Exhibit 10.2
PRECEDENT AGREEMENT
BETWEEN
▇▇▇▇▇▇ ▇▇▇▇▇▇ INTERSTATE GAS TRANSMISSION LLC
AND
NEDAK ETHANOL LLC
This Precedent Agreement ("Precedent Agreement") is made and entered into
this 27th day of September, 2007, between ▇▇▇▇▇▇ ▇▇▇▇▇▇ Interstate Gas
Transmission LLC ("Transporter"), a Colorado limited liability company, and
Nedak Ethanol LLC ("Shipper"). Each of Transporter and Shipper are sometimes
referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS:
WHEREAS, Transporter is developing plans to construct and operate, pursuant
to its Part 157 blanket facility certificate authority, certain additional
facilities on its existing mainline to be located upstream of Grand Island,
Nebraska ("Grand Island"), which are referred to herein as the Capacity
Expansion Project and which will create additional long-haul, firm
transportation capacity on Transporter's system upstream of Grand Island. The
Capacity Expansion Project will include the installation of additional mainline
facilities consisting of 16-inch diameter pipe from an interconnect with the
Trailblazer Pipeline system to an interconnection with Transporter's existing
facilities near Grand Island, or such size and length as determined by
Transporter, and potential related compressor facility modifications, with
transportation capacity of up to about 35,000 Dth/day; and
WHEREAS, the facilities and capacities described may change based on the
final project design, shipper commitments or regulatory requirements; and
WHEREAS, Transporter conducted an open season soliciting non-binding bids
from shippers, including ethanol plants, and, as a result, Shipper has expressed
interest in obtaining service from Transporter to its plant; and
WHEREAS, the commitment provided by Shipper via this Precedent Agreement
and potentially other similar agreements will be used as support for the
construction and operation of the Capacity Expansion Project; and
WHEREAS, Transporter is willing to continue its efforts to develop the
Capacity Expansion Project and to proceed with obtaining all of the necessary
governmental authorizations to construct and acquire the required facilities or
capacities, provided that Transporter receives sufficient commitments from
prospective shippers; and
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WHEREAS, this Precedent Agreement has been executed as evidence of the
agreement between Transporter and Shipper that, upon satisfaction of the
conditions precedent set forth below, the parties will enter into one or more
Firm Transportation Service Agreements (each a "FTSA") providing for firm
interstate natural gas transportation service to be provided by Transporter for
Shipper;
NOW, THEREFORE, in consideration of the mutual covenants and agreement
contained herein, and intending to be legally bound, Transporter and Shipper
agree as follows:
1. Effective Date and Term
This Precedent Agreement shall become effective as of the date first stated
above and, except as provided in Section 6(c), shall remain in effect until the
earlier of: Shipper's or Transporter's exercise of its termination rights
pursuant to this Precedent Agreement, as provided in Section 8 below, or the
effective date of the FTSA.
2. Services
Transporter agrees to work in good faith using commercially reasonable
efforts to file for, and diligently pursue any requisite FERC Authorization for
the construction and operation of the Capacity Expansion Project and as
described in this Precedent Agreement and to provide Shipper, as conditioned
herein, with firm transportation service as set forth on the attached Appendices
A and B. The construction and operation of these interstate facilities are
subject to the jurisdiction of the FERC, and subject to FERC and other federal,
state and local permits and approvals.
3. Rates and Facility Reimbursement Charge
Shipper acknowledges that, in connection with contracting for service on
the Capacity Expansion Project, it has made an election, as set forth on
Appendix A, for service in Transporter's East Rate Zone - North/PXP Area, to
either (i) pay the Maximum Recourse Reservation Rate for firm service under each
FTSA; or (ii) to pay a Fixed Negotiated Reservation Rate for firm service under
each FTSA. Shipper acknowledges that it has made an additional election, as set
forth on Appendix A, related to the recovery by Transporter of construction
costs for the Capacity Expansion Project, to pay a fixed monthly facility
reimbursement charge per dekatherm of Shipper's Contract MDQ pursuant to Section
5.3(a) of Transporter's Rate Schedule FT ("Facility Reimbursement Charge") for
each month during the initial primary term of the FTSA , in order to reimburse
Transporter in full for Shipper's pro rata share of the costs to Transporter of
constructing and installing the Capacity Expansion Project; provided, however,
that Shipper, at its sole discretion, may elect at any time during the initial
primary term of the FTSA to pay Transporter the sum of the then-outstanding
monthly Facility Reimbursement Charges for the remainder of such initial primary
term. Upon
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Transporter's receipt of any such payment by Shipper, Shipper shall no longer be
required to pay Transporter the Facility Reimbursement Charge. The rates elected
by Shipper for service in Transporter's East Rate Zone - North/PXP Area, and the
amortized unit amount of the Facility Reimbursement Charge to recover the
construction costs for the Capacity Expansion Project, are each separately
applicable and additive to one another.
