REA PROJECT DESIGNATION:
OKLAHOMA 535-A MCLOUD
TELEPHONE LOAN CONTRACT
DATED AS OF MARCH 19, ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF AMERICA
DEPARTMENT OF AGRICULTURE
RURAL ELECTRIFICATION ADMINISTRATION
AGREEMENT, made as of March 19, 1956, pursuant to the Rural
Electrification Act of 1936, as amended (7 U.S.C. 901 et seq.)
(hereinafter called the "Act"), between McLOUD TELEPHONE COMPANY
(hereinafter called the "Borrower"), a corporation existing under the
laws of the State of Oklahoma, and United States of America
(hereinafter called the "Government"), acting through the
Administrator of the Rural Electrification Administration (hereinafter
called the "Administrator").
WHEREAS, the Borrower owns and operates telephone facilities
(hereinafter called the "Existing Facilities"), serving approximately 332
subscribers located in the Counties of Cleveland, Lincoln, Oklahoma and
Pottawatomie, in the State of Oklahoma; and
WHEREAS, it is intended that the Government shall lend and the
Borrower shall borrow an amount not in excess of $218,000 to finance the
improvement and operation of the Existing Facilities and the construction and
operation of additional telephone facilities to serve approximately 313
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 improved and added to by
the Project or otherwise, being hereinafter called the "System"), and to finance
the payment and discharge of outstanding indebtedness of the Borrower as
hereinafter provided; and
WHEREAS, it is contemplated that the amount of such loan 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 (such loan and any such increases
in the amount thereof being hereinafter collectively called the "Loan"); and
WHEREAS, the Administrator, in determining to enter into this
agreement, has relied upon the representation of the Borrower to him that it is
willing to furnish adequate telephone service to the widest practicable number
of persons in rural areas whom it is possible to serve, and the Borrower has
agreed to do so as hereinafter provided;
NOW, THEREFORE, for and in consideration of the mutual agreements
herein contained, the Borrower and the Government agree as follows:
ARTICLE I
LOAN, NOTES AND SECURITY
SECTION 1.1 AMOUNT AND PURPOSE. For the purpose of furnishing or
improving telephone service in rural areas, the Government shall lend and the
Borrower shall borrow an amount not in excess of $218,000, to finance pursuant
to the provisions of the Act, the construction of the Project and the operation
of the System, the Project to be located in the Counties of Cleveland, Lincoln,
Oklahoma and Pottawatomie, and in counties contiguous thereto, all in the State
of
-2-
Oklahoma, and to finance the payment and discharge of outstanding indebtedness
of the Borrower in an aggregate amount not in excess of $11,712, plus accrued
interest, if any, and such other charges, if any, as the Borrower may be
obligated to pay in order to discharge such outstanding indebtedness.
SEC. 1.2 NOTES. The debt created by the Loan shall be evidenced by
notes (such notes and any notes executed and delivered to refund, or in
substitution for, such notes being hereinafter collectively called the "Notes")
to be executed by the Borrower, payable to the order of the Government. The
Notes shall bear interest at rates prescribed by applicable Federal statutes,
and shall otherwise be in form and substance satisfactory to the Administrator.
Interest shall accrue on the principal of each Note only in respect of amounts
which shall have been advanced to the Borrower from time to time on account of
the Loan and charged against such Note.
SEC. 1.3 LOAN CLOSING. The Administrator and the Borrower may from
time to time determine by agreement the amount required to enable the Borrower
to perform its obligations hereunder. If any reduction in the maximum amount of
the loan herein provided for is thus agreed upon, the Administrator shall cause
such one or more of the Notes as may be agreed upon to be appropriately credited
with an amount equal to such reduction, and the principal amount of such Note or
Notes shall, for the purposes of this agreement, be deemed to be correspondingly
reduced. When the Administrator and the Borrower shall agree that no further
funds are required to be advanced by the Government hereunder in order to enable
the Borrower to perform its obligations hereunder, the Administrator shall
execute and deliver to the Borrower a loan closing certificate (hereinafter
called the "loan closing certificate") which shall, among other things, specify
the date of the closing of the Loan and the amount of unpaid principal of and
the accrued and unpaid interest on each of the Notes.
