EXHIBIT 10.6
LOAN AGREEMENT
LOAN AGREEMENT, (this "Agreement") dated as of June 22, 2000 between
CAP ROCK ELECTRIC COOPERATIVE, INC. ("Borrower"), a corporation organized and
existing under the laws of the State of Texas and NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION ("CFC"), a cooperative association
incorporated under the laws of the District of Columbia.
RECITALS
WHEREAS, the Borrower has applied to CFC for a loan and agrees to
use the proceeds thereof for the purposes set forth in Schedule 1 hereto and
consistent with the Borrower's Articles of Incorporation, Bylaws and
applicable federal, state and local laws and regulations; and
WHEREAS, CFC has approved a loan to the Borrower in the aggregate
principal amount of the CFC Commitment, subject to the terms and conditions
stated herein; and
WHEREAS, the Borrower has agreed to execute one or more secured
promissory notes to evidence Borrower's indebtedness to CFC under this
Agreement;
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants hereinafter contained, the parties hereto agree and bind
themselves as follows:
ARTICLE I
DEFINITIONS
SECTION 1. Capitalized terms that are not defined herein shall have
the meanings as set forth in the Mortgage.
"ACCOUNTING REQUIREMENTS" shall mean any system of accounts
prescribed by a federal regulatory authority having jurisdiction over the
Borrower or, in the absence thereof, the requirements of generally accepted
accounting principles applicable to businesses similar to that of the Borrower.
"ADVANCE" or "ADVANCES" shall mean one or more advances of funds by
CFC to Borrower under a Note and pursuant to the terms and conditions of this
Agreement.
"AMORTIZATION BASIS DATE" shall mean, with respect to an Advance
that Borrower elects to amortize, the date Borrower selects to begin
amortizing such Advance as stated on Schedule 1 hereto, or, if not stated on
Schedule 1, then such date as stated on the written funds requisition
submitted by Borrower to CFC pursuant to the terms hereof.
"BUSINESS DAY" shall mean any day that both CFC and the depository
it utilizes for funds transfers hereunder are open for business.
"CFC COMMITMENT" shall have the meaning as defined in Schedule 1.
C42 100% CFC Long Term Loan
Class A-Member - Distribution, Non-RUS Borrower
TX 107-A-9050 and TX 107-A-9051 (JJJ)
Rev. 11/99, 05/00
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"CFC FIXED RATE" shall mean the fixed rate as available for loans
similarly classified pursuant to CFC's policies and procedures in effect at
the time a conversion request is approved.
"CFC FIXED RATE TERM" shall mean the specific period of time that a
CFC Fixed Rate is in effect.
"CFC VARIABLE RATE" shall mean the rate established by CFC for
variable interest rate loans similarly classified pursuant to CFC's policies
and procedures in effect at the time a conversion request is approved.
"CONVERSION REQUEST" shall mean a request from any duly authorized
official of the Borrower, in form and substance satisfactory to CFC, that
requests an interest rate conversion.
"DEBT SERVICE COVERAGE RATIO ("DSC")" shall mean the ratio
determined as follows: for any calendar year add (i) Operating Margins, (ii)
Non-Operating Margins--Interest, (iii) Interest Expense, (iv) Depreciation
and Amortization Expense for such year, and (v) cash received in respect of
generation and transmission and other capital credits, and divide the sum so
obtained by the sum of all payments of Principal and Interest Expense during
such calendar year; PROVIDED, HOWEVER, that in the event that any Long-Term
Debt has been refinanced during such year the payments of Principal and
Interest required to be made during such year on account of such Long-Term
Debt shall be based (in lieu of actual payments required to be made on such
refinanced Long-Term Debt) upon the larger of (i) an annualization of the
payments required to be made with respect to the refinancing debt during the
portion of such year such refinancing debt is outstanding or (ii) the payment
of Principal and Interest Expense required to be made during the following
year on account of such refinancing debt.
"DEPRECIATION AND AMORTIZATION EXPENSE" shall mean an amount
constituting the depreciation and amortization of the Borrower computed
pursuant to Accounting Requirements.
"DISTRIBUTIONS" shall have the meaning defined in Section 5.H.
"EQUITY" shall mean the aggregate of Borrowers equities and margins
computed pursuant to Accounting Requirements.
"INTEREST EXPENSE" shall mean an amount constituting the interest
expense with respect to Total Long-Term Debt of the Borrower computed
pursuant to Accounting Requirements. In computing Interest Expense. there
shall be added, to the extent not otherwise included, an amount equal to
33-1/3% of the excess of Restricted Rentals paid by the Borrower over 20% of
the Borrower's Equity.
"LCTC" shall mean the Loan Capital Term Certificate as described in
Section 5.E. hereto.
"LONG-TERM DEBT" shall mean any amount included in Total Long-Term
Debt pursuant to Accounting Requirements.
"MATURITY DATE", with respect to each Note, shall mean the date set
forth therein, provided, however, that if such date is not a Payment Date,
then the Maturity Date shall be the Payment Date immediately preceding such
date.
"MORTGAGE" shall have the meaning as described in Schedule 1.
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"MORTGAGED PROPERTY" shall have the meaning as defined in the
Mortgage.
"NON-OPERATING MARGINS--INTEREST" shall mean the amount of
non-operating margins--interest of Borrower computed pursuant to Accounting
Requirements.
"NOTE" or "NOTES" shall mean one or more secured promissory notes
executed by Borrower pursuant to this Agreement.
"OPERATING MARGINS" shall mean the amount of patronage capital and
operating margins of the Borrower computed pursuant to Accounting
Requirements.
"PAYMENT DATE" shall mean the last day of each of the months
referred to in Schedule 1.
"PAYMENT NOTICE" shall mean a notice furnished by CFC to Borrower
that indicates the precise amount of each payment of principal and interest
and the total amount of each payment.
"PRINCIPAL" shall mean the amount of principal billed on account of
Total Long-Term Debt of the Borrower as computed for purposes of the
Accounting Requirements.
