Document:

exv10w3

 

Exhibit 10.3

AQUILA, INC. d/b/a AQUILA NETWORKS

LARGE VOLUME TRANSPORTATION

SERVICE AGREEMENT

(Iowa)

                  
                  
                  
                  
                         December JR

     This Agreement is entered into effective the 6th day of October 2004, by and
between Aquila, Inc., d/b/a Aquila Networks (“Company”) and Amaizing Energy Corporation, L.L.C.
(“Customer”), whose service address is Hwy 30, Denison, Iowa 51442.

     Whereas, Customer has obtained or will obtain supplies of natural gas and desires Company to
receive such natural gas and transport and deliver such gas to Customer, and to provide certain
other related services to Customer; and

     Whereas, Company is willing to provide natural gas transportation and related services to
Customer, subject to the terms and conditions set forth herein.

     Now, therefore, in consideration of the above premises and the covenants contained herein,
Company and Customer agree as follows:

     1. Availability: Service under this Agreement is available to any large volume
non-general service end-use customer who purchases gas supplies that can be transported on a firm
or interruptible basis by Company. Service hereunder shall be offered on a non-discriminatory firm
and/or interruptible basis contingent on adequate system capacity. Customers electing
interruptible service must sign an affidavit confirming the customer has an alternate fuel
capability or is willing to discontinue gas service during the period of curtailment. Large volume
customers who convert to transportation service will be required to take assignment to pay for, at
the option of the Company, firm interstate pipeline capacity and supplies designated by Company for
a period of up to one year. Service will be provided on a firm basis only if Customer has arranged
firm transportation for such gas supplies on the interstate pipeline serving Company’s distribution
system. Customer represents that it meets the service availability requirements for transportation
service under this Agreement.

     2. Service Considerations: Service hereunder is provided by Company pursuant to its
Transportation Rate Schedule, Sheet Nos. 61 through 61G and pursuant to the General Rules,
Regulations, Terms and Conditions, all as contained in Company’s Gas Tariff on file with the Iowa
Utilities Board (“IUB”), as the same may be amended, modified or superseded from time to time (the
“Tariff”). All Large Volume transportation customers must have the Company install telemetry
equipment at the customer’s expense. The Company will offer financing for periods up to 90 days
interest free. The Company will offer financing with interest to a customer to pay for the
installation of telemetry equipment for a period of more than 90 days but not more than 12
consecutive months on a non-regulated basis. The telemetry equipment and any other improvements
made by the Company shall remain the property of the Company and will be maintained by the Company.

     Delivery of natural gas by Company shall be at such varying pressures as may exist under
operating conditions in the pipeline of Company at the point of delivery. For the sale the

 

 

delivery pressure to the customer will be 60 pounds per square inch gauge absent of any force
majeure situations.

     3. Charges: Customer shall be responsible for and shall pay to Company the following
charges for the periods indicated or as otherwise applicable:

	 	 	 	 	 
	 
	 	 	 	 
	Applicable Sales Tariff:

	 	LVI

	 
	 	 	 	 
	Customer Charge:

	 	$150 per month per facility for administrative costs
relating to transportation, plus the basic monthly
charge according to the applicable sales rate tariff for
which Customer would otherwise qualify, subject to
change as may be approved by the IUB from time to time.
“Facility” shall include all meters serving buildings
under common ownership behind the same town border
station (“TBS”).

	 
	 	 	 	 
	Daily Firm Units:

	 	4,210
	 
	 	 	 	 
	Capacity Charge:

	 	If applicable, the amount is set forth in Customer’s
regular sales tariff schedule.

	 
	 	 	 	 
	Commodity Charge:

	 	All volumes received by Customer hereunder shall be
charged a rate equal to the tariff margin component of
Company’s rate then in effect under its sales rate
schedule for such Customer. In addition, Customer must
pay for all fixed gas costs assigned to Customer in the
regular sales tariff rate. Fixed gas costs could
include but are not limited to the following: Daily
Firm Capacity Charges, and Annual Cost Adjustment
Charges.

