EXHIBIT 10.9
LOAN AGREEMENT
AGREEMENT, dated March 10, 1992, between CAP ROCK ELECTRIC
COOPERATIVE, INC. ("Borrower"), a corporation organized and existing under
the laws of the State of Texas (the "State") and NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION ("CFC"), a corporation organized and existing
under the laws of the District of Columbia.
RECITALS
WHEREAS, the Borrower has applied to CFC for a loan to finance on a
long-term basis the discounted prepayment of certain Lone Wolf Electric
Cooperative debt to the Rural Electrification Administration which has been
paid by Borrower using its line of credit with CFC ("Line of Credit"); and
WHEREAS, the Borrower wishes to pay back said Line of Credit with
funds advanced pursuant to this Agreement and CFC is willing to make such a
loan to the Borrower on the terms and conditions stated herein;
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
REPRESENTATIONS AND WARRANTIES
SECTION 1. The Borrower represents and warrants that:
A. GOOD STANDING. The Borrower is a corporation duly incorporated
and validly existing and in good corporate standing under the laws of the
State, is duly qualified in those states in which it is required to be
qualified to conduct its business and has corporate power to make and perform
this Agreement, to borrow hereunder and to give security as provided for
herein.
B. AUTHORITY. The execution, delivery and performance by the
Borrower of this Agreement, the Note (as hereinafter defined) and the
Mortgage (as defined In Schedule 1 hereto) 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 By-Laws 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
CFC Form C42 100% CFC Long-Term Loan
Class A Member - Distribution, Non-REA Borrower
Rev. 10/91
TX 107-A-9025 [STB 11/91]
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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 l hereto, 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.
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 l hereto.
F. LOCATION OF PROPERTIES. All property owned by the Borrower is
located in the counties identified in Schedule l hereto.
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, except as disclosed in writing
to CFC prior to the date hereof.
H. REQUIRED APPROVALS. No license, consent or approval of any
governmental agency or authority is required to enable the Borrower to enter
into this Agreement or to perform any of its obligations provided for herein
except as disclosed in Schedule l hereto.
I. SURVIVAL. All representations and warranties made by the Borrower
herein or made in any certificate delivered pursuant here to shall survive
the making of tone Advances (as hereinafter defined) and the execution and
delivery to CFC of Note.
ARTICLE II
LOAN
SECTION 2.1. ADVANCES. CFC agrees to make, and the Borrower agrees
to request, on the terms and conditions of this Agreement, Advances (herein
called "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, as defined in Schedule 1 hereto.
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Four years after the date hereof (the "Termination Date"), CFC may
stop advancing funds and limit the CFC Commitment to the amount advanced. The
obligation of the Borrower to repay the Advances shall be evidenced by a
promissory note of the Borrower (in the form of Exhibit A hereto and herein
called the "Note") in the principal amount of the unpaid principal amount of
the Advances from time to time outstanding. The Borrower shall give CFC
written notice of the date on which each Advance is to be made. Advances made
by CFC pursuant to this Agreement shall be endorsed by CFC on the reverse
side of the Note on or before any assignment or transfer thereof by CFC.
SECTION 2.2 INTEREST RATE AND PAYMENT. The Note shall be payable and
bear interest as follows. The Borrower, promptly upon receipt of an invoice,
shall pay interest only on the Advances on or before the last day of each of
the months referred to in Schedule l hereto (each such date being herein
called a "Payment Date") until the first Payment Date of the first full
quarter following the earlier of (a) the date two years from the date hereof
or (b) the date on which the CFC Commitment has been fully advanced (the
earlier of such dates being herein called the "Amortization Basis Date").
Thereafter, quarterly or monthly installments, as determined by CFC, of
principal and interest in the amounts shown in the Payment Notice (described
below), shall be paid on each Payment Date; except that if not sooner paid,
any balance of the principal amount and interest accrued thereon shall be due
and payable on the Maturity Date (as that term is defined in the Note). On or
after the Amortization Basis Date, and thereafter at least quarterly, CFC
will furnish to the Borrower a Payment Notice indicating the precise amount
of each payment of principal and interest, and the total amount of each such
payment. Such Payment Notice shall be sent to the Borrower at least ten (10)
days before the next ensuing Payment Date. Principal will be amortized in
accordance with the method stated in Schedule l hereto. CFC will use for the
purpose of calculating the amortization of principal of each Advance: (a) the
fixed interest rate in effect on the date of such Advance, if the Borrower
elected a fixed rate; or (b) the variable interest rate in effect on the
first day of the first quarter in which principal is due, if the Borrower
elected a variable rate.