"RESTRICTED RENTALS" shall mean all rentals required to be paid
under finance leases and charged to income, exclusive of any amounts paid
under any such lease (whether or not designated therein as rental or
additional rental) for maintenance or repairs, insurance, taxes, assessments,
water rates or similar charges. For the purpose of this definition the term
"finance lease" shall mean any lease having a rental term (including the term
for which such lease may be renewed or extended at the option of the lessee)
in excess of three (3) years and covering property having an initial cost in
excess of $250,000 other than automobiles, trucks, trailers, other vehicles
(including without limitation aircraft and ships), office, garage and
warehouse space and office equipment (including without limitation computers).
"TERMINATION DATE" shall mean a date four (4) years after the date
hereof.
"TOTAL ASSETS" shall mean an amount constituting the total assets of
the Borrower computed pursuant to Accounting Requirements.
"TOTAL LONG-TERM DEBT" shall mean an amount constituting the
long-term debt of the Borrower computed pursuant to Accounting Requirements.
"TOTAL UTILITY PLANT" shall mean the amount constituting the total
utility plant of the Borrower computed pursuant to Accounting Requirements.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2. The Borrower represents and warrants that:
A. GOOD STANDING. The Borrower is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of its
incorporation, is duly qualified in those states in which it is required to
be qualified to conduct its business, and has corporate power to enter into
and perform this Agreement, to borrow hereunder and to give security as
provided for herein. The Borrower is a member in good standing of CFC.
B. AUTHORITY. The execution, delivery and performance by the
Borrower of this Agreement, each Note and the Mortgage, and the performance
of the transactions contemplated thereby, have been duly authorized by all
necessary corporate action and will not violate any provision of law or of
the Articles of Incorporation or Bylaws of the Borrower or result in a breach
of, or constitute a default under, any agreement, indenture or other
instrument to which the Borrower is a party or by which it may be bound.
C. LITIGATION. There are no suits or proceedings pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or
its properties which, if adversely determined, would have a material adverse
effect upon the financial condition or the business of the Borrower. The
Borrower is not, to its knowledge, in default with respect to any judgment,
order, rule or regulation of any court, governmental agency or other
instrumentality which would have a material adverse effect on the Borrower.
D. FINANCIAL STATEMENTS. The balance sheet of the Borrower as at the
date identified in Schedule 1, and the statement of operations of the
Borrower for the period ending on said date, heretofore furnished to CFC, are
complete and correct. Said balance sheet fairly presents the financial
condition of the Borrower as at said date and said statement of operations
fairly reflects its operations for the period ending on said date. The
Borrower has no contingent obligation or unusual forward or long-term
commitments except as specifically stated in said balance sheet or herein.
There has been no material adverse change in the financial condition or
operations of the Borrower from that set forth in said financial statements
except changes disclosed in writing to CFC prior to the date hereof.
E. LOCATION OF OFFICE. The principal place of business of the
Borrower and the office where its records concerning accounts and contract
rights are kept is identified in Schedule 1.
F. LOCATION OF PROPERTIES. All property owned by the Borrower is
located in the counties identified in Schedule 1.
G. NO OTHER LIENS. As to property which is presently included in the
description of Mortgaged Property (as that term is defined in the Mortgage),
the Borrower has not, without the prior written approval of CFC, signed any
security agreement or filed or permitted to be filed any financing statement
with respect to assets owned by it, other than security agreements and
financing statements running in favor of CFC or except as disclosed in
writing to CFC prior to the date hereof.
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H. REQUIRED APPROVALS. The Borrower has obtained all licenses,
consents and approvals of all governmental agencies or authorities that are
required to enable the Borrower to enter into this Agreement, any Note, or
the Mortgage, or to perform any of its obligations provided for in such
documents, including without limitation (and if applicable), any state public
utilities commission, any state public service commission, and the Federal
Energy Regulatory Commission.
I. SURVIVAL. All representations and warranties made by the
Borrower herein or made in any certificate delivered pursuant hereto shall
survive the making of the Advances and the execution and delivery to CFC of
each Note.
ARTICLE III
LOAN
SECTION 3.1. ADVANCES. CFC agrees to make, and the Borrower agrees
to request, on the terms and conditions of this Agreement, Advances from time
to time at the main office of CFC, or at such other place as may be mutually
agreed upon, in an aggregate principal amount not to exceed the CFC
Commitment.
On the Termination Date, CFC may stop advancing funds and limit the
CFC Commitment to the amount advanced prior to such date. The obligation of
the Borrower to repay the Advances shall be evidenced by one or more Notes.
The Borrower shall give CFC written notice of the date on which each Advance
is to be made.
SECTION 3.2. INTEREST RATE AND PAYMENT. Notes shall be payable and
bear interest as follows:
A. PAYMENTS; MATURITY; AMORTIZATION.
(a) Each Note shall have a Maturity Date that is not more than
thirty-five (35) years from the date hereof, PROVIDED, HOWEVER, that if such
date is not a Payment Date, then the Maturity Date shall be the Payment Date
immediately preceding such date.
(b) Prior to or at the time of each Advance on a Note, Borrower
shall elect an amortization method and Amortization Basis Date for principal,
or shall elect not to amortize principal for such Advance.
(i) AMORTIZING ADVANCES. Each Advance that the Borrower
elects to amortize shall amortize over a period not to exceed thirty-five
(35) years from the date of such Advance, provided; however, that such period
shall not extend beyond the Maturity Date. The Borrower, upon receipt of an
invoice relating to an Advance, shall promptly pay interest only on each
Payment Date until the first Payment Date of the first full quarter following
the Amortization Basis Date. Thereafter, quarterly or monthly installments,
as determined by CFC, of interest and/or principal in the amounts shown in
the Payment Notice, shall be paid on each Payment Date; except that if not
sooner paid, any amount due on account of the unpaid principal, interest
accrued thereon and fees, if any, shall be due and payable on the Maturity
Date. The amortization method for each Advance shall be as stated on Schedule
1 or, if not so stated, then as stated on the written requisition for such
Advance submitted by Borrower to CFC pursuant to the terms hereof.
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(ii) NON-AMORTIZING ADVANCES: Each Advance that the
Borrower elect& not to amortize shall be repaid within thirty-five (35) years
from the date of such Advance, or the Maturity Date, whichever is earlier. On
each Payment Date, Borrower shall promptly pay interest only until the final
Payment Date corresponding to the term of such Advance, or the Maturity Date
(whichever is applicable), upon which date all unpaid principal. interest
accrued thereon and fees, if any, shall be due and payable. If the term of a
non-amortizing Advance ends on a date that is not a Payment Date, then the
repayment of such Advance shall be due and payable on the Payment Date
immediately preceding such gate.
