Exhibit 10.32


 


Form
Approved by VP-Law


 


OTTER TAIL
VALLEY RAILROAD COMPANY AND BNSF RAILWAY COMPANY


INDUSTRY
TRACK AGREEMENT


 


THIS AGREEMENT (“Agreement”)  made as of this first day of 4-6, 2007  (“Effective Date”) by and between BNSF RAILWAY COMPANY, a Delaware
corporation (“BNSF”),
OTTER TAIL VALLEY RAILROAD COMPANY, INC., A Minnesota corporation  (“OTVR”),
(hereinafter OTVR and BNSF are collectively called “Railroad”)  and OTTER TAIL AG ENTERPRISES, a Minnesota corporation (“Industry”).


 


WHEREAS, Industry desires that OTVR: (i) maintain
and operate over certain rail, ties, ballast, and appurtenances thereto shown
as green solid on Exhibit “A” attached hereto and incorporated herein (“Railroad
Track”); and (ii) operate
over certain additional track shown as heavy red solid on Exhibit “A” (“Industry
Track”), (Railroad
Track and Industry Track collectively, together with all appurtenances, called “Track”), located at Fergus
Falls, County of Otter Tail, State of Minnesota, to serve a facility operated
by Industry (“Plant”),  and
Railroad desires to provide such service, subject to the terms of this
Agreement.


 


NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:


 


1.    OWNERSHIP. Railroad shall own the Railroad Track and Industry shall own
the Industry Track.


 


2.    MAINTENANCE AND OPERATION.


 


(a)   Industry shall be responsible for obtaining, without expense to
OTVR, all necessary real property rights and public authority and permission,
including applicable permits, for the maintenance and operation of the Track.
Industry shall strictly comply with all laws, statutes, regulations,
ordinances, orders, covenants, restrictions, or decisions of any court of
competent jurisdiction, including,without limitation, those pertaining to
environmental matters (collectively, “Legal
Requirements”) and other Railroad requirements relating to the use
of the Track, Facilities or Equipment. Prior to entering Railroad’s property,
Industry shall and shall cause its contractor(s) to comply with all Railroad’s
applicable safety rules and regulations. Prior to commencing any work on
Railroad’s Property, Industry shall complete and shall require its contractor
to complete the safety training program at the Railroad’s Internet Website “http://contractororientation.com”.
This training must be completed no more than one year in advance of Industry’s
entry on Railroad’s property.


 


(b)   OTVR shall, for the accommodation of and at the sole risk and
expense of Industry, maintain the Railroad Track. Industry shall at all times,
and at its sole risk and expense, maintain, or cause to be maintained, the
Industry Track and all Facilities and Equipment (defined below) (if any) in a
safe and satisfactory condition and in compliance with all applicable Legal
Requirements (defined below). Maintenance means, among other things, providing
proper drainage along the relevant portion of the Track, keeping the Track free
and clear of snow, ice, vegetation, structures, and other obstacles,
maintaining grade crossing warning devices, passive warning signs, gates,
fences, barriers, roadways, track drainage facilities, lighting and track and
other signals. Without relieving Industry from any of its obligations under
this Agreement, OTVR may refuse to operate over the Industry Track or use or
enter the Facilities or contact the Equipment whenever OTVR, in its sole
discretion, determines that the same is unsatisfactory for OTVR’s operation,
entry or contact.  If and when Industry
has remedied such condition to OTVR’s sole satisfaction, OTVR shall resume
operation over the Industry Track or use of or entry into the Facilities or
contact with the Equipment. OTVR’s operation over the Track or use of or entry
into any Facility or contact with any Equipment with knowledge of an unsatisfactory
condition is not a waiver of Industry’s obligations contained herein or of OTVR’s
right to recover for or be indemnified and defended against such damages to
property or injury to or death of persons that may result therefrom.