SEC. 1.4. SECURITY. The Notes shall be secured by a mortgage made
by the Borrower to the Government, in form and substance satisfactory to the
Administrator and covering all the property of the Borrower now owned or
hereafter acquired (such mortgage being hereinafter called the "Mortgage"), as
supplemented by such supplemental mortgages made by the Borrower to the
Government, by such chattel mortgages, and supplemental or additional chattel
mortgages, made by the Borrower to the Government, 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 of these presents that the Mortgage shall cover all property of
the Mortgagor, whether now owned or hereafter acquired (any such supplemental
mortgage, chattel mortgage, supplemental or additional chattel mortgage, and any
such other action, as the case may be, being hereinafter called a "supplemental
mortgage").
-3-
ARTICLE II
ADVANCES AND DISPOSITION OF FUNDS
SECTION 2.1. PREREQUISITES TO ADVANCES. The Government shall be
under no obligation to advance any funds on account of the Loan from time to
time unless and until the Borrower shall have delivered to the Administrator, in
form and substance satisfactory to him, the following:
(a) one or more of the Notes, the Mortgages, and such
supplemental mortgages as may be required pursuant to section 1.4
hereof, all duly executed and accompanied by proof of the due
recordation and filing of the mortgage and any supplemental mortgage
in such places as may be required by law in order fully to perfect and
maintain the lien of the Mortgage and any supplemental mortgage;
(b) evidence of appropriate corporate action authorizing the
execution and delivery of 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 perform all other acts to be performed
by it hereunder;
(d) evidence that the Borrower has duly adopted a tariff which
does not include mileage or zone charges for rural multi-party service
and which will provide revenues sufficient to meet all necessary
expenditures, including all interest and principal payments under the
Notes;
(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 Borrower is not involved in or threatened
with any litigation which may substantially and adversely affect the
Borrower's financial condition and that there are no liens or clouds
on title except the lien of the Mortgage and any supplemental
mortgage, on any of its property; provided, however, that with respect
to the first advance of funds on account of the Loan (which advance is
more particularly conditioned as hereinafter provided in this section)
the obligation of the Borrower to furnish evidence relating to liens
on its property shall be to furnish evidence that there are no liens
on any of its property except the lien of the mortgage and any
supplemental mortgages, and any chattel mortgages or other mortgages
(hereinafter collectively called the "Underlying Mortgage"), securing
certain indebtedness owing by the Borrower to ▇▇▇ ▇▇▇▇▇▇ in the
approximate principal
-4-
amount of $10,700, and to the ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Supply Company in the
approximate amount of $850;
(g) evidence that the Borrower has duly adopted articles of
incorporation and by laws in form and substance adequate to enable the
Borrower to perform all acts to be performed by it hereunder;
(h) such opinions as the Administrator may 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;
(i) evidence that the Borrower has good and marketable title to
the Existing Facilities, subject only to the lien of the Underlying
Mortgage referred to in subparagraph (f) of this section. 2.1, and
holds such franchises, permits, leases, easements, rights, privileges,
licenses or right-of-way instruments, 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;
(j) a comment or commitments from other companies covering the
joint use of facilities, as may be necessary for the construction or
proper operation of the System;
The first advance of funds on account of the Loan shall be made by the
Government to the Borrower (upon compliance by the Borrower with all conditions
of this agreement precedent to the advance of funds on account of the Loan) for
the purpose of enabling the Borrower: (1) to pay and discharge outstanding
indebtedness, in an amount not in excess of the amount provided in Section 1.1
hereof for such purpose, and (2) to pay for preloan engineering services, in an
amount to be approved by the Administrator. Thereafter, the Government shall be
under no obligation to make any further advances on account of the Loan until
the Borrower shall have submitted evidence, satisfactory in form and substance
to the Administrator, of: (a) the payment and discharge of all indebtedness of
the Borrower required to be paid and discharged with loan funds; and (b) the
position of the Mortgage and any supplemental mortgages as the first and only
lien against the System.
