Document:

Exhibit
10(a)

(REVISED, Effective 2011)

GROWERS AGREEMENT

(Applicable to all Farmer-Grower-Stockholders

of Minn-Dak Farmers Cooperative)

          This
agreement is entered into between _1030 ROBERT G BEYER , a
farmer-grower-stockholder of Minn-Dak Farmers Cooperative, Wahpeton, North
Dakota, whose mailing address is 6610 790TH STREET TINTAH, MN 56583,
hereinafter referred to as the “Grower”; and MINN-DAK
FARMERS COOPERATIVE of 7525 Red River Road, Wahpeton, North Dakota,
hereinafter referred to as the “Cooperative”.

     This
Growers Agreement provides as follows:

          1.
The Grower agrees to prepare the land, plant, care for, harvest and deliver the
product of 70 Units of stock times the acres per share authorized by the
Board of Directors each year for the farming year commencing on 01-01-2011
and continuing for a period of one (1) year. (Each Unit consists of one share
of the Company’s Class A Preferred Stock, par value $105 per share, one share
of the Company’s Class B Preferred Stock, par value $75 per share and one share
of the Company’s Class C Preferred Stock, par value $76 per share). At the end
of each “farming year” the term of this agreement shall automatically be
renewed for an additional period of one (1) year so that at the commencement of
each year of farming, there shall be a term of one (1) year remaining, unless
notice of termination shall have been given by the Cooperative to the grower
prior to the beginning of any farming year with the termination effective as of
the end of that year. For purposes of this agreement, a “farming year” shall
commence on January 1 and run through December 31 of each year.

          (a)
The Grower agrees that in the planting of said sugarbeets the Grower will
follow a crop rotation plan which will be established by the Cooperative from
time to time. (See Addendum A for current crop rotation policy)

          (b)
The Grower agrees that annually the Grower will furnish and enter into an
annual requirement agreement with the Cooperative setting forth the description
of the land on which said sugarbeets will be grown and including such other
information as may be required by the Cooperative. Each current annual
requirement shall become a part of this agreement and be binding upon the
parties hereto. The Grower shall report all changes to the Annual Requirement
to the Agricultural Staff by August 1 of each year.

          (c)
The Grower agrees that the designations of acreage location shall be subject to
approval of the Cooperative.

          (d)
The Grower agrees to notify and receive written approval from two members of
the Agricultural Staff and the vice president of agriculture before acreage is
destroyed.

   
       (e)
The Grower shall not plant sugarbeets on any land on which canola has been
planted during any of the previous six years.

   
       Any
Grower who violates 1(d) will be required to pay the Cooperative a sum equal to
100% of the Cooperative’s direct overhead costs per acre on the authorized
acreage less .1 acres per share. [i.e. at authorized acreage of 1.60, the
direct overhead costs would be assessed using 1.60 less .1 acres = 1.50
acres/share] (See Addendum A for calculation of direct overhead costs per acre)

82

          Any
Grower who violates 1 (a), (b), (c) or (e), and such violation is discovered
prior to harvest, will not be issued harvest cards until the acreage in
violation has been destroyed. If the violation is not discovered until after
the acreage has been harvested, the grower shall forfeit the crop raised on the
acres determined to have been in violation. The forfeiture of the crop shall be
implemented by reducing the grower’s total pounds of sugar by the pounds of
sugar produced on the number of acres determined by the Board to be in
violation, using the total farm average/acre. This will adjust downward all
future payments for this crop made to the grower including the trucking
payment. Any amount already paid for these pounds of sugar to the grower shall
be deducted from the next beet payment to be made. In addition, the grower shall
be required to sign a release authorizing the FSA Office to provide to Minn-Dak
all certification of acres records for a three-year period following the year
of the violation. These records will be used by the agriculturist for
comparison with Minn-Dak records. If any discrepancy is found, it will be
brought to the attention of the Board.

          2.
The Grower agrees to furnish the Cooperative with such information as it may
request from time to time regarding the crop or crops covered by this agreement.
Representatives of the Cooperative shall also have the right to enter the
Grower’s beet fields from time to time during the growing and harvesting
seasons to inspect the crops thereon and to take samples for testing in
ascertaining the quality of the beets.

          3.
The Grower will harvest and deliver to the Cooperative all beets grown under
this contract, said delivery to be made at such times and in such quantities
and to such place or places as may be designated by the Cooperative. All beets
delivered hereunder shall be properly topped as designated by the Cooperative’s
Agricultural Department. All beets shall be subject to a proper deduction for
tare. There shall be deducted from the gross weight of beets delivered
hereunder, before net tons are determined, the Grower’s tare weight, as
determined by the Cooperative’s method of sampling loads for tare and through
the use of the Cooperative’s laboratory which measures each Grower’s beet
sample for dirt, stones, trash and other foreign substances. Each Grower’s
daily average tare percentage, as determined by all load samples of the Grower
for that delivery day or delivery day by field, if field method is used by
Grower, is used to determine the tare weight of all beets delivered by the
Grower for that delivery day. The Cooperative has the option of rejecting any
diseased, frozen, muddy, or damaged beets; beets with excessive weeds or which
were improperly topped; beets which, in the Cooperative’s opinion, are not
suitable for the manufacture of sugar; beets as to which in the Cooperative’s
opinion, the terms and conditions of this contract have not been properly
complied with or for any other bona fide reason.

          4.
Any grower who fails to plant by June 20 the authorized acreage less .1 acres
per share [i.e. at an authorized acreage of 1.60, the direct overhead costs
would be assessed using 1.60 less .1 acres = 1.50 acres/share] of Cooperative
stock owned by the Grower in any one year, may be subject to a minimum penalty
in a sum equal to 100% of the Cooperative’s direct overhead costs per acre and
a maximum penalty of $1000 per acre found to be in violation following a
hearing and a determination of such by the Board of Directors. (See Addendum A
for calculation of direct overhead costs per acre) 

          5.
Any Cooperative member grower who does not replant
acreage through June 20 which his agriculturist determines necessary, may be
required to pay the Cooperative a sum equal to 100% of the Cooperative’s direct
overhead costs per acre in violation following a hearing and a determination of
such by the Board of Directors. (See Addendum A for calculation of direct
overhead costs per acre) 

          Such
penalty will be assessed on the authorized acreage less .1 acres per share of
stock owned, which such grower fails to replant through June 20.

83

           6.
The Cooperative may assess a penalty against any Grower who it determines,
after a review by the Board of Directors and the Agricultural Staff, has not
properly cared for the crop. The penalty shall be a sum up to 100% of the
Cooperative’s direct overhead costs per acre. (See Addendum A for calculation
of direct overhead costs per acre)

           7.
Any grower having acres unreported to the Cooperative over and above the
Grower’s contracted acres plus the overplant permitted in that year after the
August 1st deadline for destroying acres, will be penalized for such
excess of unreported acres in the following manner. First, there shall be a
hearing before the Board of Directors and a finding as the number of acres in
violation. Second, the following overplant penalties shall be assessed.

First
Violation:

A.
If the unreported acres are discovered prior to harvest, the sugarbeets shall
be destroyed and the grower shall be assessed a penalty of $200 per acre found
in violation.

B.
If the unreported acres are discovered after harvest, the grower shall be
assessed a penalty of $200 per acre found in violation. Further, the grower
shall forfeit the crop raised on the acres determined to have been unreported.
The forfeiture of the crop shall be implemented by reducing the grower’s total
pounds of sugar by the pounds of sugar produced on the number of acres
determined by the Board to be unreported, using the total farm average/acre.
This will adjust downward all future payments for this crop made to the grower
including the trucking payment. Any amount already paid for these pounds of
sugar to the grower shall be deducted from the next beet payment to be made.

C.
In addition to number one or two above, the grower shall be required to sign a
release authorizing the FSA Office to provide to Minn-Dak all certification of
acres records for a three-year period following the year of the violation.
These records will be used by the field man for comparison with Minn-Dak
records. If any discrepancy is found, it will be brought to the attention of
the Board.

Second
Violation:

In
addition to the penalties stated under First Violation, the Grower shall be
subject to a maximum penalty of $1000 per acre found to be in violation
following a hearing by the Board of Directors.

           8.
It is understood and agreed that if any Governmental authority shall establish
any restrictions, allotment or quota upon the growing, production or processing
of beets, or the output, transportation or sale of beet sugar, then the
Cooperative may reduce to the extent which it deems necessary the acreage of
beets herein contracted for, and shall be obligated to purchase beets only from
such reduced acreage.

_______  Initial

           9.
Grower agrees not to intentionally apply to the crop or land on which the crop
is grown any pesticide chemical, or other substance, as defined in all
applicable Federal and State laws, unless a regulation shall then be in effect,
exempting such chemical from the necessity of a tolerance or establishing a
tolerance for such chemical, in which event such chemical shall be applied to
the crop or land only at such time and in such manner and quantities as shall
be specified in the labeling of such chemical and so that any residue of such
chemical on beets delivered hereunder shall be within the tolerance specified
in such regulation. The Cooperative reserves the right to reject the delivery
of any beets not complying with this provision. In addition, any Grower found
to be in noncompliance with this provision, after hearing before the Board of
Directors, at the discretion of the Board the Grower may be: 

84

	
  

 	
  

 	
  

 
	
  

 	
 a)

 	
 assessed
 all direct overhead costs (as defined in Addendum A – B) incurred by the
 Cooperative in each incident. As the result of the rejection of noncompliant
 beets;

 
	
  

 	
  

 	
  

 
	
  

 	
 b)

 	
 assessed
 all direct costs (as defined in Addendum A - C) incurred by the Cooperative
 in each incident as the result of the rejection of noncompliant beets;

 
	
  

 	
  

 	
  

 
	
  

 	
 c)

 	
 held
 liable for consequential damages including but not limited to the value of a
 lost pile of sugarbeets in the event that any contaminated sugarbeets are
 deposited into a pile and the pile must then be destroyed.

