Exhibit 10(l)

Master Coal Purchase and Sale Agreement

between

Minn-Dak Farmers Cooperative

and

Rio Tinto Energy America Inc.

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Master Coal Purchase and Sale Agreement Index

 

 

 

Article 1.

 

General Terms and Definitions

 

Article 2.

 

Term

 

Article 3.

 

Quantity

 

Article 4.

 

Delivery and Transportation

 

Article 5.

 

Title and Risk of Loss; Equipment Damage

 

Article 6.

 

Coal Quality Specifications

 

Article 7.

 

Sampling and Analysis

 

Article 8.

 

Weighing

 

Article 9.

 

Price and Price Adjustments

 

Article 10.

 

Invoices, Payments, Netting, Set off, and Credit Ratings

 

Article 11.

 

Force Majeure

 

Article 12.

 

Records, Audits, Access

 

Article 13.

 

Default, Remedies, and Termination

 

Article 14.

 

Notices

 

Article 15.

 

Cooperation

 

Article 16.

 

Warranty, Limitation on Liability, Duty to Mitigate & Indemnification

 

Article 17.

 

Limitation on Waiver

 

Article 18.

 

Confidentiality

 

Article 19.

 

Entirety, Amendments

 

Article 20.

 

Successors and Assigns

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Article 21.

 

Governing Laws

 

Article 22.

 

Interpretation

 

Article 23.

 

Resale to Local College

 

Article 24.

 

Survival

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MASTER COAL PURCHASE AND SALE AGREEMENT

This MASTER COAL PURCHASE AND SALE AGREEMENT (“Agreement”) is entered into and
is effective as of the 31st day of July 2006, between Rio Tinto Energy America
Inc. (“RTEA”), a Delaware corporation, and Minn-Dak Farmers Cooperative
(“Minn-Dak”), a North Dakota cooperative. Both RTEA and Minn-Dak may be
individually referred to herein as a “Party” or collectively as “Parties”.

RECITALS

WHEREAS, each Party is engaged in the sale and/or purchase of Powder River Basin
(“PRB”) Coal or other Coal. The Parties believe it will be mutually beneficial
to set the terms and conditions under which such Coal sales and purchases may be
made between them.

IN CONSIDERATION of the mutual covenants and promises set forth hereafter, the
Parties to this Agreement, intending to legally bind themselves, agree now as
follows:

ARTICLE 1. GENERAL TERMS AND DEFINITIONS

 

 

1.01

The terms of this Agreement shall govern all purchases and sales of Coal between
the Parties (hereinafter “Transactions”) or options thereon during the term of
this Agreement unless the Parties expressly indicate otherwise. All amendments,
modifications, revisions and changes to this Agreement or any related
Transaction or option must be in writing and signed by both Parties. If the
Parties enter into an option concerning the purchase and/or sale of Coal, the
terms and conditions of this Agreement and the Confirmation Letter shall govern
the Transaction once the option has been exercised.

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1.02

For individual Transactions, the Parties shall enter into a written Confirmation
Letter (hereinafter “Confirmation”) that sets forth and defines the following:
the Buyer, the Seller, the price, price adjustments, quantity, term, quality
specifications, mine(s), and any other Transaction-specific provisions mutually
agreed upon by the Parties. All Confirmations shall be in writing, signed by
both Parties. The Parties intend the provisions of each individual Confirmation
and the provisions of this Agreement be construed as one single integrated
agreement and that without a written Confirmation the Parties would not
otherwise enter into a Transaction. Any inconsistency or conflict between
provisions of the individual Confirmation and provisions of this Agreement shall
be resolved in favor of any provisions of the Confirmation.

 

 

1.03

Each of the following terms when used in this Agreement will have the meaning
given to it in this section:

 

 

 

 

 

 

a)

“Actual Btu” means the monthly ton-weighted average as-received calorific value
(stated in Btu/lb.).

 

 

 

 

 

 

b)

“Buyer” means the Party to a Transaction who is obligated to purchase and
receive Coal, or causes Coal to be received.

 

 

 

 

 

 

c)

“Claim” means all claims or actions threatened or filed that directly or
indirectly relate to the subject matter of this Agreement, including but not
limited to indemnity, the resulting losses, damages, expenses, reasonable
attorneys’ fees and costs.

 

 

 

 

 

 

d)

“Coal” means any and all Coal to be sold by Seller and purchased by Buyer
pursuant to the terms and conditions of this Agreement.

 

 

 

 

 

 

e)

“Electronic” means faxes, telegraphs, emails, and all other forms of electronic
data transfer.

 

 

 

 

 

 

f)

“Standard Btu” means the standard calorific value as set forth in a Confirmation
(stated in Btu/lb.) and is the basis for a price adjustment as described in
Section 9.03.

 

 

 

 

 

 

g)

“Seller” means the Party to a Transaction who is obligated to sell and deliver
Coal or causes Coal to be delivered.

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h)

“Ton” means 2,000 pounds avoirdupois.

 

 

 

 

 

 

i)

“Loading Provisions” means the terms and conditions of Buyer’s contracts or
excerpts thereof that Seller has reviewed and approved. The Loading Provisions
are further described in Section 4.04 and attached as Exhibit A.

ARTICLE 2. TERM

 

 

2.01

This Agreement shall begin on the date first set forth above and shall continue
in effect until terminated by either Party upon sixty (60) days written notice
to the other Party, which right of termination shall be each Party’s absolute
right to exercise. Termination of this Agreement under this Article shall not
affect either Party’s rights and obligations with respect to any Transactions
that have been agreed to in writing in a Confirmation prior to termination.

ARTICLE 3. QUANTITY

 

 

3.01

Buyershall be obligated to purchase and pay for, and Seller shall be obligated
to sell and tender for delivery, the amount of Coal agreed to in a Confirmation,
except as may be limited by Article 11 of this Agreement.

 

 

3.02

Unless otherwise limited in the Confirmation, Buyer has the right to ship or use
the Coal delivered under this Agreement at any of Buyer’s locations or for any
such purpose Buyer designates.

ARTICLE 4. DELIVERY AND TRANSPORTATION

 

 

4.01

For each Transaction, Seller agrees to tender to Buyer and Buyer agrees to
accept from Seller the quantity of Coal as provided in the relevant
Confirmation. Seller shall tender the Coal to Buyer in accordance with
reasonable monthly delivery schedules to be submitted by

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Buyer in accordance with the Agreement and the Confirmation. Schedules shall be
based on a ratable monthly basis unless otherwise agreed to by both Parties. In
addition, Buyer shall provide Seller with monthly schedules at least sixty (60)
days prior to the beginning of each applicable month. If the Seller objects to a
schedule submitted by Buyer, Seller shall notify Buyer of its objections within
fifteen (15) days of Seller’s receipt of such schedule and the Parties shall
work together in good faith to agree on a reasonable and mutually acceptable
schedule. The mine(s) used to source the Coal supplied under this Agreement
shall be any mine set forth in the Confirmation.

 

 

4.02

Buyer shall supply the appropriate unit train railcars. Said railcars shall be
of a size compatible with the loading requirements set forth in this Agreement.
Unit train sizes will normally vary from 105 to 135 railcars per train; however,
depending on railcar availability, shorter or longer trains may occasionally be
operated by mutual agreement.