(c) CFC will furnish to the Borrower a Payment Notice at least ten
(10) days before each Payment Date, provided, however, that CFC's failure to
send a Payment Notice shall not constitute a waiver by CFC or be deemed to
relieve Borrower of its obligation to make payments as and when due as
provided for herein.
(d) No provision of this Agreement or the Notes shall require
payment, or permit the collection, of interest in excess of the Maximum
Lawful Rate. As used herein, "Maximum Lawful Rate" means the greater of (i)
the highest non-usurious rate permitted by applicable United States law, or
(ii) a rate per annum equal to the applicable weekly ceiling described in
Chapter 303 of the Texas Finance Code and Art. 5069-1 D.002 and Art. 5069-1
D.003 of the Texas Credit Title, as amended, as such weekly ceiling is in
effect from time to time. Unless precluded by law, changes in the Maximum
Lawful Rate created by statute or governmental action during the term of the
this Agreement and the Notes shall be immediately applicable to the Notes,
the Advances, this Agreement, and all other agreements between the Borrower
and CFC on the effective date of such changes.
All agreements and transactions between the Borrower and CFC,
whether now existing or hereafter arising, whether contained herein or in any
other instrument, and whether written or oral, are hereby expressly limited
so that in no contingency or event whatsoever, whether by reason of
acceleration of the term of any Advance or the maturity of any Note, late
payment, prepayment, or otherwise, shall the amount of interest contracted
for, charged or receive by CFC from the Borrower for the use, forbearance, or
detention of the principal indebtedness or interest hereof, which remains
unpaid from time to time, exceed the Maximum Lawful Rate, it particularly
being the intention of the parties hereto to conform strictly to the
applicable usury laws of the Xxxxx xx Xxxxx (xx xxxxxxxxxx Xxxxxx Xxxxxx law
to the extent that it permits the Borrower to contract for, charge or receive
a greater amount of interest than under Texas law). Any interest payable
hereunder or under any other instrument relating to the indebtedness
evidenced hereby that is in excess of the Maximum Lawful Rate shall, in the
event of acceleration of maturity, late payment, prepayment, or otherwise, be
applied to a reduction of the unrepaid indebtedness hereunder and not to the
payment of interest, or if such excessive interest exceeds the unpaid balance
of such unrepaid indebtedness, such excess shall be refunded to the Borrower.
To the extent not prohibited by applicable law, determination of the Maximum
Lawful Rate shall at all times be made by amortizing, prorating, allocating
and spreading in equal pads during the full term of this loan, all interest
at any time contracted for, charged or received from the Borrower in
connection with this loan, so that the actual rate of interest on account of
such indebtedness is uniform throughout the term of this Agreement, the
Notes, and all other agreements between the Borrower and CFC.
B. APPLICATION OF PAYMENTS. Each payment shall be applied first to
any charges other than interest or principal then due on the related Note,
second to interest accrued on the principal amount to the due date of such
payment on such Note (or, at the election of the holder of
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the Note, to the date of such payment if the same is not paid on its due
date), and the balance to the reduction of principal against the Note
according to an amortization schedule provided to Borrower by CFC.
C. ELECTION OF INTEREST RATE AND INTEREST RATE COMPUTATION. Prior
to each Advance on a Note, the Borrower must select in writing either a CFC
Fixed Rate or the CFC Variable Rate, as follows:
(a) CFC FIXED RATE. If the Borrower elects a CFC Fixed Rate for an
Advance, then such rate shall be in effect for the CFC Fixed Rate Term
selected by Borrower. CFC shall provide the Borrower with at least sixty (60)
days prior written notice of the date on which the CFC Fixed Rate is due to
reprice. Pursuant to CFC's policies of general application for repricing, the
Borrower may choose any of the interest rate options then available for
similarly classified borrowers repricing from a CFC Fixed Rate. If Borrower
does not select an interest rate in writing when a CFC Fixed Rate is subject
to repricing, then outstanding Advances shall reprice for the same CFC Fixed
Rate Term as in effect immediately prior to the repricing, and shall bear
interest at the then prevailing CFC Fixed Rate in effect for such term. CFC
agrees that its long-term loan policies will include a fixed interest rate
option until the Maturity Date. For any Advance, the Borrower may not select
a CFC Fixed Rate with a CFC Fixed Rate Term that extends beyond the Maturity
Date. Interest on amortizing Advances bearing interest at a CFC Fixed Rate
shall be computed for the actual number of days elapsed on the basis of a
year of 365 days, until the first day of the complete calendar quarter
following the Amortization Basis Date. Thereafter, interest shall be computed
on the basis of a 30-day month and 360-day year. Interest on non-amortizing
Advances bearing interest at a CFC Fixed Rate shall be computed for the
actual number of days elapsed on the basis of a year of 365 days.
(b) CFC VARIABLE RATE. If the Borrower elects the CFC Variable Rate
for an Advance, then such CFC Variable Rate shall apply until the Maturity
Date, unless the Borrower elects to convert to a CFC Fixed Rate pursuant to
the terms hereof. Interest on Advances bearing interest at the CFC Variable
Rate shall be computed for the actual number of days elapsed on the basis of
a year of 365 days.
SECTION 3.3. CONVERSION OF INTEREST RATES.
A. CFC VARIABLE RATE TO A CFC FIXED RATE. The Borrower may at any
time convert from the CFC Variable Rate to a CFC Fixed Rate by submitting to
CFC a Conversion Request requesting that a CFC Fixed Rate apply to any
outstanding Advance. The rate shall be equal to the rate of interest offered
by CFC in effect on the date of the Conversion Request. The effective date of
the new interest rate shall be a date determined by CFC pursuant to its
policies of general application following receipt of the Conversion Request.
B. CFC FIXED RATE TO CFC VARIABLE RATE. The Borrower may at any time
convert a CFC Fixed Rate to the CFC Variable Rate by: (i) submitting a
Conversion Request requesting that the CFC Variable Rate apply to any
outstanding Advance; and (ii) paying to CFC promptly upon receipt of an
invoice any applicable conversion fee calculated pursuant to CFC's long-term
loan policies as established from time to time for similarly classified
long-term loans. The effective date of the CFC Variable Rate shall be a date
determined by CFC pursuant to its policies of general application following
receipt of the Conversion Request.
