EXHIBIT 10(k)
SUPPLEMENTARY AGREEMENT
THIS SUPPLEMENTARY AGREEMENT is entered into as of January
1, 1987, between the Trustees of the Cincinnati Southern Railway
(hereinafter "Lessor" or "Trustees"), and the Cincinnati, New
Orleans and Texas Pacific Railway Company ("Lessee"), an Ohio
corporation,
WITNESSETH
WHEREAS, the City of Cincinnati, Ohio, is the owner of a
line railroad known as the Cincinnati Southern Railway and certain
properties which are under the control and jurisdiction of the
Lessor ("Line") and which are leased to Lessee pursuant to a Lease
made and entered into the 11th day of October, 1881, as extended,
modified and supplemented ("Lease"); and
WHEREAS, certain differences have arisen between the Lessor
and Lessee regarding the interpretation, meaning, effect and
performance of certain provisions contained in the aforementioned
Lease and regarding the amount of rental that should be paid
thereunder;
WHEREAS, the shareholder and board of directors of Lessee, at
special meetings, have authorized the undertakings hereinafter set
forth; and
WHEREAS, Southern Railway Company ("SR") and Norfolk Southern
Corporation ("NS"), Virginia corporations, are executing this
Agreement as guarantors of the performance by Lessee of its
obligations hereunder; and
WHEREAS, by and Act of the General Assembly of the State of
Ohio, passed June 25, 1961, the board of trustees of any railway
appointed under the provisions of the Act of May 4, 1869, among
other things, were authorized to modify any existing lease of such
railway in accordance with ordinances of the council of the city
owning such line of railway; and
WHEREAS, Council of the City of Cincinnati on the 5th day
of August, 1987, passed Ordinance No. 309-1987, entitled
"Authorizing the Trustees of the Cincinnati Southern Railway to
Execute a Supplementary Agreement with The Cincinnati, New Orleans
and Texas Pacific Railway Company", a copy of which is attached
hereto as Exhibit A;
NOW, THEREFORE, it is mutually covenanted and agreed by said
parties each for itself, its or their successors and assigns, as
follows:
1. Commencing with the calendar year 1987, Lessee
agrees to pay rent to Lessor in advance, in quarterly
installments, on January 1, April 1, July 1 and October 1 of each
year at the offices of the Treasurer of the City of Cincinnati.
The amount of rental shall be determined as follows:
(a) For the calendar year 1987, the rental shall be
$11,000,000.00. Any quarterly payments, net of payments timely
made in accordance with the existing Lease, which are delayed
pending execution of this Agreement shall be paid within five days
after this Agreement is fully executed and all required approvals
obtained, and shall bear interest at 6% per annum from the date
each applicable quarter's payment was due until the day before its
payment.
(b) For 1988 and subsequent years the annual rent by a
"Factor" obtained by dividing the Implicit Price Deflator for
Gross National Product ("IPD-GNP") for the prior calendar year by
the IPD-GNP for the year preceding the prior calendar year,
provided, however, that the rent will not be less than
$11,000,000.00 for any year.
For any given year, the denominator of the fraction used to
calculate the Factor will be the same as the numerator of the
fraction used to calculate the previous year's Factor. The
calculations of the Factor to be applied to the previous year's
rent shall be carried out to five places to the right of the
decimal and rounded.
IPD-GNP is developed by the U. S. Department of Commerce,
Bureau of Economic Analysis and is reported in the publication
ECONIMIC INDICATORS prepared for the Joint Economic Committee by
the Council of Economic Advisors.
(c) If, in the rent calculation for the year 1988 or any
subsequent year, the Factor is greater than 1.04, then 1.04 will
be the Factor used. If, in the rent calculation for 1988 or any
subsequent year, the Factor as calculated under subparagraph (b)
hereof is less than .96, then .96 will be the Factor used.
(d) Because the IPD-GNP for each calendar year cannot be
available on the first day of the following year, the parties
agree that rent installments in any year will not be adjusted
until after the IPD-GNP for the previous calendar year is
published. Any difference between the installment payment made in
any quarter and what it would have been had the IPD-GNP been known
will be reflected in the rent for the quarter next following the
date the applicable IPD-GNP becomes known.