 

 

4.03

Unless excused by Article 11 of this Agreement, if Buyer fails over a quarterly
basis to schedule the appropriate unit trains for delivery of an amount of Coal
scheduled under a Transaction, Seller shall have the right at Seller’s sole
option to reduce the annual quantities of that Transaction by the deficit from
the scheduled amount. This right shall be in addition to any other rights
available to Seller hereunder.

 

 

4.04

Seller shall cause Coal to be loaded and delivered at the loading facilities
into railcars supplied by Buyer. Seller agrees to comply with the weighing and
railcar Loading Provisions. Said Loading Provisions are subject to Seller’s
ability to load the required net tonnages in Buyer’s railcar without significant
risk of spillage or exceeding railcar limits and shall be in general compliance
with industry standards for the applicable coal region. Seller shall have at
least 48 hours notice of any changes to the Loading Provisions. If the changes
to the Loading Provisions are inconsistent with Seller’s commitments as
otherwise set forth in this Agreement and Seller’s then current operating
practice, Seller shall not be liable for

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noncompliance with such changes unless expressly accepted by Seller. Should the
obligations as set forth in this Article 4 not be met, and as a result, Buyer
incurs costs under its transportation agreement with the rail carrier as a
direct result of Seller’s not meeting its obligation hereunder and such failure
is not the fault of either Buyer or the railroad, then Seller shall reimburse
Buyer for any such costs as set forth in Exhibit A.

 

 

4.05

The scheduled Coal shall be F.O.B. loaded in Buyer-provided railcars at the
delivery point located at each individual mine (“Delivery Point”). Buyer’s
railcars and unit train shall be compatible with Seller’s trackage, storage and
loading facilities, and shall be ready to load upon arrival at the individual
mine. Seller shall load each railcar at Seller’s expense and shall complete the
loading of all railcars in each unit train within four hours after the first
empty railcar is actually placed by the railroad under the Seller’s loading
chute. Unless excused by Article 11 or due to actions of Buyer or Buyers rail
carrier, Seller shall be responsible for demurrage or other charges invoiced to
Buyer by Buyer’s rail carrier resulting directly from Seller’s failure to load
Buyer’s trains as provided above.

 

 

4.06

Seller is required to load each railcar to the gross weight(s) designated in the
Confirmation; however, under no circumstances will the gross weight exceed the
maximum limit established by the rail carrier(s) for the railcar type and for
the designated train routes. Should Seller load any railcar on Buyer’s behalf
outside of these specified limits, the Seller assumes any and all reasonable
costs which may be charged by the rail carrier(s) and paid by Buyer as a direct
result of such underloading or overloading of these railcars.

ARTICLE 5. TITLE AND RISK OF LOSS; EQUIPMENT DAMAGE

 

 

5.01

Title to the Coal and all risk of loss shall pass to Buyer upon completion of
loading all railcars in each unit train at the Delivery Point.

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5.02

Seller shall be responsible for, and shall indemnify Buyer for, any and all
direct reasonable costs resulting from damage to: (i) Buyer’s equipment if such
equipment is damaged while on Seller’s property except to the extent such damage
is caused by the negligence or recklessness of Buyer or its contracted rail
carrier; and (ii) Buyer’s equipment, including mobile railcars and stationary
equipment at Buyer’s electric generating station, if said equipment is damaged
as a result of non-Coal material having been interspersed with the tendered Coal
prior to leaving Seller’s mine property.

ARTICLE 6. COAL QUALITY SPECIFICATIONS

If the Parties set forth coal quality specifications in a Confirmation, the
following Sections 6.01 – 6.03 shall apply with respect to those specifications.

 

 

6.01

At the Delivery Point, all tendered Coal shall be raw, substantially free of
magnetic material and other foreign material impurities, and crushed to a
maximum size as set forth in the Confirmation as determined in accordance with
applicable American Society of Testing and Materials (ASTM) standards.

 

 

6.02

If there are three (3) Non-Conforming Shipments as defined in Section 6.04,
whether rejected or not, under a Transaction in any three (3) month period or,
if two (2) out of four (4) consecutive shipments under a Transaction are
Non-Conforming Shipments, Buyer may upon notice confirmed in writing and sent to
Seller, suspend future shipments except those shipments already loaded into
railcars. Seller shall, within sixty (60) days, provide Buyer with reasonable
assurances that subsequent deliveries of Coal shall meet or exceed the
specifications set forth in the Confirmation. If Seller fails to provide such
assurances within that sixty (60) day period, Buyer shall have the right to
terminate the Transaction without further obligation hereunder on the part of
either party. Termination shall be the sole remedy of Buyer under this Section.
Buyer’s waiver of this right for any one train shall not constitute a

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waiver for subsequent trains. If Seller provides such assurances to Buyer’s
reasonable satisfaction, deliveries hereunder shall resume and any tonnage
deficiencies resulting from suspension may be made up at Buyer’s sole option
subject to a mutually agreeable schedule. Buyer shall not unreasonably withhold
its acceptance of Seller’s assurances, or delay the resumption of shipment.

 

 

6.03

The Parties recognize during the performance of a Transaction, legislative,
regulatory bodies or the courts may adopt environmental laws, rules, and
regulations that will make it impossible or commercially impracticable for Buyer
to utilize or to remarket Coal purchased under this Agreement. If, as a result
of the adoption of such laws, rules, and regulations or changes in the
interpretation or enforcement thereof, Buyer, in good faith, decides it will be
impossible or commercially impracticable for Buyer to utilize or to remarket
such Coal, Buyer shall promptly notify Seller in writing. After receiving such
notification, Buyer and Seller shall promptly consider whether corrective
actions can be taken in the mining and preparation of the Coal, in the operation
of Buyer’s generating station, or in Seller’s substituting different source
Coal. If in the Parties’ reasonable judgment such actions will, make it
impossible and commercially impracticable for Buyer to utilize or to remarket
tendered Coal without violating any applicable law, regulation, policy, or
order, Buyer shall have the right, upon sixty (60) days notice to Seller, to
terminate the Transaction without further obligation on the part of either
party. Termination shall be the sole remedy of Buyer and Seller under this
section.

 

 

If Rejection Limits are specified in the Confirmation, this Section 6.04 shall
apply.

 

 

6.04

If any Shipment of Coal triggers any of the Rejection Limits specified in the
Confirmation for a Transaction (a “Non-Conforming Shipment”), Buyer shall have
the option, within twenty-four (24) hours of Buyer’s receipt of the quality
analysis of the Coal, of either (i) rejecting such Non-Conforming Shipment prior
to unloading the Coal, or, (ii) accepting the Non-Conforming Shipment and in
addition to any quality adjustments outlined in the Confirmation, reducing the

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price of Coal for such trainload by $0.50 per ton. If Buyer fails to timely
exercise its rejection rights under this Section as to a Shipment, Buyer shall
be deemed to have waived such rights to reject with respect to that Shipment
only. Buyer’s failure to timely exercise such notice does not constitute a
waiver of its right to any penalty adjustment provided for herein or in the
relevant Confirmation. If Buyer timely rejects the Non-Conforming Shipment,
Seller shall be responsible for promptly transporting the rejected Coal to an
alternative destination determined by Seller and, if applicable, promptly
unloading such Coal. Seller shall reimburse Buyer for all reasonable costs and
expenses associated with the transportation, storage, handling and removal of
the Non-Conforming Shipment. Buyer shall cooperate with Seller in minimizing
Seller’s cost of redirecting the rejected Coal. Seller shall replace the
rejected coal within a reasonable period of time.

