20020503RUS Loan Documents.pdf

GIVENS PURSLEY LLP
LAW OFFICES Gary G.Allen Franidin G.Lee Patrick PMiller
277 North 6th Street,Suite 200 ChristopherJ.Beeson David R.Lombardi Judson B.Montgomery
PO Box 2720,Boise,Idaho83701 Michael C.Creamer D.Dávid.Lorello,Jr Ängela K.Nelson
TELEPHONE:[phone] Jeffrey A.DeVoe deviä T.iMalo e Ñ HugggRiordan
FACSIMILE:208 388-1300 EmilyMacMaster Durkee KimberlyD.Malone ÈÑnme Pursley
WEBSITE:www.givenspursley.com Thomas E.Dvorak John M.Marshall Brad V.Sneed
Roy Lewis Eiguren KennethR.McClure Conley E.Ward
Timothy P.Fearnside Kelly GreeneMcConnell Robert B.White
Jeffrey C.Fereday Cynthia A.Melillo
Karl T.Klein Christopher H.Meyer Raymond D.Givens
Debora K.Kristensen Kendall L.Miller James A.McClure
Anne C.Kunkel L.Edward Miller StephanieC.Westermeier
OF COUNSELCynthiaA.Melillo
Direct Dial:[phone]E-Mail:[e-mail]
May 2,2002
Terri Carlock
Idaho Public Utilities Commission
472 W.Washington
P.O.Box 83720
Boise,ID 83720-0074
Re:Midvale TelephoneExchange,lncorporated,Rural Utilities Service "G"Loan and Lien Accommodation
Our File:1614-62
Dear Terri:
Pursuant to Idaho Public Utilities Commission ("lPUC")Order No.28887,asamended,which authorized Midvale Telephone Exchange,Incorporated ("Midvale")toborrowfromtheRuralUtilitiesService("RUS"),Midvale was required to file with the IPUCcopiesofallfinalRUSloandocumentsandrequiredfilings.Enclosed herewith are copies ofthefollowingfinalRUSloandocumentsandrequiredfilings:
1.Amending Telephone Loan Contract,dated as of February 1,2002;
2.Modgage Note;
3.Restated Modgage,Security Agreementand Financing Statements;and
4.Copy of UCC 1 financing statement filed with the Idaho Secretary of State.
If you have any questions or comments regarding the enclosed,or if you need anyadditionalinformation,please do not hesitate to contact me.
S
Cynthia A.Melillo
CAMlnff
Enclosures
S:\Clients\1614\62\Corr\2002-04-15 CAM Ltr to IPUC.doc
RUS Project Designation:
IDAHO 514-GII LA-1 MIDVALE
AMENDING TELEPHONE LOAN CONTRACT
Dated as of February 1,2002
among
MIDVALE TELEPHONE EXCHANGE,INC,
and
UNITED STATES OF AMERICA
UNITED STATES DEPARTMENTOF AGRICULTURERURALUTILITIESSERVICE
NO .Generated:January 23,2002 5.89
AGREEMENT,made as of February 1,2002,pursuant to the RuralElectrificationActof1936,as amended (7 U.S.C.901 _et seg.,hereinafter called the
"Act"),among MIDVALE TELEPHONEEXCHANGE,INC.(hereinafter called the
"Borrower"),a corporation existing under the laws of the State of Idaho,and UNITED
STATES OF AMERICA (hereinafter called the "Government"),acting through theAdministratoroftheRuralUtilitiesService(hereinafter called the "Administrator").
WHEREAS,pursuant to Public Law No.103-354,the Rural Utilities Service (hereinafter
sometimes called "RUS")is the successor to the Rural ElectrificationAdministration (hereinafter sometimes called
"REA")and the Administrator of the Rural Utilities Service is the successor to the Administrator of the Rural
Electrification Administration and,for the purposes of the Prior Loan Contract (hereinafter defined),as amended,the
terms "REA"and "Administrator"shall be deemed to mean respectively "RUS"and "Administrator of the RUS";
and
WHEREAS,the Borrowerand the Government have heretofore entered into a certain telephone
loan contract,amending telephone loan contract,consolidating telephone loan contract,or consolidating and
amending telephone loan contract,dated as of April 22,1980 (such agreement,as it may have been amended,being
hereinafter called the "Prior Loan Contract");and
WHEREAS,pursuant to the Prior Loan Contract the Borrowerand/or its predecessor(s)in interest
have heretofore borrowed funds from the Government in the aggregate principal amount of $6,409,000.00
(hereinafter called "Prior RUS Loan"),from the Bank in the aggregate principal amount of $0 (hereinafter called the"Prior Bank Loan"),except such portion of the Prior Bank Loan used for the purchase of Class B stock of the Bank,
and from the Federal Financing Bank (hereinafter called "FFB"),a body corporate and instrumentality of the
Government,in the aggregate principal amount of $0 (hereinafter called the "Prior FFB Loan",and together with the
Prior RUS Loan being hereinafter collectively called the "Prior Loans"),the Prior FFB Loan being guaranteed by theGovernmentpursuanttotheAct,to finance pursuant to the provisions of the Act,the improvements and operation of
the initial telephone facilities owned and operated by the Borrower and/or its predecessor(s)in interest (hereinafter
called the "Existing Facilities");and
WHEREAS,the Borrowerand the Government desire to amend the Prior Loan Contract in certain
respects,and it is intended that the entire agreement between the Borrower and the Government,containing such
amendments and covering the terms upon which the "Loan"(hereinafter defined)shall be made and expanded,shall
be expressed in this agreement,except to the extent the Borrower and the Government have heretofore performed
obligations under the Prior Loan Contract in accordance with the terms thereof and except as may hereinafter
otherwise be provided;and
WHEREAS,it is intended that the Borrowershall use the proceeds of the loan(s)as provided for
in section 1.1 of this agreement to finance partially the improvement and operation of the Existing Facilities,as
previously expanded and added to by facilities financed with the proceeds of the Prior Loans,and the construction
and operation of additional telephone facilities to serve approximately nine hundred thirty-five subscribers in
addition to those now being served (the improvements and additional telephone facilities so financed being
hereinafter collectively called the "Project",and the Existing Facilities,as the same has previously been expanded
and added to,and as improvedand added to by the Project or otherwise,being hereinafter called the "System");and
WHEREAS,it is contemplated that the amounts of such loan(s)may be increased from time to
time for purposes permitted by the provisions of the Act,as from time to time amended,and upon the terms and
conditions contained in this agreement,as from time to time amended (the RUS Hardship Loan and the Guaranteed
Loan (to be made to the Borrower by FFB),all as provided for in section Ll of this agreement and any such
increases in the amounts thereof,and together with the Prior Loans being hereinafter collectively called the "Loan");
and
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WHEREAS.the Administrator,in determining to enter into this agreement,has relied upon therepresentationoftheBorrowertohimthatitiswillingtofurnishadequatetelephoneservicetothewidestpracticablenumberofpersonsinruralareaswhomitispossibletoserve,and the Borrowerhas agreed to do so as hereinafterprovided;
NOW,THEREFORE,for and in consideration of the mutual agreements herein contained,theBorrowerandtheGovernmentagreeasfollows:
ARTICLE I
LOAN,NOTES AND SECURITY
SECTION1.1.RUS Hardship Loan:Pursuant to section 305(d)(1)of the Act (7 U.S.C.§935(d)(l)),the Government shall lend and the Borrowershall borrow not in excess of $5,695,000.00 to partiallyfinancetheProject.RUS Hardship Loan funds shall be used for the purposes providedin section 20]of the Act (7U.S.C.§922).
Guaranteed Loan -FFB shall lend and the Borrowershall borrow not in excess of $0,therepaymentofwhichshallbeguaranteedbytheGovernmentpursuanttosection306oftheAct(7 U.S.C.§936),topartiallyfinancetheProject.
SEC.1.2.Notes.The debt created by the Loan shall be evidenced by notes (such notes and anynotesexecutedanddeliveredtorefund,or in substitution for,such notes being hereinafter collectivelycalled the
"Notes")previouslyexecuted by the Borrowerand/or its predecessor(s)in interest to evidence the Prior Loans and to
be executed by the Borrower,payable to the order of the Government or payable to FFB,as the case may be.TheNotesshallbeinformandsubstancesatisfactorytotheAdministrator.Interest shall accrue on the principal of eachNoteonlyinrespectofamountswhichshallhavebeenadvancedtotheBorrowerfromtimetotimeonaccountoftheLoanandchargedagainstsuchNote.
The Loans providedfor in section 1.1 of this agreement shall bear interest as follows:
RUS Hardship Loan -Each advance of funds included in the RUS Hardship Loan shall bearinterestattherateoffivepercentperyear.
Guaranteed Loan -Each advance (a "Guaranteed Loan Advance")of funds included in theGuaranteedLoanshallbearinterestattherateestablishedbyFFBatthetimesuchGuaranteedLoanAdvanceismadeonthebasisofthedeterminationmadebytheSecretaryoftheTreasurypursuanttosection6(b)(12 U.S.C.§2285(b))of the Federal Financing Bank Act of 1973,as amended (12 U.S.C.§2281 e.l seg.).
SEC.1.3.Loan Closine.The Administrator and the Borrowermay from time to time determine
by agreement the amount required to enable the Borrowerto perform its obligations hereunder.If any reduction inthemaximumamountoftheloanhereinprovidedforisthusagreedupon,the Administrator shall cause such one ormoreoftheNotesasmaybeagreedupon,to be appropriately credited with an amount equal to such reduction,andtheprincipalamountofsuchNoteorNotesshall,for the purposes of this agreement,be deemed to becorrespondinglyreduced.When the Administrator and the Borrower shall agree that no furtherfunds are required tobeadvancedbytheGovernmenthereunderinordertoenabletheBorrowertoperformitsobligationshereunder,theAdministratorshallexecuteanddelivertotheBorroweraloanclosingcertificate(hereinafter called the "loan closing
certificate")which shall,among other things,specify the date of the closing of the Loan and the amount of theunpaidprincipalofandanyaccruedinterestoneachoftheNotes.
SEC.1.4.Securitv.The Notes shall be secured by a security instrument (hereinafter called the"Mortgage"),in form and substance satisfactory to the Administrator,coveringall the property of the Borrowernow
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owned or hereafter acquired.as supplemented by such supplemental mortgages.deeds of trust,supplemental deedsoftrust,chattel mortgages or additional chattel mortgages and by such other action on the part of the Borrower as
may be required to confirm,fully convey,preserve or renew the lien of the Mortgage as security for the Notes and to
effectuate the intention to these presents that the Mortgage shall cover all property of the Borrower,whether now
owned or hereafter acquired (any such supplemental mortgage,supplemental deed of trust,supplemental or
additional chattel mortgage,and any such other action,as the case may be.being hereinafter called a "supplemental
mortgage").
ARTICLE II
ADVANCESAND DISPOSITIONOF FUNDS
.SECTION2.1.Prerequisites to Advances.(A)The Government shall be under no obligation toadvanceorcausetobeadvancedfundsonaccountoftheLoanfromtimetotimeunlessanduntiltheBorrowershall
have delivered to the Administrator,in form and substance satisfactory to him,the following:
(a)one or more of the Notes,the Mortgage,and such supplemental mortgages as may be required
pursuant to section 1.4 bereof,all duly executed and accompanied by proof of the due recordation and filingoftheMortgageandanysupplementalmortgageinsuchplacesasmayberequiredbylawinorderfullytoperfectandmaintainthelienoftheMortgageandanysupplementalmortgage;
(b)evidence of appropriate corporate action authorizing the execution and deliveryof the Notes,
the Mortgage,and any supplemental mortgage and amendment to this agreement;
(c)evidence that the Borrower has duly registered when and where required by law with all state,
Federal and other public authorities and regulatory bodies and obtained therefrom all authorizations,
certificates,permits,and approvals to the extent required by law in order to enable the Borrower to enter
into this agreement,to execute and deliver the Notes,the Mortgage,and any supplemental mortgage and
amendment to this agreement;to construct and operate the System,and to performall other acts to be
performed by it hereunder;
(d)evidence that the Borrowerhas duly adopted a tariff which (1)will providefor such grades of
service as the Administrator may approve,(2)does not include mileage or zone charges for any telephone
service provided by the Pro.ject and (3)is designed to produce net income or margins before interest butaftertaxesinanamountatleastgreatenough,when divided by the amount of the interest requirements onalloftheBorrower's outstanding and proposed loans,to produce the ratio required by section 2.8 hereof;
(e)evidence that there has been no substantial adverse change in the Borrower's financial
condition or plant since the date of the last financial statement submitted by the Borrower to the
Administrator;
(f)evidence that the Borroweris not involvedin or threatened with any litigation which may
substantially and adversely affect the Borrower's financial condition and that there are no liens or clouds ontitleexcepttheliensoftheMortgageandanyunderlyingsecurityinstrumentsreferredtointheMortgage
and any supplemental mortgage on any of its property;
(g)evidence that the Borrowerhas duly adopted articles of incorporation and bylaws in form and
substance adequate to enable the Borrowerto perform all acts to be performed by it hereunder;
(h)such opinions as the Administratormay require,by counsel (who may be a member of the
Borrower's legal staff,if any,or an attorney regularly employed by the Borrower)selected by the Borrower
and approved by the Administrator;
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(i)evidence that the Borrower has good and marketable title to the Existing Facilities.subject only
to the lien of the Mortgage and any underlying security instruments referred to in the Mortgage,and holds
such franchises,permits,leases,easements,rights,privileges,licenses or right-of-wayinstruments,
reasonably adequate in form and substance,as may be required by law for the continued maintenance and
operation of the Existing Facilities,and every part thereof,in their present location.
(B)Notwithstanding the provisionsset forth in (A)above of this section 2.1 the Government shallnotcausetobeadvancedanyfundsonaccountofanyGuaranteedLoanunlessanduntilthefollowingspecial
conditions applicable to the Guaranteed Loan have been satisfied:
(a)the Government,acting through the Administrator,has entered into a contract with FFB andFFBhasagreedtomaketheBorrowertheGuaranteedLoan;
(b)the Borrowerhas submitted evidence to the Administrator,in form and substance satisfactorytohim,that conditions in the contract of guarantee referred to in subsection (a)above have been satisfied to
the extent and in the manner prescribed by the Administrator;and
(c)the Borrower has duly authorized,executed and has delivered to the Administrator a
promissory note payable to FFB in the amount of the Guaranteed Loan and a reimbursement note payable to
the order of the Government in the manner prescribed by the Administrator.
(C)Notwithstanding the provisions set forth in (A)and (B)above of this section 2.1,no advancesoffundsonaccountofanyRUSHardshipLoanand/or any Guaranteed Loan provided for in section 1.1 of this
agreement will be made unless and until those additional prerequisites to advances of funds have been met as setforthinScheduleAattachedtoandmadeapartofthisagreement.
(D)The first advance of funds on account of the RUS Hardship Loan and/or any Guaranteed Loanprovidedforinsection1.1 of this agreement shall include,but shall not be limited to:
(a)an amount to be determined by the Administrator for costs of construction which were incurred
subsequent to May 14,2001,and which have been approved by the Government;
Thereafterno furtheradvances of funds shall be made unless and until the Borrower has furnished evidence to theAdministrator,in form and substance satisfactory to him,that al indebtedness incurred for any interim constructionreferredtoinsubsection(b)above has been paid in full and any associated liens have been duly discharged of
record.
SEC.2.2.Requisitions.The Borrowershall from time to time submit to the Administrator
requisitions,on forms furnished by the Administrator,requesting the Government to make advances on account of
the Loan.Each requisition shall be accompanied by the following:
(a)evidence that the construction of the Project effected to the date of the requisition complies
with the provisions hereof;
(b)a certificate signed by a duly authorized officer or employee of the Borrower,which shallspecifyallpaymentsnotpreviouslyaccountedfortheretoforemadebytheBorrowerfromfundsinthe
Special Construction Account providedfor in section 2.4 hereof;
(c)a statement,on a form to be furnished by the Administrator,setting forth the purposes for
which it is intended the requested advance will be used by the Borrower;and
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(d)such additional information.opinions,documents,and proofs relating to the construction oftheProject,the expenditure of Loan funds,and the Government's security for the Loan,as may reasonably
be requested by the Administrator.
SEC.2.3.Advances.Loan funds shall be advanced to the Borroweronly if the Borrower has (1)complied with section 2.1 hereof and all other conditions precedent to advance of Loan funds,(2)furnished theAdministratorwitharequisitionandaccompanyingdocumentscomplyingwithsection2.2 hereof and (3)notified
the Administratorwhether such Loan funds are to be advanced on account of the Loan.Within a reasonable timethereafter,the Government as requested by the Borrowershall advance Loan funds to the Borrower sufficient in theaggregateforsuchofthepurposesinthestatementaccompanyingtherequisitionastheAdministratorshallapprove.The Administratormay at any time,as a condition to making any advance on account of the Loan,requirecompliancebytheBorrowerwithanyoneormoreofthecovenants,terms or conditions of this agreement and anyamendmenttheretotobeperformedbytheBorrower.The Government shall be under no obligation to makeadvancesonaccountofaloanafterthedateoftheclosingofsuchloanspecifiedinaloanclosingcertificate.
SEC.2.4.Special Construction Account.The Borrower shall promptly deposit all moneysadvancedtoitbytheGovernmenthereunderinaspecialconstructionaccount(hereinafter called "SpecialConstructionAccount")in a bank,institution or other depository,which shall meet the requirements specified insection4.3 hereof,and shall hold such moneys in trust for the Government until disbursed.Any SpecialConstructionAccountshallbedesignatedbythecorporatenameoftheBorrower,followedby the words "Trustee,RUS Construction Fund Account".All Loan funds in any Special Construction Account shall be used solely for thepurposesspecifiedinsection1.1 hereof.Moneys in any Special Construction Account may be withdrawn only uponchecks,drafts or orders signed on behalf of the Borrower.The Borrowershall expend each advance on account oftheLoanonlyforsuchofthepurposesspecifiedinthestatementofpurposesaccompanyingtherequisitionforsuchadvanceasshallhavebeenapprovedbytheAdministrator.
SEC.2.5.Unexpended Loan Funds.Any funds advanced on account of the Loan remainingunexpendedinanySpecialConstructionAccountupontheclosingoftheloanshallbeforthwithremittedbytheBorrowertotheGovernmentandacreditinrespectthereofallowedagainstsuchNoteorNotesasshallbeagreeduponbytheAdministratorandtheBorrower.
SEC.2.6.Compliance with Restrictions on Use of Materials.No advances will be made onaccountoftheLoanfortheconstructionofanypartoftheProjectwithrespecttowhichtheBorrowershallhavefailedtosubmittotheGovernmentsatisfactoryevidencethattheBorrowerhasobtainedfromtheappropriateagencyoragenciesoftheGovernmentallnecessaryordersorapprovalswithrespecttotheuseofthematerialsrequiredfortheconstructionofsuchpartoftheProject.No construction shall be undertaken except in accordance withauthorizationsorregulationsofanysuchagencyoragencieshavingjurisdictioninthepremises.
SEC.2.7.Loan Rescissions.The Borrowermay request rescission of all or part of theunadvancedportionoftheLoanatanytime.The Administrator shall comply with such request if the Borrowerdemonstrates,to the satisfaction of the Administrator,that (1)the purposes intended to be financed by theunadvancedLoanfundshavebeencompleted,(2)sufficient funds are available from non-governmental sources tocompletesuchpurposes,or (3)the Loan funds being rescinded are no longer required to extend or improvetelephoneserviceinruralareas.The Administrator shall not initiate rescission of the unadvanced portion of theLoan,unless all of the purposes for which telephone loans have been made to the Borrower under the Act have beenaccomplishedwithfundsprovidedundersuchAct.Loan funds that have been rescinded are no longer available totheBorrower.
SEC.2.8.Tariff.(a)The Borrowershall,during the period ending on December 31,2005(hereinafter called the "Forecast Period")(1)use its diligent best efforts to obtain all regulatory approvals necessarytoplaceineffectandthereaftertomaintainineffectatariffwhich(i)provides for such grades of service as theAdministratorshallapprove,(ii)does not include mileage or zone charges for any telephone service providedby theProject,and (iii)is designed to produce net income or margins,before interest but after taxes,in such amounts that
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when dividedby the amount of interest requirements on all of the Borrower's outstanding and proposed loans,produces a ratio of at least 1.0,and (2)place such tariff into effect as soon as permitted by applicable laws andregulations.The Borrower shall use its diligent best efforts to obtain all necessary regulatory body approvals of suchrevisionsofitstariffasmaybenecessaryfromtimetotimetosatisfytherequirementsofthisprovision.
(b)The Borrowershall continue to comply with the requirements of this provision after theForecastPeriodexceptthattherequiredratioshallbechangedto1.39.
(c)The Borrower shall providethe Administrator with evidence,in form and substancesatisfactorytohim,that the Borroweris in full compliance with this section whenever the Administrator shall sorequest.
ARTICLE III
CONSTRUCTION
SECTION3.1.Labor and Materials Contract.The Borrowershall cause the Project to beconstructedunderlaborandmaterialscontractbyaresponsiblecontractororcontractorsselectedbytheBorrowerandapprovedbytheAdministrator,except to the extent that the Administrator may in writing authorize other
methods of construction.The Borrower shall keep accurate and detailed records of all costs and expenses inconnectionwithconstructionoftheProject.
SEC.3.2.Commencement and Completion.The Project shall be constructed in accordance withtheapprovedplansandspecificationshereinafterprovidedfor,the provisions of this agreement and all contracts andsubcontractsmadepursuanthereto.Construction of the Project or any portion thereof shall be commenced promptlyaftertheAdministratorshallhavenotifiedtheBorrowerofapprovaltocommencesuchconstruction,and theBorrowershallcausesuchconstructiontobeprosecuteddiligentlyandtobecompletedwithinareasonabletime,unless prevented from so doing by causes beyond the control and without the fault or negligence of the Borrower.The Borrower shall cause the Project to be completed in such manner that the System shall be free and clear of allliensandlawfulclaimsforliensexcepttheliensoftheMortgageandanysupplementalmortgage.
SEC.3.3.Biddine.The Borrowershall invite bids for construction of outside plant and buildings,for installation of station equipment,and for purchase and installation,or either,of central office equipment,included in the Project,unless otherwise authorized in writing by the Administrator.The Borrowershall open allbidspubliclyatthetimeandplacewhichshallhavebeenspecifiedinthenoticetobidders,after reasonable priorwrittennotificationofsuchtimeandplacehasbeengivenbytheBorrowertotheAdministrator.The Borrowershallawardeachcontracttothelowestresponsiblebidder,unless all bids are rejected.
SEC.3.4.Inspection bv Administrator.The Administratormay inspect the construction andequipmentoftheProject,and shall have the right to examine and test all work and materials,and the BorrowershallprovidereasonablefacilitiesthereforfortheuseoftheAdministratorandhisagents.The Administrator may rejectanydefectivematerialorworkmanshipandrequirethatanysuchmaterialshallbereplacedwithpropermaterialandthatanysuchworkmanshipshallbecorrected,to the end that all material and workmanship shall conform with theapprovedplansandspecificationshereinafterprovidedfor.
SEC.3.5.Certificates and Maps.The Borrower shall,at the request of the Administrator,furnishtotheGovernment:(a)such certificates of the approved engineer and of the officers and employees of the Borrower
as the Administrator shall reasonably require with respect to construction of the Project,or any portion thereof,andthecostthereof;(b)a complete inventory by construction units,in sufficient detail to reflect accurately allconstructioncosts,and a description of the Project,or any portion thereof;and (c)a map or maps,in the same form
as contained in the approved plans and specifications hereinafter providedfor,corrected to show actual locations and
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classification of all exchanges,lines and other properties of the Borrower except those.if any.not directly connectedwiththeProject.
ARTICLE IV
PARTJCULARCOVENANTS
SECTION 4.1.Appointments bv Borrower.The Borrowershall designate:(a)one or moreengineerswhoshallperformtheengineeringservicesinvolvedintheconstructionoftheProjectortheseveralportionsthereof,and execute all certificates and other instruments pertaining to engineering details requiredhereundertobedeliveredtotheAdministrator;and (b)a person (who may be regularly employed by the Borrower)
who,subject to the general policies fixed by the board of directors for the conduct of the Borrower's business,shall
have active charge of the management and operations of the Borrower (hereinafter called the "Manager").Persons
so designated by the Borrower shall be subject to the approval of the Administrator;provided that if any such person
is disapproved by the Administrator,the Administratorshall notify the Borrowerin writing of the reasons why thedesignatedpersonisdeemednotqualifiedtoperformtheproposeddutiesproperly;and provided further that theAdministrator's approval shall not be required for a person designated as the Manager by the Borrower if,for each ofthefiveyearsimmediatelyprecedingsuchdesignation,the Borrower has owned and operated the Existing Facilities
and has not had a deficit in net income or net margins as determined in accordance with methods of accountingprescribedbythestateregulatorybodyhavingjurisdictionovertheBorrower,or in the absence of such regulatorybodyorsuchprescription,by the Federal Communications Commission.
SEC.4.2.Submission of Plans.Specifications and Contracts With Third Parties.The Borrowershallsubmit,when requested by the Administratorand subject to the Administrator's approval:
(a)a contract or contracts with one or more approved engineers for all necessary engineering
services in connection with the construction of the Project;
(b)plans and specifications for the construction of each portion of the Project,identified by the
signatures of the approved engineer for such portion or portions,and of a duly authorized and responsibleofficeroremployeeoftheBorrower;
(c)a contract or contracts for the construction of outside plant and buildings,for installation ofstationequipment,and for purchase and installation,or either,of central office equipment,included in theProject,together with any contractor's or subcontractor's bond relating thereto;
(d)a contract or contracts for such toll traffic and operator assistance services,to be furnished by
connecting companies,as may be necessary for the proper operation of the System;provided,however,thattheAdministrator's approval shall not be required for any such contract or contracts,submitted to theAdministrator,which in form and substance conform with contracts in general use in the telephone industry;
(e)a contract or contracts for the purchase by the Borrowerof materials,equipment and suppliesforuseinconnectionwiththeProject;
(f)a contract or contracts for the purchase,lease,or other acquisition of land for use in connectionwiththeconstructionoroperationoftheSystem;and
(g)a contract or contracts for extended area service to be providedby or for other companies,as
may be necessary for the proper operation of the System.
SEC.4.3.Deposit of Funds.The Borrowershall not deposit or allow to remain on deposit any ofitsfunds,regardless of the source thereof,in any bank,institution or other depository which is not fully insured by
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the Federal government.The Borrowershall inform the Administrator of the names of the banks,institutions orotherdepositorieswhichithasselectedfordepositofitsfunds.
SEC.4.4.Easements and Permits.The Borrowershall submit to the Government,when requestedbytheAdministrator,evidence satisfactory to the Administrator that the Borrowerhas obtained such easements fromlandownersandreleasesfromlienorsandsuchfranchises,authorizations,permits,licenses,certificates ofconvenienceandnecessity,approvals,and orders from public bodies and others,reasonably adequate in form andsubstance,as may be required by law for the construction of the Project and the operation of the System.IfrequestedsotodobytheAdministrator,the Borrowershall cause such easements and releases to be recorded inappropriateofficesofrecord.Except with the consent of the Administrator,none of the funds advanced on accountoftheLoanshallbeusedbytheBorrowertopayforeasementsobtainedfromlandownersorforreleasesofliensaffectingeasements.
SEC.4.5.Area Coverase.The Borrowershall furnish adequate telephone service to the widestpracticablenumberofruralusersintheBorrower's telephone service area,as such area is shown on the map which isapartoftheBorrower's application for the Loan,and which map,as revised by agreement between the Borrower andtheAdministrator,is incorporated herein by reference thereto.In the performance of this obligation,the Borrowershall(except to the extent that the Administrator,upon request of the Borrower,may in writingauthorize deviationstherefrom):
(a)furnish service to all applicants for service included in the Project,without payment by suchapplicantsofanyextrachargeasacontributiontothecostofconstructionoffacilitiestoprovidesuchservice;and
(b)take all action that may be required to enable it to extend service,with the use of such funds asmayfromtimetotimebeavailabletoit,either from surplus earnings,increased equity capital,additionalloansmadebylendersotherthantheGovernment,or otherwise as the Borrower may elect,and withoutpaymenttotheBorrowerofanyextrachargeasacontributiontoconstructionoffacilitiestoprovidesuchservice,to every other unserved rural applicant for service in its telephone service area if the cost ofconstructingtherequiredlineextensionforsuchapplicantwillnotexceedseventimestheestimated annuallocalservicerevenuesfromsuchapplicant.Such service shall be furnished pursuant to terms andconditionssetforthintheBorrower's tariff,as duly filed with or approved by regulatory bodies havingjurisdictioninthepremises,or in the absence of any such regulatory body,as adopted by the Borrower;providedthat the Borrowershall not file with or submit for approval of appropriate regulatory bodies oradoptanyproposedtariff,or continue in effect any existing tariff not required to be continued by anyregulatorybody,unless under such tariff the Borrowerwill be obligated to serve unserved rural applicants
as provided herein.
