Document:

Exhibit 10.2

 

DISTILLER’S GRAIN MARKETING AGREEMENT

 

THIS
DISTILLER’S GRAIN MARKETING AGREEMENT (the “Agreement”), is entered into
effective as of August 31, 2004, by United Wisconsin Grain Producers LLC,
a Wisconsin Limited Liability Company (“Seller”), and Commodity Specialists
Company, a Delaware corporation (“Buyer”).

 

W I T N E S S E T H:

 

WHEREAS,
Seller desires to sell and Buyer desires to purchase the Distiller’s Dried
Grains with Solubles (“DDGS” or “Products”), output of the ethanol production
plant which Seller owns in Friesland, Wisconsin; and

 

WHEREAS,
Seller and Buyer wish to agree in advance of such sale and purchase to the
price formula, payment, delivery and other terms thereof in consideration of
the mutually promised performance of the other;

 

NOW,
THEREFORE, in consideration of the promises and the mutual covenants and
conditions herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by both parties, it is
hereby agreed:

 

1.                                       BUYER
PERFORMANCE.  Buyer agrees to perform
the services that it provides for Seller in a professional and competent
manner.

 

2.                                       PURCHASE
AND SALE. Seller agrees to sell to Buyer and Buyer agrees to purchase from
Seller the entire bulk feed grade DDGS output from Seller’s plant at Friesland,
Wisconsin (hereinafter the “Plant”) that is shipped from Plant by rail, and so
much output that is shipped by truck that Seller in its discretion elects to
sell to Buyer, subject to all terms and conditions set forth in this
Agreement.  Buyer shall label all Product
that is sold by Buyer and shall register all labels with the states where the
Products are sold.

 

3.                                       TRADE
RULES.  All purchases and sales made
hereunder shall be governed by the Feed Trade Rules of the National Grain and
Feed Association unless otherwise specified. 
Said Trade Rules, a copy of which is appended hereto as Exhibit A,
shall, to the extent applicable, be a part of this Agreement as if fully set
forth herein.

 

4.                                       TERM.  The term of this Agreement shall be for one
year commencing as of completion and start-up of production of the Plant.  Start-up is anticipated to be February 15,
2005.  Thereafter this agreement shall
remain in effect until terminated by either party at its unqualified option by
providing the other party hereto not less than 90 days written notice of its
election to terminate this Agreement.

 

 

5.                                       DELIVERY
AND TITLE.

 

A.  The place of delivery for all the Products
sold pursuant to this Agreement shall be FOB Plant.  Buyer and Buyer’s agents shall be given
access to Seller’s Plant in a manner and at all times reasonably necessary and
convenient for Buyer to take delivery as provided herein.  Buyer shall coordinate the loading and
shipping of all outbound Products purchased hereunder which is shipped by truck
or rail with Seller.  All labor and
equipment necessary to load trucks or rail cars shall be supplied by Seller
without charge to Buyer.  Seller agrees
to handle the Products in a good and workmanlike manner in accordance with
Buyer’s reasonable requirements and in accordance with normal industry
practice.  Seller shall maintain the
truck and rail loading facilities in safe operating condition in accordance
with normal industry standards.

 

B.  Seller further warrants that storage space
for not less than seven days production of DDGS shall be reserved for Buyer’s
use at the Plant and shall be continuously available for storage of DDGS
purchased by Buyer hereunder at no charge to Buyer.  Seller shall be responsible at all times for
the quantity, quality and condition of any the Products in storage at the
Plant. Seller shall not be responsible for the quantity, quality and condition
of any of the Products stored by Buyer at locations other than the Plant.

 

C.  Buyer shall give to Seller a schedule of
quantities of the Products to be removed by truck and rail with sufficient
advance notice reasonably to allow Seller to provide the required
services.  Seller shall provide the
labor, equipment and facilities necessary to meet Buyer’s loading schedule and,
except for any consequential or indirect damages, shall be responsible for
Buyer’s actual costs or damages resulting from Seller’s failure to do so.  Buyer shall order and supply trucks and rail
cars as scheduled for truck and rail shipments. 
All freight charges shall be the responsibility of Buyer and shall be
billed directly to Buyer.

 

D.  Buyer shall provide loading orders as
necessary to permit Seller to maintain Seller’s usual production schedule,
provided, however, that Buyer shall not be responsible for failure to schedule removal
of the Products unless Seller shall have provided to Buyer production schedules
as follows:  Five (5) days prior to the
beginning of each calendar month during the term hereof, Seller shall provide
to Buyer a tentative schedule for production in the next calendar
month.  Seller shall inform Buyer daily
of inventory and production status. For purposes of this paragraph,
notification will be sufficient if made by e-mail or facsimile as follows:

 

If to Buyer, to the attention of Steve Markham,
Facsimile number 612-330-9894 or e-mail to smarkham@csc-world.com, and

 

If to Seller, to the attention of Jeff Robertson or
e-mail to jrobertson@uwgp.com. Or to such other representatives of Buyer and
Seller as they may designate to the other in writing.

 

E.                                      Title,
risk of loss and full shipping responsibility shall pass to Buyer upon loading
the Products into trucks or rail cars and delivering to Buyer the bill of
lading for each such shipment.

 

 

6.                                       PRICE
AND PAYMENT

 

A. Buyer agrees to pay
Seller as follows:  for all DDGS removed
by Buyer from the Plant a price equal to ninety eight (98%) of the FOB Plant
price actually received by Buyer from its customers. For purposes of this provision,
the FOB Plant price shall be the actual sale price, less all freight costs
incurred by Buyer in delivering the Product to its customer.  Buyer agrees that it shall not sell Product
for delivery more than 90 days from the date of entering into a sale without
the consent of Seller.  Buyer agrees to
use commercially reasonable efforts to achieve the highest resale price
available under prevailing market conditions. 
Seller’s sole and exclusive remedy for breach of Buyer’s obligations
hereunder shall be to terminate this Agreement. Buyer shall collect all
applicable state tonnage taxes on Products sold by Buyer and shall remit to the
appropriate governmental agency.

 

B.  Within three (3) business days following
receipt of certified weight certificates, which certificates shall be presented
to Buyer each Thursday for all shipments during the preceding week, Buyer shall
pay Seller the full price, determined pursuant to paragraph 6A above, for all
properly documented shipments.  Buyer
agrees to maintain accurate sales records and to provide such records to Seller
upon request.  Seller shall have the
option to audit Buyer’s sales invoices at any time during normal business hours
and during the term of this Agreement. 
If any such audit shall reveal a deficiency in the payment due Seller,
Buyer shall immediately pay Seller the amount of such deficiency together with
interest from the date that such payment should have been made at the prime
rate then in effect as reported in the Wall Street Journal.

 

7.                                       QUANTITY
AND WEIGHTS.

 

A.   It is understood that the output of the
Products shall be determined by Seller’s production schedule and that no
warranty or representation has been made by Seller as to the exact quantities
of Products to be sold pursuant to this Agreement.

 

B.  The quantity
of Products delivered to Buyer from Seller’s Plant shall be established by
weight certificates obtained from scale at the Plant which is certified as of
the time of weighing and which complies with all applicable laws, rules and
regulations or in the event that the scale at the Plant is inoperable then at
other scales which are certified as of the time of weighing and which comply
with all applicable laws, rules and regulations. The outbound weight
certificates shall be determinative of the quantity of the Products for which
Buyer is obligated to pay pursuant to Section 5.

 

8.                                       QUALITY.

 

A.  Seller understands that Buyer intends to sell
the Products purchased from Seller as a primary animal feed ingredient and that
said Products are subject to minimum quality standards for such use.  Seller agrees and warrants that the Products
produced at its plant and delivered to Buyer shall be accepted in the feed
trade under current industry standards.

 

B.  Seller warrants that all Products, unless the
parties agree otherwise, sold to

 

 

Buyer hereunder shall, at
the time of delivery to Buyer, conform to the following minimum quality
standard:

 

	
   

  	
   

  	
  Protein

  	
   

  	
  Fat

  	
   

  	
  Fiber

  	
   

  	
  Moisture

  	
   

  	
  Ash

  	
   

  
	
   

  	
   

  	
  Min

  	
   

  	
  Max

  	
   

  	
  Min

  	
   

  	
  Max

  	
   

  	
  Min

  	
   

  	
  Max

  	
   

  	
  Min

  	
   

  	
  Max

  	
   

  	
  Min

  	
   

  	
  Max

  	
   

  
	
  DDGS

  	
   

  	
  25

  	
   

  	
   

  	
   

  	
  10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  15

  	
   

  	
   

  	
   

  	
  12

  	
   

  	
   

  	
   

  	
  6

  	
   

  

 

The standard for DDGS
will be determined on an as is basis per original sample rather than a dry
weight basis.

 

C.  Seller warrants that at the time of loading,
the Products will not be adulterated or misbranded within the meaning of the
Federal Food, Drug and Cosmetic Act and that each shipment may lawfully be
introduced into interstate commerce under said Act.  Payment of invoice does not waive Buyer’s
rights if goods do not comply with terms or specifications of this
Agreement.  Unless otherwise agreed between
the parties to this Agreement, and in addition to other remedies permitted by
law, the Buyer may, without obligation to pay, reject either before or after
delivery, any of the Products which when inspected or used fail in a material
way to conform to this Agreement.  Should
any of the Products be seized or condemned by any federal or state department
or agency for any reason except noncompliance by Buyer with applicable federal
or state requirements, such seizure or condemnation shall operate as a rejection
by Buyer of the goods seized or condemned and Buyer shall not be obligated to
offer any defense in connection with the seizure or condemnation. When
rejection occurs before or after delivery, at its option, Buyer may:

 

(1)
Dispose of the rejected goods after first offering Seller a reasonable
opportunity of examining and taking possession thereof, if the condition of the
goods reasonably appears to Buyer to permit such delay in making disposition;
or

 

(2)
Dispose of the rejected goods in any manner directed by Seller which Buyer can
accomplish without violation of applicable laws, rules, regulations or property
rights; or

 

(3) If
Buyer has no available means of disposal of rejected goods and Seller fails to
direct Buyer to dispose of it as provided herein, Buyer may return the rejected
goods to Seller, upon which event Buyer’s obligations with respect to said
rejected goods shall be deemed fulfilled. 
Title and risk of loss shall pass to Seller promptly upon rejection by
Buyer.

 

(4)
Seller shall reimburse Buyer for all costs reasonably incurred by Buyer in
storing, transporting, returning and disposing of the rejected goods. Buyer
shall have no obligation to pay Seller for rejected goods and may deduct
reasonable costs and expenses to be reimbursed by Seller from amounts otherwise
owed by Buyer to Seller.

 

(5) If
Seller produces Products which comply with the warranty in Section C

 

 

above but which do not
meet applicable industry standards, Buyer agrees to purchase such Products for
resale but makes no representation or warranty as to the price at which such
Product can be sold.  If the Products
deviate so severely from industry standard as to be unsalable, then it shall be
disposed of in the manner provided for rejected goods in Section C above.

