EXHIBIT 4.31
REA Project Designation:
SOUTH DAKOTA 515-S8 XXXXX
TELEPHONE LOAN
CONTRACT AMENDMENT
Dated as of February 4, 1986
between
DAKOTA COOPERATIVE TELECOMMUNICATIONS, INC.
and
UNITED STATES OF AMERICA
No. 2
AGREEMENT, made as of ----------------------- February 4,
1986 between DAKOTA COOPERATIVE TELECOMMUNICATIONS, INC.----
-------------------------------------------------------------
(hereinafter called the "Borrower"), a corporation existing under
the laws of the State of South Dakota --------------------, and
UNITED STATES OF AMERICA (hereinafter called the "Government"),
acting through the Administrator of the Rural Electrification
Administration (hereinafter called the "Administrator").
WHEREAS, the Government and the Borrower have heretofore entered
into a telephone loan contract, amending telephone loan contract,
consolidating telephone loan contract, or consolidating and amending
telephone loan contract, dated as of September 5, 1952 ------------ (such
agreement, as it may have been amended, being hereinafter called the "Loan
Contract"); and
WHEREAS, it is intended by this agreement to amend the Loan
Contract by increasing the amount of the loan therein provided for through
a loan from the Government to the Borrower of not to exceed $4,140,000
------------------ (hereinafter called the "Loan Increase"), and in certain
other respects;
NOW, THEREFORE, for and in consideration of the mutual agreements
herein contained, the Borrower and the Government agree as follows:
SECTION 1. The definition of "Project" in the Loan Contract is
amended by changing to 4,626 ----------- the approximate number of
subscribers to be served thereby (aside from those served by "Existing
Facilities", if any, as defined in the Loan Contract).
SEC. 2. Section 1.1 of the Loan Contract is amended by
(a) increasing the maximum amount which the Government shall lend and the
Borrower shall borrow, by the amount of the Loan Increase, and (b) adding
the following to the counties listed in said Section:
NONE
SEC. 3. The provisions set forth in Exhibit I hereto, pages I-1
through I-5---, and by this reference made a part hereof, shall amend and
supersede all provisions of the Loan Contract inconsistent therewith. If
the Loan Contract does not include "System" as a defined term, any
reference to "System" in this agreement, including Exhibit I, shall be read
as "Project". If the Loan Contract does not include "Project" as a defined
term, any reference to "Project" in this agreement, including Exhibit I,
shall be read as "System".
SEC. 4. The debt created by the Loan Increase shall be evidenced
by additional notes to be executed by the Borrower pursuant to the Loan
Contract, as amended hereby, which shall bear interest at the rate of five
---- (5.0 ) per centum per annum.
SEC. 5. Notwithstanding anything contained in this agreement or the
Loan Contract, the Government shall be under no obligation to advance to
the Borrower any portion of the Loan Increase in addition to the $176,000
of the prior Loan Increase provided for in the Telephone Loan Contract
Amendment dated November 22, 1982, unless and until the Borrower has duly
executed, recorded and filed a mortgage, in form and substance satisfactory
to the Administrator, and unless and until all other conditions of the Loan
Contract and this agreement which are precedent to the advance of loan
funds shall have been satisfied.
SEC. 6. Special Covenant:
The Borrower shall, as soon as possible after the construction
of any major portion of those facilities financed by the Loan
Increase is completed, or sooner if requested by the
Administrator, (a) adopt a tariff which (1) will provide for one-
party service, (2) does not include mileage or zone charges on
one-party service, and (3) is designed to produce revenues
sufficient to meet all necessary expenditures including all
interest and principal payments under the Notes, and (b) place
such tariff into effect as soon as permitted by applicable laws
and regulations.
SEC. 7. ELECTRONIC FUNDS TRANSFER. Except as otherwise
prescribed by the Administrator, the Borrower shall make payments of all
principal of and interest on all notes issued by the Borrower pursuant to
the Loan Contract, as amended by this agreement and any subsequent
amendment, which payments, in the aggregate, exceed $10,000, by Electronic
Funds Transfer utilizing the Treasury Financial Communications
Systems/ Federal Reserve Communications System through the United States
Department of the Treasury account (021030004) at the Federal Reserve Bank
of New York, all in the manner prescribed by REA Bulletin 20-9; 320-12.
SEC. 8. 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
has caused this agreement to be duly executed all as of the day and year
first above written.
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DAKOTA COOPERATIVE TELECOMMUNICATIONS, INC.
By /s/ Xxxx X. Bye
President
(Seal)
Attest: /s/ Xxxx Xxxxxxxx
Secretary
UNITED STATES OF AMERICA
by /s/ Xxxx Van Xxxx
Acting Administrator
of
Rural Electrification Administration
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EXHIBIT I
1. DEFINITIONS.
Each term defined in the Loan Contract and in the agreement
("Underlying Agreement") of which this Exhibit is a part shall have the
same meaning when used in this Exhibit I. As used in this Exhibit I, "this
Agreement" shall mean the Underlying Agreement together with this
Exhibit I.
