Document:

exv10w7

 

Exhibit 10.7

IOWA FARM BUREAU

March 14, 2005

Randy Layton, Secretary

Southern Iowa Bio-Energy

c/o Decatur County Development Corporation

207 North Main Street

Leon, IA 50144

Dear Mr. Layton:

I am pleased to inform you that your request for funding to assist in the development of a
biodiesel production facility has been approved. The Iowa Farm Bureau Federation is awarding
a Value Added Agricultural Processing Technical Assistance Grant in the amount of $5,000 in
support of your effort.

The Iowa Farm Bureau actively supports the growth and development of Iowa’s biodiesel
industry. Southern Iowa Bio-energy is to be commended for its leadership in this industry,
which is so important to Iowa’s agricultural economy.

Please accept this check with our best wishes for success.

Sincerely,

/s/Craig A. Lang

Craig A. Lang

President

Enclosure

cc: Calvin Rozenboom, District 8 Director

     Darrell Weems, Regional Manager

 

5400 University Avenue. West Des Moines, IA 50266-5997 / (515) 225-5400exv10w8

 

Exhibit
10.8

March 18, 2005

Randy Layton, Secretary

Southern Iowa Bio-Energy

c/o Decatur County, Development Corporation

207 North Main Street

Leon, Iowa 50144

RE: Project Creation Assistance (VAAPFAP)

     Application Number 05-PCA-07

Dear Mr. Layton:

It is my pleasure to advise you that the Iowa Department of Economic Development staff has reviewed
the above captioned application and an award of $20,000 has been approved for Southern Iowa
Bio-Energy. This approval is expressly contingent upon any terms and conditions set forth in the
financial assistance agreement with the State of Iowa.

On behalf of the Iowa Department of Economic Development we wish you the very best in your business
endeavors and looks forward to working with you on this project. Should you have any questions
regarding this award, please contact Joe Jones at 515-242-4801.

Sincerely,

/s/ Michael Blouin

Michael Blouin

Director

MB/jhj

cc:      File

IOWA DEPARTMENT OF ECONOMIC DEVELOPMENTexv10w9

 

Exhibit 10.9

USDA

	 	 	 	 	 
	 

	 	United States Department of Agriculture	 	 
	 

	 	Rural Development
	 	Phone:(515)284-4714
	 

	 	210 Walnut Street, Room 873
	 	FAX: (515/284-4859
	 

	 	Des Moines, IA 50309
	 	TDD for hearing impaired:(515) 284-4858
	 

	 	 	 	www.rurdev.usda.gov/ia
	 
	 	 	 	 
	 

	 	 	 	Date: 9-25-2003

Rex Galloway

Nodaway Valley Biodiesel Project

125 North 2nd Ave

Villisca, Iowa 50864

Re: Letter of Conditions

Dear Mr. Galloway:

This letter establishes conditions which must be understood and agreed to by you before further
consideration may be given to your Renewable Energy-Systems (RESG) / Energy Efficiency
Improvements Grant (EEIG) application. The grant will be administered on behalf of the Rural
Business-Cooperative Service (RBS) by the State and Area staff of the United States Department of
Agriculture, Rural Development.

This letter is not to be considered as grant approval or as a representation as to the
availability of funds. The docket may be completed on the basis of a grant not to exceed
$500,000.

Please complete and sign the attached Form RD 1942-46, “Letter of Intent to Meet Conditions” and
Form FmHA 1940-1, “Request for Obligation of Funds” if you desire that further consideration be
given your application.

The grant will be considered approved on the date a signed (by Rural Development) copy of Form
RD 1940-1, “Request for Obligation of Funds" is mailed to you.

1.       PROJECT FUNDING

A. Use of Funds.

Nodaway Valley Biodiesel Project (Grantee) may use grant and matching funds to construct a
12 million gallon bio-diesel production plant in southwest Iowa.

The Project is designed to help agricultural producers and rural small businesses
reduce energy costs and consumption and help meet the nation’s critical energy needs
in accordance with the application package as submitted or as amended and approved by
USDA Rural Development.

	 	 	          USDA Rural Development is an Equal Opportunity Lender, Provider and Employer.

          Complaints of discrimination should be sent to USDA, Director, OCR, Washington D.C. 20250-9410.

 

 

Renewable Energy Systems/Bioenergy Efficiency Improvements Grant Program
Letter of Conditions            Page 2

Any changes in the proposed use of funds must be submitted in writing to USDA
Rural Development and receive prior written approval.