 

          In
addition, pursuant to Article XVI of the By Laws of Minn-Dak Farmers
Cooperative, if the Board of Directors finds intentional or repeated violations
or breach of contract, the Board of Directors shall in its discretion recall
all common stock owned by such member, and the cooperative shall refund to him
the par value or the book value of the stock whichever is less. In the event
the common stock is recalled, the cooperative shall have the right, at its
option, (a) to purchase the preferred shares at its book or par value,
whichever is less, as determined by the Board of Directors; or (b) to require
the transfer of any such stock at such book or par value, to any person
eligible to hold it.

          10.
The Grower agrees that, in connection with the growing and delivery of beets
under this contract, he will comply with all applicable laws, including but not
limited to child and migrant labor laws, and all regulations or rulings
relating thereto issued by any duly authorized governmental authority.

_______  Initial

          11.
Seed varieties to be planted by Growers must be approved by the Cooperative’s
Seed Committee. All sugar beet seed to be planted by the Grower must be
purchased by the Grower from the Cooperative with the exception of seed used in
field test plots; however, all such test plot seed must be approved by the
Cooperative’s Ag Staff. No sugarbeets raised from Biotech seed shall be
delivered to the Cooperative until authorized by the Board of Directors. The
Cooperative agrees to use its best efforts to obtain its seed inventory at the best
possible prices and terms and to resell such seed to the Grower at no profit to
the Cooperative. The Cooperative makes no warranty of merchantability, fitness
for a particular purpose, productiveness or any other warranty as to any seed
furnished by the Cooperative, except that seed furnished by the Cooperative is
warranted, to the extent of the purchase price only, to be as described on the
seed container within recognized tolerances. It is also expressly agreed that
the Cooperative does not guarantee a crop. The Cooperative reserves the right
to reject the delivery of any beets not complying with this provision and
assess back to the grower direct costs incurred by the Cooperative in each
incident. (See Addendum A for calculation of direct costs.)

          In
addition to the penalties stated above, in the event of a second violation, the
Grower shall be subject to a maximum penalty of $1000 per acre found to be in
violation following a hearing by the Board of Directors.

     Further,
any Grower who knowingly jeopardizes the processibility or marketability of the
crop or a portion of the crop through actions, including but not limited to,
use of nonlabeled chemicals or planting of unapproved beet seed varieties, may
be held liable for damages incurred by the Cooperative including consequential
damages.

85

          12.
The amount charged for all beet seed furnished by the Cooperative to the Grower
hereunder, and all charges, penalties, costs and/or advances made to the Grower
by the Cooperative shall constitute a debt from the Grower to the Cooperative
which the Cooperative shall have the right to collect as in the case of any
other contractual obligation. The Cooperative shall have the right, at its
option, to treat any such amounts, advances or indebtedness as part payment for
beets grown and delivered under this contract. Any such amounts, advances, or
indebtedness which are due and payable or which hereafter may become due and
payable from the Grower to the Cooperative shall be, become, and remain a first
and prior lien on any payments
from the Cooperative to the Grower which shall become due hereunder, or under
any prior or subsequent beet contract between the Cooperative and the Grower.

          13.
The Cooperative will furnish all loading equipment at the loading stations, pay
all freight charges from outside piling stations, and pay mileage on beets
assigned to and delivered to all receiving stations in accordance with policies
determined and amended by the Cooperative from time to time. (See Addendum A
for current Receiving Station Regulation) Upon delivery to and acceptance by
the Cooperative of the sugarbeets as provided for herein, title thereto shall
be deemed to vest, and shall be vested, in the Cooperative.

     
          Any
Grower using an unauthorized truck(s) for the delivery of sugarbeets to a
Cooperative piler will be subject to the following penalty:

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 1st
Violation:

 
	
  

 	
  

 	
  

 
	
  

 	
 A.

 	
 Upon
 determination by the Agriculturist and Vice President of Ag that a violation
 has occurred, the violator shall lose all unallocated trucks and one
 allocated truck, as determined by the cooperative, for the remainder of the
 harvest.

 
	
  

 	
  

 	
  

 
	
  

 	
 B.

 	
 Notification
 of violation will be sent to all members of the hauling group including
 shareholders and growers. This notification will include the following
 language: “All members of a hauling group are responsible for the actions of
 another member of that hauling group in regard to the use of unauthorized
 trucks.

 
	
  

 	
  

 	
  

 
	
  

 	
 C.

 	
 For
 three subsequent harvests:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 -

 	
 Special
 stickers will be issued to the hauling group in violation

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 -

 	
 The
 special stickers will not be issued until just before main harvest and may be
 replaced periodically during the harvest

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 -

 	
 The
 hauling group shall be subject to audit which may include, but is not limited
 to, spot checks of all stickers and trucks during harvest, and requiring the
 hauling group members to provide, and document to Minn-Dak, all license
 numbers of all trucks used by the hauling group.

 

	
  

 	
  

 	
  

 
	
  

 	
 2nd
 Violation:

 
	
  

 	
  

 	
  

 
	
  

 	
 A.

 	
 All
 penalties listed above for 1st violation

 

 B. After
 a hearing before the Board of Directors, a $2,500/unallocated truck penalty
 will be assessed against the hauling group.

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 First
 time violations by a hauling group shall always remain on the records of the cooperative,
 making them subject to the penalties for a 2nd violation, should
 further violations occur.

 

86

          14.
Each delivery pool may harvest the number of acres equal to its stock acres
multiplied by a “Harvest Factor”, as determined by the Board of Directors
annually based on acreage of record as of August 10. Any acres in excess of
those determined by the “Harvest Factor” calculation will be considered “at
risk” acres. No “at risk” acres may be defoliated or harvested prior to
receiving permission from the Cooperative, nor may the “at risk” acres by
destroyed prior to being released by the Cooperative. After the completion of
harvest, the Cooperative will audit (GPS verify) delivery pools for “at risk”
acreage compliance. Each delivery pool’s respective agriculturist will measure
the acres remaining. Any delivery pool found to have harvested more acreage
than allocated under the “Harvest Factor” calculation shall not receive payment
from the Cooperative for beets harvested from those “at risk” acres and be
assessed a penalty of $1,000 per acre found in violation following a hearing
before the Board of Directors and a finding made of the number of acres in
violation. 

_______  Initial

     
          15.
The Grower specifically acknowledges and agrees that the Grower may be required
by the Cooperative to take back sugarbeets, dirt or other substances, if
determined by the Board of Directors that hauling out is necessary and legally
feasible.

     
          16.
Each year of this agreement, the Cooperative will pay to the Grower for beets
delivered and accepted at the time and in the manner hereinafter provided, a
price per pound of extractable sugar, determined to be as follows:

     
          (a)
Extractable pounds of sugar will be determined by the Cooperative in its
laboratory from beet samples statistically taken from each Grower at its
receiving stations. The beet samples will be tested for sugar content and
purity, and said results used in a formula to determine extractable pounds of
sugar delivered. (See Addendum A for calculation of extractable pounds of
sugar.)

     
          (b)
In addition, the Board, in its sole discretion shall make a determination each
year if an early harvest bonus shall be paid. If it is determined that an early
harvest bonus will be paid, each Grower will be reviewed for eligibility for
early harvest bonus extractable pounds of sugar. The bonus extractable pounds
of sugar will be determined by a formula that takes into account the delivery
date in early harvest, as well as the extractable pounds of sugar delivered on
that same date. (See Addendum A for the current Bonus Sugar Formula and Early
Harvest Delivery Policy.)

     
          (c)
Payment to the Grower will be an amount equal to the individual Grower’s total
delivered extractable pounds of sugar (as determined in 16a.) plus the
calculated pounds of early harvest bonus sugar (as determined in 16b.),
multiplied by the price to be paid per pound of extractable sugar to all
Growers.

     
          (d)
The price per pound of extractable sugar to all Growers will be determined by
dividing the total Grower proceeds by the total pounds of extractable and bonus
sugar delivered from all Growers. Grower’s proceeds are defined as the amount
after deducting from gross sales, all costs, charges, expenses, and margins
(including reserves but excluding payments to growers) as are regularly and
customarily deducted from gross sales in accordance with the Cooperative’s
system of accounting heretofore established.

     
          (e)
If in the opinion of the Board of Directors of the Cooperative, the working
capital position of the Cooperative is at any time insufficient, the
Cooperative may and shall retain from the price to be paid for beets such
amount(s) as are deemed necessary by the Board of Directors, the deduction(s)
to be made at such time(s) as the Board of Directors shall require; and such
amounts(s) as may be retained shall be evidenced in the records of the
Cooperative by equity credits in favor of the Shareholders.

87

     
          17.
Settlements shall be made as follows:

     
          For
all beets delivered from the beginning of harvest up to and including October
31st, initial payments shall be made on or about November 15th of the year in
which beets are delivered to the Cooperative; for all beets delivered after
October 31st, initial payment shall be made no later than the 15th day of each
month for beets delivered during the previous calendar month. Further, each
Grower agrees to the following:

                (a)
The first payment shall not exceed 65 percent of the estimated price to be paid
per pound of extractable sugar to all Growers;

                (b)
The second payment shall be paid on the first Friday in February, and shall
bring the total of the first and second payments to an amount not to exceed 70
percent of the estimated price to be paid per pound of extractable sugar to all
Growers; 

                (c)
The third payment shall be paid on the first Friday in April, and shall bring
the total of the first, second and third payments to an amount not to exceed 80
percent of the estimated price to be paid per pound of extractable sugar to all
Growers;

                (d)
The fourth payment shall be paid on the first Friday in July, and shall bring
the total of the first, second, third and fourth payments to an amount not to
exceed 95 percent of the estimated price to be paid per pound of extractable
sugar to all Growers;

                (e)
The final payment shall be determined as of the end of the Cooperative’s fiscal
year, after the Board of Directors has reviewed the final audited financial
statements of the Cooperative; and shall bring the total of the payments to an
amount equal to the price to be paid per pound of extractable sugar to all
Growers.

