Exhibit 10.8
MONONGAHELA USAGE AGREEMENT
Dated as of June 1, 1999
By and Among
CSX TRANSPORTATION, INC.
NORFOLK SOUTHERN RAILWAY COMPANY
PENNSYLVANIA LINES LLC
NEW YORK CENTRAL LINES LLC
TABLE OF CONTENTS
Page
Section 1. Definitions.......................................................4
Section 2. Description of Monongahela.......................................10
Section 3. Customer Service.................................................11
Section 4. Usage of Subject Trackage........................................11
Section 5. Miscellaneous Operations Provisions..............................12
Section 6. Car Hire.........................................................19
Section 7. Accounting Records...............................................19
Section 8. Repairs and Lading Adjustments...................................20
Section 9. Usage Charges....................................................21
A. Transportation Costs..........................................21
B. Other Usage Charges...........................................21
Section 10. Maintenance of the Monongahela..................................27
Section 11. Capital Improvements............................................29
Section 12. Labor Claims....................................................32
Section 13. Freight Claims..................................................32
Section 14. Liability.......................................................33
(a) Sole Responsibility ..........................................33
(b) NSR-CSXT Joint Responsibility.................................34
(c) Process.......................................................34
(d) Indemnification...............................................35
Page
(e) Specified Level Damages.......................................35
(f) Exceptions....................................................36
(g) Damages.......................................................36
(h) Limitation....................................................37
Section 15. No Partnership..................................................37
Section 16. Arbitration.....................................................37
Section 17. Force Majeure...................................................39
Section 18. Entire Agreement................................................39
Section 19. Amendment and Waiver............................................40
Section 20. Severability....................................................40
Section 21. Remedies........................................................40
Section 22. Interpretation..................................................41
Section 23. Headings........................................................41
Section 24. Parties.........................................................42
Section 25. Assignment......................................................42
Section 26. Term............................................................43
Section 27. Termination of Other Agreements.................................45
Section 28. Notices.........................................................45
Section 29. Governing Law...................................................47
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MONONGAHELA USAGE AGREEMENT
This Monongahela Usage Agreement ("Agreement") made this 1st day
of June, 1999, by and between NORFOLK SOUTHERN RAILWAY COMPANY, hereinafter
referred to as "NSR", PENNSYLVANIA LINES LLC, hereinafter referred to as "PRR",
and CSX TRANSPORTATION, INC., hereinafter referred to as "CSXT," and NEW YORK
CENTRAL LINES LLC, hereinafter referred to as "NYC";
WITNESSETH:
WHEREAS, all capitalized terms in this Agreement have the
respective meanings set forth in Section 1; and
WHEREAS, Consolidated Rail Corporation ("CRC") is a wholly owned
subsidiary of Conrail Inc. ("CRR"); and
WHEREAS, CSX Corporation ("CSX") owns all of the common stock of
and controls CSXT, Norfolk Southern Corporation ("NSC") owns all of the common
stock of and controls NSR, and CSX and NSC jointly control CRC; and
WHEREAS, pursuant to the Transaction Agreement, certain assets of
CRC have been allocated to PRR, which is a wholly-owned subsidiary of CRC, to be
operated by NSR under the terms of the NSR Operating Agreement; and
WHEREAS, NSR and CSXT have agreed, and the STB has approved in
Finance Docket No. 33388, that certain tracks comprising all the rail facilities
described in Section 2 of this Agreement (hereinafter "Monongahela"), shall be
allocated to PRR pursuant to the Transaction Agreement, and pursuant to the NSR
Operating Agreement, be operated by NSR, and NSR shall control, operate and
maintain the Monongahela under this Agreement, provided, however, that NYC shall
have equal access, pursuant to the terms of this Agreement, through full use of
the Monongahela to all current and future customer facilities located on or
accessed from the Monongahela; and
WHEREAS, pursuant to the Transaction Agreement, certain assets of
CRC (including equal access to the Monongahela that is the subject of this
Agreement) have been allocated to NYC, which is a wholly-owned subsidiary of
CRC, to be operated by CSXT under the terms of the CSXT Operating Agreement; and
WHEREAS, pursuant to the CSXT Operating Agreement, NYC is
assigning to CSXT all of its rights and obligations to operate NYC's assets,
including all of its rights and obligations with respect to the Monongahela set
forth in this Agreement, and thus CSXT, pursuant to this Agreement and the CSXT
Operating Agreement, shall have all of the rights and obligations conferred by
or imposed under this Agreement during the term of the CSXT Operating Agreement;
WHEREAS, under provisions of this Agreement and the CSXT
Operating Agreement, CSXT, as the assignee of NYC, shall have equal access
through full use of the Monongahela to all current and future customer
facilities located on or accessed from the Monongahela; and
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WHEREAS, in accordance with the terms of this Agreement, NSR and
CSXT shall share all maintenance and other expenses as specifically described
herein which relate directly to the Monongahela on a joint usage basis; and
WHEREAS, NSR and CSXT shall be able to provide separately
transportation service to all customers on or accessed from the Monongahela and,
except as provided herein, no access fees shall be charged NYC for the joint
usage; provided, however, the Operating Fee payable by CSXT to NYC under the
CSXT Operating Agreement includes an arm's-length charge for the assignment by
NYC to CSXT of access to the Monongahela; and
WHEREAS, as provided herein, NSR and CSXT will work together to
develop the expansion of existing and future facilities serving customers
located on or accessed from the Monongahela; and
WHEREAS, NSR and CSXT are agreeable to such an arrangement under
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises, covenants and
agreements set forth herein, and for good and valuable consideration, the
receipt and sufficiency of which is acknowledged, CSXT and NSR hereby agree as
follows:
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Section 1. Definitions.
For purposes of this Agreement, the following terms have the
following meanings:
(a) "AAA" means the American Arbitration Association.
(b) "AAR" means the Association of American Railroads.
(c) "Accounting Plan" means the plan of accounting adopted
pursuant to Section 9(B)(a).
(d) "Action" means any action, claim, suit, arbitration,
inquiry, subpoena, discovery request, proceeding or investigation by or before
any Governmental Entity.
(e) "▇▇▇▇" means a ▇▇▇▇ delivered by NSR to CSXT pursuant to
Section 9(B)(e).
(f) "Billing Month" means the calendar month for which
information is shown on a Usage Statement.
(g) "Budgeted Capital Expenditures" means capital expenditures
included on a Capital Expenditure Budget which has been agreed upon by NSR and
CSXT.
(h) "CCBU" means CSXT's Cumberland Coal Business Unit, currently
headquartered in Cumberland, MD, or any successor thereof.
(i) "CSXT Operating Agreement" has the meaning set forth in the
Transaction Agreement.
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(j) "Capital Expenditure Budget" means a written budget
specifying proposed capital expenditures to be made on the Monongahela for the
periods of time specified in such budget and the proposed sources of the capital
required to make such expenditures.
(k) "Capital Expenditure Statement" means a statement delivered
by NSR pursuant to Section 9(B)(d).
(l) "▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ Letter" means the letter agreement dated
April 28, 1998, concerning the operation of the Monongahela.
(m) "Damage(s)" means all assessments, fines, losses, damages,
liabilities, and costs and expenses related thereto, including, without
limitation, interest, penalties and attorneys' and consultants' fees and also
expressly including, without limitation, all liabilities arising after the
effective date hereof under the Federal Employers Liability Act, as amended, and
environmental laws.
