Document:

exv10w9

 

Exhibit 10.9

CORNERSTONE

ENERGY

BASE AGREEMENT

	 	 	 
	Seller:

	 	Cornerstone Energy, Inc.
	 

	 	11011 Q Street
	 

	 	Suite 106A
	 

	 	Omaha, NE 68137
	Contact:

	 	John Markham
	Phone:

	 	(563) 556-9018
	Fax:

	 	(563) 556-1923
	 
	 	 
	Buyer:

	 	West Dubuque Bio Diesel, LLC
	 

	 	10749 James Meier Road
	 

	 	Farley, IA 52046
	Contact:

	 	Ed Recker
	Phone:

	 	563-744-3554
	Fax:
	 	 

Dated December 15, 2006

Agreement Number: 17998

     This Agreement incorporates and is subject to the Terms and Conditions attached hereto and has
been executed as of the date first written above. This Base Agreement supersedes and replaces all
existing or previously executed Base Agreements and amendments thereto.

	 	 	 	 	 	 	 	 	 	 	 
	Seller: Cornerstone Energy, Inc.	 	Buyer: West Dubuque Bio Diesel, LLC
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Mark Straub
 

	 	 	 	By:
	 	/s/ Joyce Jarding
 

	 	 
	Title: Vice President, Sales	 	Title: Secretary

 

 

GENERAL TERMS AND CONDIITONS

ARTICLE 1. PURPOSE AND DEFINITIONS

1.1 This Base Agreement for Natural Gas Sale Transactions (“Agreement”) establishes mutually agreed
and legally binding terms governing purchases, sales and exchanges of Natural Gas, made between
Buyer and Seller during the period this Agreement is in effect As used herein, the term “Buyer”
refers to the party purchasing and accepting delivery of Gas and the term “Seller” refers to the
party selling and making delivery of Gas.

1.2 (a) All transactions are entered into in reliance on the fact that this Agreement and all
transactions form a single agreement between the Parties. For each transaction entered into between
the Parties, Seller will prepare an Ordering Exhibit reflecting agreed upon terms and forward that
Ordering Exhibit to Buyer

     (b) If the Ordering Exhibit is contrary to Buyer’s understanding of the transaction, then
Buyer agrees to notify Seller within two (2) business days of the date of the Ordering Exhibit.
Buyer understands and agrees that its failure to so notify Seller constitutes Buyer’s agreement to
the transaction set out in the Ordering Exhibit.

     (c) The Parties agree that fax signatures on any Ordering Exhibit will be accepted by each
Party as original signatures.

     (d) Except for items noted in Article 9, if there is a conflict between the Ordering Exhibit
and this Agreement, the Ordering Exhibit will control.

	1.3	 	The terms of this Agreement shall, unless specifically agreed otherwise, apply to and are
incorporated in the following transaction types:

     (a) Firm: If sales under this Agreement are designated as “Firm”, then deliveries and
receipts of gas under this Agreement may not be interrupted except for reasons of Force Majeure or
curtailment on Buyer’s LDC. The Parties agree to make and accept deliveries of gas on a
non-interruptible basis up to Buyer’s MDQ. If Seller interrupts Buyer for reasons other than Force
Majeure or a curtailment by Buyer’s LDC, Buyer’s exclusive remedy shall be that Buyer may recover
damages as provided in Article II.

     (b) Secondary Firm: If sales under this Agreement are designated as
“Secondary Firm”, then the Parties have agreed to make and accept deliveries of gas on a
best-efforts basis up to Buyer’s MDQ. Seller may interrupt its performance without liability to
Buyer to the extent that one or more of the following conditions are present: i) Force Majeure; ii)
curtailment by Buyer’s LDC; iii) curtailment of supply by a gas supplier, iv)curtailment of storage
by a storage provider; v) curtailment of transportation by a transporter, including, but not
limited to, transportation between secondary firm points; vi) recall of transportation capacity
release by its releasor; vii) curtailment of gas production behind a specific meter. If Seller
interrupts for any other reason, Buyer’s exclusive remedy shall be that it may recover damages as
provided in Article 11.

     (c) Interruptible: If sales under this Agreement are designated as “Interruptible”,
then Seller may interrupt Buyer at any time for any reason. The Parties have agreed to make and
accept deliveries of gas on a daily basis without any obligation other than Buyer’s obligation to
take and to pay for the gas it nominates on a daily basis, and Seller’s obligation to bill Buyer
for the gas Seller delivers at the price specified in the Ordering Exhibit

1.4 “MDQ” means Buyer’s maximum daily quantity as specified in the Ordering Exhibit. If the MDQ has
not been specified in the Ordering Exhibit and if Buyer has contracted for Firm or Secondary Firm
service, Buyer’s MDQ for each month shall be calculated by dividing the monthly contract volume
specified on the Ordering Exhibit by 25 days.

1.5 “OFO” (Operational Flow Order) or “PODB” (Period of Daily Balancing) shall mean an event where
a monthly balanced pipeline or LDC requires balancing on a daily basis. If, in the event an OFO or
PODB is issued by the interstate pipeline or LDC, Buyer’s MDQ will be restricted to Buyer’s first
of the month confirmed nomination over the duration of the OFO or PODB.

1.6 “SOL” (System Overrun Limitation) shall mean an event where a daily balanced pipeline or LDC
calls a critical day due to operational problems, capacity constraints, or any other cause.

ARTICLE 2. TERM

2.1 Unless terminated earlier pursuant to any other provision of this Agreement, the term of this
Agreement shall be for a two (2) year period commencing on the date first written above, and shall
continue month to month thereafter until terminated by either Party upon thirty (30) days prior
written notice to the other, provided, however, that if one or more Ordering Exhibit(s) are in
effect, termination under this Article 2 shall not be effective for such Ordering Exhibit(s) until
the expiration of the term of such Ordering Exhibit(s).

ARTICLE 3. QUANTITY

3.1 Seller agrees to sell and make delivery of and Buyer agrees to purchase and accept delivery of
the contract volume specified in the Ordering Exhibit in accordance with the terms of the specified
transaction.

ARTICLE 4. CONTRACT PRICE

4.1 Unless otherwise indicated in the Ordering Exhibit, the contract price is stated in MMBtu. In
the event a transporter changes any rates (e.g., Btu factor, fuel, demand charges, transportation
charges) related to the delivery of gas hereunder, the contract price for such gas shall likewise
change effective the date of the rate change by such transporter. Unless otherwise provided for in
the Ordering Exhibit or associated Monthly Balancing Agreement, the per MMBtu charge for all gas
supplies taken in excess of the monthly contract volume

 

 

shall equal either the highest posted daily price as published in Gas Daily’s “Daily Price Survey”
or the first of the month Index as published in Inside F.E.R.C. Gas Market Report (IFGMR) for
natural gas from the same region and pipeline as the delivery point(s), plus all applicable
pipeline charges. Unless otherwise provided for in the Ordering Exhibit or associated Monthly
Balancing Agreement, the per MMBtu credit for all gas supplies not taken shall equal either the
lowest posted daily price as published in Gas Daily’s “Daily Price Survey” or the first of the
month Index as listed in TFGMR for natural gas from the same region and pipeline as the delivery
point(s).