	 
	 	 	 	 
	 

	 	Additional costs will be assigned as they are authorized by the FERC or the
IUB to be charged for transportation services, including but not limited to
take-or-pay costs, TCR costs, and GRI costs. In addition, all volumes
delivered from system gas supply shall be charged the rate set forth in the
appropriate Company’s sales tariff schedule.

	 
	 	 	 	 
	Reconnect Charge:

	 	An end-use customer receiving transportation service
without system supply reserve service must pay a $5
reconnection charge when such customer requests to
return to Company’s system supply.

	 
	 	 	 	 
	Optional Services:

	 	The following service, described in Company’s Tariff
Sheet 61B, is available at Customer’s option:

	 
	 	 	 	 
	 

	 	_________ Aggregation Service

     Customer has initialed which of the above listed optional services, if any, are desired by
Customer and agrees to pay the charges associated therewith according to and as set forth in
Company’s Tariff. Customer shall, upon request of Company, execute such agreements as Company
deems necessary or appropriate to effectuate the above services.

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     4. Term: This Agreement shall remain in effect for a primary term of Ten (10 years
from the date service commences hereunder, and thereafter from year to year until canceled by
either party on six (6) months prior written notice to the other party. Notwithstanding the
provisions of this Section, Customers transporting gas for seasonal non-winter peaking purposes
lasting less than six months shall be allowed to transfer to sales service at any time after
providing one month written notice, and do not have to be on transportation service for any
specific period of time.

     5. Balancing: Customer agrees that nominated volumes and actual receipt and delivery
volumes must balance. Customer is responsible for: (a) providing nominations which accurately
reflect Customer’s expected consumption, and (b) balancing volumes consumed at the delivery points
with deliveries to Company’s system. Failure to fulfill these responsibilities will result in
Customer incurring balancing and/or scheduling charges described in Company’s Transportation Rate
Schedule, which charges shall be in addition to any Company charges, and which charges shall change
as the interstate pipeline changes its rates.

     6. Pipeline Charges; Capacity Assignment: Any charges Company incurs from a pipeline
on behalf of Customer will be passed through to Customer. Such charges may include but are not
limited to any other charges referenced in Sections 5 and 8 of this Agreement.

     7. Nominations: Customers are required to nominate daily. Customers requesting
volumes to flow on the first day of any month must contact Company’s Gas Control Department via
Company’s Internet-enabled electronic bulletin board, known as Gas Track Online
(http://www.gastrackonline.com), and inform them of the volumes to be transported by receipt
point(s) and delivery point(s). First of the month nominations and daily nominations via the
Internet are due by 11:30 a.m. Central Time one day before the gas flows. Intra-day nomination for
the 2nd through the 31st days of a month will be accepted until 5:00 p.m.
Central Time. A confirmed pipeline nomination will also be accepted on a best effort basis on the
day of gas flow. The Company shall have the right, in its sole discretion, to reject or change any
nomination that it deems is being made in order to take unfair advantage of any tariff provision,
including but not limited to, monthly cash out.

     8. Penalty for Unauthorized Takes When Service is Interrupted or Curtailed: If
Customer fails to curtail its use of gas hereunder when requested to do so by Company, Customer
shall be billed at the transportation charge, plus the cost of gas Company secures for Customer,
plus the greater of either pipeline daily delivery variance charges or $20 per Mcf for gas used in
excess of the volumes of gas to which Customer is limited. Company may in addition disconnect
Customer’s supply of gas in the event of Customer’s failure to curtail its use thereof when
requested by Company to do so.

     9. Billing and Payment: Bills shall be calculated in accordance with the applicable
rate schedule each month and shall be payable monthly. Upon request, Company shall give Customer
the approximate date on which Customer should receive its bill each month, and if a bill is not
received or is lost, Company shall, upon request, issue a duplicate. Failure to receive a bill
shall not relieve Customer from payment. The bill shall be considered rendered to Customer when
deposited in the U.S. Mail with postage prepaid. If delivery is by other than U.S. Mail, the

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bill shall be considered rendered when delivered to the last known address of the party
responsible for payment. Bills become delinquent if not paid within twenty (20) days after
rendering of the bill.