Each payment shall be applied first to any charges then due, second
to interest accrued on the principal amount to the due date of such payment
(or, at the election of the holder of 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.
Prior to the first Advance of this loan. the Borrower must elect in
writing either a fixed interest rate or a variable interest rate. Interest
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, if the loan bears interest
at a fixed rate, interest shall be computed on the basis of a 360-day year.
If the loan bears interest at a variable rate, then interest shall be
computed for the actual number of days elapsed on the basis of a year of 365
days.
If the Borrower elects a fixed interest rate, the rate shall equal
the CFC long-term rate at the time of the each Advance for loans similarly
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classified pursuant to the long-term loan programs established by CFC from
time to time. Such rate shall apply until a date, determined by CFC,
approximately seven years after the first Advance (the "Adjustment Date"),
written notice of which shall be provided to the Borrower at least 90 days
prior to the Adjustment Date. After the Adjustment Date, the interest rate
shall be computed in like manner and fixed by CFC from time to time;
provided, however, that CFC will not change any such fixed interest rate
without giving the Borrower at least 60 days prior written notice (any such
90-day or 60-day notification period being herein called a "Notification
Period" and such period from January 1 to December 31 immediately following a
Notification Period being herein called a "Repricing Period").
If the Borrower elects a variable interest rate, the rate for each
month shall be equal to the rate established by CFC for such month for
variable interest rate long-term loans similarly classified pursuant to the
long-term loan programs established by CFC from time to time. Such variable
interest rate shall apply until the Maturity Date of the Note unless the
Borrower elects to convert to a fixed rate pursuant to the terms hereof.
The Borrower may, at any time, convert from a variable interest rate
to a converted fixed interest rate provided that the Borrower submits to CFC
a resolution of its Board of Directors requesting such conversion. The
converted fixed interest rate shall be equal to the rate of interest quoted
by CFC and communicated, or generally made known, to borrowers from CFC on
the date an authorized representative of the Borrower requests such
conversion. Such quoted rate shall remain available to the Borrower for 30
days; it being understood and agreed that the effective date of such quoted
rate as to all amounts outstanding on the Note shall be the day after the
Payment Date next following receipt by CFC of the resolution referred to in
the preceding sentence. Upon the election of the Borrower to convert to a
converted fixed rate, such rate shall remain in effect for seven years
beginning the January l next following the effective date of such converted
fixed interest rate. At the end of such time, the Borrower may elect either a
variable interest rate or a fixed interest rate pursuant to the long-term
loan policies then in effect and applicable to long-term loans similarly
classified. CFC agrees that its long-term loan policies will include a fixed
interest rate option until the Maturity Date.
The Borrower may at any time convert from a fixed interest rate to a
variable interest rate, if the borrower: (1) submits to CFC a resolution of
its Board of Directors requesting that the variable interest rate apply to
any outstanding loan balance and future Advances; and (ii) pays to CFC,
promptly upon receipt of an invoice, a conversion fee calculated pursuant to
the long-term loan policies of CFC as established from tame to time for
long-term loans similarly classified.
SECTION 2.3. PREPAYMENT. Subject to the terms of the Mortgage, the
Borrower may at any time or from time to time, on not less than 30 days'
written notice to CFC, prepay the Note in whole or in part together with the
interest accrued to the date of prepayment and any prepayment premium that
CFC may from time to time prescribe; provided that no prepayment premium may
be prescribed by CFC in connection with full or partial prepayment of this
Note
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made during any Repricing Period, and further provided that no other
repricing option has been previously exercised within such Repricing Period.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3. 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, the 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 or its counsel shall require. CFC shall have received an opinion of
counsel for the Borrower: (i) substantially in the form of Exhibit B hereto;
and (ii) addressing such other legal matters as CFC or its counsel shall
reasonably require.
C. GOVERNMENT APPROVALS. The Borrower shall have furnished to CFC
true and correct copies of all certificates, authorizations and consents,
including without limitation the consents referred to in Section 1.H. hereof,
necessary for the execution, delivery or performance by the Borrower of this
Agreement, the Note and the Mortgage.
D. REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in Article I shall (except as affected by the
transactions contemplated by this Agreement) be true 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 V and no event which, with the lapse of time or
the notice and lapse of time specified in Article V 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 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 Borrower shall have caused
satisfactory evidence thereof to be furnished to CFC.
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F. SPECIAL CONDITIONS. The Borrower shall have complied with any
special conditions listed in Schedule 1 hereto.
G. REQUISITIONS. The Borrower will requisition all Advances by
submitting its requisition to CFC in form and substance satisfactory to CFC.
Requisitions shall be made only for the purpose of Borrower repaying its Line
of Credit as set forth above. The Borrower agrees to apply the proceeds of
the Advances in accordance with its loan application with such modifications
as may be mutually agreed and to deposit, if applicable, all funds advanced
hereunder in its Trustee Special Construction Fund Account (as defined in the
Uniform System of Accounts, as defined in the Mortgage).
ARTICLE IV
AFFIRMATIVE COVENANTS
SECTION 4. After the date hereof and until payment in full of the
Note and performance of all obligations of the Borrower hereunder, the
Borrower agrees that it will:
A. MEMBERSHIP. Remain a member in good standing of CFC.
B. ANNUAL REPORT. Promptly upon its becoming available, furnish to
CFC a true and correct copy of the annual report of the Borrower to the
United States Department of the Treasury on Form 990 or any successor form
thereto.
C. FINANCIAL RATIOS. Subject to applicable laws and rules and orders
of regulatory bodies, and to events in the judgment of CFC beyond the control
of the Borrower, so operate and manage its business as to achieve both a
Times Interest Earned Ratio (as herein called "TIER") of not less than 1.5,
and a Debt Service Coverage Ratio (as herein called "DSC") of not less than
1.25, both in the manner required by the Mortgage.
D. ANNUAL CERTIFICATE. Within 60 days after the close of each
calendar year, commencing with the year following the year In which the
initial Advance hereunder shall have been made, deliver to CFC a written
statement signed by its General Manager, stating that said person has
furnished to the governing board of the Borrower a report of the activities
of the Borrower, and of its performance under this Agreement, the Note and
the Mortgage, during such year, and that to the best of said person's
knowledge, the Borrower has fulfilled all of its obligations under thiS
Agreement, the Note, and the Mortgage throughout such year or, if there has
been a default in the fulfillment of any such obligations, specifying each so
default known to said person and the nature and status thereof.
E. LOAN CERTIFICATE PURCHASE. The Borrower will purchase a Loan
Capital Term Certificate ("LCTC") from CFC in an amount equal to the amount
identified in Schedule l hereto at a purchase price of 100% of the principal
amount thereof. Unless otherwise requested in writing by the Borrower prior
to the initial Advance (which request must comply with CFC's then current
policy relating to the purchase of LCTC's), the Borrower agrees that the
initial Advance hereunder shall at least equal the amount of such LCTC and
the
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Borrower will apply a portion of the proceeds of such Advance to the purchase
of such LCTC. If the Borrower elects to pay for such LCTC other than from
loan funds, the amount of the CFC Commitment will be correspondingly reduced
by said amount when the LCTC is fully paid. If the Borrower obtains Advances
hereunder other than for the purpose of purchasing an LCTC and fails to pay
for the LCTC, then CFC may make loan Advances for the account of the Borrower
to purchase the LCTC. CFC agrees to deliver the LCTC within ninety days
following the date on which the LCTC has been paid for in full.
ARTICLE V
EVENTS OF DEFAULT
SECTION 5. The following shall be Events of Default under this
Agreement:
A. REPRESENTATIONS AND WARRANTIES. Any representation or warranty
made by the Borrower in Article I hereof or any certificate furnished to CFC
hereunder shall prove to have been incorrect in any material respect at the
time made and shall at the time in question be untrue or incorrect in any
material respect and remain uncured;
B. PAYMENT. Default shall be made in the payment of or on account of
interest on or principal of the Note when and as the same shall be due and
payable, whether by acceleration or otherwise, which shall remain unsatisfied
for 5 business days;
C. OTHER COVENANTS. Default by the Borrower in the observance or
performance of any other covenant or agreement contained in this Loan
Agreement, in the Note or the Mortgage, which shall remain unremedied for 30
calendar days after written notice thereof shall have been given to the
Borrower by CFC;
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. A court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Borrower in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official, or ordering
the winding up or liquidation of its affairs, and such decree or order shall
remain unstayed and in effect for a period of 90 consecutive days or the
Borrower shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or under any such
law, or consent to the appointment or taking possession by a receiver,
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liquidator, assignee, custodian or trustee, of a substantial part of its
property, or make any general assignment for the benefit of creditors; or
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 30 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 permitting such actions.
