EXHIBIT 10.2
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RESTATED MORTGAGE
AND
SECURITY AGREEMENT
Made By And Between
CAP ROCK ELECTRIC COOPERATIVE, INC.
Mortgagor
and
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
Mortgagee
Dated as of September 21, 1988
THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A UTILITY AND SECURES FUTURE
ADVANCES MADE BY THE MORTGAGEE TO THE MORTGAGOR AND FUTURE OBLIGATIONS OF THE
MORTGAGOR TO THE MORTGAGEE.
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CFC Electric Mortgage for Non-REA Borrowers
CFC Form C48 Mortgage
Class A Member - Distribution, Non-REA Borrower
Rev. 9/91
TABLE OF CONTENTS
Page
ARTICLE I
SECTION 1.01 Definitions 2
SECTION 1.02 Construction 6
ARTICLE II
SECURITY
SECTION 2.01 Granting Clause 6
ARTICLE III
ADDITIONAL NOTES
SECTION 3.01 Additional Notes 9
ARTICLE IV
PARTICULAR COVENANTS OF THE MORTGAGOR
SECTION 4.01 Authority to Execute and Deliver Notes and Mortgages;
All Action Taken; Enforceable Obligations 9
SECTION 4.02 Authority to Mortgage Property; No Liens; Exception
for Permitted Encumbrances; Mortgagor to Defend
Title and Remove Liens 10
SECTION 4.03 No Encumbrances on Property 10
SECTION 4.04 Additional Permitted Debt 10
SECTION 4.05 Payment of Notes 11
SECTION 4.06 Preservation of Corporate Existence and Franchises;
Compliance with Laws; Limitations on Mergers and
Transfers of Capital Assets 11
SECTION 4.07 Maintenance of Mortgaged Property 12
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TABLE OF CONTENTS, Continued
Page
SECTION 4.08 Insurance; Restoration of Damaged Mortgaged
Property 13
SECTION 4.09 Mortgagee Right to Expend Money to Protect
Mortgaged Property 14
SECTION 4.10 Limitations on: System Extensions and Additions;
Operations and Maintenance Contracts; Power
Purchase Contracts; Power Sales Contracts 14
SECTION 4.11 Financial Books; Financial Reports; Mortgagee Right
of Inspection 15
SECTION 4.12 Further Assurances to Confirm Security of
Mortgage 15
SECTION 4.13 Time Extensions for Payment of Notes 15
SECTION 4.14 Achievement of Times Interest Earned Ratio and
Debt Service Coverage; Design of Rates 16
SECTION 4.15 Limitation on Dividends, Patronage Refunds and Other
Cash Distributions 16
SECTION 4.16 Application of Proceeds from Condemnation 16
SECTION 4.17 Compliance with Loan Agreements; Notice of Amendments
to, and Defaults under, Loan Agreements and Certain
Other Agreements; Terms of Mortgage to Govern 17
SECTION 4.18 Notice of Change in Place of Business 17
SECTION 4.19 Rights of Way, etc., Necessary in Business 17
SECTION 4.20 Limitations on Loans, Investments and Other
Obligations 17
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TABLE OF CONTENTS, Continued
Page
ARTICLE V
REMEDIES OF THE MORTGAGEE AND NOTEHOLDERS
SECTION 5.01 Events of Default 18
SECTION 5.02 Acceleration of Maturity; Recision and Amendment 18
SECTION 5.03 Remedies of Mortgagee and Noteholders 19
SECTION 5.04 Application of Proceeds from Remedial Actions 21
SECTION 5.05 Remedies Cumulative; No Election 21
SECTION 5.06 Waiver of Appraisement Rights 21
SECTION 5.07 Notice of Default 21
ARTICLE VI
POSSESSION UNTIL DEFAULT - DEFEASANCE CLAUSE
SECTION 6.01 Possession Until Default 22
SECTION 6.02 Defeasance 22
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Property Deemed Real Property 22
SECTION 7.02 Mortgage to Bind and Benefit Successors and Assigns 22
SECTION 7.03 Headings 23
SECTION 7.04 Notices 23
SECTION 7.05 Severability 23
SECTION 7.06 Mortgage Deemed Security Agreement 23
SECTION 7.07 Indemnification by Mortgagor of Mortgagee 00
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THIS RESTATED MORTGAGE AND SECURITY AGREEMENT, dated as of September
21, 1988 (hereinafter sometimes called this "Mortgage") is made by and
between CAP ROCK ELECTRIC COOPERATIVE, INC. (hereinafter called the
"Mortgagor"), a corporation existing under the laws of the State of Texas,
(herein after called the "State") and NATIONAL RURAL UTILITIES COOPERATIVE
FINANCE CORPORATION (hereinafter called "CFC" or the "Mortgagee"), a
corporation existing under the laws of the District of Columbia.
RECITALS
WHEREAS, the Mortgagor and CFC are parties to that certain
Supplemental Mortgage and Security Agreement dated as of May 15, 1973, as
supplemented (the "Original Mortgage" identified in Appendix "A" of this
Mortgage), originally entered into between the Mortgagor and the United
States of America acting by and through the Administrator of the Rural
Electrification Administration (hereinafter the "REA") and CFC; and
WHEREAS, the Mortgagor has prepaid all of its outstanding
indebtedness to the REA secured by the Original Mortgage and the REA has
released of record all of its Liens under the Original Mortgage; and
WHEREAS, pursuant to the terms of the Original Mortgage, CFC has
succeeded to all of the rights and obligations of the REA under the Original
Mortgage; and
WHEREAS, the parties agree that in order to achieve certain of the
Mortgagor's purposes in prepaying its obligations to the REA including the
ability to have greater flexibility in its operations and financing, this
Restated Mortgage and Security Agreement restates and consolidates the
Original Mortgage while preserving the priority of CFC's Liens under the
Original Mortgage securing the payment of the Mortgagor's outstanding secured
indebtedness to CFC, which indebtedness is described more particularly in
Appendix "A"; and
WHEREAS, the Mortgagor and CFC are authorized to enter into this
Mortgage;
NOW, THEREFORE, this Mortgage
W I T N E S S E T H:
That the parties hereto, in consideration of the mutual covenants
contained herein, do agree as follows
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS In addition to the terms elsewhere defined
in this Mortgage, the terms defined in this Article I shall have the meanings
herein specified and/or under the applicable Uniform Commercial Code, unless
the context clearly requires otherwise. The terms defined herein include the
plural as well as the singular and the singular as well as the plural.
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ACCOUNT NUMBER of the Uniform System of Accounts shall mean such
Account Number included in the Uniform System of Accounts.
ADDITIONAL NOTES shall mean any Notes issued by the Mortgagor to CFC
or any other lender pursuant to Article III of this Mortgage including any
refunding, rearrangement, renewal, or substitute Notes which may from time to
time be executed and delivered by the Mortgagor pursuant to the terms of
Article III.
CFC is defined in the recitals to this Mortgage.
CFC NOTES shall mean the Original CFC Notes and any Additional Notes
issued by the Mortgagor to CFC.
DEBT SERVICE COVERAGE RATIO ("DSC") shall mean the ratio determined
as follows: for each Calendar Year add (i) Patronage Capital or Margins of
the Mortgagor, (ii) Interest Expense (as computed in accordance with the
principles set forth in the definition of Times Interest Earned Ratio herein)
of the Mortgagor and (iii) Depreciation and Amortization Expense of the
Mortgagor, and divide the total so obtained by an amount equal to the sum of
all payments of principal and interest required to be made on account of
Total Long-Term Debt during such Calendar Year; PROVIDED, HOWEVER, that in
the event that any Long-Term Debt (being any amount included in Total
Long-Term Debt computed as provided above) 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 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 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 Mortgagor as computed
for purposes of Line A.12 of Form 7.
DISTRIBUTIONS shall have the meaning specified in Section 4.16
hereof.
EQUITIES AND MARGINS shall mean Equities and Margins as such terms
are defined in the Uniform System of Accounts.
EQUITY shall mean the aggregate of Equities and Margins.
EVENTS OF DEFAULT shall have the meaning specified in Section 5.01
hereof.
EXCEPTED PROPERTY shall have the meaning specified in Section 2.01.
FISCAL YEAR shall mean the fiscal year of the Mortgagor.
FORM 7 shall mean the 10-86 revision of REA Form 7; or the
corresponding form prescribed at the time by REA, or, if no such form is
applicable to the accounts of the Mortgagor, such reference shall apply to
the corresponding information otherwise determined in a comparable manner.
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INTEREST EXPENSE shall mean an amount constituting the interest
expense of the Mortgagor as computed for purposes of Line A.15 of REA Form 7.
LIEN shall mean any statutory or common law consensual or
non-consensual mortgage, pledge, security interest, encumbrance, lien, right
of set off, claim or charge of any kind, including, without limitation, any
conditional sale or other title retention transaction, any lease transaction
in the nature thereof and any secured transaction under the Uniform
Commercial Code of any jurisdiction.
LOAN AGREEMENTS shall mean any loan agreement executed by and
between the Mortgagor and CFC in connection with the execution and delivery
of any Additional Notes and any loan agreement between the Mortgagor and any
other Noteholder hereunder.
LONG-TERM DEBT shall mean any amount included in Total Long-Term
Debt pursuant to the Uniform System of Accounts.
LONG-TERM LEASES shall mean leases having unexpired terms (taking
into account terms of renewal at the option of the lessor, whether or not
such leases have theretofore been renewed) of more than 12 months.
MAXIMUM DEBT LIMIT, if any, shall mean the amount more particularly
described in Appendix "A" hereto.
