EXHIBIT 10(k)
AMENDMENT NO. 3
Dated as of June 1, 2001
OF THE
SHARED ASSETS AREA
OPERATING AGREEMENT
FOR
[NORTH JERSEY]
[SOUTH JERSEY/PHILADELPHIA]
[DETROIT]
Dated as of June 1, 1999
By and Among
CONSOLIDATED RAIL CORPORATION
CSX TRANSPORTATION, INC. and
NORFOLK SOUTHERN RAILWAY COMPANY
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AMENDMENT NO. 3
OF THE
SHARED ASSETS AREA OPERTING AGREEMENT
FOR
[NORTH JERSEY]
[SOUTH JERSEY/PHILADELPHIA]
[DETROIT]
This AMENDMENT No. 3 dated as of June 1, 2001 ("Amendment No. 3")
of the SHARED ASSETS AREA OPERATING AGREEMENT for [North Jersey]
[South Jersey/Philadelphia] [Detroit] (the "Agreement") dated as
of June 1, 1999, is by and among Consolidated Rail Corporation ("CRC"),
CSX Transportation, Inc. ("CSXT") and
Norfolk Southern Railway Company ("NSR").
W I T N E S S E T H
WHEREAS, the parties have previously entered into the Agreement;
WHEREAS, the parties previously amended the Agreement by an
Amendment No. 1, dated as of June 1, 2000 ("Amendment No. 1"), which
provided for the allocation of responsibility for Damage with respect
to certain incidents occurring prior to June 1, 2001;
WHEREAS, the parties now desire to extend the effectiveness of
the provision described in Amendment No. 1 for an indefinite period,
subject to reexamination in the future; and
WHEREAS, it is the intent of the parties that, except as
expressly amended hereby and in Amendment No. 1, the Agreement shall
remain unamended and in full force and effect.
NOW, THEREFORE, the parties hereby further amend the Agreement
as follows:
Section 1. Definitions. Capitalized terms used in this
Amendment No. 2 and not defined herein shall have the meanings
assigned to such terms in the Agreement Section 2. Amendment of the
Agreement. The Agreement is hereby amended pursuant to and in
compliance with Section 17 as follows:
A. The heading and text of Section 11(b) are hereby deleted
in their entirety and the following substituted therefore:
(b) Operators' Joint Responsibility.
(i) Damages Borne Equally. Except as otherwise provided
in 1) Section 11(a) (Operators' Sole Responsibility), (2) Section 11(c)
(1)(CRC Damages Generally), (3) Section 11(c)(ii)(B) (No Reallocation
for Insurance), (4) Section 11(f) (Specified Level Damages), and (5)
Section 11(g) (Substance Abuse Exceptions), and subject to Section
11(c)(ii)(A)(Net of Insurance), responsibility for all Damage shall
be borne equally by the Operators, with each being liable for one-half
(1/2) of the Damage.
(ii) Reexamination. Either Operator may give written
notice to the other Operator and CRC (the "Proposed Change Notice")
that it wishes to propose a new method for allocating Operators'
Joint Responsibility (Section 11(b)(i) above) and such Proposed Change
Notice shall set forth details of such new method, including the
language of the proposed amendment of Section 11(b). The two
Operators and CRC shall have ninety (90) days from the date of the
Proposed Change Notice to agree upon a new method of allocating
Operators' Joint Responsibility, which agreement shall be evidenced
by an amendment ("Change Amendment") to this Agreement executed by
both Operators and CRC. From and after the effective date specified
in the Change Amendment, the new method of allocation of Operators'
Joint Responsibility shall be effective. If both Operators and CRC
are not able to so agree and execute an appropriate Change Amendment
within ninety (90) days after the date of the Proposed Change Notice,
then, at 12:01 a.m. on the Ninety-first (91st) day after the date
of the Proposed Change Notice (the "Default Time"), the Default
Provision allocating Operators' Joint Responsibility (Section
11(b)(iii) below) shall become effective. The method of allocating
Damage in the case of Operators' Joint Responsibility under the
Change Amendment or the Default Provision, as the case may be,
shall apply only to incidents that occur on or after the effective
date thereof, and not to Damage related to incidents that occurred
before such effective date.
(iii) Default Provision. From and after the Default Time,
except as otherwise provided in (1) Section 11(a) (Operators' Sole
Responsibility), (2) Section 11(c)(i) (CRC Damages Generally), (3)
Section 11(c)(ii)(B) (No Reallocation for Insurance), (4) Section
11(f) (Specified Level Damages), and (5) Section 11(g) (Substance
Abuse Exceptions) and subject to Section 11(c)(ii)(A) (Net of
Insurance), all Damage shall be apportioned between the Operators
in proportion to their respective Total 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.
B. The heading and text of Section 11(f)(i)(A.1) are
hereby deleted in their entirety and the following substituted
therefor:
(A.1) Tier One Damages Defined. In this Section 11(f),
"Tier One Damages" for any incident occurring on or after June 1,
2001 shall, except as otherwise provided in Section 11(g) (Substance
Abuse Exceptions), include the greater of:
1) $25 million of Damages; or
2) the lowest amount of Damages which, when allocated
among all parties, results in an allocation to either Operator of
Damages in an amount equal to all insurance benefits available to
that Operator (called the "Lesser Insured Operator") which has the
lesser (as between the Operators) amount of insurance benefits
available to it, including, without limitation, insurance to which
CRC looks under Section 11(c) (CRC Responsibility, Allocation and
Insurance). In determining insurance benefits available to the
Lesser Insured Operator, both property and liability insurance shall
be considered but (i) only to the extent benefits are actually
available in connection with that incident; and (ii) they shall be
calculated separately (i.e., property insurance benefits shall not be
considered in any determination of available liability insurance
benefits and vice versa)."
SECTION 3. Effectiveness. This Amendment No. 3 shall become
effective as of June 1, 2001 (the "Amendment Date").
SECTION 4. Integration; Confirmation. On and after the
Amendment Date, each reference in the Agreement to "this
Agreement," "herein," "hereunder," or words of similar import,
and each reference in any Note or other document delivered in
connection with the Agreement shall be deemed to be a reference
to the Agreement as amended by this Amendment, and the Agreement as
so amended shall be read as a single integrated document. Except
as specifically amended by this Amendment, all other terms and
provisions of the Agreement shall continue in full force and effect
and unchanged and are hereby confirmed in all respects.
SECTION 5. Confirmation of Agreement. In all respects not
inconsistent with the terms and provisions of this Amendment No. 3,
the Agreement is hereby ratified, adopted, approved and confirmed.
SECTION 6. Counterparts. This Amendment No. 3 may be signed
in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were
upon the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
CSX TRANSPORTATION, INC.
By: /s/ Ellen M. Fitzsimmons
Name: Ellen M. Fitzsimmons
Title: Sr. V.P.-Law & General Counsel
NORFOLK SOUTHERN RAILWAY COMPANY
By: /s/ Kathryn B. McQuade
Name: Kathryn B. McQuade
Title: Sr. V.P. - Financial Planning
CONSOLIDATED RAIL CORPORATION
By: /s/ Gregory R. Weber
Name: Gregory R. Weber
Title: President and Chief Executive
Officer