ClimaChem Inc. Contracts
Sample Business Contracts
Railcar Services Agreement - Prime Financial Corp. and El Dorado Chemical Co.
Services Forms
RAILCAR SERVICES AGREEMENT
This RAILCAR SERVICES AGREEMENT, dated as of the 29th day of July, 1999
("Agreement"), is entered into by and between Prime Financial Corporation, an
Oklahoma corporation ("PFC"), with its principal office at 16 South
Pennsylvania, Oklahoma City, Oklahoma 73107, and El Dorado Chemical Company,
an Oklahoma corporation ("EDC"), with its principal place of business at
655 Craig Road, Suite 322, St. Louis, Missouri 63141.
W I T N E S S E T H:
WHEREAS, PFC is the lessee of certain railcars; and
WHEREAS, EDC desires to obtain and utilize certain railcar services
provided by PFC; and
WHEREAS, PFC is willing to provide such railcar services to EDC in
accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree
as follows:
1. Scope of Services. Pursuant to the terms and conditions of this
Agreement, PFC shall provide certain consulting personnel and those units of
railroad rolling stock which are specifically described on the Equipment
Schedule attached hereto as Exhibit A, together with all attachments,
additions, accessories, and appliances attached thereto or incorporated
therein (referred to herein collectively as the "Equipment" or individually
as a "Unit") in order to provide the railcar services to EDC as required
under this Agreement.
2. Term. The term of this Agreement shall commence on August 1, 1999
(the "Commencement Date") and will continue unless terminated by one of the
parties hereto at any time upon thirty (30) days written notice to the other
party;
3. Service Fees. In the event EDC elects to utilize the Services
provided by PFC hereunder, EDC shall provide PFC thirty (30) days written
notice of EDC's intent to utilize the Services associated with respect to
the Equipment or any Unit and pay PFC a fee based on each Unit provided by
PFC of $1,031.43 per month (the "Services Fee"). Each payment shall be due
on the first day of each month that such Unit is in use by EDC and payable
at such address as PFC may designate. EDC's obligation to pay the Services
Fee shall remain in effect only for so long as EDC elects to utilize the
Services associated with any Unit.
4. Railcar Services. PFC shall provide the following railcar services
(the "Services") to EDC:
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4.1 Equipment Use. PFC shall furnish and make available for use by
EDC the Equipment.
4.2 Consulting Services. PFC shall provide EDC with information and
guidance and consult with EDC to assist EDC in (i) the performance of
required maintenance on the Equipment or any Unit as provided under this
Agreement, and (ii) proper use of the Equipment or any Unit in accordance
with applicable regulations established by The Association of American
Railroads ("AAR"), the United States Department of Transportation, the
Federal Railroad Administration and every other state, federal or
provincial agency having jurisdiction over the condition, maintenance,
repair or safety of the Equipment ("FRA"), the Interstate Commerce
Commission ("ICC") or other relevant state, federal or provincial agency.
4.3 Regulatory Filing. PFC will comply with all regulatory filing
requirements that may exist with respect to the Equipment.
4.4 Degree of Care. PFC shall perform the Services with the reason-
able degree of care, skill and prudence customarily exercised by others
in business of a similar type.
5. Option Rights. EDC shall not have any purchase rights with respect
to the Equipment or any Unit.
6. Return. In the event EDC elects not to continue its use of a particu-
lar Unit or PFC terminates this Agreement as provided herein, EDC shall arrange
for the return of the Unit at a location in North America as PFC or its assignee
shall designate. EDC shall notify PFC in writing of any election by EDC not to
continue to use any Units no less than sixty (60) days prior to the return of
any Unit by EDC to PFC.
7. Railroad Mileage Compensation. All sums received by PFC for mileage
compensation due to usage of the Equipment by EDC shall be paid to EDC.
8. Insurance. EDC shall maintain, at its expense, and at all times
during its use and possession of the Equipment or any Unit "all-risk" physical
damage insurance and comprehensive general liability insurance (covering bodily
injury and property damage) on in such amounts, against such risks, in such form
and with such insurers as shall be satisfactory to PFC; provided, that the
amount of "all-risk" physical damage insurance shall not on any date be
less than the greater of the full replacement value of the Equipment or any Unit
as of such date, and the amount of general liability insurance shall not on any
date be less than Seventy-Five Million Dollars ($75,000,000.00) per occurrence.
Such insurance policy will, among other things, name PFC as an additional named
insured or as loss payee (as the case may be), require that the insurer give PFC
at least thirty (30) days prior written notice (at the address for notice to
PFC set forth in Section 17 hereof) of any alteration in or cancellation of the
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terms of such policy. At PFC's option, EDC shall furnish to PFC a certificate
or other evidence satisfactory to PFC that such insurance coverage is in effect.