     
          18.
The Grower is an independent contractor. Agricultural or other advice may be
offered the Grower by the Cooperative’s representatives, but the Grower’s
status as an independent contractor shall not be thereby affected. In no event
shall the Cooperative be responsible for any failures or partial failures of
the crop or damage to the beets or actions of the Grower.

     
          19.
In case of the bankruptcy of the Cooperative, the destruction of an integral
part of the factory and the Cooperative’s failure or inability to rebuild or
repair the same, or in the event of fire, strikes, accidents, acts of God and
the public enemy, or other causes beyond the control of the parties which
prevent the Grower from the performance of this contract or the Cooperative
from utilizing the beets contracted for in the manufacture of sugar therefrom,
shall excuse the respective parties hereto from the performance of this
contract. Furthermore the Cooperative shall not be subject to any damage for
failing to receive the sugarbeets of the Grower, the Grower hereby waiving and
abandoning any rights or claims which the Grower may have for such damages, if
any. However, in the event a Lendor shall through foreclosure or otherwise
acquire in whole or in part the assets of the Cooperative, the Growers shall
remain obligated hereunder as though the contract were originally entered into
between the Growers and the Lendor.

88

     
          20.
The Grower acknowledges and agrees that the Grower may be liable to the
Cooperative for damages in the event the Grower’s actions result in a loss to
the Cooperative. Any Grower who knowingly jeopardizes the processibility or
marketability of the crop or a portion of the crop through actions, including
but not limited to, use of nonlabeled chemicals or planting of unapproved beet
seed varieties, may be held liable for damages incurred by the Cooperative
including consequential damages.

     
          21.
It is mutually agreed that there are no other or different documents,
representations, promises or agreements affecting this agreement, and that this
agreement, the annual requirement, the Articles of Incorporation and By-Laws of
the Cooperative, constitute the full, free and complete understanding of the
parties.

     
          22.
No agent of the Cooperative has any authority to change, waive, or modify any
of the terms or provisions of this contract.

     
          23.
This Agreement may be amended effective at the beginning of any calendar year
by the Cooperative giving notice to the Grower of the amendment by November 1
of the prior year and providing a new Agreement to the Grower/Shareholder for
signature prior to the planting of the crop.

     
          24.
This agreement shall be binding upon the Grower, the Grower’s heirs, legal
representative, successors, and assigns, and upon the Cooperative, its
successors and assigns, and shall not be transferable by the Grower without the
written consent of the Cooperative, its successors and assigns; and shall apply
equally to owned, rented or leased acres.

     
          25.
By signing this Growers Agreement, the parties specifically agree that all
prior Growers Agreements between the Grower and the Cooperative are hereby
canceled effective on the first day of the year following the date this
agreement is signed by both parties.

                IN
WITNESS WHERE OF, the Grower has hereunto executed this Growers Agreement on
this _____ day of _______________, 20__.

	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Farmer-Grower-Stockholder

 	
  

 	
 Farmer-Grower-Stockholder

 

ACCEPTANCE BY COOPERATIVE

          This
Growers Agreement is hereby accepted by the Board of Directors of Minn-Dak
Farmers Cooperative on this _____ day of ___________________, 20 _____.

	
  

 	
  

 	
  

 
	
  

 	
  

 	
      MINN-DAK FARMERS
 COOPERATIVE

 
	
  

 
	
  

 	
 By

 	
  

 

89

ADDENDUM A

2010

	
  

 	
  

 
	
 A.

 	
 (G.A.-1a,) CROP
 ROTATION POLICY: The board of directors adopted a policy for a three-year
 rotation for all sugarbeets, including irrigated acres, unless authorized by
 the board in an emergency situation only.

 
	
  

 	
  

 
	
 B.

 	
 (G.A.-5,6) DIRECT
 OVERHEAD COST CALCULATION: Direct Overhead Cost Calculation is defined as
 a penalty equal to 100% of the cooperative’s prior fiscal year’s actual fixed
 costs per acre for the number acres involved. Overhead costs vary from year
 to year depending on the crop size. Total actual fixed costs for the prior
 fiscal year divided by the authorized acreage per share of stock owned would
 equal the fixed cost per acre. The cost per acre times the number of acres
 involved equals the amount of the penalty. An example for 25 affected acres
 would be:

 
	
  

 	
  

 
	
  

 	
 $24,254,875
 FY2010 fixed costs
 / 115,520 2009 crop (the authorized acreage per share of stock owned)
 = $209.96 fixed cost per acre 

 
	
  

 	
 $209.96
 fixed cost per acre X 25 acres = $5,249.00 penalty

 
	
  

 	
  

 
	
 C.

 	
 (G.A.-9,11) DIRECT
 COSTS DEFINITION: Direct costs are defined as all direct and indirect
 costs incurred by the cooperative to mitigate said violation of the Growers
 Agreement. These would include but not be limited to the following:
 director(s) fees, analysis and testing costs and travel expenses and attorney
 fees.

 

	
  

 	
  

 	
  

 	
  

 
	
 D.

 	
 (G.A.-13)

 	
 RECEIVING
 STATION REGULATIONS

 	
  

 
	
  

 	
  

 	
 (2010)

 	
  

 

	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 Grower shall pick up
 cards, stickers, letters and truck numbers at preharvest meetings.

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 Designated sticker
 certification will be required on all trucks to be unloaded at factory.

 
	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 Growers with 24-hour
 trucks shall haul the full 24 hours.

 
	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 In case of breakdowns, the
 Agriculturist must be contacted prior to any substitute truck being
 authorized.

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 In the absence of the
 Agriculturist, the piler operator has the authority to enforce Minn-Dak
 Policy regarding harvest deliveries.

 
	
  

 	
  

 	
  

 
	
  

 	
 6.

 	
 The grower is ultimately
 responsible for a driver’s conduct at the receiving station. Drivers
 suspected of operating trucks under the influence of drugs/alcohol will not
 be allowed to unload their trucks and will be reported to law enforcement
 officials. Growers will be notified if any of their drivers are driving
 unsafely at the receiving station. Any driver considered unfit to drive or
 who refuses to conform to receiving station rules will be dismissed by the
 Agriculturist. Any criminal conduct will be reported to law enforcement
 officials.

 

90

	
  

 	
  

 	
  

 
	
  

 	
 7.

 	
 Growers whose drivers
 block the scale intentionally, or act in any manner which causes delay in
 delivery of sugarbeets at the receiving station in any way, will not be
 allowed to deliver any beets for a minimum of 24 hours as determined by the
 Agriculturist.

 
	
  

 	
  

 	
  

 
	
  

 	
 8.

 	
 Drivers shall not drive
 over beets at the toe of the pile, miss their tare dirt or drive over an
 unprotected portion of the power cord.

 

	
  

 	
  

 
	
 E.

 	
 (G.A.-16a) EXTRACTABLE
 SUGAR FORMULA: The formula for arriving at total pounds of extractable
 sugar delivered per grower is as follows:

 

	
  

 	
  

 
	
  

 	
 1. Each day’s delivery of
 beets by each grower is sampled for RDS (which is converted to purity), sugar
 content and net weight of beets.

 
	
  

 	
  

 
	
  

 	
 2. The samples are
 averaged for purity and sugar content, and those averages are plugged into a
 formula to determine pounds of extractable sugar per ton of beets delivered.

 
	
  

 	
 The formula is:

 

[40.4(S)] - [2040(S)]
- 12 = Pounds of Sugar Per Ton
                        Q 

Where: S = % sugar content

         Q = Purity

3. After determining the
pounds of extractable sugar per ton for the grower for that day’s delivery of
beets, that resultant number is multiplied by the total net tons of beets
delivered for that day, resulting in the total pounds of extractable sugar
delivered for that day for each grower. Each day’s deliveries are calculated
and accumulated until the total pounds of extractable sugar delivered for the
entire harvest, by grower, has been determined.

	
  

 	
  

 
	
 F.

 	
 (G.A.-16b) EARLY
 HARVEST DELIVERY POLICY (including Bonus Sugar Formula): 

 

1. The plan is based upon a
premium payment for beet deliveries starting the first day of early harvest and
continuing to the first day of stockpiling.

2. Premium payment is on a
daily declining percentage rate of two percent (2%). The initial premium will
be determined by the interval from the first day of early harvest, up to, but
not including the first day of main harvest.

	
  

 	
  

 	
  

 	
  

 
	
 Example: 

 	
 Early-harvest starts
 September

 	
 10

 	
  

 
	
  

 	
 Main harvest starts
 October

 	
 5

 	
  

 
	
  

 	
  

 	
 25

 	
  day interval

 
	
  

 
	
 All deliveries on September
10 will receive a fifty percent (50%) adjustment, on September 11, a 48%
adjustment, and continue the adjustment decline at 2% per day until deliveries
on October 4 would receive only a 2% adjustment.

 

3. The actual pounds of
extractable sugar delivered on any delivery day will be multiplied by the
premium adjustment for that day. This “Bonus Sugar” will be added to the grower
final total extractable sugar delivery and paid for at the final average rate
per pound for the crop.