2. INTEREST ON NOTES.
The Notes with respect to any portion of the Loan shall bear
interest at the rate specified in the loan agreement relating thereto, and
shall otherwise be in form and substance satisfactory to the Administrator.
3. PREREQUISITES TO ADVANCES.
The Government shall be under no obligation to advance funds from
time to time on account of the Loan, unless and until the Borrower shall
have (a) complied with the provisions of section 2.1 of the Loan Contract
(or such other section thereof as is headed "Prerequisites to Advances"),
and (b) delivered to the Administrator, in form and substance satisfactory
to him, evidence that the Borrower has duly adopted a tariff which (1) will
provide for such grades of service as the Administrator may approve,
(2) does not include mileage or zone charges for the lowest grade of
service provided in each central office area and (3) is designed to produce
revenues sufficient to meet all necessary expenditures, including all
interest and principal payments under the Notes.
4. SPECIAL CONSTRUCTION ACCOUNT.
The Borrower shall promptly deposit all moneys advanced to it by
the Government hereunder in a special construction account (hereinafter
called "Special Construction Account") in a bank or banks, which shall meet
the requirements specified in section 4.3 of the Loan Contract (or such
other section thereof as is headed "Deposit of Funds"), and shall hold such
moneys in trust for the Government until disbursed. Any Special
Construction Account 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 of the Loan Contract, as amended by
this Agreement and any subsequent amendment. If the Borrower is required
to obtain equity funds by the terms of the Loan Contract, as amended by
this Agreement or any subsequent amendment, the Borrower shall also deposit
all such equity funds in the Special Construction Account on the same terms
and conditions and for the same purposes as funds advanced on account of
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the Loan. Equity funds may be withdrawn from the Special Construction
Account only upon approval by the Administrator of requisitions therefor
submitted by the Borrower in accordance with the requirements applicable to
the requisitioning of loan funds, as set forth in section 2.2 of the Loan
Contract (or such other section thereof as is headed "Requisitions") except
that to the extent equity funds (if required to be obtained) are expressly
required to be used for other purposes under the Loan Contract, as amended
by this Agreement and any subsequent amendment, they shall be used for such
other purposes. 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 equity funds and not from funds
advanced by the Government to the Borrower. The Borrower shall expend each
advance on account of the Loan or equity funds, if any, only for such of
the purposes specified in the statement of purposes accompanying the
requisition for such advance or equity funds, if any, as shall have been
approved by the Administrator.
5. PARTICULAR COVENANTS.
(A) SUBMISSION OF CONTRACTS WITH THIRD PARTIES. The Borrower
shall submit, when requested by the Administrator and subject to the
Administrator's approval:
(1) 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;
(2) a contract or contracts for the purchase, lease, or
other acquisition of land for use in connection with the
construction or operation of the System; and
(3) a contract or contracts for extended area service to be
provided by or for other companies, as may be necessary for the
proper operation of the System.
(B) EVIDENCE OF TARIFF. The Borrower shall deliver, when
requested by, and in form and substance satisfactory to, the Administrator,
evidence that the Borrower has in effect a tariff which will provide for
such grades of service as the Administrator may approve and which does not
include mileage or zone charges for the lowest grade of service provided in
each central office area.
(C) EASEMENTS AND PERMITS - EQUITY FUNDS. If the Borrower is
required to obtain equity funds by the terms of the Loan Contract, as
amended by this Agreement or any subsequent amendment, none of such funds
shall be used by the Borrower to pay for easements obtained from land
owners, or for releases of lien affecting easements.
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(D) 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):
(1) 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 service; and
(2) 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 lenders other than 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 every
other unserved rural applicant for service in its telephone
service area if the cost of constructing the required line
extension for such applicant will not exceed seven times the
estimated annual local service revenues 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.
(E) EQUAL OPPORTUNITY CLAUSE. The Borrower hereby agrees that
it will incorporate or cause to be incorporated into any contract for
construction work, or modification thereof, as defined in Executive Order
11246 or in the rules and regulations of the Secretary of Labor, which is
paid for in whole or in part with funds obtained from the Federal
Government or borrowed on the credit of the Federal Government pursuant 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:
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(1) The contractor will not discriminate against any employee or
applicant for employment because of race, color, religion, sex or national
origin. The contractor will take affirmative action to ensure that
applicants are employed, 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 other forms of
compensation; and selection for training, including apprenticeship. The
contractor agrees to post in conspicuous places, available to employees and
applicants for employment, notices to be provided setting forth the
provisions of this nondiscrimination clause.
(2) The contractor will, in all solicitations or advertisements
for employees placed by or on behalf of the contractor, state that all
qualified applicants will receive consideration for employment without
regard to race, color, religion, sex or national origin.
