MANAGEMENT REPRESENTATION LETTER BY ULTIMATE LOAN RECIPIENT

(a) Loan funds were not used for activities that would adversely affect the environment, or activities that limit the choice of reasonable alternatives prior to satisfying Rural Development environmental requirements;

(b) Loan funds were not used to pay off or refinance any existing indebtedness or costs of the Project that was incurred prior to Rural Development receipt of the Intermediary’s completed application;

(c) Loan funds were not used for any electric or telecommunications purpose or for the Intermediary’s electric or telecommunications operations, for affiliated operations of the Intermediary, or for the benefit of other Intermediaries or their affiliated operations, except those purposes contained in § 4280.15(f);

(d) Loan funds were not used to pay the salaries of any employee or owner of the Intermediary, its subsidiaries, or affiliates, except for salaries incurred in administering a Revolving Loan Fund established under the REDG Program;

(e) Loan funds were not used for community antenna or cable television systems or facilities;

(f) Loan funds were not used for residential purposes such as residential dwellings and land sites; facilities to provide entertainment television; to transfer property between owners without making improvements that will promote or sustain economic development in Rural Areas; or for personal, non-business related vehicles;

(g) Loan funds were not used where there is directly or indirectly a conflict of interest or the appearance of a conflict of interest in the Project; for Intermediaries this would include a situation in which the Intermediary, its officers, managers, Board of Directors, employees, their spouses, children, or close relatives, have a financial or ownership interest in the Project being funded, including its construction or development;

Examples of Conflicts of interest include but are not limited to:

1. The Intermediary, Board Member and/or employee, its officers, manager, their spouses, children, or close relatives have an ownership interest in the project.

2. The Intermediary, Board Member and/or employee, its officers, manager, their spouses, children, or close relatives have an ownership interest in the property or other assets being purchased by the project.

3. The Intermediary, Board Member and/or employee, its officers, manager, their spouses, children, or close relatives providing technical assistance financed with project funds.

4. Any other activity which may have the appearance of a conflict of interest.

(h) Loan funds were not used for any purpose when receipt of loan funds is conditioned upon the requirement that the Ultimate Recipient acquire electric or telecommunications service from the Intermediary or its affiliates;

(i) Loan funds were not used for any gambling activity;

(j) Loan funds were not used for a Project that would result in the transfer of existing employment or business activity more than 25 miles from its existing location;

(k) Loan funds were not used for proposed Projects located in areas covered by the Coastal Barrier Resources Act (16 U.S.C. 3501-3510);

(l) Loan funds were not used for any illegal activity or any activity involving prostitution;

(m) Loan funds were not used for Agricultural Production, except where the Project is a farmer-owned cooperative or similar organization where the benefits of the Project are passed on to the farmer-owners, and the Agricultural Production is part of an integrated business that processes the agricultural products, and the Agricultural Production portion of the loan will not exceed 50% of the loan amount;

(n) Loan funds were not used for any pass-through Grant funding activity (a Grant by the Intermediary to the Ultimate Recipient);

(o) Loan funds were not used for provision of only local exchange voice telephone service; or

(p) Loan funds were not used for any other purpose announced in a notice by Rural Development.

Signature of Authorized Official-Ultimate Recipient

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Exhibit B to Letter of Agreement
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