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I
RESTATED MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT, dated as
of 19 , made by and between WESTERN NEW MEXICO TELEPHONE COMPANY, INC.
(hereinafter called the "Mortgagor"), a corporation existing under the laws of
the State of New Mexico, as mortgagor and debtor, and UNITED STATES OF AMERICA
(hereinafter sometimes called the "Mortgagee" and sometimes called the
"Government"), acting through the Administrator of the Rural Electrification
Administration (hereinafter called "REA"), as mortgagee and secured party.
WHEREAS, the Mortgagor has heretofore borrowed funds from the
Government, acting through the Administrator of REA, pursuant to a certain
Telephone Loan Contract identified in the fifth recital hereof (hereinafter
called the "Instruments Recital") by and between the Mortgagor and the
Government (said Telephone Loan Contract, as it may have heretofore been, and as
it may hereafter be, amended or supplemented, being hereinafter called the
"Consolidated Loan Agreement"); and
WHEREAS, the Mortgagor, for value received, has heretofore
duly authorized and executed, and has delivered to the Mortgagee, or has assumed
the payment of, certain mortgage notes all payable to the order of the
Mortgagee, in installments, of which the mortgage notes (hereinafter
collectively called the "Outstanding Notes") identified In the Instruments
Recital are now outstanding and held by the Mortgagee, all of which Outstanding
Notes evidence loans made or guaranteed by the Government to the Mortgagor or to
a third party or parties to finance telephone exchanges, lines and related
facilities; and
WHEREAS, the Outstanding Notes are secured by the security
instruments (hereinafter collectively called the "Underlying Mortgage")
identified in the Instruments Recital made by the Mortgagor to the Mortgagee;
and
WHEREAS, the Mortgagor has determined to borrow additional
funds from the Government pursuant to the Rural Electrification Act of 1936, as
amended (7 U.S.C. 901 et seq., hereinafter called the "Act"), and pursuant to
the Consolidated Loan Agreement, and has accordingly duly authorized and
executed, and has delivered to the Mortgagee, its mortgage note (identified in
the Instruments Recital as and hereinafter called the "Current Note") to be
secured by the Underlying Mortgage, as amended, supplemented, consolidated and
restated hereby; and
WHEREAS, the instruments referred to in the preceding
recitals, the Maximum Debt Limit referred to in Article I, Section 1 hereof, the
subdivision or subdivisions of Article II hereof made applicable by this
recital, and certain data referred to in Article II, Section 15 and in Article
II, Section 20(a) hereof, are as follows:
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INSTRUMENTS RECITAL
The instruments referred to in the preceding recitals are as follows:
"Telephone Loan Contract" dated as of May 14, 1979.
"Telephone Loan Contract Amendment" dated as of July 28, 1993.
"Outstanding Notes":
Six (6) certain mortgage notes in an aggregate principal amount of $27,112,bOO,
all of which will mature on or before June 23, 2015.
"Underlying Mortgage"
Instrument
Mortgage and Security Agreement Supplemental Mortgage
"Current Note" (Of even date herewith):
Principal Amount
$10,750,000
Dated as of
August 9, 1979 March 9, 1984
Interest Rate
(per annual five percentum (50/6)
Trustee, if any
Final Payment Date
Sixteen (16) years after the date thereof
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2. "Maximum Debt Limit" for purposes of Article I, Section I hereof, shall
be fifty-five million dollars ($55,000,000).
3. The following subdivision(s) of Article II hereof Is(are) hereby made
applicable: Section 4(b).
4. The date referred to in Section 15(a)(3) of Article II hereof Is hereby
established as December 31, 1978.
5. The Forecast Period referred to in Article 11, Section 20(a) of this
Mortgage shall be the period commencing with the date hereof and ending December
31, 1997. Also in Article II, Section 20(a), the TIER the Mortgagor is required
to maintain after the end of the Forecast Period shall be 1.5.
WHEREAS, the Underlying Mortgage provides that the Mortgagor
shall, upon the request in writing of the holder or holders of not less than a
majority in principal amount of the notes secured by the Underlying Mortgage at
the time outstanding, duly authorize, execute, and deliver and record and file
all such supplemental mortgages and conveyances as may reasonably be requested
by such holder or holders to effectuate the Intention of the Underlying Mortgage
and to provide for the conveying, mortgaging and pledging of the property of the
Mortgagor intended to be conveyed, mortgaged or pledged by the Underlying
Mortgage to secure the payment of the principal of and interest on notes
executed and delivered thereunder and pursuant thereto, or otherwise secured
thereby, and the Mortgagee, as the holder of all such notes, has in writing
requested the execution and delivery of such a supplemental mortgage pursuant to
such provisions; and
WHEREAS, it is Intended by the Mortgagor, at the request and
with the consent of the Mortgagee, as the holder of all of the outstanding
Notes, to amend and supplement the Underlying Mortgage in the respects
hereinafter set forth; and
WHEREAS, the changes in the Underlying Mortgage which the
Mortgagor and the Mortgagee, as the holder of all of the Outstanding Notes,
desire now to effect make advisable the consolidating and restating of each the
instruments constituting the Underlying Mortgage in its entirety; and
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WHEREAS, all acts, things, and conditions prescribed by law and by
Mortgage; and
the articles of incorporation and bylaws of the Mortgagor have been duly
performed and complied with to authorize the execution and delivery of this
Restated Mortgage, Security Agreement and Financing Statement (hereinafter
called "this Restated Mortgage"), and to make this Restated Mortgage an
amendment and supplement to, and a consolidation and restatement of, the
Underlying Mortgage; and
WHEREAS, the Mortgagee is authorized to enter into this Restated
WHEREAS, it is contemplated that the outstanding Notes and the
Current Note shall be secured by this Restated Mortgage, and also that any
additional notes and refunding, renewal and substitute notes (hereinafter
collectively called the "Additional Notes") which may from time to time be
executed by the Mortgagor and delivered to the Mortgagee as hereinafter
provided, shall be secured by this Restated Mortgage (the Outstanding Notes, the
Current Note and any Additional Notes being hereinafter collectively called the
" notes"): and
WHEREAS, the Mortgagor now owns a telephone system and other
facilities identified in the Property Schedule contained in the Granting Clause
hereof (hereinafter called the "Existing Facilities"); and
WHEREAS, to the extent that any of the property described or
referred to herein and in the Underlying Mortgage is governed by the provisions
of the Uniform Commercial Code of any state (hereinafter called the "Uniform
Commercial Code"), the parties hereto desire that the Underlying Mortgage and
this Restated Mortgage, collectively, be regarded as a "security agreement"
under the Uniform Commercial Code and that this Restated Mortgage be regarded as
a "financing statement" under the Uniform Commercial Code for said security
agreement.
NOW, THEREFORE, this Restated Mortgage
WITNESSETH
That each of the instruments constituting the Underlying
Mortgage is hereby amended, supplemented, consolidated and restated to read in
its entirety from and after the date of execution of this Restated Mortgage (the
Underlying Mortgage, as amended, supplemented, consolidated and restated by this
Restated Mortgage, being herein called "this Mortgage") as follows:
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GRANTING CLAUSE
In order to secure the payment of the principal of and
interest on the notes, according to their tenor and effect, and further to
secure the due performance of the covenants, agreements and provisions contained
in this Mortgage and the Consolidated Loan Agreement and to declare the terms
and conditions upon which the notes are to be secured, the Mortgagor, in
consideration of the premises, has executed and delivered this Mortgage, and has
granted, bargained, sold, conveyed, warranted, assigned, transferred, mortgaged,
pledged, and set over, and by these presents does hereby grant, bargain, sell,
convey, warrant, assign, transfer, mortgage, pledge and set over, unto the
Mortgagee, and assigns, all and singular the following- described property
(hereinafter sometimes called the "Mortgaged Property"):
All right, title and Interest of the Mortgagor in and to the
Existing Facilities and buildings, plants, works, Improvements, structures,
estates, grants, franchises, easements, rights, privileges and properties real,
personal and mixed, tangible or intangible, of every kind or description, now
owned or leased by the Mortgagor or which may hereafter be owned or leased,
constructed or acquired by the Mortgagor, wherever located, and in and to all
extensions and improvements thereof and additions thereto, including all
buildings, plants, works, structures, improvements, fixtures, apparatus,
materials, supplies, machinery, tools, implements, poles, posts, crossarms,
conduits, ducts, lines, whether underground or overhead or otherwise, wires,
cables, exchanges, switches including, without limitation. host switches and
remote switches, desks. testboards, frames, racks, motors, generators, batteries
and other items of central office equipment, paystations, protectors,
instruments, connection and appliances, office furniture and equipment, work
equipment and any and all other property of every kind, nature and description,
used, useful or acquired for use by the Mortgagor in connection therewith and
including, without limitation, the property described in the following property
schedule:
PROPERTY SCHEDULE
(a) The Existing Facilities are located in the following
Counties: Catron, Grant, Xxxxxxx and Socorro, in the State of New Mexico.