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C. A CFC FIXED RATE TO ANOTHER CFC FIXED RATE. The Borrower may at
its option at any time convert from a CFC Fixed Rate to another CFC Fixed
Rate if the Borrower: (i) submits a Conversion Request requesting that a CFC
Fixed Rate apply to any outstanding loan balance on an Advance and (ii) pays
to CFC promptly upon receipt of an invoice any applicable conversion fee
calculated pursuant to CFC's long-term loan policies as established from time
to time for similarly classified long-term loans. The effective date of the
new interest rate shall be a date determined by CFC pursuant to its policies
of general application following receipt of the Conversion Request.
SECTION 3.4. PREPAYMENT. The Borrower may at any time, on not less
than thirty (30) days prior written notice to CFC, prepay any Advance, in
whole or in part, together with the interest accrued to the date of
prepayment and any prepayment premium prescribed by CFC pursuant to its
policies of general application in effect from time to time.
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4. The obligation of CFC to make any Advance hereunder is
subject to satisfaction of the following conditions:
A. LEGAL MATTERS. All legal matters incident to the consummation of
the transactions hereby contemplated shall be satisfactory to counsel for CFC
and, as to all matters of local law, to such local counsel as counsel for CFC
may retain.
B. DOCUMENTS. CFC shall have been furnished with executed copies,
satisfactory to CFC, of this Agreement, each Note and the Mortgage and
certified copies, satisfactory to CFC, of all such corporate documents and
proceedings of the Borrower authorizing the transactions hereby contemplated
as CFC shall require. CFC shall have received an opinion of counsel for the
Borrower addressing such legal matters as CFC shall reasonably require.
C. GOVERNMENT APPROVALS. The Borrower shall have furnished to CFC
true and correct copies of all certificates, authorizations and consents
necessary for the execution, delivery or performance by the Borrower of this
Agreement, each Note and the Mortgage.
D. REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in Article II shall (except as affected by the
transactions contemplated by this Agreement) De :rue on the date of the
making of each Advance hereunder with the same effect as though such
representations and warranties had been made on such date; no Event of
Default specified in Article VI and no event which, with the lapse of time or
the notice and lapse of time specified in Article VI would become such an
Event of Default, shall have occurred and be continuing or will have occurred
after giving effect to the Advance on the books of the Borrower; there shall
have occurred no material adverse change in the business or condition,
financial or otherwise, of the Borrower; and nothing shall have occurred
which in the opinion of CFC materially and adversely affects the Borrower's
ability to meet its obligations hereunder.
E. MORTGAGE FILING. The Mortgage (and any amendments, supplements or
restatements as CFC may require from time to time) shall have been duly
recorded as a mortgage on real property and duly filed, recorded or indexed
as a security interest in personal property wherever CFC shall have
requested, all in accordance with applicable law, and the
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Borrower shall have paid all applicable taxes, recording and filing fees and
caused satisfactory evidence thereof to be furnished to CFC.
F. REQUISITIONS. Borrower shall have requested the Advance in
writing by submitting its requisition to CFC in form and substance
satisfactory to CFC.
G. OTHER INFORMATION. Borrower shall have furnished such other
information as CFC may reasonably require, including but not limited to (a)
information regarding the specific purpose for an Advance and the use
thereof, and (b) feasibility studies, cash flow projections, financial
analyses and pro forma financial statements sufficient to demonstrate to
CFC's reasonable satisfaction that after giving effect to the Advance
requested, Borrower shall continue to achieve the DSC ratio set forth in
Section 5.B. herein, to meet all of its debt service obligations, and
otherwise to perform and to comply with all other covenants and conditions
set forth in this Agreement.
H. SPECIAL CONDITIONS. Borrower shall have complied with any
special conditions listed in Schedule 1.
ARTICLE V
COVENANTS
SECTION 5. After the date hereof and until payment in full of all
Notes and performance of all obligations of the Borrower hereunder:
A. MEMBERSHIP. Borrower agrees that it will remain a member in good
standing of CFC.
B. FINANCIAL RATIOS; DESIGN OF RATES. The Borrower, subject to
events in the judgment of CFC to be beyond the control of the Borrower, shall
so operate and manage its business as to achieve a DSC of not less than 1.35,
said DSC ratio being determined by averaging the two highest annual ratios
during the most recent three calendar years. The Borrower shall design its
rates so that such ratios will be achieved. The Borrower shall not decrease
its rates for electric service if it has failed to achieve a DSC of 1.35 for
the calendar year prior to such reduction subject only to an order from a
regulatory body properly exercising jurisdiction over the Borrower.
C. ANNUAL CERTIFICATES. A/thin one hundred twenty (120) days after
the close of each calendar year, commencing with the year in which the
initial Advance hereunder shall have been made, Borrower will deliver to CFC
a written statement, in form and substance satisfactory to CFC, signed by
Borrower's General Manager, stating that during such year, and that to the
best of said person's knowledge, the Borrower has fulfilled all of its
obligations under this Agreement, each Note, and the Mortgage throughout such
year or, if there has been a default in the fulfillment of any such
obligations, specifying each such default known to said person and the nature
and status thereof. Borrower shall deliver to CFC within one hundred twenty
(120) days of CFC's written request, which shall be no more frequently than
once every year, a certification, in form and substance satisfactory to CFC,
regarding the condition of the Mortgaged Property both in a form and prepared
by a professional engineer satisfactory to CFC. Borrower shall also deliver
to CFC such other information as CFC may reasonably request from time to time.
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D. NOTICE OF CHANGE IN PLACE OF BUSINESS. Borrower will notify CFC
promptly in writing of any change in location of its principal place of
business or the office where its records concerning accounts and contract
rights are kept.
E. LOAN CAPITAL TERM CERTIFICATE PURCHASE. Borrower will purchase an
LCTC, if required, in an amount calculated pursuant to CFC's policies of
general application. The purchase price of the LCTC, if any, shall be
calculated at the time of the initial Advance on a Note pursuant to CFC's
policies as established from time to time for ]i similarly classified. Such
purchase shall be paid for on a pro , basis with each Advance pursuant to
CFC's policies. CFC agrees to deliver the LCTC within ninety (90) days
following the date on which the LCTC has been paid for in full.
