Document:

EX-10.2

   

  Exhibit 10.2

  Forte Biosciences, Inc.

  Amended and Restated Non-Employee Director Compensation Policy

  (February 23, 2022)

   

  Each member of the Board of Directors (the “Board”) who is not also serving as an employee of or consultant to Forte Biosciences, Inc. (“Forte Biosciences”) or any of its subsidiaries (each such member, an “Eligible Director”) will receive the compensation described in this Amended and Restated Non-Employee Director Compensation Policy for his or her Board service.  This policy is effective as of February 23, 2022 (the “Effective Date”) and may be amended at any time in the sole discretion of the Board or the Compensation Committee of the Board.

   

  Annual Cash Compensation

   

  The annual cash compensation amount set forth below is payable in equal quarterly installments, payable in arrears on the last day of each fiscal quarter in which the service occurred. If an Eligible Director joins the Board or a committee of the Board at a time other than effective as of the first day of a fiscal quarter, each annual retainer set forth below will be pro-rated based on days served in the applicable fiscal year, with the pro-rated amount paid for the first fiscal quarter in which the Eligible Director provides the service, and regular full quarterly payments thereafter. All annual cash fees are vested upon payment. 

   

  1.	Annual Board Service Retainer: 

  a.	All Eligible Directors: $40,000

  b.	Chairman of the Board Service Retainer (in addition to Eligible Director Service Retainer): $30,000

  c.	Lead Independent Director Service Retainer (in addition to Eligible Director Service Retainer): $20,000

   

  2.	Annual Committee Member Service Retainer:

  a.	Member of the Audit Committee: $8,000

  b.	Member of the Compensation Committee: $6,000

  c.	Member of the Nominating & Governance Committee: $5,000

   

  3.	Annual Committee Chair Service Retainer (in addition to Committee Member Service Retainer):

  a.	Chairman of the Audit Committee: $16,000

  b.	Chairman of the Compensation Committee: $12,000

  c.	Chairman of the Nominating & Governance Committee: $10,000

   

  Equity Compensation

   

  The equity compensation set forth below will be granted under the Forte Biosciences, Inc. 2021 Equity Incentive Plan (the “Plan”). All stock options granted under this policy will be nonstatutory stock options, with an exercise price per share equal to 100% of the Fair Market Value (as defined in the Plan) of the underlying Forte Biosciences Common Stock on the date of grant, and a term 

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  of ten years from the date of grant (subject to earlier termination in connection with a termination of service as provided in the Plan, provided that upon a termination of service other than for death, disability or cause, the post-termination exercise period will be 12 months from the date of termination).

   

  1.	Initial Grant: On the date of the Eligible Director’s initial election to the Board, for each Eligible Director who is first elected to the Board following the Effective Date (or, if such date is not a market trading day, the first market trading day thereafter), the Eligible Director will be automatically, and without further action by the Board or Compensation Committee of the Board, granted a stock option for 50,000 shares (the “Initial Grant”).  The shares subject to each Initial Grant will vest in equal monthly installments over a three year period such that the option is fully vested on the third anniversary of the date of grant, subject to the Eligible Director’s Continuous Service (as defined in the Plan) through each such vesting date and will vest in full upon a Change in Control (as defined in the Plan).

   

  2.	Annual Grant: On the date of each Forte Biosciences annual stockholder meeting held after the Effective Date, for each Eligible Director who continues to serve as a non-employee member of the Board (or who is first elected to the Board at such annual stockholder meeting), the Eligible Director will be automatically, and without further action by the Board or Compensation Committee of the Board, granted a stock option for 25,000 shares (the “Annual Grant”). In addition, each Eligible Director who is first elected to the Board following the Effective Date and other than at an annual stockholder meeting will be automatically, and without further action by the Board or Compensation Committee of the Board, granted an Annual Grant, pro rated for the number of months remaining until the next annual stockholder meeting.  The shares subject to the Annual Grant will vest in equal monthly installments over the 12 months following the date of grant, provided that the Annual Grant will in any case be fully vested on the date of Forte Biosciences’ next annual stockholder meeting, subject to the Eligible Director’s Continuous Service (as defined in the Plan) through such vesting date and will vest in full upon a Change in Control (as defined in the Plan). 