ARTICLE 7. SAMPLING AND ANALYSIS

 

 

7.01

Seller shall cause, at its expense, the Coal in each unit train to be sampled
and analyzed at the individual mine in accordance with applicable ASTM
standards. Buyer shall have the right, at its own risk and expense, to have a
representative present at any and all times to observe sampling and analysis
procedures. All samples shall be divided into three (3) parts and put in
suitable airtight containers. One part shall be furnished to Buyer or its
designee for its analysis, one part shall be retained for analysis by Seller or
its designee (which analysis shall be the basis for payment), and the third part
shall be retained by Seller or its designee in one of the aforesaid containers
properly sealed and labeled for a period thirty (30) days after the date of
sample collection. Buyer’s samples are to be clearly labeled as to mine, date of
sampling, date of preparation, and other identification as to shipment (such as
train identification number) and are to be sent within forty-eight (48) hours of
train loading to the address listed below unless a different address is provided
by Buyer in the Confirmation or otherwise in writing. Seller shall cause the
following data, subject to future adjustment, to be provided to Buyer by a
mutually agreed upon method of electronic data transmission within

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forty-eight (48) hours of train loading: tonnage (gross, net, and tare average
for each railcar and the unit train in total), and the average calorific value,
% moisture, % ash, % sulfur, and % Na2O in ash (if set forth in the
Confirmation), (the “Short Proximate Analysis”). Any additional analysis
requested by Buyer that exceeds the information provided in the Short Proximate
Analysis shall be at Buyer’s expense.

 

 

 

 

 

Mailing address for sample splits:

 

 

 

 

 

Minn-Dak Farmers Cooperative

 

 

Attn: Ron Ehlert

 

 

7525 Red River Road

 

 

Wahpeton, MN 58075-9698

 

 

7.02

In the event a dispute arises between Buyer and Seller within thirty (30) days
of Seller’s analysis due to a difference between Buyer and Seller’s short
proximate analyses of a sample that exceeds the ASTM interlab repeatability
limits, an independent testing laboratory, mutually agreeable to Buyer and
Seller, will be retained to analyze the third part of such sample. The Party
whose calorific value analysis is closest to the independent analysis shall
prevail and such Party’s calorific value analysis shall govern for the trainload
in question. In such case, the cost of the analysis made by such independent
testing laboratory will be borne by the Party whose calorific value analysis is
furthest from the independent analysis and therefore, not used. In the event
both Parties’ calorific value analyses differ from the independent testing
laboratory’s result by the same amount, the independent testing laboratory’s
result shall govern for the trainload in question and the Parties shall share
equally the cost of the independent testing.

 

 

ARTICLE 8. WEIGHING

 

 

8.01

Certified commercial scales at Seller’s train loading facility at each
individual mine will determine weights. Scales shall be calibrated and tested as
customary in industry practice with copies of calibration and testing reports
provided to Buyer upon request. If Seller’s scales are not available to
determine the valid net weight of all of the railcars in a unit train

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but valid weights are obtained for thirty (30) or more railcars in such train,
the arithmetic average of all of the valid net weights of the thirty or more
railcars in such train shall be used as the net weight for each railcar in such
train for which a valid net weight was not determined by Seller’s scales. If
Seller’s scales are inoperative or fail to determine the valid net weight of at
least thirty (30) railcars in a unit train, the weighted arithmetic average of
the net railcar weights of the previous ten (10) unit trainloads of Coal shipped
to Buyer shall be used as the net weight for each of the unweighed railcars in
such train. The calculation of the weighted arithmetic average net weight for
the previous ten (10) unit trainloads shall exclude all bad-order railcars,
which were not loaded, and any trainload of Coal for which the net weights were
estimated on thirty (30) or more railcars. The Buyer shall be notified
electronically immediately after the above instance occurs.

 

 

ARTICLE 9. PRICE AND PRICE ADJUSTMENTS

 

 

9.01

For all Coal delivered under this Agreement, Buyer shall pay Seller the base
price as set forth in the Confirmation.

 

 

9.02

Seller shall be solely responsible for all assessments, fees, costs, expenses,
and taxes relating to the mining, production, sale, use, loading and tender of
Coal to Buyer or in any way accruing or levied prior to transfer of title to the
Coal to Buyer and including, without limitation, severance taxes, royalties, ad
valorem, black lung fees, reclamation fees and other costs, charges and
liabilities. The base price includes reimbursement to Seller of all
environmental, land restoration and regulatory costs, including without
limitation any reclamation costs required under applicable federal, state or
local law as of the date of the Transaction. Buyer shall be responsible for any
sales and/or use tax unless Buyer provides Seller an appropriate exemption
certificate or similar document. The base price shall be subject to adjustments
for changes in existing laws and regulations (including changes in levies and
rates), or new laws or regulations, or changes in interpretations thereof
enacted

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and in force during the term of sale set forth in the Confirmation that change
Seller’s costs of producing Coal for delivery pursuant to any Confirmation.
Notwithstanding the above, no price adjustment will occur under this Section
until the cumulative effect of all such changes equals or exceeds $0.05 per ton
for any calendar year under a Transaction. Seller shall use commercially
reasonable best efforts to inform Buyer of any such change as soon as Seller
becomes aware of such change and its effect on the base price of Coal hereunder.

 

 

9.03

The base price may also include an adjustment based upon the calorific value,
sulfur content or other qualities of the Coal as the Parties may mutually agree
upon and as set forth in the Confirmation.

 

ARTICLE 10. INVOICES, PAYMENTS, NETTING, SET OFF, AND CREDIT RATINGS

 

 

10.01

Based on Seller’s weights, Seller will invoice Buyer twice a month for all Coal
delivered. Invoices for quality adjustment, as provided in a Transaction, shall
be issued monthly, based on Seller’s analyses. Seller shall clearly indicate
Buyer’s applicable purchase order number on all invoices. Each invoice shall
state for each trainload of Coal: the quantity of Coal delivered, the Actual Btu
and SO2, % Na2O in ash (if set forth in the Confirmation) and the invoice price
and any other required quality adjustment. Invoices shall be mailed or
electronically transmitted, as applicable, to:

 

 

 

 

 

Invoices to Minn-Dak:

 

 

Minn-Dak Farmers Cooperative
Attn: Arland Anderson
7525 Red River Road
Wahpeton, ND 58075-9698
Email: aanderson@minndak.coop

 

 

 

 

 

Invoices to RTEA:

 

 

 

 

 

Rio Tinto Energy America Inc.
Attn: Revenue Accounting
Caller Box 3017 (82717-3017)
405 West Boxelder Road, Suite D
Gillette, WY 82718

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Checks to RTEA:

 

 

Rio Tinto Energy America Inc.
Account Number 060-00298-13
Wells Fargo, N.A.
P.O. Box 26094
Salt Lake City, UT 84126-0094

 

 

 

 

 

ACH/Wires to RTEA:

 

 

Rio Tinto Energy America Inc.
Account # 060-00298-13
Wells Fargo Bank
41 East 100 South
ACH ABA # 124000012
Wire ABA # 121000248

 

 

 

 

 

Payment Detail:

 

 

To ensure proper allocation of payments to appropriate invoice, e-mail invoice
numbers and amounts to: Doreen.Heuck@Riotinto.com or information may be faxed to
(307) 687-6010.