Nodaway Valley Biodiesel Project must maintain all receipts and other documentation
for all transactions where grant and matching funds are used. These documents will be
reviewed annually while the grant is active.

B. Applicant Contribution.

The following funds will be applied to the project by May 2005, and will consist
of the following:

	 	•	 	$16,900,000 in matching funds.
	 
	 	•	 	The amount of grant fund cannot exceed $500,000.

2.       RENEWABLE ENERGY SYSTEMS/ENERGY EFFICIENCY IMPROVEMENTS GRANT AGREEMENT

By signing the Renewable Energy Systems / Energy Efficiency Improvements Grant Agreement,
Nodaway Valley Biodiesel Project agrees with all the terms and conditions contained in
that agreement including those on fund disbursement and reporting requirements. These
terms and conditions are incorporated into this letter by reference. .

3.      CONSTRUCTION CONTRACT DOCUMENTS AND BIDDING

RBS will use 7 CFR 1780.54,1780.57(b)-(f) and (h)-(o), 1780.61, 1780.67, 1780.68,
1780.70, 1780.72, 1780.74, 1780.75, and 1780.76 for planning, designing, procurement
methods and procedures, bidding, contract award and administration, and construction of
renewable energy system and energy efficiency improvement projects’ as applicable.
However, grantees are not authorized to construct the facility/project/improvement in
total, or in part, or utilize its own personnel and/or equipment under this Notice of
Funds Availability (NOFA).

Final plans and specifications and contract documents will be prepared following
the Rural Development approval technical requirements in accordance with Rural
Development Instructions. (Iowa Instruction 1942-A, Iowa Guide 6A, “Index, Engineer
Contract Documents, contains the list of documents to use in preparing the
contracts). Rural Development approval must be obtained prior to advertising for bids.
Final plans and all addenda must be approved prior to. release to the
contractors. Rural Development concurrence must be obtained prior to the award of the
contract.

Should you elect, contract documents such as those of the American Institute of Architects
(AIA) may be used when modified to comply with Rural Development regulations and by
including RD Supplemental General Conditions, noted above. (Iowa Guide 6B lists the AIA
forms and modifications of forms approved by the Rural Development Regional Attorney -
contact the Rural Development Area Office for these forms).

Iowa Guides and Instructions are enclosed with this document.

 

 

Renewable Energy Systems, Bioenergy, Efficiency Improvements Grant Program
Letter of Conditions            Page 3

4.      CONTRACTOR INSURANCE

The contractor shall provide the insurance coverage required by the contract
documents.

5.      GRANTEE INSURANCE AND BONDING

Grantee must maintain sufficient hazard insurance, workman’s compensation insurance and
liability insurance, as recommended by Grantee‘s attorney, to protect the
interests of the Grantee and the government. Grantee shall provide satisfactory evidence to
USDA Rural Development that all officers of Grantee organization authorized to receive and/or
disburse Federal funds are covered by such bonding and/or insurance requirements as are
normally required by the Grantee. The bond should identify USDA Rural Development as
co-obligee.

6.      TITLE TO PROPERTY

A good and marketable title must be obtained for the property acquired. Your Attorney will
provide an opinion of title prior to submission of the docket for grant closing instructions
showing good and marketable title of property.

7.      RIGHTS-OF-WAY

The engineer, prior to contract bids, will prepare a rights-of-way map showing location of
all electrical lines, structures, pipelines, and ditches. Provide property descriptions
contained in the rights-of-way instruments. The map should be color-coded, with a legend
and certification by the Engineer on the map. The map should show that rights-of-way are
continuous with no gaps.

8.      ORGANIZATION

The proceedings of incorporation (Articles and Bylaws), must be approved by the Grantee’s
attorney showing that the Nodaway Valley Biodiesel Project is duly incorporated, has
continued legal existence, and has the legal capacity and authority to administer the grant
funds as proposed.

9.      DISBURSEMENT OF GRANT FUNDS

Grant funds will de disbursed by USDA Rural Development on a reimbursement basis not to
exceed one advance every 30 days. An original and one copy of Standard Form (SF) 271,
“Outlay Report and Request for Reimbursement for Construction Programs,” will be submitted
to USDA Rural Development. Requests for advance shall not be made in excess of reasonable
outlays for the month covered. The financial management system of the recipient
organization shall provide for effective control over and accountability for all funds,
property, and other assets.