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PRECEDENT AGREEMENT  WEST LEG 2023 EXPANSION  BETWEEN  Contract No. 602577-0  NORTHERN NATURAL GAS COMP ANY  AND  DAKOTA ETHANOL, LLC  This agreement ("Precedent Agreement") is made and entered into as of this 6 day of June 2022,  by and between Northern Natural Gas Company, a Delaware corporation (11N01thern11 ), and Dakota  Ethanol, LLC, a South Dakota limited liability company ("Customer"). Northern and Customer  are sometimes referred to herein individually as a 11Pa1ty11 and collectively as the "Parties. 11  WITNESSETH:  WHEREAS, Northern owns and operates an interstate natural gas transmission system subject to  the jurisdiction of the FERC; and  WHEREAS, Customer seeks to acquire natural gas transp01iation services from Northern; and  WHEREAS, Customer and Northern, upon fulfillment of the conditions precedent set forth herein,  desire to enter into a finn throughput service agreement, as defined below, under which Northern  will provide, and Customer will receive, firm transportation service;  NOW THEREFORE, in consideration of the tenns and conditions set fo1th below, the receipt and  sufficiency of which are hereby acknowledged, N01thern and Customer hereby agree and consent  as follows:  Section 1. Definitions  1.1. "Actual Cost" means the Customer's allocated share of the cost of the Project, as  dete1mined by Northern, including, but not limited to, (i) planning, design, matetials, labor,  contract and engineering costs; (ii) overheads; (iii) all applicable taxes; (iv) income tax  gross-up, when applicable; (v) allowance for funds used during construction (AFUDC),  when applicable; (vi) associated operation and maintenance costs; and (vii) any reservation  Page 1  

 

Contract No. 602577-0  charge credits, as defined in Northem's FERC Gas Tariff, paid to other shippers by  Northern as a result of any outage caused by the constrnction of the Project.  1.2. "CIAC" means contribution in aid of construction and is defined as any amount of money  or other property contributed to Northern for the purpose of constructing plant or adding  constructed plant to Northern's natural gas pipeline and storage systems. Income tax gross­ up associated with the CIAC, which represents the time value of money resulting from the  timing of tax payments made and tax deductions allowed, will be included in the Actual  Cost if the CIAC is determined by Northern to be taxable revenue as defined by§ 118(b)  of the Internal Revenue Code. The amount of the CIAC is subject to Trne-Up. Northern's  good faith estimate for the CIAC is $8,890,000.  1.3. "Contract Value" means, as of the determination date, the m1paid reservation charges for  the remaining original term of the TSA.  1.4. "Customer Facilities" means all natural gas service facilities (including, but not limited to,  valves, pressure regulators and odorization equipment) located downstream of the Prima1y  Delivery Point(s) set forth in Table A-1 of Exhibit A.  1.5. "Customer's Remaining Obligation" means that portion of the Actual Cost which has not  been paid to Northern, as of any determination date, and is equal to the Actual Cost less  any CIAC payment received by Northern. If Actual Cost is not known at the time the  Customer's Remaining Obligation is calculated or dctcnnined, Northern, at its sole  discretion, may use a good faith estimate of Actual Cost.  1.6. "Entitlement" or "MDQ" means the maximum daily quantity of natural gas to be  transported under the TSA.  1.7. "FERC" means the Federal Energy Regulat01y Commission.  1.8. "GT&C" means the General Tenns and Conditions of Northem's FERC Gas Tariff, as  revised from time to time.  Page2  

 

Contract No. 602577-0  1.9. "Imaged Documents" means any image or electronically stored copy of any document(s)  generated by any Party with respect to this Precedent Agreement, including this Precedent  Agreement.  1.10. "Maximum Reservation Rate" means the monthly maximum reservation rate set forth in  the applicable Rate Schedule ofNorthern's FERC Gas Tariff.  1.11. 11Necessa1y Approval" means an order, approvals, consents or waivers, issued by FERC,  any federal, state, local, sovereign, or mlmicipal body, or any other governmental authority  that have become final and are no longer subject to rehearing or appeal regarding (i) the  construction and operation of the Project, and (ii) this Precedent Agreement. All Necessary  Approvals must be in a fonn and substance and on a time schedule satisfact01y to N01them  in its sole dete1mination. Northern in its sole discretion, may waive a Necessa1y Approval.  1.12. "Northern's FERC Gas Tariff' means Northern's FERC Gas Tariff, as revised from time to  time.  1.13. "Open Season" means the notice and opportunity to bid for service associated with the  Project.  1.14. "Precedent Agreement" means this agreement, including Exhibits A through C, which are  incorporated herein.  1.15. "Primaty Delivery Point(s)" means N01thern's Market Area delive1y points set forth in  Table A-1 of Exhibit A at which Customer requests firm service.  1.16. "Primary Receipt Point(s)" means Northern's Market Area receipt points set forth in Table  A-1 of Exhibit A at which Customer requests firm service.  1.17. "Project" means the activities related to the Open Season and Northem's construction and  completion of any facilities that are necessary, as determined in Northern's sole discretion,  to provide the service contemplated by this Precedent Agreement.  Page3  