 

 

10.02

For all invoices, payment will be made within 5 business days of receipt of that
invoice. Amounts shall be paid via check or electronic means (i.e., ACH or
Federal Reserve wire transfer of funds). The wire transfer of funds shall be
sent to Seller’s bank as indicated on the invoice.

 

 

10.03

In the event Buyer in good faith disputes part or all of an invoice, notice of
the disputed portion, with reasons for dispute, must be given prior to the due
date of the invoice and the undisputed portion shall be paid by the due date. If
the disputed portion is determined to have been properly due and payable,
interest on that portion in dispute and which has not been paid shall accrue
from the date that portion was due and payable. If a disputed portion is paid
and is later determined not to have been properly due and payable, interest will
similarly be refunded from the date payment had been received. Interest shall be
paid at one (1) percentage point over the then current U.S. prime rate as listed
in the Money Rates section of The Wall Street Journal. All invoices will be
final and not subject to further adjustments or correction unless objection to
the accuracy thereof is made prior to the lapse of one (1) year after the
termination of the applicable Transaction.

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10.04

If each Party or Party’s affiliate is required to pay an amount to the other
Party in the same invoice period, then such amounts with respect to each Party
may be aggregated and the Parties may discharge their obligations to pay through
netting; in which case, the Party owing the greater aggregate amount shall pay
to the other Party the difference between the amounts owed.

 

 

10.05

Each Party reserves to itself all rights, setoffs, counterclaims, and other
remedies and defenses to the extent not expressly denied or waived herein which
such Party has or may be entitled to arising from or out of this Agreement. All
outstanding Transactions and the obligations to make payment in connection under
this Agreement may be offset against each other, set off, or recouped therefrom.

 

 

10.06

If a Party fails to pay amounts under this Agreement within 5 business days
after receipt of invoice, unless such amount is the subject of a dispute as
provided above, or is excused by Article 11, in addition to the rights and
remedies otherwise provided in this Agreement, the aggrieved Party shall have
the right to suspend performance under any or all Transactions under this
Agreement. If such failure to pay continues for an additional 5 business days,
the aggrieved Party shall have the right to terminate this Agreement and all
Transactions and shall be entitled to all other rights under this Agreement.

 

 

10.07

Should the creditworthiness or either Party’s ability to perform become
unsatisfactory to the other Party, or if situations develop where either Party
could reasonably conclude that a credit downgrade or protection under bankruptcy
code is imminent, then the failing Party will provide satisfactory security or
assurances.

 

 

10.08

Should Buyer’s creditworthiness, financial responsibility, or performance
viability become unsatisfactory to the Seller at any time in Seller’s reasonably
exercised discretion with regard to any Transaction pursuant to this Agreement,
the Seller may request in writing that

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the Buyer provide, reasonable assurance acceptable to Seller in the form of
either (a) the posting of a Letter of Credit, (b) Cash, (c) a cash prepayment,
(d) the posting of other acceptable collateral or security by the Buyer, (e) a
guarantee agreement executed by a creditworthy entity; (f) compressed payment
terms or (g) some other mutually agreeable method of satisfying the Seller
(collectively, “Performance Assurance”). If the Seller’s request for Performance
Assurance is made on a Business Day, Buyer shall have two (2) Business Days to
provide such Performance Assurance.

 

ARTICLE 11. FORCE MAJEURE

 

11.01

The term “Force Majeure” as used herein shall mean an act or event that is not
reasonably within the control and is without the fault of the party claiming
Force Majeure including without limitation, acts of God; acts of the public
enemy; insurrections; terrorism; riots; labor disputes; boycotts; fires;
explosions; floods; breakdowns of or damage to major components or equipment of
Buyer’s generating station, Seller’s mine, or transmission systems, or railcar
transportation system; embargoes; acts of judicial or military authorities; acts
of governmental authorities; inability to obtain necessary permits, licenses,
and governmental approvals after applying for same with reasonable diligence; or
other causes which prevent the producing, processing, and/or loading of Coal by
Seller, or the receiving, accepting, unloading and/or utilizing of Coal by
Buyer. Force Majeure includes the failure of a Party’s contractor(s) to furnish
labor, services, Coal, materials or equipment in accordance with its contractual
obligations (but solely to the extent such failure is itself due to Force
Majeure).

 

 

11.02

If, because of Force Majeure, either Party fails to perform any of its
obligations under this Agreement (other than the obligation of a Party to pay
money), and if such Party shall promptly give to the other Party written notice
of such Force Majeure, then the obligation of the Party giving such notice shall
be suspended to the extent made necessary by such Force Majeure and during its
continuance; provided, the Party giving such notice shall use good

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faith efforts to eliminate such Force Majeure, insofar as reasonably possible,
with a minimum of delay. Should the situation of Force Majeure exceed sixty (60)
consecutive days, the Party not affected by the Force Majeure event may, at its
option, terminate the Transaction in whole or in part and neither Party shall
have any further obligation to the other Party; however, each Party shall be
obligated to make any payments which had become due and payable prior to such
termination. Any deficiencies in deliveries of Coal caused by an event of Force
Majeure shall not be made up, except by mutual consent. The affected Party shall
provide suitable proof to the other Party to substantiate any claim made under
this Article 11.

 

 

11.03

Both Parties agree significant capital expenditures and settlement of strikes
and lockouts shall be entirely within the discretion of the Party having the
difficulty. The above requirement that any Force Majeure shall be remedied with
all reasonable dispatch shall not require significant capital expenditure or
settlement of strikes and lockouts by acceding to the demands of the opposing
Party when such course is inadvisable in the discretion of the Party having
difficulty.

 

 

11.04

The loss of Buyer’s markets or Buyer’s inability to economically use or resell
Coal purchased hereunder, the loss of Seller’s supply or Seller’s ability to
sell Coal to a market at a more advantageous price, the change in the market
price of Coal or price of power, or regulatory or contractual disallowance of
the pass-through of the costs of Coal or other related costs shall not
constitute events of Force Majeure.

 

 

ARTICLE 12. RECORDS, AUDITS, ACCESS

 

 

12.01

Seller shall maintain books and records relating to the supply of Coal under
this Agreement and the applicable Transaction for a period of not less than two
(2) years after the end of each calendar year for all Coal tendered during such
calendar year.

-18-

--------------------------------------------------------------------------------

 

 

 

12.02

Upon reasonable notice and during normal business hours, Buyer and/or Buyer’s
independent auditors shall have the right to inspect Seller’s books and records
relating to all provisions of this Agreement which include Coal quality,
quantity shipped, and price adjustments or as may be necessary to satisfy
inquiries from governmental or regulatory agencies, but only to the extent
necessary to verify the accuracy of any statement, charges or computations made
pursuant to this Agreement and/or a Transaction. Seller shall make a reasonable
effort to facilitate Buyer’s inspection of such records in Seller’s possession.
Buyer and its auditors, to the extent permitted by law or regulation, shall
treat all such information as confidential.