(n) "Dispute Letter" means a letter delivered by CSXT pursuant to
Section 9(B)(g).
(o) "Expense Statement" means a statement delivered by
NSR pursuant to Section 9(B)(c).
(p) "GAAP" at any time means generally accepted accounting
principles in effect at such time.
(q) "Governmental Entity" means any federal, state, local or
foreign court, administrative agency or commission or other governmental or
regulatory authority or commission or any arbitration tribunal.
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(r) "Liabilities" means any and all debts, liabilities and
obligations of any kind whatsoever, whether or not accrued, contingent or
reflected on a balance sheet, known or unknown, absolute, determined,
determinable or otherwise, including, without limitation, those arising under
any law, rule, regulation, action, order or consent decree of any Governmental
Entity or any judgment in any Action of any kind or award of any arbitrator of
any kind and those arising under any contract.
(s) "Monongahela Train" means a train operated by NSR for NSR or
for CSXT and serving customers located on the Monongahela.
(t) "Monongahela Train Usage Percentage" means for either NSR or
CSXT, for a particular time period, the percentage obtained by multiplying 100
by the quotient obtained by dividing (1) the total number of loaded and empty
Railcars in the account of NSR or CSXT, as the case may be, that are in
Monongahela Trains, by (2) the sum of the total number of loaded and empty
Railcars in the accounts of both NSR and CSXT that are in Monongahela Trains,
during such period for each Zone.
(u) "Nonseverable Improvement" means a capital improvement which
is integral to the operation of the Monongahela and is not readily removable.
(v) "NSR Operating Agreement" has the meaning set forth in the
Transaction Agreement.
(w) "Railcar" means, except as otherwise provided in the
Accounting Plan, each railroad freight car, locomotive, caboose or other
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equipment (including RoadRailer(R) equipment (or comparable bimodal freight
hauling equipment in either NSR's or CSXT's account)) furnished in substitution
of railroad equipment, loaded or empty, which an Operator originates,
terminates, switches or moves on or overhead within the Monongahela, except that
(i) a single standard flat car not exceeding 96 feet in length (excluding
articulated flat cars) shall count as a single Railcar, (ii) freight railcars
consisting of articulated units bearing AAR car type codes "Q" and "S" shall
count as multiple Railcars based on the second (numeric) digit of the car type
code for such articulated units (by way of example, a car consisting of AAR Car
Type Code "S566" would be counted as five Railcars) (or corresponding car type
codes and digits if the AAR car type codes should be modified at any time during
the term of this Agreement), and (iii) a single unit of RoadRailer(R) equipment
(or comparable bimodal freight hauling equipment in either NSR's or CSXT's
account) shall count as one-half (1/2) of a Railcar.
(x) "Railroad Consequential Damages" means consequential,
indirect, incidental or other similar damage, injury or loss to either NSR or
CSXT.
(y) "Reimbursable Expenses" means the expenses shown on an
Expense Statement, minus the revenues, if any, shown on such Expense Statement.
(z) "RoadRailer(R) means bimodal freight hauling equipment
manufactured by or under license from "RoadRailer(R), a division of Wabash
National Corporation, and capable of movement over the highway when pulled by a
tractor and on the rails using locomotive power.
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(aa) "Severable Improvement" means a capital improvement that is
not a Nonseverable Improvement, and specifically includes but is not limited to,
track extensions to customer facilities.
(bb) "STB" means the Surface Transportation Board, or if there
shall be no Surface Transportation Board, any federal agency which is charged
with the function of approving combinations by rail carriers or persons
controlling them, or of other arrangements between such rail carriers, and
granting exemptions from other laws with respect thereto or regulating other
specific functions with respect to the context in which such term is employed or
any successor entity thereof.
(cc) "Tax" or "Taxes" means taxes, levies or other similar
assessments, customs, duties, imposts, charges or fees, including, without
limitation, ad valorem, excise, real or personal property, sales, use, payroll,
withholding, unemployment, transfer and gains taxes or other governmental taxes
imposed by or payable to the United States, or any state, local or foreign
government or subdivision thereof, and in each instance such term shall include
any interest, penalties or additions to tax attributable to such Tax or Taxes.
(dd) "Total Monongahela Train Usage Percentage" means for either
NSR or CSXT, for a particular time period, the percentage obtained by
multiplying 100 by the quotient obtained by dividing (1) the total number of
loaded and empty Railcars in the account of NSR or CSXT, as the case may be,
that are in Monongahela Trains by (2) the sum of the total number of loaded and
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empty Railcars in the accounts of both NSR and CSXT that are in Monongahela
Trains, during such period for the entire Monongahela.
(ee) "Total Train Usage Percentage" means for either NSR or CSXT
for a particular time period, the percentage obtained by multiplying 100 by the
quotient obtained by dividing (i) the total number of loaded and empty Railcars
in the account of either NSR or CSXT, as the case may be, by (ii) the sum of the
total number of loaded and empty Railcars in the accounts of both NSR and CSXT,
during such period on the Monongahela.
(ff) "Train Usage Percentage" means for either NSR or CSXT for a
particular time period and Zone, the percentage obtained by multiplying 100 by
the quotient obtained by dividing (i) the total number of loaded and empty
Railcars in the account of either NSR or CSXT, as the case may be, by (ii) the
sum of the total number of loaded and empty Railcars in the accounts of both NSR
and CSXT, during such period in such Zone.
(gg) "Transaction Agreement" means the Transaction Agreement
dated as of June 10, 1997, among CSX, CSXT, NSC, NSR, Conrail Inc., CRC and CRR
Holdings LLC.
(hh) "Usage Statement" means a statement delivered by NSR
pursuant to Section 9(B)(b).
(ii) "USOA" means the uniform system of accounts prescribed for
class I railroads by the STB or any successor federal agency that shall succeed
to the functions of the STB in prescribing uniform systems of accounts for rail
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carriers; provided, that if there shall be no STB and no such federal agency,
USOA shall mean such system of accounts as is generally maintained by rail
carriers consistent with GAAP as applied in the rail industry.
(jj) "Zone" refers to the division of the Monongahela for
accounting purposes, into the following three segments.
Zone 1:MP 0.0 ▇▇ ▇▇▇▇▇ to CP 85 WAYNESBURG (including
Manor Branch) Zone 2:CP 85 WAYNESBURG to MP W27.3 FEDERAL
2 MINE Zone 3:MP 0.0 ▇▇ ▇▇▇▇▇ to MP 79.6 ▇▇▇▇▇▇▇▇▇
Section 2. Description of Monongahela.
The Monongahela is defined as the trackage described in the
definition of Zones set forth above, and as shown on Exhibit "A", which is
attached and made a part hereof (which includes CRC's Waynesburg Southern
Branch), and includes all existing and future spurs, sidings, leads, industry,
switching, loading, side, team and other tracks extending therefrom, together
with the right to use the Manor Branch shown on Exhibit "A", which is attached
hereto and made a part hereof. Monongahela includes the track structure (rails,
ties, ballast, etc., including structures supporting the track), right of way,
communication facilities, signal facilities and all other appurtenances thereto.