(e) The following examples are provided to illustrate the
application of the formula:
Example 1: Assuming that the IPD-GNP for the calendar year 1987
is 113.1, the rent payable in 1988 would be
calculated as follows:
113.1 (IPD-GNP for 1987) = .98864 x $11 mill. =
114.1 (IPD-GNP for 1986) $10.87504 million
The rent would be $11 million since the calculation
would yield a rental less than the agreed upon floor
of $11 million.
Example 2: Assuming that IPD-GNP for the calendar year 1988 is
117.5, the rent payable in 1989 would be calculated
as follows:
117.5 (IPD-GNP for 1988) = 1.03890 x $11 mill. =
113.1 (IPD-GNP for 1987) = $11.41794 million
Example 3: Assuming that the IPD-GNP for the calendar year 1989
is 124.6, the rent payable in 1990 would be
calculated as follows:
124.6 (IPD-GNP for 1989) = 1.06043
117.5 (IPG-GNP for 1988) 1.04 x $11.4279 mill. =
$11.885058 million
In this example, since a factor of 1.06043 is
produced by the calculation, and 1.04 is the
established cap, the 1.04 factor is to be used.
Example 4: Assuming that the IPD-GNP for the calendar year 190
is 117.1, the rent payable in 1991 would be
calculated as follows:
117.1 (IPD-GNP for 1990) = .93981
124.6 (IPD-GNP for 1989) .96 x $11.885058 mill. =
$11.409656 million
In this example, since a factor of .93981 is
produced by the calculation, and .96 is the
established minimum, the .96 factor is to be used.
(f) The rental provided for herein shall be in lieu of the
fixed and contingent rent(s) provided for in the Lease but shall
not affect Lessee's obligation to pay in accordance with the
Supplemental Agreement of November 16, 1961, the principal and
interest on bonds issued to finance certain improvements to the
leased premises.
2. Lessee shall have the option to extend the term of the
Lease for twenty-five (25) years beyond the present expiration
date or until December 31, 2051. Such option shall be exercised
on or before January 1, 2022 by Lessee notifying Lessor in writing
of Lessee's intent to extend the Lease. Within thirty (30) days
after receipt of such notice of intent to extend, Lessor shall
notify Lessee in writing of its proposed rental terms for the
extension period. If such proposed rental terms are acceptable to
Lessee, such acceptance shall be communicated to Lessor in writing
on or before April 1, 2022, and the parties shall execute the
appropriate documents necessary to effect the extension. If the
proposed rental terms are unacceptable to Lessee and the parties
have been unable to reach agreement on different rental terms on
or before June 30, 2022, or such later date as is mutually agreed
to by Lessor and Lessee, either party may submit the issue to
arbitration in accordance with Section 8, in which case the
arbitrators shall determine fair market rental terms for the
leased premises for the period in extension.
Within 90 days after receiving the arbitrators' determination
of fair market rental terms, Lessor and Lessee shall file sealed
statements with the arbitrators stating whether they accept the
arbitration decision. Such statements are only to be opened by
the arbibtrators after both parties have submitted their
statements. If both parties accept the arbitrators'
determination, the parties shall execute the appropriate documents
incorporating such determination necessary to effect the extension.
If Lessee accepts the arbitrators' determination but Lessor
does not, the Lessor may seek to Lease or sell the leased property
to another party; however, Lessee shall have a right of first
refusal to extend the Lease or purchase the leased property on the
same terms as any bona fide third party offer received by and
acceptable to Lessor. If Lessor does not obtain a bona fide third
party offer acceptable to it to lease or buy the railroad prior to
one year prior to the expiration of the lease term, or prior to
one year after the date of the arbitration determination,
whichever is later, and has not committed to operate the leased
property itself, Lessee shall have the option to extend the Lease
on the terms decided upon in the arbitrators' determination. In
the interim, Lessee shall have the right to continue using the
leased property on the same terms as the current Lease on a year
to year basis.