Grant funds will be transferred to the Grantee via Electronic Funds Transfer (EFT). The
Grantee will complete and deliver to USDA Rural Development, Form SF-3881, Electronic Funds
Transfer Payment Enrollment Form.

 

 

Renewable Energy Systems/Bioenergy Efficiency Improvements Grant Program
Letter of Conditions

10.      RURAL AREA

You must certify that the Business or Grantee’s headquarters are located in a rural area
and the Project is located in a rural area as defined by the definition of “Rural” in the
NOFA dated April 8, 2003.

11.      CITIZENSHIP

You must certify that at least 51 percent of the outstanding interest in the Project has
membership or is owned by those who are either citizens of the United States or reside in the
United States after being legally admitted for permanent residence.

12.      DEBARMENT

You must execute Form AD-1047, “Certification Regarding Debarment, Suspension, and Other
Responsibility Matters — Primary Covered Transactions,” to certify that your organization is
not debarred or suspended from Government assistance. You also must obtain a certification on
Form AD-1048, “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary
Exclusion — Lower Tier Covered Transactions,” from any person or entity you do business with
as a result of this Government assistance that they are not debarred or suspended from
Government assistance.

13.      DRUG-FREE WORKPLACE

You must execute Form AD-1049, “Certification Regarding Drug-Free Workplace Requirements
(Grants) Alternative I — For Grantees Other Than Individuals,” to certify that you will
provide a drug-free awareness program for employees.

14.      EQUAL OPPORTUNITY AND NONDISCRIMINATION REQUIREMENTS

The Grantee will comply with Title VI of the Civil Rights Act of 1964, “Nondiscrimination in
Federally Assisted Programs, “42 U.S.C. 2000d4, Section 504 of the Rehabilitation Act for
Federally Conducted Programs and Activities, the Age Discrimination Act of 1975 and the
Americans with Disabilities Act. RD Forms 400-1, Equal Opportunity Agreement and 400-4,
Assurance Agreement, must be

completed by the Grantee.

15.      LOBBYING RESTRICTIONS (Applies only when grant greater than $100,000)

You must execute RD Instruction 1940-Q, Exhibit A, acknowledging you are prohibited from
influencing or attempting to influence an officer or employee of any Agency, any member of
Congress, or an employee or officer of any member of Congress to obtain specific Federal
awards.

16.      ENVIRONMENTAL

The environmental assessment and supporting documentation have been reviewed and found to be
in acceptable compliance with Rural Development regulations, as such, the environmental
assessment is approved subject to the following:

“Satisfactory compliance with Section 106 SHPO and Tribal consultation requirements.”

 

 

Renewable Energy Systems/Bioenergy Efficiency Improvements Grant Program
Letter of Conditions 

Page 4

17.      REPORTING

	A.	 	Forms-SF-269, “Financial Status Report” and a Project Performance Report will be
required on a quarterly basis (Due 30 working days after end of quarter. For the
purposes of this grant, quarters end on March 31, June 30, September 30, and December
31). The financial status report must show how grant funds and leveraged funds have been
used to date and project the funds needed and their purposes for the next quarter. A
final report may serve as the last quarterly report. Grantees shall constantly monitor
performance to ensure that the time schedules are being met and projected goals by time
periods are being accomplished. See the Grant Agreement and the NOFA for the complete
detailed requirements.

	B.	 	For the year(s) in which the Grant funds are received, Grantee will provide an
annual
financial statement (Generally Accepted Accounting Principles basis for small
businesses)

to

	 	 	RBS within 90 days of the end of the Grantee’s fiscal year.

18.     RESPONSIBILITIES OF THE GRANTEE

The Grantee must sign the Form FmHA 1940-1, “Request for Obligation of Funds” and the Grant
Agreement and abide by all requirements contained in the Form FmHA 1940-1 and the Grant
Agreement or any other Federal statutes or regulations governing this program. Failure to
follow the requirements may result in termination of the grant and adoption of other remedies
provided for in the Grant Agreement.

19.     OTHER REQUIREMENTS

The Grantee will be responsible for any additional requirements of federal, state
or local governments that may apply in accordance with NOFA dated April 8, 2003.

	 	•	 	All requirements and permits of the governing agencies will be followed for
any activities related to the project.
	 