 

Contrnct No. 602577-0  1.18. "Security" means the amount of credit assurance required by Northern pursuant to Exhibit  C, provided by Customer and held by or for Northern to secure Customer's obligations to  Northern under this Precedent Agreement and/or the TSA.  1.19. "Trne-Up" means the process(es) initiated by Northern at any time during or after  completion of the Project, to adjust any amount previously estimated to the Actual Cost  and the CIAC.  1.20. 11TSA 11 means the finn throughput service agreement including all exhibits and appendices  thereto, to be entered into as required pursuant to this Precedent Agreement.  1.21. "Will" means is required to and imposes an obligation on the appropriate Party.  Section 2. Firm TSA  2.1. Northern and Customer will enter into the TSA consistent with Northern's Rate Schedule  TFX or any successor firm transportation rate schedule in effect on the date of execution  of the TSA, which will be subject to all of the terms and conditions of Northern's FERC  Gas Tariff and all rnles and regulations of governmental authorities having jurisdiction as  well as any Necessaiy Approvals. The TSA will provide for the transportation of natural  gas from the Primaiy Receipt Point(s) to the Primaiy Delive1y Point(s).  2.2. The beginning date and ending date of service under the TSA are set forth in Exhibit A,  subject to receipt of Necessaiy Approvals by Northern, acceptance of such approvals, if  necessaty, and the completion (as determined in Northern's sole opinion) of the Project  facilities necessaiy to provide firm transportation service to Customer under the TSA.  Northern will not be liable for any delays in the anticipated in-service date, due to delays  in Necessary Approvals.  2.3. The transpmiation rates to be paid by Customer to Northern under the TSA are set forth in  Exhibit A.  2.4. The Entitlement or MDQ is set fmih in Exhibit A.  Page4  

 

Contract No. 602577-0  2.5. If any customer participating in the Project tenninates its participation in the Project, any  available quantities may be reallocated to the extent permitted among Customer and the  other customers participating in the Project; provided, however, Customer's acceptance of  any quantity reallocated will be at the sole discretion of Customer.  2.6. Customer will execute the TSA (without modification) within thirty (30) calendar days of  tender by Northern. If Customer fails to execute the TSA (without modification) within  thirty (30) calendar days of tender by Nmthem, Customer will immediately be in breach  of this Precedent Agreement on the date of such failure and will be liable for any and all  damages available, at law or in equity as a result of that breach, as accelerated to the date  of such breach.  Section 3. Construction of Facilities  3.1. No1them will use commercially reasonable efforts to (i) secure all Necessa1y Approvals  and, (ii) subject to the timely receipt and acceptance of all Necessary Approvals, to  construct the Project.  3.2. To the extent reasonably requested by N01them, Customer will file in supp01t of any filing  made by Northern to secure any Necessaiy Approval and will timely provide to Northern  information and documents requested by Northern to demonstrate the approval sought is  in the public convenience and necessity.  3.3. Upon Nmthern's acceptance or waiver of all Necessmy Approvals, Nmthern will  commence constrnction of the Project.  3.4. The Patties acknowledge that supply chain shotiages in materials may adversely impact  the planned completion of the Project. Northern will endeavor to use commercially  reasonable eff01ts to timely acquire and install all necessaiy materials to complete the  Project timely. Notwithstanding these efforts, consistent with other provisions of this  Agreement, Northern will not be held liable should the facilities be placed in-service after  the targeted in-service date.  Page 5  

 

