National Rural Utilities Cooperative Finance Corporation
Secured Revolving Line of Credit Agreement
("Agreement")
Name of Borrower: Cap Rock Electric Cooperative, Inc.
Address: 000 Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx, 00000
National Rural Utilities Cooperative Finance Corporation
("CFC"), a District of Columbia corporation, has approved Borrower for a secured
revolving line of credit loan in an amount not to exceed Twenty-five Million
Dollars ($25,000,000.00) (hereinafter referred to as the "CFC Commitment").
Borrower hereby agrees that the terms and conditions herein, plus any additional
terms and conditions agreed to in writing by the parties, shall constitute a
valid and binding agreement between Borrower and CFC. In consideration of their
mutual promises hereunder and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, CFC and Borrower agree to the
following terms and conditions:
1. Revolving Credit and Term. CFC agrees to advance funds to the
Borrower pursuant to the terms and conditions hereof (each
such advance of funds is referred to herein as an "Advance"),
provided, however, that the amount at any time outstanding
under this line of credit shall not exceed the CFC Commitment.
The Borrower may borrow, repay and reborrow funds at any time
or from time to time for a period up to twelve (12) months
from the effective date hereof. This Agreement shall
thereafter automatically renew for subsequent periods of
twelve (12) months each. Either party may terminate this
Agreement at the end of any period by providing written notice
to the other party at least ninety (90) days prior to the
expiration of such period.
2. Requisitions. Requests for Advances shall be in such written
form as CFC may reasonably require from time to time.
3. Interest Rate and Payment. The Borrower unconditionally
promises and agrees to pay, as and when due, interest on all
amounts advanced hereunder from the date of each Advance and
to repay all amounts advanced hereunder with interest on the
date this Agreement terminates as provided herein. Interest
shall be due and payable in accordance with CFC's regular
billing cycles as may be in effect from time to time. CFC
shall send a payment notice to the Borrower at least five days
prior to the due date of any interest payment. All amounts
shall be payable at CFC's main office at Woodland Park, 0000
Xxxxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxx 00000-0000 or at such other
location as designated by CFC from time to time. The interest
rate on all Advances will be equal to the total rate per annum
as may be fixed by CFC from time to time, which shall not
exceed the Prevailing Bank Prime Rate (as defined herein),
plus one percent per annum. Interest
will be computed on the basis of a 365 day year for the actual
number of days that any Advance is outstanding. The effective date
of an interest rate adjustment will be determined from time to
time by CFC, provided that no such adjustment may be effective on
a date other than the first or sixteenth day of any month, and any
such adjustment shall remain in effect until any subsequent
change in the interest rate occurs.
The "Prevailing Bank Prime Rate" is that bank prime rate
published in the "Money Rates" column of the eastern edition
of The Wall Street Journal on the publication day immediately
preceding the day on which an adjustment in the interest rate
hereof shall become effective. If The Wall Street Journal
shall cease to be published, then the Prevailing Bank Prime
Rate shall be determined by CFC by reference to another
publication reporting bank prime rates in a similar manner.
4. CFC Accounts. CFC shall maintain in accordance with its usual
practices an account or accounts evidencing the indebtedness
of the Borrower resulting from each Advance and the amounts of
principal and interest payable and paid hereunder. In any
legal action or proceeding in respect of this Agreement, the
entries made in such account or accounts (whether stored on
computer memory, microfilm, payment notices or otherwise)
shall be presumptive evidence (absent manifest error) of the
existence and amounts of the Borrower's transactions therein
recorded.
5. Corporate and Regulatory Approvals. Borrower represents and
warrants that it has obtained any and all necessary corporate
and regulatory approvals for Borrower to execute, deliver and
perform its obligations under this Agreement.
6. Reports. During the term of this Agreement, Borrower agrees
(a) to provide CFC, within 120 days of the end of Borrower's
fiscal year, its annual financial statements, prepared in
accordance with generally accepted accounting principles
("GAAP") and audited by an independent certified public
accountant, or otherwise in form and substance satisfactory to
CFC, and (b) to provide CFC with any other reports or
information which CFC may from time to time reasonably
request.
7. Fees. If any amount outstanding and due hereunder shall not be
paid when due, Borrower agrees to pay on demand CFC's
reasonable costs of collection or enforcement of this
Agreement, or preparation therefor, including reasonable fees
of counsel. If payment of any principal and/or interest due
under the terms of this Agreement is not received at CFC's
office in Herndon, Virginia, or such other location designated
by CFC within 5 business days after the due date thereof, then
Borrower shall pay to CFC, on demand, and in addition to all
other amounts due under the terms of this
Agreement, any late-payment and additional interest charges as
may then be in effect pursuant to CFC's then current policies without
setoff or counterclaim. For purposes of this Agreement, a "business
day" means a day that both CFC and the financial institution
it employs for funds remittance are open for business.