 


(c)   Industry shall, at its sole expense, pay all costs for changes,
repairs or alterations to the Industry Track that may be necessary to conform
to any changes of grade or relocation of the Railroad Track at the point of
connection with the Industry Track, if such change of grade or relocation is
required to comply with any Legal Requirement or is made for any other reason
beyond Railroad’s reasonable control.


 


(d)   If Industry installs any gates or fencing across the Track, or a
track scale, unloading pit, loading or unloading device, adjustable loading
dock, warehouse door, or any other structure (collectively, “Facilities”)  affecting the
Track, Industry shall be solely responsible for assuring the safe and
satisfactory condition of the same and shall not allow any Facilities to be a
source of danger to the safe operation of the Track. Industry shall also be
solely responsible for assuring the safe and satisfactory condition of all of
Industry’s equipment touching, used in conjunction with or affecting the Track (“Equipment”)  and shall not allow any Equipment
to be source of danger to the safer operation of the Track. Before utilizing or
unloading any equipment spotted onto the Track, Industry shall inspect the same
and all other Equipment and Facilities for the safety of persons working on or
about these items to assure compliance with the foregoing. Industry shall
utilize all Facilities, Equipment and spotted equipment so as not to affect
negatively safe and efficient operation over the Track. Industry shall, among
other things: keep any gates across the Track open whenever necessary, in OTVR’s
sole judgment, to enable OTVR to safely and efficiently operate over the Track;
keep unloading pits securely covered when not in


 


Form 301A; Rev 01/20/05


 


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actual use and at all times when the Track is
being switched by OTVR; keep all doors firmly secured; and keep adjustable
loading docks at warehouses securely fastened in an upright position when not
in actual use and at all times when the Track is being switched ‘y OTVR.


 


(e)    OTVR may require for safety purposes that
Industry, at its sole cost and expense, provide flagmen, lights, traffic
control devices, automatic warning devices, or any such safety measure that
OTVR deems appropriate in connection with the Industry’s use of the Track,
including but not limited to the furnishing of Licensor’s Flagman and any
vehicle rental costs incurred. The cost of flagger services provided by the
Railway, when deemed necessary by the OTVR’s representative, will be borne by
the Licensee. The estimated cost for one (1) flagger is $350.00 for an
eight (8) hour basic day with time and one-half or double time for
overtime, rest days and holidays. The estimated cost for each flagger includes
vacation allowance, paid holidays, Railway and unemployment insurance, public
liability and property damage insurance, health and welfare benefits,
transportation, meals, lodging and supervision. Negotiations for Railway labor
or collective bargaining agreements and rate changes authorized by appropriate
Federal authorities may increase actual or estimated flagging rates. The
flagging rate in effect at the time of performance by the Contractor hereunder
will be used to calculate the actual costs of flagging pursuant to this
paragraph.


 


(f)  In the event the public authority having
jurisdiction thereover orders the separation of the grade of the Track and any
street,

road, highway, other rail line or the like, Industry hereby consents to the
removal and/or relocation of the Track and shall reimburse

OTVR all expenses in connection with the removal and/or relocation of the
Track.


 


(g)   Industry shall not place, permit to be
placed, or allow to remain, any permanent or temporary material, structure,
pole, container, storage vessel, above-ground or underground tank, or other
obstruction within 81⁄2 feet laterally from the center (nine and one-half (9-1/2)
feet on either side of the centerline of curved Track) or within 23 feet
vertically from the top of the rail of said Track (“Minimal Clearances”), provided that if any Legal Requirement
requires greater clearances than those provided for in this Section 2(g),
then Industry shall strictly comply with such Legal Requirement. Industry shall
not place or allow to be placed any freight car within 250 feet of either side
of any at-grade crossings on the Track. OTVR’s operation over the Track with
knowledge of an unauthorized reduced clearance will not be a waiver of the
covenants of Industry contained in this Section 2(g) or of
OTVR’s right to recover and be indemnified and defended against such damages to
property, or injury to or death of persons, that may result therefrom.


