Document:

Exhibit
10.35

 

ORIGINAL

AGREEMENT

 

GAS TRANSPORTATION AGREEMENT

 

THIS AGREEMENT is
by and between GREAT PLAINS NATURAL GAS CO., a Division of MDU Resources Group, Inc.
(“Company”), and OTTER TAIL AG ENTERPRISES. LLC (“Customer”) and is
effective 9:00 a.m. CCT on the 1 day of September, 2007.

 

Customer has
entered into agreements to purchase natural gas and have that gas delivered to
a “receipt point” using Shipper/Agent(s) as specified in attached Exhibit “A”
as Shipper/Agent. Customer agrees to notify Company prior to any change in
Shipper/Agent(s) and further agrees to execute a new Exhibit “A” prior to
the change of event.

 

Customer and
Company enter into this Gas Transportation Agreement to have said gas
transported by Company from the “receipt point” to the “delivery point(s)”.

 

WITNESSETH: The parties
hereto, each in consideration of the agreement of the other, agree as follows:

 

1. TERM. This Agreement
will continue in effect for Five (5) year(s) from its effective
date. Upon expiration of the initial term, this Agreement shall continue month
to month thereafter until either party furnishes the other party 30 days prior
written notice of termination.

 

2. RECEIPT POINT, DELIVERY
POINT(S), RATE SCHEDULE. Natural Gas delivered hereunder shall be in
accordance with the Company’s approved rate schedules titled: Small
Interruptible General Gas Transportation Service or Large Interruptible General
Gas Transportation Service.

 

	
  Receipt Point:

  	
  Fergus Falls #11979A

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Delivery Point(s):

  	
  24008 170th
  Ave.

  	
   

  
	
   

  	
  Fergus Falls, MN

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Rate Schedule:

  	
  Large
  Interruptible General Gas

  	
   

  
	
   

  	
  Transportation
  Service Rate N82

  	
   

  
						

 

3. RECORD
EXAMINATION. Customer shall have the right at all reasonable times to
examine the books, records and charts of Company, for a two year period
subsequent to the issuance in writing of a dispute invoice, to the extent
necessary to verify the accuracy of any statement, charge or computation made
under or pursuant to any provisions of this Agreement.

 

4. RATE. The rates charged
and services rendered Customer under this Agreement shall be as specified in
applicable Company tariffs as approved by Minnesota Public Utilities Commission.
In the event “Rate”, as specified in attached “Exhibit B” is not executed
by both parties of this Agreement, Customer agrees to pay Company the currently
approved Fixed Distribution Charge of the Rate Schedule specified in Section 2
of this Agreement.

 

Company shall have the right to modify the rates charged and the terms
and conditions hereunder by making unilateral rate filings with the Minnesota
Public Utilities Commission.

 

5. ASSIGNMENT. Customer
agrees that it will not assign this Agreement except upon written consent of
Company.

 

6.  INGRESS AND EGRESS.
Company is hereby granted rights of ingress and egress, at reasonable times,
for operating, inspecting and maintaining any of Company’s facilities on
Customer’s premises.

 

7.  REGULATORY AUTHORITY.
This Agreement is subject to all valid laws, orders, rules and regulations
of any and all duly constituted authorities having jurisdiction over the
subject matter herein and is subject to the receipt of any necessary
authorization for the transportation service contemplated herein.

 

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date and year below written. 

 

	
  CUSTOMER

  	
  COMPANY

  
	
   

  	
   

  
	
  OTTER TAIL AG ENTERPRISES. LLC

  	
  GREAT PLAINS NATURAL GAS CO.,

  A Division of MDU Resources Group, Inc.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jerry Larson

  	
   

  	
  By:

  	
  /s/ K. Frank Morehouse

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  K. Frank Morehouse

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Region Manager

  	
   

  
	
  Title:

  	
  President

  	
   

  	
   

  
	
  Dated:

  	
  6/26/06

  	
   

  	
  Dated:

  	
  6/28/06

  	
   

  
									

 

* Please type or print the name below the signature
line.