If Shipper shall have opted to pay a Fixed Negotiated Reservation Rate, as
described on Appendix A, for service in Transporter's East Rate Zone - North/PXP
Area, such Fixed Negotiated Reservation Rate shall be applicable to service
under the affected FTSA during the entire primary term of such FTSA, regardless
of any otherwise applicable maximum rate; provided that the applicability of the
Fixed Negotiated Reservation Rate or any other rate assumes that receipts and
deliveries under the FTSAs will be made at the prevailing operating pressures of
Transporter's facilities, and that the agreed-to rate does not cover any
non-conforming quality or pressure requirement at any receipt or delivery point
unless caused by Transporter or any third party shippers.
Regardless of which form of reservation rate Shipper shall have opted to
pay, the Commodity Rate, Fuel, Lost and Unaccounted for Gas ("FL&U"), ACA and
any other additional authorized charges or surcharges will be applied pursuant
to KMIGT's FERC approved Gas Tariff, as in effect from time-to-time (the
"Tariff"). Shipper understands and agrees that the Facilities Reimbursement
Charge applicable pursuant to Section 5.3 of Transporter's Rate Schedule FT is
not subject to any maximum rate or charge set forth in Transporter's Tariff.
4. Quantity, Receipt and Delivery Points
The contract Maximum Daily Quantity ("MDQ"), the Primary Receipt Point(s),
the Primary Delivery Point(s), and primary terms elected by Shipper are set
forth on the attached Appendix A (subject to the minimum term requirements set
forth in Appendix A). Shippers may elect MDQ's that increase over time on
Appendix A that increase at specified times to specific levels. Secondary
Receipt and Delivery Points will be made available pursuant to the Tariff.
5. Conditions Precedent
Performance by Transporter of the duties and obligations assumed by it in
this Precedent Agreement are expressly subject to the following conditions
precedent:
(a) All appropriate and final governmental approvals and other applicable
authorization must be obtained and maintained on terms reasonably
acceptable to Transporter, including approval of construction, rates
and terms and conditions of service; and
(b) All rights-of-way and other surface rights required to site and
maintain the pipeline facilities along the route described herein must
be obtained and
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maintained on terms and conditions reasonably acceptable to
Transporter; and
(c) Sufficient firm capacity subscription must exist at acceptable rates,
in Transporter's sole discretion, to proceed with the Capacity
Expansion Project; provided, however, that this condition shall expire
on the date of receipt by Transporter of an acceptable Certificate or
otherwise applicable authorization for the Capacity Expansion Project,
if Transporter has not otherwise terminated this Precedent Agreement
on or before such date; and
(d) Shipper shall have complied with all its material obligations
hereunder and under any FTSA then in effect.
6. Shipper's Obligations
(a) Shipper agrees that it will execute the FTSA(s) consistent with the
form of Service Agreement as contained in Appendix B hereto within
five (5) business days after tender by Transporter. The FTSA(s) will
reflect the receipt points, delivery points, term(s), rate(s),
Facility Reimbursement Charge, and MDQ(s) described herein.
(b) Upon request by Transporter, Shipper agrees to reasonably support any
notification, tariff filing, application or certificate filing made to
the FERC or any other governmental body to obtain any necessary
authorizations to construct, own and operate the Capacity Expansion
Project or to provide services as set out herein; and
(c) Shipper shall provide sufficient evidence of credit worthiness as
reasonably determined by Transporter in accordance with the standards
set forth in Appendix C. Shipper shall have and maintain such credit
or provide assurances ("credit support"), as are required by
Transporter in its reasonable discretion, to satisfy Shipper's
financial obligations under the FTSA(s), including without limitation
the Facility Reimbursement Charge, which may result from this
Precedent Agreement. Such credit support shall consist of (i)
prepayment of value or letter of credit in the amount of 36 months of
Shipper's reservation charges, resulting from the MDQ and rates stated
herein; (ii) a guarantee in form and substance acceptable to
Transporter from an entity which meets the credit standards of
Appendix C and is otherwise acceptable to Transporter; or (iii) such
other credit assurances as Transporter may require. Such assurances
shall be provided by Shipper within 5 business days of the Effective
date of this Precedent Agreement.
