EXHIBIT 10
A RAIL TRANSPORTATION AGREEMENT
AMONG
BURLINGTON NORTHERN RAILROAD COMPANY,
THE UNION PACIFIC RAILROAD COMPANY
AND
WESTERN RESOURCES, INC.
TABLE OF CONTENTS
Article I. GENERAL DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 2
Article II. EFFECTIVE DATE AND TERM OF AGREEMENT . . . . . . . . . . . . . . 4
Article III. TRANSPORTATION PROVIDED UNDER THIS AGREEMENT . . . . . . 5
A. Transportation Services. . . . . . . . . . . . . . . . . . . . . 5
B. Routing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
C. Transportation of Empty Railcars . . . . . . . . . . . . . . . . 5
Article IV. EQUIPMENT COMMITMENTS. . . . . . . . . . . . . . . . . . . . . . 6
A. Railcar Supply . . . . . . . . . . . . . . . . . . . . . . . . . 6
B. Railcar Specifications . . . . . . . . . . . . . . . . . . . . . 6
C. Railcar Repairs and Maintenance. . . . . . . . . . . . . . . . . 7
D. Shipper Supplied Railcars Damaged or Destroyed . . . . . . . . . 7
E. Substitute Railcars Damaged or Destroyed . . . . . . . . . . . 10
F. Shipper Supplied Railcars Damaged or Destroyed
Due to Mechanical Defect . . . . . . . . . . . . . . . . . . . .11
G. Locomotives and Cabooses . . . . . . . . . . . . . . . . . . . 12
Article V. SHIPPER'S VOLUME COMMITMENTS . . . . . . . . . . . . . . . . . 13
A. Minimum Annual Volume. . . . . . . . . . . . . . . . . . . . . 13
B. Train Cycle Time and Tonnage . . . . . . . . . . . . . . . . . 15
Article VI. TRAIN SIZE AND WEIGHT; LOADING AND UNLOADING . . . . . . . . . 15
A. Train Size . . . . . . . . . . . . . . . . . . . . . . . . . . 15
B. Designation of Origins . . . . . . . . . . . . . . . . . . . . 15
C. Loading and Unloading; Loading and Unloading
Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . .16
D. Advance Notice . . . . . . . . . . . . . . . . . . . . . . . . 18
E. Transportation of Train Through Loading
and Unloading Facilities . . . . . . . . . . . . . . . . . . . .18
F. Loading Time . . . . . . . . . . . . . . . . . . . . . . . . . 18
G. Unloading Time . . . . . . . . . . . . . . . . . . . . . . . . 19
H. Placement. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
I. Loading Disability . . . . . . . . . . . . . . . . . . . . . . 22
J. Unloading Disability . . . . . . . . . . . . . . . . . . . . . 23
K. Notices for Train Movement . . . . . . . . . . . . . . . . . . 24
Article VII. WEIGHING AND DETERMINATION OF WEIGHTS. . . . . . . . . 25
Article VIII. HOLDING OR RELEASING OF TRAIN CREWS
AND/OR LOCOMOTIVES . . . . . . . . . . . . . . . . . . .26
A. Hold Charge. . . . . . . . . . . . . . . . . . . . . . . . . . 26
B. Release Charge . . . . . . . . . . . . . . . . . . . . . . . . 27
Article IX. MISCELLANEOUS HANDLING OF RAILCARS . . . . . . . . . . 28
A. Removal, Rotation and/or Addition of Railcars. . . . . . . . . 28
B. Out-of-Route Movement. . . . . . . . . . . . . . . . . . . . . 29
C. Railcar Storage Charge . . . . . . . . . . . . . . . . . . . . 30
D. Switching Charge . . . . . . . . . . . . . . . . . . . . . . . 30
E. Service Maintenance. . . . . . . . . . . . . . . . . . . . . . 31
Article X. CONTRACT RATES . . . . . . . . . . . . . . . . . . . . 32
A. Base Rates . . . . . . . . . . . . . . . . . . . . . . . . . . 32
B. Application of Base Rates. . . . . . . . . . . . . . . . . . . 32
C. Rates for Shipments in Early 1993. . . . . . . . . . . . . . . 33
Article XI. ADJUSTMENTS TO RATES AND CHARGES . . . . . . . . . . . 33
Article XII. PAYMENT PROCEDURES . . . . . . . . . . . . . . . . . . 37
Article XIII. FORCE MAJEURE. . . . . . . . . . . . . . . . . . . . . 38
Article XIV. LIABILITY FOR COAL LOSS OR DAMAGE. . . . . . . . . . . 40
Article XV. CLAIMS PROCEDURES. . . . . . . . . . . . . . . . . . . 41
A. Overcharges. . . . . . . . . . . . . . . . . . . . . . . . . . 41
B. Undercharges . . . . . . . . . . . . . . . . . . . . . . . . . 41
C. Damage to Equipment. . . . . . . . . . . . . . . . . . . . . . 41
D. Coal Loss or Damage. . . . . . . . . . . . . . . . . . . . . . 41
E. Amount Due Under Claims. . . . . . . . . . . . . . . . . . . . 42
Article XVI. CHOICE OF LAW. . . . . . . . . . . . . . . . . . . . . 42
Article XVII. SEVERABILITY AND CANCELLATION IN THE
EVENT OF CHANGE IN LAW OR REGULATIONS. . . . . . . . . .42
Article XVIII. TERMINATION. . . . . . . . . . . . . . . . . . . . . . 43
Article XIX. BINDING EFFECT . . . . . . . . . . . . . . . . . . . . 43
Article XX. NONDISCLOSURE: CONFIDENTIALITY . . . . . . . . . . . . 43
Article XXI. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . 44
Article XXII. ENTIRETY AND AMENDMENTS. . . . . . . . . . . . . . . . 45
Article XXIII. NONWAIVER OF RIGHTS AND OBLIGATIONS. . . . . . . . . . 45
Article XXIV. RECORDS. . . . . . . . . . . . . . . . . . . . . . . . 46
Article XXV. INDEMNITIES. . . . . . . . . . . . . . . . . . . . . . 46
Article XXVI. CONSTRUCTION OF TERMS. . . . . . . . . . . . . . . . . 48
Article XXVII. CAPTIONS . . . . . . . . . . . . . . . . . . . . . . . 48
Article XXVIII. EFFECT OF PRIOR AGREEMENTS . . . . . . . . . . . . . . 48
Article XXIX. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 48
Article XXX. DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . 49
A. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
B. Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . 49
C. Alternative Dispute Resolution Procedure . . . . . . . . . . . 50
RAIL TRANSPORTATION AGREEMENT
ICC-BN-C-2801
This Agreement, made as of this 27th day of January, 1993,
by and among the Union Pacific Railroad Company (UP), a Utah
Corporation, Burlington Northern Railroad Company (BN), a
Delaware Corporation (hereinafter collectively referred to as
Railroads), and Western Resources, Inc. (Shipper), a Kansas
Corporation, on behalf of itself and the owners of the Jeffrey
Energy Center.
WHEREAS, Shipper has entered into a supply contract for
Powder River Basin Coal for its Jeffrey Energy Center (JEC),
located near St. Marys, Kansas, and may enter into one or more
other such contracts in the future for a supply of coal to JEC,
and desires to provide for transportation of such Coal to JEC;
and
WHEREAS, Railroads are common carriers subject to the
Interstate Commerce Act, 49 U.S.C. Paragraph 10101, et seq., and
Railroads and Shipper desire to enter into a contractual
arrangement pursuant to 49 U.S.C. Paragraph 10713 whereby Shipper
will cause to be loaded and Railroads will transport Coal
originating at mines
located in the Powder River Basin of Wyoming and destined to JEC;
and
WHEREAS, the parties also desire to provide for
transportation, equipment, service and volume commitments, rates,
adjustments to rates and charges, payment procedures, and other
matters hereinafter specified; and
WHEREAS, the parties further desire that the contractual
arrangement promote maximum equipment utilization and efficiency;
THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the
receipt of which is hereby acknowledged, Railroads and Shipper
agree as follows:
Article I. GENERAL DEFINITIONS.
For purposes of this Agreement:
A. AAR Rules shall mean the rules set out in the Field
Manual and Office Manual of the Interchange Rules
adopted by the Association of American Railroads (AAR),
as amended from time to time.
B. Coal shall mean that mineral substance which is
classified as subbituminous coal by the American
Society for Testing and Materials and whose Standard
Transportation Commodity Code (STCC) begins with the
three digits 11-2 as set forth in STCC Tariff 6001-V.
This substance may be processed or treated but not
dried.
C. Destination shall mean JEC near St. Marys, Pottawatamie
County, Kansas.
D. ICC shall mean the Interstate Commerce Commission or
its successor agency or body having the same or similar
jurisdiction over common carriers by rail in interstate
commerce.