If Lessee does not accept the arbitrators' determination, the
Lessor may seek to lease or sell the leased property to another
party. If Lessor receives a bona fide third party offer
acceptable to it on terms more favorable to it than the terms of
the arbitrators' determination, Lessee shall have no rights to
extend the Lease. If the best bona fide third party offer
acceptable to Lessor is less favorable to Lessor than the
arbitrators' determination, Lessee shall have a right of first
refusal to extend the Lease or purchase the leased property on the
same terms as the third party offer. If the best bona fide third
party offer acceptable to Lessor is equal to the arbitrators'
determination, then Lessee shall have a right of first refusal on
the same terms only if Lessor has also rejected the arbitrators'
determination. If Lessor does not receive a bona fide third party
offer to lease or buy the railway acceptable to Lessor within one
year prior to expiration of the lease term, and Lessor has not
committed to operate the leased property itself, Lessee shall have
the right to continue using the property on the same terms as the
current Lease on a year to year basis. At any time during such
year to year extension, Lessee shall have the option to match any
bona fide third party offer acceptable to Lessor.
The right of first refusal provided for herein shall be
exercised as follows: Lessor shall advise Lessee in writing of
the terms of such bona fide offer. Lessee shall have sixty days
from the date of such notice within which to exercise its right of
first refusal by notifying Lessor in writing of such exercise. If
notice of exercise of the right of first refusal is not given
within such sixty day period, the right of first refusal shall
expire.
3. (a) Lessee may grant to others trackage rights,
easements, licenses and subleases of any part of the leased
premises for any purpose so long as such trackage rights,
easements, licenses and subleases do not extend beyond the term of
the Lease or any extension thereof, do not exceed the rights
granted to Lessee hereunder, are subject to the rights of Lessor
arising from failure by Lessee to comply with the terms of this
Agreement, and do not impair the maintenance or operation of the
Line. The parties agree that at the termination of the Lease, no
hazardous waste material will be stored on the leased premises in
violation of then applicable law. In the event license,
sublease or other agreement is entered into for installation of a
fiber optics communication system on the leased property, Lessee
agrees to pay Lessor 75% of the revenue attributable to such
license, sublease or agreement. In the event such a system is
part of a fiber optics agreement encompassing rights of way beyond
the leased property, the revenue base used for calculating
Lessor's share shall be determined taking into account the
proportionate mileage of Lessor's property which is part of the
fiber optics agreement, the relative value of such mileage to the
communications system, and any other factors necessary to
determine a fair proportion of the revenue attributable to such
mileage.
(b) The right to develop and use the air space over the
leased property titled in the name of Lessor in the City of
Cincinnati and Kenton County, Kentucky is reserved to the Lessor,
subject to the requirements of Lessee for clearances and other
protections to prevent interference with Lessee's use of the
leased property. Prior to undertaking development of any of the
said air rights, Lessor will provide Lessee with detailed plans
and specifications for its review. Development and use of such
air rights shall be subject to the express written consent of
Lessee, upon terms and conditions satisfactory to Lessee, which
consent shall not unreasonably be withheld.
(c) The right to develop and use mineral rights underlying
the leased property titled in the name of the Lessor is reserved
to the Lessor, but during the term of the Lease and any extension,
such mineral rights shall not be exercised in a manner causing
interference with Lessee's use of the leased property. Prior to
undertaking development of any of the said mineral rights, Lessor
will provide Lessee with detailed plans and specifications for
Lessee's review. Development and use of such mineral rights shall
be subject to the express written consent of Lessee, upon terms
and conditions satisfactory to Lessee, which consent shall not
unreasonably be withheld.
(d) The parties agree that nothing in the Lease or this
Supplementary Agreement constitutes any impediment to the
acquisition of and exercise of all rights of ownership by Lessee
or its corporate affiliates over any property, subject only to the
requirements of the Lease that, at the termination of the Lease or
any extension, Lessee surrender to the Lessor the line of railway
complete in all respects, and that construction of additional main
or side track be upon rights of way owned by Lessor. At the time
of surrender, the Line shall be in condition equivalent to the
classification established by the Federal Railway Administration
as applied to the line in the applicable portions of the timetable
for the Southern Railway System Kentucky Division in effect as of
the date of execution hereof (a copy of which is attached hereto
as Exhibit B).
