Form RD 4280-3 RD 4280-3 Rural Economic Development Grant/Rural Microentrepreneur

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Form RD 4280-3
(Rev. 6-10)

Form Approved
OMB No. 0570-0035
OMB No. 0570-0062

DATE:

AMOUNT:

RURAL ECONOMIC DEVELOPMENT GRANT/
RURAL MICROENTREPRENEUR ASSISTANCE PROGRAM
AGREEMENT
This Rural Economic Development Grant/Rural Microentrepreneur Assistance Program
Agreement (''Agreement'') dated as of the date above between
, a corporation duly organized and existing under the laws of
the State of
(''Grantee''), and Rural Development, through the
Rural Business-Cooperative Service, Rural Development sets forth the terms and
understandings between the Grantee and the Government regarding a grant in the amount
(''Grant'') Rural Development is making to the Grantee
of
pursuant to Section 313 of the Rural Electrification Act of 1936, as amended (''Act''),
Section 6022 of the Consolidated Farm and Rural Development Act of 2008, 7 CFR part
4280, Subpart A - Rural Economic Development Loan and Grant Program, and 7 CFR part
4280, Subpart D - Rural Microentrepreneur Assistance Program (''Regulations'').
Rural Development makes this Grant to the Grantee and the Grantee accepts this Grant to
establish and operate a Revolving Loan Fund (''Fund'') as more particularly described in
the Rural Economic Development Grant Letter of Conditions (''Letter of Conditions''), or
to perform operational enhancement services/activities, technical assistance, training
integrated with microlending, etc., as described in the Rural Microentrepreneur Assistance
Program (RMAP), between Rural Development and the Grantee dated
.

NOW, THEREFORE, in consideration of the mutual agreements herein contained, Rural
Development and the Grantee agree as follows:
GRANT TERMS
Rural Development grants a sum not to exceed
to the Grantee
to be used under the Rural Economic Development Grant Program solely for 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 and 0570-0062. 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.

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establishment and operation of a Revolving Loan Fund (''Fund'') to finance approved rural
economic development projects, or under the RMAP to perform operational enhancement
services/activities, technical assistance, training integrated with microlending, etc. as
more particularly described in the Application Materials and materials that may have
been modified by the Letter of Conditions (''Approved Purpose''). In the event that it is
determined that any portion of the Grant is used for purposes other than an Approved
Purpose, the Grantee will reimburse Rural Development the amount used for unapproved
purposes plus accrued interest at the rate established in 31 CFR 901.9.
Rural Development shall advance the proceeds of the Grant in the manner specified in the
Letter of Conditions and the Regulations. Unless otherwise authorized by Rural
Development, any portion of the Grant not disbursed to the Grantee by the first anniversary
of this Agreement will be terminated.
AFFIRMATIVE COVENANTS FOR RURAL ECONOMIC DEVELOPMENT
GRANTS ONLY
The Grantee covenants that:
a.
the proceeds of the Grant shall be used solely for the purpose of establishing and
operating a Revolving Loan Fund to finance approved rural economic development
project(s) to borrowers (''Ultimate Recipients'') in accordance with the Grantee's
Revolving Loan Fund Plan dated
, as approved by Rural Business and
Cooperative Service (''Plan'');
b.

the original loan that will be financed by Grant funds will be made to the
,
to finance
(''Project''), and that such loan will carry no interest. The Project is more fully set forth in
as modified by the approved Plan;
the Grantee's application dated
c.
the original loan to be financed by Grant funds shall not be used to finance any
costs or retire any indebtedness incurred on the Project prior to
which is the date the application was received by Rural Development;
d.
the original loan(s) made from the Fund that will be established with the Grant
will carry an interest rate of zero percent and will be made in accordance with the
Grantee's Plan, as approved by Rural Development;
e.
any original loan(s) made from the Fund with the proceeds of the Grantee's
contribution, and all subsequent loans made from the Fund using the proceeds from
repayment of the original loan(s), will be made in accordance with the Grantee's approved
Plan;
f.
the Grantee: (1) will not condition the receipt of a loan from the Fund with the
requirement that the Ultimate Recipient take electric or telecommunications service from
the Grantee or any other specific electric or telecommunications utility, and (2) will