The furnishingof service to applicants for service under the conditions provided in this section is of the essence oftheBorrower's obligations under this agreement,and the failure or neglect of the Borrowerto perform suchobligationshallbedeemedtobeaneventofdefaulthereunder.
SEC.4.6.Morteace Covenants.The Borrowershall perform all covenants by it to be performedundertheMortgageandanysupplementalmortgage.
SEC.4.7.Representations and Warranties.The Borrowerrepresents and warrants as follows:
(a)it is a corporation duly organized,existing and in good standing under the laws of the Statespecifiedintheintroductoryparagraphofthisagreementandhascorporatepowertoenterintothisagreementandperformeveryactrequiredtobeperformedbyithereunder;
(b)all proceedings prerequisite to the valid execution of this agreement by it have been duly takenandallrequiredauthorizationsthereforhavebeensecured;
ATLC-01-09-003-ID Page 8
(c)it has not entered into any contract (not heretofore fully performed)for the construction of anyportionoftheProject,or for engineering or for other services pertaining to the construction or operation oftheSystem,unless such contract has (1)been approved by the Administrator;(2)will be submitted for theapprovaloftheAdministrator;or (3)the effectiveness thereof has been made subject to the approval of theAdministrator;
(d)the capital structure of the Borroweris as shown in a certified copy of its articles ofincorporationlastsubmittedtotheAdministrator;the Borrowerhas issued and has outstanding only suchnumbersandclassesofsharesofitscapitalstockandsuchbondsandotherevidencesofindebtedness,ifany,as shown in the statement thereoflast submitted to the Administrator;and the Borrowerhas not enteredintoanyagreementfortheissuanceofanyothersharesofitscapitalstock,or of bonds or other evidences ofindebtedness;and
(e)every statement contained in this agreement and in every other document,statement,certificate
and opinion submitted to the Government by it or in its behalf is true and correct.
SEC.4.8.Fees and Commissions.No fee or commission has been or shall be paid and noagreementthereforhasbeenorshallbeenteredintobytheBorroweroranyofitsofficers,employees,agents,orrepresentativesinordertoobtaintheLoan.
SEC.4.9."Buy American"Clause.The Borrowershall use or cause to be used in connection withtheexpendituresoffundsadvancedonaccountoftheLoanonlysuchunmanufacturedarticles,materials,andsuppliesashavebeenminedorproducedintheUnitedStatesorinanyeligiblecountry,and only such manufacturedarticles,materials,and supplies as have been manufactured in the United States or in any eligible countrysubstantiallyallfromarticles,materials,or supplies mined,produced,or manufactured,as the case may be,in theUnitedStatesorinanyeligiblecountry,except to the extent the Administratorshall determine that such use shall beimpracticableorthatthecostthereofshallbeunreasonable.For purposes of this section,an "eligible country"is anycountrythatapplieswithrespecttotheUnitedStatesanagreementensuringreciprocalaccessforUnitedStatesproductsandservicesandUnitedStatessupplierstothemarketsofthatcountry,as determined by the United StatesTradeRepresentative.
SEC.4.10.Equal Opportunity Clause.The Borrowerhereby agrees that it will incorporate orcausetobeincorporatedintoanycontractforconstructionwork,or modificationthereof,as defined in ExecutiveOrder11246ofSeptember24,1965,or in the rules and regulations of the Secretary of Labor,which is paid for inwholeorinpartwithfundsobtainedfromtheGovernmentorborrowedonthecreditoftheGovernmentpursuant to
a grant,contract,loan,insurance or guarantee,or undertaken pursuant to any Federal program involving such grant,contract,loan,insurance or guarantee,the following equal opportunity clause:
During the performance of this contract,the Contractor agrees as follows:
(1)The Contractor will not discriminate against any employee or applicant for employmentbecauseofrace,color,religion,sex or national origin.The Contractor will take affirmativeaction to ensure thatapplicantsareemployed,and that employees are treated during employment,without regard to their race,color,religion,sex or national origin.Such action shall include,but not be limited to the following:employment,upgrading,demotion or transfer;recruitment or recruitment advertising;layoff or termination;rates of pay or otherformsofcompensation;and selection for training,including apprenticeship.The Contractor agrees to post inconspicuousplaces,available to employees and applicants for employment,notices to be providedsetting forth theprovisionsofthisnondiscriminationclause.
(2)The Contractor will,in aH solicitations or advertisements for employees placed by or on behalfoftheContractor,state that all qualified applicants will receive consideration for employment without regard to race,color,religion,sex or national origin.
ATLC-01-09-003-ID Page 9
(3)The Contractor will send to each labor union or representative of workers with which he has acollectivebargainingagreementorothercontractorunderstanding,a notice to be provided advising the said labor
union or workers'representative of the Contractor's commitments under this section,and shall post copies of thenoticeinconspicuousplacesavailabletoemployeesandapplicantsforemployment.
(4)The Contractor will comply with all provisions of Executive Order 11246 of September 24,
1965,and of the rules,regulations and relevant orders of the Secretary of Labor.
(5)The Contractor will furnish all information and reports required by Executive Order 1 1246 of
September 24,1965,and by the rules,regulations and orders of the Secretary of Labor,or pursuant thereto,and will
permit access to his books,records,and accounts by the administering agency and the Secretary of Labor for
purposes of investigation to ascertain compliance with such rules,regulations and orders.
(6)In the event of the Contractor's noncompliance with the nondiscrimination clauses of thiscontractorwithanyofthesaidrules,regulations or orders,this contract may be canceled,terminated or suspended
in whole or in part,and the Contractor may be declared ineligible for further Government contracts or federally
assisted construction contracts in accordance with procedures authorized in Executive Order i 1246 of September 24,
1965,and such other sanctions may be imposed and remedies invoked as provided in said Executive Order 11246 of
September 24,1965,or by rule,regulation or order of the Secretary of Labor,or as otherwise provided by law.
(7)The Contractor will include the portion of the sentence immediately preceding paragraph (1)
and the provisions of paragraphs (1)through (7)in every subcontract or purchase order unless exempted by rules,regulations or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of
September 24,1965,so that such provisions will be binding upon each subcontractor or vendör.The Contractor will
take such action with respect to any subcontract or purchase order as the administering agency may direct as a meansofenforcingsuchprovisions,including sanctions for noncompliance.Provided,however,that in the event a
contractor becomes involved in,or is threatened with,litigation with a subcontractor or vendor as a result of suchdirectionbytheadministeringagency,the Contractor may request the United States to enter into such litigation toprotecttheinterestsoftheUnitedStates.
The Borrower furtheragrees that it will be bound by the above equal opportunity clause with respect to its own
employment practices when it participates in federally assisted construction work:Provided,that if the BorrowersoparticipatingisaStateorlocalgovernment,the above equal opportunity clause is not applicable to any agency,
instrumentality or subdivision of such government which does not participate in work on or under the contract.
The Borrower agrees that it will assist and cooperate actively with the administering agency and the Secretary ofLaborinobtainingthecomplianceofcontractorsandsubcontractorswiththeequalopportunityclauseandtherules,
regulations and relevant orders of the Secretary of Labor,that it will furnish the administering agency and the
Secretary of Labor such informationas they may require for the supervision of such compliance,and that it will
otherwise assist the administering agency in the discharge of the administering agency's primary responsibility for
securing compliance.
The Borrower furtheragrees that it will refrain from entering into any contract or contract modification subject toExecutiveOrder11246ofSeptember24,1965,with a contractor debarred from,or who has not demonstratedeligibilityfor,Government contracts and federally assisted construction contracts pursuant to Executive Order
11246,of September 24,1965,and will carry out such sanctions and penalties for violation of the equal opportunity
clause as may be imposed upon contractors and subcontractors by the administering agency or the Secretary of Labor
pursuant to Part II,Subpart D of Executive Order ]1246,of September 24,1965.
In addition,the Borrower agrees that if it fails or refuses to comply with these undertakings,the administering
agency may take any or all of the following actions:cancel,terminate or suspend in whole or in part this contract;refrain from extending any furtherassistance to the Borrowerunder the program with respect to which the failure or
ATLC-01-09-003-ID Page 10
refusal occurred until satisfactory assurance of further compliance has been received from such Borrower;and refer
the case to the Department of Justice for appropriate legal proceedings.
SEC.4.1 1.Evidence of Feasibility.The Borrower shall,whenever requested so to do by the
Administrator,submit evidence satisfactory to the Administrator of the economic and engineering feasibility of eachportionoftheSystemdesignatedbytheAdministrator.
SEC.4.12.Proof of Title.No funds shall be advanced on account of the Loan to finance the
acquisition of any real property by the Borrower,or any construction thereon,until the Borrower shall have
submitted evidence satisfactory to the Administrator that it has acquired or will acquire good and marketable title to
such real property.
SEC.4.I 3.Commencement of Operation.The Borrowershall not operate any portion of the
Project until the Borrower shall have furnished evidence that (a)such portion of the Project has been properly
constructed and is ready to be operated,(b)there are sufficient subscribers ready to take service to permit the
economical operation of such portionof the Project,and (c)the Borrower has complied with the provisions of the
Mortgage concerning insurance in respect of such portion of the Project.
SEC.4.14.Operating and Maintenance Procedures.The Borrower shall,subject to applicable
laws and rules,regulations and orders of regulatory bodies,operate and maintain the System in accordance with
standards of operation and maintenance generally accepted for corporations of the size and character of the
Borrower.
SEC.4.15.Compliance with Environmental Requirements.The Borrower shall,with respect to
all facilities which may be part of the System,comply with all applicable water and air pollution control standards
and other environmental requirements imposed by Federal or state statutes,regulations,licenses or permits.
SEC.4.16.Historic Preservation.The Borrower shall not use any portion of the Loan without thepriorwrittenapprovaloftheAdministratorforanyproject,activity or program that can result in changes in the
character or use of any prehistoric or historie district,site,building,structure or object included in,or eligible for
inclusion in.the National Register of Historic Places maintained by the Secretary of the Interior pursuant to the
National Historic Preservation Act,as amended.
SEC.4.17.Historic Landmarks.The Borrower shall not use any portion of the Loan,without the.
prior written approval of the Administrator,for any project,activity or program that may directly and adverselyaffectanypropertythattheSecretaryoftheInteriorhasdesignatedaNationalHistoricLandmarkpursuanttothe
National Historic Preservation Act,as amended.
SEC.4.)8.Electronic Funds Transfer.Except as otherwise prescribed by the Administrator,the
Borrower shall make all payments on all notes issued by the Borrower pursuant to this agreement and any subsequent
amendment,utilizing electronic funds transfer procedures as specified by the Administrator.
SEC.4.19.Uniform Relocation and Acquisition Act.The Borrower hereby covenants that it shall,
in acquiring real property,comply with the provisions of the Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970 (the "UniformAct"),as amended by the Uniform Relocation Act Amendments of
1987,and 49 C.F.R.Part 24,referenced by 7 C.F.R.Part 21,to the extent the Uniform Act is applicable to such
acquisition.
SEC.4.20.Flood Insurance.The Borrowershall not,without the prior written approval of the
Administrator,use any portion of the Loan to finance,in whole or in part,the acquisition,construction,repair or
improvement of any buildingor any machinery,equipment,fixtures or furnishings contained or to be contained
therein in any area identified by the Director of the Federal Emergency Management Agency (the "Director of
FEMA")pursuant to the Flood Disaster Protection Act of 1973,as amended (the "Flood Insurance Act")as an area
ATLC-01-09-003-ID Page 11
havingspecial flood hazards unless and until the Borrowerhas submitted evidence satisfactory to the Administrator.
or the Administrator has otherwise determined:(i)the Director of FEMA has made flood insurance available,pursuant to the Flood Insurance Act,in the area in which the acquisition,construction,repair or improvement isproposedtooccur;and (ii)the Borrowerhas obtained flood insurance coverage with respect to such building,machinery,equipment,fixtures or furnishings as may then be required pursuant to the Flood Insurance Act.
SEC.4.21.Nonduplicationof Facilities.If the Borrowerprovides telephone service in any stateinwhichthereisnostateregulatorybodywithauthoritytoregulatetelephoneserviceandtorequirecertificatesofconvenienceandnecessitytotheBorrower,the Borrowershall not use any portion of the Loan for the constructionoftelephonefacilitiestofurnishorimproveservicetopersonslocatedinsuchstatereceivingtelephoneservicefromanyothertelephonecompanyatthetimetheBorrowerproposestofurnishorimproveservicetosuchpersons,except that the Borrower may provideor improveservice to persons receiving service through facilities acquired ortobeacquiredbytheBorrower,and except to the extent the Administrator,on the basis of evidence submitted to him
by the Borrower,shall have determined that service by the Borrowerto such persons will not result in duplication oflines,facilities or systems providingreasonably adequate service.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
SECTION5.1.Events of Default.The happening of any of the followingevents (hereinafter
called "events of default")shall constitute a default by the Borrowerhereunder:
(a)any failure to perform,or any violationof,any term,covenant,promise,condition,oragreementonthepartoftheBorrowertobeperformedhereunderatthetimeandinthemannerhereinprovided;
(b)any breach of any warranty or any material or substantial inaccuracy in any representation on
the part of the Borrower;or
(c)any event of default which is specified in the Mortgage or any supplemental mortgage.
SEC.5.2.Remedies Upon Default.Upon the happening of any event of default,as specified insection5.]hereof,the Government or the holder or holders of any one or more of the Notes,as their respectiveinterestsmayappear,may exercise any one or more of the followingrights,privileges,powers,and remedies,to theextentthattheexercisethereofisnotprohibitedbylaw:
(a)refuse to make any advance or any further advances on account of the Loan,but any advancethereaftermadebytheGovernmentshallnotconstituteawaiverofsuchdefault;
(b)declare all unpaid principal of and all interest accrued on any or all of the Notes held by suchholderorholders(which may include the Government)to be due and payable immediately and upon suchdeclarationallsuchprincipalandinterestshallbecomedueandpayableimmediately,anything herein or inanyotheragreementtowhichtheBorrowershallbeaparty,or in the Notes or in the Mortgage or anysupplementalmortgagetothecontrarynotwithstanding.
SEC.5.3.Remedies Cumulative.Every right,privilege,power or remedy herein or in the NotesorintheMortgageorinanysupplementalmortgageconferreduponorreservedtotheGovernmentoranyholderorholdersoftheNotesshallbecumulativeandshallbeinadditiontoeveryotherright,privilege,power,and remedy
now or hereafter existing at law or in equity or by statute.The pursuit of any right,privilege,power,or remedy shallnotbeconstruedasanelection.
ATLC-01-09-003-ID Page 12
ARTICLE VI
MISCELLANEOUS
SECTION6.1.Members of Concress.No Member of or Delegate to the Congress of the UnitedStatesshallbeadmittedtoanyshareorpartofthisagreementortoanybenefittoarisetherefromotherthanthereceivingoftelephoneservicethroughtheSystemonthesametermsaccordedothersservedthroughtheSystem.
SEC.6.2.Receipt of Certain Criminal Sections of U.S.Code.The Borrowerand each of theofficerssigningthisagreementrespectivelyacknowledgethattheyarefamiliarwiththeprovisionsofsections201,286,287,641,666,1001,1361 and 1366 of Title 18,United States Code,Crimes and Criminal Procedure.
SEC.6.3.Definitions.Whenever the following terms are used in this agreement,unless thecontextindicatesanotherordifferentmeaningorintent,.they shall be construed to have meanings as follows:
(a)"Administrator"means the Administrator of the Rural Utilities Service or his duly authorizedrepresentativeoranyotherpersonorauthorityinwhommaybevestedthedutiesandfunctionsrelatingtoloansfortelephoneserviceinruralareasmadepursuanttotheActwhichtheAdministratorisnowormayhereafterbeauthorizedbylawtoperform.
(b)"plans and specifications"means the plans and specifications for the Project originallyapprovedbytheAdministratorandshallincludesuchchangesandmodificationsthereofasmayfrom timetotimebeagreeduponbytheBorrowerandtheGovernment;
(c)"note"includes "bond";and
(d)"construction"includes "acquisition",and the word "construct"includes the word "acquire".
SEC.6.4.Approvalsin Writine.No counsel,engineer,manager or other person,or instruments,or act of the Borrower,who or which shall be subject to the approval of the Administrator,shall be deemed to beapprovedunlessanduntiltheAdministratorshallhavegivensuchapprovalinwriting.
SEC.6.5.Waiver.The Administrator,in his absolute discretion and upon such terms andconditionsashemaydetermine,may waive the performance or doing of any one or more of the acts to be performedorthingstobedonebytheBorrower,and any provision hereof may be modified or amended by mutual consent oftheBorrowerandtheAdministrator.The Borrowershall not claim any modification,amendment,rescission,release,or annulment of any part hereof except pursuant to a written instrument subscribed by the Administrator.The approvalby or on behalf of the Administrator of any advance of funds on account of the Loan shall constitute afindingofsufficientperformancebytheBorrowerofallactsprerequisitetosuchadvance,or a waiver thereof;provided,however,that any such waiver shall be effectiveonly with reference to such advance and shall not precludetheAdministratorfromrequiringfullperformanceoftheactssowaivedasaprerequisitetoanysubsequentadvance.
SEC.6.6.Non-Assignabilitv.The Borrowershall not assign this agreement or any part hereof oranymoneysdueortobecomeduehereunder.
SEC.6.7.Descriptive Headings:Separability.The descriptive headings of the various articles andsectionshereofwereformulatedandinsertedforconvenienceonlyandshallnotbedeemedtoaffectthemeaningorconstructionofanyoftheprovisionshereof.The invalidity of any one or more phrases,clauses,sentences,paragraphs,or provisions of this agreement shall not affect any remaining portion or portions hereof.
SEC.6.8.Notices.All demands,notices,approvals,designations,or directions permitted orrequiredtobemadeuponorgiventotheBorrowerhereundershallbemailedtotheBorroweratP.O.Box 7,Midvale,Idaho 83645 or such other address as the Borrowershall designate in writing to the Administrator.All
ATLC-01-09-003-ID Page 13
notices,designations.or communications permitted or required to be given or sent to the Government or theAdministratorhereundershallbemailedtotheAdministratoratWashington,D.C.20250-1500,or such otheraddressastheAdministratorshalldesignateinwritingtotheBorrower.
SEC.6.10.Duration of Aereement.Except where otherwise required by the context,allprovisionsofthisagreementshallcontinueinfullforceandeffectuntilallamountsowingbytheBorrower to theGovernmentonaccountoftheLoanshallhavebeenpaid,and upon such payment this agreement shall be deemed tohavebeenfullyperformed.
SEC.6.12.Counterparts.This agreement may be simultaneously executed and delivered in two ormorecounterparts,each of which so executed and delvered shall be deemed to be an original,and all shall constitutebutoneandthesameinstrument.
IN WITNESSWHEREOF the Borrowerhas caused this agreement to be signed in its corporatenameanditscorporatesealtobehereuntoaffixedandattestedbyitsofficersthereuntodulyauthorized,and theGovernmenthascausedthisagreementtobedulyexecutedallasthedayandyearfirstabovewritten.
MIDVALE TELEPHONEEXCHANGE,INC.
by
President
(Seal)
Attest:
UNITED STATES OF AMERICA
by
as
Assistant Administrator
Telecommunications Program
of the
Rural Utilities Service
ATLC-01-09-003-ID Page 14
SCHEDULE A
Notwithstandinganything contained in this agreement or the Loan Contract,the
Government shall be under no obligation to advance funds to the Borrower on the
account of any portion of the RUS Hardship Loan unless and until the Borrower has
delivered to RUS,among other things,all of the documents,opinions and other
evidence listed in the loan contract applicable to this loan,including:
1.Evidence that all of the necessary approvalshave been obtained from the
Federal Communications and the National Exchange Carriers Association for theSilverbell,Rio Verde and Millsite exchanges;
2.Evidence that Qwest,Inc.,has entered into an agreementor agreements with the
Borrower to providecertain toll traffic between the followingcommunities:
Midvale to Weiser,lD;Millsite to Prescott,AZ;Cascabel to Tucson,AZ;Rio
Verde to Phoenix,AZ,and Silverbell to Arizona City,AZ;which agreementoragreementsareinformandsubstancesatisfactorytotheAdministrator;
3.Evidence that the Syringa Network has entered into an agreementwith the
Borrower to provide certain toll traffic between Stanley,which agreementis in
form and substance satisfactory to the Administrator;
4.Evidence that the Mortgage and Security Agreement,dated October 15,1996,
between the Borrower and the Rural TelephoneFinance Cooperative (RTFC)
and related financing statements have been released of record in all offices
where said security instruments had been filed;
5.Evidence that the Modgage and Security Agreement,dated October 15,1996,
between Sawtooth Telephone,Inc.,and the RTFC and related financing
statements have been released in all offices where said security instruments had
been filed;
6.Evidence that the Modification to the Mortgage and Security Agreement,dated
July 17,1998,between Sawtooth Telephone,Inc.,and the RTFC and related
financing statements have been released in all offices where said securityinstrumentshadbeenfiled.
In addition,no RUS Hardship Loan funds will be advanced for outside plant construction
in the Arizona exchangesuntil evidence of final clearance from the State Historical
Preservation Office has been received.
PROJECT DESIGNATION:
IDAHO 514-Gl I LA-1 MIDVALE
MORTGAGENOTE
made by
MIDVALE TELEPHONEEXCHANGE.INC.
to
UNITED STATES OF AMERICA
MORTGAGENOTE
Midvale,Idaho
February 1,2002
Article I:Special Provisions -RUS Hardship Rate Note
1.Amount
MIDVALE TELEPHONEEXCHANGE,INC.(hereinafter called the "Corporation"),a corporation organized andexistingunderthelawsoftheStateofIdaho,for value received,promises to pay to the order of the UNITEDSTATESOFAMERICA(hereinafter called the "Government"),acting through the Administrator of the RuralUtilitiesService,at the United States Treasury,Washington,D.C.,at the times and in the manner hereinafterprovided,the sum of five million six hundred ninety-fivethousand dollars ($5,695,000),with interest on the amountthereofadvancedbytheGovernment,pursuant to a certain loan contract,dated as of February 1,2002,between theCorporationandtheGovernment,as the same may be amended from time to time (said loan contract,as it may be so
amended,being hereafter called the "Loan Contract"),and remaining unpaid from time to time,at the rate of five (5)
percent per annum.
2.Payment on Advances made within two (2)vears
Interest on principal advanced made pursuant to the Loan Contract and remaining unpaid shall be payable on the lastdayofeachmonthforaperiodendingonadatetwo(2)years after the date hereof.Thereafter,to and including adate(the "Maturity Date")fourteen (14)years after the date hereof,the Corporation shall make a payment on each of
said monthly dates in each year at the rate of $9.25 per $1,000 of principal amount hereof advanced pursuant to the
Loan Contract and unpaid two (2)years after the date hereof.
3.Pavment on Advances made after two (2)vears
Interest and principal payments on principal advanced more than two (2)years after the date hereof shall be mademonthlybeginningwiththelastdayofthemonthfollowingthemonthofeachadvanceofprincipal.Each payment
shall be (a)substantially equal to all subsequent monthly payments and (b)in an amount that will pay all principalandinterestonthisNotenolaterthantheMaturityDate.The first payment on an advance made more than two yearsafterthedateofthisNoteshallbeincreasedbytheamountofinterestaccruingbetweenthedateoftheadvanceandthefirstdayofthemonthfollowingthemonthoftheadvance.These payments shall be in addition to the payment
made on the principal amount advanced and unpaid two (2)years after the date hereof.
4.Prepayment
The Corporation on any payment date,as hereinabove provided may pay all or any part of the principal hereof then
advanced pursuant to the Loan Contract and remaining unpaid,but so long as any of the principal hereof advanced
pursuant to the Loan Contract shall remain unpaid,the Corporation shall be obligated to make the monthly payment
on account of principal and interest,in the amount hereinabove provided,unless the Corporation and the holder of
this Note shall otherwise agree.
Article II:Standard Provisions
1.Applicationof Pavments
THMN-01-09-003-ID Page 1
Each payment made on this Note shall be applied first to the payment of interest on principal and then on account ofprincipal.On the Maturity Date,the principal hereof advanced pursuant to the Loan Contract remaining unpaid,ifany,and interest thereon,shall become due and payable.
2.Security
This Note has been executed and delivered pursuant to and is secured by a certain mortgage,dated as of February 1,2002,made by and among the Corporation,the Government and Rural Telephone Finance Cooperative,as the samemayhavebeenamendedorsupplementedbyanysupplementalmortgageorsupplementalmortgages(said mortgageandanysuchsupplementalmortgageorsupplementalmortgagesbeinghereinaftercollectivelycalledthe"Mortgage"),and is one of several notes (hereinaftercalled the "notes")permitted to be executed and delivered bytheCorporationpursuanttotheMortgage.The Mortgage provides that all notes shall be equally and ratably securedtherebyandreferenceisherebymadetotheMortgageforadescriptionofthepropertymortgagedandpledged,thenatureandextentofthesecurityandtherightsoftheholdersofnoteswithrespectthereto.
3.Default
In case of default by the Corporation,as providedin the Mortgage,all principal advanced pursuant to the LoanContractandremainingunpaid,on this Note and any other notes at the time outstanding,and all interest thereon,may be declared or may become due and payable in the manner and with the effect providedin the Mortgage.
4.Noteholder
This Note evidences.indebtedness created by a loan made under the Rural ElectrificationAct of 1936,as amended.
If the Government shall at any time assign this Note und insure the payment hereof,the Corporation shall continue tomakepaymentshereundertotheGovernmentascollectionagentfortheinsuredholder,and,for purposes of theMortgage,the Government,and not such insured holder.shall be considered to be,and shall have the rights of,thenoteholder.
5.Additional Notes
If the Government,at any time prior to the advance of the entire principal amount hereof on account of this Note,shall make a written endorsement hereon stating the amount advanced on account of the principal hereof,and shallnotifytheCorporation,in writing,of such endorsement,then the principal amount of this Note shall be deemed to beandshallbecomereducedtotheamountspecifiedinsuchendorsement,and the Corporation shall then execute anddelivertotheGovernmentoneormoreadditionalnotes,in an amount or amounts designated by the GovernmentwhichintheaggregateshallbeequaltothethenunadvancedportionoftheoriginalprincipalamountofthisNote,such additional notes to be dated currently when executed,to be in the same form,and to bear the same interest rate,as this Note.The Corporation,upon the request therefor in writing by the Government,shall execute and deliver totheGovernmenttwoormorenotes,in substitution for this Note,in the same form and bearing the same interest rateanddate(except that any such substitute note which will evidence only an unadvanced portion of this Note may,atthediscretionoftheGovernment,be dated currently when executed),in an aggregate principal amount which shallbeequaltotheprincipalamountofthisNote,but in such individualprincipal amounts as the Government shallrequest;providedthat (i)all payments which shall have been made on account of the principal of and interest on thisNoteshallbecreditedonaccountofsuchsubstitutenotesand(ii)the Government shall return this Note to theCorporationuponreceiptofsuchsubstitutenotes.
THMN-01-09-003-ID Page 2
IN WITNESS WHEREOF,the Corporation has caused this Note to be signed in its corporate name and its corporate
seal to be hereunto affixed and attested by its officers thereunto duly authorized,all as of the day and year first abovewritten.
MIDVALE TELEPHONE EXCHANGE,INC.
by
President
THMN-01-09-003-ID Page 3
RUS PROJECT DESIGNATION:
IDAHO 514-Gll LA-1 MIDVALE
RESTATED MORTGAGE,
SECURITYAGREEMENT
AND
FINANCINGSTATEMENT
made by and among
MIDVALE TELEPHONEEXCHANGE,INC.