(e) If, at any time during the term of the Lease or any
extension thereof, leased property shall, in the opinion of the
Lessee, not be necessary for the operation of the railroad, then
the Lessee shall have the right to use he same for any other
lawful purposes, and shall have the right to receive as its own
all rents, issues and profits therefrom. At the termination of
the Lease or any extension thereof, Lessee shall surrender the
same to the Lessor with all improvements thereon. Alternatively,
Lessee may at any time declare any such property to be superfluous
and upon written notice to Lessor return such property to Lessor
and release it from the leased premises.
(f) If, at any time during the term of the Lease or any
extension thereof, leased property is condemned or conveyed under
threat of condemnation, the following provisions shall govern;
any award or payment, net of any tax and expenses, shall be held
by Lessee in an interest paying account and used, with its
interest, only to replace the property or improvements taken, or
to acquire additional real property to be titled in the name of
the Lessor and to make improvements thereon for the operation of
the railway, which property shall become part of the leased
property. Lessee shall make an annual accounting of the use of
such funds to Lessor. Any balance in such account at the
termination of the Lease, including any extension or renewal
thereof, shall then become the property of Lessor.
(g) In the event of termination of this Lease or any
extension or renewal thereof, Lessee agrees to grant to Lessor or
any subsequent Lessee or purchaser of Lessor's line of railroad in
Cincinnati, Ohio, and Lessor agrees to grant to Lessee or its
successors and assigns, non-exclusive joint use of each other's
rail facilities within the Gest Street Yard in the City of
Cincinnati as necessary for the operation of their respective rail
liens in accordance with the customary terms for such usage and in
exchange for payment of the customary charges received among
railroads for such usage rights.
4. During the term(s) hereby granted Lessee will pay and
save harmless the Lessor from the payment of any costs, expenses,
claims, liabilities, damages and demands whatsoever rising out of
the Lessee's possession, control, management and operation of the
said line of railway and its equipment, or any part of the leased
premises. Lessee assumes the duties, liabilities and obligations
of an owner, doing every act and thing required by law of the
Trustees, their successors and assigns. If Lessee shall be covered
by insurance for any of its obligations set forth in this Section
4, it will, if it can do so within added premium cost, name
Lessor as an additional insured. During the term(s) hereby
granted Lessee also shall provide to Lessor an annual report
summarizing the condition of the leased premises, the nature of
repairs or replacements made with respect thereto, and the sale of
any rail lines between Cincinnati, Ohio and Chattanooga, Tennessee
during the previous twelve months.
5. Lessee agrees that it will, during the continuance of the
Lease, pay to the Trustees, without deduction from the rent herein
reserved, the sum of one hundred thousand dollars per annum
payable quarterly at the Cincinnati offices of the Trustees of the
Cincinnati Southern Railway to cover the necessary expense
devolving upon the Trustees in conducting the Trustees' affairs.
The amount of this payment shall be adjusted annually, beginning
with the Lease year commencing January 1, 1988, and continuing
every year thereafter during the term of the Lease and any
extension to reflect increases in the Consumer Price Index. For
each such year the expense payment shall be determined by
multiplying the sum of $100,000 by a fraction, the numerator of
which shall be the Consumer Price Index as of the end of the
immediately preceding year, and the denominator of which shall be
the Consumer Price Index as of the end of 1986. If the result of
this calculation is less than or equal to $100,000, the expense
payment for that year shall be $100,000. If the result of the
calculation exceeds $100,000, the result of the calculation shall
be the expense payment for that year. Any amounts payable under
this Section 5 in excess of $100,000 shall be paid on or before
July 1 of that year.
6. (a) In consideration of the Trustees' full release of
Lessee from any and all claims arising out of or on account of the
prior lease relationship between the parties, Lessee will,
concurrently with the execution of this Agreement and conditioned
upon execution of a similar release of claims by the City of
Cincinnati, pay to the Trustees the sum of six million dollars.
