Document:

<PAGE>

            National Rural Utilities Cooperative Finance Corporation
                   Secured Revolving Line of Credit Agreement
                                  ("Agreement")

Name of Borrower: Cap Rock Electric Cooperative, Inc.

Address:       500 West Wall, Suite 400, Midland, Texas, 79701

                  National Rural Utilities Cooperative Finance Corporation
("CFC"), a District of Columbia corporation, has approved Borrower for a secured
revolving line of credit loan in an amount not to exceed Twenty-five Million
Dollars ($25,000,000.00) (hereinafter referred to as the "CFC Commitment").
Borrower hereby agrees that the terms and conditions herein, plus any additional
terms and conditions agreed to in writing by the parties, shall constitute a
valid and binding agreement between Borrower and CFC. In consideration of their
mutual promises hereunder and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, CFC and Borrower agree to the
following terms and conditions:

1.    Revolving Credit and Term. CFC agrees to advance funds to the
      Borrower pursuant to the terms and conditions hereof (each
      such advance of funds is referred to herein as an "Advance"),
      provided, however, that the amount at any time outstanding
      under this line of credit shall not exceed the CFC Commitment.
      The Borrower may borrow, repay and reborrow funds at any time
      or from time to time for a period up to twelve (12) months
      from the effective date hereof. This Agreement shall
      thereafter automatically renew for subsequent periods of
      twelve (12) months each. Either party may terminate this
      Agreement at the end of any period by providing written notice
      to the other party at least ninety (90) days prior to the
      expiration of such period.

2.    Requisitions. Requests for Advances shall be in such written
      form as CFC may reasonably require from time to time.

3.    Interest Rate and Payment. The Borrower unconditionally
      promises and agrees to pay, as and when due, interest on all
      amounts advanced hereunder from the date of each Advance and
      to repay all amounts advanced hereunder with interest on the
      date this Agreement terminates as provided herein. Interest
      shall be due and payable in accordance with CFC's regular
      billing cycles as may be in effect from time to time. CFC
      shall send a payment notice to the Borrower at least five days
      prior to the due date of any interest payment. All amounts
      shall be payable at CFC's main office at Woodland Park, 2201
      Cooperative Way, Herndon, Virginia 20171-3025 or at such other
      location as designated by CFC from time to time. The interest
      rate on all Advances will be equal to the total rate per annum
      as may be fixed by CFC from time to time, which shall not
      exceed the Prevailing Bank Prime Rate (as defined herein),
      plus one percent per annum. Interest

<PAGE>

      will be computed on the basis of a 365 day year for the actual
      number of days that any Advance is outstanding. The effective date
      of an interest rate adjustment will be determined from time to
      time by CFC, provided that no such adjustment may be effective on
      a date other than the first or sixteenth day of any month, and any
      such adjustment shall remain in effect until any subsequent
      change in the interest rate occurs.

      The "Prevailing Bank Prime Rate" is that bank prime rate
      published in the "Money Rates" column of the eastern edition
      of The Wall Street Journal on the publication day immediately
      preceding the day on which an adjustment in the interest rate
      hereof shall become effective. If The Wall Street Journal
      shall cease to be published, then the Prevailing Bank Prime
      Rate shall be determined by CFC by reference to another
      publication reporting bank prime rates in a similar manner.

4.    CFC Accounts. CFC shall maintain in accordance with its usual
      practices an account or accounts evidencing the indebtedness
      of the Borrower resulting from each Advance and the amounts of
      principal and interest payable and paid hereunder. In any
      legal action or proceeding in respect of this Agreement, the
      entries made in such account or accounts (whether stored on
      computer memory, microfilm, payment notices or otherwise)
      shall be presumptive evidence (absent manifest error) of the
      existence and amounts of the Borrower's transactions therein
      recorded.

5.    Corporate and Regulatory Approvals. Borrower represents and
      warrants that it has obtained any and all necessary corporate
      and regulatory approvals for Borrower to execute, deliver and
      perform its obligations under this Agreement.