 

 

EXHIBIT “A”

GAS TRANSPORTATION AGREEMENT

 

This document is an attachment to the Gas
Transportation Agreement dated 6-26-06 between GREAT PLAINS NATURAL GAS CO. (“Company”)
and OTTER TAIL AG ENTERPRISES, LLC (“Customer”).

 

This Exhibit “A” is effective 9:00 a.m. CCT on the 1 day of September 2007.

 

Customer’s Maximum Interruptible Transportation Quantity: 6000 dk per
day.

 

The Shipper/Agent(s) name is BP Canada Energy Marketing Co.

 

 

Customer hereby authorizes Company to furnish the Shipper/Agent any
information relating to the volume and/or cost of natural gas furnished by
Company for use by Customer. This authorization will remain in effect until a
written notice is received from Customer.

 

Accepted and agreed to this 26 day of June, 2006.

 

CUSTOMER

 

OTTER
TAIL AG ENTERPRISES. LLC

 

	
  By:

  	
  /s/ Jerry Larson

  	
   

  
	
  Title:

  	
  President

  	
   

  
					

 

Accepted and
agreed to this 28th day of June, 2006.

 

COMPANY

 

GREAT
PLAINS NATURAL GAS CO.,

A
Division of MDU Resources Group, Inc.

 

	
  By:

  	
  /s/ K. Frank Morehouse

  	
   

  
	
   

  	
  K. Frank Morehouse

  	
   

  
	
   

  	
  Region Manager

  	
   

  
				

 

 

EXHIBIT “B”

GAS TRANSPORTATION AGREEMENT

 

This document is an attachment to the Gas Transportation Agreement dated
6-26-06  between GREAT PLAINS
NATURAL GAS CO. (“Company”) and OTTER TAIL AG ENTERPRISES, LLC (“Customer”).

 

 

	
  Rate

  	
   

  	
  Term of Rate

  
	
   

  	
   

  	
   

  
	
  $0.4874 per dk plus $0.027
  per dk CIP Base Rate

  for a distribution rate of $0.5144 per dk plus

  currently effective CIP Tracking Adjustment.***

  	
   

  	
  9-1-2007 to 9-1-2012

  

 

***Note: If the CIP Base Rate is changed during the term of this
contract, the new amount will supersede the current charge of $.027 per dk in
determining the distribution rate before the CIP tracking adjustment.

 

 

***Note:
If the CIP Base Rate is changed during the term of this contract, the new
amount will either be subtracted if negative or added if positive to the total
rate indicated.

 

Accepted
and agreed to this 26 day of June, 2006.

 

CUSTOMER

 

OTTER
TAIL AG ENTERPRISES. LLC

 

	
  By:  

  	
  /s/ Jerry Larson

  	
   

  	
   

  
	
  Title:  

  	
  President

  	
   

  	
   

  
						

 

 

Accepted and agreed to this 28th  day of June, 2006.

 

COMPANY

 

GREAT
PLAINS NATURAL GAS CO.,

A Division of MDU Resources Group. Inc.

 

	
  By: 

  	
  /s/ K.Frank Morehouse

  	
   

  
	
   

  	
  K. Frank Morehouse

  	
   

  
	
   

  	
  Region ManagerExhibit 10.36

 

UNITED
STATES DEPARTMENT OF AGRICULTURE

RURAL
BUSINESS-COOPERATIVE SERVICE

 

VALUE-ADDED
PRODUCER GRANT AGREEMENT

 

This Grant Agreement (Agreement) dated October 1,2007, between Otter Tail Ag Enterprises, LLC  (Grantee),
and the United States of America, acting through the Rural Business-Cooperative
Service of the Department of Agriculture (Grantor), for $300,000 in grant funds under the VAPG
program, delineates the agreement of the parties.

 

NOW, THEREFORE, in consideration of the grant;

 

The parties agree that all the terms and provisions of the VAPG Notice
of Solicitation of Applications (NOSA) and application submitted by the Grantee
for this VAPG grant, including any attachments or amendments, are incorporated
and included as part of this Agreement. Any changes to these documents or this
Agreement must be approved in writing by the Grantor.