E. Loading Facility shall mean the equipment and support
facilities used to load Trains with Coal at Origin
including, but not limited to: rail trackage; raw coal
hopper; crusher, processing and/or preparation plants;
all coal storage facilities; and conveyor systems from
raw coal hopper through all intermediate phases to the
railcar loading chutes.
F. Origins shall mean the Eagle Butte and Belle Ayr mines
of AMAX Coal West, Inc.; provided, if Shipper's Mine
Operator provides Shipper with Coal from some other
mine located in Campbell and Converse Counties,
Wyoming, then Railroads shall transport said Coal
subject to the same rates, charges and other provisions
of this Agreement.
G. Shipper's Mine Operator shall mean Amax Coal West, Inc.
or its successor as operator of the mines identified in
Article I.F. or any other operator of a mine located in
Campbell and Converse Counties, Wyoming.
H. Shipper Supplied Railcar shall mean a railcar furnished
by Shipper and placed in service under this Agreement.
I. Ton shall mean a ton of 2,000 pounds avoirdupois.
J. Train shall mean not less than 115 railcars,
locomotives and a caboose or other end of train device,
as described in Article VI.A., and assembled as an
operating unit.
K. Unloading Facility shall mean the equipment necessary
to remove Coal from railcars and transfer such Coal to
stockpiles and/or bunkers at Destination.
Article II. EFFECTIVE DATE AND TERM OF AGREEMENT.
1. This Agreement shall become effective upon filing of a
contract summary with the ICC; provided, until the ICC approves
this Agreement performance hereunder shall be subject to the
conditions of 49 C.F.R. Paragraph 1313.3(a). The term shall
commence on the Effective Date and shall terminate at 11:59 p.m.,
Mountain Standard Time, December 31, 2013. Within five (5) days
of receipt by BN of a fully executed copy of this Agreement, BN
shall file the requisite contract summary with the ICC pursuant
to 49 U.S.C. Paragraph 10713 and regulations promulgated
thereunder.
2. The parties hereto acknowledge that the rates, terms,
and conditions set forth herein were mutually agreed upon on
January 27, 1993. As part of their agreement, the parties agreed
to apply the provisions of this Agreement, under authority of
49 C.F.R. Paragraph 1313.3(c), to all transportation service
provided by Railroads on or after such date and prior to this
Agreement's approval by the ICC. It was further agreed that upon
approval of this Agreement by the ICC all shipments moving from
Origins to Destination shall be treated as having moved pursuant
to this Agreement, but only if such shipments complied with the
terms and provisions of this Agreement in all respects.
Article III. TRANSPORTATION PROVIDED UNDER THIS AGREEMENT.
A. Transportation Services.
Railroads shall transport all Coal loaded in railcars
and tendered by Shipper at Origins and shall deliver loaded
railcars to Destination as set forth in this Agreement.
B. Routing.
Except as otherwise provided in this Agreement, loaded
Trains under this Agreement shall be transported via BN-
Northport, Nebraska-UP from Origins to Destination and empty
railcars will be transported via the reverse route (Planned Route
of Movement); provided, Railroads may, at their option, use
alternate routes for their operating convenience, subject to the
same rates, charges and other provisions of this Agreement. BN's
Planned Route of Movement from Origins to Northport, Nebraska, is
via Edgemont, South Dakota. If Railroads change the Planned
Route of Movement from that designated in this Section, they must
first obtain written approval from Shipper, which approval will
not be unreasonably withheld. If Shipper's designated railcar
repair and/or maintenance facility would be left off the Planned
Route of Movement on account of a change in the Planned Route of
Movement utilized by Railroads, then Railroads may use such
alternate route only if Shipper's Trains are transported to and
from such railcar repair and/or maintenance facility at no charge
to Shipper.
C. Transportation of Empty Railcars.
As part of the transportation provided under this
Agreement, Railroads shall, at no additional charge to Shipper,
transport empty railcars to Origins from Destination as described
in Section B., above.
Article IV. EQUIPMENT OBLIGATIONS.
A. Railcar Supply.
1. Shipper shall furnish sufficient railcars, including
spares, to assemble Trains of 115 railcars for shipments under
this Agreement at no charge to Railroads, except as otherwise
provided in this Agreement.
2. BN shall store spare Shipper Supplied Railcars at
locations that it deems appropriate in order that such railcars
will be available for substitution in a Train; provided, BN shall
not be obligated to store more than 12 spare Shipper Supplied
Railcars for each Train placed in service by Shipper. Shipper
shall not be assessed storage charges for such spare railcars.
B. Railcar Specifications.
All railcars used in service under this Agreement shall
be open-top rotary coupler equipped railcars and shall have a
total allowable maximum gross weight on rail of not less than
263,000 pounds each. Except as may be otherwise mutually agreed
upon by the parties, all railcars shall in all respects be
suitable and ready for loading when Actual Placement is made at
Origins and shall be compatible with the Loading Facility and the
Unloading Facility. Such railcars shall also meet or exceed the
AAR Rules, as amended from time to time, and shall have been
inspected and approved in accordance with Federal Railroad
Administration (FRA) regulations or those of a successor agency,
as amended from time to time.
C. Railcar Repairs and Maintenance.
1. Except as otherwise provided under this Agreement,
Shipper shall be responsible for paying for and/or performing all
repairs and maintenance to keep Shipper Supplied Railcars in
compliance with AAR Rules and FRA regulations. Railroads may
perform enroute repairs to Shipper Supplied Railcars under the
AAR Rules and Shipper shall pay the standard charges pursuant to
the AAR Rules.
2. Except as otherwise provided under this Agreement,
Railroads shall be responsible for performing and paying for all
repairs and maintenance (including enroute repairs and
maintenance under the AAR Rules) to keep any railcars provided by
the Railroads in compliance with AAR Rules and FRA regulations.
D. Shipper Supplied Railcars Damaged or Destroyed.
1. Damage.
If a Shipper Supplied Railcar is damaged under
circumstances in which the AAR Rules make Railroads responsible
for the damage and Railroads become aware of such damage,
Railroads shall:
(a) Provide Shipper prompt written notice of such
damage giving railcar initial and number, the current location of
the railcar, the date and place the damage occurred, a
description of the damage, and the Railroads' current belief
concerning the cause of the damage; and
(b) Perform repairs to Shipper Supplied Railcars at
a railroad repair facility at no charge to Shipper, exercising
due diligence to complete such repairs within 180 days after the
date the damage is discovered, and paying for any transportation
costs to and from such facility; or
(c) Perform repairs, at no charge to Shipper, at a
non railroad repair facility designated by Railroads and
acceptable to Shipper, exercising due diligence to complete such
repairs within 180 days after the date damage is discovered and
paying for any transportation costs to and from such facility.
2. Destruction.
If a Shipper Supplied Railcar is damaged to the extent
that the cost of repair would exceed the railcar's AAR settlement
value, as determined by Rule 107(B) of the AAR Rules, as amended
from time to time (AAR Settlement Value), or is otherwise
destroyed under circumstances in which the AAR Rules make
Railroads responsible for damage or destruction, Railroads shall
pay Shipper the AAR Settlement Value for the railcar so damaged
or destroyed. At Shipper's option, Shipper may repair the
railcar without regard to cost, in which event Railroads'
liability for such railcar shall not exceed its AAR Settlement
Value.
3. Replacement of Damaged or Destroyed Shipper
Supplied Railcars by Railroads.
If Railroads damage a Shipper Supplied Railcar under
circumstances in which the AAR Rules make Railroads responsible
for such damage, Railroads, upon being made aware of such damage,
shall provide equivalent or greater substitute railcar capacity
in tons at no charge to Shipper until the earlier of (1) 180 days
from the date Railroads become aware of such damage or (2) the
date that repairs are completed and the Shipper Supplied Railcar
is returned to service. If Railroads provide substitute railcars
as provided in this Section which are not the same size and
capacity as Shipper Supplied Railcars, then Railroads will use
their best efforts to assemble Trains in such a manner as to
prevent the inter-mingling of substitute railcars with Shipper
Supplied Railcars.
In the case of a destroyed Shipper Supplied Railcar for
which Railroads are responsible under the AAR Rules, Railroads
shall provide equivalent or greater substitute railcar capacity
in tons at no charge to Shipper until the earlier of (i) 365 days
following the date Railroads become aware of such destruction or
(ii) the date Shipper actually replaces such destroyed railcars.
Once Railroads pay for destruction of one of Shipper's railcars,
Railroads shall have no further obligation to provide an
equivalent capacity substitute for that railcar.
If, at the end of ten (10) business days after the date
Railroads become aware of the damage or destruction of a Shipper
Supplied Railcar, Railroads do not supply equivalent railroad
railcar capacity in tons, Railroads shall pay to Shipper, an
amount equal to $25.00 per day, commencing with the 11th day
after the date Railroads become aware of the damage or
destruction, for each damaged or destroyed railcar that a
substitute is not supplied, until the railcar is repaired or
replaced or Railroads provide a substitute railcar, whichever is
sooner.