 

D.  If Seller knows or reasonably suspects that
any of the Products produced at its Plant are adulterated or misbranded, or
outside of industry quality standards, Seller shall promptly so notify Buyer so
that such Product can be tested before entering interstate commerce.  If Buyer knows or reasonably suspects that
any of the Products produced by Seller at its Plant are adulterated, misbranded
or outside of industry quality standards, then Buyer may obtain independent
laboratory tests of the affected goods. If such goods are tested and found to
comply with all warranties made by Seller herein, then Buyer shall pay all
testing costs; and if the goods are found not to comply with such warranties,
Seller will pay all testing costs.

 

9.                                       RETENTION
OF SAMPLES.  Seller will take an
origin sample of Products from each truck and rail car before it leaves the
Plant using standard sampling methodology. 
Seller will label these samples to indicate the date of shipment and the
truck or railcar number involved.  Seller
will also retain the samples and labeling information for no less than one
year.

 

10.                                 INSURANCE.

 

A.  All UWGP employees engaged in the removal of
the Products from Seller’s Plant shall be covered as required by law by worker’s
compensation and unemployment compensation insurance.

 

B.  Seller agrees to maintain throughout every
term of this Agreement commercial general liability insurance, including
product liability coverage, with combined single limits of not less than
$2,000,000.  Seller’s policies of
comprehensive general liability insurance shall be endorsed to require at least
thirty (30) days advance notice to Buyer prior to the effective date of any
decrease in or cancellation of coverage. 
Seller shall cause Buyer to be named as an additional insured on Seller’s
insurance policy and shall provide a certificate of insurance to Buyer to
establish the coverage maintained by Seller not later than fourteen (14) days
prior to completion and start-up of production of the Plant.

 

C.  Buyer agrees to carry such insurance on its
vehicles operating on Seller’s property as Seller reasonably deems
appropriate.  The parties acknowledge
that Buyer may elect to self insure its vehicles.  Upon request, Buyer shall provide certificate
of insurance to Seller to establish the coverage maintained by Buyer.

 

D.  Notwithstanding the
foregoing, nothing herein shall be construed to constitute a waiver by either
party of claims, causes of action or other rights which either party may have
or hereafter acquire against the other for damage or injury to its agents,
employees, invitees, property, equipment or inventory, or third party claims
against the other for damage or injury to other persons or the property of
others.

 

 

11.                                 REPRESENTATIONS
AND WARRANTIES

 

A.  Seller
represents and warrants that all of the Products delivered to Buyer shall not
be adulterated or misbranded within the meaning of the Federal Food, Drug and
Cosmetic Act and may lawfully be introduced into interstate commerce pursuant
to the provisions of the Act.  Seller
further warrants that the Products shall fully comply with any applicable state
laws governing quality, naming and labeling of product.  Payment of invoice shall not constitute a
waiver by Buyer of Buyer’s rights as to goods which do not comply with this
Agreement or with applicable laws and regulations.

 

B.  Seller represents and warrants that the
Products delivered to Buyer shall be free and clear of liens and encumbrances.

 

C.  EXCEPT AS
SPECIFICALLY STATED IN THIS AGREEMENT, SELLER MAKES NO WARRANTY OR REPRESENTATIONS,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTIBILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

12.                                 EVENTS
OF DEFAULT.  The occurrence of any of
the following shall be an event of default under this Agreement (“Event of
Default”):  (1) failure of either party
to make payment to the other when due; (2) default by either party in the
performance of the covenants and agreements set forth in this Agreement; (3) if
either party shall become insolvent, or make a general assignment for the
benefit of creditors or to an agent authorized to liquidate any substantial
amount of its assets, or be adjudicated bankrupt, or file a petition in
bankruptcy, or apply to a court for the appointment of a receiver for any of
its assets or properties with or without consent, and such receiver shall not
be discharged within sixty (60) days following appointment.

 

13.                                 REMEDIES.  Upon the happening of an Event of Default,
the parties hereto shall have all remedies available under applicable law with
respect to an Event of Default by the other party.  Without limiting the foregoing, the parties
shall have the following remedies whether in addition to or as one of the
remedies otherwise available to them; (1) to declare all amounts owed
immediately due and payable; and (2) immediately to terminate this Agreement
effective upon receipt by the party in default of the notice of termination,
provided, however, the parties shall be allowed 10 days from the date of
receipt of notice of default to cure any default. Notwithstanding any other
provision of this Agreement, Buyer may offset against amounts otherwise owed to
Seller the price of any product which fails to conform to any requirements of
this Agreement.

 

14.                                 FORCE
MAJEURE.  Neither Seller nor Buyer
will be liable to the other for any failure or delay in the performance of any
obligation under this Agreement due to events beyond its reasonable control,
including, but not limited to, fire, storm, flood, earthquake, explosion, act
of the public enemy, riots, civil disorders, sabotage, strikes, lockouts, labor
disputes, labor shortages, war stoppages or slowdowns initiated by labor, transportation
embargoes, failure or

 

 

shortage of materials,
acts of God, or acts or regulations or priorities of the federal, state or
local government or branches or agencies thereof.

 

15.                                 INDEMNIFICATION.

 

A.                                   Seller
shall indemnify, defend and hold Buyer and its officers, directors, employees
and agents harmless, from any and all losses, liabilities, damages, expenses
(including reasonable attorneys’ fees), costs, claims, demands, that Buyer or
its officers, directors, employees or agents may suffer, sustain or become
subject to, or as a result of (i) any misrepresentation or breach of warranty,
covenant or agreement of Seller contained herein or (ii) the Seller’s
negligence or willful misconduct.

 

B.                                     Buyer
shall indemnify, defend and hold Seller and its officer, directors, employees
and agents harmless, from any and all losses, liabilities, damages, expenses
(including reasonable attorneys’ fees), costs, claims, demands, that Seller or
its officers, directors, employees or agents may suffer, sustain or become
subject to, or as a result of (i) any misrepresentation or breach of warranty,
covenant or agreement of Buyer contained herein or (ii) the Buyer’s negligence
or willful misconduct.

 

C.                                     Where
such personal injury, death or loss of or damage to property is the result of
negligence on the part of both Seller and Buyer, each party’s duty of
indemnification shall be in proportion to the percentage of that party’s
negligence or faults.

 

D.                                    Seller
acknowledges that in order to maximize the total revenue to be generated
through the sale of the Products, Buyer may take positions by selling Product
in anticipation of Seller providing the Products.  Notwithstanding the fact that Seller’s
obligation is to provide Buyer with the output of the Plant the parties
acknowledge that Buyer may suffer losses as a result of positions taken by
Buyer if Seller discontinues operations for any reason whatsoever including
Force Majeure.  Therefore, Seller shall
indemnify, defend and hold Buyer and its officers, directors, employees and
agents harmless from any and all losses, liabilities, damages, expenses (including
reasonable attorney’s fees), costs, claims, demands that Buyer or its officers,
directors, employees, or agents may suffer, sustain or become subject to as a
result of any sale or purchase of product taken by Buyer in anticipation of
Seller delivering the Products hereunder, provided Buyer has taken commercially
reasonable steps to avoid the loss. 
Notwithstanding the above, Seller shall not be liable for any loss
resulting from Seller discontinuing operations related to a position taken by
Buyer for delivery more than 90 days from the date of entering into a sale
without the consent of Seller nor shall Seller be liable to Buyer for any
positions taken by Buyer that result in Buyer being over contracted beyond
Seller’s production capacity.

 

16.                                 GOVERNMENTAL
ACTION.  The parties recognize that
the value of the Products could change as a result of various governmental
programs, be they foreign or domestic. 
In the event that a significant value change of the Products as a result
of any such governmental program, Buyer may request re-negotiation of the
contract price for the Products by providing written notice to Seller.  Buyer shall be required to demonstrate that
the value of the

 

 

Products has
significantly changed in the market. 
Should such a change take place, the parties agree to negotiate, in good
faith, a revised sale price for the Products. 
If, after a good faith effort, the parties are unable to agree on a new
price within the 90 day period immediately following notice to the other party,
then in such event and notwithstanding the other provisions hereof, Buyer may
terminate this Agreement upon 90 days prior written notice.

 

17.                                 RELATIONSHIP
OF PARTIES.  This Agreement creates
no relationship other than that of buyer and seller between the parties
hereto.  Specifically, there is no agency,
partnership, joint venture or other joint or mutual enterprise or undertaking
created hereby.  Nothing contained in
this Agreement authorizes one party to act for or on behalf of the other and
neither party is entitled to commissions from the other.

 

18.                                 MISCELLANEOUS.

 

A.  This writing is intended by the parties as a
final expression of their agreement and a complete and exclusive statement of
the terms thereof.

 

B.  No course of prior dealings between the
parties and no usage of trade, except where expressly incorporated by
reference, shall be relevant or admissible to supplement, explain, or vary any
of the terms of this Agreement.

 

C.  Acceptance of, or acquiescence in, a course
of performance rendered under this or any prior agreement shall not be relevant
or admissible to determine the meaning of this Agreement even though the
accepting or acquiescing party has knowledge of the nature or the performance
and an opportunity to make objection.

 

D.  No representations, understandings or
agreements have been made or relied upon in the making of this Agreement other
than as specifically set forth herein.

 

E.  This Agreement can only be modified by a
writing signed by all of the parties or their duly authorized agents.

 

F.  The paragraph headings herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

 

G.  This Agreement shall be construed and
performed in accordance with the laws of the State of  Iowa.

 

H.  The respective rights, obligations and
liabilities of the parties under this Agreement are not assignable or delegable
without the prior written consent of the other party.

 

I.   Notice
shall be deemed to have been given to the party to whom it is addressed
ninety-six (96) hours after it is deposited in certified U.S. mail, postage
prepaid, return receipt requested, addressed as follows:

 

 

	
  Buyer:

  	
  Commodity Specialist Company

  
	
   

  	
  310 Grain
  Exchange Bldg.

  
	
   

  	
  400 South Fourth
  Street,

  
	
   

  	
  Minneapolis, MN
  55415

  
	
   

  	
  ATTN: Steve J.
  Markham

  
	
   

  	
   

  
	
  Seller:

  	
  United Wisconsin
  Grain Producers, LLC

  
	
   

  	
  P.O. Box 247

  
	
   

  	
  Friesland, WI
  53935

  
	
   

  	
  ATTN: Jeff
  Robertson

  

 

IN
WITNESS THEREOF, the parties have caused this Agreement to be executed the day
and year first above written.

 

	
   

  	
  COMMODITY
  SPECIALISTS COMPANY

  
	
   

  	
   

  
	
   

  	
  By

  	
  /S/ Philip
  Lindau

  	
   

  
	
   

  	
  Its

  	
  EVP

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  United Wisconsin
  Grain Producers LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /S/ Kevin Roche

  	
   

  
	
   

  	
  Its

  	
  PresidentExhibit 10.3

 

FACILITY USE AGREEMENT

 

No. 6723-00-51

 

THIS AGREEMENT, made this day          
of                         ,
2004, by and between the Town of Randolph, Columbia County, Wisconsin (“Municipality”),
a municipal corporation, and United Wisconsin Grain
Producers, LLC (“Industry”).