P.O.Box 7
Midvale,Idaho 83645,as mortgagor and debtor,
and
UNITED STATES OF AMERICA
Rural Utilities Service
Washington,D.C.20250-1500,as mortgagee and secured party,
and
RURAL TELEPHONEFINANCE COOPERATIVE
2201 Cooperative Way
Herndon,Virginia 20171-3025 as mortgagee and secured party.
Dated as of February 1,2002
THIS INSTRUMENTGRANTS A SECURITY1NTEREST JN A TRANSMITTINGUT1LITY,THE DEBTORAS MORTGAGOR IS A TRANSMITTING UTILITY.THISINSTRUMENTCONTAINS PROVISIONSTHAT COVER REAL AND PERSONALPROPERTY,AFTER-ACOUIREDPROPERTY,PROCEEDS,FUTUREADVANCES AND FUTUREOBLIGATIONS.ORGANIZATIONAL NO.30686
No.Generated:.lanuary 23,2002 5.89
RESTATEDMORTGAGE,SECURITYAGREEMENTAND FINANCINGSTATEMENT,dated as of February 1,2002,made by and among MIDVALETELEPHONEEXCHANGE,INC.(hereinafter called the "Mortgagor"),a corporationexistingunderthelawsoftheStateofIdaho,UNITED STATES OF AMERICA(hereinafter called the "Government"),acting through the Administrator of the RuralUtilitiesService(hereinaftercalled "the Administrator"),and RURAL TELEPHONEFINANCECOOPERATIVE(hereinafter called "RTFC"),a South Dakota CooperativeAssociation(the Government and RTFC being hereinafter sometimes collectively calledthe"Mortgagees").
WHEREAS,pursuant to Public Law 103-354,the Rural Utilities Service (hereinafter sometimescalled"RUS")is the successor to the Rural ElectrificationAdministration (hereinafter sometimes called "REA")andtheAdministratoroftheRuralUtilitiesServiceisthesuccessortotheAdministratoroftheRuralElectrificationAdministrationandforpurposesofthe"UnderlyingMortgage"(as hereinafter defined)identified in Schedule A of"this Mortgage"(as hereinafter defined)the terms "REA"and "Administrator"shall be deemed to mean respectively"RUS"and the "Administrator of the RUS";and
WHEREAS,the Mortgagorhas heretofore borrowed funds from one or more of the Mortgagees orfrom"FFB"(as hereinafter defined)whose loans are guaranteed by the Government and to secure such indebtednesshasexecutedanddeliveredtosuchMortgagee(s)the "Outstanding Notes"(as hereinafter defined)identified inScheduleAheretoand/or in Schedule B hereto.
WHEREAS,the Outstanding Notes are secured by the Underlying Mortgage;and
WHEREAS,the Mortgagordeems it necessary to borrow additional funds from one or more of theMortgageesand/or from FFB whose loans are guaranteed by the Government and to evidence such additionalindebtednesshasexecutedanddeliveredtosuchMortgagee(s)the "Current Notes"(as hereinafter defined)identifiedinScheduleAheretoandtosecureandpledgeitspropertyhereunderdescribedormentionedtosecurethesame:and
WHEREAS,the Mortgagordesires to enter into this Mortgage pursuant to which all mortgagenotesshallbesecuredonparity;and
WHEREAS,this Mortgage consolidates and restates the Underlying Mortgage in its entirety;and
WHEREAS,all acts necessary to make this Mortgage a valid and binding legal instrument for thesecurityoftheOutstandingNotes,the Current Notes and other indebtedness of the Mortgagor hereunder,subject tothetermsofthisMortgage,have been in all respects duly authorized;and
WHEREAS,to the extent that any of the property described or referred to in this Mortgage isgovernedbytheprovisionsoftheUniformCommercialCodeofanystate(hereinafter called the "UniformCommercialCode"),the parties hereto desire that this Mortgage be regarded as a "security agreement"and as a"financing statement"for said security agreement under the Uniform Commercial Code;
NOW,THEREFORE,THIS MORTGAGEWITNESSETHthat,in order to secure the payment oftheprincipalofandinterestonthe"notes"(as hereinafter defined),according to their tenor and effect,and further tosecurethedueperformanceofthecovenants,agreements and provisions contained in this Mortgage and the"Consolidated Loan Agreement"(as hereinafter defined)and the "RTFCLoan Agreement"(as hereinafter defined)and to declare the terms and conditions upon which the notes are to be secured,the Mortgagor,in consideration ofthepremises,has executed and delivered this Mortgage,and has granted,bargained,sold,conveyed,warranted,assigned,transferred,mortgaged,pledged,and set over,and by these presents does hereby grant,bargain,sell,convey,warrant,assign,transfer,mortgage,pledge and set over,unto the Mortgagees,and their respective assigns,all and singular the following-described property (hereinafter sometimes called the "Mortgaged Property"):
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I
All right,title and interest of the Mortgagor in and to the "Existing Facilities"(as hereinafterdefmed)and buildings,plams,works,improvements,structures,estates,grants,franchises,easements,rights,privilegesand properties real,personal and mixed,tangible or intangible,of every kind or description,now owned orleasedbytheMortgagororwhichmayhereafterbeownedorleased,constructed or acquired by the Mortgagor,whereverlocated,and in and to all extensions and improvements thereof and additions thereto,including allbuildings,plants,works,structures,improvements,fixtures,apparatus,materials,supplies,machinery,tools,implements,poles,posts,crossarms,conduits,ducts,lines,whether underground or overhead or otherwise,wires,cables,exchanges,switches,including,without limitation,host switches and remote switches,desks,testboards,frames,racks,motors,generators,batteries and other items of central office equipment,pay-stations,protectors,instruments,connections and appliances,office furniture and equipment,work equipment and any and all otherpropertyofeverykind,nature and description,used,useful or acquired for use by the Mortgagor in connectiontherewithandincluding,without limitation,the real property described in the following property schedule:
PROPERTY SCHEDULE
(a)The Existing Facilities are located in the Counties of Chochise,Gila,Maricopa,Pinal,YavapaiintheStateofArizona,the Counties of Bonner,Custer,Idaho,Valley,Washington in the State of Idaho,and the County of Malheurin the State of Oregon.
(b)The property referred to in the last line of paragraph 1 of the Granting Clause includes the realestatedescribedinExhibitAattachedhereto,and by this reference made a part hereof,as if fully set forth atlengthatthispoint.
(c)If the real estate described in Exhibit A is by reference to deeds,grantor(s),grantee,etc.,thenthedescriptionofeachofthepropertiesconveyedbyandthroughsuchdeedsisbyreferencemadeapartofExhibitAasthoughfullysetforthatlengththerein.
(d)The real estate described in Exhibit A shall also include all plants,works,structures,erections,reservoirs,dams,buildings,fixtures and improvements now or hereafter located on such real estate,and alltenements,hereditaments and appurtenances now or hereafter thereunto belonging or in any wiseappertaining.
II
All right,title and interest of the Mortgagor in,to and under any and all grants,privileges,rights ofwayandeasementsnowowned,held,leased,enjoyed or exercised,or which may hereafter be owned,held,leased,acquired,enjoyed or exercised,by the Mortgagorfor the purposes of,or in connection with,the construction oroperationbyoronbehalfoftheMortgagoroftelephoneproperties,facilities,systems or businesses,whetherundergroundoroverheadorotherwise,wherever located;
III
All right,title and interest of the Mortgagor in,to and under any and all licenses,franchises,ordinances,privileges and permits heretofore granted,issued or executed,or which may hereafter be granted,issuedorexecuted,to it or to its assignors by the United States of America,or by any state,or by any county,township,municipality,village or other political subdivision thereof,or by any agency,board,commission or department ofanyoftheforegoing,authorizing the construction,acquisition,or operation of telephone properties,facilities,systems or businesses,insofar as the same may by law be assigned,granted,bargained,sold,conveyed,transferred,mortgaged,or pledged;
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IV
All right,title and interest,whether presently owned or hereafter acquired,of the Mortgagor in,toandunderanyandallcontractsheretoforeorhereafterexecutedbyandbetweentheMortgagorandanyperson,firm,or corporation relating to the Mortgaged Property together with any and all other accounts,chattel paper,contractrightsandgeneralintangibles(as such terms are defined in the applicable Uniform Commercial Code),and all stock,bonds,notes,debentures,commercial paper,subordinated capital certificates,securities,obligations of or beneficialinterestorinvestmentsinanycorporation,association,partnership,joint venture,trust,government or any agency ordepartmentthereof,or any othef entity of any kind;
V
Also,all right,title and interest of the Mortgagor in and to all other property,real or personal,tangible or intangible,of every kind,nature and description,and wheresoever situated,now owned or leased orhereafteracquiredbytheMortgagor,it being the intention hereof that all such property now owned or leased but notspecificallydescribedhereinoracquiredorheldbytheMortgagorafterthedatehereofshallbeasfullyembracedwithinandsubjectedtothelienhereofasifthesamewerenowownedbytheMortgagorandwerespecificallydescribedhereintotheextentonly,however,that the subjection of such property to the lien hereof shan not becontrarytolaw;
TOGETHERWITH all rents,income,revenues,profits,proceeds and benefits at any time derived,received or had from any and all of the above-described property of the Mortgagor.
Provided,however,that except as hereinafter providedin Section 12(b)of Article II hereof,noautomobiles,trucks,trailers,tractors or other vehicles (including without limitation aircraft or ships,if any)owned orusedbytheMortgagorshallbeincludedintheMortgagedProperty.
TO HAVE AND TO HOLD all and singular the Mortgaged Property unto the Mortgagees andtheirrespectiveassignsforever,to secure equally and ratably the payment of the principal of and interest on thenotes,according to their tenor and effect,without preference,priority or distinction as to interest or principal (exceptasotherwisespecificallyprovidedherein)or as to lien or otherwise of any note over any other note by reason of thepriorityintimeoftheexecution,deliveryor maturity thereof or of the assignment or negotiation thereof,orotherwise,and to secure the due performance of the covenants,agreements and provisions herein and in theConsolidatedLoanAgreementandintheRTFCLoanAgreementcontained,and for the uses and purposes and upontheterms,conditions,provisos and agreements hereinafter expressed and declared.
ARTICLE I
DEFINITIONS AND ADDITIONAL NOTES
SECTION 3.(a)The parties to this Mortgage are hereby deemed to be parties to the UnderlyingMortgage.
(b)In addition to the terms defined elsewhere in this Mortgage,the termsdefinedinthissubsection(b)shall have the meanings specified herein.The terms defined herein include the pluralaswellasthesingularandthesingularaswellastheplural.
"Act"shall mean the Rural Electrification Act of J 936,as amended (7 U.S.C.901 _etseg.).
"Additional Notes"shall mean the Additional RTFC Notes and the Additional RUS Notescollectively.
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"Additional RTFCNotes"shall mean any notes issued by the Mortgagor to RTFC pursuant toArticleI,Section 1 of this Mortgage including any refunding,renewal or substitute notes which may fromtimetotimebeexecutedanddeliveredbytheMortgagortoRTFCpursuanttothetermsofArticleI,Section 1.
"Additional RUS Notes"shall mean any notes issued by the Mortgagor to the Government or FFB,and guaranteed by the Government,pursuant to Article I,Section 1 of this Mortgage including anyrefunding,renewal,or substitute notes which may from time to time be executed and delivered by theMortgagortotheGovernmentpursuanttothetermsofArticleI,Section J.
"Consolidated Loan Agreement"shall mean the loan agreement between the Mortgagor and theGovernment,under the heading "Telephone Loan Contract"in Schedule A hereto,as the same may have
been previously amended,and any futureamendments thereto,together with any agreements among theMortgagor,the Government,acting through the Administrator,and FFB,pursuant to which the GovernmentguaranteestheloansmadebyFFBtotheMortgagor,pursuant to the Act,and any amendments thereto.
"Current Notes"shall mean the notes issued by the Mortgagor to secure the loans to the MortgagormadeinconjunctionwiththisMortgagepayabletotheorderoftheGovernmentundertheheading"CurrentRUSNote(s)"in Schedule A hereto,payable to the order of RTFC under the heading "Current RTFCNote"in Schedule B hereto,payable to FFB under the heading "Current FFB Note"in Schedule A hereto andpayabletotheorderoftheGovernmenttoreimbursetheGovernmentforcertainamountspaidfromtime to
time by the Government to FFB under the heading "Current Reimbursement Note"in Schedule A hereto.
"Existing Facilities"shall mean the telephone system and other facilities presently owned by theMortgagoridentifiedintheGrantingClauseofthisMortgage.
"FFB"shall mean the Federal Financing Bank.
"this Mortgage"shall mean this Restated Mortgage,Security Ágreement and Financing Statement,including any amendments or supplements thereto from time to time.
"notes"shall mean collectively the RTFC Notes and the RUS Notes.
"Outstanding Notes"shall mean the notes evidencing outstanding indebtedness of the Mortgagor to
the Government under the heading "Outstanding RUS Notes"in Schedule A hereto,to RTFC under theheading"Outstanding RTFCNotes"in Schedule B hereto and to FFB under the heading "Outstanding FFB
Notes"in Schedule A hereto.
"RTFC Loan Agreement"shall mean the loan agreement (s)between the Mortgagor and RTFC
listed in Schedule B hereto under the heading "Prior RTFCLoan Agreement(s)"and any amendmentsthereto,the loan agreement under the heading "Current RTFC Loan Agreement"in Schedule B hereto with
respect to any Current Note payable to RTFClisted in Schedule B hereto and any loan agreements with
respect to Additional RTFCNotes and any amendments thereto.
"RTFC Notes"means the Outstanding Notes payable to RTFC,the Current Notes payable toRTFCandtheAdditionalRTFCNotes.
"RUS Notes"shall mean the Outstanding Notes payable to the order of the Government andpayabletoFFB,the Current Notes payable to the order of the Government and payable to FFB and theAdditionalRUSNotes.
"Underlying Mortgage"shall mean the instruments identified as such in Schedule A hereto andScheduleBhereto.
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Where in these definitions there is a reference to an instrument as being listed under a particularheadinginSchedulesAandBandnosuchheadingisincludedinSchedulesAandBthensuchdefinitionshallbereadasthoughtherewerenosuchreference.
(c)The Mortgagor,when authorized by resolution or resolutions of its board ofdirectors,may from time to time (1)execute and deliver to the Government one or more Additional RUS Notes toevidenceloansmadeorguaranteedbytheGovernmenttotheMortgagorpursuanttotheAct,or to evidenceindebtednessoftheMortgagorincurredbytheassumptionbytheMortgagoroftheindebtednessofathirdparty orpartiestotheGovernmentcreatedbyaloanorloanstheretoforemadeorguaranteedbytheGovernmenttosuchthirdpartyorpartiespursuanttotheAct,and (2)execute and deliverto RTFC one or more Additional RTFC Notes toevidenceloansmadebyRTFCtotheMortgagor,or to evidence indebtedness of the Mortgagor incurred by theassumptionbytheMortgagor,of the indebtedness of a third party or parties to RTFC created by a loan or loanstheretoforemadebyRTFCtosuchpartyorparties.The Mortgagor,when authorized by resolution or resolutions ofitsboardofdirectors,may also from time to time execute and deliverone or more AdditionalNotes to refund anynoteornotesatthetimeoutstandingandsecuredhereby,or to renew or in substitution for,any such outstanding noteornotes.Additional Notes shall contain such provisions and shall be executed and delivered upon such terms andconditionsastheboardofdirectorsoftheMortgagorintheresolutionorresolutionsauthorizingtheexecutionanddeliverythereofandtherelevantlendershallprescribe;provided,however,that the outstanding principal balancesowingonthenotesshallnotatanyonetimeexceedtwenty-fivemillion dollars and no cents ($25,000,000.00)and nonoteshallmaturemorethanfifty(50)years after the date hereof.Additional Notes,including refunding,renewalandsubstitutenotes,when and as executed and delivered,shall be secured by this Mortgage,equally and ratably withallothernotesatthetimeoutstanding,without preference,priority,or distinction of any of the notes over any otherofthenotesbyreasonofthepriorityofthetimeoftheexecution,deliveryor maturity thereof or of the assignment ornegotiationthereof.Except as hereinafter provided,however,no Additional RTFCNotes shall be secured by thisMortgagewithoutthepriorwrittenapprovalthereofbytheGovernment,and no AdditionalRUS Notes shall besecuredbythisMortgagewithoutthepriorwrittenapprovalthereofbyRTFC.No such prior written approval shallberequiredwithrespecttotheexecutionanddeliverybytheMortgagorof(1)notes issued to refund,renew orsubstituteforanyoutstandingnoteornotes,and (2)the Outstanding Notes,and (3)AdditionalNotes issued to theGovernmentinaccordancewithSubsection(d)of this Section 1.
(d)The Mortgagormay execute and deliverAdditionalRUS Notes to evidencealoanorloansfromtheGovernmenttotheMortgagorand/or a loan or loans fromFFB to the Mortgagorprovidedthatthefollowingconditionprecedentismetwithrespecttoeachsuchloan:
Written acknowledgment is obtained from RUS and RTFCindicating that RUS's and RTFC's proformafinancialanalysisoftheMortgagor,for the test year used by RUS in establishing the economic feasibility ofsuchloanshowsthattheMortgagorshallhaveaTimesInterestEarnedRatio("TIER")of not less than 1.5;a DebtServiceCoverage("DSC")of not less than 1.25;and an Equity to Assets Ratio equal to or greater than 40%,as theabovearedefinedinArticleII,Section 20 hereof,taking into account the interest to be charged on the AdditionalRUSNotesproposedtobeexecutedanddeliveredtoevidencesuchloan.
(e)As used in this Mortgage,the term "directors"includes trustees.
SECTION 2.The Mortgagor,when authorized by resolution or resolutions of its board ofdirectors,may from time to time execute,acknowledge,deliver,record and file mortgages supplemental to thisMortgagewhichthereaftershallformaparthereof,for the purpose of formallyconfirmingthis Mortgage as securityforthenotes.Nothing herein contained shall require the execution and deliveryby the Mortgagor of a supplementalmortgageinconnectionwiththeissuancehereunderorthesecuringherebyofnotesexceptashereinafterprovidedinSection12ofArticleIIhereof.
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ARTICLE II
PARTICULARCOVENANTS OF THE MORTGAGOR
The Mortgagorcovenants with the Mortgagees and the holders of notes secured hereby(hereinafter sometimes collectively called the "noteholders")and each of them as follows:
SECTION1.The Mortgagoris duly authorized under its articles of incorporation and by-laws andthelawsoftheStateofitsincorporationandallotherapplicableprovisionsoflawtoexecuteanddelivertheOutstandingNotes,the Current Notes and this Mortgage and to execute and deliverAdditionalNotes;and allcorporateactiononitspartfortheexecutionanddeliveryoftheOutstandingNotes,the Current Notes and thisMortgagehasbeendulyandeffectivelytaken;and the Outstanding Notes,the Current Notes and this Mortgage are,or when executed and delivered will be,the valid and enforceable obligations of the Mortgagor in accordance withtheirrespectiveterms.
SECTION2.The Mortgagor warrants that it has good,right and lawful authority to mortgage thepropertydescribedinthegrantingclauseofthisMortgageforthepurposeshereinexpressed,and that the saidpropertyisfreeandclearofanydeedoftrust,mortgage,lien,charge or encumbrance thereon or affecting the titlethereto,except (i)the lien of this Mortgage and taxes or assessments not yet due;(ii)deposits or pledges to securepaymentofworker's compensation,unemployment insurance,old age pensions or other social security;and (iii)deposits or pledges to secure performance of bids,tenders,contracts (other than contracts for the payment ofborrowedmoney),leases,public or statutory obligations,surety or appeal bonds,or other deposits or pledges forpurposesoflikegeneralnatureintheordinarycourseofbusiness.The Mortgagor wilL so long as any of the notesshallbeoutstanding,maintain and preserve the lien of this Mortgage superior to all other liens affecting theMortgagedProperty,and will foreverwarrant and defend the title to the property described as being mortgagedherebytotheMortgageesagainstanyandallclaimsanddemandswhatsoever.The Mortgagor will promptly pay ordischargeanyandallobligationsfororonaccountofwhichanysuchlienorchargemightexistorcouldbecreatedandanyandalllawfultaxes,rates,levies,assessments,liens,claims or other charges imposed upon or accruing uponanyoftheMortgagor's property (whether taxed to the Mortgagoror to any noteholder),or the franchises,earnings orbusinessoftheMortgagor,as and when the same shall become due and payable;and whenever called upon so to dotheMortgagorwillfurnishtotheMortgageesortoanynoteholderadequateproofofsuchpaymentordischarge.
'SECTION3.The Mortgagor will duly and punctually pay the principal of and interest on thenotesatthedatesandplacesandinthemannerprovidedtherein,according to the true intent and meaning thereof,and all other sums becoming due hereunder.The Mortgagormay at any time make prepayments on account of all orpartoftheprincipalofthenotestotheextentandinthemannerthereinprovidedandassetforthintheConsolidatedLoanAgreementandtheRTFCLoanAgreement;providedthat any such prepayment shall be applied pro rata to theRUSNotesandtheRTFCNotes,according to the proportions that the aggregate unpaid principal amount of theRUSNotesandtheaggregateunpaidprincipalamountoftheRTFCNotes,respectively,bear lo the aggregate unpaidprincipalamountoftheRUSNotesandtheRTFCNotes,collectively,on the date of prepayment and shall beappliedtosuchnotesandinstallmentsthereofasmaybedesignatedbytherespectivenoteholdersal.the time of anysuchprepayment.For purposes of this Section 3,deliveryby the Mortgagor of any note which renews or is insubstitutionforanoutstandingnoteshallnotbeconsideredaprepaymenthereunderanddeliveryofarefunding noteshallnotbeconsideredaprepaymentprovidedthat,the refunding note will result in (1)an economic benefit definedasapresentvaluesavingswhencomparingthecashflowsoftherefundingnotewiththecashflowsofthenotebeingrefunded;(2)will not cause the TIER as of the most recent December 31 RUS Form 479,when recalculated bysubstitutingtheactualinterestexpenseofthenotetoberefundedwiththepro.jected interest expense of the refundingnote,to be less than the greater of the TIER before such recalculation or J.5;and (3)will not cause the DSC as of themostrecentDecember31RUSForm479,when recalculated by substituting the scheduled principal payments of thenotetoberefundedwiththescheduledprincipalrepaymentsoftherefundingnote,to be less than 1.25.Additionally,the majority RUS noteholders and the majority RTFC noteholders (as such terms are defined in Section4ofArticleIIhereof)may agree that such noteholder shall not be paid the pro rata prepayment to which suchnoteholdermaybeentitledunderthisSection3.
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SECTION4.(a)The Mortgagor wilL at all times,so long as any of the notes shall be outstanding,take or cause to be taken all such action as from time to time may be necessary to preserve its corporate existenceandtopreserveandrenewallfranchises,rights of way,easements,permits and licenses now or hereafter to il grantedoruponitconferred,and will comply with all valid laws,ordinances,regulations and requirements applicable to it oritsproperty.The Mortgagorwill not,without the approval in writing of the holder or holders of not less than amajorityinprincipalamountoftheRUSNotesatthetimeoutstanding(hereinafter called the "majority RUSnoteholders")and of the holder or holders of not less than a majority of the RTFC noteholders at the timeoutstanding(hereinaftercalled the "majority RTFC noteholders"),take or suffer to be taken any steps to reorganize,or to consolidate with or merge into any other corporation or to permit any other corporation to merge into theMortgagororacquireallorsubstantiallyallofthebusinessorassetsofanothercorporationifsuchacquisition isanalogousinpurposeoreffecttoamergerorconsolidationortosell,lease or transfer,mortgage,convey by deed tosecuredebt,pledge or encumber other than under the lien hereof (or make any agreement therefor)the MortgagedProperty,or any part thereof.
(b)Nothing herein contained shall prevent any such reorganization,consolidation or merger provided that the lien and security of this Mortgage and the rights or powers of theMortgageesandthenoteholdershereundershallnottherebybeimpairedoradverselyaffected,and providedthatuponsuchreorganization,consolidation or merger,the due and punctual payment of the principal of and interest onthenotesaccordingtotheirtenorandthedueandpunctualperformanceofallcovenantsandconditionsofthisMortgageshallbeassumedbythecorporationformedbysuchreorganization,consolidation or merger,and the lienofthisMortgageshallremainasuperiorlienuponthepropertyownedbytheMortgagoratthetimeofsuchreorganization,consolidation or merger and upon any improvements or additions to such property,either prior to orsubsequenttosuchreorganization,consolidation or merger.
(c)The Mortgagor may,however,without obtaining the approval of the holderorholdersofanyofthenotesatthetimeoutstanding,at any time or from time to time so long as the Mortgagorisnotindefaulthereunder,sell or otherwise dispose of,free from the lien hereof,any of its property which is neithernecessarytonorusefulfortheoperationoftheMortgagor's business,or which has become obsolete,worn out ordamagedorotherwiseunsuitableforthepurposesoftheMortgagor;provided,however,that the Mortgagor shall:(1)to the extent necessary,replace the sarne by,or substitute therefor,other property of the same kind and nature,which shall be subject to the lien hereof,free and clear of all prior liens,and apply any proceeds derived from suchsaleorotherdispositionofsuchpropertyandnotneededforthereplacementthereoftothepaymentoftheindebtednessevidencedbytheRUSNotesandtheRTFCNotesintheproportionswhichtheaggregateprincipalbalancesthenowingontheRUSNotesandtheaggregateprincipalbalancesthenowingontheRTFCNotes,respectively,bear to the aggregate principal balances then owing on the RUS Notes and the RTFC Notes,collectively,and shall be applied to such notes and installments thereof as may be designated by the respectivenoteholdersatthetimeofanysuchreceipt;or (2)immediately upon the receipt of the proceeds of any sale or otherdispositionofsaidproperty,apply the entire amount of such proceeds to the payment of the indebtedness evidencedbytheRUSNotesandtheRTFCNotesintheproportionsandinthemannerprovidedforin(1)above;or (3)depositallorsuchpartoftheproceedsderivedfromthesaleorotherdispositionofsaidpropertyasthemajorityRUSnoteholdersandthemajorityRTFCnoteholdersshallspecifyinsuchrestrictedbankaccountsassuchholderorholdersshalldesignate,and shall use the same only for such additions to or improvements of the Mortgaged Propertyandonsuchtermsandconditionsassuchholderorholdersshallspecify.
SECTION5.The Mortgagor will at all times maintain and preserve the Mortgaged Property ingoodrepair,working order and condition,and will from time to time make all needful and proper repairs,renewals,and replacements and useful and proper alterations,additions,betterments and improvements,and will,subject tocontingenciesbeyonditsreasonablecontrol,at all times keep its plant and properties in continuous operation and useallreasonablediligencetofurnishthesubscribersservedbyitthroughtheMortgagedPropertywithadequatetelephoneservice.
SECTION6.Except as specifically authorized in writing in advance by the majority RUSnoteholdersandthemajorityRTFCnoteholders,the Mortgagor will purchase all materials,equipment,supplies and
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replacements to be incorporated in or used in connection with the Mortgaged Property outright.and not subject toanyconditionalsalesagreement,chattel mortgage,bailment lease,or other agreement reserving to the seller anyright,title or lien.
SECTION7.(a)The Mortgagorshall take out,as the respective risks are incurred,and maintain the classes and amounts of insurance in conformance with generally accepted utility industry standardsforsuchclassesandamountsofcoverageforutilitiesofthesizeandcharacteroftheMortgagorandconsistentwith"Prudent Utility Practice."Prudent Utility Practice shall mean any of the practices,methods,and acts which,in theexerciseofreasonablejudgement,in light of the facts,including but not limited to,the practices,methods,and actsengagedinorapprovedbyasignificantportionofthetelecommunicationsindustrypriorthereto,known at the timethedecisionwasmade,would have been expected to accomplish the desired result consistent with cost-effectiveness,reliability,safety,and expedition.It is recognized that Prudent Utility Practice is not intended to be limited tooptimumpractice,method,or act to the exclusion of all others,but rather is a spectrum of possible practices,methods,or acts which could have been expected to accomplish the desired result at the lowest reasonable costconsistentwithcost-effectiveness,reliability,safety,and expedition.