(b) The property referred to in the last line of paragraph I
of the Granting Clause includes the following described real estate:
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A certain tract of land described in a certain Warranty Deed dated June 25,
1979, by the Village of Reserve, New Mexico, a municipal corporation, as
Grantor, to Western New Mexico Telephone Company, Inc. as Grantee, and recorded
on September 4, 1979, in the office of the Xxxxxx County Clerk, in the State of
New Mexico, in Volume 6 of Deeds at page 324.
A certain tract of land described in a certain Warranty Deed dated October 15,
1979, by Xxxxxx X. XxXxxxxxx, Xxxxxxxxx X. XxXxxxxxx, Xxxxxx X. XxXxxxxxx
Trustee for Xxxxxx X. XxXxxxxxx and Xxxxxxxxx X. XxXxxxxxx under deed of trust
dated May 5, 1975, and Xxxxxx X. XxXxxxxxx Trustee for Xxxxx Xxxx Sage, Xxxxx X.
XxXxxxxxx and Xxxxxxxxx X. XxXxxxxxx under Deed of Trust dated March 1, 1970, as
Grantors, to Western New Mexico Telephone Company, Inc. as Grantee, and recorded
October 22, 1979, in the office of the County Clerk of Xxxxxx County, in the
State of New Mexico, in Volume 6 of Deeds at page 378.
A certain tract of land described in a certain Warranty Deed dated November 9,
1979, by Xxxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxxx, as Grantor, to Western New
Mexico Telephone Company, Inc. as Grantee, and recorded on November 27., 1979,
in the office of the County Clerk of Xxxxxx County, in the State of New Mexico,
in Volume 6 of Deeds at page 416.
A certain tract of land described in a certain Warranty Deed dated May 2, 1980,
by The Mountain States Telephone and Telegraph Company, a Colorado corporation,
as Grantor, to Western New Mexico Telephone Company, Inc. as Grantee, and
recorded on July 24, 1980, in the office of the Xxxxxx County Clerk, in the
State of New Mexico, in Volume 6 of Deeds at page 703.
A certain tract of land described in a certain Warranty Deed dated May 2, 1980,
by The Mountain States Telephone and Telegraph Company, a Colorado corporation,
as Grantor, to Western New Mexico Telephone Company, Inc. as Grantee, and
recorded on July 24, 1980, in the office of the Xxxxxx County Clerk, in the
State of New Mexico, in Volume 6 of Deeds at page 704.
A certain tract of land described in a certain Warranty Deed dated May 7, 1980,
by Xxxxxxx X. Xxxxxxx and Xxxx Xxxxxxx, husband and wife, Xxxxxxx Xxxxxxx, Xxxxx
Xxxxxxx and Xxxxxx Xxxxx Xxxxxxx, as their sole and separate property, as
Grantors, to Western New Mexico Telephone Company, Inc. as Grantee, and recorded
on May 7, 1980, in the office of the Xxxxxx County Clerk, in the State of New
Mexico, in Volume 6 of Deeds at pages 614-616.
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A certain tract of land described in a certain Warranty Deed dated June 12,
1980, by Xxxxx X. Xxxxxx, a widow, as Grantor, to Western New Mexico Telephone
Company, Inc. as Grantee, and recorded on June 13, 1980, in the office of the
County Clerk of Xxxxxx County, in the State of New Mexico, in Volume 6 of Deeds
at page 657.
A certain tract of land described in a certain Statutory Warranty Deed dated
October 9, 1981, by Xxxxx X. Xxxxx and Xxxx X. Xxxxx, husband and wife, as
Grantor, to Western New Mexico Telephone Company, as Grantee, and recorded on
August 12, 1982, in the office of the County Clerk of Xxxxxx County, in the
State of New Mexico, in Volume 7 of Deeds at pages 896-897.
A certain tract of land described in a certain Warranty Deed dated April 5,
1985, by Xxxxxx X. Xxxx-head and Xxxxxxxx X. Xxxxxxxx, Husband and Wife, as
Grantors, to Western New Mexico Telephone Company, Inc. as Grantee, and recorded
on May 13, 1985, in the office of the Xxxxxx County Clerk, in the State of New
Mexico, in Volume 9 of Deeds at page 107.
A certain tract of land described in a certain Warranty Deed dated October 4,
1985, by Xxxx Xxxxxxx, Xxxxxxx Xxxxx Xxxxxxx and Xxxxxx Xxxxx Xxxxxxx, as their
separate property, as Grantors, to Western New Telephone Company, Inc. as
Grantee, and recorded on 8, 1985, in the office of the Xxxxxx County Clerk,
State of New Mexico, in Volume 9 of Deeds at pages Xxxxxxx, sole and Mexico
October in the 301-303.
A certain tract of land described in a certain Lease Agreement dated September
15, 1980, by Xxxxxx X. Xxxxxx and Xxxxxxxxx X. Xxxxxx, his wife, as Lessor, to
Western New Mexico Telephone Company, C71S Lessee, and recorded on May 25, 1983
in tht- ()Fficnof- the Countv Clerk of Xxxxxx County, in the State of New
Mexico, in Volume 68 of Miscellaneous Records at pages 675-682.
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A certain tract of land described in a certain Statutory Warranty Deed dated
August 14, 1980, by Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx, husband and wife,
as Grantors, to Western New Mexico Telephone Company, Inc. as Grantee, and
recorded on August 18, 1980, in the office of the County Clerk of Grant County,
in the State of New Mexico, in Book 215 of Deeds at page 44.
A certain tract of land described in a certain Statutory Warranty Deed dated
September 11, 1981, by Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx, husband and
wife, as Grantors, to Western New Mexico Telephone Company, as Grantee, and
recorded on September 16, 1981, in the office of the County Clerk of Grant
County, in the State of New Mexico, in Book 219 of Deeds at page 937.
A certain tract of land described in a certain Statutory Warranty Deed dated
March 18, 1982, by Xxxxxx X. XxXxxxxx and Xxxxx XxXxxxxx, his wife, as Grantor,
to Western New Mexico Telephone Company, Inc. as Grantee, and recorded on March
25, 1982, in the office of the County Clerk of Grant County, in the State of New
Mexico, in Book 223 of Deeds at page 752.
A certain tract of land described in a certain Statutory Warranty Deed dated
April 14, 1982, by Xxx X. Xxxxxxxxxx and Xxxxxxxx Xxxxxxxxxx, husband and wife,
as Grantor, to Western New Mexico Telephone Company, Inc. as Grantee, and
recorded on May 21, 1982, in the office of the County Clerk of Grant County, in
the State of New Mexico, in Book 223 of Deeds at page 1011.
A certain tract of land described in a certain Statutory Warranty Deed dated
November 11, 1983, by the Xxxxxxx Revocable Trust, Xxxxx Xxxxxx Xxxxxxx,
Trustee, as Grantor, to Western New Mexico Telephone Company, Inc. as Grantee,
and recorded on November 22, 1983, in the office of the County Clerk of Grant
County, in the State of New Mexico, in Book 226 of Deeds at pages 2224-25.
A certain tract of land described in a certain Statutory Warranty Deed dated
February 8, 1984, by Xxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx, husband and wife, as
Grantor, to Western New Mexico Telephone Company, Inc. as Grantee, and recorded
on February 8, 1984, in the office of the County Clerk of Grant County, in the
State of New Mexico, in Book 226 of Deeds at page 2528.
A certain tract of land described in a certain Statutory Warranty Deed dated
April, 19, 1984, by Xxxxxx X. XxXxxxxx and Xxxxx XxXxxxxx, his wife, as Grantor,
to Western New Mexico Telephone Company, Inc. as Grantee, and recorded on April
27, 1984, in the office of the County Clerk of Grant County, in the State of New
Mexico, in Book 226 of Deeds at page 2814.
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A certain tract of land described in a certain Statutory Warranty Deed dated
January 21, 1985, by Xxxxx 0. Xxxxxx and Xxxxxx Xxxxxx, Co-Personal
Representatives of the Estate of Xxxx Xxxxxx Xxxxxx, as Grantors to Western New
Mexico Telephone Company, Inc. as Grantee, and recorded on January 21, 1985, in
the office of the County Clerk of Grant County, in the State of New Mexico, in
Book 226 of Deeds at pages 3788-90.
Except for A certain tract of land described in a certain Statutory Warranty
Deed dated November 14, 1991, by Western New Mexico Telephone Company, Inc. as
Grantor to Tris Germain, as Grantee, and recorded on November 14, 1991, in the
office of the County Clerk of Grant County, in the State of New Mexico, in Book
226 of Deeds at pages 6452-3.