 


3.    TERM. Unless earlier terminated as
provided herein, this Agreement will be in force for the term of ONE YEAR from
its date and will automatically
continue thereafter until terminated by either party giving to the other thirty
(30) days’ written notice.


 


4.    INDEMNITY.


 


(a)    For purposes of this Agreement: (i) “Indemnitees” means Railroad and Railroad’s
affiliated companies, partners, successors, assigns, legal representatives,
officers, directors, shareholders, employees and agents; (ii) “Liabilities” means all claims,
liabilities, fines, penalties, costs, damages, losses, liens, causes of action,
suits, demands, judgments and expenses (including, without limitation, court
costs, attorneys’ fees and costs of investigation, removal and remediation and
governmental oversight costs) environmental or otherwise; and (iii) “Industry Parties” means Industry or
Industry’s officers, agents, invitees, licensees, employees, or contractors, or
any party directly or indirectly employed by any of them, or any party they
control or exercise control over.


 


(b)    INDUSTRY SHALL RELEASE, INDEMNIFY, DEFEND,
AND HOLD THE INDEMNITEES HARMLESS FROM AND AGAINST ANY LIABILITIES ARISING OUT
OF OR RELATED TO (IN WHOLE OR IN PART) ANY CLAIM THAT BY VIRTUE OF THE USE OF
THE TRACK CONTEMPLATED IN THIS AGREEMENT, UNDER CERCLA OR OTHER ENVIRONMENTAL LAWS
RAILROAD IS (I) AN “OWNER”, “OPERATOR”, “ARRANGER” OR “TRANSPORTER” OF THE
INDUSTRY TRACK OR THE PLANT, OR (II) OTHER THAN A COMMON CARRIER WITH
RESPECT TO THE TRACK REGARDLESS OF ANY NEGLIGENCE OR STRICT LIABILITY OF ANY
INDEMNITEE.


 


(c)    IF ANY EMPLOYEE OF ANY INDUSTRY PARTY CLAIMS
HE OR SHE IS AN EMPLOYEE OF ANY INDEMNITEE, INDUSTRY SHALL INDEMNIFY AND HOLD
THE INDEMNITEES HARMLESS FROM AND AGAINST ANY LIABILITIES ARISING OUT OF OR
RELATED TO (IN WHOLE OR IN PART) ANY SUCH CLAIM INCLUDING, BUT NOT LIMITED TO,
CLAIMS RELATED TO PROCEEDINGS UNDER OR RELATED TO THE FEDERAL EMPLOYERS’
LIABILITY ACT, THE SAFETY APPLIANCE ACT, THE BOILER INSPECTION ACT, THE
OCCUPATIONAL HEALTH AND SAFETY ACT, THE RESOURCE CONSERVATION AND RECOVERY ACT,
AND ANY SIMILAR STATE OR FEDERAL STATUTE AND REGARDLESS OF ANY NEGLIGENCE OR
STRICT LIABILITY OF ANY INDEMNITEE RELATED TO SUCH CAUSES OF ACTION.


 


(d)    Upon written notice from Railroad, Industry
agrees to assume the defense of any lawsuit or other proceeding brought against
any Indemnitee by any entity, relating to any matter covered by this Agreement
for which Industry has an obligation to assume liability


 


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for and/or save and hold harmless any Indemnitee. Industry shall pay
all costs incident to such defense, including, but not limited to, attorneys’
fees, investigators’ fees, litigation and appeal expenses, settlement payments,
and amounts paid in satisfaction of judgments.


 


5.    INSURANCE. Industry
shall, at its sole cast and expense, procure and maintain during the life of
this Agreement the following insurance coverage:


 


A.             Commercial General Liability
insurance that contains broad form contractual liability with a combined single
limit of a minimum of $1,000,000 each occurrence and an aggregate limit of at
least $2,000,000. Coverage must be purchased on a post 1998 ISO occurrence or
equivalent and include coverage for, but not limited to, Bodily Injury and
Property Damage, Products and completed operations. The definition of insured
contract shall be amended to remove any exclusion or other limitation for any
work being done within 50 feet of railroad property.