(b)The foregoinginsurance coverage shall be obtained by means ofbondandpolicyformsapprovedbyregulatoryauthoritieshavingjurisdiction,and,with respect to insurance uponanypartoftheMortgagedProperty,shall provide that the insurance shall be payable to Mortgagees as their interestsmayappearbymeansofthestandardmortgageeclausewithoutcontribution.Each policy or other contract for suchinsuranceshancontainanagreementbytheinsurerthat,notwithstanding any right of cancellation reserved to suchinsurer,such policy or contract shall continue in force for at least 30 days after written notice to each Mortgagee ofsuspension,cancellation,or termination.
(c)In the event of damage to or the destruction of any portion of theMortgagedPropertywhichisusedorusefulintheMortgagor's business and which shall be covered by insurance,unless each Mortgagee shall otherwise agree,the Mortgagorshall replace or restore such damaged,destroyed,or lostportionsothatsuchMortgagedPropertyshalbeinsubstantiallythesameconditionasitwasinpriortosuchdamage,destruction,or loss and shall apply the proceeds of the insurance for that purpose.The Mortgagor shallreplacethelostportionofsuchMortgagedPropertyorshallcommencesuchrestorationpromptlyaftersuchdamage,destruction,or loss shall have occurred and shall complete such replacement or restoration as expeditiously aspracticable,and shall pay or cause to be paid out of the proceeds of such insurance form all costs and expenses inconnectiontherewith.
(d)Sums recovered under any policy or fidelity bond by the MortgagorforalossoffundsadvancedunderthenotesorrecoveredbyanyMortgagororanynoteholderforanylossundersuchpolicyorbondshall,unless applied as providedin the preceding paragraph,be used to finance construction ofutilityplantsecuredortobesecuredbythisMortgage,or unless otherwise directed by the Mortgagees,be applied totheprepaymentofthenotesprorataaccordingtotheunpaidprincipalamountsthereof(such prepayments to beappliedtosuchnotesandinstallmentsthereofasmaybedesignatedbytherespectiveMortgageeatthetimeofanysuchprepayment),or be used to construct or acquire utility plant which will become part of the Mortgaged Property.At the request of any Mortgagee,the Mortgagor shall exercise such rights and remedies which they may have undersuchpolicyorfidelitybondandwhichmaybedesignatedbysuchMortgagee,and the Mortgagor hereby irrevocablyappointseachMortgageeasitsagenttoexercisesuchrightsandremediesundersuchpolicyorbondassuchMortgageeinaychoose,and the Mortgagor shall pay all costs and reasonable expenses incurred by the Mortgagee inconnectionwithsuchexercise.
SECTION8.In the event of the failure of the Mortgagorin any respect to comply with thecovenantsandconditionshereincontainedwithrespecttotheprocuringofinsurance,the payment of taxes,assessments and other charges,the keeping of the Mortgaged Property in repair and free of liens and other claims ortocomplywithanyothercovenantcontainedinthisMortgage,any noteholder or noteholders shall have the right(without prejudice to any other rights arising by reason of such default)to advance or expend moneys for the purposeofprocuringsuchinsurance,or for the payment of insurance premiums,taxes,assessments or other charges,or to
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save the Mortgaged Property from sale or forfeiturefor any unpaid tax or assessment,or otherwise,or to redeem the
same from any tax or other sale.or to purchase any tax title thereon,or to remove or purchase any mechanics'hens
or other encumbrance thereon,or to make repairs thereon or to comply with any other covenant herein contained or
to prosecute or defend any suit in relation to the Mortgaged Property or in any manner to protect the MortgagedPropertyandthetitlethereto,and all sums so advanced for any of the aforesaid purposes with interest thereon at thehighestlegalratebutnotinexcessofChaseManhattanPrimeplus400BasisPointsperannumshanbedeemedachargeupontheMortgagedPropertyinthesamemannerasthenotesatthetimeoutstandingaresecuredandshalbeforthwithpaidtothenoteholderornoteholdersmakingsuchadvanceoradvancesupondemand.It shall not beobligatoryforanynoteholderinmakinganysuchadvancesorexpenditurestoinquireintothevalidityofanysuch
tax title,or of any of such taxes or assessments or sales therefor,or of any such mechanics'liens or otherencumbrance.
SECTION 9.The Mortgagorwill not,without the approval in writing of the majority RUS
noteholders and the majority RTFCnoteholders:(a)enter into any contract or contracts for the operation ormaintenanceofalloranypartofitsproperty.for the use by others of any of the Mortgaged Property,or for tolltraffic,operator assistance,extended scope or switching services to be furnished by or for connecting or othercompanies;provided,however,that such approval shall not be required for any toll traffic or operator assistancecontractwhichinformandsubstanceconformswithcontractsingeneraluseinthetelephoneindustry;or (b)depositanyofitsfunds,regardless of the source thereof.in any bank,institution or other depository which is not insured bytheFederalGovernment.
SECTION 10.Salaries,wages and other compensation paid by the Mortgagor for services,anddirectors'or trustees'fees,shall be reasonable and in conformity with the usual practice of corporations of the size
and nature of the Mortgagor.Except as specifically authorized in writing in advance by the majority RUSnoteholdersandthemajorityRTFCnoteholders.the Mortgagor will make no advance payments or loans,or in anymannerextenditscredit,either directly or indirectly.with or without interest,to any of its directors,trustees,officers,employees,stockholders,members or alTiliated companies,provided,however,the Mortgagor may make aninvestmentforanypurposedescribedinsection607(ex2)of the Rural Development Act of 1972 (including anyinvestmentin,or extension of credit,guarantee or advance made to,an affiliated company of the Mortgagor that is
used by such company for such purpose)to the extent that,immediately after such investment,(1)the aggregate ofsuchinvestmentsdoesnotexceedone-third of the net worth (defined in Exhibit One hereto)of the Mortgagor and
(2)the Mortgagor's net worth is at least twenty percent of its total assets (defined in Exhibit One hereto).As usedherein,the term "affiliated companies"shall have the meaning prescribed for this term by the Federal
Communications Commission in its prevailinguniform system of accounts for Class A telephone companies.
SECTION 11.The Mortgagor will at all times keep,and safely preserve,proper books,records
and accounts in which full and true entries will be made of all of the dealings,business and affairs of the Mortgagor,in accordance with methods of accounting prescribed by the state regulatory body having jurisdiction over theMortgagor,or in the absence of such regulatory body or such prescription,by the Federal Communications
Commission in its uniform system of accounts for telecommunications companies as those methods and principles ofaccountingmaybesupplementedfromtimetotimehyRUS.The Mortgagorwill prepare and furnish eachnoteholdernotlaterthanthethirtiethdayofJanuary,Aprik July and October in each year,or at such more or lessfrequentintervalswhenspecifiedbythemajorityRUSnoteholdersandthemajorityRTFCnoteholders,financial andstatisticalreportsonitsconditionandoperations.Such reports shall be on the RUS Form 479 and include suchinformationasmaybespecifiedbythemajorityRUSnoteholdersandthemajorityRTFCnoteholders,includingwithoutlimitationananalysisoftheMortgagor's revenues,expenses and subscriber accounts.The Mortgag r will
cause to be prepared and furnished to each noteholder at least once during each 12-month period during the termhereof,a full and complete report of its financial condition and cash flow as of a date (hereinafter called the "FiscalDate")not more than 90 days prior to the date such report is furnished to the noteholders hereunder,and of itsoperationsforthe12-month period ended on the Fiscal Dale,in form and substance satisfactory to the majority RUSnoteholdersandthemajorityRTFCnoteholders,audited and certified by independent certified public accotmtantssatisfactorytosaidnoteholders,and accompanied by a report of such audit in form and substance satisfactory to saidnoteholders.Each of the majority RUS noteholders or the majority RTFCnoteholders,through its or their
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representatives,shall at all times during reasonable business hours have access to,and the right to inspect and makecopiesof,any or an books,records and accounts,and any or all invoices,contracts,leases,payrolls,cancelledchecks,statements and other documents and papers of every kind belonging to or in the possession of the Mortgagororinanywisepertainingtoitspropertyorbusiness.The Mortgagorshall enter into an audit agreement with anindependentcertifiedpublicaccountantinformandsubstancesatisfactorytothemajorityRUSnoteholdersand themajorityRTFCnoteholders.
SECTION12.(a)The Mortgagor will from time to time upon written demand of the majorityRUSnoteholdersorthemajorityRTFCnoteholdersmake,execute,acknowledge and deliver or cause to be made,executed,acknowledged and delivered all such further and supplemental indentures of mortgage,deeds of trust,mortgages,financingstatements,continuation statements,security agreements,instruments and conveyances as mayreasonablyberequestedbythemajorityRUSnoteholdersorthemajorityRTFCnoteholdersandtakeorcausetobetakenallsuchfurtheractionasmayreasonablyberequestedbythemajorityRUSnoteholdersorthemajorityRTFCnoteholderstoeffectuatetheintentionofthesepresentsandtoprovideforthesecuringandpaymentoftheprincipalofandinterestonthenotesequallyandratablyaccordingtothetermsthereofandforthepurposeoffullyconveying,transferring and confirmingunto the Mortgagees the property hereby conveyed,mortgaged and pledged,or intendedsotobe,whether now owned by the Mortgagor or hereafter acquired by it and to reflect the assignment of the rightsorinterestsofanyoftheMortgageesorofanynoteholderhereunderorunderanynote.The Mortgagor will causethisMortgageandanyandallsupplementalindenturesofmortgage,mortgages and deeds of trust and every securityagreement,financing statement,continuation statement and every additional instrument which shall be executedpursuanttotheforegoingprovisionsforthwithuponexecutiontoberecordedandfiledandrerecordedandrefiled asconveyancesandmortgagesanddeedsoftrustofandsecurityinterestsinrealandpersonalpropertyinsuchmannerandinsuchplacesasmayberequiredbylaworreasonablyrequestedbythemajorityRUSnoteholdersorthemajorityRTFCnoteholdersinorderfullytopreservethesecurityforthenotesandtoperfectandmaintainthesuperiorlienofthisMortgageandallsupplementalindenturesofmortgage,mortgages and deeds of trust and therightsandremediesoftheMortgageesandthenoteholders.
(b)In the event that the Mortgagorhas had or suffers a deficit in net income ornetmargins,as determined in accordance with methods of accounting prescribed in Section 11 of Article II hereof,for any of the five (5)fiscal years immediately preceding the date hereof or for any fiscal year while any of the notesareoutstanding,the Mortgagor will at any time or times upon written demand of the majority RUS noteholders or themajorityRTFCnoteholders,make,execute,acknowledge and deliveror cause to be made,executed,acknowledgedanddeliveredall.such furtherand supplemental indentures of mortgage,mortgages,security agreements,financingstatements,instruments and conveyances,and take or cause to be taken all such further action,as may reasonably berequestedbythemajorityRUSnoteholdersorthemajorityRTFCnoteholdersinordertoincludeinthisMortgage,as Mortgaged Property,and to subject to all the terms and conditions of this Mortgage,all right,title and interest oftheMortgagorinandto,all and singular,the automobiles,trucks,trailers,tractors,aircraft,ships and other vehiclesthenownedbytheMortgagor,or which may thereafter be owned or acquired by the Mortgagor.From and after the -time of such written demand of the majority RUS noteholders or the majority RTFCnoteholders such vehicles shallbedeemedtobepartoftheMortgagedPropertyforallpurposeshereof.
SECTION13.Any noteholder may,at any time or times in succession without notice to or theconsentoftheMortgagororanyothernoteholderanduponsuchtermsassuchnoteholdermayprescribe,grant toanyperson,firm or corporation who shall have become obligated to pay all or any part of the principal of or interestonanynoteheldbyorindebtednessowedtosuchnoteholderorwhomaybeaffectedbythelienherebycreated,anextensionofthetimeforthepaymentofsuchprincipalorinterest,and after any such extension the Mortgagor willremainliableforthepaymentofsuchnoteorindebtednesstothesameextentasthoughithadatthetimeofsuchextensionconsentedtheretoinwriting.
SECTION 14.The Mortgagor,subject to applicable laws and rules and orders of regulatorybodies,shall charge rates for its telephone service and other services furnished which shall yield revenues at leastsufficientto(1)pay and discharge all taxes.maintenance expenses,operating expenses,and other expenses of itstelephonesystemwhendue,(2)pay all obligations of the Mortgagor and make all payments of principal of and
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interest on the notes when due,(3)provideand maintain reasonable capital for the Mortgagor,(4)maintain anAverageTIERonallofthenotesofnotlessthan1.50 but in no year shall the TIER be less than 1.00,and (5)maintain a DSC of not less than 1.25.Not less than 90 days prior to the effectivedate of any proposed change in itsrate,the Mortgagor shall giveto the holder or holders of the notes written notice of such change and a copy of thescheduleshowingthethenexistingratesandtheproposedchangestherein.
SECTION 15.(a)The Mortgagormay make a distribution (hereinafter called a "distribution"),inthenatureofaninvestment,guarantee,extension of credit,advance,loan,non-affiliated company joint venture,affiliatedcompany investment,or dividend or capital credit distribution only if the majority RUS noteholders and themajorityBanknoteholdershavegivenpriorwrittenapprovaltothedistributionorif,after such distribution,
(1)the Mortgagor's net worth is equal to at least one percent of its total assets and the amount of allsuchdistributionsduringthecalendaryeardoesnotexceedtwenty-five percent of the Mortgagor'snetincomeornelmarginsforthepriorcalendaryear;
(2)the Mortgagor's net worth is equal to at least twenty percent of its total assets and the amount of allsuchdistributionsduringthecalendaryeardoesnotexceedfiftypercentoftheMortgagor's netincomeornelmarginsforthepriorcalendaryear;
(3)the Mortgagor's net worth is equal to at least thirty percent of its total assets and the amount of allsuchdistributionsduringthecalendaryeardoesnotexceedseventy-five percent of its net incomeornetmarginsforthepriorcalendaryear;or
(4)the Mortgagor's net worth is equal to at least forty percent of its total assets,regardless of theaggregateamountofsuchdistributions.
The terms "net worth","total assets",and "net income or net margins"are determined in accordance with ExhibitOne.
(b)In addition to the distributions authorized under the preceding subsection (a),the Mortgagormaymakeanydistributionorinvestmentprovidedin7CFR1744SubpartD.
SECTION 16.In the event that the Mortgaged Property,or any part thereof,shall be taken underthepowerofeminentdomain,all proceeds and avails therefrom,except to the extent that all noteholders shalconsenttootheruseandapplicationthereofbytheMortgagor,shall forthwithbe applied by the Mortgagor:first,totheratablepaymentofanyindebtednessbythisMortgagesecuredotherthanprincipaloforinterestonthenotes;second,to the ratable payment of interest which shan have accrued on the notes and be unpaid;third,to the ratablepaymentoforonaccountoftheunpaidprincipalofthenotesandtosuchinstallmentsthereofasmaybedesignatedbytherespectivenoteholdersatthetimeofanysuchpayment;and fourth,the balance,if any,shall be paid towhosoevershallbeentitledthereto.
SECTION17.The Mortgagorwill well and truly observe and perform all of the covenants,agreements,terms and conditions contained in the Consolidated Loan Agreement and the RTFC Loan Agreement,onitsparttobeobservedorperformed.The Mortgagor will promptly furnish each Mortgagee with written notice ofanyamendmentormodificationofanyagreementunderwhichanoteorotherobligationoftheMortgagorsecuredbythelienofthisMortgagehasbeenorwilbeissued,including,without limitation,the Consolidated LoanAgreementandtheRTFCLoanAgreement,and the occurrence of any default or event of default of which theMortgagorhasknowledgeunderanysuchagreement.In the event of any inconsistency between the terms andconditionsoftheMortgageandtheConsolidatedLoanAgreementandtheRTFCLoanAgreement,the terms of theMortgageshallapplytotheMortgagor.
SECTION18.If all of the notes in any one of the two groups of notes secured hereby (RUS NotesandRTFCNotes)are paid and discharged while notes of the other group of notes remain outstanding,all rights and
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powers of the Mortgagee associated with the paid and discharged group of notes shall vest in the Mortgageeassociatedwiththegroupsofnotesremainingoutstanding,and the rights and powers of the holder(s)of the paid anddischargedgroupofnotesshallvestintheholder(s)of the group of notes remaining outstanding.The Government isthe"Mortgagee associated with"the RUS Notes:and RTFC is the "Mortgagee associated with"the RTFC Notes.The Government,the Mortgagor,RTFC and the noteholders shall execute and deliversuch instruments,assignments,releases or other documents as shall be reasonably required to carry out the intention of this section.
SECTION 19.At all times when any note is held by the Government,or in the event theGovernmentshallassignanotewithouthavinginsuredthepaymentofsuchnote,this Mortgage shall secure paymentofsuchnoteforthebenefitoftheGovernmentorsuchuninsuredholderthereof,as the case may be.Whenever anynotemaybesoldtoaninsuredpurchaser,it shall continue to be considered a "note"as defined herein,but as to anysuchinsurednotetheGovernment,and not such insured purchaser,shall be considered to be,and shall have therightsof,the noteholder for purposes of this Mortgage.Notice of the rights of the Government under the precedingsentenceshallbesetforthinallsuchinsurednotes.As to any note which evidences a loan made by FFB to theMortgagor,and guaranteed by the Government,acting through the Administrator,pursuant to the Act,theGovernmentandnotFFBshallbeconsideredtobe,and shall have the rights of the noteholder for purposes of thisMortgage.
SECTION20.As used in Article I.Section 1(d),Article II,Section 3,and Article II,Section 14hereofandinthisSection,TIERshall mean the Mortgagor's net income or net margins (determined in accordancewithExhibitOnehereto)plus interest expense (determined in accordance with Exhibit One hereto),divided byinterestexpense.
For purposes of Article 11.Section 14 hereof,Average TIER shall be determined as of January 1 ofeachyearduringwhichanyobligationsecuredbythisMortgageremainsunsatisfiedandshallmeantheaverageofthetwohighestTIERratiosachievedbytheMortgagorduringeachofthethreecalendaryearslastprecedingthevariousdatesofitsdetermination.
As used in Article I,Section Ud).Article II,Section 3 and Article II,Section 14 hereof,DSC shallmeanthesumofnetincome,plus interest,plus depreciation,plus amortization,all divided by the sum of interestplusscheduledprincipalpaymentsandcapitalleaseobligationsdueinthetestyear.
As used in Article I,Section 1(d),Equity to Asset Ratio shall mean all equity divided by the totalassetsoftheMortgagor.
SECTION21.(a)Net worth,net income or net margins,interest expense,total assets,depreciation,amortization and equity,as used in Sections 10,15 or 20 of this Article II,are defined in Exhibit OneofthisMortgage.Net plant and secured debt,if referred to in this Mortgage,are also determined in accordance withExhibitOnehereto.
(b)Accounting terms used in this Mortgage shall also apply to accounts orgroupsofaccountsoftheMortgagor,regardless of the account title or the system of accounts used,if such accountshavesubstantiallythesamemeaningasthoseprescribedbytheFederalCommunicationsCommissioninitsprevailinguniformsystemofaccountsfortelecommunicationscompanies(47 CFR Part 32).
SECTION22.If the Underlying Mortgage contains provisions requiring the Mortgagor tomaintainanetplanttosecureddebtratioorafundedreserve,then such provisions are incorporated in and made apartofthisMortgageasthoughfullysetforthhereinatthispoint.
SECTION 23.Schedule A,Schedule B,Exhibit A and Exhibit One,attached hereto,are madepartofthisMortgage.
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ARTICLE III
REMEDIES OF THE MORTOAGEESAND NOTEHOLDERS
SECTION1.If one or more of the following events (hereinafter caled "events of default")shallhappen,that is to say:
(a)defaull shall be made in the payment of any installment of or on account of interest on orprincipalofanynoteornoteswhenandasthesameshallberequiredtobemadewhetherbyacceleration orotherwiseandsuchdefaultshallcontinueforthirty(30)days;
(b)default shall be made in the due observance or performance of any other of the representations,warranties,covenants,conditions or agreements on the part of the Mortgagor in any of the notes,thisMortgage,the Consolidated Loan Agreement or the RTFC Loan Agreement contained;and such defaultshallcontinueforaperiodofthirty(30)days after written notice specifying such default and requiring thesametoberemediedshallhavebeengiventotheMortgagorbyanynoteholder;
(c)the Mortgagor shall file a petition in bankruptcy or be adjudicated a bankrupt or insolvent,orshallmakeanassignmentforthebenefitofitscreditors,or shall consent to the appointment of a receiver ofitselforofitsproperty,or shall institute proceedings for its reorganization or proceedings instituted byothersforitsreorganizationshallnotbedismissedwithinthirty(30)days after the institution thereof;
(d)a receiver or liquidatorof the Mortgagoror of any substantial portion of its property shall beappointedandtheorderappointingsuchreceiverorliquidatorshallnotbevacatedwithinthirty(30)daysaftertheentrythereof;
(e)the Mortgagor shall forfeit or otherwise be deprivedof its corporate charter or franchises,permits or licenses required to carry on any material portion of its business;or
(f)afinal judgment in an amount of two thousand five hundred dollars ($2,500)or more shall beenteredagainsttheMortgagorandshallremainunsatisfiedorwithoutastayinrespectthereofforaperiodofthirty(30)days;
then in each and every such case any noteholder may,by notice in writing to the Mortgagor and deliveryof a copythereoftotheothernoteholders,without protest,presentment or demand declare all unpaid principal of and accruedinterestonanyorallnotesheldbysuchnoteholdertobedueandpayableimmediately;and upon any suchdeclarationallsuchunpaidprincipalandaccruedinterestsodeclaredtobedueandpayableshallbecomeand be dueandpayable,immediately,anything contained herein or in any note or notes to the contrary notwithstanding;provided,however,that if at any time after the unpaid principal of and accrued interest on any of the notes sha11 havebeensodeclaredtobedueandpayable,all payments in respect of principal and interest which shall have becomedueandpayablebythetermsofsuchnoteornotesshallbepaidtotherespectivenoteholders,and all other defaultshereunderandunderthenotesshallhavebeenmadegoodorsecuredtothesatisfactionofallofthenoteholders,together with reimbursement for any resulting expenses os damage and together with interest at the highest ratelegallypermissible,then and in every such case,the noteholder or noteholders who shall have declared the principalofandinterestonnotesheldbysuchnoteholderornoteholderstobedueandpayablemay,by written notice to theMortgagoranddeliveryofacopythereoftotheothernoteholders,annu)such declaration or declarations and waivesuchdefaultordefaultsandtheconsequencesthereof,but no such waiver shall extend to or affect any subsequentdefaultorimpairanyrightconsequentthereon.
SECTION 2.If one or more of the events of default shall happen,the holder or holders of not lessthanamajorityofthetotalamountofprincipaloutstandingonthenotes,hereinafter called the "majoritynoteholders",for itself or themselves,and as the agent or agents of the other noteholders,personaly or by attorney,in its or their discretion,may,insofar as not prohibited by law:
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(a)take immediate possession of the Mortgaged Property,collect and receive all credits,outstanding accounts and bills receivable of the Mortgagorand all rents,income,revenues and profitspertainingtoorarisingfromtheMortgagedProperty,or any part thereof,and issue binding receiptstherefor;and manage,control and operate the Mortgaged Property as fully as the Mortgagor might do if inpossessionthereof,including,without limitation,the making of all repairs or replacements deemednecessaryoradvisable;
(b)proceed to protect and enforce the rights of the Mortgagees and the rights of the noteholder ornoteholdersunderthisMortgageby.suits or actions in equity or at law in any court or courts of competentjurisdiction,whether for specific performance of any covenant or any agreement contained herein or in aidoftheexecutionofanypowerhereingrantedorfortheforeclosurehereoforhereunderorforthesaleoftheMortgagedProperty,or any part thereof,or to collect the debts hereby secured or for the enforcement ofsuchotheroradditionalappropriatelegalorequitableremediesasmaybedeemedmosteffectualtoprotectandenforcetherightsandremedieshereingrantedorconferred,and in the event of the institution of any.such action or suit the noteholder or noteholders instituting such action or suit shall have the right to haveappointedareceiveroftheMortgagedPropertyandofallrents,income,revenues and profits pertainingtheretoorarisingtherefromderived,received or had from the time of the commencement of such suit oraction,and such receiver shall have all the usual powers and duties of receivers,in like and similar cases,tothefullestextentpermittedbylaw,and if application shall be made for the appointment of a receiver theMortgagorherebyexpresslyconsentsthatthecourttowhichsuchapplicationshallbemademaymakesaidappointment;and
(c)sell os.cause to be sold all and singular the Mortgaged Property or any part thereof,and allright,title,interest,claim and demand of the Mortgagor therein or thereto,at public auction at such place inanycountyinwhichthepropertytobesold,or any part thereofis located,at such time and upon such termsasmaybespecifiedinanoticeofsale,which shall state the time when and the place where the sale is to beheld,shall contain a brief general description of the property to be sold,and shall be given by mailing acopythereoftotheMortgagoratleastfifteen(15)days prior to the date fixed for such sale and bypublishingthesameonceineachweekfortwosuccessivecalendarweekspriortothedateofsuch .sale.in anewspaperofgeneralcirculationpublishedinsaidcounty,or if no such newspaper is published in suchcounty,in a newspaper of general circulation in such county,the first such publication to be not less thatfifteen(15)days nor more than thirty (30)days prior to the date fixed for such sale.Any sale to be madeunderthissubparagraph(c)of this Section 2 may be adjourned from time to time by announcement at thetimeandplaceappointedforsuchsaleorforsuchad.journed sale or sales,and without further notice orpublicationthesalemaybehadatthetimeandplacetowhichthesameshallbeadjourned,provided,however,that in the event another or differentnotice of sale or another or differentmanner of conductingthesameshallberequiredbylawthenoticeofsaleshallbegivenorthesaleshallbeconducted,as the casemaybe,in accordance with the applicable provisions of law.
SECTION3.If,within thirty (30)days after the majority noteholders shall have had knowledge ofthehappeningofaneventorevemsofdefault,the majority noteholders shall not have proceeded to exercise therightsandenforceeachoftheremedieshereinorbylawconferreduponorreservedtotheMortgageesortosaidmajoritynoteholders,then,and only then,any noteholder,including the majority noteholders,may proceed toexerciseanysuchrigh1orrightsandremedyorremediesnotbeingenforcedbythemajoritynoteholders.NothingcontainedinthisMortgageshallaffectoiimpairtheright,which is absolute and unconditional,of any holder of anynotewhichmaybesecuredherebytoenforcethepaymentoftheprincipaloforinterestonsuchnoteonthedateordatesanysuchinterestorprincipalshallbecomedueandpayableinaccordancewiththetermsofsuchnote.
SECTION4.At any sale hereunder any noteholder or noteholders shall have the right to bid forandpurchasetheMortgagedProperty,or such part thereof as shall be offered for sale,and any noteholder ornoteholdersmayapplyinsettlementofthepurchasepriceofthepropertysopurchasedtheportionofthenetproceedsofsuchsalewhichwouldbeapplicabletothepaymentonaccountoftheprincipalof-and interest on the
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note or notes held by such noteholder or noteholders,and such amount so applied shall be credited as a payment onaccountofprincipalofandinterestonthenoteornotesheldbysuchnoteholderornoteholders.
SECTION5.Any proceeds or funds arising from the exercise of any rights or the enforcement ofanyremedieshereinprovidedafterthepaymentorprovisionforthepaymentofanyandallcostsandexpensesinconnectionwiththeexerciseofsuchrightsortheenforcementofsuchremediesshallbeappliedfirst,to the paymentofindebtednessherebysecuredotherthantheprincipaloforinterestonthenotes;second,to the ratable payment ofinterestwhichshallhaveaccruedonthenotesandwhichshallbeunpaid;third,to.the ratable payment of or onaccountoftheunpaidprincipalofthenotes;and fourth,the balance,if any,shall be paid to whosoever shall beentitledthereto.
SECTION6.The Mortgagorcovenants that it will give immediate written notice to each of theMortgageesandtoallofthenoteholdersoftheoccurrenceofaneventofdefaultorintheeventthatanyrightorremedydescribedinclauses(a)through (c)of Section 2 of this Article III is exercised or enforced,or any action istakentoexerciseorenforceanysuchrightorremedy.
