RD 4280-6 Loan - Letter of Conditions

Form RD 4280-6 Form Approved

6. OMB No. 0570-0035

RURAL ECONOMIC DEVELOPMENT LOAN

LETTER OF CONDITIONS

[ (1) __Date___]

[ (2) __Name___]

President

[ (3) __Utility__]

[ (4) __Address__]

[ (5) __City, State, Zip__]

Dear Mr./Mrs. [ (6) __Name__]:

We are pleased to announce that the application of the _[ (7) Intermediary]____, (“Intermediary”) for a zero-interest loan in the amount of $_[ (8) amount]_____ (“Loan”) to partially finance a loan to [ (9) __Ultimate Recipient__] (“Ultimate Recipient”) for the project known as, __[ (10)Project Description]______ located in [town, county, State] (“Project”), for the purpose of [ (11) state the purpose] has received approval of Rural Development, subject to the following terms and conditions:

A. The Intermediary will:

1. deliver satisfactory evidence to Rural Development that the Ultimate

Recipient has obtained or received binding commitments for supplemental

financing of at least $[ (12) amount] that is needed, in addition to the

Loan proceeds, to ensure completion of the Project.

2. establish a Loan payment system using the Automated Clearing House-

Customer Initiated Payment (ACH-CIP) method. These steps include:

(i) sending a canceled or voided check on the account that the

Intermediary will use to make payments on the Loan to the Rural

Development Finance Office, and (ii) completing and submitting to

Rural Development an ACH-CIP enrollment form with the

Intermediary’s canceled or voided check. Establishment of the

According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0570-0035. The time required to complete this information collection is estimated to average one hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

ACH-CIP account will be handled by Mellon Bank, Pittsburgh,

PA, and a personal identification number (PIN) will be issued

directly to the Intermediary by Mellon Bank. Payment instructions

will be issued to the Intermediary by the Rural Development

Finance Office.

3. execute and return to the Rural Development State office at the address

below, the enclosed original Promissory Note, original Rural Development

Loan Agreement, and duplicate original of the Letter of Conditions.

4. execute and deliver its Promissory Note to Rural Development in the form

attached hereto.

5. submit "Certification Regarding Debarment, Suspension, Ineligibility and

Voluntary Exclusion - Lower Tier Covered Transactions" properly signed

by the Ultimate Recipient.

6. certify that no adverse actions have occurred since the application was

approved.

And,

B. Rural Development approval of:

1. the Rural Development Loan Agreement, the Rural Development

Promissory Note, and any security agreement which will be entered into

between the Intermediary and the Ultimate Recipient.

2. a draft version of a legal opinion from both the Intermediary’s and the

Ultimate Recipient's respective attorneys, in the form of a typical opinion

given to a lender in the Project State in commercial loan transactions,

opining as to the legal authority of the entities to execute the Promissory

Note and perform its obligations under the Rural Development Loan

Agreement. Any legal issues identified by the Intermediary’s counsel

should be discussed and agreed to by counsel and the Rural Development

State office before the executed legal opinion is sent to the Rural

Development.

C. The Loan is also subject to the following conditions:

1.

2.

Please evidence your acceptance of the terms and conditions of this Letter of Conditions by executing and dating the enclosed duplicate original in the space provided and returning it to the State Office address below within 60 days from the date of this Letter of Conditions.

After closing, the Intermediary may request funds by submitting a letter, signed by an authorized official and addressed to the National office address shown below, requesting the advance of Loan funds for specific Approved Purposes as described by this Letter of Conditions and the enclosed Rural Development Loan Agreement.

Unless otherwise extended, if the Intermediary fails to satisfy all conditions and requirements within 120 days of the Intermediary’s acceptance of the terms and conditions of the Letter of Conditions then this Letter of Conditions will terminate.

Sincerely,

[ (13) State Director]

Accepted and Agreed to:

_______________________

[ (14) Intermediary]

by:

[ (15) President] [ (16) Date ]

(SEAL)

Attested to for the Intermediary:

by:

[ (17) Secretary]

State Office Address

National Office Address

Enclosures:

• Duplicate Original Letter of Conditions

• Rural Development Loan Agreement

• Promissory Note

• Certification Regarding Debarment, Suspension, Ineligibility

and Voluntary Exclusion - Lower Tier Covered Transactions

INSTRUCTIONS FOR FORM RD 4280-6

Rural Economic Development Loan Letter of Conditions

Rural Economic Development Loan and Grant Program

Rural Development and the Intermediary complete this form. Rural Development uses this form for establishing the terms and conditions between the Intermediary and the Government regarding a loan.

Submit the original of the completed form in hard copy to the appropriate Rural Development State Office.

Features for transmitting the form electronically are available to those customers with access credentials only. If you would like to establish online access with USDA, follow the instructions provided at the USDA eForms web site.

Rural Development and the Intermediary complete all of the items specified in the following table.

Fld Name/Item No.	Instruction
1. Date	Enter the date the Letter of Conditions was signed.
2. Name	Enter the name of the contact for the intermediary.
3. RUS Utility	Enter the name of the intermediary.
4. Address	Enter the address of the intermediary.
5. City/State/Zip	Enter the City/State/Zip of the intermediary.
6. Name	Enter the name of the contact for the intermediary.
7. Intermediary	Enter the name of the intermediary.
8. Amount	Enter the amount of the loan.
9. Ultimate Recipient	Enter the name of the ultimate recipient of the grant.
10. Project Description	Enter a brief description of the project to be funded.
11. Amount	Enter amount of supplemental funds.
12. State Director	State Director’s signature.
13. Intermediary	Intermediary’s signature.

14. President	President’s signature.
15. Date	Enter the date the president signs.
16. Secretary	Secretary of the Board’s signature.