**\[Form of legal opinion of borrower\'s counsel\]**

**\[Date\] (Must not be earlier than date of note)**

Area Director

USDA Rural Development

**\[Address\]**

Re: **\[Borrower\]**

Rural Economic Development Loan

Dear Area Director:

We are providing this opinion to you pursuant to a Letter of Conditions
dated **\[insert date of the Letter of Conditions\]** between
**\[Borrower\]** (the \"Borrower\") and the United States of America
(\"the Government\") as lender, and delivering this opinion at the
Closing concurrently with the consummation of the loan transactions
contemplated thereby. Capitalized terms defined in the Rural Development
Loan Agreement between the Borrower and the Government dated as of
**\[Loan Agreement Date\]** (the \"Rural Development Loan
Agreement\"),and not otherwise defined herein, are used herein with the
meanings so defined.

We are general counsel to the Borrower and have acted as such for
**\[#\]** years **\[or since \[date\]\]**.

OR

We have acted as special counsel for the Borrower in the transactions
contemplated by the Letter of Conditions.

We have examined:

\(a\) The Application Materials,

\(b\) The Letter of Conditions,

\(c\) The Rural Development Loan Agreement,

\(d\) The Note dated as of \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,

> \(e\) A copy of the **\[restated\]** Articles of Incorporation **\[or
> other charter documents\]** of the Borrower and all amendments thereto
> (the \"Charter\") on file in the office of the Secretary of State
> **\[or other appropriate office\]** of the State of Iowa, as certified
> by the said Secretary of State \[or other appropriate official\]; a
> certificate dated \_\_\_\_\_\_\_\_\_\_ of said Secretary of State
> **\[or other appropriate official\]** attesting to the continued
> corporate existence of the Borrower as of that date; and a certificate
> of recent date of the Secretary of the Borrower that there have been
> no further amendments to the Charter,
>
> \(f\) A copy of the By‑Laws of the Borrower certified by the Secretary
> of the Borrower as being now in effect,
>
> \(g\) A certificate of the Secretary of State of Iowa attesting to the
> qualification of the Borrower to do business in that state and its
> good standing therein **\[furnish only if Borrower or Project is
> located in state different from that named in (e)\],**
>
> \(h\) A certificate of the Borrower\'s Secretary,
> \_\_\_\_\_\_\_\_\_\_\_, delivered to you contemporaneously herewith
> about the incumbency and signatures of the officers of the Borrower,
> and
>
> \(i\) Such minutes of the meetings of the board of directors
> **\[trustees\]** and members of the Borrower and other certificates,
> documents, records and materials as we deemed necessary for this
> opinion.

Based upon the foregoing and subject to any qualifications that may be
set forth in this opinion, having regard for legal considerations which
we deem relevant, we are of the opinion that:

1\. The Borrower is a corporation duly organized, validly existing and
in good standing under the laws of Iowa. The Borrower has corporate
power and authority adequate to carry on the business and own or lease
all the properties now conducted and owned or leased by it. The Borrower
is duly qualified to do business and is in good standing as a foreign
corporation in \_\_\_\_\_\_\_\_\_\_\_\_. **\[Omit preceding sentence if
Borrower operates in one state only.\]**

2\. The Borrower has the corporate power and authority to enter into and
perform its obligations under the Letter of Conditions, the Rural
Development Loan Agreement, and the Note (collectively, the \"Loan
Instruments\") and to consummate the transactions contemplated thereby.
The Loan Instruments and all instruments, documents, and certificates
delivered pursuant thereto have been duly authorized by all necessary
corporate action, have been duly executed and delivered by the Borrower,
and are the legal, valid and binding obligations of the Borrower
enforceable in accordance with their terms.

3\. The execution and delivery of the Loan Instruments do not, and the
performance of the terms thereof will not, contravene any provision of
existing law or regulations or of the Borrower\'s Charter or By‑Laws,
and will not conflict with or result in the breach of the terms,
conditions or provisions of, or constitute a default under, or result in
or permit the creation or imposition of any lien, charge or encumbrance
upon any of the properties of the Borrower pursuant to, any indenture,
mortgage or other agreement or instrument or any judgment, decree, order
or decision of which we have knowledge, and to which the Borrower is a
party or is bound and the Government is not a party.

4\. The Borrower has in effect those approvals, authorizations, licenses
and permits from all federal, state and local authorities necessary for
the conduct of its business and operations as now conducted by it; and
all approvals, authorizations, licenses and permits from such
authorities required for consummation of the transactions contemplated
by the Loan Instruments and for the carrying on, after such
consummation, of the business now engaged in by the Borrower and the
activities proposed to be undertaken by the Borrower in the Application
Materials, have been obtained **\[except the following: \[here
specifically list any exceptions\]\].**

5\. We know of no action, suit, proceeding or investigation pending or
threatened against the Borrower which if adversely determined would,
either in the single case or in combination, question the validity of,
or prevent the consummation of the transactions contemplated by, the
Application Materials or the Loan Instruments or materially and
adversely affect the properties, existence, financial condition or
business of the Borrower taken as a whole or materially and adversely
affect the Borrower\'s right to carry on its business substantially as
now conducted by it or as contemplated by the Application Materials
**\[, except for\]** .

Very truly yours,

**\[Name of firm\]**