EXHIBIT 4.17
REA Project Designation:
SOUTH DAKOTA 515-A
TELEPHONE LOAN CONTRACT
Dated as of September 5, 1952
between
DAKOTA COOPERATIVE TELEPHONE COMPANY, INC.
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 September 30, 1952.
/s/ X.X. Xxxxxxxxxx
Secretary of Meeting
No. A
AGREEMENT, made as of September 5, 1952, pursuant to the
Rural Electrification Act of 1936, as amended (7 U.S.C. 901 et
seq.) (hereinafter called the "Act"), between DAKOTA COOPERATIVE
TELEPHONE COMPANY, INC. (hereinafter called the "Borrower"), a
corporation existing under the laws of the State of South Dakota,
and UNITED STATES OF AMERICA (hereinafter call 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 $1,027,000 to finance
partially the acquisition, construction and operation of a telephone system
in rural areas to bring telephone service to approximately 1,776
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 borrower an amount not in excess of $1,027,000 which,
together with the sum of $88,364 in equity funds 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 acquisition, construction and operation of
telephone lines and facilities (hereinafter called the "Project") to be
located in Counties of Clay, Hutchinson, McCook, Turner, and Yankton and in
counties contiguous thereto, all in the State of South Dakota.
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 mortgage
made by the Borrower to the Government (such mortgage being hereinafter
called the "Mortgage"), as supplemented by such supplemental mortgages made
by the Borrower to the Government 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 mortgage, 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.
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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 until the
Borrower shall have submitted evidence, satisfactory to the Administrator,
that it has:
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(1) entered into binding sales contracts, in form and substance
satisfactory to the Administrator, providing for the transfer and
conveyance to the Borrower of (a) all properties used or useful in the
telephone business, owned or operated by Dakota State Telephone
Company, including, without limitation, real estate located at Xxxxx,
in Xxxxxx County, South Dakota, at Yolin, in Yankton County, South
Dakota, at Xxxxx, in Clay County, South Dakota, and at Monroe, in
Xxxxxx County, South Dakota; (b) all properties used or useful in the
telephone business owned or operated by Hurley Telephone Company,
including, without limitation, real estate located at Hurley, in
Xxxxxx County, South Dakota; and (c) properties used or useful in the
telephone business operated as a switcher line west of Hurley, South
Dakota, and switched at Xxxxxx, owned by the Northwestern Xxxx
Telephone Company.
(2) obtained all necessary orders or approvals of appropriate
regulatory bodies, including, without limitation, certificates of
convenience and necessity, and approvals of the acquisition of
existing facilities listed in the preceding paragraph;
(3) adopted a schedule of rates, satisfactory to the
Administrator, and has obtained required approvals of such schedule of
rates by appropriate regulatory bodies;
(4) complied with all laws and regulations applicable to the
sale or issuance of membership and equity certificates, such
certificates to be in form and substance satisfactory to the
Administrator;
(5) obtained commitments or contracts, in form and substance
satisfactory to the Administrator, providing for all necessary toll
traffic, operator assistance and extended scope services to be
provided by connecting companies;
(6) obtained required franchises, in form and substance
satisfactory to the Administrator, from all incorporated communities
in which the Project will be located; and
(7) obtained the sum of $16,860 in initial equity payments, and
has deposited such sum in the Special Construction Account hereinafter
defined and provided for in section 2.4 hereof;
(C) The first advance of funds on account of the Loan, not in
excess of $85,614 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) only for the purpose of
enabling the Borrower to acquire the telephone facilities referred to in
section 2.1(B)(1) hereof. Thereafter, the Government shall be under no
obligation to make any further advances on account of the Loan until the
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Borrower shall have submitted proof, satisfactory to the Administrator,
that it has obtained and recorded duly authorized and executed deeds and
bills of sale transferring and conveying the acquired properties to the
Borrower, in accordance with the terms of the sales contracts previously
approved by the Administrator.
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 advane 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.
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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 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 Borrower shall also deposit in the Special Construction
Account, at such time or times as the Administrator may direct, 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 $88,364, obtained by the Borrower in accordance with
section 4.21 hereof (hereinafter called the "equity funds"). Until the
aggregate amount of withdrawls 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 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 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 Project 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 Project. 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 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, 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
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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 of any part of the
funds on account of the Loan not previously advaned 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, 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
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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 Project as shall be designated by the Administrator,
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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) contracts for toll traffic, operator assistance and extended
scope and for joint use of facilities;
(e) contracts for the acquisition of existing facilities to be
included in the Project;
(f) 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; and
(g) 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 or operation of the Project;
(f) the acquisition of existing facilities to be included in the
Project;
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(g) the purchase, lease or other acquisition of land for use in
connection with the construction or operation of the Project;
(h) management, accounting or other like services; and
(i) operator assistance services and extended scope service.
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.
SEC. 4.6. AREA COVERAGE. The Borrower shall furnish adequate
telephone service to the widest practicable 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 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 of the
Borrower 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.
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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, pay-rolls,
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, such 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; and
(c) it has not entered into any contract 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 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;
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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 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 impracticable 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.
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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.
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 theAdministrator, 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 of the Project, or any part 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. 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
obligations which the Borrower may be obligated to perform pursuant to the
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provisions of section 4.6 hereof, or to preserve the security of the Loan
and shall have the power to operate the Project and other property of the
Borrower necessary to the operation of 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 and expenses of all employees appointed by the
Supervisor shall be paid by the Borrower, provided, however, that the
salaries and expenses of the Supervisor 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 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 or the performance of the functions
of the Supervisor.
SEC. 4.21. EQUITY FUNDS. The Borrower shall submit to the
Administrator, with each requisition submitted by the Borrower pursuant to
section 2.2 hereof, evidence that it has collected and deposited in the
Special Construction Account equity payments averaging $49.64 for each of
the subscribers acquired in connection with the acquisition of the
facilities described in section 2.1(B)(1) hereof, before telephone service
to such acquired subscriber was improved by the Borrower, and averaging $50
for each of all other subscribers before telephone service to such new
subscriber was initially furnished by the Borrower, until a total of
$88,364 in equity funds on behalf of a total of $1,776 subscribers has been
collected and deposited.
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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, 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, 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 relating 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
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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 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 Xxxxx 00, Xxxxxx Xxxxxx Code, Crimes and Criminal Procedure,
and regulations issued pursuant to Public Act Xx. 000, 00x Xxxxxxxx (00
X.X.X. 000 (x) (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
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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 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 agreeed 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 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
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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 Irene, South
Dakota, 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.
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.
DAKOTA COOPERATIVE TELEPHONE
COMPANY, INC.
by /s/ B. Xxxxxxx Xxxxxxxxxxx
President
(Seal)
Attest: /s/ X.X. Xxxxxxxxxx
Xxxxxxxxx
-00-
XXXXXX XXXXXX XX XXXXXXX
by /s/ Wm. X. Xxxx
Acting Administrator
of
Rural Electrification Administration
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