4. Settlement.
If the damage or destruction of railcars covered by
this Agreement occurs in such a manner that both Shipper and
Railroads are responsible for such damage or destruction, Shipper
and Railroads shall each pay the proportion of the damage or
destruction equal to their responsibility for such damage or
destruction.
5. Use of Shipper Supplied Railcars.
Upon Shipper's agreement, Railroads may use Shipper
Supplied Railcars, if available, instead of providing Railroads'
railcars by paying Shipper $25.00 per railcar per day or fraction
thereof. For all other purposes of this Agreement said railcars
shall remain Shipper Supplied Railcars.
E. Substitute Railcars Damaged Or Destroyed.
1. Damage.
If a substitute railcar provided by Railroads is
damaged under circumstances in which the AAR Rules make Shipper
responsible for the damage and upon becoming aware of such
damage, Shipper shall:
(a) provide Railroads prompt written notice of such
damage giving railcar initial and number, the current location of
the railcar, the date and the place the damage occurred, a
description of the damage and Shipper's current belief as to the
cause of the damage, and
(b) perform repairs to such railcars at a non-
railroad repair facility at no charge to Railroads or pay
Railroads for the cost of repairs performed at a railroad repair
facility designated by Railroads, exercising due diligence to
complete such repairs within 180 days after the date the damage
is discovered, paying for any transportation costs to and from
such facility, and providing a substitute Shipper Supplied
Railcar at no charge to Railroads until the repairs are
completed.
2. Destruction.
If a substitute railcar provided by Railroads is
damaged to the extent that the cost of transportation and repair
would exceed the railcar's AAR Settlement Value, or is otherwise
destroyed under circumstances in which the AAR Rules make Shipper
responsible for such damage or destruction:
(a) Shipper shall pay Railroads the AAR Settlement
Value for the railcar so damaged or destroyed or, at Railroads'
option, Railroads may repair the railcar without regard to cost,
in which event Shipper's liability for such railcar shall not
exceed its AAR Settlement Value; and
(b) Shipper shall provide a substitute Shipper
Railcar at no charge to Railroads for 30 days or until Shipper
pays to Railroads the AAR Settlement Value, whichever is sooner.
F. Shipper Supplied Railcars Damaged
or Destroyed Due to Mechanical Defect.
Railroads shall have no obligation to repair or replace
a Shipper Supplied Railcar where its damage or destruction is due
to a defect in the materials, workmanship, or design of the
railcar. If a dispute arises concerning the issue of whether any
damage or destruction of a railcar was the result of a defect in
material, workmanship or design, said dispute shall be resolved
in accordance with the applicable law under the procedures
prescribed by Article XXX of this Agreement; provided, Railroads
will not be obligated to provide substitute or replacement
railcars until it is determined that the cause of such damage or
destruction was attributable to the Railroads and not due to
defects in material, workmanship or design. If it is determined
that the damage or destruction was attributable to the Railroads,
Railroads shall pay Shipper the rate specified in Article IV,
Section D.5. of this Agreement for each day that Shipper was
required to provide substitute railcars during the pendency of
the dispute. If Railroads have supplied substitute railcars and
it is determined that the damage or destruction was attributable
to defects in material, workmanship or design of the Shipper
Supplied Railcars, then Shipper shall pay Railroads the rate
specified in Article IV, Section D.5. of this Agreement for each
day that Railroads were required to provide substitute railcars
during the pendency of the dispute.
G. Locomotives and Cabooses.
Railroads shall provide any necessary locomotives,
cabooses and/or end-of-train devices, related transportation
facilities, equipment and personnel needed, in Railroads' sole
discretion, for Railroads' provision of transportation under this
Agreement. Railroads shall perform all repairs and maintenance
on such locomotives, cabooses and/or end-of-train devices,
Railroads' related transportation facilities, and equipment at no
charge to Shipper. In the event Railroads' locomotive or other
equipment is damaged or destroyed while on a mine track at an
Origin or Shipper's track at Destination, Shipper or the Mine
Operator will give Railroads verbal notification as soon as
practicable after the damage or destruction occurs. This
notification shall include the initial and number for each
damaged or destroyed locomotive power unit, end of train device,
or other equipment, and the nature or cause of the damage or
destruction.
Shipper shall reimburse Railroads for the cost of
reasonable repairs, transportation, and/or replacement of
locomotives and/or end-of-train devices to the extent such
charges are attributable to the damage or destruction for which
Shipper is liable under applicable law.
Article V. SHIPPER'S VOLUME COMMITMENTS.
A. Minimum Annual Volume.
1. During each calendar year of this Agreement, Shipper
shall load for transportation and Railroads shall transport,
pursuant to this Agreement, the greater of 6,000,000 Tons or 100%
of all tons of Coal shipped from Origins for delivery to JEC
(Minimum Annual Volume). Tonnage tendered by Shipper between
January 1 and January 27, 1993, pursuant to tariff BN 4181-A
shall be credited to Shipper's 1993 Minimum Annual Volume.
Shipper agrees to pay Railroads for movement of the
Minimum Annual Volume at the Contract Rates set out in Article X
unless such payment is excused by an event of Force Majeure or
reduced under Paragraph A.3 of this Article.
2. Within 30 days after the end of each calendar year,
Shipper shall send a written statement to Railroads certifying
for such calendar year the aggregate number of Tons of Coal
tendered for transportation under this Agreement for use at JEC,
the total number of tons of Coal shipped from Origins for use at
JEC and whether Shipper has met the Minimum Annual Volume.
3. In the event Shipper fails to ship the Minimum Annual
Volume in any year and such failure is not due to an event of
Force Majeure or Railroads' failure to meet their obligations
under this Agreement, Shipper shall pay Railroads an amount equal
to the difference between the Minimum Annual Volume and the tons
actually shipped times 37.5% of the 115 tons per railcar rate in
effect on December 31 of the year in which the shortfall occurs.
Within 15 days of receipt of an invoice for the same, Shipper
shall make payment of such amount to Railroads. Such payment
will be considered liquidated damages (not a penalty) and shall
satisfy Shipper's Minimum Annual Volume obligation for the year
in which the shortfall occurs. This liquidated damages provision
is meant to accommodate Shipper in case of genuine difficulty in
taking delivery of the Minimum Annual Volume, such as reduced
demand for electricity, and is not to be used to allow a route
other than the route shown in Article III, Section B.
B. Train Cycle Time and Tonnage.
Not later than each November 1 during the term of this
Agreement, Railroads shall provide to Shipper its non-binding
projected Train cycle times for the next calendar year, by month,
for Trains moved pursuant to this Agreement. Not later than each
December 1 during the term of this Agreement, Shipper shall
provide to Railroads a non-binding declaration of Tons of Coal
anticipated to be shipped under this Agreement in the next
calendar year, by month.
Article VI. TRAIN SIZE AND WEIGHT; LOADING AND UNLOADING.
A. Train Size.
If Shipper provides sufficient empty Shipper Supplied
Railcars to Railroads, Railroads shall assemble Trains of not
less than 115 railcars for movement to, and loading at, Origins.
Notwithstanding any other provision of this Agreement to the
contrary, the minimum Train size requirement of 115 cars shall be
reduced for the following reasons: (1) an event of Force Majeure
which affects Train size; (2) railcars bad-ordered by the
Railroads enroute, when Shipper has made sufficient spares
available to Railroads; (3) the Railroads fail to utilize spare
railcars and place them into service; or (4) any other cause
attributable to the Railroads.
B. Designation of Origins.
1. For each calendar month in which Shipper intends to
tender Coal for transportation pursuant to this Agreement,
Shipper shall give a non-binding notice to Railroads by
telephone, confirmed in writing, not later than the fifteenth day
of the preceding calendar month, of the Origin(s) from which it
intends to load Coal and the number of Trains it intends to have
in service.
2. Shipper may change the Origin of a Train, without
charge, from that which it specified under paragraph 1 of this
Section by giving BN notice by telephone, confirmed by facsimile,
of such change prior to the departure of the empty Train from
Alliance, Nebraska. If such change is requested by Shipper after
the departure of the empty Train from Alliance, Nebraska, a
charge of $500.00 per train will apply; provided, if any such
route change is made for the Railroads' convenience, then no
charge shall be made.
C. Loading and Unloading; Loading and
Unloading Facilities.
1. If Railroads provide locomotives which will operate the
Trains through the Loading Facility at Origins at a controlled
speed so as to permit uniform loading of each railcar, Shipper
shall be responsible for the loading of railcars, including, but
not limited to, improper loading, underloading, or overloading,
and for providing Loading Facilities; provided, Shipper's Mine
Operator shall be permitted to underload railcars which contain
one or more Tons of snow, ice or other non-Coal items by the
amount of such foreign matter; provided further, subject to
Article VII, Section C., Shipper's Mine Operator may load
railcars up to the lower of 286,000 pounds gross weight on rail
or the total allowable capacity of the railcar. Shipper shall
also be responsible for the unloading of railcars at Destination,
and for providing an Unloading Facility. Shipper shall also be
responsible for ensuring that railcars released after unloading
are free of any Coal which, in the opinion of Railroads, makes
such railcars unsafe to transport.