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The creditworthiness requirements of this Section 6 and in Appendix C,
including without limitation all creditworthiness requirements
pertaining to the Facility Reimbursement Charge, shall apply to any
assignment (in whole or in part) of this Precedent Agreement or the
FTSA(s) or to any permanent release, in whole or in part, of an FTSA
and shall survive termination of this Precedent Agreement.
(d) The Project contemplates capacity expansion on Transporter's system
and does not incorporate transportation capacity on any upstream
pipeline to facilitate transportation. Shipper agrees that it is
Shipper's responsibility to obtain gas supply at the primary receipt
points or secondary receipt points on Transporter's system and that
obtaining such gas supply is not a condition precedent to this
Agreement.
7. Timing
KMIGT agrees to work in good faith using commercially reasonable efforts to
complete the Project and to provide to Shipper firm transportation service as
set forth herein no later than October 31, 2008, subject to the Conditions to
KMIGT's Obligations set forth in Section 5 above. If KMIGT is unable to commence
the service as contemplated hereunder by October 31, 2008, KMIGT will proceed
with due diligence and in good faith to commence the service for Shipper at the
earliest practicable date thereafter.
8. Termination Rights
(a) Shipper shall have the right to terminate this Precedent Agreement
with no liability to Transporter by giving Transporter at least
fifteen (15) days advance written notice (which notice must be given,
if at all, within twenty (20) days after the occurrence or
non-occurrence of the relied upon event) in the event: (i) Transporter
has failed to file for any requisite FERC Authorization for the
Capacity Expansion Project by no later than April 30, 2008.
Transporter shall provide Shipper with written notice of any such
filing; or (ii) any FTSA tendered by Transporter to Shipper for
execution pursuant to the terms of this Precedent Agreement reflects
an MDQ which is less than the MDQ set forth in Appendix A hereto;
(b) Transporter shall have the right to terminate this Precedent Agreement
with no liability to Shipper by giving Shipper fifteen (15) days
advance written notice (which notice must be given, if at all, within
twenty (20) days after the occurrence or non-occurrence of the relied
upon event); provided that notice under this Section 8(b) may be given
at any time while Shipper shall be in default of its obligations under
Section 6(c), in the event:
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i. FERC shall attach conditions to the FERC Authorization for the
Capacity Expansion Project, or impose conditions requiring
subsequent compliance filings which, in Transporter's reasonable
judgment, are unacceptable.
ii. Transporter has not received the necessary FERC Authorization for
the Capacity Expansion Project by no later than November 1, 2008.
iii. Shipper fails to comply with any of its material obligations
hereunder.
iv. Shipper fails to comply with its obligation stated in Section
6(c) above.
(c) In the event Transporter terminates this Precedent Agreement for any
reason other than that stated at Section 8(b) iv above, concurrent
with such termination, Transporter shall return to Shipper any credit
support provided by Shipper under Section 6 above.
9. Authorities
This Precedent Agreement and the performance hereof are subject to all
present and future applicable valid laws, orders, decisions, rules and
regulations of duly constituted governmental authorities having jurisdiction
over the provision of natural gas transportation service in the interstate
commerce of the United States of America ("governmental authority"). Should
either of the parties, by force of any such law, order, decision, rule or
regulation, at any time during the term of this Precedent Agreement be ordered
or required to do any act inconsistent with the provisions hereof, then for the
period during which the requirements of such law, order, decision, rule or
regulation are applicable, this Precedent Agreement shall be deemed modified to
conform with the requirement of such law, order, decision, rule or regulation;
provided, however, nothing herein shall alter, modify or otherwise affect the
respective rights of the parties to terminate this Precedent Agreement under the
terms and conditions hereof.
10. Assignment
This Precedent Agreement may be assigned by Transporter to a wholly- or
partially-owned affiliate, special purpose joint venture, partnership, or other
affiliated entity, including a parent company or partnership; provided that such
assignee shall have credit or credit support equivalent to the higher of that of
Transporter or its guarantor. Shipper may assign this Precedent Agreement, in
its entirety only, and any associated FTSA(s) to any single entity which
satisfies the credit worthiness standards set forth in Appendix C, in the
Tariff, and/or in Sections 6 and 8 herein, as well as all credit requirements
pertaining to the Facility Reimbursement Charge. Once the Project is in-service,
Shipper may release its capacity pursuant to the General Terms and Conditions
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of the Tariff, provided that Shipper shall continue to be solely responsible for
payment of the Facility Reimbursement Charge unless Transporter has agreed in
writing to a permanent release of all of Shipper's capacity. In the case of any
other proposed assignment of this Precedent Agreement, prior approval of
Transporter is required, which approval shall not be unreasonably withheld.