This release shall not apply to Lessor's claims to ownership of
the leased property under the terms of the Lease. Lessor agrees
to defer all such claims existing as of July 15, 1987 until
termination of the Lease. Lessor and Lessee agree that the
execution of this Agreement shall not abridge, estop, compromise,
release or waive Lessor's claims with regard to such ownership
rights an that no defense of waiver, laches, acquiescence,
release, estoppel or the like arising on or after July 15, 1987
with respect to claims existing on that date may be asserted by
reason of Lessor's agreement not to assert or prosecute such
claims at this time. It is the intention of the parties that
these property issues not impede the resolution of other issues in
dispute and that neither party should be prejudiced by the
deferral of issues pertaining to ownership of property until
termination of the lease.
It is understood and agreed between the parties that the
accrual and/or payment of the six million dollars, together with
the related tax benefit, shall not operate to increase or decrease
the contingent rental for years prior to 1987, as computed i
accordance with the November 16, 1961 Supplemental Agreement
between the parties.
(b) In further consideration of the execution hereof and
the covenants of Lessor as set forth herein, Lessee agrees to
transfer and convey, by sufficient special warranty deed, to
Lessor and the successors and assigns thereof, certain Riverfront
real estate situated in the City of Cincinnati, ▇▇▇▇▇▇▇▇ County,
Ohio described on Attachment C hereto. Said deed shall be
executed by Lessee and delivered to Lessor no later than ninety
days after execution of this Supplementary Agreement and receipt
of all necessary approvals. Such property shall constitute part
of the leased property, except that air rights over said property
shall be reserved to Lessor as provided in Section 3(b) hereof.
7. As security for the faithful performance by the Lessee of
the terms of this Contract, but not in limitation of other rights
of the Lessor, Lessee agrees to deposit with the Lessor a surety
bond or bonds issued by an insurer or insurers having a
certificate of authority to act as surety in the State of Ohio in
the amount of $5,500,000.00. During any lease year that the
annual rental exceeds $11,000,000, the amount of the surety bond
for such year shall be increased by $500,000 for each full
$1,000,000 that such year's rent exceeds $11,000,000. Such surety
bond or bonds shall be renewed annually as of the date the rent is
calculated.
In consideration hereof, and in further consideration of the
other covenants herein by Lessee, Norfolk Southern Corporation,
and Southern Railway Company, the Mortgage by Lessee to Lessor,
dated October 11, 1881, as subsequently confirmed and extended, is
hereby cancelled, and shall be of no further force or effect.
Likewise, Clause 7 of the 1881 Indenture, creating the lien
secured by the said Mortgage, is hereby abrogated and annulled.
8. (a) If, during the term(s) hereby granted or upon the
expiration of other termination thereof, any disagreement,
dispute, controversy or difference shall arise between the parties
hereto concerning the construction of the Lease a modified and
supplemented by this Agreement, or the rights of either party
thereunder, it shall be submitted to arbitration pursuant to the
Federal Arbitration Act, 9 U.S.C. Sections 1-14, by three disinterested
persons, to be chosen one by each of the parties hereto and one by
the two so chosen.
(b) The party desiring such arbitration shall give
written notice thereof by certified or registered mail to the
other party and shall in such notice name the arbitrator selected
by it and state precisely the matter or matters to be resolved
through arbitration. Within 20 days after receipt of such notice,
the other party shall name its arbitrator to the party which gave
notice, and may also state additional matters then to be
arbitrated, such notification and statement also to be in writing
and given by certified or registered mail. In case the other
party fails or refuses to name an arbitrator, upon application of
the party giving such written notice the arbitrator shall be
appointed by the Chief Judge, then sitting, of the United States
District Court for the Southern District of Ohio, at Cincinnati,
Ohio, or of any Court succeeding to its jurisdiction. In the
event the Chief Judge declines to make such an appointment, the
arbitrator shall be named by the Arbitration Committee of the
American Arbitration Association, presently headquartred at ▇▇▇
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so stated by the parties shall be considered or decided by the
arbitrators.
(c) Said two arbitrators so selected shall, within 20
days after the selection of the second arbitrator, select a third
arbitrator. In case the two arbitrators shall fail to agree
within 20 days upon a third arbitrator, the third arbitrator shall
be appointed in the manner provided in paragraph (b) of this
Section 8.