2. Overloaded Railcars discovered at Origin shall be
reduced and the remaining coal reasonably distributed throughout
the railcar by Shipper or Shipper's Mine Operator before the
release of the Train to Railroads, and Origin Detention Charges
shall be assessed against Shipper when reducing the overload
causes Loading Time to exceed Free Loading Time. If Railroads
discover substantially overloaded Railcars after a loaded Train
is enroute to Destination, Railroads may notify Shipper pursuant
to Section K of this Article by telephone and request that
Shipper correct the overload at its expense. If Shipper does not
agree to such a request, Railroads may correct the overload, with
any cost reasonably incurred by them in doing so to be reimbursed
by Shipper.
3. Railroads may remove a substantially overloaded railcar
or railcars from the Train. Railroads will notify Shipper by
telephone of such removal, and Shipper shall remove the excess
Coal at its own expense. Upon notification by Shipper that the
excess Coal has been removed, Railroads will return the removed
railcar or railcars to service. For each such substantially
overloaded railcar removed from and returned to service, Shipper
shall pay Railroads a charge of $225 per hour (including any
fraction of an hour) for the time spent in switching a
substantially overloaded railcar out of and back into the Train.
D. Advance Notice.
Railroads shall provide to Shipper or Shipper's Mine
Operator at Origin and Shipper at Destination, as the case may
be, not less than four hours advance notice by radio or telephone
of the arrival of empty Trains at a Loading Facility and of
loaded Trains at the Unloading Facility. If Railroads fail to
provide at least four hours advance notice to Shipper or
Shipper's Mine Operator, as the case may be, then a Train's
Unloading or Loading Free Time shall not commence until four
hours after such notice is given or the actual time when loading
or unloading commences, whichever is earlier.
E. Transportation of Trains Through Loading and
Unloading Facilities.
At Origins, Railroads shall provide locomotives
compatible with loading equipment at Origin and Train crews to
transport Trains through the Loading Facility in a manner which
will facilitate the full and uniform loading of each railcar. At
Destination, Railroads shall provide locomotives compatible with
unloading equipment at Destination and Train crews to position
each Train at the Unloading Facility in order that the Shipper
can engage the Unloading Facility railcar indexer to facilitate
the full unloading of each railcar within the Unloading Free
Time.
F. Loading Time.
1. A Train's loading time shall commence when the first
locomotive of the Train has arrived at the point designated in
BN's timetable as the point at which the Train crew must stop the
Train prior to entering the Shipper's Mine Operator's track
("Designated Point") and the Train crew has requested loading
instructions from Shipper's Mine Operator or when the Train is
constructively placed, as defined in Section H of this Article,
and shall end when Shipper or Shipper's Mine Operator has
released the Train to BN (Loading Time).
2. Shipper shall pay no additional charge if Shipper or
Shipper's Mine Operator releases the Train within the first four
hours of Loading Time (Loading Free Time). For each hour
(including any fraction thereof) that a Train's Loading Time
exceeds its Loading Free Time, Shipper shall pay BN an Origin
Detention Charge of $225.00. When a Loading Disability under
Section I of this Article or delay caused by Railroads occurs
during a Train's Loading Free Time, Shipper's Loading Free Time
shall be extended for a period of time equal to the duration of
said Loading Disability.
3. If a Train arrives at an Origin before another Train
has been released, the second and subsequent Train(s) shall not
be considered Constructively Placed, and Loading Time for such
Train shall not commence, until it reaches the Designated Point.
G. Unloading Time.
1. A Train's unloading time shall commence with the actual
placement in position to unload at Destination, or when the Train
is Constructively Placed, as defined in Section H of this
Article, and shall end when Shipper has released the unloaded
Train to UP (Unloading Time).
2. Shipper shall pay no additional charge if Shipper
releases the unloaded Train within the first six hours of
Unloading Time (Unloading Free Time). For each hour or fraction
thereof that a Train's Unloading Time exceeds its Unloading Free
Time, Shipper shall pay UP a Destination Detention Charge of
$225.00; provided, when an Unloading Disability under Section J
of this Article occurs during a Train's Unloading Free Time,
Shipper's Unloading Free Time shall be extended for the duration
of Unloading Disability Time as defined in Section J of this
Article.
3. If Coal is frozen in railcars upon arrival at
Destination, to the extent thawing or loosening is required to
permit unloading, the Unloading Free Time shall be extended up to
twelve (12) hours for the unloading of such Train.
4. If a Train arrives at Destination before another Train
has been released, the second and subsequent Train(s) shall not
be considered Constructively Placed, and Unloading Time for such
Train shall not commence, until the earlier of the expiration of
the Unloading Free Time of the prior Train or upon the release of
the prior Train.
H. Placement.
1. Actual Placement occurs when the first locomotive of
the Train has arrived at the Designated Point on the Shipper's
Mine Operator's or Shipper's track and the train crew requests
loading or unloading instructions from the Shipper's Mine
Operator or Shipper.
2. A Train shall be considered Constructively Placed for
purposes of Sections F and G of this Article when Railroads
receive notice from Shipper or Shipper's Mine Operator that
(a) the Train cannot be positioned on Shipper's Mine
Operator's track at an Origin due to any cause attributable to
Shipper or Shipper's Mine Operator, or
(b) the first railcar of a Train cannot be positioned
to unload at Destination due to any cause attributable to
Shipper.
3. A Constructively Placed Train shall be held at the
nearest available hold point as determined by Railroads.
Immediately upon arrival of the Train at the hold point the
Railroads shall notify Shipper or Shipper's Mine Operator by
electronic transmission, such notice to be confirmed in writing,
of the date and time that hold time begins. Immediately upon
departure of the Train from the hold point, Railroads shall
notify Shipper or Shipper's Mine Operator by electronic
transmission, such notice to be confirmed in writing, of the date
and time that hold time ends.
4. For purposes of computing the Loading Time of a
Constructively Placed Train under Section F of this Article:
(a) The time elapsed while transporting a
Constructively Placed Train from the hold point to a Loading
Facility shall be excluded from Loading Time; and
(b) If the Train must reverse direction to reach an
available hold point, the time elapsed from the Railroads'
receipt of the hold notice to the return of the Train to the
point of reverse direction shall be included in Loading Time.
5. For purposes of computing the Unloading Time of a
Constructively Placed Train under Section G of this Article:
(a) The time elapsed while transporting a
Constructively Placed Train from the hold point to the Unloading
Facility shall be excluded from Unloading Time; and
(b) If the Train must reverse direction to reach an
available hold point, the time elapsed from the Railroads'
receipt of the hold notice to the return of the Train to the
point of reverse direction shall be included in Unloading Time.
I. Loading Disability.
"Loading Disability" means any of the following events
which results in the inability to load Coal into a Train at an
Origin: (i) an Act of God; (ii) a strike or other labor
disturbance; (iii) a riot or other civil disturbance; (iv) snow
and/or ice accumulation sufficient to immobilize Train operations
and/or prevent loading of such Train; (v) governmental acts or
regulations; (vi) Railroads' failure to provide Train crews; or
(vii) mechanical or electrical breakdown, explosion, fire or
other damages to equipment in a Loading Facility or the Train
then being utilized by Shipper. Shipper is currently using its
Mine Operator's "Batch Loading System" at both Eagle Butte and
Belle Ayr mines. If these systems fail and Shipper's Mine
Operator must resort to flood loading railcars, Shipper may not
declare a Loading Disability; provided, Shipper shall be given an
additional two free hours to load each Train that must be loaded
using the flood method. "Loading Disability Time" means the
period of time for which Shipper or Shipper's Mine Operator is
prevented from loading a Train at an Origin due to a Loading
Disability. Shipper or Shipper's Mine Operator shall notify BN
immediately by telephone (a) as to the nature and time of
commencement of the Loading Disability and (b) as to the time of
termination of the Loading Disability. Shipper or Shipper's Mine
Operator shall confirm such telephone notification in writing to
Railroads within ten days after Loading Disability Time is
terminated.
J. Unloading Disability.
"Unloading Disability" means any of the following
events which directly results in the inability to unload Coal
from a Train at Destination: (i) an Act of God, (ii) a strike or
other labor disturbance, (iii) a riot or other civil disturbance,
(iv) snow and/or ice accumulation sufficient to immobilize Train
operations and/or prevent unloading of such Train, (v)
governmental acts or regulations, (vi) Railroads' failure to
provide Train crews or (vii) mechanical or electrical breakdown,
explosion, fire or other damage to equipment in Shipper's
Unloading Facility including shutdown for emergency maintenance
or for the purpose of investigating or preventing such
occurrence. "Unloading Disability Time" means the period of time
for which Shipper is prevented from unloading a Train at
Destination due to an Unloading Disability. Shipper shall notify
UP immediately by telephone (a) as to the nature and time of
commencement of the Unloading Disability and (b) as to the time
of termination of the Unloading Disability. Shipper shall
confirm such telephone notification in writing to Railroads
within ten days after Unloading Disability Time is terminated.