 


B.            Workers
Compensation and Employers Liability insurance including coverage for, but not
limited to:


·                  Industry’s statutory liability under the
worker’s compensation laws of the state(s) in which the work is to be
performed. If optional under State law, the insurance must cover all employees
anyway.


·                  Employers’ Liability (Part B) with
limits of at least $500,000 each accident, $500,000 by disease policy limit,
$500,000 by disease each employee.


 


In addition, Industry shall comply with the following additional
requirements with respect to such insurance:


 


Any insurance policy shall be written by a reputable insurance company
with a current Best’s Guide Rating of A- and Class VII or better, and
authorized to do business in the state(s) in which the service is to be
provide. If any portion of the operation is to be subcontracted by Industry,
Industry shall require that the subcontractor provide and maintain insurance
coverage as set forth herein.


 


Prior to commencing
operations governed by this Agreement, Industry shall furnish to OTVR an
acceptable certificate(s) of insurance including an original signature of
the authorized representative evidencing the required coverage, endorsements,
and amendments and referencing the contract audit/folder number if available.
The policy(ies) shall contain a provision that obligates the insurance
compan(ies) issuing such policy(ies) to notify OTVR in writing at least 30 days
prior to any cancellation or non-renewal with such provision indicated on the
certificate of insurance. In the event of a claim or lawsuit involving Railroad
arising out of this agreement, Industry will make available any required policy
covering such claim or lawsuit.


 


Failure to provide evidence
as required by this section shall entitle, but not require, OTVR to terminate
this Agreement immediately. Acceptance of a certificate that does not comply
with this section shall not operate as a waiver of Industry’s obligations
hereunder. The fact that insurance (including, without limitation,
self-insurance) is obtained by Industry shall not be deemed to release or
diminish the liability of Industry including, without limitation, liability
under the indemnity provisions of this Agreement. Damages recoverable by
Railroad shall not be limited by the amount of the required insurance coverage.


 


6.    DEFINITION OF COST AND
EXPENSE. For the purpose of this Agreement, “cost” or “costs”
“expense” or “expenses” includes, but is not limited to, actual labor and
material costs including all assignable additives, and material and supply
costs at current value where used. In the event that Industry shall fail to pay
any monies due to OTVR within thirty (30) days after the invoice date, then Industry
shall pay interest on such unpaid sum from such due date until paid at an
annual rate equal to the lesser of (i) the prime rate last published in The Wall Street Journal in the preceding December plus
two and one-half percent (2 1/2%), or (ii) the maximum rate permitted by
law.


 


7.    RIGHT OF RAILROAD TO
CONSTRUCT FUTURE FACILITIES. Railroad retains the
right, without liability to the Industry or any other party, to construct or
allow to be constructed upon its property other facilities, and to use its property
in any manner, provided Railroad uses all commercially reasonable efforts to
avoid material interference with the use of the Track as described herein.


 


8.    PUBLIC ASSESSMENTS. Industry
shall timely pay all compensation, assessments and levies required at any time
by any public authority, entity, or person for the privilege of maintaining and
operating the Track, and shall not cause or permit any liens to be filed
against the Railroad Track or any Railroad property. In the event any such
liens are filed, Industry shall cause such liens to be released within fifteen
(15) days.


 


9.    NOTIFICATION
REQUIREMENTS


 


(a) Industry shall give
immediate notice to OTVR’s General Manager at Fergus Falls at (218) 205-7431 of
any release of hazardous substances on or from the Track, violation of
environmental Legal Requirements, or inspection or inquiry by governmental
authorities charged with enforcing environmental Legal Requirements with
respect to Industry’s use of the Track. Industry shall use


 


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the best efforts to promptly respond to any release on or from the
Track. Industry also shall give OTVR immediate notice of all measures
undertaken on behalf of Industry to investigate, remediate, respond to or
otherwise cure such release or violation.