4.2 In the event Buyer fails to take receipt of any quantity of gas for which Seller has obtained
or entered into financial risk management contracts, regardless of the transaction type, Buyer
shall reimburse Seller the difference, if any, between a) the Contract Price multiplied by that
portion of the volume not taken by Buyer and b) the price obtained by Seller in a sale of such
quantity to a third party(ies) or the repurchase of such quantity, or part thereof, by the Seller.
Sales or repurchases conducted by Seller to mitigate Buyer’s loss will be conducted by Seller in a
commercially reasonable manner. If such sale or repurchase does not occur, Buyer will pay to Seller
an amount sufficient to keep Seller whole under its risk management contracts. In addition, Buyer
shall reimburse Seller for all of Seller’s incremental costs associated with Buyer’s failure to
take or accept delivery of gas.

4.3 In the event an OFO, SOL or similar critical day is in effect, Seller shall have the right to
bill all gas supplies nominated above the first of the month nomination at the highest Gas Daily
index price for the days in question, plus all applicable pipeline charges. All such gas will be
considered first through the meter.

4.4 Where natural gas sales are made on a Secondary Firm basis, Seller will base Buyer’s Contract
Price upon the acquisition of released firm pipeline capacity. Seller shall use commercially
reasonable efforts to acquire such released firm pipeline capacity. To the extent such released
firm pipeline capacity is unavailable to Seller or unattainable by Seller due to prevailing market
conditions, Seller shall have the right to pass on incremental pipeline transportation costs to
Buyer that are incurred by Seller. Total pipeline transportation charges will not exceed the
maximum FERC approved tariff charges of the applicable pipeline.

ARTICLE 5. NOMINATIONS, SCHEDULING, AND BALANCING

5.1 Nominations are due from Buyer to Seller no later than 24 hours prior to the nomination
deadline of the applicable transporter for gas volumes to flow at the beginning of the month, or
for any nomination change. The Ordering Exhibit shall set forth which of the parties is responsible
for nominations, scheduling, and daily balancing with various gas suppliers and transporters. If
the Ordering Exhibit is silent on those responsibilities, then Buyer will be responsible for
nominating, scheduling, and daily balancing. With respect to these responsibilities that Buyer
retains, Seller shall bear no liability to Buyer or any of Buyer’s gas suppliers or transporters.
With respect to these responsibilities assumed by Seller under the Ordering Exhibit, Seller will
rely on the accuracy and timeliness of information from Buyer regarding its current nominations.
Buyer’s failure to timely communicate to Seller any changes to its daily nomination will entitle
Seller to recover from Buyer any resulting imbalance or overrun charges, penalties and fees
assessed by a supplier or transporter to Seller. Timeliness shall include, but not be limited to,
communicating as soon as reasonable and sufficiently in advance of supplier and transporter
deadlines to permit Seller to act. Seller is not responsible for any penalties caused by variances
between the gas scheduled and the gas burned by Buyer unless a Daily Balancing Agreement has been
executed between the parties, in which case the Daily Balancing Agreement will specify the extent,
if any, of Seller’s obligation for this variance. Gas taken in excess of the Maximum Daily Quantity
during a period of curtailment without prior authorization shall be unauthorized and shall be paid
for by the Buyer at the higher of the sum of all associated penalty and other charges from Seller’s
suppliers and transporters, or the Contract Price in 4.7 above.

5.2 If Buyer fails to communicate a daily nomination on a timely basis to Seller, Seller shall
nominate Buyer’s monthly contract volume divided by the number of days in the month.

ARTICLE 6. TITLE AND RISK OF LOSS

6.1 Seller shall hold title to the gas up to the Delivery Point. Buyer shall hold title to the gas
at the Delivery Point and downstream thereof. Each party shall bear the risk of loss during the
time that such party holds title to the gas.

ARTICLE 7. TAXES

7.1 Seller shall be responsible for payment of all taxes with respect to the gas prior to the
delivery of such gas at the Delivery Point(s). Buyer will be responsible for payment of all taxes
at and after delivery of the gas at the Delivery Point(s). If a party is required to remit or pay
taxes that are the other party’s responsibility hereunder, the party responsible for such taxes
shall promptly reimburse the other party for such taxes. Reimbursement to Seller shall include, but
not be limited to, taxes charged by an LDC when Seller is acting as Buyer’s LDC bill-paying agent.
Buyer shall indemnify, defend, and bold harmless Seller from any claims for such taxes.

7.2 If applicable, Buyer shall pay all sales and use taxes, gross receipts taxes, franchise fees or
similar taxes and fees in addition to the price stated in the Ordering Exhibit. In the event that
Buyer claims tax exemption, Buyer shall provide Seller with exemption certificate(s) in a form
acceptable to the appropriate taxing authority. If such certificate or other proof of exemption is
not provided for a Particular transaction, Seller shall add the non-exempt tax to Seller’s invoice
to be paid by Buyer.

ARTICLE 8. CREDIT REQUIREMENTS

8.1 Each party shall meet or exceed the other’s credit requirements during the term of this
Agreement, and shall provide any financial

 

 

information available as reasonably requested by the other party for its credit evaluation(s). The
parties’ credit requirements may include, but shall not be limited to, prepayments, a parental
guaranty, a letter of credit, or a margin account. Seller reserves the right to request such credit
arrangements before and during the term of the Agreement. Should Buyer fail to provide satisfactory
security to Seller, then Seller, in its sole discretion, may terminate this Agreement and
immediately suspend deliveries hereunder.

8.2 In the event Buyer shall (i) make an assignment or any general arrangement for the benefit of
creditors; (ii) default in the payment or performance of any obligation to Seller under any
transaction(s); (iii) file a petition or otherwise commence, authorize, or acquiesce in the
commencement of a proceeding or cause under any bankruptcy or similar law for the protection of
creditors or have such petition filed or proceeding commenced against it; (iv) otherwise become
bankrupt or insolvent (however evidenced); (v) be unable to pay its debts as they fall due; or (vi)
fail to give adequate security for or assurance of its ability to perform its further obligations
under any transaction within twenty-four (24) hours of a reasonable request by Seller; (vii) is
downgraded below a rating of “BBB-” by Standard & Poor’s Rating Group or its successor or below a
“Baa3” by Moody’s Investors Service or its successor, then Seller shall have the right to withhold
or suspend deliveries under any or all currently effective transaction(s) between the Parties or
terminate this Agreement and all transactions, or both, without prior notice, in addition to any
and all other remedies available hereunder or pursuant to law.