SECTION7.Every right or remedy herein conferred upon or reserved to the Mortgagees or to thenoteholdersshallbecumulativeandshallbeinadditiontoeveryotherrightandremedygivenhereunderornoworhereafterexistingatlaw,or in equity,or by statute.The pursuit of any right or remedy shall not be construed as anelectionandshallnotprecludethepursuitofanyotherrightorremedy.
SECTION8.The Mortgagor,for itself and all who may clairn through or under it,covenants thatitwillnotatanytimeinsistuponorplead,or in any manner whatever claim,or take the benefit or advantage of,anyappraisement,valuation,stay,extension or redemption laws now or hereafter in force in any locality where any of theMortgagedPropertymaybesituated,in order to prevent,delay or hinder the enforcement of foreciosure of thisMortgage,or the absolute sale of the Mortgaged Property,or any part thereof,or the final and absolute putting intopossessionthereof,immediately after such sale,of the purchaser or purchasers thereat,and the Mortgagor,for itselfandallwhomayclaimthroughorunderit,hereby waives the benefit of all such laws unless such waiver shall beforbiddenbylaw.
SECTION 9.For purposes of this Article III,to the extent permitted by applicable state law,eachnoteholderappointstheMortgageeorMortgageesexercisinganyremedyasaboveprovidedasitsattorney(s)-in-factforsuchpurpose.
SECTION 10.Nothing herein contained shall be deemed to authorize the Mortgagees to authorizeorconsenttooracceptoradoptonbehalfofanynoteholderanyplanofreorganization,arrangement,adjustment orcompositionaffectingthenotesortherightsofanyholderthereof,or to authorize the Mortgagees to vote in respectoftheclaimofanynoteholderinanysuchproceeding.
SECTION 11.Any rights of action and claims under this Mortgage or the notes may beprosecutedandenforcedbythenoteholderornoteholdersprosecutingandenforcingthesamewithoutthe possessionofanyofthenotesortheproductionthereofinanyproceedingrelatingthereto,and,to the extent permitted byapplicablestatelaw,any such proceeding instituted by any noteholder shall be brought in its own name asattorney-in-fact for the noteholders,and any recovery of judgment shalL after provisionfor the payment of thereasonablecompensation,expenses,disbursements and advances of the noteholders,their agents and counsel (butonlytotheextentactuallyincurred),be for the ratable benefit of the noteholders in respect of which such judgmenthadbeenrecovered.
ARTICLE IV
POSSESSION UNTIL DEFAULT-DEFEASANCECLAUSE
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SECTION 1.Until some one or more of the events of default shall have happened.the Mortgagorshallbe-suffered and permitted to retain actual possession of the Mortgaged Property,and to manage,operate andusethesameandanypartthereof,with the rights and franchises appertaining thereto,and to collect,receive,take,use and enjoy the rents,revenues,issues,earnings,income,products and profits thereof or therefrom,subject to theprovisionsofthisMortgage.
SECTION2.The assignments to the Mortgagees of all of the Mortgagor's right,title and interestin,to and under contracts,licenses,franchises,ordinances,privileges,permits,chattel paper,contract rights,leases,subleases,(hereinafter collectively referred to in this Section 2 as the "assigned items"),to the extent set forth in thegrantingclausesofthisMortgage,constitutes an assignment for security purposes.Notwithstanding any otherprovisionsofthisMortgagetothecontrary,the Mortgagorshall at all times remain liable under each of the assigneditemstoperformallofitsdutiesandobligationsthereundertothesameextentasiftherehadbeennoassignmentcontainedinthisMortgage.Furthermore,(i)neither the assignment under this Mortgage nor the exercise by theMortgageesoftherightsassignedhereundershallcausetheMortgageestobecomesubjecttoanyobligationorliabilityunderanyoftheassigneditems,or release the Mortgagorfrom any of its duties or obligations under any oftheassigneditems,or any instrument or document relating thereto,except to the extent such exercise by anyMortgageeshallconstituteperformanceofsuchdutiesorobligations,and (ii)no Mortgagee shall have anyobligationbyreasonoftheassignmentunderthisMortgagetomakeanyinquiryastothesufficiencyorauthorizationforanypaymentsreceivedbyitortakeanyotheractiontocollectorenforceanyclaimforpaymentassignedhereunder.
SECTION3.If the Mortgagorshall well and truly pay or cause to be paid the whole amount of theprincipalofandtheinterestonthenotesatthetimeandinthemannerthereinprovided,according to the true intentandmeaningthereof,and shall also pay or cause to be paid all other sums payable hereunder by the Mortgagor andshallwellandtrulykeepandperformaccordingtothetrueintentandmeaningofthisMortgage,all covenants hereinrequiredtobekeptandperformedbyit,then and in that case,all property,rights and interests hereby conveyed orassignedorpledgedshallreverttotheMortgagorandtheestate,right,title and interest of the Mortgagees and thenoteholdersshallthereuponcease,determine and become void and the Mortgagees and the noteholders,in such case,on written demand of the Mortgagor but at the Mortgagor's cost and expense,shall enter satisfaction of thisMortgageupontherecord.In any event,each noteholder,upon payment in full to him by the Mortgagor of allprincipalofandinterestonanynoteheldbyhimandthepaymentanddischargebytheMortgagorofallcharges duetosuchnoteholderhereunder,shall execute and deliver to the Mortgagorsuch instrument of satisfaction,dischargeorreleaseasshallberequiredbylawinthecircumstances.
ARTICLE V
MISCELLANEOUS
SECTION1.It is hereby declared to be the intention of the Mortgagor that all lines,or systems,embraced in the Mortgaged Property,including,without limitation,all rights of way and easements granted or giventotheMortgagororobtainedbyittouserealpropertyinconnectionwiththeconstruction,operation or maintenanceofsuchlines,or systems,and all service and connecting lines,poles,posts,crossarms,wires,cables,conduits,ducts,connections and fixtures formingpart of,or used in connection with,such lines,or systems,and all other propertyphysicallyattachedtoanyoftheforegoing-described property,shall be deemed to be real property.
SECTlON 2.All acts and obligations of the Mortgagorhereunder shall be subject to all applicableorders,rules and regulations,now or hereafter in effect,of all regulatory bodies having jurisdiction in the premises,to the end that no act or omission to act on the part of the Mortgagor shall constitute a default hereunder insofar assuchactoromissionshallhavebeenrequiredbyreasonofanyorder,rule or regulation of any such regulatory body.
SECTION3.All of the covenants,stipulations,promises,undertakings and agreements hereincontainedbyoronbehalfoftheMortgagorshallbinditssuccessorsandassigns,whether so specified or not,and alltitles,rights and remedies hereby granted to or conferred upon the Mortgagees shall pass to and inure to the benefit
TMAG-01-09-003-ID Page 16
of the successors and assigns of the Mortgagees and shall be deemed to be granted or conferred for the ratablebenefitandsecurityofallwhoshallfromtimetotimebetheholdersofnotesexecutedanddeliveredashereinprovided.The Mortgagorand each of the Mortgagees hereby agree to execute and deliver such consents,acknowledgments and other instruments as may be reasonably requested by any of the Mortgagees or any noteholderinconnectionwithanyassignmentoftherightsorinterestsofanyMortgageeornoteholderhereunderorunderthenotes.
SECTION4.The descriptive headings of the various articles of this Mortgage were formulatedandinsertedforconvenienceonlyandshallnotbedeemedtoaffectthemeaningorconstructionofanyoftheprovisionshereof.
SECTION5.All demands,notices,reports,approvals,designations,or directions required orpermittedtobegivenbereundershallbeinwritingandshallbedeemedtobeproperlygivenifmailedbyregisteredmailaddressedtotheproperpartyorpartiesatthefollowingaddresses:
As to the Mortgagor:As stated in the testimonium clause hereof.
As to the Mortgagees The Government:
Rural Utilities Service
U.S.Department of Agriculture
Washington,D.C.20250-1500
RTFC:
Rural Telephone Finance
Cooperative
Woodland Park
2201 Cooperative Way
Herndon,Virginia 22071-3025
and as to any other person,firm,corporation or governmental body or agency having an interest herein by reason ofbeingtheholderofanynoteorotherwise,at the last address designated by such person,firm,corporation,governmental body or agency to the Mortgagorand the Mortgagees.The Mortgagor or the Mortgagees may fromtimetotimedesignatetooneanotheranewaddresstowhichdemands,notices,reports,approvals,designations ordirectionsmaybeaddressedandfromandafteranysuchdesignationtheaddressdesignatedshallbedeemedtobetheaddressofsuchpartyinlieuoftheaddresshereinabovegiven.The Mortgagor will promptly notify theMortgageesinwritingofanychangeinlocationofitschiefplaceofbusinessortheofficewhereitsrecordsconcerningaccountsandcontractrightsarekept.
SECTION6.The invalidity of any one or more phrases,clauses,sentences,paragraphs orprovisionsshallnoteffecttheremainingportionsofthisMortgage,nor shall any such invalidityas to any MortgageeorastoanyholderofnoteshereunderaffecttherightshereunderoftheotherMortgageeoranyotherholderorholdersofnotes.
SECTION7.To the extent that any of the property described or referred to in this Mortgage isgovernedbytheprovisionsoftheUniformCommercialCodethisMortgageisherebydeemeda"securityagreement"under the Uniform Commercial Code,and a "financing statement"únder the Uniform Commercial Codeforsaidsecurityagreement.The mainng addresses of the Mortgagor as debtor,and of the Mortgagees as securedparties,are as set forth in Section 5 of this Article V.
SECTION8.The Mortgagor agrees to indemnify and save harmless the Mortgagees against anyliabilityordamageswhichanysuchMortgageemayincurorsustainintheexerciseandperformanceofitspowersanddutieshereunder.For such reimbursement and indemnity,such Mortgagee shall be secured under this Mortgage
TMAG-01-09-003-ID Page 17
in the same manner as the notes and all such reimbursements for expense or damage shall be paid to such Mortgagee
with interest at the rate specified in Article II,Section 8 hereof.
SECTION9.This Mortgage may be simultaneously executed in any number of counterparts.and
all said counterparts executed and delivered,each as an original,shall constitute but one and the same instrument.
IN WITNESS WHEREOF,MIDVALE TELEPHONEEXCHANGE,INC.,P.O.Box 7,Midvale,
Idaho 83645,as Mortgagor,has caused this Mortgage to be signed in its name and its corporate seal to be hereunto
affixedand attested by its officers thereunto duly authorized RURAL TELEPHONE FINANCECOOPERATIVE,as
Mortgagee,has caused this Mortgage to be signed in its name and its corporate seal to be hereunto affixed and
attested by its officers thereunto duly authorized,and UNITED STATES OF AMERICA,as Mortgagee,has caused
this Mortgage to be duly executed in its behalf,all as of this day and year first above written.
M XC C.
President
Secretary
Executed by the Mortgagor
Witnesses
TMAC-0\-09-003-ID Page 18
UNIT AMER
as
Assistant Administrator
Telecommunications Program
of the
Rural Utilities Service
Executed by United States of America,Mortga ee,in the prese e of:
Witn sses
RURAL TELEP ONE F ERATIVE
(SEAL)By:4ssistantretary-Tre urer
At
As stant e ry-Treasurer
Executed by RTFC,Morgagee,
i-t esses '
TMAG-01-09-003-ID
Page 19
STATE OF AR-I-28N-A i Da 90
)
)SSCOUNTYOFLU'Ñ5/-l//ÜÕ TU/
On this /§day of F'e b ,200>,before me47¿a g oa e er ,the undersigned officer,personally appeared La ne /2 £6';///Æ>x 5 andmA-ry G.Lt)i i/i Am 5 ,who acknowledged themselves to be the President and Secretary,respectively,ofMidvaleTelephoneExchange,Inc.,a corporation,and that they,as such President and Secretary,being authorizedsotodo,executed the foregöinginstrument,for the purposes therein contained,by signing the name of thecorporationbythemselvesasPresidentandSecretary.
IN WITNESSWHEREOF,I have hereunto set my hand and official seal.
NN NER
LC/V
State of Idaho 'Notary Public
(Notarial Seal)
My commission expires:
TMAG-0]-09-003-ID Page 20
STATE OF IDAHO )
)SS
COUNTYOF 1Arf§N/N )
On the /day of F€.in the year 20 ca,before me personally
appeared i da e &N Ñ &en 4 and MN RS ,and
known to me to be the persons who executed the foregoinginstrument on behalf of MIDVALE TELEPHONE
EXCHANGE,INC.,and acknowledged to me that such corporation executed the same.
GLENNIS K.BONNER -La½W /C-etAL
.Notary Public Notary Public in and for thË State of Idaho,residing at ()y'gg
State of Idaho
(Notarial Seal)
My commi sion expires:
TMAG-01-09-003-lD Page 21
STATE OF GREGON Ñ NO )
COUNTY OF W A 5 N /ÑA T A
This instrument was acknowledged before me on A $$,20 0 2-
,by&R .)(a ¿oet I as president of MIDVALE TELEPHONE EXCHANGE,INC.
GLENNIS K.BONNER
Notary Pubbc Ñotary Public
State of Idaho
(Notarial Seal)
My commission expires:
TMAC-01 09-003-lD Page 22
DISTRICT OF COLUMBIA )SS
Th instrument was acknowledged before rne on ,20 01 byCOA-
,Assistant ministrator -Te c mm nic ions Program of the
Rural Utilities Service of the United States of America.
Stary Public
(Notarial Seal)
My commission expires:N(p
TMAG-01-09-003-ID Page 23
COMMONWEALTH OF VIRGINIA )
)SSCOUNTYOFFAIRFAX)
BE IT REMEMBERED,that on this day of
,20Q.__A ,before me,the undersigned,a notary public in and for theComrnonwealthofVifginia,aforesaid,came K enne¾Á.FGrf .signing as an AssistantSecretary-Treasurer of the RURAL TELEPHONEFINANCE COOPERATIVE,a corporation,who is personallyknowntometobethepersonwhoexecutedthewithininstrumentofwritingonbehalfofsuchcorporationandsuchpersondulyacknowledgedtheexecutionofthesameastheactanddeedofsaidcorporation.
IN TESTIMONY WHEREOF,I have hereunto set my hand and affixed my notarial seal the day and yearabovewritten.
Notary Public
(Notarial Seal)
My commission expires:A 'U^
TMAG-01-09-003-ID Page 24
SCHEDULE A
"Telephone Loan Contract"(exclusive of any amendments)dated as of April 22,1980
"Outstanding RUS Notes":
Five (5)certain mortgage notes payable to the order of the Government,in the aggregate principal amount
of $6,409,000.00,all of which will finally mature on or before December 19,2020.
"UnderlyingMortgage"
Instrument _Dat_e
Restated Mortgage,Security Agreement and Financial Statement .September 29,1994
"Current RUS Note":(Of even date herewith):
lnierest Rate Final Payment
Principal Amount (per annum)Date
$5,695,000 five per centum February 1,2016
SCHEDULE B
"Current RTFC Loan Agreement"being that certain Amended Loan Agreement by and between
Midvale Telephone Exchange,Inc.and RTFC,dated as of even date herewith.
"Current RTFC Notes"being two certain Substitute Secured Promissory Notes dated as of even
date herewith in the principal amounts of $2,103,981 (ID 514 -9001 note)and $378,947 (ID 514
-9002 note).
"UnderlyingMortgage"
Instrument Date
Restated Mortgage,Security Agreement and Financing Statement September29,1994
Exhibit One (Exhibit to Mortgage)UNIFORMSYSTEM OF ACCOUNTSACCOUNTNUMBERSUSEDINCERTAINPROVISIONS
All references regarding account numbers are to 47 CFR Part 32.
ACCOUNT NUMBERSACCOUNTNAMESCLASSACLASSB
NET INCOME OR NET MARGINS:the sum of the balances of the followingaccounts of the Mortgagor:
Local Network Services Revenues )NetworkAccess Services Revenues )Long Distance Network Services Revenues )5000s thru 5300sMiscellaneousRevenues)LESS:Uncollectible Revenues )
Other Operating Income and Expense 7100*7100NonoperatingIncomeandExpense7300*7300IncomeEffectofJurisdictional
Rate-making Difference-Net 7910 7910NonregulatedNetIncome79907990OtherNonregulatedRevenues79917991LESS:balances of the following accounts:Plant Specific Operations Expense )Plant Nonspecific Operations Expense )6100s thru 6700sCustomerOperations)Corporate Operations )Operating Taxes 7200*7200NonoperatingTaxes7400*7400InterestandRelatedItems7500*7500ExtraordinaryItems7600*7600
INTEREST EXPENSE:the sum of the balances of the followingaccounts of the Mortgagor:
Interest and Related Items 7500*7500InterestonFundedDebt7510InterestExpense-Capital Leases 7520AmortizationofDebtIssuanceExpense7530OtherInterestDeductions7540LESS:Allowance for Funds Used
During Construction 7340 7300.4
*Summary Accounts
TEX1-01-09-003-ID
Page 1
TOTAL TELECOMMUNICATIONSPLANT:the sum of the balances of the followingaccounts of theMortgagor:
Telecommunications Plant in Service 2001 200IPropertyHeldforFuture
Telecommunications Use 2002 2002TelecommunicationsPlantUnder
Construction -Short Term 2003 2003TelecommunicationsPlantUnder
Construction -Long Term .2004 2004TelecommunicationsPlantAdjustment20052005NonoperatingPlant20062006Goodwill20072007
NET WORTH OR EQUITY:the sum of the balances of the following accounts of the Mortgagor:
Capital Stock 4510AdditionalPaid-InCapital 4520TreasuryStock4530OtherCapital4540RetainedEarnings4550NOTE:FOR NONPROFITORGANIZATIONS-OWNER'S EQUITY SHALL BE SHOWN INSUBACCOUNTSOF4540AND4550.
TOTAL ASSETS:the sum of the balances of the folowing accounts of the Mortgagor:
Current Assets 1100s thru 1300sNoncurrentAssets1400sthru1500sTotalTelecommunicationsPlant2001thru2007LESS:Accumulated Depreciation 3100 thru 3300sLESS:Accumulated Amortization 3400 thru 3600s
DEPRECIATION AND AMORTIZATION:the sum of the balances of the following accounts of the Mortgagor:
Depreciation and
Amortization Expenses 6560*Depreciation Expense-
Telecommunications Plant in Service 6561DepreciationExpense-
Property Held for Future
Telecommunications Use 6562AmortizationExpense-Tangible 6563AmortizationExpense-Intangible 6564AmortizationExpense-Other 6565
TEXI-01-09-003-ID
Page 2
EXHIBIT A
Gila County,Arizona
FJ H I HIT "À"
FIRST AMENDED
NO.903-000-1301657
A portion of that certain piece or parcel of land,situate,lying and being in the Southeast quarterofSection17andtheSouthwestquarterofSection16andtheNortheastquarterofSection20,Township 9 North,Range 14 East of the Gila and Salt River Base and Meridian,Gila County,Arizona,more particularlydescribed as follows:
That parcel shown as "Lot 1"on Record of Survey on October 30,1996,as Map No.1275.
Cochise County,Arizona
Exhibit A
That portion of the Northwest quarter of Section 2,Township 17 South,Range 20 East of the Gila andSaltRiverBaseandMeridian,Cochise County,Arizona,more particularlydescribed as follows:
COM1VŒNCING at the North quartercomer of said Section 2;thence South 00°05'50"West along the North-Southcenter section line a distance of 982.26 feet,moreorless,to the Southeast corner of the Northeast quarter of the Southeast quarter of Government Lot 3 ofsaidSection2;
thence South 00°05'18"West along the North-Southcenter section line a distance of 327.42 feet;thence South 87°41'09"West a distance of281.03 feet to the POINT OF BEGINNING;thence continuing South 87°41'09"West a distance of lSO.00 feet;thence North 00°05'18"East a distance of290.40 feet;thence North 87°41'09"East a distance of 150.00 feet;
thence South 00°05'18"West a distance of290.40 feet the POINT OF BEGINNING.
Custer County,idaho
LOTS 5 AND 6,LESS THE WEST 35 FEET OF SAID LOT 6,BLOCK3,STANLEY
GOVERNMENT TOWIISITE,CUSTER COUNTY,IDAHO,ACCORDING TO THE
OFFICIAL SURVEY TEEREOF,NOW ON FILE IN THE OFFICE OF THE
SURVEYOR GENEILàl,BOISE,IDAHO,
ALSO:
THAT PORTION OF TFIE ALLEY,20 FEET WIDE,LYING NORTHERLY AND
IM1VÏEDIATELY ADJACENT TO LOT 5 AND PORTION OF LOT 6,EXCEPTING THE
WEST 35 FEET THERIOF IN BLO CK 3,STANLEY GOVERNMENT TOWNSITE
VACATED BY ORDER OF THE CUSTER COUNTY COMMISSIONERS APPlL 11,
1960.
ALSO INCLUDING:
A PART OF THE LOWER STANLEY TOWNSITE LOCATED IN SECTION 34,
TOWNSEIP 11 NORTII,RANGE 13 EAST,BOISE MERIDIAN,CUSTER COUNTY,
IDAHO,MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT C ORNER 4 OF TRACT 5 OF THE SAWTOOTH NATIONAL
RECREATION AREA (A.N ALUMINTJM PIPE AND CAP);THENCE SOUTH 0°33'00"
EAST FOR128.69 FEET ALONG TEE EAST LINE OF TRACT 6 TO A BRASS CAP
THAT IS CORNER 3 OF TRACT 6;THENCE SOUTH 34°39'14"WEST FOR 84.38
FEET ACROSS THOlvlPSON STREET TO ABRASS CAP TEATIS CORNER2 OF
TRACT 7 OF THE SA3VTOOTH NATIONAL RECREATION AREA;THENCE
SOUTH 74°57 EAST TOR 20.10 FEET ALONG THE SOUTR LINE OF THOMPSON
STREET TO THE NOILTK CORNER OF LOT 12,BLO CK 3 OF TKE LOWER
STANLEY TOWNSITE;THENCE SOUTH 20°43'WEST FOR 108.19 FEET ALONG
THE NORTHWEST LINE OF LOT 12,THE POINT OF BEGINNING;THENCE
SOUTH 36°40'51"WEST FOR 72.72,FEET TO CORNER 3 OF TRACT 7 OF THE
SAWTOOTHNATIONAL RECREATION AREA;THENCE NORTH 20°43'EAST,
APPROXIKATELY 81FEET TO A POINT WHICH LIES NORTH 37°27'WEST
FROM THE POINT OF BEGINNING;THENCE SOUTH 37°27 EAST,
APPROXIKATELY 25FEET,MORE OR LESS TO THE POINT OF BEGINNING.
PARCEL II:
LOT 3 IN BLO CK I OF STANLEY TOWNSITE IN NE1/4NE1/4 OF SECTION NINE
(9),TOWNSHIP TEN (10)NORTH,RANGE THIRTEEN (13)EAST,BOISE
MERIDIAN,AS SHOVIN BY THE OFFICIAL PLAT THEREOF NOW ON FILE IN
THE OFFICE OF TKE CUSTER COUNTY RECORDER IN CKALLIS,IDAHO.
Malheur County,Oregon
Parcel 1:
Land in the TOWN OF HARPER,located in Section 5,Township20 South,Range 42 East of theWillametteMeridian,MalheurCounty,Oregon,according to the Of5cial Plat thereof,as follows:
In Block 9:Lots 3,4 and 5.
Parcel 2:
Land in the TOWN OF HARPER,located in Section 5,Township20 South,Range 42 East of theWillametteMeridian,MalheurCounty,Oregon,according to the Official Plat thereof,as follows:
In Block 9:A parcel of land in Lot 6 described as follows:Beginning at the Northeast corner of said Lot 6 which faces "B"Street;thence South 460 21'West,along said "B"Street,25 feet;thence South 430 39'East,25 feet;
thence North 460 21'East,25 feet;
thence North 430 39'West,25 feet to the Point of Beginning.
Parcel 3:
Land in the TOWN OF JUNTURA,MalheurCounty,Oregon,according to the Official Plat thereof,as follows:
In Block 19:Beginningat the most Northerlycomer of Lot 4;thence Southwesterly along the Northwest lot line of said Lot 4,100 feet;thence Southeasterly on a line parallelwith the Southwest line of 3rd Street,35 feet;thence Northeasterly on a line parallelwith the Northwest lot line of said Lot 4,100 feet to a point ontheSouthwestlineof3rdStreet;
thence Northwesterlyalong the Southwest Ene of 3rd Street,35 feet to the Point of Beginning.
Washington County,idaho
Exhibit "A"
Order No.100-00-7731
Situated in Section 7,Township 13 North,Range 3 West of the BoiseMeridian,in Washington County,Idaho:
In the SW1/45E1/4 of said Section 7:Commencing at the southeast corneroftheSW1/45E1/4;
thence North Oo34'30"West 322.41 feet to the True Point of Beginning;thence South 88°42'West a distance of 150 feet,more or less;thence south 0°34'30"East a distance of 150 feet,more or less;thence North 88°42'East 150 feet,more or less;thence North 0°34'30"West 150 feet,more or less,to the True Point ofBeginning.
AND ALSO
A parcel of land in the SWl/45W1/4 of Section 8,Township.13 North,Rangge
3 west of the Eoise Meridian,Washington County,.Idaho,described asfollows:
Beginning[at a point S 74°.56'E 247 feet from the southeast corner of Lot19ofBlock7,Middle Valley Townsite,according to the official plat ofsaidTownsite;Thence N 14°516 E 150 feet,more or less,to the south line of BridcãeStreet,the True Point of Beginning;Thence East 50 feet,more or less,to the center of the channel of theWeiserRiver;Thence southerly aloner the .center of the Channel of the Weiser River 55feet;
Thence westerly 50 feet,more or less;Thence northerly 55 feet,more or less,to the True Point of Beginning.
SAVE AND EXCEPT that portion deeded to Washington County in Deed recordedNovember2,1994 as Instrument No.161713,Official Records.
IDAHD SECRETARY OF STATE83/12/200E 05:08CK:32353 CT:1626 BH:451591
1 §12,00 =12.00 UCCi FILE il 2FilingNumber:UCC FINANCINGSTATEMENT B 2002-0918971-1:OLLOW INSTRUCTIONS (front and back)CAREFULLY
A.NAME &PHONE OF CONTACT AT FILER [optional)Cynthia A.Melillo 208-388-1273
B.SEND ACKNOWLEDGMENT TO:(Name and Address)
Givens Pursley LLP
277 N.6th St.,Suite 200
Boise,ID 83702
THE ABOVESPACE IS FOR FILING OFFICE USE ONLY1.DEBTOR'SEXACT FULL LEGAL NAME -insert only 9.e:debtorname(1e or 1b)-do not abbreviateor combinenames18.ORGANIZATION'S NAMË
-Midvale Telephone Exchange,incorporated
1b,INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c.MAlLING ADDRESS CITY STATE POSTAL CODE COUNTRY2205KeithleyCreekRoad,P.O.Box 7 Midvale ID 83645 USA1dTAX10#:SSN OR ElN ADD'L INFO RE 1e.TYPE OF ORGANIZATlON 11.JURISD1CTION OF ORGANIZATION 1g.ORGANIZATlONAL ID #,il anyORGAZKTIONCorporationIdahoC30686 NONE2.ADDITIONAL DEBTOR'SEXACTFULL LEGAL NAME -insert only gg debtorname (28 of 2b)-do DDI abbreviateor combine names2a.ORGAN1ZATION'S NAME
2b.INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c.MAILING ADDRESS CITY STATE POSTAL CODE COUMTRY
2d TAX ID #.SSN OR EIN ADD'L INFO RE 2e.TYPEOF ORGAN]ZATION 2f.JURISDICTION OF ORGANIZATION 2g.ORGANJ2ATIONAL ID #,if anyORGAN1ZATION
DEBTOR
NONE3.SECUREDPARTY'S NAME (or NAME of TOTALASSIGNEEof ASSIGNOR S/P)-insertonlyone secured partyname (3e or 3b)38.ORGANJZATlON'S NAME
jB B United States of America,Rural Utilities Servicegb30.INOIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c.MAlLING ADDRESS CITY STATE POSTAL CODE COUNTRYWashingtonD.C.20250-1500 USA4.This FINANCING STATEMENT covers the followingcolisteral:
THIS IS A FINANCING STATEMENTOF A TRANSMITTINGUTILITY.