6.    Reports. During the term of this Agreement, Borrower agrees
      (a) to provide CFC, within 120 days of the end of Borrower's
      fiscal year, its annual financial statements, prepared in
      accordance with generally accepted accounting principles
      ("GAAP") and audited by an independent certified public
      accountant, or otherwise in form and substance satisfactory to
      CFC, and (b) to provide CFC with any other reports or
      information which CFC may from time to time reasonably
      request.

7.    Fees. If any amount outstanding and due hereunder shall not be
      paid when due, Borrower agrees to pay on demand CFC's
      reasonable costs of collection or enforcement of this
      Agreement, or preparation therefor, including reasonable fees
      of counsel. If payment of any principal and/or interest due
      under the terms of this Agreement is not received at CFC's
      office in Herndon, Virginia, or such other location designated
      by CFC within 5 business days after the due date thereof, then
      Borrower shall pay to CFC, on demand, and in addition to all
      other amounts due under the terms of this

<PAGE>

      Agreement, any late-payment and additional interest charges as
      may then be in effect pursuant to CFC's then current policies without
      setoff or counterclaim. For purposes of this Agreement, a "business
      day" means a day that both CFC and the financial institution
      it employs for funds remittance are open for business.

8.    Credit Support. With CFC's prior written approval, this
      Agreement may be used as credit support for other financings.

9.    Reduce Balance to Zero. Each 12-month period while this
      Agreement is in effect, Borrower shall, for a period of at
      lest five consecutive business days, reduce to zero all
      amounts outstanding hereunder. Borrower shall make the first
      balance reduction within 360 days of the first Advance
      hereunder. Each subsequent balance reduction shall be made
      within 360 days of the last day of such five-day period.

10.   Security. Borrower's indebtedness and other obligations under
      this Agreement are secured by that certain Second Restated
      Mortgage and Security Agreement, dated as of October 24, 1995,
      by and between Borrower and CFC, as the same may have been or
      shall be supplemented, amended, consolidated, or restated from
      time to time (the "Mortgage").

11.   Notices, Acceleration of Debt and Waivers. While an Advance is
      outstanding, Borrower agrees to notify CFC in writing of (a)
      any delinquency or default on any of its financial
      obligations, (b) any material adverse change in its financial
      or business condition, and (c) if any representation or
      warranty made in this Agreement is no longer true in any
      material respect. If any delinquency, default, or any other
      event as a result of which any holder of indebtedness may
      declare the same due and payable shall occur and continue
      uncorrected for more than any applicable grace period, or any
      representation or warranty herein shall no longer be true, or
      Borrower shall fail to perform or to comply with any term of
      this Agreement, or if the financial condition of Borrower
      shall have changed to the extent that such change, in the
      reasonable judgment of CFC, materially increases CFC's risk of
      repayment hereunder, then CFC may declare at any time all
      outstanding principal, interest and other amounts due
      hereunder immediately due and payable in full with accrued
      interest, without presentment or demand, and may withhold
      Advances. The Borrower waives the defense of usury and all
      rights to setoff, counterclaim, deduction or recoupment.

12.   Survival of Representations and Warranties and Payment
      Obligations. Borrower agrees that its obligation to repay
      principal, interest and all other amounts due hereunder, and
      the representations and warranties made herein, shall survive
      termination of this Agreement. Borrower further agrees that
      such repayment obligations shall be automatically reinstated
      if and to the extent that for any reason any payment by or on
<PAGE>

      behalf of the Borrower is rescinded, set aside or must be
      otherwise restored, whether as a result of any proceeding in
      bankruptcy or reorganization or otherwise.