Article VI
REMEDIES
SECTION 6. If any of the Events of Default listed in Section 5
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 the Mortgage in the manner, upon the condItions, and with
the effect provided in the Mortgage, 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 remedies available to a
creditor following the occurrence of an Event of Default listed in Section 5
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.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. NOTICES. All notices, requests and demands shall be
given to or made upon the respective parties hereto as follows:
National Rural Utilities
Cooperative Finance Corporation
Woodland Park
0000 Xxxxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Governor
The Borrower:
The address set forth in
Schedule 1 here to
or in such other manner as to either party hereto, as such party shall
designate by written notice to the other party hereto.
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SECTION 7.2. 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, 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 7.3. LATE PAYMENTS. If payment of any principal and/or
interest due under the terms of the Note is not received at CFC's office in
Herndon, Virginia, or such other location as CFC may designate to the
Borrower within five business days after the due date thereof or such other
time period as CFC may prescribe from time to time in its policies of general
application in connection with any late payment charge (such unpaid amount of
principal and/or interest being herein called the "delinquent amount", and
the period beginning after such due date until payment of the delinquent
amount being herein called the "late-payment period"), the Borrower will pay
to CFC, in addition to all other amounts due under the terms of the 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 7.4. 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 all financing
statements and instruments as may be required by CFC in connection with this
Agreement, including, without limitation, 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.
SECTION 7.5. 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 7.6. GOVERNING LAW THIS AGREEMENT AND THE DOCUMENTS PROVIDED
FOR HEREIN SHALL BE DEEMED TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
SECTION 7.7. HOLIDAY PAYMENTS. If any payment to be made by the
Borrower hereunder shall become due on a Saturday, Sunday or business holiday
under the laws of the District of Columbia, such payment shall be made on the
next succeeding business day and such extension of time shall be included in
computing any interest in respect of such payment.
SECTION 7.8. RESCISSION FEE. The Borrower may elect not to borrow
all or any portion of the CFC Commitment in which event CFC shall release the
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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.
SECTION 7.9. MODIFICATIONS. No modification or waiver of any
provision of this Agreement or the Note, and no consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be
in writing.
SECTION 7.10. MERGER AND INTEGRATION. This Agreement and the
attached ExhibIts and matters incorporated by reference contain the entire
agreement of the parties here to with respect to the matters covered and the
transactions contemplated hereby.
SECTION 7.11. 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 7.12. SEVERABILITY. If any term, provision or condition, or
any part thereof, of this Agreement or the Mortgage shall for any reason be
found or held invalid or 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, the 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 7.13. 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 head 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 the 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.
SECTION 7.14. SCHEDULE 1. Schedule 1 attached hereto is an integral
part of this Agreement.
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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/ Xxxxxxx X. Xxxxx
-----------------------------------
President
Attest: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Secretary
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
(SEAL)
By: /s/ ILLEGIBLE
-----------------------------------
for Governor
Attest:
-----------------------------------
Assistant Secretary
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SCHEDULE 1
1. The term "Mortgage" as used in this Agreement shall mean the Restated
Mortgage and Security Agreement, dated as of September 21, 1988,
between the Borrower and CFC, as it may have been supplemented,
amended, restated, or consolidated to the date of this Agreement.
2. The date of the Borrower's balance sheet referred to in Section 1.D. is
March 31, 1991.
3. The principal place of business of the Borrower referred to in Section
1.E. is Xxxx Xxxxxxx 00, X.X. Xxx 000, Xxxxxxx, XX 00000-0000.
4. All of the property of the Borrower is located in the counties of
Andrews, Borden, Dawson, Ector, Xxxxxxxxx, Xxxxxx, Irion, Martin,
Midland, Reagan, Sterling, Xxx Xxxxx, Scurry, Fisher, Xxxxx, Xxxxxxxx
and Upton in the State of Texas.
5. The governmental authority referred to in Section 1.H. is
_______________ (to be completed by Borrower's attorney)
6. The term "CFC Commitment" as referred to in Section 2.1 shall mean
$846,411.00.