F. FINANCIAL BOOKS; FINANCIAL REPORTS; RIGHT OF INSPECTION. Borrower
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 Borrower, in accordance with generally accepted
accounting principles. The Borrower will prepare and furnish CFC within 45
days of the close of each fiscal quarter of the Borrower, financial and
statistical reports on its condition and operations for the previous fiscal
quarter. When requested by CFC, the Borrower will prepare and furnish CFC
from time to time, not later than the last day of each month, financial and
statistical reports on its condition and operations for the previous month.
All of such reports shall be in such form and include such information as may
be specified by CFC, including without limitation an analysis of Borrower's
revenues, expenses and consumer accounts. Within one hundred twenty (120)
days of the end of each calendar year during the term hereof, Borrower shall
furnish to CFC a full and complete report of its financial condition and
statement of its operations as of the end of such calendar year, in form and
substance satisfactory to CFC. ln addition, within one hundred twenty (120)
days of the end of each Borrower's fiscal years during the term hereof,
Borrower shall furnish to CFC a full and complete report of its financial
condition and statement of its operations as of the end of such fiscal year,
audited and certified by independent certified public accountants nationally
recognized or otherwise satisfactory to CFC and accompanied by a report of
such audit in form and substance satisfactory to CFC. CFC, through its
representatives, shall at all times during reasonable business hours and upon
prior notice 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 the possession of the Borrower or in anyway
pertaining to its property or business.
G. LIMITATIONS ON MERGERS AND SALE, LEASE OR TRANSFER OF CAPITAL
ASSETS; APPLICATION OF PROCEEDS. The Borrower may consolidate with, merge, or
sell all or substantially all of its business or assets, to another entity or
person provided such action is either approved, as is evidenced by the prior
written consent of CFC, or the purchaser, successor or resulting corporation
is or becomes a member in good standing of CFC and assumes the due and
punctual payment of the Notes and the due and punctual performance of the
cover ants contained in the Mortgage and this Agreement. Notwithstanding
anything in this Agreement to the contrary, in the event that Borrower does
not obtain the written consent of CFC prior to consolidating with, merging or
selling all or substantially all of its business assets to another entity or
person, then CFC may stop advancing funds and limit the CFC Commitment to the
amount advanced as of the effective date of such consolidation, merger or
sale. If no Event of Default (and no event which with notice or lapse of time
and notice would become an Event of Default) shall have occurred and be
continuing, Borrower may, without the prior written consent of CFC, sell,
lease or transfer any capital asset in exchange for fair market value
consideration paid to the Borrower if the value
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of such capital asset is less than five percent (5%) of Total Utility Plant
and the aggregate value of capital assets sold, leased or transferred in any
12-month period is less than ten percent (10%) of Total Utility Plant.
Subject to the terms of the Mortgage, if the Borrower does sell, lease or
transfer any capital assets, then the proceeds thereof (less ordinary and
reasonable expenses incident to such transaction) shall immediately (i) be
applied as a prepayment of the Notes, to such installments as may be
designated by CFC at the time of any such prepayment; (ii) in the case of
dispositions of equipment, material or scrap, be applied to the purchase of
other property useful in the Borrower's business, although not necessarily of
the same kind as the property disposed of, which shall forthwith become
subject to the lien of the Mortgage; or (iii) be applied to the acquisition
or construction of other property or in reimbursement of the costs of such
property.
H. LIMITATION ON DIVIDENDS, PATRONAGE REFUNDS AND OTHER
DISTRIBUTIONS.
(a) The Borrower may make Distributions in any calendar year if,
after giving effect to the Distribution, the total Equity of the Borrower
will be at least twenty percent (20%) of its Total Assets.
(b) If, after giving effect to the Distribution, the total Equity of
the Borrower will be less than twenty percent (20%) of its Total Assets, then
the Borrower may nevertheless make Distributions of up to thirty percent
(30%) of its total margins for the preceding calendar year.
(c) Notwithstanding anything to the contrary in subparagraphs (a)
and (b) above, the Borrower shall not make any Distribution without the prior
written consent of CFC if (i) a payment default or other Event of Default
under this Agreement has occurred and is continuing, or (ii) after giving
effect to the Distribution, the Borrower's total current and accrued assets
would be less than its total current and accrued liabilities, or (iii) such
Distribution would be in excess of the Distributions permitted by
subparagraphs (a) or (b), above.
(d) For purposes of this paragraph H., the term "Distribution" means
any dividend, patronage refund, patronage capital retirement or cash
distribution to its members, stockholders or consumers (including but not
limited to any general cancellation or abatement of charges for electric
energy or services furnished by the Borrower). The term "Distribution" shall
not include (i) a distribution by the Borrower to the estate of a deceased
patron, (ii) repayment by the Borrower of a membership fee upon termination
of a membership, or (iii) any rebate to a patron resulting from a cost
abatement received by the Borrower. such as a reduction of wholesale power
cost previously incurred.
I. LIMITATIONS ON LOANS, INVESTMENTS AND OTHER OBLIGATIONS.
(a) The Borrower shall not, without first obtaining the written
approval of CFC: (i) purchase or make any commitment to purchase any stock,
bonds, notes, debentures, or other securities or obligations of or beneficial
interests in, (ii) make any other investment in, (iii) make any loan to, or
(iv) guarantee, assume, or otherwise become liable for any obligation of any
corporation, association, partnership, joint venture, trust, government or
any agency or department thereof, or any other entity of any kind if the
aggregate amount of all such purchases, investments, loans and guarantees
exceeds the greater of fifteen percent (15%) of Total Utility Plant or fifty
percent (50%) of Equity.
11
(b) The following shall not be included in the limitation of
purchases, investments, loans and guarantees in (a) above: (i) bonds, notes,
debentures, stock, or other securities or obligations issued by or guaranteed
by the United States government or any agency or instrumentality thereof;
(ii) bonds, notes, debentures, stock, commercial paper, subordinated capital
certificates, or any other security or obligation of institutions whose
senior unsecured debt obligations are rated by at least two nationally
recognized rating organizations in either of their two highest categories;
(iii) investments incidental to loans made by CFC; and (iv) any deposit that
is fully insured by the Federal Government.