 

The Grantor agrees to make available to the
Grantee for the purpose of this Agreement funds in an amount not to exceed the
Grant funds, subject to the terms and conditions of this Agreement.

 

As a condition of the Agreement, the Grantee certifies 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.

 

As a condition of the Agreement, the Grantee
certifies that it is in compliance with and will comply in the course of the
Agreement with all applicable laws, regulations, Executive Orders, and other
generally applicable requirements, including those contained in 7 CFR parts
3015,3019,4284, and the VAPG NOSA, which are incorporated into this agreement
by reference, and such other statutory provisions as are specifically contained
herein. The Grantee will comply with title VI of the Civil Rights Act of 1964,
section 504 of the Rehabilitation Act of 1973, the Age Discrimination Act of
1975, the Americans with Disabilities Act, Executive Order 12898, and Executive
Order 12250.

 

As a condition of the Agreement, the Grantee certifies that its
management has read and understands the requirements of 7 CFR parts 3015,3017,
3018,3019, and 4284.

 

NOW, THEREFORE, the parties do hereby agree as follows:

 

1. Grant

 

A. The total amount of grant funds payable to
the Grantee by the Grantor shall not exceed $300,000.

 

1

 

(Grant). Any unexpended Grant funds remaining
at the time of project completion or termination of the Agreement shall be
returned to the Grantor within 30 calendar days from the date of project
completion or termination of the Agreement.

 

B. Grantee will match Grant
funding with an amount equal to or greater than $300,000. The matching funds will be spent at a rate equal to
or in advance of grant funds, with the expenditure of matching funds not to
occur until the date the Grant begins.

 

C. The funding period of this
grant will begin on October 1,2007 and
will conclude within 365 days of the starting date, but no later than December 31, 2008. The Grantee may
charge to the Grant only allowable costs resulting from obligations incurred
during the funding period.

 

D. The Grantee shall use Grant
funds and matching funds only for the purposes and activities specified in
detail in EXHIBIT A, entitled “GRANT WORK PLAN AND BUDGET” which is attached
hereto and incorporated herein. Any uses not provided for in EXHIBIT A must be
approved in writing by the Grantor in advance of expenditure by the Grantee.

 

2. Financial Management

 

A. The Grantee shall relate
financial data to performance data and develop unit cost information whenever
practical.

 

B. The Grantee shall maintain a
financial management system in accordance with 7 CFR 3019.21.

 

C. Payment shall be made in
accordance with 7 CFR 3019.22. If the Grantee cannot maintain a financial
management system in accordance with 7 CFR 3019.21 or if Grantee fails to
satisfactorily meet any other conditions set forth in this Agreement, the
Grantee may be paid on a reimbursement basis, at the discretion of the Grantor.

 

i. If payment is to be made by advance, the
Grantee shall request advance payment, but not more frequently than once every
30 days, of grant funds by using Standard Form 270, “Request for Advance
or Reimbursement.” Receipts, hourly wage rate, personnel payroll records, or
other documentation must be provided upon request from the Agency.

 

ii. If payment is to be made by
reimbursement, the Grantee shall request reimbursement of grant funds, but not
more frequently than once every 30 days, by using Standard Form 270, “Request
for Advance or Reimbursement.” Receipts, hourly wage rate, personnel payroll
records,

 

2

 

or other documentation, as determined by the
Agency, must be provided with the request to justify the amount.

 

D. If program income is earned
during the time period of the grant, it may be used to replace other sources of
matching funds if prior approval is received from the Agency. Program income
that is not used as matching funds for the grant project must first be added to
the total project costs and used to further eligible project or program
objectives. Program income earned in excess of funds that can be used for
matching funds or eligible expenses must be deducted from the total project or program
allowable cost and will result in a reduction of the Federal share. Costs incident
to the generation of program income may be deducted from gross income to
determine program income, provided these costs have not been charged to the award.

 

E. The Grantee shall provide
satisfactory evidence to the Grantor that the Grantee has complied with the
bonding or insurance requirements specified by EXHIBIT B, “BONDING COVERAGE,”
which is attached hereto and incorporated herein.

