Document:

Exhibit 10.11

 

NATURAL
GAS TRANSPORTATION AGREEMENT

INTERSTATE
POWER AND LIGHT COMPANY

Applicable
to the Iowa Service Area of

the
former Interstate Power Company

 

 

FIRM
TRANSPORTATION AGREEMENT

 

THIS AGREEMENT,
made this 23rd day of October, 2003, by and between INTERSTATE POWER AND LIGHT COMPANY, an Iowa
corporation headquartered at 200 First Street SE, Cedar Rapids, Iowa,
(hereinafter referred to as “Company”) and GOLDEN
GRAIN ENERGY, LLC, a limited liability company, with principal
offices at 951 North Linn Avenue, New Hampton, Iowa (hereinafter refereed to as
“Customer”):

 

WITNESSETH:

 

NOW
THEREFORE, in consideration of the mutual promises and upon
the following terms and conditions, the parties agree as follows:

 

1.             The initial term (the “Initial
Term”) of this Agreement shall be for a period starting on the later of
November 1, 2004 or on the date Company facilities are installed and available
to carry natural gas to Customer (such facility installation date shall be
established by letter from Company to the Customer), as provided by the Gas
Facilities Extension Agreement (Advance) entered into by and between the
parties on the 23rd day of October 2003, and ending ten (10) years after the
starting date. After expiration of the Initial Term, the Agreement shall
continue from month-to-month and may be terminated upon sixty (60) days written
notice to terminate by either party.  At
Customer’s option and upon at least sixty (60) days notice prior to the end of
the Initial Term of this Agreement, this Agreement may be extended for an
additional five (5) years beyond the end of the Initial Term.  Such additional five (5) year term shall be
the “Renewal Term.”  The Renewal Term
pricing shall be based on a change in the then applicable monthly charge as set
out in Paragraph 3 of this Agreement to reflect the percent change in the
Consumer Price Index (“CPI”) between the start and end of the Initial Term.

 

1

 

2.             Company
will furnish firm transportation of Customer-owned gas (“Transportation
Service”) to the Customer through one (1) meter location in accordance with the
Supply Information set forth in Exhibit A of this Agreement.  For compensation for lost and unaccounted
for gas in the Company’s distribution system, the volume of transportation gas
the Company delivers to the Customer’s location shall be the transportation gas
volume received by the Company reduced by one-half (1/2 %) percent.  Customer shall be responsible for making gas
nominations in accordance with applicable Company procedures.

 

3.             Customer
shall use and pay for such Transportation Service in accordance with the terms
and conditions of this Agreement and pursuant to the terms set forth in the
Price Schedule(s) specified in Exhibit A, or such other applicable price
schedules as may hereafter at any time be established for this class of
Transportation Service pursuant to an order of the Iowa Utilities Board or such
other regulatory authority having jurisdiction.  Customer shall pay a monthly delivery system transportation
charge of fifteen thousand ($15,000) dollars from the start date of the Initial
Term of this Agreement until October 31, 2005. 
Thereafter, Customer shall pay a monthly charge of thirteen thousand
($13,000) dollars for the remaining term of the Agreement for transportation
service for reservation of capacity on the Company’s gas distribution system
for the firm delivery of up to three hundred thirty-three (333) dekatherms an
hour of Customer’s natural gas supply to the point at which Customer and
Company gas facilities interconnect. 
Any increase in capacity reservation shall be subject to prior Company
approval with a proportionate increase in the initial monthly charge level.  Notwithstanding any other provision of this
Agreement, all prices, charges and terms contained in this Agreement may be
modified at any time by a ruling of the Iowa Utilities Board and/or a
subsequent filing made pursuant to the provisions of Chapter 476 of the Code of
Iowa.

 

4.             Company
shall not be liable for any loss or damage of any nature whatsoever incurred or
suffered as a result of any failures or delays in the performance of its
obligations under this Agreement due to any cause or circumstance beyond its
control, including but not limited to strikes, riots, acts of God, or
accidents; provided, however, that Company shall in good faith use such effort
as is reasonable under all the circumstances known to Company at the time to
remove or remedy the cause and mitigate the damages. The above provision shall
also fully apply in limiting the Customer’s liability to the Company,

 

2

 

but shall not in any way affect the Customer’s monthly payment
obligations pursuant to Paragraph 3 of this Agreement.