(c) In no event may the Borrower take any action pursuant to
subsection (a) when there is: (i) unpaid any due installment of principal
and/or interest on a Note; or (ii) Borrower has failed to meet the financial
ratio tests in Section 5.B. herein.
J. CHANGE OF NAME. Borrower will notify CFC promptly in writing of
any change to the name of the Borrower.
K. NOTICE OF ADDITIONAL SECURED DEBT. Borrower will notify CFC
promptly in writing if it incurs any additional secured indebtedness other
than indebtedness to CFC.
L. FUNDS REQUISITION; USE OF PROCEEDS. Borrower agrees (a) that CFC
may rely conclusively upon the interest rate option, interest rate term and
other written instructions submitted to CFC in Borrower's written request for
an Advance hereunder, (b) that such instructions shall constitute a covenant
under this Agreement to repay the Advance in accordance with such
instructions, the applicable Note, the Mortgage and this Agreement, (c) to
request Advances only for the purposes set forth herein, and (d) to use the
proceeds thereof only in accordance with the terms hereof.
M. SPECIAL AFFIRMATIVE COVENANTS. Borrower agrees to comply with any
special affirmative covenant(s) identified in Schedule 1.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6. The following shall be Events of Default under this
Agreement:
A. REPRESENTATIONS AND WARRANTIES. Any representation or warranty
made by the Borrower herein, in the Mortgage or in any certificate or
financial statement furnished to CFC hereunder which shall prove to be false
or misleading in any material respect;
B. PAYMENT. Borrower shall fail to pay any amount due under the
terms of a Note or this Agreement within five (5) Business Days of when the
same is be due and payable, whether by acceleration or otherwise;
C. OTHER COVENANTS. Default by the Borrower in the observance or
performance of any other covenant or agreement contained in this Loan
Agreement, in a Note or the Mortgage, which shall continue for thirty (30)
calendar days after written notice thereof shall have been given to the
Borrower by CFC;
12
D. CORPORATE EXISTENCE. The Borrower shall forfeit or otherwise be
deprived of its corporate charter, franchises, permits, easements, consents
or licenses required to carry on any material portion of its business;
E. OTHER OBLIGATIONS. Default by the Borrower in the payment of any
obligation, whether direct or contingent, for borrowed money or in the
performance or observance of the terms of any instrument pursuant to which
such obligation was created or securing such obligation;
F. BANKRUPTCY. The Borrower shall file a petition in bankruptcy or
be adjudicated 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 sixty (60) days after the institution thereof;
G. DISSOLUTION OR LIQUIDATION. Other than as provided in subsection
F. above, the dissolution or liquidation of the Borrower, or failure by the
Borrower promptly to forestall or remove any execution, garnishment or
attachment of such consequence as will impair its ability to continue its
business or fulfill its obligations and such execution, garnishment or
attachment shall not be vacated within sixty (60) days. The term "dissolution
or liquidation of the Borrower", as used in this subsection, shall not be
construed to include the cessation of the corporate existence of the Borrower
resulting either from a merger or consolidation of the Borrower into or with
another corporation following a transfer of all or substantially all its
assets as an entirety, under the conditions set forth in Section 5.G.
H. FINAL JUDGMENT. A final judgment in excess of $100,000 shall be
entered against the Borrower and shall remain unsatisfied or without a stay
for a period of sixty (60) days.
ARTICLE VII
REMEDIES
SECTION 7. If any of the Events of Default listed in Section 6
hereof shall occur after the date of this Agreement and shall not have been
remedied, then CFC may pursue all rights and remedies available to CFC that
are contemplated by this Agreement, the Mortgage or any of the Notes in the
manner, upon the conditions and with the effect provided in this Agreement,
the Mortgage or any of the Notes, including, but not limited to, a suit for
specific performance, injunctive relief or damages. Nothing herein shall
limit the right of CFC to pursue all rights and legal and equitable remedies
available to a creditor following the occurrence of an Event of Default
listed in Section 6 hereof. Each right, power and remedy of CFC shall be
cumulative and concurrent, and recourse to one or more rights or remedies
shall not constitute a waiver of any other right, power or remedy.
13
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. All notices, requests and other communications
provided for herein including, without limitation, any modifications of, or
waivers, requests or consents under, this Agreement shall be given or made in
writing (including, without limitation, by telecopy) and delivered or
telecopied to the intended recipient at the "Address for Notices" specified
below, or, as to any party, at such other address as shall be designated by
such party in a notice to each other party. Except as otherwise provided in
this Agreement, all such communications shall be deemed to have been duly
given when personally delivered or, in the case of a telecopied or mailed
notice, upon receipt, in each case given or addressed as provided for herein.
The Address for Notices of the respective parties are as follows:
National Rural Utilities Cooperative Finance Corporation
0000 Xxxxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Governor
Fax: (000) 000-0000
Borrower: the address set forth in Schedule 1
SECTION 8.2. EXPENSES. The Borrower will pay all costs and expenses
of CFC, including reasonable fees of counsel, incurred in connection with the
enforcement of this Agreement, the Note(s), the Mortgage and the other
instruments provided for herein or with the preparation for such enforcement
if CFC has reasonable grounds to believe that such enforcement may be
necessary.
SECTION 8.3. LATE PAYMENTS. If any amount due hereunder is not
received at CFC's office in Herndon, Virginia, or such other location as CFC
may designate by notice to the Borrower, within ten (10) Business Days after
the due date thereof, or such shorter or longer time period as CFC may
prescribe from time to time in its policies of general application in
connection with any late payment charge, and as permitted by the Texas Credit
Title (as amended and in effect from time to time) and other governing laws,
the Borrower will pay to CFC, in addition to all other amounts due under the
terms of a Note, the Mortgage and this Agreement, any late-payment charge as
may be fixed by CFC from time to time on the delinquent amount for
the-late-payment period.
