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69 KV Credit

NEA agreement for 69 KV credit

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_____________________
President

SONIA B. SAN DIEGO
Director
Finance Services Department

EDITA S. BUENO
Administrator

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 NIA Road, Government Center, Diliman Quezon City,
hereinafter referred to as “NEA” represented herein by its Administrator,
EDITA S. BUENO ;
- 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 69 KV Credit
Facility to finance the Electric Cooperatives’ (ECs) equity requirements up to 20% of
the total acquisition cost of the NPC/TRANSCO subtransmission facilities (69 KV lines)
in line with Section 8 of Republic Act No. 9136.
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 at least 1.2
2) Must show capability to pay the proposed loan on top of all other existing
obligations
3) With Lease Purchase Agreement with TRANSCO or with an approved Bank
Loan

_______________________
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
1.01 Loan – The NEA agrees to lend to the BORROWER an amount not
exceeding pesos: ___________________________________________
____________________________________ (P_______________) for
payment of the 20% equity requirement of the EC’s in the acquisition of 69 KV lines
from TRANSCO but not to exceed P15M.
1.02 Interest - The BORROWER shall pay to NEA interest at the rate of 9%
per annum on the amount availed by the EC.

1.03 Repayment –

SONIA B. SAN DIEGO
Director
Finance Services Department
_____________________
President

5 years repayment period; to start one quarter after release of the
loan;

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 18% per
month;

D.

EDITA S. BUENO
Administrator

A.

The BORROWER has the option, to prepay the availment/
borrowing in part or in full together with the accrued interest
thereon up to the date of prepayment.

SECTION II
REQUIREMENTS PRIOR TO DISBURSEMENT
2.01 The BORROWER shall before the implementation of the 69 KV Credit
Facility, submit a Board Resolution requesting for the loan; 69 KV Line Profile a)
Condition Factor and b) Inspection Report of actual structures; c) 5 Year Projected
Income Statement and Cash Flow including Schedules and Assumptions to
projection; d) Lease Purchase Agreement between EC and TRANSCO; e) Indicative
Loan Terms with the Bank; f) Issuance of post-dated checks (PDC).
SECTION III
DEFAULTS, REMEDIES, AND SANCTIONS
3.01 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;
b. breach of any warranty or gross misrepresentation;
c. violation of any policy, rules or regulations issued by NEA.
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:

_______________________
General Manager

a. Suspend and/or stop all types of assistance (Financial, Technical &
Institutional);
b. Declare all unpaid obligations to be immediately due and payable;
c. Assign or designate an Acting General Manager and/or Project Supervisor;
d. Take over the construction, operation, management and control of the
SYSTEM;
e. Foreclose any mortgage or deed of trust or other security held by the NEA
on the properties of such borrower.

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SECTION IV
MISCELLANEOUS
4.01 This contract maybe revised or amended by mutual consent of the parties.
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.
4.03 The BORROWER shall not assign or transfer to a third party any of the rights
arising from this Agreement.
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

By:

ELECTRIC COOPERATIVE, INC.
By:

EDITA S. BUENO
Administrator

______________________
President

SIGNED IN THE PRESENCE OF:

SONIA B. SAN DIEGO
Director
Finance Services Department

______________________
General Manager

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EDITA S. BUENO
Administrator

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

_______________________
General Manager

_____________________
President

SONIA B. SAN DIEGO
Director
Finance Services Department

Name

Comm. Tax
Cert. No.

Date/Place Issued

EDITA S. BUENO

known to me and to me known to be the same persons who executed the foregoing
69 KV Credit Facility Agreement 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
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-

________________________
Notary Public
Until December 31, 20___

Doc. No. _____;
Page No. _____;
Book No. _____;
Series of _____

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