Contract No. 602577-0  Section 4. Reimbursement for Construction of the Project  4.1. Customer will pay Northern for the Actual Cost of the Project by paying a CIAC (including  the True-Up), plus the Maximum Reservation Rate for the service over the term of the  TSA. Customer will pay the CIAC as follows: 30% due on September 30, 2022; 30% due  on December 31, 2022; and 40% due on March 31, 2023. Customer's failure to promptly  and unconditionally pay the CIAC by these dates is a breach of this Precedent Agreement.  The Parties acknowledge the CIAC is based on Northem's good faith estimate of the Actual  Cost.  4.2. To the extent any CIAC is paid to Northern prior to the Actual Cost being known, Northern  will provide notice to Customer of the Actual Cost once it is known, Customer will  promptly pay Northern the difference between the Actual Cost and any amount of the  CIAC previously paid to Northern if the Actual Cost is greater than the estimated cost, or  Northern will promptly reimburse Customer the difference between any amount of the  CIAC previously paid to Northern and the Actual Cost if the Actual Cost is less than the  estimated cost.  4.3. Notwithstanding anything herein to the contraiy, in the event of a default under this  Precedent Agreement or the TSA, Customer will pay Northern for Customer's Remaining  Obligation in addition to any damages for such default under the TSA, via acceleration or  otherwise.  4.4. In exchange for the consideration received hereunder, including without limitation the  expected revenue from the TSA, Nmihern is willing to make the capital expenditures for  the construction of the Project; provided, however, if Customer has not provided a CIAC  for an amount equal to 100% of Customer's Actual Cost, and if the Entitlement under the  TSA is, for any reason during the tetrn of the TSA, in whole or in pati, (i) reduced (except  in the instance of a temporary capacity release), or (ii) realigned away from the Primaiy  Receipt or Primaty Delive1y Points, such act is a breach of this Precedent Agreement and  Customer will promptly pay to Northern an amount, which is immediately due and owing,  equal to the Customer's Remaining Obligation on the date triggering the provisions of this  Paragraph. This Paragraph and the reimbursement obligations herein will survive the  permanent release of the capacity in the TSA or any assignment thereof and Customer will  Page 6  

 

Contract No. 602577-0  continue to be obligated for the reimbursement of Customer's Remaining Obligation unless  Northern consents to the express release of such obligation.  Section 5. Termination  In addition to any other termination rights set forth herein, this Precedent Agreement and, if  executed, the TSA are subject to termination as specified below:  5.1. Northern may, at any time, terminate this Precedent Agreement and the TSA and withdraw  any application for a Necessary Approval or refuse to accept or file to rescind any  Necessary Approval if N01them determines, in its sole discretion, the Project should be  cancelled, and upon such termination, Northern shall reimburse Customer CIAC payments  made by Customer, except as provided in Section 5.3 below.  5.2. Northern may, at any time, terminate this Precedent Agreement and the TSA if Northern  dete1mines, in its sole discretion, that a governmental authority has placed unacceptable  conditions or mitigation measures on any Necessary Approval.  5.3. In the event the Project is tem1inated prior to the Project being ready for service for any  reason not solely caused by Northern, Customer will pay to Northern within ten (10)  calendar days of written notice, or Northern will retain from the CIAC, as applicable, the  amount of any Actual Cost incw-red, including, but not limited to, costs committed for  construction of the Project through the date of tennination. The Customer's sole and  equitable interest in the CIAC is limited to a residual interest, which will mean the  beneficial interest in the CIAC remaining after payment of the Actual Cost or any costs  committed to. Northern will be deemed to have a right of recoupment for the CIAC.  5.4. Northern may tenninate this Precedent Agreement and the TSA immediately upon written  notice to Customer if (i) Customer, in Northern's reasonable judgment, fails to meet and  maintain the creditworthiness requirements set fo1th in Section 6 below and Exhibit C of  this Precedent Agreement, and (ii) Customer fails to provide Security in accordance with  Section 6 below and Exhibit C of this Precedent Agreement.  Page 7  

 