K. Notices for Train Movement.
All notices required to be given verbally or
electronically under this Article shall be given and, except for
the advance notice required in Section D of this Article,
confirmed in writing, as follows:
To Shipper: Operations Supervisor/Fuel Coordinator
Western Resources, Inc.
St. Marys, KS 66536
Phone: (913) 456-2035
FAX: (913) 456-8498
With a
Copy To: Manager-Coal
Western Resources, Inc.
818 Kansas Ave., P.O. Box 889
Topeka, KS 66601
FAX: (913) 575-1797
To BN: General Superintendent - Unit Coal Trains
Burlington Northern Railroad Company
777 Main Street, Suite 3700
Fort Worth, Texas 76102
Phone: (817) 878-1441
FAX: (817) 878-1595
To UP: Director Unit Train Operations (HDC)
Union Pacific Railroad Company
1416 Dodge Street
Omaha, Nebraska 68179
Phone: (800) 443-4319
FAX: (402) 636-7415
Any party may change its designation for receipt of notice in
accordance with Article XXI. Failure to provide notice to a
party designated to receive a copy shall not invalidate the
giving of notice.
Article VII. WEIGHING AND DETERMINATION OF WEIGHTS.
A. Shipper or Shipper's Mine Operator shall weigh loaded
railcars at Origins(s) at no charge to Railroads. Batch weighing
system, coupled in motion scales or scales used for weighing
shall be subject to certification and verification by BN or its
agent.
B. If any Train or portion thereof cannot be weighed due
to a breakdown of scales, the lading weight per railcar of such
Train or portion thereof shall be determined by averaging the
lading weight per railcar of the last ten Trains of like
equipment moving under this Agreement weighed at that Origin
prior to such breakdown. If less than ten Trains of like
equipment under this Agreement were weighed at that Origin prior
to the breakdown, the weight per railcar shall be determined by
averaging the weight per railcar of the Train(s) of like
equipment moving under this Agreement weighed at that Origin
prior to the breakdown as well as the lading weight per railcar
of Train(s) of like equipment under this Agreement first weighed
at that Origin after the scales are repaired, so as to comprise a
ten weighed Train average; provided, the lading weight of any
Train used to determine the average lading weight per railcar
under this Section shall meet the minimum Train size and weight
requirement under Article X., Section B.
C. All weights specified in this Agreement are subject to
variance for scale tolerances. If any actual weight required by
this Agreement is within + 0.5% of the weight specified in this
Agreement, then it shall be deemed to comply with the weight
specification. This Section shall not apply to the Shipper's
Minimum Annual Volume requirement of Article V., Section A.
Article VIII. HOLDING OR RELEASING OF
TRAIN CREWS AND/OR LOCOMOTIVES.
A. Hold Charge.
If Railroads must hold, in a manner, time or place
inconsistent with existing Railroads' operating procedures for
the purpose of this Agreement, locomotives and/or a Train crew
that has been called for or that is on duty due to (1) any cause
attributable to Shipper or Shipper's Mine Operator including
Shipper's request; (2) Shipper Force Majeure under Article XIII;
or (3) a Loading or Unloading Disability with respect to another
Train of Shipper, Shipper shall pay to Railroads a Hold Charge of
$100.00 for each hour (including any fraction of an hour) that
each Train is held or the applicable charge for detention, which
ever is greater. Such Hold Charge shall not apply to a Train
whose Train crew and/or locomotives are being held during
Shipper's Loading or Unloading Time, whether during Loading or
Unloading Free Time, or time for which an Origin or Destination
Detention Charge is applicable. A Hold Charge shall cease if and
when a Train crew and/or locomotives are released in accordance
with Section B of this Article and Shipper agrees to pay a
Release Charge. Railroads shall notify Shipper immediately by
telephone, confirmed in writing, that a Train is being held under
this Section and of the hold location.
B. Release Charge.
1. If, in lieu of paying or continuing to pay a Hold
Charge, Origin Detention Charge or Destination Detention Charge,
Shipper notifies Railroads by telephone, confirmed in writing,
that it elects to release locomotives and/or a Train crew that
has been called for or that is on duty, Railroads shall release
such Train crew and/or locomotives and Shipper shall cease to
incur a Hold Charge, Origin Detention Charge or Destination
Detention Charge from the time of such release, and Shipper shall
pay to Railroads a Release Charge of $1,500.00 per occurrence per
Train.
2. In addition to the circumstance described in Paragraph
1 of this Section B, if Railroads must release, in a manner, time
or place inconsistent with existing Railroad operating
procedures, a Train crew that has been called for or that is on
duty and/or locomotives due to: (1) any cause attributable to
Shipper or Shipper's Mine Operator; (2) Shipper Force Majeure; or
(3) a Loading or Unloading Disability with respect to another
Train of Shipper, Shipper shall pay to Railroads a Release Charge
of $1,500.00 per occurrence per train.
3. If there is a release under Paragraph 1 or Paragraph 2
of this Section, Railroads shall not call another Train crew
and/or locomotives back to the Train until notified to do so by
telephone, later confirmed in writing by Shipper, unless the
Train is stored on available Railroad trackage and storage
thereon is or becomes impracticable in which case Railroads may
call another Train crew and/or locomotives at their option and
expense. If, after the Train crew and/or locomotives have been
released, the Train is stored on Railroads' trackage, at
Shipper's direction, Shipper shall pay a Railcar Storage Charge
in accordance with Article IX(C). Railroads shall use their best
efforts to restore a Train crew and/or locomotives to a Train
upon telephonic notice from Shipper to do so; provided, in no
event shall restoration of a train crew and/or locomotives exceed
96 hours. In the event that restoration of a Train crew and/or
locomotives does not occur within 96 hours of notice from
Shipper, the Railroad holding the Train shall pay Shipper a fee
of $1,500 per occurrence.
Article IX. MISCELLANEOUS HANDLING OF RAILCARS.
A. Removal, Rotation And/Or Addition of Railcars.
Railroads shall, at Shipper's verbal request, confirmed
in writing, remove, rotate and/or add Shipper Supplied Railcars.
The charge for such service shall be $225.00 per hour (including
any fraction of an hour) per occurrence. For purposes of
assessing a removal, rotation and/or addition charge, time shall
be computed from the time the Train stops for removal, rotation
and/or addition of railcar(s) and end when the Train has been
reassembled and is ready for movement; provided, time during
which the crew is assigned to unrelated tasks shall not be
included. Railroads shall not be obligated to remove, rotate or
add railcars unless sufficient trackage is available at such
intermediate point to accommodate the Train and for Railroads to
perform the required removal, rotation and/or addition of
railcars. Railcars which have been bad ordered by Railroads and
their replacements from Shipper's pool of spare railcars shall be
switched in and out of service by Railroads at no charge to the
Shipper.
B. Out-of-Route Movement.
An "Out-of-Route Movement" shall be any Shipper-
requested movement of an empty Train, or any part thereof, that
differs from the routing specified in Article III(B). If, at
Shipper's verbal request, confirmed in writing, Railroads provide
an Out-of-Route Movement to a repair and/or maintenance facility
on trackage located at a point which is not directly intermediate
between an Origin and Destination on the route of movement but is
served by the Railroads, Shipper shall pay Railroads any
applicable reciprocal switch charge plus the following Out-of-
Route Charges:
Out-of-Route Charge in Cents Number of Railcars
Per Railcar Per Mile Out-of-Route Per Movement
105 Cents 25 railcars or less
95 Cents 26 to 75 railcars
85 Cents 76 railcars or more
The Out-of-Route Charge shall be calculated based upon the
greater of actual miles or a distance of at least 75 miles for
each empty movement. Notwithstanding any other provision of this
Section to the contrary, at Shipper's request, confirmed in
writing, Railroads will provide an Out-of-Route Movement, at no
charge, to a repair and/or maintenance facility on trackage
served by Railroads that is located at a point between Northport,
Nebraska and Origins via Guernsey, Wyoming; provided, a request
for such an Out-of-Route Movement shall be made to Railroads
prior to the empty Train leaving Destination; provided further,
such Out-of-Route Movements will be provided at no additional
charge no more than 12 times during any one calendar year.
C. Railcar Storage Charge.
1. If, at Shipper's verbal request, confirmed in writing,
Railroads store an empty Shipper Supplied Railcar used in service
under this Agreement on available Railroad trackage, Shipper
shall pay to Railroads a Shipper Supplied Railcar Storage Charge
of $1.00 per 24 hour period (including any fraction of a 24-hour
period) of storage time for each stored railcar. Railcars stored
pursuant to Article IV(A) hereof shall be stored without charge
to Shipper.
