Exhibit 10.8


 


	
   

  	
   

  	
  1000 Superior Blvd., Suite 201

  	
   

  	
  914 North Golden Prairie

  
	
   

  	
  U.S. ENERGY

  	
   

  	
  Wayzata, MN 55394-1873

  	
   

  	
  Burton,
  Kansas

  
	
   

  	
  SERVICES, INC.

  	
   

  	
  Office 952 745-4300

  	
   

  	
  Office 316 835-2399

  
	
   

  	
   

  	
  Fax   952
  473-1224

  	
   

  	
  Fax      315 535-8507

  



 


March 9,
2004


 


Bill
Pracht, President


East
Kansas Agri-Energy, LLC


210
1/2 East 4


Garnett,
KS 66032


 


RE: Agency Authorization Agreement


 


Dear
Mr. Pracht:


 


East
Kansas Agri-Energy, LLC (EKAE) agrees to engage the services of U.S. Energy
Services, Inc. (U.S. Energy) to manage EKAE’s natural gas and
electric supply for its facilities.  The
EKAE facilities are in Garnett Kansas.


 


EKAE
and U.S. Energy agree on the following terms and conditions:


 


1.     APPOINTMENT OF U.S. ENERGY
AS EKAE AGENT::  EKAE agrees to appoint U.S.  Energy as its agent, for purposes of managing
EKAE’s natural gas and electric supply and usage for its facilities referred to
above. U.S. Energy accepts its appointment as EKAE’s agent for those
purposes.


 


2.     LIMITATIONS ON THE AUTHORITY
OF U.S. ENERGY;  U.S.
Energy has the authority to deal with third parties on behalf of EKAE in
connection with natural gas and electric matters in its capacity as EKAE’s
agent. Execution of contracts on behalf of EKAE is limited to those specified
in paragraph 6.


 


3.     COMMUNICATIONS AND INFORMATION
SHARING:  U.S. Energy shall
keep EKAE fully informed on a regular basis with regard to U.S. Energy’s
activities, as the manager of EKAE’s natural gas and electric supply and usage,
At the request of EKAE, U.S. Energy shall immediately provide EKAE with any and
all information related to U.S. Energy’s activities as the manager of EKAE’s
natural gas and electric supply and usage.


 


4.     RELEASE OF ENERGY
CONSUMPTION RECORDS AND BILLS:  This
Agency Agreement serves as authorization for the release of EKAE’s energy
consumption records and invoices from utilities to U.S. Energy Services.


 


5.     TERM OF THE AGREEMENT;
TERMINATION:  This
Agreement shall begin upon execution and shall continue month-to-month
thereafter until it is terminated. Either party may terminate this Agreement at
any time and for any reason, without recourse to the other party, by giving a
sixty-day (60) prior written notice to the other party.


 

















 


	
  EKAE
  Agency Agreement

  	
   

  	
  EKAE’s Initials  /s/

  
	
   

  	
   

  	
  U.S. Energy’s Initials  /s/

  



 


6.
SERVICES: U.S. Energy shall
perform the following services for EKAE:


 


a)             Solicit bids for, negotiate, execute, and
administer NAESB and ISDA natural gas contracts and electric supply
contracts.  Administration of said
contracts shall include:


•        Placing daily
and monthly nominations and transactions


•        Providing
timely notices


•        Review past and
future invoices


 


b)            Solicit bids for, negotiate, execute, and
administer Commodity Account Agreements for natural gas and electricity.
Administration of said contracts shall include:


•        Placing and executing orders for New York
Mercantile Exchange traded products.


•        Providing timely notices


•        Review past and future bills


 


c)             Negotiate, execute and
administer interstate natural gas and electric transportation contracts.
Administration of said contracts shall include:


•        Providing daily
and monthly nominations


•        Receiving
curtailment notifications


•        Managing daily
and monthly imbalances


•        Requesting and
negotiating pipeline taps


•        Reviewing invoices for accuracy, approving
for payment, and making payment


•        Providing timely notices


 


d)            Negotiate, execute, and administer utility
natural gas and electric distribution contracts.  Administration of said contracts shall include:


•        Providing daily
and monthly nominations


•        Receiving
curtailment notifications


•        Managing daily
and monthly imbalances


•        Reviewing invoices for accuracy, approving
for payment, and making payment


•        Negotiating and resolving all discrepancies
including imbalances


•        Providing timely notices


 


e)      Perform other related services requested by EKAE


 


7.
CONFIDENTIALITY:


 


a)     Nondisclosure: U.S. Energy shall not divulge to any other
person or party any information developed by U.S. Energy hereunder or revealed
to U.S. Energy pursuant to this Agreement, unless such information is (a) already
in U.S. Energy’s possession if such information is not known by U.S. Energy to
be subject to another Confidentiality Agreement, or (b) is or becomes generally


 


2

















 


available
to the public other than as a result of an unauthorized disclosure by U.S.
Energy, its officers, employees, directors, agents or its advisors, or (c)
becomes available to U.S. Energy on a non-confidential basis from a source
which is not known to be prohibited from disclosing such information to U.S.
Energy  by legal, contractual or
fiduciary obligation to the supplier, or (d) is required by U.S. Energy to be
disclosed by court order, or (e) is permitted by EKAE. All such information
shall be and remain the property of EKAE unless such information is subject to
another Confidentiality Agreement, and upon the termination of this Agreement,
U.S. Energy shall return all such information upon EKAE request.


 


b) Protection of
Information About EKAE.  U.S.
Energy agrees to inform its employees who work with EKAE of the requirements of
this Section 7 U.S. Energy also agrees to protect information about EKAE
with the same degree of diligence that U.S. Energy uses to protect its own
confidential information.


 


 


	
   

  	
  Sincerely,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. ENERGY SERVICES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Todd D.
  Overgard

  	
  (signature)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:  

  	
  Todd D. Overgard

  	
  (print)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:  Chief Operating
  Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Accepted and agreed to this 15th day

  	
   

  
	
   

  	
  of March, 2004.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EAST KANSAS AGRI-ENERGY, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ William R. Pracht

  	
  (signature)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  William R. Pracht

  	
  (print)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:  Chairman

  	
   

  
							



 


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