BNSF RAILWAY COMPANY
BNSFC 307074
ALLOWANCE CONTRACT
Effective Date: 09/15/2005 Expiration Date: 09/14/2015
1. INTRODUCTION
This Allowance Contract ("Contract") is entered into 09/15/2005 by and between
the party ("Customer") named and identified herein and the rail carrier(s)
("Railroad") named and identified herein.
GREEN PLAINS RENEWABLE ENERGY INC
0000 XXXXXX XXX XXXXX, XXX XXXXX, XX. 89147
BNSF RAILWAY CO
PO BOX 961069, FORT WORTH, TX. 76161 -0069
Railroad agrees to perform the transportation for its portion of the Route(s) as
specified in this Contract in exchange for Customer's utilization of Railroad in
said movements. This Contract, including all amendments thereto and incorporated
Transportation Services Agreement ("TSA") as defined below, comprises the entire
Contract and merges and supersedes all prior understandings and representations
between Customer and Railroad concerning the subject matter. As used in this
Contract, references to the Contract shall include amendments thereto and the
TSA as applicable.
The terms as set forth in this Contract have been arrived at after mutual
negotiation and, therefore, it is the intention of the parties that its terms
may not be construed against any of the parties by reason of the fact that it
was prepared by one of the parties. The parties to this Contract will protect
the confidentiality of the terms and conditions of this Contract. Only where a
party is required by a court of competent jurisdiction or federal agency to
reveal any of the terms and provisions of this Contract, or where all parties
give their written consent to disclosure, will disclosure be allowed. The party
making disclosure will notify the others in advance of such disclosure. If a
third party requests a transportation contract to cover traffic moving in whole
or in part under this Contract, Customer or Railroad may advise that a Contract
covering the traffic exists and may reveal its duration and the identity of the
parties to the Contract. Nothing in this confidentiality provision will preclude
the use of this Contract by any party hereto to obtain financing.
Customer warrants it is the purchaser of transportation services covered by this
Contract. At the request of Railroad, Customer shall make available to Railroad,
Railroad's employees or Railroad's designated agent acceptable to Customer, at a
reasonable time during normal business hours, records relating to this Contract.
2. TERM
This Contract becomes effective on 09/15/2005 and shall remain in effect through
09/14/2015.
3. RENEWABILITY
This Contract may only be renewed by mutual consent of the parties.
BNSF RAILWAY COMPANY
BNSFC 307074
ALLOWANCE CONTRACT
4. TRANSPORTATION SERVICE AGREEMENT
Railroad shall transport the commodity(ies) ("Commodity") as named in the TSA,
including all incorporated attachments thereto attached hereto and made part of
this Contract for Customer from the origin(s) ("Origin(s)") to the
destination(s) ("Destination(s)") via the route(s) ("Route(s)") as set forth in
the TSA attached hereto and incorporated herein. Rates and charges and
adjustments thereto for shipments under this Contract are as shown in the TSA.
In the event of any conflict between this Contract and the TSA, the TSA shall
govern.
5. EQUIPMENT
Equipment used under this Contract and Amendments thereto shall be as described
in the aforementioned TSA and in the Official Railway Equipment Register, RER
6412-Series.
Private Equipment:
When the equipment used under this Contract is privately owned or leased
equipment of the Customer ("Private Equipment"), the following shall apply:
The Private Equipment used under this Contract shall be in serviceable condition
for the safe transportation of commodity over rail lines and shall comply with
all applicable statutes, regulations, rules, tariffs/rules books,
classifications, standards and practices that would govern in the absence of
this Contract. Compliance with the foregoing shall in no way relieve any party
from any liabilities otherwise assumed under this Contract and it shall be the
responsibility of the party providing the Private Equipment in any case to
assure such compliance.
Use of Private Equipment is limited to cars which have been authorized by
Railroad to operate over the rail lines of Railroad. Where OT-5 approval is
applicable or required, this Contract does not commit Railroad to accept Private
Equipment that does not have OT-5 approval from Railroad.
Railroad shall not be liable to Customer, and Customer shall indemnify and hold
harmless Railroad, for all loss (including without limitation attorney's fees
and other costs of litigation), damage or injury due to (a) any defects in
Private Equipment, (b) improper loading practices, failure to properly close,
secure and tender loaded or empty Private Equipment, (c) failure by the Customer
(or its agents or contractors) to comply with the representations, warranties
and covenants made in this Contract and with the rules applicable to Customer
with respect to the movement of commodities contemplated by this Contract.
Acceptance of the Private Equipment and commodity in interchange by Railroad
will not relieve Customer of its obligations under this Contract and shall not
constitute waiver by Railroad of the obligations of Customer under this
Contract.
Customer warrants that its interest in the equipment used under the Contract is
sufficient to permit it to waive full payment of mileage allowances. Customer
and Railroad agree that Railroad will not be liable for mileage allowances in
excess of the obligation outlined in said TSA. In the event that a party other
than Customer submits a claim to Railroad for mileage allowance payments in
excess of Railroad's obligation under this Contract, Customer shall, at
Railroad's option either (1) release, defend and indemnify Railroad from said
claim including attorney's fees and cost of litigation, or (2) reimburse
Railroad for excess mileage allowances paid by Railroad within thirty (30) days
of notice by Railroad.