     Late payment penalties are assessed on the past due amount and shall not exceed one and
one-half percent (11/2%) per month of the past due amount. The penalty date shall be not less than
twenty (20) days after the rendering of the bill and shall be considered to have expired at office
opening time of the next day after the date indicated on the bill. If the penalty date falls on a
Saturday, Sunday or holiday, it will be extended to the next normal working day before the penalty
is assessed.

     10. Notices: Notices required or otherwise given under this Agreement, except notices
specifically allowed to be provided by facsimile, shall be given in writing and mailed by first
class mail to the other party at the addresses provided below:

	 	 	 	 	 	 
	 	 	 	 	 	 
	 	Company:	 	 	Customer:	 
	 	 	 	 	 	 
	 	Aquila, Inc.

	 	 	Company: Amaizing Energy LLC	 
	 	d/b/a Aquila Networks
	 	 	 	 
	 	Attention: Matt O’Reilly

	 	 	Attention: Al Jentz	 
	 	PO Box 68

	 	 	Address: 2404 West Highway 30	 
	 	1414 W. Broadway
	 	 	 	 
	 	Council Bluffs, IA 51501

	 	 	Denison, IA 51142	 
	 	 
	 	 	 	 
	 	Telephone: (712) 325-3001

	 	 	Telephone: 712-263-2676	 
	 	Fax: (712) 325-3038

	 	 	Fax: 712-263-4134	 
	 	 
	 	 	 	 
	 	Gas Supply Services Division
	 	 	 	 
	 	Attention: Marissa Birchard
	 	 	 	 
	 	1815 Capital
	 	 	 	 
	 	Omaha, NE 68102
	 	 	 	 
	 	Telephone: (402) 221-2673
	 	 	 	 
	 	Fax: (402) 829-2673
	 	 	 	 
	 	 	 	 	 	 

     11. Regulatory Commission Authority: The provisions of this Agreement are subject to
Company’s Tariff, all valid legislation with respect to the subject matter hereof and to all
present and future orders, rules, and regulations of the IUB and any other regulatory authorities
having jurisdiction over (i) the transportation of natural gas contemplated hereunder, or (ii) the
construction and operation of any facilities required to deliver said natural gas. Customer agrees
that Company shall have the right to unilaterally make and to file with any and all regulatory
bodies exercising jurisdiction, now or in the future, changes in rates or new rates or any other
changes to Company’s Tariff, and that Customer shall be bound by such changes or new rates as are
approved by such regulatory bodies. In the event of any conflict between the terms of this
Agreement and the Tariff, the Tariff shall control.

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     12. Acknowledgment of Transportation Risks: Customer hereby acknowledges and accepts
the following risks and requirements associated with transporting gas:

	 	(a)	 	the risk that Customer may incur penalties for unauthorized takes described in
Section 12 of Company’s Tariff Sheet No. 61G, balancing and scheduling charges pursuant
to Section 7 of Company’s Tariff Sheet No. 61D, and any charges Company incurs from the
pipeline on behalf of Customer; and
	 
	 	(b)	 	that Customer must stop using gas when notified by Company or by Customer’s gas
supplier of any interruption affecting Customer’s gas supply or transportation service.

     13. Entire Agreement: This Agreement and Company’s Tariff constitute the entire
agreement of the parties with respect to the subject matter hereof, and supersedes and replaces all
other prior or contemporaneous agreements between the parties regarding such subject matter.

     The parties have executed this Agreement effective the date first above written.

	 	 	 	 	 	 	 
	Aquila, Inc., d/b/a
Aquila Networks	 	Amaizing Energy Corp., L.L.C.

