EXHIBIT 10(a)
TRANSACTION AGREEMENT
by and among
CSX CORPORATION,
CSX TRANSPORTATION, INC.,
NORFOLK SOUTHERN CORPORATION,
NORFOLK SOUTHERN RAILWAY COMPANY,
CONRAIL INC.,
CONSOLIDATED RAIL CORPORATION
and
CRR HOLDINGS LLC
Dated as of June 10, 1997
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1. Defined Terms. . . . . . . . . . . . 1
Section 1.2. Other Definitive Provisions. . . . . 15
ARTICLE II
DESIGNATION AND ALLOCATION OF ASSETS
AND LIABILITIES
Section 2.1. Conveyance of Assets.. . . . . . . . 16
Section 2.2. Allocation of Certain Assets . . . . 16
Section 2.3. System Support Operations; Dispatching 24
Section 2.4. Transition Period Accommodation. . . 27
Section 2.5. Trackage, Haulage, Shared Asset and Other
Operating Agreements . . . . . . . . 30
Section 2.6. Equipment. . . . . . . . . . . . . . 30
(a) Locomotive Equipment. . . . . 30
(b) Rolling Stock Equipment . . . . 31
(c) Work Equipment. . . . . . . . . 32
(d) Assignment. . . . . . . . . . . 32
(e) Lease of Equipment. . . . . . . 32
(f) Equitable Adjustment. . . . . . 33
Section 2.7. Inventory at Altoona and Hollidaysburg 33
Section 2.8. Allocated and Retained Liabilities . 34
Section 2.9. Other Liabilities. . . . . . . . . . 35
Section 2.10. Interline Accounts and Allocation. . 36
Section 2.11. Insurance Proceeds . . . . . . . . . 37
ARTICLE III
CLOSING AND CLOSING DATE
Section 3.1. Closing. . . . . . . . . . . . . . . 37
Section 3.2. Pre-Closing Actions. . . . . . . . . 37
Section 3.3. Closing Deliveries . . . . . . . . . 37
ARTICLE IV
CRR PARENT, CRR AND CRC GOVERNANCE AND FUNDING
Section 4.1. Pre-Control Date Matters . . . . . . 39
Section 4.2. Post-Control Date CRC Governance . . 40
Section 4.3. Post-Closing Date CRC Funding. . . . 41
Section 4.4. Post-Control Date CRC and Other
Distributions. 41
Section 4.5. Operating Fees, Interest Rentals and
Base Rent. . . . . . . . . . . . . . . 42
ARTICLE V
NYC and PRR GOVERNANCE AND CONDUCT
Section 5.1. NYC Governance . . . . . . . . . . . 42
Section 5.2. PRR Governance . . . . . . . . . . . 43
Section 5.3. NYC and PRR Actions. . . . . . . . . 43
Section 5.4. NYC and PRR Distributions. . . . . . 43
Section 5.5. Actions. . . . . . . . . . . . . . . 43
ARTICLE VI
EMPLOYEE MATTERS
Section 6.1. Employees of CRR and CRC . . . . . . 43
Section 6.2. Employee Related Liabilities . . . . 44
Section 6.3. Non-Agreement Employee Benefit Plans 46
Section 6.4. Residual Liability . . . . . . . . . . 47
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1. CSX. . . . . . . . . . . . . . . . . 48
(a) Organization and Good Standing. 48
(b) Authority . . . . . . . . . . . 48
(c) Enforceability. . . . . . . . . 48
(d) No Violation. . . . . . . . . . 48
(e) No Approvals. . . . . . . . . . 48
Section 7.2. NSC. . . . . . . . . . . . . . . . . 49
(a) Organization and Good Standing. 49
(b) Authority . . . . . . . . . . . 49
(c) Enforceability. . . . . . . . . 49
(d) No Violation. . . . . . . . . . 49
(e) No Approvals. . . . . . . . . . 49
ARTICLE VIII
COVENANTS
Section 8.1. Conduct of Business. . . . . . . . . 50
Section 8.2. Best Efforts . . . . . . . . . . . . 50
Section 8.3. Further Assurances; Consents . . . . 50
Section 8.4. STB Approval . . . . . . . . . . . . 51
Section 8.5. Other Approvals. . . . . . . . . . . 52
Section 8.6. INTENTIONALLY OMITTED. . . . . . . . 52
Section 8.7. Risk of Loss; Forced Disposal. . . . 53
Section 8.8. Public Statements; Public Filings. . 53
Section 8.9. Restructuring of CRC . . . . . . . . 53
Section 8.10. Provision of Corporate Records . . . 55
Section 8.11. Access to Information. . . . . . . . 55
Section 8.12. Production of Witnesses and Individuals56
Section 8.13. Confidentiality. . . . . . . . . . . 56
Section 8.14. Privileged Matters . . . . . . . . . 57
Section 8.15. Administration of Actions. . . . . . 58
Section 8.16. Administration of FELA Claims. . . . 59
Section 8.17. Tax Matters. . . . . . . . . . . . . 60
Section 8.18. Committees . . . . . . . . . . . . . 60
Section 8.19. Chicago Gateway Access . . . . . . . 60
Section 8.20. Car Hire and Car Service . . . . . . 61
ARTICLE IX
CONDITIONS PRECEDENT TO THE CLOSING
Section 9.1. Conditions Precedent to Obligations. 61
ARTICLE X
INDEMNIFICATION
Section 10.1. Indemnification. . . . . . . . . . . . 62
Section 10.2. Indemnification Procedures . . . . . . 62
Section 10.3. Remedies . . . . . . . . . . . . . . . 63
ARTICLE XI
MISCELLANEOUS
Section 11.1. Amendment. . . . . . . . . . . . . . . 64
Section 11.2. Extension; Waiver. . . . . . . . . . . 64
Section 11.3. Notices. . . . . . . . . . . . . . . . 64
Section 11.4. Interpretation . . . . . . . . . . . . 65
Section 11.5. Entire Agreement . . . . . . . . . . . 65
Section 11.6. Parties in Interest. . . . . . . . . 66
Section 11.7. Governing Law. . . . . . . . . . . . 66
Section 11.8. Counterparts . . . . . . . . . . . . . 66
Section 11.9. Assignment . . . . . . . . . . . . . 66
Section 11.10 Severability . . . . . . . . . . . . 67
Section 11.11. Lack of Control; Effect on CRR and its
Controlled Subsidiaries. . . . . . . 67
Section 11.12. Dispute Resolution . . . . . . . . . 67
Section 11.13. CRC Status . . . . . . . . . . . . . 68
Schedule 1
Assets
Attachment I
Attachment II
Schedule 2
Major Decisions
Schedule 3
Preservation of Fair Access to Chicago Gateway
Schedule 4
Schedule of Trackage Rights, Haulage,
Shared Assets and Other Operating Agreements
Exhibit A
Form of Operating Agreements
Exhibit A-1 (CSXT Operating Agreement)
Exhibit A-2 (NSR Operating Agreement)
Exhibit B
Form of LLC Agreements
Exhibit C
Form of Trackage Rights Agreements
Exhibit C-1 (NSR on CSXT)
Exhibit C-2 (CSXT on NSR)
Exhibit D
Form of CSX/NSC Haulage Agreements
Exhibit E
Form of Capital Contribution, Assignment
And Assumption Agreements
Exhibit F
Tax Allocation Agreement
Exhibit G
North Jersey Shared Assets Agreement
Exhibit H
South Jersey/Philadelphia Shared Assets Agreement
Exhibit I
Detroit Shared Assets Agreement
Exhibit J
Ashtabula Interlocking Agreement
Exhibit K
CP-Mounds Interlocking Agrement
Exhibit L
Warsaw Interlocking Agreement
Exhibit M
Crestline Interlocking Agreement
Exhibit N
Buckeye Interlocking Agreement
Exhibit O
▇▇▇▇ Interlocking Agreement
Exhibit P
Bucyrus Interlocking Agreement
Exhibit Q
CP 138 Interlocking Agreement
Exhibit R
Short Interlocking Agreement
Exhibit S
Berea Interlocking Agreement
Exhibit T
Ashtabula Access Agreement
Exhibit U
Seneca Yard Access Agreement
Exhibit V
Ford (Rockport) Switching Agreement
Exhibit W
GM Parma Switching Agreement
Exhibit X
Indianapolis Switching Agreement
Exhibit Y
GM Lordstown Switching Agreement
Exhibit Z
Lorain Switching Agreement
Exhibit AA
Fairlane Switching Agreement
Exhibit BB
Crawfordsville Switching Agreement
Exhibit CC
▇▇▇▇▇▇ Switching Agreement
Exhibit ▇▇
▇▇▇▇▇▇▇▇ Switching Agreement
Exhibit EE
Upper Sandusky Switching Agreement
Exhibit FF
Indiana Harbor Belt Agreement
Exhibit GG
Monongahela Access and Use Agreement
Exhibit HH
Park Manor Temporary Lease Agreement
Exhibit II
NSR and CSXT Construction Rights Agreement
Exhibit JJ
NSR Buckeye Construction Rights Agreement
Exhibit KK
NSR Field-Belmont Construction Rights Agreement
Exhibit LL
Erie Deed of Easement
Exhibit MM
Fort ▇▇▇▇▇-Chicago/Streator Line Exchange Agreement
Exhibit NN
Piqua Yard Agreement
Exhibit OO
Elizabethport Yard Access Agreement
Exhibit PP
Agreement for Assignment of CRC Rights
Exhibit QQ
CSXT Eastwick Construction Agreement
Exhibit RR
Agreement for Assignment of CRC Rights
(Northeast Corridor)
Exhibit SS
Agreement for Assignment of Chicago Rights
TRANSACTION AGREEMENT
TRANSACTION AGREEMENT, dated as of June 10, 1997
("Agreement"), by and among CSX CORPORATION, a Virginia
corporation ("CSX"), CSX TRANSPORTATION, INC., a Virginia
corporation, for itself and on behalf of its controlled
Subsidiaries (collectively, "CSXT"), NORFOLK SOUTHERN
CORPORATION, a Virginia corporation ("NSC"), NORFOLK SOUTHERN
RAILWAY COMPANY, a Virginia corporation, for itself and on
behalf of its controlled Subsidiaries (collectively, "NSR"),
CONRAIL INC., a Pennsylvania corporation, for itself and on
behalf of its controlled Subsidiaries (collectively, "CRR"),
CONSOLIDATED RAIL CORPORATION, a Pennsylvania corporation
("CRC"), and CRR HOLDINGS LLC, a Delaware limited liability
company ("CRR Parent").
WHEREAS, CSX and NSC have entered into a letter
agreement dated as of April 8, 1997 (the "April 8 Agreement").
WHEREAS, pursuant to the April 8 Agreement, CSX and NSC
have jointly acquired all of the outstanding capital stock of CRR
through CRR Parent, in which CSX and NSC each owns a 50% voting
interest.
WHEREAS, CSX and NSC are seeking the approval of the
STB to undertake the transactions contemplated by this Agreement
and the April 8 Agreement.