SEC. 2.2 REQUISITIONS. The Borrower shall 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 shall specify all payments not
previously accounted for theretofore
-5-
made by the Borrower from funds in the Special Construction Account
provided for 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
(d) such additional information, opinions, documents and proofs
relating to the construction of the Project, 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. The Government, upon receipt of a requisition
and accompanying documents complying with the provisions of section 2.2 hereof
shall, within a reasonable time thereafter, if the Borrower has complied with
the provisions of section 2.1 hereof and all other conditions precedent to the
advance of funds on account of the Loan, make an advance to the Borrower
sufficient for such of the purposes specified in the statement of purposes
accompanying the requisition as the Administrator shall approve. The
Administrator may at any time, as a condition to making any advance on account
of the Loan, require compliance by the Borrower with any one or more of the
covenants, terms and conditions of this agreement to be performed by the
Borrower. Advances made by the Government pursuant to this section 2.3 shall be
charged by the Government against any one or more of the Notes in such manner
and in such amounts as the Administrator and the Borrower shall agree. The
Government shall be under no obligation to make advances on account of the Loan
after the date of the closing of the Loan specified in the loan closing
certificate.
SEC. 2.4. SPECIAL CONSTRUCTION ACCOUNT. The Borrower shall hold all
moneys advanced to it by the Government hereunder in trust for the Government
and shall deposit such moneys promptly after the receipt thereof in a bank or
banks which shall meet the requirements specified in section 4.3 hereof. Any
account (herein called "Special Construction Account") in which any such moneys
shall be deposited shall be designated by the corporate name of the Borrower
followed by the words "Trustee, REA Construction Fund Account". All loan funds
in any Special Construction Account shall be used solely for the purposes
specified in section 1.1 hereof.
The Fairer shall expend each advance on account of the Loan only for such of the
purposes specified in the statement of purposes accompanying the requisition for
such advance as shall have been approved by the Administrator.
SEC. 2.5 UNEXPENDED LOAN FUNDS. Any Funds advanced on account of the
Loan remaining unexpended in any Special Construction Account upon the closing
of the Loan shall be forthwith remitted by the Borrower to the Government and a
credit in respect thereof allowed against such Note or Notes as shall be agreed
upon by the Administrator and the Borrower.
-6-
SEC. 2.6. COMPLIANCE WITH RESTRICTIONS ON USE OF MATERIALS. No
advances will be made on account of the Loan for the construction of any part of
the Project with respect to which the Borrower shall have failed to submit to
the Government satisfactory evidence that the Borrower has obtained from the
appropriated agency or agencies of the Government all necessary orders or
approvals with respect to the use of the materials required for the construction
of such part of the Project. No construction shall be undertaken except in
accordance with authorizations or regulations of any such agency or agencies
having jurisdiction in the premises.
SEC. 2.7. TERMINATION OF ADVANCES.
(a) If, within one year from the date hereof, the Borrower has
not complied with all conditions precedent to the first advance of
funds on account of the Loan, including the submission of a
requisition therefor in compliance with section 2.2 hereof, the
Administrator may, at any time or times thereafter, request the
Borrower in writing to advise the Administrator whether the Borrower
will be able to comply with such conditions and, if so, to submit
evidence to the Administrator, within thirty days, of the Borrower's
need for additional time for compliance with such conditions. Upon
consideration of such evidence, if any, and all other relevant
circumstances, the Administrator may, in his discretion, by written
notice to the Borrower, terminate any obligation of the Government to
advance any funds on account of the Loan to the Borrower, and such
action by the Administrator shall be conclusive.