Railroad Equipment:
When the equipment is Railroad owned or leased, Railroad will provide this
equipment consistent with its common carrier obligation.
BNSF RAILWAY COMPANY
BNSFC 307074
ALLOWANCE CONTRACT
Railroad reserves the right to furnish any type or size of equipment that meets
the above description to fill car orders under this Contract and TSA.
6. HAZARDOUS MATERIAL TRANSPORTATION
If hazardous materials/waste is to be transported under this Contract, Equipment
used under this Contract or TSA shall be as described in the aforementioned TSA
and in the Official Railway Equipment Register, RER 6412-Series and tendered to
Railroad in accordance with all applicable Hazardous Material Regulations of the
U. S. Department of Transportation (DOT), as published in 49 C.F.R. Each bill of
lading shall contain all information required by all applicable Rules (as
defined below) governing the transportation of hazardous material/waste.
All shipments of any of the hazardous materials/waste tendered to Railroad under
this Contract or TSA will be prepared for shipment, loaded and unloaded pursuant
to all applicable Rules concerning the handling, packaging, disposing and
transportation of hazardous materials/waste, including without limitation the
Hazardous Materials Transportation Act (49 U.S.C. 1801 et. seq.), the Resource
Conservation and Recovery Act of 1976 (RCRA) (42 U.S.C 6901 et. seq.) and the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. 9615 et. seq.).
In the event of any leakage, release, spillage, dumping or other discharge of
the commodity Customer shall provide prompt advice with respect to the proper
method of cleanup, disposal and other remedial actions to take with respect to
such discharge and both parties shall cooperate fully to the extent reasonably
necessary to expeditiously and prudently xxxxx or eliminate any hazard and to
meet the requirements of all applicable Rules: PROVIDED, HOWEVER, that nothing
contained in this paragraph shall alter the responsibilities and obligations of
Customer nor the responsibilities and obligations of Railroad under this
Contract or TSA.
7. GOVERNING PROVISIONS
Except as otherwise provided for in this Contract, shipments moving under this
Contract will be governed by the tariffs/rules books, exempt circulars, rate
memorandums, rules and regulations, including BNSF Rules Book 6100-Series, which
would apply if this Contract were not in effect, except that origin and
destination intermediate application rules will not apply. Customer acknowledges
that it has received a copy of BNSF Rules Book 6100-Series. If, for any reason,
any rule, regulation, or provision of any tariff/rules book, exempt circular or
rate memorandum referenced under this Contract is canceled or becomes
inapplicable, the last published provision that would have been applied will
govern. In the event of conflict between the above-referenced rules,
regulations, etc., which are herein incorporated by general reference, and this
Contract, this Contract shall govern.
Railroad's obligation to provide service under this Contract shall be no greater
than it would be as a common carrier. Services or other matters not specifically
addressed in this Contract, including but not limited to, loss and damage
liability and settlement, credit and collection, and track weight limitations,
shall continue to be governed by rules, regulations, tariffs/rules books, and
statutory provisions, as amended from time to time, which would apply if it were
not for this Contract, and which are incorporated herein by reference.
Shipments under this Contract shall be governed by the terms and conditions set
forth in the Uniform Straight Bill of Lading ("Bill of Lading") and are
incorporated herein by reference and made a part hereof as if fully herein set
forth; provided, however, that in the event of any conflict between said terms
and conditions and any other provisions of this Contract and the TSA, the
provisions of this Contract and the TSA shall govern.
8. DEMURRAGE PROVISIONS
BNSF RAILWAY COMPANY
BNSFC 307074
ALLOWANCE CONTRACT
Provisions of the applicable Demurrage tariffs/rules books will govern, except
as otherwise noted herein or in the applicable TSA.
9. ALLOWANCE CONDITION
For each shipment made under this Contract, Railroad agrees to pay the
allowance(s) specified in the TSA.
Customer must submit an electronic claim for allowance in writing on such basis
as detailed in said TSA to xxxxxxxxxx@xxxx.xxx. Such basis commencing with the
Effective Date of this Contract ("Allowance Period") specifying the volume it
has shipped under this Contract during that Allowance Period.
Electronic claim must include waybill date, waybill number, car initial, car
number, claim amount, and any other applicable data in support of the
requirements of this Contract. Each electronic claim shall contain reference to
this BNSF Contract Number. In the event the customer is delinquent on any
outstanding BNSF payments or charges, unless under dispute, BNSF reserves the
right to withhold and/or deduct any refunds and/or allowance payments due the
customer. Payments to BNSF that exceed the applicable payment terms are
considered to be delinquent.
10. BILLING
Each shipment made under this Contract shall be evidenced by a Bill of Lading,
Order Notify Bill of Lading ("Order Notify Bill of Lading") or Shipping Order
(collectively referred to as the "Shipping Document."). All cars for each
shipment are to be billed on one (1) Bill of Lading, Order Notify Bill of Lading
or Shipping Order. At the time shipment is tendered the original and all copies
of the Bill of Lading, Order Notify Bill of Lading or Shipping Order shall
contain reference to the Contract Number assigned to this Contract. Any
inadvertent omission of the Contract number shall not be deemed a breach hereof.