 

5.             This
Agreement shall be binding upon the successors and assigns of both parties, and
may be amended from time to time as mutually agreed in writing.  This Agreement shall be governed by the laws
of the State of Iowa.  All
communications related to this Agreement shall be to the persons listed below
or to such other persons as the parties may specify in writing:

 

 

	
   

  	
  COMPANY:

  	
  Deb Marson

  
	
   

  	
   

  	
  Interstate Power and Light Company

  
	
   

  	
   

  	
  22 Second Street NW

  
	
   

  	
   

  	
  Mason City, Iowa 50401

  
	
   

  	
   

  	
  Telephone: 641-422-1722

  
	
   

  	
   

  	
  Fax:
  641-422-1778

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CUSTOMER:

  	
  Walter Wendland President

  
	
   

  	
   

  	
  Golden Grain Energy, LLC

  
	
   

  	
   

  	
  951 N Linn Avenue

  
	
   

  	
   

  	
  New Hampton, Iowa 50659

  
	
   

  	
   

  	
  Telephone: 641-394-4059

  
	
   

  	
   

  	
  Fax:
  641-394- 2431

  

 

6.             Pursuant
to 199 Iowa Admin.  Code 19.13(6),
Company hereby notifies Customer of the risks to Customer associated with
transportation of Customer-owned gas. 
The risks disclosed are those reasonably known to Company at the time
this Agreement is executed by Company. 
Customer is assumed by Company to be aware of all risks associated with
Customer’s purchase and transportation of gas prior to its delivery to Company
at the Point of Receipt.  This notice
shall not be construed as limiting in any manner the risks assumed by Customer
upon entering into this Agreement.  By
signing this Agreement, Customer acknowledges that it has been made aware of
the risks disclosed and accepts those risks.

 

The risks associated of election without
Company-supplied reserve are as follows:

 

A.                                   During
the term of this Agreement, Company has no obligation to maintain or secure any
gas to sell to Customer for reserve or any other purpose.

 

3

 

B.                                     If,
at any time, Customer desires to purchase sales service gas, Company shall only
be obligated to provide such gas on an as-available basis pursuant to Company’s
tariff on file with the Iowa Utilities Board.

 

C.                                     Customer
will be liable to Company for Pipeline penalties, which Company may incur as a
result of incorrect, improper, or late transportation nominations provided to Company.  Such penalties also apply to Customer’s
failure to properly nominate Company supplied reserves.  Company reserves the right to reject
improper nominations or those not made in a timely manner.

 

D.                                    If
Customer uses gas from Company supplies in excess of the quantity of Customer­
owned gas transported, the gas will be provided only on an as-available basis
and subject to penalty provisions, except where Customer has received prior
written authorization from Company for limited excess use to be billed under
the Company’s tariff.

 

E.                                      Upon
termination of this Agreement, Company shall have no obligation to sell gas to
the Customer.  The right of Customer to
buy gas or obtain transportation of Customer-owned gas from Company after
termination of this Agreement shall be dependent on Company having or being
able to secure adequate distribution capacity or supply at that time.  The gas and the transportation of
Customer-owned gas shall be provided in accordance with Company’s tariff.

 

F.                                      Other
risks not specifically identified in this Article may arise from other
provisions of this Agreement, the Company’s tariff, and rules, regulations or
orders of regulatory authorities.

 

This
Agreement represents the complete understanding of the parties and shall govern
over all other documents and oral representations making all other
representations of the parties null and void.

 

IN
WITNESS WHEREOF, the parties hereunder have caused these
presents to be executed as of the day and year first above written.

 

4

 

	
   

  	
  INTERSTATE POWER AND LIGHT COMPANY

  
	
   

  	
  By

  	
  /s/ E. Protsch

  
	
   

  	
  Title

  	
  VP of Energy Delivery

  
	
   

  	
   

  
	
   

  	
  GOLDEN
  GRAIN ENERGY, LLC

  
	
   

  	
  By

  	
  /s/ Walter Wendland

  
	
   

  	
  Title

  	
  President

  
						

 

5

 

EXHIBIT
A

 

TO
AGREEMENT DATED OCTOBER 23, 2003 BY AND BETWEEN

INTERSTATE POWER AND
LIGHT COMPANY AND

GOLDEN
GRAIN ENERGY, LLC

 

(1)                                  The
“applicable Pipeline” is Northern Natural Gas/Northern Border Pipeline Co.