Contract No. 602577-0  Section 6. Creditworthiness and Security  6.1. Customer must meet the requirements of Section 46 of the GT &C and the Security  requirements of Exhibit C hereto.  6.2. In the event of any conflict between the security requirements of Exhibit C and the Security  requirements of Section 46 of the GT &C, the security requirements of Exhibit C will  prevail.  Section 7. Assignment  This Precedent Agreement and the TSA will be binding upon and inure to the benefit of Customer  and its successors and assigns and Northern and its successors and assigns. Notwithstanding the  foregoing, Customer may not assign or delegate its rights or obligations hereunder without the  prior express written consent of Northern, which will not be unreasonably withheld, and any such  pUlJ)Orted assignment or delegation without Northern's express written consent will be null and  void.  Section 8. {Reserved)  Section 9. Governmental Regulations, Choice of Law, Jurisdiction, and Waiver of Jury Trial  9.1. This Precedent Agreement and the TSA are subject to Northem's FERC Gas Tariff (except  as specifically provided herein), all valid laws, rules, regulations and orders of any  governmental agency or regulatory authority having jurisdiction, including without  limitation, the receipt of Necessa1y Approvals.  9.2. AS TO ALL MATTERS OF CONSTRUCTION AND INTERPRETATION, THIS  PRECEDENT AGREEMENT WILL BE INTERPRETED, CONSTRUED AND  GOVERNED BY THE LAWS OF THE STATE OF NEBRASKA WITHOUT REGARD  TO CONFLICT OF LAW PROVISIONS.  9.3. THE STATE OR FEDERAL COURTS SITUATED IN THE STATE OF NEBRASKA  WILL HA VE EXCLUSIVE nJRISDICTION TO RESOLVE ANY DISPUTES WITH  Page 8  

 

Contract No. 602577-0  RESPECT TO THIS PRECEDENT AGREEMENT, AND CUSTOMER AND  NORTHERN HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION  THEREOF FOR ANY ACTIONS, SUITS OR PROCEEDINGS ARISING OUT OF OR  RELATING TO THIS PRECEDENT AGREEMENT.  9.4. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES  HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY mRY WITH  RESPECT TO LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,  UNDER OR IN CONNECTION WITH, THIS PRECEDENT AGREEMENT. EACH  PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN  WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN  WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  Section 10. Notices  10.1. Any notices requh·ed by this Precedent Agreement must be in writing and addressed to:  (a) Ifto Customer:  Dakota Ethanol, LLC  46269 Sodak Hwy 34  Wentworth, South Dakota 57075  Agent:  Kinect Energy, Inc.  Attn: Bill Anderson  111000 Wayzata Blvd  Minnetonka, Minnesota 55441  (b) Ifto Northern:  Nmihem Natural Gas Company  Customer Service and Business Development  1111 So. 103rd St.  Omaha, Nebraska 68124  Phone No.: (402) 398-7094  Fax No.: (402) 398-7117  Page 9  

 

Contract No. 602577-0  Email: nngcontracts@nngco.com  10.2. Notices will be properly served when sent via overnight mail, certified mail, postage  prepaid return receipt requested, when received by Facsimile at the facsimile number set  forth in this Precedent Agreement or when received by email at the email address set forth  in this Precedent Agreement. Customer may change its address for the purpose of this  Precedent Agreement by giving written notice of such change to Northern. Northem's  contact information may be changed by posting revised contract information on its internet  website at www.n01thcrnnaturalgas.com. This Precedent Agreement will be deemed  amended to reflect the revised contact infonnation.  Section 11. Breach and Consequential Damages  11.1. Customer's failure to comply with the terms contained in the TSA, the applicable rate  schedule, the GT &C, or the terms of this Precedent Agreement is a breach and constitutes  a default tmder this Precedent Agreement. Upon te1mination of this Precedent Agreement  based on Customer's default, Customer will be liable for any and all damages hereunder,  at law or in equity, as accelerated to the date of such breach, including any such rights that  may be exercised pursuant to Northern's FERC Gas Tariff.  11.2. NEITHER PARTY, NOR ITS RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,  REPRESENTATIVES, AFFILIATES, SUCCESSORS OR ASSIGNS WILL BE LIABLE  TO THE OTHER PARTY FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL, OR  PUNITIVE DAMAGES OR FOR LOST PROFITS, OR LOSS OF BUSINESS OR  BUSINESS OPPORTUNITY HOWSOEVER CAUSED, WHETHER ARISING OUT OF  CONTRACT, TORT, STRICT LIABILITY, INDEMNITY, WARRANTY,  PROFESSIONAL LIABILITY, CONTRIBUTION, OR OTHERWISE.  Section 12. Representation and Warranties of Parties  Each Party hereby watrants and represents to the other Paity the following:  12.1. It is duly organized, validly existing and in good standing under the laws of the jurisdiction  of its organization/incorporation and has full power to execute, deliver and perform this  Precedent Agreement.  Page 10  

 