A certain tract of land described in a certain Statutory Warranty Deed dated
March 14, 1985, by Xxxxxxx X. Xxxxxx, Xx. and Xxxx Xxxx Xxxxxx, as Grantors, to
Western New Mexico Telephone Company, Inc., as Grantee, and recorded in on March
18, 1985, in the office of the County Clerk of Grant County, in the State of New
Mexico, in Book 226 of Deeds at page 4006.
A certain tract of land described in a certain Lease Agreement dated December,
1982 by Xxxxx Xxxxxxx, Jr. and Xxx Xxxxxxx, his wife, as Lessor, to Western New
Mexico Telephone Company, Inc. as Lessee, and recorded on May 17, 1983 in the
office of the County Clerk of Grant County, in the State of New Mexico, in Book
227 of Miscellaneous Records at pages 2059-67, and amended on June 7, 1984, and
recorded on June 8, 1984, in the office of the County Clerk of Grant kCounty, in
the State of New Mexico, in Book 227 of Miscellaneous Records at pages 4567-68.
A certain tract of land described in a certain Lease Agreement dated January 1,
1984 by Chino Mines Company, A General Partnership, as Lessor, to Western New
Mexico Telephone Company, as Lessee, and recorded on June 1, 1984 in the office
of the County Clerk of Grant County, in the State of New Mexico, in Book 227 of
Miscellaneous Records at pages 4514-22A, and Amended on the 13th day of March,
1985 and recorded on March 18, 1985, in the office of the County Clerk of Grant
County, in the State of New Mexico, in Book 227 of Miscellaneous Records at
pages 6400-401.
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A certain tract of land described in a certain Warranty Deed dated November 7,
1983, by The Mountain States Telephone and Telegraph Company, a Colorado
corporation, as Grantor, to Western New Mexico Telephone Company, Inc. as
Grantee, and recorded on November 21, 1983, in the office of the Hidlago County
Clerk, in the State of New Mexico, in Book 24 of Deeds at page 115.
A certain tract of land described in a certain Statutory Warranty Deed dated
March 8, 1987, by S. H. Strange and Alameda Strange, husband and wife, as
Grantors, to Western New Mexico Telephone Company, Inc. as Grantee, and recorded
on March 17, 1987, in the office of the Hidlago County Clerk, in the State of
New Mexico, in Book 25 of Deeds at page 629.
A certain tract of land described in a certain Statutory Warranty Deed dated
February 28, 1980, by Xxxxxx X. Xxxxxxx, Xx. and Xxxx X. Xxxxxxx, his wife, as
Grantors, to Western New Mexico Telephone Company, Inc. as Grantee, and recorded
on March 14, 1980, in the office of the Xxxxxxx County Clerk, in the State of
New Mexico, in Volume 355 of Deeds at page 940.
A certain tract of land described in a certain Warranty Deed dated May 2, 1980,
by The Mountain States Telephone and Telegraph Company, a Colorado corporation,
as Grantor, to Western New Mexico Telephone Company, Inc. as Grantee, and
recorded on July 24, 1980, in the office of the Xxxxxxx County Clerk, in the
State of New Mexico, in Volume 359 of Deeds at page 458.
TOGETHER WITH all plants, works, structures, erections, reservoirs, dams,
buildings, fixtures and improvements now or hereafter located on any of the
properties conveyed by any and all of the aforesaid deeds mentioned above and
all tenements, hereditaments and appurtenances now or hereafter thereunto
belonging or in anywise appertaining.
The description of the property conveyed by and through the provisions of the
aforesaid deed is by reference made a part hereof as though fully set forth at
length herein.
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II
All right, title and Interest of the Mortgagor in, to and under any and all
grants, privileges, rights of way and easements now owned, held, leased, enjoyed
or exercised, or which may hereafter be owned, held, leased. acquired, enjoyed
or exercised. by the Mortgagor for the purposes of, or in connection with, the
construction or operation by or on behalf of the Mortgagor of telephone
properties, facilities, systems or businesses. whether underground or overhead
or otherwise, wherever located;
III
All right, title and interest of the Mortgagor In, to and
under any and all licenses, franchises, ordinances, privileges and permits
heretofore granted, Issued or executed, or which may hereafter be granted,
issued or executed, to it or to Its assignors by the United States of America,
or by any state, or by any county, township, municipality, village or other
political subdivision thereof, or by any agency, board, commission or department
of any of the foregoing. authorizing the construction, acquisition, or operation
of telephone properties. facilities, systems or businesses, Insofar as the same
may by law be assigned, granted, bargained, sold, conveyed, transferred.
mortgaged, or pledged;
IV
All right, title and interest of the Mortgagor in, to and
under any and all contracts heretofore or hereafter executed by and between the
Mortgagor and any person, firm. or corporation relating to the Mortgaged
Property together with any and all other accounts, chattel paper. contract
rights and general intangibles (as such terms are defined in the applicable
Uniform Commercial Code) and all stock, bonds, notes, debentures, commercial
paper, subordinated capital certificates, securities, obligations of or
beneficial interests or investments in any corporation, association,
partnership, joint venture, trust, Government or any agency or department
thereof, or any other entity of any kind, heretofore or hereafter acquired by
the Mortgagor;
V
Also, all right. title and Interest of the Mortgagor in and to
all other property, real or personal, tangible or intangible, of every kind,
nature and description, and wheresoever situated, now owned or leased or
hereafter acquired by the Mortgagor, it being the intention hereof that all such
property now owned or leased but not specifically described herein or acquired
or held by the Mortgagor after the date hereof shall be as fully embraced within
and subjected to the lien hereof as if the same were now owned by the Mortgagor
and were specifically described herein to the extent only, however, that the
subjection of such property to the lien hereof shall not be contrary to Jaw;
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Together with all rents, Income, revenues, profits and
benefits at any time derived, received or. had from any and all of the
above-described property of the Mortgagor.
Provided, however, that except as hereinafter provided in
Section 12(b) of Article II hereof. no automobiles, trucks. trailers, tractors
or other vehicles (including without limitation aircraft or ships, if any) owned
or used by the Mortgagor shall be included In the Mortgaged Property.
TO HAVE AND TO HOLD all -and singular the Mortgaged Property
unto the Mortgagee and its assigns forever, to secure equally and ratably the
payment of the principal of and interest on the notes, according to their tenor
and effect, without preference, priority or distinction as to interest or
principal (except as otherwise specifically provided herein) or as to lien or
otherwise of any note over any other note by reason of the priority in time of
the execution, delivery or maturity thereo or of the assignment or negotiation
thereof, or otherwise, and to secure the due performance of the covenants,
agreements and provisions herein and in the Consolidated Loan Agreement
contained, and for the uses and purposes and upon the terms, conditions,
provisos and agreements hereinafter expressed and declared.
ARTICLE I
ADDITIONAL NOTES
SECTION 1. The Mortgagor, when authorized by resolution or
resolutions of Its board of directors, may from time to time execute and deliver
to the Government one or more Additional Notes to evidence (1) loans made by the
Government to the Mortgagor pursuant to the Ao.t; (2) indebtedness of the
Mortgagor incurred by the assumption by the Mortgagor of the indebtedness of a
third party or parties to the Government created by a loan or loans theretofore
made by the Government to such third party or parties pursuant to the Act; or
(3) obligations of the Mortgagor to the Government on account of a guarantee or
guarantees made by the Government pursuant to the Act of the repayment of a loan
or loans made by a legally organized lending agency or agencies to the
Mortgagor. The Mortgagor, when authorized by resolution or resolutions of Its
board of directors. may also from time to time execute and deliver one or more
Additional Notes to refund any note or notes at the time outstanding and secured
hereby, or in renewal of, or in substitution for, any such outstanding note or
notes. Additional Notes shall contain such provisions and shall be executed and
delivered upon such terms and conditions as the board of directors of the
Mortgagor in the resolution or resolutions authorizing the execution and
delivery thereof and the Government shall prescribe; provided, however, that the
outstanding principal balances owing on the notes shall not at any one time
exceed the amount identified in the Instruments Recital as the Maximum Debt
Limit, and no note shall mature more than fifty (50) years after
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the date hereof. Additional Notes, including refunding, renewal and substitute
notes, when and as executed and delivered, shall be secured by this Mortgage,
equally and ratably with all other notes at the time outstanding. without
preference, priority, or distinction of any of the notes over any other of the
notes by reason of the priority of the time of the execution, delivery or
maturity thereof or of the assignment or negotiation thereof. As used In this
Mortgage, the term "directors" includes trustees
SECTION 2. The Mortgagor. when authorized by resolution or
resolutions of its board of directors, may from time to time execute,
acknowledge, deliver, record and file mortgages supplemental to this Mortgage
which thereafter shall form a part hereof, for the purpose of formally
confirming this Mortgage as security for the notes. Nothing herein contained
shall require the execution and delivery by the Mortgagor of a supplemental
mortgage in connection with the Issuance hereunder or the securing hereby of
notes except as hereinafter provided In Section 12 of Article II hereof.