 

ARTICLE 1.0
– DEFINITIONS

 

a.                                       “Operator” means the Union Pacific Railroad
Company.

 

b.                                      “Municipality” means the Town of Randolph,
Columbia County, Wisconsin.

 

c.                                       “WisDOT” means the Wisconsin Department of
Transportation.

 

d.                                      “Industry” means United Wisconsin Grain
Producers, LLC.

 

e.                                       “Industry Land” means the corridor of real
estate owned by Industry upon which the project facility is located at the
Industry plant site in Town of Randolph, Wisconsin and more fully described in
Attachment II.

 

f.                                               “Improved Property” means the rails, ties,
ballast, track material, switches, and culverts acquired, used or installed
with the proceeds received by the Municipality from the TEA-Rail Agreement.

 

g.                                      “Person” means an individual, a partnership,
an association, and bodies politic or corporate.

 

h.                                      “Project Facility” means the industrial
railroad spur constructed under the TEA-Rail Agreement using improved property
and providing Industry’s plant with access to the Operator’s track.

 

i.                                          “BORAH” means the Bureau of Railroads and
Harbors of WisDOT.

 

j.                                          “Industry Track Agreement” means the
agreement by and between the Operator and Municipality or Industry, or both,
governing the provision of rail service over and the maintenance of the project
facility.

 

k.                                       “TEA-Rail” means the agreement by and between
the Municipality and WisDOT, Identification No. 6723-00-51, setting forth the
terms of the

 

 

Municipality’s receipt of a
Transportation Economic Assistance-Rail grant to construct the project
facility.

 

l.                                          “Direct Job(s)” means the number of eligible
jobs directly associated with the economic development project and listed on
the application, as reviewed and approved by WisDOT under TRANS 510.

 

ARTICLE 2.0
- PROJECT DESCRIPTION

 

The Project Facility constructed by the Municipality
on Municipality and/or Industry Land consists of a multiple track, mini rail
yard railroad spur of initial construction of 8,033 feet and projected
additions which would total 10,421 feet from the point of the switch on the
Operator’s track to the end of the track at Industry’s plant site as shown on
Attachment III.

 

ARTICLE 3.0
- USE, TERM AND JOB GUARANTEE

 

(a)                                  The Municipality grants to Industry the right
to use the Project Facility for the purpose of shipping and receiving materials
from and at industry’s plant, provided Industry complies with the terms and
conditions set forth in this Agreement. 
Industry’s right to use the Project Facility shall continue until
terminated pursuant to this Agreement.

 

(b)                                 Industry shall comply with the criteria
established in the Direct Jobs Guarantee attached hereto as Attachment I.

 

ARTICLE 4.0
- PROJECT FACILITY LIQUIDATION

 

In the event the Project Facility is liquidated at
any time, the net proceeds received from disposition of the Improved Property
included in the Project Facility shall be distributed as follows: 50% thereof
shall be paid to Municipality for reimbursement to WisDOT, and 50% thereof
shall be paid to Municipality.

 

2

 

ARTICLE 5.0
- PROJECT FACILITY OPERATION

 

Section 5.1.                                Written
Agreements

 

Industry has entered or shall enter into the
following written agreements with appropriate parties to assure its ability to
comply with the requirements of this Agreement. 
These agreements shall be submitted in approvable form to the
Municipality by Industry, so the Municipality may submit them to BORAH for
acceptance.  If Industry fails to comply
with this provision or BORAH does not accept said written agreements, this Agreement
is automatically terminated.

 

(a)                                  Industry shall furnish a track easement to
the Municipality on Industry Land (as described in Attachment II) granting the
Municipality a perpetual right for construction, operation and ownership of the
Project Facility on said land.

 

(b)                                 Industry shall provide an Industry Track
Agreement by and between Municipality or Industry, or both, and Operator. Said
Industry Track Agreement shall be attached hereto as Attachment III and made a
part of this Agreement as of the date Attachment III is accepted in writing by
BORAH.

 

Section 5.2.                                Maintenance
of Project Facility

 

Industry shall, at its expense, perform or arrange
for performance of all maintenance and repairs of the Project Facility, the
road bed of the Project Facility, drainage ways and any structures necessary
for the safe operation of railroad service as determined by Operator or the
Federal Railroad Administration, or both.

 

Section 5.3.                                Project
Facility Use

 

(a)                                  A defacto condition of default for failure to
use may be declared by Municipality or WisDOT upon occurrence of any one or
more of the following events:

 

3

 

(i)                                     Industry renders its loading docks or track
side facilities unfit for use for rail service or ceases its operation of its
plant.

 

(ii)                                  Industry files for protection under
bankruptcy laws.

 

(iii)                               Operator abandons the line haul track and/or
industrial lead track to which the Project Facility is connected.

 

(iv)                              Operator ceases operation of line haul track
and/or industrial lead track serving the Project Facility.

 

(v)                                 The Project Facility is rendered unfit for
railroad freight service by Municipality, Industry, or Operator.

 

(b)                                 Industry shall provide to BORAH not later
than January 20th of each year a report of the number of loaded rail cars
shipped or received on the Project Facility by Industry.  Industry shall arrange for access by BORAH or
its authorized agent to examine waybill, demurrage, or other appropriate records
for purposes of validating reported car counts.

 

Section 5.4.                                Defective
Work

 

If it is reasonably determined by Industry,
Municipality or WisDOT that any material or workmanship is deficient Industry,
without reimbursement, shall promptly require the replacement of materials or
correction of workmanship necessary to cure the deficiency.

 

ARTICLE 6.0
- PROJECT PROPERTY SECURITY, LIENS AND SALE

 

Section 6.1.                                Security
for Borrowing

 

(a)                                  Industry shall not itself nor shall it allow
Operator to use the value of the Improved Property acquired or used for this
project as security or collateral for any loan or other borrowing.

 

4

 

(b)                                 Industry shall not use Industry Land as
security or collateral for any loan or other borrowing which is not recorded in
the office of the Register of Deeds of Columbia County on the date of execution
of this Agreement.

 

Section 6.2                                   Liens
Against Improved Property

 

(a)                                  Industry acknowledges that the TEA-Rail
Agreement creates a first priority lien in favor of WisDOT on the material
purchased in whole or in part with the proceeds of the TEA-Rail Agreement
beginning with acceptance of delivery and continuing for the duration of their
placement on Industry Land, and that the Municipality shall cause a legally
sufficient notice of this lien to be recorded in the office of the Register of
Deeds of Columbia County, the Wisconsin Department of Financial Institutions,
and shall notify BORAH when recording is accomplished.  Said notice shall be removed from the record
only upon written waiver of lien by WisDOT.

 

(b)                                 Industry shall not directly or indirectly
create, incur, assume, or suffer to exist any mortgage, pledge, lien, charge,
encumbrance, or other security interest or claim on or with respect to the
Improved Property or any interest therein not in existence on the date of
execution of this Agreement. Industry shall immediately take such action as may
be necessary to duly discharge any such mortgage, pledge, lien, charge,
encumbrance, security interest, or claim against Improved Property if the same
shall arise at any time.

 

Section 6.3.                                Sale
of Improved Property or Industry Land

 

In the event Industry sells the Improved Property or
Industry Land, or both, without the written approval of BORAH, which approval
shall not be unreasonably withheld, Industry shall immediately pay to the
Municipality an amount equal to the amount the Municipality is required to
repay to WisDOT from the TEA-Rail grant as a result of said sale.

 

5

 

ARTICLE 7.0
- DEFAULT AND TERMINATION

 

Section 7.1.                                Declaration
of Default

 

A condition of default exists under this Agreement
when either party to this Agreement fails to abide by or perform according to
any one or more of its terms and conditions. 
A declaration of default of this Agreement shall be made in writing and
delivered to the alleged defaulting party by certified mail sent to the address
shown in Section 10.2.  The letter
shall identify the action or inaction constituting the default and reference
the portion of the Agreement under which the default occurs.  The date of default shall be the date of
delivery of notice or the date insurance coverage fails to meet requirements or
the date of filing for bankruptcy by Industry, whichever first occurs.

 

Section 7.2.                                Termination
of Default

 

In the event of any failure on the part of either
party to perform its obligations under the terms of this Agreement, including,
but not limited to, transmittal of required payments under this Agreement, the
other party shall have the right to give immediate notice of default and, at
its option, after first giving ten (10) days written notice thereof by
certified mail to the party in default and notwithstanding any waiver by the
party giving notice of any prior breach thereof, to terminate this Agreement,
and the exercise of such right shall not impair any other rights of the parry
giving notice under this Agreement or any rights of action against the
defaulting party for the recovery of damages.

 

Section 7.3.                                Removal
of a Condition of Default

 

The Municipality or Industry shall have ten (10)
calendar days from written notification of the default to remove or remedy the
cause of the default.  This remedy period

 

6

 

may
be waived by the party declared in default. Correction by the defaulting party
shall be completed and ready for verification by the other party within the ten
(10) day period.  Upon written petition
by the defaulting party, the other party may extend the period for removal of a
default condition.  The defaulting party
shall be notified of satisfactory correction in writing.

 

Section 7.4.                                Expenses
of Termination

 

The parties shall themselves, and Industry shall
require Operator, to mitigate the expenses of termination to the greatest
extent possible, and the Municipality shall pay those that do occur if default
is caused by Municipality, and Industry shall pay those that do occur if
default is caused by Industry.

 

Section 7.5.                                Vacating
the Property

 

Upon determination by the Municipality that remedial
action has not removed the default condition caused by Industry, the
Municipality shall provide written notice to Industry and Operator for Industry
and Operator to vacate the Project Facility within fourteen (14) days of delivery
of such notice.

 

Section 7.6.                                Force
Majeure

 

The parties hereto will be excused from performance
of any of their respective obligations hereunder, for the duration of any
interruption occasioned by any event beyond their respective control (not due to
their own fault or actions), which shall include, without limitations: Acts of
God; strikes or other labor troubles or other causes except the unavailability
of insurance coverage in full accordance with Section 9.2 of this
Agreement or any amendment thereto, beyond the reasonable control of the
parties; interruption of service 

 

7

 

caused
by accidents, explosions, fires, vandalism, or malicious mischief.  To the extent permitted by WisDOT, the
parties will be excused from the performance of their obligations hereunder of
the parties’ failure to use the Project Facility is due to the economic or
business conditions of Industry or the failure of Operator to provide freight
cars or switching service.

 

Section 7.7.                                Cost
of Collection

 

In the event of default of any provision of this
Agreement, in addition to any other remedies to which the non-defaulting party
may be entitled, the defaulting party shall pay all of the non-defaulting party’s
costs and expenses of enforcing this Agreement, including all reasonable
attorneys’ fees and expenses, whether incurred prior to or after commencement
of any lawsuit.

 

ARTICLE 8.0
REPRESENTATIONS AND WARRANTS

 

The parties hereto represent and warrant that they
have the power and authority to enter into this Agreement and to carry out
their obligations under this Agreement.

