1780 28 Form – Fill Out and Use This PDF

Section 2. (Terms of Loan). That the Organization borrow							and issue as evidence
thereof an installment promissory note in			the form prescribed		by the Government for the full	principal amount of		the loan.
The note shall be signed by the President,			attested	by the Secretary and have the corporate seal of the			Organization	affixed
thereto, and shall bear interest from its date, which shall be the date of delivery at a rate not to exceed							percent per annum;
the principal and interest	shall be paid over a period of				years in accordance with the payment schedule set forth in
the promissory note, until	the	principal and interest are fully paid except the final payment of				the entire indebtedness, if not
sooner paid, shall be due and		payable		years from the date of the note. Each		payment	shall be applied first to the
payment of the accrued interest and second to the				payment of	the principal. Prepayments of	any installment may		be made
in any amount at any time at the option of the Organization.

Section 3. (Assignment and Pledge of Revenue). The indebtedness hereby authorized to be incurred, together with the interest thereon, shall be payable from the gross income and revenue to be derived from the operation of the Facility, a sufficient portion of which, to pay the principal and interest as and when the same shall become due, is hereby assigned, and pledged and shall be set aside for that purpose and this assignment and pledge shall extend to and include any assessments that may be levied pursuant to Section 5 (d) hereof.

Section 4. (Protection and Disposition of Funds). The

of the Organization shall be the custodian of all funds of the Organization. Funds may be deposited in institutions insured by the State or Federal Government or invested in readily marketable securities backed by the full faith and credit of the United States. Any income from these accounts will be considered as revenues of the system.

The		is hereby directed to establish the following accounts into which the current funds
of the Organization,	note proceeds, the	revenues from	the Facility and any other income shall be deposited, which accounts
shall be continually	maintained, except	as otherwise	provided, so long as the indebtedness hereby authorized remains unpaid:

(a)Construction Account.

The proceeds of the borrowing hereby authorized not disbursed contemporaneously with loan closing for incurred Facility

costs,	and		at least the amount of			to be contributed by the Organization from the collection of initial
connection			fees, membership	fees or contributions shall be deposited in the Construction Account which shall be established
as required			by the Government.		Withdrawals from the	construction account shall be made	only on checks signed by the
						of the Organization as authorized by	the Board from time to time,
and with prior concurrence of					the Government. At the option of the Government, the construction account may be established
as a "supervised bank account".					Amounts in the supervised bank account exceeding $100,000		shall be secured by the depository
bank	in	advance in accordance with U.S. Treasury Department Circular No. 176. Withdrawals from a supervised bank account
shall	be	made only on checks		signed by the		of the Organization and countersigned by
an authorized official of the Department of Agriculture.						The Organization’s share of any insurance or liquidated damages

and other monies paid by defaulting contractors or their sureties will be deposited in the Construction Account to assure

completion of	the Facility.	When all construction	costs have been paid in full,	any	balance	remaining	in the Construction
Account may	be applied	on the loan or used for	other authorized purposes	that	have been	approved	by the Government
and the Construction Account shall be closed.

(b)General Account

As soon as the facility becomes revenue producing, all funds received shall be set aside in an account to be designated as the General Account, and disbursements and transfers from this account shall be in the following priority: Debt Service, Operations and Maintenance, transfers to Reserve Account. Monies deposited in the General Account shall be used only in the manner and order as follows:

(1)Borrowers making monthly USDA Debt Service Payments shall use the General Account for making such payments plus operating and maintenance expenses. Also, funds will be transferred from this account to the Reserve Account in accordance with (d) below.

(2)Borrowers making other than monthly USDA Debt Service Payments shall use the General Account to pay operating and maintenance expenses. Other transfers from this account will be made in the following order: (i) Transfers to the Debt Service Account will be made in accordance with (c) below, (ii) Transfers to the Reserve Account will be made in accordance with (d) below.

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(c)Debt Service Account

For borrowers on other than monthly debt service payments, transfers, in proportion to income availability, shall be made from the General Account and set aside in an account designated as the Debt Service Account, in sufficient amounts which will accumulate for the next installment on the note.

(d)Reserve Account

From the remaining funds in the General Account, after transfers and payments required in (b)(1) or (b)(2) and (c), there

shall be set aside into an account(s) designated as the Reserve Account(s) the sum of

each month until the sum ofis reached. With the prior written approval of the Government,

funds may be withdrawn and used for such things as loan installments, emergency maintenance, extensions to facilities and replacement of short-lived assets, subject to conditions established by the Government.

(e)Whenever there shall accumulate in the General Account amounts in excess of those required in subsections (b)(1) and (2), (c), and (d), such excess will be used by the organization to make prepayments on the loan or retained in the General Account.

(f)The accounts required in subsections (b)(1) and (2), (c), and (d) may be established and maintained as bookkeeping accounts or as separate bank accounts at the election of the Organization, unless otherwise directed by the Government.

Section 5. (Other Covenants and Agreements of the Organization). The Organization covenants and agrees that so long as the indebtedness hereby authorized remains unpaid;

(a)It will indemnify the Government for any payments made or losses suffered by the Government.

