Share

Equity Financing Agreement

NEA agreement for equity financing

Your Browser Doesn't Support Canvas. Showing the Text Content of the PDF Instead: EQUITY FINANCING AGREEMENT

SONIA B. SAN DIEGO
Director, Financial Srvs. Dept.

MARIANO T. CUENCO
Deputy Administrator for
Corporate Resources &
Financial Services

KNOW ALL MEN BY THESE PRESENTS:
This AGREEMENT, made and entered into this ________day
________________ 20___ at _______________ by and between:

of

NATIONAL ELECTRIFICATION ADMINISTRATION a government
corporation organized and existing under Presidential Decree No. 269, as amended,
with office address at #57 NEA Building, NIA Road, Government Center, Diliman
Quezon, City, hereinafter referred to as “NEA” represented herein by its
Deputy Administrator, MARIANO T. CUENCO
- and ELECTRIC COOPERATIVE, INC. an electric
cooperative organized and existing under the laws of the Philippines with office
address at
represented herein by
, hereinafter referred to as “BORROWER”.

W I T N E S S E T H: T H A T WHEREAS, the BORROWER has applied for a loan under NEA’s Equity
Financing Scheme for the Electric Cooperatives (EFSEC) to finance the actual equity
requirement or up to 20% of the total purchase price of the distribution equipment
and in the implementation of their rehabilitation and upgrading projects;

President

WHEREAS, the NEA is willing to extend said loan to the BORROWER which
meets the following criteria;
1) Must have a debt-service ratio of 1.2
2) The BORROWER must show capability to pay the proposed loan on top of all
other existing obligations
3) With a loan/financing application or other mode of financing agreement
WHEREAS, funds, grant of the loan shall be prioritized as follows:
First Priority – Overloaded substations
Second Priority – Loaded Substations
Third Priority – Other rehab/upgrading projects.

Vv

General Manager

NOW THEREFORE, for and in consideration, of the mutual covenants
herein contained, NEA and BORROWER hereby agree as follows:
SECTION I
TERMS OF THE LOAN
SECTION 1.01 Loan – The NEA agrees to lend to the BORROWER an
amount not exceeding pesos:_______________________________________
__
__________________________________
(P
) to
finance the equity requirement of the BORROWER in the procurement of distribution
equipment up to 20% of the total purchase price thereof through financing or not to
exceed P8M as well as in the implementation of their rehabilitation and upgrading
projects.

MARIANO T. CUENCO
Deputy Administrator for
Corporate Resources &
Financial Services

SECTION 1.02 Interest – The BORROWER shall pay to NEA interest on
the loan at the rate of 12% per annum.
SECTION 1.03 Repayment –
A. The BORROWER may avail of the EFSEC with 3 years repayment period
with six (6) months grace period;
B. NEA, however, may require accelerated repayment if the financial
condition of the BORROWER warrants;
C. Should there be default in the payment of any loan amortization, the
amount in arrears shall bear interest at the rate of 1% per month;
SECTION 1.04 Application and Place of Payment – All payments by
the BORROWER shall be made thru an inter-bank fund transfer/electronic transfer of
funds to the account of NEA-EFSEC without further demand from NEA.

SONIA B. SAN DIEGO
Director, Financial Srvs. Dept.

SECTION II
REQUIREMENTS PRIOR TO DISBURSEMENT
SECTION 2.01 The BORROWER shall before the implementation of the
EFSEC, submit a Board Resolution covering the same a, Project Profile (Projected
Cost, Technical study, benefit/impact); 5 years Projected Income Statement and
Cash Flow including schedules and assumptions to projections. Term Loan
Summary/offer sheet from the Bank or other Financing Agreement.
SECTION III
DEFAULTS, REMEDIES, AND SANCTIONS
SECTION 3.01 The occurrence of any of the following events shall
constitute default by the BORROWER:

President

a. failure to perform any term, covenant, promise, condition or agreement
as set forth in the contract;
b. breach of any warranty or gross misrepresentation;
c. violation of any policy, rules or regulations issued by NEA.
SECTION 3.02. In the event of default, the 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, exercise any or all of the following
remedies:

b.

Withhold NEA advances, or withhold advances released in behalf
of any other lender with respect to which the NEA has such power
relative to loans made;

c.

Withhold any technical or professional assistance otherwise being
furnished or that might be furnished to the borrower;
Foreclose any mortgage or deed of trust or other security held by
the NEA on the properties of such borrower;

Vv

Refuse to make or approve any new loan to the borrower or to
release funds to implement loans that are otherwise already
approved;

d.

General Manager

a.

2

e.

Take preventive and/or disciplinary measures including suspension and/or
removal and replacement of any or all of the members of the Board of
Directors, officers or employees of the Cooperative, other borrowing
institutions or supervised or controlled entities as the NEA Board of
Administrators may deem fit and necessary and to take other remedial
measures as the Law or the Loan Agreement may provide.
SECTION IV
MISCELLANEOUS

parties.

SECTION 4.01 This contract maybe revised or amended by mutual consent of the

Section 4.02 The Projected Income or Cash Flow Statements submitted by the
BORROWER to NEA along with the commitments/assumptions used in such statements shall
form an integral part of this Contract.
Section 4.03 The BORROWER shall not assign or transfer to a third party any of
the rights arising from this Agreement..
Section 4.04 Should any part of this Contract be declared invalid, such declaration
shall not affect the validity and enforceability of the other provisions.
IN WITNESS WHEREOF, the parties have affixed their signatures on the date and
place first above-written.

NATIONAL ELECTRIFICATION
ADMINISTRATION

ELECTRIC COOPERATIVE, INC.

By:

By:

MARIANO T. CUENCO
Deputy Administrator for
Corporate Resources &
Financial Services

___________________
President

SIGNED IN THE PRESENCE OF:

SONIA B. SAN DIEGO
Director, Financial Services Dept.

__________________
General Manager

3

SONIA B. SAN DIEGO
Director, Financial Srvs. Dept.

MARIANO T. CUENCO
Deputy Administrator for
Corporate Resources &
Financial Services

ACKNOWLEDGEMENT

REPUBLIC OF THE PHILIPPINES)
__________________________)
BEFORE ME, a Notary Public for and in ____________________,
Philippines, on this ______ day of ______________________, 20____ personally
appeared:

NAME
MARIANO T. CUENCO

CTC No.

O
R

1

____________

ISSUED ON/ISSUED AT

o

_________________________

Known to me and to me known to be the same persons who executed
the foregoing Equity Financing Scheme for Electric Cooperatives (EFSEC) 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.

President

I CERTIFY that this Contract consists of _4_ pages including this page
whereupon this Acknowledgment is written each page duly signed by the PARTIES
and their instrumental witnesses at the left-hand margin except page 3 which is
signed at the foot thereof.
written.

WITNESS MY HAND AND SEAL on the date and at the place first above-

Doc. No. _______
Page No. _______
Book No. _______
Series of _______

Vv

General Manager

________________________
Notary Public
Until December 31, 20___

4
 
Page of
Share