WHEREAS, pursuant to the April 8 Agreement the parties
wish to provide herein for the governance and operation of CRR
and its Affiliates and for the basis pursuant to which CRR's
assets and liabilities will be allocated to or shared by CSX and
its Affiliates, on the one hand, and NSC and its Affiliates, on
the other hand, after the Closing Date (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and
the respective agreements hereinafter set forth, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Defined Terms. As used in this
Agreement, the following terms have the meanings set forth below:
"AAC" means Atlantic Acquisition Corporation, a
Pennsylvania corporation and a wholly owned Subsidiary of NSC.
"AAR" means the Association of American Railroads.
"AAR Car Service Rules" means the Code of Car Service
Rules/Code of Car Hire Rules contained in AAR Circular OT-10 as
promulgated in the Official Railway Equipment Register.
"AAR Depreciated Value" means depreciated value as
determined in accordance with Rule 107 of the Office and Field
Manuals of the AAR Interchange Rules adopted by the AAR Technical
Services Division, Mechanical Section, Operations and Maintenance
Department.
"Action" shall mean any action, claim, suit,
arbitration, inquiry, subpoena, discovery request, proceeding or
investigation by or before any Governmental Entity or forum or
authority having jurisdiction over the matter involving or
related to CRR, CRC or their respective Affiliates, the Assets,
the Retained Liabilities or the Allocated Liabilities, but shall
exclude FELA Claims.
"Affiliate" means, with respect to a specified Person,
any Person that directly or indirectly controls, is controlled by
or is under common control with, the specified Person or any
trust for the benefit of such Person or any entities controlled
by such Person; provided that, for the purposes of this Agree-
ment, (a) NYC shall not be an Affiliate of CSX and its Subsidiar-
ies or NSC and its Subsidiaries, (b) PRR shall not be an Affili-
ate of NSC and its Subsidiaries or CSX and its Subsidiaries and
(c) CSX and NSC and their respective Subsidiaries shall not be
Affiliates of CRR or CRR Parent and their respective Subsidiaries
and vice versa.
"Allocated Assets" means the Assets to be transferred
at the Closing to either NYC ("NYC Allocated Assets") or PRR
("PRR Allocated Assets").
"Allocated Liabilities" means the Liabilities of CRR,
CRC or their respective Affiliates to be assumed at the Closing
by either NYC ("NYC Allocated Liabilities") or PRR ("PRR
Allocated Liabilities").
"Amended and Restated Voting Trust Agreement" means the
Voting Trust Agreement among CSX, NSC, CRR Parent, Green and
Deposit Guarantee National Bank, dated as of April 8, 1997.
"Ancillary Agreements" means the Equipment Agreements,
the CSXT Operating Agreement, the NSR Operating Agreement, the
NYC LLC Agreement, the PRR LLC Agreement, the CRR Holdings LLC
Agreement, the Trackage Rights Agreements, the CSXT/NSR Haulage
Agreements, the Tax Allocation Agreement, the Shared Assets
Agreements and the Other Operating Agreements.
"April 8 Agreement" has the meaning set forth in the
preamble to this Agreement.
"Assets" means any and all of CRR's, CRC's or their
respective Affiliates' right, title and interest in and to all of
the rights, properties, assets, claims, Contracts and businesses
of every kind, character and description, whether real, personal
or mixed, whether tangible or intangible, whether accrued,
contingent or otherwise and wherever located, owned or used
primarily by such party. On the Closing Date, all Assets will be
either (i) NYC Allocated Assets, (ii) PRR Allocated Assets or
(iii) Retained Assets.
"Base Inventory" has the meaning ascribed thereto in
Section 2.7.
"Base Rent" has the meaning set forth in the CSXT
Equipment Agreement and the NSR Equipment Agreement.
"Books and Records" means the books, files and records
(including computerized databases and records) of CRR, CRC or
their respective Affiliates and includes the NYC Books and
Records and the PRR Books and Records.
"Capital Contribution, Assignment and Assumption Agree
ments" means the instruments (including quitclaim deeds or other
instruments transferring title to real estate) pursuant to which
the Allocated Assets and the Allocated Liabilities will be trans-
ferred at the Closing to NYC or PRR, as the case may be, substan-
tially in the form attached hereto as Exhibit E.
"Closing" has the meaning ascribed thereto in Section
3.1.
"Closing Date" has the meaning ascribed thereto in Sec-
tion 3.1.
"Co-Chairmen" means the co-chairmen of the CRC Board
after the Control Date, being the CSX Co-Chairman and the NSC
Co-Chairman.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time or any successor United States federal
tax statute. References to a specific section of the Code shall
include a reference to the corresponding provisions of any such
successor United States federal tax statute.
"Communications Team" has the meaning ascribed thereto
in Section 2.2.
"Continuing CRC Management" means employees (regardless
of craft, position or classification) of CRR, CRC or their
respective Affiliates (other than NYC, PRR and their respective
Subsidiaries) who are determined to be Continuing CRC Management
pursuant to Section 6.1(c), which employees will consist of the
following categories: (a) employees performing general and
administrative functions for CRR, CRC or their respective Affili-
ates (other than NYC, PRR and their respective Subsidiaries), (b)
employees performing interim general, administrative or technical
functions for CRR, CRC or their respective Affiliates (other than
NYC, PRR and their respective Subsidiaries) (including employees
performing such functions at CRR's headquarters office building
and information technology center in Philadelphia, PA) which
functions CSX and NSC shall identify prior to the Closing Date
and shall agree are necessary for an interim period after the
Closing Date in accordance with Section 2.4, (c) employees
operating, managing or performing work at the SSO Facilities, and
(d) employees (other than those described in clauses (a), (b) and
(c) above) operating, managing or performing work on Retained
Assets that are to be operated pursuant to the Shared Assets
Agreements.
"Contracts" means any contract, lease, loan agreement,
deed, easement, license, reversion, mortgage, security agreement,
trust indenture or other agreement or instrument to which any of
CRR, CRC or their respective Affiliates is a party or by which
any of them is bound or to which any of the Assets is subject.
"Contracts Team" has the meaning ascribed thereto in
Section 2.2.
"Control Date" means the effective date on which CSX
and NSC are authorized by the STB to exercise control over CRR.
"Corporate Level Liabilities" means the following Li-
abilities of CRR, CRC or their respective Affiliates: (a) Envi-
ronmental Liabilities that are designated as Corporate Level Li-
abilities pursuant to Section 2.8(b)(iii); (b) all Liabilities
(except as specified in Section 2.8(b)(i) or (ii), Section 2.8(c)
or Section 2.9) associated with the handling and disposition of
Actions arising prior to the Closing Date; (c) all Liabilities
(except as specified in Section 2.8(b)(i) or (ii), Section 2.8(c)
or Section 2.9) associated with the handling and disposition of
Actions arising on or after the Closing Date and that do not
relate predominantly to Allocated Assets; (d) all Liabilities
(except as specified in Section 2.8(b)(i) or (ii), Section 2.8(c)
or Section 2.9) associated with the handling and disposition of
Actions arising on or after the Closing Date designated as Corpo-
rate Level Liabilities pursuant to Section 2.8; (e) Employee
Related Liabilities that are designated as Corporate Level Lia-
bilities pursuant to Article VI; (f) all Taxes accruing for
periods prior to the Closing Date, including in respect of tax
leverage transactions; (g) Taxes, if any, associated with the
designation, allocation and transfer of the Assets as
contemplated in this Agreement; (h) Liabilities under leases
(including without limitation lease termination costs) that arise
prior to the Closing Date (other than the lease Liabilities in
respect of the CRC headquarters office building in Philadelphia,
PA, or the information technology center in Philadelphia, PA, or
the Altoona, PA or Hollidaysburg, PA shops); (i) Indebtedness
(other than intercorporate Indebtedness of direct or indirect
Subsidiaries of CRR the capital stock, or similar interests, of
which is included in the Allocated Assets, which will be treated
as agreed to by the parties prior to the Closing); (j) all
Liabilities associated with the handling and disposition of FELA
Claims made prior to the Control Date and all Liabilities
associated with the handling and disposition of FELA Claims made
on or after the Control Date and designated as Corporate Level
Liabilities pursuant to Section 2.8(c); (k) all employee costs
not otherwise allocated under this Agreement; (l) all Liabilities
arising prior to the Closing Date not otherwise allocated under
this Agreement; (m) transition costs not the sole responsibility
of CSX, CSXT, NYC, NSC, NSR or PRR and not otherwise allocated
under this Agreement; and (n) all Liabilities incurred with
respect to Continuing CRC Management, the SSO Facilities and the
Retained Assets, except where this Agreement (including the
Schedules and Exhibits hereto) or the Ancillary Agreements may
expressly designate the Liability in some other manner.
"Corporate Memorabilia" means all corporate memora-
bilia, antiques, artifacts, charters and art owned by CRR, CRC or
their respective Affiliates, wherever located.
"CRC" has the meaning set forth in the preamble to this
Agreement.
"CRC Board" means the Board of Directors of CRC.
"CRR" has the meaning set forth in the preamble to this
Agreement.
"CRR Holdings LLC Agreement" means the Limited Liabili-
ty Company Agreement of CRR Holdings LLC, dated May 21, 1997, as
amended from time to time.
"CRR Industries" means CRR Industries, Inc., a
Pennsylvania corporation and a wholly owned Subsidiary of CRR.
"CRR Parent" has the meaning set forth in the preamble
to this Agreement.
"CRR Shares" means the shares of Common Stock and Se-
▇▇▇▇ A ESOP Convertible Junior Preferred Stock of CRR.
"CRR Stay Bonus Program" means either the Conrail Inc.
Stay Bonus Program, Classes 8 And Below, or the Conrail Inc. Stay
Bonus Program Classes 9-11, both to be entered into pursuant to
Attachment A to the Third Amendment.
"CSX" has the meaning set forth in the preamble to this
Agreement.
"CSX Co-Chairman" has the meaning ascribed thereto in
Section 4.2.
"CSX Directors" has the meaning ascribed thereto in
Section 4.2.
"CSXT" has the meaning set forth in the preamble to
this Agreement.
"CSXT Equipment" means the Equipment subject to the
CSXT Equipment Agreement.
"CSXT Equipment Agreement" means the agreement to be
entered into between NYC and CSXT in a form to be agreed by CSX
and NSC, to provide CSXT with the right to use, operate and main-
tain certain of the Equipment which NYC has the right to use and
operate pursuant to the NYC Equipment Agreement.
"CSXT/NSR Haulage Agreements" means the agreements
pursuant to which CSXT and/or NSR will provide haulage services
for the other, in substantially the form attached hereto as
Exhibit D; each CSXT/NSR Haulage Agreement shall be in respect of
a Route identified on Item 2 of Schedule 4 and shall incorporate
the terms set forth therein.
"CSXT Operating Agreement" means the agreement to be
entered into between CSXT and NYC, substantially in the form at-
tached hereto as Exhibit A-1, to provide for the use, operation
and maintenance by CSXT of certain of the NYC Allocated Assets
after the Closing Date.
"Damages" means all assessments, losses, damages, li-
abilities, costs and expenses, including without limitation in-
terest, penalties and attorneys' and consultants' fees.
"Distribution" means any dividend or other distribution
with respect to any shares of capital stock or similar equity
interests.
