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[NSC-____-8584]
NORFOLK SOUTHERN RAILWAY COMPANY
ISSUED: June 23, 1997 EFFECTIVE: August 25, 1997
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EXHIBIT 10.41
C O N F I D E N T I A L
RAILROAD TRANSPORTATION CONTRACT
This Railroad Transportation Contract (this "Contract"), is
made pursuant to 49 U.S.C. Section 10709, as of June 23,1997,
by and between COGENTRIX OF NORTH CAROLINA, INC. ("Industry"),
having a business address at 0000 Xxxxxxxxxx Xxxxxxxxx,
Xxxxxxxxx, XX 00000-0000 and NORFOLK SOUTHERN RAILWAY
COMPANY. and its subsidiary railroads ("Carrier"), having a
business address at 000 Xxxxxxxx Xxxx, Xxxxxxx, XX 00000-0000.
1. Effective Date.
This Contract shall take effect on August 25, 1997
(the "Effective Date").
2. Term.
This Contract will be effective from the Effective Date and
shall expire at midnight on December 15, 2002. Notwithstanding
the foregoing, Industry and Carrier acknowledge and agree that,
pursuant to the Power Purchase Agreement (the "PPA") between
Industry and Carolina Power & Light Company ("CP&L") relating to
Industry's cogeneration facility in Roxboro, NC (the "Facility"),
CP&L has the right to reject this Contract and enter into a
replacement contract for the transportation of coal to the
Facility. Accordingly, and notwithstanding anything contained
herein to the contrary, in the event CP&L exercises its right to
reject this Contract and enter into a replacement contract for
the transportation of coal to the Facility pursuant to the PPA,
then this Agreement shall terminate automatically on December 31,
1997 and thereafter be of no further force and effect. Industry
agrees to notify Carrier of CP&L's decision promptly after
receipt of notice thereof from CP&L, but in no event later than
December 31, 1997.
3. Commodity, Origins Destination, Rates and Car Type.
Carrier, acting solely as a contract carrier, agrees to
transport the Commodity from the Origins to Industry's off-
loading facility at the Destination via Carrier routes and at the
Yearly Rates specified below:
A. Commodity: Coal, STCC 11 212 90, to be
consumed at Destination.
B. Route: Carrier-Direct.
C. Car Type: Carrier-Supplied open Top Xxxxxx Cars.
D. Destination: Industry's Facility in Roxboro, NC.
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E. Origins and Rates (See Notes 1-2 below):
Origin
District CY 1997 CY 1998 CY 1999 CY 2000 CY 2001 CY 2002
-------- ------- ------- ------- ------- ------- -------
Kenova $[xxx] $[xxx] $[xxx] $[xxx] $[xxx] $[xxx]
Xxxxxxx $[xxx] $[xxx] $[xxx] $[xxx] $[xxx] $[xxx]
Notes:
1. "CY" shall refer to each calendar year or portion thereof
during the term of this Contract.
2. Rates shown are in dollars per net ton (2,000 pounds avoirdupois).
3. Minimum Percentage.
During each calendar year, or portion thereof, during the
term of this Contract (each such period, a "Contract Period"),
Industry agrees to ship, pursuant to this Contract, at least 65%
of Industry's entire receipts of coal at Industry's Facility
located in Roxboro, North Carolina. Surpluses in Contract
Periods may not be credited against deficits in other Contract
Periods. Shipments of coal by other transportation modes during
periods of force majeure, which prevent Carrier from delivering
to Industry a supply of coal, shall not be included in the
computation of the minimum percentage hereunder. Other than with
respect to the percentage requirement set forth above, Carrier
acknowledges and agrees that Industry shall not be obligated to
ship any minimum amount of coal pursuant to this Contract.
If Industry fails to meet the percentage provision during a
Contract Period, Industry agrees to pay a deficit charge to
Carrier. This charge will be computed by multiplying the tonnage
shortfall times one-fourth of the applicable rate (as set forth
in Section 3.E. above) in effect on the last day of the
applicable Contract Period. Industry shall pay this amount to
Carrier within sixty (60) days after the end of the applicable
Contract Period.