SECTION 8.4. FILING FEES. To the extent permitted by law, the
Borrower agrees to pay all expenses of CFC (including the fees and expenses
of its counsel) in connection with the filing or recordation of the Mortgage,
all financing statements and instruments as may be required by CFC in
connection with this Agreement, including, without limitation, any
supplements, amendments or restatements thereto, all documentary stamps,
recordation and transfer taxes and other costs and taxes incident to
recordation of any document or instrument in connection herewith. Borrower
agrees to save harmless and indemnify CFC from and against any liability
resulting from the failure to pay any required documentary stamps,
recordation and transfer taxes, recording costs, or any other expenses
incurred by CFC in connection with this Agreement. The provisions of this
subsection shall survive the execution and delivery of this Agreement and the
payment of all other amounts due hereunder or due on a Note.
14
SECTION 8.5. NO WAIVER. No failure on the part of CFC to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver
thereof nor shall any single or partial exercise by CFC of any right
hereunder preclude any other or further exercise thereof or the exercise of
any other right.
SECTION 8.6. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL.
(a) THE PERFORMANCE AND CONSTRUCTION OF THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF VIRGINIA.
(b) BORROWER HEREBY SUBMIT(S) TO THE NONEXCLUSIVE JURISDICTION OF
THE UNITED STATES COURTS LOCATED IN VIRGINIA AND OF ANY STATE COURT SO
LOCATED FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. BORROWER IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE ESTABLISHING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE BORROWER AND CFC HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 8.7. HOLIDAY PAYMENTS. If any payment to be made by the
Borrower hereunder shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in computing any inte rest in respect of
such payment.
SECTION 8.8. MODIFICATIONS. No modification or waiver of any
provision of this Agreement or a Note, and no consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be
in writing by the party granting such modification, waiver or consent.
SECTION 8.9. MERGER AND INTEGRATION. This Agreement (including the
Recitals and all exhibits and schedules hereto), the instructions contained
in the written funds requisition statement with respect to each Advance, and
matters incorporated by reference herein together contain the entire
agreement of the parties hereto with respect to the matters covered and the
transactions contemplated hereby.
SECTION 8.10. HEADINGS. The headings and sub-headings contained in
the titling of this Agreement are intended to be used for convenience only
and do not constitute part of this Agreement.
SECTION 8.11. SEVERABILITY. If any term, provision or condition, or
any part thereof, of this Agreement, any Note or the Mortgage shall for any
reason be found or held invalid or
15
unenforceable by any governmental agency or court of competent jurisdiction,
such invalidity or unenforceability shall not affect the remainder of such
term, provision or condition nor any other term, provision or condition, and
this Agreement, any Note, and the Mortgage shall survive and be construed as
if such invalid or unenforceable term, provision or condition had not been
contained therein.
SECTION 8.12. RIGHT OF SETOFF. Upon the occurrence and during the
continuance of any Event of Default, CFC is hereby authorized at any time and
from time to time, without prior notice to the Borrower, to exercise rights
of setoff or recoupment and apply any and all amounts held, or hereafter
held, by CFC or owed to the Borrower or for the credit or account of the
Borrower against any and all of the obligations of the Borrower now or
hereafter existing hereunder or under any Note. CFC agrees to notify the
Borrower promptly after any such setoff or recoupment and the application
thereof, provided that the failure to give such notice shall not affect the
validity of such setoff, recoupment or application. The rights of CFC under
this section are in addition to any other rights and remedies (including
other rights of setoff or recoupment) which CFC may have. Borrower waives all
rights of setoff, deduction, recoupment or counterclaim.
SECTION 8.14. RESCISSION FEE. The Borrower may elect not to borrow
all or any portion of the CFC Commitment in which event CFC shall release the
Borrower from its obligations hereunder, provided the Borrower complies with
such terms and conditions as CFC may impose for such release including,
without limitation, payment of any rescission fee that CFC may from time to
time prescribe, pursuant to its policies of general application.
SECTION 8.15. PRIOR LOAN DOCUMENTS. It is understood and agreed that
with respect to all long-term loan agreements previously entered into by and
between CFC and Borrower and all promissory notes thereto secured under the
Mortgage (both hereinafter being referred to as "Prior Loan Documents") the
Borrower shall be required, after the date hereof, to meet reporting and
financial covenants as set forth in this Agreement rather than those set
forth in the Prior Loan Documents. ln the event of any conflict between any
reporting and financial covenant set forth in a Prior Loan Document and any
reporting and financial covenant in this Agreement, the requirements as set
forth in this Agreement shall apply. Nothing in this section shall, however,
eliminate or modify any special condition, special affirmative covenant or
special negative covenant, if any, unless specifically agreed to in writing
by CFC. Furthermore, the interest rate and amortization options available to
Borrower as set forth in this Agreement shall supersede the interest rate and
amortization options as set forth in any Prior Loan Documents. For purposes
of the foregoing, this Agreement shall be deemed to be an amendment to all
Prior Loan Documents.
SECTION 8.16. SCHEDULE 1. Schedule 1 attached hereto is an integral
part of this Agreement.
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
CAP ROCK ELECTRIC COOPERATIVE, INC.
(SEAL)
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Title: Vice President and Chief
Financial Officer
----------------------------
Attest: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Secretary
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
(SEAL)
By: /s/ ILLEGIBLE
-------------------------------
Assistant Secretary-Treasurer
Attest: /s/ Xxx Xxxxx
--------------------------------
Assistant Secretary-Treasurer
17
SCHEDULE 1
1. The aggregate CFC Commitment is $21,000.00.00. Within this aggregate
amount, Borrower may, at its discretion, execute one or more Notes,
each Note representing a separate loan with CFC and containing a face
amount and Maturity Date in accordance with the terms, conditions and
provisions of this Agreement.
2. The purpose of this loan is as follows:
(A). Loan Number TX 107-A-9050 shall be used for Borrower's electric
construction and plant additions.
(B). Loan Number TX 107-A-9051 shall be used to finance Borrower's
prepayment of RUS and CoBank, ACB debt pursuant to the merger of
XxXxxxxxx Electric Cooperative and Borrower effective as of January 1,
2000.
3. The Mortgage shall mean the Second Restated Mortgage and Security
Agreement dated as of October 24,1995 between the Borrower and CFC, as
it may have been or shall be supplemented, amended, consolidated, or
restated from time to time.