7. The months referred to in the first paragraph of Section 2.2. are
February, May, August and November.
8. Amortization of Advances shall be based upon the method indicated
below:
level principal
--------------
XX level debt service
--------------
9. The special condition(s) referred to in Section 3.F. is (are):
NONE
10. The amount of the Loan Capital Term CertifIcate referred to in Section
4.E. shall be $59,249.00 if purchased with the initial Advance or
$55,101.00 if purchased with general funds.
11. The address of the Borrower referred to in Section 7.1. is Xxxx Xxxxxxx
00, X.X. Xxx 000, Xxxxxxx, XX 00000-0000.
Exhibit A
SECURED PROMISSORY NOTE
$ , 19
a corporation ("Borrower"),
for value received promises to pay 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 made by the
Payee pursuant to the Loan Agreement, dated as of even date herewith, between
the Borrower and the Payee ("Loan Agreement"), on the dates provided in the
Loan Agreement (except that if not sooner paid, any balance shall be due and
payable on a date years after the date hereof, such date being the Maturity
Date), with interest thereon in like money from the respective dates of each
Advance (as defined in the Loan Agreement) hereunder, at the rate or rates
and payable at the times provided in said Loan Agreement.
All Advances made by the Payee pursuant to said Loan Agreement shall
be endorsed by the Payee on the reverse side hereof on or before any
assignment or transfer hereof by the Payee.
This Note is secured under a Mortgage and Security
Agreement dated as of between the Borrower and the
Payee, as it may have been or shall be supplemented, amended or consolidated
from time to time ("Mortgage"). This Note is the Note referred to in, and has
been executed and delivered pursuant to, the Loan Agreement.
Upon the occurrence of an event of default under the Mortgage, the
principal hereof and interest accrued thereon may be declared to be forthwith
due and payable in the manner, upon the conditions, and with the effect
provided in the Mortgage.
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.
THIS IS AN EXHIBIT ONLY
--------------------------------------
(Name of Borrower)
(SEAL)
By:
--------------------------------------
(President)
Attest:
----------------------------
(Secretary)
Loan No.
---------------------------
Exhibit B
Date:
--------------------
Governor
National Rural Utilities
Cooperative Finance Corporation
Woodland Park
0000 Xxxxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxx 00000
Re:
----------------------------------------------------------
Dear Sir:
I am counsel for _________________________________ , organized under the laws
of the State of _________ ("Borrower"), and render this opinion to you in
connection with the loan of $___________ provided for in the loan agreement
("CFC Loan Agreement"), dated as of ________________ , 19___ , made by and
between the Borrower and National Rural Utilities Cooperative Finance
Corporation ("CFC").
I have examined such corporate records and proceedings of the Borrower, and
such other documents as I have deemed necessary as a basis for the opinions
hereinafter expressed.
I have also examined the following documents as executed and delivered: (1)
the CFC Loan Agreement, (2) the Secured Promissory Note ("CFC Note") , dated
___________________ 19____, in the principal amount of $___________, payable
to the order of CFC, and (3) the __________________ Mortgage and Security
Agreement ("Mortgage"), dated as of ____________________________, made by and
between the Borrower and CFC.
I have also examined, or caused to be examined by competent and trustworthy
persons, the records and files of all offices in which there might be
recorded, filed or indexed evidence of the Borrower's title, and any liens of
any nature whatsoever affecting the title, to any real or personal property
of the Borrower other than easements or rights of way relating to the
electric lines of the Borrower.
