient at the "Address far N()tiDes" specified below; or, as to any party~ at $uch
other address as shall be designated by such party in a notice to each other party. Exoept as
otherwise provided in thi$ Agreement, all stich communications shall be deemed to have been duly
giv€'.in when personally daliverecl or. in the case t1f a teleoopied or mailed notice, upon receipt, in
each caSE: given or addressed as provided for herelli. The Addrass for Notices of the respective
parties are on the last page of this Agreement.
RTFO seeiNG
WYBO2-SOO1 (YEAGII~J)
3006(\..1
Oi/09/2003 10: 27 FAX 30i :183 95i" 'ILVER
--
STAR COMM ~012
09 Waivers, etc. The terms of this Agreement may be waived, altered or amended only
by an instrument in writing duly executed by Pledgor and the Lender.
4:10 Headings. The headings and sub-headings contained in this Agreement are
intended to be used for convenience only and do not constitute part of this Agreement.
11 successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of Pledgor, the Lender and each subsequent
holder of the Secured Obligations (provided, however, that Pledgor shall not assign or transfer its
rights hereunder without the prior written consent of the Lender).
12 Counterparts. This Agreement may be executed in one or more counterparts and
aU of such counterparts taken together shall constitute one and the same instrument.
RiFe SECIN$
wYeO~.A.80tl'i. (YERGlbJJ)
30068-
07/(19/2003 10: 28 FAX [phone] SILVER STAR emU!I4J 013
IN WITNESS WHEREOF, the parties hereto have caused this Pledge and Security
Agreement to be duly executed as of the day and year first above written.
THE HOOPES TELEPHONE
LIMITED PARTNERSHIP
MANAGEMENT
(SEAL)
Operati ng Manager 0 A&M Management,
1(rt\i)x
\ .
r.. t G~nf'.ral Par.tner of he:iHoopes
Telephone M~nagement Limited Partnership
AIIeSt I /If Secretary
Address:104101 Highway 89
O. Box 226
Freedom, WY 83120
Attention: General Manager
" .. "
Telecopy:307/883~2575
RURAL TELEPHONE
FINANCE COOPERATIVE
fY~ Treasurer
rSEAL)
Address:Woodland Park
2201 Cooperative Way
Herndon, VA 2017H3025
T elecopy:703~709~6776
RIFe SEOINS
WY802-MJOO1 (YERGINJ)
30068"1
/09/2003 10:28 FAX '307 '3 2575 S I L VER STAR GOMM ~014
SCHEDULE A TO PLEDGE AND SECURITY AGREEMENT
Collateral , as defined and described in Section 2 of the Pledge and Security
Agreement, shall be:
(a.)
(i)500 voting Shares of Common Stock of Silver Star Telephone
Company, Inc., a Wyoming corporation. As of the date hereof,
Silver Star Telephone Company, Ino. has issued and outstanding
i 0,000 Shares of Common Stock and No Shares of Preferred
Stock;
(ii)500 non-voting Shares of Common Stock of Sliver Star
Telephone Company, Ino" a Wyoming corporation. As of the date
hereof, Silver Star Telephone Company, Inc. has issued and
outstanding -10,000 Shares of Common Stock and Zero Shares of
Preferred Stock;
(in)250 voting Shares of Common Stock of Teton Communications,
Inc., a Wyoming corporation. As of the date hereof, Teton
Communications, Inc. has issued and outstanding 1,000 Shares of
Common Stock and Zero Shares of Preferred Stock;
(iv)750 non-voting Shares at Common Stock of Teton
Communications, Inc., a Wyoming corporation. As of the date
hereof, Teton Communications. Ino, has issued and outstanding
000 Shares of Common Stock and Zero Shares of Preferred
Stock; and
(V)Land100% 01; the membership interests in Mountain
Communications, LLC, an Idaho limited liability company
(b) without affecting any provision prohibiting such action hereunder or
under the Basic Documents, in the event of any consolidation or merger in which
the pledged company identified in 1 (a)(i - v) above is not the surviving company.