The Monongahela also includes all future Nonseverable Improvements. The
Monongahela excludes any tracks or facilities constructed beyond the limits of
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the Zones described above, or connecting to CP 58, MP 0.0 or MP 66.4
(Rivesville) from outside the Zones.
Section 3. Customer Service.
Both NSR and CSXT shall be able to provide separately and
independently rail transportation service to all customers on or accessed from
the Monongahela with their own equipment and crews.
Section 4. Use of Subject Trackage.
(a) CSXT shall have equal access to the Monongahela, as more
specifically provided herein.
(b) Subject to the terms of this Agreement, NSR shall have
control of the management and operation of the Monongahela. However, should CSXT
be dissatisfied with the fairness and equality of treatment of CSXT's movements
by NSR's Monongahela dispatchers, NSR and CSXT shall attempt to resolve these
dispatching concerns. If the attempt does not resolve CSXT's concerns about
Monongahela dispatching, CSXT shall have the right to request a change of
control of Monongahela dispatching to CSXT. If NSR disagrees with such request
for change in dispatching control, NSR and CSXT agree to submit that request to
binding arbitration as provided in Section 16 of this Agreement. From time to
time, but not more frequently than 12 months after the last change in
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dispatching control or arbitration, the party not controlling dispatching may
again seek a change and require arbitration.
Section 5. Miscellaneous Operations Provisions.
(a) When operating over the Monongahela, locomotives and crews
shall be equipped to communicate with the controlling dispatcher on radio
frequencies normally used in directing train movements on the Monongahela.
(b) Procedures for qualification and occupancy of the Monongahela
shall be arranged by the local supervision of NSR and CSXT, and shall be fair
and impartial as between NSR and CSXT.
(c) Before locomotives or equipment of NSR and CSXT enter onto
Monongahela, the employees shall request permission from the dispatcher in
charge of the Monongahela. Further, NSR and CSXT shall ascertain that the
trackage is clear and shall await confirmation from the dispatcher that such
permission has been issued to allow NSR and/or CSXT movements on or over the
Monongahela. Upon completing its operations and clearing the Monongahela, NSR or
CSXT, as the case may be, shall notify the dispatcher that it has completed its
operations and that its equipment is in the clear for other operations or has
moved off of Monongahela. Once NSR or CSXT has notified the dispatcher it is in
the clear or has cleared the Monongahela, NSR or CSXT shall not reenter the
Monongahela without again obtaining permission from the dispatcher.
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(d) The operation and equal access to the mines on the
Monongahela (the "Mines") will be governed by the loading demand of the Mines,
while always taking into account the customer's choice of carrier for the
particular movement. Trains will be scheduled onto the Monongahela based on the
Mines' request. The current practice of the Mines in providing a seven day
loading schedule of required loading will continue. The scheduling and
sequencing will be coordinated between the Mines and designated NSR and CSXT
representatives. All parties will work towards a monthly loading projection to
facilitate advanced planning and scheduling.
A rolling 36 hour loading schedule will be coordinated and
maintained by the Mines, NSR and CSXT, and will be updated every four hours. The
loading schedule will be the governing vehicle for sequencing trains on the
Monongahela by the dispatcher. This will allow each carrier to have sufficient
notification to ensure trains are positioned to protect loading on the
Monongahela. NSR and CSXT will develop scheduled running times from their
staging facilities to the entrance to the Monongahela. NSR and CSXT will
jointly develop running times from the entrance points to each of the Mines.
Changes in the train loading schedule or train ordering
will be coordinated jointly between NSR and CSXT to assure demand is met for all
Mines. In the event either an NSR or CSXT train fails to make the loading
schedule, every effort will be made to coordinate and resequence the
loading schedule to facilitate both carriers. The governing factor is to
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provide the appropriate NSR or CSXT trains required by the Mines. NSR and
CSXT agree to coordinate and implement an operating plan for the
Monongahela (the "Operating Plan") to ensure efficient movement of traffic
on the Monongahela. Related to the Operating Plan, Accounting Plan and
this Agreement is the ▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ Letter. The ▇▇▇▇▇▇▇▇▇/Tobias Letter
was executed in furtherance of this Agreement, the Operating Plan and the
Monongahela Accounting Plan and shall be enforceable according to its terms.
In the event that coal producers on the Monongahela need to change the loading
sequence once trains are positioned on the Monongahela, every attempt will
be made to have the original carrier secure the loading, subject to customer
approval.
A Service Standards Committee ("Committee") shall be
established with equal local representation from NSR and CSXT including General
Manager Coal Operations and General Manager CCBU or other representatives for
CSXT and the Superintendent of the Pittsburgh Division and the AVP
Transportation, or other representatives, for NSR. The Committee is charged
with developing and agreeing upon the contents of a "Report Card" for the
service on the Monongahela. The Report Card will attempt to provide a
mechanism to determine whether impartial access (as measured by train
performance, dispatching and maintenance) to all Mines is being provided. The
Committee will meet on a quarterly basis, or more frequently if required, to
review service, dispatching, maintenance and other issues as they arise. The
Committee's goal is to resolve all issues encompassing the operation on the
Monongahela.
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(e) NSR and CSXT shall comply with the provisions of the Federal
Locomotive Inspection Act and the Federal Safety Appliance Act, as amended, and
any other federal and state and local laws, regulations and rules respecting the
operation, condition, inspection and safety of its trains, locomotives, cars and
equipment while such trains, locomotives, cars, and equipment are being operated
over the Monongahela.
(f) CSXT in its use of the Monongahela shall comply in all
respects with the safety rules, operating rules and other regulations of NSR,
and the movement of CSXT trains, locomotives, cars, and equipment over the
Monongahela shall at all times be subject to the orders of the transportation
officers of NSR; provided that all such rules, regulations, practices and orders
must be impartially administered as between NSR and CSXT. NSR and CSXT trains
shall not include locomotives, cars or equipment which exceed the width, height,
weight or other restrictions or capacities of the Monongahela as published in
Railway Line Clearances, and no train shall contain locomotives, cars or
equipment which require speed restrictions or other movement restrictions that
would violate operating rules and regulations applicable to the Monongahela,
except with the concurrence of NSR which shall not be unreasonably withheld.
(g) CSXT shall make such arrangements with NSR as may be required
to have all CSXT employees who shall operate its trains, locomotives, cars and
equipment over the Monongahela qualified for operation thereover, and CSXT shall
pay to NSR, upon receipt of bills therefor, any cost incurred by NSR in
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connection with the cost of pilots furnished by NSR, until such time as such
employees are deemed by the appropriate examining officer of NSR to be properly
qualified for operation over Monongahela.
(h) In the event of any investigation or hearing concerning the
violation of any operating rule or practice by CSXT's employees while on the
Monongahela, CSXT shall be notified in advance of any such investigation or
hearing and such investigation or hearing may be attended by any official
designated by CSXT, and any such investigation or hearing shall be conducted in
accordance with the collective bargaining agreements, if any, that pertain to
CSXT's employee or employees required to attend such hearings.
(i) NSR shall have the right to exclude from the Monongahela any
employee of CSXT determined by above, to be in violation of NSR's rules,
regulations, orders, practices, or instructions issued by NSR's timetable or
otherwise. CSXT shall release, indemnify, defend, and save harmless NSR and its
parent corporation, subsidiaries and affiliates, and all of their respective
directors, officers, agents and employees from and against any and all claims
and expenses resulting from such reasonable and lawful exclusion.