13.   Representations and Warranties. Borrower represents and
      warrants that as of the date of its application for this line
      of credit, and on the date of each Advance hereunder:

      a)    the Borrower is not in default of any of its financial
            obligations;

      b)    there has been no material adverse change in the
            Borrower's business or financial condition from that set
            forth in its most recent audited financial statements;

      c)    no litigation is pending or, to the best of Borrower's
            knowledge, threatened against the Borrower which, if
            adversely determined, would have a material adverse
            effect on the Borrower's ability to perform under this
            Agreement;

      d)    the information contained in Borrower's audited
            financial statements, its other financial reports and
            information otherwise submitted in connection with this
            Agreement is complete and accurate, and said financial
            statements and financial reports fairly represent the
            financial condition of the Borrower as of the dates
            reflected thereon;

      e)    the execution, delivery and performance of this
            Agreement has been duly authorized by the Borrower,
            which authorization has not been rescinded or modified;

      f)    all Advances hereunder will be used only for proper
            corporate purposes;

      g)    Borrower has notified CFC in writing if the principal
            place of business of the Borrower and the office where
            its records concerning accounts and contract rights are
            kept has changed;

      h)    all property owned by the Borrower is located in the
            counties identified in the Mortgage;

      i)    as to property which is presently included in the
            description of Mortgaged Property (as that term is
            defined in the Mortgage), the Borrower has not, without
            the prior written approval of CFC, signed any security
            agreement or filed or permitted to be filed any
            financing statement with respect to assets owned by it,
            other than security agreements and financing statements
            running in favor of CFC or except as disclosed in
            writing to CFC prior to the date hereof; and

<PAGE>

      j)    no license, consent or approval of any governmental
            agency or authority is required to enable the Borrower
            to enter into this Agreement, the Mortgage, or to
            execute any  Note, or to perform any of its obligations
            provided for in such documents, except as disclosed in
            Schedule 1 hereto, all of which Borrower has obtained
            prior to the date hereof.

14.   Conditions of Lending. As a condition to CFC making Advances
      hereunder, each of the following conditions shall be satisfied
      at the time of each Advance:

      a)    CFC shall have received the Borrower's most recent
            annual financial statements, prepared in accordance
            with GAAP and audited by an independent certified public
            accountant, or otherwise in form and substance
            satisfactory to CFC;

      b)    all representations and warranties set-forth herein
            shall be true and correct;

      c)    the Borrower shall have obtained any and all necessary
            corporate, regulatory and governmental approvals for the
            Borrower to execute, deliver and perform its obligations
            under this Agreement; and

      d)    Borrower shall have caused the Mortgage to be duly
            recorded as a mortgage on real property and duly filed,
            recorded or indexed as a security interest in personal
            property in each jurisdiction necessary in order to
            provide CFC with a perfected lien on all of Borrower's
            Mortgaged Property (as defined in the Mortgage), and the
            Borrower shall have paid all applicable taxes, recording
            and filing fees and caused satisfactory evidence thereof
            to be furnished to CFC.

15.   GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.

      (a)   THE PERFORMANCE AND CONSTRUCTION OF THIS AGREEMENT SHALL
            BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
            LAWS OF THE COMMONWEALTH OF VIRGINIA.

      (b)   BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE
            JURISDICTION OF THE UNITED STATES COURTS LOCATED IN
            VIRGINIA AND OF ANY STATE COURT SO LOCATED FOR PURPOSES
            OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO
            THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
            BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
            PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY
            NOW OR HEREAFTER HAVE TO THE ESTABLISHING OF THE VENUE
            OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
            CLAIM THAT ANY SUCH PROCEEDING HAS BEEN BROUGHT IN AN

<PAGE>
            INCONVENIENT FORUM.

      (c)   EACH OF THE BORROWER AND CFC HEREBY IRREVOCABLY WAIVES,
            TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
            AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
            ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
            TRANSACTIONS CONTEMPLATED HEREBY.

16.   Severability. If any term, provision or condition, or any part
      thereof, of this Agreement shall for any reason be found or
      held invalid or unenforceable by any court or governmental
      agency of competent jurisdiction, such invalidity or
      unenforceability shall not affect the remainder of such term,
      provision or condition nor any other term, provision or
      condition, and this Agreement shall survive and be construed
      as if such invalid or unenforceable term, provision or
      condition had not been contained herein.