See attached Restated Mortgage,Security Agreementand Financing Statement.
5.ALTERNATl\/EDESIGMATION (if apolicable]:LESSEE/LESSOR CONStGNEE/CONStGNDR BA1LEE/BA)LOR SELLERIBUYER AG.LIEN NON-UCCFlUNG6.;|I nis HNANulNu à Al eMcN i is to De filed por recortlhor recoraed)in lue NCAL i 7 ChecK to NeuUt-b i SLANGH kbPuku on Debtonte \\]I
I IESTATE RECOROS.Attach Adclendµm lif applicabiel )lADDITIONAL FEE1 ootionell i All Debtors I IDebior i Debtor28.OPTIONAL FILER REFERENCE DATA
FILING OFFICE COPY -NATIONAL UCC FINANCING STATEMENT (FORM UCC1)(REV.07/29/98)DAHo Flu.ABLEFORM FT:enom
ssé
Ucc FINANCINGSTATEMENT ADDENDUM
FOLLOW INSTRUCT10NS (front and back)CAREFULLY
9.NAME OF FlRST DEBTOR(1a or ib)ON RELATED FINANCING STATEMENT
Be.ORGANIZATION's NAME
Midvaie Telephone Exchange,Incorporated
OR
Ob.INDIVIDUAL'S LAST NAME FIRSTNAME MIDDLE NAME.SLIFFIX
10.MISCELLANEOUS:
THE ABOVESPACE IS FOR FILING OFFICE USE ONLY
11.ADDITIONAL DEBTOR'SEXACT FULL LEGAL NAME.insert only Le name (11a or 11b)-do not abbreviateor combine names
11a.ORGANIZATION'S NAME
OR 110.INDIV1DLIAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
11c.MAILING ADDRESS CITY STATE PO5TALCODE COUNTRY
116.TAX ID #:SSN OR ElN ADDi lNFO RE 11e.TYPE OF ORGANIZATION 111.JURISDICTIONOF ORGAN1ZATlON 11g ORGANIZATIONAL 10 #.I any
ORGAN1ZATION
DEBTOR NONE
12.M ADDITIONAL SECURED PARTY'S o_r ASSIGNORS/P'S NAME -insarl only.orLe name (12a or 12b)
12a.ORGANIZATION'S NAME
Rural TelephoneFinance Cooperative
12b.IND1VfDUAL'S LAST NAME F\RST NAME MIDDLE NAME SLJFF1X
120.MAILING ADDRESS Cly STATE POSTAL CDDE COUNTRY
2201 CooperativeWay Herndon VA 20171-3025 USA
13.This FINANCING STATEMENT covers limber 10 be cut or as-extracted 16.Additional collateral ciascription:
collateral,or is filed as a fm Mn
14.Descripuonaf real estale:
15.Name and address of a RECORD OWNER of above-clescribedreal estate
(if Debtor does not have a recorrJ interest)
17.Check miy li applicable and check Daly one box.
Debtor is a Trust or Trustee acting with respectto property held in trusi or Decedent'sESLBLE
18 Check RDiy if applicable and check olly one box.
H
DebtorisaTRANSMITTING UTlüTY
Filed in connecuon with a Manufactured-Home Transaolian -effective30 vaars
Filati in connection wilh a Pubilc-Finance Transacilon --effective30 years
FILING DFFICE COPY-NATlONALUCC FIMANCING STATEMENT ADDENDUM (FORM UCC1Ad)(REV 07/29/98)p:.lo mu.as rapp REy opsyy
RUS PROJECT DESIGNATION:
IDAHO 514-Gl]LA-1 MIDVALE
RESTATED MORTGAGE,
SECURITY AGREEMENT
AND
FINANCING STATEMENT
made by and among
MIDVALE TELEPHONE EXCHANGE,INC.
P.O.Box 7
Midvale,Idaho 83645,as mortgagor and debtor,
and
UNITED STATES OF AMERICA
Rural Utilities Service
Washington,D.C.20250-1500,as mortgagee and secured party.
and
RURAL TELEPHONEFINANCE COOPERATIVE
220 I Cooperative Way
Herndon,Virginia 2017 ]-3025 as mortgagee and secured party.
Dated as of February L 2002
THIS INSTRUMENTGRANTS A SECURITYINTERESTIN A TRANSMITTINGUTILITY.
THEDEBTORAS MORTOAGOR IS ATRANSMITTING UTlLITY.
THIS INSTRUMENTCONTAINSPROVISIONSTHAT COVERREAL AND PERSONALPROPERTY.AFTER-ACQUIREDPROPERTY,PROCEEDS.FUTUREADVANCES AND FUTUREOBLlGATIONS.
ORGANIZATIONALNO.30686
No,Generated:January 23.2002 5.89
RESTATED MORTOAGE,SECURITY AGREEMENTAND FINANCING
STATEMENT.dated as of February l.2002.made hy and among MIDVALE
TELEPHONE EXCHANGE,INC.(hereinafter called the "Mortgagor"),a corporation
existing under the laws oF the State of ldaho.UNITED STATES OF AMERICA
(hereinafter called the "Government"),acting through the Administrator of the Rural
Utilities Service (hereinaftercalled "the Administrator"),and RURALTELEPHONE
FINANCE COOPERATIVE (hereinafter called "RTFC"),a South Dakota Cooperative
Association (the Government and RTFC being hereinafter sometimes collectively called
the "Mortgagees").
WHEREAS,pursuant to Public Law 103-354,the Rural Utilities Service (hereinafter sometimes
called "RUS")is the successor to the Rural Electrification Administration (hereinafter sometimes called "REA")and
the Administrator of the Rural Utilities Service is the successor to the Administrator of the Rural Electrification
Administration and for purposes of the "Underlying Mortgage"(as hereinafter defined)identified in Schedule A of
"this Mortgage"(as hereinafter defined)the terms "REA"and "Administrator"shall be deemed to mean respectively
"RUS"and the "Administrator oF the RUS";and
WHEREAS,the Mortgagor has heretofore borrowed funds from one or more of the Mortgagees or
from "FFE"(as hereinafter defined)whose loans are guaranteed by the Government and to secure such indebtedness
has executed and delivered to such Mortgagee(s)the "Outstanding Notes"(as hereinafter defined)identiñed in
Schedule A hereto and/or in SchedLle B hereto.
WHEREAS,the Outstanding Notes are secured by the UnderlyingMortgage;and
WHEREAS,the Mortgagordeems it necessary lo borrow additional funds from one or more of the
Mortgagees and/or from FFB whose loans are guaranteed by the Government and to evidence such additional
indebtedness has executed and deliveredto such Mortgagee(s)the "Current Notes"(as hereinafter defined)identified
in Schedule A hereto and to secure and pledge its property hereunder described or mentioned to secure the same;and
WHEREAS,the Mortgagordesires to enter into this Mortgage pursuant to which all mortgage
notes shall be secured on parity:and
WHEREAS,this Mortgage consolidates and restates the UnderlyingMortgage in its entirety;and
WHEREAS,all acts necessary to make this Mortgage a valid and binding legal instrument for the
security of the Outstanding Notes,the Current Notes and other indebtedness of the Mortgagor hereunder,subject to
the terms of this Mortgage,have been in all respects duly authorized;and
MŒlEREAS,to the extent that any of the property described or referred to in this Mortgage is
governed by the provisions of the Uniform Commercial Code of any state (hereinafter called the "Uniform
Commercial Code"),the parties hereto desire that this Mortgage be regarded as a "security agreement"and as a
"financing statement"for said security agreement under the Uniform Commercial Code:
NOW,THEREFORE,THIS MORTGAGEWITNESSETHthat,in order to secure the payment of
the principal of and interest on the "notes"(as hereinafter defined),according to their tenor and effect.and furtherto
secure the due performance of the covenants,agreements and provisions contained in this Mortgage and the
"Consolidated Loan Agreement"(as hereinafter defined)and the "RTFC Loan Agreement"(as hereinafter defmed)
and to declare the terms and conditions upon which the notes are to be secured,the Mortgagor,in consideration of
the premises,has executed and deliveredthis Mortgage,and has granted,bargained,sold.conveyed,warranted,
assigned,transferred,mortgaged.pledged,and set over,and by these presents does hereby grant,bargain,sell.
convey,warrant,assign,transfer,mortgage,pledge and set over,unto the Mortgagees,and their respective assigns,
all and singular the following-describedproperty (hereinafter sometimes called the "Mortgaged Property"):
TMAG-01-09-003-ID Page ]
I
All right,title and interest of the Mortgagor in and to the "Existing Facilities"(as hereinafter
defined)and buildings,plants,works.irnpi-ovements,structures,estates,grants,franchises,easements,rights.
privileges and properties real.personal and mixed,tangible or intangible.of every kind or description,now owned or
leased by the Mortgagor or which may hereafter be owned or leased,constructed or acquired by the Mortgagor,
wherever located,and in and to all extensions and improvements thereof and additions thereto,including all
buildings.plants,works,structures,improvements,fixtures,apparatus,materials,supplies,machinery,tools,
implements,poles,posts,crossarms,conduits,ducts,lines,whether underground or overhead or otherwise,wires.-
cables,exchanges,switches,including,without limitation,host switches and remote switches,desks.testboards,
frames,racks,motors.generators,batteries and other items of central office equipment,pay-stations.protectors,
instruments,connections and appliances,office furniture and equipment,work equiprnent and any and all other
property of every kind,nature and description,used,useful or acquired for use by the Mortgagor in connection
therewith and including,without limitation,the real property described in the followingproperty schedule:
PROPERTY SCHEDULE
(a)The Existing Facilities are located in the Counties of Chochise,Gila.Maricopa.Pinal,Yavapai
in the State of Arizona.the Counties of Bonner,Custer.Idaho,Valley,Washington in the State of Idaho,
and the County of Malheur in the State of Oregon.
(b)The property referred to in the last line of paragraph I of the Granting Clause includes the real
estate described in Exhibit A attached hereto,and by this reference made a part hereof.as if fully set forth al
length at this point.
(c)If the real estate described in Exhibit A is by reference to deeds,grantor(s),grantee,etc.,then
the description of each of the properties coriveyed by and through such deeds is by reference made a part of
Exhibit A as though fully set forth at length therein.
(d)The real estate described in Exhibit A shall also include all plants,works,structures.erections,
reservoirs,dams,buildings,fixtures and improvements now or hereafter located on such real estate,and all
tenements,hereditarnents and appurtenances now or hereafter thereunto belonging or in any wise
appertaining.
II
All righL title and interest of the Mortgagor in.to and under any and all grants,privileges,rights of
way and easements now owned,held.leased,enjoyed or exercised,or which may hereafter be owned,held,leased,
acquired,enjoyed or exercised,by the Mortgagorfor the purposes of,or in connection with.the construction or
operation by or on behalf of the Mortgagor of telephone properties,facilities,systems or businesses,whether
underground or overhead or otherwise,wherever located;
III
All right,title and interest of the Mortgagor in,to and under any and all licenses,franchises,
ordinances,privileges and permits heretofore granted,issued or executed,or which may hereafter be granted,issued
or executed,to it or to its assignors by the United States of America,or by any state,or by any county,township,
municipality,village or other political subdivision thereof,or by any agency,board.commission or department of
any of the foregoing,authorizing the construction,acquisition,or operation of telephone properties,facilities,
systems or businesses,insofar as the same may by law be assigned,granted,bargained,sold.conveyed,transferred,
snortgaged,or pledged;
TMAG-Dl-09-003-lD Page 2
IV
All right,title and interest.whether presently owned or hereafter acquired,of the Mortgagor in.to
and under any and all contracts heretofore or hereafter executed by and between the Mortgagor and any person.firm,
or corporation relating to the Mortgaged Property together with any and all other accounts.chattel paper,contract
rights and general intangibles (as such terms are defined in the applicable Uniform Commercial Code).and all stock,
bonds,notes.debentures.comrriercial paper,subordinated capital certificates.securities,obligations of or beneficial
interest or investments in any corporation.association.partnership,joint venture.trust,government or any agency or
departrnent thereof,or any other entity of any kind:
V
Also,all right,title and interest of the Mortgagor in and to all other property,real or personal,
tangible or intangible,of every kind,nature and description,and wheresoever situated.now owned or leased or
hereafter acquired by the Mortgagor,it being the intention hereof that all such property now owned or leased but not
specifically described herein or acquired or held by the Mortgagor after the date hereof shall be as fully embraced
within and subjected to the lien hereof as if the same were now owned by the Mortgagor and were specifically
described herein to the extent only,however,that the subjection of such property to the lien hereof shall not be
contrary to law;
TOGETHERWITH all rents.income,revenues,profits,proceeds and benefits at any time derived,
received or had from any and all of the above-described property of the Mortgagor.
Provided,however,that except as hereinafter providedin Section 12(b)of Article II hereof,no
automobiles,trucks.trailers,tractors or other vehicles (including without limitation aircraft or ships.if any)owned or
used by the Mortgagor shall be included in the Mortgaged Property.
TO HAVE AND TO HOLD all and singular the Mortgaged Property unto the Mortgagees and
their respective assigns forever,to secure equally and ratably the payment of the principal of and interest on the
notes,according to their tenor and effect,without preference.priority or distinction as to interest or principal (except
as otherwise specifically providedherein)or as to lien or otherwise of any note over any other note by reason of the
priority in time of the execution,delivery or maturity thereof or of the assignment or negotiation thereof,or
otherwise,and to secure the due performance of the covenants,agreements and provisions herein and in the
Consolidated Loan Agreement and in the RTFC Loan Agreement contained,and for the uses and purposes and upon
the terms,conditions,provisos and agreements hereinafter expressed and declared.
ARTICLE I
DEFINITIONS AND ADDITIONAL NOTES
SECTION 1.(a)The parties to this Mortgage are hereby deemed to be parties to the Underlying
Mortgage.
(b)In addition to the terms defined elsewhere in this Mortgage,the terms
defined in this subsection (b)shall have the meanings specified herein.The terms defined herein include the plural
as well as the singular and the singular as well as the plural.
"Act"shall mean the Rural Electrification Act of 1936,as amended (7 U.S.C.901 et
s_eg.).
"Additional Notes"shall mean the Additional RTFC Notes and the Additional RUS Notes
collectively.
TMAG-01-09-003-ID Page 3
"Additional RTFC Notes"shall mean any notes issued by the Mortgagor to RTFC pursuant to
Article I.Section I of this Mortgage including any refunding,renewal or substitute notes which may from
time to time be executed and delivered by the Mortgagor to RTFC pursuant to the terms of Article I.
Section L
"Additional RUS Notes"shall mean any notes issued by the Mortgagor to the Government or FFB,
and guaranteed by the Government,pursuant to Article I,Section 1 of this Mortgage including any
refunding.renewal.or substitute notes which may from time to time be executed and delivered by the
Mortgagor to the Government pursuant to the terms of Article I,Section 1.
"Consolidated Loan Agreement"shall mean the loan agreement between the Mortgagor and the
Government,under the heading "Telephone Loan Contract"in Schedule A hereto,as the same may have
been previously amended,and any future amendments thereto,together with any agreements among the
Mortgagor,the Government,acting through the Administrator,and FFB,pursuant to which the Government
guarantees the loans made by FFB to the Mortgagor,pursuant to the Act,and any amendments thereto.
"Current Notes"shall mean the notes issued by the Mortgagorto secure the loans to the Mortgagor
made in conjunction with this Mortgage payable to the order of the Government under the heading "Current
RUS Note(s)"in Schedule A hereto,payable to the order of RTFC under the heading "Current RTFC Note"
in Schedule B hereto,payable to FFB under the heading "Current FFB Note"in Schedule A hereto and
payable to the order of the Government to reimburse the Government for certain amounts paid from time to
time by the Government to FFB under the heading "Current Reimbursement Note"in Schedule A hereto.
"Existing Facilities"shall snean the telephone system and other facilities presently owned by the
Mortgagor identified in the Granting Clause of this Mortgage.
"FFB"shall mean the Federal Financing Bank.
"this Mortgage"shall mean this Restated Mortgage,Security Agreement and Financing Statement,
including any amendments or supplements thereto from time to time.
"notes"shall mean collectively the RTFC Notes and the RUS Notes.
"Outstanding Notes"shall mean the notes evidencing outstanding indebtedness of the Mortgagor to
the Government under the heading "Outstanding RUS Notes"in Schedule A hereto,to RTFC under the
heading "Outstanding RTFC Notes"in Schedule B hereto and to FFB under the heading "Outstanding FFB
Notes"in Schedule A hereto.
"RTFC Loan Agreement"shall mean the loan agreement (s)between the Mortgagor and RTFC
listed in Schedule B hereto under the heading "Prior RTFC Loan Agreement(s)"and any amendments
thereto,the loan agreement under the heading "Current RTFCLoan Agreement"in Schedule B hereto with
respect to any Current Note payable to RTFC listed in Schedule B hereto and any loan agreements with
respect to Additional RTFC Notes and any amendments thereto.
"RTFC Notes"means the Outstanding Notes payable to RTFC.the Current Notes payable to
RTFC and the Additional RTFCNotes.
"RUS Notes"shall mean the Outstanding Notes payable to the order of the Government and
payable to FFB,the Current Notes payable to the order of the Government and payable to FFB and the
Additional RUS Notes.
"Underlying Mortgage"shall mean the instruments identified as such in Schedule A hereto and
Schedule B hereto.
TMAG-01-09-003-FD Page 4
Where in these definitions there is a reference to an instrument as being listed under a particular
heading in Schedules A and B and no such heading is included in Schedules A and B then such definition shal be
read as though there were no such reference.
(c)The Mortgagor.when authorized by resolution or resolutions of its board of
directors,may from time to time (1)execute and deliver to the Government one or more Additional RUS Notes to
eviderice loans made or guaranteed by the Government to the Mortgagor pursuant to the Act.or to evidence
indebtedness of the Martgagor incurred by the assumption by the Mortgagorof the indebtedness of a third party or
parties to the Government created by a loan or loans theretofore made or guaranteed by the Government to such third
party or parties pursuant to the Act,and (2)execute and deliver to RTFC one or more Additional RTFC Notes to
evidence loans made by RTFC to the Mortgagor,or to evidence indebtedness of the Mortgagor incurred by the
assumption by the Mortgagor,of the indebtedness of a third party or parties to RTFC created by a loan or loans
theretofore rnade by RTFC to such party or parties.The Mortgagor,when authorized by resolution or resolutions of
its board of directors,may also from time to time execute and deliverone or more Additional Notes to refund any
note or notes at the time outstanding and secured hereby,or to renew or in substitution for,any such outstanding note
or notes.Additional Notes shall contain such provisions and shall be executed and delivered upon such terms and
conditions as the board of directors of the Mortgagorin the resolution or resolutions authorizing the execution anddeliverythereofandtherelevantlendershallprescribe;provided.however,that the outstanding principal balances
owing on the notes shall not at any one time exceed twenty-five million dollars and no cents ($25,000,000.00)and no
note shall mature more than fifty (50)years after the date hereof.Additional Notes,including refunding,renewal
and substitute notes.when and as executed and delivered,shall be secured by this Mortgage,equally and ratably with
all other notes at the time outstanding.without preference,priority,or distinction of any of the notes over any other
of the notes by reason of the priority of the time of the execution,delivery or maturity thereof or of the assignrnent or
negotiation thereof.Except as hereinafter provided,however,no Additional RTFC Notes shall be secured by this
Mortgage without the prior written approval thereof by the Governrnent.and no Additional RUS Notes shall be
secured by this Mortgage without the prior written approval thereof by RTFC.No such prior written approval shall
be required with respect to the execution and delivery by the Mortgagor of (1)notes issued to refund,renew or
.substitute for any outstanding note or notes,and (2)the Outstanding Notes,and (3)Additional Notes issued to the
Government in accordance with Subsection (d)of this Section 1.
(d)The Mortgagormay execute and deliverAdditional RUS Notes to evidence
a loan or loans from the Government to the Mortgagorand/or a loan or loans from FFB to the Mortgagor provided
that the following condition precedent is met with respect to each such loan:
Written acknowledgment is obtained from RUS and RTFC indicating that RUS's and RTFC's pro
forma financial analysis of the Mortgagor,for the test year used by RUS in establishing the economic feasibility of
such loan shows that the Mortgagorshall have a Times Interest Earned Ratio ("TIER")of not less than 1.5;a Debt
Service Coverage ("DSC")of not less than L25;and an Equity to Assets Ratio equal to or greater than 40%,as the
above are defined in Article II,Section 20 hereof,taking into account the interest to be charged on the Additional
RUS Notes proposed to be executed and deliveredto evidence such loan.
(e)As used in this Mortgage,the term "directors"includes trustees.
SECTION 2.The Mortgagor,when authorized by resolution or resolutions of its board of
directors,may from time to time execute,acknowledge,deliver,record and file mortgages supplemental to this
Mortgage which thereafter shall form a part hereof,for the purpose of formally confirmingthis Mortgage as security
for the notes.Nothing herein contained shall require the execution and deliveryby the Mortgagor of a supplemental
mortgage in connection with the issuance hereunder or the securing hereby of notes except as hereinafter provided in
Section 12 of Article II hereof.
TMAG-01-09-003-ID Page 5
ARTICLE Il
PARTlCULAR COVENANTS OF THE MORTOAGOR
The Mortgagorcovenants with the Mortgagees and the holders of notes secured herehy
(hereinafter sometimes collectively called the "noteholders")and each of them as follows:
SECTION 1.The Mortgagor is duly authorized under its articles of incorporation and by-laws and
the laws of the State of its incorporation and all other applicable provisions of law to execute and deliverthe
Outstanding Notes,the CLllTent Notes and this Mortgage and to execute and deliverAdditional Notes;and allcorporateactiononitspartfortheexecutionanddeliveryoftheOutstandingNotes.the Current Notes and thisMortgagehasbeendulyandeffectivelytaken;and the Outstanding Notes,the Current Notes and this Mortgage are,
or when executed and deliveredwill be,the valid and enforceable obligations of the Mortgagor in accordance with
their respective terms.
SECTION 2.The Mortgagor warrants that it has good.right and lawful authority to mortgage thepropertydescribedinthegrantingclauseofthisMortgageforthepurposeshereinexpressed,and that the saidpropertyisfreeandclearofanydeedoftrust,mortgage,lien,charge or encumbrance thereon or affecting the title
thereto,except (i)the lien of this Mortgage and taxes or assessments not yet due;(ii)deposits or pledges to secure
payment of worker's compensation,unemployment insurance,old age pensions or other social security:and (iii)
deposits or pledges to secure performance ofbids,tenders,contracts (other than contracts for the payment ofborrowedmoney),leases,public or statutory obligations,surety or appeal bonds,or other deposits or pledges forpurposesoflikegeneralnatureintheordinarycourseofbusiness.The Mortgagorwill.so long as any of the notes
shall be outstanding,maintain and preserve the lien of this Mortgage superior to all other liens affecting the
Mortgaged Property,and will foreverwarrant and defend the title to the property described as being mortgaged
hereby to the Mortgagees against any and all claims and demands whatsoever.The Mortgagor will promptly pay ordischargeanyandallobligationsfororonaccountofwhichanysuchlienorchargemightexistorcouldbecreated
and any and al lawful taxes.rates,levies,assessments,liens,claims or other charges imposed upon or accruing upon
any of the Mortgagor's property (whether taxed to the Mortgagor or to any noteholder),or the franchises,earnings or
business of the Mortgagor.as and when the same shall become due and payable;and whenever called upon so to do
the Mortgagor will furnish to the Mortgagees or to any noteholder adequate proof of such payment or discharge.
SECTION 3.The Mortgagor will duly and punctually pay the principal of and interest on the
notes at the dates and places and in the manner provided therein,according to the true intent and meaning thereof,
and all other sums becorning due hereunder.The Mortgagor may at any time make prepayments on account of all orpartoftheprincipalofthenotestotheextentandinthemannerthereinprovidedandassetforthintheConsolidated
Loan Agreement and the RTFC Loan Agreement;provided that any such prepayment shall be applied pro rata to theRUSNotesandtheRTFCNotes,according to the proportions that the aggregate unpaid principal amount of theRUSNotesandtheaggregateunpaidprincipalamountoftheRTFCNotes,respectively,bear to the aggregate unpaidprincipalamountoftheRUSNotesandtheRTFCNotes,collectively,on the date of prepayment and shall be
applied to such notes and installments thereof as may be designated by the respective noteholders at the time of any
such prepayment.For purposes of this Section 3,delivery by the Mortgagor of any note which renews or is insubstitutionforanoutstandingnoteshallnotbeconsideredaprepaymenthereunderanddeliveryofarefunding noteshallnotbeconsideredaprepaymentprovidedthat,the refunding note will result in (1)an economic benefit defined
as a present value savings when comparing the cash flows of the refunding note with the cash flows of the note beingrefunded;(2)will not cause the TIER as of the most recent December 31 RUS Form 479,when recalculated by
substituting the actual interest expense of the note to be refunded with the projected interest expense of the refundingnote,to be less than the greater of the TŒR before such recalculation or 1.5;and (3)will not cause the DSC as of the
most recent December 31 RUS Form 479,when recalculated by substituting the scheduled principal payments of the
note to be refunded with the scheduled principal repayments of the refunding note,to be less than 1.25.
Additionally,the majority RUS noteholders and the majority RTFC noteholders (as such terms are defined in Section
4 of Article II hereof)may agree that such noteholder shall not be paid the pro rata prepayment to which such
noteholder may be entitled under this Section 3.
TMAG-01-09-003-ÏD Page 6
SECTION 4.(a)The Mortgagor will,at all times,so long as any of the notes shall be outstanding,take or cause to be taken all such action as from time to time may be necessary to preserve its corporate existenceandtopreserveandrenewallfranchises,rights of way,easements.permits and licenses now or hereafter to it grantedoruponitconferred,and will comply with all valid laws.ordinances,regulations and requirements applicable to it oritsproperty.The Martgagor will not,without the approval in writing of the holder or holders of not less than amajorityinprincipalamountoftheRUSNotesatthetimeoutstanding(hereinafter called the "majority RUSnoteholders")and of the holder or holders of not less than a majority of the RTFC noteholders at the time
outstanding (hereinafter called the "majority RTFCnoteholders"),take or suffer to be taken any steps to reorganize.or to consolidate with or merge into any other corporation or to permit any other corporation to merge into theMortgagororacquireallorsubstantiallyallofthebusinessorassetsofanothercorporationifsuchacquisition isanalogousinpurposeoreffecttoamergerorconsolidationortoselLleaseortransfer,mortgage.convey by deed tosecuredebt.pledge or encumber other than under the lien hereof (or make any agreement therefor)the MortgagedProperty,or any part thereof.
(b)Nothing herein contained shall prevent any such reorganization,consolidation or merger provided that the lien and security of this Mortgage and the rights or powers of theMortgageesandthenoteholdershereundershallnottherebybeimpairedoradverselyaffected,and provided thatuponsuchreorganization.consolidation or merger,the due and punctual payment of the principal of and interest onthenotesaccordingtotheirtenorandthedueandpunctualperformanceofallcovenantsandconditionsofthisMortgageshallbeassumedbythecorporationformedbysuchreorganization,consolidation or merger,and the lienofthisMortgageshallremainasuperiorlienuponthepropertyownedbytheMortgagotatthetimeofsuchreorganization,consolidation or merger and upon any improvements or additions to such property,either prior to orsubsequenttosuchreorganization,consolidation or merger.