91

4. Growers will receive and
be expected to deliver the assigned pre-harvest tonnage quotas on the specific
scheduled receiving station operating days. The agriculture department must
approve and be informed of any quota adjustments between growers. All quotas
are net tons.

5. Unless specifically
requested by the agriculture department, no premium payment will be paid on
deliveries in excess of assigned quotas.

6. Premium payment example:

September 10 = 50% premium
adjustment

Grower delivers 100 tons with 20,000 pounds of extractable sugar

20,000 X 50% - 10,000 pounds of Bonus Sugar

September 20 = 30% premium
adjustment

Grower delivers 100 tons with 20,000 pounds of extractable sugar

20,000 X 30% - 6,000 pounds Bonus Sugar

September 30 = 10% premium
adjustment

Grower delivers 100 tons with 20,000 pounds of extractable sugar

20,000 X 10% - 2,000 pounds Bonus Sugar

92Exhibit 10(1) 

Coal Purchase and Sale
Agreement

between

Minn-Dak Farmers
Cooperative

and

Enserco Energy Inc.

The prices for coal have been redacted for
business confidentiality.

COAL PURCHASE AND SALE
AGREEMENT

          This
Coal Purchase and Sale Agreement (the “Agreement”) is entered into and is
effective as of the 1st day of September, 2010, by and between Enserco Energy lnc., a South Dakota
corporation (“Enserco” or “Seller”), and Minn-Dak
Farmers Cooperative, a North Dakota cooperative, (“Minn-Dak” or
“Buyer”). Both Enserco and Minn-Dak may be individually referred to herein as
“Party” or collectively as “Parties”. Any capitalized term used but not
otherwise defined in the Agreement shall have its meaning set forth in Article
27 of the Agreement. 

RECITALS

          WHEREAS,
Minn-Dak operates a sugar beet processing plant in North Dakota, and requires
coal to operate such plant; and 

          WHEREAS,
Enserco is engaged in the business of trading coal and other energy
commodities; and 

          WHEREAS,
Minn-Dak desires to purchase coal from Enserco, and Enserco desires to sell
coal to Minn-Dak. 

          NOW,
THEREFORE, in consideration of the mutual covenants and promises set forth
hereafter, the Parties to this Agreement, intending to be legally bound, hereby
agree as follows: 

ARTICLE 1 – TERM

	
  

 	
  

 
	
 1.1

 	
 This Agreement shall begin on September 1, 2010
 and shall continue in effect until August 31, 2013, unless terminated earlier
 in accordance with Article 13 (“Term”). 

 

2

ARTICLE 2 – QUANTITY

	
  

 	
  

 	
  

 
	
 2.1

 	
 Except as otherwise provided for hereunder, Buyer
 shall be obligated to purchase and pay for, and Seller shall be obligated to
 sell and deliver a minimum of 100,000 Tons of Coal during each 12 month
 period over the Term (“Base Quantity”). 

 	
  

 
	
  

 	
  

 	
  

 
	
 2.2

 	
 Buyer shall also have the right to purchase and
 pay for, and Seller shall be obligated to sell and deliver any additional
 quantity of Coal above the Base Quantity necessary to fuel its sugar beet
 plant, or to sell back to Seller in conjunction with any third party sales
 under Article 23, in any 12 month period (“Additional Quantity”). Buyer shall
 provide Seller with a written, non-binding notice of the quantity of Coal it
 expects to take during each 12 month period at least 60 days prior to the
 start of each such period. 

 	
  

 

ARTICLE 3 – DELIVERY,
TRANSPORTATION, and EQUIPMENT DAMAGE

	
  

 	
  

 	
  

 
	
 3.1

 	
 All Coal (as defined in Article 6.1) delivered
 hereunder shall be delivered to Buyer F.O.B. Railcar (as defined in Article
 3.3) at the source mine (“Delivery Point”). 

 	
  

 
	
  

 	
  

 	
  

 
	
 3.2

 	
 Seller shall deliver the Coal to Buyer over the
 Term in accordance with monthly delivery schedules to be submitted by Buyer
 not later than 60 days prior to the beginning of each applicable delivery
 month (“Delivery Schedule”). Delivery Schedules shall be based on a ratable
 monthly basis unless otherwise agreed to in writing by both Parties. Within
 15 days of receipt of such Delivery Schedules, Seller may notify Buyer of any
 objections to such Delivery Schedules, and the Parties shall thereafter work
 together in good faith to reach a mutually acceptable Delivery Schedule. 

 	
  

 

3

	
  

 	
  

 	
  

 
	
 3.3

 	
 Seller shall be responsible for providing the
 railcars (“Railcars”) necessary to deliver the Coal to Buyer as unit trains.
 Unit trains shall be comprised of a minimum of 115 Railcars per train (a
 “Unit Train”), with the exact size of the Unit Trains to be determined by
 Seller. Each Unit Train of Coal shall constitute a “Shipment”.

 	
  

 
	
  

 	
  

 	
  

 
	
 3.4

 	
 Buyer shall be responsible for arranging and
 paying for all rail transportation services to move the Unit Trains from the
 Delivery Point to the Red River Valley & Western Railroad rail yard at
 Wahpeton, ND (“Rail Yard”), to shuttle the Railcars from the Rail Yard to
 Buyer’s facility (“Unloading Point”) to unload the Coal, and to return the
 clean and empty Railcars to Seller at the source mine. 

 	
  

 
	
  

 	
  

 	
  

 
	
 3.5

 	
 Buyer shall promptly notify Seller of the arrival
 of each Unit Train at the Rail Yard. Upon arrival of each Unit Train at the
 Rail Yard from the source mine, Buyer shall have 12 days from the date of
 such arrival (“Free Time”) in which to complete unloading of the Railcars at
 the Unloading Point and to return the empty and clean Railcars to the Rail
 Yard prior to Buyer either transporting the Railcars to the source mine or
 placing Railcars into storage in accordance with Article 4. Buyer shall
 promptly return Railcars to Rail Yard upon unloading the Coal at the
 Unloading Point, and Buyer shall have no rights to use Railcars for any other
 purpose. In the event that Buyer fails to return a minimum of 115 Railcars to
 Rail Yard in an empty and clean state before the expiration of the Free Time,
 Buyer shall incur and pay Seller a charge Confidential per Railcar per
 day for all 115 Railcars (Whether such Railcars have been returned or not)
 until such time that a minimum of 115 Railcars have been returned to Rail
 Yard in an empty and clean condition. Buyer shall notify Seller when the 115th
 Railcar has been returned to the Rail Yard and again after the last of the
 Railcars has been returned to the Rail Yard (if any Unit Train contains more
 than 115 cars). 

 	
  

 

4

	
  

 	
  

 	
  

 
	
 3.6

 	
 Buyer shall return custody of the Railcars to
 Seller in as good a condition, order and repair as when Buyer takes custody
 of the Railcars at the Delivery Point. Buyer shall be responsible for, and
 shall indemnify Seller for any and all direct costs associated with, or
 resulting from damage to or destruction of Railcars if such Railcars
 are damaged or destroyed while in Buyer’s or Buyer’s agent’s custody from the
 Delivery Point until the time custody of the Railcars is returned to Seller.
 Settlement for damage or destruction of Railcars shall be made by Buyer in
 accordance with the Field Office Manual of the Code of Interchange Rules,
 promulgated by the Association of American Railroads (“Code of Rules”). 

 	
  

 
	
  

 	
  

 	
  

 
	
 3.7

 	
 In order to obtain a more favorable rail
 transportation rate, and at Buyer’s request, Seller has agreed to deliver all
 Coal hereunder in aluminum Railcars. Buyer and Seller recognize that Coal
 stored in aluminum Railcars can experience unloading problems due to freezing
 of the Coal during the winter months. Seller agrees to use commercially
 reasonable efforts to work with Buyer to help minimize any such unloading
 problems. However, notwithstanding anything to the contrary herein, Buyer
 agrees that any costs incurred because of delivery complications or delays
 due to the inability to unload Coal from Railcars at the Unloading Point
 because of frozen Coal in such Railcars (including, but not limited to, any
 charges incurred under Article 3.5, above, because
 of inability to return a minimum of 115 Railcars before the expiration of
 Free Time) shall be solely for Buyer’s account. 

 	
  

 
	
  

 	
  

 	
  

 
	
 3.8

 	
 At Buyer’s request, Seller shall make
 commercially reasonable efforts to treat the Coal with freeze control agents
 or other additives as directed by Buyer. Buyer shall thereafter reimburse
 Seller for the actual cost of materials, including costs for the application
 of the freeze control agents or other additives. Seller shall invoice Buyer
 and Buyer shall pay Seller for such freeze conditioning in accordance with
 Article 11.1. 

 	
  

 

5

ARTICLE 4 – RAILCAR STORAGE

	
  

 	
  

 	
  

 
	
 4.1

 	
 Prior to the commencement of Free Time for any
 delivery, Seller shall notify Buyer if Buyer should return the Railcars to
 the source mine specified by Seller, or if Seller requires Buyer to store
 Railcars at the Rail Yard. If Seller notifies Buyer to return Railcars to the
 source mine, Buyer shall transport all Railcars to the source mine at Buyer’s
 expense. If Seller notifies Buyer that it requires storage of Railcars, Buyer shall
 arrange for such storage at the Rail Yard until such time as Seller notifies
 Buyer that Railcars should be transported by Buyer to the source mine, at
 which time Buyer shall so transport all Railcars to the source mine at
 Buyer’s expense. All costs and fees associated with storage of Railcars shall
 be for Buyer’s account. Seller shall not be limited in the number of times it places Railcars
 into storage or removes Railcars from storage during the Term. Seller will
 use commercially reasonable efforts to utilize the Railcars when not in use
 for deliveries under this Agreement in order to minimize storage time at Rail
 Yard and Buyer’s associated costs of storage. 