ARTICLE II
PARTICULAR COVENANTS OF THE MORTGAGOR
The Mortgagor covenants with the Mortgagee and the holders of notes
secured hereby (hereinafter sometimes collectively called the "noteholders") and
each of them as follows:
SECTION 1. The Mortgagor is duly authorized under Its articles
of incorporation and by-laws and the laws of the State of Its incorporation and
all other applicable provisions of law to execute and deliver the Outstanding
Notes the Current Note and this Mortgage and to execute and deliver Additional
Notes; all corporate action on its part for the execution and delivery of the
Outstanding Notes, the Current Note and this Mortgage has been duly and
effectively taken; and the Outstanding Notes, the Current Note and this Mortgage
are the valid and enforceable obligations of the Mortgagor In accordance with
their respective terms.
SECTION 2. The Mortgagor warrants that it has good right and
lawful authority to mortgage the property described In the Granting Clause of
this Mortgage for the purposes herein expressed, and that the said property is
free and clear of any deed of trust, mortgage, lien, charge or encumbrance
thereon or affecting the title thereto, except (I) the lien of this Mortgage and
taxes or assessments not yet due; 00 deposits or pledges to secure payment of
workmen's compensation, unemployment insurance, old age pensions or other social
security; and (Ili) deposits or pledges to secure performance of bids, tenders,
contracts (other than contracts for the payment of borrowed money). leases,
public or statutory obligations, surety or appeal bonds, or other deposits
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or pledges for purposes of like general nature in the ordinary course of
business.
The Mortgagor-will. so long as any of the notes shall be
outstanding, maintain and preserve the lien of this Mortgage superior to all
other Dens affecting the Mortgaged Property, and will forever warrant and
defend-the title to the property described as being mortgaged hereby to the
Mortgagee against any and all claims and demands whatsoever.- The Mortgagor will
promptly pay or discharge any and all obligations for or on account of which any
such lien or charge might exist or could be created and any and all lawful
taxes, rates, levies, assessments, liens, claims or other charges imposed upon
or accruing upon any of the Mortgagor's property (whether taxed to the Mortgagor
or to any noteholder), or the franchises, earnings or business of the Mortgagor,
as and when the same shall become due and payable; and whenever called upon so
to do the Mortgagor will furnish to the Mortgagee or to any noteholder adequate
proof of such payment or discharge.
SECTION 3. The Mortgagor will duly and punctually pay the
principal of and Interest on the notes at the dates and places and In the manner
provided therein, according to the true intent and meaning thereof, and all
other sums becoming due hereunder.
SECTION 4. (a) The Mortgagor will at all times, so long as any
of the notes shall be outstanding, take or cause to be taken all such action as
from time to time may be necessary to preserve its corporate existence and to
preserve and renew all franchises, rights of way, easements, permits and
licenses now or hereafter to it granted or upon it conferred, and will comply
with all valid laws, ordinances, regulations and requirements applicable to It
or Its property. The Mortgagor will not, without the approval in writing of the
bolder or holders of not less than a majority in principal amount of the notes
at the time outstanding (hereinafter called the "majority noteholders"), take or
suffer to be taken any steps to reorganize, or to consolidate with or merge into
any other corporation, or to sell, lease or transfer (or make any agreement
therefor) the Mortgaged Property, or any part thereof.
(b) If this subsection is made applicable by the Instruments Recital. then
nothing herein contained shall prevent any such reorganization, consolidation or
merger provided that the lien and security of this Mortgage and the rights or
powers of the Mortgagee and the noteholders hereunder shall not thereby be
impaired or adversely affected, and provided that upon such reorganization.
consolidation or merger, the due and punctual payment of the principal of and
Interest on the notes according to their tenor and the due and punctual
performance of all covenants and conditions of this Mortgage shall be assumed by
the corporation formed by such reorganization, consolidation or merger, and the
lien of this Mortgage shall remain a superior lien upon the property owned by
the Mortgagor at the time of such reorganization. consolidation or merger and
upon any improvements or additions
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to such property, either prior to or subsequent to such reorganization.
consolidation or merger.
(c) The Mortgagor may, however, without
obtaining the approval of the holder or holders of any of the notes at the time
outstanding, at any time or from time to time so long as the Mortgagor is not In
default hereunder, sell or otherwise dispose of, free from the lien hereof, any
of Its property which is neither necessary to nor useful for the operation of
the Mortgagor's business, or which has become obsolete, worn out or damaged or
otherwise unsuitable for the purposes of-the Mortgagor; provided, however, that
the Mortgagor shall: (1) to the extent necessary. replace the same by, or
substitute therefor, other property of the same kind and nature, which shall be
subject to the lien hereof, free and clear of all prior liens, and apply any
proceeds derived from such sale or other disposition of such property and not
needed for the replacement thereof to the payment of the indebtedness evidenced
by the notes; or (2) immediately upon the receipt of the proceeds of any sale or
other disposition of said property. apply the entire amount of such proceeds to
the payment of the indebtedness evidenced by the notes-, or (3) deposit all or
such part of the proceeds derived from the sale or other disposition of said
property as the majority noteholders shall specify in such restricted bank
accounts as such holder or holders shall designate, and shall use the same only
for such additions to or improvements of the Mortgaged Property and on such
terms and conditions as such holder or holders shall specify.
SECTION 5. The Mortgagor will at all times maintain and
preserve the Mortgaged Property In good repair, working order and condition, and
will from time to time make all needful and proper repairs, renewals, and
replacements, and useful and proper alterations, additions, betterments and
Improvements, and will. subject to contingencies beyond Its reasonable control,
at all times keep its plant and properties in continuous operation- and use '
all reasonable diligence to furnish the subscribers served by it through the
Mortgaged Property with adequate telephone service.
SECTION 6. Except as specifically authorized in writing In
advance by the majority noteholders, the Mortgagor will purchase all materials,
equipment, supplies and replacements to be Incorporated in or used in connection
with the Mortgaged Property outright, and not subject to any conditional sales
agreement, chattel mortgage, bailment lease, or other agreement reserving to the
seller any right, title or lien.
SECTION 7. (a) The Mortgagor will take out, as the respective
risks are incurred, and maintain the following classes and amounts of insurance:
(1) fidelity bonds covering each offIcer and employee of the Mortgagor in not
less than the following amounts, based on the estimated annual gross revenues
(including gross toll collected) of the Mortgaged Property:
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From
Annual Gross Revenue
Less than $ 200,000
$200,001 to 400,000
400,001 to 600,000
600,001 to 800,000
800,001 to 1,000,000
over 1,000,000
Amount of Coverage $ 60,000
100,000
250,000
300,000
400,000
500,000
and each collection agent of the Mortgagor shall be included In such fidelity
bonds for not less than $2,500, or 10 percent of the highest amount collected
annually by any one collection agent, whichever is greater; (2) workmen's
compensation and employer's liability insurance covering all employees of the
Mortgagor. in such amounts as may be required by law, or if the Mortgagor or any
of Its employees are not subject to the workmen's compensation laws of the State
or States In which the Mortgagor conduct its operations, then its workmen's
compensation policy shall provide voluntary compensation, coverage to the same
extent as though the Mortgagor and such employees were subject to such laws; and
including occupational disease liability coverage, employer's liability
insurance, and "additional medical" coverage of not less than $10,000 In States
where full medical coverage is not required by law; (3) public liability and
property damage liability insurance, covering ownership liability, and all
operations of the Mortgagor, with limits for bodily injury or death of not less
than $1,000,000 aggregate for the policy period: (4) liability Insurance on all
motor vehicles, trailers, semitrailers, and aircraft used in the conduct of the
Mortgagor's business. whether owned, non-owned or hired by the Mortgagor, with
bodily injury limits of not less than $1,000,000 for one person and $1,000,000
for each accident, in connection with aircraft liability, also passenger bodily
Injury limits of $1.000,000 per person and $1,000,000 for each accident; (5)
comprehensive, or separate fire, theft and windstorm insurance covering loss of
or damage to all owned motor vehicles, trailers. and aircraft of the Mortgagor,
having a unit value in excess of $1,000, In an amount not less than the actual
cash value of the property insured-, and (6) fire and extended coverage
Insurance, designating the Government as mortgagee In the policy, on each
building, each building and Its contents. and materials, supplies, poles and
crossarms. owned by the Mortgagor, having a value at any one location in excess
of $5,000, or In excess of one percent of the total plant value, whichever is
larger, and In an amount not less than 80 percent of the current cost to replace
the property new. less actual depreciation.