 

ARTICLE 9.0
- LIABILITY AND INSURANCE

 

Section 9.1.                                Hold
Harmless

 

Industry shall save and hold the Municipality and
WisDOT, their officers, employees and agents harmless from and against all
liability, damage, loss, claims, demands and actions of any nature whatsoever
which arises out of or are connected with, or are claimed to arise out of or be
connected with, any act, omission or operation of Industry or Operator, or
Industry’s or Operator’s agents, servants, subcontractors or employees, or
which arises out of or is connected with, or is claimed to arise out of or be
connected with any accident or occurrence which happens or is alleged to have
happened, in or about a

 

8

 

place
where such operation, act or omission is being performed or in the vicinity
thereof (1) while Operator or Industry is performing its work, or (2) during
the period this Agreement between Industry and Municipality is in effect, or
(3) while any of the Operator’s or Industry’s property, equipment, or
personnel, is in or about such place or the vicinity thereof by reason of or as
a result of the performance of Operator’s or Industry’s operations including,
without limiting the applicability of the foregoing: all liabilities, damages,
losses, claims, demands and actions on account of personal injury, death or
property loss to the Municipality or WisDOT, their, officers, employees,
agents, subcontractors, or frequenters, or to any other person or legal entity
whether based upon, or claimed to be based upon contract, tort, or having its
basis in workers’ compensation under federal or state statutes or having any
other code, or statutory basis, or based upon administrative laws or other
provisions, or other liability of the Municipality or WisDOT, Industry or any
other persons or entities, and whether or not caused or claimed to have been
caused by the negligence, or other breach of duty by the Municipality or
WisDOT, their officers, employees, agents, subcontractors, or frequenters, or
Industry, its officers, employees, agents, subcontractors or frequenters, or
any other person or legal entity. 
Without limiting the applicability of the foregoing, the liability,
damage, loss, claims, demands and actions indemnified against shall include all
liability, damage, loss, claims, demands and actions for trademark, copyright
or patent infringement, for unfair competition or infringement of any so-called
“intangible” property right, for defamation, false arrest, malicious
prosecution or any other infringement of personal or property rights of any
kind whatsoever.

 

9

 

Section 9.2.                                Insurance

 

(a)                                  Required Coverage - During the term of this Agreement,
Industry shall maintain, at its own cost and expense, a Comprehensive General
Liability Policy in an amount of not less than $1,000,000.00 single limit
coverage, and for matters of liability arising from the existence and use of
the Project Facility, shall name the Municipality and WisDOT, their officers,
employees, and agents as additional insureds on all Primary and Excess
Comprehensive General Liability insurance documents. Industry shall, in
addition, maintain and keep in force worker’s compensation and employer’s
liability insurance, to the extent, if any, that worker’s compensation and
employer’s liability is not covered under the Comprehensive General Liability
Policy.

 

(b)                                 Validation of Coverage and Notice of Cancellation - Upon initial inclusion of the Municipality
and WisDOT as additional insureds and on each renewal of insurance coverage
required by Section 9.2(a), the insurance carrier shall provide to the
Municipality and WisDOT written documentation from the insurance carrier or its
authorized representative of the terms and effective date of coverage. In the
event of insurance coverage suspension or insurance cancellation by any
insurance carrier, both the insurance carrier and Industry shall provide the Municipality
and WisDOT with notification of such suspension or cancellation of insurance
coverage required by Section 9.2(a) no less than 10 days prior to such
suspension or cancellation.

 

(c)                                  Reporting of Incidents and Claims - During the term of this Agreement, any
damage or injury to person or property occurring on the Project Facility or
from the operation of the equipment of Operator or Industry or by the employees
of Operator or Industry (herein referred to as an “incident”) shall be reported
to the Municipality and WisDOT at such time

 

10

 

as
said incident is reported to any regulatory agencies or Industry’s insurance
carrier. Industry and Operator shall forthwith furnish the Municipality and
WisDOT with copies of any notice of injury or claim of damage made to Industry
or Operator.  Thereafter, Industry and
Operator shall provide the Municipality and WisDOT access to copies of any
further instruments, reports and records involving such matter and shall report,
at least quarterly, to the Municipality and WisDOT as to further happenings
regarding the incident including the final disposition of the matter. Notice of
court dates shall be given to the Municipality and WisDOT upon receipt.

 

ARTICLE 10.0
- GENERAL CONDITIONS

 

Section 10.1.                         Choice
of Law

 

This Agreement shall be interpreted in accordance
with the statutes and laws of the United States of America and the State of
Wisconsin. Interpretation may be had in any court of record of the County of
Columbia.

 

Section 10.2.                         Notice

 

(a)                                  Any notice required or permitted under this
Agreement shall be personally served or mailed by certified United States mail,
return receipt requested, postage prepaid, to the following addressed persons
at the following addresses and to such other persons and addresses as the
following persons shall direct by notice pursuant to this Section:

 

	
  Town of
  Randolph

  	
  United
  Wisconsin Grain Producers, LLC

  
	
  W1441 Vaughn Road

  	
  Post Office Box 247

  
	
  Cambria, WI 53923

  	
  Friesland, WI 53935-0247

  

 

(b)                                 Any notice provided under Section 10.2(a)
shall be provided to the following by first class mail.

 

11

 

	
  Director, Bureau of Railroads & Harbors

  	
  President

  
	
  WI
  Dept. of Transportation

  	
  Union
  Pacific Railroad Company

  
	
  P.O. Box 7914

  	
  1416 Dodge Street

  
	
  Madison, WI 53707-7914

  	
  Omaha, NB 68179

  

 

Section 10.3.                         Transfer
of Rights Under This Agreement

 

This Agreement shall be binding upon and inure
solely to the benefit of the parties hereto. Industry’s or Operator’s rights
hereunder shall not be assignable whether by way of assignment, sublease,
license or otherwise, directly or indirectly without the Municipality’s prior,
written consent.

 

Section 10.4.                         Severability

 

If any term, covenant, condition or provision (or
part thereof) of this Agreement, or the application thereof to any party or
circumstance, shall at any time or to any extent be held to be invalid or
unenforceable, the remainder of this Agreement, or the application of such term
or provision, or remainder thereof, to parties or circumstances other than
those as to which it is held to be invalid or unenforceable, shall not be
affected thereby, and each term, covenant, condition and provision of this
Agreement shall be valid and be enforced to the fullest extent permitted by
law.

 

Section 10.5.                         Amendment,
Consents and Approvals

 

(a)                                  No term or provision of this Agreement, or
any of its attachments, may be changed, waived, discharged or terminated,
except by an instrument in writing signed by both parties to this Agreement.

 

(b)                                 Consents and approvals required under this
Agreement and interpretation of this Agreement may be made or granted by letter
from one party to the other party hereunder or by an exchange of letters
between the parties.

 

12

 

Section 10.6.                         Officials

 

(a)                                  Officials authorized to execute amendments or
modifications to this Agreement on behalf of the Municipality are the Town
Chairman and the Town Clerk.

 

(b)                                 Officials authorized to execute amendments or
modifications to this Agreement on behalf of Industry are the President and
Secretary.

 

Section 10.7.                         Handicapped

 

No otherwise qualified handicapped individual in the
United States, as defined in Section 706(7) of Title 29 USC, and
subchapter II of Chapter 111, Wis. Stats., shall solely by reason of the
individual’s handicap, be excluded from the participation in, be denied the
benefits of, or be subjected to discrimination under any program or activity
receiving benefits under this Agreement.

 

Section 10.8.                         Environmental
Protection

 

(a)                                  Industry agrees to conduct work under this
Agreement in compliance with all applicable Wisconsin Environmental
requirements. Industry will complete a Wisconsin Department of Transportation
Programmatic Environmental Report and provide WisDOT with copies of approval
letters from the Wisconsin Department of Natural Resources, the Wisconsin State
Historical Society, or other state or federal agency who may have reviewed thus
project for environmental reasons, prior to execution of this Agreement by
WisDOT.  This report and letters shall
become part of this Agreement.

 

(b)                                 Facilities or equipment shall not be
acquired, constructed, or improved as a part of the Project Facility unless
such facilities or equipment are designed and equipped to

 

13

 

limit
water and air pollution in accordance with all applicable state and federal
standards, statutes, and regulations.

 

(c)                                  Operations shall be conducted in compliance
with all the requirements of Section 114 of the Clean Air Act, 42 USC sec.
7414, and Section 308 of the Federal Water Pollution Control Act, 33 USC
1318, and all applicable regulations issued under said Acts.

 

(d)                                 Industry certifies that no facilities, which
will be utilized or improved as part of the Project Facility, are listed on the
Environmental Protection Agency (“EPA”) List of Violating Facilities (“List”).

 

(e)                                  Industry shall notify the Municipality as
soon as it, the Operator or any subcontractor receives any communication from
the EPA indicating that any facility which will be utilized or improved as part
of the Project Facility is under consideration to be listed on the EPA List.

 

Section 10.9.                         Prohibited
Interests/Conflicts of Interest:

 

(a)                                  Neither Municipality, Industry nor Operator,
nor any of their subcontractors shall enter into any contract, subcontract, or
agreement in connection with the project or any property included or planned to
be included in the Project Facility in which any director, officer or employee
of Municipality during his or her tenure or for one (1) year thereafter has any
interest, direct or indirect, except as permitted under Sec. 946.13(2), Wis.
Stats. (2001-2002).

 

(b)                                 No director, officer, or employee of
Municipality, during his or her tenure or for one (1) year thereafter shall
have any interest, direct or indirect, in this contract or the proceeds thereof
except as permitted under Sec. 946.13(2), Wis. Stats. (2001-2002).

 

14

 

(c)                                  No subcontractor of Municipality or Industry
may enter into any contract, subcontract or other arrangements which may affect
the activities for which assistance is available to the Municipality under the
TEA-Rail Agreement if any director, officer, any key salaried employee or
official, or any member of the immediate family of one of the foregoing has any
material interest in said Agreement.

 

(d)                                 The provisions of this subsection shall
not be applicable to any agreement between Municipality or Industry and its
fiscal depositories or to any agreement for utility services for which rates
are fixed by government regulation.

 

Section 10.10.                  Non-Discrimination

 

(a)                                  In connection with the performance of work
under this Agreement or the TEA-Rail Agreement, Industry agrees not to
discriminate against any employee or applicant for employment because of age,
race, religion, color, handicap, sex, physical condition, developmental
disability as defined in Sec. 51.01(5), Wis. Stats., sexual orientation
or national origin.  This provision shall
include, but not be limited to, the following: employment, upgrading, demotion
or transfer, recruitment or recruitment advertising; layoff or termination;
rates of pay or other forms of compensation; and selection for training,
including apprenticeship.  Except with
respect to sexual orientation, the contractor further agrees to take
affirmative action to ensure equal employment opportunities. Industry agrees to
post in conspicuous places, available for employees and applicants for
employment, notices setting forth the provisions of the nondiscrimination
clause.

 

(b)                                 Municipality shall comply with the following
laws, policies, regulations and pertinent directions as may be applicable and
will require their subcontractors through contractual agreement to similarly
comply

 

15

 

(i)                                     Title VI of the Civil Rights Act of 1964, 78
Stats. 252, 42 U.S.C. 2000d et seq.

 

(ii)                                  Subchapter II of Chapter 111, Wis. Stats.