 

F. The Grantee is subject to
the audit requirements specified in EXHIBIT C, “AUDIT REQUIREMENTS,” which is
attached hereto and incorporated herein.

 

3. Property Standards

 

The Grantee must adhere to the property standards outlined in 7 CFR
3019.31 through 3019.37.

 

4. Procurement Standards

 

The Grantee must adhere to the procurement standards outlined in 7 CFR
3019.41 through 3019.48.

 

5. Reports

 

The Grantee shall submit financial and project performance reports
satisfactory to the Grantor in accordance with EXHIBIT D, entitled “REPORTING
REQUIREMENTS,” which is attached hereto and incorporated herein.

 

6. Site Visits

 

The Grantee will allow the Grantor to conduct site visits as needed for
monitoring the Grantee’s progress and auditing the Grantee’s financial records
related to the performance under the Agreement. Failure to allow the Grantor to
conduct site visits shall be grounds for terminating the grant.

 

3

 

7. Records

 

The Grantee shall retain and provide access to records as required by 7
CFR 3019.53.

 

8.       Termination

 

The award that is the subject of this Agreement shall only be
terminated in accordance with 7 CFR 3019.61.

 

9. Enforcement

 

The terms and conditions of this award will be enforced using the
provisions of 7 CFR 3019.62.

 

10. Extensions

 

If the grant will not be completed by the end of the funding period, as
defined in paragraph l.C., the Grantee may request an extension. The extension
must be requested at least 30 days prior to the end of the funding period or it
will not be considered. The request must be in writing and addressed to the
State Director. It must include the following information: (1) the time
period of the extension requested; (2) a revised budget and work plan
demonstrating that funds will be completely expended by the end of the
extension; (3) the reason(s) why the extension is being requested;
and (4) what steps will be taken by the Grantee to ensure that the project
is completed by the end of the extension. Submission of a request for an
extension does not guarantee that the Agency will approve the extension. The
Agency may grant one no-cost extension of up to one year at its discretion.
However, extensions will only be approved in cases where significant
circumstances beyond the Grantee’s control prohibited timely performance of
grant activities. Extensions will not be approved for changes in scope.

 

11. Other Conditions

 

If the Grantee is a farmer or rancher cooperative, the Grantee’s Board
of Directors must take director training on cooperative governance and the
responsibilities of cooperative directors during the time period of the Grant.
Members on the Board of Directors that have taken this training previously can
certify, in writing, to the Grantor the specifics of the training and when it
was completed. Any new members or members who have not completed the training
previously must complete the training as approved by the Grantor.

 

IN WITNESS WHEREOF, Grantee has this day authorized and caused this
Agreement to be signed it its name and its corporate seal to be hereunto
affixed and attested by its duly authorized officers thereunto, and the Grantor
has caused this Agreement to be duly executed on its behalf by:

 

4

 

	
  Grantor

  	
   

  	
   

  
	
  UNITED STATES OF AMERICA

  	
   

  	
   

  
	
  RURAL BUSINESS-COOPERATIVE SERVICE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ David Gaffaney

  	
   

  	
   

  	
  October 5, 2007

  	
   

  
	
  Signature

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  David Gaffaney

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Business & Cooperative Programs
  Director 

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Grantee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Kelly Longtin

  	
   

  	
   

  	
  11-14-07

  	
   

  
	
  Signature

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  Kelly Longtin

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CEO

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  
										

 

5

 

EXHIBIT
A

 

GRANT
WORK PLAN AND BUDGET

 

Work Plan

 

Otter Tail Ag Enterprises is currently building a 55 million gallon per
year ethanol plant on a site in Fergus Falls, Minnesota. The following are some
of the essential tasks that have been completed or need to be completed before
plant operation can begin.

 

Site Selection:     The
110 acre site, known as the Piekarski tract, was chosen after an exhaustive
site selection process by the Board of Governors. The site is located near
rail, a major state highway and Interstate 94. Both natural gas and electrical
service are readily available, and there is a sufficient water supply at the
site.