all shares of each class of the capital stock of the successor corporation formecl by
or resulting from such consolidation or merger di$tribut~d in respect of the pledged
stock described above;
(0) aU proceeds ot and to any of the property described in clauses (a)
and (b) above and, tl'.) the extent related to any property described in said clauses
or above in this claU~ie (0), all bookG, corrsspolldenoe, credit files, records, invoices
and other papers; and
(d) all di'Jidends on 1"'6 stock and membersrlip interests described in
clauses (8.) and (b) above, and any other dlstributione;; to their stockholders or
members relating to said stock or tnsmbership interests; pr0vided however, that
prior' to the occurrent;e of an Event of Default under the Loan Agreement and so
RTFC I:'iECIN$
WV802-t;,90D1 (YERGINJ)
30068-
Oi /09/2003 10: 28 FAX 30i 883 ")-..--,...O i...2.-SILVER STAR COMM ~O15" .' .
long as such Event of Default Is not continuing, the Pledgor shall be en.titl~d to.,
receive, spend and othslWise utilize free of the security interest granted hereby any
and all cash dividends and other distrIbutIons with respect to the pledged stock and
membership interests to the extent permitted by the terms and conditions set forth
herein and in the Loan Agreement.
The Pledgor represents and warrants that the Collateral is owned by the Pledgor
free and clear of any lien or encumbrance and that such Collateral is not subject to
any 'restrictions as to transfer, except those specifically disclosed in writing to
Lender or such as may be imposed by applicable law affecting transfers generally.
Pledgor office. as referred to in Section 3.08 of the Pledge and Security
Agreement, is located at 104101 Highway B9/P.O. Box 226~ Freedom, WY
83120.
RTFC seCINS
VNBO?-.-A-(,10Q1 (VEFlGII'!J)
300EW-
07/08/2003 16: 34 FA..:1 307 883 2575 ~006
The undersigned, the Secretary of SILVER STAR TELEPHONE COMPANY, INC. (the
Company ), a Wyoming corporatIon, hereby certifies to RURAL TELEPHONE 1riNANCE
COOPEAATIVE, a South Dakota cooperative association, that I am authorized to execute
this Certificate on behalf of the Company and further certifies that:
The Company is duly organized, validly existing and in goad standihg under
the laws of the state of its organization and there is no per ding or
contemplated proceeding for the merger, consolidation, sale af as5ets or
business or dissolutIon of the Company;
Attached hereto as Attachment 1 is a true, complete and correct cdpy of the
resolutions of the Board of Directors of the Company adopted on IJune 30
~~
Such action for the Company W8S .puly, regularly and legally I taken
accordance with law and the by-laws of the Company; and said rJsolutlons
have not been modified, altered or rescinded and the same are ktill in fullfarce and effect;
! .
The fOIlQwin~' persons are duly qualified and acting officers or ~thorizad
representatives of the Company~ duly elected or appointed to the offices or
authorized to represent the Company in the capacities set forthi opposite
their respective names, and ."the signature appearing opposite the name of
each person is the genuIne signature:
(a)
Allen R.Hoopes
Ron B. McCue
Chad Turner
SILVER STAR COMM
Certificate as to Resolutions
Board of
Directors and Incumbency
(b)
(c)
(d)
Name Title ~Q~l.~r?i'~~
.#*
)uJ' !J~MLA
c0 CJ\~
~.
JJn
Certificate on behtf of the
President
Vice. President
Vice President
Bonnie E. Hoopes Secretary
IN WlTNESS WHEREOF, I have execut~d this
Company this 30th day of June, 2003.
03) ~
~,
1: - .Jtn7~
Name: Bonnie E. Hoopes Title: Secretary
SlIver"Star Certificate a5 to Resolutions :'1
S:\cIi~lltS\1534\42\SnV~r Star Certificate as to Resolutions GPO'DOC
U7/ U~/~UU3 16: 34 FAX [phone] SILVER STAR COMM ~OO7
Attacijment 1
RESOLUTIONS AUTHORIZiNG PLEDGE OF SILVER STAR TELEPHONe COM
SHARES
RESOLVED, that Silver Star Telephone Company, 'Ino: (the "Company") pledge aJd granta security interest in 1,483 shares of capita! stock of Columbine Telephone Company, Inc.
Columbine ) now owned by the Company to Rural Telephone Finance Coo~erativeRTFC") as collateral for a loan to Columbine and other Company
Affiliates (the "P~edgein amounts which shall not at anyone time exceed $8,333,333.00 in the aggregate; !
