REA Project Designation:
TENNESSEE 521-A
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TELEPHONE LOAN CONTRACT
Dated as of October 15, 1951
between
DEKALB TELEPHONE COOPERATIVE
and
UNITED STATES OF AMERICA
Identified as form of document presented to and approved
by the board of directors trustees of the above named
corporation at a meeting held December 17, 1951.
/s/ M.D. ▇▇▇▇▇▇▇▇
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Secretary of Meeting
DEPARTMENT OF AGRICULTURE
RURAL ELECTRIFICATION ADMINISTRATION
No. A
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AGREEMENT, made as of October 15, 1951, pursuant to
the Rural Electrification Act of 1936, as amended (7 U.S.C.
901 et seq.) (hereinafter called the "Act"), between DeKALB
TELEPHONE COOPERATIVE (hereinafter called the "Borrower"),
a non-profit cooperative association existing under the laws
of the State of Tennessee, and UNITED STATES OF AMERICA
(hereinafter called the "Government"), acting through the
Administrator of the Rural Electrification Administration
(hereinafter called the "Administrator").
WHEREAS, it is intended that the Government shall lend and
the Borrower shall borrow an amount not in excess of $180,000 to finance
partially the construction and operation of a telephone system in rural areas
to bring telephone service to approximately 530 subscribers, upon the terms
and conditions contained in this agreement, as from time to time amended; 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
telephone service in rural areas, the Government shall lend and the Borrower
shall borrow an amount not in excess of $180,000 which, together with the sum
of $7,950 to be deposited by the Borrower in the "Special Construction
Account" hereinafter defined and provided for in section 2.4 shall be used to
finance, pursuant to the provisions of the Act, the construction and
operation of telephone lines and facilities (hereinafter called the
"Project") to be located in the Counties of DeKalb, ▇▇▇▇▇ and ▇▇▇▇▇▇ and in
counties contiguous thereto, all in the State of Tennessee.
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 when and as the Administrator shall
determine, 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 may from time to time
determine the amount required to enable the Borrower to perform its
obligations hereunder. Upon notification by the Administrator to the Borrower
in respect of any such determination, any reduction in the maximum amount of
the loan herein provided for resulting therefrom shall be conclusive and
binding upon both the Government and the Borrower, and the Administrator
shall cause such one or more of the Notes as he shall select 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
shall determine 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, at such time
thereafter as he shall elect, 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 the 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 deed of trust
made by and between the Borrower and a trustee satisfactory to the
Administrator (such deed of trust being hereinafter called the "Mortgage"),
as supplemented by such supplemental deeds of trust made by and between the
Borrower and such trustee as the Administrator shall from time to time
require, and the Notes shall also be secured by such chattel mortgages and
such supplemental or additional chattel mortgages, made by the Borrower to
the Government, as the Administrator shall from time to time require (any
such supplemental deed of trust, and any such chattel mortgage, supplemental
or additional chattel mortgage, as the case may be, being hereinafter called
a "supplemental mortgage"). The Borrower shall also take such other action
as the Administrator shall from time to time require to perpetuate or renew
the lien of the Mortgage, or any supplemental mortgage, so long as any part
of the Loan or the interest thereon shall remain unpaid. The Mortgage and all
supplemental mortgages, if any, shall be in form and substance satisfactory
to the Administrator and collectively shall cover all the property of the
Borrower now owned or hereafter acquired.
ARTICLE II
ADVANCES AND DISPOSITION OF FUNDS
SECTION 2.1. Prerequisites to Advances.