I have supervised, examined, or caused to be examined by competent and
trustworthy persons, the recordation of the Mortgage as a mortgage of
Based upon the foregoing, I am of the opinion that:
(i) the Borrower is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
organization, and the Borrower has full corporate power (a) to execute and
deliver the CFC Note, the CFC Loan Agreement and the Mortgage; (b) to perform
all acts required to be done by it under the CFC Note, the CFC Loan Agreement
and the Mortgage; and (c) to own, operate and maintain its properties and
operate its business as conducted at the date of this Opinion;
(ii) to the extent reasonably required for the maintenance and
operation of its properties and business taken as a whole, the Borrower has
complied with all requirements of the laws of all states in which it operates
or does business and holds all certificates, licenses, consents or approvals
of governmental authorities required to be obtained on or prior to the date
of this Opinion to enable it to engage in the business then transacted by it;
(iii) the CFC Note, the CFC Loan Agreement, and the Mortgage have
been duly authorized, executed and delivered by the Borrower and constitute
the valid and binding obligations of the Borrower, enforceable against the
Borrower in accordance with their respective terms;
(iv) the execution and performance by the Borrower of the CFC Note,
the CFC Loan Agreement and the Mortgage, and the transactions contemplated
thereby will not violate any provision of law, the articles of incorporation,
or bylaws* of the Borrower, or result in the 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, known to counsel;
(v) the Mortgage has been duly recorded and filed, in such manner
and to such extent as specified in paragraph "7" under COVENANTS AND
WARRANTIES contained in Attachment B to this Opinion, to constitute the
Mortgage a validly recorded and filed mortgage lien upon the real and
personal property of the Borrower therein described, subject and subordinate
only to liens and encumbrances, if any, permitted by paragraph "2" of
COVENANT AND WARRANTIES contained in Attachment B to this Opinion;
-------------------------------------------------------------------------------
*NOTE: As used herein, "articles of incorporation" includes "certificate of
incorporation", "articles of association" or "charter"; and "bylaws"
includes "code of regulations".
(vi) all authorizations, if any, from regulatory bodies required in
connection with the execution and delivery of the CFC Note, the CFC Loan
Agreement, and the Mortgage have been obtained and a copy thereof is attached
hereto; and
(vii) I know of no litigation pending or threatened against or
affecting the Borrower or its property which, in my opinion, would have a
material adverse effect upon the business, operations or financial condition
of the Borrower.
I also wish to advise you that nothing has occurred since the date of the
opinion of counsel of ______________________, 19____, heretofore delivered to
you, which in any manner changes the effect or application of such opinion
with reference to the matters therein set forth, and I confirm that said
opinion is true and correct as of the date hereof.
This Opinion (or a true copy thereof) may be relied upon by Manufacturers
Hanover Trust Company, as Trustee under the CFC Indenture dated as of
December 1, 1972, as amended and supplemented, as if this Opinion were
addressed to it. I have read the conditions contained in paragraph (5) of
Section 3.01(b) of said Indenture and the definitions in Article I of said
Indenture relating thereto*; in my opinion I have made such examination or
investigation as is necessary to enable me to express an informed opinion as
to whether or not said conditions will be complied with upon delivery of this
Opinion (or a true copy thereof) to said Trustee; and in my opinion, such
conditions will be complied with upon such delivery.
Sincerely,
--------------------------------------------------------------------------------
*NOTE: The conditions and definitions referred to are attached to this Opinion
as Attachment A and Attachment B.
(vi) no authorization from any regulatory body is required in
connection with the execution and delivery of the CFC Note, the CFC Loan
Agreement, or the Mortgage; and
(vii) I know of no litigation pending or threatened against or
affecting the Borrower or its property which, in my opinion, would have a
material adverse effect upon the business, operations or financial condition
of the Borrower.
I also wish to advise you that nothing has occurred since the date of the
opinion of counsel of ______________________, 19____, heretofore delivered to
you, which in any manner changes the effect or application of such opinion with
reference to the matters therein set forth, and I confirm that said opinion is
true and correct as of the date hereof.
This Opinion (or a true copy thereof) may be relied upon by Manufacturers
Hanover Trust Company, as Trustee under the CFC Indenture dated as of
December 1, 1972, as amended and supplemented, as if this Opinion were
addressed to it. I have read the conditions contained in paragraph (5) of
Section 3.01(b) of said Indenture and the definitions in Article I of said
Indenture relating thereto*; in my opinion I have made such examination or
investigation as is necessary to enable me to express an informed opinion as
to whether or not said conditions will be complied with upon delivery of this
Opinion (or a true copy thereof) to said Trustee; and in my opinion, such
conditions will be complied with upon such delivery.
Sincerely,
--------------------------------------------------------------------------------
*NOTE: The conditions and definitions referred to are attached to this Opinion
as Attachment A and Attachment B.