(d) The three arbitrators so selected shall, as soon as
possible after their selection is completed, but not more than 60
days thereafter, meet to hear and decide the matter or matters
submitted to them and shall given to each side of the controversy
not less than 30 days' notice in writing, by certified or
registered mail, of the tie and place of such hearing.
(e) After hearing both parties to the controversy and
taking such testimony, making such further investigation as may be
deemed necessary and considering such briefs as either party may
submit within 20 days after the close of the hearing, the
arbitrators shall make in writing, within 30 days, their award
upon the matter or matters submitted to them and shall serve a
copy of such award, by certified or registered mail, upon each of
the parties to the controversy. Such written award, approved and
signed by not less than two of such arbitrators, shall be final
and binding upon the parties to the controversy and each shall
promptly conform thereto. Until the arbitrators have made their
determination of the matter or matters submitted to them, the
business, settlements and payments to be transacted and made under
this Agreement shall continue to be transacted and made in the
manner and form existing prior to the arising of such questions.
No resort may be had to any court regarding such arbitration
except to compel arbitration, to enforce an award or by way of
appeal on the grounds set forth in 9 U.S.C. Sections 10 and 11.
(f) In the case of death, disability,
disqualification or refusal of any arbitrator, his successor shall
be chosen within 10 days thereafter by the party selecting him,
or, if he be the third arbitrator selected by the two arbitrators
already selected and acting. If either party fails or refuses to
select an arbitrator willing to hear the controversy within said
10 day period, or to select a successor to a deceased, disabled or
disqualified arbitrator within the prescribed ten (10) day period,
a replacement for such arbitrator shall be named in the manner set
forth in paragraph (b) of this Section 8.
(g) Each party shall pay the compensation, costs, fees
and expenses of its arbitrator, witnesses, exhibits and counsel.
The compensation, costs, and expenses of the third arbitrator, the
stenographic records, if any, and one copy of a transcript for
each arbitrator and each party shall be borne equally by the
parties hereto.
(h) The Commercial Arbitration Rules of the American
Arbitration Association shall apply except to the extent the same
may be inconsistent with this Article.
(i) The award rendered by the arbitrators shall be
final, and judgment may be entered upon it in accordance with
applicable law in any court having jurisdiction over the parties.
9. In the event that either party believes the other has
breached any provisions of the Lease as modified and supplemented
by this Agreement, the following procedure shall be followed:
(a) The party claiming breach shall give the other party
notice in writing referencing this Section 9, setting forth the
particular provision it claims to have been breached, and stating
the operative facts supporting such claim of breach and the dollar
amount (if applicable) by which that party claims to have been
damaged by such breach.
(b) The responding party shall within 30 days of
receiving such notice either: (i) admit the breach and the
claimed damages, if any, (ii) admit the breach but deny the
claimed damages; or (iii) deny the breach.
(c) (i) If a party admits a breach and concurs in the
amount of any claimed damages, it shall immediately discontinue
any continuing breach and pay the amount of the claimed damages.
(ii) If a party admits a breach but denies the claimed damages, it
shall immediately discontinue any continuing breach.
(d) Either party may demand arbitration, in accordance
with Section 9, as to any issue of breach or damages which is not
admitted. The arbitrators shall determine if a breach occurred
and, if so, (i) shall reduce the breach to an award of money
damages, if any such damages are determined to have been incurred;
(ii) order specific performance of the duty or duties breached;
and/or (iii) order the discontinuance of any continuing breach.
(e) Upon receipt of the arbitration decision, any party
that has been found in breach of the Lease shall discontinue any
continuing breach and shall pay the damaged party any monetary
award determined by the arbitrators. If within 30 days after
receipt of the arbitration decision either the breach (if it is a
continuing breach) is not discontinued or the damage award, if
any, is not paid, the aggrieved party may declare the Lease
forfeited and exercise all legal rights available to it to end the
tenancy and/or recover any unpaid damages.