 	
  

 
	
  

 	
  

 	
  

 
	
 4.2

 	
 Buyer shall be responsible for, and shall indemnify
 Seller for, any and all direct costs associated with, or resulting from
 damage to, or destruction of Railcars if such Railcars are damaged or
 destroyed while Buyer or Buyer’s agent is storing Railcars under this
 Agreement. Settlement for damage or destruction shall be in accordance with
 the Code of Rules. 

 	
  

 

TITLE AND
RISK OF LOSS

	
  

 	
  

 	
  

 
	
 5.1

 	
 Title to the Coal and all risk of loss shall pass
 to Buyer upon delivery at the Delivery Point. Seller and Buyer shall each
 indemnify, defend and hold harmless the other Party and its Affiliates and
 their officers, directors, agents, and employees from and against any
 liabilities, losses, claims, damages, penalties, causes of action, or suits
 arising out of or in connection with its failure to comply with its obligations
 under this Agreement while title to and risk of loss of the Coal is vested in
 the indemnifying Party, unless caused by the gross negligence or willful
 misconduct of the indemnified Party or its Affiliates, or their officers,
 directors, agents, or employees.

 	
  

 

6

ARTICLE 6 – COAL
SPECIFICATIONS

	
  

 	
  

 	
  

 
	
 6.1

 	
 All Coal sold and delivered under this Agreement
 shall be crushed, sub-bituminous, containing no synthetic fuels,
 substantially free from any extraneous material (including, but not limited
 to, mining debris, bone, slate, iron, steel, petroleum coke, earth, rock
 pyrite, wood or blasting wire), be Substantially consistent in quality
 throughout a Shipment, with no intermediate sizes to be added or removed, and
 otherwise meeting the specifications of this Agreement (“Coal”). 

 	
  

 
	
  

 	
  

 	
  

 
	
 6.2

 	
 Except as provided under Article 6.3, all Coal
 delivered hereunder shall be sourced from the Black Thunder Mine located in
 the Powder River Basin of Wyoming, and shall meet the specifications for PRB 8800 as follows: 

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Characteristic

 	
  

 	
  

 	
 Base
 Standard

 	
  

 	
  

 	
 Rejection
 Limit

 	
  

 	
  

 
	
 Btu/lb:

 	
  

 	
 8800

 	
  

 	
 <8600
 

 	
  

 
	
 Sulfur
 (%)

 	
  

 	
 0.29

 	
  

 	
 >0.45
 

 	
  

 
	
 Moisture
 (%)

 	
  

 	
 27.0

 	
  

 	
 >30.0
 

 	
  

 
	
 Ash
 (%)

 	
  

 	
 5.5

 	
  

 	
 >7.5
 

 	
  

 
	
 Sodium
 (%)

 	
  

 	
 1.2

 	
  

 	
 >2.8
 

 	
  

 
	
 Top
 Size (inches)

 	
  

 	
 <3

 	
  

 	
 N/A
 

 	
  

 

7

	
  

 	
  

 	
  

 
	
 6.3

 	
 Upon 45 days written notice to Seller prior to any
 scheduled Shipment, Buyer shall have the right to have Seller deliver Coal
 meeting PRB 8400 specifications, with Seller having the right to source such Coal from
 any of the Rawhide, Buckskin, Eagle Butte, or Dry Fork mines located in the
 Powder River Basin of Wyoming. Any PRB 8400 Coal delivered hereunder shall
 meet the following specifications: 

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Characteristic

 	
  

 	
  

 	
 Base
 Standard

 	
  

 	
  

 	
 Rejection
 Limit

 	
  

 	
  

 
	
 Btu/lb:

 	
  

 	
 8400

 	
  

 	
 <8200
 

 	
  

 
	
 Sulfur
 (%)

 	
  

 	
 0.29

 	
  

 	
 >0.45
 

 	
  

 
	
 Moisture
 (%)

 	
  

 	
 30.0

 	
  

 	
 >32.0 

 	
  

 
	
 Ash
 (%)

 	
  

 	
 5.5

 	
  

 	
 >8.0
 

 	
  

 
	
 Sodium
 (%)

 	
  

 	
 1.2

 	
  

 	
 2.8
 

 	
  

 
	
 Top
 Size (inches)

 	
  

 	
 <3

 	
  

 	
 N/A
 

 	
  

 

ARTICLE 7 – SAMPLING AND
ANALYSIS

	
  

 	
  

 	
  

 
	
 7.1

 	
 Seller, or Seller’s agent, shall cause a
 representative Coal sample (“Mine Sample”) to be taken from each Shipment at
 the Railcar load point. The sample shall be taken in accordance with ASTM
 Standards, using a mechanical sampler or other ASTM approved procedure.
 Seller shall have an active quality control program at the load point,
 assuring the mechanical sampler is in proper working condition and has been
 bias-tested by an independent third party at least once each calendar year.
 If an alternate sampling procedure is used, Seller shall be capable of
 demonstrating the alternate procedure conforms to ASTM Standards and the procedure
 produces accurate and repeatable results. Sampling, sample preparation, and
 sample analysis shall be performed at Seller’s expense in accordance with
 ASTM Standards. Each sample shall be divided into three (3) parts in
 accordance with ASTM Standards and placed in separate airtight
 containers. One (1) part of each sample shall be analyzed by an independent
 certified laboratory selected by Seller (“Commercial
 Lab”); one (1) part shall be retained by the Commercial Lab for a period of
 45 days or shipped per Buyer’s directions; and one (1) part shall be retained
 by the Commercial Lab for a period of 45 days to be used in a Referee
 Analysis, if necessary (“Referee Split”).

 	
  

 

8

	
  

 	
  

 	
  

 
	
 7.2

 	
 The Commercial Lab shall perform a short
 proximate analysis on an “as-received” basis and in accordance with ASTM
 Standards. Such analysis shall include total moisture, ash, Btu and sulfur
 and any other specification that has a Rejection Limit. At the request and
 the expense of either Party, additional analyses may be performed. The
 results of such analysis shall be defined as the “Shipment Quality.” As soon
 as available, but in any event no later than 48 hours after the completion of
 the loading of each Shipment, Seller shall cause the shipping data, which
 shall include Shipment Weight (as defined In Article 9.1) and Shipment
 Quality, to be reported to Buyer (“Shipping Report”). 

 	
  

 
	
  

 	
  

 	
  

 
	
 7.3

 	
 Buyer or Seller may request an analysis of the
 Referee Split within forty-five (45) days of the delivery of a Shipment
 (“Referee Analysis”). If a Referee Analysis is requested, the Referee Split
 shall be sent for analysis to an independent third party laboratory agreeable
 to both Buyer and Seller. If the Referee Analysis is within interlaboratory
 ASTM Reproducibility Limits, then the original Shipment Quality shall
 control, and the cost of the Referee Analysis shall be paid by the Party
 requesting such analysis. If the Referee Analysis is not within the ASTM
 Reproducibility Limits, then the Referee Analysis shall control, and the cost
 of such analysis shall be paid by the non-requesting Party. 

 	
  

 
	
  

 	
  

 	
  

 
	
 7.4

 	
 Upon providing Seller 24-hour advance written
 notice, Buyer may, at Buyer’s risk and expense, arrange for an independent
 laboratory to witness the collection of samples during the loading of any
 Shipment at the load point. If the Independent laboratory designated by Buyer
 visits any of Seller’s mines and/or load points for purposes of sampling
 inspections, the independent laboratory must show evidence of insurance and
 must conform to all mine safety procedures while at such location.

 	
  

 

9

ARTICLE 8 – REJECTION

	
  

 	
  

 	
  

 
	
 8.1

 	
 If any Shipment of Coal triggers any of the
 Rejection Limits identified under the specifications provided in Articles 6.2
 or 6.3, as appropriate (a “non-Conforming Shipment”), Buyer shall have the
 option, exercisable by written notice to Seller not later than 48 hours of
 receipt of the Shipping Report of either (i) rejecting such Non-Conforming
 Shipment while enroute, but prior to unloading thereof, or (ii) accepting
 any Non-Conforming Shipment with a price adjustment agreed to between Seller
 and Buyer. If Buyer timely fails to exercise its rejection rights hereunder
 as to a Non-Conforming Shipment, Buyer shall be deemed to have waived such
 rights with respect to that Non-Conforming Shipment only. 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, and
 shall reimburse Buyer for all reasonable costs and expenses associated with
 the transportation, storage, handling and removal of the Non-Conforming
 Shipment, if any. Seller shall use commercially reasonable efforts to replace
 the rejected Coal as soon as possible. Any Shipment delivered in any calendar
 month that has been rejected by Buyer in accordance with this section and not
 made up within 30 days after such rejection shall be deemed to have not been
 delivered for purposes of calculating damages under this Agreement. 

 	
  

 

10

ARTICLE 9 – WEIGHING

	
  

 	
  

 	
  

 
	
 9.1

 	
 Unless otherwise agreed by the Parties, each
 Shipment shall be weighed at Seller’s expense (“Shipment Weights”). Weighing
 shall be by means of a certified batch weighing system, certified track
 scales, or, in the absence of both, a batch weighing system and certified
 track scales, by official railroad weights. If Seller’s scales are not
 available to determine the valid net weight of all of the railcars in a Unit
 Train but valid weights are obtained for 30 or more railcars in such train,
 the arithmetic average of all of the valid net weights of the 30 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 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 30 or more railcars. Absent manifest
 error, the weights as determined hereunder will be the basis on which
 invoices will be rendered and payments made. 