2. For purposes of assessing the Railcar Storage Charge,
storage time shall commence when the railcar is placed for
storage and end when Railroads receive Shipper's verbal request,
to be subsequently confirmed in writing, that the railcar be
released from storage.
3. No charge will be assessed for storing Shipper Supplied
Railcars that require enroute repairs.
D. Switching Charge.
If, at Shipper's verbal request, confirmed in writing,
Railroads provide an Out-of-Route movement to a repair and/or
maintenance facility or to trackage not served by Railroads, thus
necessitating a switch movement or other service by a connecting
railroad, Shipper shall be responsible for any switching and
other charges that are otherwise applicable under tariff or
separate agreement in addition to the charges payable by Shipper
to Railroads under this Agreement. In the event Railroads
receive such a bill from another railroad they shall provide
copies of the same to Shipper.
E. Service Maintenance.
1. Upon reasonable request from the Shipper, BN will stop
a Train on the return empty movement at Shipper's railcar repair
and/or maintenance facility at a point directly intermediate on
BN trackage between Origin and Northport, Nebraska, where
trackage is available to accommodate such Train. For removal and
replacement of railcars in said Train, Shipper shall pay BN a
charge of $225.00 per hour (including any fraction of an hour)
for such services. The time will be computed from the time the
Train stops for removal and/or replacement of railcars until such
time as the last railcar is removed from the Train or until the
last railcar is placed into the Train; provided, any time the
crew is prohibited from working for reasons attributable to
Railroads shall be deducted from the time calculation.
2. If BN is instructed to leave an entire Train of empty
railcars at the railcar maintenance facility located in Alliance,
Nebraska and remove the locomotives and caboose or end of train
device, a switching charge as provided in Article IX, Section A
shall be paid by Shipper. If BN is instructed to leave an entire
Train of empty railcars at a railcar maintenance facility located
elsewhere and remove the locomotives and caboose or end of train
device, a charge of $1,500.00 will be paid by Shipper.
Article X. CONTRACT RATES.
A. Base Rates.
The Base Rates for transportation of Coal from an
Origin to Destination under this Agreement shall be:
Trains loaded at a minimum average
weight of 115 tons per railcar
except as provided in Article IV.D.3 $ 9.90 per Ton
Trains loaded at a minimum average
weight of 103 tons per railcar
except as provided in Article IV.D.3 $10.17 per Ton
Trains loaded at a minimum average
weight of 98 tons per railcar
except as provided in Article IV.D.3 $10.43 per Ton
The Base Rates as adjusted in accordance with Article XI shall be
the Contract Rates; provided, in no case shall the rates and
charges assessed pursuant to this Agreement be lower than the
rates shown above and the charges set forth in this Agreement.
B. Application of Base Rates.
Transportation charges for a Train transported pursuant to this
Agreement shall be calculated by multiplying the greater of:
(1) actual lading weight of the Train, (determined pursuant to
Article VII in the event of a scale breakdown), or (2) minimum
average lading weight per railcar applicable under this Article,
times the greater of either (i) 115 railcars or (ii) the actual
number of railcars in the Train; provided, if one of the
conditions identified in Article VI., Section A. exists, then the
actual number of railcars shall be used. In the event Railroads
supply substitute railcars to Shipper pursuant to Article IV. D.
3, the Contract Rate applicable to the Train shall be determined
based upon the per railcar average lading weight of the Shipper
Supplied Railcars contained in the Train and thence applied to
the Railroad supplied substitute railcars in the Train without
regard to the Railroads' railcars actual capacity.
C. Rates for Shipments in Early 1993.
Railroads shall assess Shipper $12.86 per net Ton for
transportation provided under the terms of this Agreement for all
Tons shipped from January 1, 1993 through February 28, 1993.
Commencing with March 1, 1993, Railroads shall begin assessing
the applicable rate(s) specified in Section A of this Article,
less the per Ton difference between the $12.86 assessed in
January and February 1993 and that which would have otherwise
applied under the terms of this Agreement until such time as the
equivalent number of Tons have been shipped subsequent to
February 28, 1993 as those which had been (1) shipped from
January 1, 1993 through February 28, 1993 and (2) assessed a rate
of $12.86 per net Ton.
Article XI. ADJUSTMENTS TO RATES AND CHARGES.
A. Beginning July 1, 1993, adjustments to the rates and
charges in this Agreement shall be made using the methodology
described in this Article. The parties recognize that the ICC
publishes a Rail Cost Adjustment Factor (RCAF) in proceedings
currently denominated Ex Parte 290 (Sub-No. 2), Rail Cost
Recovery Procedures, and Ex Parte 290 (Sub-No. 5) Quarterly Rail
Cost Adjustment Factor. The ICC publishes an RCAF figure
unadjusted and adjusted for productivity in Ex Parte 290 (Sub-No.
5), which productivity adjustment is calculated according to
procedures established in a proceeding denominated Ex Parte 290
(Sub-No. 4), Railroad Cost Recovery Procedures - Productivity
Adjustment.
B. Beginning on July 1, 1993, and on October 1,
January 1, April 1, and July 1 during each calendar year
thereafter for the term of this Agreement, the Contract Rates and
all other Charges set forth in this Agreement shall be increased
or decreased as determined by application of the Adjustment
Factor. The Adjustment Factor shall be one (1) plus the result
of Eighty Percent (80%) multiplied by the percentage change in
the RCAF, unadjusted for productivity, (RCAF-U) as published by
the ICC in Ex Parte 290 (Sub-No. 5), Quarterly Rail Cost
Adjustment Factor (or successor proceeding) for the current
calendar quarter over the preceding calendar quarter; provided,
the Contract Rates and all other Charges shall not fall below the
base levels stated in this Agreement. Adjusted rates and charges
shall become effective on the first day of each calendar quarter,
applied retroactively if the RCAF-U is not published by that
date. Attached hereto and incorporated herein by this reference
is Exhibit A, which is intended by the parties to demonstrate the
methodology used to adjust the rates and charges as described in
this Article.
C. In computing the rates and all other charges specified
in this Agreement, the percent change in the RCAF-U shall be
rounded to a thousandth of a percent; the percent change
resulting from the multiplication of the percentage change in the
RCAF-U by 80% shall be rounded to a one hundredth of a percent;
the Adjustment Factor shall be stated to a ten thousandth; and
all rates and charges shall be rounded to a whole cent. The
rounding rule will be that any fraction less than one-half shall
be dropped, while any fraction equal to or greater than one-half
shall be increased to the next higher value.
D. It is the intent of the parties that the adjustment
methodology reflect changes in railroad input expenses as
measured by the RCAF-U. In the event that a party is of the
opinion that one or more changes to the RCAF-U adopted after the
Effective Date of this Agreement cause the RCAF-U to depart
materially from that intent, that party may invoke the provisions
of this Section to require the other parties to review the index
and seek mutual agreement as to whether the RCAF-U as changed
departs from that intent.
E. If the ICC ceases to publish the RCAF-U the parties
shall adopt an index that would replicate, as closely as
possible, changes in railroad input expenses as measured by the
RCAF-U, to be used for adjustments for the remainder of the
contract Term. The parties agree that the RCAF Adjusted for
Productivity is not an appropriate substitute index. If the
parties cannot informally agree to a substitute index then either
party may commence formal negotiations by giving the other party
notice in writing. If the parties do not agree upon a substitute
index within 90 days after the commencement of such formal
negotiations, then the matter shall be submitted to binding
arbitration in accordance with the rules of the Center of Public
Resources (CPR), except as specifically provided herein or
otherwise agreed to by the parties. Arbitration shall be
initiated by notice from one party to the other. For purposes of
this Section, Railroads shall be considered one party. Within
thirty (30) days after receipt of such notice, each party shall
designate a competent and disinterested person to act as its
arbitrator. Within twenty (20) days after their designation, the
two persons so designated shall select a competent and
disinterested third party to act as the neutral arbitrator. In
the event the first two arbitrators are unable to agree as to the
third, then the arbitrators shall apply to the CPR to designate
and appoint the third arbitrator. The arbitrators shall be
requested to select an index replicating, as closely as possible,
changes in Railroad input expenses as measured by the RCAF-U to
be used as a substitute index for the remainder of the contract
Term. The cost of the neutral arbitrator shall be borne 50
percent by the Railroads and 50 percent by the Shipper. During
the pendency of the arbitration, the Rates and Charges as last
adjusted by the RCAF-U shall be paid; provided, the substitute
index selected by the arbitrators shall be made effective from
the date of discontinuance of the RCAF-U.