8. Credit Support. With CFC's prior written approval, this
Agreement may be used as credit support for other financings.
9. Reduce Balance to Zero. Each 12-month period while this
Agreement is in effect, Borrower shall, for a period of at
lest five consecutive business days, reduce to zero all
amounts outstanding hereunder. Borrower shall make the first
balance reduction within 360 days of the first Advance
hereunder. Each subsequent balance reduction shall be made
within 360 days of the last day of such five-day period.
10. Security. Borrower's indebtedness and other obligations under
this Agreement are secured by that certain Second Restated
Mortgage and Security Agreement, dated as of October 24, 1995,
by and between Borrower and CFC, as the same may have been or
shall be supplemented, amended, consolidated, or restated from
time to time (the "Mortgage").
11. Notices, Acceleration of Debt and Waivers. While an Advance is
outstanding, Borrower agrees to notify CFC in writing of (a)
any delinquency or default on any of its financial
obligations, (b) any material adverse change in its financial
or business condition, and (c) if any representation or
warranty made in this Agreement is no longer true in any
material respect. If any delinquency, default, or any other
event as a result of which any holder of indebtedness may
declare the same due and payable shall occur and continue
uncorrected for more than any applicable grace period, or any
representation or warranty herein shall no longer be true, or
Borrower shall fail to perform or to comply with any term of
this Agreement, or if the financial condition of Borrower
shall have changed to the extent that such change, in the
reasonable judgment of CFC, materially increases CFC's risk of
repayment hereunder, then CFC may declare at any time all
outstanding principal, interest and other amounts due
hereunder immediately due and payable in full with accrued
interest, without presentment or demand, and may withhold
Advances. The Borrower waives the defense of usury and all
rights to setoff, counterclaim, deduction or recoupment.
12. Survival of Representations and Warranties and Payment
Obligations. Borrower agrees that its obligation to repay
principal, interest and all other amounts due hereunder, and
the representations and warranties made herein, shall survive
termination of this Agreement. Borrower further agrees that
such repayment obligations shall be automatically reinstated
if and to the extent that for any reason any payment by or on
behalf of the Borrower is rescinded, set aside or must be
otherwise restored, whether as a result of any proceeding in
bankruptcy or reorganization or otherwise.
13. Representations and Warranties. Borrower represents and
warrants that as of the date of its application for this line
of credit, and on the date of each Advance hereunder:
a) the Borrower is not in default of any of its financial
obligations;
b) there has been no material adverse change in the
Borrower's business or financial condition from that set
forth in its most recent audited financial statements;
c) no litigation is pending or, to the best of Borrower's
knowledge, threatened against the Borrower which, if
adversely determined, would have a material adverse
effect on the Borrower's ability to perform under this
Agreement;
d) the information contained in Borrower's audited
financial statements, its other financial reports and
information otherwise submitted in connection with this
Agreement is complete and accurate, and said financial
statements and financial reports fairly represent the
financial condition of the Borrower as of the dates
reflected thereon;
e) the execution, delivery and performance of this
Agreement has been duly authorized by the Borrower,
which authorization has not been rescinded or modified;
f) all Advances hereunder will be used only for proper
corporate purposes;
g) Borrower has notified CFC in writing if the principal
place of business of the Borrower and the office where
its records concerning accounts and contract rights are
kept has changed;
h) all property owned by the Borrower is located in the
counties identified in the Mortgage;
i) 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; and
j) no license, consent or approval of any governmental
agency or authority is required to enable the Borrower
to enter into this Agreement, the Mortgage, or to
execute any Note, or to perform any of its obligations
provided for in such documents, except as disclosed in
Schedule 1 hereto, all of which Borrower has obtained
prior to the date hereof.
14. Conditions of Lending. As a condition to CFC making Advances
hereunder, each of the following conditions shall be satisfied
at the time of each Advance:
a) CFC shall have received the Borrower's most recent
annual financial statements, prepared in accordance
with GAAP and audited by an independent certified public
accountant, or otherwise in form and substance
satisfactory to CFC;
b) all representations and warranties set-forth herein
shall be true and correct;
c) the Borrower shall have obtained any and all necessary
corporate, regulatory and governmental approvals for the
Borrower to execute, deliver and perform its obligations
under this Agreement; and
d) Borrower shall have caused the Mortgage to be duly
recorded as a mortgage on real property and duly filed,
recorded or indexed as a security interest in personal
property in each jurisdiction necessary in order to
provide CFC with a perfected lien on all of Borrower's
Mortgaged Property (as defined in the Mortgage), and the
Borrower shall have paid all applicable taxes, recording
and filing fees and caused satisfactory evidence thereof
to be furnished to CFC.
15. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) THE PERFORMANCE AND CONSTRUCTION OF THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE COMMONWEALTH OF VIRGINIA.
(b) BORROWER HEREBY SUBMITS 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.
16. Severability. If any term, provision or condition, or any part
thereof, of this Agreement shall for any reason be found or
held invalid or unenforceable by any court or governmental
agency 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 shall survive and be construed
as if such invalid or unenforceable term, provision or
condition had not been contained herein.
17. Setoff. 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. 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.
18. Termination and Cancellation of Existing Agreement Borrower
agrees that its existing line of credit No. R-5103 with CFC,
and the agreement(s) relating thereto shall be terminated and
any outstanding principal, interest and other amounts
outstanding thereunder shall be transferred to the line of
credit established pursuant to this Agreement and deemed an
Advance hereunder.
19. Miscellaneous. (a) This Agreement contains the entire
agreement of the parties hereto with respect to the matters
covered and the transactions contemplated hereby, and no other
agreement, statement or promise made in connection with this
line of credit by any party hereto, or by any employee,
officer, agent or attorney of any party hereto which is not
contained herein shall be valid and binding. (b) Any amendment
to this Agreement must be in writing signed by both parties.
(c) No failure or delay by CFC in exercising any right or
remedy hereunder shall operate as a waiver or preclude the
future exercise thereof or of any other right or remedy. (d)
If any payment is due from Borrower on a day which CFC is not
open for business, then such payment shall be made on the next
succeeding day on which CFC is open for
business.
20. Effective Date. This Agreement is dated and is effective as of
JUNE 24, 1997.
Name of Borrower: Cap Rock Electric Cooperative, Inc.
Signed By:
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Title:
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NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
By: Loan Number: TX-107-R-5104
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Assistant Secretary-Treasurer
CERTIFIED COPY OF MINUTES AUTHORIZING
Secured Revolving Line of Credit
I, Xxxxxx X. Xxxxxxxx, do hereby certify that: I am the Secretary of (the
"Borrower") and further certify as follows:
The following is a true and correct copy of excerpts from the minutes
of a meeting of the Board of Directors of the Borrower held on June 24, 1997, as
they in the Minute Book of the Borrower; the meeting was duly and properly
called, with a quorum present and acting throughout; said resolutions were duly
adopted thereat; the Secured Revolving Line of Credit (the "Agreement')
submitted to National Rural Utilities Cooperative Finance Corporation ("CFC") is
substantially in the form as presented to said meeting; the Board of Directors
authorized the execution and delivery of the Agreement; and said resolutions
have not been modified or rescinded:
RESOLVED, that the Borrower establish a secured line of credit and
authorize borrowing from National Rural Utilities Cooperative Finance
Corporation ("CFC") in an amount which shall not at any one time exceed
Twenty-five Million Dollars ($25,000,000.00), (the "Line of credit Amount"), for
a term of twelve (1-2) months, which period shall automatically renew for
successive twelve (12) month periods subject to the provisions of the Secured
Revolving Line of Credit Agreement substantially in the form submitted to this
meeting, a copy of which is attached hereto (the "Agreement"), and to pay such
interest rate or rates as shall be prescribed in the Agreement; and,
RESOLVED, that the Chairman of the board of Directors of the Borrower,
Xxxxxxx Xxxxx, be and is hereby authorized to execute the Agreement on behalf of
the Borrower, to execute any future amendments to said Agreement as such
individual may deem appropriate within the Line of Credit Amount so authorized,
and to execute such further documents as may be necessary or appropriate in
order to comply with CFC's requirements; and,
RESOLVED, that it is the intent of the Board that upon execution and
delivery of the Agreement to CFC, and when executed by CFC, the Agreement shall
constitute a valid and binding agreement between CFC and the Borrower,
enforceable in accordance with its terms, and that the Borrower's obligations
under the Agreement shall be secured by the Second Restated Mortgage and
Security Agreement, dated as of October 24, 1995, by and between Borrower and
CFC, as the same may have been or shall be supplemented, amended, consolidated,
or restated from time to time; and,
RESOLVED, that CFC shall be entitled to rely upon the direction of
such director, officer or employee of Borrower as CFC reasonably believes is
authorized on behalf of the Borrower to request and receive funds pursuant to
the Agreement; and,
RESOLVED, that CFC is hereby authorized to receive, review and make
copies of any financial statements, documents, reports, contracts or other
materials as CFC may reasonably request from time to time in connection with the
Agreement; and,
RESOLVED, that the appropriate officers are authorized to take all
other actions they deem advisable to carry out the purpose of these resolutions.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed the seal
of the Borrower, this 24th day of June, 1997.
(Corporate Seal)
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Xxxxxx X. Xxxxxxxx, Secretary