ARTICLE 9. BILLING

9.1 Buyer shall be billed based on the monthly contract volume stated in the Ordering Exhibit,
trued up to actual consumption or scheduled quantities at the delivery point.

9.2 Seller shall have the right to bill based on estimated volumes and true up to actuals when
those become available.

9.3 If not otherwise indicated in the Ordering Exhibit, the following shall be deemed to apply: i)
billing units shall be in MMBTU, ii) the billing volume shall be equal to the actual MMBtu
consumption, iii) the transaction type for any contract period shall be Secondary Firm, and (iv)
the delivery point shall be Buyer’s city gate.

9.4 Buyer shall be billed at the Contract Price and other charges as provided in this Agreement,
including, but not limited to, imbalance or overrun charges, penalties, and fees assessed by a
supplier or transporter and which are the responsibility of the Buyer.

ARTICLE 10. PAYMENT

10.1 Payment from Buyer to Seller of the full amount of Seller’s invoice shall be due within ten
(10) days of the invoice date (“Due Date”) at the herein-noted address. Payments shall be made by
wire transfer or by check. Commencing on the day following the Due Date, interest shall accrue at
the rate in Article 10.3 until the invoice is paid. Seller shall impose a 825.00 charge on all
ranted checks.

10.2 If Buyer disputes, in good faith, any portion of Seller’s invoice, Buyer shall pay the amount
invoiced and then notify Seller in writing of the disputed amount. If it is determined that any
disputed amount is owed to Buyer, then Seller shall reimburse such amount, plus interest, at the
rate specified in Article 10.3 from the original payment date.

10.3 Commencing on the day following the Due Date, interest shall accrue at 1 1/2% per month until
the same is paid, provided, however, such rate shall not exceed the maximum rate established by
law. Seller shall have the right to terminate this Agreement or any transactions hereunder if any
bill remains unpaid for ten (10) days after the Due Date thereof or if Buyer breaches any other
term or condition of this Agreement and fails to remedy or correct the same, within forty-eight
(48) hours after receipt of written notice of such default from. Seller. Suspension of gas under
this Section shall be in addition to any and all other remedies available in this Agreement. Buyer
shall pay all costs and expenses (including attorney’s fees) incurred by Seller in collecting any
unpaid amounts owed by Buyer.

ARTICLE 11. LIABILITY AND INDEMNIFICATION

11.1 EXCEPT AS SET FORTH HEREIN, THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE
EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES
HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED,
SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S
LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR. DAMAGES AT LAW
OR IN EQUITY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR IN A
TRANSACTION, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT
ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR
IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR
CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS
INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE.
IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF
DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY
PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT

 

 

OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE
LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR
OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER
CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS.

11.2 In the event Seller fails to comply with its obligations as specified in Article 1.1, Seller
shall reimburse Buyer within ten (10) days of receipt of an invoice and supporting detail from
Buyer for the difference between the Contract Price for the gas not delivered and the purchase
price paid by Buyer for replacement gas, adjusted for reasonable incremental transportation costs,
multiplied by that portion of the quantity not delivered. Buyer shall use commercially reasonable
efforts to obtain gas at the lowest price possible for the delivery area.

11.3 If Buyer fails to take its monthly contract volume, Buyer will be liable for any and all firm
transportation charges related to Buyer’s supply, which shall be billed in addition to the price of
natural gas supply if such charges have not previously been included in the Contract Price.

11.4 Neither Party shall be liable to the other Party for losses or damages which result from (i)
an event of Force Majeure preventing performance under this Agreement; or (ii) Claims made against
such other Party by third parties due to the performance or non-performance of this Agreement,
whether such Claims arise in contract, tort or otherwise; or (iii) the death of or bodily injury to
such other Party’s employees, contractors or agents or damage to such other Party’s property due to
the performance or nonperformance of this Agreement.

11.5 Each Party shall indemnify and hold the other Party and its directors, officers, agents,
employees and contractors harmless from and against any and all claims, damages, costs (including
attorneys’ fees), fines, penalties, liabilities, actions or proceedings in tort, contract or
otherwise which the indemnified Party may be required to pay to, or which are asserted or brought
by, the indemnifying Party’s employees, contractors or agents or third parties providing services
to or receiving services from the indemnifying Party, arising from or claimed to have arisen from
the performance or non-performance of this Agreement by the indemnifying Party.

11.6 Notwithstanding any other provision in this Agreement, in no event shall a party be liable for
any penalties or charges assessed by any transporter for the unauthorized receipt of gas by the
other party.

ARTICLE 12. FORCE MAJEURE

12.1 It is agreed that if a party gives written notice of an event of Force Majeure to the other
party as soon as reasonably possible the obligations of the party giving such notice, to the extent
such party is affected by such event, shall be suspended from the inception and during the
continuance of the Force Majeure. The cause of the Force Majeure shall be remedied with reasonable
diligence and dispatch.

12.2 “Force Majeure” means an event not within the control of the party claiming it and claiming
suspension of this Agreement. It shall include, but not be limited to, acts of God, landslides,
lightning, earthquakes, fires, storms, hurricanes, floods, washouts, explosions, terrorism, low
temperatures causing freezing or failure of wells or lines of pipe, curtailment of firm
transportation or gas storage, strikes, lockouts, riots, sabotage, insurrections, wars, or other
actions of governmental authorities.

12.3 If the price for the gas, or any portion of it, purchased under this Agreement has been fixed
or hedged by Seller pursuant to one or more risk management contracts, then Buyer’s obligations
shall not be excused by any event of Force Majeure; however, Seller shall have the obligation to
attempt resale of such hedged position as provided in Article 4 of this Agreement In no event will
an event of Force Majeure excuse Buyer’s obligation to pay directly or reimburse Seller for
imbalance or overrun charges, penalties, and fees assessed by a supplier or transporter. Nothing
contained herein shall require a party to settle any labor dispute. Force Majeure shall not excuse
Buyer from taking or paying for volumes of natural gas at fixed charges or subject to related
financial instruments.

ARTICLE 13. REGULATION

13.1 This Agreement is subject to all valid present and future laws, orders, rules, and regulations
of duly constituted authorities with jurisdiction. In the event any jurisdictional body asserts
jurisdiction over this Agreement or imposes or changes regulations, regardless of whether Seller is
the entity being regulated, which materially impact the Seller’s economic benefit under this
Agreement, Seller may terminate this Agreement on thirty (30) days’ written notice to Buyer. If
either party’s activities hereunder become subject to law or regulation of any kind which renders
this Agreement illegal, unenforceable, or uneconomical to perform, then either party shall at such
time have the right to terminate this Agreement upon written notice to the other party.