	 	•	 	Any project activity will be accomplished in accordance with the requirements
of the Iowa Department of Natural Resources.
	 
	 	•	 	Rural Development must concur with the Engineering Service Agreement
using our suggested forms.
	 
	 	•	 	Technical Requirements/Engineer or Architect Report. Separate technical
requirements exist for grants for renewable energy systems and energy efficiency
improvement projects. Please refer to the NOFA dated April 8, 2003, for the 13
requirements for renewable energy and/or the 11 requirements for energy efficiency
projects. These technical requirements submitted with the application must be
followed as approved by RBS and/or DOE.

 

 

USDA Rural

Development

Committed to the future of rural communities.

Nov 01 2005

United States Department of Agriculture

Rural Development

Iowa State Office

October 31, 2005

	 	 	 	 	 	 	 
	 	 	Subject:	 	Nodaway Valley Biodiesel Project Southern Iowa BioEnergy, LLC Renewable Energy Grant Program Name Change approval
	 
	 	 	 	 	 	 
	 	 	To:	 	John Pyle, Area Director; Jeff Kuntz, BC Program Specialist
Dave Dunfee, Area Director; Shannon Chase, BCP Specialist
	 
	 	 	 	 	 	 
	 	 	From:	 	/s/ Randy Frescoln
	 	 	 	 	Randy Frescoln, Business Cooperative Program Director
	 

	 	 	 	 	 	From:

	1.	 	This letter notifies your office that a name change has been processed by the state
office. Nodaway Valley Biodiesel Project was selected for a $500,000 Renewable Energy Grant.
A review of their case file reflects the agency issued a letter of conditions on September 25,
2003. Rex Calloway, Nodaway Valley Biodiesel Project Chairman, signed Form RD 1942-46, Letter
of Intent to Meet Conditions and Form 1940-1, Request for Obligation of Funds, the same date.
	 
	2.	 	Nodaway Valley Biodiesel Project organized as Nodaway Valley Biodiesel Project, LLC on July
25, 2005. Effective August 8, 2005, Nodaway Valley Biodiesel Project, LLC merged with and
into Southern Iowa BioEnergy, LLC.
	 
	3.	 	The OGC October 24, 2005 letter states, “...given that the regulations do not specifically
deal with this type of situation, I believe that this not a legal issue... but rather is a
program issue that your office should resolve in

210 Walnut Street, Room 873 — Des Moines, IA 50309

PHONE: 515-284-4714 • FAX: 515-284-4859 • TDD: 515-284-4858 — www.rurdev.usda.govlia

An Equal Opportunity Provider and Employer

 

 

	 	 	executing and servicing the grant. The Agency should review the merger documents of
the two entities, and have SIBE execute any obligations or assumptions so that the Agency
has fully documented its relationship to SIBS...”
	 
	4.	 	On October 26, 2005, Joseph Ben-Israel, Specialty Lending Division
Processing Director, left a message on Teresa Bomhoff’s telephone Southern Iowa
BioEnergy, LLC stating that a program director is authorized to process a name change.
	 
	5.	 	There is a close and genuine relationship between the above mentioned entities. Southern
Iowa BioEnergy, LLC and the project are both eligible. T
	 
	6.	 	State Office processed a name change on the $500,000 Renewable Energy
Grant from Nodaway Valley Biodiesel project (16-069-270064411) to
Southern Iowa BioEnergy, LLC (16-027-202226223).
	 
	7.	 	In accordance with the guidance contained in the OGC October 24, 2005
	 
	 	 	letter, the merger documents between the two entities was obtained and reviewed.
	 
	8.	 	To achieve OGC’s request to “...have Southern Iowa BioEnergy, LLC execute the obligations and
assumptions of the Agency issued (a) Form 1940-1,
	 
	 	 	Request for Obligation of Funds, (b) RD 1942-46, Letter of Intent to Meet
Conditions, and (c) September 25, 2003 Letter of Conditions”, a October 31,
2005 letter was obtained from William T. Higdon, SIBE President.
	 
	9.	 	Please continue processing the grant in the name of Southern Iowa BioEnergy, LLC. All
files associated with this project are to be transferred to the Albia Area Office.

210 Walnut Street, Room 873 • Des Moines, IA 50309

PHONE: 515-284-4714 • FAX: 515-284-4859 • TDD: 515-284-4858. www.rurdev.usda.govlia

An Equal Opportunity Employer

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