Contract No. 602577-0  12.2. The execution, delivery and performance of this Precedent Agreement have been and  remain duly authorized by all necessaty corporate or organizational action and do not  contravene any provision of law or of its constitutional documents or any contractual  restriction binding on it or its assets.  12.3. All consents, authorizations and approvals of, and registrations and declarations with, any  govemmental authority necessary for the due execution, delive1y and performance of this  Precedent Agreement have been obtained and remain in full force and effect and all  conditions thereof have been duly complied with, and no other action by and no notice to  or filing with, any governmental authority is required in connection with the execution,  delivery or performance of this Precedent Agreement.  12.4. Its assets, at their respective fair value, exceed such Party's liabilities and it has, or will  have, sufficient cash and capital to pay its liabilities and obligations as they become due.  12.5. In consideration for its execution of this Precedent Agreement, Customer will receive  reasonably equivalent value for the obligations that it is assuming as a result of this  Precedent Agreement and/or the TSA.  Section 13. Miscellaneous  13.1. Notwithstanding any other provision herein to the contraiy, in order for Northern to  evaluate the commitments that customers are willing to make and thus determine the  feasibility of the Project, and the engineering design and size of any expansion facilities,  Northern is seeking a commitment from customers through other precedent agreements  similar to this Precedent Agreement. Additionally, these commitments will enable  Northern to allocate capacity, if necessary, among customers who have signed such  precedent agreements or commitments from customers through agreements. Accordingly,  Customer hereby recognizes and acknowledges that, although Customer is obligated by  this Precedent Agreement upon its execution and delivery to Nmthern, said agreement and  the te1ms and conditions herein will be of no force and effect on Northem and Northem  will have no obligations whatsoever under this Precedent Agreement until Northern  executes this Precedent Agreement.  Page 11  

 

Contract No. 602577-0  13.2. Covenants regarding the Project and the Customer Facilities are in Exhibit B, attached  hereto and incorporated herein.  13.3. This Precedent Agreement may be executed in counterparts, each of which when signed  will be deemed an original, but all of which together will constitute one and the same  instrument. A signature in "PDF" format or an electronic signature to this Precedent  Agreement will be deemed an original and binding upon the Party against which  enforcement is sought.  13.4. Upon both Parties' execution of the TSA, Section 2 and Exhibit A of this Precedent  Agreement will expire and be superseded by the TSA. All remaining sections and  paragraphs and Exhibit C of this Precedent Agreement will survive until all obligations or  responsibilities under this Precedent Agreement and the TSA have been fully satisfied.  Exhibit B will survive for the life of the Project.  13.5. Imaged Documents may be introduced as evidence in any proceeding as if such were  original business records and neither Party may contest the admissibility of Imaged  Documents as evidence in any proceeding.  13 .6. Each provision of this Precedent Agreement will be considered severable so that if any one  provision or clause conflicts with or may not be given full effect because of applicable law,  this will not affect any other provisions which can be given effect without the conflicting  provision or clause and the conflicting provision or clause will be renegotiated by the  Parties in good faith to provide equal economic value to both Parties; provided, however,  this Section 13. 6 will provide no basis to treat the Precedent Agreement and the TSA as  separate, severable agreements or to effect such a severance.  13.7. This Precedent Agreement is not intended to create, and will not be construed to create, a  legal relationship of partnership or an association for profit between the Parties hereto. The  provisions of this Precedent Agreement will not impart rights of enforceability to any  person, firm or organization not a Party or not bound as a Party, or not a permitted successor  or assignee of a Party bound by this Precedent Agreement.  13.8. Any terms not defined herein will have the meanings set forth in Northem's FERC Gas  Tariff. Any conflicts between this Precedent Agreement and Northem's FERC Gas Tariff  Page 12  

 

Contract No. 602577-0  will be resolved in favor ofNorthern's FERC Gas Tariff, with the exception of the Security  requirements of Exhibit C.  13 .9. This Precedent Agreement together with the TSA and Exhibits hereto and thereto constitute  the entire agreement between N01thern and Customer pe1taining to the subject matter  hereof. Iu the event of a conflict between a provision of this Precedent Agreement and a  provision of a prior agreement, representation or understanding of the Parties, oral or  written, the provision of this Precedent Agreement will control without invalidating the  remaining provisions of such prior agreement, representation or understanding. Except as  specifically provided in Section 10, no provision of this Precedent Agreement may be  amended or waived unless such amendment or waiver is agreed to in writing and signed  by both Parties.  The Parties hereto have executed this Precedent Agreement to indicate their acceptance.  NORTHERN NATURAL GAS COMPANY DAKOTA ETHANOL, LLC  C ;::-,,  Title:V? D.M:bY'.YWhvC.J18us1·11.tb.f ~~Title: -~-'-_U _____ _  Date: _fo=----/ _I _7 ,__) _Z L~_  Page 13  