MORTGAGED PROPERTY shall have the meaning specified in Section 2.01
hereof.
MORTGAGEE shall mean CFC, its successor and assigns and any other
Note-holder.
NOTE OR NOTES shall mean one or more of the CFC Notes, and any other
Notes which pursuant to Article III may, from time to time, be secured under
this Mortgage.
NOTEHOLDER OR NOTEHOLDERS shall mean one or more of the holders of
Notes secured by this Mortgage.
ORIGINAL CFC NOTES shall mean the Notes evidencing outstanding
indebtedness of the Mortgagor to CFC on the date of this Mortgage, listed on
Appendix "A" hereto.
OUTSTANDING shall mean all Notes heretofore issued as of the date of
determination except Notes the principal and interest on which have been
fully paid and which have been canceled by the Noteholder or Notes the
payment for which has been provided for pursuant to Section 6.02.
PATRONAGE CAPITAL OR MARGINS shall mean the amount of net patronage
capital or margins of the Mortgagor as computed for purposes of Line A.27 of
Form 7 minus the amount which is the sum of Lines A.24 and A.25 of Form 7
plus the total of cash received from patronage capital retirements.
PERMITTED DEBT shall have the meaning specified in Section 4.04.
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PERMITTED ENCUMBRANCES shall mean: (i) any Liens for taxes,
assessments or governmental charges for the current year and taxes,
assessments or governmental charges not due and delinquent; (ii) Liens for
workmen's compensation awards and similar obligations not then delinquent;
(iii) mechanics', laborers', materialmen's and similar Liens not then
delinquent, and any such Liens, whether or not delinquent, whose validity is
at the time being contested in good faith; (iv) 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 to the Mortgagor are insignificant in amount; (v) 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; (vi) 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 hereof or to regulate the property and
business of the Mortgagor; (vii) attachment of judgment Liens covered by
insurance, or upon appeal and covered by bond; (viii) deposits or pledges to
secure payment of workmen's compensation, unemployment insurance, old age
pensions or other social security; (ix) deposits or pledges to secure
performance of bids, tenders, contracts (other than contracts for the payment
of borrowed money), leases, public or statutory obligations; (x) surety or
appeal bonds, and other deposits or pledges for purposes of like general
nature in the ordinary course of business; (xi) 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 to the Mortgagor is such as to
interfere with the proper operation of the property affected thereby; (xii)
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; (xiii)
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 encumbrances; (xiv) any exceptions, reservations and other
matters referred to in the description of the Mortgaged Property on the date
hereof 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 other instruments under
which the Mortgagor shall hereafter acquire the same, none of which in the
opinion of counsel to the Mortgagor materially adversely affects or will
affect the property to which the same relates or the operation thereof by the
Mortgagor; (xv) any Lien reserved as security for rent or compliance with
other provisions of the lease in case of any leasehold estate made, or
existing on property acquired, in the ordinary course of business or in
connection with Restricted Rentals permitted by Section 4.04; and (xvi)
purchase money mortgages permitted by Section 4.04.
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REA is defined in the recitals to this Mortgage.
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 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).
SECURITY INTEREST shall mean any assignment, transfer, mortgage,
hypothecation or pledge.
SUBORDINATED INDEBTEDNESS shall mean indebtedness of the Mortgagor,
payment of which shall be subordinated to the prior payment of the Notes by
subordination agreement in form and substance satisfactory to the Mortgagee
which approval will not be unreasonably withheld.
TIMES INTEREST EARNED RATIO ("TIER") shall mean the ratio determined
as follows: for each Calendar Year: add (i) Patronage Capital or Margins of
the Mortgagor (ii) Interest Expense on Total Long-Term Debt of the Mortgagor
and (iii) taxes paid, if any, based upon income during the year and divide
the total so obtained by Interest Expense of the Mortgagor, PROVIDED,
HOWEVER, that 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 Mortgagor over 2% of the Mortgagor's Equities
and Margins.
TOTAL LONG-TERM DEBT shall mean an amount constituting the long-term
debt of the Mortgagor as computed for purposes of Line C.35 of the Form 7.
TOTAL UTILITY PLANT shall mean the amount constituting the total
utility plant of the Mortgagor computed in accordance with the Uniform System
of Accounts.
UNIFORM COMMERCIAL CODE shall mean the Uniform Commercial Code of
any state.
UNIFORM SYSTEM OF ACCOUNTS shall mean the Uniform System of Accounts
prescribed by the REA for electric borrowers, or if the Mortgagor is not
required to maintain its accounts in accordance with said Uniform System of
Accounts, otherwise determined in a manner in accordance with generally
accepted accounting principles applicable to electric utilities or electric
cooperatives and acceptable to the Mortgagee.
SECTION 1.02. CONSTRUCTION
a. Accounting terms not referred to above are used in this
Mortgage in accordance with the meanings given them in the Uniform System of
Accounts or,
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failing provision therefor in said System, the meanings given them by
generally accepted accounting practices.
b. Any reference herein to "directors" or "board of directors" shall
be deemed to mean "trustees" or "board of trustees," as the case may be.
c. Except as set forth in Article V, whenever this Mortgage requires
the consent or approval of the Mortgagee, if there is more than one
Mortgagee, such consent or approval may be given by CFC so long as CFC is
lender of a majority of the unpaid principal balance of the Notes outstanding
and otherwise by each Noteholder which is a lender of at least 10% of the
aggregate unpaid principal balance of the Notes outstanding.
ARTICLE II
SECURITY
SECTION 2.01. GRANTING CLAUSE. In order to secure the payment of the
principal of and interest on the Notes, and the performance of the covenants
therein and herein contained and to declare the terms and conditions on which
the Notes are secured, and in consideration of the premises, the Mortgagor by
these presents does grant, bargain, sell, convey, assign, transfer, mortgage,
hypothecate, pledge, set over and confirm to the Mortgagee and any the other
Noteholders, all property, rights, privileges and franchises of the Mortgagor
of every kind and description, real, personal or mixed, tangible and
intangible, whether now owned or hereafter acquired by the Mortgagor,
wherever located and grants a security interest therein for the purposes
herein expressed, except any Excepted Property (as hereinafter defined)
hereinafter expressly excepted from the Lien hereof, and including all and
singular the following (hereinafter sometimes called the "Mortgaged
Property"):
GRANTING CLAUSE FIRST
All right, title and interest of the Mortgagor in and to all the
real and personal property, rights, privileges, permits, licenses and
franchises particularly described in Appendix "B," attached hereto and
incorporated herein, are hereby made a part of, and deemed to be described
in, this Granting Clause as fully as if set forth in this Granting Clause at
length.
GRANTING CLAUSE SECOND
All right, title and interest of the Mortgagor in and to all other
property, real, personal or mixed (other than Excepted Property), of every
kind and description and wheresoever situated, now owned or which may be
hereafter acquired by the Mortgagor, it being the intention hereof that all
property, rights, privileges, permits, licenses and franchises now owned by
the Mortgagor or acquired by the Mortgagor after the date hereof (other than
Excepted Property) shall be as fully embraced within and subjected to the
Lien hereof as if such property were specifically described herein.
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GRANTING CLAUSE THIRD
Also any Excepted Property, except for any property described in
paragraph (9) of the description of Excepted Property, that may, from time to
time hereafter, by delivery or by writing of any kind, be subjected to the
Lien hereof by the Mortgagor or by anyone in its behalf; and the Mortgagee
and the other Noteholders are hereby authorized to receive the same at any
time as additional security hereunder. Such subjection to the Lien hereof of
any Excepted Property as additional security may be made subject to any
reservations, limitations or conditions which shall be set forth in a written
instrument executed by the Mortgagor respecting the use and disposition of
such property or the proceeds thereof.
GRANTING CLAUSE FOURTH
Together with (subject to the rights of the Mortgagor set forth in
Section 6.01) all the rents, issues, profits, revenues and other income
(including the proceeds of insurance and condemnation) of the Mortgaged
Property and all the estate, right, title and interest of every nature
whatsoever of the Mortgagor in and to the same and every part thereof.
EXCEPTED PROPERTY
There is, however, expressly excepted and excluded from the Lien and
operation of this Mortgage the following described property of the Mortgagor,
now owned or hereafter acquired (herein sometimes referred to as the
"Excepted Property"):
(1) all automobiles, trucks, trailers, tractors or other
vehicles (including, without limitation, aircraft or ships, if any)
owned or used by the Mortgagor;
(2) all cash on hand or in banks, bills, notes and accounts
receivable; patents, chooses in action and judgments; shares of stock,
bonds, notes and other securities (other than those referred to in
clause (9) below); contract and operating agreements, except those
accounts receivable, contract rights and agreements, if any,
specifically described in Appendix "A" to this Mortgage;
(3) all goods, wares, materials, merchandise and supplies
acquired for purpose of sale in the ordinary course of business;
(4) fuel, fissionable and other materials and supplies, and
other personal property which are consumable (other than by ordinary
wear and tear) in their use in the operation of the business;
(5) all office furniture, equipment, supplies and leaseholds
for office use;
(6) all coal, oil, gas, ore, gravel or other minerals on, in
or under the Mortgaged Property of the Mortgagor;
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(7) all electric energy, gas, steam, water and other products
generated, produced or purchased;
(8) any leasehold interests, permits, licenses, franchises and
other rights which cannot be assigned, mortgaged or granted without the
consent of other parties;
(9) stock, membership or capital term certificates issued by
any Noteholder; and
(10) any other property which has heretofore been released in
accordance with the terms of this Mortgage or which is not useful to
the Mortgagor in the business of generating, manufacturing, storing,
transmitting, distributing, utilizing, purchasing, or disposing of
electricity for heat, light, power, refrigeration or other uses.