ARTICLE 14. SHIPPER SERVICES

14.1 To the extent necessary according to the delegation of responsibility for nominating,
scheduling, and daily balancing as designated in the Ordering Exhibit, Seller will provide shipper
services for Buyer, for the purpose of procuring Buyer’s gas supplies, including taking title to
such gas for Buyer, scheduling Buyer’s daily and monthly requirements of natural gas with
transporters, negotiating, arranging, and managing Buyer’s contracts with transporters and
receiving and paying billing statements for all gas commodity and transportation charges. Buyer
agrees to execute such documents as may be required by transporters to allow Seller to

 

 

provide such shipper services. Buyer shall ultimately be responsible for payment of all costs and
charges incurred by Seller in providing shipper services for Buyer.

ARTICLE I5. SUCCESSION AND ASSIGNMENT

15.1 The provisions of this Agreement will be binding upon and inure to the benefit of the
successors and assigns of each of the Parties hereto. Buyer may not assign this Agreement to any
other person or entity without the prior written consent of Seller. Seller may assign this
Agreement at any time without having to obtain Buyer’s consent. Any consent required by this
Article 15.1 shall not be unreasonably withheld. No future assignment will in any way operate to
enlarge, alter or change any obligation of the non-assigning party under this Agreement.

ARTICLE 16. CONFIDENTIALITY

16.1 The terms of this Agreement and of any transactions shall be kept confidential by the Parties
hereto, except, and only to the extent any such information must be disclosed for the purpose of
effectuating gathering, transportation, or processing of the gas or as may be required to be
disclosed by regulatory bodies (including the NYMEX), or to vested interest owners. Any and all
information received by a Party pursuant to financial responsibility requirements will be held as
confidential and used only for the purpose for which such information was requested.

ARTICLE 17. NOTICES

17.1 Any notice, demand, request, or statement provided for in this Agreement shall be in writing
and shall be considered duty delivered when received by mail, facsimile, or nationally recognized
overnight courier, at the addresses for NOTICES shown below:

NOTICES

Cornerstone Energy, Inc.

Attn: Contract Administration

11011 “Q” Street, Suite 106A

Omaha, NE 68137

17.2 Check payment made to Seller shall be considered duly delivered when received by mail, or
overnight courier, at the address listed below:

CHECK PAYMENT

Cornerstone Energy, Inc.

P.O. Box 3366 Dept. 0850

Omaha, NE 68176

ARTICLE 18. MISCELLANEOUS

18.1 This Agreement shall be governed by and construed in accordance with the laws of the State of
Nebraska, without regard to principles of conflicts of laws.

18.2 The language used in this Agreement is the product of both parties’ efforts and each party
hereby irrevocably waives the benefit of any rule of contract construction which disfavors the
drafter of a contract or the drafter of specific language in a contract.

18.3 Any waiver of any default under this Agreement shall not be construed as a waiver of any
future defaults, whether of like or different character.

18.4 No action or claim, regardless of form, arising out of any transaction may be brought by
either Party more than two (2) years after the cause of action has arisen.

18.5 This Agreement constitutes the entire agreement of the parties regarding the subject matter
hereto and may not be altered, modified, or amended except in writing signed by both parties.
Alterations, modifications or amendments by Buyer to this Agreement that have not been agreed to
and initialed by Seller void Seller’s signature and terminate the Agreement.

18.6 This Agreement and any Ordering Exhibit may be executed by Seller with an electronic signature
and the parties agree such signature is legally effective and binding.

 

 

			
	 	 	 
	CORNERSTONE ENERGY	 	 
	 
	 	MPF Ordering Exhibit w/ Addendum
	11011 Q Street, Suite 106A, Omaha, NE 68137	 	 
	Sales Rep: John Markham	 	 
	Phone: (563) 556-9018 Fax: (563) 556-1923
	 	Page 1

This Managed Procurement Fund Ordering Exhibit confirms the agreement between Cornerstone Energy,
Inc. (Seller) and West Dubuque Bio Diesel, LLC (Buyer) regarding the purchase and sale of natural
gas as of December 15, 2006. The Ordering Exhibit is subject to the Terms and Conditions set forth
herein and in the Base Agreement between the parties.

Acct #:                      or X New AcctBase Agreement #: 17998 Ordering Exhibit #: 18000-REVISED

	 	 	 	 	 	 	 
	Contract Term	 	 	 	Transaction Type	 	MDQ
	Start June 1, 2007

	 	End: March 31, 2008
	 	X Firm o Secondary Firm
	 	o Interruptible

	 	 	 	 	 
	Delivery Point	 	Delivery Information	 	 
	o Into-the-Pipe

	 	Pipeline Name: Northern Natural Gas
	 	LDC: Aquila Networks
	X LDC City Gate

	 	Zone/Line Segment Zone D
	 	LDC Acct#:                    
	o Direct Connect

	 	POI #:                     
	 	City/State: Farley, IA

Projected Total Monthly Supply Needs (MMBtu):

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Year	 	Jan	 	Feb	 	Mar	 	Apr	 	May	 	Jun	 	Jul	 	Aug	 	Sept	 	Oct	 	Nov	 	Dec	 	Total
	2007
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3,000	 	 	 	7,500	 	 	 	7500	 	 	 	7500	 	 	 	7500	 	 	 	7500	 	 	 	7,500	 	 	 	48000	 
	2008
	 	 	7500	 	 	 	7500	 	 	 	7500	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	22500	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 
	Total
	 	 	7,500	 	 	 	7,500	 	 	 	7,500	 	 	 	0	 	 	 	0	 	 	 	3,000	 	 	 	7,500	 	 	 	7,500	 	 	 	7,500	 	 	 	7,500	 	 	 	7,500	 	 	 	7,500	 	 	 	70,500	 

Billable Volume: X Actual Consumption o Nominations

Contract Price at the Delivery Point - Managed Procurement Fund Supply Price plus
applicable transportation, fuel and any other costs associated with bringing gas to the delivery
point

Level of Participation: The Buyer must choose one of the following levels of participation which
are more fully described in the Managed Procurement Fund Addendum attached hereto and by this
reference made a part hereof:

	 	X	 	 Full Requirements (Cash Out Provision does not apply)
	 
	 	 o	 	Set Volume: The first                     MMBtu delivered each month. Additional volumes delivered up to
Buyer’s First of the Month nomination will be priced at                     . The volumes stated above
represent an estimate of Buyer’s total monthly supply needs.
	 
	 	o	 	Percent of Volumes: % of all volumes each month, after which the remaining volumes,
up to Buyer’s First of the Month nomination, will be priced at                     . The volumes stated
above represent an estimate of Buyer’s total monthly supply needs.
	 
	 	o	 	Volumes in Excess of Existing Hedge: All volumes in excess of the existing respective
monthly hedged volumes specified in currently effective Ordering Exhibit(s). (Cash out
provision does not apply.)