Notwithstanding the foregoing, any Party to this Precedent Agreement may assign
this Precedent Agreement and its rights hereunder as security for indebtedness
or other obligations, and each Party hereby agrees to timely execute and deliver
such documents and certificates as are reasonably requested by the assigning
Party or its lenders in connection with any such collateral assignment and are
reasonably acceptable to the non-assigning Party.
11. Representations and Warranties
Each Party represents and warrants to each other as follows:
(a) Such Party is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and is in good
standing in each other jurisdiction where the failure to so qualify
would have a material adverse effect upon the business or financial
condition of such Party.
(b) The execution, delivery and performance of this Precedent Agreement by
such Party does not and will not require the consent of any trustee or
holder of any indebtedness, or be subject to or inconsistent with
other obligations of such Party under any other agreement.
(c) This Precedent Agreement has been duly executed and delivered by such
Party. This Precedent Agreement constitutes the legal, valid, binding
and enforceable obligation of such Party, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general
application relating to or affecting creditor's rights generally and
by general equitable principles.
(d) No governmental authorization, approval, order, license, permit,
franchise or consent, and no registration, declaration or filing with
any governmental authority is required on the part of such Party in
connection with the execution and delivery of this Precedent
Agreement, although it is subject to the necessary governmental
approvals specified herein for its effectuation.
(e) Except as otherwise disclosed by Shipper's parent in its Form 10-K
most recently filed with the Securities and Exchange Commission, there
is no pending or, to the best of such Party's knowledge, threatened
action or proceeding affecting such Party before any court, government
authority or arbitrator that could reasonably be expected to
materially and adversely affect the financial condition or operations
of such Party or the ability of such Party to perform its obligations
hereunder, or that purports to affect
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the legality, validity or enforceability of this Precedent Agreement
or would otherwise hinder or prevent performance hereunder.
12. Choice of Law
AS TO ALL MATTERS OF CONSTRUCTION AND INTERPRETATION, THIS PRECEDENT
AGREEMENT SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY THE LAWS OF THE STATE
OF COLORADO, WITHOUT REGARD TO THE CHOICE OF LAW RULES OF THAT STATE.
13. Limitation of Liability
NO PARTY SHALL BE LIABLE TO ANY OTHER PARTY UNDER THIS PRECEDENT AGREEMENT
OR UNDER ANY OF THE FTSA(S) OR OTHER AGREEMENTS TO BE EXECUTED PURSUANT TO THIS
PRECEDENT AGREEMENT FOR ANY INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES OF ANY NATURE, OR FOR ANY LOST PROFITS, HOWEVER ARISING, EVEN IF SUCH
PARTY HAS BEEN MADE AWARE OF THE POSSIBILITY OF SUCH DAMAGES OR LOST PROFITS.
THIS PROVISION SHALL SURVIVE THE TERMINATION OF THIS PRECEDENT AGREEMENT.
14. Further Assurance
Transporter and Shipper shall enter into such additional agreements as may
be necessary in furtherance of this Precedent Agreement.
15. Counterparts
This Agreement may be executed in one or more counterparts, each of which,
when executed and delivered including by facsimile, shall be an original, but
all of which together shall constitute but one and the same instrument.
16. Confidentiality
Each Party and its respective agents, employees, affiliates, officers,
directors, attorneys, auditors and other representatives shall keep and maintain
this Precedent Agreement and the individual provisions hereof in confidence, and
shall not transmit, reveal, disclose or otherwise communicate any of the
provisions of this Precedent Agreement to any person without first obtaining the
express written consent of the other Party, which consent shall not be
unreasonably withheld; provided, however, that such consent shall not be
required to the extent that either Party determines in its sole reasonable
judgment that any such disclosure is expressly contemplated or required by law,
regulation, an entity providing financing or order of any governmental authority
of competent jurisdiction, including but not limited to the SEC and the FERC.
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Accepted and Agreed to as of the date hereof:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Interstate Gas Transmission LLC
Signature: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, Commercial Operation
NEDAK ETHANOL LLC ("SHIPPER")
Signature: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Printed Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President - General Manager
The above company representative is a duly authorized agent of the company and
has the authority to bind the company.