4. Force Majeure.
If because of force majeure, shipments cannot be made or
transportation cannot be provided pursuant to this Contract
during a Contract Period, and if the affected party promptly
gives the other party written notice of such force majeure, then
the volume obligation contained in Section 4 shall be adjusted
to the extent made necessary by such force majeure, provided,
however, that the disabling effect of the force majeure shall be
eliminated by the affected party as soon as and to the extent
reasonably possible. Shipments that are delayed as a result of
force majeure but are, or can be, shipped later during the
Contract Period shall not result in any volume adjustment.
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[xxx] These portions of this exhibit have been omitted and filed
separately with the Commission pursuant to a request for
confidential treatment.
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The term force majeure, as used herein, shall mean any cause
which is not reasonably within the control of a party, and the
adverse effects of which are not due to the fault or negligence
of said party. Force majeure shall include, but not be limited
to, Acts of God, riot, insurrection, war, fire, flood, explosion,
labor dispute, orders or acts of military or civil authority,
mechanical breakdown of equipment vital to the loading or
unloading operation and acts or disabilities of Carrier including
derailment, and inability to obtain governmental permits or
approvals required by law and necessary to the transporting,
storing or handling of coal.
The party claiming force majeure shall, within five (5)
business days after it learns of the existence of a force majeure
condition, notify the other party hereto of said condition, and
will similarly notify the other party within two (2) business
days of the termination or expiration of each such force majeure
condition.
5. Verification.
Within thirty (30) days after the end of each Contract
Period, Industry shall send a certified statement to Carrier that
must include the following:
(i) the total number of tons of coal which Industry
actually received by all transportation modes from all
originating points (whether an Origin listed under this
Contract or otherwise) at Industry's Facility at
Roxboro, NC, as adjusted in accordance with Section 3
and 4 of this Agreement;
(ii) the number of tons of coal which Industry shipped
under this Contract; and
(iii) the amount of coal shipped under this Contract,
expressed as a percentage of the total amount of coal
received at Industry's Facility in Roxboro, NC.
Industry agrees to allow carrier to inspect the records of
Industry to verify compliance with the percentage provision.
Industry will allow Carrier one (1) year from the last day of the
appropriate Contract Period to make such inspection and such
inspection shall be binding on the parties unless Industry
disputes the results of such inspection by extending a written
notice to Carrier within thirty (30) days from receipt of
inspection results. Upon such dispute, Industry may select a
third party, mutually satisfactory to the parties hereto, to make
an additional inspection at Industry's sole expense. If Carrier
and Industry are still in disagreement after receiving the report
of the third party, the disagreement shall be resolved under the
Commercial Arbitration Rules of the American Arbitration
Association.
6. Incorporation of Tariffs, Rules, Etc.
Shipments of Commodity moving under the terms of this
Contract are subject to all government, AAR and carrier rules,
including NS Conditions of Carriage No. 2, which is attached
hereto and incorporated herein as Exhibit A, that would apply if
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this Contract were not in effect; provided, however, that where
any such rule conflicts with the provisions of this Contract, the
provisions of this Contract shall control and govern.
7. Car Supply.
Carrier does not guarantee car supply, but will furnish cars
in accordance with the common carrier standard.
8. Agent.
In the event that Industry does not ship to itself from
Origins to Destination, and strictly for purposes of this
Contract, any third party performing any obligation of Industry
under this Contract is considered as its agent.
9. Confidentiality.
The parties shall not disclose the terms of this Contract to
a third party without the prior written consent of the other
party except: (1) as required by law or regulations, (2) as
required or permitted by AAR Rule, (3) to an inspection bureau,
(4) to a parent, subsidiary, affiliated company, (5) to CP&L in
connection with its right to approve this contract under the PPA,
or (6) to any other entity to the extent such disclosure may be
required in connection with any financing or proposed financing
of any of Industry's facilities.