TO HAVE AND TO HOLD all and singular, the Mortgaged Property unto
the Mortgagee and any other Noteholders from time to time and their
respective assigns forever, to secure equally and ratably the payment of the
principal of and interest on the Notes secured hereby, and to secure the due
performance of the covenants, agreements and provisions herein and contained
in the Loan Agreements.
SUBJECT, HOWEVER, to the Permitted Encumbrances, upon condition
that, until the occurrence of an Event of Default, the Mortgagor shall be
permitted to possess and use the Mortgaged Property, and to receive and use
the rents, issues, profits, revenues and other income of the Mortgaged
Property.
ARTICLE III
ADDITIONAL NOTES
SECTION 3.01. ADDITIONAL NOTES: Without the prior consent of the
Mortgagee or any other Noteholder, the Mortgagor may issue Additional Notes
to CFC or to another lender or lenders for the purpose of acquiring or
constructing new or replacement assets which Notes will thereupon be secured
equally and ratably with the Original CFC Notes if the following requirements
are satisfied:
(1) As evidenced by a certificate of an independent accountant
delivered to the Noteholders, the Mortgagor shall have achieved, for
each of the two Calendar Years preceding, or any two consecutive 12
month periods ending within 180 days preceding the issuance of such
Notes, a TIER of not less than 1.5 and a DSC of not less than 1.25; and
(2) No Event of Default or any event which with the giving of
notice or lapse of time or both has occurred and is continuing
hereunder.
The Mortgagor shall also have the right without the consent of the
Mortgagee or any Noteholder, so long as an Event of Default or any event
which with the giving of notice or lapse of time or both, has not occurred
and is continuing hereunder, to issue Additional Notes for the purpose of
refunding or defeasing any Notes so long as the total amount of outstanding
indebtedness
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evidenced by such Notes is not thereby increased by more than 5%.
ARTICLE IV
PARTICULAR COVENANTS OF THE MORTGAGOR
The Mortgagor covenants with the Mortgagee and any Noteholder from
time to time, as follows:
SECTION 4.01. AUTHORITY TO EXECUTE AND DELIVER NOTES AND MORTGAGES:
ALL ACTION TAKEN: ENFORCEABLE OBLIGATIONS: The Mortgagor is duly authorized
under its articles of incorporation and bylaws and all applicable laws and by
corporate action to execute and deliver the Notes and any Additional Notes
and this Mortgage; and the Notes and this Mortgage are, and any Additional
Notes when executed and delivered will be, the valid and enforceable
obligations of the Mortgagor in accordance with their respective terms.
SECTION 4.02. AUTHORITY TO MORTGAGE PROPERTY: NO LIENS: EXCEPTION
FOR PERMITTED ENCUMBRANCES: MORTGAGOR TO DEFEND TITLE AND REMOVE LIENS: The
Mortgagor warrants that it has good right and lawful authority to mortgage
the Mortgaged Property for the purposes herein expressed, and that the
Mortgaged Property is free and clear of any Lien, affecting the title
thereto, except the lien of this Mortgage and Permitted Encumbrances. Except
as to Permitted Encumbrances, the Mortgagor will, so long as any of the Notes
shall be outstanding, maintain and preserve the lien of this Mortgage
superior to all other Liens affecting the Mortgaged Property and will forever
warrant and defend the title to the Mortgaged Property against any and all
claims and demands. Except as to Permitted Encumbrances, the Mortgagor will
promptly pay or discharge any and all obligations for or on account of which
any such Lien or charge might exist or could be created and any and all
lawful taxes, rates, levies, assessments, Liens, claims or other charges
imposed upon or accruing upon any of the Mortgagor's property (whether taxed
to the Mortgagor or to any Noteholder), or the franchises, earnings or
business of the Mortgagor, as and when the same shall become due and payable;
and when called upon so to do the Mortgagor will furnish to the Mortgagee or
to any Noteholder adequate proof of such payment or discharge; PROVIDED,
HOWEVER, that this provision shall not be deemed to require the payment or
discharge of any tax, rate, levy, assessment or other governmental charge
while the Mortgagor is contesting the validity thereof by appropriate
proceedings in good faith and so long as it shall have set aside on its books
adequate reserves with respect thereto.
SECTION 4.03. NO ENCUMBRANCES ON PROPERTY: Except to secure loans
made by the Mortgagor to the Mortgagee or any other Noteholder, the Mortgagor
will not, without the consent in writing of the Mortgagee, create or incur or
suffer or permit to be created or incurred or to exist any Lien, charge,
assignment, pledge, mortgage on any of the Mortgaged Property prior to or on
a parity with the Lien of this Mortgage except for the Permitted
Encumbrances. Subject to the provisions of Section 4.04, or unless approved
by the Mortgagee, the Mortgagor will purchase all materials, equipment and
replacements to be incorporated in or used in connection with the Mortgaged
Property outright and not subject to any conditional sales agreement, chattel
mortgage, bailment, lease or other agreement reserving to the seller any
right, title or Lien.
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SECTION 4.04. ADDITIONAL PERMITTED DEBT: Except as permitted by
Section 4.20, the Mortgagor shall not incur, assume, guarantee or otherwise
become liable in respect of any debt other than the following (the "Permitted
Debt"):
(1) Additional Notes;
(2) Purchase money indebtedness in non-electric utility
property, in an amount not exceeding 10% of Total Utility Plant or 50%
of Equity, whichever is greater;
(3) Subordinated Indebtedness;
(4) Restricted Rentals in an amount not to exceed 5% of Equity
during any 12 consecutive calendar month period;
(5) Unsecured current debt and lease obligations incurred in
the ordinary course of business including accounts payable for goods
and services; and
(6) Debt represented by dividends declared but not paid.
SECTION 4.05. PAYMENT OF NOTES: The Mortgagor will duly and
punctually pay the principal of and interest on the Notes at the dates and
places and in the manner provided therein, and all other sums becoming due
hereunder.
SECTION 4.06. PRESERVATION OF CORPORATE EXISTENCE AND FRANCHISES:
COMPLIANCE WITH LAWS: LIMITATIONS ON MERGERS AND TRANSFERS OF CAPITAL ASSETS:
(a) The Mortgagor will, so long as any of the Notes are outstanding,
take or cause to be taken all such action as from time to time may be
necessary to preserve its corporate existence and to preserve and renew all
franchises, rights of way, easements, permits, and licenses not or hereafter
to be granted or upon it conferred, and will comply with all valid laws,
ordinances, regulations, and requirements applicable to it or its property.
(b) The Mortgagor will not consolidate with or merge or sell all or
substantially all of the business or assets of the Mortgagor unless such
consolidation, merger or sale of all or substantially all of the assets of
the Mortgagor is either approved by the Mortgagee or the successor
corporation assumes the due and punctual payments of the Notes and the due
and punctual performance of the covenants contained in this Mortgage. In the
event of any consolidation or merger or sale or all or substantially all of
the assets of the Mortgagor, and provided a supplement to this Mortgage is
executed specifying that no Additional Notes may be issued hereunder and that
no further advances may be made on any outstanding Notes, the Lien of this
Mortgage shall not extend to property of the successor entity or any property
thereafter acquired by the successor entity subsequent to such merger except
for property then subject to the Lien of this Mortgage and extensions,
improvements, substitutions and alterations to, upon, or of such property.
(c) The Mortgagor will not sell, lease or transfer (or make any
agreement therefor) any capital asset, unless the fair market value of such
asset is less than $50,000 and the aggregate value of assets so sold, leased
or transferred in
10
any 12-month period is less than $200,000 and the proceeds of such sale,
lease or transfer, less ordinary and reasonable expenses incident to such
transaction, are immediately (i) applied as a prepayment of the Notes, to
such installments thereof as may be designated by the Noteholder at the time
of any such prepayment, (ii) in the case of dispositions of equipment,
materials or scrap, applied to the purchase of other property useful in the
Mortgagor's business, not necessarily of the same kind as the property
disposed of, which shall forthwith become subject to the Lien of the
Mortgage, (iii) set aside as a deposit in the construction fund contemplated
by Account Number 132.1 of the Uniform System of Accounts, or (iv) applied to
the acquisition or construction of other property or in reimbursement of the
cost of such property; PROVIDED, HOWEVER, 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, the Mortgagee approves sales,
leases or transfers by the Mortgagor of any capital asset in exchange for
fair market value consideration to the Mortgagor in respect of such sale,
lease or transfer if the value of such capital asset is less than 5% of Total
Utility Plant and the aggregate value of capital assets sold, leased or
transferred in any 12-month period is less than 10% of Total Utility Plant.
SECTION 4.07. MAINTENANCE OF MORTGAGED PROPERTY: (a) So long as the
Mortgagor holds title to the Mortgaged Property, the Mortgagor will at all
times maintain and preserve the Mortgaged Property and each and every part
and parcel thereof in good repair, working order and condition, ordinary wear
and tear and Acts of God excepted, and in compliance with all applicable
laws, regulations and orders, and will from time to time make all needed and
proper repairs, renewals, and replacements, and useful and proper
alterations, additions, betterments and improvements, and will, subject to
contingencies beyond its reasonable control, at all times keep its plant and
properties in continuous operating condition and use all reasonable diligence
to furnish the consumers served by it through the Mortgaged Property, or any
part thereof, with an adequate supply of electric energy and other services
furnished by the Mortgagor. if any substantial part of the Mortgaged Property
is leased by the Mortgagor to any other party, the lease agreement between
the Mortgagor and the lessee shall obligate the lessee to comply with the
provisions of subsections (a) and (b) of this Section in respect of the
leased facilities and to permit the Mortgagor to operate the leased
facilities in the event of any failure by the lessee to so comply.