F. If any party should suffer a gross inequity due to the
operation of this Agreement as a result of unusual economic
conditions, such inequities will be resolved by mutual agreement
between BN, UP and the Shipper. Either the Shipper or the
Railroads (BN and UP collectively) may invoke the provisions of
this Section any time subsequent to January 1, 2000; provided,
that once a party has invoked its initial gross inequity claim,
that party may not invoke the provisions of this Section again
prior to the latter of either (i) the fifth anniversary of the
date that the first claim was invoked or (ii) the third
anniversary date of the date the first claim was resolved. In no
case shall either party to this Agreement have the ability to
invoke the provisions of this Section more than twice during the
Term of this Agreement. A party seeking relief under this
Section shall submit with its claim the basis for and evidence
supporting its claim, as well as a statement of the relief
sought. Unless otherwise agreed by the parties, relief under
this Section shall be effective as the parties may agree or as
the final tribunal, if any, deciding the issue shall direct.
Article XII. PAYMENT PROCEDURES.
A. For all sums payable under this Agreement, Railroads
and Shipper shall invoice by means of mail or electronic transfer
of documentation. Railroads and Shipper shall pay the amount
invoiced by electronic transfer of funds within fifteen (15)
calendar days after receipt of the invoice.
B. If there is a dispute regarding applicable charges, the
party disputing the charges shall pay the undisputed amount. If
the ultimate resolution of the dispute is not in favor of the
disputing party, the disputing party shall pay the other party
the disputed amount plus simple interest at the prime rate in
effect at the Chase Manhattan Bank in New York City, New York on
the date of payment plus one percent or the maximum rate
permitted by Kansas law if less than the described rate.
C. Notwithstanding any provision of Section B to the
contrary, Shipper may not withhold any payment based upon a
dispute which is based upon the provisions of Article X., Section
A. or Article XI. If a dispute arises under those provisions and
the ultimate resolution of the dispute results in the payment of
an amount from one party to another, then such amount shall
include simple interest as calculated in Section B.
Article XIII. FORCE MAJEURE.
A. The term "Force Majeure" used herein shall mean any
cause beyond the control of the party affected which cannot be
overcome and which delays or prevents the party from the
performance of its obligations under this Agreement, in whole or
in part, including, but not limited to, an Act of God;
accumulation of snow and/or ice sufficient to immobilize or halt
the movement of loaded or empty Trains; war; insurrection; riot
or other civil disturbance; governmental acts; explosion; fire;
derailment; destruction of or damage to right of way, including
bridges; strike, lockout or other labor disturbance; or
mechanical or electrical breakdown (including shutdown for
emergency maintenance or the like which may be necessary to
mitigate or eliminate the imminent threat of explosion, fire, or
mechanical or electrical breakdown) in an Origin mine, in a
Loading Facility, in any of the facilities used by Railroads for
the transportation of Coal for Shipper, in a power generating
facility, or in the Unloading Facility to the extent that Shipper
cannot unload Coal. It shall not, however, include any change in
demand or projected demand for electrical power or generating
facilities, whether foreseeable or not. The affected party's
obligations and those of such other parties affected thereby
shall be suspended for the duration of such Force Majeure;
provided, the parties shall make all reasonable efforts to
continue to meet their obligations for the duration of the Force
Majeure.
B. If an event of Force Majeure occurs, the party affected
by a Force Majeure shall promptly notify all other parties, by
telephone or electronic transmission, as to the nature of the
Force Majeure, when it began, the expected effect on the party's
performance and its projected duration. Such party also shall
notify promptly by telephone or electronic transmission all other
parties upon the cessation of the Force Majeure. All notices
shall promptly be confirmed in writing.
C. The parties shall make all reasonable efforts to
eliminate or abate such Force Majeure and resume their
obligations expeditiously upon its cessation, except that no
party hereto will be required to acquiesce to an unfavorable
settlement of any labor dispute.
D. The suspension of any obligations owing to a Force
Majeure shall neither cause the Term of this Agreement to be
extended nor affect any rights accrued under this Agreement prior
to the Force Majeure.
E. Shipper shall be excused from its obligation under this
Agreement to ship the Minimum Annual Volume of Coal to the extent
of 16,450 tons for each continuous 24-hour period in excess of
the first 72 hours for each event of Force Majeure.
F. In the event of a Force Majeure affecting an Origin
mine or Loading Facility at an Origin then being utilized by
Shipper and if Shipper elects to purchase replacement Coal from a
Wyoming Powder River Basin Mine, such replacement Coal shall move
under this Agreement.
Article XIV. LIABILITY FOR COAL LOSS OR DAMAGE.
Railroads shall be liable for any Coal loss or damage
(including contamination or degradation) caused by their
negligence. Railroads shall not be liable for (1) Coal loss
attributable to the negligence of Shipper or Shipper's Mine
Operator; (2) Coal loss attributable solely to scale variances;
(3) wind loss or moisture loss; (4) Coal loss or damage caused by
defects in the design or manufacture of Shipper Supplied
Railcars; or (5) Coal loss or damage caused by improper loading.
Railroads' liability for lost or damaged Coal shall be limited to
the price paid for the Coal at its Origin plus transportation
charges paid therefor. In the event of alleged Coal loss or
damage, Shipper shall promptly notify Railroads by telephone,
later confirmed in writing, to allow Railroads, at its option, to
inspect and verify the loss or damage.
Article XV. CLAIMS PROCEDURES.
A. Overcharges.
Shipper shall submit claims for overcharges to
Railroads within two years following the date of delivery of the
shipment. Shipper may not offset any other payments due
Railroads under this Agreement by the amount of any claim for
overcharge.
B. Undercharges.
Railroads shall submit claims for undercharges to
Shipper within two years following the date of delivery of the
shipment. Railroads may not offset any other payments due
Shipper under this Agreement by the amount of any claim for
undercharge.
C. Damage to Equipment.
Any party shall submit claims for damage to equipment
within 60 calendar days after the occurrence of such damage. The
occurrence of such damage shall not suspend any party's
obligation to pay all charges applicable or related to the Train
in which such damage occurred, and such charges may not be offset
by the amount of any claim for damage.
D. Coal Loss or Damage.
Shipper shall submit claims for loss of or damage to
Coal to Railroads within 30 calendar days after the occurrence of
such loss or damage. The occurrence of loss of or damage to Coal
shall not suspend Shipper's obligation to pay Railroads all
charges applicable or related to the Train in which such loss of
or damage to Coal occurred, and Shipper may not offset such
charges by the amount of any claim for loss or damage to Coal.
E. Amount Due Under Claims.
The amount due for claims under this Article shall bear
simple interest at the prime rate in effect at the Chase
Manhattan Bank in New York City, New York on the date on which a
claim is submitted plus one percent or the maximum rate permitted
by Kansas law, if lower. Such simple interest shall accrue
beginning 60 days from the date on which the claim is made and
end on the date payment is made.
Article XVI. CHOICE OF LAW.
This Agreement shall be deemed a contract made in the
State of Kansas for all purposes and shall be governed by and
construed according to the law of that State.
Article XVII. SEVERABILITY AND CANCELLATION IN THE EVENT
OF CHANGE IN LAW OR REGULATIONS.
If any provision of this Agreement is held to be
unlawful or unenforceable by a decision of any court or
administrative agency having jurisdiction over this Agreement or
the parties hereto, such provision shall be considered as having
been severed from this Agreement, and the remaining provisions of
this Agreement shall continue in full force and effect. If,
however, the absence of such unlawful provision or any part
thereof would cause the maintenance of this Agreement to result
in a material adverse departure from the obligations or benefits
that would otherwise have been realized from this Agreement by
any party, this Agreement may be terminated at the option of such
party upon 90 days written notice by Certified Mail, Return
Receipt Requested, to all other parties, but only after a good
faith attempt to remedy such absence.
Article XVIII. TERMINATION.
Termination of this Agreement by expiration of the Term
of this Agreement, shall not release any party from any
obligation that may have accrued prior to such termination, nor
shall it preclude any party from exercising any remedies it may
have in law or equity to enforce such obligations.
Article XIX. BINDING EFFECT.
This Agreement shall be binding upon and inure to the
benefit of Railroads and Shipper, their successors and assigns.
Article XX. NONDISCLOSURE; CONFIDENTIALITY.
Except as otherwise provided in this Article, no party
hereto shall disclose any information regarding any part of this
Agreement not otherwise included in the nonconfidential contract
summary filed with the ICC except upon the written consent of all
parties to this Agreement, or without written consent if counsel
advises that disclosure is required by law, required for
regulatory purposes or required for evidentiary purposes in any
legal or arbitration proceeding or if disclosure is to the
external auditors, consultants, or counsel of a party. Prior to
disclosure to the external auditors, consultants or counsel of
any party such auditors, consultants or counsel shall first sign
an agreement in the form attached as Exhibit B. The parties
hereto will make every effort to protect the confidentiality of
the rates and charges under this Agreement. Where disclosure is
required, notice shall be given to all other parties, in advance
of disclosure.
Article XXI. NOTICES.