The date appearing in the applicable Shipping Document as set forth above in
this Section will govern as to the day on which a shipment was made. Except to
the extent provided otherwise in any TSA or any incorporated attachment thereto,
the date of shipment will govern as to the applicable rate or charges and
tonnage requirements as covered by this Contract.
11. PAYMENT PLAN
Payments for services under this Contract are due and payable in accordance with
Railroad's credit terms, as set forth in BNSF Rules Book 6100-Series.
12. ASSIGNMENT
Customer may not assign its rights or obligations under this Contract without
the prior written consent of Railroad. If Railroad does consent to such
assignment, Customer shall remain liable for the obligations assigned in the
event the Assignee does not perform.
13. LOSS AND DAMAGE
Standard common carrier liability pursuant to 49 U.S.C. 11706 will apply on
shipments made under this Contract. Accordingly, Railroad shall not be liable
for any loss, damage or injury caused by an act of God, the public enemy, act of
the Customer, a public authority, or inherent vice or nature of the goods.
Railroad shall not be liable for any loss, damage or injury due to improper
loading. Pursuant to 49 U.S.C.1 1706, all claims against Railroad must be
brought within nine (9) months and all civil actions against Railroad must be
brought within two (2) years.
14. FORCE MAJEURE
BNSF RAILWAY COMPANY
BNSFC 307074
ALLOWANCE CONTRACT
In the event any party cannot perform under this Contract due to or as a result
of the following causes: acts of God, including, but not limited to flood,
storm, earthquake, hurricane, tornado, or other severe weather or climatic
conditions; acts of public enemy, war, blockade, insurrection, derailment,
vandalism, sabotage, fire, accident, wreck, washout or explosion; labor strike
or interference, lockout or labor dispute, shortage of diesel fuel, embargo or
AAR service order or governmental law, orders or regulation, or breakage of
machinery; and/or any like causes beyond the reasonable control of Customer or
Railroad, the parties' obligations under this Contract shall be suspended to the
extent made necessary by the Force Majeure event at the affected origin(s)
and/or destination(s) during any such disability period insofar as it applies to
the affected location(s). Suspension shall not result in extension of the term
of this Contract.
If this Contract contains a minimum percentage or other volume requirement
("Minimum Volume"), then any shipments made contrary to the route(s) specified
in this Contract due to a Force Majeure will be excluded in determining
compliance with any minimum percentage requirement.
The party claiming Force Majeure shall take all reasonable steps to remove the
Force Majeure event, and shall promptly notify the other party(ies) within a
period of five (5) days, excluding weekends and holidays, when it learns of the
existence of a Force Majeure condition and will similarly notify the other
party(ies) within a period of five (5) days, excluding weekends and holidays,
when a Force Majeure is terminated.
15. NOTICES
Any notice given under this Contract shall be effective when received. Notices,
except as otherwise provided herein, shall be delivered to the party(ies)
entitled to receive the same by personal delivery, First Class Mail, or by any
electronic means which can produce a written copy. Notices shall be addressed to
the appropriate party(ies) as shown in this Contract.
Any notice pertaining to a Force Majeure or to matters of an emergency or
operating nature may be given by any reasonable means. Any notice given verbally
shall be confirmed in writing by First Class Mail as soon as practicable, if
requested by party(ies) receiving such notice.
16. LINE ABANDONMENT
The provisions of this Contract in no way obligates the Railroad to maintain any
service schedules or to continue ownership, maintenance (including weight
standards) or operations of any rail lines. Railroad will not be liable for any
increased transportation costs or any other consequential, special, incidental,
punitive or other damages that may result from such discontinuation.
If this Contract contains Minimum Volume requirements and Customer fails to
satisfy the Minimum Volume requirements of this Contract due solely to
Railroad's discontinuance of service(s) named in the above paragraph then, as
Customer's sole remedy, the Minimum Volume requirements for the then current
period shall be waived.
17. AMENDMENT
All amendments to the terms of this Contract or the TSA, shall be in writing and
signed by the parties except as provided below in the Signatures section.
18. DEFAULT
BNSF RAILWAY COMPANY
BNSFC 307074
ALLOWANCE CONTRACT
If any party shall default in any material covenant, condition or obligation of
this Contract which is not excused by Force Majeure, and continues in default
for a period of ten (10) days after written notice is given to the defaulting
party, the non defaulting party may, without prejudice to other rights and
remedies, terminate this Contract by giving thirty (30) days written notice to
the party in default.
If this Contract is terminated by Customer due to Railroad default, and Contract
contains a Minimum Volume requirement, then all shipments which moved under this
Contract during the then current Period (as used herein the term "Period" refers
to the time frame in which Customer must comply with the Minimum Volume
requirements) shall be determined as if the Minimum Volume requirements of this
Contract have been met. If this Contract is terminated by Railroad due to
Customer default, and Customer has not met the Minimum Volume requirements of
this Contract for the then current Period, liquidated damages will be assessed
in accordance with provisions contained in the Liquidated Damages section of the
Contract and related attachments.
