The Agency will notify the Applicant of the loan or loan/grant combination offer in writing, and the date by which the Applicant must accept the offer. If the Applicant accepts the terms of the offer, a loan or loan/grant combination contract, note, security agreement, and any other necessary documents will be executed by the Agency and sent to the Applicant. The Applicant must execute the Award documents and satisfy all conditions precedent to closing within the timeframe specified by the Agency. If the conditions are not met within this timeframe, the loan or loan/grant combination offer may be terminated, unless the Applicant requests and the Agency approves, an extension. The Agency may approve such a request if the Applicant has diligently sought to meet the conditions required for closing and has been unable to do so for reasons outside its control.

(a) Construction paid for with loan or loan/grant combination funds must comply with 7 CFR parts 1787, 1788, and 1970, the RUS Broadband Construction Procedures located at https://reconnect.usda.gov, and any other guidance from the Agency.

(b) Once the Agency has extended a loan or loan/grant combination offer, the Applicant, at its own risk, may start construction that is included in the application on an interim financing basis. For this construction to be eligible for reimbursement with loan or loan/grant combination funds, all construction procedures contained in this part must be followed. Note, however, that the Agency's extension of a loan or loan/grant combination offer is not a guarantee that a loan or loan/grant combination will be made, unless and until a contract has been entered into between the Applicant and RUS.

(c) All Awardees must complete build-out within 5 years from the date that funds have been made available. Build-out is considered complete when the network design has been fully implemented, the service operations and management systems infrastructure is operational, and the awardee is ready to support the activation and commissioning of individual customers to the new system.

(a) Borrowers must make payments on the broadband loan as required in the note.

(b) Awardees must comply with all terms, conditions, affirmative covenants, and negative covenants contained in the Award documents.

(c) In the event of default of any required payment or other term or condition:

(1) The Agency may exercise the default remedies provided in the Award documents and any remedy permitted by law but is not required to do so.

(2) If the Agency chooses not to exercise its default remedies, it does not waive its right to do so in the future.

(a) Awardees must adopt a system of accounts for maintaining financial records acceptable to the Agency, as described in 7 CFR part 1770, subpart B.

(b) Awardees will be required to prepare audits as follows:

(1) If the awardee is a for-profit entity, an electric or telecommunications cooperative, or any other entity not covered by the definition of “non-Federal entity” in 2 CFR 200.1, the awardee shall provide an independent audit report in accordance with 7 CFR part 1773 and the award agreement. The certified public accountant (CPA) conducting the annual audit is selected by the awardee and must be approved by RUS as set forth in 7 CFR 1773.5.

(2) If the awardee is a non-Federal entity, as defined in 2 CFR 200.1, the awardee shall provide an audit in accordance with subpart F of 2 CFR part 200.

(c) Loan and loan/grant combination Awardees must submit to RUS 30 calendar days after the end of each calendar year quarter, balance sheets, income statements, statements of cash flow, rate package summaries, and the number of customers subscribing to broadband service from the Awardee utilizing RUS' online reporting system. These reports must be submitted throughout the loan amortization period.

(d) Loan and loan/grant combination Awardees must submit annually updated service area maps through the RUS mapping tool showing the areas where construction has been completed and premises are receiving service until the entire proposed funded service area can receive service at the broadband lending speed. At the end of the project, Awardees must submit a service area map indicating that all construction has been completed as proposed in the application. If parts of the proposed funded service area have not been constructed, RUS may require a portion of the Award to be rescinded and/or paid back.

(e) Loan and loan/grant combination Awardees must comply with all reasonable Agency requests to support ongoing monitoring efforts. The Awardee shall afford RUS, through its representatives, reasonable opportunity, at all times during business hours and upon prior notice, to have access to and the right to inspect the broadband system, and any other property encumbered by the mortgage or security agreement, and any or all books, records, accounts, invoices, contracts, leases, payrolls, timesheets, cancelled checks, statements, and other documents, electronic or paper of every kind belonging to or in the possession of the Awardee or in any way pertaining to its property or business, including its subsidiaries, if any, and to make copies or extracts therefore.

(f) Awardee records shall be retained and preserved in accordance with the provisions of 7 CFR part 1770, subpart A.

If a default under the loan or loan/grant combination documents occurs and such default has not been cured within the timeframes established in the Award documents, the Applicant acknowledges that the Agency may, depending on the seriousness of the default, take any of the following actions:

(a) To the greatest extent possible recover the maximum amount of grant and loan funds;

(b) De-obligate all funds that have not been advanced or demonstrate an insufficient level of performance or fraudulent spending; and

(c) Reallocate recovered funds to the extent possible.