(c)The Mortgagor may,however,without obtaining the approval of the holderorholdersofanyofthenotesatthetimeoutstanding,at any time or from time to time so long as the Mortgagorisnotindefaulthereunder,sell or otherwise dispose of,free from the lien hereof,any of its property which is neithernecessarytonorusefulfortheoperationoftheMortgagor's business,or which has become obsolete,wlorn out ordamagedorotherwiseunsuitableforthepurposesoftheMortgagor;provided,however,that the Mortgagorshall:(1)to the extent necessary,replace the same by.or substitute therefor.other property of the same kind and nature,which shall be subject to the lien hereof,free and clear of all prior liens,and apply any proceeds derived from suchsaleorotherdispositionofsuchpropertyandnotneededforthereplacementthereoftothepaymentoftheindebtednessevidencedbytheRUSNotesandtheRTFCNotesintheproportionswhichtheaggregateprincipalbalancesthenowingontheRUSNotesandtheaggregateprincipalbalancesthenowingontheRTFCNotes,respectively,bear to the aggregate principal balances then owing on the RUS Notes and the RTFC Notes,collectively,and shall be applied to such notes and installments thereof as may be designated by the respectivenoteholdersatthetimeofanysuchreceipt;or (2)immediately upon the receipt of the proceeds of any sale or otherdispositionofsaidproperty,apply the entire amount of such proceeds to the payment of the indebtedness evidencedbytheRUSNotesandtheRTFCNotesintheproportionsandinthemannerprovidedforin(1)above;or (3)depositallorsuchpartoftheproceedsderivedfromthesaleorotherdispositionofsaidpropertyasthemajorityRUSnoteholdersandthemajorityRTFCnoteholdersshallspecifyinsuchrestrictedbankaccountsassuchholderorholdersshalldesignate,and shall use the same only for such additions to or improvements of the Mortgaged Propertyandonsuchtermsandconditionsassuchholderorholdersshallspecify.
SECTION 5.The Mortgagor will at all times maintain and preserve the Mortgaged Property ingoodrepair,working order and condition,and will from time to time make all needful and proper repairs,renewals,and replacements and useful and proper alterations,additions,betterments and improvements.and will,subject tocontingenciesbeyonditsreasonablecontrol,at all times keep its plant and properties in continuous operation and useallreasonablediligencetofurnishthesubscribersservedbyitthroughtheMortgagedPropertywithadequatetelephoneservice.
SECTION 6.Except as specifically authorized in writing in advance by the majority RUSnoteholdersandthemajorityRTFCnoteholders,the Mortgagor will purchase all materials,equipment,supplies and
TMAG-01-09-003-ID Page 7
replacements to be incorporated in or used in connection with the Mortgaged Property outright,and not subject to
any conditional sales agreernent,chattel mortgage.bailment lease.or other agreement reserving to the seller anyright.title or lien.
SECTION7.(a)The Mortgagor shall take out.as the respective risks are incurred.
and maintain the classes and amourits of insurance iri confor!Tiance with generally accepted utility industry standardsforsuchclassesandamountsofcoverageforutilitiesofthesizeandcharacteroftheMortgagorandconsistentwith"Prudent Utility Practice."Prudent Utility Practice shall mean any of the practices,methods,and acts which,in theexerciseofreasonablejudgement.in light of the facts,including but not limited to,the practices,methods,and actsengagedinorapprovedbyasignificantportionofthetelecommunicationsindustrypriorthereto,known at the time
the decision was made,would have been expected to accomplish the desired result consistent with cost-effectiveness.reliability,safety,and expedition.It is recognized that Prudent Utility Practice is not intended to be limited to
optimum practice,method,or act to the exclusion of all others,but rather is a spectrum of possible practices,
methods,or acts which could have been expected to accomplish the desired result at the lowest reasonable costconsistentwithcost-effectiveness,reliability,safety,and expedition.
(b)The foregoing insurance coverage shal be obtained by means of
bond and policy forms approvedby regulatory authorities having jurisdiction,and,with respect to insurance upon
any part of the Mortgaged Property,shall provide that the insurance shall be payable to Mortgagees as their interestsmayappearbymeansofthestandardmortgageeclausewithoutcontribution.Each policy or other contract for suchinsuranceshallcontainanagreementbytheinsurerthat,notwithstanding any right of cancelation reserved to suchinsurer,such policy or contract shall continue in force for at least 30 days after written notice to each Mortgagee ofsuspension,cancelation,or termination.
(c)In the event of damage to or the destruction of any portion of theMortgagedPropertywhichisusedorusefulintheMortgagor's business and which shall be covered by insurance,unless each Mortgagee shall otherwise agree,the Mortgagor shall replace or restore such damaged,destroyed,or lostportionsothatsuchMortgagedPropertyshallbeinsubstantiallythesameconditionasitwasinpriortosuchdamage,destruction,or loss and shall apply the proceeds of the insurance for that purpose.The MortgagorshallreplacethelostportionofsuchMortgagedPropertyorshallcommencesuchrestorationpromptlyaftersuchdamage,destruction,or loss shall have occurred and shall complete such replacement or restoration as expeditiously aspraClicable,and shall pay or cause to be paid out of the proceeds of such insurance form all costs and expenses inconnectiontherewith.
(d)Sums recovered under any policy or fidelity bond by the MortgagorforalossoffundsadvancedunderthenotesorrecoveredbyanyMortgagororanynoteholderforanylossunder
such policy or bond shall,unless applied as providedin the preceding paragraph.be used to finance construction ofutilityplantsecuredortobesecuredbythisMortgage,or unless otherwise directed by the Mortgagees,be applied totheprepaymentofthenotesprorataaccordingtotheunpaidprincipalamountsthereof(such prepayments to beappliedtosuchnotesandinstallmentsthereofasmaybedesignatedbytherespectiveMortgageeatthetimeofany
such prepayment),or be used to construct or acquire utility plant which wilThecome part of the Mortgaged Property.At the request of any Mortgagee,the Mortgagorshall exercise such rights and remedies which they rnay have under
such policy or fidelity bond and which may be designated by such Mortgagee,and the Mortgagor hereby irrevocablyappointseachMortgageeasitsagenttoexercisesuchrightsandremediesundersuchpolicyorbondassuchMortgageemaychoose.and the Mortgagor shall pay all costs and reasonable expenses incurred by the Mortgagee inconnectionwithsuchexercise.
SECTION8.In the event of the failure of the Mortgagor in any respect to comply with thecovenantsandconditionshereincontainedwithrespecttotheprocuringofinsurance,the payment of taxes,
assessments and other charges,the keeping of the Mortgaged Property in repair and free of liens and other claims or
to comply with any other covenant contained in this Mortgage,any noteholder or noteholders shall have the right(without prejudice to any other rights arising by reason of such default)to advance or expend moneys for the purposeofprocuringsuchinsurance,or for the payment of insurance premiums,taxes,assessments or other charges,or to
TMAO-01-09-003-lD Pase 8
save the Mortgaged Property from sale or forFeiture for any unpaid tax or assessmenL or otherwise.or lo redeem thesamefromanytaxorothersale,or lo purchase any tax litle thereon.or to remove or purchase any mechanics'liensorotherencumbrancethereon,or to make repairs thereon or to comply with any other covenant herein contained ortoprosecuteordefendanysuitinrelationtotheMortgagedPropertyorinanymanner.lo protect the MortgagedPropertyandthetitlethereto,and all sums so advanced for any of the aforesaid purposes with interest thereon at thehighestlegalratebutnotinexcessofChaseManhattanPrimeplus400BasisPointsperannumshallbedeemedachargeupontheMortgagedPropertyinthesamemannerasthenotesatthetimeoutstandingaresecuredandshallbeforthwithpaidtothenoteholderornoteholdersmakingsuchadvanceoradvancesupondemand.It shall not beobligatoryforanynoteholderinmakinganysuchadvancesorexpenditurestoinquireintothevalidityofanysuchtaxtitle,or of any of such taxes or assessments or sales therefor,or of any such mechanics'liens or otherenCLimbrance.
SECTION9.The Mortgagor will not,without the approval in writing of the majority RUSnoteholdersandthemajorityRTFCnoteholders:(a)enter into any contract or contracts for the operation ormaintenanceofalloranypartofitsproperty,for the use by others of any of the Mortgaged Property,or for tolltraffic.operator assistance,extended scope or switching services to be furnished by or for connecting or othercompanies;provided,however.that such approval shall not be required for any toll traffic or operator assistancecontractwhichinformandsubstanceconformswithcontractsingeneraluseinthetelephoneindustry;or (b)depositanyofitsfunds,regardless of the source thereof,in any bank,institution or other depository which is not insured bytheFederalGovernment.
SECTION10.Salaries,wages and other compensation paid by the Mortgagor for services,anddirectors'or trustees'fees,shall be reasonable and in conformity with the usual practice of corporations of the sizeandnatureoftheMortgagor.Except as specifically authorized in writing in advance by the majority RUSnoteholdersandthemajorityRTFCnoteholders,the Mortgagor will make no advance payments or loans,or in anymannerextenditscredit,either directly or indirectly,with or without interest,to any of its directors,trustees.officers,employees,stockholders,members or affiliatedcompanies,provided,however,the Mortgagor rnay make aninvestmentforanypurposedescribedinsection607(c)(2)of the Rural Development Act of 1972 (including anyinvestmentin,or extension of credit,guarantee or advance made to,an affiliatedcompany of the Mortgagor that isusedbysuchcompanyforsuchpurpose)to the extent that,immediately after such investment,(1)the aggregate ofsuchinvestmentsdoesnotexceedone-third of the net worth (defined in Exhibit One hereto)of the Mortgagorand(2)the Mortgagor's net worth is at least twenty percent of its total assets (defmed in Exhibit One hereto).As usedherein,the term "affiliated companies"shall have the meaning prescribed for this term by the Federal
Communications Commission in its prevailinguniform system of accounts for Class A telephone cornpanies.
SECTION1 1.The Mortgagor will at all times keep,and safely preserve,proper books,recordsandaccountsinwhichfullandtrueentrieswillbemadeofallofthedealings,business and affairs of the Mortgagor,in accordance with methods of accounting prescribed by the state regulatory body having jurisdiction over theMortgagor.or in the absence of such regulatory body or such prescription,by the Federal CommunicationsCommissioninitsuniformsystemofaccountsfortelecommunicationscompaniesasthosemethodsandprinciples ofaccountingmaybesupplementedfromtimetotimebyRUS.The Mortgagorwill prepare and furnish eachnoteholdernotlaterthanthethirtiethdayofJanuary,ApriL July and October in each year,or at such rnore or lessfrequentintervalswhenspecifiedbythemajorityRUSnoteholdersandthemajorityRTFCnoteholders,financial andstatisticalreportsonitsconditionandoperations.Such reports shall be on the RUS Form 479 and include suchinformationasmaybespecifiedbythemajorityRUSnoteholdersandthemajorityRTFCnoteholders,includingwithoutlimitationananalysisoftheMortgagor's revenues,expenses and subscriber accounts.The Mortgagor willcausetobepreparedandfurnishedtoeachnoteholderatleastonceduringeach12-month period during the termhereof,a full and complete report of its financial condition and cash flow as of a date (hereinafter called the "FiscalDate")not more than 90 days prior to the date such report is furnished to the noteholders hereunder,and of itsoperationsforthe12-month period ended on the Fiscal Date.in form and substance satisfactory to the majority RUSnoteholdersandthemajorityRTFCnoteholders,audited and certified by independent certified public accountantssatisfactorytosaidnoteholders,and accompanied by a report of such audit in form and substance satisfactory to saidnoteholders.Each of the majority RUS noteholders or the majority RTFC noteholders,through its or their
TMAG-0 I-09-003-ID Page 9
representatives.shall at all times during reasonable business hours have access to,and the right to inspect and makecopiesof.any or all hooks,records and accounts,and any or all invoices,contracts,leases,payrolls,cancelledchecks.statements and other documents and papers of every kind belonging to or in the possession of the Mortgagororinanywisepertainingtoitspropertyorbusiness.The Mortgagor shall enter into an audit agreement with anindependentcertifiedpublicaccountantinformandsubstancesatisfactorytothemajorityRUSnotehoklersand themajorityRTFCnoteholders.
SECTION 12.(a)The Mortgagor will frorn time to tirne upon written demand of the majorityRUSnoteholdersorthemajorityRTFCnoteholdersmake.execute.acknowledge and deliveror cause to be made,executed,acknowledged and deliveredall such furtherand supplemental indentures of mortgage.deeds of trust,rnortgages,financing statements,continuation statements.security agreements,instruments and conveyances as mayreasonablyberequestedbythemajorityRUSnoteholdersorthemajorityRTFCnoteholdersandtakeorcausetobetakenallsuchfurtheractionasmayreasonablyherequestedbythema.jority RUS noteholders or the majority RTFCnoteholderstoeffectuatetheintentionofthesepresentsandtoprovideforthesecuringandpaymentoftheprincipalofandinterestonthenotesequallyandratablyaccordingtothetermsthereofandforthepurposeoffullyconveying,transferring and confirming unto the Mortgagees the property hereby conveyed,mortgaged and pledged.or intendedsotobe,whether now owned by the Mortgagoror hereafter acquired by it and to reflect the assignment of the rightsorinterestsofanyoftheMortgageesorofanynoleholderhereunderorunderanynote.The Mortgagor will causethisMortgageandanyandallsupplementalindenturesofmortgage,mortgages and deeds of trust and every securityagreement,financing statement,continuation stalement and every additional instrument which shall be executedpursuanttotheforegoingprovisionsforthwithuponexecutiontoberecordedandfiledandrerecordedandrefiled asconveyancesandmortgagesanddeedsoftrustalandsecurityinterestsinrealandpersonalpropertyinsuchmannerandinsuchplacesasmayberequiredbylaworreasonablyrequestedbythemajorityRUSnoteholdersorthemajorityRTFCnoteholdersinorderfullytopreservethesecurityforthenotesandtoperfectandmaintainthesuperiorlienofthisMortgageandallsupplementalindenturesofmortgage,mortgages and deeds of trust and therightsandremediesoftheMortgageesandthenotcholders.
(b)In the event that the Mortgagor has had or suffers a deficit in net income ornetmargins,as determined in accordance with methods of accounting prescribed in Section i i of Article II hereof,for any of the five (5)fiscal years immediately preceding the date hereofor for any fiscal year while any of the notesareoutstanding,the Mortgagor will at any time or times upon written demand of the majority RUS noteholders or themajorityRTFCnoteholders,make,execule,acknowledge and deliveror cause to be made,executed,acknowledgedanddeliveredallsuchfurtherandsupplementalindenturesofmortgage,rnortgages,security agreements,financingstatements.instrurnents and conveyances.and take or cause to be taken all such further action,as may reasonably berequestedbythemajorityRUSnoteholdersorthemajorityRTFCnoteholdersinordertoincludeinthisMortgage,as Mortgaged Property,and to subject to all the terms and conditions of this Mortgage,all right,title and interest oftheMortgagorinandto.all and singular,the automobiles,trucks,trailers,tractors,aircraft,ships and other vehiclesthenownedbytheMortgagor,or which may thereafter be owned or acquired by the Mortgagor.From and after thetimeofsuchwrittendemandofthemajorityRUSnoteholdersorthernajorityRTFCnoteholderssuchvehiclesshallbedeemedtobepartoftheMortgagedPropertyforallpurposeshereof.
SECTION 13.Any noteholder may,at any time or times in succession without notice to or theconsentoftheMortgagororanyothernoteholderanduponsuchtermsassuchnoteholdermayprescribe,grant toanyperson,firm or corporation who shall have become obligated to pay all or any part of the principal of or interestonanynoteheldbyorindebtednessowedtosuchnoteholderorwhomaybeaffectedbythelienherebycreated,anextensionofthetimeforthepaymentofsuchprincipalorinterest,and afterany such extension the Mortgagor willremainliableforthepaymentofsuchnoteorindebtednesstothesarneextentasthoughithadatthetimeofsuchextensionconsentedtheretoinwriting.
SECTION J 4.The Mortgagor,subject to applicable laws and rules and orders of regulatorybodies,shall charge rates for its telephone service and other services furnished which shall yield revenues at leastsufficientto(1)pay and discharge all taxes,maintenance expenses,operating expenses,and other expenses of itstelephonesystemwhendue,(2)pay all obligations of the Mortgagor and make all payments of principal of and
TMAC-01-09-003-fD Page 10
interest on the notes when due,(3)provideand maintain reasonable capital for the Mortgagor.(4)maintain an
Average TIER on al of the notes of not less than l.50 but in no year shall the TIER he less than 1.00,and (5)
maintain a DSC of not less than !.25.Not less than 90 days prior to the effective date of any proposed change in its
rate,the Mortgagor shall give to the holder or holders of the notes written notice of such change and a copy of the
schedule showing the then existing rates and the proposed changes therein.
SECTION 15.(a)The Mortgagor may make a distribution (hereinafter called a "distribution"),in
the nature of an investment,guarantee,extension of credit.advance,loan.non-affiliated company joint venture,
affiliatedcompany investment,or dividendor capital credit distribution only if the majority RUS noteholders and the
majority Bank noteholders have given prior written approval to the distribution or if.after such distribution,
(D the Mortgagor's net worth is equal to at least one percent of its total assets and the amount of all
such distributions during the calendar year does not exceed twenty-five percent of the Mortgagor's
net income or net margins for the prior calendar year;
(2)the Mortgagor'snet worth is equal to at least twenty percent of its total assets and the amount of all
such distributions during the calendar year does not exceed fifty percent of the Mortgagor's net
income or net margins for the prior calendar year;
(3)thë Mortgagor'snet worth is equal to at least thirty percent of its total assets and the amount of all
such distributions during the calendar year does not exceed seventy-five percent of its net income
or net margins for the prior calendar year;or
(4)the Mortgagor'snet worth is equal to at least forty percent of its total assets,regardless of the
aggregate amount of such distributions.
The terms "net worth"."total assets",and "net income or net margins"are determined in accordance with Exhibit
One.
(b)In addition to the distributions authorized under the preceding subsection (a),the Mortgagor
may make any distribution or investment providedin 7 CFR 1744 Subpart D.
SECTION 16.In the event that the Mortgaged Property,or any part thereof,shall be taken under
the power of eminent domain,all proceeds and avails therefrom.except to the extent that all noteholders shall
consent to other use and application thereofby the Mortgagor,shall forthwithbe applied by the Mortgagor:first.to
the ratable payment of any indebtedness by this Mortgage secured other than principal of or interest on the notes;
second,to the ratable payment of interest which shall have accrued on the notes and be unpaid;third,to the ratable
payment of or on account of the unpaid principal of the notes and to such installments thereof as may be designated
by the respective noteholders at the time of any such payment;and fourth,the balance,if any,shall be paid to
whosoever shall be entitled thereto.
SECTION 17.The Mortgagorwill well and truly observe and perform all of the covenants,
agreements,terms and conditions contained in the Consolidated Loan Agreement and the RTFC Loan Agreement,on
its part to be observed or performed.The Mortgagor will promptly furnish each Mortgagee with written notice of
any amendment or modificationof any agreement under which a note or other obligation of the Mortgagor secured
by the lien of this Mortgage has been or will be issued.including,without limitation,the Consolidated Loan
Agreement and the RTFCLoan Agreement,and the occurrence of any default or event of default of which the
Mortgagorhas knowledge under any such agreement.In the event of any inconsistency between the terms and
conditions of the Mortgage and the Consolidated Loan Agreement and the RTFC Loan Agreement,the terms of the
Mortgage shall apply to the Mortgagor.
SECTION18.If all of the notes in any one of the two groups of notes secured hereby (RUS Notes
and RTFCNotes)are paid and discharged while notes of the other group of notes remain outstanding,all rights and
TMAG-01-09-003-1D Page 11
powers of the Mortgagee associated with the paid and discharged group of notes shall vest in the Mortgagee
associated with the groups of notes remaining outstanding,and the rights and powers oF the holder(s)of the paid and
discharged group of notes shall vest in the holder(s)of the group of noles remaining outstanding.The Government is
the "Mortgagee associated with"the RUS Notes;and RTFC is the "Mortgagee associated with"the RTFC Notes.
The Government.the Mortgagor,RTFC and the noleholders shall execute and deliver such instruments.assignments.
releases or other documents as shall be reasonably required to carry out the intention of this section.
SECTION 19.At all times when any note is held by the Government,or in the event the
Government shall assign a note without having insured the payment of such note,this Mortgage shall secure payment
of such note for the benefit of the Oovernment or such uninsured holder thereof.as the case may be.Whenever any
note may be sold to an insured purchaser,it shall continue to be considered a "note"as defined herein,but as to any
such insured note the Government,and not such insured purchaser,shall be considered to be,and shall have the
rights of,the noteholder for purposes of this Mortgage.Notice of the rights of the Government under the preceding
sentence shall be set forth in all such insured notes.As to any note which evidences a loan made by FFB to the
Mortgagor,and guaranteed by the Government.acting through the Administrator,pursuant to the Act,the
Government and not FFB shall be considered to be.and shall have the rights of the noteholder for purposes of this
Mortgage.
SECTION 20.As used in Article I,Section l (d),Article II Section 3,and Article II,Section 14
bereof and in this Section,TIER shall mean the Mortgagor's net income or net margins (determined in accordance
with Exhibit One hereto)plus interest expense (determined in accordance with Exhibit One hereto),dividedby
interest expense.
For purposes of Article II,Section 14 hereof,Average TIER shall be determined as of January I of
each year during which any obligation secured by this Mortgage remains unsatisfied and shall mean the average of
the two highest TIER ratios achieved by the Mortgagorduring each of the three calendar years last preceding the
various dates of its determination.
As used in Article L Section 1(d),Article II,Section 3 and Article II,Section 14 hereof,DSC shall
mean the sum of net income,plus interest,plus depreciation,plus amortization,all divided by the sum of interest
plus scheduled principal payments and capital lease obligations due in the test year.
As used in Article I,Section 1(d),Equity to Asset Ratio shall mean all equity dividedby the total
assets of the Mortgagor.
SECTION 21.(a)Net worth,net income or net margins,interest expense,total assets,
depreciation,amortization and equity.as used in Sections 10,15 or 20 of this Article II,are defined in Exhibit One
of this Mortgage.Nel plant and secured debt,if referred to in this Mortgage,are also determined in accordance with
Exhibit One hereto.
(b)Accounting terms.used in this Mortgage shall also apply to accounts or
groups of accounts of the Mortgagor,regardless of the account title or the system of accounts used,if such accounts
have substantially the same meaning as those prescribed by the Federal Comrnunications Commission in its
prevailinguniform system of accounts for telecommunications companies (47 CFR Part 32).
SECTION 22.If the Underlying Mortgage contains provisions requiringthe Mortgagorto
maintain a net plant to secured debt ratio or a funded reserve,then such provisions are incorporated in and made a
part of this Mortgage as though fully set forth herein at this point.
SECTION 23.Schedule A,Schedule B,Exhibit A and Exhibit One,attached hereto,are made
part of this Mortgage.
TMAG-01-09-003-ID Page 12
ARTlCLEIll
REMEDIES OF THE MORTGAGEES AND NOTEHOLDERS
SECTION 1.If one or more of the following events (hereinaftercaled "events of delbuit")shallhappen.that is to say:
(a)default shall be made in the payment of any instaÌ1ment of or on account of interest on orprincipalofanynoteornoteswhenandasthesameshallberequiredtobemadewhetherbyacceleration orotherwiseandsuchdefaultshallcontinueforthirty(30)days;
(b)default shall be made in the due observance or performance of any other of the representations,
warranties,covenants,conditions or agreements on the part of the Mortgagor in any of the notes,thisMortgage.the Consolidated Loan Agreement or the RTFC Loan Agreement contained:and such defaultshallcontinueforaperiodofthirty(30)days after written notice specifying such default and requiring the
same to be remedied shall have been given to the Mortgagor by any noteholder;
(c)the Mortgagorshall file a petition in bankruptcy or be adjudicated a bankrupt or insalvent,orshallmakeanassignmentforthebenefitofitscreditors,or shall consent to the appointment of a receiver ofitselforofitsproperty,or shall institute proceedings for its reorganization or proceedings instituted by
others for its reorganization shall not he dismissed within thirty (30)days after the institution thereof;
(d)a receiveror liquidatorof the Mortgagor or of any substantial portion of its property shall beappointedandtheorderappointingsuchreceiverorUguidatorshallnotbevacatedwithinthirty(30)days
after the entry thereof;
(e)the Mortgagor shall forleil or otherwise he deprived of its corporate charter or franchises,permits or licenses required to carry on any material portion of its business;or
(f)a final judgment in an amount of two thousand five hundred dollars ($2,500)or more shall beenteredagainsttheMortgagorandshallremainunsatisfiedorwithoutastayinrespectthereofforaperiodofthirty(30)days;
then in each and every such case any noteholder may.by notice in writing to the Mortgagor and delivery of a copythereoftotheothernoteholders,without protest.presentment or demand declare all unpaid principal of and accruedinterestonanyorallnotesheldbysuchnoteholdertobedueandpayableimmediately;and upon any suchdeclarationallsuchunpaidprincipalandaccruedin\erest so declared to be due and payable shall become and be dueandpayable.immediately,anything contained herein or in any note or notes to the contrary notwithstanding;provided,however,that if at any time after the unpaid principal of and accrued interest on any of the notes shall havebeensodeclaredtobedueandpayable,all payments in respect of principal and interest which shall have becomedueandpayablebythetermsofsuchnoteornotesshallbepaidtotherespectivenoteholders,and all other defaultshereunderandunderthenotesshallhavebeenmadegoodorsecuredtothesatisfactionofallofthenoteholders,together with reimbursement for any resulting expenses or damage and together with interest at the highest ratelegallypermissible,then and in every such case,the noteholder or noteholders who shall have declared the principalofandinterestonnotesheldbysuchnoteholderornoteholderstobedueandpayablemay,by written notice to theMortgagoranddeliveryofacopythereoftotheothernoteholders,annul such declaration or declarations and waive
such default or defaults and the consequences thereof.but no such waivershall extend to or affect any subsequentdefaultorimpairanyrightconsequentthereon.
SECTION2.If one or more of the events.of default shall happen,the holder or holders of not lessthanamajorityofthetotalarnountofprincipaloutstandingonthenotes,hereinafter called the "majority
noteholders",for itself or themselves,and as the agent or agents of the other noteholders,personally or by attorney,in its or their discretion,may,insofar as not prohibited by law:
TivlAG-0 009-003-ID Page 13
(a)take immediate possession of the Mortgaged Property.collect and receive al credits,outstanding accounts and bills receivable of the Mortgagor and al rents,income,revenues and profitspertainingtoorarisingfromtheMortgagedProperty.or any part thereof,and issue binding receiptstherefor;and manage,control and operate the Mortgaged Property as fully as the Mortgagormight do if inpossessionthereof,including,without limitation,the making of al repairs or replacements deemednecessaryoradvisable:
(b)proceed to protect and enforce the rights of the Mortgagees and the rights of the noteholder ornoteholdersunderthisMortgagebysuitsoractionsinequityoratlawinanycourtorcourtsofcompetentjurisdiction,whether for specific performance of any covenant or any agreement contained herein or in aidoftheexecutionofanypowerhereingrantedorfortheforeciosurehereoforhereunderorforthesaleoftheMortgagedProperty,or any part thereof,or to collect the debts hereby secured or for the enforcement ofsuchotheroradditionalappropriatelegalorequitableremediesasmaybedeemedmosteffectualtoprotectandenforcetherightsandremedieshereingrantedorconferred,and in the event of the institution of anysuchactionorsuitthenoteholderornoteholdersinstitutingsuchactionorsuitshallhavetherighttohaveappointedareceiveroftheMortgagedPropertyandofallrents,income,revenues and profits pertainingtheretoorarisingtherefromderived.received or had from the time of the commencement of such suit oraction,and such receiver shall have all the usual powers and duties of receivers,in like and similar cases,tothefullestextentpermittedbylaw.and if application shall be made for the appointment of a receiver theMortgagarherebyexpresslyconsentsthatthecourttowhichsuchapplicationshallbemademaymakesaidappointment;and
(c)sell or cause to be sold all and singular the Mortgaged Property or any part thereof,and allright,title,interest,claim and demand of the Mortgagor therein or thereto.at public auction at such place inanycountyinwhichthepropertytobesold.or any part thereof is located,at such time and upon such termsasmaybespecifiedinanoticeofsale,which shall state the time when and the place where the sale is to beheld,shall contain a brief general description of the property to be sold,and shall be given by mailing acopythereoftotheMortgagoratleastfifteen(15)days prior to the date fixed for such sale and bypublishingthesameonceineachweekfortwosuccessivecalendarweekspriortothedateofsuch sale in anewspaperofgeneralcirculationpublishedinsaidcounty,or if no such newspaper is published in suchcounty,in a newspaper of general circulation in such county,the first such publication to be not less thatfifteen(15)days nor more than thirty (30)days prior to the date fixed for such sale.Any sale to be madeunderthissubparagraph(c)of this Section 2 may be adjourned from time to time by announcement at thetimeandplaceappointedforsuchsaleorforsuchadjournedsaleorsales,and without further notice orpublicationthesalemaybehadatthetimeandplacetowhichthesameshallbeadjourned,provided,however,that in the event another or differentnotice of sale or another or differentmanner of conductingthesameshallberequiredbylawthenoticeofsaleshallbegivenorthesaleshallbeconducted,as the casemaybe,in accordance with the applicable provisions of law.