Management Fee. Buyer will pay Seller a monthly management fee to cover the cost of administering
fixed price and option hedging, market analysis, billing, reporting and general management of the
Program. The monthly management fee will be:

$.05 per MMBtu delivered to the Buyer

Natural gas will be billed as it flows through the meter in the following order: (1) Fixed, Basis,
NYMEX or Index price; (2) Managed Procurement Fund volumes (3) Spot. Cost components not included
in the Contract Price, but incurred by Seller will be billed to Buyer at the applicable market
rate.

Fuel on Interstate Pipeline - Will be billed by Seller to Buyer at the monthly index price
for gas delivered to the Delivery point specified herein.

 

 

			
	 	 	 
	CORNERSTONE ENERGY
	 	MPF Ordering Exhibit w/ Addendum
	 
	11011 Q Street, Suite 106A, Omaha, NE 68137	 	 
	Sales Rep: John Markham	 	 
	Phone: (563) 556-9018 Fax: (563) 556-1923
	 	Page 2

Evergreen Pricing Provisions

The initial term of this agreement is as stated under Contract Term. Unless terminated by either
party giving 60 days written notice to the other party, this contract will automatically renew for
additional one (1) year terms, beginning April 1 of each year and continuing through March 31 of
the end of the term year. Should Buyer provide such written notice of cancellation of this Managed
Procurement Fund pricing, and should Seller continue to deliver to Buyer after such cancellation is
received, default Evergreen Pricing will apply. Said deliveries will be made on a month-to-month
basis until terminated by either party giving the other 30 days written notice. The default
“Evergreen Price” will be based upon index for deliveries to NNG Ventura as published in Inside
FERC’s Gas Market Report plus applicable transportation, fuel, and any other charges associated
with the delivery of gas for the month in which the delivery occurred. The default “Evergreen
Volume” shall equal the previous calendar year’s monthly consumption in MMBtu for the applicable
month unless otherwise designated by Buyer.

	 	 	 
	Cash-Out Monthly imbalances managed by:

	 	o Cornerstone per the provisions below o Utility per tariff
	 

	 	X Cornerstone per the Balance Service Contract with Buyer

	 	 	 	 	 	 	 	 	 
	Nominations, Scheduling, and Daily Balancing	 	Storage
	Responsibility:	 	Buyer	 	Seller	 	Not Applicable	 	 
	Nominations

	 	o
	 	X
	 	o
	 	o Buyer assigns its pipeline storage account to Seller
	Scheduling

	 	o
	 	X
	 	o
	 	o Buyer assigns its Utility storage account to Seller
	Daily Balance

	 	o
	 	X
	 	o
	 	X Not applicable

Special Provisions

Extreme variances in Buyer’s usage compared to historical usage, or the usage projected by Buyer,
may result in an adjustment to Buyer’s monthly Managed Procurement Fund Price.

Site(s) Covered by Ordering Exhibit (Invoices will include tax unless customer has provided
Cornerstone an exemption certificate for each site.)

	 	 	 	 	 	 	 	 	 
	Facility Name:	 	West Dubuque Bio Diesel, LLC	 	Tax Exempt*:	 	o Yes X No
	Street Address:	 	10749 James Meier Road	 	Inside City Limits:	 	X Yes o No
	City, State, Zip:	 	Farley, IA 52046	 	County: Crawford	 	 
	Utility Account #:	 	 	 	Utility: Aquila Networks	 	 
	 

	 	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Buyer’s Address	 	 	 	 	 	 
	Company Name:	 	West Dubuque Bio Diesel, LLC	 	Contact: Ed Recker	 	 
	Street Address:

	 	10749 James Meier Road
	 	Phone:
	 	563-744-3554	 	 
	City, State, Zip:

	 	Farley, IA 52046
	 	Fax:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Billing Address (if different)	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Company Name:

	 	 	 	Attn:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	Street Address:

	 	 	 	Phone:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	City, State Zip:

	 	 	 	Fax:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 

	 	 	 	 	 
	Buyer:

	 	Signature: /s/ Joyce Jarding	 	 
	West Dubuque Bio Diesel, LLC
	 	 	 	 
	 

	 	Title:Secretary
	 	Date: 3/8/07
	 
	 	 	 	 
	Seller:

	 	Signature: /s/ Mark Straub	 	 
	 

	 	Title Vice President, Sales	 	 
	Cornerstone Energy, LLC

	 	 	 	Date: 3/6/07

IF ANY OF THE ABOVE TERMS ARE CONTRARY TO YOUR UNDERSTANDING OF OUR AGREEMENT, PLEASE NOTIFY US IN
WRITING SPECIFYING YOUR OBJECTIONS. FAILURE TO SO NOTIFY US WITHIN TWO (2) BUSINESS DAYS OF THE
DATE OF THIS TRANSACTION CONFIRMATION CONSTITUTES YOUR ACCEPTANCE OF THE TERMS SPECIFIED HEREIN.

 

 

			
	 	 	 
	CORNERSTONE ENERGY	 	 
	 
	 	MPF Ordering Exhibit w/ Addendum
	11011 Q Street, Suite 106A, Omaha, NE 68137	 	 
	Sales Rep: John Markham	 	 
	Phone: (563) 556-9018 Fax: (563) 556-1923
	 	Page 3

MANAGED PROCUREMENT FUND ADDENDUM

Cornerstone Energy, Inc. (Seller) and West Dubuque Bio Diesel, LLC (Buyer) have entered into
a Base Agreement and Ordering Exhibit for the procurement, purchase and management of natural gas
transportation and supply. This Managed Procurement Fund Addendum is made a part of the Ordering
Exhibit and Base Agreement between Buyer and Seller.

Seller has established a diversified portfolio fund program (“Program”) for the purpose of
assisting Buyers in managing price volatility which enables Buyer to purchase natural gas from
Seller with a commodity price based upon a combination of fixed pricing, call options, monthly
index pricing, daily index pricing and a discretionary pricing component. Seller will manage
natural gas price volatility through the diversification of natural gas commodity purchases.

General Terms and Conditions of the effective Base Agreement between the parties shall apply.

 Program Election will apply to the Buyer’s natural gas supply purchases at the election of
the Buyer. The Buyer must choose one of the following options:

     Full Requirements: The Program pricing will apply to all volumes delivered to the Buyer.
This election can only be offered if no components of gas delivery to customer have been fixed
for the term of the Managed Procurement Fund Ordering Exhibit

     Set Volume: Buyer identifies a specific volume for which the Program pricing will apply.
Volumes delivered in excess of this specified volume will be priced as stated in the Managed
Procurement Fund Ordering Exhibit.

     Percent of Volumes: Buyer identifies a specific percent of all volumes to be included in the
Program pricing. Volumes in excess of this specified quantity will be priced as stated in the
Managed Procurement Fund Ordering Exhibit.