(f) Anything in the Lease and this Agreement to the
contrary notwithstanding, when the claimed breach is nonpayment of
rent and the amount due is not disputed, Lessor shall give Lessee
notice of such breach in writing in accordance with subsection
(a) of this Section; if payment of the rental is not made or an
agreement for payment of the rental is not reached within 30 days
of such notice, Lessor, at its option and without prior resort to
arbitration, may declare the Lease forfeited an exercise all
legal rights available to it to end the tenancy and/or recover
damages.
(g) The Lease may not be forfeited except as specified
in this Section 9.
(h) If a claiming party shall be entitled to arbitration
under paragraph (d) above with regard to a claimed breach of the
Lease and/or a refusal to admit damages of which notice has been
given in accordance with subparagraph (a) hereof, and, with
knowledge of same, shall fail to seek arbitration for 30 days
after the right to arbitration becomes known to the claiming
party, then such party's claims shall be deemed waived.
10. The Lease and all the covenants and agreements of this
Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties hereto; provided,
however that no assignment of the Lease shall be made by the
Lessee unless the assignee shall, by instrument in writing
executed by such assignee and delivered to the Lessor, expressly
assume all of the obligations of the Lessee hereunder. Neither
any such assignment nor the execution and delivery by any such
assignee of any such instrument of assumption shall, except with
the express written consent of the Lessor (which, in the case of
liquidation of the Lessee, shall not be unreasonably withheld),
relieve the Lessee or its guarantors from of its or their
obligations hereunder. Nothing in this paragraph shall be
construed to prevent the transfer of the rights of the Lessee
under the Lease in connection with a merger or consolidation or
other transfer of all of its assets if the Corporation remaining
or resulting from such merger or consolidation or to which assets
are transferred, shall execute and deliver to the Lessor a written
instrument of assumption as above provided.
11. The covenants and agreements herein contained are made
subject to any valid existing or future law and to the lawful
exercise of power thereunder by any public authority, whether by
way of authorization, prohibition or otherwise.
12. The Lease is to remain in full force and effect, except
insofar as it is inconsistent with or expressly modified by these
presents, and except that Clause 6 of the October 11, 1881
Indenture and Sections 8, 9, 10 and 11 of the 1902 Contract of
Modification and Extension of Lease are expressly abrogated and
annulled.
13. Lessee, for itself, its successors and assigns, hereby
covenants that it will keep and perform all the covenants,
stipulations and agreements of the Lease and of this Supplementary
Agreement, and will not evade or violate any of the same.
14. Except as otherwise provided herein, notice called for
under the terms of this Supplementary Agreement shall be in
writing delivered by certified or registered mail, at the
following addresses:
For Lessor:
President
Board of Trustees
Cincinnati Southern Railway
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and
Office of the City Solicitor
City of Cincinnati
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
For Lessee:
President
The Cincinnati, New Orleans and Texas Pacific Railway
Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
President
The Cincinnati, New Orleans and Texas Pacific Railway
Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Guarantors:
President
Southern Railway Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer
Norfolk Southern Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
15. SR as the holder of all the common stock of Lessee and NS
as the holder of all the common stock of SR each hereby guarantees
to Lessor that the Lessee will fully perform all of its
obligations under the Lease and this Supplementary Agreement, and
jointly and severally argee with Lessor to make Lessor whole for
any loss suffered by it as a result of the failure of Lessee to so
perform. Any claim made by Lessor under this guarantee shall, if
not agreed to by SR and NS, be subject to arbitration under the
provisions of Section 8 hereof, which arbitration decision shall
be binding upon Le4ssor and upon SR and NS as guarantors of the
obligations of Lessee herein.
16. This Supplementary Agreement is subject to approval or
exemption from approval by the Interstate commerce Commission of
the undertakings by Lessee and Guarantors of the obligations
herein, as may be required by 49 U.S.C. Sections 11301 an 11343 et
seq., and such decision having become final.