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accept and consider applications, without restriction to service area, from prospective
Ultimate Recipients for projects that will significantly benefit rural areas;
the proceeds from repayment of the original loan(s) will be used to finance rural
g.
economic development projects and will be made available in the time and manner set
forth in the Grantee's approved Plan;
loan servicing fees will be reasonable and appropriate for each project but not in
h.
excess of one (1) percent per year on the outstanding principal on the first day of each
year on each loan to the project;
l.
the Grantee will coordinate lending activities with local financial institutions to the
maximum extent practicable, and will not compete with, but supplement other sources of
legal financing;
m.
the Grantee may charge an interest rate on all subsequent loans made from the
Fund using the proceeds from repayment of the original loans, that is no higher than, the
prevailing prime rate as published in the Wall Street Journal. The intent is to minimize the
project's interest expense consistent with sound business practices, all in accordance with
the Grantee's approved Plan;
n.
the Grantee shall manage, operate and maintain the Fund in an efficient and
economic manner, consistent with sound business practices. If the Fund will be managed,
or operated by participants other than the Grantee, the Grantee will obtain Rural
Development's approval and shall maintain decision making control and authority over all
proceeds derived directly from this Grant and all future earnings and repayments of loans
therefrom;
o.
the Grantee will avoid conflicts of interest or the appearance of conflicts of interest
in its lending practices;
p.
the Grantee will maintain at its premises, for review by Rural Development or
others conducting an audit of the Grantee's records for the benefit of Rural Development
such records as necessary to identify the purposes for which, and the manner in which,
Grant and other funds were expended, including all receipts for expenditures. The
Grantee further covenants that it will maintain such records of expenditure, as well as
copies of all reports submitted by the Grantee to Rural Development with respect to the
Application Materials, in accordance with 7 CFR parts 3015 and 3019. The Grantee
agrees to permit a designated representative of Rural Development to periodically inspect
and copy records, during regular business hours, of Grantee's operations as related to the
administration of the Fund. If the Fund is administered by others, the Grantee shall
require the administrators to provide all necessary financial, accounting, and budget
information and other records deemed necessary to facilitate audits to Rural Development
or its representatives, including inspecting the activities and records of the Fund from time
to time as necessary, during regular business hours;

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q.
the Grantee will provide Rural Development, a ''Survey of Recipients of Rural
Economic Development Loan and Grant Program,'' reporting on the accomplishments of
the project financed with Grant proceeds. This form shall be submitted to Rural
Development, on an annual basis, no later than 90 days after December 31 of each year,
until the Fund is terminated;
r.
the Grantee will provide to Rural Development a report regarding the loan activity
of the Fund. The report must provide an aggregate list of projects funded, the amount
financed for each project, the project repayment terms, a brief description of each project,
the project objectives, whether or not the project has been completed, the number and
types of jobs created or saved by each project, and the payments status of each loan. The
cash balance of the Fund as of the latest calendar year end must also be reported. This
report shall be submitted no later than 90 days after December 31 of the reporting year;
s.
the Grantee will provide fidelity bond coverage for all persons who have access to
funds. Coverage may be provided either for all individual positions or persons, or through
''blanket'' coverage providing protection for all appropriate employees and officials.
Fidelity bond coverage shall be in an amount sufficient to cover the amount in the Fund,
including the Grantee's contribution;
t.
the Grantee will promptly use the proceeds of the Grant only in the manner and
exclusively for the purposes set forth in the Letter of Conditions, this Agreement, and the
Regulations (as they may be amended from time to time), and 7 CFR parts 3015 and 3019,
and that no material changes will be made in the purposes previously approved in the
Letter of Conditions, this Agreement, and the Regulations without the prior written
approval of Rural Development;
u.
the Grantee will comply with the Regulations, as they may be amended from
time to time, including, without limitation, any Federal regulations or Federal statutes which
the Regulations identify as being applicable to activities contemplated by the Application
Materials, the Letter of Conditions, or this Agreement including 7 CFR parts 3015, 3019,
and 3052;
v.
after each loan closing between the Grantee and an Ultimate Recipient, the
Grantee will deliver to Business Programs a copy of the executed loan agreement
including lower tier debarment certification, the promissory note(s), and the security
agreement entered into between the Grantee and the Ultimate Recipient, together with a
copy of the legal opinion rendered by counsel for the Ultimate Recipient;
w.
the Grantee will obtain prior written approval from Rural Development before
revising or amending any agreement that had been reviewed and approved by Rural
Development in connection with the advance of Grant funds or executing, revising, or
amending any other agreement between the Grantee and the Ultimate Recipient as
required under the Regulations;

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x.
the Grantee will make its request for Grant funds using Standard Form 270,
''Request for Advance or Reimbursement,'' bearing the original signature of the officer,
employee, or agency of the Grantee authorized to receive or disburse Grant funds;
y.
no material changes will be made in the Plan or the Project without prior written
approval of Rural Development. Any material changes in the Plan or the Project will be
set forth in a revised Project description to be prepared by the Grantee and approved by
Rural Development.
z.
only funds provided to authorized project(s) after the date Rural Development
received the Grantee's completed application may be used to satisfy Grantee's 20 percent
contribution requirement.