ATTACHMENT A
I. Conditions contained in Section 3.01(b), paragraph (5) of the
Indenture, dated as of December 1, 1972, made by and between CFC and
Manufacturers Hanover Trust Company, Trustee, relating to the
requIrements that Opinions of Counsel for a member state in substance
that as of the date of such Opinion:
(i) such Member is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization and
has full corporate power to execute and deliver such Mortgage Note, the
Loan Agreement pursuant to which it was issued (if any) and the
Mortgage securing the same, to perform all acts required to be done by
it under such Mortgage Note, Loan Agreement (if any) and Mortgage and
to own, operate and maintain its properties and operate its business as
conducted at the date of such opinion;
(ii) to the extent reasonably required for the maintenance and
operation of its properties and business taken as a whole, such Member
has complied with all requirements of the laws of all States in which
it operates or does business and holds all certificates, licenses,
consents or approvals of governmental authorities required to be
obtained on or prior to the date of such Opinion to enable it to engage
in the business then transacted by it;
(iii) such Mortgage Note, Loan Agreement (if any) and Mortgage
have been duly authorized, executed and delivered by said Member and
constitute the valid and binding obligations of such Member,
enforceable against such Member in accordance with their respective
terms;
(iv) the execution and performance by such Member of such
Mortgage Note, Loan Agreement (if any) and Mortgage, and the
transactions contemplated thereby, will not violate any provisions of
law, the Articles of Incorporation or by-laws of such Member, or result
in the breach of, or constitute a default under, any agreement,
indenture or other instrument to which such Member is a party, or by
which it may be bound, known to such Counsel;
(v) such Mortgage has been duly recorded and filed in such
manner and to such extent, as shown by such Opinion, as specified in
paragraph 7 under COVENANTS AND WARRANTIES in Schedule 1 to this
Indenture)* to constitute such Mortgage a validly recorded and filed
lien upon the real and personal property of such Member therein
described, shown by such Opinion to be subject and subordinate only to
liens and encumbrances, if any, permitted by paragraph 2 under said
COVENANTS AND WARRANTIES;*
--------------------------------------------------------------------------------
*NOTE: Provisions of paragraphs 2 and 7 under COVENANTS AND WARRANTIES in
Schedule 1 of the Indenture are attached as Attachment B.
ATTACHMENT A
Page 2
(vi) no authorization from any regulatory body is required in
connection with the execution and delivery of such Mortgage Note, Loan
Agreement (if any) or Mortgage or that each such authorization so
required has been obtained; and
(vii) such Counsel knows of no litigation pending or
threatened against or affecting such Member or its property which, in
the opinion of such Counsel (or in the opinion of such Member as
evidenced by a certificate of the manager or other responsible officer
of such Member annexed to said Opinion), would have a material adverse
effect upon the business, operations or financial condition of such
Member.
II. Definitions, contained in Article I of the Indenture, relating to the
foregoing conditions:
COMPANY - means National Rural Utilities Cooperative Finance
Corporation until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
DISTRIBUTION SYSTEM MEMBER - means a Member 50% or more of
whose gross operating revenues are derived from sales of electricity to
ultimate consumers, determined as of the end of the last Completed
Calendar Year.
INDENTURE - means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more
indentures supplemental here to entered into pursuant to the applicable
provisions hereof.
LOAN AGREEMENT - means a loan agreement (if any) between a
Member and the Company (or between a Member and a wholly-owned
subsidiary of the Company whose interest has been assigned to the
Company) providing for the issuance of Mortgage Notes.
MEMBER - means any Person which is a member or patron of the
Company, or any Person which at any time has been or is eligible to
borrow from REA under the Rural Electrification Act of 1936, as from
time to time in effect.
MORTGAGE - means a mortgage or deed of trust or pledge of
revenues securing one or more Mortgage Notes (i) which complies with
the requirements set forth in Schedule l here to annexed and made a
part hereof, or, in the case of a change in the status of a
Distribution System Member to a Power System Member, or vice versa,
which complies with the requirements set forth in Schedule l either
with respect to mortgages or deeds of trust or pledges of revenues of
Power System Members or with respect to mortgages or deeds of trust or
pledges of revenues of Distribution System Members, as said Schedule
ATTACHMENT A
Page 3
1 shall have been amended from time to time in accordance with the
provisions hereof; (ii) which was made to the Company (or to a
wholly-owned subsidiary of the Company whose interest has been assigned
to the Company) or to a Trustee or Trustees under a trust indenture;
(iii) as to which the interest of the Company (if any) has been
assigned to the Trustee; and (iv) an executed or true copy of which has
been delivered to the Trustee.