(b) If, within three years from the date hereof, or, in case
this agreement is amended to provide for an increase in the amount of
the Loan, then within three years from the date of the latest such
amendment, the Borrower has not complied with all conditions precedent
to the advance of the maximum amount of the Loan, including the
submission of requisitions therefor in compliance with section 2.2
hereof,t he Administrator may, at any time or times thereafter,
request the Borrower in writing to advise the Administrator whether
the Borrower will require any further advances on account of the Loan
and, if so, to submit evidence to the Administrator, within thirty
days, of the Borrower's need for additional time for compliance with
such conditions. Upon consideration of such evidence, if any, and all
other relevant circumstances, the Administrator may, in his
discretion, by written notice to the Borrower, terminate any
obligation of the Government to advance funds on account of the Loan
not previously advanced to the Borrower, and such action by the
Administrator shall be conclusive.
-7-
ARTICLE III
CONSTRUCTION
SEC. 3.1. LABOR AND MATERIALS CONTRACT. The Borrower shall cause the
Project to be constructed under labor and materials contract by a responsible
contractor or contractors selected by the Borrower and approved by the
Administrator, 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 in connection with construction of
the Project.
SEC. 3.2 COMMENCEMENT AND COMPLETION. The Project shall be
constructed in accordance with the approved plans and specifications hereinafter
provided for, the provisions of this agreement and all contracts and
subcontracts made pursuant hereto. Construction of the Project or any portion
thereof shall be commenced promptly after the Government shall have notified the
Borrower of approval to commence such construction, and the Borrower shall cause
such construction to be prosecuted diligently and to be completed within a
reasonable time, 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 all liens and lawful claims for liens except the liens of the Mortgage and
any supplemental mortgage.
SEC. 3.3 BIDDING. The Borrower shall invite bids for construction
of outside plant and buildings, for installation of station equipment, and for
purchases and installation, or either, of central office equipment, included in
the Project, unless otherwise authorized in writing by the Administrator. The
Borrower shall open all bide publicly at the time and place which shall have
been specified in the notice to bidders, after reasonable prior written
notification of such time and place has been given by the Borrower to the
Administrator. The Borrower shall award each contract to the lowest responsible
bidder, unless all bids are rejected.
SEC. 3.4 INSPECTION BY ADMINISTRATOR. The Administrator may inspect
the construction and equipment of the Project, and shall have the right to
examine and test all work and materials, and the Borrower shall provide
reasonable facilities therefor for the use of the Administrator and his agents.
The Administrator may reject any defective material or workmanship and require
that any such material shall be replaced with proper material and that any such
workmanship shall be corrected, to the end that all material and workmanship
shall conform with the approved plans and specifications hereinafter provided
for.
SEC. 3.5. CERTIFICATES AND MAPS. The Borrower shall, at the request
of the Administrator, furnish to the Government: (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, and the cost thereof; (b) a complete inventory
by construction units, in sufficient detail to reflect accurately all
construction costs, 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 provided for, corrected to show actual locations and
classification of all exchanges, lines and other properties of the Borrower
except those, if any, not directly connected with the Project.
-8-
ARTICLE IV
PARTICULAR COVENANTS
SEC. 4.1. APPOINTMENTS BY BORROWER. The Borrower shall designate:
(a) one or more engineers who shall perform the engineering services involved in
the construction of the Project or the several portions thereof, and execute all
certificates and other instruments pertaining to engineering details required
hereunder to be delivered to the Government; 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 Administrator shall notify the Borrower in
writing of the reasons why the designated person is deemed not qualified to
perform the proposed duties properly; and provided further that the
Administrator's approval shall not be required for a person designated as the
Manager by the Borrower if, for each of the five years immediately preceding
such designation, the Borrower has owned and operated the Existing Facilities
and has not had a deficit in net income as determined in accordance with methods
of accounting prescribed by the state regulatory body having jurisdiction over
the borrower, or in the absence of such regulatory body or such prescription, by
the Federal Communications Commission.
SEC. 4.2. SUBMISSION OF PLANS, SPECIFICATIONS AND CONTRACTS WITH
THIRD PARTIES. The Borrower shall submit, when requested by the Administrator
and 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
responsible officer or employee of the Borrower;
(c) a contract or contracts for the 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, 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, that the Administrator's approval shall not be required for
any such contract or contracts, submitted to the
-9-
Administrator, 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 Borrower of
materials, equipment and supplies for use in connection with the
Project;
(f) a contract or contracts for the joint use of facilities of
other companies, as may be necessary for the construction or proper
operation of the System.