17.   Setoff. CFC is hereby authorized at any time and from time to
      time without prior notice to the Borrower to exercise rights
      of setoff or recoupment and apply any and all amounts held, or
      hereafter held, by CFC or owed to the Borrower or for the
      credit or account of the Borrower against any and all of the
      obligations of the Borrower now or hereafter existing
      hereunder. CFC agrees to notify the Borrower promptly after
      any such setoff or recoupment and the application thereof,
      provided that the-failure to give such notice shall not affect
      the validity of such setoff, recoupment or application. The
      rights of CFC under this section are in addition to any other
      rights and remedies (including other rights of setoff or
      recoupment) which CFC may have.

18.   Termination and Cancellation of Existing Agreement Borrower
      agrees that its existing line of credit No. R-5103 with CFC,
      and the agreement(s) relating thereto shall be terminated and
      any outstanding principal, interest and other amounts
      outstanding thereunder shall be transferred to the line of
      credit established pursuant to this Agreement and deemed an
      Advance hereunder.

19.   Miscellaneous. (a) This Agreement contains the entire
      agreement of the parties hereto with respect to the matters
      covered and the transactions contemplated hereby, and no other
      agreement, statement or promise made in connection with this
      line of credit by any party hereto, or by any employee,
      officer, agent or attorney of any party hereto which is not
      contained herein shall be valid and binding. (b) Any amendment
      to this Agreement must be in writing signed by both parties.
      (c) No failure or delay by CFC in exercising any right or
      remedy hereunder shall operate as a waiver or preclude the
      future exercise thereof or of any other right or remedy. (d)
      If any payment is due from Borrower on a day which CFC is not
      open for business, then such payment shall be made on the next
      succeeding day on which CFC is open for

<PAGE>

      business.

20.   Effective Date. This Agreement is dated and is effective as of
      JUNE 24, 1997.

Name of Borrower: Cap Rock Electric Cooperative, Inc.

Signed By:
          -------------------------------------
Title:
      -----------------------------------------

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

By:                                 Loan Number: TX-107-R-5104
   -------------------------------
                  Assistant Secretary-Treasurer

<PAGE>

                      CERTIFIED COPY OF MINUTES AUTHORIZING
                        Secured Revolving Line of Credit

     I, Alfred J. Schwartz, do hereby certify that: I am the Secretary of (the
"Borrower") and further certify as follows:

          The following is a true and correct copy of excerpts from the minutes
of a meeting of the Board of Directors of the Borrower held on June 24, 1997, as
they in the Minute Book of the Borrower; the meeting was duly and properly
called, with a quorum present and acting throughout; said resolutions were duly
adopted thereat; the Secured Revolving Line of Credit (the "Agreement')
submitted to National Rural Utilities Cooperative Finance Corporation ("CFC") is
substantially in the form as presented to said meeting; the Board of Directors
authorized the execution and delivery of the Agreement; and said resolutions
have not been modified or rescinded:

          RESOLVED, that the Borrower establish a secured line of credit and
authorize borrowing from National Rural Utilities Cooperative Finance
Corporation ("CFC") in an amount which shall not at any one time exceed
Twenty-five Million Dollars ($25,000,000.00), (the "Line of credit Amount"), for
a term of twelve (1-2) months, which period shall automatically renew for
successive twelve (12) month periods subject to the provisions of the Secured
Revolving Line of Credit Agreement substantially in the form submitted to this
meeting, a copy of which is attached hereto (the "Agreement"), and to pay such
interest rate or rates as shall be prescribed in the Agreement; and,

          RESOLVED, that the Chairman of the board of Directors of the Borrower,
Russell Jones, be and is hereby authorized to execute the Agreement on behalf of
the Borrower, to execute any future amendments to said Agreement as such
individual may deem appropriate within the Line of Credit Amount so authorized,
and to execute such further documents as may be necessary or appropriate in
order to comply with CFC's requirements; and,