 

 

ARTICLE 13. DEFAULT, REMEDIES, AND TERMINATION

 

 

13.01

The remedies set forth in this Section 13.01 shall cover the non-defaulting
Party’s remedies for the defaulting Party’s failure to perform prior to any
termination for default that may occur.

 

 

 

 

    a)

As an alternative to the damages provision below, if the Parties mutually agree
in writing, the non-performing Party may schedule deliveries or receipts, as the
case may be, pursuant to such terms as the Parties agree in order to discharge
some or all of the obligation to pay damages. In the absence of such agreement,
the damages provision of this Article shall apply.

 

 

 

 

    b)

Unless excused by Force Majeure, if Seller fails to deliver the quantity of Coal
in accordance with the applicable Confirmation and this Agreement, Seller shall
pay to Buyer an amount for each ton of Coal of such deficiency equal to (i) the
lowest reasonable market price on an equivalent per mmBtu SO2 adjusted basis at
which Buyer is able, or (ii) at the time of Seller’s breach, would be able to
purchase or otherwise receive comparable supplies of Coal of comparable quality
minus the base price agreed to for the specific Transaction; except that if such
difference is negative,

-19-

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then neither Party shall have any obligation to make any deficiency payment to
the other.

 

 

 

 

    c)

Unless excused by Force Majeure, if Buyer fails to accept delivery of the
quantity of Coal in accordance with the applicable Confirmation and this
Agreement, Buyer shall pay to Seller an amount for each ton of Coal of such
deficiency equal to (i) the base price agreed to for the specific Transaction
minus the highest reasonable market price on an equivalent per mmBtu SO2
adjusted basis at which Seller is able, or (ii) would be able, to sell or
otherwise dispose of the Coal at the time of Buyer’s breach; except that if such
difference is negative, then neither Party shall have any obligation to make any
deficiency payment to the other.

 

 

 

 

    d)

Buyer and Seller shall be subject to commercially reasonable good faith
obligation to mitigate any damages hereunder.

 

 

 

13.02

The occurrence of any of the following shall constitute an “Event of Default”:

 

 

 

 

    a)

Failure by either Party to pay any amounts due.

 

 

 

 

    b)

Either Party materially breaches any contractual obligation under this
Agreement.

 

 

 

 

    c)

Either Party (i) makes any general assignment or any general arrangement for the
benefit of creditors, (ii) files a petition or otherwise commences, authorizes
or acquiesces in the commencement of a proceeding or cause of action under any
bankruptcy or similar law for the protection of creditors or has such a petition
involuntarily filed against it and such petition is not withdrawn or dismissed
within thirty (30) days after such filing, (iii) otherwise becomes bankrupt or
insolvent (however evidenced), or (iv) is unable to pay its debts as they fall
due.

-20-

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13.03

In addition to the non-defaulting Party’s remedies under this Article, in the
Event of Default with respect to a specific Transaction, the non-defaulting
Party shall have the same rights with respect to such specific Transaction as it
has under this Agreement in addition to the right to exercise all other rights
and remedies available under applicable law.

 

 

 

ARTICLE 14. NOTICES

 

 

 

14.01

Except as expressly provided otherwise, any notice, election or other
correspondence required or permitted hereunder shall become effective upon
receipt and, except invoices and payments, shall be deemed to have been properly
given or delivered when made in writing and delivered personally to the Party to
whom directed, or when sent by United States certified mail with all necessary
postage prepaid and a return receipt requested, or by a nationally recognized
overnight delivery service with charges fully prepaid and addressed to the Party
at the below-specified address:

 

 

 

 

 

Notices to RTEA:

 

 

 

 

 

Rio Tinto Energy America Inc.
Attn: Contract Administration
8000 E. Maplewood Ave., Suite 250
Greenwood Village, CO 80111
Phone: (720) 377-2065
Fax:     (303) 773-0235

 

 

 

 

 

With a copy to:

 

 

 

 

 

Rio Tinto Energy America Inc.
Attn: Legal Department
505 So. Gillette Avenue
Gillette, CO 82716

 

 

 

 

 

Scheduling to RTEA:

 

 

 

 

 

Rio Tinto Energy America Inc.
Attn: Customer Service Department
8000 E. Maplewood Ave., Suite 250
Greenwood Village, CO 80111
Phone: (720) 377-2044
Fax:     (303) 773-0235

-21-

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Notices to Minn-Dak:

 

 

 

 

 

Minn-Dak Farmers cooperative
Attn: John Nyquist
7525 Red River Road
Wahpeton, MN 58075-9698
Phone: (701) 671-1310
Fax:     (701) 671-1369

 

 

 

 

The addresses may be changed upon written notice in the manner provided above,
and no amendment hereof shall be required for a change of address under this
Article 14.

 

 

 

ARTICLE 15. COOPERATION

 

 

 

15.01

Each Party agrees to take all further action that may be reasonably necessary to
perform and to effectuate the purposes and intent of the Agreement, the
Confirmation, and any particular Transaction.

 

 

ARTICLE 16. WARRANTY, LIMITATION ON LIABILITY, DUTY TO MITIGATE &
INDEMNIFICATION

 

 

16.01

In no event shall either Party be liable to the other Party for incidental,
consequential or punitive damages however and wherever arising out of, or in
connection with, this Agreement or any Transaction.

 

 

16.02

EXCEPT AS EXPRESSLY WARRANTED HEREIN, IT IS EXPRESSLY AGREED THAT SELLER MAKES
NO WARRANTY EXPRESSED OR IMPLIED AS TO THE QUALITY, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OF THE COAL TO BE DELIVERED UNDER THIS AGREEMENT OR AS
TO THE RESULTS TO BE OBTAINED FROM THE USE OF SUCH COAL. SELLER SHALL NOT BE
LIABLE FOR ANY INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT
LIMITATION LOSS OF PROFITS OR OVERHEAD, BY VIRTUE OF ITS BREACH OF ANY

-22-

--------------------------------------------------------------------------------

 

 

 

OF ITS OBLIGATIONS UNDER THE AGREEMENT. NOTHING IN THIS ARTICLE SHALL BE
CONSTRUED AS LIMITING BUYER’S RIGHT, SUBJECT TO THE TERMS OF THIS AGREEMENT, TO
SEEK DIRECT DAMAGES FOR SELLER’S BREACH OF ANY OF ITS OBLIGATIONS HEREUNDER.

 

 

16.03

Each Party agrees it has a duty to mitigate damages and covenants. Each Party
will use commercially reasonable efforts to minimize any damages it may incur as
a result of the other Party’s performance or non-performance of the Agreement
(except that neither Party shall be required to enter into a replacement
transaction as provided under this Agreement).

 

 

16.04

Each Party shall indemnify, defend, and hold the other Party harmless from and
against any and all Claims arising out of or resulting from the willful acts or
negligence of such Party, its agents, and employees.

 

 

ARTICLE 17. LIMITATION ON WAIVER

 

 

17.01

No waiver by either Party of any one or more defaults of the other Party in the
performance of this Agreement or any Transaction shall operate or be construed
as a waiver of any future default, or defaults, whether of a like or different
character.