9. Compliance with Laws; Operation and Maintenance; Additions.
9.1 Use of Equipment by EDC. EDC will use the Equipment or any Unit
in a careful and proper manner, will comply with and conform to all govern-
mental laws, rules and regulations and industry association rules and
regulations relating thereto, and will cause the Equipment or any Unit
to be operated in accordance with the manufacturer's or supplier's
instructions or manuals. Without limitation to the generality of the
foregoing, EDC will (i) cause the Equipment or any Unit to be used and
maintained in compliance with all rules and recommendations of AAR and
FRA and, if mandated, modified so that it will qualify for unrestricted
interchange in the United States and Canada and remain suitable for
loading, transporting and unloading nitric acid and concentrated nitric
acid (the "Commodity"); (ii) will not permit any Unit to be loaded
improperly or in excess of the load limit stenciled thereon; and (iii)
will not permit any Unit to be outside the continental United States
at any time.
9.2 Maintenance of Equipment by EDC. During the period the Equipment
or any Unit is in use by or in the possession of EDC, EDC will keep and
maintain the Equipment or any Unit in good repair, condition and working
order and in compliance with all rules and recommendations of AAR and FRA
or other organization having jurisdiction over the Equipment. EDC shall
also furnish all parts, replacements, mechanism, devices and servicing
required therefor so that the value, condition and operating efficiency
thereof will at all times be maintained and preserved, reasonable wear
and tear excepted. All repairs, parts, mechanisms, devices, replacements
and modifications shall immediately, without further act, become the
property of the owner of the Equipment and part of the Equipment or any
Unit. PFC shall reimburse EDC for all costs incurred by EDC in the
performance of its maintenance obligations hereunder.
9.3 Alteration of Equipment. EDC will not make or authorize any
improvement, change, addition or alteration to the Equipment or any Unit
(i) if such improvement, change, addition or alteration will impair the
originally intended function or use of the Equipment or any Unit or impair
the value of Equipment or any Unit as it existed immediately prior to such
improvement, the change, addition or alteration; (ii) unless the parts
installed are in compliance with all rules and recommendations of AAR
and FRA; or (iii) if any parts installed in or attached to or otherwise
becoming a part of the Equipment or any Unit as a result of any such
improvement, change, addition or alteration shall not be readily remov-
able without damage to the Equipment or any Unit (unless such improve-
ment is mandated by AAR, FRA or other agency or organization having
jurisdiction over the Equipment). All such parts shall be and remain
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free and clear of any liens and shall become part of the Equipment or any
Unit, unless it can be removed without damaging or diminishing the value
of the Equipment or any Unit.
10. Inspection. PFC or its authorized representatives may at any reason-
able time or times inspect the Equipment or any Unit. EDC will at all times
requested by PFC cooperate with and assist PFC in locating and gaining access
to the Equipment.
11. Identification. EDC shall, at its own expense, attach to and cause
to be maintained on each Unit a notice satisfactory to PFC disclosing PFC's
interest in such Unit as a lessee. EDC will cause each Unit to be kept
marked and numbered with the identifying mark and number set forth in Exhibit A.
No Unit will bear any running marks other than those registered in the name
of PFC or other marks as PFC may from time to time require. EDC will not
place or permit any such Unit to be placed in operation or use the same until
such marks and numbers shall have been so marked on all sides thereof and
will replace or cause to be replaced promptly any such marks and numbers that
may be removed, defaced, obliterated or destroyed.
12. Loss or Damage. During the period the Equipment or any Unit is in
use by or in the possession of EDC, all risk of loss, theft, damage or destruc-
tion to such Equipment or Unit, however incurred or occasioned, shall be
borne by EDC.
13. General Indemnity. EDC assumes liability for, and shall indemnify,
protect, save and keep harmless PFC and its agents, servants, officers,
directors, employees, attorneys, affiliates, successors and assigns (each,
an "Indemnitee") from and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, suits, costs and expenses,
including legal expenses, of whatsoever kind and nature, imposed on, incurred
by or asserted against any Indemnitee, in any way relating to or arising out
of EDC's possession or use of the Equipment or any part or Unit thereof;
provided, however, that EDC shall not be required to indemnify any Indemnitee
for loss or liability arising from acts or events which occur after the Equip-
ment or any Unit has been returned to PFC in accordance with this Agreement,
or for loss or liability resulting solely from the willful misconduct or gross
negligence of such Indemnitee. The provisions of this Section 13 shall
survive the expiration or earlier termination of this Agreement.
14. Event of Default. An event of default under this Agreement ("Event of
Default") shall occur if PFC fails to receive any Services Fee or other amount
owing hereunder within ten (10) days after the date the same is due or if EDC
performs or observes any warranty, covenant, condition or agreement to be
performed or observed by it with respect to this Agreement and such failure
shall continue unremedied for thirty (30) days. PFC may terminate this Agree-
ment if an Event of Default shall occur.