 

Roadway Improvements:     County
Highway 116, as well as adjacent township roads will need to be improved, OTAE
will bear the cost of these road improvements.

 

Rail Access:     OTAE
will be responsible for constructing rail siding trackage and switching sufficient
for high volume load out as well as corn unloading capability. Rail Works has
been hired to construct the trackage per BNSF specifications for industrial
track.

 

Site Grading:     Interstate
Engineering was engaged for the site design and to assist with pre-bid
procedures, and to prepare bid documents. OTAE was responsible identification
of eligible contractors

 

Utilities:     OTAE
is responsible for bringing utilities to the site: natural gas, electricity and
water, as well as providing for discharging non-contact water from the site.

 

Environmental and Other Permits:     Before
construction began, OTAE was required to obtain various environmental and
operating permits. The design-builder, Harris Mechanical was responsible for
obtaining construction permits, and OTAE was responsible for environmental and
operating permits. Natural Resource Group, Inc. was hired to provide
engineering and permitting services.

 

Hire Key Management:     CEO
- Kelly Longtin was hired by the Board of Governors in August 2006. Plant
Manager - Gunner Greene was hired in December 2006 by the CEO and Board of
Governors. The Controller will be hired in June of 2007, and all of the
other management positions will be filled by fall of 2007.

 

6

 

Construction
of the Project:        Harris
Mechanical has been selected as the Design-Builder for the project. Full Notice
to Proceed occurred in October of 2006. Construction is expected to take
sixteen months to complete, followed by six to eight weeks of Commissioning and
Start-up.

 

Otter Tail Ag Enterprises asking for $300,000
in Value Added Producer Grant Program funds to be used as Working Capital.
Program funds will be used mostly at about the time of plant operation
start-up. The following are the tasks that will utilize Program funding.

 

Task l:    Utilities
Gas/Electric.

 

Otter Tail Ag Energy will use large quantities of natural gas and
electricity in the dry mill process, turning com into ethanol and its
co-product distillers grains. OTAE has contracted with BP Canada Energy
Marketing Corporation to procure and deliver gas to the Vergas Station on the
Viking line, approximately fifty miles from the site. OTAE has contracted with
Great Plains Natural Gas to deliver uninterruptible gas from the Vergas Station
site. OTAE has contracted with Otter Tail Power Company to provide a substation
and loop-fed primary power to the site. Natural gas and electricity will mainly
be used to fire boilers, dry distillers grains and operate plant machinery. The
plant is expected to begin operating in the early part of 2008. Value Added
Producer Grant Funds for utilities would be used during this startup period.
Use of program funds during plant operation startup will provide operating
capital at a time when it is much needed. Program funds used for utilities will
be $187,500. Staff responsible will be the Controller and CEO.

 

Task 2:   Salaries

 

Otter Tail Ag Energy will begin hiring its production labor force
approximately three months before it begins plant operations in early 2008.
Value Added Producer Grant funds would be used during this time period to pay
the salaries of these workers. Because the plant will not be producing during
this period, there will be no revenue from sale of product. Use of program
funds to pay salaries during this time will provide much needed capital just
prior to the plant beginning operations. Program funds used for this purpose
will amount to $100,000. Staff responsible for paying production salaries will
be the Controller and CEO.

 

Task 3:   Design
and produce materials for marketing distillers grains to a local market.

 

Otter Tail Ag Enterprises plans to market
distillers grains to a local market. The

 

6a

 

feasibility study done by BBI International, identified a potentially
sizable local market for distillers grains. Especially beneficial to OTAE,
would be to develop the local market for wet distillers grains, as this would
reduce drying costs. Beginning in Early May 2008 OTAE will design and
produce materials for marketing distillers grains to a local market. Program
funds used for this task will amount to $12,500 Staff responsible for this
project will be the Plant Manager, Gunner Greene and the CEO, Kelly Longtin.