(A) The Borrower shall deliver to the Government, when directed by
the Administrator and in form and substance satisfactory to him, the following:
(1) one or more of the Notes, the Mortgage and such
supplemental mortgages as the Administrator shall require, all duly
executed and accompanied by proof of the due recordation and filing
of the Mortgage and any supplemental mortgage in every appropriate
office specified by the Administrator;
(2) evidence of appropriate corporate action authorizing
the execution and delivery of the Notes, the Mortgage, and any
supplemental mortgage and amendment to this agreement;
(3) evidence that the Borrower has duly registered when
and where required by law with all State and Federal authorities and
obtained therefrom all authorizations, permits, and approvals to the
extent required by law in order to enable the Borrower to enter into
this agreement, and to execute and deliver the Notes, the Mortgage,
and any supplemental mortgage and amendment to this agreement;
(4) 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;
(5) 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;
(6) evidence that the Borrower has duly adopted articles
of incorporation and bylaws in form and substance satisfactory to the
Administrator; and
(7) such opinions as the Administrator may require, by
counsel who shall have been previously approved by the Administrator.
(B) No funds shall be advanced on account of the Loan unless and
until the Borrower shall have submitted evidence, satisfactory to the
Administrator, that:
(1) it has obtained all franchises required by law from
any incorporated
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municipality or municipalities in which lines are, or will be located;
(2) the Alexandria Home Telephone Company and the
Liberty Home Telephone Company have taken all necessary action to
abandon their operations and dissolve their organizations when
telephone service is made available to their members by the Borrower;
(3) the Borrower has obtained commitments or contracts,
in form and substance satisfactory to the Administrator, covering all
necessary toll traffic and operator services to be furnished by
connecting companies and all necessary joint use of facilities with
other companies;
(4) it has complied with all regulations applicable to
the sale of membership certificates in the Borrower;
(5) it has adopted a schedule of rates, for the
furnishing of telephone service, satisfactory to the Administrator;
and
(6) the Borrower has obtained a total $1,175 in equity
funds through the collection of $5.00 from each of 235 members and
has deposited said $1,175 in the Special Construction Account
provided for in section 2.4 hereof all in accordance with section
4.22 hereof.
SEC. 2.2. Requisitions. The Borrower shall from time to time submit
to the Administrator requisitions in such form and detail as the
Administrator shall prescribe requesting the Government to make advances on
account of the Loan. Each requisition shall be accompanied by the following:
(a) evidence satisfactory to the Administrator that the
construction of the Project effected to the date of the requisition
complies with the provisions hereof;
(b) a certificate signed by such officers or employees of
the Borrower as shall be acceptable to the Administrator, which shall
specify all payments not previously accounted for theretofore made
by the Borrower from funds in the Special Construction Account
provided for in section 2.4 hereof;
(c) a statement, in such form and detail as the
Administrator shall prescribe, setting forth the purposes for which
it is intended the requested advance will be used by the Borrower;
and
(d) such information, opinions, documents and proofs, of
whatever kind and nature, in addition to the foregoing, 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 to the satisfaction
of the Administrator, 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 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 shall determine. 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 4.4 hereof. Any
account (hereinafter called "Special Construction Account") in which any such
moneys shall be deposited
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shall be designated by the corporate name of the Borrower followed by the
words "Trustee, REA Construction Fund Account". Moneys in any Special
Construction Account shall be used solely for the construction and operation
of the Project. The Borrower shall also deposit in the Special Construction
Account on the same terms and conditions, subject to the same requirements
regarding requisitions and for the same purposes as funds advanced on account
of the Loan the sum of $7,950 (hereinafter called the "equity funds"). Until
the aggregate amount of withdrawals from the Special Construction Account
shall equal or exceed the amount of the equity funds, they shall be deemed to
have been made from the equity funds and not from funds advanced by the
Government to the Borrower. Subject to the provisions of section 5.2(c)
hereof, moneys in any Special Construction Account may be withdrawn only upon
checks, drafts or orders signed on behalf of the Borrower and countersigned
by an executive officer thereof.
SEC. 2.5. Unexpended Loss 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 any one or more of
the Notes to be designated by the Administrator.
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 System with respect to which the Borrower shall have failed to submit
to the Government evidence satisfactory to the Administrator that the
Borrower has obtained from the appropriate 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 System. No
construction shall be undertaken except in accordance with authorizations or
regulations of the Office of Defense Mobilization or any other Federal agency
having jurisdiction in the premises.