 

(iii)                               Section 16.765, Wis. Stats.

 

(c)                                  Municipality in the procurement process,
shall not discriminate against minority owned or operated firms qualified to
bid and perform on contracts, subcontracts, or materials procurement connected
with the work performed under this Agreement or the TEA-Rail Agreement.

 

Section 10.11.                  Assurance

 

Municipality shall require its construction
contractor to acquire a performance and payment bond or an irrevocable letter
of credit in the full amount of the grant to the Municipality under the
TEA-Rail Agreement in favor of Municipality for the duration of the
construction work set forth under said Agreement.

 

Section 10.12.                  Specific
Performance

 

The Municipality shall have the right, as provided
by law, to require specific performance by Industry of Industry’s obligations
under this Agreement.  This right may be
asserted at any time after thirty (30) days of the Municipality notifying
Industry of its obligation to perform.

 

Section 10.13.                  Entire
Agreement

 

This Agreement and the attachments hereto contain
the entire agreement of the parties and supersede any and all prior agreements
or oral understandings between the parties.

 

16

 

SIGNATURES

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their duly authorized officers on the date and
year designated in this Agreement.

 

	
   

  	
  TOWN OF
  RANDOLPH

  
	
   

  	
   

  
	
  WITNESS:

  	
  /s/ Brad Bruxvoort

  	
   

  	
  By:

  	
  /s/ David Hughes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  David
  Hughes, Town
  Chairman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WITNESS:

  	
  /s/ Brad Bruxvoort

  	
   

  	
  By:

  	
  /s/ Rodney Kok

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Rodney
  Kok, Town Clerk

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  UNITED
  WISCONSIN GRAIN

  
	
   

  	
   

  	
   

  	
  PRODUCERS,
  LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WITNESS:

  	
  /s/ Suzanne Wendt

  	
   

  	
  By:

  	
  /s/ Kevin Roche

  	
   

  
	
   

  	
   

  	
   

  	
  *

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WITNESS:

  	
  /s/ Suzanne Wendt

  	
   

  	
  By:

  	
  /s/ Bob Lange

  	
   

  
	
   

  	
   

  	
   

  	
  *

  	
  Sect.

  	
   

  

 

17

 

FUA

Agreement
No.               6723-00-51

 

 

ATTACHMENT I

 

TRANSPORTATION ECONOMIC ASSISTANCE JOB GUARANTEE

 

 

 

	
  DT1236

  	
  Wisconsin Department of
  Transportation

  

 

TRANSPORTATION ECONOMIC ASSISTANCE

 

JOB GUARANTEE

 

The
TOWN OR RANDOLPH, COLUMBIA COUNTY, hereby agrees to authorize inclusion and be
bound by this repayment provision in the Project Agreement that will be
executed between the applicant and the Wisconsin Department of Transportation
as part of the Department’s approval of the applicant’s request for assistance
under the Transportation Facilities Economic Assistance and Development (TEA)
program.

 

The
VILLAGE OF CAMBRIA agrees, in this repayment provision, to reimburse the
Department up to the full grant amount if employment within the economic development
project (RANDOLPH (TOWN)/UNITED WISCONSIN GRAIN PRODUCERS. LLC MINI RAIL
YARD CONSTRUTION) fails to meet the following goals: (1) expansion of
employment by 32 jobs in three years after A Rail Project Agreement is
executed; and, (2) retention of these 32 jobs for another 4 years
(verifications to be made at 3 and 7 years after Rail Project Agreement is
executed).

 

For
purposes of this provision, a job is defined to be consistent with Trans. 510
of the Wisconsin Administrative Code.  It
will include all new non-retail jobs and exclude jobs obtained through
geographic job transfers within Wisconsin except those that would be lost to
the state. Eligible jobs may include full time equivalents (FTE’s).

 

If
the job guarantee is not satisfied, the Department will evaluate the job
benefits that have been obtained in order to determine if reimbursement of
either the full grant amount or reimbursement of a reduced amount based on a
prorated share related to the number of jobs that have materialized as a result
of the economic development project is appropriate.

 

The
full grant amount involved here, of which partial or total reimbursement may be
required, is $160,000.

 

 

	
  /s/ Frank J. Busalacchi

  	
   

  	
  /s/ Dave Hughes

  	
   

  
	
  (Name)

  	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  FRANK J. BUSALACCHI

  	
   

  	
  DAVE HUGHES

  	
   

  
	
  SECRETARY,

  	
   

  	
  CHAIRMAN

  	
   

  
	
  WISCONSIN DEPARTMENT

  	
   

  	
  TOWN OF RANDOLPH 53935-0247

  
	
  OF TRANSPORTATION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9-15-04

  	
   

  	
  8-23-04

  	
   

  
	
  (Date)

  	
   

  	
  (Date)

  	
   

  

 

 

FUA

Agreement
No.               6723-00-51

 

 

ATTACHMENT II

 

RAILROAD SPUR EASEMENT AGREEMENT

 

 

 

	
  RAILROAD SPUR

  	
   

  
	
  EASEMENT AGREEMENT

  	
   

  

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Name
  & Return Address:

  
	
   

  	
  Attorney Lan Waddell

  
	
   

  	
  WADDELL OF COLUMBUS, SC

  
	
   

  	
  P. O. Box 407

  
	
   

  	
  Columbus, WI 53925

  
	
   

  	
   

  
	
   

  	
  Parcel
  Identification Numbers: 535.01, 535.02

  

 

Railroad Spur Easement Agreement (“Agreement”)
effective as of
                             ,
2004 by and between United Wisconsin Grain
Producers, LLC (“UWGP”) and Town of Randolph, a
municipal corporation (“Town”).

 

RECITALS

 

A.                                   UWGP is the fee simple owner of certain real
property in the Town of Randolph, Columbia County, State of Wisconsin, more
particularly described as follows:

 

Lots 1 and 2, Certified Survey Map No. 4050; being
part of the NW 1⁄4 NW 1⁄4 of NE 1⁄4 NW 1⁄4, the SE 1⁄4 NW 1⁄4 of SW 1⁄4 NW 1⁄4, Section 27,
Township 13 North, Range 12 East, Town of Randolph, Columbia County, Wisconsin
(the “Property”).

 

B.                                     Town and Wisconsin Department of
Transportation are parties to a Transportation Economic Assistance
Agreement-Rail (“TEA-Rail”), Identification No. 6723-00-51, that contains the
terms and conditions of a Transportation Economic Assistance-Rail grant to Town
for construction by Town of an industrial railroad spur on the Property
(“Project Facility”).

 

C.                                     Pursuant to a Facility Use Agreement between
Town and UWGP dated
                            ,
2004 (“FUA”), UWGP is to furnish to Town a track easement for the right to
construct and operate the Project Facility on the following described portion
of the Property (“Easement Area”):

 

See
attached Railroad Easement LEGAL DESCRIPTION.

 

AGREEMENT

 

For good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree as follows:

 

1.                                       Grant of Easement.  UWGP grants to Town a perpetual easement and
right-of-way for the purposes of facilitating the Project Facility on and over
the Easement Area and for the purpose of UWGP gaining access to and from the
railroad track owned by Union Pacific Railroad Company

 

 

(or
its successor) (“Easement”), pursuant to the FUA and TEA-Rail. Town agrees to
construct the Project Facility no later than June, 2005 (the “Final Completion
Date”). This Easement shall terminate upon termination of the FUA or TEA Rail.

 

2.                                       Temporary Construction Easement.  During the period of construction
or installation of the Project Facility on and over the Easement Area, Town
shall have a temporary construction easement over those portions of the
Property located within sixty (60) feet of the Easement Area for the purpose of
transporting equipment and materials in connection with the construction or
installation of the Project Facility on the Easement Area (“Temporary
Construction Easement”). The Temporary Construction Easement shall expire on
the earlier of (a) completion of the Project Facility as contemplated in Section 1,
above; or (b) the Final Completion Date as specified in Section 1, above.

 

3.                                       Consistent Uses Allowed.  UWGP shall have the right to use
the Project Facility and reserves the right to use the Easement and the Temporary
Construction Easement for purposes that will not interfere with Town’s
enjoyment of the Easement rights granted in this Agreement.

 

4.                                       Restoration of Surface.  Town shall restore the surface
disturbed by any construction or maintenance of any equipment located within
the Easement or the Temporary Construction Easement to its condition before the
disturbance.

 

5.                                       Covenants Run with Land.  All of the terms and conditions
in this Agreement, including the benefits and burdens, shall run with the land
and shall be binding upon, inure to the benefit of, and be enforceable by UWGP
and Town and their respective successors and assigns. Except as otherwise
provided in the FUA, the party named as UWGP in this Agreement and any
successor or assign to UWGP as fee simple owner of the Property shall cease to
have any liability under this Agreement with respect to facts or circumstances
arising after the party has transferred its fee simple interest in the
Property.

 

6.                                       No Public Dedication.  Nothing in this Agreement shall be deemed to
be a gift or dedication of any portion of the easements granted under this
Agreement to the general public.

 

	
  TOWN OF
  RANDOLPH

  	
  UNITED
  WISCONSIN GRAIN PRODUCERS, LLC

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ David Hughes

  	
   

  	
  By:

  	
  /s/ Kevin Roche

  	
   

  
	
   

  	
  David
  Hughes, Town Chairman

  	
   

  	
  *

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Rodney Kok

  	
   

  	
  By:

  	
  Bob Lange

  	
   

  
	
   

  	
  Rodney
  Kok, Town Clerk

  	
   

  	
  *

  	
  Sect.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subscribed and sworn to before me this 4th day, October,
  2004 by the above named person(s) David Hughes and Rodney Kok

  	
   

  	
  Subscribed and sworn to before me this 4th day, October,
  2004 by the above named person(s) Kevin Roche – President and Bob Lange –
  Secretary

  
	
  Notary Public, State of Wisconsin

  	
   

  	
  Notary Public, State of Wisconsin

  
	
  My commission expires 4/22/07

  	
   

  	
  My commission expires 5/25/08

  
								

 

This Instrument was Drafted by:

Attorney
Lan Waddell

WADDELL
OF COLUMBUS, SC

P.O.
Box 407

Columbus,
WI 53925

 

2

 

Railroad Easement

LEGAL DESCRIPTION

United Wisconsin Grain Producers

Friesland, Wisconsin

 

Part
of the Northwest quarter of Section 27, Township 13 North, Range 12 East,
Township of Randolph, Columbia County, Wisconsin, described as follows:

 

An
easement for railroad spur track and rail car storage yard described as
follows;

 

Commencing
at the Northwest corner of said Section 27,

 

thence
N 87°56’05” E along the North line of the Northwest quarter of said section, a
distance of 1705.36 feet to a point on the Union Pacific’s Westerly right of
way line and also being the POINT OF BEGINNING,

 

thence
S 4°40’37” E, a distance of 949.88 feet,

 

thence
S 11°49’47” E, a distance of 763.02 feet,

 

thence
S 32°48’59” E , a distance of 231.63 feet,

 

thence
S 26°08’07” E, a distance of 143.89 feet,

 

thence
N 11°50’11” W, a distance of 2061.20 feet to the POINT OF BEGINNING.