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APPENDIX A
TO
PRECEDENT AGREEMENT
BETWEEN ▇▇▇▇▇▇ ▇▇▇▇▇▇ INTERSTATE GAS TRANSMISSION LLC
AND
NEDAK ETHANOL LLC ("SHIPPER')
DATED September __, 2007
In accordance with the Precedent Agreement, Shipper makes the following
elections for service. The commencement date of the Firm Transportation Service
Agreement shall be the date on which the Capacity Expansion Project, as defined
in the Precedent Agreement, is in service. Final determination of the Capacity
Expansion Project size will be based upon the total requests received that are
economically acceptable:
Firm Transportation Service
------ ------------ ---------------- ---------- ---------------- ----------------- ----------------- ---------
Primary Primary MDQ Facility Total Term
Receipt Delivery Point (Dth/d) Reimbursement Reservation (Years)
Point * ** East Rate Zone Charge for Rate and
- North/PXP Capacity Facility
Area Expansion Reimbursement
Reservation Project Charge
Rate ***
------ ------------ ---------------- ---------- ---------------- ----------------- ----------------- ---------
1. Trailblazer- KMIGT/KMIGT 1,000 Fixed $23.1167/Dth/mo $25.6619/Dth/mo 10
▇▇▇▇▇ NEDAK Dth/Day Negotiated years
(PIN 7857) Ethanol Plant Reservation
(PIN 42543) Rate of
$2.5452/Dth/mo
------ ------------ ---------------- ---------- ---------------- ----------------- ----------------- ---------
TOTAL MDQ 1,000
Dth/Day
------ ------------ ---------------- ---------- ---------------- ----------------- ----------------- ---------
• *Call your KMIGT Account Director as to the availability of
alternative receipt points.
• ** Call your KMIGT Account Director for existing or new delivery point
pins required on KMIGT mainline system near plant location
APPENDIX A (Continued)
• *** Fixed Negotiated Reservation Rate shall be stated as $ per Dth of
MDQ or MDCQ per month. Upon expiration of the ten year term, the
reservation rate for any extended service under the FTSA shall be the
applicable maximum reservation rate under Transporter's FERC Gas
Tariff, as may be revised from time to time, unless otherwise agreed
in writing between KMIGT and Shipper.
Agreed to by:
Shipper Signature:
---------------------------------
Name (Please print):
-------------------------------
Title:
---------------------------------------------
APPENDIX B
TO
PRECEDENT AGREEMENT
BETWEEN ▇▇▇▇▇▇ ▇▇▇▇▇▇ INTERSTATE GAS TRANSMISSION LLC
AND
NEDAK ETHANOL LLC ("SHIPPER")
DATED SEPTEMBER _______, 2007
Contract No. ______
FIRM TRANSPORTATION SERVICE AGREEMENT
(APPLICABLE TO RATE SCHEDULE FT)
This Agreement ("Agreement"), is made and entered into by ▇▇▇▇▇▇ ▇▇▇▇▇▇
Interstate Gas Transmission LLC, a Colorado limited liability company
("Transporter") and by the Party(s) named in Article XIII ("Shipper").
In consideration of the premises and of the mutual covenants, the parties
do agree as follows:
ARTICLE I
SCOPE OF AGREEMENT
Subject to the terms, conditions and limitations hereof and of
Transporter's Rate Schedule FT, Transporter agrees to receive from, or for the
account of, Shipper for transportation on a firm basis quantities of natural gas
tendered by Shipper on any day at the Primary Receipt Point(s) up to the
applicable Maximum Daily Receipt Quantity for such Receipt Point. Shipper shall
not tender at all Primary Receipt Points on any day without the prior consent of
Transporter, a cumulative quantity of natural gas in excess of the Maximum Daily
Transportation Quantity set forth in Article XIII.
Transporter agrees to transport and deliver to, or for the account of,
Shipper at the Delivery Point(s) the nominated gas received from Shipper at the
Receipt Point(s), less the Fuel Reimbursement Quantity and other deductions, and
Shipper agrees to accept or cause acceptance of delivery of these quantities;
provided, however, that Transporter shall not be obligated to deliver at any
Delivery Point on any day a quantity of natural gas in excess of the applicable
Maximum Daily Delivery Quantity.