10. Restrictions.
A. No transit, diversion, or reconsignment privileges
are granted.
B. This contract may not be used in connection with a
prior or subsequent rail movement of the Commodity without the
written consent of Carrier, except if otherwise provided herein.
C. Any notices given under this Contract must be in
writing and shall be deemed to be given when posted by U.S. Mail
properly addressed to the other party hereto at the address of
such party as set forth in the preamble of this Contract.
D. The parties rely on the individual credit of each
other by entering into this Contract which may not be transferred
or assigned without the written permission of the other
party(ies) hereto. Subject to the foregoing, this Contract will
inure to the assignees and successors of the parties.
E. The failure of a party to enforce any provision of
this Contract or to prosecute any default will not be considered
as a waiver of that provision or bar to prosecution of that
default unless so indicated in writing.
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11. Governing Law.
This Contract shall be governed by and construed in
accordance with the laws of the state of North Carolina to the
extent not governed by and construed in accordance with Federal
Law.
12. Consent and Agreement.
If requested by Industry in connection with the financing
arrangements relating to the Facility, Carrier agrees to execute
a "Consent and Agreement" subsequent to the execution of this
Agreement in a form mutually satisfactory to the parties hereto.
13. Entire Understanding and Execution.
This Contract constitutes the entire understanding of the
parties and may not be modified without the written consent of
both parties. It has been executed by the authorized officials
of the parties on the date shown above.
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IN WITNESS WHEREOF, the parties hereto have caused this
Contract to be executed by their duly authorized representatives
as of the day and year first above written.
COGENTRIX OF NORTH CAROLINA, INC.
By: /s/ Xxxxxx X. Xxxxx
Title: Vice President, Fuels & Transportation
NORFOLK SOUTHERN RAILWAY COMPANY
By: /s/ Xxxx X. Xxxxx
Title: Assistant Vice President, Export and
Metallurgical Coal Marketing
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EXHIBIT A
See "NS Conditions of Carriage No. 2" attached hereto.
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NORFOLK SOUTHERN RAILWAY COMPANY
NS CONDITIONS OF CARRIAGE # 2
COAL, COKE and IRON ORE
Effective February 20, 1996
Issued By:
Coal Marketing Department
Norfolk Southern Corporation
000 Xxxxxxxx Xxxx, X. X.
Xxxxxxx, Xxxxxxxx 00000-0000
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NS CONDITIONS OF CARRIAGE FOR COAL, COKE AND IRON ORE
CONDITION 1 -- SUBSIDIARIES AND AFFILIATED CARRIERS
These conditions apply to Norfolk Southern and the
subsidiaries and affiliated carriers listed here. References to
"NS" include the listed carriers:
Norfolk Southern Railway Company
Alabama Great Southern Railroad Company, The
Atlantic and East Carolina Railway Company
Camp Xxxxxxx Railroad Company
Chesapeake Western Railway
Cincinnati, New Orleans and Texas Pacific Railway Company, The
Central of Georgia Railroad Company, The
Georgia Southern and Florida Railway Company
Norfolk and Western Railway Company
State University Railroad Company
Tennessee, Alabama & Georgia Railway Company
Tennessee Railway Company
CONDITION 5 -- GENERAL APPLICATION
These Conditions apply to the transportation in interstate
and intrastate commerce of coal, coke and iron ore on NS by NS.
If a movement is covered by a bilateral transportation contract
that incorporates these Conditions, either specifically or by
general incorporation, then these Conditions will apply to that
movement. Specific quotations and tariffs constitute unilateral
offerings of rates and terms, including these Conditions, for the
movement of coal, coke and iron ore on NS whether NS is the
origin carrier or is a connecting carrier in a joint single
factor rate.
However, if there are provisions in an applicable contract,
tariff or quotation that are inconsistent with the terms of these
Conditions, the terms of the applicable contract, tariff or
quotation shall govern.