SEC. 2.7. Termination of Advances. If, within two 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 two 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 of Article II hereof,
the 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 to
advance all or any part of the funds on account of the Loan not previously
advanced to the Borrower, and such action by the Administrator shall be
conclusive.
ARTICLE III
CONSTRUCTION
SECTION 3.1. Contract and Force Account. The Borrower shall cause
the Project to be constructed under contract by a responsible contractor or
contractors approved by the Administrator, except to the extent that the
Administrator shall permit the Borrower to construct by force account any
portion of the Project. The term "force account" shall mean construction by
the Borrower and the furnishing by the Borrower of all labor, transportation,
materials, tools, supplies, and equipment used in connection therewith. Force
account construction shall be prosecuted subject to such terms and conditions
as the Administrator shall prescribe and the Borrower shall keep accurate and
detailed records of all costs and expenses in connection therewith. The
Project shall be constructed in such sections as the Administrator shall
direct.
SEC. 3.2. Commencement and Completion. The Project shall be
constructed in accordance with the approved plans and specifications
hereinafter provided for,
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the provisions of this agreement and all contracts and subcontracts made
pursuant hereto. Construction of the respective sections of the Project shall
be commenced promptly after the Government shall have notified the Borrower
to commence such construction, and the Borrower shall cause such construction
to be prosecuted diligently and to be completed within such reasonable time
as the Administrator shall prescribe, unless prevented from so doing by
causes beyond the control and without the fault or negligence of the
Borrower, including fires, floods, strikes, and unusually severe weather
conditions. The Borrower shall cause the Project to be completed in such
manner that it 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, if the Administrator shall
so require, invite bids for construction work pertaining to the Project, and
for materials, equipment, or supplies to be used therein, and the Borrower
shall include all persons designated by the Administrator among those invited
to submit bids. If the Administrator shall so require, the Borrower shall
open bids in the presence of a representative of the Administrator and, in
any event the Borrower shall open all bids publicly at the time and place
which shall have been specified in the notice to bidders. The Borrower shall
award each contract to the lowest responsible bidder, unless all bids are
rejected or the Administrator shall approve the award of the contract to
another responsible bidder upon a showing that the award of the contract to
such bidder is in the best interests of the Borrower.
SEC. 3.4. Inspection by Administrator. The Administrator may
supervise the construction and equipment of the Project, and shall have the
right to inspect, 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.
SEC. 3.5. Certificates and Maps. The Borrower shall at such times
as the Administrator shall determine, furnish to the Government (a) such
certificates of the approved engineer and of the officers and employees of
the Borrower as the Administrator shall require with respect to construction
of the Project, or any section thereof, and the cost thereof; (b) a complete
and detailed inventory and description of the Project, or any section
thereof; and (c) a map or maps, in form satisfactory to the Administrator,
showing the location and classification of all exchanges, lines and other
properties of the Borrower except those, if any, not directly connected with
the Project.
ARTICLE IV
PARTICULAR COVENANTS
SECTION 4.1. Appointments by Borrower. The Borrower shall designate,
subject to the Administrator's approval: (a) one or more engineers (who may
be a member or members of the Borrower's engineering staff, if any, or an
engineer or engineers regularly employed by the Borrower) who shall perform
the engineering services involved in the construction of the Project or the
several parts 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 (the person so approved being
hereinafter called the "Manager").
SEC. 4.2. Submission of Plans, Specifications and Contracts With
Third Parties. The Borrower shall submit, when the Administrator shall so
require and subject to the Administrator's approval:
(a) plans and specifications for the construction of
each section of the
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Project as shall be designated by the Administrator, identified by
the signature of the approved engineer for such section or sections,
and, if the Administrator shall so require, certified by the
secretary of the Borrower as having been approved by the board of
directors thereof;
(b) a contract or contracts for the construction of the
section of the Project designated by the Administrator;
(c) a contract or contracts with an approved engineer
for all necessary engineering services in connection with the
construction of the several sections of the Project;
(d) a contract or contracts for the interchange of
traffic and the division of toll revenues;
(e) an option or options or contract or contracts, as
the case may be, for the purchase, lease or other acquisition of land
for use in connection with the construction or operation of the
Project or any part thereof;
(f) a contract for the employment of a Manager and such
other managerial personnel as the Administrator shall specify.