ARTICLE II
TERM OF AGREEMENT
This Agreement shall become effective as of the date set forth below and
shall remain in full force and effect in accordance with the terms of this
Service Agreement. This Agreement may be extended for another primary term if
agreed to by both parties in accordance with the provisions in the General Terms
and Conditions on the Right of First Refusal Process.
ARTICLE III
RATE SCHEDULE
Shipper shall pay Transporter for all services rendered and for the
availability of such service at rates filed under Transporter's FT Rate Schedule
as shown on Sheet No. 4-A of Second Revised Volume No. 1-A and as the same may
be hereafter revised or changed. Unless otherwise agreed to in writing between
Transporter and Shipper, the rates to be charged Shipper for transportation
shall not be more than the maximum rate under Rate Schedule FT, nor less than
the minimum rate under Rate Schedule FT.
This Agreement and all terms and provisions contained or incorporated
herein are subject to the provisions of Transporter's applicable Rate Schedules
and of Transporter's General Terms and Conditions on file with the Federal
Energy Regulatory Commission, or other duly constituted authorities having
jurisdiction, and as the same may be legally amended or superseded, which Rate
Schedules and General Terms and Conditions are by this reference made a part
hereof.
Shipper agrees that Transporter shall have the unilateral right to file
with the appropriate regulatory authority and make changes effective in: (a) the
rates and charges applicable to service pursuant to Transporter's Rate Schedule
FT, (b) Transporter's Rate Schedule FT, pursuant to which service is rendered,
or (c) any provision of the General Terms and Conditions applicable to Rate
Schedule FT.
ARTICLE IV
PRIMARY RECEIPT POINT(S)
Natural gas to be received by Transporter for the account of Shipper shall
be delivered by Shipper and received by Transporter on the outlet side of the
measuring station(s) at or near the Primary Receipt Point(s) specified in
Appendix A, with the Maximum Daily Receipt Quantity and the facility number,
maximum receipt pressure, and provisions for incremental facilities as set forth
in Appendix A. If multiple primary delivery point rate zones are specified in
Appendix B the primary receipt point(s) and quantities must be allocated by
primary delivery point rate zone in Appendix A.
ARTICLE V
PRIMARY DELIVERY POINTS
Natural gas to be delivered by Transporter for the account of Shipper shall
be delivered by Transporter and received by Shipper on the outlet side of the
measuring station(s) at or near the Primary Delivery Point(s) specified in
Appendix B, with the Maximum Daily Delivery Quantity and the facility number,
maximum delivery pressure, and provisions for incremental facilities indicated
for each such Delivery Point as set forth in Appendix B.
ARTICLE VI
QUALITY
All natural gas tendered to Transporter for transportation for the account
of Shipper at the Receipt Point(s) shall conform to the quality specifications
set forth in Section 4 of the General Terms and Conditions of Transporter's FERC
Gas
Tariff, as revised from time to time unless otherwise agreed to. Transporter may
refuse to take delivery of any gas for transportation which does not meet such
quality specifications.
ARTICLE VII
INTERPRETATION
The interpretation and performance of the Agreement shall be in accordance
with the laws of the State of Colorado.
This Agreement, and all its rates, terms and conditions, shall at all times
be subject to modification by order of the FERC upon notice and hearing and a
finding of good cause therefor. In the event that any party to this Agreement
requests the FERC to take any action which could cause a modification in the
conditions of this Agreement, that party shall provide written notice to the
other parties at the time of filing the request with the FERC.
ARTICLE VIII
AGREEMENTS BEING SUPERSEDED
When this Agreement becomes effective, it shall supersede and cancel any
other firm agreements between the parties for the same service.
ARTICLE IX
CERTIFICATIONS
By executing this Agreement, Shipper certifies that: (1) Shipper has a
valid right to deliver the gas to be transported by Transporter; (2) Shipper
has, or will have, entered into all arrangements necessary for the commencement
of deliveries to Transporter; and (3) Shipper has a transportation contract(s)
or will enter into a transportation contract(s) with the party ultimately
receiving the gas, prior to the commencement of service.
