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Loan Contract
NEA contract for loan
Your Browser Doesn't Support Canvas. Showing the Text Content of the PDF Instead: MARIANO T. CUENCO
Deputy Administrator
Corporate Resources &
Financial Services
CONTRACT OF LOAN
Revised 5/18/11
KNOW ALL MEN BY THESE PRESENTS:
This CONTRACT, made and entered into this __
_______________________ by and between
day of ______________ at
NATIONAL ELECTRIFICATION ADMINISTRATION, a government
corporation created under Presidential Decree No. 269, as amended, represented herein
by ___MARIANO T. CUENCO__ with office address at #57 NEA Building, NIA Road,
Government Center, Diliman, Quezon City, Metro Manila, herein after referred to as
“NEA”
______________________
General Manager
_____________________
President
SONIA B. SAN DIEGO
Director
Finance Services Department
- and ______________ ELECTRIC COOPERATIVE, INC. an electric cooperative
organized under existing laws with principal office address at ______________________
represented herein by _____________________, Filipino, of legal age, herein after
referred to as “BORROWER”. The appropriate Board Resolution authorizing him/her to
appear for and on behalf of his/her principal is hereto attached as Annex “A”, and made
an integral part hereof;
WITNESSETH:
WHEREAS, the BORROWER has applied for a loan from NEA; (through
______________________________)
WHEREAS, the BORROWER, having been satisfied as to the feasibility and
priority of the Project described in Schedule 1 of this Contract has requested NEA to
assist in the financing of the Project;
WHEREAS, NEA has agreed, on the basis of the foregoing, to extend the loan
to the BORROWER upon the terms and conditions set forth in this Contract;
NOW THEREFORE, the parties hereto hereby agree as follows:
ARTICLE 1
THE LOAN
SECTION 1. NEA agrees to lend to the BORROWER, on the terms and
conditions set forth or referred to hereinafter as aggregate amount of _____________
_____________________________________________________________
(P_________________) Philippine Currency.
SECTION 2. The amount of the loan may be withdrawn from the loan account
in accordance with the provisions of Schedule 2 of this Contract for expenditures made
(or, if NEA shall so agree, to be made) in respect of the reasonable cost of goods and/or
services required for the project described in Schedule 1 of this Contract and to be
financed out of the proceeds of the loan.
SECTION 3. Interest – The BORROWER shall pay NEA interest which shall
accrue at the rate of ______ per annum on the outstanding balance of the principal and
any due and unpaid interest subject to the provisions of Section 2, Article VII. Interest
shall be computed on the basis of a 365-day year.
MARIANO T. CUENCO
Deputy Administrator
Corporate Resources &
Financial Services
2
SECTION 4. Repayment – The BORROWER shall repay to NEA the principal
and interest within _
___ years in ___
___ equal quarterly installments
during the repayment period; provided however, that NEA may require accelerated
repayment if the financial condition of the BORROWER so warrants.
Payments of principal and interest shall be deferred for not more than
___________________ year/s after ________________. Interest accruing during the
deferment period shall be capitalized and treated as principal.
Should there be default in the payment of any loan amortization, the amount in
arrears shall bear penalty interest at the rate of _
_ per annum.
SONIA B. SAN DIEGO
Director
Finance Services Department
SECTION 5. Application of Payment – All payments shall be applied in the
following order:
5.1. Surcharges
5.2. Interest
5.3. Principal
All payments shall be made to the order of the National Electrification
Administration.
SECTION 6. Terminal Date of Disbursement – The BORROWER shall have
a period not exceeding _____________________________________ from the date of
first release within which to submit all requests for disbursements and, unless otherwise
agreed upon in writing, this period will pertain even in the event that this Contract is
amended for an increase in the amount of the loan.
______________________
General Manager
_____________________
President
After such period, NEA may, in its discretion, by written notice to the
BORROWER terminate any commitment to disburse and such action by NEA shall be
conclusive.
ARTICLE II
REQUIREMENTS PRIOR TO DISBURSEMENT
SECTION 1. Requirements – The BORROWER shall furnish to NEA, prior to
initial disbursement, the following:
a. The Promissory Note, Deed of Mortgage and other Supplemental
Mortgages, as may be required by NEA;
b. Evidence of appropriate corporate action authorizing the execution and
delivery of the Contract of Loan, Promissory Note, Deed of Mortgage
and other Supplemental Mortgages, including the authorized
signatory/ies and their specimen signature/s;
c. Statement of the name of the person holding or acting in the office of
the Borrower;
d. Evidence that the Borrower is clear of any encumbering lawsuits and
other legal restraints; and
e. Other related documents as may be required by NEA.