 

Said
easement contains 165,282 square feet or 3.79 acres.

 

This
easement shall continue in force indefinitely and shall terminate upon
termination of the TEA-Rail Agreement with respect to the above described land
entered into and between the Town of Randolph and the Wisconsin Department of
Transportation.

 

 

FUA

Agreement
No.               6723-00-51

 

 

ATTACHMENT III

 

INDUSTRY TRACK AGREEMENT

 

 

 

ITC Ind
Dev-New Trk 05/01/01

Form
Approved, AVP-Law

 

INDUSTRY TRACK CONTRACT

ARTICLES OF AGREEMENT

 

THIS AGREEMENT is made and entered into as of the
     day of
                ,
2004, by and between UNION PACIFIC RAILROAD COMPANY, a Delaware corporation
having an address of 1400 Douglas Street, Omaha, Nebraska 68179 (hereinafter
the “Railroad”), and UNITED WISCONSIN GRAIN PRODUCERS, L.L.C., a Wisconsin
limited liability company, to be addressed at Post Office Box 247, Friesland,
Wisconsin 53935 (hereinafter the “Industry”).

 

RECITALS:

 

The Industry desires the
construction, maintenance and operation of a 2,150-foot spur Track A,
1,300-foot spur Track C, 2,062-foot double-ended Track D, 1,795-foot
double-ended Track E, 1,546-foot double-ended Track F, 1,310-foot double-ended
Track G and future 1,310-foot double-ended Track H (hereinafter collectively
“Track”) at or near Milepost 251.1, Adams Subdivision, in Friesland, Columbia
County, Wisconsin, shown on the attached Drawing No. W10033 dated July 21,
2004, marked Exhibit A, hereto attached and hereby made a part
hereof.

 

AGREEMENT:

 

NOW, THEREFORE, IT IS MUTUALLY AGREED BY AND BETWEEN
THE PARTIES HERETO AS FOLLOWS:

 

Article 1.                                                TRACK IDENTIFICATION MARKERS.

 

For the purpose of this Agreement, the following
segments of the Track shall be identified as follows:

 

Track A:

 

	
  Engineering Station 0+00 -

  	
   

  	
  the initial switch connection or sometimes referred to as the point of
  switch.

  
	
   

  	
   

  	
   

  
	
  Engineering Station 1+74 -

  	
   

  	
  the initial 13-foot clearance point of the track. It is the point on
  the track where a rail car either being moved or stored on the track will not
  interfere with the movement of other rail cars on adjacent main, branch or
  lead trackage owned by the Railroad.

  
	
   

  	
   

  	
   

  
	
  Engineering Station 5+01 -

  	
   

  	
  the point on the track that intersects the property line or
  right-of-way boundary line of the Railroad.

  
	
   

  	
   

  	
   

  
	
  Engineering Station 21+50 -

  	
   

  	
  the end of Track A.

  

 

1

 

Track D:

 

	
  Engineering Station 0+00 -

  	
   

  	
  the initial switch connection.

  
	
  Engineering Station 16+51 -

  	
   

  	
  the right-of-way boundary line of the Railroad.

  
	
  Engineering Station 18+88 -

  	
   

  	
  the southerly 13-foot clearance point.

  
	
  Engineering Station 20+62 -

  	
   

  	
  the end of Track D.

  

 

Article 2.                                                INDUSTRY-SUPPLIED TRACK MATERIAL.

 

The Industry, at its expense, will furnish loose
materials obtained from a Railroad-approved vendor, for one new No. 11 136-lb.
right-hand turnout and one new No. 11 136-lb. left-hand turnout, for assembly
and installation by Railroad forces.

 

Article 3.                                                CONSTRUCTION COST; PAYMENT.

 

A.                                   Upon the execution of this Agreement, the
Industry shall pay the Railroad the sum of TWO HUNDRED FIFTY THOUSAND TWO
HUNDRED FIFTY-THREE DOLLARS ($250,253.00), which is the firm cost to the
Industry for construction of that portion of the Track to be constructed by the
Railroad, as described in Article 4.

 

B.                                     The Railroad reserves the right to change
construction costs and design of the Track if construction is not started by
the Railroad within six (6) months of the date of this Agreement due to delays
imposed by the Industry.

 

Article 4.                                                PORTIONS OF TRACK TO BE CONSTRUCTED BY
RAILROAD.

 

The Railroad, in consideration of payment by
Industry of the amount stated in Article 3 of this Agreement, will perform
the following work:

 

1.                                       Construct 174 track feet of Track A including
one No. 11 136-lb. right-hand turnout supplied by the Industry, and install a
switch circuit controller at or near Milepost 251.1.

 

2.                                       Construct 174 track feet of Track D including
one No. 11 136-lb. left-hand turnout supplied by the Industry, and install a
switch circuit controller at or near Milepost 251.69.

 

3.                                       Relocate signal pole line underground and
perform other signal work as required.

 

Article 5.                                                PORTIONS OF TRACK TO BE CONSTRUCTED BY
INDUSTRY.

 

A.                                   The Industry, at its own expense and subject
to the prior approval of the Railroad, will perform all grading and install all
necessary drainage facilities required in connection with the construction of
the Track to the standards and satisfaction of the Railroad, and arrange to
modify any overhead and/or underground utilities to meet Railroad
specifications.

 

B.                                     The Industry, at its own expense, will also
perform the following work:

 

2

 

1.                                       Construct the remainder of Track A and
install a sliding derail with wheel crowder at or near Engineering Station 2+54
and a bumper at the end of the track.

 

2.                                       Construct all of Track C including one No. 8
turnout.

 

3.                                       Construct the remainder of Track D including
one No. 8 turnout and install a sliding derail with wheel crowder at or near
Engineering Station 18+08.

 

4.                                       Construct all of Track E, Track F, Track G,
and future Track H including two No. 8 turnouts for each track.

 

Article 6.                                                RIGHT-OF-WAY AND PRIVILEGE.

 

The Industry shall procure any needed right-of-way,
public authority or permission for construction, maintenance and operation of
the Track outside the limits of the Railroad’s right-of-way. The Industry shall
pay any fees or costs imposed by any public authority or person for the
privilege of constructing, maintaining and operating the Track.

 

Article 7.                                                GRANT OF RIGHT; USE AND OPERATION OF THE
TRACK.

 

A.                                   During the term hereof and subject to the
terms and conditions set forth in this Agreement, Railroad hereby grants to
Industry the right, at Industry’s sole cost and responsibility, to construct,
own, keep, maintain, repair and use Industry’s private section of Track
where located on and along Railroad’s right-of-way.

 

B.                                     The Railroad shall operate the Track subject
to any applicable tariffs or rail transportation contracts and the terms of
this Agreement, but the Railroad shall not be obligated to operate or maintain
the Track (and the Industry shall not have any claim against the Railroad) if
the Railroad is prevented or hindered from doing so by the Industry’s breach or
by acts of God, public authority, strikes, riots, labor disputes, or other
cause beyond its control. The Railroad shall have the right to use the Track
when not to the detriment of the Industry.

 

C.                                     The Industry shall bear the cost of any
modifications to the Railroad’s tracks, structures and communication facilities,
other than track changes connected with the initial switch connection, required
by the construction, reconstruction or operation of the Track.

 

D.                                    The use and operation of the Track shall also
be in accordance with the terms and conditions set forth in Exhibit B, hereto
attached and hereby made a part hereof.

 

Article 8.                                                OWNERSHIP OF THE TRACK.

 

A.                                   The Railroad shall own the portion of Track A
from the point of switch to the 13-foot, clearance point at Engineering Station
1+74, and the portion of Track D from the 13-foot clearance point at
Engineering Station 18+88 to the end of Track D (hereinafter “Railroad-owned
Track”).

 

3

 

B.                                     The Industry shall own the portion of Track A
from the 13-foot clearance point to the end of the track, all of Track C, the
portion of Track D from the point of switch to the 13-foot clearance point at
Engineering Station 18+88, and all of Track E, Track F, Track G and future
Track H (hereinafter “Industry-owned Track”).

 

Article 9.                                                MAINTENANCE OF THE TRACK STRUCTURE (RAIL,

TIES, BALLAST. OTHER TRACK MATERIAL).

 

A.                                   The Railroad, at its expense, shall maintain
the track structure for the portion of Railroad-owned Track.

 

B.                                     The Industry, at its expense, shall maintain
the track structure for the portion of Industry-owned Track.

 

Article 10.                                          MAINTENANCE OF RIGHT-OF-WAY

AND TRACK APPURTENANCES.

 

A.                                   The Railroad, at its expense, shall maintain
the right-of-way and track appurtenances for the portion of Railroad-owned
Track.

 

B.                                     The Industry, at its expense, shall perform
the following maintenance of the right-of-way and track appurtenances for the
portion of Industry-owned Track:

 

1.                                       Remove snow, ice, sand and other substances
and maintain drainage and grading as needed to permit safe operation over the
portion of Industry-owned Track.

 

2.                                       Maintain all appurtenances to the portion of
Industry-owned Track (other than an automatic signal system), including without
limitation, gates, fences, bridges, undertrack unloading pits, loading or unloading
devices and warning signs above, below or beside the track.

 

Article 11.                                          INDUSTRY TO GIVE NOTICE: FLAGGING.

 

Prior to entering Railroad’s right-of-way or other
property for the purpose of performing any construction, maintenance, repair or
reconstruction of the Track as set forth in this Agreement, and/or constructing
additional track segments connecting to the Track, the Industry and/or its
contractors are required to notify the Railroad’s local Director-Track
Maintenance, in writing, at least ten (10) working days in advance of such
work, so that the Railroad may, in the event it deems necessary, arrange for
flagging or other protection as required. Any such flagging or other protection
furnished by Railroad will be at Industry’s sole cost and expense.

 

Article 12.                                          CONSTRUCTION, MAINTENANCE AND REPAIRS BY

INDUSTRY TO CONFORM TO RAILROAD STANDARDS.

 

A.                                   Track construction, maintenance and repair
work performed by the Industry shall conform to the Railroad’s standards. If,
in the judgment of the Railroad, any

 

4

 

portion
of the Track is non-conforming and/or unsafe for railroad operations, the
Railroad shall not be obligated to operate over the Track.

 

B.                                     The Railroad, at the Industry’s expense,
shall have the right, but not be required, to make repairs on the
Industry-owned Track when requested by the Industry or when necessary to
operate the Track safely.

 

Article 13.                                          NON-DISCLOSURES CONFIDENTIALITY.

 

Except to the extent that disclosure of information
contained in this Agreement is required by law, the contents of this Agreement
shall not be disclosed or released by any party without the written consent of
all other parties to this Agreement.

 

Article 14.                                          TERM.

 

This Agreement shall take effect as of the date of
this Agreement and shall continue in full force and effect until terminated as
herein provided.

 

Article 15.                                          CONSENT OF THE RAILROAD TO

CERTAIN FACILITIES OR OPERATIONS.