The Mortgagor will also. from time to time, Increase or
supplement the classes and amounts of insurance specified above to the extent
requested by the Administrator or required to conform to the accepted practice
of the telephone industry for companies of the size and character of the
Mortgagor. The Mortgagor will, upon request of the majority noteholders, submit
to the noteholder or noteholders designated in such request a schedule of its
insuranc in effect on the date specified in such request. If the Mortgagor shall
at any time fail or refuse to take out or maintain insurance or to make changes
in
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respect thereof upon appropriate request by such noteholder or noteholders. such
noteholder or noteholders may take out such Insurance on behalf and in the name
of the Mortgagor, and the Mortgagor will pay the cost thereof.
(b) In the event of damage to or the
destruction or loss of any portion of the Mortgaged Property which shall be
covered by Insurance. unless the majority noteholders shall otherwise agree, the
Mortgagor shall replace or restore such damaged, destroyed or lost portion so
that the Mortgaged Property shall be in substantially the same condition as it
was in prior to such damage, destruction or loss, and shall deposit the proceeds
of the Insurance in the Special Construction Account required by the Telephone
Loan Contract to be applied for that purpose. The Mortgagor shall replace the
loss or shall commence such restoration promptly after such damage, destruction
or loss shall have occurred and shall complete such replacement or restoration
as expeditiously as practicable, and shall pay or cause to be paid out of the
proceeds of such insurance all costs and expenses in connection therewith so
that such replacement or restoration shall be so completed that the portion of
the Mortgaged Property so replaced or restored shall be free and clear of all
mechanics' liens and other claims.
(c) Sums recovered under any fidelity
bond by the Mortgagor for a loss of funds advanced under the notes or recovered
by a Mortgagee for any loss under such bond shall, unless otherwise directed by
the Mortgagee, be applied to the prepayment of the notes, p.Lq rata according to
the unpaid principal amounts thereof (such prepayments to be applied to such
installments thereof as may be designated by the respective noteholders at the
time of such prepayments) or to construct or acquire facilities approved by the
Mortgagee, which will become part of the Mortgaged Property.
(d) The foregoing insurance coverage
shall be obtained by means of bond and policy forms approved by regulatory
authorities, including standard REA endorsements and riders used by the
insurance industry to provide coverage for REA borrowers. Each policy or other
contract for such insurance shall contain an agreement by the Insurer that,
notwithstanding any right or cancellation reserved to such insurer. such policy
or contract shall continue in force for at least ten (10) days after written
notice to the Mortgagee of cancellation.
SECTION 8. In the event of the failure of the Mortgagor in any
respect to comply with the covenants and conditions herein contained with
respect to the procuring of insurance, the payment of taxes, assessments and
other charges, the keeping of the Mortgaged Property in repair and free of liens
and other claims or to comply with any other covenant contained in this
Mortgage, any noteholder or noteholders shall have the right (without prejudice
to any other rights arising by reason of such default) to advance or expend
moneys for the purpose of procuring such insurance, or for the payment of
Insurance premiums, taxes. assessments or other charges, or to save the
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Mortgaged Property from sale or forfeiture for any unpaid tax or assessment, or
otherwise. or to redeem the same from any tax or other sale, or to purchase any
tax title thereon, or to remove or purchase any mechanics' liens or other
encumbrance thereon, or to make repairs thereon or to comply with any other
covenant herein contained or to prosecute or defend any suit in relation to the
Mortgaged Property or In any manner to protect the Mortgaged Property and
thetitle thereto, and all sums so advanced for any of the aforesaid purposes
with interest thereon at the highest legal rate but not In excess of twelve per
centum (12%) per annum shall be deemed a charge upon the Mortgaged Property in
the same manner as the notes at the-time outstanding are secured and shall be
forthwith paid to the noteholder or noteholders making-such advance or advances
upon demand. It shall not be obligatory for any noteholder in making any such
advances or expenditures to inquire into the validity of any such tax title. or
of an of such taxes or assessments or sales therefor, or of any such mechanics'
liens or other encumbrance.
SECTION 9. The Mortgagor will not, without the approval in
writing of the majority noteholders: (a) enter into any contract or contracts
for the operation or, maintenance of all or any part of Its property, for the
use by others of any of the Mortgaged Property, or for toll traffic, operator
assistance, extended scope or switching services to be furnished by or for
connecting or other companies; provided, however, that such approval shall not
be required for any toll traffic or operator assistance contract which In form
and substance conforms with contracts in general use in the telephone industry-,
or (b) deposit any of Its funds, regardless of the source thereof, in any bank.
Institution or other depository which is not Insured by the Federal Government.
SECTION 10. (a) If this subsection is made applicable by the
Instruments Recital, the Mortgagor will not pay its directors or trustees, as
such, any salaries for their services, except such as shall have been approved
by the majority noteholders, provided that nothing herein contained shall
preclude any director or trustee from serving the Mortgagor in any other
capacity and receiving compensation therefor.
(b) Salaries, wages and other compensation
paid by the Mortgagor for services, and directors' or trustees' fees, shall be
reasonable and in conformity with the usual practice of corporations of the size
and nature of the Mortgagor. Except as specifically authorized in writing in
advance by the majority noteholders, the Mortgagor will make no advance payments
or loans, or In any manner extend its credit, either directly or indirectly,
with or without interest, to any of Its directors, trustees, officers,
employees, stockholders, members or affiliated companies, provided, however, the
Mortgagor may make an Investment for any purpose described in section 607(c)(2)
of the Rural Development Act of 1972 (including any investment In. or extension
of credit. guarantee or advance made to, an affiliated company of the Mortgagor
that is used by such company for such purpose) to the extent that, immediately
after such investment, (1) the aggregate of such Investments does not excee one
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third of the net worth (defined in Exhibit One) of the Mortgagor and (2) the
Mortgagor's net worth is at least twenty percent of its total assets (defined in
Exhibit One). As used in this section, the term "affiliated * companies" shall
have the meaning prescribed for this term by the Federal Communications
Commission in its prevailing uniform system of accounts for Class A telephone
companies.
SECTION 11. The Mortgagor will at all times keep, and safely
preserve,- proper books, records and accounts in which full and true entries
will be made of all of the dealings business and affairs of the Mortgagor, in
accordance with the methods and principles of accounting then prescribed by the
state regulatory body having jurisdiction over the Mortgagor, or In the absence
of such regulatory body or such prescription, by the Federal Communications
Commission in its uniform system of accounts for telecommunications companies,
as those methods and principles of accounting may be supplemented, from time to
time, by the Administrator. The Mortgagor will prepare and furnish each
noteholder not later than the thirtieth day of January in each year, or at such
more or less frequent Intervals when specified by the majority REA noteholders.
financial and statistical reports on its condition and operations. Such reports
shall be In such form and Include such Information as may be specified by the
majority REA noteholders. including without limitation an analysis of the
Mortgagor's revenues, expenses, and subscriber accounts. The Mortgagor will
cause to be prepared and furnished to each noteholder at least once during each
twelve (12)-month period during the term hereof, full and complete reports of
Its financial condition and cash flow as of a date (hereinafter called the
"Fiscal Date"), and a full and complete report of Its operations of the twelve
(12)month period ended on the Fiscal Date, all In form and substance
satisfactory to the majority REA noteholders, and will cause such reports to be
furnished to each noteholder within 120 days of the Fiscal Date, such reports
having been audited and certified by independent certified public accountants
satisfactory to said noteholders and accompanied by such reports of such audit
in form and substance satisfactory to said noteholders. The majority REA
noteholders. through Its or their representatives, shall at all times during
reasonable business hours have access to, and the right to inspect and make
copies of. any or all books, records and accounts, and any or all invoices,
contracts, leases, payrolls. canceled checks, statements and other documents and
papers of every kind belonging to or in possession of the Mortgagor and in
anywise pertaining to its property or business. The Mortgagor shall enter into
an audit agreement with an independent certified public accountant in form and
substance satisfactory to the majority REA noteholders.
SECTION 12. (a) The Mortgagor will from time to time upon
written demand of the majority noteholders make. execute, acknowledge and
deliver or cause to be made. executed, acknowledged and delivered all such
further and supplemental Indentures of mortgage, deeds of trust, mortgages,
financing statements, continuation statements, security agreements, instruments
and conveyances as may reasonably be requested by the majority noteholders
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and take or cause to be taken all such further action as may reasonably be
requested by the majority noteholders to effectuate the intention of these
presents and to provide for the securing and payment of the principal of and
interest on the notes according to the terms thereof and for the purpose of
fully conveying. transferring and confirming unto the Mortgagee the property
hereby conveyed, mortgaged and pledged. or intended so to be, whether now
owned-by the Mortgagor or hereafter acquired by it and t reflect the assignment
of the rights or Interests of the Mortgagee or of any noteholder hereunder or
under any note. The Mortgagor will cause this Mortgage and any and all
supplemental Indentures of mortgage, mortgages and deeds of trust and every
security agreement, financing statement, continuation statement and every
additional instrument which shall be executed pursuant to the foregoing
provisions forthwith upon execution to be recorded and filed and rerecorded .and
refiled as conveyances and mortgage and deeds of trust of and security interests
In real and personal property in such manner and in such places as may be
required by law or reasonably requested by the majority noteholders in order
fully to preserve the security for the notes and to perfect and maintain the
superior lien of this Mortgage and all supplemental Indentures of mortgage,
mortgages and deeds of trust and the rights and remedies of the Mortgagee and
the noteholders.