(b) The Mortgagor will cause the sum (the "Sum") of the amount used
during each period of three consecutive calendar years during the term of
this Mortgage for maintenance, renewals and replacements of the Mortgaged
Property, to be at least equal to 10% of the result (the "Result") obtained
subtracting the power cost of the Mortgagor for such three-year period from
the gross operating revenues of the Mortgagor for such three-year period. The
Mortgagor will, within five months after the close of the third complete
calendar year, and within five months after the end of each three-year period
following said year, furnish to the Mortgagee a certificate from the general
manager or other officer of the Mortgagor in form and substance satisfactory
to the Mortgagee certifying compliance with this Section.
(c) The Mortgagor further agrees upon reasonable written request of
the Mortgagee, which request shall be made no more frequently than once every
three years, to supply promptly to the Mortgagee an initial certification
(hereinafter
11
called the "Initial Certification"), in form satisfactory to the Mortgagee,
prepared by an independent professional engineer, who shall be satisfactory
to the Mortgagee, as to the condition of the Mortgaged Property. If in the
sole judgment of the Mortgagee such Initial Certification discloses the need
for improvements to the condition of the Mortgaged Property or the utility
operations of the Mortgagor, the Mortgagee may send to the Mortgagor a
written report of such improvements and the Mortgagor will upon receipt of
such written report promptly undertake to accomplish such of these
improvements as are required by the Mortgagee. One year after receipt of such
written report, the Mortgagor shall submit a second certification
(hereinafter called the "Second Certification"), in form satisfactory to the
Mortgagee, prepared by an independent professional engineer, who shall be
satisfactory to the Mortgagee, as to the condition of the Mortgaged Property
and the utility operations of the Mortgagor. If in the sole judgment of the
Mortgagee such Second Certification discloses inadequacies in the condition
of the Mortgaged Property or the utility operations of the Mortgagor, the
Mortgagee may send to the Mortgagor written notice of these inadequacies, and
the Mortgagor shall cure such inadequacies, within sixty (60) days of receipt
of such notice.
SECTION 4.08. INSURANCE: RESTORATION OF DAMAGED MORTGAGED PROPERTY:
The Mortgagor will take out, as the respective risks are incurred, and
maintain the classes and amounts of insurance in conformance with generally
accepted utility industry standards for such classes and amounts of coverages
of utilities of the size and character of the Mortgagor.
The foregoing insurance coverage shall be obtained by means of bond
and policy forms approved by regulatory authorities, and, with respect to
insurance upon any part of the Mortgaged Property, shall provide that the
insurance shall be payable to the Noteholders as their interest may appear
(by means of the standard mortgagee clause without contribution, if
obtainable). Each policy or other contract for such insurance shall contain
an agreement by the insurer that, notwithstanding any right of cancellation
reserved to such insurer, such policy or contract shall continue in force for
at least 30 days after written notice to the Mortgagee of cancellation.
In the event of damage to or the destruction or loss of any portion
of the Mortgaged Property which shall be covered by insurance, unless the
Mortgagee shall otherwise agree, the Mortgagor shall replace or restore such
damaged, destroyed or lost portion so that the Mortgaged property shall be in
substantially the same condition as it was in prior to such damage,
destruction or loss and shall apply the proceeds of the insurance or that
purpose. The Mortgagor shall replace the loss or shall commence such
restoration promptly after such damage, destruction or loss shall have
occurred and shall complete such replacement or restoration as expeditiously
as practicable, and shall pay or cause to be paid out of the proceeds of such
insurance all costs and expenses in connection therewith so that such
replacement or restoration shall be so completed that the portion of the
Mortgaged Property so replaced or restored shall be free and clear of all
mechanics' liens and other claims.
Sums recovered under any policy or fidelity bond by the Mortgagor
for a loss of funds advanced under the Notes or recovered by the Mortgagee
for any loss under such policy or bond shall, unless otherwise directed by
the Mortgagee, be
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applied to the prepayment of the Notes PRO RATA according to the unpaid
principal amounts thereof (such prepayments to be applied to such notes and
installments thereof as may be designated by the noteholder at the time of
any such prepayment), or be deposited in the construction fund-trustee
account and used to construct or acquire facilities which will become part of
the Mortgaged Property. At the request of the Mortgagee, the Mortgagor shall
exercise such rights and remedies which it may have under such policy or
fidelity bond and which may be designated by the Mortgagee, and the Mortgagor
hereby irrevocably appoints the Mortgagee as its agent to exercise such
rights and remedies under such policy or bond as the Mortgagee may choose,
and the Mortgagor shall pay all costs and expenses incurred by the Mortgagee
in connection with such exercise.
SECTION 4.09. MORTGAGEE RIGHT TO EXPEND MONEY TO PROTECT MORTGAGED
PROPERTY: The Mortgagor agrees that the Mortgagee and any other Noteholder
from time to time hereunder may, in its sole discretion, after having given 5
business days prior written notice to Mortgagor, but shall not be obligated
to, advance funds on behalf of Mortgagor, in order to insure Mortgagor
compliance with any covenant, warranty, representation or agreement of
Mortgagor made in or pursuant to this Agreement or any of the Loan
Agreements, to preserve or protect any right or interest of the Mortgagee
in the Mortgaged Property or under or pursuant to this Agreement or any of
the Loan Agreements, including without limitation, the payment of any
insurance premiums or taxes and the satisfaction or discharge of any judgment
or any Lien upon the Mortgaged Property or other property or assets of
Mortgagor; provided, however, that the making of any such advance by the
Mortgagee or any Noteholder shall not constitute a waiver by the Mortgagee or
any Noteholder of any Event of Default with respect to which such advance is
made nor relieve Borrower of any such Event of Default. The Mortgagor shall
pay to the Mortgagee or any such Noteholder upon demand all such advances
made by the Mortgagee or any such Noteholder with interest thereon at a rate
equal to the Mortgagee's rate at such time for short-term loans but in no
event shall such rate be in excess of the maximum rate permitted by
applicable law. All such advances shall be included in the obligations and
secured by the security interest granted hereunder.
SECTION 4.10. LIMITATIONS ON: SYSTEM EXTENSIONS AND ADDITIONS:
OPERATIONS AND MAINTENANCE CONTRACTS: POWER PURCHASE CONTRACTS: POWER SALES
CONTRACTS: Unless the Mortgagor shall at the time have an Equity of at least
40% or shall have achieved a TIER of at least 1.5 for each of the last two
Calendar Years, the Mortgagor will not, without the approval in writing of
the Mortgagee, unless otherwise required by State regulatory authority, (a)
construct, make, lease, purchase or otherwise acquire any extensions or
additions to its system which provide direct service to an ultimate consumer
having an anticipated or contract demand in excess of twenty-five (25)
percent of the Mortgagor's maximum system electrical demand recorded during
the past twelve months; (b) enter into any contract or contracts for the sale
to the ultimate consumer of electric power and energy in excess of
twenty-five (25) percent of the Mortgagor's maximum system demand; (c)
subject to Section 4.07(a) enter into any contract or contracts for the use
by others of all or a substantial part of its property; (d) enter into any
contract or contracts for the purchase of electric power or energy which
would alter the source of more than 25% of the Mortgagor's source of
wholesale power or for any transmission, interconnection or pooling
arrangements.
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SECTION 4.11. FINANCIAL BOOKS: FINANCIAL REPORTS: MORTGAGEE RIGHT OF
INSPECTION: The Mortgagor will at all times keep, and safely preserve, proper
books, records and accounts in which full and true entries will be mad& of
all of the dealings, business and affairs of the Mortgagor, in accordance
with the methods and principles of accounting prescribed in the Uniform
System of Accounts adopted or endorsed by the Mortgagee. The Mortgagor will
prepare and furnish the Mortgagee and the other Noteholders from time to time
hereunder not later than the last day of each month, or at less frequent
intervals when specified by the Mortgagee, financial and statistical reports
on its condition and operations for the previous month. Such reports shall be
in such form and include such information as may be specified by the
Mortgagee, including without limitation an analysis of the Mortgagor's
revenues, expenses and consumer accounts. The Mortgagor will cause to be
prepared and furnished to the Mortgagee and the other Noteholders from time
to time hereunder, at least once during each 12-month period during the term
hereof, a full and complete report of its financial condition and of its
operations as of the end of the Mortgagor's Calendar Year in form and
substance satisfactory to the Mortgagee, audited and certified by independent
certified public accountants nationally recognized or otherwise satisfactory
to the Mortgagee and accompanied by a report of such audit in form and
substance satisfactory to the Mortgagee. Such report shall be furnished
within 120 days of the end of the Mortgagor's Calendar year. The Mortgagee,
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 Mortgagor
or in anywise pertaining to its property or business.
SECTION 4.12. FURTHER ASSURANCES TO CONFIRM SECURITY OF MORTGAGE:
Upon request of any Noteholder from time to time hereunder, the Mortgagor
shall promptly execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, to such Noteholder from time to time such
supplements hereto and such financing statements and other instruments and
documents as may be requested by such Noteholder to protect and preserve the
Mortgaged Property, perfection of such Noteholder's security interest therein
and/or such Noteholder's rights and remedies hereunder.