(Print customer name)
	 
	 	 	 	 	 	 
	By:

	 	/s/ Ivan Vancas
	 	By
	 	/s/ Sam J. Cogdill
	 

	 	 
	 	 	 	 
	 

	 	Name:  Ivan Vancas
	 	 	 	Name: Sam Cogdill
	 

	 	Title:   Operating VP
	 	 	 	Title:   President

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ADDENDUM TO

LARGE VOLUME TRANSPORTATION

SERVICE AGREEMENT

                  
                  
                  
                  
                  
                     December JR

     This Addendum is made and entered into effective the 6th day of October 2004,
by and between Aquila, Inc., d/b/a Aquila Networks (“Company”) and Amaizing Energy, L.L.C.
(“Customer”).

     WHEREAS, Company and Customer have entered into an Large Volume Transportation Service
Agreement dated December October 6, 2004 JR (the “Transportation Agreement”) pursuant to
which Company agreed to transport on its distribution system quantities of gas on behalf of
Customer on an interruptible basis, on the terms and conditions specified in the Transportation
Agreement; and

     WHEREAS, Company and Customer desire to amend certain provisions of the Transportation
Agreement.

     NOW THEREFORE, the parties agree as follows:

     1. Minimum Annual Throughput and Rate. Customer agrees to transport, under the
Transportation Agreement, an annual total of at least 1, 306,153 MMBtu (“Minimum Annual
Throughput”) during the period January 1, 2006 through December 31, 2015. Customer shall be
responsible and shall pay to Company the following charges for the periods indicated or as
otherwise applicable:

	 	 	 
	Customer Charge:

	 	$150.00 per month
	 
	 	 
	Monthly Transportation Charge:

	 	$150.00 per month
	 
	 	 
	Firm Demand Charge:

	 	$2,109.21 per month (Maximum Daily Quantity
of 4,210 MMBtu times $0.501)
	 
	 	 
	Commodity Charge:

	 	For all gas transported by Customer under
the Transportation Agreement, including the
Minimum Annual Throughput, Customer shall
pay Company the Company’s regulated margin
(“Commodity Charge”). The Commodity Charge
for years 1 through 5 shall be
$0.035/MMBtu. For years 6-10 the
respective Commodity Charge shall be
$0.03605, $0.03713, $0.03939, $0.04.

     All other charges applicable to transportation service provided to Customer, as set forth in
Company’s tariff, shall apply to gas transported under the Transportation Agreement. If Customer
does not transport at least the Minimum Annual Throughput during the appropriate throughput
periods, Customer will pay at the end of each year to Company the appropriate rate multiplied by
the difference between the actual throughput and the Minimum Annual

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Throughput. Such payment shall not be used as a credit for any gas transported in years
subsequent to the throughput period.

     2. Transportation of Additional Quantities. Subject to the Transportation Agreement,
Company agrees to transport to Customer additional quantities of gas delivered to Company by or on
behalf of Customer to Company at such times that there is adequate distribution system capacity,
and according to Company’s currently effective tariff.

     3. Term. The Transportation Agreement shall remain in effect for ten (10) years from
the date service commences hereunder (“Original Term”). The terms of this addendum shall remain in
effect after the Original Term until a new agreement can be executed by both parties. The parties
agree to negotiate, in good faith, a replacement Transportation Agreement to be effective upon the
expiration of the Original Term.

     4. Penalty for Confiscation of Gas: If Company fails to deliver Customer’s gas, which
has been confirmed and delivered to the TBS for Customer’s use, and Company’s failure is not
otherwise excused by any provisions of the Transportation Agreement, a reason of force majeure, or
applicable interstate pipeline curtailment statutes and regulations, then Company will pay Customer
an amount equal t the undelivered volume times the Customers cost for the time frame of the
confiscation upon customer presenting verifiable costs to the Company.

     5. Regulatory Jurisdiction. If any regulatory body directly or indirectly asserts
jurisdiction and significantly changes the rules and regulation applicable to the Transportation
Agreement, which thereby makes performance hereunder commercially impracticable by either Party,
then the party so affected shall have the right to terminate the Transportation Agreement upon
thirty (30) days written notice to the other.

     6. Effect of Addendum. Except as otherwise provided herein, the Transportation
Agreement shall remain in full force and effect according to their respective terms.