 	
  

 
	
  

 	
  

 	
  

 
	
 9.2

 	
 Seller shall cause the mine source to test, calibrate,
 and certify the scales at the source approximately every six (6) months, so
 to maintain them at a scale accuracy in accordance with the guidelines
 outlined in Handbook 44 of the National Institute of Standards and
 Technology. Seller shall use commercially reasonable efforts to notify Buyer
 as soon as it knows the date and time for such testing, calibration, and
 certification, and Buyer shall have the right to witness such events. 

 	
  

 

11

	
  

 	
  

 	
  

 
	
 9.3

 	
 Buyer, at its own risk and expense, shall have
 the right to have a representative present at any and all times to observe
 weighing of the Coal. If either Party should at any time question the
 accuracy of the scales at the source, such Party may request a prompt test
 and, if necessary, adjustment of such track scales or batch weighing
 system at its expense by an entity mutually agreed upon by Buyer and Seller.
 Should an inaccuracy be discovered during the test, and if an adjustment of such track scales or
 batch weighing system is necessary, then the Party requesting such test shall
 be reimbursed for its expense in requesting a test and adjustment of such
 track scales or batch weighing system from the other, non-disputing party. 

 	
  

 

ARTICLE 10 – PRICE, PRICE
ADJUSTMENTS, AND TAXES

	
  

 	
  

 	
  

 
	
 10.1

 	
 For all Shipments of Coal sold to Buyer under
 this Agreement, Buyer shall pay Seller a Base Price per ton, which sh
 Confidential per ton for all 8800 Coal, confidential per ton for all 8400 Coal. The Base Price shall include the
 cost of use by Buyer of the Railcars. 

 	
  

 
	
  

 	
  

 	
  

 
	
 10.2

 	
 The Base Price for each Shipment of Coal sold to
 Buyer will also include a price adjustment based upon the calorific value and
 sulfur content of the Coal as follows: 

 	
  

 

          BTU
Adjustment 

If the actual Btu on an as-received basis of any
Shipment accepted by Buyer is other than the Standard Btu, an adjustment
shall be calculated based on each Shipment as follows: 

BTU Adjustment = ((Actual
Shipment Btu/lb – Standard Btu/lb) ÷ Standard Btu/lb ) × Base Price 

          SO2 Adjustment

If the actual SO2 Ibs/MMBTU on an as-received
basis of any Shipment accepted by Buyer is other than the Standard SO2 Ibs/MMBTU, an adjustment shall be calculated based on each Shipment as follows:  

SO2 Adjustment = ( (Standard SO2 Ibs/MMBTU – Actual
Shipment SO2 Ibs/MMBTU) × Actual Shipment Btu/lb × E × F ) / 1,000,000  

12

E is the price of one SO2 Allowance. The price of an SO2 Allowance
is determined by the monthly SO2 price
indices published in Argus Air Daily published by Argus
Media Ltd. or any successor publication (“Air Daily”) for the vintage year of the
SO2 Index Month  

F is the number of SO2 Allowances required to emit one ton of SO2 during the current calendar year in a state covered by the Clean Air
Interstate Rule under 40 CFR 96.202 (“CAIR”) (see Final Rule, 60 Fed. Reg. 91
(May 12, 2005) at p. 25363). F shall be as follows (irrespective of where the
coal is delivered or burned): Year 2010 – 2014: F=2.00; and
After 2014: F = 2.86. 

In the event the information contained in Air Daily
is no longer published or a change in the methodology, law, regulations or
industry standards has occurred that will materially alter the information, a
substitute calculation shall be mutually agreed to by the Parties. 

The above information reflects that pursuant to
CAIR, currently two SO2 Allowances are required to emit one ton of SO2
during a calendar year in a state covered by CAIR and that in 2015, this will Increase
to 2.86 SO2 Allowances
required to emit one ton of SO2. The Parties recognize that CAIR is required
to be modified pursuant to a court order, and agree that SO2 Adjustments shall
be calculated using the ratios of SO2 Allowances to tons of SO2 as
set forth above, or as may be otherwise changed by the modification of CAIR or
any replacement or Successor rules or laws, as applicable, to as closely as
possible reflect that number of SO2 Allowances required to emit one ton of SO2
in a state covered by CAIR or any replacement thereof.  

	
  

 	
  

 	
  

 
	
 10.3

 	
 Seller shall be solely responsible for all
 assessments, fees, costs, expenses, and taxes (including but not limited to
 any ad valorem, property, occupation, severance, generation, first use,
 conservation, Btu or energy, utility, gross receipts, privilege, sales, use,
 consumption, excise, lease, transaction, and other taxes, governmental
 charges, licenses, fees, permits and assessments, or increases thereto, other
 than taxes based on net income) imposed by governmental authorities or other
 third parties (“Third Party Impositions”) relating to the mining,
 beneficiation, production, sale, use, loading and delivery of Coal to Buyer
 at the Delivery Point or in any way accrued or levied prior to the transfer
 of title to the Coal to Buyer, and including, without limitation, all
 severance taxes, royalties, black lung fees, reclamation fees and other
 costs, charges and liabilities. Buyer shall be solely responsible for Third
 Party Impositions relating to the Coal accrued or levied at or after the
 transfer of title to the Coal to Buyer, including, but not limited to sales
 or use tax, if applicable. 

 	
  

 

13

ARTICLE 11 – BILLING,
PAYMENT, NETTING, & SETOFF

	
  

 	
  

 	
  

 
	
 11.1

 	
 After each Shipment month, Seller shall provide
 Buyer with an invoice, setting forth (i) the aggregate sum owed pursuant to
 Article 10.1 for Coal delivered to Buyer at the Delivery Point, including a
 per Shipment itemization; (ii) Quality Adjustments pursuant to Article 10.2 for such Coal, if any, or for previous
 Shipments and their supporting calculation; (iii) charges for treatment
 pursuant to Article 3.8 for such Coal, if any; and (iv) any other
 charges owed by Buyer pursuant to this Agreement. No later than five (5)
 Business Days after receipt of Seller’s invoice, Buyer shall pay Seller via
 electronic means in immediately available United States funds the amount set
 forth on such invoice. Over due payments shall accrue interest at the
 Interest Rate from the due date until the date paid. 

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Payment shall be sent to Seller to the following
 account:

 	
  

 

	
  

 	
  

 
	
 Account
 Name:

 	
 Enserco
 Energy Inc. 

 
	
 Account#

 	
 341
 8229 328 

 
	
 Bank
 Name:

 	
 Wells
 Fargo Bank, N.A. 

 
	
 ABA
 Bank #

 	
 121
 000 248 

 

	
  

 	
  

 	
  

 
	
 11.2

 	
 If Buyer disputes in good faith part or all of an
 invoice, then Buyer shall provide notice of the disputed portion, including a
 written explanation of the dispute, and pay any undisputed portion no later
 than the due date. If an amount disputed by Buyer is subsequently determined
 due, then such amount shall be paid by Buyer to Seller within five (5)
 Business Days of such determination, along with interest at the Interest
 Rate, accrued from the original due date through date paid. If a disputed
 amount is paid and it is subsequently determined such amount was not due,
 then such amount shall be refunded from Seller to Buyer within five (5)
 Business Days of such determination, along with interest calculated at the
 Interest Rate, accrued from the original due date through the date refunded.
 All invoices will be final and not subject to further adjustments or
 correction unless objection to the accuracy thereof is made prior to one (1)
 year from the rendition thereof.

 	
  

 

14

	
  

 	
  

 	
  

 
	
 11.3

 	
 If the Parties are required to pay amounts to
 each other under this Agreement 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. 

 	
  

 
	
  

 	
  

 	
  

 
	
 11.4

 	
 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. 

 	
  

 
	
  

 	
  

 	
  

 
	
 11.5

 	
 If a Party fails to pay amounts under this
 Agreement within ten (10) Business Days after receipt of an invoice, unless
 such amount is the subject of a dispute as provided above, in addition to the
 rights and remedies otherwise provided in this Agreement, the aggrieved Party
 shall have the right to suspend performance hereunder. If such failure to pay
 continues for an additional five (5) Business Days, the aggrieved Party shall
 have the right to terminate this Agreement and shall be entitled to all other
 rights under this Agreement. 

 	
  

 

15

ARTICLE 12 – FORCE MAJEURE

	
  

 	
  

 	
  

 
	
 12.1

 	
 The term “Force Majeure” as used herein shall
 mean an unanticipated or unexpected 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
 plants or Seller’s mines; 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). 

 	
  

 
	
  

 	
  

 	
  

 
	
 12.2

 	
 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 faith efforts to eliminate such Force Majeure,
 insofar as reasonably possible, with a minimum of delay. Should the situation
 of Force Majeure exceed 90 consecutive days, so long as the Force Majeure
 event is continuing, the Party not claiming Force Majeure may, at its option,
 terminate this Agreement in whole or in part and neither Party shall have any
 further obligation to the other Party; provided, 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 agreement. The Party
 claiming a Force Majeure shall provide suitable proof to the other Party to
 substantiate any claim made under this Article 12. 

 	
  

 

16

	
  

 	
  

 	
  

 
	
 12.3

 	
 Both Parties agree the 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 the 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 claiming a Force Majeure. 

 	
  

 
	
  

 	
  

 	
  

 
	
 12.4

 	
 Notwithstanding the provisions of Article 12.1,
 the following shall not constitute an event of Force Majeure: 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 any regulatory or contractual disallowance of the
 pass-through of the costs of Coal or other related costs. 