ARTICLE X
ADDRESSES
Except as otherwise provided or as provided in the General Terms and
Conditions of Transporter's FERC Gas Tariff, any notice, request, demand,
statement, ▇▇▇▇ or payment provided for in this Agreement, or any notice which
any party may desire to give to the other, shall be in writing and shall be
considered as duly delivered when mailed by registered, certified, or regular
mail to the post office address of the parties as follows:
(a) Transporter:
Mailing Address: Street Address:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Interstate Gas ▇▇▇▇▇▇ ▇▇▇▇▇▇ Interstate
Transmission LLC Gas Transmission LLC
▇.▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Scheduling: Payment Address:
Transportation and Storage Services ▇▇▇▇▇▇ ▇▇▇▇▇▇ Interstate Gas
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Transmission LLC
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Dept. ▇▇▇▇
▇ ▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Wires:
KMIGT-▇▇
▇▇▇▇▇ Fargo Bank
ABA No. 121 000 248
Account No. 412 112 9266
(b) Shipper: As shown in Article XIII or such other address as either party
shall designate by formal written notice.
ARTICLE XI
SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of any
successor(s), substantially as an entirety, to either Transporter or Shipper by
merger, consolidation or acquisition. Either Transporter or Shipper may assign
or pledge this Agreement and all rights and obligations hereunder under the
provisions of any mortgage, deed of trust, indenture or other instrument which
it has executed or may execute hereafter as security for indebtedness;
otherwise, except as provided in Section 23 of the General Terms and Conditions,
neither Transporter nor Shipper shall assign this Agreement or its rights
hereunder.
ARTICLE XII
CAPACITY RELEASE
Shipper may release its capacity under this Firm Transportation Service
Agreement, up to Shipper's Maximum Daily Transportation Quantity or Maximum
Contract Quantity, in accordance with the General Terms and Conditions of
Transporter's FERC Gas Tariff.
ARTICLE XIII
SPECIFIC INFORMATION
Firm Transportation Service Agreement between ▇▇▇▇▇▇ ▇▇▇▇▇▇ INTERSTATE GAS
TRANSMISSION LLC ("Transporter") and NEDAK ETHANOL LLC ("Shipper").
Contract Number: _____________
Contract Date: _____________
Term: _____________
Termination Notice: _____________
Shipper Address:
________________________
________________________
________________________
Telephone: _____________
Telecopy: _____________
Maximum Daily
Transportation Quantity: 1,000 MMBtu per day.
Rate: The rate charged will be the maximum transportation rate unless otherwise
agreed to in writing.
Fuel Reimbursement: As stated on Tariff Sheet No. 4-D, unless otherwise agreed
to in writing.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their duly authorized representative.
▇▇▇▇▇▇ ▇▇▇▇▇▇ INTERSTATE GAS
TRANSMISSION LLC NEDAK ETHANOL LLC
"Transporter" "Shipper"
By: By:
--------------------------------- ---------------------------------
Title: Title:
------------------------------ ------------------------------
APPENDIX A
RECEIPT POINT(S)
To the Firm Transportation Service Agreement between ▇▇▇▇▇▇ ▇▇▇▇▇▇
INTERSTATE GAS TRANSMISSION LLC ("Transporter") and NEDAK ETHANOL LLC
("Shipper").
Contract Number: Dated:
---------------------------- -------------------------
Effective Date: ____, 2007
Provision
Maximum for
Primary Receipt Maximum Daily Incremental
Receipt Point(s) Facility No. Pressure Receipt Quantity Facility
------------------- ----------- -------- ---------------- -----------
PIN 7858 TRAILBLAZER ▇▇▇▇▇ 1,034 DTH/DAY
This Appendix A supersedes and cancels any previously effective Appendix A to
the referenced Firm Transportation Service Agreement.
▇▇▇▇▇▇ ▇▇▇▇▇▇ INTERSTATE GAS
TRANSMISSION LLC "Transporter" NEDAK ETHANOL LLC "Shipper"
By: By:
--------------------------------- ---------------------------------
Title: Title:
------------------------------ ------------------------------
APPENDIX B
DELIVERY POINT(S)
To the Firm Transportation Service Agreement between ▇▇▇▇▇▇ ▇▇▇▇▇▇
INTERSTATE GAS TRANSMISSION LLC ("Transporter") and NEDAK ETHANOL LLC
("Shipper").
Contract Number: Dated:
---------------------------- -------------------------
Effective Date: ____, 2007
Provision
Maximum for
Primary Receipt Maximum Daily Incremental
Receipt Point(s) Facility No. Pressure Receipt Quantity Facility
------------------- ----------- -------- ---------------- -----------
PIN 42543 KMIGT/KMIGT NEDAK ETHANOL PLANT 1,000 DTH/DAY
This Appendix B supersedes and cancels any previously effective Appendix B to
the referenced Firm Transportation Service Agreement.