     IN WITNESS WHEREOF, the parties have executed this Addendum as of the date first above
written.

	 	 	 	 	 	 	 
	Aquila, Inc., d/b/a
Aquila Networks	 	Amaizing Energy, L.L.C.

(Print customer name)
	 
	 	 	 	 	 	 
	By:

	 	/s/ Ivan Vancas
	 	By
	 	/s/ Sam J. Cogdill
	 

	 	 
	 	 	 	 
	 

	 	Name: Ivan Vancas
	 	 	 	Name: Sam Cogdill
	 

	 	Title:   Operating VP
	 	 	 	Title:   President

7exv10w4

 

Exhibit 10.4

ASSIGNMENT and PLEDGE AGREEMENT

(Electric Service Agreement)

     Amaizing Energy, LLC (“Assignor”), an Iowa limited liability company, for valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, hereby grants,
pledges, and assigns to CoBank, ACB (“Assignee”), all of Assignor’s right, title and interest in
and to:

That certain Agreement for Electric Service (“Agreement for Electric Service”) between
Assignor, and Harrison County Rural Electric Cooperative. (“Harrison County REC”) dated as
of October 29, 2004, pursuant to which the Harrison County REC will transmit and distribute
electric power and energy to Assignor pursuant to the terms contained in such Agreement for
Electric Service

to secure payment and performance of all obligations of Assignor to Assignee under that certain
Master Loan Agreement, that certain Construction and Revolving Term Loan Supplement, that certain
Statused Revolving Credit Supplement, and that certain Non-Revolving Credit Supplement, all between
Assignor and Assignee, which by this reference are made a part hereof.

     It is the intention of Assignor that by this assignment Assignee shall acquire all of the
rights previously enjoyed by Assignor as owner under the Agreement for Electric Service and that
Assignee shall be a secured creditor holding a security interest in the Agreement for Electric
Service.

     Assignor agrees to execute such other documents as may reasonably be requested by Assignee,
from time to time to evidence the above and foregoing assignment.

	 	 	 	 	 
	Dated: February  11 , 2005 	Amaizing Energy, LLC

 	 
	 	By:  	/s/ Sam J. Cogdill
 	 
	 	 	Samuel Cogdill, Chairman 	 
	 	 	 	 

 

 

	 	 	 	 	 

By its execution hereof, Harrison County Rural Electric Cooperative consents to and acknowledges
the foregoing collateral assignment of the described agreement.

	 	 	 	 	 	 	 	 	 
	 	 	Harrison County Rural Electric Cooperative	 	 
	 
	 	 	 	 	 	 	 	 
	Dated February          , 2005

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	STATE OF IOWA                     )
	 	 	 	 	 	 	 	 
	                                                      )ss.
	 	 	 	 	 	 	 	 
	COUNTY OF CRAWFORD      )
	 	 	 	 	 	 	 	 

     On this 11th day of February, 2005, before me, the undersigned, a Notary
Public personally appeared Samual Cogdill, Chairman of Amaizing Energy,LLC on behalf of said
entity, who executed the foregoing instrument, and acknowledged that he executed the same as his
voluntary act and deed.

	 	 	 	 	 
	 	 	 	 	 
	 	SEAL     ANGEL R. JEPSEN

	 	 	                                        /s/ Angel Jepsen     
	 	Commission Number 727183

	 	 	                              Angel Jepson      Notary Public
	 	My Commission Expires

	 	 	In and for said State
	 	March 2, 2007

	 	 	My commission expires: March 2, 2007
	 	 	 	 	 

	 	 	 
	STATE OF                                  )

	 	 
	                                                      )ss.
	 	 
	COUNTY OF                               )
	 	 

     On this                      day of February, 2005, before me, the undersigned, a Notary Public, personally
appeared                                         , the                                          of Harrison County Rural Electric Cooperative on behalf of said entity, who executed
the foregoing instrument, and acknowledged that s/he executed the same as his/her voluntary act and
deed.

                                
                                                 

                                                                                 Notary Public

In and for said State

My commission expires:

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