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Po.cilian 5
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<br /> RUS BULLETIN 1780-27 ArrlxoveD
<br /> OMB. No. 0575-0015
<br />
<br /> (Automated 8-97) LOAN RESOLUTION
<br /> (Public Bodies)
<br /> A RESOLUTION OF "CHE COUNTY COUNCIL
<br /> OF THE COUNTY OF HAWAII
<br /> AUTHORIZING AND PROVIDING FOR THE INCURRF,NCE OF INDEBTEDNESS FOR THE PURPOSE OF PROVIDING A
<br /> PORTION OF TH8 COST OF ACQUIRING, CONSTRUCTING, ENLARGING, IMPROVING, AND/OR EXTENDING ITS
<br /> PUBLIC WATER SYSTEM IMPROVEMENTS FOR IMPROVEMENT DISTRICT NO. 18. NORTH KONA, HAWAII
<br /> FACILITY TO SERVE AN AREA LAWFULLY WITHIN ITS JURISDICTION TO SERVE.
<br />
<br /> WHEREAS, it is necessary for the COUNTY OF HAWAII
<br /> (Publtc Body)
<br /> (herein after called Association) to raise a portion of the cost of such undertaking by issuance of its bonds in the principal amount of
<br /> THREE MILLION SIX HUNDRED NINETY-SIX THOUSAND FOUR HUNDRED AND NO/100 DOLLARS ($3,696,400.001
<br /> pursuant to [he provisions of Par[ 1 Chavter 47 Hawaii Revised Statutes as amended ;and
<br /> WHEREAS, the Association intends to obtain assistance from the United States Department of Agriculture,
<br /> (herein called the Government) acting under the provisions of the Consolidated Farm and Rural Development Act (7 U.S.C. 1921
<br /> et seq.) in the planning. financing, and supervision of such undertaking and the purchasing of bonds lawfully issued, in the event
<br /> that nu other acceptable purchaser for such bonds is found by the Association:
<br /> NOW THEREFORE., in consideration of the premises the Association hereby resolves:
<br /> 1. 'Co have prepared on its behalf and to adopt an ordinance or resolution for [he issuance of iLS bonds containing such
<br /> items and in such forms as arc required by State statutes and as are agreeable and acceptable to the Government.
<br /> 2. To refinance the unpaid balance, in whole or in part, of its bonds upon the request of the Government iC at any time
<br /> it shall appear to the Government that the Association is able to refinance its bonds by obtaining a loan for such purposes
<br /> from responsible cooperative or private sources at reasonable rates and terms for loans for similar purposes and periods
<br /> of time as required by section 333(c) of said Consolidated Farm and Rural Development Act (7 U.S.C. 1983(c)).
<br /> 3. To provide for, execute, and amply with Form RD 400-4, "Assurance Agreement," and Form RD 400-1. "Equal
<br /> Opportunity Agreement," including an "Equal Opportunity Clause," which clause is to be incorporated in, or attached
<br /> as a rider to, each construction contract and subcontwct involving in excess of $10,000.
<br /> 4. To indemnify the Government for any payments made or losses suffered by the Government on behalf of the Association.
<br /> Such indemnification shall he payable from the some source of funds pledged to pay the bonds or nny other legally permissible
<br /> source.
<br /> 5. That upon default in the payments of any principal and accrued interest on the bonds or in the performance of any
<br /> covenant or agreement contained herein or in the instruments incident to making or insuring the loan, the Government at
<br /> its option may (a) declare the entire principal amount then outstanding and accrued interest immediately due and
<br /> payable. (b) for the account of the Association (payable from the source of funds pledged to pay the bonds or any other
<br /> legally permissible source), incur and pay reasonable expenses for repair, maintenance, and operation of the facility
<br /> and such other reasonable expenses as may be necessary to cure the cause of default, and/or (c) take possession uCthc
<br /> facility, repair, maintain, and operate or rent it. Default under the provisions of this resolution or any instrument incident to
<br /> the making or insuring of dte loan may be construed by the Government to constitute default under any other instrument
<br /> held by the Government and exe;euted or assumed by the Association, and default under any such instrument may be
<br /> construed by [he Government to constitute default hereunder.
<br /> 6. Not to sell transfer, lease, or otherwise encumber the facility or any portion thereof; or interest therein, or permit others
<br /> to do so, without the prior written consent of the Government.
<br /> 7. Not to delease the bonds, or to borrow money, enter into any contractor agreement, or otherwise incur any liabilities
<br /> for any purpose in annection with the facility (exclusive of normal maintenance) without the prior written consent of the
<br /> Government if such undertaking would involve the source of funds pledged to pay the bonds.
<br /> 8. To place the proceeds of the bonds on deposit in an acaunt and in a manner approved by the Government. Funds may be
<br /> deposited in institutions insured by the State or Federal Government or invested in readily marketable securities backed
<br /> by the full faith and credit of the United States. Any income Isom these accounts will be considered as revenues ofthe system.
<br /> 9. To comply with all applicable State and Federal laws and regulations and to continually operate and maintain the facility
<br /> in good condition.
<br /> 10. To provide for the receipt of adequate revenues to meet the requiremems of debt service, operation and maintenance, and
<br /> the establishment of adequate reserves. Revenue accumulated over and above that needed to pay operating and maintenance,
<br /> debt service and reserves may only be retained or used to make prepayments on the loan. Revenue cannot be used
<br /> to pay airy expenses which are not directly incurred for the facility financed by USDA. No free service or use ofthe
<br /> facility will be permitted.
<br /> Puh(ie reporting harden Inr [hev cuOecOnn n/ m)ornianun i,a r.vhmamd to averaga I boor prr roerynuce, rndudrnp the urne /ur rev~ewmg rnsnvcuonr,
<br /> eearchuig esi.eting duly rr gguthenng and mammuung the damneeded and cnrnplerrng and revicw,ng the a.lleuunn u(m/nrmahun. fiend aunimrnl.r
<br /> regarding (hu burden esbnm(e m my nlhev a.cpec( u/ Ihie' cu[leolinn u/ m/oemalinn, !nc'lud~ng a'ugge.vlmn.c /or reducing (he burden, L, Deparimenl of
<br /> Agncul(wa (7earmme Ujfiaer, O/I7M, ftnom FN-W. Wu.vhmgtrny UC 20250; and m the Upse of Mannpemenr and Hudgel, Paperwork 2uhct,on
<br /> Pnprcl (UMB Na. OJ75-Otll )J, Wavhmgmn, D(' 20.Li03..
<br /> EXHIBIT A
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