(b) In the event that the Mortgagor
has had or suffers a deficit in net income or net margins, as determined in
accordance with methods of accounting prescribed in Section 11 of Article II
hereof, for any of the five fiscal years immediately preceding the date hereof
or for any fiscal year while any of the notes are outstanding, the Mortgagor
will at any time or times upon written demand of the majority noteholders make,
execute, acknowledge and deliver or cause t be made, executed, acknowledged and
delivered all such further and supplemental Indentures of mortgage, mortgages,
security agreements, financing statements, Instruments and conveyances, and take
or cause to be taken all such further action, as may reasonably be requested by
the'majority noteholders in order to include in this Mortgage, as Mortgaged
Property, and to subject to all the terms and conditions of this Mortgage, all
right, title and Interest of the Mortgagor in and to, all and singular, the
automobiles, trucks, trailers, tractors, aircraft, ships and other vehicles then
owned by the Mortgagor. or which may thereafter be owned or acquired by the
Mortgagor. From and after the time of such written demand of the majority
noteholders such vehicles shall be deemed to be part of the Mortgaged Property
for all purposes hereof.
SECTION 13. Any noteholder may. at any time or times in
succession without notice to or the consent of the Mortgagor or any other
noteholder and upon such terms as such noteholder may prescribe, grant to any
person, firm or corporation who shall have become obligated to pay all or any
part of the principal of or interest on any note held by or indebtedness owed to
such noteholder or who may be affected by the lien hereby created, an extension
of the time for the payment of such principal or interest, and after
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any such extension the Mortgagor will remain liable for the payment of such note
or Indebtedness to the same extent as though it had at the time of such
extension consented thereto in writing.
SECTION 14. The Mortgagor, subject to applicable laws and
rules. and regulations and orders of regulatory bodies, will charge for
telephone service furnished by its rates which shall yield revenues at least
sufficient to enable the Mortgagor to pay and discharge all taxes and expenses
when due. and also to make any payment In respect of principal of and interest
on the notes when and as the same shall becorhe due. The Mortgagor will, not
less than ninety (90) days prior to the effective date of any proposed change in
its rate, F.Jve to the holder or holders of the notes at the time outstanding
written notice of such proposed change and a copy of a schedule showing the then
existing rates and the proposed changes therein.
SECTION 15. (a) Except as specifically authorized in writing
in advance by the majority noteholders, the Mortgagor will not declare or pay
any dividends on its capital stock. membership certificates or equity capital
certificates '(other than in shares of such capital stock or in such
certificates). or make any other distribution to its stockholders, members or
subscribers, or purchase, redeem or retire any of Its capital stock. membership
certificates or equity capital certificates, or make any investment in
affiliated companies (except as allowed by subsection (d) below), unless after
such action the Mortgagor's current assets (determined In accordance with
Exhibit One hereto) will equal or exceed Its current liabilities (determined in
accordance with Exhibit One hereto) (exclusive of current liabilities incurred
for additions to plant), and the Mortgagor's adjusted net worth (determined in
accordance with Exhibit One hereto) will be at least forty per centum (40%) of
its adjusted assets (determined in accordance with Exhibit One hereto), or the
sum of the following (whichever is the smaller amount):
(1) ten percentum (10%) of Its adjusted assets, plus
(2) thirty per centum (30%) of Its adjusted net worth, if any, in
excess of the amount represented by the percentage of
adjusted assets set out in the immediately preceding
subparagraph (1), plus
(3) thirty per centum (30%) of the amount of any reduction of Its
adjusted net worth after the date specified in the Instruments Recital,
resulting from the declaration or payment of dividends or
distributions, the purchase. redemption or retirement of its capital
stock, membership certificates or equity capital certificates or
investments In affiliated companies.
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adjusted net worth
(b) During such time or times as the Mortgagor's is less than ten
percentum (10%):
the Mortgagor will make no increase, without prior written approval of the
majority noteholders, in salaries, wages. fees and other compensation paid to
officers, directors, trustees, executives. or supervisors of the Mortgagor, or
to other employees having either a substantial ownership Interest In the
Mortgagor, or a close family relationship with officers, directors, trustees,
executives, supervisors, or holders of substantial ownership interests In the
Mortgagor, and
(2) the Mortgagor will promptly furnish the majority noteholders
with certified copies of the minutes of all meetings of its
stockholders, members, directors or trustees; and
(3) If the operation of the Mortgaged Property for the preceding
calendar year resulted in a decrease in the Mortgagor's retained
earnings (determined In accordance with Exhibit One hereto), the
Mortgagor shall upon the written direction of the majority noteholders,
take all required action to promptly (1) increase its charges for
telephone service or (2) execute a plan for reducing expenses, such
increase in charges and such plan to be submitted to all the
noteholders and to be acceptable to and approved in writing by the
majority noteholders.
(c) During such time or times as the
Mortgagor's adjusted net worth is less lian twenty per centum (20%) of Its
adjusted assets, the Mortgagor will promptly furnish the noteholders with a
detailed report on ownership or transfers of its capital stock, membership
certificates or equity capital certificates whenever requested in writing by the
majority noteholders, or whenever one per centum (1%) or more of its outstanding
ownership interests has been transferred since th last preceding report to such
noteholders on ownership interests or transfers.
(d) If the Mortgagor's net worth (defined In
Exhibit One hereto) is equal to at least 20 percent of its total assets (defined
In Exhibit One). then the term "Investment In affiliated companies" used In
subsection (a) of this section 15 shall not include investments by the Mortgagor
for any purpose described In section 607(c)(2) of the Rural Development Act of
1972 (including any investment in, or extension of credit, guarantee, or advance
made to an affiliated company o the Mortgagor that is used by such company for
such purpose) to the extent that. immediately after such investment. the
aggregate of such investments does not exceed one-third of the net worth of the
borrower.
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SECTION 16. In the event that the Mortgaged Property, or any
part thereof. shall be taken under the power of eminent domain, all proceeds and
avails therefrom, except to the extent that all noteholders shall consent to
other use and application thereof by the Mortgagor, shall forthwith be applied
by the Mortgagor: first, to the ratable payment of any indebtedness by this
Mortgage secured other than principal of or interest on the notes; second, to
the ratable payment of interest which shall have accrued on the notes and be
unpaid; third, to the ratable payment of or on account of the unpaid principal
of the notes: and fourth, the balance shall be paid to whosoever shall be
entitled thereto.
SECTION 17. The Mortgagor will well and truly observe and
perform 911 of the covenants, agreements, terms and conditions contained in. the
Consolidated Loan Agreement, on its part to be observed or performed.
SECTION 18. If this section is made applicable by the
Instruments Recital, then: (a) The Mortgagor will not at any time employ, or
enter into any contract for the employment of. any manager of its telephone
properties, unless such employment or such contract shall first have been
approved by the majority noteholders. (b) If. during such periods as the
Mortgagor shall be in default In the making of a payment or payments of
principal of or interest on one or more of the notes, the majority noteholders
shall give notice to the Mortgagor that In their opinion Its telephone
properties are not being efficiently operated, and shall request the termination
of the employment of any such manager, or shall request the termination of any
operating contract In respect of any such telephone properties, the Mortgagor
will terminate such employment or operating contract within thirty (30) days
after the date of such notice. (c) All contracts In respect of the employment of
any such manager or for the operation of such telephone properties shall contain
provisions to permit compliance with the foregoing covenants.
SECTION' 19. At all times when any note Is held by the
Government, or in the event the Government shall assign a note without having
Insured the payment of such note, this Mortgage shall secure payment of such
note for the benefit of the Government or such uninsured holder thereof, as the
case may be. Whenever any note may be sold to an Insured purchaser, it shall
continue to be considered a "note" as defined herein, but as to any such insured
note, the Government, and not such insured purchaser, shall be considered to be,
and shall have the rights of, the noteholder for purposes of this Mortgage.