RESOLVED, that Allen R. Hoopes, the President, is hereby authorized on behal~ of theCompany to execute and deliver under its corporate seal , which the Secretary orAssistant Secretary is directed to affix and attest). as many counterparts as ~hall bedeemed advisable . of a Pledge and Security Agreement with RTFC as "pledgee" andrelated Stock Powers, in substantially the farms as presented to the Board of Directdrs; and
RESOLVED, that said officer be, and hereby is, authorized and directed to execlte anddeliver in the name of and on behatf of the Company such other documents and ~o takesuch other actions as such person, in his sole ' discretion, shall deem necessary oradvisable to carry out the intent and purpose of the foregoing resolutions lor thetransactions contemplated thereby.
. Silv~r Star Certificate as to Resolutions ~ 2
8:\clients\ "534\42\Silver Star Certificate as to Rescl)uiioTls GPOi.DOC
07/08/2003 16: 33 FAX [phone] SILVER STAR COM~l ~002
CONSENT RESOLUTION
OF THE BOARD OF DIRECTORS
SILVER STAR TELEPHONE COMPANY~ INC.
The undersigned being all of the directors of SILVER STAR TELEPHONE
COMPANY, INC., a Wyoming corporation (the "Company ) do hereby take tre following
corporate actions without a meeting in accordance with the general corporatiofllaws ofthe
State of Wyoming and the constituent documents of the Corporation:
WHEREAS, the Company has been asked by RTFC to pledge and grant a security
interest in 1,483 shares of cE!pital stock of Columbine Telephone Co!mpany, Inc.
Columbfne ) now owned by the Company to Rural Telephone Finance Cooperative
RTFCII) as collateral for a loan to Columbine and other Company Affiliates (the
Pledga in amounts which shan not at anyone time exceed $8j 333,33.00 in theaggregate;
WHEREAS, the directors believe such Pledge is in th~ best interest of theCompany.
NOW, THEREFORE BE IT RESOLVED, that the Company pledge :and grant a
security interest in 1,483 shares of capital stock of Columbine now owned bythelCompanyto
RTFC as collateral for a loan to Columbine and other Company Affiliates (the I Pledge ), in
. amounts which shall not at anyone time 'exceed $8,333,333.00 in the aggregate;
RESOLVED, that Allen R, I-Ioopes, the President. is hereby authorized I on behalf of
, the Company to execute and deliver under , its corporate seal, which the Secretary or
Assistant Secretary is directed to a'ffix and sttest, as many counterparts as shall be deemed
advisable of a Pledge and Security Agreement with RTFC as "pledgee" and r~!ated Stock
Powers, in substantially the forms as presented to the Board of Directors;
RESOLVED, that said officer be, and hereby is, authorized and direct~d to execute
and deliver in the name of and on behalf of the Company such other document~ and to take
SLIGh other actions as such persan~ in his sale discretion , shall deem nscessarYior advisable
to carry out the intent and purpose of the foregoing resolutions or the itransactionscorltemplated thereby; and
RESOLVED, that alf actions heretofore taken by the authorized agents of the
Company, in connection with and in furtheranC8of providing the Pledge are hrreby ratified
and confirmed in all respects as acts of the Company.
(end oftext)
CONSENi R~SOLUTION SilVER STAR TELSPHON!:: COMPANY INC, ~ '
S:\dlenia\H"34\42\8!1ver StEIl' CcnGent of Directors GPD1.tloc
07/08/2003 16: 33 FAX [phone] SILVER STAR COMM ~OO3
Dated effective the 30th day of June, 2003.
Melvin R. Hoopes. Director
Stephen R. Hoopes, Director
Bradford E. Hoopes, Director
Rod 8. Jensen, Director
Vince Zimmer, Director
Tam Davis, Director
Bonnie E. Hoopes. Director
Allen R. Hoopee , Director
COI\lS!:.NT RESOLUTION SILVER STAR rELEF'HONE COMPANl', II'~C. ~ 2
S;\diehts\1584\1!2\$lIvl'Jl' star Consent or Dlrm:;ttJfS GPO'doc
.. ,. ,,
Oi/08/2003 16:34 FAX 30i 883 25i5 S I L VER STAR COMM
Dated effective the 30 th day of June, 2003.