MARIANO T. CUENCO
Deputy Administrator
Corporate Resources &
Financial Services
3
ARTICLE III
EXECUTION OF THE PROJECT
SECTION 1. The BORROWER declares its commitment to the objectives of the
Project as set forth in Schedule 1 of this Contract, and, to this end, shall carry out the
Project with due diligence and efficiency and in conformity with appropriate engineering,
financial and public utility practices, and shall provide, promptly as needed, the
counterpart funds, facilities, services and other resources required for the project.
SECTION 2. The BORROWER shall cause the SYSTEM to be constructed by
contract and/or by Force Account, subject to approval of NEA.
SONIA B. SAN DIEGO
Director
Finance Services Department
SECTION 3. All plans and specifications for construction of the Project and any
amendments thereto shall be subject to prior written approval of NEA.
SECTION 4. All line extensions, rehabilitations and additional work shall not
commence until approved by NEA in writing.
SECTION 5. Bidding and construction administration shall be in accordance
with NEA Construction Administration Procedures and other pertinent laws, rules and
regulations.
SECTION 6. The NEA or its duly authorized representative and/or
representative/s of international lending institutions, reserve the right to inspect,
examine and test all the work and materials relating thereto, and the BORROWER shall
provide reasonable facilities for the use of the NEA or its duly authorized representative
and/or representative/s of international lending institutions.
_____________________
President
SECTION 7. NEA shall administer all loan funds of the BORROWER.
ARTICLE IV
PARTICULAR COVENANTS
SECTION 1. The BORROWER shall:
a. Deposit its funds in government Banks or any established bank duly
approved by NEA.
b. Select an auditing firm from a list of NEA accredited external auditors.
c. Provide adequate coverage for all insurable assets.
______________________
General Manager
d. Appoint a general manager or designate an OIC subject to the
confirmation of NEA, who shall not be suspended or dismissed without
prior written approval of NEA.
SECTION 2. The BORROWER shall carry on its operations and conduct its
affairs in accordance with sound administrative, financial and public utility practices
under the supervision of qualified and experienced management assisted by competent
staff in adequate numbers.
SECTION 3. The BORROWER shall at all times operate and maintain its plants,
machinery, equipment and other property, and from time to time, promptly as needed,
make all necessary repairs and replacements thereof, all in accordance with sound
engineering, financial and public utility practices.
SECTION 4. The BORROWER shall obtain easements, authorizations and
permits necessary for the construction and operation of the System. No funds shall be
used by BORROWER to pay for easements without prior written approval of NEA.
______________________
General Manager
_____________________
President
SONIA B. SAN DIEGO
Director
Finance Services Department
MARIANO T. CUENCO
Deputy Administrator
Corporate Resources &
Financial Services
4
SECTION 5. The BORROWER shall establish or adopt rules and regulations,
policies and such other terms and conditions affecting its extension and furnishing of
services, to ensure achievement of the loan purposes, subject to prior written approval
and/or revision by NEA before implementation.
SECTION 6. The BORROWER covenants that it shall not operate or energize
any portion of the System until the BORROWER and the NEA shall have determined that
such portion of the System has been properly constructed, completed and closed-out in
accordance with prescribed procedures.
SECTION 7. The BORROWER, together with its undersigned officials,
represents and warrants that no fee or commission has been or shall be paid and no
agreement therefore has been or shall be entered into by the BORROWER or any of its
officials, employees, agents or representatives in order to obtain the loan.
SECTION 8. The BORROWER, together with its undersigned officials, agrees
and binds itself to comply with all NEA policies, letters, bulletins, memoranda, guidelines,
rules and regulations, procedures and other documents issued pursuant to Presidential
Decree No. 269, as amended, the Contract of Loan and Mortgaged Contract and other
pertinent laws, rules and regulations.
SECTION 9. The BORROWER shall before implementation, submit all budget
appropriations for approval by NEA. Cooperative funds disbursed without the written
approval of NEA shall be accounted for by the accountable Cooperative officials and they
shall be held liable therefore.
SECTION 10. NEA, through its authorized representative and/or
representatives of international lending institutions, shall have access to and the right to
inspect and require the BORROWER to submit all such books, records, accounts and
plans, specifications, drawings and other documents pertaining to the management,
operations and maintenance of the SYSTEM.
SECTION 11. The NEA reserves the right to be represented and to participate
in all Board meetings and deliberations of the Borrower of whatever kind, nature and
character, and to approve all policies and resolutions of the Board. The Borrower further
hereby agrees that during the lifetime of this Contract, it shall remain under the
supervision and control of NEA.
SECTION 12. The BORROWER agrees and binds itself to adopt policies,
resolutions or amendments to its By-Laws in conformity with existing laws. In case of
conflict among such policies, resolutions or amendments with the BORROWER’S By-Laws
and the NEA policy and future issuances, the latter shall conclusively prevail.