 

(2)                                  Point of
Receipt by COMPANY    Company’s interconnection with
Northern Natural Gas/Northern Border Pipeline Co., near Ventura, Iowa pursuant
to Paragraph (1), above.

 

(3)                                  Point
of Delivery to Customer Golden Grain Energy, LLC at Mason City, Iowa

 

(4)                                  Advance
or contribution to extension facilities $ Applicable per separate Facility
Extension Agreement

 

(5)                                  Account
No.(s)

 

(6)                            Meter No.(s)

 

SUPPLY INFORMATION

 

	
  Applicable

  Transp. Service

  Price Schedules

  	
   

  	
  Max.

  Daily Transp.

  Volumes (Dth)*

  	
   

  	
  Daily

  System Supply

  Resrves (Dth)*

  	
   

  	
  Applicable

  Sales Service

  Price Schedule

  	
   

  
	
  280

  	
   

  	
  9000

  	
   

  	
  0

  	
   

  	
  500

  	
   

  

 

 

Customer
acknowledges that its election to purchase system supply reserves, if any,
shall be for a one (1) year period commencing on the first day of the first
month following execution of this Exhibit A by Customer.  Customer agrees to pay, on a monthly basis,
the appropriate demand charges for system supply reserves to the extent
contracted or designated above. 
Customer acknowledges that such demand charges may be increased or decreased,
during the term of this one- (1) year period.

 

 

	
  INTERSTATE POWER AND LIGHT

  COMPANY

  	
  GOLDEN GRAIN ENERGY, LLC

  
	
   

  	
   

  
	
  By

  	
  /s/ E. Protsch

  	
   

  	
  By

  	
  /s/ Walter Wendland

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  10-23-03

  	
   

  	
  Date

  	
  10-24-03

  	
   

  
								

 

*
or other applicable unit of measure as may be set forth in the Company’s tariff
on file with the Iowa Utilities Board.

 

6Exhibit 10.12

 

AMENDMENT NUMBER ONE

to

LETTER OF INTENT (“LOI”)

DATED JANUARY 13, 2003

by and between

FAGEN, INC. (“FAGEN”)

and

GOLDEN GRAIN ENERGY, LLC (“OWNER”)

 

This Amendment Number One is
entered into this 1st day of October, 2003, by and between Fagen,
Inc., a Minnesota Corporation (“Fagen”) and Golden Grain Energy, LLC, an Iowa
limited liability company (“Owner”).

 

Anything to the contrary
contained in the LOI between the parties hereto, and in consideration of the
mutual promises, covenants, and conditions contained in the LOI and contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto covenant and
agree that the terms and conditions of this Amendment Number One shall prevail.

 

The parties hereto agree as
follows:

 

1.                                       Section 6 of the
LOI is amended as follows:

 

In lines 3
through 5 of Section 6, delete sentence 2 of that Section and replace with the
following:

 

Owner and
Fagen agree that during the term of this Letter of Intent, Fagen agrees that it
will not develop or construct another ethanol project or facility within 75
miles of New Hampton, Iowa, except one project identified to be greater than 50
miles from New Hampton, Iowa.

 

The other provisions of the LOI
shall remain unchanged and in full force and effect.

 

IN WITNESS WHEREOF, the parties
hereto have executed this Amendment Number One on the date set forth above.

 

	
  FAGEN, INC.

  	
  GOLDEN GRAIN
  ENERGY, LLC

  
	
   

  	
  (Owner)

  
	
   

  	
   

  
	
   

  	
   

  
	 
	
  By

  	
  /s/ O. Wayne
  Mitchell

  	
   

  	
  By

  	
  /s/ Walter
  Wendland

  	
   

  
	 
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	 
	
  Title

  	
  Senior
  Vice-President

  	
   

  	
  Title

  	
  President

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