141004
Melvin R. Hoopes, Director
, Director
~mor
h~~
Allen R. Hoopes , Dlrecto
CONSENT RESOLUTION SILVER STAR TELEPHONE COMPANY, lNG, - ~
S~\clIent5\1534\42\8nver Star CcJnOlent of Dlrm:tOm GPO'doc
UI/UO/~UU~ ~D-~~ ~OJ :A..i ;5 1'( ~"'$ ;; ~:) 7 5 SILVER STAR COMM
Certificate as to Resolutions of
Board of
Directors and Incumbency
~ 006/022
The undersigned, the Secretary of TETON COMMUNICATIONS, INC. (the "Compa~Y'). a
Wyoming corporation, hereby certifies to RURAL TELEPHONE FIMANCE
CQOPERA TIVE, a South Dakota cooperative association, that I am authorized to execute
this Certificate on behalf of the Company and further certifies that
The Company is duly organized, valldly existing and in good standing under
the laws of the state of its organization and there is no penqing or
contemplated proceeding for the merger, consolidation, sale of assets or
business or dissolution of the Company;
Attached hereto as Attachment 1 is a true, complete and correct copw of the
resolutions of the Board of Directors of the Company adopted on June 302003;
Such action for the Company was duly, regularlY and legally bken
- accordance with law and the by-1aws of the Company; and said re~olutions
have not been modified, altered or rescinded and the same are still in
full
force and effect;
(a)
(b)
(0)
The fol\owir\~ persons are duly qualified and acting officers or authorized
representatives of the Company, duly elected or appointed to the
mffices or
authorized to represent the Company in the capacities sat forth Iopposite
their respective names, and the signature app8aring opposite ths
:name of
each person is, the genuine signature;
(d)
Nama
Allen R. Hoapes
Title
Pre~ident
Ron B. McCue Vice President
Bonnie E. Hoopes Secretary
Certificate as to Resolutions (Teton) -
S:\client$\'1534\42\T eton Certificate as to Resolutions GPO'I.DGe
lJ Ii l'" .: 1I U ;5 J.1j: t) z t'AA. ;5 II I) 13 ;j :: 575 SI~~R ~TAR COMM
IN WITNESS WHEREOF, I have executed this CerilflOBte on behalf Jf the
Company this 30th day of June, 2003.
~(I\~!_
Nc;lme: Bonnie H. Hoopes Title: Secretary
certificata as to Resolution$ (Teton) "
S:\cllt;':nts\ i 534-\42\Teton CertIficate as to RsGohJ\\OIlS GPO1.DOC
~ OOi /022
1,/ t.I~,/ .:;tHI.l.b:::' ~ r';H17 ~~;.I ~575 SILVER STAR COMM ~ (108/022
Attachment 1
RESOLUTIONS AUTHORiZING BORROWING
RESOLVED, that Teton Communications , Inc. (the "Company") borrow from i Rural
Telephone Finance Cooperative (IIRTFC") , and that"the Board of Directors hereby authorize
borrowings from RTFC, from "time to time in amounts which shall not at any on~ time
exceed $8,333,333.00 in the aggregatel ten percent (10%) of which amount shall be used
for the purchase of Subordinated Capital Certificates if the Company does not pay for such
purchase out of its general funds;
RESOLVED. that the proceeds of such borrowings shall be used bylhe Company s~le\y.s
specified in the Loan Agreement (as defined be1ow);
RESOLVED, that the Company pledge and grant 8 security iflterest to RTFC as cmllateral
for the Loan the Company's interest in and to 10 000 shares of capital stock of Columbine
Telephone Company, Inc. ("Columbine
);
, RESOLVED, that Allen R, Hoopes Is hereby authorized on behalf of the com~any to
execute and deliver under its corporate seal, which the Secretary or Assistant Secretary
Is directed to affix and attest:
(a) as many counierparts as shall b. deemed advisable of. Loan Agkament
with RTFC (the "Loan Agreement"
' '
suQstantia!ly in the form presented to
the Board of Directors;
a Secured Promissory NotEI payable to the order of RTFC in the e~gregate
principal amount of $8,333,333.00, bearing such interest as provided for
therein and providing for the payment of the indebtedness evidenced
thereby .with!n fifteen ('15) years after the dat~ thereof (the I "Note
) ,
substantially In the farm presented to the Board of Directors;
as many counterparts as shan be deemed advisable of a Pledge and
Security Agreement with RTFC as pledgee, and related stoc~ Powers,
substantially in the forms presented to the Board of Directors;
RESOLVED, that said officer be, and hereby is, authorized and directed to e)(~cute- and
dsliver in the name of and on behalf of the Company such other documents ElIi1d to take
such other actions as such person, in his/har 80le discretion, shaH deem necessary or
advisable to carry out the intent and purpose of ,the foregoing resolutiOlli5 or the
transactions contemplated thereby; and "
(b)
(c)
RESOLVED, that Allen R. Hoopes is authorized on behalf of the Company to
request and
receive funds on account of the l\Iote tram time to time, to repay sLich funds in accordance
with the Loan Agreement end the Note, and is directed to deposit suol1 funds if a special
bank account used to receive advances from the Lender.