AFFIRMATIVE COVENANTS FOR THE RURAL MICROENTREPRENEUR
ASSISTANCE PROGRAM ONLY
The Grantee covenants that:
a.

the proceeds of the Grant shall be used solely for the purpose(s) of providing:
(i) technical assistance grants to Microlenders to assist in providing marketing,
management, and other technical assistance for rural microentrepreneurs or
microentrepreneurs that have received or are seeking one or more microloans
from the microlender, or
(ii) technical assistance-only grants to eligible MDOs that seek to provide
business-based technical assistance and training to eligible microentrepreneurs,
but do not seek funding for a rural microloan revolving fund and in accordance
with the Grantee's application dated
, as approved by Rural
Business-Cooperative Service (Supporting Narrative);

b.
no more than ten (10) percent of a Grant received by an MDO for a Federal fiscal
year may be used to pay administrative expenses.
c.
the 15 percent match required by the Grantee will be used in accordance with
§ 4280.313(a)(2) and in accordance with the Grantee's approved Plan; and , any cash
contributions deposited in the Account will not be removed from the Fund except for
approved purposes;
d.
the Grantee will avoid conflicts of interest or the appearance of conflicts of interest
in its administration of Federal funds, in accordance with § 4280.323(c);
e.
the Grantee will maintain at its premises, for review by Rural Development or its
designees, such records as necessary to identify the purposes for which, and the manner in
which, Grant and other funds were expended, including all receipts for expenditures. The

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Grantee further covenants that it will maintain such records of expenditure, as well as
copies of all reports submitted by the Grantee to Rural Development with respect to the
Application Materials, in accordance with 7 CFR parts 3015 and 3019. The Grantee
agrees to permit one or more designated representative(s) of Rural Development to
periodically inspect and copy records as they pertain to this program, during regular
business hours.
the Grantee will provide Rural Development a report on the accomplishments of
f.
the operational enhancement services/activities, training, technical assistance integrated
with microlending, etc., achieved with the grant proceeds. This report shall be submitted
to Rural Development as part of normal reporting requirements, no later than 90 days after
December 31 of each year, until the purpose of the Grant is fulfilled;
g.
the Grantee will provide fidelity bond coverage for all persons who have access to
funds. Coverage may be provided either for all individual positions or persons, or through
''blanket'' coverage providing protection for all appropriate employees and officials.
Fidelity bond coverage shall be in an amount sufficient to cover the amount of the grant,
including the Grantee's matching contribution;
h.
the Grantee will promptly use the proceeds of the Grant only in the manner and
exclusively for the purposes set forth in the Letter of Conditions, this Agreement, and
Regulations (as they may be amended from time to time), and 7 CFR parts 3015 and 3019,
and that no material changes will be made in the purposes previously approved in the
Letter of Conditions, this Agreement, and the Regulations or other official guidance
without the prior written approval of Rural Development;
i.
the Grantee will comply with the Regulations or other official guidance, as they
may be amended from time to time, including, without limitation, any Federal regulations
or Federal statutes which the Regulations identify as being applicable to activities
contemplated by the Application Materials, the Letter of Conditions, or this Agreement
including 7 CFR parts 3015, 3019, and 3052;
j.
the Grantee will make its request for Grant funds using Standard Form 270,
''Request for Advance or Reimbursement,'' bearing the original signature of the officer,
employee, or agency of the Grantee authorized to receive or disburse Grant funds. The
Agency reserves the right to refuse payment in the event of a lack of evidence of activity as
described.