     Volumes in Excess of Existing Hedge: The Program pricing will apply for all volumes in excess
of the respective monthly volumes specified in Ordering Exhibit(s) covering any hedged volumes
during the term of this MPF Ordering Exhibit. This option precludes Buyer from hedging additional
volumes during the term of the Managed Procurement Fund Ordering Exhibit.

Extreme variances in Buyer’s usage compared to historical usage, or the usage projected by
Buyer, may result in an adjustment to Buyer’s monthly Managed Procurement Fund Price.

Program Pricing is based on a combination of fixed pricing call options, monthly index
pricing, daily index pricing and a discretionary pricing component.. The target weighting
of each component is specified below:

	 	a.	 	30% — 70% — fixed price
	 
	 	b.	 	20% — 60% — call options
	 
	 	c.	 	5% — 20% — monthly index pricing based on monthly spot market price of gas
	 
	 	d.	 	5% — 20% — daily index pricing based on daily spot market price of gas
	 
	 	e.	 	0% — 20% — discretionary pricing based on current market
conditions and Seller’s expertise in the
procurement of natural gas.

Management Fee: Buyer will pay Seller a monthly management fee to cover the cost of
administering fixed price and option hedging, market analysis, billing, reporting and general
management of the Program.

Warranties and Representations: Seller does not make any warranties or representations to Buyer
regarding the performance of the Program. Seller has established the Program for the purpose of
assisting Buyer in managing price volatility. Buyer acknowledges that the price of natural gas is
market sensitive and may increase despite Seller’s attempt to manage prices through the
diversification of natural gas commodity purchases.

 

 

			
	 	 	 
	Contract #: 18108-REVISED Base Agreement #: 17998
	 	CORNERSTONE ENERGY

DAILY & MONTHLY BALANCING SERVICE CONTRACT

	 	 	 
	BUYER 

West Dubuque Bio Diesel, LLC

10749 James Meier Road 

Farley, IA 52046

Acct #:

PHONE: 563-744-3554 
FAX:

	 	SELLER

Cornerstone Energy, Inc. 
11011 Q Street,
Suite 106 A 
Omaha, NE 68137

PHONE: 563-556-9018 
FAX: 563-556-1923
	 
	 	 
	IINVOICE ADDRESS

	 	SUBMITTED BY
	 
	 	 
	X Same as above

	 	Account Manager John Markham
	o Other
	 	 

TERM

June 1, 2007 to December 31, 2009 , and unless otherwise terminated as provided in
the General Terms and Conditions of the Cornerstone Energy Base Agreement, will continue thereafter
for successive two (2) year extension terms, until terminated by either party giving written notice
not less than 60 days prior to the expiration of the applicable two-year extension term.

SCOPE OF SERVICE

Seller will protect Buyer from daily balancing and scheduling penalties and punitive monthly
imbalance cash-outs provided that Buyer timely performs its obligations hereunder and subject to
this Contract. Buyer and Seller agree that the specific terms of this Daily and Monthly Balancing
Service shall apply in conjunction with the sale of Seller’s natural gas commodity supply, and
agree that Seller will be Buyer’s exclusive provider of daily and monthly balancing services for
the term of this agreement. Under the terms of this Daily and Monthly Balancing Service, Seller
will schedule Buyer’s daily gas requirements with applicable transporting pipelines on a daily
basis and will balance for Buyer on the interstate pipeline and applicable LDC on a daily basis.
Seller will also be responsible for balancing Buyer’s monthly gas requirement with Buyer’s monthly
consumption quantity. Should the monthly gas requirement purchased by Seller on behalf of the
Buyer not equal the monthly quantity of gas consumed by Buyer, Seller will true-up Buyer’s long or
short physical imbalance at a non-punitive market-based rate for the month in which the imbalance
occurred. Seller will rely on the accuracy and timeliness of information from Buyer regarding its
operational changes, which may cause usage to deviate from historical values upon which
nominations are based. In the event that Buyer fails to timely provide such information, Seller
will not be responsible for the imbalance created thereby and may terminate this Contract
immediately. if a gas transporter restricts or curtails Buyer’s gas, then Seller will not be
responsible for any resulting imbalances or penalties if Buyer takes unauthorized gas or otherwise
fails to comply with the directives of the gas transporter. This service is also available on
those days where the transporting pipeline declares a “SOL” or ‘SUL” day as defined in the
pipeline’s tariff and given that Seller is providing commodity supply on Buyer’s behalf. As a
provision of this Balancing Service, Buyer’s gas volumes must be included in Seller’s Aquila
aggregation pool.

DAILY & MONTHLY BALANCING FEE

As consideration for the Daily and Monthly Balancing Service to be provided by Seller hereunder,
Buyer will pay Seller a Daily & Monthly Balancing Fee of $.10 per MMBtu of gas delivered to
Buyer’s premises.

PHYSICAL IMBALANCE TRUE-UP RATE

Monthly physical imbalances will be trued up by Seller based upon the daily posted midpoint
spot prices for deliveries at Northern Natural Gas Co. — Ventura, Iowa, as established by
Gas Daily’s Daily Price Survey, plus applicable fuel, transportation and any other delivery
costs for the month in which the imbalance occurred.

SPECIAL PROVISIONS

This Daily and Monthly Balancing Service Contract supersedes and replaces all existing or
previously executed balancing agreements and amendments thereto,

This Contract is subject to the General Terms and Conditions of the Cornerstone Energy Base Agreement.

	 	 	 	 	 	 	 	 	 
	 

	 	Buyer
	 	/s/ Joyce Jarding
 

Signature
	 	Secretary 
 
Title
	 	3/8/07
 

Date
	 
	 	 	 	 	 	 	 	 
	 

	 	Seller
	 	/s/ Mark Straub
 

Signature
	 	Vice President, Sales 

 
Title
	 	3/6/07

 
Date

 

 

GUARANTEED DELIVERY AGREEMENT

	 	 	This Guaranteed Delivery Agreement is made and entered into the 12th day of March 2007, by and
between Cornerstone Energy, Inc (“Company”) and West Dubuque Bio Diesel, LLC (“Customer”).
	 
	 	 	WHEREAS, Company and Customer have previously entered into various Agreements, including a
Cornerstone Base Agreement, regarding the sale and/or transportation of natural gas to which this
agreement will be an extension thereto; and
	 
	 	 	WHEREAS, Customer is actively seeking to reserve “firm” natural gas interstate transportation
capacity and Company has certain interstate transportation capacity, which it is willing to make
available to Customer on a firm basis.
	 