(b)It will comply with applicable State laws and regulations and continually operate and maintain the Facility

in good condition.

(c)It will impose and collect such rates and charges that gross revenues will be sufficient at all times to provide for payment of the operation and maintenance thereof; the installment payments on the note; and the maintenance of

the various funds herein created. All service rendered by or use of the Facility shall be subject to the full rates prescribed in the rules and regulations of the Organization; no free service by or use of the Facility will be permitted.

(d)It will cause to be levied and collected such assessments as may be necessary to operate and maintain the Facility in good condition and meet installment payments on the note when the same become due if, for any reason, gross revenues are insufficient.

(e)It will establish and maintain such books and records relating to the operation of the system and its financial affairs, and will provide for the annual audit thereof, in such manner as may be required by the Government; will provide the Government without its request a copy of each such audit; and will make and forward to the Government such additional information and reports as it may from time to time require.

(f)It will provide the Government, at all reasonable times, access to all books and records relating to the Facility and access to the property of the Facility so that the Government may ascertain that the Organization is complying with the provisions hereof and with the provisions of other instruments incident to the making or insuring of the loan.

(g)It will maintain at least such insurance and fidelity bond coverage as may be required by the Government.

(h)It will not borrow any money from any source or enter into any contract or agreement or incur any other liabilities in connection with making extensions or improvements to the Facility, exclusive of normal maintenance, without obtaining the prior written consent of the Government.

(i)It will not cause or permit any voluntary dissolution of its organization, or merge or consolidate with any

other organization, without obtaining the prior written consent			of the Government. It will not dispose of or transfer title
to the facility or any part thereof, including lands and interest in lands, by sale, security instrument, lease or other
encumbrance, without	obtaining	the prior written consent of the Government. Revenue		in excess of	the amount required to
maintain the accounts	described	by Section 4 herein will not be	distributed or transferred	to any other	organization or
legal entity.

(j)It will not modify or amend the Articles of Incorporation or the Bylaws of the Organization without the written consent of the Government,

(k)It will provide adequate service to all persons within the service area who can feasibly and legally be served

and will obtain USDA’s concurrence prior to refusing new or adequate services to such persons. Upon failure to provide services which are feasible and legal, such person shall have a direct right of action against the organization or public body.

(l)All present and future contract rights, accounts receivable, and general intangibles arising in connection with the facility are pledged as security for the loan.

(m)It will comply with the measures identified in the Government's environmental impact analysis for this facility for the purpose of avoiding or reducing adverse environmental impacts of the facility’s construction or operation.

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Section 6. (Security Instruments). In order to secure the payment of the principal and interest of the note, the President and Secretary of the Organization are hereby authorized and directed to execute and deliver good and sufficient lien instruments, where necessary, encumbering the properties and assets both real and personal constituting said Facility, as completed or as the same may be thereafter extended, including an assignment and pledge of revenues and such other instruments as may be prescribed by the Government

Section 7. (Refinancing). If at any time it shall appear to the Government that the Organization is able to refinance the amount of the indebtedness then outstanding, in whole or in part, by obtaining a loan for such purposes from responsible cooperative or private credit sources at reasonable rates and terms for loans for similar purposes and periods of time, the Organization will, upon request of the Government, apply for and accept such loan in sufficient amount to repay the Government and will take such actions as may be required in connection with such loan.

Section 8. ("Equal Employment Opportunity under Construction Contracts and Nondiscrimination”). The President and the Secretary be and they are hereby authorized and directed to execute for and on behalf of the Organization, Form RD 400-1, "Equal Opportunity Agreement", and Form RD 400-4, "Assurance Agreement".

Section 9.	In the case of a grant in the sum	not to	exceed	, the Organization
hereby accepts the grant under the terms as offered		by the Government and that the
and	of the Organization are		hereby authorized and empowered to take all	action necessary or

appropriate in the execution of all written instruments as may be required in regard to or as evidence of such grant and the Organization hereby resolves to operate the facility under the terms as offered in said grant agreement(s).

Section 10. Default under the provisions of this agreement or any instrument incident to the making or issuing of the loan may be construed by the Government to constitute default under any other instrument held by the Government and executed or assumed by the Organization, and default under any such instrument may be construed by the Government to constitute default hereunder.

Section 11. (Resolution of Contract). The provisions hereof and the provisions of all instruments incident to the making or the insuring of the loan, unless otherwise specifically provided by the terms of such instruments, shall constitute a contract between the Organization and the Government or assignee so long as the note hereby authorized remains unpaid.

Section 12.	This resolution shall take effect and be in force from and after the			day of
	, being the date of its enactment.
The vote was:	Yeas	Nays	Absent

(SEAL) (if applicable)

By

Attest:Title

Title

CERTIFICATION

I, the undersigned, as secretary of the
hereby certify that the		of such Organization or Corporation is composed of _______
members of whom ___________ , constituting a quorum, were present at a meeting thereof duly called and held on the			day
of	; that the	foregoing resolution was adopted at such meeting by the vote shown
above, and that said resolution	has not been rescinded or amended in any way.
Dated, this	day of	.

Secretary of

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