19. SEVERABILITY
Any part, term or provision of this Contract that is held to be unenforceable,
illegal, against public policy, or in conflict with any federal, state or local
laws, shall be severable from the rest of this Contract. The remaining portions
of the Contract shall not be affected. The rights and obligations of the parties
shall be construed and inferred as if the Contract did not contain the
particular term, part, or provision held to be invalid, unless the invalid
provisions contain the material financial terms of this Contract, or when
considered in the aggregate, render the administration of this Contract
unreasonably burdensome, in which case (unless new terms or provisions can be
negotiated within three (3) months of written request for renegotiation by
either party) this Contract shall be terminated. In the event of termination,
and if the Contract contains Minimum Volume requirements, then the Minimum
Volume requirements of this Contract will be waived for the then current Period.
20. MINIMUM VOLUME REQUIREMENT If Contract or the TSA contains a Minimum Volume
Requirement, then Customer must submit written certification to the following:
BNSF Railway Company Attention: Contract Analyst Price Management
0000 Xxx Xxxx Xxxxx
Xxxx Xxxxx, XX 00000-0000
with a copy to Railroad at address(es) as shown in The Official Railway Guide,
within thirty (30) days after the close of each Period stating whether the
Minimum Volume has or has not been met. Customer will, upon request, permit
Railroad or its authorized agent to inspect Customer's shipping documents to
verify that certification is correct. Customer shall retain such records for a
period of three years after the close of each Period and this requirement shall
survive the termination of this Contract.
Railroad or its agent will protect the confidentiality of such documents.
21. LIQUIDATED DAMAGES
BNSF RAILWAY COMPANY
BNSFC 307074
ALLOWANCE CONTRACT
*Transportation Service Agreement*
If Customer fails to meet the Minimum Volume requirement of this Contract during
any Period, Customer will pay BNSF, in addition to the freight charges that have
already been assessed pursuant to this Contract, the amount specified set forth
in this Contract or the TSA as applicable ("Liquidated Damages"). Customer
acknowledges that such payments are not a penalty or forfeiture but are
Liquidated Damages agreed upon as a reasonable substitution for BNSF's damages
which are difficult to measure.
Payments to BNSF for Liquidated Damages, along with the supporting calculations,
will be made within thirty (30) days after the close of the Period to:
BNSF Railway Company Attention: Contract Analyst Price Management
0000 Xxx Xxxx Xxxxx
Xxxx Xxxxx, XX 00000-0000
In the event of late payments on liquidated damages, Customer shall submit to
BNSF at the same address added interest at a rate of one and one-half percent (1
1/2%) for each month or portion thereof that the payment is late, or the maximum
interest allowed by applicable law, if lower. Payment of liquidated damages
hereunder to BNSF is not divisible or otherwise payable to any other
participating Railroad(s).
22. GOVERNING LAW
This Contract and incorporated TSAs shall be governed by the laws of the State
of Texas without regard to conflict of laws.
23. DISPUTE RESOLUTION
If a question or controversy arises between the parties concerning the
observance, performance, interpretation or implementation of any of the terms,
provisions, or conditions contained herein or the rights or obligations of
either party under this Contract or the TSA, such question or controversy shall
in the first instance be the subject of a meeting between the parties to
negotiate a resolution of such dispute. If, within thirty (30) days after the
meeting, the parties have not negotiated a resolution or mutually extended the
period of negotiation, either party may seek resolution of the question or
controversy pursuant to binding arbitration.
The party calling for arbitration ("Initiating Party") shall give written notice
the other party setting forth: (a) a statement of the issues(s) to be
arbitrated; (b) a statement of the claim showing that Initiating Party is
entitled to relief; and (c) a statement of the relief to which the Initiating
Party claims to be entitled. Within twenty (20) days from the receipt of such
notice, the other party ("Receiving Party") may submit its written response and
give notice in the same manner required above of additional issues to be
arbitrated. The Initiating Party shall have ten (10) days from receipt of said
response to respond to any issues submitted for arbitration by the Receiving
Party.
Within sixty (60) days of the date of the Initiating Party's written notice
requesting arbitration, each party shall designate a competent and disinterested
person to act as that party's designated arbitrator, with the two (2) persons
designated selecting a third neutral arbitrator within thirty (30) days of their
designation. In the event the first two designated arbitrators cannot agree on
the third neutral arbitrator, the neutral arbitrator shall be selected pursuant
to the rules of the American Arbitration Association ("AAA"). The arbitration
proceeding shall be conducted in accordance with the Commercial Arbitration
Rules of the AAA.
The decision and award of the arbitration panel shall be rendered within thirty
(30) days of the close of the arbitration proceeding. Any decision and award of
the majority of the panel shall be final and binding upon the parties. The
arbitrators shall not award punitive or exemplary damages against either party.
Judgment
BNSF RAILWAY COMPANY
BNSFC 307074
ALLOWANCE CONTRACT
*Transportation Service Agreement*
upon the decision or award rendered may be entered in any court of competent
jurisdiction in the State of Texas in accordance with the Laws of the State of
Texas. The parties shall each bear the expense of their respective designated
arbitrator as well as their own fees and costs. The expense of the neutral
arbitrator shall be shared equally by the parties.