 

6b

 

Work Plan and Budget

 

	
   

  	
   

  	
  Start

  	
   

  	
  End

  	
   

  	
  Budget

  	
   

  
	
  Task

  	
   

  	
  Date

  	
   

  	
  Date

  	
   

  	
  Federal

  	
   

  	
  Cash

  	
   

  	
  In-Kind

  	
   

  	
  Total

  	
   

  
	
  Task 1: Utilities gas/electric 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Responsible Staff: CEO/Controller

  	
   

  	
  Jan-08

  	
   

  	
  Jun-08

  	
   

  	
  $

  	
  187,500

  	
   

  	
  $

  	
  187,500

  	
   

  	
   

  	
   

  	
  $

  	
  375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Task 2: Salaries 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Responsible Staff: CEO/Controller

  	
   

  	
  Oct-07

  	
   

  	
  Mar-08

  	
   

  	
  $

  	
  100,000

  	
   

  	
  $

  	
  100,000

  	
   

  	
   

  	
   

  	
  $

  	
  200,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Task 3: Design and produce materials for
  marketing distillers grains to a local market 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Responsible Staff: CEO/Plant Mgr

  	
   

  	
  May-08

  	
   

  	
  Aug-08

  	
   

  	
  $

  	
  12,500

  	
   

  	
  $

  	
  12,500

  	
   

  	
   

  	
   

  	
  $

  	
  25,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Task 4:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Task 5:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Cost of Project

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  300,000

  	
   

  	
  $

  	
  300,000

  	
   

  	
   

  	
   

  	
  $

  	
  600,000

  	
   

  

 

6c

 

EXHIBIT
B

 

BOND
COVERAGE

 

Since the USDA grant will be provided on a reimbursement basis, the
Grantee shall not be required to provide evidence of fidelity bond coverage
covering all officers and employees of the Grantee’s organization authorized to
receive or disburse Federal funds (7 CFR 3015.17). However, we would
recommend that you obtain such coverage. Any bond coverage obtained should be
from a company or companies holding certificates of authority as acceptable
sureties, as prescribed in 31 CFR part 223, “Surety Companies Doing Business
With the United States.”

 

7

 

EXHIBIT
C

 

AUDIT
REQUIREMENTS

 

If a the Grantee is a non-profit corporation and the Grantee expends
$500,000 or more in federal funds in one year, the Grantee shall be audited by
a Certified Public Accountant. The audit, for the years the Grantee receives
this financial assistance, will be conducted in accordance with Generally
Accepted Government Auditing Standards (GAGAS) and OMB Circular A-133. These
audits are due within 9 months after the end of the Grantee’s fiscal year. The
Grantor is to receive a copy of this audit.

 

If the Grantee is a nonprofit corporation and the Grantee expends less
than $500,000 in federal funds or the Grantee is a for profit corporation and
the Grant amount is greater than $100,000, the project shall be audited by a
Certified Public Accountant in accordance with Generally Accepted Government
Auditing Standards (GAGAS). This audit will be a limited-scope audit focused
only on the expenditure of grant and matching funds to assess compliance with
applicable laws and regulations. It must be completed within 90 days after the
funding period with a copy submitted to the Grantor.

 

If the Grantee is a nonprofit corporation and the Grantee expends less
than $500,000 in federal funds or the Grantee is a for profit corporation and
the Grant amount is $100,000 or less, the Grantee is subject to an audit by the
Grantor of all records whose retention is required by the Agreement. This audit
will focus only on the expenditure of grant and matching funds to assess compliance
with applicable laws and regulations and must be completed within 90 days after
the funding period.

 

8

 

EXHIBIT
D

 

REPORTING
REQUIREMENTS

 

You must provide Rural Development with a paper copy original or an
electronic copy that includes all required signatures of the following reports.
The reports should be submitted to the Agency contact listed for your assigned
state in Section VII of the VAPG NOSA. Failure to submit satisfactory
reports on time may result in suspension or termination of your grant. Both
performance reports and financial reports must be in compliance with 7 CFR
3019.51 and 3019.52.