Notice of the rights of the Government under the preceding sentence shall be set
forth in all such Insured notes. As to any note which may evidence the
obligations of the Mortgagor to the Government on account of a guarantee or
guarantees made by the Government pursuant to the Act of the repayment of a loan
or loans made by a legally organized lending agency or agencies to the
Mortgagor, the Government, and not such legally organized lending agency or
agencies, shall be considered to be, and shall have the rights of, the
noteholder for purposes of this Mortgage
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SECTION 20. (a) The Mortgagor, subject to applicable laws and
rules and orders of regulatory bodies, shall design its rates for telephone
service and other services furnished by it with a view to paying and discharging
ail taxes, maintenance expenses and operating expenses of its telephone system.
and also to making all payments in respect of principal of and interest on the
notes when and as the same shall become due, to providing and maintaining
reasonable working capital for the Mortgagor and to maintaining an Average TIER
on all of the outstanding indebtedness to the Government and all other lenders
of not less than 1.00 during the Forecast Period described in the Instruments
Recital and the TIER specified in the Instruments Recital after the Forecast
Period.
(b) For purposes of this section 20
Average TIER shall be determined as of January 1 of each year during which any
obligation secured by the Mortgage remains unsatisfied and shall mean the
average of the two highest TIER ratios achieved by the Mortgagor during each of
the three calendar years last preceding the various dates of its determination.
Mortgage.
(c) As used in this section 20,
TIER means the Mortgagor's net income or net margins (determined in accordance
with Exhibit One hereto) plus Interest expenses (determined in accordance with
Exhibit One hereto) divided by Interest expense.
SECTION 21. (a) Current assets, current liabilities, net
worth, adjusted net worth, adjusted assets, retained earnings, net income or net
margins, interest expense, taxes, and total assets, as used in sections 10, 15
or 20 of Article II of this Mortgage, are determined in accordance with Exhibit
One of this Mortgage. Net plant and secured debt, if referred to in this
Mortgage, are also determined in accordance with Exhibit One.
(b) Accounting terms used in this
Mortgage shall also apply to accounts or groups of accounts of the Mortgagor,
regardless of the account title or the system of accounts used, if such accounts
have substantially the same meaning as those prescribed by the Federal
Communications Commission in its prevailing uniform system of accounts for
telecommunications companies (47 CFR Part 32).
SECTION 22. Exhibit One, attached hereto, is made a part of this
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ARTICLE III
REMEDIES OF THE MORTGAGEE AND NOTEHOLDERS
SECTION 1. If one or more of the following events (hereinafter
called "events of default") shall happen, that is to say:
(a) default shall be made in the payment of any installment of or on
account of Interest on or principal of any note or notes when and as the same
shall be required to be made and such default shall continue for thirty (30)
days;
(b) default shall be made in the due observance or performance of any
other of the representations, warranties, covenants, conditions or agreements on
the part of the Mortgagor in any of the notes or in this Mortgage or in the
Consolidated Loan Agreement contained; and such default shall continue for a
period of thirty (30) days after written notice specifying such default and
requiring the same to be remedied shall have been given to the Mortgagor by any
noteholder;
(c) the Mortgagor shall file a petition in bankruptcy or be adjudicated
a bankrupt or Insolvent, or shall make an assignment for the benefit of Its
creditors, or shall consent to the appointment of a receiver of itself or of Its
property, or shall Institute proceedings for its reorganization or proceedings
instituted by others for its reorganization shall not be dismissed within thirty
(30) days after the institution thereof;
(d) a receiver or liquidator of the Mortgagor or of any substantial
portion of Its property shall be appointed and the order appointing such
receiver or liquidator shall not be vacated within thirty (30) days after the
entry thereof;
(e) the Mortgagor shall forfeit or otherwise be deprived of its
corporate charter or franchises, permits or licenses required to carry on any
material portion of its business;
(f) a final judgment shall be entered against the Mortgagor and shall
remain unsatisfied or without a stay in respect thereof for a period of thirty
(30) days; or
then in each and every such case any noteholder may, by notice in writing to the
Mortgagor and delivery of a copy thereof to the other noteholders, declare all
unpaid principal of and accrued Interest on any or all notes held by such
noteholder to be due and payable immediately; and upon any such declaration all
such unpaid principal and accrued interest so declared to be due and payable
shall become and be due and payable. immediately, anything contained
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herein or In any note or notes to be the contrary notwithstanding; provided.
however, that if at any time after the unpaid principal of and accrued interest
on any of the notes shall have been so declared to be due and payable, all
payments in respect of principal and interest which shall have become due and
payable by the terms of such note or notes shall be paid to the respective
noteholders, and all other defaults hereunder and under the notes shall have
been made good or secured to the satisfaction of all of the noteholders, then
and In every such case, the noteholder or noteholders who shall have declared
the principal of and Interest on notes held by such noteholder or noteholders to
be due and payable may, by written-notice to the Mortgagor and delivery of a
copy thereof to the other noteholders, annul such declaration or declarations
and waive such default or defaults and the consequences thereof, but no such
waiver shall extend to or affect any subsequent default or impair any right
.consequent thereon.
SECTION 2. If one or more of the events of default shall
happen. the majority noteholders, for itself or themselves, and as the agent or
agents of the other noteholders, personally or by attorney, In its or their
discretion, may, insofar as not prohibited by law:
(a) take immediate possession of the Mortgaged Property, collect and
receive all credits, outstanding accounts and bills receivable of the Mortgagor
and all rents, Income, revenues and profits pertaining to or arising from the
Mortgaged Property, or any part thereof, and issue binding receipts therefor;
and manage, control and operate the Mortgaged Property as fully as the Mortgagor
might -do if in possession thereof, including, without limitation, the making of
all repairs or replacements deemed necessary or advisable;
(b) proceed to protect and enforce the rights of the Mortgagee and the
rights of the noteholder or noteholders under this Mortgage by suits or actions
in equity or at law in any court or courts of competent jurisdiction. whether
for specific performance of any covenant or any agreement contained herein or In
aid of the execution of any power herein granted or for the foreclosure hereof
or hereunder or for the sale of the Mortgaged Property, or any part thereof, or
to collect the debts hereby secured or for the enforcement of such other or
additional appropriate legal or equitable remedies as may be deemed most
effectual to protect and enforce the rights and remedies herein granted or
conferred, and In the event of the Institution of any such action or suit the
noteholder or noteholders Instituting such action or suit shall have the right
to have appointed a receiver of the Mortgaged Property and of all rents, Income,
revenues and profits pertaining thereto or arising therefrom derived, received
or had from the time of the commencement of such suit or action. and such
receiver shall have ail the usual powers and duties of receivers, in like and
similar cases, to the fullest extent permitted by law, and if application shall
be made for the appointment of a receiver the Mortgagor
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hereby expressly consents that the court to which such application shall be made
may make said appointment; and
(c) sell or cause to be sold all-and singular the Mortgaged Property or
any part thereof, and all right, title. interest-cialm and demand of the
Mortgagor therein or thereto, at public auction at such place in any county in
which the property to be sold, or any part thereof is located, at such time and
upon such terms as may be specified in a notice of sale, which shall state the
time when and the place where the sale Is to be held. shall contain a brief
general description of the property to be sold, and shall be given by mailing a
copy thereof to the Mortgagor at least fifteen (15) days prior to the date fixed
for such sale and by publishing the same once in each week for two successive
calendar weeks prior to the date of such sale In a newspaper of general
circulation published in said county, or if no such newspaper is published in
such county, In a newspaper of general circulation in such county, the first
such publication to be not less than fifteen (15) days nor more than thirty (30)
days prior to the date fixed for such sale. Any sale to be made under this
subparagraph (c) of this section 2 may be adjourned from time to time by
announcement at the time and place appointed for such sale or for such adjourned
sale or sales, and without further notice or publication the sale may be had at
the time and place to which the same shall be adjourned, provided, however, that
in the event another or different notice of sale or another or different manner
of conducting the same shall be required by law the notice of sale shall be
given or the sale shall be conducted, as the case may be. in accordance with the
applicable provisions of law.
SECTION 3. If, within thirty (30) days after the majority
noteholders shall have had knowledge of the happening of an event or events of
default, such noteholder or noteholders shall not have proceeded to exercise the
rights or to enforce the remedies herein or by law conferred upon or reserved to
the Mortgagee or to the noteholders. then, and only then. any noteholder, for
itself and as the agent of the other noteholders, may proceed forthwith to
exercise such rights and to enforce such remedies. Nothing herein contained
shall, however, affect or impair the right, which is absolute and unconditional,
of any holder of any note which may be secured hereby to enforce the payment of
the principal of or interest on such note on the date or dates any such interest
or principal shall become due and payable in accordance with the terms of such
note.
SECTION 4. At any sale hereunder any noteholder or noteholders
shall have the right to bid for and purchase the Mortgaged Property, or such
part thereof as shall be offered for sale, and any noteholder or noteholders may
apply in settlement of the purchase price of the property so purchased the
portion of the net proceeds of such sale which would be applicable to the
payment on account of the principal of and Interest on the note or notes held
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by such noteholder or noteholders, and such amount so applied shall be credited
as a payment on account of principal of and interest on the note or notes held
by such noteholder or noteholders.