"Employee Related Liabilities" means Liabilities to be
designated as NYC Allocated Liabilities, PRR Allocated
Liabilities or Corporate Level Liabilities pursuant to Article
VI.
"Environmental Laws" means any and all federal, state,
local and foreign statutes, laws, judicial decisions, regula-
tions, ordinances, rules, judgments, orders, decrees, codes,
plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and governmental restrictions, whether now
or hereafter in effect, relating to human health, the environment
or to emissions, discharges, or releases of pollutants, contami-
nants, hazardous or toxic materials or substances or wastes into
the environment, including, without limitation, ambient air, sur-
face water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, haz-
ardous or toxic materials or substances or wastes or the cleanup
or other remediation thereof.
"Environmental Liabilities" means any and all
Liabilities arising in connection with or in any way relating to
any Asset (or formerly held Asset) and which arise under or
relate to matters covered by any Environmental Laws.
"Equipment" means all freight car rolling stock, ca-
booses, trailers, containers, end of train devices, locomotives
and Work Equipment of CRR, CRC or their respective Affiliates,
whether owned or leased.
"Equipment Agreements" means the NYC Equipment Agree-
ment, the PRR Equipment Agreement, the CSXT Equipment Agreement
and the NSR Equipment Agreement.
"Fair Market Rental Value" has the meaning set forth in
the CSXT Operating Agreement, the NSR Operating Agreement, the
CSXT Equipment Agreement and the NSR Equipment Agreement.
"FELA Claim" means a claim made under the Federal
Employers Liability Act, as amended from time to time. A FELA
Claim shall be considered "made" upon the earliest to occur of
the following: (i) the claimant's employer has received or pre-
pared a written report (including, in the case of an alleged
occupational injury, a questionnaire) of the claim or of the
incident from which the claim arises; or (ii) the claimant's
employer has received written notice of the claim from the claim-
ant or the claimant's attorney; or (iii) an action, claim or suit
asserting the claim has been filed and properly served on the
claimant's employer. For the purposes of this definition (i) the
term "written report" shall include reports which are
electronically prepared or transmitted, and (ii) the term
"employer" shall include the employer currently responsible under
the Federal Employers Liability Act for the claim or cause of
action being asserted and such employer's attorney.
"FF&E" means all furniture, fixtures, computers,
office supplies and equipment (other than Equipment and system
stock- piles of supplies and inventory) of CRR, CRC or their
respective Affiliates.
"Governmental Entity" means any federal, state, local
or foreign court, administrative agency or commission or other
governmental or regulatory authority or commission or any arbi-
tration tribunal.
"Green" means Green Acquisition Corp., a Pennsylvania
corporation and a wholly owned Subsidiary of CRR Parent.
"Indebtedness" means, when used with reference to a
specified Person, at any date, without duplication, (a) all obli-
gations of such Person for borrowed money, including, without
limitation, all principal, interest, premiums, fees, expenses,
overdrafts and penalties with respect thereto, (b) all obliga-
tions of such Person evidenced by bonds, debentures, notes or
other similar instruments, (c) all obligations of such Person to
pay the deferred purchase price of property or services, except
trade accounts payable, (d) all obligations of such Person to
reimburse any bank or other Person in respect of amounts paid
under a letter of credit or similar instrument, (e) all payment
obligations under capitalized leases and (f) all indebtedness of
any other Person of the type referred to in clauses (a) to (e)
above directly or indirectly guaranteed by such Person.
"Indemnified Party" means a Person who requires or re-
quests indemnification under Article X.
"Indemnifying Party" means a Person who is required or
requested to indemnify another Person under Article X.
"Interest Rental" has the meaning set forth in the
Shared Assets Agreements.
"Inventory Team" has the meaning ascribed thereto in
Section 2.2.
"IRS Submission" has the meaning ascribed thereto in
Section 8.9.
"Liabilities" means any and all debts, liabilities and
obligations of any kind whatsoever, whether or not accrued, con-
tingent or reflected on a balance sheet, known or unknown, abso-
lute, determined, determinable or otherwise, including, without
limitation, those arising under any law, rule, regulation, ac-
tion, 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. At the Closing
Date, all Liabilities of CRR, CRC or their respective Affiliates
will be either (i) NYC Allocated Liabilities, (ii) PRR Allocated
Liabilities or (iii) Retained Liabilities.
"Locomotive Team" has the meaning ascribed thereto in
Section 2.6.
"Major Decisions" means any of the items identified on
Schedule 2 hereto.
"Merger" means the merger of a subsidiary of Green
with and into CRR pursuant to the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of
Merger by and among CRR, CSX and Green dated as of October 14,
1996 and as amended as of November 5, 1996, December 18, 1996,
March 7, 1997 and April 8, 1997 and as may be further amended
from time to time in accordance with its terms and the terms of
this Agreement.
"NSC" has the meaning set forth in the preamble to
this Agreement.
"NSC Co-Chairman" has the meaning ascribed thereto in
Section 4.2.
"NSC Directors" has the meaning ascribed thereto in
Section 4.2.
"NSR" has the meaning set forth in the preamble to
this Agreement.
"NSR Equipment" means the Equipment subject to the NSR
Equipment Agreement.
"NSR Equipment Agreement" means the agreement to be
entered into between PRR and NSR, in a form to be agreed among
CSX and NSC, to provide NSR with the right to use, operate and
maintain certain of the Equipment which PRR has the right to use
and operate pursuant to the PRR Equipment Agreement.
"NSR Operating Agreement" means the agreement to be
entered into between NSR and PRR, substantially in the form at-
tached hereto as Exhibit A-2, to provide for the use, operation
and maintenance by NSR of certain of the PRR Allocated Assets
after the Closing Date.
"NYC" means New York Central Lines LLC (or such other
name as may be specified by CSX), which will be organized on or
prior to the Closing pursuant to Section 3.2 as a Delaware
limited liability company and a wholly owned Subsidiary of CRC.
"NYC Action" has the meaning ascribed thereto in Sec-
tion 8.14.
"NYC Allocated Assets" means the Assets identified on
Item 1 of Schedule 1 hereto and the Transportation Contracts
allocated to NYC pursuant to Section 2.2(c) (unless CSX and NSC
in their discretion agree that any such Assets shall not be NYC
Allocated Assets) together with the Unallocated Assets designated
as NYC Allocated Assets prior to the Closing Date pursuant to
Article II, including any cash benefit in lieu of such Assets
pursuant to Section 8.7.
"NYC Allocated Liabilities" means the Liabilities des-
ignated as NYC Allocated Liabilities pursuant to Section 2.8 or
Article VI, together with all Liabilities allocated to and the
responsibility of NYC under any Ancillary Agreement.
"NYC Books and Records" shall mean the books, files
and records (including computerized databases and records) of
CRR, CRC or their respective Affiliates that relate principally
to the NYC Allocated Assets or NYC Allocated Liabilities and are
necessary or useful for the operation of the business in
respect thereof.
"NYC Equipment Agreement" means the agreement to be
entered into between CRC and NYC, in a form to be agreed among
CSX and NSC, to provide NYC with the right to use, operate and
maintain certain of the Equipment allocated to NYC pursuant to
Section 2.6(e)(i).
"NYC LLC Agreement" means the Limited Liability
Company Agreement of NYC, substantially in the form attached
hereto as Exhibit B.
"NYC Restructuring" has the meaning ascribed thereto
in Section 8.9.
"Operating Fee" has the meaning set forth in the CSXT
Operating Agreement and the NSR Operating Agreement.
"Other Operating Agreements" means the agreements to
be entered into between and among CRC, NYC, PRR, CSXT and/or NSR,
substantially in the forms attached hereto as Exhibits J through
RR, providing for various operating, access, construction and
other matters. The Other Operating Agreements are listed in Item
4 of Schedule 4 hereto.
"PBCL" means the Pennsylvania Business Corporation Law
of 1988, as amended from time to time.
"Pennsylvania Control Transaction Law" means
Subchapter E of Chapter 25 of the PBCL, as amended from time to
time.
"Percentage" means, in the case of CSX, 42% and, in
the case of NSC, 58%.
"Person" includes any individual, corporation,
association, partnership (general or limited), joint venture,
trust, estate, limited liability company or other legal entity or
organization.
"Pooled Assets" means all Unallocated Assets for which
no allocation methodology is provided for in Section 2.2(a)
through (i), including the Assets identified on Item 4 of Sched-
ule 1.
"Privileged Information" has the meaning ascribed
thereto in Section 8.14.
"Privileges" has the meaning ascribed thereto in Sec-
tion 8.14.
"PRR" means Pennsylvania Lines LLC (or such other name
as may be specified by NSC), which will be organized on or prior
to Closing pursuant to Section 3.2 as a Delaware limited li-
ability company and a wholly owned Subsidiary of CRC.
"PRR Action" has the meaning ascribed thereto in Sec-
tion 8.15.
"PRR Allocated Assets" means the Assets identified on
Item 2 of Schedule 1 hereto and the Transportation Contracts
allocated to PRR pursuant to Section 2.2(c) (unless CSX and NSC
in their discretion agree that any such Assets shall not be PRR
Allocated Assets), together with the Unallocated Assets designat-
ed as PRR Allocated Assets prior to the Closing Date pursuant to
Article II, including any cash benefit in lieu of such Assets
pursuant to Section 8.7.
"PRR Allocated Liabilities" means the Liabilities des-
ignated as PRR Allocated Liabilities pursuant to Section 2.8 or
Article VI, together with all Liabilities allocated to and the
responsibility of PRR under any Ancillary Agreement.
"PRR Books and Records" shall mean the books, files
and records (including computerized databases and records) of
CRR, CRC or their respective Affiliates that relate principally
to the PRR Allocated Assets or PRR Allocated Liabilities and are
necessary or useful for the operation of the business in
respect thereof.
"PRR Equipment Agreement" means the agreement to be
entered into between CRC and PRR, in a form to be agreed among
CSX and NSC, to provide PRR with the right to use, operate and
maintain certain of the Equipment allocated to PRR pursuant to
Section 2.6(e)(i).
"PRR LLC Agreement" means the Limited Liability
Company Agreement of PRR, substantially in the form attached
hereto as Exhibit B.
"PRR Restructuring" has the meaning ascribed thereto
in Section 8.9.
"Radio Licenses" has the meaning ascribed thereto in
Section 2.2.
"Required Approvals" has the meaning ascribed thereto
in Section 7.1.
"Restructuring" means either the NYC Restructuring or
the PRR Restructuring, as the context requires.
"Retained Assets" means the Assets identified on Item
3 of Schedule 1 hereto (unless CSX and NSC in their discretion
agree that any such Assets shall not be Retained Assets) together
with the Unallocated Assets designated as Retained Assets prior
to the Closing Date pursuant to Article II, including (a)
Equipment that is not included in the Allocated Assets, (b) the
SSO Facilities and (c) the Pooled Assets not designated as
Allocated Assets pursuant to Section 2.2(j).
"Retained Liabilities" means the Liabilities
designated as Retained Liabilities pursuant to Section 2.8
(including, without limitation, all Corporate Level Liabilities),
together with all Liabilities allocated to and the responsibility
of CRR, CRC or their respective Affiliates under any Ancillary
Agreement.