(j) The railcars, trains, locomotives, cars and equipment of NSR
and CSXT shall be operated without prejudice or partiality to either party and
in such manner as shall afford the most economical and efficient movement of all
traffic.
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(k) In the event that a train of CSXT shall be forced to stop on
the Monongahela, due to mechanical failure of CSXT's equipment, or any other
cause not resulting from an accident or derailment, and such train is unable to
proceed, or if a train of CSXT fails to maintain the minimum speeds required on
the Monongahela, or if in emergencies, crippled or otherwise defective Railcars
are set out of CSXT's trains on the Monongahela, NSR shall arrange for motive
power or such other assistance as may be necessary to haul, help or push such
trains or Railcars, or to properly move the disabled equipment in the clear or
off the Monongahela, and CSXT shall reimburse NSR for the cost of rendering any
such assistance. If such assistance cannot be commenced within a reasonable
time, CSXT shall have the option through coordination with NSR, to provide such
assistance itself. If a train of NSR becomes unable to proceed or maintain the
required minimum speed or NSR Railcars become crippled and are set out, NSR
shall promptly clear off such trains or Railcars so as not to impede movements
on the Monongahela.
(l) If it becomes necessary to move, make repairs to, adjust or,
transfer the lading of crippled or defective Railcars, such work shall be done
by NSR, and if the Railcar is in the account of CSXT, CSXT shall reimburse NSR
for the cost thereof. If the Railcar is in the account of NSR, such cost shall
be borne by NSR and not shared pursuant to Section 9.
(m) In the event NSR and CSXT agree that NSR should retain
employees or provide additional employees for the sole benefit of CSXT, the
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parties hereto shall enter into a separate agreement under which CSXT shall bear
all cost and expense for any such retained or additional employees provided,
including without limitation all cost and expense associated with labor
protective payments which are made by NSR and which would not have been incurred
had the retained or additional employees not been provided.
(n) Notwithstanding the provisions of Section 14, for the
purposes of this Section 5, the word "equipment" shall mean and be confined to
(i) cabooses, (ii) vehicles and machinery which are capable of being operated on
railroad tracks that, at the time of an occurrence, are being operated on the
Monongahela and (iii) vehicles and machinery that, at the time of an occurrence,
are on the Monongahela or its right of way for the purpose of maintenance,
repair or inspection thereof or the clearing of wrecks thereon.
(o) Whenever CSXT's or NSR's use of the Monongahela requires
rerailing, wrecking service or wrecking train service, NSR shall perform or
provide such service. The cost of rerailing and the repair and restoration of
roadbed, track and structures shall be borne 100% by CSXT if the Railcars are in
CSXT's account or 100% by NSR if they are in NSR's account. Any other cost,
liability and expense related to the foregoing, including without limitation
loss of, damage to, or destruction of any property whatsoever and injury to and
death of any person or persons whomsoever or any damage to or destruction of the
environment whatsoever, including without limitation land, air, water, wildlife,
and vegetation, resulting therefrom, shall be apportioned in accordance with the
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provisions of Section 14 hereof. All locomotives, railcars, and equipment and
salvage from the same so picked up and removed which is owned by or under the
management and control of or used by CSXT at the time of such wreck, shall be
promptly delivered to CSXT. If such assistance cannot be commenced within a
reasonable time, CSXT shall have the option to provide such assistance itself.
Section 6. Car Hire.
All NSR and CSXT Railcars shall remain in the respective accounts
of NSR and CSXT at all times. NSR and CSXT Railcars and lading being moved in
their respective trains pursuant to this Agreement shall be the sole property of
that party. NSR and CSXT shall each pay and collect or cause to be paid and
collected all car hire and mileage charges pertaining to their respective
Railcars, and neither NSR nor CSXT shall have any responsibility for any such
car hire or mileage charges in the other party's account however incurred.
Section 7. Accounting Records.
The records of each party hereto, insofar as they pertain to
matters covered by this Agreement, shall be retained for a period of three (3)
calendar years and shall be open at all reasonable times to inspection by the
other party during such period. These records shall include train consist (list)
indicating car initial and number with associated car type code.
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Section 8. Repairs and Lading Adjustments.
If any CSXT Railcars are bad ordered en route and it is necessary
that they be set out, such Railcars, after being promptly repaired, shall be
returned or delivered to CSXT. NSR shall at the expense of CSXT, furnish
required labor and material, and perform light repairs on such bad ordered
equipment to make it safe for movement. For liability purposes only, the
employees and equipment of NSR while in any manner so engaged or while en route
to or returning from such repair assignment shall be considered sole CSXT
employees and exclusive CSXT equipment. In the case of such repairs by NSR to
CSXT Railcars, billing therefor shall be in accordance with the Field and Office
Manuals of the AAR Interchange Rules, or similar rules providing "industry
standard" procedures which are in effect at the time such work is performed,
hereinafter called "Interchange Rules". NSR shall prepare and submit billing
directly to and collect from the car owners for car owner responsibility items
as determined under the Interchange Rules and NSR shall prepare and submit
billing directly to and collect from CSXT for handling line responsibility items
as determined under the Interchange Rules. NSR shall also submit billing to and
collect from CSXT any charges for repair to freight cars that are car owner
responsibility items as determined under the Interchange Rules, should said car
owner refuse or otherwise fail to make payment therefor. In the event NSR
Railcars are bad ordered en route and set out, repaired, or work is performed on
such Railcars, as provided above, all such costs shall be borne by NSR and not
shared pursuant to Section 9.
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Section 9. Usage Charges.
A. Transportation Costs. The ▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ letter states that
--------------------
NSR will provide crews to operate CSXT trains between the Mines and CSXT's
▇▇▇▇▇▇ Yard or the ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ barge terminals (or such other locations as
may be mutually agreed upon). Transportation costs associated with NSR's
operation of CSXT trains shall be as set forth in the Accounting Plan. To the
extent NSR and CSXT will be performing service over the Monongahela by operating
their own trains with their own crews, any and all costs directly associated
with the operation of such trains and crews shall be borne by the party
operating such trains and crews.
B. Other Usage Charges. Given the rights of equal access to the
--------------------
Monongahela, the parties agree that certain costs directly related to the
maintenance and operation of the Monongahela shall be shared based upon usage.