ARTICLE V
FINANCIAL COVENANTS
SECTION 1. (a) The BORROWER shall maintain records and accounts
adequate to reflect in accordance with sound accounting
practices its operations and financial situation.
(b) The Borrower shall:
(i)
have its records, accounts and financial statements each
fiscal year audited, in accordance with appropriate
auditing principles consistently applied, by independent
auditors acceptable to NEA;
SONIA B. SAN DIEGO
Director
Finance Services Department
MARIANO T. CUENCO
Deputy Administrator
Corporate Resources &
Financial Services
5
(ii) furnish to NEA as soon as available, but in any case not
later than six (6) months after the end of such year:
(A.) certified copies of BORROWER’s financial
statements for such year as so audited; (B.) the report
of such audit by said auditors, of such scope and in such
detail as NEA shall have reasonably requested; and
(iii) furnish to NEA such other information concerning said
records, accounts and financial statements as well as
the audit thereof as NEA may reasonably request.
SECTION 2. Each year and during Project implementation period, the
BORROWER shall carry out in consultation with NEA, a review of its investment program
for the succeeding five (5) years and its accomplishment report and accounting of funds
for the preceding two (2) years.
SECTION 3. The Borrower shall:
a. Upon determination of the need for rate adjustment in the annual rate
review/consultation conducted by NEA, cause the immediate
application of such rate adjustment, the proposal for which shall be
concurred to by NEA.
b. Secure NEA concurrence on all transactions related to rates,
negotiations and power supply contracts involving with all Power
Suppliers and large industrial loads prior to signing of such contracts.
_____________________
President
ARTICLE VI
DEFAULTS, REMEDIES, AND SANCTIONS
SECTION 1. The occurrence of any of the following events shall constitute
default by the BORROWER:
a. failure to perform any term, covenant, promise, condition or agreement
as set forth in the Contract of Loan, Mortgage Contract and
Supplemental Mortgage(s);
b. breach of any warranty or gross misrepresentation;
c. violation of any policy, rules or regulations issued by NEA;
d. Registration with the Cooperatives Development Authority (CDA),
Securities and Exchange Commission (SEC) or any other agency other
than NEA.
______________________
General Manager
e. occurrence of financial reverses in its
NEA;
f.
operations as determined by
any petition has been filed by or against BORROWER to declare
BORROWER a bankrupt or to delay, reduce or modify BORROWER’s
debts or obligations;
g. any assignment of BORROWER’s property made for the benefit of the
creditors or if a receiver or trustee is appointed for BORROWER or its
property.
SECTION 2. In the event of default, NEA may, in addition to the rights,
privileges, powers and remedies granted to it under Presidential Decree No. 269 as
amended and other pertinent laws, including but not limited to Sections 3.5, 7 of PD
1645, exercise any or all of the following remedies:
6
MARIANO T. CUENCO
Deputy Administrator
Corporate Resources &
Financial Services
a. Suspend and/or stop all types of assistance (financial, technical and
institutional);
b.
Declare all unpaid obligations to be immediately due and payable;
c. Assign or designate an Acting General Manager and/or a Project
Supervisor;
d. Take over the construction, operation, management and control of the
SYSTEM;
SONIA B. SAN DIEGO
Director
Finance Services Department
e. Take any other lawful remedial measure, including but not limited to
the filing of the appropriate case(s) in courts, together with provisional
remedies provided under the Rules of Court;
f.
Extrajudicially enforce/effect collection of BORROWER’s indebtedness
pursuant to the powers granted in Section 3, hereunder:
SECTION 3. The BORROWER hereby irrevocably appoints the NEA as its
attorney-in-fact with the following power and functions, to be exercised upon the
occurrence of any of the events of default:
_____________________
President
open, enter, padlock, secure, enclose or fence any or ALL of the properties
of the BORROWER and/or otherwise take full and complete physical
possession and control of the any or all of said properties;
(ii)
______________________
General Manager
(i)
take an inventory of ALL of the properties of the BORROWER, including
receivables;
(iii)
collect any or all of said receivables and extrajudicially dispose, in a public
sale, so much of the said properties in a public sale/s and to apply the
proceeds thereof to the payment of any liability and/or indebtedness due to
the NEA from the BORROWER, including reasonable expenses incurred by
the NEA in connection with such sale/s, without prejudice to the right of
the NEA to collect the deficiency, if any.
The appointment of the NEA as attorney-in-fact is considered coupled with interest and
hence irrevocable. It is agreed and understood that NEA shall enjoy a preferred lien on
all properties of the BORROWER and any officer/employee of the BORROWER that
disposes of any said property in violation or preemption of this section shall be criminally
liable for estafa under Art. 315 of Act. No. 3815, as amended.