SECTION 4.13. TIME EXTENSIONS FOR PAYMENT OF NOTES: Any Noteholder
may, at any time or times in succession without notice to or the consent of
the Mortgagor and upon such terms as such Noteholder may prescribe, grant to
any person, firm or corporation who shall have become obligated to pay all or
any part of the principal of or interest on any Note held by or indebtedness
owed to such Noteholder or who may be affected by the lien hereby created, an
extension of the time for the payment of such principal or interest, and
after any such extension the Mortgagor will remain liable for the payment of
such Note or indebtedness to the same extent as though it had at the time of
such extension consented thereto in writing.
SECTION 4.14. ACHIEVEMENT OF TIMES INTEREST EARNED RATIO AND DEBT
SERVICE COVERAGE: DESIGN OF RATES: The Mortgagor, subject to events in the
judgment of the Mortgagee to be beyond the control of the Mortgagor, shall so
operate and manage its business as to achieve a TIER of not less than 1.5,
and a DSC of not
14
less than 1.25, each of said ratios being determined by averaging the two
highest annual ratios during the most recent three Calendar Years. The
Mortgagor shall design its rates so that such TIER and DSC ratios will be
achieved and shall notify any Noteholder in writing of any change in its
general rate structure within thirty days after such change takes effect. The
Mortgagor shall not decrease its rates if it is failing on an actual
historical basis to meet the ratios set forth in this Section.
SECTION 4.15. LIMITATION ON DIVIDENDS. PATRONAGE REFUNDS AN& OTHER
CASH DISTRIBUTIONS: The Mortgagor will not, in any Calendar Year, without the
approval in writing of the Mortgagee, declare or pay any dividends or pay or
determine to pay any patronage refunds, or retire any patronage capital or
make any other cash distributions (such dividends, refunds, retirement and
other distributions being hereinafter collectively called "distributions"), to
its members, stockholders or consumers if after giving effect to any such
distribution the total Equity of the Mortgagor will not equal or exceed 40%
of its total assets and other debits; PROVIDED, HOWEVER, that in any event
the Mortgagor may make distributions to estates of deceased patrons to the
extent required or permitted by its articles of incorporation and bylaws,
and, if such distributions to such estates do not exceed 25% of the patronage
capital and margins received by the Mortgagor in the next preceding year,
make such additional distributions in any year as will not cause the total
distributions in such year to exceed 25% of the patronage capital and margins
received in such next preceding year, and PROVIDED, FURTHER, HOWEVER, that in
no event will the Mortgagor make any distributions if there is unpaid when
due any installment of principal of or interest on the Notes, if the
Mortgagor is otherwise in default hereunder or if, after giving effect to any
such distribution, the Mortgagor's total current and accrued assets would be
less than its total current and accrued liabilities. For the purpose of this
section a "cash distribution" shall be deemed to include any general
cancellation or abatement of charges far electric energy or services
furnished by the Mortgagor, but not the repayment of a membership fee upon
termination of a membership and not the rebate of an abatement of costs
incurred by the Mortgagor, such as a reduction of wholesale power cost
previously incurred.
SECTION 4.16. APPLICATION OF PROCEEDS FROM CONDEMNATION: In the
event that the Mortgaged Property or any part thereof, shall be taken under
the power of eminent domain, all proceeds and avails therefrom may be
deposited in the construction fund contemplated by Account 131.2 of the
Uniform System of Accounts and used to finance construction or facilities
secured or to be secured by this Mortgage. Any proceeds not so used shall
forthwith be applied by the Mortgagor; first, to the ratable payment of any
indebtedness secured by this Mortgage other than principal of or interest on
the Notes; second, to the ratable payment of interest which shall have
accrued on the Notes and be unpaid; third, to the ratable payment of or on
account of the unpaid principal of the Notes, to such installments thereof as
may be designated by the respective Noteholders at the time of any such
payment.
SECTION 4.17. COMPLIANCE WITH LOAN AGREEMENTS: NOTICE OF AMENDMENTS
TO AND DEFAULTS UNDER. LOAN AGREEMENTS AND CERTAIN OTHER AGREEMENTS: TERMS OF
MORTGAGE TO GOVERN: The Mortgagor will observe and perform all of the
covenants, agreements, terms and conditions contained in any Loan Agreement
entered into in
15
connection with the issuance of any of the Notes, as from time to time
amended. The Mortgagor will send promptly to any Noteholder notice of any
default by the Mortgagor under any Loan Agreement; and a notice of any
amendment to any Loan Agreement. For purposes of this Mortgage, in the event
of any inconsistency between the terms of this Mortgage and the terms of the
Loan Agreement the terms of this Mortgage shall govern.
SECTION 4.18. NOTICE OF CHANGE IN PLACE OF BUSINESS: The Mortgagor
will promptly notify the Mortgagee in writing of any change in location of
its chief executive offices or the office where its records concerning
accounts and contract rights are kept.
SECTION 4.19. RIGHTS OF WAY, ETC., NECESSARY IN BUSINESS: The
Mortgagor will use its best efforts to obtain all such rights of way,
easements from landowners and releases from lienors as shall be necessary or
advisable in the conduct of its business, and, if requested by the Mortgagee,
deliver to the Mortgagee evidence satisfactory to them of the obtaining of
such rights of way, easements or releases.
SECTION 4.20. LIMITATIONS ON LOANS, INVESTMENTS AND OTHER
OBLIGATIONS: The Mortgagor will not, without the written approval of the
Mortgagee, hereafter make any loan or advance to, or make any investment in,
or purchase or make any commitment to purchase any stock, bonds, notes or
other securities of, or guaranty, assume or otherwise become obligated or
liable with respect to the obligations of, any person, firm or corporation,
except (i) securities or deposits issued, guaranteed or fully insured as to
payment by the United States Government or any agency thereof, (ii) Capital
Term Certificates or other securities of the Mortgagee, (iii) capital
credits, (iv) loans, deposits, advances, investments, securities and
obligations which the Mortgagor has, prior to the date hereof, committed
itself to make, purchase or undertake, as the case may be, and as to which
the Mortgagor has given the notice in writing prior to the date hereof, and
(v) such other loans, deposits, advances, investments and obligations as may
from time to time to be made, purchased or undertaken by the Mortgagor;
PROVIDED, HOWEVER, that the aggregate cost of investments, plus the total
unpaid principal amount of loans, guarantees, deposits, advances and
obligations, permitted under this clause (v) shall not at any time exceed the
greater of 10% of the Total Utility Plant of the Mortgagor or 50% of Total
Margins and Equity.
ARTICLE V
REMEDIES OF THE MORTGAGEE AND NOTEHOLDERS
SECTION 5.01. EVENTS OF DEFAULT: Each of the following shall be an
Event of Default:
(a) default shall be made in the payment of any installment of
or on account of interest on or principal of any note or notes for more
than thirty (30) days after the same shall be required to be made;
(b) default shall be made in the due observance or performance
of any other of the covenants, conditions or agreements on the part of
the
16
Mortgagor, in any of the notes loan agreements or in this Mortgage
contained, and such default shall continue for a period of sixty (60)
days after written notice specifying such default and requiring the
same to be remedied shall have been given to the Mortgagor by any
noteholder;
(c) the Mortgagor shall file a petition in bankruptcy or be
adjudicated a bankrupt or insolvent, or shall make an assignment for
the benefit of its creditors, or shall consent to the appointment of a
receiver of itself or of its property, or shall institute proceedings
for its reorganization or proceedings instituted by others for its
reorganization shall not be dismissed within sixty (60) days after the
institution thereof;
(d) a receiver or liquidator of the Mortgagor or of any
substantial portion of its property shall be appointed and the order
appointing such receiver or liquidator shall not be vacated within
sixty (60) days after the entry thereof;
(e) the Mortgagor shall forfeit or otherwise be deprived of
its corporate charter or franchises, permits, easements, or licenses
required to carry on any material portion of its business;
(f) a final judgment shall be entered against the Mortgagor
and shall remain unsatisfied or without a stay in respect thereof for a
period of sixty (60) days; or,
(g) any representation or warranty made by the Mortgagor
herein, in the Loan Agreements or other loan agreement providing for a
loan secured hereby or in any certificate or financial statement
delivered hereunder or thereunder shall prove to be false in any
material respect.
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND AMENDMENT:
(a) If an Event of Default described in Section 5.01(a) has
occurred and is continuing, the Holder of any Note upon which such
default has occurred may declare the principal of all its Notes secured
hereunder to be due and payable immediately by a notice in writing to
the Mortgagor and to all other Holders of Notes secured by this
Mortgage, and upon such declaration, all unpaid principal and accrued
interest so declared shall become due and payable immediately, anything
contained herein or in any Note or Notes to the contrary
notwithstanding. Upon receipt of any notice of acceleration by any
Noteholder, all other Holders of Notes secured hereunder may declare
the principal of all of such Notes to be due and payable immediately by
a notice in writing to the Mortgagor and to all other Holders of Notes
secured by this Mortgage and upon such declaration, all unpaid
principal and accrued interest so declared shall become due and payable
immediately, anything contained herein or in any Note or Notes to the
contrary notwithstanding.
(b) If any other Event of Default shall have occurred and be
continuing, CFC may declare the principal and accrued interest on all
Notes secured by this Mortgage due and payable and upon such
declaration,
17
all unpaid principal and interest so declared shall become due and
payable immediately, anything contained herein or in any Note or Notes
to the contrary notwithstanding. Should CFC not take action to
accelerate the Notes within thirty days after an Event of Default, any
Noteholder shall have the right to declare the principal and accrued
interest on all Notes secured by this Mortgage due and payable and upon
such declaration, all unpaid principal and interest so declared shall
become due and payable immediately, anything contained herein or in any
Note or Notes to the contrary notwithstanding.