 	
  

 

17

ARTICLE 13 – DEFAULT,
REMEDIES, AND TERMINATION

	
  

 	
  

 	
  

 
	
 13.1

 	
 Unless excused by Force Majeure or the other
 Party’s failure to perform, the occurrence of one or more of the following
 events with respect to a Party (the “Defaulting Party”) shall constitute an
 “Event of Default””: (i) a Party’s failure to make, when due, any payment
 required hereunder, if such failure is not remedied within three (3) Business
 Days of being provided written notice of such failure by the other Party;
 (ii) a Party’s failure to comply in good faith with any material obligations
 under this Agreement (except for the obligation to deliver or receive Coal,
 the exclusive remedies for which are provided for in Articles 13.3 and 13.4,
 respectively) and such non-compliance is not cured within five (5) Business
 Days of being provided written notice of such failure by the other Party;
 provided that if it shall be impracticable or impossible to remedy such failure within
 such five (5) Business Day period, then the cure period shall be extended for
 an additional period reasonably necessary to remedy such failure, subject to the condition that during the
 additional period, the potential Defaulting Party shall be diligently
 pursuing a remedy for the failure; (iii) a Party or its guarantor are subject to a
 Bankruptcy Proceeding; (iv) a failure of a Party’s guarantor to perform any
 covenant in a guaranty of such Party’s obligations that is provided to the
 other Party and such non-performance is not cured within five (5) Business
 Days of being provided written notice of such failure by the other Party; (v)
 a material representation or warranty made by a Party herein shall prove to
 be untrue in a material respect when made; (vi) a Party fails to establish, maintain,
 extend, increase or enhance Credit Assurance when required pursuant to this
 Agreement and such failure is not cured within three (3) Business Days of
 being provided written notice of such failure by the other Party; or (vii) a Party repudiates its obligations
 hereunder. 

 	
  

 

18

	
  

 	
  

 	
  

 
	
 13.2

 	
 Upon the occurrence of an Event of Default and
 while such Event of Default continues, the Non-Defaulting Party may (A)
 suspend performance of its obligations under the Agreement, (B) establish by
 notice to the Defaulting Party a date on which the Agreement shall terminate,
 which date shall be no earlier than the date such notice is effective
 and no later than twenty (20) days after such notice is effective (“Early
 Termination Date”), and calculate its resulting Gains, Losses, and Costs, and/or (C) exercise
 such other remedies as may be provided under this Agreement. The Gains,
 Losses, and Costs shall be determined by calculating the value of the amount
 of Coal that the Parties contracted to be delivered under the Agreement but
 has not been delivered (“Terminated Quantity”) using the applicable Price and
 comparing to the value of the Terminated Quantity, using relevant market
 price(s) quoted by a bona fide third-party or that are reasonably expected to
 be available in the market to replace the Terminated Quantity. In calculating
 the Terminated Quantity, the quantity contracted to be delivered shall be the
 Base Quantity. The Non-Defaulting Party shall aggregate such Gains, Losses
 and Costs with respect to the Terminated Quantity into a single net amount
 (the “Termination Payment”) and notify the Defaulting Party of such amount.
 If the Non-Defaulting Party’s aggregate Losses and Costs exceed its aggregate
 Gains, then the Defaulting Party shall, within five (5) days of receipt of
 such notice, pay the net amount to the Non-Defaulting Party, which amount
 shall bear interest at the Interest Rate from the Early Termination Date
 through the date paid. If the Non-Defaulting Party’s aggregate Gains exceed
 its aggregate Losses and Costs, then the Non-Defaulting Party, shall, within
 20 Business Days of the Early Termination Date, pay the net amount (without
 interest) to the Defaulting Party; provided, however, that notwithstanding
 any provision to the contrary contained in this Agreement, the Non-Defaulting
 Party may withhold any payment otherwise owed to the Defaulting Party
 hereunder until the Non-Defaulting Party receives confirmation satisfactory,
 in the reasonable opinion of the Non-Defaulting Party, that (I) all amounts
 due and payable as of the Early Termination Date by the Defaulting Party
 under the Transaction have been fully and finally paid, and (ii) all other
 obligations of the Defaulting Party to the Non-Defaulting Party that are due
 under the Agreement as of the Early Termination Date have been fully and
 finally performed. As used herein with respect to a Party: (i) “Costs” shall
 mean, brokerage fees, commissions and other similar transaction costs and
 expenses reasonably incurred by such Party in entering into new agreements to
 replace the Terminated Quantity and reasonable attorneys’ fees, if any,
 incurred in connection with enforcing its rights under the Agreement; (ii)
 “Gains” shall mean, with respect to a Party, the present value of the
 economic benefit (exclusive of Costs), if any, to such Party, resulting from the
 termination of its obligations with respect to the Terminated Quantity,
 determined in a commercially reasonable manner and (iii) “Losses” shall mean,
 with respect to a Party, the present value of the economic loss (exclusive of
 Costs), if any, to such Party resulting from the termination of its
 obligations with respect to the Terminated Quantity, determined in a
 commercially reasonable manner. A Party’s Gains, Losses or Costs may not
 include penalties or similar charges unless such penalties or charges are
 unavoidably assessed by a third party.

 	
  

 

19

	
  

 	
  

 	
  

 
	
 13.3

 	
 Unless excused by Force Majeure or Buyer’s
 failure to perform, if Seller fails to deliver all
 or part of the Base Quantity or Additional Quantity of Coal to be delivered
 hereunder, then Seller shall pay Buyer for each Ton of such deficiency
 (“Seller’s Deficiency”) the positive difference, if any, obtained by
 subtracting the Base Price for the Seller’s Deficiency from the Replacement
 Price. “Replacement Price” means the price at which Buyer, acting in a
 commercially reasonable manner, purchases substitute Coal for the Seller’s
 Deficiency or, absent such a purchase, the market price for such quantity of
 Coal (F.O.B., Delivery Point), as determined by Buyer in a commercially
 reasonable manner. It is expressly agreed that Buyer shall not be required to
 enter into a replacement transaction in order to determine the Replacement
 Price. Seller shall make any payment owed to Buyer pursuant to this Paragraph
 13.3 within five (5) days after receipt of notice from Buyer requesting
 payment of such amount. 

 	
  

 
	
  

 	
  

 	
  

 
	
 13.4

 	
 Unless excused by Force Majeure or Seller’s
 failure to perform, if Buyer fails to accept all or part of the Base Quantity
 or Additional Quantity of Coal to be delivered hereunder, then Buyer shall
 pay Seller for each Ton of such deficiency (“Buyer’s Deficiency”) the
 positive difference, if any, obtained by subtracting the Sales Price from the
 Price. “Sales Price” means the price at which Seller, acting in a
 commercially reasonable manner, resells the Buyer’s Deficiency (including
 additional transportation charges, if any, incurred by Seller as a result of delivering
 Coal
 at a location other than the relevant Delivery Point) or,
 absent such a sale, the market price for such quantity of coal (F.O.B., Delivery
 Point),
 as determined by Seller in a commercially reasonable manner. It is expressly
 agreed that Seller shall not be required to enter into a replacement
 transaction in order to determine the Sales Price. Buyer shall make any
 payment owed to Seller pursuant to this Paragraph 13.4 within five (5) days
 after receipt of notice from Seller requesting payment of such amount.

 	
  

 

20

	
  

 	
  

 	
  

 
	
 13.5

 	
 Each Party stipulates that the payment
 obligations set forth in this Article 13 are reasonable in light of the
 anticipated harm and the difficulty of estimation or calculation of actual
 damages, and each Party waives the right to contest such payments as an
 unreasonable penalty. The remedies set forth in Articles 13.3 and 13.4 shall
 be the sole and exclusive remedy of the aggrieved Party for the failure of
 the other Party to deliver or accept, as the case may be, the quantity of
 Coal specified herein prior to the Early Termination Date, and all other
 damages and remedies are hereby waived as to such failure(s). 

 	
  

 

ARTICLE 14 – RECORDS,
AUDITS, AND ACCESS

	
  

 	
  

 	
  

 
	
 14.1

 	
 Seller shall maintain books and records relating
 to the supply of Coal under this Agreement and the calendar year 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. 

 	
  

 
	
  

 	
  

 	
  

 
	
 14.2

 	
 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; provided, however, that no adjustment for any statement of
 payment will be made unless objection to the accuracy thereof was made in
 writing, in reference hereto, prior to the lapse of one (1) year from the
 rendition thereof. 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.

 	
  

 

21

ARTICLE 15 – NOTICES

	
  

 	
  

 	
  

 
	
 15.1

 	
 Except as expressly provided otherwise, any
 notice, election or other correspondence required or permitted hereunder shall
 be in writing and delivered by letter, facsimile, electronically or other
 documentary form. Notice by facsimile, electronic means, or hand delivery
 shall be deemed to have been received (and effective) by the close of the
 Business Day on which it was transmitted or hand delivered. Notice by
 overnight mail or courier shall be deemed to have been received one (1) Business Day after it was sent. 

 	
  

 

	
  

 	
  

 
	
  

 	
 Notices
 to Minn-Dak: 

 
	
  

 	
 Minn-Dak
 Farmers Cooperative

 
	
  

 	
 Attn:
 Purchasing and A/P 

 
	
  

 	
 7525
 Red River Rd 

 
	
  

 	
 Wahpeton
 ND 58075 

 
	
  

 	
 Fax
 701-671-1369 

 
	
  

 	
  

 
	
  

 	
 Scheduling
 to Minn-Dak: 

 
	
  

 	
 Attn:
 Purchasing & Factory Clerk

 
	
  

 	
 Fax
 701-671-1369

 
	
  

 	
 purchasing@mdf.coop

 
	
  

 	
 vnelson@mdf.coop
 

 

22

	
  

 	
  

 
	
  

 	
 Notices
 to Enserco: 

 
	
  

 	
 Enserco
 Energy Inc.