Accordingly, the parties agree to the following:
(a) The parties shall develop and implement a written Accounting
Plan containing a detailed description, by category of cost and location, of the
costs directly associated with the management and operation of the Monongahela
and the method by which such costs shall be fairly and properly apportioned
between the parties. Such Accounting Plan will include separate accounting and
sharing of costs as mutually agreed for particular Zones or for the overall
Monongahela, as the case may be, and shall conform to the following general
principles:
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(i) General and administrative, supervisory and
overhead expenses incurred within the Monongahela or for functions directly
related to the Monongahela shall be apportioned on the basis of the Total
Train Usage Percentages, or Total Monongahela Train Usage Percentages,
whichever is applicable as provided in the Accounting Plan;
(ii) Dispatching (where dispatching is located on the
Monongahela or where dispatching is devoted 100% to the Monongahela),
maintenance of dispatching equipment and train control costs (including labor,
materials and maintenance expenses) incurred with respect to the Monongahela
shall be apportioned on the basis of the Total Train Usage Percentages, or
Total Monongahela Train Usage Percentages, whichever is applicable as provided
in the Accounting Plan;
(iii) Police and other costs incurred with respect to
security within the Monongahela shall be apportioned on the basis of the Total
Train Usage Percentages, or Total Monongahela Train Usage Percentages, whichever
is applicable as provided in the Accounting Plan;
(iv) Damage paid by NSR pursuant to Section 14 shall be
apportioned in accordance with Section 14;
(v) Taxes (excluding income taxes) incurred with
respect to the Monongahela or individual Zones thereof shall be apportioned
between NSR and CSXT on the basis of the Total Train Usage Percentages, or
Total Monongahela Train Usage Percentages, whichever is applicable as
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provided in the Accounting Plan, or Train Usage Percentage for the individual
Zone, if capable of determination, for the period for which such Taxes apply;
(vi) The cost of premiums for liability and property
insurance, other than self-insurance, incurred with respect to the Monongahela
or individual Zones thereof shall be apportioned between NSR and CSXT on the
basis of (w) Total Train Usage Percentage, (x) Train Usage Percentage for the
individual Zone, (y) Total Monongahela Train Usage Percentage, or (z)
Monongahela Train Usage Percentage for the individual Zone, whichever is
applicable, as provided in the Accounting Plan, if capable of determination
for the period for which such Insurance costs apply;
(vii) The expense of installation and maintenance of AEI
readers including, but not limited to, those in the vicinity of CP 58
(existing), CP 85 Waynesburg, MP 0.5 and MP 66.0 shall be borne 50% by NSR and
50% by CSXT;
(viii) Section 14 of this Agreement deals with the
apportionment of Liability between the parties. Any payments made by NSR
pursuant to Section 14(a) which arise from the death or injury to NSR
employees, when such NSR employees are "joint employees," such as
Maintenance of Way, Signal, Dispatch, Bridge and Building, Mechanical and other
employees whose work on the Monongahela is other than revenue train
operations, shall be paid by NSR in accordance with Section 14(a), but
apportioned based on Total Train Usage Percentage or Train Usage Percentage for
the individual Zone, whichever is applicable as provided in the Accounting
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Plan; provided, however, should such employee Liability expense arise from work
performed as a result of capital improvements at the sole cost of NSR or CSXT,
then that party shall be fully responsible for all such payments; and
(ix) Maintenance of track structure (rails, ties,
ballast, etc., including structures supporting the track), right of way,
tunnels, communication facilities, signal facilities and all other appurtenances
thereto shall be apportioned on the basis of the Total Train Usage Percentage,
for the entire Monongahela or Train Usage Percentage for each Zone, whichever
is applicable, as provided in the Accounting Plan.
(x) Any other costs shall be reimbursed as otherwise
provided in this Agreement.
If the parties are unable to agree on the terms and
provisions of the Accounting Plan, such disagreement may be submitted by
either NSR or CSXT for resolution by binding arbitration pursuant to Section
16.
(b) NSR shall deliver to CSXT prior to the last day of each
calendar month, a written statement (the "Usage Statement") showing for the
prior Billing Month:
(i) the total number of Railcars moved by NSR or CSXT
on the Monongahela and in each Zone; and
(ii) the calculation of the Total Train Usage
Percentage, the Train Usage Percentage, Total Monongahela Train Usage Percentage
- 24 -
and Monongahela Train Usage Percentage for each party for each Zone, and (A)
all Railcars in a train shall be deemed to be on the Monongahela, or a Zone,
as the case may be, when the first or last Railcar of such train is on the
Monongahela, or a Zone, as the case may be, and (B) each time that a Railcar
is removed from or added to a train on the Monongahela, or a Zone, as the
case may be, shall constitute a separate movement of such Railcar.
(c) Concurrently with the delivery of each Usage Statement, NSR
shall deliver to CSXT a statement (the "Expense Statement") showing the expenses
incurred by NSR and CSXT during the Billing Month, computed in accordance with
GAAP and the USOA, as modified by the Accounting Plan.
(d) Concurrently with the delivery of each Usage Statement, NSR
shall deliver to CSXT a statement (the "Capital Expenditure Statement") showing
the estimated Budgeted Capital Expenditures for the calendar month immediately
succeeding the calendar month in which such statement is delivered.
(e) Concurrently with the delivery of a Usage Statement for a
Billing Month, NSR shall deliver to CSXT a ▇▇▇▇ (a "▇▇▇▇") showing for such
Billing Month:
(i) the amount of each Reimbursable Expense payable by
CSXT for such Billing Month calculated in accordance with the Accounting Plan;
and
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(ii) CSXT's percentage of the amount of Budgeted Capital
Expenditures and shown on the Capital Expenditure Statement delivered with such
Usage Statement.
(f) CSXT shall pay to NSR the amount shown on each ▇▇▇▇ on or
before the 30th day after the date of such ▇▇▇▇ regardless of whether or not
CSXT disputes the accuracy of any amount or calculation shown on such ▇▇▇▇.
(g) Disputed Bills:
(i) Any dispute by CSXT of the accuracy of any amount
or calculation shown on any ▇▇▇▇, shall be described and specified in reasonable
detail in a Dispute Letter from CSXT to NSR within two (2) years after the date
of such ▇▇▇▇.
(ii) Any amounts or calculations shown on any ▇▇▇▇ which
are not disputed in accordance with this section 9 shall conclusively be deemed
to be accurate and shall be binding on both parties.
(iii) CSXT and NSR shall promptly endeavor to resolve the
disputes described in each Dispute Letter, and if they fail to agree to a
resolution of such disputes within 45 days of the delivery of such
Dispute Letter, then a firm of independent public accountants shall be
selected jointly by CSXT and NSR (or if they do not agree on such firm, then
such firm shall be selected by arbitration pursuant to Section 16) to resolve
such disputes, in each case in accordance with GAAP and the USOA, as modified
by the Accounting Plan, and the written resolution of such disputes signed by
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such accounting firm shall be binding on CSXT and NSR.
(iv) Any adjustments to Bills which result from the
resolution of Dispute Letter disputes shall be reflected as charges or credits
on the first Bills delivered by NSR to CSXT after such disputes have been
resolved.
(v) The costs of NSR's and CSXT's auditors in connection
with the resolution of any Dispute Letter disputes shall be paid by each
respective party, and the fees of any independent public accounting firm
engaged to resolve such disputes shall be paid 50 percent by NSR and 50 percent
by CSXT.
(h) At the option of either party hereto, the Accounting Plan
provided for in this Section 9 may be opened for reevaluation every year from
the effective date of this Agreement. Such reevaluation may include the
definition of the Zones and any modifications needed thereto. In the event the
parties fail to reach agreement upon reevaluation, such failure shall not
constitute a breach of this Agreement, and the parties shall continue to be
bound by the terms of compensation provided in this Section 9 until the matter
is settled or submitted to binding arbitration as outlined in Section 16.
Section 10. Maintenance of the Monongahela.