(c) If at any time after the unpaid principal of and accrued
interest on any of the Notes shall have been so declared to be due and
payable, all payments in respect of principal and interest which shall
have become due and payable by the terms of such Note or Notes (other
than amounts due as a result of the acceleration of the Notes) shall be
paid to the respective Noteholders, and all other defaults hereunder
and under the Notes shall have been made good and secured to the
satisfaction of all of the Noteholders, then and in every such case,
the Noteholder or Noteholders who shall have declared the principal of
and interest on Notes held by such Noteholder or Noteholders to be due
and payable may, by written notice to the Mortgagor and delivery of a
copy thereof to the other Noteholders, annul such declaration or
declarations and waive such default or defaults and the consequences
thereof, but no such waiver shall extend to or affect any subsequent
default or impair any right consequent thereon.
SECTION 5.03. REMEDIES OF MORTGAGEE AND NOTEHOLDERS: If one or more
of the Events of Default shall occur and be continuing CFC personally or by
attorney, in its or their discretion, may, in so far as not prohibited by law:
(a) take immediate possession of the Mortgaged Property,
collect and receive all credits, outstanding accounts and bills
receivable of the Mortgagor and all rents, income, revenues and profits
pertaining to or arising from the Mortgaged Property, or any part
thereof, whether then past due or accruing thereafter, and issue
binding receipts therefor; and manage, control and operate the
Mortgaged Property as fully as the Mortgagor might do if in possession
thereof, including, without limitation, the making of all repairs or
replacements deemed necessary or advisable;
(b) proceed to protect and enforce the rights of the Mortgagee
and the rights of the Noteholder or Noteholders under this Mortgage by
suits or actions in equity or at law in any court or courts of
competent jurisdiction, whether for specific performance of any
covenant or any agreement contained herein or in aid of the execution
of any power herein granted or for the foreclosure hereof or hereunder
or for the sale of the Mortgaged Property, or any part thereof, or to
collect the debts hereby secured or for the enforcement of such other
or additional appropriate legal or equitable remedies as may be deemed
necessary or advisable to protect and enforce the rights and remedies
herein granted or conferred, and in the event of the institution of any
such action or suit the Noteholder or Noteholders instituting such
action or suit shall have the
18
right to have appointed a receiver of the Mortgaged Property and of
all rents, income, revenues and profits pertaining thereto or arising
therefrom, whether then past due or accruing after the appointment of
such receiver, derived, received or had from the time of the
commencement of such suit or action, and such receiver shall have all
the usual powers and duties of receivers in like and similar cases, to
the fullest extent permitted by law, and if application shall be made
for the appointment of a receiver the Mortgagor hereby expressly
consents that the court to which such application shall be made may
make said appointment; and
(c) sell or cause to be sold all and singular the Mortgaged
Property or any part thereof, and all right, title, interest, claim and
demand of the Mortgagor therein or thereto, at public auction at such
place in any county in which the property to be sold, or any part
thereof, is located, at such time and upon such terms as may be
specified in a notice of sale, which shall state the time when and the
place where the sale is to be held, shall contain a brief general
description of the property to be sold, and shall be given by mailing a
copy thereof to the Mortgagor at least fifteen (15) days prior to the
date fixed for such sale and by publishing the same once in each week
for two successive calendar weeks prior to the date of such sale in a
newspaper of general circulation published in said county or, if no
such newspaper is published in such county, in a newspaper of general
circulation in such county, the first such publication to be not less
than fifteen (15) days nor more than thirty (30) days prior to the date
fixed for such sale. Any sale to be made under this subparagraph (c) of
this Section 5.03 may be adjourned from time to time by announcement at
the time and place appointed for such sale or for such adjourned sale
or sales, and without further notice or publication the sale may be had
at the time and place to which the same shall be adjourned; PROVIDED,
HOWEVER, that in the event another or different notice of sale or
another or different manner of conducting the same shall be required by
law the notice of sale shall be given or the sale be conducted, as the
case may be, in accordance with the applicable provisions of law. The
expense incurred by such Noteholder or Noteholders (including, but not
limited to, receiver's fees, counsel fees, cost of advertisement and
agents' compensation) in the exercise of any of the remedies provided
in this Mortgage shall be secured by this Mortgage.
Upon the expiration of 60 days after one or more Events of Default, any right
or remedy herein or by law conferred which CFC shall not have proceeded to
exercise or enforce may to the extent permitted by applicable law, be
exercised or enforced by any Noteholder on behalf of all Noteholders.
SECTION 5.04. APPLICATION OF PROCEEDS FROM REMEDIAL ACTIONS: Any
proceeds or funds arising from the exercise of any rights or the enforcement
of any remedies herein provided after the payment or provision for the
payment of any and all costs and expenses in connection with the exercise of
such rights or the enforcement of such remedies shall be applied first, to
the ratable payment of indebtedness hereby secured other than the principal
of or interest on the notes; second, to the ratable payment of interest which
shall have accrued on the notes and which shall be unpaid; third, to the
ratable payment of or on account of the unpaid principal of the notes; and
the balance, if any, shall be paid to
19
whosoever shall be entitled thereto.
SECTION 5.05. REMEDIES CUMULATIVE: NO ELECTION: Every right or
remedy herein conferred upon or reserved to the Mortgagee or to the
Noteholders shall be cumulative and shall be in addition to every other right
and remedy given hereunder or now or hereafter existing at law, or in equity,
or by statute. The pursuit of any right or remedy shall not be construed as
an election.
SECTION 5.06. WAIVER OF APPRAISEMENT RIGHTS: The Mortgagor, for
itself and all who may claim through or under it, covenants that it will not
at any time insist upon or plead, or in any manner whatever claim, or take
the benefit or advantage of, any appraisement, valuation, stay, extension or
redemption laws now or hereafter in force in any locality where any of the
Mortgaged Property may be situated, in order to prevent, delay or hinder the
enforcement or foreclosure of this Mortgage, or the absolute sale of the
Mortgaged Property, or any part thereof, or the final and absolute putting
into possession thereof, immediately after such sale, of the purchaser or
purchasers thereat, and the Mortgagor, for itself and all who may claim
through or under it, hereby waives the benefit of all such laws unless such
waiver shall be forbidden by law.
SECTION 5.07. NOTICE OF DEFAULT: The Mortgagor covenants that it
will give immediate written notice to the Mortgagee and to all Noteholders of
the occurrence of an Event of Default or in the event that any right or
remedy described in clauses (a) through (c) of Section 5.02 hereof is
exercised or enforced or any action is taken to exercise or enforce any such
right or remedy.
ARTICLE VI
POSSESSION UNTIL DEFAULT-DEFEASANCE CLAUSE
SECTION 6.01. POSSESSION UNTIL DEFAULT: Until some one or more of
the Events of Default shall have happened, the Mortgagor shall be suffered
and permitted to retain actual possession of the Mortgaged Property, and to
manage, operate and use the same and any part thereof, with the rights and
franchises appertaining thereto, and to collect, receive, take, use and enjoy
the rents, revenues, issues, earnings, income, products and profits thereof
or therefrom, subject to the provisions of this Mortgage.
SECTION 6.02. DEFEASANCE: If the Mortgagor shall pay or cause to be
paid the whole amount of the principal of and Interest on the Notes at the
times and in the manner therein provided, and shall also pay or cause to be
paid all other sums payable by the Mortgagor hereunder or under any Loan
Agreement and shall keep and perform, all covenants herein required to be
kept and performed by it, then and in that case, all property, rights and
interest hereby conveyed or assigned or pledged shall revert to the Mortgagor
and the estate, right, title and interest of the Mortgagee and the
Noteholders shall thereupon cease, determine and become void and the
Mortgagee and the Noteholders, in such case, on written demand of the
Mortgagor but at the Mortgagor's cost and expense, shall enter satisfaction
of the Mortgage upon the record. In any event, each Noteholder, upon payment
in full to such Noteholder by the Mortgagor of all principal of and interest
on any Note held by such Noteholder and the payment and discharge by the
Mortgagor of all charges due to such Noteholder hereunder or
20
under any Loan Agreement, shall execute and deliver to the Mortgagor such
instrument of satisfaction, discharge or release as shall be required by law
in the circumstances.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. PROPERTY DEEMED REAL PROPERTY: It is hereby declared
to be the intention of the Mortgagor that any electric generating plant or
plants and facilities and all electric transmission and distribution lines,
or other electric or non-electric systems and facilities, embraced in the
Mortgaged Property, including, without limitation, all rights of way and
easements granted or given to the Mortgagor or obtained by it to use real
property in connection with the construction, operation or maintenance of
such plant, lines, facilities or systems, and all other property physically
attached to any of the foregoing, shall be deemed to be real property.
SECTION 7.02. MORTGAGE TO BIND AND BENEFIT SUCCESSORS AND ASSIGNS:
All of the covenants, stipulations, promises, undertakings and agreements
herein contained by or on behalf of the Mortgagor shall bind its successors
and assigns, whether so specified or not, and all titles, rights and remedies
hereby granted to or conferred upon the Mortgagee shall pass to and inure to
the benefit of the successors and assigns of the Mortgagee and shall be
deemed to be granted or conferred for the ratable benefit and security of all
who shall from time to time be the Holders of Notes executed and delivered as
herein provided. The Mortgagor hereby agrees to execute such consents,
acknowledgements and other instruments as may be reasonably requested by the
Mortgagee or any Noteholder in connection with the assignment, transfer,
mortgage, hypothecation or pledge of the rights or interests of the Mortgagee
or any Noteholder hereunder or under the notes or in and to any of the
Mortgaged Property.