 

The Railroad hereby consents
to:

 

A.                                   the construction, maintenance and operation
by the Industry of an ethanol loadout facility at Engineering Station 7+51 of
Track C as shown on Exhibit A;

 

B.                                     the performance by the Industry of intraplant
switching over the portion of Track A from the derail at Engineering Station
2+54 to the end of the track, over all of Track C, over the portion of Track D
from the point of switch to the derail at Engineering Station 18+08, and over
all of Tracks E, F, G and H, and this consent shall constitute written consent
as required in Section 1(e) of Exhibit B;

 

subject
to the terms, provisions and conditions set forth in this Agreement and to any
prior regulatory approval that may be needed.

 

Article 16.                                          INSURANCE.

 

A.                                   The Industry, at its expense, shall obtain
the insurance described in Exhibit C, hereto attached and hereby made a part
hereof, and provide a certificate(s) of insurance certifying to the
effectiveness of such insurance to the address shown in Paragraph C below.

 

B.                                     If the Industry uses the Track to store
and/or handle hazardous materials, the Industry, in addition to the other
endorsements to be obtained by Industry as provided in Exhibit C, must also
ensure that the Commercial General Liability insurance policy contains a
Designated Premises Pollution Coverage (CG00-39) endorsement. Evidence of the
endorsement must also be indicated on the certificate of insurance provided to
the Railroad.

 

5

 

C.                                     All insurance certificates and correspondence
shall be addressed and sent to:

 

Union Pacific Railroad Company

Real Estate Department

1400 Douglas Street – Stop
1690

Omaha, NE 68179-1690

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed in duplicate as of the date first herein written.

 

	
   

  	
  UNION PACIFIC RAILROAD COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Steven J. McLaws

  	
   

  
	
   

  	
   

  	
  General Director – Industrial Development

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
  UNITED WISCONSIN GRAIN

  
	
   

  	
  PRODUCERS, L.L.C.

  
	
   

  	
   

  
	
  /s/ Suzanne Wendt

  	
   

  	
  By

  	
  /s/ Kevin Roche

  	
   

  
	
   

  	
  Printed Name

  	
  Kevin Roche

  	
   

  
	
   

  	
  Title

  	
  President

  	
   

  
									

 

6

 

 

 

 

 

	
  ITC Ind Dev-New Trk 05/01/01

  	
   

  	
  Exhibit B

  
	
  Form Approved, AVP-Law

  	
   

  	
   

  

 

 

Section 1.                                            SAFETY.

 

(a)                                  Clearances/Impairments.  The
Industry shall not permit or maintain any building, platform, fence, gate,
vehicle, or other structure, obstruction or material of any kind, closer to the
Track than the standard clearances of the Railroad without the prior written
consent of the Railroad. The standard clearances of the Railroad are (i) horizontally,
nine (9) feet from the centerline of the Track, and (ii) vertically,
twenty-three (23) feet above the top of the rail of the Track. For any portion
of the Track that is curved, the standard horizontal clearance shall be
increased one and one-half inches for each degree of curvature. All doors,
windows and gates shall be of the sliding type or open away from the Track if
opening them toward the Track would impair clearances. Any moveable appliance,
including, but not limited to, dock plates and loading or unloading spouts or
equipment, that impairs the standard clearances only when in use, shall be
securely stored or fastened by the Industry when not in use so as to not impair
such clearances. If greater clearances are required by the National Electrical
Safety Code or by statute, regulation or other competent public authority, the
Industry shall comply therewith and shall obtain any necessary public authority
and Railroad consent to impair clearances before creating an impairment. Any
structure, material or other obstruction (whether in use or not) which is
closer to the Track than the Railroad’s standard clearances or applicable
public authority, whichever distance is greater, shall be considered an
impairment, whether or not consented to or permitted by the Railroad or public
authority.

 

(b)                                 Facilities.  The Industry shall not
construct, locate, maintain or permit the construction or erection of any pits,
loadout facilities, buildings, private crossings, beams, pipes, wires, or other
obstructions or installations of any kind or character (hereinafter
“Facilities”) over or under the Track without the prior written consent of the
Railroad.

 

(c)                                  Walkways.  The Industry, at its expense,
shall provide and maintain a clear and safe pathway for Railroad employees
along both sides of the Track beyond the clearance point. If walkways are
required by statute or regulation, the Industry, at its expense, shall ensure
that walkways are built and maintained to conform with such statute or
regulation.

 

(d)                                 Industry to Train and Oversee Employees.  The
Industry shall have a non-delegable duty and responsibility to train and
oversee its employees and agents as to proper and safe working practices while
performing any work in connection with this Agreement, or any work associated
with the Railroad serving the Industry over the Track.

 

(e)                                  Intraplant Switching.  The
Industry shall not perform, permit or cause intraplant switching without the
prior written consent of the Railroad. Intraplant switching means the movement
of rail cars on the Track by the Industry by any method and includes the
Industry’s capacity to move rail cars, whether before, during or after any such
movement, except as allowed by Article 15 of this Agreement.

 

(f)                                    Standards.  The Industry shall comply with
all applicable ordinances, regulations, statutes, rules, decisions and orders
including, but not limited to, safety, zoning, air and water quality, noise,
hazardous substances and hazardous wastes (hereinafter “Standards”) issued by
any federal, state or local governmental body or agency (hereinafter
“Authority”). lf the Industry is not in full compliance with any Standards
issued by any authorized Authority, the Railroad, after notifying the Industry
of its noncompliance and the Industry’s failure within twenty days of such
notice to correct such noncompliance, may elect to take whatever action is
necessary to bring the Track and any Railroad property into compliance with
such Standards; PROVIDED, HOWEVER, that if Industry’s failure to comply with
Standards interferes with, obstructs or endangers Railroad mainline or yard
operations in any way, Railroad may initiate compliance action immediately. The
Industry shall reimburse the Railroad for all costs (including, but not limited
to, consulting, engineering, clean-up, disposal, legal costs and attorneys’
fees, fines and penalties) incurred by the Railroad in complying with, abating
a violation of, or defending any claim of violation of such Standards. A waiver
by the Railroad of the breach by the Industry of any covenant or condition of
this Agreement shall not impair the right of the Railroad to avail itself of
any remedy for any subsequent breach thereof.

 

1

 

(g)                                 Railcars Containing Hazardous Materials.  If
the Industry uses the Track for the purpose of shipping, receiving or storing
railcars containing hazardous materials, as defined by the Department of
Transportation (the “DOT”), the Industry will comply with and abide by all DOT
regulations as set out in 49 Code of Federal Regulations, Parts 100-199,
inclusive, as amended from time to time, and provisions contained in applicable
Circular’s of the Bureau of Explosives, Association of American Railroads,
including any and all amendments and supplements thereto. The term “Standards”
defined in Section 1(f) shall include (but is not limited to) regulations
referenced in this subsection (g).

 

(h)                                 Telecommunications and Fiber Optic Cable
Systems.  Telecommunications and Fiber optic cable
systems may be buried on the Railroad’s property. Industry shall telephone the
Railroad during normal business hours (7:00 a.m. to 9:00 p.m., Central Time,
Monday through Friday, except holidays) at 1-800-336-9193 (also a 24-hour,
7-day number for emergency calls) to determine if telecommunications or fiber
optic cable are buried anywhere on the Railroad’s premises to be used by the
Industry. If it is, Industry will telephone the telecommunication company(ies)
involved, arrange for a cable locator, and make arrangements for relocation or
other protection of the cable and will commence no work on Railroad’s property
until all such protection or relocation has been accomplished.

 

(i)                                     Fire Precautions. 
Industry shall not permit, place, pile, store, or stack any flammable
material within ten (10) feet of centerline of the Track. Industry shall remove
or otherwise control vegetation adjacent to the Track so that it does not
constitute a fire hazard. Industry shall ensure that suitable firefighting
equipment is available and in working order.

 

Section 2.                                            LIABILITY.

 

(a)                                  For purposes of this Section, the following
definitions shall apply:

 

(1)                                  “Railroad”: the Railroad and its officers,
agents and employees.

 

(2)                                  “Industry”: the Industry and its officers,
agents and employees.

 

(3)                                  “Party”: the Railroad or the Industry.

 

(4)                                  “Third Person”: any individual, corporation
or entity other than the Railroad or the Industry.

 

(5)                                  “Loss” means loss of or damage to the
property of any Third Person or Party and/or injury to or death of any Third
Person or Party. “Loss” shall also include, without limitation, the following
associated expenses incurred by a Party: costs, expenses, the cost of defending
litigation, attorneys’ fees, expert witness fees, court costs, the amounts paid
in settlement, the amount of the judgment, and pre-judgment and post-judgment
interest and expenses arising from analysis and cleanup of any incident
involving the release of hazardous substances or hazardous wastes.

 

(b)                                 Except as otherwise specifically provided in
this Agreement, all Loss related to the construction, operation, maintenance,
use, presence or removal of the Track shall be allocated as follows:

 

(1)                                  The Railroad shall indemnify Industry from
and against Loss arising from or growing out of the negligent acts or omissions
of the Railroad.

 

(2)                                  The Industry shall indemnify Railroad from
and against Loss arising from or growing out of the negligent acts or omissions
of the Industry or arising from:

 

(i) any impairment of the
Track by Industry as described in Section 1(a);

 

2

 

(ii)                                  the Industry’s failure to construct or
adequately maintain pathways or walkways as required by Section 1(c);

 

(iii)                               intraplant switching as defined by Section 1(e);

 

(iv) the Industry’s failure to
comply with Standards, as required by Section 1(f); or

 

(v) any explosion or leakage
or evaporation of hazardous substances or hazardous wastes shipped, received or
stored by Industry resulting from Industry’s failure to comply with DOT and
other applicable regulations as set forth in Sections 1(f) and 1(g) of Exhibit
B.

 

(3)                                  Subsection 2(b)(2), subparagraphs (i)
through (v), apply regardless of whether the Railroad had notice of, consented
to, or permitted the aforesaid impairments, failures, noncompliance with
Standards, wastes or substances, and whether or not the Railroad or a Third
Person contributes to cause the Loss.

 

(4)                                  Except as otherwise more specifically
provided in this Agreement, Railroad and Industry shall pay equal parts of the
Loss that arises out of the joint or concurring negligence of the Railroad and
the Industry, whether or not the acts or omissions of a Third Person contribute
to cause the Loss; PROVIDED, however, that nothing in this Agreement to the
contrary shall be construed as impairing the right of either party to seek
contribution or indemnification from a Third Person.

 

(5)                                  Industry expressly and specifically assumes
potential worker’s compensation liability under this subsection (b) for
claims or actions brought by Industry’s own employees, subject to all defenses.
Industry waives any immunity it may have under worker’s compensation or
industrial insurance acts to indemnify Railroad for claims falling under subsection 2(b)(2).  Industry acknowledges that this waiver was
mutually negotiated by the parties hereto.

 

(6)                                  No court or jury findings in any employee’s
suit pursuant to any worker’s compensation act or the Federal Employer’s
Liability Act against a party to this Agreement may be relied upon or used by
Industry in any attempt to assert liability against Railroad.

 

Section 3.                                            REARRANGEMENT OF TRACK; ADDITIONAL TRACKAGE.