SEC. 4.3. Contracts Subject to the Administrator's Approval. Unless
the effectiveness of each such contract shall be conditioned upon the
approval of the Administrator, the Borrower shall not enter into any
contracts for:
(a) the construction of any portion of the Project;
(b) engineering services pertaining to the construction
of the Project;
(c) the interchange of traffic and the division of toll
revenues;
(d) the joint use of telephone, telegraph or electric
facilities;
(e) the purchase in excess of $2,000 in any one instance
of materials, equipment or supplies for use in connection with the
construction of the Project or operation of the System;
(f) the acquisition of existing facilities to be
included in the Project;
(g) management, accounting or other like services; and
(h) operating service assistance.
SEC. 4.4. Deposit of Funds. 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. 4.5. Easements and Permits. The Borrower shall submit to the
Government, when required 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 public convenience and necessity, approvals, and
orders from public bodies and others, as the Administrator shall deem
necessary or advisable in connection with the Project or the Loan. If
required 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 and none of the equity funds shall be used by the
Borrower to pay for easements obtained from landowners, or for releases of
liens affecting easements.
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SEC. 4.6. Area Coverage. The Borrower shall furnish adequate
telephone service to the widest practacable number of persons in rural areas,
and, subject to applicable laws, rules, regulations and orders of regulatory
bodies, shall, in the performance of such obligation, use the funds in the
Special Construction Account and such other funds as may from time to time be
available to it, either from surplus earnings, from additional loans made to
the Borrower by the Government, from increased capital derived through the
sale of additional memberships, or otherwise as the Borrower may elect, to
extend service, except as otherwise provided in section 4.21 hereof, to all
persons (hereinafter called "applicants") in rural areas 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 hereto) who shall (a) desire such service and (b) shall meet all
reasonable requirements established by the Borrower as a condition of
service. The extension of service to all applicants in the telephone service
area 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 and under the Mortgage and any
supplemental mortgage.
SEC. 4.7. Books and Records. The Borrower shall at all times keep,
in accordance with methods of accounting prescribed by the Administrator, but
subject to applicable laws and rules and regulations of regulatory bodies,
and shall safely preserve, books, records and accounts in which full and true
entries shall be made of all the dealings, business and affairs of the
Borrower. The Government, through its agents, or through certified public
accountants approved by the Administrator, to be employed by the Borrower at
its expense when so requested by the Administrator, shall at all times during
reasonable business hours have access to and the right to inspect and make
copies of all such books, records, and accounts and all invoices, contracts,
leases, payrolls, canceled checks, statements, plans, specifications,
drawings, and other documents and papers of every kind belonging to or in the
possession of the Borrower in any wise pertaining to the Project. The
Borrower, at such times as the Administrator may designate, shall submit to
the Government financial and operating reports in such form as shall be
acceptable to the Administrator.
SEC. 4.8. Mortgage Covenants. The Borrower shall perform all
covenants by it to be performed under the Mortgage and any supplemental
mortgage.
SEC. 4.9. Contractor's Bonds. The Borrower shall forthwith, upon
receipt thereof, deliver to the Administrator any contractor's or
subcontractor's bond relating to the construction of the Project.
SEC. 4.10. 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 (except such
contracts, if any, as may have been entered into and been completely
performed prior to the date hereof) for the construction of any
portion of the Project, or for engineering or for other services
pertaining to the construction or operation of the Project, or for
the purchase of materials, equipment or supplies for use in
connection with the construction or operation of the Project, unless
such contract (1) has 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; and
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(d) 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. 4.11. Fees and Commissions. No fee or commission has been or
shall be paid and no agreement therefor or 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. 4.12. "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 extent the Administrator shall determine that such use shall be
impracti-cable or that the cost thereof shall be unreasonable.