24. LIMITATION OF DAMAGES
Neither party shall be liable to the other for any consequential, incidental,
special or punitive damages arising out of this Contract or the TSA.
25. WARRANTY
The person(s) signing this Contract and the TSA on behalf of Customer and
Railroad warrant that they have the authority to bind, and hereby binds,
Customer and Railroad to all of the terms and conditions of this Contract and
the TSA.
26. SIGNATURES
The parties acknowledge and agree that faxed signatures and/or electronic
acceptance of the terms and conditions of this Contract and the TSA shall
constitute acceptance of the terms and conditions of this Contract and the TSA
as well as written amendments thereto.
Intending to be legally bound, the parties hereto have caused this Contract to
be executed by their representatives as written below:
GREEN PLAINS RENEWABLE ENERGY INC
By /s/ Xxxxx Xxxxxxxxx
--------------------------
President
Date:
------------------------------
BNSF RAILWAY CO
By
---------------------------------
President
Date:
------------------------------
BNSF RAILWAY COMPANY
BNSFC 307074
ALLOWANCE CONTRACT
*Transportation Service Agreement*
Effective Date: 09/15/2005 Expiration Date: 09/14/2015
CUSTOMER
GREEN PLAINS RENEWABLE ENERGY INC is the Party who is designated to receive
specified allowance payments. 0000 XXXXXX XXX XXXXX, XXX XXXXX, XX. 89147
GREEN PLAINS RENEWABLE ENERGY INC is a Party also entitled to the price(s). 0000
XXXXXX XXX XXXXX, XXX XXXXX, XX. 89147
GREEN PLAINS RENEWABLE ENERGY INC is the Party entitled to the price(s). 0000
XXXXXX XXX XXXXX, XXX XXXXX, XX. 89147
GREEN PLAINS RENEWABLE ENERGY INC is the Party who is designated to receive
either notifications of a price authority, amendments, revisions or supplements,
or escalations, or matters pertaining to a Force Majeure or other matters of an
emergency or operating nature. 0000 XXXXXX XXX XXXXX, XXX XXXXX, XX. 89147
GREEN PLAINS RENEWABLE ENERGY INC is a signature Party to the contract. 0000
XXXXXX XXX XXXXX, XXX XXXXX, XX. 89147
BNSF RAIL WAY CO is a signature Party to the contract. PO BOX 961069, FORT
WORTH, TX. 76161-0069
EXHIBIT
- Freight charges must be prepaid, or freight charges must be collect.
- Price applies in US funds.
- Prices in this Allowance Con tract alternate with other Allowance Contracts.
- Allowance can be petitioned for on an Annual schedule and will be paid in 30
Days.
- Allowances apply to BNSF portion of freight revenue only.
- The parties agree that following terms and conditions apply:
1). Minimum average BNSF revenue requirement only:
The purpose of an average revenue requirement is to establish a base line that
will generate BNSF a minimum return to compensate (per-car refund) GPRE for its
funding of the Renovation Project as defined below in Section 6.
If market rates (see section 2) fall below the average minimum revenue
requirement for any Con tract Year as defined below, BNSF shall have no
obligation make any refunds, as set forth below in Section 4, to GPRE for that
Contract Year. The rates identified in this section are not to be used for
billing shipments.
Eastbound shipments (example: New York)
Weighted average minimum BNSF revenue portion per car: sin gle:$1890 unit:$1500*
- does not constitute a rate offer
Westbound shipments (example: California)
Weighted average minimum BNSF revenue
portion per car: single: $4000 unit:$3330
- does not constitute a rate offer
Southbound shipments (example: Texas)
Weighted average minimum BNSF revenue portion per car:
BNSF RAILWAY COMPANY
BNSFC 307074
ALLOWANCE CONTRACT
*Transportation Service Agreement*
single: $2880 unit: $2230
- does not constitute a rate offer
Southwest bound shipments (example: New Mexico)
Weighted average minimum BNSF revenue portion per car:
single: $3040 unit: $2570*
- does not constitute a rate offer
Weighted average is based on 800 cars of corn, 1706 cars of ethanol, and 550
cars of DDGs. Rate factors used to calculate the weighted average revenue
portion (BNSF only) are based from applicable tariff rates. Annual adjustment to
the weighted average revenue portion (BNSF only) will be based on tariff changes
subsequent to December 1, 2005.
* No corn unit train rates published. Weighted average is DDG and ethanol only.
When/if corn unit train rates are published they will be factored same way as
west/southbound weighted average.
2). Rates:
All rates will be market (tariff) based and subject to fuel surcharge and price
escalation.
- BNSF will maintain Shenandoah at equal rates to Red Oak based on like
commodity (whole grains) and unit (train/single) size. This will apply as long
as BNSF owns or operates on the Line.
3). Annual volume threshold (AVT):
3,100 loaded rail cars shipped via BNSF during each twelve-month period
beginning with the AVT Date as defined below (Con tract Year) during the term of
the Contract (inbound or outbound).