(a) NSR shall be responsible to maintain, repair and renew the
infrastructure of the Monongahela. NSR shall keep and maintain the Monongahela
in good condition for the use herein contemplated. NSR shall take all reasonable
- 27 -
steps to ensure that any interruptions to train operations shall be kept to a
minimum. Furthermore, except as may be otherwise provided in Section 14, CSXT
shall not by reason of failure or neglect on the part of NSR to maintain, repair
or renew the Monongahela, have or make any claim or demand against NSR or its
parent corporation, subsidiaries or affiliates, including PRR, or their
respective directors, officers, agents or employees for any injury to or death
of any person or persons whomsoever, or for any damage to or loss or destruction
of any property whatsoever, or for any damages of any nature suffered by CSXT
resulting from any such failure or neglect.
(b) The Monongahela will be jointly inspected by each party's
Chief Engineer or their designees at any time upon mutual agreement, but not
less than once every three (3) years to determine if appropriate track standards
are maintained, and to review the performance of any capital plan for the
Monongahela as pertains to maintenance of track, signals, right of way and
appurtenances thereto. On or before August 15 of each year, NSR will provide
CSXT with a capital improvement plan covering the next three (3) years.
(c) Existing and future connections or facilities which are
jointly used by the parties hereto shall continue to be maintained, repaired and
renewed by and at the expense of both parties apportioned in accordance with
Sections 9 and 11 and the Accounting Plan, which shall become a part hereof.
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Section 11. Capital Improvements.
Capital Improvements on the Monongahela shall be governed by the
following provisions:
(a) From time to time, NSR or CSXT may propose to each other
construction of capital improvement projects ("Project"). Each Project shall be
reviewed promptly by the other party. If approved by both parties, NSR and CSXT
shall be responsible for an equal share of the budgeted initial funding, as
approved in the Capital Expenditure Budget, for the approved Project. A final
accounting will be made to adjust the initial budgeted funding to the actual
project cost as specified in the Accounting Plan.
(b) If a proposed project is not approved, and the proposed
Project would be a Nonseverable Improvement of the Monongahela which may be used
in the normal course of business by NSR or CSXT, then the following procedure
shall occur:
(i) At the written request of either NSR or CSXT
delivered to the other, each party shall, within 45 days of the delivery of
such request, submit to an arbitrator in accordance with Section 16 a written
proposal with respect to a Nonseverable Improvement Project which was not agreed
upon by the parties (1) describing any changes from the initial request which
such party proposes be made to such Project and specifying a schedule, budget
and allocations between NSR and CSXT of the capital costs of such Nonseverable
Improvement or (2) proposing that it not be made.
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(ii) The arbitrator receiving the proposals referred to
in Section 11(b)(i) (A) shall consider (1) the degree, if any, to which the
construction, operation and use of such Nonseverable Improvement would impair
or interfere with the use of the Monongahela, conflict with any pending capital
improvements, or be necessary or unnecessary to the operations of a particular
party, and (2) the budget and allocations between NSR and CSXT of the capital
costs of such Nonseverable Improvement as proposed by NSR and CSXT and (B) shall
determine within 45 days of such receipt which of such proposals shall be
accepted, or that such Nonseverable Improvement shall not be made. The
arbitrator's decision shall be binding and enforceable upon NSR to fund and
cause the Nonseverable Improvement to be made in accordance with such
decision and upon CSXT to fund such Nonseverable Improvement in accordance
with such decision, unless the decision is that such Nonseverable Improvement
shall not be made.
(c) Severable Improvements:
(i) (A) NSR shall have the right to cause the
construction, at its sole expense, and (B) CSXT shall have the right to require
NSR to cause the construction, but at CSXT's sole expense, of any Severable
Improvement which has not been agreed upon by the parties to be funded on a
shared basis.
(ii) Each Severable Improvement funded exclusively by
NSR or CSXT shall be used exclusively by NSR or CSXT, as the case may be, and
each party shall be solely responsible for the cost of maintaining such
Severable Improvement (recognizing that in either case the actual performance
- 30 -
of such maintenance shall be the responsibility of NSR), until such time that
the other party gives written notice that it desires also to use such
Severable Improvement, stating the amount which such other party is prepared
to pay to the party which initially funded such Severable Improvement for
the right to use such Severable Improvement.
(iii) If the parties are unable to agree on the amount of
such payment within 45 days after such notice was given, then at the written
request of a party delivered to the other after 45 days but before 60 days after
such notice was given, NSR and CSXT, within 15 days of the delivery of such
request, shall submit to an arbitrator in accordance with Section 16 a
written statement setting forth the proposed payment by the other party, and
the arbitrator shall within 45 days of such receipt determine which of such
proposed amounts shall apply, which shall be binding on both parties and
paid promptly. Upon payment of the amount determined by the arbitrator,
the improvement shall become a Nonseverable Improvement.
(d) Upon completion, all capital improvements shall become part
of the Monongahela owned by PRR subject to all provisions of this Agreement.
(e) Subject to all of the provisions hereof, the parties will
work together to develop the expansion of existing and future facilities serving
customers located on or accessed from the Monongahela.
(f) The construction, operation and use of a Severable
Improvement by a party shall not unduly impair or interfere with the use of a
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Severable Improvement by the other party, nor shall any Severable Improvement
unduly impair or interfere with train operations on the Monongahela. No
Severable Improvement shall unduly impair or interfere with any pending or
proposed capital improvements included in an approved Capital Expenditure
Budget.
Section 12. Labor Claims.
Each party shall indemnify and hold harmless the other party
against any and all costs and payments, including benefits, allowances, and
arbitration, administrative, and litigation expenses, arising out of claims or
grievances made by or on behalf of or lawsuits brought by or on behalf of its
own employees or their collective bargaining representatives, either pursuant to
employee protective conditions imposed by a governmental agency upon the
agency's approval or exemption of this Agreement and operations hereunder or
pursuant to a collective bargaining agreement. It is the parties' intention that
each party shall bear the full costs of protection of its own employees under
employee protective conditions that may be imposed, and of grievances filed by
its own employees arising under its collective bargaining agreements with its
employees.
Section 13. Freight Claims.
The parties shall agree between themselves on the most fair,
practical and efficient arrangements for handling and administering freight loss
and damage claims with the intent that (a) each party shall be responsible for
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losses occurring to lading in its possession for the account of such party and
(b) the parties shall follow relevant AAR rules and formulas in providing for
the allocation of losses which are either of undetermined origin or in Railcars
handled in interline service by or for the account of both parties.
Section 14. Liability.
Except as otherwise provided in Section 13 and this Section 14,
the responsibility between CSXT and NSR for all Damage arising out of,
incidental to or occurring in connection with this Agreement shall be
apportioned without consideration of fault or negligence of any kind or degree
as follows:
(a) Sole Responsibility. Except as otherwise provided in Section
14(e) (Specified Level Damages) and Section 14(f) (Exceptions), each party shall
assume and bear all responsibility for Damage to its own trains, locomotives and
equipment, to Railcars and lading in its possession or being handled for its
account, and for the death of or injury to its own employees. Subject to Section
14(f) (Exceptions), for the purpose of this Section 14(a):
(i) when NSR employees are engaged in capital
improvements at the sole cost of CSXT under Section 9(B)(a)(viii), such
employees engaged in such capital improvements shall be treated as if they were
CSXT employees; and
(ii) when NSR is operating trains for CSXT, NSR employees
engaged in moving, inspecting, preparing, handling, being transported to or
- 33 -
from, transporting such employees to or from, or other similar activities
directly related to the movement of CSXT trains shall be treated as if they
were CSXT employees and such trains shall be CSXT trains.