 

 

ARTICLE 18. CONFIDENTIALITY

 

 

18.01

This Agreement and any Confirmation are deemed confidential. The Parties shall
protect the confidentiality of the terms of this Agreement and neither this
Agreement or any of its terms shall be disclosed to any other person unless such
disclosure is: (i) agreed to in writing by the Parties prior to release, (ii)
required by law, (iii) required by jurisdictional regulation pursuant to the
request of any regulatory authorities (including, without limitation, state
utility commissions or boards, the Federal Energy Regulatory Commission, the
U.S. Securities and

-23-

--------------------------------------------------------------------------------

 

 

 

Exchange Commission and tax authorities); to attorneys, auditors, consultants or
other outside experts of the parties if said individuals are advised of the
confidential nature of the information and said individuals agree to maintain
the confidentiality of the information; or to generating unit co-owner(s). Where
the law requires such disclosure, notice shall be given to the other Party, and
to the extent possible, such notice shall be given in advance of disclosure.

 

 

ARTICLE 19. ENTIRETY, AMENDMENTS

 

 

19.01

This Agreement constitutes the entire agreement between the Parties. This
Agreement may not be amended except in a written instrument making reference
hereto signed by the Parties.

 

 

ARTICLE 20. SUCCESSORS AND ASSIGNS

 

 

20.01

This Agreement shall inure to the benefit of and be binding upon the Parties
hereto and their respective successors and assigns; provided, however, this
Agreement may not be assigned by either Party without the prior written consent
of the other Party, which consent shall not be unreasonably withheld or delayed.

 

 

ARTICLE 21. GOVERNING LAWS

 

 

21.01

This Agreement shall be governed by and construed in accordance with the laws in
the State of Wyoming.

-24-

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ARTICLE 22. INTERPRETATION

 

 

22.01

The Parties acknowledge that each Party and its counsel have reviewed this
Agreement and that the rule of construction to the effect that any ambiguities
are to be resolved against the drafting Party shall not be employed in the
interpretation of this Agreement.

 

 

ARTICLE 23. RESALE TO LOCAL COLLEGE

 

 

23.01

Seller agrees to allow Buyer to re-sell the Coal in Buyer’s stockpile to North
Dakota State College of Science.

 

 

ARTICLE 24. SURVIVAL

 

 

24.01

The provisions of Articles 12 through 22 and Article 24 shall survive the
termination of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement by their
respective, duly authorized representatives effective as of the date first
written above.

 

 

 

 

Rio Tinto Energy America Inc.

Minn-Dak Farmers Cooperative

 

 

By:

-s- Jeffrey D. Price [img004.jpg]

By:

-s- John S. Nyguist [img005.jpg]

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

Jeffrey D. Price

 

 

Vice President, Marketing,

Title:

Purchasing Manager

Government Affairs & Communications

 

 

 

 

 

 

Date:

25 August 2006

Date:

6th August 2006

 

 

 

 

-25-

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RAILROAD EQUIPMENT LEASE

          THIS RAILROAD EQUIPMENT LEASE (the “Lease”) is entered into as of this
the 1st day of August 2006, (the “Effective Date”) by and between Northern Coal
Transportation Company, an Oregon corporation (hereinafter referred to as
“Lessor”), and Minn-Dak Farmers Cooperative (hereinafter referred to as
“Lessee”).

          WHEREAS, Lessee desires to lease from Lessor and Lessor desires to
lease to Lessee certain coal hauling railcars (the “Units”) that make up a Unit
Train so that Lessee may make deliveries of coal to its Wahpeton Sugar Beet
Factory.

          NOW, THEREFORE, in consideration of the mutual premises, covenants and
agreements set forth herein, the parties hereby agree as follows:

          1.      LEASE OF UNITS. Lessor hereby leases to Lessee and Lessee
hereby leases from Lessor the Units commencing on the Effective Date written
above and ending for all Units on the last day of July 2010 or on the date
Lessee has unloaded the last Unit Train, whichever occurs first (the “Expiration
Date”).

          2.      BASE RENTAL. Lessee agrees to pay to Lessor the amount of the
trip lease price of $X.XX per/ton for all tons hauled in the Units. Lessor shall
invoice Lessee semimonthly for the base rental. Payment shall be due on each
invoice within ten (10) days after the date of the invoice by check or wire
transfer to Northern’s account, as follows:

 

 

 

 

Wire Transfer:

 

 

 

 

 

BANK:

First Security Bank of Utah

 

ABA No:

124000012

 

Account No:

060-00069-02

 

Account Name:

Northern Coal Transportation

 

 

 

 

Check:

 

 

 

 

 

Account Name:

Northern Coal Transportation

 

Account No.:

060-00069-02

 

Address:

P.O. Box 26094, Salt Lake City, Utah 84126-0094

          3.      DELIVERY OF UNITS. Lessor will cause each Unit to be tendered
to the Lessee at the Spring Creek Mine in Decker Montana. Each Unit shall: (i)
be empty, substantially free from debris, lading, residue of lading, and
suitable for loading; (ii) meet the standards of the Interchange Rules of the
Association of American Railroads, the Surface Transportation Board, the
Department of Transportation, and any other legislative, administrative,
judicial, regulatory or governmental body having jurisdiction in the matter.

--------------------------------------------------------------------------------

          4.      MAINTENANCE AND REPAIRS.

          (a) Lessor shall have the right, but not the obligation, to inspect
the Unit(s) and conduct preventative maintenance as Lessor deems necessary. If,
as a result of such inspections, repairs that are Lessee’s responsibility under
Sections 4(c) are found to be necessary, then Lessee will provide freight and
switching services to and from any shop of Lessor’s choosing at no cost to
Lessor. Lessor will undertake such maintenance when possible and in a manner
that minimizes the interruptions of service to Lessee.

          (b) Lessee shall not make any alteration, improvement or addition to
any Unit without Lessor’s prior written consent.

          (c) Lessee shall be responsible for all repairs necessary as a result
of damage to a Unit, including but not limited to, damage caused by cornering,
sideswiping, derailment, improper or abusive loading or unloading methods,
unfair usage or similar occurrences while under this Lease, whether such damage
to a Unit is direct, indirect, incidental or consequential, but excluding the
maintenance and repairs made necessary by ordinary wear and tear which shall be
the Lessor’s responsibility.

          (d) Notwithstanding anything herein contained, Lessor may notify
Lessee that it is withdrawing from this Lease any Unit which, in the opinion of
Lessor, has been destroyed, damaged or needs repairs in excess of its economic
value, whereupon this Lease will terminate as to such withdrawn Unit; provided,
however, Lessor may, with Lessee’s consent, substitute a Unit of like
specifications, for such withdrawn Unit, in which case all of the terms and
conditions of this Lease shall apply to the substituted Unit.