"Rolling Stock Team" has the meaning ascribed thereto
in Section 2.6.
"Route" means the rights and Assets used to provide
transportation service along a railroad line connecting two or
more stations and consisting of one or more tracks (together with
associated sidings, side tracks, signaling, land and other
related facilities).
"Ruling" has the meaning ascribed thereto in Section
8.9.
"Separation Costs" means labor protection costs, in-
cluding dismissal allowances, displacement allowances and the
cost of administering, arbitrating and litigating such labor
protection provisions, severance (including payments under
severance agreements), personnel relocation expenses and all
other dismissal expenses and stay bonuses, including any payment
intended to reimburse for excess parachute excise tax imposed
under Section 4999 of the Code with respect to such dismissal ex-
penses or stay bonuses.
"Service" has the meaning ascribed thereto in Section
8.9.
"Shared Assets Agreements" means the agreements
between and among CRC, NYC, PRR, CSXT and/or NSR, substantially
in the forms attached hereto as Exhibits G through I, providing
for the operation of certain Retained Assets for the benefit of
CSXT and NSR. The Shared Assets Agreements are listed in Item 3
of Sched- ule 4 hereto.
"Shared Assets Areas" means (a) the North Jersey
shared Asset facility to be covered by the Shared Assets
Agreement substantially in the form attached hereto as Exhibit G,
(b) the South Jersey/Philadelphia shared Asset facility to be
covered by the Shared Assets Agreement substantially in the form
attached hereto as Exhibit H and (c) the Detroit shared Asset
facility to be covered by the Shared Assets Agreement
substantially in the form attached hereto as Exhibit I.
"SSO Facilities" means the CRR or CRC system support
operations facilities described in Item 3(B) of Schedule 1
(including equipment and other Assets associated with such
facilities) used as of the date hereof by CRR and CRC or their
respective Affiliates to provide support functions benefitting
the CRC rail system as a whole, including: (a) the customer
service center in Pittsburgh, PA; (b) the crew management facili-
ty in Dearborn, MI; (c) the system maintenance-of-way equipment
center in Canton, OH; (d) the signal repair center in Columbus,
OH; (e) the system freight claims facility in Buffalo, NY; (f)
the system non-revenue billing facility at Bethlehem, PA; (g) the
system rail welding plant at Lucknow (Harrisburg), PA; (h) the
system road ▇▇▇▇▇▇▇/engineer training center at Philadelphia and
Conway, PA; (i) the CRC police operations center at Mt. Laurel,
NJ; and (j) such other facilities providing system-wide support
functions as CSX and NSC shall identify and agree upon prior to
the Closing Date.
"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 combina-
tions 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 em-
ployed or any successor entity thereof.
"Subsidiary" means, when used with reference to a
specified Person, any corporation or other organization, whether
incorporated or unincorporated, of which at least a majority of
the securities or other interests having by their terms ordinary
voting power to elect a majority of the Board of Directors or
others performing similar functions with respect to such corpora-
tion or other organization is directly or indirectly owned or
controlled by such Person or by any one or more of its Subsidiar-
ies, or by such Person and one or more of its Subsidiaries; pro-
vided that CRR Parent and any Person in which CRR Parent owns,
directly or indirectly an interest (it being assumed for the pur-
poses of this Agreement that CRR Parent does not own, directly or
indirectly, an interest in either CSX or NSC) shall not be a Sub-
sidiary of either CSX or NSC.
"Surviving Corporation" means the surviving
corporation of the Merger.
"Tax" or "Taxes" means taxes of any kind, levies or
other similar assessments, customs, duties, imposts, charges or
fees, including, without limitation, income taxes, gross re-
ceipts, 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 inter-
est, penalties or additions to tax attributable to such Tax or
Taxes. The term "Tax" or "Taxes" shall not include any payment
intended to reimburse the recipient for an excess parachute ex-
cise tax imposed under Section 4999 of the Code.
"Tax Allocation Agreement" means the agreement to be
entered into among Green, CRR, CRC, CRR Industries, PRR and NYC,
substantially in the form attached hereto as Exhibit F, pursuant
to which the rights and obligations relating to Tax matters
involving the operations of CRR, CRC, PRR and NYC shall be
allocated.
"Tax Returns" means all returns, information returns,
statements, certifications, reports or other documentation
relating to Taxes.
"Third Amendment" means the third amendment, dated
March 7, 1997, to the Merger Agreement.
"Third Party Claim" has the meaning ascribed thereto
in Section 10.2.
"Trackage Rights Agreements" means the agreements pur-
suant to which CSXT and NSR will grant trackage rights to the
other, in substantially the form attached hereto as Exhibit C;
each Trackage Rights Agreement shall be in respect of a Route
identified on Item 1 of Schedule 4 and shall incorporate the
terms set forth therein.
"Transaction Expenses" means, with respect to a speci-
fied Person, all of such Person's fees and expenses, including,
without limitation, filing fees and fees and expenses of legal
counsel, depositaries, dealer managers, proxy solicitors, infor-
mation agents, printers, investment bankers or advisors, financ-
ing sources, accountants, public relations advisors and other
consultants and advisors incurred in connection with the acquisi-
tion of CRR Shares, the Merger, the April 8 Agreement, this
Agreement, the Ancillary Agreements and the transactions
contemplated herein and therein.
"Transportation Contracts" means Contracts between
rail carrier(s) and a Person or Persons relating to the purchase
of transportation services as specified in 49 U.S.C. Section
10102(9)(A) and (B); provided that, if a Transportation Contract
covers service between more than one pair of points, the
provisions governing service between each pair of points shall be
treated as a distinct Transportation Contract.
"Unallocated Assets" means Assets which are not as of
the date of this Agreement identified on Schedule 1 hereto as
Allocated Assets or Retained Assets.
"Valuation Date" has the meaning set forth in the CSXT
Operating Agreement, the NSR Operating Agreement, the CSXT
Equipment Agreement, the NSR Equipment Agreement and the Shared
Assets Agreements.
"Voting Trust" means the voting trust for the shares
of capital stock of CRR or CRC created under the Amended and
Restated Voting Trust Agreement.
"Work Equipment" means track machinery, non-revenue
rolling stock dedicated to track maintenance (such as ballast and
tie cars), other mobile equipment (such as backhoes, bulldozers
and the like), other engineering equipment and automobiles and
trucks assigned to CRC system and staff functions (automobiles
and trucks assigned to Allocated Asset locations shall be
included in the Allocated Assets).
"Work Equipment Team" has the meaning ascribed thereto
in Section 2.6.
Section 1.2. Other Definitive Provisions. When used
in this Agreement in respect of a Liability or an Action, the
terms "arise" or "arising" mean that the circumstances giving
rise to the Liability or Action have transpired, whether or not
such Action or Liability has been discovered, asserted or
accrued. When used in this Agreement, the term "control" means
the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract
or otherwise.
ARTICLE II
DESIGNATION AND ALLOCATION OF ASSETS
AND LIABILITIES
Section 2.1. Conveyance of Assets. On the Closing
Date and upon the terms and subject to the conditions set forth
in this Agreement, (i) CRC and its Affiliates shall contribute,
assign, transfer, convey and deliver the NYC Allocated Assets to
NYC and NYC shall accept from CRC and its Affiliates all of the
right, title and interest of CRC and its Affiliates in all of the
NYC Allocated Assets, and (ii) CRC and its Affiliates shall con-
tribute, assign, transfer, convey and deliver the PRR Allocated
Assets to PRR and PRR shall accept from CRC and its Affiliates
all of the right, title and interest of CRC and its Affiliates in
all of the PRR Allocated Assets. Except as expressly provided in
this Agreement, CSX and its Affiliates, on the one hand, and NSC
and its Affiliates, on the other hand, shall retain all their
existing rights with respect to the Assets.
Section 2.2. Allocation of Certain Assets. As soon as
practicable after the date hereof and in any event prior to the
Closing Date, CSX and NSC shall use their best efforts to desig-
nate the Unallocated Assets as either NYC Allocated Assets, PRR
Allocated Assets or Retained Assets. CSX and NSC shall continue
to monitor such designation up to, and shall update such designa-
tion as of, the Closing Date. Such designation shall be as
agreed between CSX and NSC in accordance with the following
guidelines (which shall not, unless CSX and NSC otherwise agree,
affect Assets already designated as Allocated Assets or Retained
Assets pursuant to Schedule 1 hereto):
(a) Unallocated FF&E shall be designated as follows:
(i) all FF&E located in or along Allocated Assets shall be desig-
nated in the same manner as such Allocated Assets, (ii) all FF&E
located in or along Retained Assets shall be designated as Re-
tained Assets and (iii) all FF&E not designated pursuant to
clause (i) or (ii) above shall be designated as NYC Allocated
Assets or PRR Allocated Assets by value in proportion to CSX's
and NSC's respective Percentage.
(b) On or prior to the Closing Date, CSX, NSC and CRR
shall take an inventory of all Corporate Memorabilia, and CSX and
NSC shall value the principal items or categories, engaging an
appraiser if they cannot agree on the value thereof. One half of
the Corporate Memorabilia by value shall be designated as NYC
Allocated Assets and the other half shall be designated as PRR
Allocated Assets by the mutual agreement of CSX and NSC. If CSX
and NSC have not agreed on the particular items or categories of
Corporate Memorabilia to be designated as NYC Allocated Assets
and PRR Allocated Assets, respectively, they will alternate se-
lecting Corporate Memorabilia having a value of 5% (as near as
may be) of the total value of all of the Corporate Memorabilia,
with the party having first choice selected by lot.
(c) The parties recognize the importance of assuring
that the acquisition of CRC does not create shipping disruptions
for CRC customers and hence are hereby making arrangements to
carry out CRC's Transportation Contracts in the manner
hereinafter set forth.
(i) All CRC Transportation Contracts in effect as of
the Closing Date ("Existing Transportation Contracts") shall
remain in effect through their stated term and the
obligations thereunder shall be carried out thereafter by
CSXT utilizing NYC Allocated Assets and NSR utilizing PRR
Allocated Assets, or pursuant to the Shared Assets
Agreements, as the case may be.
(ii) CSXT and NSR shall allocate the responsibilities
to serve customers under the Existing Transportation
Contracts in a manner to achieve reliability and proper
service to the customers, and the revenues and expenses
associated with the Existing Transportation Contracts and
related services shall be allocated and accounted for
between CSXT and NSR in accordance with the Percentage
Division to the extent that the performance of contracts
allocated by Percentage Division departs from the Percentage
Division.
(iii) The following decision rules shall be applied on
an annual basis with tentative settlements to the extent
required by subsection (c)(ii) on a quarterly basis 60 days
after the end of the quarter and an annual true-up 90 days
after the end of the year:
(A) For purposes of this Subsection (c), "Local"
means a station that is not Dual and is served solely
by CSXT or NSR, and "Dual" means a station with
line-haul service by both, including service accessed
by one or the other through trackage rights or haulage,
in each case as of the date of this Agreement giving
effect to the effectuation of the Closing. For
purposes of the definition of "Dual", the term includes
(a) as to commodities that are handled by rail before
or after shipment by water, all stations at which such
commodities are handled in Ocean, Gulf and Great Lakes
port cities to which each of CSXT and NSR has line haul
service to any such station, and (b) as to intermodal
service, all intermodal facilities in any city in which
each of CSXT and NSR has line haul service to any
intermodal facility. Further, references to "Off Line"
stations in this Subsection (c) do not include a
situation where such station is Local or Dual to NSR or
CSXT or a third railroad whose sole connection is with
CSXT or NSR.