 


(b)   In the event that OTVR has notice from Industry or otherwise of a
release or violation of Environmental Laws on the Track which occurred or may
occur during the term of this Agreement, OTVR may require Industry, at Industry’s
sole risk and expense, to take timely measures to investigate, remediate,
respond to or otherwise cure such release or violation affecting the Track or
Railroad’s property.


 


(c)    Industry shall promptly report to OTVR in writing any conditions
or activities upon the Plant or Track which create a risk of harm to persons,
property or the environment and shall take whatever action is necessary to
prevent injury to persons or property arising out of such conditions or
activities; provided, however, that Industry’s reporting to OTVR shall not
relieve Industry of any obligation whatsoever imposed on it by this Agreement.
Industry shall promptly respond to OTVR’s request for information regarding
said conditions or activities.


 


10.  DEFAULT. The following
events shall constitute defaults hereunder: (a) creating or allowing to
remain any condition, including without limitation, any environmental
condition, on or about the Track, which in OTVR’s sole judgment interferes with
or endangers the operations of OTVR; (b) assignment or transfer by
operation of law of Industry’s rights or obligations under this Agreement; (c) defaults
on any of the covenants or agreements of Industry contained in this document.


 


11.  TERMINATION.


 


(a)    In addition to all other remedies available at law or in equity,
OTVR may, without incurring any liability to Industry,

terminate this Agreement and discontinue the maintenance and operation of the
Track and remove the Railroad Track, in the event of

any of the following events:


 


(i)             any default as described in Sections 10(a) or
(b) occurs;


(ii)          any default as described in Section 10(c) occurs
and persists for 30 days following written notice from Railroad;


(iii)      Industry fails to utilize rail service from OTVR to
or from the Plant for a period of eight (8) months in any period of


twelve (12) months;


(iv)     OTVR is authorized by competent public authority to
abandon its line to which said Track is connected; or


(v)        OTVR is dispossessed of the right to operate over
the Track or its connecting track or any part thereof, OTVR may


terminate this Agreement
effective immediately by written notice to Industry.


 


(b)   Upon the expiration or earlier termination of this Agreement as
provided herein, OTVR at its sole discretion shall have the right to: (i) require
Industry to transfer title to that portion of the Industry Track located upon
Railroad’s property, and any Facilities or improvements located upon, over, or
under Railroad’s property to OTVR. Upon such transfer, OTVR shall pay Industry
the salvage value of the same; or (ii) require Industry to remove, at its
sole cost and expense, that portion of the Industry Track located upon Railroad’s
property and any Facilities, Equipment or improvements upon, over, or under
such property and restore the Railroad’s property to substantially the state in
which it was on the Effective Date of this Agreement. In the event OTVR elects
option (ii) and Industry fails within thirty (30) days after the date of
such termination to make the removal and restoration, then OTVR may do so
itself and in such event Industry shall, within thirty (30) days after receipt
of a bill therefor, reimburse OTVR for any costs incurred.


 


(c)    Industry hereby agrees to waive and release all claims, rights,
and causes of action that Industry has or may have against OTVR because of the
discontinuance of operation and removal of the Railroad Track as provided in
this Section 11.


 


12.  ASSIGNMENT. This
Agreement will inure to the benefit of and be binding upon the successors and
assigns of the parties hereto; provided, however, that Industry may not assign
this Agreement without the prior written consent of OTVF, which may be withheld
in OTVR’s sole discretion. Either party hereto may assign any receivables due
them under this Agreement; provided, however, that such assignments will not
relieve the assignor of any of its rights or obligations under this Agreement.