          5.      DISCLAIMER OF WARRANTIES. LESSOR, NOT BEING THE MANUFACTURER
OF THE UNITS, NOR THE MANUFACTURER’S AGENT, HEREBY EXPRESSLY DISCLAIMS AND MAKES
TO LESSEE NO WARRANTY OR REPRESENTATION, EXPRESSED OR IMPLIED, OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR OTHERWISE, INCLUDING,
BUT NOT LIMITED TO; THE FITNESS FOR USE, DESIGN OR CONDITION OF THE UNITS; THE
QUALITY OR CAPACITY OF THE UNITS; THE WORKMANSHIP IN THE UNITS; THAT THE UNITS
WILL SATISFY THE REQUIREMENT OF ANY LAW, RULE, SPECIFICATION OR CONTRACT
PERTAINING THERETO; AND ANY GUARANTEE OR WARRANTY AGAINST PATENT INFRINGEMENT OR
LATENT DEFECTS, IT BEING AGREED THAT ALL SUCH RISKS, AS BETWEEN LESSOR AND
LESSEE, ARE TO BE BORNE BY LESSEE. LESSOR IS NOT RESPONSIBLE OR LIABLE FOR ANY
DIRECT, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGE TO OR LOSSES RESULTING FROM
THE INSTALLATION, OPERATION OR USE OF THE UNITS OR ANY UNIT. Lessor acknowledges
that any manufacturer’ and/or seller’s warranties are for the benefit of both
Lessor and Lessee.

2

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          6.      USE OF THE UNITS. Lessee agrees to comply in with all laws or
rules of the jurisdictions in which operations involving any Unit subject to
this Lease may extend. Lessee shall indemnify and hold harmless Lessor from and
against any and all liability that may arise from any infringement or violation
of any such laws or rules by Lessee, its agents, employees, or any other person.

          Lessee agrees that the Units shall be used in a careful and prudent
manner, solely in the use, service and manner for which they were designed.
Lessee shall not use the Units, or any Unit, for the loading, storage or hauling
of any ruminant protein products, corrosive, hazardous, toxic or radioactive
substance or material. Specifically, Lessee intends to use the Units to
transport Coal. Lessee is prohibited from using the Units to transport any other
commodity without Lessor’s prior written consent.

          7.     FILINGS AND MARKS. Lessee will cause each Unit to be kept
numbered with the identifying numbers and all other markings and stenciling
required by the Interchange Rules and the Codes of Car Hire and Car Service
Rules of the Association of American Railroads, as the same may be amended from
time to time.

          8.     TAXES, LIENS AND OTHER ASSESSMENTS. Lessee will keep at all
times all and every part of the Units free and clear of all Assessments which
might in any way affect the title of Lessor to any Unit or result in a lien upon
any Unit.

          9.     INDEMNIFICATION.

          (a) Lessee assumes all liability for and shall indemnify and hold
harmless Lessor, its affiliates and subsidiaries together with its and their
directors, officers, employees, agents, representatives, successors and assigns
from and against any and all liabilities, obligations, losses, damages,
injuries, claims, demands, penalties, actions, costs and expenses, including
reasonable attorney’s fees, of whatsoever kind and nature, arising out of the
possession, use, condition (including but not limited to, latent and other
defects and whether or not discoverable by Lessee or Lessor), operation,
ownership, selection, delivery, leasing or return of the Units or any Unit,
regardless of where, how and by whom operated, and regardless of any failure on
the part of Lessor to perform or comply with any conditions of this Lease. This
Section 9 shall continue in full force and effect notwithstanding the expiration
or other termination of this Lease. Lessee is an independent contractor and
nothing contained in this Lease shall authorize Lessee or any other person to
operate any of the Units so as to incur or impose any liability or obligation
for or on behalf of Lessor.

          (b) Lessor shall not be liable for any loss of or damage to any
commodities loaded or shipped in the Units. Lessee agrees to assume
responsibility for and to indemnify and hold harmless Lessor, its affiliates and
subsidiaries together with its and their directors, officers, employees, agents,
representatives, successors and assigns from any claim in respect of such loss
or damage caused to any Unit by such commodities.

3

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          10.      LESSOR’S PERFORMANCE OF LESSEE’S OBLIGATIONS. If Lessee shall
fail to duly and promptly perform any of its obligations under this Lease with
respect to the Units, and Lessor has given Lessee reasonable prior written
notice of such nonperformance, then Lessor shall have the option, but not the
obligation, to perform any act or make any payment which Lessor deems necessary
for the maintenance and preservation of the Units and/or Lessor’s title thereto,
and all sums so paid or incurred by Lessor shall be reimbursed by Lessee on
demand. The performance of any act or payment by Lessor as aforesaid shall not
be deemed a waiver or release of any obligation or default on the part of the
Lessee, and Lessee shall continue to be liable for any such performance or
payment by Lessor notwithstanding the expiration or earlier termination of this
Lease.

          11.      INSURANCE.

          (a) Lessee shall procure and maintain prior to Lessor’s release of the
Units, at its sole cost and expense, for all Units subject to this Lease: (1)
comprehensive general liability insurance, including products liability and
contractual coverage for the liabilities assumed herein, without exclusions
related to railroad operations, punitive damages, hazardous materials
transportation or otherwise, against liability and claims for injuries to
persons (including injuries resulting in death), and property damage. Such
coverage shall name Lessor as additional insured as the Lessor’s interest may
appear and shall be in a combined single limit of not less than $2,000,000; and
(2) all risk property insurance relating to loss of or damage to the Units in
such amounts not less than $2,000,000. Such coverage shall name Lessor as loss
payee. The Lessor is entitled, as loss payee, to act with Lessee in making,
adjusting or settling any claims under any insurance policies insuring the Units
leased by Lessee. Lessee shall furnish certificates, policies, or endorsements
to Lessor as proof of such insurance. Notwithstanding anything herein to the
contrary, Lessee may in its sole discretion self-insure for part or all of the
insurance coverage required by this paragraph, in lieu of purchasing insurance.

          (b) The proceeds of any all risk property damage with respect to such
Units shall be payable solely to Lessor and shall be applied by Lessor in
accordance with Section 12 hereof. The proceeds of any comprehensive general
liability insurance shall be payable first to Lessor to the extent of its
liability, if any, and the balance to Lessee.

          12.      RISK OF LOSS. Lessee assumes all risk of loss, damage, theft,
condemnation or destruction of the Units, whether direct, indirect, incidental
or consequential, including, but not limited to, damages caused by or arising
from cornering, sideswiping, derailment, improper or abusive loading or
unloading methods, negligent or unfair usage, or similar occurrences while under
this Lease.

          13.      LESSEE’S DEFAULT. Lessee shall be in default under this Lease
upon the happening of any of the following events or conditions (hereinafter
referred to as “Events of Default”): (i) if Lessee fails to pay any sum required
to be paid hereunder on or before the due date and such failure continues for a
period of three (3) consecutive days; (ii) if Lessee fails at any time to
procure or maintain any insurance coverage

4

--------------------------------------------------------------------------------

required by this Lease; (iii) if Lessee fails to observe or perform any of the
covenants, conditions or obligations contained in this Lease (other than those
specified in (i) and (ii) above) and such failure continues for ten (10) days
after receipt by Lessee of written notice from Lessor of such failure; (iv) the
appointment of a receiver, trustee or liquidator of Lessee or of a substantial
part of its property, or the filing by Lessee of a voluntary petition in
bankruptcy or other similar insolvency laws or for reorganization; (v) if a
petition against Lessee in a proceeding under bankruptcy laws or other similar
insolvency laws shall be filed and shall not be withdrawn or dismissed within
thirty (30) days thereafter; (vi) if an event of default shall occur under any
other obligation Lessee owes to Lessor; or (vii) if an event of default shall
occur under any indebtedness Lessee may now or hereafter owe to any affiliate or
subsidiary of Lessor.