SEC. 4.13. 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 of employment because of race,
creed, color or national origin.
SEC. 4.14. 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 part of the
Project designated by the Administrator. If the Borrower shall fail to submit
such evidence with respect to any such part, the Government may refuse to
make any advance or further advances hereunder (in which case the
Administrator may execute and deliver to the Borrower a loan closing
certificate as described in section 1.3 hereof) or the Administrator may
determine that such part shall not be constructed and in such event the
Borrower shall not construct such part. Any determination by the
Administrator hereunder shall be conclusive and binding upon both the
Government and the Borrower.
SEC. 4.15. 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 such
right, title or interest in such real property as the Administrator may
require.
SEC. 4.16. Commencement of Operation. The Borrower shall not operate
any portion of the Project until the Borrower shall have furnished evidence
satisfactory to the Administrator 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 Borrower has complied
with the provisions of the Mortgage concerning insurance in respect of such
portion of the Project. The Borrower shall not serve any subscriber through
the Project until the Borrower shall have furnished evidence satisfactory to
the Administrator that the telephone wiring and equipment installed in such
subscriber's premises are of a type and quality, and have been installed, in
accordance with the approved plans and specifications.
SEC. 4.17. Operating and Maintenance Procedures. The Borrower shall,
subject to applicable laws, rules, regulations and orders of regulatory
bodies, operate and maintain the Project in accordance with operating and
maintenance procedures and practices satisfactory to the Administrator. The
Borrower shall inaugurate and carry out such personnel training programs,
office procedures and equipment maintenance programs as the Administrator may
specify.
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SEC. 4.18. Minutes. The Borrower shall promptly submit to the
Government certified copies of the minutes of all meetings of its members and
of its directors.
SEC. 4.19. Signs and Pole Marking. The Borrower shall erect and
maintain during the construction of the Project, in an appropriate place
where construction work on the Project is being prosecuted, a sign which
shall be subject to the approval of the Administrator, bearing the legend
"Rural Electrification Administration Telephone Project under Federal
Government Loan", or such other legend of similar import as the Administrator
may designate. The Borrower shall at all times identify all poles owned by it
in such manner as the Administrator shall direct.
SEC. 4.20. Supervisor: Appointment and Powers. If the construction
or operation of the Project, or any parts thereof shall not proceed in
accordance with the terms hereof, or if, in the opinion of the Administrator,
action is necessary to protect the Government's security for the Loan or is
essential to achieve the objectives for which the Loan is made, the
Administrator may appoint, as the representative of the Government a
supervisor (hereinafter called the "Supervisor") for the Project or other
property of the Borrower necessary to the construction or operation of the
Project and shall notify the Borrower of such appointment and the duration
thereof and of the salary of the Supervisor. The Supervisor shall take such
steps as he deems necessary to assure construction or operation of the
Project in accordance with the terms hereof, or such portion or portions
thereof as may be designated by the Administrator, or any extensions thereto
which the Borrower may be obligated to construct and operate pursuant to the
provisions of section 4.6 hereof, or to preserve the security of the Loan and
shall have power to operate the Project and do all things reasonably incident
to the exercise of the powers herein granted, including, without limitation,
directing the conservation of any funds of the Borrower, the collection of
all debts due it, directing the payment of all expenses of the Borrower from
any of its funds, termination of the employment of such employees of the
Borrower as he shall determine upon and the employment of such persons, on
such terms and conditions as he may designate, as he shall deem necessary to
assist him in carrying out his functions. The salaries, fees, disbursements
and expenses of the Supervisor, and of any employee appointed by him, shall
be paid by the Borrower, except that the salary of the Supervisor and of any
assistants who shall be employees of the Government shall not be chargeable
to the Borrower for a period of thirty (30) days after the appointment of the
Supervisor. So long as the appointment of the Supervisor shall be in effect,
all checks, drafts, and orders drawn on any bank account maintained by the
Borrower shall be countersigned by the Supervisor, except that, if the proper
officers or employees of the Borrower shall refuse to sign any such check,
draft or order, the Supervisor shall have full power and authority to sign
such check, draft or order for the Borrower without the requirement of any
other signature thereon, if the Supervisor shall certify to the bank upon
which such check, draft or order is drawn that the same is required to carry
out the obligations of the Borrower hereunder. The Borrower hereby
constitutes the Administrator its agent for the purpose of notifying any bank
in which any account of the Borrower shall be maintained of the appointment
of a Supervisor and of the provisions hereunder with respect thereto, and
agrees that such notice shall include a direction to any such bank with
respect to the signing or countersigning of the checks, drafts or orders
drawn on any such account as in this section provided. The Borrower shall
comply with all reasonable instructions of the Supervisor incident to
carrying out the obligations of the Borrower hereunder the performance of the
functions of the Supervisor.