Certificate 'as to Resolutions (Teton) ~ 3
S:\clisnts\ 1534\42\Teton Certificate as to Resolutions GPOi
.DOC
"'/"""""",; J.V;;JU t'n..-I. .)~I' 00;) ;:010 ::J1LVER STAR COMM---- _.~ 002/022
CONSENT ReSOLUT'ON
OF THE BOARD OF DiReCTORS
TETON COMMUNICATiONS, iNC.
The undersigned being all of the directors of the board of directors bf Taton
Communications, Inc., a Wyoming corporation (the ~Company ) po hereby ~ake the
following corporate actions without a meeting in accordance with the general co~poration
laws of the State of Wyoming and the constituent documents of the
Company:
W ~ EREAS, the directors, at a duly called meeting of the directors, have Jven their
approval to pursue a loan commitment to provide funding for the restructuring ofthe
ownership interests of the Company and its affiliates; and
WHEREAS. the directors of the Company have obtained a loan cornmit~ent from
Rural Telephone Finance Cooperative (lrRTFC") in the amount of Eight Million Three
Hundred Thirty Three Thousend Three Hundred Thirty Three
Dollar$ ahd no/100
($8,333,333.00) (the "Loan
);
WHEREAS, the Company has been asked to pledge and grants securi~interestto
RTFC (the "Pledge ) as collateral for the Loan the company's inter-est in and
10,000 shares of capital stock of Columbine Telephone Company. Inc. ("C(!)IUmbine
);
WHEREAS, the directors believe such Loan and the Pledge is in the bes~ interest of
the Company; and
WHEREAS, the directors now desires to a prove the Loan and the PIJdga.
NOWj THEREFORE BE IT RESOLVED, that the cOmpanYbOrrowfrom RTFCJ and
tlla~ the directors hereby a~thari2'.e borr?wings from R:TFC, from time to time in amounts
whIch shall not at anyone time exceed $8,333,333.00 In the aggregate, ten pe cent ('10%)
of which amoun1 shall be llsed,forthe purchase of Subordinated Capital Certificates if the.
Company does not pay for such purchase out of its general funds;
RESOLVED, that the proceeds of such borrowings shaH be used by ttie Company
solely as specified in the Loan Agreement (as defined below);
RESOLVED, that the Company pledge and grant a security interest in 1 ,000 shares
of capital stock of Columbine) all currently owned by the Company to RTFC as collateral for
the Loan;
RESOLVED, that Allen R. Hoopes, the President of the compady Ie hereby
authorized on behalf of the Company to execute and deliver the following:
(a)as many countl3rparts as shall be deemed advisable of a Loan
AQweementwith
GONSEll.JT REsOLurION TEiON COMMUI~IC;A110N$ ~ '
S:\clisnts\'1534\42\1"etcn Consent of Directors GPOi.doc.
.. ' .... - ,..." ,'
"'f"",..,.,..) ~V.;)J. rl1.A .'Ut ()OJ ;':011:1......---SILVI?R STAR COMM I4J 003/022
RTFC (the "Loan Agreamentll), substantially in the form presente9 to thedirectors;
(b) a Secured Promissory Note payable to the order of ~TFC in the
a~gregate
principal amount of $8,333,333,00, bearing such interest as proVided for
therein and providing for the payment of the indebtedness evidenced thereby
within fifteen (15) years after the date thereof (the .'