SEC. 4.3. DEPOSIT OF FUND. The Borrower shall not deposit or allow
to remain on deposit any of its funds, regardless of the source thereof, in any
bank which is not insured by the Federal Deposit Insurance Corporation, or the
successor thereof. The Borrower shall inform the Administrator of the names of
the banks which it has selected for deposit of its funds.
SEC. 4.4 EASEMENTS AND PERMITS. The Borrower shall submit to the
Government, when requested by the Administrator, evidence satisfactory to the
Administrator that the Borrower has obtained such easements from landowners and
releases from lienors and such franchises, authorizations, permits, licenses,
certificates of convenience and necessity, approvals, and orders from public
bodies and others, reasonably adequate in form and substance, as may be required
by law for the construction of the Project and the operation of the System. If
requested so to do by the Administrator, the Borrower shall cause such easements
and releases to be recorded in appropriate offices of record. Except with the
consent of the Administrator, none of the funds advanced on account of the Loan
shall be used by the Borrower to pay for easements obtained from landowners, or
for releases of liens affecting easements.
SEC. 4.5. AREA COVERAGE. The Borrower shall furnish adequate
telephone service to the widest practicable number of rural users in the
Borrower's telephone service area, as such area is shown on the map which is a
part of the Borrower's application for the Loan, and which map, as revised by
agreement between the Borrower and the Administrator, is incorporated herein by
reference thereto. In the performance of this obligation, the Borrower shall
(except to the extent that the Administrator, upon request of the Borrower, may
in writing authorize deviations therefrom):
(a) furnish service to all applicants for service included in
the Project, without payment by such applicants of any extra charge as
a contribution to the cost of construction of facilities to provide
such serviced; and
(b) take all action that may be required to enable it to extend
service, with the use of such funds as may from time to time be
available to it, either from surplus earnings, increased equity
capital, additional loans made by the Government, or otherwise as the
Borrower may elect, and without payment to the Borrower of any extra
charge as a contribution to construction of facilities to provide such
service, to
-10-
at lease those other unserved rural applicants for service in its
telephone service area who meet either of the following conditions:
(1) service to such applicant will not reduce the overall density of
the System below 3.9 subscribers per route mile of pole line,
underground cable and radio link, or (2) the cost of constructing the
required line extension for such applicant will not exceed seven times
the estimated annual exchange revenue from such applicant. Such
service shall be furnished pursuant to terms and conditions set forth
in the Borrower's tariff, as duly filed with or approved by regulatory
bodies having jurisdiction in the premises, or in the absence of any
such regulatory body, as adopted by the Borrower; provided that the
Borrower shall not file with or submit for approval of appropriate
regulatory bodies or adopt any proposed tariff, or continue in effect
any existing tariff not required to be continued by any regulatory
body, unless under such tariff the Borrower will be obligated to
serve unserved rural applicants as provided herein.
The furnishing of service to applicants for service under the conditions
provided in this section is of the essence of the Borrower's obligations under
this agreement, and the failure or neglect of the Borrower to perform such
obligation shall be deemed to be an event of default hereunder.
SEC. 4.6 MORTGAGE COVENANTS. The Borrower shall perform all
covenants by it to be performed under the Mortgage and any supplemental
mortgage.
SEC. 4.7. REPRESENTATIONS AND WARRANTIES. The Borrower represents
and warrants as follows:
(a) it is a corporation duly organized, existing and in good
standing under the laws of the State specified in the introductory
paragraph of this agreement and has corporate power to enter into this
agreement and perform every act required to be performed by it
hereunder;
(b) all proceedings prerequisite to the valid execution of this
agreement by it have been duly taken and all required authorizations
therefor have been secured;
(c) it has not entered into any contract (not heretofore fully
performed) for the construction of any portion of the Project, or for
engineering or for other services pertaining to the construction or
operation of the System, unless such contract has (1) been approved by
the Administrator; (2) will be submitted for the approval of the
Administrator; or (3) the effectiveness thereof has been made subject
to the approval of the Administrator;
(d) the capital structure of the Borrower is as shown in a
certified copy of its articles of incorporation last submitted to the
Administrator; the Borrower has issued and outstanding only such
numbers and classes of shares of its capital stock and such bonds and
other evidence of indebtedness, if any, as shown in the statement
-11-
thereof last submitted to the Administrator; and the Borrower has not
entered into any agreement for the issuance of any other shares of its
capital stock, or of bonds or other evidence of indebtedness; 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 no agreement therefor has been or shall be entered into by the
Borrower or any of its officers, employees, agents, or representatives in order
to obtain the Loan.
