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 com
mon 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) "Bill" means a bill 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) "Carpenter/Tobias 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 equipment (including RoadRailer 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 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.
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(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 means bimodal freight hauling
equipment manufactured by or under license from "RoadRailer , 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 empty Railcars in the accounts of both NSR and CSXT that are
in Monongahela Trains, during such period for the entire
Monongahela.
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(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 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.
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(jj) "Zone" refers to the division of the Monongahela
for accounting purposes, into the following three segments.
Zone 1: MP 0.0 CP BROWN to CP 85 WAYNESBURG
(including Manor Branch)
Zone 2: CP 85 WAYNESBURG to MP W27.3 FEDERAL
2 MINE
Zone 3: MP 0.0 CP BROWN to MP 79.6 LOVERIDGE
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 the Zones described above, or connecting to
CP 58, MP 0.0 or MP 66.4 (Rivesville) from outside the Zones.
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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 dispatching control or arbitration, the party
not controlling dispatching may again seek a change and require
arbitration.
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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 provide the
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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 Carpenter/Tobias
Letter. The Carpenter/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
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.
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(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 parties hereto shall enter into a separate
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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 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.
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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 Carpenter/Tobias letter
states that NSR will provide crews to operate CSXT trains between
the Mines and CSXT's Newell Yard or the Alicia or LaBelle 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 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;
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(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 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
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(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 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.
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(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 bill
(a "Bill") 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
Bill on or before the 30th day after the date of such Bill
regardless of whether or not CSXT disputes the accuracy of any
amount or calculation shown on such Bill.
(g) Disputed Bills:
(i) Any dispute by CSXT of the accuracy of any
amount or calculation shown on any Bill, 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 Bill.
(ii) Any amounts or calculations shown on any Bill
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 such accounting firm shall
be binding on CSXT and NSR.
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(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 steps to ensure that
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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.
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(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 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.
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(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 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.
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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 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.
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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 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.
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(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 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.
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(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 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.
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(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 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.
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(h) Limitation. The parties hereto acknowledge that,
pursuant to the penultimate paragraph of the Carpenter/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 sole discretion of a
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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.
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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 Carpenter/Tobias 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 of any
inconsistency between the terms of this Agreement and such April
8, 1997 letter agreement, this Agreement shall prevail.
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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 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.
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(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.
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(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 NYC, in
its sole discretion, upon (90) days written notice.
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(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 Brown,
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.
500 Water Street, J120
Jacksonville, Florida 32202
(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
2001 Market Street
Philadelphia, Pennsylvania 19103
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
2001 Market Street
Philadelphia, Pennsylvania 19103
Attention: Vice President-General Counsel
Copy to:
Executive Vice President and
Chief Operating Officer
CSX Transportation, Inc.
500 Water Street, J120
Jacksonville, Florida 32202
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/ Peter J. Shudtz
Title: Vice President - Law and
General Counsel - CSX
Corporation, authorized agent
for CSX Transportation, Inc.
NORFOLK SOUTHERN RAILWAY COMPANY
By: /s/ J. L. Manetta
Title: Senior Vice President Operations
PENNSYLVANIA LINES LLC
By: /s/ James D. McGeehan
Title: Assistant Treasurer
NEW YORK CENTRAL LINES LLC
By: /s/ C. A. Cook
Title: Vice President and Assistant Secretary
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EXHIBIT "A" [MAP]
Map of Monongahela Mine District