(B) In addition, for purposes of this Subsection
(c) only, the phrase "Percentage Division" shall mean
50% CSXT - 50% NSR.
(C) Revenues shall be allocated as follows:
(aa) Where the Existing Transportation
Contract calls for transportation from an origin
station located on the PRR Allocated Assets, the
allocation shall be solely to NSR, except as
follows:
(x) If the origin station is Local to
NSR and the destination station is on the NYC
Allocated Assets and Local to CSXT, then the
allocation shall be on a joint line basis
between NSR and CSXT with the interchange to
be negotiated between NSR and CSXT and the
revenues to be split 30% to NSR, 30% to CSXT,
and the remainder to be based upon a mileage
prorate; and
(y) If, notwithstanding its location on
the PRR Allocated Assets, the origin station
is Dual and the destination station is on the
NYC Allocated Assets and Local to CSXT, then
the allocation shall be solely to CSXT.
(bb) Where the Existing Transportation
Contract calls for transportation from an origin
station located on the NYC Allocated Assets, the
allocation shall be solely to CSXT, except as
follows:
(x) If the origin station is Local to
CSXT and the destination station is on the
PRR Allocated Assets and Local to NSR, then
the allocation shall be on a joint line basis
between CSXT and NSR with the interchange to
be negotiated between CSXT and NSR and the
revenues to be split 30% to CSXT, 30% to NSR,
and the remainder to be based an a mileage
prorate; and
(y) If, notwithstanding its location on
the NYC Allocated Assets, the origin station
is Dual and the destination station is on the
PRR Allocated Assets and Local to NSR, then
the allocation shall be solely to NSR.
(cc) Where the Existing Transportation
Contract calls for transportation where at least
one of the origin and destination stations is Dual
or which is located in a Shared Assets Area or
located on or accessed from the tracks of the
former Monongahela Railway or Waynesburg Southern
Railway ("MGA") (collectively, a "Specified
Station"), the following shall apply as to such
Existing Transportation Contract:
(x) If the other station is located on
a PRR Allocated Asset and is Local to NSR,
then the allocation shall be solely to NSR;
(y) If the other station is located on
an NYC Allocated Asset and is Local to CSXT,
then the allocation shall be solely to CSXT;
and
(z) If the other station is a Specified
Station, then CSXT and NSR shall divide the
allocation on the Percentage Division (by
revenue) annually.
(dd) Where the origin station is Off Line and
the destination station is within the former CRC
territory, the following shall apply as to the
Existing Transportation Contract:
(x) If the destination station is
located on an NYC Allocated Asset and is
Local to CSXT, the allocation shall be solely
to CSXT.
(y) If the destination station is
located on a PRR Allocated Asset and is Local
to NSR, the allocation shall be solely to
NSR.
(z) If the destination Station is Dual
or is located in a Shared Assets Area or in
MGA, CSXT and NSR shall divide the allocation
on the Percentage Division (by revenue)
annually.
(ee) Where the origin station is within the
former CRR territory and the destination station
is Off Line, the following shall apply as to the
Existing Transportation Contracts:
(x) If the origin station is located on
an NYC Allocated Asset and is Local to CSXT,
the allocation shall be solely to CSXT.
(y) If the origin station is located on
a PRR Allocated Asset and is Local to NSR,
the allocation shall be solely to NSR.
(z) If the origin station is Dual or is
located in a Shared Asset Area or in MGA,
CSXT and NSR shall divide the allocation on
the Percentage Division (by revenue)
annually.
(ff) Where the origin station and the
destination station are both Off Line, CSXT and
NSR shall divide the allocation on the Percentage
Division.
(gg) As to any joint line Existing
Transportation Contract which involves either CSXT
and CRC and NSR and CRC, that Transportation
Contract shall be treated, for the purposes of the
above rules, as if it involved an NSR or CSXT
Local origin or off-line destination (as the case
may be) and only that portion of the
transportation over former CRC Routes shall be
governed by the foregoing.
(hh) Where, as of the Closing Date, CRC has a
proportional rate Existing Transportation Contract
which provides a through rate in combination with
a separate proportional rate CSXT or NSR
transportation contract, the separate CSXT or NSR
transportation contract shall be unaffected and
only the CRC portion of the transportation shall
be governed by the foregoing.
(iv) There shall be a presumption that responsibility
for the performance of contracts shall follow the
allocations referred to above and that presumption, except
in extraordinary cases, shall control in all cases except
those provided for in Sections 2.2(c)(iii)(C)(cc)(z),
2.2(c)(iii)(C)(dd)(z), and 2.2(c)(iii)(C)(ee)(z).
Exceptions in those cases just mentioned shall be made to
promote the use of efficient routes, high-quality service
and consistency of service to customers, and in that
connection there shall be a presumption against dividing a
contract between a single destination and a single origin
between the two carriers.
(v) In the case of a single Existing Transportation
Contract which covers multiple origin and destination pairs,
allocation of revenue shall be on the basis of each pair but
CSXT and NSR shall cooperate as necessary to assure that the
shippers under such Existing Transportation Contracts
receive the benefits (e.g., volume pricing, refunds, etc.)
to which they are entitled thereunder, notwithstanding any
division of responsibility in providing the transportation.
(vi) Nothing in this Section 2.2(c) shall limit any
right of the parties to provide service to or enter into
transportation contracts with shippers with Existing
Transportation Contracts.
(d) All Contracts granting any unrelated Person the
right to bury fiber optic cable longitudinally along Assets shall
be designated as Retained Assets (if any Assets in respect of
which such rights are given are Allocated Assets, NYC or PRR, as
the case may be, will license or otherwise grant rights to CRC or
its Affiliates to maintain the subject matter of the Contracts
granting such rights), except where such rights relate only to
either NYC Allocated Assets or PRR Allocated Assets, in which
case such Contracts shall be designated in the same manner as
such Allocated Assets; provided that NYC and PRR shall, to the
extent permitted under such Contracts that are designated as
Retained Assets, be given equal access to CRC's or its
Affiliate's rights to use capacity on such fiber optic cable and
shall participate equally in any other benefits of such
Contracts.
(e) Promptly after the date hereof, CSXT and NSR each
shall appoint up to five members of a committee (the "Contracts
Team"). The Contracts Team shall meet and not later than January
1, 1998 shall negotiate an equitable designation of all Contracts
(other than Transportation Contracts and Contracts otherwise
allocated or designated under the terms hereof) based on the
following guidelines:
(i) Contracts that relate predominantly to either NYC
Allocated Assets, PRR Allocated Assets or Retained Assets
will be designated in the same manner as such Assets.
(ii) Contracts (A) that benefit CRC as a whole (such
as unfilled system purchase and supply Contracts), (B) that
relate predominantly to Retained Assets (such as certain
intermodal terminal Contracts) or (C) that the Contract Team
cannot designate for whatever reason, shall be Retained
Assets and CRC shall, to the extent permitted under the
relevant Contract, subcontract its duties, obligations and
rights under such Contract to NYC or PRR by value in
proportion to CSX's and NSC's respective Percentage in
accordance with the procedure set forth in Section 8.5(b).
(f) Promptly after the date hereof, NSR and CSXT each
shall appoint up to five members of a committee (the
"Communications Team"). The Communications Team shall meet and
not later than January 1, 1998 shall negotiate an equitable
designation of all radio licenses held or owned by CRR, CRC or
their respective Affiliates ("Radio Licenses") based on the
following guidelines:
(i) In general, Radio Licenses will be designated as
PRR Allocated Assets or NYC Allocated Assets depending on
the designation of the Allocated Assets to which the Radio
Licenses most relate. The designation of Radio Licenses
will be made in such manner as to facilitate and permit
continued operations on the PRR Allocated Assets and the NYC
Allocated Assets substantially as conducted before the
Closing Date.
(ii) Base Radio Licenses shall be designated and
reissued on their present frequencies to PRR or NYC,
depending on whether the Allocated Assets on or near which
the base radio operates are NYC Allocated Assets or PRR
Allocated Assets. If the base radio is used for train
operations on a line that includes both PRR Allocated Assets
and NYC Allocated Assets, the Radio License shall be
allocated in the same manner as the Allocated Assets on
which the base radio is located and the party allocated such
Radio License shall grant to the other party the right to
operate a base station and other needed radio equipment on
that frequency.
(iii) Mobile Radio Licenses (such as those relating to
engine radios and end-of-train-devices) will be designated
as NYC Allocated Assets or PRR Allocated Assets giving
effect to the relative operating needs and existing systems
of each of NYC and/or CSXT, on the one hand, and PRR and/or
NSR on the other hand.
(iv) Radio Licenses for which the Communications Team
can not agree upon the designation as PRR Allocated Assets
or NYC Allocated Assets prior to the Closing Date or that
are required for CRC operations under the Shared Assets
Agreements will be Retained Assets and held by CRR for the
benefit of both NYC and PRR.
(g) In connection with its negotiations under Section
2.2(f), the Communications Team also shall not later than January
1, 1998 negotiate an equitable designation in accordance with
CSX's and NSC's respective Percentage of all Unallocated Assets
that are signal and communications equipment or facilities and
leased communications services. This will include all signal and
communications equipment and facilities and leased services that
are (i) used by CRC system-wide, (ii) used in conjunction with
the operation of both a Route included in NYC Allocated Assets
and a Route included in PRR Allocated Assets (such as a microwave
tower), or (iii) of a character that precludes such Assets from
being logically segregated and designated by Route. In making
its designation, the Communications Team shall consider, among
other things, Asset value and each party's relative ability to
maintain current operations and compatibility with existing
equipment. Items for which the Communications Team cannot agree
upon the designation as PRR Allocated Assets or NYC Allocated
Assets prior to the Closing Date or that are required for CRC
operations under the Shared Assets Agreements will be Retained
Assets and held for the benefit of both NYC and PRR, although it
is the intention of the parties that such signal and
communications equipment or facilities and leased communications
equipment (other than items required for CRC operations under the
Shared Assets Agreements) be designated to the extent possible as
Allocated Assets.
