RD Instruction 2000-JJJ

PART 2000 - GENERAL

Subpart JJJ - Memorandum of Understanding with the Alternative
Agricultural\
Research and Commercialization Corporation

§ 2000.3051 [General]{.underline}.

The Rural Business-Cooperative Service (RBS) has entered into a
Memorandum of Understanding (MOU) with the Alternative Agricultural
Research and Commercialization Corporation (AARCC) that sets the
framework for a working relationship between the two agencies.

§ 2000.3052 [Implementation]{.underline}.

The MOU, attached as Exhibit A, specifies the type of assistance AARCC
may request of Rural Development State Offices relative to the conduct
of due diligence assessment, monitoring, and the review of AARCC-funded
projects. It further provides for the RBS Administrator, under
provisions of the Business and Industry (B&I) Guaranteed Loan Program to
grant a 90 percent guarantee for loans of up to \$10 million of
AARCC-funded companies that are otherwise qualified for a guaranteed
loan under the B&I program, subject to the overall limitations of RD
Instruction 4279-B, § 4279.107(b). AARCC companies seeking loan amounts
above \$10 million are eligible for the standard 60 percent guarantee.
Finally, in accordance with the MOU, the Administrator has determined
that AARCC-funded B&I loan applicants satisfy the eligibility
requirements for a reduced guaranteed fee of 1 percent, subject to the
overall limitations of RD Instruction 4279-B, § 4279.119(b)(4).

§§ 2000.3053 - 2000.3100 \[Reserved\]

Attachment: Exhibit A

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DISTRIBUTION: WSDC Administration

General

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(09-30-98) PN 297

RD Instruction 2000-JJJ

Exhibit A

## **MEMORANDUM OF UNDERSTANDING**

## **Between the**

## **Alternative Agricultural Research and**

## **Commercialization Corporation (AARCC)**

## **and the**

## **Rural Business-Cooperative Service**

**I. Purpose**

This Memorandum of Understanding (the "Agreement") is executed between
the Rural Business-Cooperative Service (RBS) and the Alternative
Agricultural Research and Commercialization Corporation (AARCC) (the
"Parties"). The purpose of the Agreement is to establish parameters for
RBS providing assistance, upon request of AARCC, with the due diligence
assessment, monitoring, and review for AARCC projects. In addition, it
provides, under provisions of the Business and Industry (B&I) Guaranteed
Loan Program, for the RBS Administrator to (1) grant a ninety (90)
percent guarantee for loans of up to \$10 million and (2) reduces the
guarantee from 2 percent to 1 percent, subject to the overall
limitations as provided in RD Instruction 4279-B, Sections 4279.107(b)
and 4279.119(b)(4), to companies that are otherwise qualified for a
guaranteed loan under the B&I program and which are also companies
funded by AARCC.

**II. Agreement and Responsibilities**

A. In accordance with the purpose of this Agreement, AARCC agrees to:

1\. Designate a staff member to act as liaison to RBS. The liaison shall
be the primary contact for matters arising under this Agreement and
shall be responsible for the general coordination of requests from the
Board of Directors and Corporation Director and ensuing activities
related to implementation of this Agreement;

2\. Request services on sufficient notice to permit RBS to fulfill each
request in an orderly and efficient manner;

3\. Reimburse all costs incurred by RBS under this Agreement as may be
mutually agreed upon by the Parties upon proper presentation and demand
by RBS.

4\. Identify AARCC-funded companies that are candidates for a guaranteed
loan under the provisions of the B&I Guaranteed Loan Program.

(09-30-98) PN 297

RD Instruction 2000-JJJ

Exhibit A

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Memorandum of Understanding: AARCC and RBS 2

B. In accordance with the purpose of this Agreement, RBS agrees to:

1\. Designate a staff member to act as liaison to AARCC. The liaison
shall be the primary contact for matters arising under this Agreement
and shall be responsible for the general coordination of requests from
the AARCC liaison and ensuing activities related to implementation of
this Agreement;

2\. Only upon the request of AARCC, provide any needed assistance in
conducting due diligence assessments of proposals for funding by AARCC
in accordance with standards and instructions agreed to by AARCC and
RBS.

3\. Only upon the request of AARCC, provide any needed assistance in
conducting monitoring and review functions of projects funded by AARCC
in accordance with standards and instructions provided by AARCC.

4\. Maintain accurate records and documentation for the use of AARCC
only, obtain Confidentiality Statements from employees handling
AARCC-related information, and return all information and materials to
AARCC after completion of a review, monitoring, or due diligence
assignment.

5\. Provide a ninety (90) percent guarantee under the B&I Guaranteed
Loan Program for loans of up to \$10 million to AARCC-funded companies
that otherwise qualify for a guarantee under the B&I program, subject to
the overall limitation as provided in RD Instruction 4279-B, section
4279.107(b).

6\. Charge AARCC lenders a reduced guarantee fee of 1 percent as
specified in RD Instruction 4279-B, section 4279.119(b)(4), of the B&I
regulations.

**III. Amendment and Termination**

A. This Memorandum of Understanding will become effective upon signature
and shall continue in effect every fiscal year unless terminated by
either party with 60 days written notice to the other party, and

B. This Agreement may be amended by written agreement of both Parties
hereto.

**AGREED:**

[/s/ 4/27/98]{.underline} [/s/ 5/1/98]{.underline}

ROBERT E. ARMSTRONG (Date) DAYTON J. WATKINS (Date)

Executive Director Administrator

AARCC RBS

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