(b) NSR-CSXT Joint Responsibility. (i) Except as otherwise
provided in Section 14(b)(ii) with regard to Damages occurring in the first 12
months of operation and in Sections 14(a) (Sole Responsibility), Section 14(e)
(Specified Level Damages) and Section 14(f) (Exceptions), the parties shall
jointly assume and bear all responsibility for all Damage in proportion to their
respective Train Usage Percentages in the Zone in which the incident giving rise
to such Damage occurred for the 12 calendar month period immediately preceding
the incident giving rise to such Damage.
(ii) In the event an incident giving rise to Damage for
which the parties are jointly responsible occurs during the 12-month period
immediately following the date of this Agreement, responsibility for such
Damage shall be borne equally by the parties with each being liable for
one-half (1/2) of the damages.
(c) Process. Each party shall be responsible for the payment,
handling, administration and disposition of all Damage for which it bears
exclusive responsibility under Section 14(a), and both parties shall have joint
responsibility for the payment, handling, administration and disposition of all
Damage for which they are jointly responsible under Section 14(b). In assigning
joint responsibility to both parties, it is not the intent of this Agreement
that the parties will actually act jointly, but rather that the parties will
- 34 -
agree between themselves on the most practical and efficient arrangements for
handling, administering, and disposing of Damage for which they bear joint
responsibility, with the objective of eliminating unnecessary duplication of
effort and minimizing overall costs.
(d) Indemnification. Each party to this Agreement covenants and
agrees to (i) fully indemnify and save harmless the other party to this
Agreement from and against any payments which are the responsibility of such
party under this Agreement, and all expenses, including attorneys' fees and
expenses and other expenses of any court or regulatory proceeding, incurred by
such other parties in defending any claim that it is liable for such payments,
and (ii) defend such other party against such claims with counsel selected by
such party and reasonably acceptable to such other party.
(e) Specified Level Damages. Sections 14(a) (Sole Responsibility)
and 14(b) (NSR-CSXT Joint Responsibility) shall apply directly only when the
total amount of all Damages resulting from a single incident is $25 million or
less. Responsibility for Damages resulting from a single incident for which
Damages exceed $25 million shall be classified as "Tier One Damages" or "Tier
Two Damages" and allocated as stated in subparagraphs (i), (ii) and (iii) of
this Section 14(e).
(i) In this Section 14(e), "Tier One Damages" for any
incident include the greater of (1) $25 million of Damages or (2) an
amount equal to all combined liability insurance benefits available to
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whichever of NSR or CSXT has the lesser (as between them) amount of
insurance benefits available to it applicable to that incident, but only
to the extent that benefits are actually available.
(ii) Tier One Damages shall be allocated between NSR and
CSXT in accordance with Sections 14(a) (Sole Responsibility) and 14(b)
(NSR-CSXT Joint Responsibility).
(iii) In this Section 14(e), "Tier Two Damages" include
all of those Damages in excess of the Tier One Damages calculated under
Section 14(e)(i). Tier Two Damages shall be allocated between the
parties hereto in proportion to their respective fault or negligence in
causing the Damage.
(f) Exceptions. Each party shall assume and bear all
responsibility for Damage to the extent caused by acts or omissions of any of
its employees while under the influence of drugs or alcohol and Sections 14(b)
and (e) shall not apply to any such Damage. Notwithstanding any other provision
of this Agreement including, without limitation, both clauses of the last
sentence of Section 14(a) and Section 9(B)(a)(viii), no NSR employee handling a
CSXT train or performing other functions on the Monongahela shall be treated as
a CSXT employee for purposes of this Section 14(f).
(g) Damages. As used in this Section 14 only, the term
"Damage(s)" shall exclude Railroad Consequential Damages (which are always borne
by whichever of NSR or CSXT sustained them) and claims for exemplary and
- 36 -
punitive Damages. With regard to exemplary and punitive Damages, the parties
acknowledge and agree that, with regard to the subject of this Agreement, the
intent and agreement of the parties is that no party shall bring or recover any
claim for exemplary or punitive damages, in its own right, against any other
party, but that any party will allocate, in accordance with this Section 14,
exemplary or punitive Damages from any claim against it by a third person not a
party hereto.
(h) Limitation. The parties hereto acknowledge that, pursuant to
the penultimate paragraph of the ▇▇▇▇▇▇▇▇▇/Tobias Letter, CSXT can elect to
operate its own trains with its own crews, and if CSXT exercises that election
in the future and runs its own trains with its own crews, the provisions of
clause (ii) of the last sentence of Section 14(a) shall not apply during any
such CSXT operations.
Section 15. No Partnership.
Nothing in this Agreement shall be construed to establish a
partnership or joint venture between or among CSXT or NSR or any of their
affiliates or associates.
Section 16. Arbitration.
Any dispute, controversy or claim (or any failure by the parties
to agree on a matter as to which this Agreement expressly or implicitly
contemplates subsequent agreement by the parties, except for matters left to the
- 37 -
sole discretion of a party) arising out of or relating to this Agreement, or the
breach, termination or validity hereof, shall be finally settled through binding
arbitration by a sole, disinterested arbitrator in accordance with the
Commercial Arbitration Rules of the AAA. The arbitrator shall be jointly
selected by the parties, but if the parties do not agree on an arbitrator within
30 days after demand for arbitration is made by a party, they shall request that
the arbitrator be designated by the AAA. The award of the arbitrator shall be
final, binding and conclusive upon the parties. Each party to the arbitration
shall pay the compensation, costs, fees and expenses of its own witnesses,
experts and counsel. The compensation, and any costs and expenses of the
arbitrator, shall be borne equally by the parties. The arbitrator shall have the
power to require the performance of acts, found to be required by this
Agreement, and to require the cessation or nonperformance of acts found to be
prohibited by this Agreement. The arbitrator shall not have the power to award
consequential or punitive damages. Judgment upon the award rendered may be
entered in any court having jurisdiction thereof, which court may award
appropriate relief at law or in equity. All proceedings relating to any such
arbitration, and all testimony, written submissions and award of the arbitrator
therein, shall be private and confidential as between the parties, and shall not
be disclosed to any third party, except as required by law and except as
reasonably necessary to prosecute or defend any judicial action to enforce,
vacate or modify such arbitration award.
- 38 -
Section 17. Force Majeure.
The obligations, other than payment obligations, of the parties
to this Agreement shall be subject to force majeure (which shall include
strikes, riots, floods, accidents, Acts of God, and other causes or
circumstances beyond the control of the party claiming such force majeure as an
excuse for non-performance), but only as long as, and to the extent that, such
force majeure shall prevent performance of such obligations.
Section 18. Entire Agreement.
This Agreement, the ▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ Letter, and the Transaction
Agreement (including the other Ancillary Agreements, as defined in the
Transaction Agreement) constitute the entire agreement and supersede all other
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof, except the letter agreement dated
April 8, 1997 between CSX and NSC to the extent such April 8, 1997 letter
agreement covers matters not addressed or amended hereby or in the Transaction
Agreement or the Ancillary Agreements (as defined in the Transaction Agreement);
provided that it is the intent of the parties that this Agreement shall be an
effectuation of such April 8, 1997 letter agreement consistent with its terms,
and that the provisions of this Agreement should be interpreted to give effect
to such April 8, 1997 letter agreement; and provided further that, in the event
- 39 -
of any inconsistency between the terms of this Agreement and such April 8, 1997
letter agreement, this Agreement shall prevail.