(h) System stockpiles of inventory, material and
supplies of CRR, CRC or their respective Affiliates, regardless
of location (other than such Assets designated as PRR Allocated
Assets pursuant to Section 2.7) are Pooled Assets that shall be
Retained Assets at the Closing Date unless otherwise designated
hereunder. Promptly after the date hereof, CSXT and NSR each
shall appoint up to four members of a committee (the "Inventory
Team"). In addition to its functions pursuant to Section 2.7,
the Inventory Team shall not later than January 1, 1998 determine
whether and to what extent system stockpiles of inventory,
material and supplies of CRR, CRC or their respective Affiliates
(i) shall be designated as NYC Allocated Assets or PRR Allocated
Assets (such designation to be in proportion to CSX's and NSC's
respective Percentage) or (ii) shall be Retained Assets as to
which NYC and CSXT, on the one hand, and PRR and NSR, on the
other hand, shall have access to in accordance with the procedure
to be determined by the Inventory Team pursuant to this Section
2.2(h). In making its identification and designation, the Inven-
tory Team shall specify that (i) inventory, materials and
supplies acquired for the purpose of fulfilling third-party Con-
tracts shall be designated in the same manner as and be applied
to fulfill such Contracts and (ii) inventory, materials and sup-
plies held for maintenance of facilities that are included in
Allocated Assets shall be designated in the same manner as such
Allocated Assets. System stockpiles or portions thereof that are
not specifically designated by the Inventory Team shall be
Retained Assets. The Inventory Team shall determine an appro-
priate procedure for NYC and CSXT, on the one hand, and PRR and
NSR, on the other hand, to have access to all system stockpiles
of inventory, material and supplies that are Retained Assets by
value in proportion to CSX's and NSC's respective Percentage.
(i) Unless otherwise agreed upon by CSX and NSC prior
to the Closing, all computer software and associated data and
engineering CADD systems owned or used by CRR, CRC or their re-
spective Affiliates which may be copied and used by both NYC and
PRR without the permission of, or payment to, any Person shall be
designated in the same manner as the hardware on which it is
stored; provided that PRR shall have the right to copy and to re-
ceive a non-exclusive license of such computer software, rights,
data, licenses and systems that are designated as NYC Allocated
Assets and NYC shall have the right to copy and to receive a
non-exclusive license of such computer software, rights, data,
licenses and systems that are designated as PRR Allocated Assets.
Unless otherwise agreed upon by CSX and NSC prior to the Closing,
all computer software and associated data and engineering CADD
systems owned or used by CRR, CRC or their respective Affiliates
which may not be copied or used (or which may not be copied or
used without the permission of or payment to any Person) by both
NYC and PRR shall be Retained Assets, provided that CRR, CRC and
their respective Affiliates shall use their reasonable commercial
efforts to assign, license or otherwise make available on an
equal basis to each of CSX, NSC or their designees, upon request,
the nonexclusive use of all or any portion of such software,
data, licenses and systems. Notwithstanding the foregoing, no
party shall be required to maintain any item of software on
computer equipment included in Allocated Assets, or be required
to make license or other payments for such software, for a period
longer than 12 months.
(j) To the extent not otherwise agreed upon by CSX and
NSC prior to the Closing Date, all Pooled Assets shall be Re-
tained Assets available for the benefit of both CSXT and NYC, on
the one hand, and NSR and PRR, on the other hand in accordance
with CSX's and NSC's respective Percentage. If CSX and NSC agree
prior to the Closing Date that specified Pooled Assets (or groups
of Pooled Assets) should be allocated to NYC or PRR, such speci-
fied Pooled Assets shall, at the Closing, be designated as NYC
Allocated Assets or PRR Allocated Assets, as the case may be.
Section 2.3. System Support Operations; Dispatching.
(a) The parties recognize that each SSO Facility has been used by
CRR and CRC to provide a support function benefitting the CRC
rail system as a whole (e.g., system-wide crew management or
signal repair support functions). It is expected that each of
CSXT and NYC, on the one hand, and NSR and PRR, on the other
hand, may require the use or benefit of or access to the func-
tions and support provided by the SSO Facilities for a period of
time after the Closing Date. Accordingly, the SSO Facilities
shall be included in Retained Assets and will continue to be
owned by CRR, CRC or its Affiliates. Until a party terminates
its use of an SSO Facility as provided below, (i) the costs of
operating such SSO Facility shall be included in Corporate Level
Liabilities and (ii) such SSO Facility shall be operated for the
benefit of both CSXT and NYC, on the one hand, and NSR and PRR,
on the other hand, based on their operating and administrative
needs.
(b) Each of CSXT and NYC, on the one hand, and NSR and
PRR, on the other hand, shall have the right, upon six months'
prior written notice, to notify the other that it no longer needs
the use of or access to all or any specified portion of the func-
tions performed at a particular SSO Facility. If the party
receiving such notice notifies the other party within thirty days
of receipt of such notice that it no longer needs the use of or
access to all or the same specified portion of the functions
performed at a particular SSO Facility, then the effective date
of the notice sent by the receiving party shall be deemed to be
the same as that of the notice which it received from the
notifying party. If the notice relates to less than the entire
SSO Facility, it shall state with specificity the particular
func- tion(s) and/or Continuing CRC Management position(s)
covered by the notice. Notices may be given at any time before
or after the Closing Date and in each case shall specify an
effective date which shall be a date on or after the Closing Date
that is not less than six months after the date such notice is
given. From and after the effective date of a notice, all costs
associated and incurred after the effective date of such notice
with the SSO Facility (or portion thereof) and Continuing CRC
Management positions identified in the notice shall cease to be
Corporate Level Liabilities and will be allocated entirely to and
be the responsibility of the party continuing to use the
functions performed at the SSO Facility or portion thereof.
Costs associated with an SSO Facility (or portion thereof) or the
Continuing CRC Management employees performing work at that SSO
Facility which are not terminated by such notice but continue to
be incurred for the benefit of both parties will continue to be
Corporate Level Liabilities. Notwithstanding the foregoing,
Separation Costs associated with Continuing CRC Management
employees after the Control Date shall be allocated and paid as
provided in Article VI.
(c) In the case of an SSO Facility as to which both
CSXT and NYC, on the one hand, and NSR and PRR, on the other
hand, have discontinued use of the entire SSO Facility by each
giving six-month termination notices that have become effective,
CSX and NSC will cause CRC and its Affiliates to take such action
as may be appropriate to discontinue the use of or provide for
the disposition of such SSO Facility (which may include a
disposition to NYC or PRR), and costs associated with such SSO
Facility between the effective date of the second notice and such
discontinuance or disposition shall be Corporate Level
Liabilities and the cash proceeds, if any, of such discontinuance
or disposition shall, subject to Section 4.4, be for the benefit
of CRC.
(d) The full costs of maintaining and operating SSO
Facilities shall include all direct and indirect costs (excluding
return on investment and system overheads), compensation and
benefits, purchased services, insurance, facility costs and
computer processing costs. CSX and NSC shall establish
appropriate accounting systems and controls designed to capture
and track such costs.
(e) To facilitate the division of dispatching
functions currently performed for the five CRC operating
divisions, NSC and CSX agree that the territorial boundaries of
the operating divisions will be changed and dispatching functions
will be assigned and transferred as follows:
(i) Dearborn division: The Dearborn division office
building will be included in PRR Allocated Assets. All
dispatching functions at such facility will be assigned to
PRR and NSR except (A) those for dispatching the Cleveland
East, Cleveland terminal and other Dearborn division
segments included in the NYC Allocated Assets, which
functions will be assigned and transferred to NYC and CSXT,
and (B) those for dispatching of the Detroit Shared Assets
Area which functions will be assigned and transferred to CRC
and will be relocated to a neutral site.
(ii) Indianapolis division: The Indianapolis
division office building will be included in NYC Allocated
Assets. All dispatching functions at such facility will be
assigned to NYC and CSXT except those for dispatching the
▇▇▇▇▇▇ ▇▇▇▇▇▇, the Cincinnati line, the West Virginia
secondary and other Indianapolis division segments included
in the PRR Allocated Assets, which functions will be
assigned and transferred to PRR and NSR.
(iii) Pittsburgh division: The Pittsburgh division
office building will be included in PRR Allocated Assets.
All dispatching functions at such facility will be assigned
to PRR and NSR except those for dispatching Pittsburgh
division segments included in the NYC Allocated Assets,
which functions will be assigned and transferred to NYC and
CSXT.
(iv) Philadelphia division (Mt. Laurel, NJ): The
Philadelphia division office building will be included in
the Retained Assets. All dispatching functions at such
facility will be assigned to PRR and NSR except (A) those
for dispatching the Trenton line, the River line, the Popes
Creek secondary, the ▇▇▇▇▇▇▇ secondary, the Landover line
and other Philadelphia division segments included in the NYC
Allocated Assets, which functions will be assigned and
transferred to NYC and CSXT, and (B) those for dispatching
the North Jersey Shared Assets Area and the South
Jersey/Philadelphia Shared Assets Area and segments included
in the Re tained Assets, which functions will be assigned to
CRC.
(v) Albany division: The Albany division office
building will be included in the NYC Allocated Assets.
All dispatching functions will be assigned to NYC and CSXT
except those for dispatching the Southern tier, including
the Corning secondary, the New Jersey transit line, the
Buffalo line and other Albany division segments included in
the PRR Allocated Assets, which functions will be assigned
and transferred to PRR and NSR. The parties intend that the
dispatching desks, equipment and similar property associated
with a dispatching function will, to the extent practicable,
follow the assignment of that function to the party
designated pursuant to clauses (i) through (v) above, to
enable such party to perform dispatching necessary in
connection with the Assets allocated to or used by such
party. In addition, the parties recognize that interim
dispatching services may be required to be provided to each
other for the above Routes during a brief interim period
(which shall be no longer than reasonably necessary) and
that the parties may charge reasonable fees for such
services.
Section 2.4. Transition Period Accommodation. (a) To
the extent that (i) the CRR headquarters office building in
Philadelphia, PA or (ii) the CRR information technology center in
Philadelphia, PA (both of which are NYC Allocated Assets) were
used by CRR or CRC prior to the Closing Date for the benefit of
the CRR and CRC system as a whole, CSX will (or will cause CSXT
or NYC to) furnish and make available for the benefit of NSC or
its Affiliates access to and use of such NYC Allocated Assets
(including, without limitation, office and other space,
equipment, computer systems, and data and other information) as
are necessary or convenient in order to reasonably accommodate
the needs of NSC, NSR and PRR for the services and functions
performed at such facilities for a transition period not to
exceed (A) twenty-four months following the Closing Date in
respect of the CRR headquarters office building in Philadelphia,
PA and (B) six months following the Closing Date (extendable for
an additional six months at NSC's option) in respect of the CRR
information technology center in Philadelphia, PA. CSX may
accommodate such needs of NSC, NSR and PRR for such services and
functions using premises in Philadelphia, PA other than the
premises referred to in clauses (i) and (ii) of this Section
2.4(a); provided that NSC consents to such arrangement, such
consent not to be unreasonably delayed or withheld. CSX, CSXT or
NYC, as the case may be, shall furnish and make available to NSC,
NSR or PRR such NYC Allocated Assets at those facilities as may
be reasonably requested by NSC, NSR or PRR; provided that the
nature and scope of the use of such NYC Allocated Assets shall
not be greater than the nature and scope of the use of such NYC
Allocated Assets for the benefit of the CRR and CRC system prior
to the Closing Date. CSX may charge NSC, NSR or PRR, as the case
may be, charges calculated at fair market value by CSX and NSC
for such use of such NYC Allocated Assets.
