[Code of Federal Regulations]
[Title 7, Volume 11]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1786.99]

[Page 1103-1104]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1786--PREPAYMENT OF RUS GUARANTEED AND INSURED LOANS TO ELECTRIC AND TELEPHONE BORROWERS--Table of Contents
 
Subpart E--Discounted Prepayments on RUS Notes in the Event of a Merger 
                    of Certain RUS Electric Borrowers
 
Sec. 1786.99  Eligibility criteria.

    To be eligible to prepay RUS Notes at the Discounted Present Value, 
a borrower must comply with the following criteria:
    (a) The borrower must be current on all payments due on its 
outstanding RUS Notes and all other payment obligations owed to RUS;
    (b) The borrower must agree to prepay all of its outstanding RUS 
Notes;
    (c) The borrower must identify the source of financing that will be 
used directly or indirectly to refinance its outstanding RUS Notes. The 
borrower must certify in writing whether such financing will be tax 
exempt and, if so,

[[Page 1104]]

shall furnish all information on the financing as RUS may request to 
enable RUS to adjust the discount to the equivalent to fully taxable 
financing;
    (d) The borrower must have expended all funds advanced on account of 
the RUS Notes for the purposes for which such funds were advanced or 
repaid RUS for all unexpended funds;
    (e) The borrower must agree to a rescission of the unadvanced 
balance of any RUS Notes outstanding as of the date of its application 
for prepayment;
    (f) The borrower must agree that the borrower, its successors and 
assigns, shall pay to the Government, as a condition of receiving 
additional loans or loan guarantees pursuant to titles I and III of the 
Act, an amount equal to the aggregate of the difference with respect to 
each of the RUS Notes between the amount outstanding on the RUS Note and 
the Discounted Present Value of the RUS Note upon prepayment with 
interest accruing quarterly; the interest rates shall be the rates 
provided in the respective Notes; and
    (g) If the borrower is a party to a wholesale power contract with a 
power supplier financed pursuant to the Act, the borrower must provide 
the Administrator with such assurances as the Administrator may request 
that it will meet its obligations to the power supplier. The borrower 
must also specifically agree to the following limitation: The borrower 
agrees that, for so long as the Wholesale Power Contract shall be in 
effect between the borrower and the power supplier, the borrower will 
not, without the approval in writing of the power supplier and the 
Administrator, take or suffer to be taken any steps for reorganization 
or to consolidate with or merge into any corporation or any other public 
power district, or to sell, lease or transfer (or make any agreement 
therefor) all or a substantial portion of its assets, whether now owned 
or hereafter acquired. Notwithstanding the foregoing, the borrower may 
take or suffer to be taken any steps for reorganization or to 
consolidate with or merge into any corporation or any other public power 
district, or to sell, lease or transfer (or make any agreement therefor) 
all or a substantial portion of its assets, whether now owned or 
hereafter acquired, so long as the borrower shall pay such portion of 
the outstanding indebtedness evidenced by the power supplier's Notes at 
the time outstanding as shall be determined by the power supplier with 
the prior written consent of the Administrator and shall otherwise 
comply with such reasonable terms and conditions as the Administrator 
and the Power Supplier shall require.