4. The Payment Date months are February, May, August and November.
5. The date of the Borrower's balance sheet referred to in Section 2.D. is
March 31,1999.
6. The principal place of business of the Borrower referred to in Section
2.E. and Section 8.1 is 000 Xxxx Xxxx, Xxxxx 000, Xxxxxxx, XX
00000-0000.
7. The property of the Borrower referred to in Section 2.F. is located in
the counties of Andrews, Borden, Collin, Dawson, Ector, Fannin,
Fisher, Glasscock, Howard, Hunt, Irion, Martin, Midland, Mitchell,
Nolan, Reagan, Scurry, Sterling, Xxx Xxxxx and Xxxxx.
8. The special condition(s) referred to in Section 4.H. is (are): None
9. The special affirmative covenant(s) referred to in Section 5.M. is
(are) as follows: None
10. The Borrower selects the following number of Loans, the amount of each
Loan, and the amortization method and/or Amortization Basis Date for
each Loan:
==============================================================================
LOAN NUMBER AMOUNT AMORTIZATION METHOD/BASIS DATE
------------------------------------------------------------------------------
TX 107-A-9050 $15,000,000.00 LEVEL DEBT SERVICE
------------------------------------------------------------------------------
TX 107-A-9051 $6,000,000.00 LEVEL DEBT SERVICE
==============================================================================
11. Notwithstanding Section 8.14 of this Agreement, CFC agrees that it
shall not impose a rescission fee on loan Number TX 107-A-9051 with
respect to any funds not required for prepayment of RUS and CoBank, ACB
debt.
18
SECURED PROMISSORY NOTE
$6,000,000.00 dated as of JUNE 22, 2000
CAP ROCK ELECTRIC COOPERATIVE, INC., a Texas corporation ("Borrower"), for
value received promises to pay, without setoff, deduction, recoupment or
counterclaim, to the order of NATIONAL RURAL UTILITIES COOPERATIVE FINANCE
CORPORATION ("Payee") at the Payee's main office or such other place as
designated by the Payee, in lawful money of the United States, the sum of the
aggregate unpaid principal amount of all Advances (as defined in the Loan
Agreement referred to herein) made by the Payee, pursuant to a Loan Agreement
dated as of even date herewith between the Borrower and the Payee, as may be
amended from time to time (the "Loan Agreement"), on the dates provided in
the Loan Agreement, provided; however, that if not sooner paid as provided in
the Loan Agreement, then any balance shall be due and payable on the date
that is thirty-five (35) years from the date hereof (such date being the
Maturity Date hereof), provided; however, that if such date is not a Payment
Date (as defined in the Loan Agreement), then the Maturity Date shall be the
Payment Date immediately preceding such date, with interest thereon in like
money from the respective dates of each Advance hereunder, at the rate or
rates and payable at the times provided in said Loan Agreement together with
any other amount payable under the Loan Agreement
This Note is secured under a Second Restated Mortgage and Security
Agreement dated as of October 24,1995 between the Borrower and the Payee, as
it may have been or shall be supplemented, amended, consolidated or restated
from time to time ("Mortgage"). This Note is one of the Notes referred to in,
and has been executed and delivered pursuant to, the Loan Agreement.
The principal hereof and interest accrued thereon and any other
amount due under the Loan Agreement may be declared to be forthwith due and
payable in the manner, upon the conditions, and with the effect provided in
the Mortgage or the Loan Agreement.
The Borrower waives demand, presentment for payment, notice of
dishonor, protest, notice of protest, and notice of non-payment of this Note.
IN WITNESS WHEREOF the Borrower has caused this Note to be signed in
its corporate name and its corporate seal to be hereunto affixed and to be
attested by its duly authorized officers, all as of the day and year first
above written.
CAP ROCK ELECTRIC COOPERATIVE, INC.
(SEAL)
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Title: Vice President and Chief
Financial Officer
----------------------------
Attest: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Secretary
Loan No. TX 107-A-9051
SECURED PROMISSORY NOTE
$15,000,000.00 dated as of JUNE 23, 2000
CAP ROCK ELECTRIC COOPERATIVE, INC., a Texas corporation ("Borrower"), for
value received promises to pay, without setoff, deduction, recoupment or
counterclaim, to the order of NATIONAL RURAL UTILITIES COOPERATIVE FINANCE
CORPORATION ("Payee") at the Payee's main office or such other place as
designated by the Payee, in lawful money of the United States, the sum of the
aggregate unpaid principal amount of all Advances (as defined in the Loan
Agreement referred to herein) made by the Payee, pursuant to a Loan Agreement
dated as of even date her&with between the Borrower and the Payee, as may be
amended from time to time (the "Loan Agreement"), on the dates provided in
the Loan Agreement, provided; however; that if not sooner paid as provided in
the Loan Agreement, then any balance shall be due and payable on the date
that is thirty-five (35) years from the date hereof (such date being the
Maturity Date hereof), provided, however; that if such date is not a Payment
Date (as defined in the Loan Agreement), then the Maturity Date shall be the
Payment Date immediately preceding such date, with interest thereon in like
money from the respective dates of each Advance hereunder, at the rate or
rates and payable at the times provided in said Loan Agreement together with
any other amount payable under the Loan Agreement.
This Note is secured under a Second Restated Mortgage and Security
Agreement dated as of October 24, 1995 between the Borrower and the Payee, as
it may have been or shall be supplemented, amended, consolidated or restated
from time to time ("Mortgage"). This Note is one of the Notes referred to in,
and has been executed and delivered pursuant to, the Loan Agreement.
The principal hereof and interest accrued thereon and any other
amount due under the Loan Agreement may be declared to be forthwith due and
payable in the manner, upon the conditions, and with the effect provided in
the Mortgage or the Loan Agreement.
The Borrower waives demand, presentment for payment, notice of
dishonor, protest, notice of protest, and notice of non-payment of this Note.
IN WITNESS WHEREOF the Borrower has caused this Note to be signed in
its corporate name and its corporate seal to be hereunto affixed and to be
attested by its duly authorized officers, all as of the day and year first
above written.
CAP ROCK ELECTRIC COOPERATIVE, INC.
(SEAL)
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Title: Vice President and Chief
Financial Officer
----------------------------
Attest: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Secretary
Loan No. TX 107-A-9050