SECTION 4. Every right, privilege, power or remedy herein or in the Notes or
in the Mortgage or in any Supplemental Mortgage conferred upon or reserved to NEA or
any holder thereof or holders of the Notes shall be cumulative and in addition to every
other right, privilege, power and remedy now or hereafter existing in law or in equity or
by statute. The pursuit of any right, privilege, power or remedy shall not be construed as
an election of the foregoing.
ARTICLE VII
MISCELLANEOUS
SECTION 1. This Contract may be revised or amended by mutual written
consent of the parties.
SECTION 2. NEA reserves the right to increase or decrease, with notice to the
BORROWER, the rate of interest on the loan pursuant to such policy as it may adopt
from time to time during the pendency of the loan.
7
SECTION 3. The BORROWER shall not assign to a third party any of the rights arising
from this Contract.
SECTION 4. The BORROWER shall hold NEA and its officers/agents free and harmless
from any obligation, suit and/or claim arising from any act of the BORROWER or its officers,
employees or agents in implementing this loan contract, including any and all actions of NEA or its
officers/agents for the purpose of performing its rights to REVIEW, APPROVE, CONCUR,
SUPERVISE or CONTROL any or all of the BOROWER’s actions/operations as provided in this
Contract of Loan.
SECTION 5. Should any part of this Contract be declared invalid, such declaration shall
not affect the validity and enforceability of the other provisions set forth herein.
SECTION 6. It is agreed that the venue of any and all court actions arising by reason of
this contract shall be with the appropriate courts in Quezon City, to the exclusion of all other
courts.
IN WITNESS WHEREOF, the parties have affixed their signatures on the date and place
first above written.
NATIONAL ELECTRIFICATION
ADMINISTRATION
By:
ELECTRIC COOPERATIVE, INC.
By:
MARIANO T. CUENCO
Deputy Administrator
Corporate Resources &
Financial Services
_____________________
President
WITNESSES:
SONIA B. SAN DIEGO
Director
Finance Services Department
_____________________
General Manager
8
______________________
General Manager
_____________________
President
SONIA B. SAN DIEGO
Director
Finance Services Department
MARIANO T. CUENCO
Deputy Administrator
Corporate Resources &
Financial Services
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES )
_________________________ )
BEFORE ME, a Notary Public for an in ___________________ Philippines, on this
___ day of ________________ 20___ personally appeared _______________________
with Residence Certificate No. A/B _________ issued at ______________________ on
__________ and _MARIANO T. CUENCO_ with Residence Certificate No. A/B _
_
issued at _
_______
_ on _
_ representing the
____________________ELECTRIC COOPERATIVES, INC. and the NATIONAL
ELECTRIFICATION ADMINISTRATION, respectively, known to me and to me known to
be the same persons who executed the foregoing Contract of Loan and who
acknowledged to me that the same is their true and voluntary act and deed and the true
and voluntary act and deed of the Offices they respectively represent.
I CERTIFY that this Contract consists of __ten (10)__ pages including this one,
each page duly signed by the PARTIES and their instrumental witnesses at the left hand
margin except page __Seven (7)___which is signed at the foot thereof and wherein this
Acknowledgment is written.
IN WITNESS WHEREOF, I have hereunto affixed my signature and my official
seal on the date and at the place first above-written.
_______________________________
NOTARY PUBLIC
My Commission expires on _________
PTR NO. ________________________
Doc. No. __________
Page No. __________
Book No. __________
Series of 20________
MARIANO T. CUENCO
Deputy Administrator
Corporate Resources &
Financial Services
9
SCHEDULE 1
PROJECT DESCRIPTION
A. REHAB OF LINES
B. SYSTEM UPGRADING
C. REHAB / UPGRADING
SONIA B. SAN DIEGO
Director
Finance Services Department
D. EXPANSION OF LINES
Three Phase Line
________ Kms.
Two Phase Line
________ Kms.
Single Phase Line
________ Kms.
Open Secondary Line
________ Kms.
Underbuilt Secondary Line
________ Kms.
E. ADD ONS
______________________
General Manager
_____________________
President
Connections of about ______ customers to existing lines.
F. LOGISTICS
______________________
General Manager
_____________________
President
SONIA B. SAN DIEGO
Director
Finance Services Department
MARIANO T. CUENCO
Deputy Administrator
Corporate Resources &
Financial Services
10
SCHEDULE 2
BREAKDOWN OF LOAN FACILITY
A. REHAB
B. SYSTEM UPGRADING
C. REHAB / UPGRADING
D. EXPANSION
E. ADD-ONS
SUB-TOTAL
F. LOGISTICAL SUPPORT
TOTAL