SECTION 7.03. HEADINGS: The descriptive headings of the various
articles of this Mortgage were formulated and inserted for convenience only
and shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
SECTION 7.04. NOTICES: All demands, notices, reports, approvals,
designations, or directions required or permitted to be given hereunder shall
be in writing and shall be deemed to be properly given if sent by registered
or certified mall, postage prepaid, or delivered by hand, addressed to the
proper party or parties at the following address:
21
As to the Mortgagor: CAP ROCK ELECTRIC COOPERATIVE, INC.
Xxxx Xxxxxxx 00
X.X. Xxx 000
Xxxxxxx, XX 00000-0000
As to the Mortgagee: NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
Woodland Park
0000 Xxxxxxxxxxx Xxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Loan Officer
and as to any other person, firm, corporation or governmental body or agency
having an interest herein by reason of being the Holder of any Note or
otherwise, at the last address designated by such person, firm, corporation,
governmental body or agency to the Mortgagor and the Mortgagee. Any such
party may from time to time designate to each other a new address to which
demands, notices, reports, approvals, designations or directions may be
addressed, and from and after any such designation the address designated
shall be deemed to be the address of such party in lieu of the address given
above.
SECTION 7.05. SEVERABILITY: The invalidity of any one or more
phrases, clauses, sentences, paragraphs or provisions of this Mortgage shall
not affect the remaining portions hereof, nor shall any invalidity as to any
Noteholders hereunder affect the rights hereunder of any other Noteholders.
SECTION 7.06. MORTGAGE DEEMED SECURITY AGREEMENT: To the extent that
any of the property described or referred to in this Mortgage is governed by
the provisions of the Uniform Commercial Code this Mortgage is hereby deemed
a "security agreement" under the Uniform Commercial Code, and a "financing
statement" under the Uniform Commercial Code for said security agreement. The
mailing addresses of the Mortgagor as debtor, and any Noteholder as secured
party are as set forth in Section 7.04 hereof.
SECTION 7.07. INDEMNIFICATION BY MORTGAGOR OF MORTGAGEE: The
Mortgagor agrees to indemnify and save harmless the Mortgagee and any other
Noteholder against any liability or damages which any of them may incur or
sustain in the exercise and performance of their rightful powers and duties
hereunder. For such reimbursement and indemnity, the Mortgagee no any other
Noteholder shall be secured under this Mortgage in the same manner as the
Notes and all such reimbursements for expense or damage shall be paid to the
Mortgagee or any other Noteholder incurring or suffering the same with
interest at the rate specified in Section 4.10 hereof.
22
IN WITNESS WHEREOF, CAP ROCK ELECTRIC COOPERATIVE, INC. as
Mortgagor, has caused this Restated Mortgage and Security Agreement to be
signed in its name and its corporate seal to be hereunto affixed and attested
by its officers thereunto duly authorized, and NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION, as Mortgagee,. has caused this Restated
Mortgage and Security Agreement to be signed in its name and its corporate
seal to be hereunto affixed and attested by its officers thereunto duly
authorized, all 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
Executed by the (Mortgagor
in the presence of:
/s/ Ulen North, Jr.
--------------------------------------
/s/ ILLEGIBLE
--------------------------------------
Witnesses
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
(SEAL)
By: /s/ Xxxxxxxx Zaualick
--------------------------------
Governor
Attest: /s/ ILLEGIBLE
-------------------------------
Assistant Secretary
Executed by the Mortgagee
in the presence of:
/s/ Xxxxxx X. ??
--------------------------------------
/s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Witnesses
23
STATE OF TEXAS )
) SS
COUNTY OF XXXXXX )
On this 10th day of March, 1992, before me appeared Xxxxxxx X. Xxxxx
and Xxxxxx X. Xxxxxxxx personally known, who, being by me sworn did say that
they are the President and Secretary, respectively, of Cap Rock Electric
Cooperative, Inc., a corporation, and that the seal affixed to the foregoing
instrument is the corporate seal of said corporation, and that said
instrument was signed and sealed in behalf of said corporation by authority
of its Board of Directors, and said Xxxxxxx X. Xxxxx and Xxxxxx X. Xxxxxxxx
acknowledged said instrument to be the free act and deed said corporation.
IN WITNESS whereof, I have hereunto set my hand and official seal the
day and year last above written.
/s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
(Notarial Seal) Notary Public
My commission expires: 0-00-00
XXXXXXXXXXXX XX XXXXXXXX ) SS
BEFORE ME, a Notary Public, in and for the Commonwealth of Virginia,
appeared in person the within named Xxxxxxxx Zaualick. Signing for the
Governor of the National Rural Utilities Cooperative Finance Corporation, to
me personally known, and known to be the identical person who subscribed the
name of said corporation to the foregoing instrument, being by me duly sworn,
and who stated that he is duly authorized by the Board of Directors to
execute the foregoing instrument for and in the name and behalf of said
corporation, and further stated and acknowledged that he has executed the
foregoing instrument as the free and voluntary act and deed of said
corporation for the consideration, uses and purposes therein mentioned and
set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal
this 5th day of December, 1991.
/s/ Xxxxxxx X. Xxxxx
---------------------------------
(Notarial Seal) Notary Public
My commission expires:
Xxxxxxx X. Xxxxx
Notary Public
Commonwealth of Virginia
My Commission Expires
ILLEGIBLE 31, 1994
APPENDIX A
INSTRUMENTS RECITAL
"Prior CFC Loan Agreements" dated as of 5/15/73, 7/8/74, 11/13/86, 4/24/78,
11/13/86, 8/23/85, 9/25/87, 4/19/89, 4/19/89, 4/19/89, 4/19/89, 3/22/90,
3/22/90, 3/22/90, 3/22/90, 3/22/90, 5/17/90
"Current CFC Amending Loan Agreement" dated as of even date herewith.
"Outstanding CFC Notes"
Loan
DESIGNATION NOTE DATE NOTE AMOUNT MATURITY DATE
----------- --------- ----------- -------------
9001 May 15, 1973 $109,000 May 15, 2008
9002 October 21, 1974 $158,000 October 21,2009
9004 August 20, 1987 $565,000 August 14, 2010
9008 July 27, 1978 $2,330,000 July 27, 2013
9012 August 20, 1987 $3,692,000 March 18, 2017
9013 September 24, 1985 $4,186,316 September 24, 2020
9014 April 19, 1989 $5,161,290 September 25, 2022
9015 April 19, 1989 $4,000,000 September 25, 2022
9016 April 19, 1989 $4,000,000 September 25, 2022
9017 April 19, 1989 $4,000,000 September 25, 2022
9018 March 22, 1990 $4,301,075 March 22, 2025
9019 March 22, 1990 $2,365,591 March 22, 2025
9020 March 22, 1990 $4,301,075 March 22, 2025
9021 March 22, 1990 $3,763,441 March 22, 2025
9022 March 22, 1990 $3,225,806 March 22, 2025
9023 May 17, 1990 $1,612,903 March 22, 2025
INSTRUMENT DATE
---------- ----
Supplemental Mortgage and Security Agreement May 15, 1973
Supplement to the Supplemental Mortgage
and Security Agreement March 18, 1982
"Maximum Debt Limit" shall be Fifty Million Dollars ($50,000,000).
APPENDIX B
PROPERTY SCHEDULE
(a) the Existing Electric Facilities are located in the following counties:
Andrews, Dawson, Borden, Ector, Midland, Xxxxxx, Xxxxxx, Upton,
Glasscock, Reagan, Sterling, Xxx Xxxxx and Xxxxx, all in Texas.
(b) The property referred to in the Granting Clause includes the following:
1. Two tracts of land described in a deed, dated April 12, 1972,
by Cap Rock Refrigeration Cooperative, Inc., as grantor, to
Cap Rock Electric Cooperative, Inc., as grantee, and recorded
in the office of the County Clerk of Xxxxxx County, Texas, in
Volume 143 on page 446.
2. One tract of land described in a deed, dated April 22, 1960,
by Cap Rock Refrigeration Cooperative, Inc., as grantor, to
Cap Rock Electric Cooperative, no., as grantee, and recorded
in the office of the County Clerk or Xxxxxx County, Texas, in
Volume 82 on page 73.
3. One tract of land described in a deed, dated June 5, 0000 Xxxx
xx Xxxxxxx, Xxxxx, as grantor, to Cap Rock Electric
Cooperative, Inc., as grantee, and recorded in the office the
County Clerk of Xxxxxx County, Texas in Volume 74 on page 169.
4. Two tracts of land described in a deed dated January 27, 1944,
by W.A. Raderli, as grantor, to Cap Rock Electric Cooperative,
Inc., as grantee and recorded in the office of the County
Clerk of Xxxxxx County, Texas in Volume 50 on pages 94 and 95.
5. One tract of land described in a deed dated October 3, 1953,
by Xxxx X. Xxxx and Ova X. Xxxx, as grantors, to Cap Rock
Electric Cooperative, Inc., as grantee, and recorded in the
office of the County Clerk of Xxxxxx County, Texas, in Volume
75 on page 399.
6. One tract off land described in a deed dated August 1, 1974,
by City of Xxxxxxx, Texas, as grantor, to Cap Rock Electric
Cooperative, Inc., as grantee, and recorded in the office of
the County Clerk of Xxxxxx County, Texas in Volume 156 on page
453.
7. One tract off land described in a deed dated January 13, 1975,
by X.X. Xxxxxxx, and wife, Xxxxx Xxxxxxx, as grantors, to Cap
Rock Electric Cooperative, Inc., as grantee, and recorded in
the office of the County Clerk of Xxxxxx County, Texas, in
Volume 159 on page 494.