- Minus 5% variance to the annual volume will not invoke the non-compliance
provision.
- The AVT will begin once the ethanol plant becomes operational as evidenced by
the first loaded rail car billed from the ethanol plant (the AVT Date).
- If the AVT is exceeded for a con tract year, the incremental volume above the
base will be carried forward to apply to the immediate subsequent con tract year
AVT. In no event will any incremental volume of a prior contract year be carried
forward beyond one con tract year. The 5% variance will not be applicable during
a con tract year that is credited with incremental volume from the immediate
prior contract year
4). Refund payment:
Upon completion of the Project, BNSF agrees to reimburse GPRE for full
construction cost of the project estimated at three million five hundred
thousand or the actual construction cost of the Project whichever is lower. The
said reimbursement will consist of fifty ($50) per loaded car on eastbound
shipments routed BNSF direct, and/or one hundred fifty ($150) per loaded car on
westbound shipments routed BNSF direct, and/or hundred ($100) per loaded car on
south/southwest bound shipments routed BNSF direct subject to BNSF meeting its
average minimum revenue requirement (see section 1). The refund per car will be
paid on incremental shipments above 800 cars annually. No refund will be paid on
the 800-car base volume comprised of corn, cracked corn, and/or soybean
shipments. If less than 800 cars of corn, cracked corn, and/or soybeans are
shipped then refund will apply to incremental cars, (other than corn, cracked
corn, and/or soybean shipments). BNSFs obligation to make refund payments is
contin gent upon GPRE meeting the AVT. BNSF will remit payment of any
reimbursements due within 45 days after the applicable calendar quarter. BNSF
has no obligation to make the payments if the AVT are not met. Upon payment by
BNSF to GPRE, BNSF shall have no further obligation or liability with regard to
such payments. GPRE agrees to indemnify and hold BNSF harmless from any Page No:
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BNSF RAILWAY COMPANY
BNSFC 307074
ALLOWANCE CONTRACT
*Transportation Service Agreement*
claims with regard to such payments once BNSF has paid GPRE.
If the AVT is not met during an applicable annual period and BNSF has paid GPRE
a refund amount based on actual shipments, then BNSF may (at its own discretion)
withhold future payments until that applicable period and the immediate
subsequent periods AVT are met. In other words, shipments in the immediate
subsequent annual period will need to meet the AVT for that time frame and
generate incremental shipments above the AVT to cover the prior period
shortfall. This process will be applicable for any shortfall annual period. Once
the AVT is met, BNSF will resume refund payments.
In the event, the line is sold (per Section 5) any outstanding balance of
dollars owed GPRE by BNSF for line renovation will either be paid as a lump sum,
per car refund, subtracted from purchase price to buyer (transferred to GPRE, if
not purchaser) or other means determined by BNSF to satisfy repayment to GPRE.
In no event will the original timeline to satisfy payment, be extended with
change in the method of payment unless agreed by the parties.
Any payment by BNSF is subject to GPRE meeting the AVT. Any shortfall will be
reduced from the selected method of payment upon change of ownership to the
line.
5). BNSF operations
It is BNSF's current intent to provide rail service on this line (Red Oak to
Shenandoah). However, BNSF reserves the right to lease or sell the line to
another operator if, in BNSF's sole judgement, continued operations by BNSF are
not economically feasible. If BNSF does sell or lease the line to another
operator, BNSF shall give GPRE the first right of refusal to purchase or lease
and operate the line. BNSF will provide a proposed price to purchase or lease
the line segment, and GPRE will have 60 days from time of written proposal to
accept or reject the terms. If GPRE rejects the proposal, the line segment will
be bid to potential 3rd party operators, and GPRE will have the opportunity to
participate in the bid process. However, best bid (by 3rd party operator) will
be awarded the line segment and there will be no right of first refusal
available to GPRE.
If GPRE chooses not to purchase or lease the line, and the line is sold or
leased to a third party operator, such operator will be requested to honor the
terms of this agreement and provide the service listed below. Unit train
operations are defined as 95 cars for ethanol, 100 cars for DDGs and 110 cars
for whole grains. Loads will be picked up upon release and returned (spot or
place) empty as complete trains. Communication program will be established with
BNSF's grain desk operation.
Any volume less than unit train operation is considered single car (merchandise)
service.
- Single-car service (non-unit train) will be handled by the Red Oak local.
Depending on volume, service can be up to three (3) days per week (up and down
on the same day). Based on volume to be released, BNSF will design a service
plan to meet the GPRE need. Volume will drive number of days of service.
If BNSF decides to abandon the line, GPRE will have first right of refusal to
purchase and operate the line. BNSF will provide GPRE a Net Liquidated Value
(NLV) at time time of proposed abandonment. GPRE will have 60 days from date of
written notice to accept or get their own estimate (at GPRE expense). BNSF
reserves the right to accept or reject any 3rd party estimate. If GPRE elects
not to purchase the line and there is no sale to a 3rd party, then the line will
be abandoned and any outstanding refund payment to GPRE will be forfeit.
GPRE will be required to meet BNSF operating requirements same as any 3rd party
operator.