MORTGAGE NOTE - means a note or bond of a Member payable to
the Company (or a wholly-owned subsidiary of the Company whose interest
has been assigned to the Company) and pledged with the Trustee.
OPINION OF COUNSEL - means a written opinion of counsel, who
may (except as otherwise expressly provided in this Indenture) be
counsel for the Company or for a Member.
PERSON - means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
POWER SYSTEM MEMBER - means a Member, other than a
Distribution System Member.
ATTACHMENT B
SCHEDULE 1 TO INDENTURE DATED AS OF DECEMBER 1, 1972, BETWEEN CFC AND
MANUFACTURERS HANOVER TRUST COMPANY
COVENANTS AND WARRANTIES:
2. The mortgagor has the right and authority to mortgage the
property described in the granting clauses. The mortgaged property is free
and clear of any equal or prior mortgage, lien, charge or encumbrance, with
usual exceptions in utility mortgages, which exceptions may include (without
limitation) liens for taxes, assessments or governmental charges for the
current year and taxes, assessments or governmental charges not due and
delinquent; liens for workmen's compensation awards and similar obligations
not then delinquent; mechanics', laborers', materialmen's and similar liens
not then delinquent; and any of such liens, whether or not delinquent, whose
validity is at the time being contested in good faith; liens and charges
incidental to construction or current operation which have not been filed or
asserted or the payment of which has been adequately secured or which, in the
opinion of counsel, are insignificant in amount, liens, securing obligations
not assumed by the mortgagor and on account of which it does not pay and does
not expect to pay interest, existing upon real estate (or rights in or
relating to real estate) over or in respect of which the mortgagor has a
right-of-way or other easement for substation, transmission, distribution or
other right-of-way purposes; any right which the United States of America or
any state or municipality or governmental body or agency may have by virtue
of any franchise, license, contract or statute to purchase, or designate a
purchaser of, or order the sale of, any property of the mortgagor upon
payment of reasonable compensation therefor, or upon reasonable compensation
or conditions to terminate any franchise, license or other rights before the
expiration date thereof or to regulate the property and business of the
mortgagor; attachment or judgment liens covered by insurance, or upon appeal
and covered by bond; deposits or pledges to secure payment of workmen's
compensation. unemployment insurance, old age pensions or other social
security; 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; and other deposits
or pledges for purposes of like general nature in the ordinary course of
business: easements or reservations in respect to any property for the
purpose of transmission and distribution lines and rights-of-way and similar
purposes, zoning ordinances, regulations, reservations, restrictions,
covenants, party wall agreements. conditions of record and other encumbrances
(other than to secure the payment of money) , none of which in the opinion of
counsel is such as to interfere with the proper operation of the property
affected thereby; the burdens of any law or governmental organization or
permit requiring the mortgagor to maintain certain facilities or perform
certain acts as a condition of its occupancy of or interference with any
public land or any river, stream or other waters or relating to environmental
matters; any lien or encumbrance for the discharge of which moneys have been
deposited in trust with a proper depository to apply such moneys to the
discharge of such lien or encumbrance; any exceptions, reservations and other
matters referred to in the description of the mortgaged property and with
respect to any property which the mortgagor may hereafter acquire, any terms,
conditions, agreements, covenants, exceptions and reservations expressed or
provided in the deeds or
ATTACHMENT B
Page 2
other instruments under which the mortgagor shall hereafter acquire the same,
none of which in the opinion of counsel materially adversely affects or will
affect the property to which the same relates or the operation thereof by the
mortgagor; any lien reserved as security for rent or compliance with other
provisions of the lease in case of any leasehold estate; and purchase money
mortgages and liens, charges and encumbrances upon property existing at the
time of acquisition thereof by the mortgagor. The mortgagor will maintain and
preserve the priority of lien of the Mortgage, subject to exceptions usual in
utility mortgages including (without limitation) those mentioned above.
7. The mortgagor will upon written demand of the mortgagees execute
such instruments of further assurance as may be reasonably requested and will
cause the Mortgage, each supplemental indenture, financing statement and
other instrument of further assurance to be duly recorded, filed, re-recorded
and refiled as may be required by law to perfect and maintain the superior
lien of the Mortgage, except as otherwise consented to by the mortgagees (but
no such consent shall permit the lien of the Mortgage to remain unprotected
in respect of any property other than property deemed by the mortgagees to be
of minor importance to the operation of the properties of the mortgagor taken
as a whole).
