Precedent Agreement between Kinder Morgan Interstate Gas Transmission LLC and Nedak Ethanol LLC
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Kinder Morgan Interstate Gas Transmission LLC and Nedak Ethanol LLC have entered into a Precedent Agreement outlining their intent to enter a future Firm Transportation Service Agreement. Kinder Morgan will seek regulatory approvals and construct additional pipeline facilities to expand capacity, while Nedak Ethanol commits to contract for firm natural gas transportation service. The agreement specifies rate options, reimbursement for construction costs, and conditions such as obtaining necessary government approvals. The agreement remains in effect until either party terminates or the transportation agreement becomes effective.
EX-10.2 3 form8kexh102_110207.htm Exhibit 10.2
Exhibit 10.2 PRECEDENT AGREEMENT BETWEEN KINDER MORGAN 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 Kinder Morgan 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 1
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 2
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 3
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. 4
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: 5
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 6
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 7
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. 8
Accepted and Agreed to as of the date hereof: Kinder Morgan Interstate Gas Transmission LLC Signature: /s/ Randy M. Holstlaw Printed Name: Randy M. Holstlaw Title: Vice President, Commercial Operation NEDAK ETHANOL LLC ("SHIPPER") Signature: /s/ Jerome Fagerland Printed Name: Jerome Fagerland Title: President - General Manager The above company representative is a duly authorized agent of the company and has the authority to bind the company. 9
APPENDIX A TO PRECEDENT AGREEMENT BETWEEN KINDER MORGAN 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 Adams 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 KINDER MORGAN 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 Kinder Morgan 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, bill 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: Kinder Morgan Interstate Gas Kinder Morgan Interstate Transmission LLC Gas Transmission LLC P.O. Box 281304 370 Van Gordon Lakewood, Colorado 80228-8304 Lakewood, Colorado 80228 Telephone: (303) 989-1740 Telecopy: (303) 763-3515
Scheduling: Payment Address: Transportation and Storage Services Kinder Morgan Interstate Gas Telephone: (713) 369-9329 Transmission LLC Telecopy: (713) 369-9325 Dept. 3040 P O Box 201607 Dallas, Texas ###-###-#### Wires: KMIGT-TB Wells 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 KINDER MORGAN 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. KINDER MORGAN 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 KINDER MORGAN 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 ADAMS 1,034 DTH/DAY This Appendix A supersedes and cancels any previously effective Appendix A to the referenced Firm Transportation Service Agreement. KINDER MORGAN 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 KINDER MORGAN 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. KINDER MORGAN 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. KINDER MORGAN 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 KINDER MORGAN 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 Moody's 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.