6). Line Renovation:
GPRE will be responsible for any renovation as defined in this agreement from
Mile Post 1.05 to Mile Post 20.05 on Farragut spur. Estimated cost of three
million five hundred thousand ($3.5 million) will be paid in advance to BNSF for
work order placement (project scheduling, materials, etc.) for the
BNSF RAILWAY COMPANY
BNSFC 307074
ALLOWANCE CONTRACT
*Transportation Service Agreement*
initial renovation of the Line (Renovation Project). Payment from GPRE to BNSF
shall be by certified check to: Assistant Manager, Miscellaneous Receivables,
BNSF Railway Co., 920 S. E. Quincy, Topeka, KS 66612-1116. BNSF has no
obligation to begin the Renovation Project (schedule maintenance ((start date)),
order materials, etc.) until such payment is made to BNSF. The parties
understand that the cost of the initial Renovation Project may vary depending on
materials, labor, weather etc. if this occurs, it is estimated that any
additional cost should not exceed 10% of the $3.5 million. BNSF shall have no
obligation to pay for any cost. GPRE will be responsible for any additional
cost. BNSF shall provide a summary of expenditures upon completion of the work
described below. Any funds from the initial deposit made by GPRE not used in the
renovation shall be refunded to GPRE. Refund payments shall be mailed to: Green
Plains Renewable Energy, Inc.; Accounting Department, 0000 Xxxxxx Xxx Xxxxx, Xxx
Xxxxx, XX 00000. BNSF will attempt to provide 180 days notice to GPRE for any
additional line renovation programs. However, in extreme cases (e.g. acts of God
or other significant events) BNSF may not be able to provide 180 days advance
notification. However, BNSF will make every effort to provide as much lead time
as possible to GPRE.
GPRE agrees, as part of the Renovation Project it has financial responsibility
(BNSF will only perform labor) for the following:
a. Replace approximately 28,400 treated wooded cross ties and surface track
following tie gang operation. This tie replacement program will result in the
replacement of approximately 35% of the ties in the route. The remaining ties
are in good condition and the next tie replacement program will likely be in
approximately seven (7) years.
b. Place 22 each, 39-foot track panels (this includes rail, ties, and fasteners)
in road crossings as part of the tie program. During this operation all
crossings requiring upgrade will be totally rehabilitated with new rail ties,
ballast, and crossing surface materials.
c. Replace treated wooden switch ties of varying lengths (10-foot to 17-foot) in
12 turnouts located on the route.
d. Relay 2 track miles of existing 90-lb. rail with secondhand continuous welded
115-lb. to 136-lb. rail. This relay represents a small portion of the total
track miles of rail on the route. The remaining 90-lb. conventional rail on the
route will need to be monitored very closely for increased defect rates and
broken or cracked angle bars as the annual traffic increases and the heavier
axle loads accumulate.
e. The upgrade plan will allow for 286,000-lb. loadings and increased annual
traffic over the route at FRA Class 2 standards (25 MPH).
f. Future tie replacement and rail relay are the responsibility of GPRE. Funding
will be handled in the same manner as described in the line renovation section.
At that time, BNSF will provide an estimated cost breakdown of required repairs.
g. If BNSF has not received the funding described above by the start date of the
Renovation Project, BNSF shall have no obligation under this Contract to perform
the Renovation Project and shall have the option in its sole discretion to
terminate the Contract upon 10 dayswritten n otice to GPRE.
h. If during the term of this Agreement, the Line needs additional renovation in
BNSFs sole discretion (Subsequent Renovation), GPRE agrees to fund the
Subsequent Renovation on the same basis as set forth in this Section. At that
time, BNSF will provide an estimated cost breakdown of the required repairs.
BNSF will refund for subsequent renovations on the same basis as defined in
section 4. However, BNSF will not refund until prior renovation obligation is
satisfied. If GPRE fails to make the required payment by the projected start
date of the Subsequent Renovation, BNSF has no obligation to perform the
Subsequent Renovation under this Con tract and in its sole discretion may
terminate this Con tract upon 10 dayswritten notice to GPRE.
7). Line maintenance:
BNSF will be responsible for normal maintenance on the Line from Mile Post 1.05
to Mile Post 20.05 on Farragut spur provided that the AVT is met. If maintenance
is performed by BNSF and the AVT is not met for that applicable period, then
GPRE will be responsible for reimbursing BNSF for any maintenance costs incurred
by BNSF during any Con tract Year. Payment to BNSF will be made within 45 days
after receipt of bill for service performed. If payment is not made, BNSF will
have the option to cease making any refund
BNSF RAILWAY COMPANY
BNSFC 307074
ALLOWANCE CONTRACT
*Transportation Service Agreement*
payments until full amount is recovered, to add a surcharge on rates to GPRE
based on a prorate basis (amount of BNSF maintenance dollars spent equally
spread over actual volume shipped for the shortfall period) until full amount is
recouped, or to recoup such amounts through other means as a lump-sum payment
for the outstanding amount.