 
	
  

 	
 Attn:
 Coal Trading 

 
	
  

 	
 1515
 Wynkoop, Suite 500

 
	
  

 	
 Denver,
 CO 80202 

 
	
  

 	
 Fax:
 303-476-5992 

 
	
  

 	
  

 
	
  

 	
 With
 copy, that shall not constitute notice, to: 

 
	
  

 	
  

 
	
  

 	
 Enserco
 Energy Inc.

 
	
  

 	
 Attn:
 legal Counsel 

 
	
  

 	
 1515
 Wynkoop, Suite 500

 
	
  

 	
 Denver,
 CO 80202 

 
	
  

 	
 Fax:
 303-476-5989 

 
	
  

 	
  

 
	
  

 	
 Scheduling
 to Enserco: 

 
	
  

 	
 Attn:
 Coal Trading

 
	
  

 	
 Fax:
 303-476-5992 

 
	
  

 	
 Email:
 coalnominations@blackhillscorporation.com 

 

	
  

 	
  

 	
  

 
	
  

 	
 The Parties’ 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 15.1. 

 	
  

 

23

ARTICLE 16 – WARRANTY,
LIMITATION OF LIABILITY, DUTY TO
MITIGATE, AND INDEMNIFICATION

	
  

 	
  

 	
  

 
	
 16.1

 	
 FOR BOTH MINN-DAK FARMERS COOPERATIVE AND ENSERCO
ENERGY INC., A BREACH OF ANY PROVISION HEREUNDER FOR WHICH AN EXPRESS REMEDY
OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES
SHALL BE THE SOLE AND EXCLUSIVE REMEDY. A PARTY’S LIABILITY HEREUNDER SHALL
BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES
AT LAW OR IN EQUITY ARE HEREBY WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS
EXPRESSLY PROVIDED HEREIN, A PARTY’S LIABILITY SHALL BE LIMITED TO DIRECT
ACTUAL DAMAGES ONLY. SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND
EXCLUSIVE REMEDY, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE
HEREBY WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL,
PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS
INTERRUPTION DAMAGES, WHETHER BY STATUTE, IN TORT OR CONTRACT, UNDER ANY
INDEMNITY PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE
LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT
REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF
ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR
PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE
LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR
IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN ADEQUATE REMEDY IS
INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE
APPROXIMATION OF THE HARM OR LOSS.

 	
  

 
	
  

 	
  

 	
  

 
	
 16.2

 	
 EXCEPT AS EXPRESSLY SETFORTH HEREIN, 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.

 	
  

 

24

	
  

 	
  

 	
  

 
	
 16.3

 	
 Each Party agrees it has a
 commercially reasonable good faith duty to mitigate damages hereunder. 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). 

 	
  

 
	
  

 	
  

 	
  

 
	
 16.4

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

 	
  

 

ARTICLE 17 – LIMITATION ON
WAIVER

	
  

 	
  

 	
  

 
	
 17.1

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

 	
  

 

ARTICLE 18 –
CONFIDENTIALITY

	
  

 	
  

 	
  

 
	
 18.1

 	
 The Parties shall protect the confidentiality of
 the terms of this Agreement and neither this Agreement nor 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 Exchange Commission and tax authorities); or (iv) 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. 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. 

 	
  

 

25

ARTICLE 19 – ENTIRETY AND
AMENDMENTS

	
  

 	
  

 	
  

 
	
 19.1

 	
 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 – SUCCESSOR AND
ASSIGNS

	
  

 	
  

 	
  

 
	
 20.1

 	
 Neither Party shall assign the Agreement without
 the prior written consent of the other Party, which consent may not be
 unreasonably withheld or delayed. Notwithstanding the foregoing, either Party
 may, without consent from the other Party (and without relieving itself from
 liability hereunder), (a) transfer, sell, pledge, encumber or assign the
 Agreement or the accounts, revenues, or proceeds hereof in connection with a
 financing or any other financial arrangement; (b) transfer or assign the
 Agreement to an Affiliate of such Party if such Affiliate’s creditworthiness
 and ability to perform the duties under this Agreement are the same or better
 than the assigning Party; or (c) transfer or assign the Agreement to any
 person or entity succeeding to all or substantially all of the assets of such
 Party; provided, however, that in each
 such case any such assignee shall agree in writing to be bound by the
 Agreement. 

 	
  

 

ARTICLE 21 – GOVERNING LAW

	
  

 	
  

 	
  

 
	
 21.1

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

 	
  

 

ARTICLE 22 – INTERPRETATION

	
  

 	
  

 	
  

 
	
 22.1

 	
 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.

 	
  

 

26

ARTICLE 23 – RESALE

	
  

 	
  

 	
  

 
	
 23.1

 	
 As part of the consideration for Seller entering
 into this Agreement, Buyer grants to Seller the exclusive right to purchase
 Coal sourced from Coal stockpiled at Buyer’s plant for Seller to sell to
 third parties during the Term of this Agreement. The Parties shall cooperate
 to identify such third parties. The terms of sale of any of Buyer’s Coal to
 Seller for sale to third parties shall be mutually agreed to between Buyer
 and Seller. 

 	
  

 

ARTICLE 24 – DISPUTE
RESOLUTION

	
  

 	
  

 	
  

 
	
 24.1

 	
 Any dispute between the Parties arising under
 this Agreement shall be referred for resolution to a senior representative of
 each Party. Upon receipt of a notice describing the dispute, designating the
 notifying Party’s senior representative, and indicating the dispute to be
 resolved by the Parties’ senior representatives under this Agreement, the
 other Party shall promptly designate its senior representative and notify the
 notifying Party. The designated senior representatives shall attempt to
 resolve the dispute on an informal basis as promptly as practicable. If the
 dispute has not been resolved within 30 days after the notifying Party’s
 notice was received by the Other Party, or within such other period as the
 Parties may jointly agree in writing, either Party may pursue whatever relief
 or remedy it deems appropriate. 

 	
  

 

27

ARTICLE 25 – CREDIT
ASSURANCE

	
  

 	
  

 	
  

 
	
 25.1

 	
 If a Party (“Requesting Party”) has reasonable
 grounds to believe the other Party (“Providing Party”) or such Party’s
 guarantor has suffered a Material Adverse Change after the date of this
 Agreement, then the Requesting Party may deliver a written demand to the
 Providing Party requiring Credit Assurance in a form reasonably acceptable to
 the Requesting Party; provided, however, that in no event shall the
 Requesting Party require the value of such Credit Assurance with respect to
 this Agreement on any day to exceed the amount that would be payable by the
 Providing Party as a Termination Payment, if such day were an Early
 Termination Date. The Providing Party shall deliver such Credit Assurance to
 the Requesting Party within three (3) Business Days.

 	
  

 

ARTICLE 26 – SURVIVAL

	
  

 	
  

 	
  

 
	
 26.1

 	
 The provisions of Articles 13 through 22 and
 Articles 24 and 26 shall survive the termination of this Agreement. 

 	
  

 

ARTICLE 27 – DEFINITIONS

	
  

 	
  

 
	
 “Affiliate” shall mean, with respect to a Party,
 any other party (other than an individual) that directly/indirectly, through
 one (1) or more intermediaries, controls or is controlled by, or is under
 common control with, such Party. For this purpose, “control” shall
 mean direct or indirect ownership of a 50% or more of the outstanding capital
 stock or other equity interests having ordinary voting power. 

 	
  

 
	
  

 	
  

 
	
 “ASTM” shall mean the American Society for
 Testing and Materials. 

 	
  

 
	
  

 	
  

 
	
 “ASTM Reproducibility Limits” shall mean the
 limits for permissible differences for reproducibility listed within the
 relevant ASTM Standard. 

 	
  

 

28

	
  

 	
  

 
	
 “ASTM Standards” shall mean the then-current,
 applicable and published standards of the American Society for Testing and
 Materials. 

 	
  

 
	
  

 	
  

 
	
 “Bankruptcy Proceeding” means with respect to a
 Party or entity, such Party or entity (a) makes an assignment or any general
 arrangement for the benefit of creditors, (b) 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, (c) has such a petition filed against it and such petition is not
 withdrawn or dismissed within 30 days after such filing, (d) otherwise
 becomes bankrupt or insolvent (however evidenced), or (e) is unable to pay
 its debts as they fall due. 

 	
  

 
	
  

 	
  

 
	
 “Business Day” shall mean any day except a
 Saturday, Sunday, or a Federal Reserve Bank holiday. A Business Day shall
 open at 8:00 a.m. and close at 5:00 p.m. eastern prevailing time. 

 	
  

 
	
  

 	
  

 
	
 “Credit Assurance” shall mean collateral deemed
 acceptable by the Requesting Party, which may be in the form of prepayment,
 cash collateral, Letter(s) of Credit, or other security, in a form acceptable
 to the Requesting Party. 

 	
  

 
	
  

 	
  

 
	
 “Interest Rate” shall mean the lower of (i) one percent
 (1%) over the then-current U.S. prime rate, as listed in the Money Rates
 section of The Wall Street Journal on the first day of the month in which
 such interest was calculated, and (ii) the maximum lawful rate. 

 	
  

 
	
  

 	
  

 
	
 “Letter of Credit” shall mean one or more irrevocable and
 nontransferable standby letters of credit issued by a U.S. commercial bank or
 a foreign bank with a U.S. branch and with such bank having a credit rating of at
 least A- from Standard & Poor’s Ratings Group and A3 from Moody’s Investor
 Services, Inc., 

 	
  

 

29

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}]]