	 	 	NOW, THEREFORE, in consideration of the above premises and mutual covenants and agreements
contained herein, the parties agree as follows:

	1.	 	Customer agrees to reserve and pay for and Company agrees to provide to Customer a Daily
“Firm” interstate transportation capacity volume of up to 500 MMBtu per Day (Daily Firm
Units) to the City Gate serving Customer’s facility located in Farley, IA. Customer shall
notify Company no later than September 1, 2006, if Customer requires volumes that exceed the
volumes stated in this paragraph. If Customer requires additional volumes, and if those
volumes are available, the parties will execute an amendment to this Agreement setting forth
such volumes; otherwise, the volumes stated herein shall apply.
	 
	2.	 	Customer’s right to transport gas under the firm capacity reserved under this Agreement
shall begin on June 1, 2007, and continue through December 31, 2009. This period shall be
considered the “contract term”. This Agreement shall automatically renew for additional
contract terms unless terminated by either party giving the other 60 days written notice
prior to the end of the current contract term, subject to availability of firm capacity on
the pipeline. This Agreement requires that Company is Customer’s natural gas supplier
through the term of this Agreement.
	 
	3.	 	The rate for the units of Daily “Firm” interstate transportation capacity that is reserved
for Customer hereunder is $8.10 per Daily Firm Unit per Month. This charge is in addition to
any charges for (i) gas supply, (ii) local transportation by the LDC, (iii) services
provided under other agreements, or (iv) imbalance, scheduling, or other charges related to
the transportation under the interstate transportation capacity reserved under this
Agreement.
	 
	4.	 	This Agreement is subject to all valid laws, orders, rules, and regulations of any and all
duly constituted authorities having jurisdiction over the subject matter herein. This
Agreement is also subject to the tariffs of the interstate pipeline with whom Company has
acquired the interstate transportation capacity. In the event such pipeline increases its
rates or other charges to Company affecting the interstate transportation capacity reserved
hereunder, then Customer agrees to and shall pay such increase in rates applicable to such
capacity. The services provided under this Agreement are intended to be exempt from
regulation of state or federal agencies. If the rates, terms, or conditions contained herein
ever become subject to state or federal regulation that adversely affects or deprives
Company from realizing the economic value of its bargain, then Company may terminate this
Agreement upon thirty (30) days’ prior written notice.
	 
	5.	 	The terms of this Agreement shall be kept confidential by Company and Customer. If Company,
in its sole discretion and through either direct or circumstantial evidence, determines that
the confidentiality provision of this Agreement has been breached by Customer, then, in
addition to any other remedy it may have, Company may immediately terminate this Agreement.
Upon such termination, Company shall have no further obligation to Customer hereunder and
Customer shall immediately pay to Company all amounts due Company hereunder.
	 
	6.	 	If either party is rendered unable wholly or in part by force majeure to carry out its
obligations under this Agreement, then the obligations of the parties, to the extent that
they are affected by such force majeure, shall be suspended during the continuance of the
event of force majeure. For the purposes of this Agreement, “Force Majeure” shall have the
same meaning as defined by the applicable transporting interstate pipeline with whom Company
has acquired transportation capacity to perform this Agreement. In the event the
transporting pipeline limits, curtails, interrupts, or in any manner affects the supply or
transportation of natural gas for the maintenance, repair, overhaul, replacement or
construction of any facilities or equipment; or to assure the availability of capacity
equitably, then Company may suspend service under this Agreement for the duration of the
limitation, curtailment or interruption.

If
initialed here ____________, Customer appoints Company as Agent to execute LDC firm addendum (IA, MN only)
priced at the current regulated tariff rate.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the date shown first above.

	 	 	 	 	 	 	 	 
	Cornerstone Energy, Inc.	 	West Dubuque Bio Diesel, LLC

Acct #: 9214623722	 
	 
	 	 	 	 	 	 	 
	By:

	 	/s/ Mark Straub
	 	By:
	 	/s/ William G. Schueller	 
	 

	 	 
	 	 	 	 	 
	Title:

	 	Vice President, Sales
	 	Title:
	 	Chairmanexv10w10

 

Exhibit 10.10

AQUILA, INC. d/b/a AQUILA NETWORKS

LARGE VOLUME TRANSPORTATION

SERVICE AGREEMENT

(Iowa)

     This Agreement is entered into effective at the date shown below, by and between Aquila, Inc.,
d/b/a Aquila Networks (“Company”) and Customer, whose name and service address are identified
below.

     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
customer as defined in accordance with Company’s then current rate schedules. Customers with
multiple service locations may include premises served under the Company’s Small Volume and General
Service rate schedules if other premises are served under the Large Volume rate schedules.

     2. Character of Service. Service hereunder shall be offered on a non-discriminatory
firm and/or interruptible basis contingent upon adequate system capacity.

     3. Confirmation Regarding Interruptible Service Customers electing interruptible
service hereby confirm the customer has an alternate fuel capacity or is willing to discontinue gas
service during periods of curtailment. Customer represents that it meets the service requirements
for transportation service under this Agreement.

     4. Pipeline Capacity Assignment. Large volume customers who convert to transportation
service may be required to take assignment to pay for, at the option of the Company, firm
interstate natural gas 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 arrange firm
transportation for such gas supplies on the interstate pipeline serving Company’s distribution
system.

     5. Governing Tariff. Service hereunder is provided by Company pursuant to its
Transportation Rate Schedule, and pursuant to the General Rules, Regulations, Terms and Conditions,
including but not limited to provisions governing pipeline charges, nominations, payment and
penalties, 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”).

 

 

     6. Customer Obligations for Firm Service: Customer agrees to provide and
maintain the following:

A. Firm Transportation Rights. Customer represents to Company that it has and will
maintain, or will have and maintain at all relevant times, firm transportation pipelines
upstream of Company’s natural gas distribution system in the community(ies) of service to
deliver on a firm basis all volumes of gas to Company for Customer’s accounts identified on
Exhibit “A” attached hereto. In the event any such firm transportation rights are
terminated or limited in any manner so that Customer is unable to deliver gas to Company’s
natural gas distribution system as required herein, then Customer shall immediately notify
Company in writing sent by facsimile to the fax number provided in Section 16.

B. Telemetry. Customers must install telemetry equipment acceptable to Company. Customer
must reimburse Company for the cost of all on-site plant investments, including telemetry
equipment, installed by Company to provide transportation service to Customer. The
telemetry equipment and any other improvements shall remain the property of Company and will
be maintained by the Company. Customer shall also provide telephonic access and service to
this telemetry equipment acceptable to Company.

     7. Optional Aggregation Service: A Marketer may combine a group of transportation Customers
that (a) have the same balancing provisions (b) are located on the same interstate pipeline system
and (c) are within the same interstate pipeline operational zone. If the Marketer purchases this
aggregation service, the aggregated group will be considered as one Customer for purposes of
calculating the daily scheduling penalties and monthly imbalances, i.e., individual Customer
nominations and consumption will be summed and treated as if they were one Customer. This does not
include aggregation of fixed costs of customer charges. The cost of this aggregation service is
$0.04 per Mcf of gas delivered to the aggregated group.