 

Contract No. 602577-0  Rate Schedule:  PRECEDENT AGREEMENT  WEST LEG 2023 EXP ANSI ON  BETWEEN  NORTHERN NATURAL GAS COMPANY  AND  DAKOTA ETHANOL, LLC  Exhibit A  TSA Terms and Conditions  Contract Tenn: Beginning 11/01/2023 and ending 10/31/2028  The Entitlement is subject to any Necessary Approvals, and acceptance of such approvals, if  necessaiy, and the completion (as determined in Northem's sole opinion) of the Northern Project  facilities necessmy to provide firm transportation service to Customer under the TSA. The  Entitlement, or portions thereof, will commence the later of 11/01/2023 or the first day of the  month following when Northern's facilities needed to provide the service are placed into service.  Customer and Northern may agree to start the service upon in-service of the facility(s) prior to the  beginning of the following month; however, the tenn shall end 5 years after the first day of the  month following when Northern's facilities needed to provide the service m·e placed into service.  Table A-1: Quantities and Points Bid (provided by Customer)  ReceiQt Point Delive1:y Point Winter Volume Smnmcr  (Dth/day) Volume  (Dth/day)  NBPL/NNG Lake Madison 7,000 4,340  Ventura SD #1*  (POI 192) (POI 71386)  * Primaiy de1ive1y points include Zone ABC Northwestern (POI 3096)  Notes:  Term  5 years  1) Winter includes November 1 through March 31. Summer includes April 1 through October 31.  2) The quantities shown are firm maximum daily quantities (MDQ or Entitlement).  Page 14  

 

Contract No. 602577-0  1. Customer will pay a CIAC plus the Maximum Reservation Rate and the commodity rates  provided under the applicable rate schedule in Northem's FERC Gas Tariff. In addition,  Customer will provide fuel, use and unaccounted for and pay all FERC-approved charges  and surcharges applicable to the service provided hereunder.  2. Upon completion of the Project, if Actual Cost is different from the amount of the CIAC  paid, Customer and Northern agree to Tme-Up the CIAC to Actual Cost (i.e., Customer  agrees to pay Northern the difference if the Actual Cost is greater than the CIAC previously  paid, or Northern will reimburse Customer the difference if the Actual Cost is less than the  CIAC previously paid).  Other Tenns:  1. Each of the Pa1ties agrees the TSA will include the following paragraph:  TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES  HERETO WAIVES ANY RIGHT IT MAY HA VE TO A TRIAL BY JURY WITH  RESPECT TO LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,  UNDER OR IN CONNECTION WITH, THIS AGREEMENT. EACH PARTY  FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A  JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY  TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  Page 15  

 

PRECEDENT AGREEMENT  WEST LEG 2023 EXPANSION  BETWEEN  Contract No. 602577-0  NORTHERN NATURAL GAS COMPANY  AND  DAKOTA ETHANOL, LLC  Exhibit B  Facilities  A. Northern Facilities:  1. Northern and/or its designee will constmct, own, operate and maintain the Project  facilities. In no event will Northern own, operate or maintain any facilities  downstream of its delivery point(s).  2. The Project, in Northern's sole determination, will be designed, constmcted,  operated, and maintained by Northern in accordance with all applicable laws and  regulations, and prudent operating procedures and constrnction standards that  Northern may adopt from time to time.  3. Northern will defend, indemnify and save harmless Customer, its affiliated  companies and officers, directors, shareholders, employees, subsidiaries, agents  and other representatives from and against that portion of the liabilities, losses,  claims, damages, penalties, causes of action, suits (including suits for personal  injuries or death and including reasonable attorneys' fees and expenses) claimed  from or against Customer caused by or resulting from the negligence or willful  misconduct of Northern in the performance of its obligations associated with the  Project.  Page 16  

 