SEC. 4.9. "BUY AMERICAN" CLAUSE. The Borrower shall use or cause to
be used in connection with the expenditures of funds advanced on account of the
Loan only such unmanufactured articles, materials, and supplies as have been
mined or produced in the United States, and only such manufactured articles,
materials, and supplies as have been manufactured in the United States
substantially all from articles, materials, or supplies mined, produced, or
manufactured, as the case may be, in the United States, except to the extend the
Administrator shall determine that such use shall be impracticable or that the
cost thereof shall be unreasonable.
SEC. 4.10. NON-DISCRIMINATION CLAUSE. The Borrower, in the
performance of this agreement, shall not discriminate against any employee or
applicant for employment in regard to hire, tenure, terms or conditions of
employment because of race, creed, color or national origin. The Borrower shall
include in every contract involving the employment of persons hereafter
negotiated or renegotiated with any third party or parties a provision
obligating such party or parties not to discriminate in performing the work
required by such contract against any employee or applicant for employment in
regard to hire, tenure, terms or conditions or employment because of race,
creed, color or national origin.
SEC. 4.11. 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 each portion of the
System designated by the Administrator.
SEC. 4.12. PROOF OF TITLE. No funds shall be advanced on account 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. 4.13. COMMENCEMENT OF OPERATION. The Borrower shall 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 portion of the Project, and (c) the
-12-
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. NON-DUPLICATION OF FACILITIES. The Borrower shall not use
any part of the Loan for the construction of telephone facilities to furnish or
improve service to persons receiving telephone service from any other telephone
company at the time the Borrower proposes to furnish or improve service to such
persons, except that the Borrower may provide or improve service to persons
receiving service through facilities acquired or to be acquired by the Borrower,
and except to the extent that the Administrator, on the basis of evidence
submitted to him by the Borrower, shall have determined that service by the
Borrower to such persons will not result in duplication of lines, facilities or
systems providing reasonably adequate service.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
SEC. 5.1. EVENTS OF DEFAULT. The happening of any of the following
events (hereinafter called "events of default") shall constitute a default by
the Borrower hereunder:
(a) any failure to perform, or any violation of, any term,
covenant, promise, condition, or agreement, on the part of the
Borrower to be performed hereunder at the time and in the manner
herein provided;
(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 in section 5.1 hereof, the Government or the holder or
holders of any one or more of the Notes, as their respective interests may
appear, may exercise either one or both of the following rights, privileges,
powers, and remedies, to the extent that the exercise thereof is not prohibited
by law:
(a) refuse to make any advance or any further advances on
account of the Loan, but any advance thereafter made by the Government
shall not constitute a waiver of such default; and
-13-
(b) declare all unpaid principal of and all interest accrued on
any or all of the Notes held by such holder or holders (which may
include the Government) to be due and payable immediately and upon
such declaration all such principal and interest shall become due and
payable immediately, anything herein or in any other agreement to
which the Borrower shall be a party, or in the Notes or in the
Mortgage or any supplemental mortgage to the contrary notwithstanding.
SEC. 5.3. REMEDIES CUMULATIVE. Every right, privilege, power or
remedy herein or in the Notes or in the Mortgage or in any supplemental mortgage
conferred upon or reserved to the Government or any holder or holders of the
Notes shall be cumulative and shall be in addition to every other right,
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 shall not be
construed as an election.