SECTION 3.If,within thirty (30)days after the majority noteholders shall have had knowledge ofthehappeningofaneventoreventsofdefault,the majority noteholders shall not have proceeded to exercise therightsandenforceeachoftheremedieshereinorbylawconferreduponorreservedtotheMortgageesorlosaidraajoritynoteholders,then,and only then,any noteholder,including the majority noteholders,rnay proceed toexerciseanysuchrightorrightsandremedyorremediesnotbeingenforcedbythemajoritynoteholders.NothingcontainedinthisMortgageshallaffectorimpairtheright,which is absolute and unconditional,of any holder of anynotewhichmaybesecuredherebytoenforcethepaymentoftheprincipaloforinterestonsuchnoteonthedateordatesanysuchimerestorprincipalshallbecomedueandpayableinaccordancewiththetermsofsuchnote.
SECTION 4.At any sale hereunder any noteholder or noteholders shall have the right to bid forandpurchasetheMortgagedProperty,or such part thereof as shall be offered for sale,and any noteholder ornoteholdersmayapplyinsettlementofthepurchasepriceofthepropertysopurchasedtheportionofthenetproceedsofsuchsalewhichwouldbeapplicabletothepaymentonaccountoftheprincipalofandintereston the
TMAG-Ol-09-003-lD Page 14
note or notes held hy such noteholder or noteholders,and such arnount so applied shall he credited as a payment anaccountofprincipalofandinterestonthenoteornotesheldbysuchnoteholderornoteholders.
SECTION 5.Any proceeds or funds arising from the exercise of any rights or the enforcement ofanyremedieshereinprovidedafterthepaymentorprovisionforthepaymentofanyandallcostsandexpensesinconnectionwiththeexerciseofsuchrightsortheenforcementofsuchremediesshallbeappliedfirst,to the paymentofindebtednessherebysecuredotherthantheprincipaloforinterestonthenotes;second,to the ratable payment ofinterestwhichshallhaveaccruedonthenotesandwhichshallbeunpaid;third,to the ratable payment of or onaccountoftheunpaidprincipalofthenotes;and fourth,the balance,if any,shall be paid to whosoever shall beentitledthereto.
SECTION6.The Mortgagorcovenants that it wil give immediate written notice to each of theMortgageesandtoallofthenoteholdersoftheoccurrenceofaneventofdefaultorintheeventthatanyrightorremedydescribedinclauses(a)through (c)of Section 2 of this Article III is exercised or enforced,or any action istakentoexerciseorenforceanystichrightorremedy.
SECTION7.Every right or remedy herein conferred upon or reserved to the Mortgagees or to thenoteholdersshallbecumulativeandshallbeinadditionloeveryotherrightandremedygivenhereunderornoworhereafterexistingatlaw,or in equity,or by statute.The pursuit of any right or remedy shall not be construed as anelectionandshallnotprecludethepursuitofanyotherrightorremedy.
SECTION8.The Mortgagor.for itself and all who may claim through or under it,covenants thatitwillnotatanytimeinsistuponorplead,or in any marmer whatever claim,or take the benefit or advantage of,anyappraisement,valuation,stay,extension or redemption laws now or hereafter in force in any locality where any of theMortgagedPropertymaybesituated.in order to prevent,delay or hinder the enforcement of foreclosure of thisMortgage,or the absolute sale of the Mortgaged Property,or any part thereof,or the fmal and absolute putting intopossessionthereof,immediately after such sale.of the purchaser or purchasers thereat,and the Mortgagor.for itself
and all who may claim through or under it.hereby waives the benefit of all such laws unless such waiver shall beforbiddenbylaw.
SECTION9.For purposes of this Article III,to the extent permitted by applicable state law,eachnoteholderappointstheMortgageeorMortgageesexercisinganyremedyasaboveprovidedasitsattorney(s)-in-factforsuchpurpose.
SECTION 10.Nothing herein contained shall be deemed to authorize the Mortgagees to authorizeorconsenttooracceptoradoptonbehalfofanynoteholderanyplanofreorganization,arrangement,adjustment orcompositionaffectingthenotesortheriglusofanyholderthereof,or to authorize the Mortgagees to vote in respectoftheclaimofanynoteholderinanysuchproceeding.
SECTIONi 1.Any rights of action and claims under this Mortgage or the notes may beprosecutedandenforcedbythenoteholderornoteholdersprosecutingandenforcingthesamewithoutthe possessionofanyofthenotesortheproductionthereofinanyproceedingrelatingthereto,and,to the extent permitted byapplicablestatelaw,any such proceeding instituted by any noteholder shall be brought in its own name asattorney-in-fact for the noteholders,and any recovery of judgment shall.after provision for the payment of thereasonablecompensation.expenses,disbursements and advances of the noteholders,their agents and counsel (butonlytotheextentactuallyincurred),be for the ratable benefit of the noteholders in respect of which such judgment
had been recovered.
ARTICLEIV
POSSESSION UNTIL DEFAULT-DEFEASANCECLAUSE
TMAG-01-09-003-ID Page 15
SECTION l.Until some one or more of the events of default shall have happened,the MortgagorshalbesufferedandpermittedtoretainactualpossessionoftheMortgagedProperty.and to mariage.operate andusethesameandanypartthereof,with the rights and franchises appertaining thereto,and to collect,receive,take,use and enjoy the rents,revenues.issues.earnings.income,products and profits thereof or therefrom.subject to theprovisionsofthisMortgage.
SECTION2.The assignments to the Mortgagees of all of the Mortgagor's right,title and interestin,to and under contracts.licenses,franchises.ordinances.privileges.permits,chattel paper,contract rights.leases,subleases,(hereinafter collectively referred to in this Section 2 as the "assigned items"),to the extent set forth in thegrantingclausesofthisMortgage,constitutes an assignment for security purposes.Notwithstanding any otherprovisionsofthisMortgagetothecontrary,the Mortgagor shall at all times remain liable under each of the assigneditemstoperforrnallofitsdutiesandobligationsthereundertothesameextentasiftherehadbeennoassignmentcontainedinthisMortgage.Furthermore,(i)neither the assignment under this Mortgage nor the exercise by theMortgageesoftherightsassignedhereundershallcausetheMortgageestobecomesubjecttoanyobligationorliabilityunderanyoftheassigneditems,or release the Mortgagor from any of its duties or obligations under any oftheassigneditems,or any instrument or document relating thereto.except to the extent such exercise by anyMortgageeshallconstituteperformanceofsuchdutiesorobligations,and (ii)no Mortgagee shall have anyobligationbyreasonoftheassignmentunderthisMortgagetomakeanyinquiryastothesufficiencyorauthorizationforanypaymentsreceivedbyitortakeanyotheractiontocollectorenforceanyclaimforpaymentassignedhereunder.
SECTION3.If the Mortgagorshall well and truly pay or cause to be paid the whole amount of theprincipalofandtheinterestonthenotesatthetimeandinthemannerthereinprovided,according to the true intentandmeaningthereof,and shall also pay or cause to be paid all other sums payable hereunder by the Mortgagor andshallwellandtrulykeepandperformaccordingtothetrueintentandmeaningofthisMortgage,al covenants hereinrequiredtobekeptandperformedbyit,then and in that case,all property,rights and interests hereby conveyed orassignedorpledgedshallreverttotheMortgagorandtheestate,right,tide and interest of the Mortgagees and thenoteholdersshallthereuponcease,determine and become void and the Mortgagees and the noteholders,in such case,
on written demand of the Mortgagor but at the Mortgagor's cost and expense.shall enter satisfaction of thisMortgageupontherecord.In any event,each noteholder,upon payment in full to him by the Mortgagor of allprincipalofandinterestonanynoteheldbyhimandthepaymentanddischargebytheMortgagorofallcharges due
to such noteholder hereunder,shall execute and deliver to the Mortgagor such instrument of satisfaction,dischargeorreleaseasshallberequiredbylawinthecircumstances.
ARTICLEV
MISCELLANEOUS
SECTION l.It is hereby declared to be the intention of the Mortgagorthat all lines,or systems,embraced in the Mortgaged Property,including,without limitation,all rights of way and easements granted or giventotheMortgagororobtainedbyittouserealpropertyinconnectionwiththeconstruction,operation or maintenanceofsuchlines,or systerns,and all service and connecting lines,poles,posts,crossarms,wires,cables,conduits,ducts,connections and fixtures forming part of,or used in connection with,such lines,or systems,and all other propertyphysicallyattachedtoanyoftheforegoing-described property,shall be deemed to be real property.
SECTION2.All acts and obligations of the Mortgagor hereunder shall be subject to all applicableorders,rules and regulations,now or hereafter in effect,of all regulatory bodies having jurisdiction in the premises,to the end that no act or omission to act on the part of the Mortgagor shall constitute a default hereunder insofar assuchactoromissionshallhavebeenrequiredbyreasonofanyorder,tule or regulation of any such regulatory body.
SECTION3.All of the covenants,stipulations,promises,undertakings and agreements hereincontainedbyoronbehalfoftheMortgagorshallbinditssuccessorsandassigns,whether so specified or not.and alltides,rights and remedies hereby granted to or conferred upon the Mortgagees shall pass to and inure to the benefit
TMAG-01-09-003-ID Page 16
of the successors and assigns of the Mortgagees and shall be cleemed to be granted or conferred for the ratable
benefit and security of all who shan from time to time be the holders of notes executed and delivered as herein
provided.The Mortgagor and each of the Mortgagees hereby agree to execute and deliver such consents.
acknowledgments and other instruments as may be reasonably requested by any of the Mortgagees or any noteholder
in connection with any assignment of the rights or interests of any Mortgagee or noteholder hereunder or under the
notes.
SECTION 4.The descriptive headings of the various articles of this Mortgage were formulated
and inserted for convenience only and shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
SECTION 5.All demands,notices,reports.approvals,designations,or directions required or
permitted to be given hereunder shall be in writing and shan be deemed to be properly given if mailed by registered
mail addressed to the proper party or parties at the followingaddresses:
As to the Mortgagor:As stated in the testimonium clause hereof.
As to the Mortgagees The Government:
Rural Utilities Service
U.S.Department of Agriculture
Washington.D.C.20250-1500
RTFC:
Rural Telephone Finance
Cooperative
Woodland Park
2201 Cooperative Way
Herndon,Virginia 22071-3025
and as to any other person,firm,corporation or governmental body or agency having an interest herein by reason of
being the holder of any note or otherwise.at the last address designated by such person,firm,corporation,
governmental body or agency to the Mortgagorand the Mortgagees.The Mortgagoror the Mortgagees may from
time to time designate to one another a new address to which demands,notices,reports,approvals,designations or
directions may be addressed and from and after any such designation the address designated shall be deemed to be
the address of such party in lieu of the address hereinabove given.The Mortgagorwill promptly notify the
Mortgagees in writing of any change in location of its chief place of business or the office where its records
concerning accounts and contract rights are kept.
SECTION 6.The invalidity of any one or more phrases,clauses,sentences,paragraphs or
provisions shall not effect the remaining portions of this Mortgage,nor shall any such invalidity as to any Mortgagee
or as to any holder of notes hereunder affect the rights hereunder of the other Mortgagee or any other holder or
holders of notes.
SECTION 7.To the extent that any of the property described or referred to in this Mortgage is
governed by the provisions of the Uniform Commercial Code this Mortgage is hereby deemed a "security
agreement"under the Uniform Commercial Code,and a "financing statement"under the UniformCommercial Codeforsaidsecurityagreement.The mailing addresses of the Mortgagor as debtor,and of the Mortgagees as secured
parties,are as set forth in Section 5 of this Article V.
SECTION 8.The Mortgagoragrees to indemnify and save harmless the Mortgagees against anyliabilityordamageswhichanysuchMortgageemayincurorsustainintheexerciseandperforrnanceofitspowers
and duties hereunder.For such reimbursernent and indemnity,such Mortgagee shall be secured under this Mortgage
TMAG-01-09-003-lD Page 17
in the sarne manner as the notes and all such reimbursements for expense or damage shall be paid to such Mortypgee
with interest at the rate specified in Article II.Section 8 hereof.
SECTION 9.This Mortgage may be simultaneously executed in any number of counterparts.and
all said counterparts executed and delivered,each as an original,shall constitute but one and the same instrument.
IN WITNESS WHEREOF,MIDVALE TELEPHONE EXCHANGE,INC.,P.O.Box 7.Midvale,
Idaho 83645,as Mortgagor.has caused this Mortgage to be signed in its name and its corporate seal to be hereunto
affixed and attested by its officers thereunto duly authorized RURALTELEPHONE FINANCE COOPERATIVE.as
Mortgagee,has caused this Mortgage to be signed in its narne and its corporate seal to be hereunto affixed and
attested by its officers thereunto duly authorized,and UNITEDSTATES OF AMERICA,as Mortgagee,has caused
this Mortgage to be duly executed in its behalf,all as of this day and year first above written.
MI EXCILOOE,INC.
President
Secretary
Executed by the Mortgagor
in the presence of:
Witnesses
TMAG-01-09-003-lD Page 18
UNITED STATES OF AMERICA
by I
as
Assistant Administrator
Telecommunications Program
of the
Rural UtiÌities Service
Executed by United States of America,
Witnesses
RURAL TELEPHONE FINANCE COOP TIVE
(SEAL)By:/-7
ssistant Seefe'tary-Treas er
Attes
Ass -Treasurer
Executed by RTFC.Morgagee
esses '
TMAG-01 09-003-lD Page 19
STATE OF-ARÏ£8Nis |D.4 ;-i G )
)SS
COUNTYOF J/Ÿ¶Ñ//N/O,0 )
On this /.5 day of /da ,20 ü>.before merg-t--e 5 -Don B<,the undersigned officer,personally appeared Lg we .UJ and(?1¾Ú.VÅ l ÎÍÆ MS ,who acknowledged themselves to be the President and Secretary,respectively,ofMidvídeTelephoneExchange,Inc.,a corporation.and that they,as such President and Secretary,being authorized
so to do,executed the foregoinginstrument,for the purposes therein contained,by signing the name of the
corporation by themselves as President and Secretary.
IN WITNESSWHEREOF,I have hereunto set my hand and official seal.
Notary Public
(Notarial Seal)
My commission expires:
TMAG-01-D9-00MD Page 20
STATE OF IDAHO )
)SSCOUNTYOF/Î $ri//A Ú /Al )
On the .,l day of 65
,in the year 20 .0 2-before me personally
appeared L a t L ¾i dAR J and dig G.*v ¿¿ci ,andknowntometobethepersonswhoexecutedtheforegoinginstrumentonbehalfofÑIIDVALETELEPHONEEXCHANGE.INC.,and acknowledged to me that such corporation executed the same.
'Notary Public in and for ti State of Idaho,residing at gij ¿yjg
(NotarialSeal)
My commission expires:
TMAG-01-09-003-ID Page 21
4-T,Mr-E--GF-BREGON |ÑË Í U )
>ssCOUNTYOFlbÑ5Ñ?ÏÜÔ~T 0 )
This instrument was acknowledged before me on ,20 02-;by
n á d nu as president of MIDVALE TELEPHONEEXCHANGE.INC.
etal.9 Public
(Notarial Seal)
My commission expires:
TMAG-0 1-09-003-ID Page 22
DISTRICT OF COLUMBIA )SS
his instrument was acknowledged before me ai .20 Ô
,by
.ghl!,Assistan Administrat ·
-elec n mu ic ions Program of theRuralUtilitiesServiceoftheUnitedStatesofAmerica.
Notary Public
(NotarialSeaf)
My commission expires:ÔCitádL I 2¿D
TMAG-0I-09-003-ID Page 23
COMMONWEALTH OF VIRGINIA )
)SSCOUNTYOFFAIRFAX)
BE IT REMEMBERED,that on this day of
.20 .before me.the undersioned,a notary public in and for theCommonwealthofVir,nia,aforesaid,came &A Ä ·$Ë .signing as an AssistantSecretary-Treasurer of the RURAL TELEPHONEFINANCECOOPERATIVE,a corporation,who is personallyknowntometobethepersonvvhoexecutedthewithininstrumentofwritingonbehalfofsuchcorporationandsuchpersondulyacknowledgedtheexecutionofthesameastheactanddeedofsaidcorporation.
IN TESTIMONYWHEREOF,I have hereunto set my hand and af6xed my notarial seal the day and yearabovewritten.
Notary Public
(Notarial Seal)
My commission expires:/
TMAG-01 09-003-ID Page 24
SCHEDULE A
"Telephone Loan Contract"(exclusive of any amendments)dated as of April 22.1980
"Outstanding RUS Notes":
Five (5)certain mortgage notes payable to the order of the Government.in the aggregate principal amountof$6,409,000.00,all of which will finally rnature on or before December 19,2020.
"UnderlyingMortgage"
Instrument MRestatedMortgage,Security Agreement and Financial Staternent September 29,1994
"Current RUS Note":(Of even date herewith):
Interest Rate Final PaymentPrincipalAmount(per annum)Date$5,695,000 five per centum February 1,2016
(59b)
SCBEDULE B
"Current RTFC Loan Agreement"being that certain Amended Loan Agreement by and betweenMidvaleTelephoneExchange,Inc.and RTFC,dated as of even date herewith.
"Current RTFC Notes"being two certain Substitute Secured Promissory Notes dated as of evendateherewithintheprincipalamountsof$2,103,981 (ID 514 -9001 note)and $378,947 (ID 514
-9002 note).
"Underlying Mortgage"
Instrument D_ateRestatedMortgage,Security Agreement and Financing Statement September 29,1994
Exhibit One (Exhibit to Mortgage)UNIFORM SYSTEM OF ACCOUNTSACCOUNTNUMBERSUSEDINCERTAINPROVISIONS
Al references regarding account numbers are to 47 CFR Part 32.
A CCOUNTNUMBERSACCOUNTNAMESCLASSACLASSB
NET INCOME OR NET MARGINS:the sum of the balances of the following accounts of the Mortgagor:
Local Network Services Revenues )Network Access Services Revenues )Long Distance Network Services Revenues )5000s thru 5300sMiscelÌaneousRevenues)LESS:Uncollectible Revenues )
Other Operating Incorne and Expense 7100*7100NonoperatingIncomeandExpense7300*7300IncomeEffectofJurisdictional
Rate-making Difference-Nel 7910 7910NonregulatedNelIncome79907990OtherNonregulatedRevenues79917991LESS:balances of the following accounts:Plant Specific Operations Expense )Plant Nonspecific Operations Expense )6100s thru 6700sCustomerOperations;Corporate Operations
)Operating Taxes 7200*7200NonoperatingTaxes7400*7400InterestandRelatedItems7500*7500ExtraordinaryItems7600*7600
INTERESTEXPENSE:the sum of the balances of the following accounts of the Mortgagor:
Interest and Related Ttems 7500*7500InterestonFundedDebt7510InterestExpense-Capital Leases 7520AmortizationofDebtIssuanceExpense7530OtherInterestDeductions7540LESS:Allowance for Funds Used
During Construction 7340 7300.4
*Summary Accounts
TEX50 F09-003-ID
Page I
TOTAL TELECOMMUNICATIONSPLANT:the sum of the balances of the followingaccounts of theMortgagor:
Telecommunications Plant in Service 2001 2001PropertyHeldforFuture
Telecommunications Use 2002 2002TelecommunicationsPlantUnder
Construction -Short Term 2003 2003TelecommunicationsPlantUnder
Construction -Long Term 2004 2004TelecommunicationsPlantAdjustment20052005NonoperatingPlant
2006 2006Goodwill
2007 2007
NET WORTH OR EQUITY:the sum of the balances of the following accounts of the Mortgagor:
Capital Stock
4510AdditionalPaid-In Capital 4520TreasuryStock4530OtherCapital
4540RetainedEarnings4550NOTE:FOR NONPROFIT ORG ANIZATIONS-OWNER'S EQUITY SHALLBE SHOWN INSUBACCOUNTSOF4540AND4550.
TOTAL ASSETS:the sum of the balances of the followingaccounts of the Mortgagor:
Current Assets
1300s thru 1300sNoncurrentAssets
1400s thru 1500sTotalTelecommunicationsPlant2001thru2007LESS:Accumulated Depreciation 3100 thru 3300sLESS:Accumulated Amortization 3400 thru 3600s
DEPRECIATION AND AMORTIZATION:the sum of the balances of the following accounts of the Mortgagor:
Depreciation and
Amortization Expenses 6560*Depreciation Expense-
Telecommunications Plant in Service 6561DepreciationExpense-
Property Held for Future
Telecommunications Use 6562AmortizationExpense-Tangible 6563AmortizationExpense-Intangible 6564AmortizationExpense-Other 6565
TEXI-01-09-003-ID
Page 2
EXHIBIT A
Gila County,Arizona
EXiilBIT "A"
FIRST AMENDEDNO.903-000-1301657
A portion of that certain piece or parcel of land,situate,lying and being in the Southeast quarterofSection17andtheSouthwestquarterofSection16andtheNortheastquarterofSection20,Township 9 North,Range 14 East of the Gila and Salt River Base and Meridian,Gila County,Arizona,more particula.rly described as follows:
That parcel shown as "Lot 1"on Record of Survey on October 30,1996,as Map No.1275.
Cochise County,Arizona
Exhibit A
That portionof the Northwest quarter of Section 2,Township 17 South,Range 20 East of the Gila andSaltRiverBaseandMeridian,Cochise County,Azizona,more particularlydescribed as follows:
COMMENCING at the North quarter comer of said Section 2;
thence South 00°05'50"West along the North-Southcenter section line a distance of 982.26 feet,moreorless,to the Southeast corner of the Northeast quarter of the Southeast quarter of GovernmentLot 3 ofsaidSection2;
thence South 00°05'18"West along the North-Southcenter section line a distance of 327.42 feet;thence South 87°41'09"West a distance of 281.03 feet to the POINT OF BEGIhWING;thence continuingSouth 87°41'09"West a distance of 150.00 feet;
thence North 00°05'18"East a distance of 290.40 feet;
thence North 87°41'09"East a distance of 150.00 feet;
thence South 00°05'18"West a distance of290.40 feet the POLNT OF BEGINKLNG.
Custer County,Idaho
LOTS 5 AND 6,LESS TEE WEST 35 FEET OF SAID LOT 6.BLO CK 3,STANLEYGOVERNMENTTOWTfSITE,CUSTER COUNTY,IDAHO,ACCORDING TO THEOFFICIALSURVEYTHEREOF,NOW ON FILE IN THE OFFICE OF THESURVEYORGENERAL,BOISE.IDAHO.
ALSO:
THAT PORTION OF TEE ALLEY,20 FEET WIDE,LYING NORTHERLY ANDIMMEDIATELYADJACENTTOLOT5ANDPORTIONOFLOT6,EXCEPTING TEEWEST35FEETTHEREOFINBLOCK3,STANLEY GOVERNMENT TOWNSITEVACATEDBYORDEROFTHECUSTERCOUNTYCOMMISSIONERSAPRIL11,1960.
ALSO INCLUDING:
A PART OF THE LOVVER STANLEY TOWNSITE LOCATED IN SECTION 34,TOWNSHIP 11 NORTTI,ILLNGE 13 EAST,BOISE MERTDIAN,CUSTER COUNTY,IDAHO,MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMNŒNCING AT C ORNER 4 OF TRACT 5 OF THE SAWTO OTH NATIONALRECREATIONAREA(AN ALUMINTIM PIPE AND CAP);THENCE SOUTH 0°33'00"EAST FOR 128.69 FEET ALONG THE EAST LINE OF TRACT 6 TO A BRASS CAPTHATISCORNER3OFTRACT6;THENCE SOUTH 34°39'14"WEST FOR 84.38FEETACROSSTHOMPSONSTREETTOABRASSCAPTHATISCORNER2OFTRACT7OFTHESA3VTOOTENATIONALRECREATIONAREA;TEENCESOUTH74°57'EAST TOR 20.10 FEET ALONG THE SOUTH LINE OF THOMPSONSTREETTOTHENOT.TE CORNER OF LOT 12,BLO CK 3 OF THE LOWERSTANLEYTOWNSITE;THENCE SOUTR 20°43'WEST FOR 108.19 FEET ALONGTHENORTHWESTLINEOFLOT12,THE POINT OF BEGINNING;THENCESOUTK36°40'51"VTST FOR 72.71 FEET TO CORNER 3 OF TRACT 7 OF THESAWTOOTHNATIONALRECREATIONAREA;TEENCE NORTH 20°43'EAST,APPROXIMATELY 81 FEET TO A POINT WHICH LIES NORTH 37°27'WESTFROMTHEPOINTOFBEGINNING;THENCE SOUTH 37°27'EAST,APPROXEiATELY 25 FEET,MORE OR LESS TO THE POINT OF BEGINNING.
PARCEL II:
LOT 3 IN BLOCK I OF STA.NTEY TOWNSITE IN NE1/4NE1/4 OF SECTION NTNE(9),TOWNSHIP TEN (10)NORTH,ILANGE THIRTEEN (13)EAST,BOISEMERIDIAN,AS SHOVVN BY THE OFFICL4L PLAT THEREOF NOW ON FILE INTHEOFFICEOFTHECUSTERCOUNTYRECORDERINCILALLIS,IDAEO.
MalheurCounty,Oregon
Parcel 1:
Land in the TOVΠOF HARPER,located in Section 5,Township 20 South,Range 42 East of theWillametteMeridian,MalheurCounty,Oregon,according to the Official Plat thereof,as follows:
In Block 9:Lots 3,4 and 5.
Parcel 2:
Land in the TOWN OF IUltPER,located in Section 5,Township 20 South,Range 42 East of theWillametteMeridian,Nalheur County,Oregon,according to the Official Plat thereof,as follows:
In Block 9:A parcel of land in Lot 6 described as foEows:Beginning at the Northeastcorner of said Lot 6 which faces "B"Street;thence South460 21'West,along said "B"Street.25 feet;thence South 430 39'East,25 feet;thence North 460 21'East,25 feet;thence North 430 39'West,25 feet to the Point of Beginning.
Parcel 3:
Land in the TOWN OF JUNTURA,Malheur County,Oregon,according to the Official Plat thereof,as follows:
In Elock 19:Beginningat the most Northerlycorner of Lot 4;thence Southwesterly along the Northwestlot line of said Lot 4,100 feet;thence Southeasterly on a line parallel with the Southwest line of 3rd Street,35 feet;thence Northeasterly on a line paraEel with the Northwest lot line of said Lot 4,100 feet to a point ontheSouthwestlineof3rdStreet;thence Northwesterlyalong the Southwest line of 3rd Street,35 feet to the Point of Beginning,
Washington County,Idaho
Exhibit "A"
Order No.100-00-7731
Situated in Section 7,Township 13 North,Range 3 West of the BoiseMeridian,in Washington County,Idaho:
In the SW1/45E1/4 of said Section 7:Commencing at the southeast corneroftheSW1/45El/4;thence North 0°34'30"West 322.41 feet to the True Point of Beginning;thence South 88°421 West a distance of 150 feet,more or less;thence South 0°34'30"East a distance of 150 feet,more or less;thence North 88°42'East 150 feet,more or less;thence North 0°34'30"West 150 feet,rore or less,to the True Point ofBeginning.
AND ALSO
A parcel of land in the SWl/45W1/4 of Section 8,Township.13 North,Remge3WestoftheBoiseMeridian,Washington County,Idaho,described asfollows:
Beginning at a point S 74°56'E 247 feet from the southeast corner of Lot19ofBlock7,Middle Valley Townsite,according to the official plat ofsaidTownsite;Thence R 14°511 E 150 feet,more or less,to the south line of BriscgeStreet,the True Point of Beginning;Thence East 50 feet,more or less,to the center of the channel of theWeiserRiver;Thence southerly alongi the center of the Channel of the Weiser River 55feet;
Thence westerly 50 feet,more or less;Thence northerly 55 feet,more or less,to the True Point of Beginning.
SAVE AND EXCEPT that portion deeded to Washington county in Deed recordedNovember2,1994 as I:astrument No.161713,Official Records.