SEC 4.21. Nonduplication of Facilities. The Borrower will not use any
part of the Loan nor any of the equity funds 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
telephone service to such persons, except with regard to service by the
Borrower 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.
SEC 4.22. Equity Funds. The Borrower shall obtain its equity funds,
in a total amount of not less than $7,950.00, by the collection from each
subscriber of the Borrower of a full equity payment of $15.00 before
telephone service to such subscriber
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is provided or improved by the Borrower. The Borrower shall submit to the
Administrator, at such times and in such form as may be required by him,
evidence that it has collected and deposited in the Special Construction
Account provided for in section 2.4 hereof, a full equity payment of $15.00
for each subscriber for whom telephone service has been furnished or
improved, until the total of $7,950 in funds has been collected and
deposited.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
SECTION 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, premise, 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, the Government or the holder or holders
of any one or more of the Notes, as their respective interests may appear,
may exercise any one or more 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;
(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;
(c) enter upon and take possession of the Project, take
possession of and utilize any and all equipment, materials, tools,
supplies, and appliances wherever located belonging to the Borrower,
take possession of any funds in any Special Construction Account,
take possession of all books, papers, records, documents, accounts,
and plans and specifications of the Borrower re1ating to the Project,
and complete or cause to be completed, by contract or otherwise, the
construction of the Project, or such portion thereof as the
Administrator may select, for the account of the Borrower, and the
amount paid therefor by the Government shall be considered an advance
on account of the Loan and if said amount, together with prior
advances, is in excess of the maximum amount which the Government
would otherwise be required to advance hereunder, the Borrower shall
immediately pay to the Government the amount of such excess; or
(d) appoint a Supervisor pursuant to section 4.20
hereof; or
(e) exercise any and all rights, privileges, remedies,
powers, claims, and demands which the Borrower may have against third
persons in any way relating or pertaining to the construction of the
Project and, for such purpose, the
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Borrower does hereby assign, transfer, and set over to the Government
any and all such rights, privileges, remedies, powers, claims, and
demands, except such as by law are not transferable or assignable,
which the Borrower hereby agrees to hold, together with any and all
proceeds resulting therefrom, in trust for the benefit of the
Government and the holder or holders of the Notes, as their
respective interests may appear.
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
SECTION 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 Project on the same terms accorded others
served through the Project.
SEC. 6.2. False Claims and the "Kick Back" Statute. 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, and regulations issued
pursuant to Public Act ▇▇. ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇ ▇.▇.▇. ▇▇▇(▇) (c)), commonly
called the "Kick Back" Statute.
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 new or may hereafter
be authorized by law to perform;
(b) "plans and 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;
(d) "section", as used in the phrase "section of the
Project", or "section of the System" or the like, means any part of
the Project or System; and
(e) "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 instrument, 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
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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
agreement this 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 Alexandria, Tennessee, 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 be been fully performed.
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.
DeKALB TELEPHONE COOPERATIVE
(Seal) by: /s/ ▇▇▇▇ ▇▇▇▇▇
President
Attest: /s/ M.D. ▇▇▇▇▇▇▇▇
Secretary
UNITED STATES OF AMERICA
by:
Administrator
of
Rural Electrification Administration
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