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇ ▇. Ach, II, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Trustees of the Cincinnati Southern Railway, authorized by
Ordinance No. 309 1987 of the City of Cincinnati and by
resolution of said Board of Trustees of the Cincinnati Southern
Railway have on this 5th day of August, 1987,
affixed their hands; the Cincinnati, New Orleans and Texas Pacific
Railway Company has upon this same day caused this Supplementary
Agreement to be signed an sealed by its President as the act and
deed of The Cincinnati, New Orleans and Texas Pacific Railway
Company and its corporate seal to be affixed by its secretary.
Executed in quintuplicate, upon the day and year above
mentioned.
THE LESSOR:
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇ ▇. Ach, II
▇▇▇▇▇ ▇. Ach, II
WITNESS:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Trustees of the Cincinnati
Southern Railway
THE LESSEE:
THE CINCINNATI, NEW ORLEANS AND
TEXAS PACIFIC RAILWAY COMPANY
ATTEST:
/s/ By: /s/
Secretary President
GUARANTORS OF LESSEE:
SOUTHERN RAILWAY COMPANY
ATTEST:
/s/ By: /s/
Secretary President and
Chief Executive Officer
NORFOLK SOUTHERN CORPORATION
ATTEST:
/s/ By: /s/
Secretary Chief Executive Officer
Chairman, President and
Chief Executive Officer
State of Ohio )
) SS:
▇▇▇▇▇▇▇▇ County )
Before me a Notary Public, in and for said County, personally
appeared the above named ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇ ▇. Ach, III, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the
duly appointed, qualified and acting Trustees of the Cincinnati
Southern Railway, who acknowledged that they did sign the
foregoing instrument on behalf of and pursuant to the direction
and in accordance with the authorization of the City of Cincinnati
and that the same is their free act and deed a such Trustees, and
for the uses and purposes therein set forth.
In testimony wherefore, I have hereunto subscribed my name and
affixed my official seal at Cincinnati, Ohio this 5th day of
August, 1987.
/s/
Notary Public
State of Virginia )
) SS:
City of Norfolk )
Before me, a Notary Public in and for said City, personally
appeared ▇. ▇. ▇▇▇▇, President
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary, of the Cincinnati, New
Orleans and Texas Pacific Railway Company, the corporation which
executed the foregoing instrument, who acknowledged that the seal
affixed to said instrument is the corporate seal of said
corporation, that they did sign and seal such instrument as
President and Secretary on behalf of said corporation and by
authority if its Board of Directors and that said instrument is
their free act and deed as such President and Secretary, and the
free act and deed of The Cincinnati, New Orleans and Texas Pacific
Railway Company
In testimony whereof, I have hereunder subscribed my name and
affixed my official seal at Norfolk, Virginia, this 13th day of
August, 1987.
/s/
Notary Public
State of Virginia )
) SS:
City of Norfolk )
Before me, a Notary Public in and for said City, personally
appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman, President and Chief Executive
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Assistant Secretary, of the Norfolk
Southern Corporation, the corporation which executed the foregoing
instrument, who acknowledged that the seal
affixed to said instrument is the corporate seal of said
corporation, that they did sign and seal such instrument as
Chairman, President and Chief Executive Officer and
Assistant Secretary on behalf of said corporation and by
authority if its Board of Directors and that said instrument is
their free act and deed as such Chairman, President and Chief
Executive Officer and Assistant Secretary, and the
free act and deed of Norfolk Southern Corporation.
In testimony whereof, I have hereunder subscribed my name and
affixed my official seal at Norfolk, Virginia, this 13th day of
August, 1987.
/s/
Notary Public
State of Virginia )
) SS:
City of Norfolk )
Before me, a Notary Public in and for said City, personally
appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman, President and Chief Executive
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary, of the Southern
Railway Company, the corporation which executed the foregoing
instrument, who acknowledged that the seal
affixed to said instrument is the corporate seal of said
corporation, that they did sign and seal such instrument as
President and Chief Executive Officer and Secretary on
behalf of said corporation and by authority if its Board of
Directors and that said instrument is their free act and deed
as such Chairman, President and Chief Executive Officer and
Assistant Secretary, and the free act and deed of Southern
Railway Company.
In testimony whereof, I have hereunder subscribed my name and
affixed my official seal at Norfolk, Virginia, this 13th day of
August, 1987.
/s/
Notary Public