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15. Assignment of Duties. PFC may, without the consent of, or notice
to, EDC, retain any affiliate of PFC to perform all or any part of the Services.
PFC may retain non-affiliates of PFC to perform the Services.
16. Further Assurances. EDC will, at its own expense, promptly and duly
execute and deliver to PFC such further documents and assurances and take such
further action as PFC may from time to time request in order to more effectively
carry out the intent and purpose of this Agreement and to establish and protect
the rights, interests and remedies created or intended to be created in favor
of PFC hereunder. To the extent permitted by applicable law, EDC hereby
authorizes PFC to file any financing statements and memoranda without the
signature of EDC. EDC will qualify to do business, and remain qualified in good
standing, in each jurisdiction in which the nature of its activities from time
to time may require.
17. Notices. Any notice required or permitted to be given by either
party hereto to the other shall be in writing, and any such notice shall become
effective upon personal delivery thereof 24 hours following delivery to or
deposit with a recognized overnight delivery service or three days after the
date on which it shall have been deposited in the United States mail with
return receipt requested, addressed as follows:
(i) if to PFC, at
Prime Financial Corporation
16 South Pennsylvania Avenue
Oklahoma City, Oklahoma 73107
Attention: President
(ii) if to EDC, at
El Dorado Chemical Company
16 South Pennsylvania Avenue
Oklahoma City, Oklahoma 73107
Attention: President
18. Miscellaneous. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating
the remaining provision hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction. To the extent permitted by applicable
law, EDC hereby waives any provision of law which renders any provision hereof
prohibited or unenforceable in any respect.
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19. Amendment. No term or provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which the enforcement of the change, waiver,
discharge or termination is sought.
20. Entire Agreement. This Agreement and the agreements referred to
herein contain the full, final and exclusive statement of the agreement between
PFC and EDC relating to the Services.
21. Title and Possession. This Agreement shall constitute an agreement
of services, and nothing herein shall be construed as conveying to EDC any
right, title or interest in the Equipment or any Unit. The Equipment or Unit
will at all times during the term of this Agreement be and remain personal
property and title thereto will remain with the owner thereof.
22. Assignment. This Agreement may be assigned by PFC, without the
consent of EDC, to any of the following: (a) any party or entity affiliated
with, or an affiliate of, PFC; (b) any party or entity with whom PFC and/or
its parent company may merge or consolidate or to whom PFC may sell all, or
substantially all, of its assets, and (c) any party or entity PFC may
retain to perform the Services.
23. Captions. The headings of the Sections are for convenience of
reference only, are not a part of this Agreement and shall not be deemed to
affect the meaning or construction of any of the provisions hereof.
24. Execution in Counterparts. This Agreement may be executed by the
parties hereto on any number of separate counterparts, but all such counterparts
shall together constitute but one and the same instrument.
25. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Oklahoma.
26. Subject and Subordinate. This Agreement is subject and subordinate
to that certain Lease Agreement dated July 29, 1999 (the "Lease"), between
Transamerica Equipment Financial Services Corporation ("TEFSC"), as lessor,
and PFC, as lessee, and TEFSC's right to repossess each unit of Equipment and
to avoid and terminate this Agreement with respect to the Equipment so
repossessed upon such repossession. EDC consents and agrees to the assignment
to TEFSC of (i) all monies due or to become due to PFC under this Agreement;
and (ii) all rights and privileges of PFC under this Agreement. EDC promises
and agrees to settle all claims against PFC directly with PFC and hereby
waives, relinquishes and disclaims as to TEFSC all counterclaims, rights of
set-off, and defenses EDC may have against PFC, including any right to with-
hold payment of or to refrain from paying, any monies that are due or to
become due under the terms of this Agreement, except that EDC shall not be
liable to TEFSC for monies paid to PFC in accordance with the terms of this
Agreement prior to the time TEFSC notifies EDC to pay TEFSC directly. EDC
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agrees and acknowledges that TEFSC has not assumed and will not have any
obligation or liabilities under this Agreement to EDC or to any other person
by reason of the aforementioned assignment or otherwise.
IN WITNESS WHEREOF, PFC and EDC have each caused this Agreement to be
duly executed all as of the date first above written.
PRIME FINANCIAL CORPORATION,
an Oklahoma corporation
By: /s/ Tony M. Shelby
_________________________________
Title:_______________________________
EL DORADO CHEMICAL COMPANY,
an Oklahoma corporation
By: /s/ David R. Goss
_________________________________
Title: VP
_______________________________
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EXHIBIT A
EQUIPMENT SCHEDULE
Description Number of Cars Marks Car Numbers
___________ ______________ _____ ___________
Nitric Acid Railcars 26 EDCX 6014-6024,
6026-6033,
6200-6205,
6207
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