          RESOLVED, that it is the intent of the Board that upon execution and
delivery of the Agreement to CFC, and when executed by CFC, the Agreement shall
constitute a valid and binding agreement between CFC and the Borrower,
enforceable in accordance with its terms, and that the Borrower's obligations
under the Agreement shall be secured by the Second Restated Mortgage and
Security Agreement, dated as of October 24, 1995, by and between Borrower and
CFC, as the same may have been or shall be supplemented, amended, consolidated,
or restated from time to time; and,

          RESOLVED, that CFC shall be entitled to rely upon the direction of
such director, officer or employee of Borrower as CFC reasonably believes is
authorized on behalf of the Borrower to request and receive funds pursuant to
the Agreement; and,

<PAGE>

          RESOLVED, that CFC is hereby authorized to receive, review and make
copies of any financial statements, documents, reports, contracts or other
materials as CFC may reasonably request from time to time in connection with the
Agreement; and,

          RESOLVED, that the appropriate officers are authorized to take all
other actions they deem advisable to carry out the purpose of these resolutions.

          IN WITNESS WHEREOF, I have hereunder set my hand and affixed the seal
of the Borrower, this 24th day of June, 1997.

(Corporate Seal)

                                            ----------------------------------
                                            Alfred J. Schwartz, Secretary<PAGE>

                                                                  EXHIBIT 10.46

                       CAP ROCK ELECTRIC COOPERATIVE, INC.
                     ACHIEVEMENT BASED COMPENSATION CONTRACT

               MERGER OR ACQUISITION WITH OTHER ELECTRIC UTILITIES

In accordance with Cap Rock Electric Cooperative, Inc.'s ("Cap Rock Electric")
Board Policy No. 143, this contract provides for calculation and payment of
incentive compensation in the form of a percentage of assets added to Cap Rock
Electric and/or Cap Rock Energy, Inc. ("Cap Rock Energy") hereinafter referred
to collectively as the "Companies" resulting from mergers with or acquisitions
of other electric utilities.

1.    RESPONSIBLE INDIVIDUAL:

      Ulen E. North, Jr.

2.    AMOUNT OF ACHIEVEMENT BASED COMPENSATION:

      The Achievement Based Compensation will be one and a half percent (1.5%)
      of the total assets added to Cap Rock Electric.

3.    CALCULATION OF ASSET BASIS:

      The amount of total assets on which the compensation is based equals
      the total of all assets acquired by Cap Rock Electric and/or Cap Rock
      Energy at the time of the merger or acquisition. This applies to all
      prior mergers and acquisitions since 1990, and includes the Lone
      Wolf,Hunt-Collin and McCulloch acquisitions and any future mergers or
      acquisitions for the next ten (10) years.

4.    TERM OF ACHIEVEMENT BASED COMPENSATION:

      The Achievement Based Compensation will be paid no later than two (2)
      months of completion of the merger or acquisition, such merger or
      acuisition being considered completed at such time as ownership of all
      of the assets of an electric utility are officially transferred to and
      become a part of Cap Rock Electric and/or Cap Rock Energy.

5.    PAYMENT OF THE ACHIEVEMENT BASED COMPENSATION:

      The Achievement Based Compensation will be paid after ownership of all
      total assets of an electric utility are transferred to Cap Rock Electric
      and/or Cap Rock Energy.

      The Achievement Based Compensation will be paid in cash to each eligible
      individual in a lump sum unless the amount exceeds $10,000.00, in which
      case Cap Rock Electric will have the option to spread the payment over
      as many months as necessary so that any one monthly payment does not
      exceed $10,000.00 or to pay in a lump sum if the Board and the
      President/CEO so decide. The lump-sum payment or series of payments, if
      applicable, will

<PAGE>

      be made as provided in Board Policy No. 143 and with cash availability
      and overall cash flow of the Companies considered.

      The eligible individual shall have the option to elect some or all of
      the payment to be made to such deferred compensation plans as may be
      maintained by the individual or Cap Rock Electric.