SECTION 5. Any proceeds or funds arising from the-exercise of
any rights or the enforcement of any remedies herein provided after the payment
or provision for the payment of any and all costs and expenses in connection
with the exercise of such rights or the enforcement of such remedies shall be
applied first, to the payment of Indebtedness hereby secured other than the
principal of or interest on the notes; second, to the ratable payment of
interest which shall have accrued on the notes and which shall be unpaid, third,
to the ratable payment of or.on account of the unpaid principal of the notes;
and the balance, if any, shall be paid to whosoever shall be entitled thereto.
SECTION 6. The Mortgagor covenants that it will give immediate
written notice to the Mortgagee and to all of the noteholders of the occurrence
of an event of default.
SECTION 7. Every right or remedy herein conferred upon or
reserved to the Mortgagee or to the noteholders shall be cumulative and shall be
in addition to every other right and remedy given hereunder or now or hereafter
existing at law, or in equity, or by statute. The pursuit of any right or remedy
shall not be construed as an election.
SECTION 8. The Mortgagor, for itself and all who may claim
through or under It, covenants that It will not at any time Insist upon or
plead, or in any manner whatever claim, or take the benefit or advantage of, any
appraisement, valuation, stay, extension or redemption laws now or hereafter in
force in any locality where any of the Mortgaged Property may be situated, In
order to prevent, delay or hinder the enforcement or foreclosure of this
Mortgage, or the absolute sale of the Mortgage Property, or any part thereof, or
the final and absolute putting into possession thereof, Immediately after such
sale, of the purchaser or purchasers thereat, and the Mortgagor, for Itself and
all who may claim through or under it, hereby waives the benefit of all such
laws unless such waiver shall be forbidden by law.
ARTICLE IV
POSSESSION UNTIL DEFAULT-DEFEASANCE CLAUSE
SECTION 1. Until some one or more of the events of default
shall have happened, the Mortgagor shall be suffered and permitted to retain
actual possession of the Mortgaged Property, and to manage, operate and use the
same and any part thereof, with the rights and franchises appertaining thereto,
and to collect, receive, take, use and enjoy the rents, revenues, issues,
earnings,
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income, products and profits thereof or therefrom, subject to the provisions of
this Mortgage.
SECTION 2. If the Mortgagor shall well and truly pay or cause
to be paid the whole amount of the principal of and interest on the notes at the
time and In the manner therein provided, according to the true intent and
meaning thereof, and shall also pay or cause to be paid all other sums payable
hereunder by the Mortgagor and shall well and truly keep and perform according
to the true intent and meaning of this Mortgage, all covenants herein required
to be kept and performed by it, then and In that case, all property, rights and
Interests hereby conveyed or assigned or pledged shall revert to the Mortgagor
and the estate, right, title and Interest of the Mortgagee and the noteholders
shall thereupon cease, determine and become void and the Mortgagee and the
noteholders, In such case, on written demand of tne Mortgagor but at the
Mortgagor's cost and expense, shall enter satisfaction of this Mortgage upon the
record. In any event, each noteholder, upon payment in full to him by the
Mortgagor of-all principal of and interest on any note held by him and the
payment and discharge by the Mortgagor of all charges due to such noteholder
hereunder, 'Shall execute and deliver to the Mortgagor such Instrument of
satisfaction, discharge or release as shall be required by law in the
circumstances.
ARTICLE V
MISCELLANEOUS
SECTION 1. It is hereby declared to be the intention of the Mortgagor that
all lines, or systems, embraced in the Mortgaged Property, Includinp, without
limitation, all rights of way and easements granted or given to the Mortgagor or
obtained by it to use real property in connection with the construction,
operation or maintenance of such lines, or systems, and all service and
connecting lines, poles, posts, crossarms, wires, cables, conduits, ducts.
connections and fixtures forming part of. or used In connection with, such
lines, or systems, and all other property physically attached to any of the f
oregoingdescribed property, shall be deemed to be real property.
SECTION 2. To the extent that any property described or referred to in this
Mortgage is governed by the provisions of the Uniform Commercial Code, this
Mortgage is hereby deemed a "security agreement" under the Uniform Commercial
Code, and this Mortgage is also hereby declared to be a "financing statement"
under the Uniform Commercial Code for said security agreement. The mailing
address of the Mortgagor as debtor and the Mortgagee as secured party are as set
forth in Section 6 of this Article V.
SECTION 3. All acts and obligations of the Mortgagor hereunder shall be
subject to all applicable orders, rules and regulations, now or hereafter
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in effect, of all regulatory bodies having jurisdiction in the premises, to the
end that no act or omission to act on the part of the Mortgagor shall constitute
a default hereunder insofar as such act or omission shall have been required by
reason of any order, rule or regulation of any such regulatory body.
SECTION 4. All of the covenants, stipulations, promises,
undertakings and agreements herein contained by or on behalf of the Mortgagor
shall bind its successors and assigns, whether so specified or not, and all
titles, rights and remedies hereby granted to or conferred upon the Mortgagee
shall pass to and Inure to the benefit of the successors and assigns of the
Mortgagee and shall be deemed to be granted or conferred for the ratable benefit
and security of all who shall from time to xxx be the holders of notes executed
and delivered as herein provided.
SECTION 5. The descriptive headings of the various articles of
this Mortgage were formulated and inserted for convenience only and shall not be
deemed to affect the meaning or construction of any of the provisions hereof.
SECTION 6. All demands, notices, reports, approvals,
designations, or directions required or permitted to be given hereunder shall be
in writing and shall be deemed to be properly given if mailed by registered mail
addressed to the proper party or parties at the following addresses:
As to the Mortgagor:
As to the Mortgagee:
Western New Mexico Telephone Company, Inc.
P. 0. Xxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Rural Electrification Administration
Washington, D. C. 20250-1500
and as to any other person, firm, corporation or governmental body or agency
having an interest herein by reason of being the holder of any note or
otherwise. at the last address designated by such person, firm, corporation,
governmental body or agency to the Mortgagor and the Mortgagee. The Mortgagor or
the Mortgagee may from time to time designate to one another a new address to
which demands, notices, reports, approvals, designations or directions may be
addressed and from and after any such designatio the address designated shall be
deemed to be the address of such party in lieu of the address hereinabove given.
The Mortgagor will promptly notify the Mortgagee in writing of any change in
location of its chief place of business or the office where its records
concerning accounts and contract rights are kept.
SECTION 7. The invalidity of any one or more phrases, clauses,
sentences, paragraphs or provisions shall not affect the remaining portions of
this Mortgage, nor shall any such invalidity as to any holder of notes hereunder
affect the rights hereunder of any other holder of notes.
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(Seal)
Attest:
Secretary
Executed by the Mortgagor in the presence of:
Witnesses
Executed by the Mortgagee in the presence of:
Witnesses
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SECTION 8. This Mortgage may be simultaneously executed in any
number of counterparts, and all said counterparts executed and delivered, each
as an original, shall constitute but one and the same instrument.
IN WITNESS WHEREOF, WESTERN NEW MEXICO TELEPHONE COMPANY,
INC., as Mortgagor and debtor, has caused this Mortgage to be signed in its name
and its corporate seal to be hereunto affixed and attested by Its officers
thereunto duly authorized, and UNITED STATES OF AMERICA, as Mortgagee and
secured party, has caused this Mortgage to be duly executed in its behalf, all
as of the day and year first above written.
WESTERN NEW MEXICO TELEPHONE COMPANY,INC.
by
President
UNITED STATES
by
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Administrator of the
Electrification Administration
[GRAPHIC OMITTED]
STATE OF NEW MEXICO
COUNTY OF
Ss
The foregoing instrument was acknowledged before me this day of
19 , by , President of Western New Mexico
Telephone Company, Inc., a New Mexico corporation, on behalf of said
corporation.
Notary Public
(Notarial Seal)
My commission expires:
DISTRICT OF COLUMBIA
) SS
BEFORE ME, a Notary Public, in and for the District of Columbia,
appeared in person the within named JAM X. XXXX, XX. ,
Administrator
of the Rural Electrification Administration, United States of America, to me
personally known, and known to be the identical person who subscribed the
foregoing instrument in said capacity, and who, after being by me duly sworn,
stated that he is duly authorized to execute the foregoing instrument for and in
the name and behalf of the United States of America, and further stated and
acknowledged that he had executed the foregoing instrument as the free and
voluntary act and deed of the United States of America, for the consideration,
uses and purposes therein mentioned and set forth.
IN TESTIMONY WHEREOF hereunto set my hand and on
seal this day of 19 Notary
(Notarial Seal)
My commission expires:
