UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended
AUGUST 31, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
-------------------------
Commission File
No. 33-94644
-------------------------
MINN-DAK FARMERS COOPERATIVE
(Exact name of registrant as specified in its charter)
North Dakota 23-7222188
(State of incorporation) (I.R.S. Employer Identification Number)
7525 Red River Road
Wahpeton, North Dakota 58075 (701) 642-8411
(Address of principal executive offices) (Registrant's telephone number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b)OF THE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g)OF THE ACT:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES _X_ NO ___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
As of November 21, 1996, 480 shares of the Registrant's Common Stock
and 58,525 "units" of the Registrant's Preferred Stock, each consisting of 1
share of Class A Preferred Stock, 1 share of Class B Preferred Stock and 1 share
of Class C Preferred Stock, were outstanding. There is only a limited, private
market for shares of the Company's Common or Preferred Stock, as such shares may
be held only by farmer-producers who are eligible for membership in the Company.
The Company's shares are not listed for trading on any exchange or quotation
system. Although transfers of the Company's shares may occur only with the
consent of the Company's Board of Directors, the Company does not verify
information regarding the transfer price in connection with such transfers. A
number of stock transfers, representing approximately 6% of available stock,
were not arms length (estate settlements, estate planning from one generation to
the next, etc.) and an accurate value for that stock was not available.
Management believes less than 1% of the Company's available stock was traded at
arms length during the fiscal year ended 8-31-96. Of the stock transferred at
arms length, the transfers were made during the second and third quarters of the
Company's fiscal year and range in price from $2,300 to $2,500 per unit.
DOCUMENTS INCORPORATED BY REFERENCE
Certain exhibits to this Report are incorporated by reference
from the Company's Registration Statement on Form S-1 (File number
33-94644), declared effective on September 11, 1995.
EXPLANATION
This Amendment No. 1 to the Annual Report on Form 10-K of Minn-Dak
Farmers Cooperative (the "Company") for the fiscal year ended August 31, 1996
(the "1996 Form 10-K") is being made to disclose material terms of Coal Supply
and Transportation Agreements to which the Company is a party, and to make
corrections and revisions to certain of the redacted exhibits that are attached
to the 1996 Form 10-K.
PART I.
ITEM 1. BUSINESS
The following text should be added on page 10 of the original filing,
before the heading "Company Districts":
COAL SUPPLY AND TRANSPORTATION AGREEMENTS
Minn-Dak uses large quantities of energy in its operations,
principally for heating the cossettes, evaporating water from juices
containing sugar, drying wet beet pulp and generating electrical power.
The Company's factory burns coal as its primary source of energy. The
Company presently obtains all of its coal from Montana pursuant to an
exclusive Coal Supply Agreement dated August 14, 1995 with Kennecott
Energy Company and Spring Creek Coal Company. This coal is transported
from Montana to the Company's factory under an exclusive Coal
Transportation Agreement dated August 14, 1995 with Northern Coal
Transportation Company. The Coal Transportation Agreement will fulfill
all of the Company's coal requirements. By their terms, each of these
Agreements expires on July 31, 2005.
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
FINANCIAL STATEMENT SCHEDULES
None
REPORTS ON FORM 8-K
The Company was not required to and did not file any reports on Form
8-K during the three months ended August 31, 1996.
EXHIBITS
Index
- -----
#3(i) Articles of Amendment to the Articles of Incorporation of Minn-
Dak Farmers Cooperative
*3(ii) Articles of Incorporation of Minn-Dak Farmers Cooperative
#3(ii) Amended Bylaws of Minn-Dak Farmers Cooperative
#10(a) Growers' Agreement (three-year Agreement) (example of agreement
which each Shareholder is required to sign)
*10(b) Uniform Member Marketing Agreement by and between United Sugars
Corporation and Minn-Dak Farmers Cooperative
#10(c) Supplement to Uniform Member Marketing Agreement by and between
United Sugars Corporation and Minn-Dak Farmers Cooperative
*10(d) Capitalization Agreement by and among Southern Minnesota Beet
Sugar Cooperative, Minn-Dak Farmers Cooperative, American
Crystal Sugar Company, and United Sugars Corporation
*10(e) Memorandum of Understanding and Uniform Member Marketing
Agreement by and between Midwest Agri-Commodities Company and
Minn-Dak Farmers Cooperative
*10(f) Molasses Purchase Contract by and between Minn-Dak Farmers
Cooperative and Universal Foods Corporation (Confidential
Treatment for certain sections)
*10(g) Yeast Purchase Contract by and between Universal Foods
Corporation and Minn-Dak Yeast Company, Inc. (Confidential
Treatment for certain sections)
*10(i) Operating Agreement of ProGold Limited Liability Company
*10(j) ProGold Limited Liability Company Member Control Agreement
*10(k) Agreement for Electrical Service
10(l) Agreements for Coal Supply, Transportation, and Oiling Service
(Confidential Treatment Requested as to certain provisions.)
*10(m) Minn-Dak Farmers Cooperative Pension Plan
*10(n) Larry D. Steward Employment Agreement
*10(o) Management Consulting Agreement between Minn-Dak Yeast Company
and Universal Foods Corporation, (Confidential Treatment for
certain sections)
#12 Statement re Computation of Ratio of Net Proceeds to Fixed
Charges
*21 Subsidiaries of the Registrant
#23 Consent of Independent Auditors
#27 Financial Data Schedule
- ---------------------------
* Incorporated by reference from the Company's Registration Statement
on Form S-1 (File No. 33-94644), declared effective September 11, 1995.
# Previously filed.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
MINN-DAK FARMERS COOPERATIVE
BY /S/ Larry D. Steward
---------------------------------
LARRY D. STEWARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DUTIES INDICATED.
SIGNATURE TITLE REPORT DATE
- ---------- ----- -----------
/s/ Larry D. Steward March 6, 1997
- ------------------------ President and ------------------------
Larry D. Steward Chief Executive Officer
/s/ Steven M. Caspers March 6, 1997
- ------------------------ Vice President - Finance ------------------------
Steven M. Caspers
/s/ Allen E. Larson March 6, 1997
- ------------------------ Controller ------------------------
Allen E. Larson
/s/ Robert Breuer March 6, 1997
- ------------------------ Director ------------------------
Robert Breuer
/s/ Victor Krabbenhoft March 6, 1997
- ------------------------ Director ------------------------
Victor Krabbenhoft
/s/ Lawrence Deal March 6, 1997
- ------------------------ Director ------------------------
Lawrence Deal
/s/ Edward Meon, Jr. March 6, 1997
- ------------------------ Director ------------------------
Edward Meon, Jr.
/s/ Mike Hasbargen March 6, 1997
- ------------------------ Director ------------------------
Mike Hasbargen
/s/ John Hought March 6, 1997
- ------------------------ Director ------------------------
John Hought
/s/ Jack Lacey March 6, 1997
- ------------------------ Director ------------------------
Jack Lacey
/s/ Jerry Meyer March 6, 1997
- ------------------------ Director ------------------------
Jerry Meyer
/s/ Paul Summer March 6, 1997
- ------------------------ Director ------------------------
Paul Summer
Exhibit 10(l)
CONFIDENTIAL TREATMENT REQUESTED FOR CERTAIN PROVISIONS
** = INFORMATION FOR WHICH CONFIDENTIALITY IS REQUESTED
COAL SUPPLY AGREEMENT
THIS AGREEMENT is made and entered into this 14th day of August,
1995, by and between Kennecott Energy Company, a Delaware corporation, with
offices in Gillette, Wyoming, for and on behalf of Spring Creek Coal Company, a
Montana corporation (hereinafter together called "Seller"), and Minn-Dak Farmers
Cooperative ("Minn-Dak"), a North Dakota cooperative with offices at Route 1,
Box 10, Wahpeton, North Dakota 58075("Buyer").
RECITALS
Buyer desires to secure a coal supply for use in the operation of its
sugar factory in Wahpeton, North Dakota ("Sugar Factory").
Seller desires to sell to Buyer coal to be mined from its Spring Creek
Mine (the "Mine") near Decker, Montana.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties set forth below, Seller agrees to sell and deliver, and Buyer
agrees to purchase and accept, coal of the quantity and quality specified below,
at the price and on the terms and conditions stated in this Agreement.
SECTION 1. TERM; CAMPAIGN SEASONS.
1.01 Term. The term of this Agreement shall commence on August
1, 1994 ("the Effective Date") and shall continue to July 31, 2005.
1.02 Campaign Seasons. Shipments under this Agreement are to
be divided into periods of approximately ten months commencing on or about
August 15 and continuing until about May 31 of the following calendar year, with
the last such period running from about August 15, 2004, to about May 31, 2005.
These ten-month periods of coal deliveries shall be referred to as "Campaign
Seasons."
SECTION 2. COAL SOURCE.
The coal sold under this Agreement shall be from Seller's Mine located
near Decker, Montana. If an event of force majeure, as defined in Section 8,
prevents delivery of coal at the Mine, Seller may, but shall not be required to,
supply coal from sources other than the Mine ("Substitute Coal"), provided that
the price for Substitute Coal shall be adjusted as necessary so that the total
delivered cost per million Btu for Substitute Coal delivered to the Sugar
Factory, taking into account Buyer's actual transportation costs, equals the
delivered cost per million Btu for coal from the Mine, subject to any price
adjustments pursuant to Sections 4.02 and 6.01. Seller's right to furnish
Substitute Coal shall not affect its right to claim a force majeure or to claim
excuse from performance pursuant to Section 8 below. Buyer may, but shall not be
required to, accept substitute coal with field averages different than Spring
Creek Mine field averages specified in Section 4.01 (a) of this Agreement. If
Seller fails to deliver for reasons other than force majeure, Seller will supply
Substitute Coal.
SECTION 3. COAL QUANTITY; SHIPMENT SCHEDULE.
3.01 Quantity. Seller agrees to sell and Buyer agrees to
purchase all of the coal that Buyer requires to operate its Sugar Factory during
the term of this Agreement, which Buyer in good faith estimates to be **
tons per Campaign Season. The term "ton" shall mean 2,000 pounds of coal,
weighed as provided in Section 5.03.
3.02 Estimates.
(a) Campaign Season Estimates. Upon execution of this
Agreement and by August 1 of each subsequent year, Buyer shall furnish Seller
with a written estimate of the quantity of coal to be delivered FOB Seller's
Mine during the Campaign Seasonbeginning in that year.
(b) Extension of Campaign Season. Buyer may extend
any Campaign Season by three months before August 15 or after May 31 of such
Campaign Season upon six weeks' written notice to Seller.
3.03 Shipments. Buyer shall use reasonable efforts to schedule
arrivals of trains at the Mine such that Seller can deliver coal in
approximately equal monthly amounts during any Campaign Season; provided that
deliveries in the first months of a Campaign Season will be larger to allow
Buyer to build stockpiles at the Sugar Factory. Weekly deliveries will be in
substantially equal quantities consistent with the monthly delivery quantity.
Seller shall use reasonable efforts to deliver as much coal as Buyer desires to
take in any week. Buyer agrees to pay for and accept delivery of up to 12
percent more than Buyer's estimated or amended coal requirements in any month,
provided that Buyer shall not be required to pay for more coal than it has
requested during any Campaign Season.
SECTION 4. QUALITY OF COAL.
4.01 Quality and Size of Coal.
(a) Field Averages. Field averages for Spring
Creek Coal are as follows:
Btu: ** per pound
Sulfur: ** percent
Sodium oxide: ** percent
Ash: ** percent
Moisture: ** percent
Size: run-of-mine, sized to pass through
two-inch round screen (crushed 2" x 0)
Buyer acknowledges that actual quality of particular coal shipments will vary as
different portions of the field are mined. Buyer's exclusive remedies for
variations from field averages are those set forth in Section 4.02 below.
(b) Sampling. Representative samples of coal from
each trainload shall be taken at the loading facilities at Seller's Mine by
agents of an independent commercial testing organization, using methods and
procedures approved by the American Society for Testing and Materials (ASTM).
The resulting analysis shall be accepted as the quality of coal on which
invoices are to be rendered and payments made in accordance with Section 6. Any
change in the quality of coal during subsequent transportation or storage shall
have no effect on the quality of coal as shown on the invoice.
4.02 Remedies for Quality Variations. Buyer may not reject any
trainload of coal once the coal has commenced loading onto railcars at the Point
of Delivery as defined in Section 5.01. The following remedies shall be Buyer's
exclusive remedies for variations in the quality of coal delivered under this
Agreement.
(a) Btu/lb. If any five consecutive trainloads of
coal contain a cumulative weighted average Btu/lb less than ** Btu/lb, then
the Purchase Price of the fifth and each consecutive trainload that, when
averaged with the previous four trains, maintains a weighted average Btu/lb less
than ** Btu/lb ("low Btu coal") shall be adjusted according to the following
formula:
Weighted Average Btu content per pound-**
(for five consecutive trainloads) x Purchase
**
If any five consecutive trainloads of coal contain a cumulative
weighted average Btu/lb greater than ** Btu/lb, then the Purchase Price of the
fifth and each consecutive trainload that, when averaged with the previous four
trains, maintains a weighted average Btu/lb greater than ** Btu/lb ("high Btu
coal") shall be adjusted according to the following formula:
Weighted Average Btu content per pound - **
(for five consecutive trainloads) x Purchase
**
(b)(i) Sulfur Dioxide. If delivered coal cannot be
burned at the Sugar Factory to which it is shipped because the cumulative
weighted average sulfur dioxide content of any five consecutive trainloads of
coal exceeds ** pounds per million Btu of sulfur dioxide, Buyer shall have the
following remedies:
(aa) Buyer may, at its option, reconsign all
segments of the fifth and each consecutive trainload that maintains a cumulative
weighted average in excess of ** pounds per million Btu of sulfur dioxide at
Seller's expense to a Sugar Factory that can burn such coal, or
(bb) If Seller cannot cure the problem
within seven (7) days by providing Substitute Coal or otherwise, Buyer may
discontinue coal purchases (as to any unit train that has not commenced loading)
with respect to the affected Sugar Factory. Reduction in tonnage to the affected
Sugar Factory shall be Buyer's sole remedy per this Section (b) (i) (bb), and
Seller shall not be liable for any incidental or consequential damages,
including lost profits, caused thereby.
(c) Sodium Oxide, Moisture and Ash. With respect to
sodium oxide, moisture and ash content, Buyer assumes the risk of all variations
from field averages.
SECTION 5. UNIT TRAINS, LOADING AND WEIGHING.
5.01 Point of Delivery. The coal for the Sugar Factory shall
be delivered FOB loaded in railcars provided by Buyer on the railroad loading
siding at the Mine or, if Substitute Coal is delivered to the Sugar Factory, at
the railroad loading siding located at the Substitute Coal Source (the "Point of
Delivery"), with freight paid by Buyer.
5.02 Title. Upon the completion of loading of a railcar, the
title and risk of loss for all coal in that car shall be Buyer's.
5.03 Weighing. The weight of coal sold under this Agreement
shall be determined on appropriate commercial scales chosen by Seller and
installed at Seller's loading facilities at the Mine. Seller's scales shall be
inspected and certified by Hoke and Associates at six-month intervals during the
term of this Agreement. The weights determined at Seller's Mine shall be
accepted by Buyer as the quantity of coal for which invoices are to be rendered
and payments made in accordance with Section 6 below. Any change in the weight
of coal during subsequent transportation or storage shall have no effect on the
weight of coal shown on the invoice. In the event Seller's scales are
inoperative for a period, Seller shall inform Buyer and use its best efforts to
restore operation of the scales as soon as possible. The weight of coal per
railcar delivered during such period that scales are inoperative shall be deemed
equal to the average weight per railcar for coal delivered during the preceding
month. If Seller's scales are inoperative during the first month of this
Agreement, the weight of coal delivered shall be determined by mutually
acceptable independent means.
SECTION 6. PRICE; PRICE ADJUSTMENTS.
6.01 Purchase Price. The Purchase Price per ton of coal (2,000
pounds) to be paid by Buyer to Seller for each delivery of coal FOB Point of
Delivery in railcars under this Agreement shall be the sum of (a) the Base
Price, as defined and as adjusted as provided below, plus (b) the Pass-Through
Costs, as defined in Section 6.04, plus (c) the New Costs, as defined in Section
6.05, applicable to such delivery. The Purchase Price, as thus determined, shall
be subject to adjustment for changes in the depletion allowance as provided in
Section 6.06 and for Btu variations as provided in Section 4.02.
As of the Effective Date, the initial Base Price per ton of coal FOB
Point of Delivery is equal to $** (the "Initial Base Price"), the
Pass-Through Costs are equal to $** and the Purchase Price is therefore equal
to $** per ton. The Purchase Price per ton of coal delivered by Seller to
Buyer during the Campaign Season from August 1994 to May 1995 ("the Campaign
Season 1994-95"), shall be adjusted from the Purchase Price to be paid by Buyer
for such coal delivery pursuant to the Coal Supply Agreement made between Buyer
and Spring Creek Coal Company, dated August 1, 1994, to the Purchase Price
referred to in this Section 6.01. Such adjustments in Purchase Price for
deliveries of coal already made during the Campaign Season 1994-95 to the date
of this Agreement shall be paid or credited to Buyer in accordance with Section
6.08 hereof.
6.02 Index Adjustment of Base Price. The Initial Base Price as
of the Effective Date shall be divided, for purposes of escalation, into three
Initial Base Price Components, weighted in percentage terms as follows: (1)
Gross Domestic Product-Implicit Price Deflator (GDP-IPD Component: **%); (2) SIC
Code 122 AHE (Labor Component: **%); and (3) PPI 112 (Machinery Component: **%).
The Initial Base Price values are set forth as follows:
GDP - IPD = First published, first quarter 1994 value (125.7) [Source:
Department of Commerce, Bureau of Economic Analysis] as published in
the April 1994 monthly report, "Survey of Current Business", Table
7.13.
SIC 122 = First published, May 1994 value (17.85) [Source: U.S.
Department of Labor, Bureau of Labor Statistics] as published in the
July 1994 monthly report, "Employment & Earnings" currently in Table
B-15.
PPI - 112 = First published, June 1994 value (133.6) [Source: U.S.
Department of Labor, Bureau of Labor Statistics] as published in the
June 1994 monthly report, "Producer Price Indexes", currently in Table
6.
The Initial Base Price will apply to all shipments of coal made during
the Campaign Season 1994-1995 and all shipments thereafter through September 30,
1995.
The Initial Base Price will be adjusted on the first day of each
calendar quarter during the term of this Agreement, beginning October 1, 1995.
The Initial Base Price, as adjusted, will be referred to as the "Base Price".
These adjustments will be calculated as follows using the most current first
published index information available at the beginning of each quarter:
ABP = ** x (AG) + ** x (AL) + ** x (AM) x IBP
(125.7) (17.85) (133.6)
where,
ABP = Adjusted Base Price for the current calendar quarter.
AG = GDP/IPD first published index value for the second
preceding quarter.
AL = SIC 122 AHE first published index value for the third
preceding month.
AM = PPI - 112 first published index value for the second
preceding month.
IBP = The Initial Base Price as referred to in Section 6.01.
6.03 Changes in Indices. Should any of the indices referred to
in Section 6.02 above be discontinued, the parties shall select a substitute
index or indices by mutual agreement.
6.04 Pass-Through Costs. Seller's costs per ton of coal
produced and delivered, falling into the categories below, shall be treated as
"Pass-Through Costs" fully reimbursable by Buyer to Seller over and above the
Base Price determined under Sections 6.01 and 6.02. The amounts set forth in
attached Exhibit A are the amounts that will be included in the Purchase Price
as of August 1, 1994, for each Pass-Through Cost Item. Pass-Through Costs, other
than pass through costs assessed on values relating to the sales price, shall be
prorated over the total volume of Seller's production from the Mine, and Buyer
shall be assigned, as its actual Pass-Through Costs, only that prorated share
based on Buyer's share of the total of Seller's production from the Mine. Buyer
shall receive a refund or credit against future purchases (if applicable) in the
event Seller receives a reduction in or refund of any Pass-Through Costs charged
to Buyer. The categories of Pass-Through Costs are more specifically defined as
follows:
(a) Taxes and Black Lung Costs. All taxes and black
lung costs (other than taxes directly borne by Buyer or taxes imposed on or
measured by net income and franchise taxes) levied or assessed by any
governmental authority on the coal, on its severance from the soil, or on
Seller's mining facilities or operations or other activities incident to the
performance of its obligations under this Agreement, including all taxes and
governmental charges levied or assessed against Seller with respect to the coal
for reclamation by any governmental authority; taxes imposed pursuant to 26 USC
ss. 4121 or other successor provision of law, or other taxes that may be imposed
to provide health or safety benefits to Seller's employees; and all costs, other
than taxes, incurred by Seller in connection with production of coal at the Mine
for black lung, including (without limitation) premiums for black lung
insurance, or payments made or accrued to a private or public trust (including a
trust fund established pursuant to Section 501(c)(21) of the Internal Revenue
Code) or reserve for future black lung claims. In the event Seller chooses to
cover its potential black lung liability by a means other than black lung
insurance, the amount included as black lung costs under this provision shall
not exceed the cost of such insurance. Buyer is to bear and pay directly (or
reimburse Seller for any such taxes Seller pays) all sales, use, or similar
taxes levied or assessed on the coal purchased hereunder. The parties agree that
if taxes are assessed on values related to the sales price, taxes paid by Buyer
under this Agreement shall be computed using the Purchase Price under this
Agreement.
(b) Royalties. All royalties in effect on the coal
sold to Buyer and for which Seller is liable under the leases then prevailing,
notwithstanding suspension of payment pending any appeal of the royalty or
adjustment thereof. In the event any royalty or adjustment is appealed by Seller
and decreased as a result, Seller will refund to Buyer any overpayments. The
amount of royalties to be paid by Buyer as to any month's deliveries of coal
mined under leases held by Seller ("Leased Coal") shall equal the applicable
royalty per ton multiplied by the number of tons of Leased Coal delivered to
Buyer from the Mine during that month. If royalties are assessed on values
related to the sales price, royalties paid by Buyer under this Agreement shall
be computed using the Purchase Price under this Agreement.
6.05 New Costs. The Base Price provided in Section 6.01
includes Seller's best estimate of the cost, per ton of coal, of complying with
all federal, state, and local laws, rules, and regulations in force as of July
1, 1994, except for those items specifically designated as Pass-Through Costs,
as they were implemented, interpreted, and enforced on the Effective Date, which
estimate shall, for purposes of this provision, be binding upon Seller (such
costs shall be referred to as "Compliance Costs"). To the extent that new laws,
rules, regulations, or governmental orders coming into effect after July 1,
1994, or changes in the implementation, interpretation or enforcement of laws,
rules and regulations in effect on July 1, 1994, cause any increase or decrease
in the Compliance Costs, the Purchase Price shall be increased or decreased, as
the case may be, by the amount that accurately reflects the change in Compliance
Costs incurred. Such changes in Compliance Costs shall be referred to as "New
Costs."
New Costs shall be prorated over the total volume of Seller's
production from the Mine if the new cost is based on tonnage sold from the Mine,
and Buyer shall be assigned, as its actual New Costs, only that prorated share
based on its share of the total of Seller's production from the Mine. If the New
Cost is based on a percentage of Sales Price, Buyer shall pay its portion of the
new cost based on its Sales Price.
6.06 Adjustment of Purchase Price for Changes in Depletion
Allowance. If at any time after the Effective Date changes are made in the law
regarding the allowance for depletion on coal that affect the state and federal
income tax deductions for depletion available to Seller, the Purchase Price
shall be increased or decreased by the amount needed to provide Seller with the
same cash flow from the sale of each ton of coal under this Agreement after
state and federal income taxes. In calculating Seller's after-tax cash flow from
the sale of a ton of coal for this purpose, Seller shall compute its taxes as if
it filed separate (nonconsolidated) state and federal income tax returns and
paid state and federal income taxes at the maximum rate for corporations.
6.07 Billing and Payment. Seller shall invoice Buyer
semimonthly for coal delivered. Payment shall be made by check or wire transfer,
due within twenty (20) days after the date of each invoice; provided, that,
Buyer may withhold payment of the portion of any invoice which is the subject of
a bona fide dispute under the provisions of this Agreement. Checks and wire
transfers shall be made to Seller's account, as follows:
Wire Transfer:
Bank: FIRST SECURITY BANK OF UTAH
ABA No.: **
Account No.: **
Account Name: Spring Creek Coal Company
Check:
Account Name: Spring Creek Coal Company
Account No: **
Address: P.O. Box 26094
Salt Lake City, Utah 84126-0094
The details of this account shall, from time to time, be notified in
writing to Buyer. All amounts due for which payment is not timely made shall
bear interest from the date on which payment became due at the then prevailing
prime interest rate quoted by Morgan Guaranty Trust Company plus 2 percent per
annum. All invoiced amounts shall be subject, however, to subsequent adjustment
wherever this Agreement specifically so provides, and no interest shall be
payable to either party with respect to the amounts of such adjustments. If
payment is not made when due, Seller may give Buyer written notice of such past
due payment. Three (3) days after such notice is effective, pursuant to Section
10.07, Seller may suspend deliveries until the invoice, including any interest,
has been paid. If the invoice is not paid within fifteen (15) days after
Seller's notice becomes effective, Buyer's failure to make payment when due
shall constitute a material breach of this Agreement by Buyer, and Seller may,
at its sole option, cancel this Agreement.
6.08 Adjustments. The parties recognize that at the time each
invoice for coal is prepared, it may not be possible to calculate definitively
the costs and other price adjustment factors applicable to the calendar
half-month for which such invoice is rendered; each invoice will, therefore, be
based upon the most current data reasonably available at the time of invoicing.
Upon receipt of information permitting determination of price adjustments,
Seller shall prepare and furnish to Buyer a supplemental invoice reflecting that
information. Seller or Buyer shall, within fifteen (15) days after mailing of
such supplemental invoice, pay the sum required by such invoice as above
provided.
6.09 Finality of Invoices. Except as otherwise expressly
provided in this Agreement, any invoice that is not contested within twenty-four
(24) months after the date thereof shall be deemed correct and final unless any
of the Pass-Through Costs have retrospective effect on the Purchase Price of
coal more than 24 months after the date of invoice, and provided that Seller
shall advise Buyer of any such effect or potential effect within a reasonable
time following Seller becoming so aware.
6.10 Records and Audits. Seller shall keep accurate records
and books of accounts showing all data relating to price, quantity and quality
determinations and adjustments required for purposes of this agreement. At the
election of Buyer, once each fiscal year of Seller, Seller shall make such
records and books of account covering the preceding fiscal year available for
audit at Seller's offices during Seller's normal office hours. Such audits shall
be prepared and certified to by a nationally recognized firm of certified public
accountants to be mutually agreed by Buyer and Seller and Buyer shall bear the
expenses of the audit. The findings of the audit will be binding on the parties
absent a finding by either party of a material error in the audit which error is
identified within 60 days after completion of the audit and submission of the
findings to the Seller. If the audit discloses that an overpayment or an
underpayment has been made, the amount thereof shall promptly be paid to the
party to whom it is owed by the other party. Buyer shall have the option of
having the audit prepared by Seller's independent auditors as part of the
regular annual audit of Seller's books and records. In such event, only those
expenses in excess of Seller's normal audit expenses will be borne by Buyer. The
accounting firm conducting the audit shall be bound not to disclose and shall
treat as confidential any and all proprietary information of Seller furnished to
or examined by such firm in connection with the audit.
SECTION 7. DISCLAIMER OF WARRANTIES, LIMITATION ON LIABILITY.
7.01 EXPRESS WARRANTIES. BUYER AGREES THAT SELLER MAKES NO
EXPRESS WARRANTIES OTHER THAN THOSE IDENTIFIED AS SUCH IN THIS AGREEMENT.
7.02 IMPLIED WARRANTIES. ALL WARRANTIES OF MERCHANTABILITY OR
OF FITNESS FOR A PARTICULAR PURPOSE OR ARISING FROM A COURSE OF DEALING OR USAGE
OF TRADE ARE SPECIFICALLY EXCLUDED.
7.03 Limitation on Liability. In no event shall either party
have liability to the other party for incidental or consequential damages except
as expressly stated in this Agreement.
SECTION 8. FORCE MAJEURE.
If either party is unable to meet any of its obligation under this
Agreement as a result of flood, earthquake, storm, or other act of God, fire,
derailment, accident, strike, lockout, boycotts, picketing, shortages of or
inability to obtain electric power, raw materials, railcars or machinery,
mechanical breakdown in facilities, war, insurrection, riot, catastrophic sugar
beet or corn crop failure (as applicable), railroad line abandonment, act of
government or governmental agency, or due to any cause beyond the reasonable
control of either party, including the inability of the Sugar Factory, the Mine
and/or the rail carrier to meet its obligations for reasons whether similar or
dissimilar to the foregoing and whether foreseeable or unforeseeable, such event
will be deemed an event of force majeure. In addition, it shall be deemed an
event of force majeure in the event Buyer is unable to burn Seller's coal due to
ash-fouling, sulfur dioxide emissions, or other legally enforceable
environmental restrictions, or either party permanently closes or experiences
partial failure or nonoperation of any of its facilities lasting a minimum of
seven (7) days as a result of reasons beyond the control of such party. In the
event of force majeure, the obligations of the parties, other than payment for
coal previously delivered, shall be suspended for the duration of the event of
force majeure, provided that reasonable notice is given. Whenever in Seller's
judgment any event of force majeure requires restriction of deliveries, Seller
reserves the right in its discretion to allocate its available supply of coal in
a fair and equitable manner without obligation to furnish products from other
sources. No suspension or reduction for reason of force majeure shall invalidate
the remainder of this Agreement; but on removal of the cause, shipments shall
resume at the specified rate; deficiencies in shipments so caused shall not be
made up except by mutual consent. If an event of force majeure prevents the
performance of either party for a period of one year or more despite that
party's efforts to eliminate the force majeure event and to mitigate its impact,
then the party not claiming an event of force majeure may terminate this
Agreement by providing at least thirty (30) days written notice of termination
to the other party. The provisions of this Section shall not excuse either party
from performing unless that party gives a reasonable notice to the other party
of the occurrence of an event of force majeure.
SECTION 9. DISPUTES.
In the event any dispute arises between the parties concerning any
issue of law or fact arising out of this Agreement, it shall be settled by
arbitration pursuant to the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award may be entered in any court
having jurisdiction over the matter.
The parties to the arbitration shall be entitled to such discovery as
would be available to them under the Federal Rules of Civil Procedure, and the
arbitrators will have all the authority of a court under such Rules incidental
to such discovery, including but not limited to orders to produce documents or
other materials and orders to appear and submit to deposition and to impose
appropriate sanctions, including but not limited to awarding sanctions against a
party for failure to comply with any order.
The arbitration panel shall consist of three arbitrators with
experience in the coal industry, one appointed by Seller, one by Buyer and the
third by the arbitrators appointed by Seller and Buyer. If the party appointed
arbitrators cannot agree within fifteen (15) days after their appointment on
appointment of the third arbitrator, then the third arbitrator shall be
appointed by the American Arbitration Association.
SECTION 10. GENERAL PROVISIONS.
10.01 Waiver. Failure of either party at any time to require
performance of any provision of this Agreement shall not limit that party's
right to enforce the provisions, nor shall any waiver of any breach of any
provision be a waiver of any succeeding breach of the provision itself or of any
other provision.
10.02 Headings. The headings in this Agreement are included
only for convenience and shall not control or affect the meaning or construction
of this Agreement.
10.03 Entire Agreement. This Agreement is the entire agreement
between the parties. There are no other provisions, representations, warranties
or understandings, express or implied. No modification, variation or amendment
of this Agreement shall be of any force or effect unless it is in writing and
signed by all the parties.
10.04 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties, their respective successors and assigns.
10.05 Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of North Dakota.
10.06 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original.
10.07 Notices. Notices under this Agreement shall be in
writing and shall be effective when actually delivered. If mailed, a notice
shall be deemed effective five (5) days after mailing as registered or certified
mail, postage prepaid, directed to the other party as set out below. If via
prepaid commercial courier or express service, a notice shall be deemed
effective upon its receipt, if directed to the other party as set forth below.
If via telefacsimile, a notice shall be deemed effective upon receipt of the
successful telefax transmission report, directed to the other party as set out
below:
SELLER: KENNECOTT ENERGY COMPANY
Attn: Contract Administration
505 South Gillette Avenue
Gillette, Wyoming 82716
or
Caller Box 3009
Gillette, Wyoming 82717-3009
Fax No. (307) 687-6009
BUYER: MINN-DAK FARMERS COOPERATIVE
Attn: Controller
7525 Red River Road
Wahpeton, North Dakota 58075-9698
Fax No. (701) 642-6814
The addresses and fax numbers of any party may be changed by giving notice in
writing at any time to the other party.
10.08 Confidentiality. Any nonpublic information, oral or
written, including the contents of this Agreement and any related agreement,
disclosed by either party to the other shall be considered confidential
information, and such information shall not be disclosed to any third party
other than to Seller's parent corporation or its employees, accountants,
attorneys, and lenders, and will be kept secret and confidential during the term
of this Agreement.
10.09 Attorneys' Fees. If any legal action or suit is
commenced by either party arising out of this Agreement, the prevailing party in
such action or suit shall be entitled to recover reasonable attorneys' fees and
expenses, including fees and expenses on appeal, as determined by the court.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the Effective Date.
SELLER KENNECOTT ENERGY COMPANY FOR AND ON
BEHALF OF SPRING CREEK COAL COMPANY
By Malcolm R. Thomas
Title: V.P. Marketing & Sales
BUYER MINN-DAK FARMERS COOPERATIVE
By Larry D. Steward
Title: President/CEO
EXHIBIT A
Estimated Pass-Through Costs
Included in Base Price
as of August 1, 1994
Price Per
Ton
Section 6.04(a) - Taxes
Severance Tax $0.**
Gross Proceeds Tax 0.**
Resource Indemnity Trust Tax 0.**
Federal Reclamation Fee 0.**
Black Lung Excise Tax 0.**
Black Lung Insurance 0.**
Property Taxes 0.**
-----
Depletion Allowance 0.**
Total Taxes $ **
Section 6.04(b) - Royalties
BLM Royalty $ **
Rosebud Royalty **
-----
Total Royalty $ **
TOTAL ESTIMATED PASS-THROUGH COSTS $X.XXX
CONFIDENTIAL TREATMENT REQUESTED AS TO CERTAIN PROVISIONS
** = INFORMATION FOR WHICH CONFIDENTIALITY IS REQUESTED
COAL TRANSPORTATION AGREEMENT
THIS AGREEMENT is made and entered into this 14th day of August, 1995,
by and between Northern Coal Transportation Company, an Oregon corporation with
an office in Gillette, Wyoming ("Northern"), and Minn-Dak Farmers Cooperative, a
North Dakota cooperative with offices at 7525 Red River Road, Wahpeton, North
Dakota 58075 ("Shipper").
RECITALS
1. Concurrent with this Coal Transportation Agreement ("Agreement"),
Kennecott Energy Company, for and on behalf of Spring Creek Coal Company, has
executed a Coal Supply Agreement with Shipper (the "Coal Supply Agreement") for
the sale and purchase of coal from the Spring Creek Mine (the "Mine") to
Shipper. The coal is to be used in Shipper's sugar factory in Wahpeton, North
Dakota (the "Sugar Factory"). Capitalized terms not otherwise defined in this
Agreement will have the meaning set forth in the Coal Supply Agreement.
2. The Coal Supply Agreement contemplates the establishment of a
transportation system that can take delivery at the Point of Delivery (as that
term is defined in Section 5.01 of the Coal Supply Agreement) of estimated
requirements of coal in approximately equal weekly and monthly amounts and
transport those amounts to the Sugar Factory.
3. Shipper has appointed United Sugars Corporation, a Minnesota company
with offices at 1700 Eleventh Street, Moorhead, Minnesota ("USC") to act as its
agent in procuring and facilitating the transportation of coal to the Sugar
Factory. USC has the authority and is acting on behalf of Shipper in relation to
the transportation of coal under the Coal Supply Agreement. USC will be acting
on behalf of Shipper under this Agreement.
4. Northern desires to enter into a contract with Shipper to arrange
for the transportation of coal called for by the Coal Supply Agreement and to
perform all of the obligations of Shipper with respect to the transportation of
coal required by the Coal Supply Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties set forth below, the parties to this Agreement agree as follows:
SECTION 1. TERM; CAMPAIGN SEASONS.
1.01 Term. The term of this Agreement shall commence on July
1, 1995 ("the Effective Date"), and shall continue to July 31, 2005.
1.02 Campaign Seasons. Shipments under the Coal Supply
Agreement have been divided into periods of approximately ten months commencing
on or about August 15 and continuing until about May 31 of the following
calendar year, with the last such period running from about August 15, 2004, to
about May 31, 2005. These ten-month periods of coal deliveries shall be referred
to in this Agreement as "Campaign Seasons."
SECTION 2. SHIPMENTS.
2.01 Description of Transportation System. Northern agrees to
transport from the Mine to the Sugar Factory the estimated annual requirements
under the Coal Supply Agreement in approximately equal weekly and monthly
amounts. The coal is to be delivered to Shipper FOB Point of Delivery. Northern
may transport Shipper's coal in unit trains which contain coal being shipped for
American Crystal Sugar, a Minnesota cooperative ("ACS"). The Coal Supply
Agreement anticipates that deliveries in the first months of a Campaign Season
will be larger to allow Shipper sufficient time to build stockpiles at each
Sugar Factory. Northern will design the system to allow Shipper substantial
flexibility to increase or decrease the amount of coal delivered to the Sugar
Factory by each unit train (when broken into segments), subject to the tonnage
minimum stated in Section 2.09 of this Agreement. However, Shipper may not stop
a unit train from cycling except in the event of a force majeure as provided in
Section 5 of this Agreement, since such interruptions greatly increase the
difficulty of transportation management. Northern reserves the right to tender
trains of not more than ** cars in total or ** tons of coal in total per
calendar month consisting of the total cars to Shipper and/or American Crystal
Sugar Company ("ACS") for the destination Sugar Factory and ACS's Sugar
Factories so that following telephonic notice to Shipper of such limitation,
Northern shall not be required to tender trains totaling ** cars or ** tons
per calendar month under this Agreement to ACS and Shipper, until such time as
Northern gives telephonic notice to Shipper that the limitation no longer
applies. In unit trains with combined deliveries to ACS and Shipper, there will
be a stop at Fargo, North Dakota, for removal of cars to be delivered to
Moorhead and Wahpeton, North Dakota. At origin, Northern may place all cars for
delivery via Fargo, North Dakota, at the head of the train. A detailed
description of the transportation system, as set forth in Northern's agreement
with the Burlington Northern Railroad (the "Carrier"), is set forth in Exhibit
A.
2.02 Responsibilities Concerning Delivery. Northern shall
deliver coal to the Sugar Factory. Northern will deliver coal in railcars
directly to sidings on Shipper's property at the Sugar Factory. Northern will,
on Shipper's behalf, fully pursue all claims against third parties for loss of
the coal in any given railcar from the time that the railcar is completely
loaded at the Spring Creek Mine until the railcar is on property at a Sugar
Factory.
2.03 Coordination. Northern shall be responsible for arranging
all transportation and for coordinating with Spring Creek Coal Company the
arrival of railroad trains for loading at the Point of Delivery (as defined in
Section 5.01 of the Coal Supply Agreement). Northern shall use reasonable
efforts to schedule arrivals of trains at the Point of Delivery such that coal
can be delivered in approximately equal monthly amounts during any Campaign
Season; provided that deliveries in the first months of a Campaign Season will
be larger to allow Shipper to build stockpiles at the Sugar Factory. Weekly
shipments will be in substantially equal quantities consistent with the monthly
delivery quantity.
2.04 Notice of Changes in Train Segments. If Shipper desires
to alter the size of train segments to be transported to the Sugar Factory
during a Campaign Season, Shipper may notify Northern by mail or by telephone,
telegraph or other electronic means. Any electronic notice shall be confirmed in
writing within ten (10) days. Requested changes in the size of train segments to
be transported to any Sugar Factory will be implemented for the first train
loaded more than 24 hours after notice is received; provided that Northern shall
not be obligated to provide unit trains of more than ** cars or fewer than 55
cars, which trains are comprised of Shipper and ACS cars. Shipper shall monitor
and control its coal stockpiles so that requested increases or decreases in the
size of train segments delivered to the Sugar Factory will not result in a unit
train with more than ** cars or fewer than 55 cars which may be combined with
ACS shipments. USC will act on Shipper's behalf in coordinating unit train
composition with ACS and Northern.
2.05 Right to Transport Excess Coal. To maintain the efficient
operation of its transportation system, Northern may transport from the Spring
Creek Mine to the Sugar Factory up to 12 percent more than Shipper's estimated
or amended coal requirements in any month, as contemplated by Section 3.03 of
the Coal Supply Agreement. Shipper agrees to accept and pay for the
transportation of such coal, provided that Shipper shall not be required to pay
transportation for more coal than it has requested during any Campaign Season,
subject to the minimum tonnage stated in Section 2.09 of this Agreement.
2.06 Extended Campaign Season. Under Section 3.02(b) of the
Coal Supply Agreement, Shipper may extend any Campaign Season by three months
before August 15 or after May 31 of such Campaign Season upon six weeks written
notice to Spring Creek Coal Company. If Shipper chooses to extend any Campaign
Season, it shall also be required to give Northern six weeks written notice and
Shipper shall pay Northern for any increased transportation costs as specified
in Section 2.08 of this Agreement.
2.07 Unloading. Shipper agrees to provide facilities at the
Sugar Factory to permit delivery by Northern of segments of a train. Said
facilities shall be designed and constructed for carload unloading. Northern
will place the loaded cars on a siding on Shipper's property. The Shipper will
complete unloading operation at its own expense. The Shipper shall exercise
reasonable care and caution when unloading railcars at their facilities and will
insure that railcar doors are closed with latches in the locked position, with
cargo hoppers free and clear of any foreign debris. The Shipper shall pay for
the actual costs incurred by Northern in respect of any failure of Shipper to
exercise such reasonable care and caution, including any origin demurrage
incurred by Northern as a result thereof. Plant personnel are responsible to
notify USC, who will in turn notify Northern, of any problems or deficiencies
found concerning the railcars. When a train reaches the Sugar Factory, the coal
shall be unloaded from each railcar within five (5) full days of the date of the
arrival of such railcar to ensure that at least 55 empty railcars are available
at all times to make up unit trains. In the event that railcars are not unloaded
within the time specified above, Northern reserves the right to charge a
mutually acceptable demurrage rate on each such railcar.
2.08 Changes in Transportation System. Shipper acknowledges
that changes in the transportation system including, but not limited to, (i) any
break in the unit train cycle due to failure to unload railcars or other reasons
caused by Shipper; (ii) any extension of the Campaign Season as provided in
Section 2.06 of this Agreement, and (iii) Carriers Line Abandonment as set forth
in Section 7.01 may result in changes in Northern's railcar and other costs as
set forth in Exhibit A. Unless excused by Section 5, Shipper agrees to pay all
such changes in transportation costs caused by or attributable to Shipper or
USC. Northern will be responsible for changes in transportation costs caused by
or attributable to Northern.
2.09 Freight Costs Due to Quantity Variations.
Shipper acknowledges that if it takes delivery of less than a
total of ** tons of coal in any Campaign Season, Northern may incur additional
freight costs. If, in any Campaign Season (1) Shipper and ACS take combined
deliveries of less than a cumulative total of ** tons of coal, and (2) Shipper
takes delivery of less than a cumulative total of ** tons of coal, Shipper
agrees to pay Northern an amount representing liquidated damages (and not a
penalty) as defined and specified in Exhibit B. Such cumulative minimum volumes
of coal will be reduced as excused or permitted by Sections 2.09(b) or 5 of the
Shipper's and ACS Coal Transportation Agreements.
(b) Notwithstanding the provisions of Section 5 of this
Agreement, the cumulative minimum volume of coal to be transported during each
Campaign Season during the term hereof shall be reduced if, after the exhaustion
of all other commercially reasonable efforts by Shipper which are coordinated
with Northern, Shipper installs gas-fired pulp dryers at any one or more of its
processing facilities in order to comply with air particulate emission
regulatory requirements. Shipper shall notify Northern of its intention to
convert any of its coal-fired pulp dryers to gas-fired pulp dryers and the
effective date of such conversion(s) under this Section. Upon the effective date
of such conversion(s), the annual minimum volume requirements of coal to be
shipped hereunder by Shipper shall be reduced to the extent necessary to reflect
that amount of coal no longer required as the result of the conversion. This
reduction in annual minimum volume shall be proportionately reduced in the first
year of the conversion to reflect the portion of the year with respect to which
the reduction is to be effective.
2.10 Frozen Coal. Shipper assumes the risk that coal may
freeze in transit between the Mine or any source of Substitute Coal and the
Sugar Factory. No price adjustment or delay in unloading shall be allowed for
frozen coal.
2.11 Sole Representative. For the purpose of proper and
efficient communication, it is expressly understood between Northern and the
Shipper that Northern is the sole representative of Shipper, USC and the Sugar
Company for all services stated or contemplated in this Agreement and that all
communication, verbal or written, relating in any way to the rates, terms,
conditions, and performance of this Agreement be accomplished solely between
Northern, Northern Mine's Representative and Carrier. The only exception to the
above will involve day-to-day communications between USC or the Sugar Company
and the Carrier pertaining or relating to railcar switching from and to the
Sugar Factory or such switching or destination related operations.
SECTION 3. TRANSPORTATION COSTS; ADJUSTMENTS; BILLING AND PAYMENT.
3.01 Transportation Costs. Shipper will pay Northern the sum
of (a) the transportation costs as set out in Exhibit C and as adjusted pursuant
to Section 3.03, below, plus (b) any increased costs caused by changes in the
transportation system under Section 2.08 which are caused by Shipper, plus (c)
any increased costs caused by Quantity Variations under Section 2.09 (together
called "Transportation Costs").
3.02 Weighing. Loaded cars will not be weighed by Northern.
Weights to be used for the assessment of transportation charges shall be those
ascertained by Spring Creek Coal Company at the Mine pursuant to Section 5.03 of
the Coal Supply Agreement.
3.03 Adjustment for Changes in Transportation Costs. The
Transportation Costs shall be adjusted quarterly by adding to them the product
of (a) the applicable Transportation Costs shown on Exhibit C, multiplied by (b)
the percentage change of seventy percent (70%) GDP FW most recent quarterly
growth rate (described in Exhibit D) effective October 1, 1995, provided always
that the Transportation Costs shall not reduce below those set forth in Exhibit
C hereto. In the event the GDP FW is discontinued, the successor tariff or index
applicable to Northern's transportation agreements with the Carrier (as outlined
in Exhibit D) shall apply for purposes of this provision.
3.04 Billing and Payment. Northern shall invoice Shipper
semimonthly for Transportation Costs. Payment shall be due on each invoice
within twenty (20) 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: **
Account No: **
Account Name: Northern Coal Transportation
Check:
Account Name: Northern Coal Transportation
Account No.: **
Address: P.O. Box 26094
Salt Lake City, Utah 84126-0094
All amounts due for which payment is not timely made shall bear interest from
the date on which payment became due at the then prevailing prime interest rate
quoted by Morgan Guaranty Trust Company plus two percent per annum. All invoiced
amounts shall be subject, however, to subsequent adjustment wherever this
Agreement specifically so provides, and no interest shall be payable to either
party with respect to the amounts of such adjustments. If payment is not made
when due, Northern may give Shipper written notice of such past due payment.
Three days after such notice is effective, pursuant to Section 7.08, Northern
may suspend transportation until the invoice, including any interest and any
increased transportation costs caused by the suspension of deliveries, has been
paid. If the invoice is not paid within 15 days after Northern's notice becomes
effective, Shipper's failure to make payment when due shall constitute a
material breach of this Agreement by Shipper, and Northern may, at its sole
option, cancel this Agreement.
3.05 Adjustments. The parties recognize that at the time each
invoice for Transportation Costs is prepared, it may not be possible to
calculate definitively the costs and other adjustment factors applicable to the
calendar half-month for which such invoice is rendered; each invoice will,
therefore, be based upon the most current data reasonably available at the time
of invoicing. Upon receipt of information permitting determination of price
adjustments, Northern shall prepare and furnish to Shipper a supplemental
invoice reflecting that information. Northern or Shipper shall, within fifteen
(15) days after mailing of such supplemental invoice, pay the sum required by
such invoice as above provided.
3.06 Finality of Invoices. Except as otherwise expressly
provided in this Agreement, any invoice that is not contested within twenty-four
(24) months after the date thereof shall be deemed correct and final.
3.07 Records and Audits. Northern shall keep accurate records
and books of accounts showing all data relating to Transportation Costs for
purposes of this Agreement. At the election of Shipper, once each fiscal year of
Northern, Northern shall make such records and books of account covering the
preceding fiscal year available for audit at Northern's offices during
Northern's normal office hours. Such audits shall be prepared and certified to
by a nationally recognized firm of certified public accountants to be selected
by Shipper and Shipper shall bear the expenses of the audit. The findings of the
audit will be binding on the parties absent a finding of material error in the
audit which is brought to the attention of Northern within 90 days after
submission of the audit results to Northern by Shipper. If the audit discloses
that an overpayment or an underpayment has been made, the amount thereof shall
promptly be paid to the party to whom it is owed by the other party. Shipper
shall have the option of having the audit prepared by Northern's independent
auditors as part of the regular annual audit of Northern's books and records. In
such event, only those expenses in excess of Northern's normal audit expenses
will be borne by Shipper. The accounting firm conducting the audit shall be
bound not to disclose and shall treat as confidential any and all proprietary
information of Northern furnished to or examined by such firm in connection with
the audit.
3.08 Termination. Shipper may terminate this Agreement at any
time upon giving at least two months notice in writing to Northern. In the event
of such termination, Shipper shall pay, as liquidated damages and not as a
penalty, twenty-five percent (25%) of the lowest effective Transportation Costs
for the Sugar Factory, as set forth in Exhibit C and as adjusted pursuant to
Section 3.03 in effect on the last day of the Campaign Season, times the tonnage
requirement of ** tons per Campaign Season, as adjusted pursuant to Sections
2.09(b) and 5, for the remaining term of this Agreement less all tons shipped
during the Campaign Season in which the notice of termination is given.
SECTION 4. LIABILITY AND INDEMNIFICATION.
4.01 Liability for Property Damage and Personal Injury. Each
party shall assume and be responsible for any liability for loss and damage to
property and for personal injury, including death, to any person caused by the
negligence of that party and arising out of or connected with performance of
this Agreement.
4.02 Joint Liability. If liability is due to the joint and
concurring negligence of the parties, it shall be shared by them proportionately
on the basis of the negligence of each party involved.
4.03 LIMITATION ON LIABILITY. IN NO EVENT SHALL EITHER PARTY
HAVE LIABILITY TO THE OTHER PARTY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES EXCEPT
AS EXPRESSLY STATED IN THIS AGREEMENT.
SECTION 5. FORCE MAJEURE.
(a) If either party is unable to meet any of its obligations
under this Agreement as a result of flood, earthquake, storm, or other act of
God, fire, derailment, accident, strike, lockout, boycotts, picketing, shortages
of or inability to obtain electric power, raw materials, railcars or machinery,
mechanical breakdown in facilities, war, insurrection, riot, catastrophic sugar
beet or corn crop failure (as applicable), act of government or governmental
agency, or due to any cause beyond the reasonable control of either party,
including the inability of the Sugar Factory, the Mine and/or the Carrier to
meet its obligations for reasons whether similar or dissimilar to the foregoing
and whether foreseeable or unforeseeable, such event will be deemed an event of
force majeure. In addition, it shall be deemed an event of force majeure in the
event Shipper is unable to burn Northern's coal due to ash-fouling, sulfur
dioxide emissions, or other legally enforceable environmental restrictions, or
either party permanently closes or experiences partial failure or nonoperation
of any of its facilities lasting a minimum of seven (7) days as a result of
reasons beyond the control of such party. In the event of force majeure, the
obligations of the parties, other than payment for Transportation Costs
incurred, shall be suspended for the duration of the event of force majeure,
provided that reasonable notice is given. Whenever in Northern's judgment any
event of force majeure requires restriction of deliveries, Northern reserves the
right in its discretion to allocate its transportation services in a fair and
equitable manner without obligation to furnish products from other sources. No
suspension or reduction for reason of force majeure shall invalidate the
remainder of this Agreement; but on removal of the cause, shipments shall resume
at the specified rate; deficiencies in shipments so caused shall not be made up
except by mutual consent. If an event of force majeure prevents the performance
of either party for a period of one year or more despite that party's efforts to
eliminate the force majeure event and to mitigate its impact, then the party not
claiming an event of force majeure may terminate this Agreement by providing at
least thirty (30) days written notice of termination to the other party. The
provisions of this Section shall not excuse either party from performing unless
that party gives a reasonable notice to the other party of the occurrence of an
event of force majeure.
(b) For the purposes of any partial or total event of Force Majeure
under this Agreement, it will be presumed that, except for the event, total
loading of coal onto trains at the mine and total deliveries to Shipper by
Northern at the Sugar Factory would have been ** Tons per Campaign Season day,
under the ** Ton Minimum Volume Requirement, for each continuous 24-hour
period. The Minimum Tonnage Requirement of ** tons (subject to reduction as
provided herein) will be proportionately reduced per Campaign Season day for
each Force Majeure day claimed.
SECTION 6. DISPUTES.
In the event any dispute arises between the parties concerning any
issue of law or fact arising out of this Agreement, it shall be settled by
arbitration pursuant to the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award may be entered in any court
having jurisdiction over the matter.
The parties to the arbitration shall be entitled to such discovery as
would be available to them under the Federal Rules of Civil Procedure, and the
arbitrators will have all the authority of a court under such Rules incidental
to such discovery, including but not limited to orders to produce documents or
other materials and orders to appear and submit to deposition and to impose
appropriate sanctions, including but not limited to awarding sanctions against a
party for failure to comply with any order.
The arbitration panel shall consist of three arbitrators, one appointed
by Northern, one by Shipper and the third by the arbitrators appointed by
Northern and Shipper. If the partyappointed arbitrators cannot agree within 15
days after their appointment on appointment of a third person, then the third
person shall be appointed by the American Arbitration Association.
SECTION 7. GENERAL PROVISIONS.
7.01 Line Abandonment. The terms of this Agreement in no way
obligate Carrier or Northern to continue ownership, maintenance (including
Weight standards), or operation of any rail lines. Northern will not be liable
for any consequential damages or increased transportation costs that may be
incurred by Shipper as the result of Carrier's discontinuation of ownership,
maintenance (including Weight standards), or operation of any rail lines. If
Shipper fails to meet its Minimum Tonnage Requirements due to lawful cessation
of service or abandonment of any rail lines during the term of this Agreement,
as the sole remedy of Shipper, the rates on all coal which moved in accordance
with this Agreement during the then current Campaign Season shall be determined
as if the Minimum Tonnage Requirement had been met.
7.02 Waiver. Failure of either party at any time to require
performance of any provision of this Agreement shall not limit that party's
right to enforce the provisions, nor shall any waiver of any breach of any
provision be a waiver of any succeeding breach of the provision itself or of any
other provision.
7.03 Headings. The headings in this Agreement are included
only for convenience and shall not control or affect the meaning or construction
of this Agreement.
7.04 Entire Agreement. This Agreement is the entire agreement
between the parties. There are no other provisions, representations, warranties
or understandings, express or implied. No modification, variation or amendment
of this Agreement shall be of any force or effect unless it is in writing and
signed by all the parties.
7.05 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties, their respective successors and assigns.
7.06 Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of North Dakota.
7.07 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original.
7.08 Notices. Notices under this Agreement shall be in writing
and shall be effective when actually delivered. If mailed, a notice shall be
deemed effective five (5) days after mailing as registered or certified mail,
postage prepaid, directed to the other party as set out below. If via
telefacsimile, a notice shall be deemed effective upon receipt of the successful
telefax transmission report, directed to the other party as set out below:
NORTHERN: NORTHERN COAL TRANSPORTATION COMPANY
Attn: Contract Administration
505 South Gillette Avenue
Gillette, Wyoming 82716
or
Caller Box 3009
Gillette, Wyoming 82717-3009
Fax No. (307) 687-6009
SHIPPER: MINN-DAK FARMERS COOPERATIVE
Attn: Controller
7525 Red River Road
Wahpeton, North Dakota 58075
Fax No. (701) 642-6814
The addresses and fax numbers of any party may be changed by giving notice in
writing at any time to the other party.
7.08 Confidentiality. Any nonpublic information, oral or
written, including the contents of this Agreement and any related agreement,
disclosed by a party to the other shall be considered confidential information,
and such information shall not be disclosed to any third party, other than to
Northern's parent corporation, USC, Shipper, or the employees, accountants,
attorneys, and lenders of such parties, and will be kept secret and confidential
during the term of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the Effective Date set forth above.
NORTHERN COAL TRANSPORTATION COMPANY
By Malcom R. Thomas
Title V.P. Marketing & Sales
MINN-DAK FARMERS COOPERATIVE
By Larry D. Steward
Title President/CEO
EXHIBIT A
DESCRIPTION OF TRANSPORTATION
(Excerpted From the Agreement between the Burlington Northern
Railroad Company and the Northern Coal Transportation Company)
Trains of not less than 55 or more than ** Northern cars will be
tendered at Origin destined to Grand Forks, North Dakota, with a stop at Fargo,
North Dakota, for removal of cars to be delivered to destinations via Fargo,
North Dakota. All cars for delivery via Fargo, North Dakota, will be loaded at
the head end of the train by Northern.
Before tendering each shipment to Carrier at Origin, Northern will
specify on the Bill of Lading the car number, the number of cars and the loaded
weight to be delivered to each Destination. Loaded trains will be divided into
segments as previously designated by Northern on the Bill of Lading and the
segments will be delivered by the Carrier to the specified Destinations. Carrier
will deliver each segment to a siding on Receiver's property at each destination
to which delivery is to be made. Empty cars shall be stored on Receiver's
property at each Destination until picked up by Carrier. Carrier shall be
responsible for making up trains of empty cars for movement to Origin. Northern
agrees to pay for line-haul transportation at the Effective Rates and for
Accessorial Services at the Effective Charges.
At request of Northern, Carrier will permit a change in the Destination
shown on the Bill of Lading to another Destination after departure from Origin
if instructions are received by Carrier, as set forth below before arrival of
train at Fargo, North Dakota, or Grand Forks, North Dakota. A diversion charge
of $**.00 per car will apply when cars are so diverted. When instructions to
divert cars are received after arrival of train at Fargo, North Dakota, a
diversion charge of $**.00 per each diverted car will apply.
Services provided by Carrier which are included in the Base Freight
Component include line-haul transportation of Coal from Origin to Destination,
operating trains through loading facilities at Origin, placing the loaded cars
on a siding on Receiver's property at Destination, returning empty
Northern-furnished cars to the Origin loading facilities, storing and handling
Northern-owned spare cars as replacement for bad order cars and providing all
motive power, necessary cabooses (if required) and related transportation
facilities and equipment. Carrier assumes full responsibility and risk for the
efficient scheduling of such operations.
If it is determined by the Carrier that 55 empty cars are not available
at Grand Forks, North Dakota, and origin for return movement to the Origin for
loading, Carrier will notify Northern. Northern will instruct Carrier whether to
release the motive power at a charge of $**.00 or to let train return to Origin
with the empty cars available at Grand Forks, North Dakota, plus whatever empty
cars Northern may instruct the Carrier to pick up en route to Origin. An
additional charge of $**.00 will apply to restart the cycle.
Carrier agrees to perform, and Northern agrees to pay for, certain
Accessorial Services as directed by Northern.
Northern may discontinue any train cycle by giving Carrier at least 24
hours advance notice. The following charges shall apply for each such
interruption to the train cycle:
(a) $**.00, which shall include release of motive power and crew;
and $**.00 for restarting of train cycle. An additional
$**.00 per 24-hour period or fraction thereof will apply for
the storage of Seller cars on Carrier track, or
(b) $**.00, which shall include release of motive power and crew;
and $**.00 for restarting a train cycle provided that
Northern cars are stored on private track directly accessible
to Carrier.
EXHIBIT B
LIQUIDATED DAMAGES
If, for reasons other than termination of the Agreement as provided in
Section 3.08, (1) Shipper and ACS fail to tender to Northern at least ** tons
combined in the Campaign Season as adjusted or as excused in Sections 2.09(b)
and 5 of the Shipper's and Minn-Dak's Coal Transportation Agreement and (2)
Shipper fails to tender to Northern at least ** tons as adjusted in Sections
2.09(b) and 5 during the Campaign Season, liquidated damages to Northern shall
be paid to Northern as follows: 45% of the lowest Effective Transportation Costs
for the Sugar Factory, as set forth in Exhibit C and as adjusted pursuant to
Section 3.03, in effect on the last day of the Campaign Season, times the
difference between the tons actually delivered to Shipper during that Campaign
Season and ** tons, as adjusted in Sections 2.09(b) and 5.
EXHIBIT C TRANSPORTATION COSTS, INCLUDING FREIGHT COST AND
RAILCAR COST (Effective July 1, 1995, per Ton)
Base
Plant Site Transportation Costs
---------- --------------------
Wahpeton $** Per Net Ton
EXHIBIT D
ADJUSTMENT OF RATES AND CHARGES
Except as otherwise provided in this Agreement, the rates and charges
set forth in Section 2.08 and Exhibit A of this Agreement, including the Base
Rate(s) set forth in Exhibit C, shall be adjusted quarterly, upward or downward,
by an amount equal to seventy percent (70%) of the GDP FW most recent quarterly
growth rate, to produce the Effective Transportation Costs as described in
Exhibits A and C.
Adjustments shall become effective quarterly on January 1, April 1,
July 1, and October 1 of each calendar year, with the first adjustment to become
effective on October 1, 1995. Northern shall notify USC in writing of all
adjustments and furnish supporting calculations prior to the effective date of
the adjustment, or, as soon thereafter as the information necessary to calculate
the adjustment is made by the Carrier. The new Transportation Costs so
determined shall be applicable retroactive to the adjustment date in question.
The percentage change shall be equal to the "Previous Quarter's GDP FW
Index" minus the "Next Previous Quarter's GDP FW Index," divided by the "Next
Previous Quarter's GDP FW Index" for each current adjustment time period. An
example of the quarterly percentage change calculation is described below:
((Q3 1994 - Q2 1994))/Q2 1994
((130.3 - 129.4)/129.4 = .0069552 rounded to .00696)
The quarterly GDP FW index percentage change (in decimal) will be
multiplied by seventy percent (70%) to produce the Adjustment Percentage Change
(in decimal). The previous quarterly Transportation Costs are multiplied by the
Adjustment Percentage Change to produce the "Change Amount." The previous
Transportation Costs plus the Change Amount equals the new quarter's
Transportation Costs.
Example:
Adjustment Percentage Change (decimal):
.0000696 TIMES .70 = .00487 rounded = .0049
Change Amount:
$10.00 (Previous Effective Rate) X .0049 = $0.45 rounded =
$0.05 New Transportation Cost:
$10.00 (Previous Transportation Cost) + $0.05 (Change Amount)
= $10.05
Source: U.S. Department of Commerce
Survey of Current Business
Table 7.1 for GDP Fixed Weight
Survey of Current
Adjustment Period Business Issue
----------------- -----------------
First Quarter October
Second Quarter January
Third Quarter April
Fourth Quarter July
All calculated numbers shall be rounded to the nearest fifth digit
after the decimal point (i.e., .00001499 = .00001). All final adjustment
computations shall be rounded to the nearest whole one cent by going to the
lower one cent when computations result in a balance of less than one-half cent
and to the next higher whole one cent when computations result in a balance of
one-half cent or more.
It is the intent of the parties that the adjustment index (the GDP FW)
reflects changes in railroad input costs. If the U.S. Department of Commerce or
any successor organizations cease to publish the GDP FW index required for the
calculations outlined in this Section, the parties shall mutually determine and
agree upon the most appropriate substitute index or indices which most closely
matches the economic structure (that is, to measure changes in railroad input
costs) of the discontinued index or indices to be used for adjustments for the
remainder of the Agreement term immediately following such action. If the
parties do not come to an agreement as to the substitute index or indices by an
adjustment date, the Transportation Costs shall not be adjusted until such time
as the index or indices are agreed to, at which time a retroactive adjustment
shall be made retroactive to said adjustment date. If the parties do not come to
an agreement as to the substitute index or indices by 60 days following an
adjustment date, the provision of Section 6 shall apply.
CONFIDENTIAL TREATMENT REQUESTED AS TO CERTAIN PROVISION
** = INFORMATION FOR WHICH CONFIDENTIAL TREATMENT IS REQUESTED.
OILING SERVICE AGREEMENT
THIS AGREEMENT, made and entered into this 14th day of August, 1995,
by and between Spring Creek Coal Company, a Montana corporation ("SCC") and
Minn-Dak Farmers Cooperative, a North Dakota cooperative ("Minn-Dak").
WHEREAS, Minn-Dak has agreed to purchase coal from SCC (the "Coal"),
produced at the Spring Creek Mine (the "Mine"), pursuant to a coal supply
agreement dated _______________, 1995 (the "Coal Supply Agreement"); and
WHEREAS, the Coal to be shipped to Minn-Dak from the Mine for use in
the operation of its sugar factory in Wahpeton, North Dakota, shall have oil
applied to it by SCC on the terms and conditions set forth herein.
NOW, THEREFORE, for and in consideration of the promises contained
herein, and for such other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
Supply of Oil. All Coal to be shipped from the Mine to
Minn-Dak for use in the operation of its sugar factory in Wahpeton, North
Dakota, from the period from August 1, 1995 to July 31, 2005, and covering the
sugar campaign seasons of Minn-Dak through March 31, 2005 (the "Term"), will,
unless otherwise excused hereunder, have oil of a type and quality appropriate
for the purposes of this Agreement and generally conforming to generally
accepted industrial standards for lubricants used in coal applications. SCC
shall use its best efforts to operate and maintain such equipment in accordance
with the supplier's instructions and absent supplier's instructions, shall use
best efforts to follow good operation and maintenance practices.
Rate of Oiling. Such oil will be applied at the rate of one
and one half (1 1/2) to two (2) gallons per ton unless the parties otherwise
agree.
Price. Minn-Dak shall pay SCC a charge for oiling each ton of
Coal shipped by SCC to Minn-Dak to which oil is applied hereunder at a Base
Price of $** per ton as of August 1, 1995. The Base Price shall be adjusted as
of the first day of each calendar quarter by an amount determined by multiplying
the Base Price by the percentage change in Table 6 of the Producer Price Index,
Finished Lubricants, BLS Code 0576 (published by the Bureau of Labor Statistics,
based on calendar year 1982 = 100) from the first published value of such index
for May 1995. The index value used for billing in any quarter shall be the first
published value for the second preceding month prior to the start of such
quarter.
Separate charges made pursuant to this paragraph shall be rendered at
the same time that bills for the Coal so oiled are rendered pursuant to the Coal
Supply Agreement and shall be payable within twenty (20) days of receipt. In
rendering such invoices, should the Index be unavailable, SCC shall use the
Index for the then most recent month as to which the Index has been published.
Adjustments to charges made necessary by the unavailability of data
required to compute the price for oiling as provided for above shall be made
promptly after such information becomes known, with SCC sending Minn-Dak an
appropriate invoice payable as above provided, or reimbursing Minn-Dak for the
amount of any excess payments within 15 days after the data becomes available.
Purchase and Transportation of Oil. SCC agrees to arrange for
the purchase and transportation of the oil to SCC's tanks at the Mine. The costs
associated with such purchase and transportation of the oil are included in the
Base Price set forth above. SCC agrees to use reasonable efforts in ordering,
purchasing and shipping the oil and Minn-Dak recognizes that SCC shall not be
responsible in the event that oil for this purpose becomes unavailable.
Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Dakota as though all
acts or omissions hereunder occurred in such state.
Binding Effect; Modification; Assignment. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. This Agreement may not be modified except by
a writing signed by the parties hereto. This Agreement shall not be assigned by
either party hereto without the prior written consent of the other party, which
consent shall not be unreasonably withheld.
Notices. All notices and other communications relating to this
Agreement shall be in writing and shall be effective when actually delivered. If
mailed, a notice shall be deemed effective five days after mailing as registered
or certified mail, postage prepaid, directed to the other party as follows:
If to SCC:
Spring Creek Coal Company
c/o Kennecott Energy Company
Attn: Director, Sales and Contract Administration
505 S. Gillette Avenue
Gillette, Wyoming 82716
OR
Caller Box 3009
Gillette, Wyoming 82717-3009
Fax Number: (307) 687-6009
If to Minn-Dak:
Minn-Dak Farmers Cooperative
Attn: Controller
7525 Red River Road
Wahpeton, North Dakota 58075-9698
Force Majeure. If either party is unable to meet its
obligations under this Agreement as a result of flood, earthquake, storm, or
other act of God, fire, derailment, accident, strike, lockout, boycotts,
picketing, shortages of or inability to obtain electric power, raw materials,
railcars or machinery, mechanical breakdown in facilities, force majeure
affecting SCC's transportation provider as defined under its transportation
contract, war, insurrection, riot, act of government or governmental agency, or
due to any cause beyond the reasonable control of either party, whether similar
or dissimilar to the foregoing and whether foreseeable or unforeseeable, such
event will be deemed an event of force majeure. In addition, it shall be deemed
an event of force majeure in the event Minn-Dak cannot use the oiling services
hereunder because Minn-Dak is unable to burn the Coal due to ash-fouling,
unlawfully high sulfur dioxide emissions, or other environmental restrictions or
in the event either party permanently closes or experiences partial failure or
nonoperation of any of its facilities lasting a minimum of seven days. In the
event of force majeure, the obligations of the parties, other than payment for
oiling services previously performed, shall be suspended for the duration of the
event of force majeure, provided that reasonable notice is given. Whenever in
SCC's judgment any event of force majeure requires restriction of its oiling
services, Seller reserves the right in its discretion to allocate its available
supply of oil in a fair and equitable manner without obligation to furnish oil
from other sources. No suspension or reduction for any reason of force majeure
shall invalidate the remainder of this Agreement; but on removal of the cause,
oiling services shall thereafter resume.
Warranties; Limitations of Liability. EXCEPT AS SPECIFICALLY
WARRANTED HEREIN, SCC HAS MADE NO OTHER EXPRESS WARRANTIES IN THIS AGREEMENT.
ALL WARRANTIES IMPLIED AT COMMON LAW OR OTHERWISE, INCLUDING, WITHOUT
LIMITATION, ALL IMPLIED WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A
PARTICULAR PURPOSE, ARE SPECIFICALLY DISCLAIMED AND EXCLUDED. IN NO EVENT SHALL
EITHER PARTY HERETO BE LIABLE TO THE OTHER FOR LOST PROFITS OR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES WHETHER CAUSED BY NEGLIGENCE, INTENTIONAL MISCONDUCT OR
BREACH OF ANY REPRESENTATION, WARRANTY OR COVENANT HEREIN.
SPRING CREEK COAL COMPANY
By Malcolm R. Thomas
Its V.P. Marketing & Sales
MINN-DAK FARMERS COOPERATIVE
By Larry D. Steward
Its President/CEO