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

	 	 	 
	Transportation
Administration
Charge:

	 	$150 per month per facility for administrative costs
relating to transportation service. Facility shall
include all meters under common ownership behind the
same town border station (TBS).
	 
	 	 
	Customer Charge:

	 	The applicable sales tariff basic monthly charge for
which Customer would otherwise qualify, subject to
change as may be approved by the IUB from time to time.
	 
	 	 
	Capacity Charge:

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

2

 

	 	 	 
	Delivery Charge:

	 	All volumes received by Customer hereunder shall be
charged a rate equal to the tariff volumetric delivery
omponent 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: 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.
	 
	 	 
	Optional Services:

	 	The following service, described in Company’s Tariff
are available at Customer’s option: Aggregation Service

Customer has elected and agreed to purchase the optional services designated in Section...herein,
if any. Customer agrees to pay the charges associated therewith according to and as set forth in
Company’s Tariff as amended from time to time. Customer shall, upon request of Company, execute
such agreements as Company deems necessary or appropriate to effectuate the applicable services.

     9. Term:
This Agreement shall remain in effect for a primary term of
five W.A.S. years from
the date service commences hereunder, and thereafter from year to year until canceled by either
party with notice as required in Company’s then current tariffs.

     10. Pipeline Charges; Capacity Assignment: Any charges that Company incurs from a
pipeline on behalf of Customer will be passed through to Customer.

     11. Regulatory Commission Authority: The provisions of this Agreement are subject to
Company’s Tariff, including but not limited to force majeure provisions, all valid legislation with
respect to the subject matter hereof and to all present and future orders, rules, and regulations
of the Iowa Utilities Board (“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.

     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, balancing
and scheduling charges, and any charges Company incurs from the pipeline on behalf of
Customer; and

3

 

	 	B.	 	The Risk that Customer must stop using gas when notified by Company or by
Customer’s gas supplier of any interruption affecting Customer’s gas supply of
transportation service.

     13. Indemnification: In addition to indemnifications included above, Customer (the
“Indemnifying Party”) will indemnify, hold harmless and defend Company and its officers, directors,
shareholders, agents, employees, and representatives (collectively, the “Indemnified Party”) from
all claims, liabilities, fines, interest, costs, expenses and damages (including reasonable
attorneys’ fees) incurred y the Indemnified Party (collectively the “Indemnified Losses”), for any
damage, injury, death, loss or destruction of any kind to persons or property, to the extent the
damage, injury, death, loss or destruction arises out of or is related to the conduct, negligence,
willful misconduct, misrepresentation, or other breach of this Agreement on the part of the
Indemnifying Party or any of its representatives, agents, employees or contractors.

     14. Assignment: Customer may not assign this Agreement, in whole or in part, or
delegate any of its obligations under this Agreement with the prior written consent of Company.

     15. 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.

     16. 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.

d/b/a Aquila Networks

Attention: Larry L. Eckhart

1015 Cedar Cross Rd.

Dubuque, IA 52003

Telephone: 563-583-0415 x12

Fax: 563-583-0850

Gas Supply Services Division

Attention: GSS

1815 Capital Avenue

Omaha, NE 68102 

Telephone: 800-454-8652

Fax:

	 	Company:  Western Dubuque BioDiesel

Attention: Ed Recker, Manager
Address: 10749 Jamesmeir Road

City, State: Farley, IA

ZIP Code: 52046

Telephone: 563-744-3554

Fax:

4

 

     17. Customer Elections

Election of Interruptible and Firm Units

Daily Interruptible Units  0 MMBtu

Daily Firm Units: 500   MMBtu

Election of Optional Services

Aggregation Service  X 

     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: 

Name:

	 	/s/ Larry L. Eckhart
 

Larry L. Eckhart
	 	By

Name:
	 	/s/ William G. Schueller
 

William G. Schueller
	 	 
	Title:

	 	Customer Relations
	 	Title:
	 	Chairman	 	 
	Date:

	 	12-16-06
	 	Date:
	 	12/15/06	 	 

5

 

ADDENDUM TO

LARGE VOLUME TRANSPORTATION

SERVICE AGREEMENT

     This Addendum is made and entered into effective the 10th day of January, 2007, by and
between Aquila, Inc., d/b/a Aquila Networks (“Company”) and Western Dubuque BioDiesel, LLC.
(“Customer”).

     WHEREAS, Company and Customer have entered into an Large Volume Transportation Service
Agreement dated December 15, 2006 (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 110,000 MMBtu (“Minimum Annual Throughput”)
during the period June 1, 2007 through May 31, 2012. 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:

	 	$250.50 per month (Maximum Daily Quantity
of 500 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 applicable
approved Large Volume transportation rate
(“Commodity Charge”).

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

6

 

     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 five year(s) 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. 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.

     5. Creditworthiness. As part of this agreement, Customer will post a performance bond
or irrevocable Letter of Credit to Company in the amount of $145,165 to guarantee the financial
obligations to Aquila for any unrecovered construction costs incurred on behalf of Customer. This
credit protection will be reduced annually to reflect the volumes delivered by Customer. For each
year the Customer consumes the Minimum Annual Throughput described herein, commencing June 1, 2008
the performance bond of Letter of Credit will be reduced, twenty percent (20%), At such time as
445,000 MMBtu are delivered to and paid for by Company, there will no longer be a bond or Letter of
Credit required. In the event Customer does take the minimum 445,000 MMBtu or does not pay for
such volumes during the term of this Agreement, Company may draw down the entire remaining balance
of the bond or Letter of Credit.

     6. Capacity. For a period of five years from the execution of this addendum, Aquila will not
require an additional contribution in aid of construction (CIAC) for delivery of natural gas up to
76 dekatherms per hour to Customer on Aquila’s line that runs from the town border station (TBS) to
Company’s plant at 10749 Jamesmeir Road, Farley, IA 52046. If an increase above 76 dekatherms per
hour is requested, Aquila reserves the right to require an additional CIAC for the increase in load
over 76 dekatherms per hour. Aquila does not and will not represent or guarantee that the town
border station will have all or part of the capacity to serve the additional load.

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

7

 

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

	 	 	 	 	 	 	 	 	 
	Aquila, Inc., d/b/a	 	 	 	 	 	 
	Aquila Networks	 	Western Dubuque BioDiesel, LLC

(Print customer name)	 	 
	 
	By: 

Name:

	 	/s/ Larry L. Eckhart
 

Larry L. Eckhart
	 	By

Name:
	 	/s/ William G. Schueller
 

William G. Schueller
	 	 
	Title:

	 	Customer Relations Mng
	 	Title:
	 	Chairman	 	 

8

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