 

A. Form SF-269 or SF-269A. A “Financial
Status Report,” listing expenditures according to agreed upon budget
categories, on a semi-annual basis. Reporting periods end each March 31
and September 30. Reports are due 30 days after the reporting period ends.
A final “Financial Status Report” is due within 90 calendar days of the
completion of the project. Reports will be on a cash basis.

 

B. Semi-annual performance reports. Reports
are due as provided in paragraph (A) of this section. These reports shall
include the following:

 

i. A comparison of actual accomplishments to
the objectives for that period. Objectives should be reported by specific task
breakdown as described in the approved work plan and budget.

 

ii. Reasons why established objectives were
not met, if applicable.

 

iii. Reasons for any problems, delays, or
adverse conditions which will affect attainment of overall program objectives,
prevent meeting time schedules or objectives, or preclude the attainment of
particular objectives during established time periods. This disclosure shall be
accomplished by a statement of the action taken or planned to resolve the
situation.

 

iv. Objectives and timetables established for
the next reporting period.

 

v. A summary at the end of the report with
the following elements to assist in documenting the annual performance goals of
the VAPG program for Congress.

 

If funds were awarded for working capital,
the Grantee must discuss the following

 

·              Number of jobs
created as a result of the project;

·              Any increase in
producer revenues as a result of the project;

·              Any increase in
customer base as a result of the project; and

·              Projects with
significant energy components must report expected or actual capacity (e.g.
gallons of ethanol produced annually, megawatt hours produced annually) and any
emissions reductions incurred during the project.

 

9

 

vi. Compliance with any special condition on
the use of award funds should be discussed.

 

C. Final project performance reports. Reports
are due as provided in paragraph (A) of this section. These reports shall
include the following:

 

i. A comparison of actual accomplishments to
the objectives for that period. Objectives should be reported by specific task
breakdown as described in the approved work plan and budget.

 

ii. Reasons why established objectives were
not met, if applicable.

 

iii. Reasons for any problems, delays, or
adverse conditions which will affect attainment of overall program objectives,
prevent meeting time schedules or objectives, or preclude the attainment of
particular objectives during established time periods. This disclosure shall be
accomplished by a statement of the action taken or planned to resolve the
situation.

 

iv. Objectives and timetables established for
the next reporting period.

 

v. Compliance with any special condition on
the use of award funds should be discussed.

 

vi. Responses to the following:

 

a. What have been the most
challenging or unexpected aspects of this program?

 

b. What advice you would give
to other organizations planning a similar program. These should include
strengths and limitations of the program. If you had the opportunity, what
would you have done differently?

 

c. If an innovative approach
was used successfully, the Grantee should describe their program in detail so
that other organizations might consider replication in their areas.

 

vii. A summary at the end of the report with
the following elements to assist in documenting the annual performance goals of
the VAPG program for Congress.

 

If funds were awarded for planning
activities, the Grantee must discuss the following:

 

·              Number of expected
jobs created as a result of continuing project;

·              Any expected
increase in producer revenues as a result of continuing the project;

 

10

 

·                 Any expected
increase in customer base as a result of continuing the project; and

·                 Projects with
significant energy components must report expected capacity (e.g. gallons of
ethanol produced annually, megawatt hours produced annually) and any emissions
reductions expected as a result of continuing the project.

 

If funds were awarded for working capital,
the Grantee must discuss the following

 

·                 Number of jobs
created as a result of the project;

·                 Any increase in
producer revenues as a result of the project;

·                 Any increase in
customer base as a result of the project; and

·                 Projects with
significant energy components must report expected or actual capacity (e.g.
gallons of ethanol produced annually, megawatt hours produced annually) and any
emissions reductions incurred during the project.

 

viii. The Grantee must submit supporting
documentation for completed tasks, which includes, but are not limited to,
feasibility studies, marketing plans, business plans, and an accounting of how
working capital funds were spent.

 

D. SF-272. If the Grantee receives advance payments, the Grantee shall
submit a “Report of Federal Cash Transactions,” listing expenditures according
to agreed upon budget categories, on a quarterly basis. Reporting periods end
each March 31, June 30, September 30, and December 31.
Reports are due 15 calendar days after the reporting period ends.

 

11

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