Note ), substanti~\lY in the
.form presented to the directors;
as many counterparts as shall be deemed advisable pf a Pledge anq Security
Agreement with RTFC as pledgee and related Stock Powers,
subs$ntially in
the forms presented to the directors;
REBa L VED, that Allen R. Hoopes. the President of the Company ba. and ~erebY
Is,
authorized and dir.ected to execute and deliver in the name of and an behalf of thelCompany
such other documents ami to take such other actions as such person,
In his sole 9iscretion,
shall deem necessary or advisable to carry out the intent and
purpose of the lforegoing
resolutions or the transactions contemplated thereby; and
RESOLVED, that al1 actions heretofore taken by the authorized agerts of the
Company. in connaction with and in furtherance of the Loan and the Pledge $re hereby
ratified and confirmed in all respects as acts of the Company.
(c)
(end of text)
CON9~NT ~ESOLUTIDlo,J TETDI~ COMMUI~lGAiION$ .
s:\clle1'lts\'1534\42.\Tatan Caf\ssnt of Directors GPO'
! .
coC
' '
UI/UO/~uua lb:51 tAX 307 88 :.I 2575 SILVER STAR COM~!
Dated effective the 30
th day of June; 2003.
Allen R. Hoopes, Director
~ 004/022
Stephen Hoopes. Director
Bradford E. Hoopes, Director
Bonnie E. Hoopes, Director
CDNSENT R~SOLUr\ON rETOH COMMUI,JICArIOI\!:;; ~ 3
$~\Gliants\'\ 534\42\TatDn Conroent of Dlreolors GPO1.doc
- I
1)(/U~/;:lIU;j 115:51 FAX [phone] .SILVER STAR COM?r!I4J 005/022
Dated effective the 30th day qf June , 2003.
Melvin R. Hoopes, Director~K~
Allen R. Hoopes, Director
~~A
0 nie E. Hoopes, Director
CONSENT RE:SOLUTI0N TETChl COMMLINIGArIDIIIS - 3
S:\clienh:\'1534-\42\ieton Consent of DlreotrJrs GPO1.tloc
Oi /09/ 2003 10: 30 FAX 30i 883 25i5 ~020S I L VER STAR COMM
Certificate as to Resolutions of
General Partner and Incumbency
The undersigned, the Operating Manager of A&M Management LC., the sale General
Partner of THE HOOPES TELE?HONE MANAGEMENT LIMITED PARTNERSHIP. an
Idaho limited partnership, (the "Partnership ), hereby certifies to RURAL TELEP\10NE
FINANCE COOPERATIVE, a South Dakota cooperative association, that I am authorized
to execute this Certificate on behalf of the Partnership and further certifies that:
(8)
(b)
The Partnership is duly organized, validly existing and in good standing
under the laws of the s-tate of its organization and there is no pending or
contemplated proceeding for the merger; consolidation, sale of assets or
business or dissolution of the Partnership;
ttached hereto 136 Attachment 1 is a true , complete and correct copy of the
resolutions of the General Partner of the Partnership adopted on June 3D,
2003;
(c)Such action for the Partnership was duly, regularly .and legally taken in
accordance with law and the Amended Certificate of Limited Partnership of
the Partnership dated January 1. '1998; and said resolutions have not been
modified, altered or rescinded and the same are stili in full farce and effect;
(d)The following persons are duly qualified and acting officers or authorized
representatives of the Partne~ship, duly elected or appointed to the offices
or authorized to re:present the Partnership in- the capacities set forth
opposite their respective name~, and the signature appearing opposite the
name of each person is the ~I~nuin~ ,~ig!)ature:
b!ame title ~ignature
Melvin R. Hoopes C)perating Manager, A&M-j
Management L,C" General CJ)~
~, ,...;.
Partner
IN WITNESS WHEREOF, I have executed this Certifu:;ate on behalf of the
Partnership this 30th clay of June, 2003.