Except as otherwise provided herein, and particularly
in Article VI, all notices required under this Agreement shall be
in writing and shall be deemed properly given when delivered in
person to the authorized representative of a party designated
below or when sent by mail, telegram, telecopy, or telex, or by
any electronic transmission of printed material and addressed as
follows:
Shipper's address is:
Vice President-Electric Production
Western Resources, Inc.
818 Kansas Ave., P.O. Box 889
Topeka, KS 66601
Copy to:
Manager-Coal
Western Resources, Inc.
818 Kansas Ave., P.O. Box 889
Topeka, KS 66601
BN's address is:
Vice President Coal Marketing
Burlington Northern Railroad Company
3700 Continental Plaza
777 Main Street
Fort Worth, TX 76102
UP's address is:
AVP Energy
Union Pacific Railroad Company
1416 Dodge Street
Omaha, NE 68179
Any party may change its address for purposes of this Agreement
by giving written notice in accordance with the provisions of
this Article. Failure to provide notice to a party designated to
receive a copy shall not invalidate the giving of notice.
Article XXII. ENTIRETY AND AMENDMENTS.
This Agreement comprises the entire agreement, merging
and superseding all prior understandings and representations
between Shipper and Railroads regarding the subject matter of
this Agreement. No subsequent agreement amending, supplementing,
modifying, or terminating this Agreement shall be binding on
Railroads or Shipper unless it is in writing and executed by
their respective authorized representatives, and, to the extent
required by applicable regulations, filed with and approved by
the ICC in accordance with 49 U.S.C. Paragraph 10713, as amended
from time to time.
Article XXIII. NONWAIVER OF RIGHTS AND OBLIGATIONS.
The failure of any party to this Agreement in any one
or more than one instance, to insist upon the performance of any
of the terms or conditions of this Agreement, or to exercise any
rights or privileges under this Agreement, or the waiver by any
party to this Agreement of any breach of the terms or conditions
of this Agreement, shall not be construed thereafter as waiving
any such terms, covenants, rights, privileges or obligations, but
the same shall continue and remain in full force and effect as if
no such forbearance or waiver had occurred.
Article XXIV. RECORDS.
The parties agree that for the purpose of verifying
bills, tendered and shipped tonnage and records and for the
purpose of making adjustments thereto, the necessary records of
the parties, insofar as they pertain to the terms of this
Agreement, shall be made available, upon reasonable notice, at
each party's respective place of business for inspection and
examination by any authorized employee, consultant or agent
(including a certified public accountant) of the other parties
during regular business hours. Nothing in this Article is
intended to require any party to this Agreement to divulge to any
other party any information pertaining to its costs of providing
transportation under this Agreement.
Article XXV. INDEMNITIES.
A. Railroads shall defend, protect, indemnify, and save
harmless Shipper, its affiliated companies and its officers,
directors, stockholders, employees, agents and servants from and
against all liabilities, losses, claims, damages, penalties,
causes of action, suits (including suits for personal injuries or
death and including reasonable attorneys' fees and expenses)
caused by the negligence or willful and wanton acts of Railroads
arising out of or in connection with their obligations under this
Agreement, and shall pay any judgments of any nature rendered
against such person for such injuries or damage due to or arising
out of or in connection with such negligence or willful and
wanton acts of Railroads.
B. Shipper shall defend, protect, indemnify, and save
harmless Railroads, their affiliated companies and officers,
directors, stockholders, employees, agents, and servants from and
against all liabilities, losses, claims, damages, penalties,
causes of action, suits (including suits for personal injuries or
death and including reasonable attorneys' fees and expenses)
caused by the negligence or willful and wanton acts of Shipper
arising out of or in connection with its obligations under this
Agreement, and shall pay any judgments of any nature rendered
against such person for such injuries or damage due to or arising
out of or in connection with such negligence or willful and
wanton acts of Shipper.
C. If any liability, loss, claim, damage, penalty, cause
of action or suit arises from the joint negligence or willful and
wanton acts of Railroads, or either one of them, and Shipper,
each party shall be responsible for only that portion of the
liability, loss, claim, damage, penalty, cause of action or suit
caused by its negligence or willful and wanton acts.
Article XXVI. CONSTRUCTION OF TERMS.
The terms of this Agreement have been arrived at after
mutual negotiation and, therefore, it is the intention of the
parties that its terms not be construed against any of the
parties by reason of the fact that it was prepared by one of the
parties.
Article XXVII. CAPTIONS.
The captions and headings of this Agreement are for the
convenience of reference only and shall neither define nor limit
any of the terms or provisions in this Agreement.
Article XXVIII. EFFECT OF PRIOR AGREEMENTS.
Upon approval of this Agreement as provided in Article
II, the terms of the document dated November 30, 1972 (1972
Document), between the Kansas Power and Light Company (KPL), the
Burlington Northern Railroad Company, and the Union Pacific
Railroad Company, and tariff ICC BN 4181-A are completely
superseded and are of no further force and effect except as to
shipments moving prior to the approval date. If the ICC fails to
approve this Agreement, it shall be null and void and the 1972
Document and related tariff shall remain in full force and
effect.
Article XXIX. REPRESENTATIONS AND WARRANTIES.
Each party represents and warrants to the others that
(1) it is duly organized and validly exists in good standing
under the laws of the state of its incorporation and has all
requisite power and authority to enter into this Agreement and to
carry out the terms and provisions thereof; (2) the person
executing this Agreement on its behalf is duly authorized and
empowered to bind it to this Agreement; (3) there is no action,
proceeding, or investigation, current or pending, and no term or
provision of any charter, by-law, certificate, license, mortgage,
indenture, contract, judgment, decree, order, statute, rule or
regulation to which such party is subject, which in any way
prevents, hinders or otherwise adversely affects, or would be
violated by, its entering into and performing this Agreement; and
(4) no approval or authority of any governmental body except the
ICC is required on the part of such party prior to entering into
and carrying out the terms and provisions of this Agreement.
ARTICLE XXX. DISPUTE RESOLUTION.
A. General.
No party to this agreement shall be entitled to take legal
action with respect to any dispute arising from or relating to
this Agreement until it has complied, in good faith, with the
procedures set forth in Section B and C, below.
B. Negotiation.
1. The parties shall attempt promptly and in good faith to
resolve any dispute arising out of or relating to this Contract,
through negotiations between representatives who have authority
to settle the controversy. All negotiations pursuant to this
clause shall be confidential and shall be treated as compromise
and settlement negotiations for purpose of the Federal and State
Rules of Evidence.
2. Any party may give the other party(ies) written notice
of any dispute not resolved in the normal course of business. As
soon as mutually agreeable after delivery of the notice,
representatives of the involved parties shall meet at a mutually
acceptable time and place (or by telephone), and thereafter as
often as they reasonably may deem necessary to attempt to resolve
the dispute. Unless the parties to the dispute agree that the
dispute cannot be resolved through unassisted negotiation,
negotiations shall not be deemed at an impasse until sixty days
after the first settlement conference.
3. If a negotiator intends to be accompanied at a meeting
by an attorney, the other negotiator(s) shall be given at least
three working days' notice of such intention and may also be
accompanied by an attorney.
C. Alternative Dispute Resolution Procedure.
1. If a dispute has reached impasse, any party may suggest
use of Alternative Dispute Resolution (ADR) procedures. Once
that party has notified the other(s) of a desire to initiate ADR,
the parties may select the ADR method they wish to use by mutual
agreement. That ADR method may include arbitration, mediation,
mini-trial, or any other method which best suits the
circumstances of the dispute. The parties shall agree in writing
to an ADR method selected and to the procedural rules to be
followed as promptly as possible. To the extent the parties are
unable to agree on procedural rules in whole or in part, the
current Center for Public Resources (CPR) Model Procedures for
Mediation of Business Disputes, CPR Model Mini-trial Procedure,
or CPR Commercial Arbitration Rules -- whichever applies to the
chosen ADR method -- shall control, to the extent such rules are
consistent with the provisions of this Section.
2. If the parties are unable to agree on an ADR method or
unwilling to use ADR to resolve the dispute, any party shall be
free to resort to litigation.
3. If the parties agree on an ADR method other than
arbitration, the decision rendered in that proceeding shall not
be binding on any party except by agreement of all the parties,
and any party may seek resolution of the dispute through
litigation. If the parties agree on arbitration as an ADR
method, the decision of the arbitrator(s) shall be binding on all
parties, subject only to confirmation or review pursuant to the
United States Arbitration Act, 9 U.S.A. Paragraph 1 et seq. The
arbitrator(s) shall not award punitive or exemplary damages
against any party.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement ICC-BN-C-2801 to be executed as of the day and year
first herein written.
WITNESS: WESTERN RESOURCES, INC.
____________________________ By:___________________________
Title:________________________
WITNESS: UNION PACIFIC RAILROAD COMPANY
____________________________ By: __________________________
Title:________________________
WITNESS: BURLINGTON NORTHERN RAILROAD
COMPANY
____________________________ By: ___________________________
Title:_________________________