ARTICLE VI
MISCELLANEOUS
SEC. 6.1. MEMBERS OF CONGRESS. No member of or Delegate to the
Congress of the United States shall be admitted to any share or part of this
agreement or to any benefit to arise herefrom other than the receiving of
telephone service through the System on the same terms accorded others served
through the System.
SEC. 6.2 FALSE CLAIMS STATUTES. The Borrower and each of the
officers signing this agreement respectively acknowledge that they have received
copies of sections 286, 287, 641, 1001 and 1361 of ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code,
Crimes and Criminal Procedure.
SEC. 6.3 DEFINITIONS. Whenever the following terms are used in this
agreement, unless the context indicates another or different meaning or intent,
they shall be construed to have meanings as follows:
(a) "Administrator" means the Administrator of the Rural
Electrification Administration or his duly authorized representative
or any other person or authority in whom may be vested the duties and
functions relating to loans for telephone service in rural areas made
pursuant to the Act which the Administrator is now or may hereafter be
authorized by law to perform;
(b) "plans of specifications" means the plans and specifications
for the Project originally approved by the Administrator and shall
include such changes and modifications thereof as may from time to
time be agreed upon by the Borrower and the Government;
(c) "note" includes "bond"; and
-14-
(d) "construction" includes "acquisition", and the word
"construct" includes the word "acquire".
SEC. 6.4 APPROVALS IN WRITING. 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 be approved
unless and until the Administrator shall have given such approval in writing.
SEC. 6.5 WAIVER. The Administrator, in his absolute discretion and
upon such terms and conditions as he may determine, may waive the performance or
doing of any one or more of the acts to be performed or things to be done by the
Borrower, and any provision hereof may be modified or amended by mutual consent
of the Borrower and the Administrator. The Borrower shall not claim any
modification, amendment, rescission, release, or annulment of any part hereof
except pursuant to a written instrument subscribed by the Administrator. The
approval by or on behalf of the Administrator of any advance of funds on account
of the Loan shall constitute a finding of sufficient performance by the Borrower
of all acts prerequisite to such advance, or a waiver thereof; provided,
however, that any such waiver shall be effective only with reference to such
advance and shall not preclude the Administrator from requiring full performance
of the acts so waived as a prerequisite to any subsequent advance.
SEC. 6.6 NON-ASSIGNABILITY. The Borrower shall not assign this
agreement or any part hereof or any moneys due or to become due hereunder.
SEC. 6.7 DESCRIPTIVE HEADINGS; SEPARABILITY. The descriptive
headings of the various articles and sections hereof were formulated and
inserted for convenience only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof. 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 or required to be made upon or given to the Borrower
hereunder shall be mailed to the Borrower at McLoud, Oklahoma or such other
address as the Borrower shall designate in writing to the Administrator. All
notices, designations, or communications permitted or required to be given or
sent to the Government or the Administrator hereunder shall be mailed to the
Administrator at Washington 25, D.C., or such other address as the Administrator
shall designate in writing to the Borrower.
SEC. 6.9 DURATION OF AGREEMENT. Except where otherwise required by
the context, all provisions of this agreement shall continue in full force and
effect until all amounts owing by the Borrower to the Government on account of
the Loan shall have been paid, and upon such payment this agreement shall be
deemed to have been fully performed.
-15-
SEC. 6.10 COUNTERPARTS. This agreement may be simultaneously
executed and delivered in two or more counterparts, each of which so executed
and delivered shall be deemed to be an original, and all shall constitute but
one and the same instrument.
IN WITNESS WHEREOF the Borrower has caused this agreement to be signed
in its corporate name and its corporate seal to be hereunto affixed and attested
by its officers thereunto duly authorized, and the Government has caused this
agreement to be duly executed, all as of the day and year first above written.
McLOUD TELEPHONE COMPANY
by /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
(Seal)
Attest: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Secretary
UNITED STATES OF AMERICA
by /s/ ▇. ▇. ▇'▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
▇. ▇. ▇'▇▇▇▇▇▇▇▇▇▇▇
Acting Administrator of Rural
Electrification Administration
-16-