A&M MANAGEMENT LC.. a Wyoming limited
liability company, General Partner of The Hoopes
Telephone Management Limited' Partnsr:ship, an
Idaho limited partnership
~tt
Name: lelvin..R, Hoopes
Title: Jperatilig Manager
Certificate a~ to Resolutlor\E:~ (Hoopes) - '
S:\G\ients\'153'n42\Hoop~S Certificate El$ to Resolutions GPD1.DOC
Oi /09,'2003 10: 31 FA..'f 30i 883 25i5 S I L VER STAR COMM I4J 021
, , . '
Attachment 1
RESOLUTIONS AUTHORIZING BORROWING
R!;:SOL VED, that The Hoopes Telephone Management Limited Partnership, an Idaho
limited partnership (tile "Partnernhip ) borrow from Rural Telephone Finance Cooperative
RTFC") , from time to time in amounts which shall not at any one time exceed
$8,333,333.00 in the aggregate (the "Loan ), ten percent (10%) of which amount shall be
used for the purchase of Subordinated Capita! Certificates if the Partnership does not pay
for such purchase out of its general funds;
RESOLVED, that the proceeds of such borrowings shall be used by the' Partnership solely
as specified in the Loan Agreement (as defined below);
RESOLVED, that the Partnersl,ip pledge and grant a securtty ini:erest to RTFC as collateral
for the Loan the Partnership s interest in and to (i) 10 000 shares of capital stock of Silver
Star Telephone Company, Inc. ("Silver Star"); (ii)' 1 ,a" shares of capital stocK of Teton
Communications, Inc. ("Teton ); and (in) 100% of the membership interests in and
Mountain Land Communications, LLC ("MLC~
RESOLVED, that the Operating Manager OT A&M Management, LC., being the General
Partner of the Pa'rtrier$hip is hereby authorized on behalf of the Partnership to execute and.
deliver:
(a)as many counterparts as shall be deemed advisable of a Loan Agreement
with RTFC (the "Loan Agreement"), 5L1bstant1ally irl the form presented tothe partners;
(b)a Secured Promissory Nate payable to the order of RTFC in the aggregate
prIncipal amount of $8,333,333.00, ~earing such interest as provided for
therein and providing for the payment of the indebtedness evidenced
thereby within fifteen (15) years after the date thereof (the "Note
substantially in thE:: fc:mTt presented to ~he partners;
(c)
' '
as many caunterparts as shall be.. ge~i-ned advisable of a Pledge and
Security Agreement wrth RTFC 'as pledgee and related Stock and
Membership Interest Powers, substantially in t11e forms presented to the
partners;
RESOLVEDv that Melvin Hoope.s, op~rating manager of the general partner be, and
h(3reb~1 IS, authorized and directed to execute and deliver in the name of and on behalf of
t~\e Partnership such ot!l~r documents and to take such other actions as such parson, in his
sale di$cretiar1, shall deem necessary or advisable to carry out the intent and purpose af
the foreg(jing resolutions elf' the transactions contemplated thereby; and
RESOLVED, that Melvin R. Hoopes or Allen R. Hoape.s. jointly and/or severally, are
authorized an bshelf of thE\ Partnership to request and receive funds on account of the !\Jete
fran') time to time, to repay such funds in accord~n,?~ with th~ Loan Agreement and th~
NDte, and is directed to deposit such funds in 8 speda\ bank account used to receive
advances from the L~ndel-
- -
Certificate as to F~e(;)olutidnt, '(Hoopes) - 2.
' ,
S:\dierrts\1534\42\Hoapes Certffici:.1te as to Re.sollltions'GPO'J..DOC
...."
07/09/2003 10:31 FAX [phone] SILVER STAR COMM ~022
CONSENT RESOLUTION
OF THE GENERAL PARTNER
THE HOOPES TELEPHONE MANAGEMENT LIMITED PARTNERSHIP,
AN IDAHO LIMITED PARTNERSHIP
The undersigned being the operating manager of the sole general partner of THE
HOOPES TELEPHONE MANAGEMENT LIMITED PARTNERSHIP, an Idaho limited
partnership (the "Partnership ) do hereby take the following actions without a meeting in
accordance with the gen eral partnership laws; of the State of Idaho and the constituent
documents of the Partnership:
WHEREAS, the general partner has given its approval forthe Partnership to pursue
a loan commitment to provide funding far the restructuring of the ownership
interests of the Partnership and its affiliates; and
WHEREAS, the Partnership 1186 obtained a loan commitmentfrom Rural Telephone
Finanoe Cooperative ("RTFC") in the amount of Eight Million Three Hundred Thirty
Three Thousand Three Hundred Thirty Three Dollars and no/100 (-$8,333,333.00)
(the "Loan ); and
WHEREAS, the general partner believes the Loan to be in the best interests ofthePartnership;
WHEREAS, the general partner now desires'to,approve the Loan;
, ,
WHEREAS, the Parthership has,been asked to pledge and grant a security interest
to RTFC (the "Pledge ) as coHatera! forthe Loan the Partnership s interest in and to (i)
10jOOO sl1ares of capital stacl~ of Silver SterTelaphone Company, Inc. ('I Silver Star");
(ii) 1,000 shares of capita~ stock of Teton Communications. Inc. (IfTeton )~ and (iii)
100% O"r the membership interests irr and to Mountain Land Communications I LLC
MLC"
VVHEREAS, the general partner believes such Pledge is in the best interest
of the
Partnership; and
WHEREAS. the general partner now de$ires t(\ approva the Pledge.