(b) To the extent that (i) the CRC car shop at
Hollidaysburg, PA or (ii) the CRC locomotive shop at Altoona, PA
(both of which are PRR Allocated Assets) were used by CRR or CRC
prior to the Closing Date for the benefit of the CRR and CRC
system as a whole, NSC will (or will cause NSR or PRR to)
reasonably accommodate the needs of CSX, CSXT or NYC for the
services and functions performed at such facilities for a
transition period not to exceed twenty-four months following the
Closing Date. NSC may accommodate such needs of CSX, CSXT and
NYC for such services and functions using premises other than the
premises referred to in clauses (i) and (ii) of this Section
2.4(b); provided that CSX consents to such arrangement, such
consent not to be unreasonably delayed or withheld. NSC, NSR or
PRR, as the case may be, shall furnish and make available to CSX,
CSXT or NYC such services and functions at those facilities as
may be reasonably requested by CSX, CSXT or NYC; provided that
the nature and scope of such services and functions shall not be
greater than those which were provided in respect of the NYC
Allocated Assets by those facilities prior to the Closing Date.
NSC may charge CSX, CSXT or NYC, as the case may be, charges
calculated at fair market value by CSX and NSC for such services
and functions.
(c) In complying with Section 2.4(a) and Section
2.4(b), (i) the accommodating party will provide or make
available the Assets or the services, functions and systems of,
and data and information from, the specified facilities to the
extent it can reasonably do so and (ii) if the accommodating
party so requests, the party accommodated will use its reasonable
commercial efforts to discontinue its need for such Assets or
services, functions, information, systems and data at the
earliest time practicable following, but not later than
twenty-four months after, the Closing Date (or earlier time as
provided in Section 2.4(a) in respect of the information
technology center in Philadelphia, PA). Nothing herein shall
preclude a party from agreeing to make available the Assets or
services, functions and systems of and information and data from,
its facilities to the using party after such maximum periods
provided for in Sections 2.4(a) and 2.4(b), but it shall not be
required to do so.
(d) CSX will (or will cause CSXT or NYC to) make
available to CRR, CRC and their respective Affiliates the CRR
headquarters office building and the CRR information technology
center in Philadelphia, PA (both of which are NYC Allocated
Assets) for use by those employees identified in clause (b) of
the definition of "Continuing CRC Management" in Section 1.1.
Unless otherwise agreed to by CSX and NSC, CRR, CRC and their
respective Affiliates shall have the right to use those
facilities for such Continuing CRC Management employees to
perform such general, administrative and technical services and
functions for an interim period not to exceed (i) twenty-four
months following the Closing Date in respect of the CRR
headquarters office building in Philadelphia, PA and (B) six
months following the Closing Date (extendable for an additional
six months at NSC's option) in respect of the CRR information
technology center in Philadelphia, PA. CSX may move such
facilities to new premises or may move the Continuing CRC
Management using the facilities to new premises; provided that
NSC consents to such arrangement, such consent not to be
unreasonably withheld and; provided further that CSX and NSC
agree on the new fair market value of such facilities which will
be Corporate Level Liabilities pursuant to this Section 2.4(d).
Until a party terminates its use of the support functions and
services of any such Continuing CRC Management employee as
provided below, the costs of employing such employee and the fair
market value of related facilities shall be Corporate Level
Liabilities and such employee's services will be available for
the benefit of both CSXT and NYC, on the one hand, and NSR and
PRR, on the other hand, based on the operating and administrative
needs of each.
(e) Each of CSX and NSC and their respective
Affiliates shall have the right, upon six months' prior written
notice, to notify the other party that the notifying party no
longer needs the support functions and services provided by any
one or more of the Continuing CRC Management employees referred
to in Section 2.4(d). The notice shall state with specificity
the particular Continuing CRC Management position(s) covered by
the notice. If the party receiving such notice notifies the
other party within thirty days of receipt of such notice that it
no longer needs the support functions and services provided by
the same (or more) continuing CRC Management employees as are
included in the first notice, then the effective date of such
second notice shall be deemed to be the same as that of the first
notice. Notices may be given at any time before or after the
Closing Date and in each case shall specify an effective date on
or after the Closing Date, but not less than six months after the
date such notice is given. From and after the effective date of
such a notice, all costs associated with the Continuing CRC
Management positions identified in the notice shall cease to be
Corporate Level Liabilities but shall be allocated entirely to
and be the responsibility of the party continuing to use the
functions and services provided by such Continuing CRC Management
positions; provided that in the case of Continuing CRC Management
positions as to which both parties have given termination notices
that have become effective, all costs associated with such
Continuing CRC Management positions after the date the second
termination notice becomes effective shall be Corporate Level
Liabilities. Notwithstanding the foregoing, Separation Costs
associated with all Continuing CRC Management employees after the
Closing Date shall be allocated and paid as otherwise provided in
Article VI.
Section 2.5. Trackage, Haulage, Shared Asset and Other
Operating Agreements. On the Closing Date and upon the terms and
subject to the conditions set forth in this Agreement, each of
CRC, CSXT and NSR shall execute and deliver, and the parties
shall cause their respective Affiliates and NYC and PRR to
execute and deliver, the following agreements to which it is a
party:
(a) The Trackage Rights Agreements: A Trackage Rights
Agreement covering each of the Routes listed in Item 1 of
Schedule 4 and containing the terms and provisions applicable to
such Route as set forth in Item 1 of Schedule 4 will be executed
by the parties designated in such Item 1.
(b) The CSXT/NSR Haulage Agreements: A CSXT/NSR
Haulage Agreement covering each of the Routes listed in Item 2 of
Schedule 4 and containing the terms and provisions applicable to
such Route as set forth in Item 2 of Schedule 4 will be executed
by the parties designated in such Item 2.
(c) The Shared Assets Agreements.
(d) The Other Operating Agreements (in respect of
Other Operating Agreements for which the relevant Exhibit hereto
sets forth all or some of the terms of an agreement rather than
the form of agreement, the parties shall use their best efforts
to agree to the form of such Other Operating Agreements prior to
the Closing Date).
Section 2.6. Equipment. The parties intend that all
Equipment will be allocated between NYC and PRR (either as
Allocated Assets or as Retained Assets which are subject to the
NYC Equipment Agreement or the PRR Equipment Agreement) by series
and condition such that NYC and PRR each receives Equipment by
value in proportion to CSX's and NSC's respective Percentage.
Disputes concerning such allocation shall be subject to binding
arbitration under Section 11.12. After the Equipment has been
allocated, the parties may agree in their sole discretion to
changes in the allocation giving consideration to other factors.
In furtherance of the foregoing sentence, the parties will
appoint representatives to various teams to consider appropriate
adjustments to allocations of Equipment as described below:
(a) Locomotive Equipment. Promptly after the date
hereof, CSXT and NSR shall each appoint up to three members of a
committee (the "Locomotive Team"). The Locomotive Team shall
meet not later than January 1, 1998, to consider an adjustment to
the allocation of locomotive Equipment (including appurtenances
and assigned or related equipment such as locomotive radios) to
NYC and PRR, taking into consideration the following guidelines:
(i) The Locomotive Team shall agree upon parameters to
be considered in any adjustment to the allocation of
locomotive Equipment to NYC and PRR, including CRC's book
value, actual numbers of locomotives, horsepower, tractive
effort, powered axles, ownership and encumbrances, age and
condition.
(ii) The CSXT appointees and the NSR appointees on the
Locomotive Team shall separately develop and present to
each other proposals for any adjustments to the allocation
of locomotive Equipment to NYC and PRR.
(iii) In its negotiations, the Locomotive Team may
consider CRC yard service, minimizing maintenance costs,
enhancing reliability, and meeting service needs. The
Locomotive Team may consider trades of CSXT and NSR
locomotives to avoid the division of small groups of
locomotive Equipment and to minimize the number of different
models each would have as a result of the allocation.
(iv) If agreement is not reached prior to March 31,
1998, the Locomotive Team will submit a list of disputed
issues for resolution to the chief operating officers of
CSXT and NSR.
(b) Rolling Stock Equipment. Promptly after the date
hereof, CSXT and NSR each shall appoint up to four members of a
committee (the "Rolling Stock Team"). The Rolling Stock Team
shall meet not later than January 1, 1998 to consider an
adjustment to the allocation of rolling stock Equipment
(including cabooses and non-revenue rolling stock but excluding
Work Equipment) to NYC and PRR, taking into consideration the
following guidelines:
(i) Consideration may be given to class and builder's
lot, series within a given AAR car type and AAR Depreciated
Value. Consideration may be given to splitting between NYC
and PRR so as to minimize ongoing maintenance and repair
cost, facilitate the assignment of car reporting marks,
permit customary and efficient handling, movement and
interchange of rolling stock in compliance with the AAR Car
Service Rules and other applicable industry requirements.
(ii) All rolling stock Equipment that CSXT and NSR
agree is either (A) obsolete or (B) damaged beyond
economical repair necessary to return the same to service,
may be grouped in a separate category and allocated between
NYC and PRR in accordance with CSX's and NSC's respective
Percentage (based on AAR Depreciated Value).
(iii) Consideration will be given to traffic and
service requirements on the Routes comprising the Allocated
Assets based on the most current traffic information
(including current and anticipated traffic density, customer
needs and transportation requirements).
(iv) Head-of-train-devices and end-of-train-devices
may be allocated between NYC and PRR based on current
transportation needs and train starts in respect of the NYC
Allocated Assets and PRR Allocated Assets, as the case may
be.
(v) If agreement is not reached prior to March 31,
1998, the Rolling Stock Team will submit a list of disputed
issues to the chief operating officers of CSXT and NSR.
(c) Work Equipment. Promptly after the date hereof,
NSR and CSXT each shall appoint up to three members of a
committee (the "Work Equipment Team"). The Work Equipment Team
shall, not later than January 1, 1998, meet to consider an
adjustment to the allocation of all Work Equipment that is part
of the Unallocated Assets. The Work Equipment Team may allocate
such Work Equipment to NYC and PRR by value in proportion to
CSX's and NSC's respective Percentage based on category of
equipment, then model, then age and then condition. If agreement
is not reached prior to March 31, 1998, the Work Equipment Team
will submit a list of disputed issues to the chief operating
officers of CSXT and NSR.
(d) Assignment. CSXT and NSR recognize that it may be
desirable to cause CRC to assign and transfer ownership of
certain of the allocated Equipment to NYC and PRR as part of the
NYC Allocated Assets or the PRR Allocated Assets, respectively,
to the extent such transfer is consistent with existing leases
and financing agreements relating to such Equipment. If CSXT and
NSR agree, Indebtedness related to Equipment may also be assigned
to and assumed by NYC and PRR as part of the NYC Allocated
Liabilities and the PRR Allocated Liabilities, respectively.
(e) Lease of Equipment. Equipment that is allocated
to NYC and PRR as provided in this Section 2.6 will be made
available to NYC and PRR as follows: (i) Equipment that is
included in the Retained Assets shall be leased by CRC or its
Affiliates to NYC or PRR, as the case may be, pursuant to the NYC
Equipment Agreement or the PRR Equipment Agreement and will
thereupon be leased or otherwise made available by NYC to CSXT
and by PRR to NSR pursuant to the CSXT Equipment Agreement or the
NSR Equipment Agreement, respectively; and (ii) Equipment that
CSXT and NSR agree shall be assigned and transferred by CRC or
its Affiliates to NYC or PRR, as the case may be, will be
included in the NYC Allocated Assets or the PRR Allocated Assets,
respectively, and will be leased or otherwise made available by
NYC to CSXT and PRR to NSR pursuant to the CSXT Equipment
Agreement or the NSR Equipment Agreement, respectively.