REPRESENTATIONS AND WARRANTIES
The Grantee represents and warrants that on and as of the date first set forth above:
The Grantee has been duly incorporated and is in good standing under the laws of
1.
the State of its charter with the corporate power and authority to perform its obligations

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under this Agreement, the Letter of Conditions, the Regulations, and other official
guidance.
2.
This Agreement and the Letter of Conditions have been duly authorized, executed,
and delivered by the Grantee and such documents constitute the legal and binding
agreements of the Grantee, enforceable against the Grantee in accordance with their
respective terms, subject to:
(i) applicable bankruptcy, reorganization, insolvency, moratorium and other laws
of general application relating to or affecting creditor's rights generally, and
(ii) the application of general principles of equity regardless of whether such
enforceability is considered in a proceeding in equity or at law.
3.
The execution or the delivery by the Grantee of this Agreement and the Letter of
Conditions; the consummation of the transactions contemplated herein or therein; and the
fulfillment by the Grantee of the terms hereof or thereof, do not conflict with or violate,
result in a breach of or constitute a default under any term or provision of the articles of
incorporation, or by-laws of the Grantee or any law or regulation or any court or
regulatory body having jurisdiction over the Grantee, or the terms of any indenture, deed
of trust, mortgage, note, note agreement or instrument to which the Grantee or any of its
properties is bound. The Grantee has not received any notice from any other party to any
of the foregoing that a default has occurred or that any event or condition exists that with
the giving of notice or lapse of time or both would constitute such a default.
4.
No approval, authorization, consent, order, registration, filing, qualification,
license or permit of or with any state or Federal court or governmental agency or body
having jurisdiction over the Grantee is required by the Grantee for the consummation by
the Grantee of the transactions contemplated by this Agreement or the Letter of
Conditions except such as have been obtained.
There is no pending or threatened action, suit or proceeding before any court or
5.
governmental agency, authority or body or any arbitrator concerning the Grantee, this
Agreement or the Letter of Conditions which, if adversely determined, would have a
material adverse effect on the Grantee's ability to perform its obligations under this
Agreement and the Letter of Conditions.
6.
All information, reports, and other papers and data furnished to Rural
Development by the Grantee concerning the application of the Grantee for the Grant were,
at the time the same were so furnished, complete and correct in all material respects to the
extent necessary to give Rural Development a true and accurate knowledge of the subject
matter and no document furnished or other written statement made to Rural Development
in connection with the Grant contains any untrue statement of a fact material to the
financial condition of the Grantee or the Project or omits to state such a material fact
necessary in order to make the statements contained therein not misleading.

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7.
That no adverse actions have occurred since the application was approved. No
material changes will be made in the Plan or the Project without prior approval of Rural
Development.

TERMINATION
Rural Development may terminate the Grant and any activities under the Grant at any time,
whenever Rural Development has determined that the Grantee has failed to comply with the
conditions of the Grant. Rural Development shall promptly notify the Grantee in writing of
the determination and reasons for the termination, together with the effective date.
Termination may place for cause such as:
1.
failure, inability, or unwillingness of the Grantee to carry out or comply with,
or cause to be carried out or complied with, the specific undertakings described in the
Application Materials as approved by Rural Development in the Letter of Conditions or
this agreement.
2.
any representation or warranty made by the Grantee herein, in the Application
Materials, in response to the Letter of Conditions, or in any certificate or report furnished
by or on behalf of the Grantee about any of the foregoing that proves to be false,
incomplete or incorrect in any material respect;
3.
failure to observe or perform any of the covenants, conditions or agreements of the
Grantee, which continues for thirty (30) days after written notice has been given to the
Grantee specifying such default and requiring the same to be remedied;
4.
violation of the Regulations by officers, directors, employees or agents of the
Grantee, that continues for a period of thirty (30) days without being rectified to the
satisfaction of Rural Development after written notice has been given by Rural
Development to the Grantee specifying such default and requiring the same to be
rectified.
Within 30 days of notification of early termination, the Grantee will provide, for approval
by Rural Development, a Termination Plan.
The Grantee will not incur new commitments for the terminated portion of the Grant after
notification of termination, and will cancel as many outstanding obligations as practicable.
The invalidity of any one or more phrases, clauses, sentences, paragraphs or provisions of
this Agreement shall not affect the remaining portions hereof.

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IN WITNESS WHEREOF, the Grantee has caused this Agreement to be signed in its
name and its corporate seal to be hereunto affixed and attested by its duly authorized
officers, thereunto, and the United States of America, has caused this Agreement to be
duly executed in its behalf, as of the day and year first written above.

Intermediary/MDO

By:
Grantee (Signature)

President's Title

(SEAL)
Attested to for the Grantee:
By:
(Signature)

[ Secretary]

United States of America

By:
State Director
Rural Business-Cooperative Service

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