Contract No. 602577-0  B. Customer Facilities:  1. Customer will provide, own, operate and maintain the Customer Facilities.  Customer is responsible for providing over-pressure protection equipment for the  Customer Facilities. Customer represents and warrants to Northern that it has the  knowledge and expertise, and its employees, agents and contractors are qualified to  design, constmct and operate the gas service equipment comprising the Customer  Facilities, including, but not limited to, the pressure of the gas delivered by  Northern to Customer into the Customer Facilities.  2. The Customer Facilities are designed, manufactured, fabricated, constructed,  installed, operated, tested and maintained by Customer in accordance with  applicable laws, regulations, industry standards, codes (including AGA design  standards) and prudent operating practices.  3. Customer will defend, indemnify and save haimless Northern, its affiliated  companies and officers, directors, shareholders, employees, subsidiaries, agents  and other representatives from and against that portion of the liabilities, losses,  claims, damages, penalties, causes of action, suits (including suits for personal  injuries or death and including reasonable attorneys' fees and expenses) claimed  from or against Northern caused by or resulting from the negligence or willful  misconduct of Customer in the ownership, operation and maintenance of  performance of its operations of the Customer Facilities.  4. Customer will grant Northem any necessaiy right-of-way access onto and across  Customer's property at no cost to Northern to complete the Project.  Page 17  

 

PRECEDENT AGREEMENT  WEST LEG 2023 EXP ANSI ON  BETWEEN  Contract No. 602577-0  NORTHERN NATURAL GAS COMPANY  AND  DAKOTA ETHANOL, LLC  Exhibit C  Security Requirements  A. When Security is not Required  No Security will be required during any period of time after the execution of this Precedent  Agreement and/or during the tenn of the TSA that Customer meets and maintains the  creditworthiness requirements of Section 46 of the GT &C.  B. When Security is Required  1. Amount of Security To Be Provided:  If Customer does not meet or maintain the creditworthiness requirements of  Section 46 of the GT &C at any time after the execution of this Precedent  Agreement and/or during the term of the TSA the Customer will provide Security  in an amount equal to the amount of credit assurance authorized for the TSA under  Section 46 of the GT &C ( equal to the highest three months of reservation charges  plus an amount to cover imbalances as provided in Northern's FERC Gas Tariff).  If Customer provides a guaranty, the amount of the guaranty will be, at a minimum,  in an amount equal to the Customer's Contract Value including, but not limited to,  an amount to cover imbalances as provided in Northern's FERC Gas Tariff.  2. Form of Security To Be Provided:  a. Customer may provide a guaranty, letter of credit or cash.  Page 18  

 

Contract No. 602577-0  b. If Customer provides a letter of credit, the letter of credit will be  substantially in the form posted on Northern's website as revised from time to time  and from a financial institution acceptable to Northern.  c. If Customer provides a guaranty, the guaranty will be substantially in the  form posted on Northem's website as revised from time to time and executed by a  guarantor that meets the creditworthiness requirements of Section 46 of the GT &C.  d. If Customer provides cash, Customer agrees to execute a Joinder in Master  Escrow Agreement substantially in the fonn posted on Northem's website as  revised from time to time.  3. Timing of Provision of Security: The amount of Security required under this  Exhibit C will be provided within ten (10) calendar days of the date of Nmthern's  written request.  4. Miscellaneous:  a. If due to default under this Precedent Agreement or the TSA, actions of  Customer set forth in subparts (i) and (ii) of Paragraph 4.4 of this Precedent  Agreement, or otherwise Customer becomes obligated to pay Customer's  Remaining Obligation, and Northern is holding Security, then Customer waives  any and all claims to the balance of the Security held by Northern and agrees that  such balance will be retained by Northern and applied toward any amounts due  from Customer.  b. Failure to remit in full all Security by the due dates constitutes a material  breach of this Precedent Agreement and may, at the discretion of Northern, result  in te1mination ofNorthem's obligations under the Precedent Agreement or the TSA.  Upon any default under this Precedent Agreement or the TSA, Northern may pursue  any remedy available at law or equity.  c. Upon any default under this Precedent Agreement or the TSA, N01thern  may pursue any remedy available at law or equity.  Page 19  

 

Contract No. 602577-0  d. The Security will be owned and held by Nmthem for its sole and exclusive  benefit until the earlier of (i) Customer meeting the creditwmthiness requirements  of Section 46 of the GT &C, or (ii) Customer satisfying in full all of its obligations  under this Precedent Agreement and/or the TSA.  e. The Secmity will be owned and held by Northern, and Customer's sole  interest in the Security will be a residual interest, if any, remaining after all of  Customer's obligations under the TSA and this Precedent Agreement are satisfied  in full. If Security is provided in the form of a letter of credit, Customer will have  no interest in the letter of credit or its proceeds.  Page 20

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