▇▇▇▇▇▇ ▇▇▇▇▇▇ INTERSTATE GAS
TRANSMISSION NEDAK ETHANOL LLC
("Transporter") ("Shipper")
By: By:
--------------------------------- ---------------------------------
Title: Title:
------------------------------ ------------------------------
APPENDIX C
PRIMARY TRANSPORTATION PATH SEGMENT MDTQ's
(Applicable to New, Renewed or Amended Transportation Segments)
An MDTQ exists for each primary transportation path segment and direction
within the primary path under this Agreement. Such MDTQ is the maximum daily
transportation quantity of gas which Transporter is obligated to transport on a
firm basis along a primary transportation path segment.
A schedule showing these primary transportation path segment MDTQ's is
attached.
This Appendix C supersedes and cancels any previously effective Appendix C
to this Firm Transportation Service Agreement.
▇▇▇▇▇▇ ▇▇▇▇▇▇ INTERSTATE
GAS TRANSMISSION LLC
("Transporter")
By: _____________________________
Title:___________________________
NEDAK ETHANOL LLC
("Shipper")
By: ______________________________
Title: ___________________________
Flow Direction
Upstream (F)orward Haul
Segment # Segment or (B)ack Haul MDTQ
APPENDIX C
TO
PRECEDENT AGREEMENT
BETWEEN ▇▇▇▇▇▇ ▇▇▇▇▇▇ INTERSTATE GAS TRANSMISSION LLC
AND
NEDAK ETHANOL LLC ("SHIPPER')
DATED SEPTEMBER __, 2007
CREDIT REQUIREMENTS
Shipper will be deemed creditworthy if (i) its long-term unsecured debt
securities are rated at least BBB- by Standard and Poor's Corporation ("S&P")
and at least Baa3 by ▇▇▇▇▇'▇ Investor Service ("Moody's"), in each case with
stable outlook; and (ii) the sum of reservation fees, commodity fees, all
Facility Reimbursement Charge obligations, and any other associated fees and
charges for thirty-six months is less than 15% of Shipper's tangible net worth.
For the purposes of this Appendix C, the term "tangible net worth" shall mean
for a corporation the sum of the capital stock, paid-in capital in excess of par
or stated value, and other free and clear equity reserve accounts less goodwill,
patents, unamortized loan costs or restructuring costs, and other intangible
assets. Only actual tangible assets are included in Transporter's assessment of
creditworthiness. In comparing the overall value of a Shipper's contract to
tangible net worth for credit evaluation purposes, Transporter will compare the
net present value of demand or reservation charge obligations under such
contracts, and all Facility Reimbursement Charge obligations, to Shipper's
current tangible net worth. If a Shipper has multiple service agreements with
Transporter, then the total potential fees and charges of all such service
agreements shall be considered in determining creditworthiness.
If Shipper does not meet the criteria described above, then Shipper may request
that Transporter evaluate its creditworthiness based upon the level of service
requested relative to the Shipper's current and future ability to meet its
obligations. Such credit appraisal shall be based upon Transporter's evaluation
of the following information and credit criteria:
a. S&P and Moody's opinions, watch alerts, and rating actions and
reports, rating, opinions and other actions by Dun and Bradstreet and
other credit reporting agencies will be considered in determining
creditworthiness.
b. Consistent financial statement analysis will be applied by Transporter
to determine the acceptability of Shipper's current and future
financial strength. Shipper's balance sheets, income statements cash
flow statements and auditor's notes will be analyzed along with key
ratios and trends regarding liquidity, asset management, debt
management, debt coverage, capital structure, operational efficiency
and profitability.
c. Shipper must not be operating under any chapter of the bankruptcy laws
and must not be subject to liquidation or debt reduction procedures
under state laws and there must not be pending any petition for
involuntary bankruptcy. An exception may be made for a Shipper who is
a debtor-in-possession operating under Chapter XI of the Federal
Bankruptcy Act if Transporter is assured that the service billing will
be paid promptly as a cost of administration under the federal court's
jurisdiction, based on a court order in effect, and if the Shipper is
continuing and continues in the future to make payment.
d. Whether Shipper is subject to any lawsuits or judgments outstanding
which could materially impact its ability to remain solvent.
e. The nature of the Shipper's business and the effect on that business
of general economic conditions and economic conditions specific to it,
including Shipper's ability to recover the costs of Transporter's
services through filings with regulatory agencies or otherwise to pass
on such costs to its customers.
f. Any other information, including any information provided by Shipper,
that is relevant to Shipper's current and future financial strength
and Shipper's ability to make full payment over the term of the
contract.