BNSF agrees it has responsibility for the following:
a. Track inspection: FRA (required by): one time weekly BNSF requirements
(weather related): twice weekly or daily
b. Vegetation control: Entire line will have herbicide application (24' track
section pattern) mechanical cutting will be necessary in all quadrants of public
crossings
c. Ultrasonic rail detection: Minimum entire route will have an internal
ultrasonic rail inspection performed one time per year. If defect rates begin to
increase, the frequency of these tests will be increased as necessary. In
conjunction with these tests, local track maintenance crews will follow closely
behind inspection vehicles replacing all defect ive rails which are identified.
BNSF will be responsible for replacing an average of 2 defects per track mile
each year. If any segment of the route which is 3 miles in length or more, and
exceeds 2 defects per track mile, BNSF (at its discretion) will be able to relay
this portion to help keep maintenance cost in check.
d. Track resurfacing: In order to maintain the track to FRA Class 2 standards
(25 MPH) on conventional (jointed) 90-lb. rail, an annual surfacing program will
be necessary using a Production Tamper and Ballast Regulator. This surfacing
crew could be required on the line for as much as 30 days per year depending
upon precipitation, annual traffic, and other occurrences which could affect the
surface of the track.
e. Gauging: All curves located on the line will need to be checked regularly to
insure track gauge (distance between the inside edges of the two rails) remains
with FRA standards. Should locations be noted where gauge widening has occurred,
it will be necessary to bring in a Track Maintenance crew to repair the location
by pulling the existing spikes, pulling the rail in so measurement is within
standard, plugging the old spike holes and re-spiking the track to standard
gauge. In the event the gauge widening is a result of defective tie conditions,
the Track Maintenance crew will also be required to replace some ties in order
to hold the gauge within standard.
f. Right-of-way fencing repairs: As necessary, the Track Maintenance crew will
be required to repair any breaks which might occur in the fence line which
divides BNSF property from the adjoining landowners.
g. Bridge inspection: All bridge structures on the line will be inspected at
least twice in each calendar year. Any minor deficiencies noted will be repaired
by a mobile Structures Maintenance crew. Any repairs that require structural
work on a bridge shall be treated as a Subsequent Renovation and handled in
accordance with Section 6 above.
h. Inspection includes all culverts located on the line to insure they are in
good condition and clear of debris and able to handle runoff in the event of a
storm. Any culverts located which are plugged or have debris build-up will be
addressed by a Track Maintenance crew. Any repairs that require structural
repairs to a culvert shall be treated as a Subsequent Renovation and handled in
accordance with Section 6 above.
i. BNSF and FRA safe-handling require ments will govern.
j. Any needed maintenance of the Line beyond that described in this Section 7
shall be a Subsequent Renovation and shall be handled as set forth in Section 6
above.
k. Ditching: Insure there is adequate drainage away from track. Runoff from
storms must be able to move quickly away from the track and not left standing in
the vicinity of the track, or soft sub-grade conditions will occur resulting in
a need for slow orders or additional track surfacing.
BNSF RAILWAY COMPANY
BNSFC 307074
ALLOWANCE CONTRACT
*Transportation Service Agreement*
l. Automated Crossing Warning Devices: Crossings protected by either flashers,
or gates and flashers, must be inspected weekly per FRA standards. Any
conditions noted during these inspections, such as bulbs not working, broken
gates, or any other defective equipment noted, must be repaired quickly. This
work is performed by a Signal Maintainer.
8). Completion
GPRE agrees to complete funding for the proposed ethanol plant and the
Renovation Project by November 29 2005, and will remit to BNSF the necessary
funds for Renovation Project by January 31, 2006. BNSF agrees to complete the
renovations as soon as practicable thereafter. GPRE agrees to complete cons
truction of the ethanol plant no later than June 30, 2007. The completion date
of June 30, 2007 may be extended up to 60 days, if delays due to acts of God
(weather) and/or disruption of cons truction due to labor disputes, material
backlog, etc.) are primarily responsible in the delay of the plants operational
startup. Notwithstanding the aforementioned dates, GPRE agrees to fund earlier
than January 31, 2006 in the event that Green Plainsequity drive is completed
prior to November 29, 2005. GPRE further agrees to cons truct the track
(plant/facility) configuration pursuant to a design that is approved by BNSF.
BNSF will complete the Renovation Project prior to ethanol plant becoming 100%
operational (exceptions are receipt of funding, weather conditions, and/or
availability of materials).
If GPRE fails to meet either of the requirements, BNSF at its sole discretion,
may terminate the Contract upon ten (10) days written notice.
9). Confidentiality
The parties agree that the terms and conditions of this Letter of Agreement are
confidential and shall not be disclosed by one party to any other party or
entity without the prior written consent of the other party except as may be
required by law.
10). Assignment Use
GPRE may not assign its rights and obligations under this Letter of Agreement
and the contract without prior written consent of BNSF.
11). Term of the Contract
Except as otherwise provided above, the term of the Con tract shall be nine (9)
years commencing from the effect ive date of the Con tract or the date of the
first billed shipment from the ethanol plant (per section 8), whichever is
later. If subsequent renovations are required, the term of this agreement will
be extended by mutual agreement. Extension of this agreement will not be
unreasonably withheld by either party.
- The maximum amount to be paid under this price authority is 3,500,000 dollars.