 

(a)                                  The Railroad may rearrange or reconstruct the
Track or modify its elevation in order to develop or change nearby Railroad
property or tracks, provided that the Industry shall continue to have similar
trackage without additional cost to the Industry. If, however, the change in
the Track, or its appurtenances, is required by or as a result of any law,
ordinance, regulation, or other contingency over which the Railroad has no
control, the Industry shall bear the cost of the change.

 

(b)                                 All references in this Agreement to Track
shall apply to the Track as constructed, even if it differs or varies from its
depiction on Exhibit A. References in this Agreement to Track shall also apply
to rearrangements, reconstructions, extensions or additions to the Track.

 

Section 4.                                            PAYMENT OF BILLS; ASSIGNABLE COSTS.

 

(a)                                  Bills for expenses properly chargeable to the
Industry pursuant to this Agreement shall be paid by the industry within thirty
days after presentation by the Railroad except as otherwise provided. Bills not
paid within thirty days shall be subject to interest at the then current rate
charged by the Railroad.

 

 

3

 

(b)                                 “Cost” or “expense” for the purpose of this
Agreement shall be all assignable costs and expenses including all current
Railroad cost additives. Material shall be charged at its current value when
and where used. Assignable costs are any costs incurred by the Railroad that
are directly or indirectly attributable to the construction, maintenance or
operation of the Track that the Railroad has not specifically agreed to pay
under the terms of this Agreement.

 

Section 5.                                            GOVERNMENTAL RESTRICTIONS.

 

This Agreement is made subject to all applicable
laws, rules and regulations of the United States Government or any state,
municipal, or local governmental authority now or hereafter in effect.

 

Section 6.                                            TERMINATION.

 

(a)                                  Industry may terminate this Agreement upon
thirty (30) days’ written notice to Railroad.

 

(b)                                 Railroad may terminate this Agreement by
sending thirty (30) days’ written notice to Industry’s last known address:

 

(1)                                  if Industry does not use the Track in an
active and substantial way for a continuous period of six (6) months; PROVIDED,
HOWEVER, that Industry has the option after receipt of such notice to pay an
annual fee towards the cost of maintaining the switch connection up to the
clearance point. The Railroad’s notice of termination for lack of use shall
state the current amount of the annual fee and how frequently it may be
adjusted. Industry may accept the option by payment of the annual fee before
the termination becomes effective on the thirtieth day after notice was mailed.

 

(2)                                  if Industry is in default in the performance
of any covenant or promise in this Agreement and continues in default for a
period of thirty (30) days after receiving such notice of default from the
Railroad; PROVIDED, HOWEVER, that if a default by the Industry is deemed by the
Railroad to be unusually dangerous or hazardous, the Railroad may immediately
suspend its performance under this Agreement during the thirty day default cure
period. Such termination shall be effective on the thirty-first day after the
Railroad sent notice of default if default still exists and no further notice
of termination shall be required.

 

(3)                                  upon thirty (30) days’ written notice if
continued operation of Track (including but not limited to the switch
connection itself) becomes impracticable due to abandonment or embargo of rail
lines, or if the continued presence of the Track would interfere with Railroad
operations (including but not limited to, line changes, construction of new
lines, or railroad installation of facilities). In the event Railroad
terminates this Agreement pursuant to this subparagraph, Railroad shall attempt
to provide Industry a substitute switch connection if such a switch connection
would be reasonably practicable, could be made safely, and would furnish
sufficient business to justify the cost of construction and maintenance.

 

(c)                                  Termination of this Agreement for any reason
shall not affect any of the rights or obligations that the parties hereto may
have accrued, or liabilities, accrued or otherwise, which may have arisen prior
thereto.

 

Section 7.                                            SURRENDER UPON TERMINATION.

 

Upon termination of this Agreement howsoever, the
Industry shall vacate and surrender the quiet and peaceable possession of any
right-of-way or other property owned by the Railroad upon which the Track is
located. The Railroad shall have the right to remove the portion of the Track
it owns. Not later than the last day of the term of this Agreement, the
Industry, at its sole cost and expense, shall (a) remove from the Railroad’s
right-of-way or other property all (i) portions of the Track owned by the

 

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Industry,
(ii) obstructions, (iii) contamination caused by or arising from the use of the
Track for purposes of the Industry, Facilities (as defined in Section 1(b))
and other property not belonging to the Railroad or a third party, located
thereon and (b) restore the Railroad’s right-of-way to as good a condition as
the same was in before the date of this Agreement. If the Industry fails to
perform such removal and restoration, or if the work performed by the Industry
is not satisfactory to the Railroad, the Railroad may perform the work at
Industry’s expense. Any portion of the Track owned by Industry and not removed
as provided herein may, at Railroad’s election, be deemed abandoned and
Railroad, at Industry’s sole cost and expense, may remove such portion(s) of
the Track from Railroad’s property and dispose of same and restore Railroad’s
property. If Railroad performs such track removal and/or disposal, the Industry
agrees to reimburse the Railroad, within thirty (30) days of its receipt of
billing from the Railroad, for all costs and expenses incurred by Railroad
(less any resulting salvage value) in connection therewith.

 

Section 8.                                            NOTICES.

 

(a)                                  Any notice, consent or approval that either
party hereto desires or is required to give to the other party under this
Agreement shall be in writing. The notice, consent or approval shall be deemed
to have been given to the Industry by serving the Industry personally or by
mailing the same, postage prepaid, to the Industry at the last address known to
the Railroad. Notice may be given to the Railroad by mailing the same, postage
prepaid to the office of the Assistant Vice President-Real Estate, Real Estate Department,
1416 Dodge Street, Omaha, Nebraska 68179.

 

(b)                                 Notices involving a notice of default or
termination shall be by certified mail, return receipt requested, and such
notice shall be deemed given on the date deposited with the United States
Postal Service.

 

Section 9.                                            ASSIGNMENTS USE BY THIRD PARTIES.

 

The Industry shall not assign this Agreement or
permit use of the Track by anyone other than the Industry without the prior
written consent of the Railroad. The Industry shall notify the Railroad in writing
of any assignment to an affiliate prior to the effective date of the
assignment. For any departure from the terms of this Section, the Railroad may
terminate this Agreement. The Railroad shall not unreasonably withhold its
consent to an assignment of this Agreement.

 

Section 10.                                      SUCCESSORS AND ASSIGNS.

 

Subject to the provisions of Section 9, the
rights and obligations contained in this Agreement shall pass to and be binding
upon the heirs, executors, administrators, successors and assigns of the parties
to this Agreement.

 

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  Track ITC Ex. C 03/01/03

  	
   

  	
  Exhibit C

  
	
  Form Approved, AVP-Law

  	
   

  	
   

  

 

UNION PACIFIC RAILROAD

CONTRACT INSURANCE REQUIREMENTS

 

Industrial Track

 

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

 

A.                                    Commercial
General Liability insurance.
This insurance shall contain broad form contractual liability with a single
limit of at least $3,000,000 each occurrence or claim and an aggregate limit of
at least $3,000,000. Coverage must be purchased on a post 1998 ISO or
equivalent form, including, but not limited to, coverage for the following:

 

•                                          Bodily injury including death and personal
injury.

 

•                                          Property damage.

 

•                                          Fire legal liability (not less than the
replacement value of the portion of the premises occupied).

 

•                                          Products and completed operations.

 

The
policy shall also contain the following endorsements which shall be indicated on the certificate of insurance:

 

•                                          The employee and Workers’
Compensation-related exclusions in the above policy apply only to Industry’s
employees.

 

•                                          The exclusions for railroads and explosion,
collapse and underground hazard shall be removed.

 

•                                          Waiver of subrogation.

 

B.                                    Business
Automobile Coverage insurance.
This insurance shall contain a combined single limit of at least $5,000,000 per
occurrence or claim, including, but not limited to, coverage for the following:

 

•                                                Bodily injury and property damage.

 

•                                                Any and all motor vehicles including owned,
hired and non-owned.

 

The
policy shall also contain the following endorsements which shall be indicated on the certificate of insurance:

 

•                                          The employee and Workers’
Compensation-related exclusions in the above policy apply only to Industry’s
employees.

 

•                                          Motor Carrier Act Endorsement - Hazardous
Materials Cleanup (MCS-90), if required by law.

 

C.                                    Workers’
Compensation and Employers Liability insurance including but not limited to:

 

1

 

•                                          Industry’s statutory liability under the
Workers’ Compensation laws of the state(s) affected by this Agreement.

 

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

 

If
Workers’ Compensation insurance will not cover the liability of Industry in
states that require participation in state Workers’ Compensation fund, Industry
shall comply with the laws of such states. If Industry is self-insured,
evidence of state approval must be provided along with evidence of excess
Workers’ Compensation coverage. Coverage shall include liability arising out of
the U.S. Longshoremen’s and Harbor Workers’ Act, the Jones Act, and the Outer
Continental Shelf Land Act, if applicable. The policy shall also contain
endorsement which shall be indicated
on the certificate of insurance:

 

•                                          Alternate Employer Endorsement

 

D.                                    Umbrella
or Excess Policies. In the
event Industry utilizes umbrella or excess policies, these policies shall
“follow form” and afford not less coverage than the primary policy.

 

Other
Requirements

 

E.                                      Punitive damage exclusion must be deleted,
which deletion shall be indicated on the certificate of insurance.

 

F.                                      Industry agrees to waive its right of
recovery, and its insurers, through policy endorsement, agree to waive their
right of subrogation against Railroad as it
pertains to the insurance coverage required herein and subject to the terms of Section 2(b)
of Exhibit B. Industry further waives its right of recovery, and its
insurers also waive their right of subrogation against Railroad for loss of its
owned or leased property or property under its care, custody and control.
Industry’s insurance shall be primary with respect to any insurance carried by
Railroad. All waivers of subrogation shall be
indicated on the certificate of insurance.

 

G.                                    All policy(ies) required above (excluding
Workers’ Compensation) shall provide severability of interests and shall name
Railroad as an additional insured. Severability of interest
and naming Railroad as additional insured shall be indicated on the certificate
of insurance.

 

H.                                    Industry shall furnish to Railroad original
certificate(s) of insurance evidencing the required coverage, endorsements, and
amendments, and reference the contract audit/folder number if available. The
certificate(s) shall contain a provision that obligates the insurance
company(ies) issuing such policy(ies) to notify Railroad in writing of any
cancellation or material alteration. Upon request
from Railroad, a certified duplicate original of any required policy shall be
furnished.

 

I.                                         Any insurance policy shall be written by a
reputable insurance company acceptable to Railroad or with a current Best’s
Insurance Guide Rating of A- and Class VII or better, and authorized to do
business in the state in which the Track is located.

 

J.                                      Industry WARRANTS that this Agreement has been thoroughly
reviewed by Industry’s insurance agent(s)/broker(s), who have been instructed
by Industry to procure the insurance coverage required by this Agreement and
acknowledges that Industry’s insurance coverage will be primary.

 

K.                                    If Industry fails to procure and maintain
insurance as required, Railroad may elect to do so at the cost of Industry plus
a 25% administration fee.

 

2

 

L.                                     The fact that insurance is obtained by
Industry or Railroad on behalf of 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.

 

3

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