6.    CONDITIONS AND CONSIDERATIONS FOR PAYMENT:

      Except upon becoming eligible for benefits under any Cap Rock Electric
      retirement plan, either early or regular, the Achievement Based
      Compensation will be payable to the recipient listed below in paragraph
      (7) without regard to the continued employment of those individuals by Cap
      Rock Electric or an affiliate or subsidiary thereof, provided that,
      unless otherwise agreed by Cap Rock Electric, each individual agrees that
      he will not voluntarily terminate his employment or seat on the Board of
      Directors or Advisory Director position with Cap Rock Electric or any
      affiliate or subsidiary of Cap Rock Electric for the shorter of three
      years following the date of initial payment under this contract.
      Further, each individual agrees that he will keep the terms of this
      contract, as well as the terms of the transaction causing the awarding
      and payment of the Achievement Based Compensation, confidential.

7.    SHARING WITH OTHER INDIVIDUALS:

      In recognition of the necessary contribution of the entire management
      team, including the General Counsel, and the Board of Directors, including
      the Advisory Directors to the continued success of Cap Rock Electric, the
      Achievement Based Compensation will be shared among the Responsible
      Individual and the other management team members as follows:

                  Responsible Individual - 20 %
                                          -----
                  Management Team - 80 %
                                   -----
                        a.    President/Chief Executive Officer - 20 %
                                                                 -----
                        b.    Other Individuals selected by the President/CEO
                              and Board of Directors - 60 %
                                                      -----

                        i.    John D. Parker            10 %
                                                        ----
                        ii.   Sam Prough                10 %
                                                        ----
                        iii.  Ronnie Lyon               10 %
                                                        ----
                        iv.   Russell E. Jones          2.70%
                                                        ----
                        v.    Alfred J. Schwartz        2.70%
                                                        ----
                        vi.   S.D Buchanan              2.70%
                                                        ----
                        vii.  Newell Tate               2.70%
                                                        ----
                        viii. Jerry Swindell            2.70%
                                                        ----
                        ix.   Jerry Hoelscher           2.70%
                                                        ----
                        x.    Floyd Ritchey             2.70%
                                                        ----

                                                                        Page 2

<PAGE>

                        xi.   Carlos Dusek              2.70%
                                                        ----
                        xii.  A.D. Reed                 2.70%
                                                        ----
                        xiii. Teddy Stewart             2.70%
                                                        ----
                        xiv.  Robert Holman             2.70%
                                                        ----

    Except for the confidentiality and retirement provisions, the conditions
    for payment described above in paragraph (6) are not applicable to those
    persons identified and listed above as "Other Individuals". It is further
    understood and agreed that such conditions of payment as set out in
    paragraph (6) are applicable subject to the amount of such Achievement
    Based Compensation total payment being commensurate and with the
    conditions placed upon the recipients by the acceptance of such
    Compensation.

    In the event the Responsible Party should violate terms of this Agreement,
    the right to receive future payments under this Agreement shall immediately
    cease and such interest or right to future payments shall revert to the
    Companies. In the event any individual named herein by the President/Chief
    Executive Officer and Board of Directors as a part of the Management Team
    shall violate the terms of this agreement, die, retire, or terminate their
    employment with the Companies for any reason, the right to receive future
    payments under this contract, if any, shall immediately cease and the
    President/Chief Executive Officer shall have the right to allocate such
    share among those named individuals or others as he may deem in the best
    interests of the Companies.

Witness our hands on this the 29 day of June, 1999.
                             ----       ----

/s/ [ILLEGIBLE]                                    Date:    7-22-1999
--------------------------------------------            ----------------------
Responsible Individual

/s/ [ILLEGIBLE]                                    Date:    6/29/99
--------------------------------------------            ----------------------
President/Chief Executive Officer

/s/ Russell E. Jones                               Date:    7-22-99
--------------------------------------------            ----------------------
Chairman

                                                                        Page 3

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