Section 19. Amendment and Waiver.
Any amendment to this Agreement must be in writing and executed
and delivered by CSXT, NSR, PRR, and NYC subject to any jurisdiction of the STB.
Any waiver of any term or provision of this Agreement must be in writing and
executed and delivered by the party entitled to enforcement of such term or
provision.
Section 20. Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction or other authority to be invalid,
void, unenforceable or against its regulatory policy, such provision is to be
intended to be ineffective only to the most limited extent possible in such
context and the remainder of the terms, provisions, covenants and restrictions
of this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 21. Remedies.
(a) Each party acknowledges and agrees that the other parties
would be irreparably damaged in the event any of the provisions of this
- 40 -
Agreement were not performed by it in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that each party shall be
entitled to an injunction or injunctions to prevent breaches of such provisions
and to specifically enforce such provisions, in addition to any other remedy to
which such party may be entitled, at law or in equity.
(b) In no event shall any party be liable to the other parties
for any consequential, indirect, incidental, punitive or other similar damages
including but not limited to lost profits for any breach or default, or any act
or omission arising out of or in any way relating to this Agreement, under any
form or theory of action whatsoever, whether in contract, tort or otherwise.
Section 22. Interpretation.
This Agreement was drafted jointly by CSXT, NSR, PRR and NYC,
each of which was advised by its own counsel and other advisors concerning all
of the terms and provisions hereof; accordingly, any ambiguity herein should not
be construed in favor of or against any of them.
Section 23. Headings.
Headings of sections in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of any term
or provision of this Agreement.
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Section 24. Parties.
This Agreement shall inure to the benefit of and be binding upon
NSR, CSXT, PRR, and NYC and any successor of any of them by operation of law,
and any assignee agreed to by them in accordance with Section 25, and nothing in
this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or with respect to this
Agreement or any term or provision hereof.
Section 25. Assignment.
(a) Except as provided herein, neither this Agreement (including
the documents and instruments referred to herein) nor any of the rights,
interests or obligations hereunder, shall be assigned by any party, including by
operation of law, without the prior written consent of the other parties, except
to a controlled subsidiary, or in the case of PRR, to NS, NSR or a subsidiary or
affiliate of NS, and in the case of NYC, to CSX, CSXT or a subsidiary or
affiliate of CSX.
(b) (i) Except as otherwise provided herein, in the event either
of NSR or PRR proposes to sell or transfer its interest in all or any portion of
the Monongahela, CSXT shall have the right of first refusal to purchase such
interest at the same price, and substantially the same terms and conditions
offered to NSR or PRR; provided CSXT must make such offer within 30 days of
receiving notification from NSR or PRR of the price, terms and conditions being
offered by such other prospective purchaser.
- 42 -
(ii) In the event CSXT or NYC proposes to sell or transfer
its operating rights on all or any portion of the Monongahela, NSR shall have
the right of first refusal to purchase such rights at the same price, and
substantially the same terms and conditions offered to CSXT or NYC, provided
NSR must make such offer within 30 days of receiving notification from CSXT
or NYC of the price, terms and conditions being offered by such other
prospective purchaser.
(c) Any party without the consent of the other party may assign
all of its rights and obligations under this Agreement only to any successor in
the event of a merger, consolidation, sale of all or substantially all its
assets, including all routes and lines owned by such party to access the
Monongahela, if such assignee executes and delivers to the other party hereto an
agreement reasonably satisfactory in form and substance to such other party
under which such assignee, which is reasonably satisfactory to the other party,
assumes and agrees to perform and discharge all the obligations and Liabilities
of the assigning party; provided that any such assignment shall not relieve the
assigning party from the performance and discharge of such obligations and
Liabilities.
Section 26. Term.
(a) This Agreement shall become effective as of the date first
above written and shall remain in effect until the 25th anniversary of such
date, and shall remain in effect continuously thereafter unless and until
terminated by CSXT or, if the CSXT Operating Agreement shall have terminated, by
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NYC, in its sole discretion, upon (90) days written notice.
(b) The rights, benefits, duties and obligations running from or
to NSR under this Agreement shall in all events expire (except liabilities
incurred prior to termination) upon the earlier of: (i) termination of this
Agreement or (ii) termination of the NSR Operating Agreement (including any
renewals thereof) and the rights, benefits, duties and obligations running from
or to CSXT under this Agreement shall in all events expire (except liabilities
incurred prior to termination) upon the earlier of (i) termination of this
Agreement or (ii) termination of the CSXT Operating Agreement (including any
renewals thereof). Notwithstanding any other provision of this Agreement, (1)
upon termination of the NSR Operating Agreement, the rights, benefits, duties
and obligations running from or to NSR under this Agreement shall run from or to
PRR, and (2) upon termination of the CSXT Operating Agreement, the rights,
benefits, duties and obligations running from or to CSXT under this Agreement
shall run from or to NYC. In the event PRR is unable or unwilling to carry out
the duties and obligations of NSR or fails to designate an operator reasonably
satisfactory to NYC to do so, then NYC, or an operator designated by NYC and
satisfactory to PRR, shall have the option to carry out such duties and
obligations related solely to the Monongahela.
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Section 27. Termination of Other Agreement.
This Agreement, upon the effective date hereof, supersedes and
terminates the agreement by and between The Monongahela Railway Company (now
CRC) and CSXT dated October 19, 1990, relating to CSXT trackage rights between
▇▇▇▇▇, Pennsylvania, and Catawba Junction (Rivesville), West Virginia.
Section 28. Notices.
Any notice given by CSXT, NSR, PRR, or NYC to the others under
this Agreement shall be deemed delivered on the date sent by registered mail, or
by such other means as they may agree, and shall be addressed to them as
follows:
(a) If to CSXT:
Executive Vice President and Chief Operating Officer
CSX Transportation, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(b) If to NSR:
Senior Vice President Operations
Norfolk Southern Railway Company
Three Commercial Place
Norfolk, Virginia 23510-2191
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(c) If to PRR:
PRR
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President-General Counsel
Copy to:
Senior Vice President Operations
Norfolk Southern Corporation
Three Commercial Place
Norfolk, Virginia 23510
(d) If to NYC:
NYC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President-General Counsel
Copy to:
Executive Vice President and Chief Operating Officer
CSX Transportation, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
and each of them may from time to time change its address in this Section 28 by
written notice delivered to the others.
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Section 29. Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Virginia, without regard to principles of
conflicts of laws.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in counterparts by their duly authorized officials as of the day
first above written.
CSX TRANSPORTATION, INC.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President - Law and General
Counsel - CSX Corporation,
authorized agent for CSX
Transportation, Inc.
NORFOLK SOUTHERN RAILWAY COMPANY
By: /s/▇. ▇. ▇▇▇▇▇▇▇
----------------
▇. ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President Operations
PENNSYLVANIA LINES LLC
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
NEW YORK CENTRAL LINES LLC
By: /s/ C. A. ▇▇▇▇
---------------
C. A. ▇▇▇▇
Title: Vice President and Secretary
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EXHIBIT "A"
[MAP]
Map of Monongahela Mine District