 


13.  NOTICES. Any notice
required or permitted to be given hereunder must be in writing and the same
shall be given and will be deemed to have been given if (i) placed in the
United States mail, certified, return receipt requested, or (ii) deposited
into the custody of a nationally recognized overnight delivery service,
addressed to the party to be notified at the address specified below, or to such
other address as the party to be notified may designate by giving the other
party no less than thirty (30) days’ advance written notice. The address for
such notice shall be the address set forth below each party’s signature, which
may be changed by written notice to the other party.


 


14.  SURVIVAL. Neither
termination nor expiration will release either party from any liability or
obligation under this Agreement, whether of indemnity or otherwise, resulting
from any acts, omissions or events happening prior to the date of termination
or


 


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expiration, or, provided OTVR does not elect option 13(b)(i), the date
when the Track, Facilities, Equipment and improvements are removed and the
right-of-way is restored to its condition as of the Effective Date.


 


15.  MISCELLANEOUS.


 


(a)    This
Agreement must not be placed of public record.


 


(b)   To the
maximum extent possible, each provision of this Agreement must be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is prohibited by, or held to be invalid under,
applicable law, such provision will be ineffective solely to the extent of such
prohibition or invalidity, and this will not invalidate the remainder of such
provision or any other provision of this Agreement. All questions concerning
the interpretation or application of provisions of this Agreement must be
decided according to the laws of the State of Texas.


 


(c)    This
Agreement is the full and complete agreement between OTVR and Industry with
respect to all matters relating to the maintenance and operation of the Track
and supersedes all other agreements between the parties hereto relating to the
maintenance and operation of the Track. However, nothing herein is intended to
terminate any surviving obligation of Industry or Industry’s obligation to
defend and hold Railroad harmless in any prior written agreement between the
parties.


 


(d)   In the
event that the Industry consists of two of more parties, all covenants and
agreements of Industry herein contained shall be the joint and several
covenants and agreements of such parties.


 


(e)    The
waiver by OTVR of the breach of any provision herein by Industry shall in no
way impair the right of OTVR to enforce that provision for any subsequent
breach thereof. All remedies provided hereunder are cumulative and are in
addition to all other remedies available at law or in equity.


 


(f)    This
Agreement is also made for the benefit of such other railroads that, either by agreement
with OTVR or order of competent public authority, have the right to use the
Track, all of which railroads shall be deemed “Railroad” under this Agreement.


 


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IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed in duplicate the
day and year first her above written.


 


	
   

  	
  BNSF:

  
	
   

  	
   

  
	
   

  	
  BNSF RAILWAY COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Stephen M. Kuzma

  	
   

  
	
   

  	
  Name:

  	
  Stephen M. Kuzma

  
	
   

  	
  Title:

  	
  Manager - Land Revenue Management

  
	
   

  	
   

  
	
   

  	
  Address for notices:

  
	
   

  	
   

  
	
   

  	
  BNSF Railway Company

  Corporate Real Estate Development

  2500 Lou Menk Dr

  Fort Worth, TX 76131

  Attn: Track Agreements

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OTVR:

  
	
   

  	
   

  
	
   

  	
  OTTER TAIL VALLEY RAILROAD COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Elizabeth A. Brown

  	
   

  
	
   

  	
  Name:
  Elizabeth A. Brown

  
	
   

  	
  Tittle:
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for notices:

  
	
   

  	
   

  
	
   

  	
  Otter Tail Valley Railroad Company

  200 North Mill Street

  Fergus Falls, MN  56537

  Attn: General Manager

  
	
   

  	
   

  
	
   

  	
  INDUSTRY:

  
	
   

  	
   

  
	
   

  	
  OTTER TAIL AG ENTERPRISES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kelly Longtin

  	
   

  
	
   

  	
  Name:
  KELLY LONGTIN

  
	
   

  	
  Title:
  CEO

  
	
   

  	
   

  
	
   

  	
  Address for notices:

  
	
   

  	
   

  
	
   

  	
  Otter
  Tail Ag Enterprises

  
	
   

  	
   

  
	
   

  	
  Fergus Falls, MN 
  56537

  Attn: Chief Executive Officer

  
						



 


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