          14.      LESSOR’S REMEDIES. Upon the occurrence of any one or more of
the Events of Default specified in Section 13 above, Lessor, may at its option
and without any further notice: (i) terminate this Lease as to any or all Units
without relieving Lessee of any of its obligations hereunder; (ii) take
possession of the Units and for this purpose enter upon any premises of Lessee
and remove the Units, without any liability or suit, action or other proceeding
by Lessee and without relieving Lessee of any of its obligations hereunder;
(iii) cause Lessee, at its sole expense, to promptly return the Units to Lessor
in accordance with the terms and provisions of Section 15 hereof; (iv) proceed
by appropriate action either at law or in equity to enforce performance by
Lessee of the applicable covenants of this Lease or to recover damages for the
breach thereof; or (v) exercise any other right available to Lessor at law or in
equity.

          15.      RETURN OF UNITS. At the expiration of this Lease, or at the
direction of Lessor pursuant to Section 14 of this Lease, Lessee shall at its
own cost, expense and risk, deliver possession of the Units to Lessor at the
Spring Creek Mine in Decker Montana. Each Unit returned to the Lessor pursuant
to this Section 15 shall: (i) be empty, free from debris, lading, residue of
lading, suitable for loading, and in the same or better operating order, repair
and condition as when originally delivered to the Lessee, reasonable wear and
tear excepted; (ii) meet the standards then in effect under the Interchange
Rules of the Association of American Railroads, the Surface Transportation
Board, the Department of Transportation, and any other legislative,
administrative, judicial, regulatory or governmental body having jurisdiction in
the matter; and (iii) be free from any damage due to the abuse of the Unit as
specified in Section 4(c). If any Unit is not delivered to Lessor on or before
the Expiration Date, or is so delivered, but not in compliance with this Section
15, each and every Unit shall remain subject to the terms and provisions of this
Lease until the Unit or Units are returned to Lessor or until any non-compliance
with this Section 15 is resolved. Nothing in this Section 15 shall be construed
as Lessor’s authorization of the Lessee’s use of the Units, or any Unit, after
the Expiration Date. Lessee’s obligations in this Section 15 shall survive the
Expiration Date of this Lease.

          16.      NOTICES. Any notice required or permitted to be given by any
party hereto to the other shall be in writing and shall be deemed given when
sent by United States Certified or Registered Mail, Return Receipt Requested,
postage prepaid,

5

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delivered by personal or overnight courier, facsimile transmission, or e-mail
addressed as follows:

 

 

 

 

TO LESSOR:

Northern Coal Transportation Company
505 South Gillette, Avenue
Gillette, WY 82716
P.O. Box 3009 (82717)
Attention: General Manager - NCTC
Fax: (307) 685-6259

 

 

 

 

TO LESSEE:

Minn-Dak Farmers Cooperative
7525 Red River Road
Wahpeton, ND 58075-9698
Attention: Purchasing Manager
Fax: (701) 671-1369

or at such other place as the parties hereto may from time to time designate by
notice, each to the other.

          17.      SEVERABILITY. Any provision of this Lease which is prohibited
or unenforceable in any jurisdiction, shall be, as to such jurisdiction,
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

          18.      MISCELLANEOUS PROVISIONS.

          (a)      This Lease constitutes the entire agreement among the parties
and exclusively and completely states the rights of the Lessor and the Lessee
with respect to the Units and supersedes all other Leases, oral or written, with
respect to the Units. No variation or modification of this Lease and no waiver
of any of its provisions or conditions shall be valid unless in writing and
signed by duly authorized officers of Lessor and Lessee.

          (b)      This Lease may be executed in several counterparts, each of
which so executed shall be deemed to be an original, and such counterparts
together shall constitute but one and the same instrument.

          (c)      The laws of the State of Wyoming shall govern this Lease.

          (d)      Lessee agrees to execute and deliver such other documents and
instruments as may be reasonably necessary or required to further evidence the
transaction contemplated by, or to carry out the intent of, this Lease.

6

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          (e)      Nothing contained herein shall give or convey to Lessee any
right, title or interest in and to the Units leased hereunder except as a lessee
thereof, and the Units are and shall at all times be and remain the sole and
exclusive property of Lessor.

          (f)      Lessee may not, by operation of law or otherwise, assign,
transfer, pledge, or otherwise dispose of this Lease or any interest herein, or
sublet any of the Units, without Lessor’s prior written consent.

          (g)      Any cancellation or termination of this Lease by Lessor,
pursuant to the terms and provisions hereof shall not release Lessee from any
then outstanding obligations and/or duties to Lessor hereunder.

          (h)      Notwithstanding anything contained in this Lease to the
contrary, Lessor shall not be liable for its failure to perform any obligations
of Lessor herein contained by reason of labor disturbances (including strikes
and lockouts), war, riots or civil commotion, acts of God, acts of terrorism,
fires, floods, explosions, storms, accidents, governmental regulations or
interference, or any cause whatsoever beyond Lessor’s reasonable control.

          (i)      To the extent there exists any conflict between the terms and
provisions of this Lease and the terms and provisions of the Interchange Rules
or the Codes of Car Hire and Car Service Rules of the Association of American
Railroads, this Lease shall control.

          (j)      Lessee hereby authorizes Lessor, and agrees that Lessor shall
be entitled, to access UMLER and receive all information thereon with respect to
the Units, or the use and operation thereof, together with all other information
as may be available from the Association of American Railroads, and Lessee
agrees to execute such instruments or consents as may be necessary or required
in order to carry out the intent of this paragraph (j).

          (k)      Whenever approval of the originating line haul carrier(s) is
required in order for the Units to be placed in service pursuant to AAR Circular
OT-5 including any revisions, replacements, or substitutions thereto, Lessor
shall, upon written request from Lessee, use its reasonable efforts to assist
Lessee in obtaining such approval. In no event shall Lessor be responsible for
obtaining such approval, and in the event that the OT-5 authority is withdrawn,
modified or denied, Lessee’s obligations under this Lease shall continue in full
force and effect.

7

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

 

 

 

 

LESSOR:

 

 

 

NORTHERN COAL TRANSPORATION COMPANY

 

 

 

BY: 

-s- Jeffrey D. Price [img001.jpg]

 

 

--------------------------------------------------------------------------------

 

 

 

 

NAME: 

Jeffrey D. Price

 

 

--------------------------------------------------------------------------------

 

 

 

 

TITLE: 

VP, Marketing, Government Affairs & Communication

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

LESSEE:

 

 

 

 

 

MINN-DAK FARMERS COOPERATIVE

 

 

 

 

 

BY: 

-s- John S. Nyguist [img003.jpg]

 

 

--------------------------------------------------------------------------------

 

 

 

 

NAME: 

John S. Nyguist

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

TITLE: 

Purchasing Manager

 

 

--------------------------------------------------------------------------------

 

8

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