8. One tract of land described in a deed dated March 24, 1975, by
Xxxxx X. Xxxxxxx, and wife, Xxxxx X. Xxxxxxx, as grantors, to
Cap Rock Electric Cooperative, Inc., as grantee, and recorded
in the office of the County Clerk of Midland County, Texas, in
Volume 591 on page 689.
9. One tract of land described in a deed dated May 7, 1975, by
Xxxxxxxx X. Xxxxxxxxxx, and wife, Xxxx Xxx Xxxxxxxxxx, as
grantors, to Cap Rock Electric Cooperative, Inc., as grantee,
and recorded in the office of the County Clerk of Xxxxxx
County, Texas, in Volume 59 on page 143.
10. One tract of land described in a deed dated April 17, 1978, by
Xxxx X. Xxxxxxxxx and wife, Xxxx Xxx Xxxxxxxxx, as grantors to
Cap Rock Electric Cooperative, Inc., as grantee, and recorded
in the office of the County Clerk of Xxxxxxxxx County, Texas,
in Volume 166, page 582.
11. One tract of land described in a deed dated May 8, 1978, by
Xxxxx Xxxxxxxxx, et. al., as grantors to Cap Rock Electric
Cooperative, Inc., as grantee, and recorded in the office of
the County Clerk of Xxxxxxxxx County, Texas in Volume 167,
page 628.
12. One tract of land described in a deed dated May 9, 1978, by
Xxx X. Xxxxxxx, Xx. and wife, Xxxxxxxx X. Xxxxxxx, as
grantors, to Cap Rock Electric Cooperative, Inc., as grantee,
and recorded in the office of the County Clerk of Upton
County, Texas n Volume 452, page 30.
13. One tract of land described in a deed dated June 20, 1978, by
X.X. Xxxxxxxxxx and wife, Xxxxxx X. Xxxxxxxxxx, as grantors,
to Cap Rock Electric Cooperative, Inc., as grantee, and
recorded in the office the County Clerk of Xxxxxx County,
Texas,
14. One tract of land described in a deed dated December 19, 1980,
by Xxxxx X. Xxxxx and wife, Xxxxxx Xxxxx, as grantors, to Cap
Rock Electric Cooperative, Inc., as grantee, and recorded in
the office of the County Clerk of Xxxxxx County, Texas, Volume
202, page 694.
15. One tract of land described in a deed dated February 15, 1980,
by Xxxx Xxxxxx Xxxxx, as grantor, to Cap Rock Electric
Cooperative, Inc., as grantee, and recorded in the office of
County Clerk of Xxxxxx County, Texas, in Volume 192, page 764.
16. One tract of land described in a deed dated June 4, 1981, by
X.X. Xxxxxxx, as grantor, to Cap Rock Electric Cooperative,
Inc., as grantee, and recorded in the office of the County
Clerk of Xxxxxx County, Texas in Volume 208, page 727.
17. One tract of land described in a deed dated January 8, 1982,
by X.X. Xxxxxx and wife, Xxxxxxxxx Xxxxxx, as grantors, to Cap
Rock Electric Cooperative, Inc., as grantee, and recorded in
the office of the County Clerk of Xxxxxx County, Texas, in
Volume 215, page 659.
18. One tract of land described in a deed dated March 7, 1984, by
Tri-City Beverages, as grantor, to Cap Rock Electric
Cooperative, Inc., as grantee, and recorded in the office of
the County Clerk of Xxxxxx County, Texas in Volume 238, Page
396.
Together with all plants, works, structures, erections, reservoirs,
dams, buildings, fixtures and improvements now or hereafter located on any of
the properties conveyed by any and all aforesaid deeds mentioned above and
all tenements, hereditaments and appurtenances now or hereafter thereunto
belonging or in anywise appertaining.
The description of each of the properties conveyed by and through the
provisions of the aforesaid deeds is by reference made a part hereof as
though fully set forth at length therein.
All properties formerly owned by Lone Wolf Electric Cooperative,
Inc. and transferred and assigned to Cap Rock Electric Cooperative, Inc.,
pursuant to the terms of the merge completed January 10, 1991, located in the
following counties of Texas:
Howard, Borden, Scurry, Fisher, Nolan, and Xxxxxxxx;
and all properties owned by Cap Rock Electric Cooperative, Inc located in the
following counties of Texas:
Xxxxxx, Midland, Glasscock, Reagan, Upton, Sterling, Xxx Xxxxx, Irion,
Ector, Dawson, Andrews, Scurry, Fisher, Xxxxx and Ardrews.
TRACT I: Being the West one hundred seventy-three feet (W 173') of Lots
Seven (7), Eight (8), Nine (9), Ten (10. eleven (11), and Twelve (12),
in Block Thirty-four (34), of the Xxxx, Xxxxxx and Xxxxx Addition of
the town of Colorado City, Xxxxxxxx County, Texas, SAVE AND EXCEPT that
part of Lots 11 and 12 deeded to the State of Texas for highway
purposes and recorded in Volume 2, Page 231, Deed Records of Xxxxxxxx
County, Texas, said Lots 7, 8, 9, 10 and the remainder of Lots 11 and
12, containing 2.096 acres of land and being more particularly
described as follows:
BEGINNING at an iron pin set for the Southwest corner of Xxx 0 xx xxx
xxxxxxxxxxxx xx Xxxxxxx Xxxxxx and College Avenue;
THENCE along the East boundary line of said Xxxxxxx Street and the West
boundary line of Xxxx 0 xxxxxxx 00, X. 00 xxx. 11' W. 558.65 feet to a
point from whence an iron pin bears N. 12 deg. 11' E. 1.25 feet;
THENCE along the South ROW of State Highway 208 with a curve to the
right with a radius of 587.28 feet a chord of S. 79 deg. 30' E. 187.5
feet to a point from whence an iron pin bears S. 12 deg. 11' E. 1.25
feet;
THENCE S. 12 deg 11' E. 486.34 feet to an iron pin set on the North
boundary line of College Avenue;
THENCE S. 77 deg. 49' along the North line of said College Avenue 173.0
feet to the PLACE OF BEGINNING and containing 2.096 acres of land, more
or less.
TRACT II: That certain 5.7 acres of land, more or less, out of Section
Xx. 00, xx Xxxxx Xx. 00, X. & P. Ry. Co. Survey, Cert. 2/1375, in
Xxxxxxxx County, Texas, conveyed by that certain Deed dated July 14,
1947, from X. X. Xxxxx, et ux,
to Western Cottonoil Co., recorded in Vol. 123, Page 353 Deed Records,
Xxxxxxxx County, Texas, to which Deed, and it record, reference is
hereby made for all purposes, and said 5.7 acres of land is more fully
described as follows:
BEGINNING at the Northwest corner of said Section No. 46;
THENCE South 13 deg. East along the Southwesterly line of said Section
No. 46 and along the Northeasterly right-of-way line of the Colorado
City Xxxxxx Xxx Highway 208, a distance of 812 feet, to the PLACE OF
BEGINNING of the tract conveyed hereby:
THENCE North 77 deg. East a distance of 520 feet to a stake for
corner;
THENCE South 13 deg. East a distance of 486 feet to a stake for
corner;
THENCE South 77 deg. West a distance of 500 feet to the Northeasterly
line of the right-of-way of said Colorado City Xxxxxx Xxx Highway No.
208, for corner;
THENCE in a Northwesterly direction along the Northeasterly line of the
right-of-way of said Colorado City Xxxxxx Xxx Xxxxxxx Xx. 000, a
distance of 487 feet to the PLACE OF BEGINNING.
TRACT III: being that part of Block No. Thirty-four (34), of the Xxxx,
Xxxxxx and Xxxxx Addition to the Town of Colorado City, Xxxxxxxx
County, Texas, described as follows:
BEGINNING at the intersection of the West line of State Highway No.
208, being the Colorado City-Xxxxxx Xxx Highway, and the South line of
said Block No. 34, being also the North line of College Avenue, for the
Southeast corner of the tract hereby conveyed;
THENCE West along the South line of said Xxxxx Xx. 00 and the North
line of College Avenue, a distance of 270 feet to a point in said South
line of Block No. 34, for the Southwest corner of this tract;
THENCE North on a line parallel with the West boundary line of said
Block No. 34, to a point in the South line of said Highway No. 208 ,
for the Northwest corner of this tract;
THENCE following the said line of said Highway No 208 in a curved
southerly direction to the PLACE OF BEGINNING, the tract hereby
conveyed being all of that part of said Block No. 34, lying South and
West of said Xxxxxxx Xx. 000 and lying East of the tract of land
heretofore conveyed to R. H. Houghston by Deed recorded in Vol 115,
Page 54, of the Deed Records of Xxxxxxxx County, Texas
being the same property convey&d by Warranty Deed dated January 10,
1991, executed by Lone Wolf Electric Cooperative, Inc. Grantor to Cap
Rock Electric Cooperative, Inc. as Grantee, said deed being recorded in
Vol. 494 at page 41 of the Official Public Records of Xxxxxxxx County,
Texas; and specifically including a easements, rights of way, and other
real property interest whether of record or not, located in the
counties of Xxxxx Xxxxxx, Xxxxxx, Fisher, Nolan, and Xxxxxxxx, State of
Texas;
Together with all plants, works, structures, erections,
reservoirs, dams, buildings, fixtures and improvements now or hereafter
located on any of the properties conveyed by any and all aforesaid
deeds mentioned above or properties described above and all tenements,
hereditaments and appurtenances now or hereafter thereunto belonging or
in anywise appertaining.