(3) The contractor will send to each labor union or
representative of workers with which he has a collective bargaining
agreement or other contract or understanding, 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 the
notice in conspicuous places available to employees and applicants for
employment.
(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 11246 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 this contract or with any of the said rules,
regulations or orders, this contract may be cancelled, 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 11246
of September 24, 1965, and such other sanctions may be imposed and remedies
invoked as provided in the said Executive Order or by rule, regulation or
order of the Secretary of Labor, or as otherwise provided by law.
(7) The contractor will include the provisions of paragraphs (1)
through (7) in every subcontract or purchase order unless exempted by
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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 vendor. The
contractor will take such action with respect to any subcontract or
purchase order as the administering agency may direct as a means of
enforcing such provisions, 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 such direction by the agency, the contractor may request the United
States to enter into such litigation to protect the interests of the United
States.
The Borrower further agrees that it will be bound by the above
equal opportunity clause in any federally assisted construction work which
it performs itself other than through the permanent work force directly
employed by an agency of government.
The Borrower agrees that it will cooperate actively with the
administering agency and the Secretary of Labor in obtaining the compliance
of contractors and subcontractors with the equal opportunity clause and the
rules, regulations and relevant orders of the Secretary of Labor, that it
will furnish the administering agency and the Secretary of Labor such
information as they may require for the supervision of such compliance, and
that it will otherwise assist the administering agency in the discharge of
the agency's primary responsibility for securing compliance. The Borrower
further agrees that it will refrain from entering into any contract or
contract modification subject to Executive Order 11246 with a contractor
debarred from, or who has not demonstrated eligibility for, Government
contracts and federally assisted construction contracts pursuant to
Part II, Subpart D of Executive Order 11246 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 11246. In addition, the Borrower agrees that if it fails
or refuses to comply with these undertakings the administering agency may
cancel, terminate or suspend in whole or in part this contract, may refrain
from extending any further assistance under any of its programs subject to
Executive Order 11246 until satisfactory assurance of future compliance has
been received from such Borrower, or may refer the case to the Department
of Justice for appropriate legal proceedings.
(F) ENVIRONMENT. The Borrower shall, with respect to all
facilities which may be part of the System, comply with applicable water
and air pollution control standards and other environmental requirements
imposed by federal or state statutes or regulations.
(G) HISTORIC PRESERVATION. The Borrower shall not, without
approval in writing by the Administrator, use any portion of the Loan to
construct any facilities which will involve any district, site, building,
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structure or object which is included in the National Register of Historic
Places, maintained by the Secretary of the Interior pursuant to the
Historic Sites Act of 1935 and the National Historic Preservation Act.
(H) DELETION OF PROVISIONS RELATING TO THE LEVEL OF GENERAL
FUNDS. If the Loan Contract contains provisions in section 2.8, or
elsewhere, relating to the level of the Borrower's general funds, such
provisions are deleted.
(I) DELETION OF PROVISIONS RELATING TO CONSTRUCTION SCHEDULES.
If the Loan Contract contains provisions in section 2.9, or elsewhere,
relating to the Borrower's construction schedules, such provisions are
deleted.
6. COUNTERSIGNATURE.
Subject to the provisions of paragraph 7 of this Exhibit I and
section 5.2(c) of the Loan Contract (or subsection (c) of such other
section of the Loan Contract as is headed "Remedies upon Default"), 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.
7. SUPERVISOR: APPOINTMENT AND POWERS.
If the construction of the Project or any section or sections
thereof, shall not proceed in accordance with the terms of the Loan
Contract, as amended by this Agreement or any subsequent amendment to the
Loan Contract, or if default shall be made in the payment of any
installment of or on account of interest on or principal of any Note when
and as the same shall be required to be made and such default shall
continue for thirty (30) days, the Administrator may appoint a supervisor
(hereinafter called the "Supervisor") for the System, or such section or
sections thereof as the Administrator shall designate, as the
representative of the Government and notify the Borrower of such
appointment and the duration thereof. 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 to assure performance of any
other obligations of the Borrower pursuant to the provisions of the Loan
Contract, as amended by this Agreement and any subsequent amendment, or of
the Notes, and shall have power to operate the System and other property
of the Borrower necessary to the operation of the System, 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, the payment of all
expenses of the Borrower from any of its funds, the 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
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designate, as he shall deem necessary to assist him in carrying out his
functions. The salaries, fees, disbursements and the expenses of the
Supervisor and of any employee appointed by him shall be paid by the
Borrower; provided, however, that the salaries, fees, disbursements and
expenses of any Supervisor who shall be an employee of the Government, and
of any assistants who shall be employees of the Government, shall not be
payable by the Borrower unless and to the extent that the Administrator,
upon written notification to the Borrower, shall so require. 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 such check, draft or order 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 instruction of the Supervisor incident to carrying out the
obligations of the Borrower hereunder or the performance of the functions
of the Supervisor.
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