NOW, THEREFORE BE IT RESOLVED. thatthe Partnership borrow from RTFC,
and that the general partner hereby authorize borrowings from RTFC, from time to time
amounts which shall not 8t anyone time exceed $8.333,333,00 in the aggregate I ten
percent ('10%) of which amount shaH be used for the purchase of Subordinated Capital
Certificates if the Partnership does not pay for Bueh pure:hase out of it$ general funds:
RESOLVED, that the proceeds of such borrowings shall be used by the Partnership
CONSE!\lT REGOLU"nOI\l HoOI"ES TtlEPHOh!c !\iJANAGEM"I'~i - i
:;-;:\t:llents\1534\t1,2\HotJpea Conset'1t of (J;t\nEm'.iI ~'C1rtner GPO"! .DOC
07/09/200~i 10: 31 FAX 30i 883 2575 SILVER STAR COMM ~023
solely as specified in the Loan Agreement (as defined below);
RESOLVED, that the PartnershIp pledge 'and gh;mt EI security interest In 10,000
shares of capital stock of Silver Star; (ii) 1,000 shares of capital stock of Teton; and (Hi) 100%
of the membership interests in and to MLC, all currently owned by the Partnership to RTFC
as collateral for the Loan;
RESOLVED, that the Operating Manager of A&M Management, LC., being the
general partner of the Partnership is hereby authorized on behalf of the Partnership to
execute and deliver the following:
(a)85 many counterparts as shall be deemed advisable of a Loan Agreement with
RTFC (the IILoan Agreementt'), substantially in the form presented to the
partners;
(b)a Secured Promissory Note payable to the order of RTFC in the aggregate
principal amount of $8,333,333.0G~;"baaring such interest as provided for
therein and providing far the payment bfth6 indebtedness evidenced thereby
within fifteen (15) years after the date thereof (the "Note ), substantially in the
form presented to the partners;
(c)as many counterparts as shall be deemed advisable of a Pledge and Security
Agreementwith RTFC as pledgee and related Stack and Membership Interest
Powers, substantially in the forms presented to the partners;
. RESOLVED. that Melvill R. Hoopes, operating manager of the general partner be,
and hereby is. authorized and directed to execute and deliver in the name of and on behalf of
the Partnership such other documents and to take such other actions 8S such person. in his
sole discretion, shall deem necessary or advisable to carry out the intent am.I purpose ofthe
foregoing resolutIons or the transactions contemplated thereby; and
RESOLVED, that all actions heretofore taken' by the authorized agents of the
Partnership, in connection with and in furtherancE;J Eifthe Loan and the Pledge are hereby
ratified and confirmed in all respects as acts of the, Partnership.
(Elnd of text)
COI\!SENT RESOLUTION HOOPES IELEPHONEMAI"/l.Gi::\,'\EI'IT- 2.
S:\cliMI:s\'1534\42\Hoopat ConEiant 01 GE;neral PartI'1~r GPOi .DOC
': ". '
Ci/09/2003 10: 32 FAX 30i 883 25i SILVER STAR COMM I4J 024
Dated effective the 30th day of june, 2003.
A & M Management, L.C., General Partner
elvin R. Hoopes, Opera ing Manager
CONSENT RESOLUTION HoopE;:() TEU::~HDNt: !"Jll1.NA(::E.MEi'Ii ~ ::\
S:\r.lients\ 1534\42\Hoopas con~ent of General Palinol" GPO'DOC