CONDITION 10 -- APPLICATION OF REFERENCED TARIFFS AND PUBLICATIONS
These Conditions incorporate and include the provisions of
the following tariffs and
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publications (and their successor publications):
Open and Prepay Station List OPSL 6000-Series
Standard Transportation Commodity Code STCC 6001-Series
Official Railway Equipment Register RER 6412-Series
NS Mileage RPS 6301-Series
Uniform Freight Committee UFC 6000-Series
NS Switching NS 8001
Demurrage Rules and Charges -- RPS 6004-Series and RPS 6008-Series
Weighing and Reweighing NS 9790-Series
Storage and Reshipment - NS Tariff - 4219-A
Diversion and Reconsignment - NS Tariff - 9037-I
Rules and Regulations - NS Tariff - 9219-B
CONDITION 15 -- ABSORPTION OF CONNECTING LINES SWITCHING CHARGES
Rates incorporating these Conditions will include full
absorption by NS of reciprocal switching charges of switch
carriers connecting with NS.
CONDITION 20 -- XXXX OF LADING
Transportation by NS under these Conditions shall be subject
to the terms of the Uniform Xxxx of Lading as contained in the
Uniform Freight Classification UFC 6000-Series, as modified from
time to time.
CONDITION 25 -- LOADING
The consignor/shipper shall load tendered rail cars to full
visible capacity unless NS advises otherwise, shall load in
accordance with the provisions of any applicable contract,
quotation or tariff, and shall notify NS when the cars are
loaded.
CONDITION 30 -- TRANSPORTATION
NS will arrange for reasonable transportation and delivery
in accordance with instructions shown on the Xxxx of Lading and
other conditions mutually agreed upon by the parties. Separate
services not covered by the Xxxx of Lading or applicable contract
must be arranged for separately with NS by the consignor or
consignee.
CONDITION 35 -- UNLOADING
Upon arrival and placement of rail cars for unloading at
destination, the consignee will be responsible for unloading cars
in a manner that does not damage equipment and for releasing cars
in a condition suitable for reloading by another shipper. If
consignee fails to remove all lading or
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other material from a car, the car shall not be considered as
released and shall remain on applicable demurrage or detention
until consignee releases the car in clean condition. If a car is
not properly cleaned, but is released and removed, then the
railroad discovering such failure may undertake to remedy such
failure and the consignee will be responsible for reimbursement
to the railroad for the cost, including associated switching.
In order for cars to be released, consignee must advise the
agent of the delivering railroad by telephone, or by fax on a
mutually agreed form, that the cars are unloaded and available.
Consignee must provide the name of the person furnishing the car
initials and numbers.
CONDITION 40 -- APPLICABLE TRANSPORTATION CHARGES
The charges applicable to the transportation from origin to
destination will be those contained in the applicable contract,
tariff or quotation in effect on the shipping date, as reflected
on the Xxxx of Lading.
CONDITION 45 -- PAYMENT AND CREDIT
The shipper or consignee holding the applicable contract or
shipping under a tariff or quotation shall be liable to NS for
payment of the transportation charges applying on a shipment
delivered by NS. If credit is established by NS for the party
responsible for payment, the credit period shall be 15 days from
delivery of the shipments, unless otherwise agreed by the
parties. If no approved credit has been established and the
charges have not been prepaid, NS may require payment, or
guarantee of payment, before making delivery.
Placement of cars by NS under a credit agreement shall be
deemed acceptance of the shipment. Acceptance of the shipment
shall be deemed acceptance of responsibility for payment of all
charges occurring on the shipment, including detention and
switching services performed at destination. All payments shall
be in U.S. money and will not be reduced to offset claims,
damages to property, or for other reasons.
CONDITION 50 -- CARRIER LIABILITY FOR LOSS OR DAMAGE TO LADING
NS will assume liability for loss and damage under the terms
of 49 USC 11706 and the terms of the Uniform Xxxx of Lading,
provided that where provisions maintained by other railroads in
the through route differ, then the rules of the origin carrier
will apply.