Liabilities arising from the ownership, operation and maintenance
of Equipment shall be borne by the parties as provided for in the
relevant Equipment Agreements. If the foregoing arrangements are
impracticable in respect of any Equipment due to the requirements
of any Contracts relating to such Equipment, the parties will
negotiate other arrangements to achieve substantially the same
effect.
(f) Equitable Adjustment. The parties recognize that
the allocation of Equipment in general and the allocation of
Equipment that is collateral with respect to Indebtedness may not
reflect precisely CSX's and NSC's respective Percentage and that
an equitable adjustment may be required with respect to Corporate
Level Liabilities or otherwise to assure that each of NYC and PRR
receives the benefits and bears the costs of Equipment as nearly
as practicable in proportion to CSX's and NSC's respective
Percentage. The Locomotive Team, the Rolling Stock Team and the
Work Equipment Team, assisted as necessary by CSX and NSC
accounting personnel, shall specify an appropriate adjustment
mechanism which may include, but need not include or be limited
to, trades between CSXT and NSR of locomotive Equipment, rolling
stock Equipment and/or Work Equipment.
Section 2.7. Inventory at Altoona and Hollidaysburg.
(a) As soon as practicable before the Closing Date, the
Inventory Team shall determine the Base Inventory. "Base
Inventory" (i) will consist of and mean all rolling-stock-related
and locomotive-related inventory and supplies (including
rolling-stock-related and locomotive-related system stockpiles)
of CRR, CRC or their respective Affiliates located at the Altoona
and Hollidaysburg shops as of a date at least thirty days prior
to the anticipated Closing Date to be agreed by the Inventory
Team, and (ii) will exclude (A) all obsolete or damaged material
and supplies and (B) all inventory acquired for the purpose of
fulfilling third-party Contracts which inventory will follow and
be applied to fulfillment of such Contracts. The Inventory Team
will code and group the items of inventory, materials and
supplies included in the Base Inventory as "new,"
"reconditioned," "re-usable," and the like, and will value the
groups based on CRC's material costs or other mutually agreeable
methodology (excluding additives and overheads). The sum of the
values of the groups will be the value of the Base Inventory.
(b) Rolling-stock-related and locomotive-related
inventory and supplies (including rolling-stock-related and
locomotive-related system stockpiles) of CRR, CRC and their
respective Affiliates located at the Altoona and Hollidaysburg
shops as of the Closing Date will be included in the PRR
Allocated Assets. To the extent that, after the Closing Date,
any work is performed at the request and for the account of CSXT
or NYC at the Altoona shop or the Hollidaysburg shop pursuant to
Section 2.4(b), CSXT and NYC will not be charged for inventory
and supplies used in such work up to an amount of inventory and
supplies equal to 42% of the total value of the Base Inventory,
but only to the extent that such work requires material and
supplies of the types included in the Base Inventory.
Notwithstanding the foregoing, NSR or PRR will separately charge
CSXT or NYC for the fair market value of work performed for the
account of CSXT or NYC.
Section 2.8. Allocated and Retained Liabilities. The
parties agree that on and as of the Closing Date (x) NYC shall
assume and agree to pay, perform and discharge as and when due
all of the NYC Allocated Liabilities, (y) PRR shall assume and
agree to pay, perform and discharge as and when due all of the
PRR Allocated Liabilities, and (z) CRC and its Affiliates shall
retain and pay, perform and discharge as and when due all of the
Retained Liabilities. In furtherance of the foregoing, the
parties agree that, in addition to Employee Related Liabilities
that are designated as Allocated Liabilities or Retained
Liabilities under Article VI, the Allocated Liabilities and the
Retained Liabilities shall consist of the following:
(a) All Liabilities of CRR, CRC or their Affiliates,
other than Environmental Liabilities (which are expressly
allocated pursuant to Section 2.8(b)), Corporate Level
Liabilities (which are expressly allocated pursuant to Section
2.8(f)), Employee Related Liabilities (which are expressly
allocated pursuant to Article VI), Liabilities referred to in
Section 2.9 or Liabilities expressly allocated to any Person
pursuant to any of the Ancillary Agreements, including
Liabilities associated with the handling and disposition of
Actions, that (i) arise on or after the Closing Date and relate
predominantly to NYC Allocated Assets shall be NYC Allocated
Liabilities, and (ii) arise on or after the Closing Date and that
relate predominantly to PRR Allocated Assets shall be PRR
Allocated Liabilities.
(b) Environmental Liabilities (other than
Environmental Liabilities expressly allocated to any Person
pursuant to any of the Ancillary Agreements) shall be designated
as follows: (i) Environmental Liabilities that relate
predominantly to NYC Allocated Assets shall be NYC Allocated
Liabilities; (ii) Environmental Liabilities that relate
predominantly to PRR Allocated Assets shall be PRR Allocated
Liabilities; and (iii) Environmental Liabilities that do not
relate predominantly to Allocated Assets shall be Corporate Level
Liabilities; provided that, in the case of Environmental
Liabilities allocated to either NYC or PRR pursuant to clause (i)
or (ii) above, NYC or PRR, as the case may be, will be reimbursed
by CRC as amounts are expended by NYC or PRR, as the case may be,
in respect of an Environmental Liability to the extent of the
amount of the reserve existing in respect of such Environmental
Liability as of April 8, 1997, reduced by any payments made and
charged against such reserve prior to the Closing Date, except
that NYC or PRR, as the case may be, will repay the amounts under
this Section 2.8(b) to CRC to the extent that they receive the
proceeds of any insurance recoveries in respect of an Allocated
Liability which exceed such Allocated Liability net of such
payments made.
(c) All Liabilities (other than Liabilities expressly
allocated to any Person pursuant to any of the Ancillary
Agreements) associated with the handling and disposition of FELA
Claims made on or after the Control Date shall be NYC Allocated
Liabilities, PRR Allocated Liabilities or Corporate Level
Liabilities based upon the final allocation under this Article II
of the Asset where the incident or incidents giving rise to the
FELA Claim occurred, or, if the FELA Claim arises from an
incident or incidents occurring at more than one location, based
upon the final allocation under this Article II of the Asset most
significantly involved.
(d) Except as provided in Section 2.8(a), Section
2.8(b) or Section 2.8(c), all Liabilities associated with the
handling and disposition of Actions arising from incidents which
occur in part prior to the Closing Date and in part on or after
the Closing Date shall be allocated as follows:
(i) that portion of the Liability which is fairly
attributable to incidents occurring prior to the Closing
Date shall be Corporate Level Liabilities; and
(ii) that portion of the Liability which is fairly
attributable to incidents occurring on or after to the
Closing Date shall be NYC Allocated Liabilities, PRR
Allocated Liabilities or Corporate Level Liabilities based
upon the final allocation under this Article II of the Asset
where the incident or incidents giving rise to the Action
occurred, or, if the Action arises from an incident or
incidents occurring at multiple locations, based upon the
final allocation under this Article II of the Asset most
significantly involved.
(e) Except as provided in Section 2.9(b) or Section
2.9(c), all Liabilities incurred after April 8, 1997 relating to
the Merger Agreement, including without limitation Liabilities
for CRR Shares, if any, that are put pursuant to the Pennsylvania
Control Transaction Law, shall be Retained Liabilities.
(f) Except as provided in Sections 2.8(b) through (e),
all Liabilities that arise prior to the Closing Date and all
Corporate Level Liabilities shall be Retained Liabilities.
Section 2.9. Other Liabilities. (a) Each of CSX and
NSC shall bear its own Transaction Expenses.
(b) CSX shall bear and pay all of CSX's, CRR's, the
Surviving Corporation's and their respective Affiliates'
Liabilities to current or former CRR shareholders with respect to
the handling (which CSX shall control) and disposition (which CSX
shall control) of claims pending on April 8, 1997 in shareholder
Actions pending on April 8, 1997 (other than Actions brought by
NSC or its Affiliates) together with all related litigation costs
(which shall not include CRR legal fees incurred prior to April
8, 1997).
(c) CSX's, Green's, CRR's and the Surviving
Corporation's, on the one hand, and NSC's and AAC's on the other
hand, Liability with respect to the handling (which shall be
controlled by the liability bearing party) and disposition (which
shall be controlled by the liability bearing party) of
disclosure-based claims based on disclosures made prior to April
8, 1997 brought by current or former CRR shareholders in
connection with the Merger Agreement, the Amended Second Offer
(as defined in the April 8 Agreement) or the transactions
contemplated thereby based on the accuracy or completeness of
information supplied by such party, together with all related
litigation costs (which shall not include CRR legal fees incurred
prior to April 8, 1997), shall be borne solely by CSX or NSC,
respectively.
Section 2.10. Interline Accounts and Allocation.
(a) The parties acknowledge that interline railroads often
allocate certain assets and liabilities arising from interline
activities between and among themselves on the basis of AAR or
industry agreements and rules, including, without limitation, AAR
rules for the allocation of freight revenues and freight loss and
damage claims. If any Asset or Liability which is allocated
under this Agreement to NYC or PRR would, in the usual course of
business under applicable AAR or industry agreement, rule or
practice, be allocated between or among participating interline
railroads, then the subsequent allocation of that Asset or
Liability between or among NYC, PRR and/or any railroad
subsidiary of either CSX or NSC under that agreement, rule or
practice shall not in any manner be affected by this Agreement
and the parties shall accept and be governed by that subsequent
reallocation under the applicable AAR or industry agreement, rule
or practice, notwithstanding any provision of this Agreement
which may be construed or interpreted to the contrary, including,
without limitation, the provisions of Section 2.2 and Section
2.8. The parties shall also accept and be governed by any
provision of any AAR or industry agreement, rule or practice
applicable to processes and procedures for dealing with the
circumstances underlying any such subsequent reallocation
(including without limitation the investigation and processing of
third party claims), notwithstanding any provision of this
Agreement which may be construed or interpreted to the contrary,
including, without limitation, the provisions of Section 8.14 and
Section 10.2.
(b) If any dispute, controversy or claim arises with
regard to the subsequent reallocation of any portion of any asset
or liability allocated under Section 2.10(a), and the pertinent
AAR or industry agreement, rule or practice provides for
arbitration, then the arbitration provisions of that agreement,
rule or practice shall, as to that subsequent reallocation,
supersede any provisions of this Agreement which may be construed
or interpreted to the contrary, including, without limitation,
the arbitration provisions of Section 11.12.
Section 2.11. Insurance Proceeds. Except as otherwise
provided in this Agreement, the proceeds of any insurance
recoveries from insurance carried by CRR, CRC or their respective
Affiliates on or prior to the Closing Date covering Assets,
Retained Liabilities or Allocated Liabilities, which are received
on or after the Closing Date, shall accrue to the benefit of and
be held by or paid over to CRC, NYC or PRR in proportion to the
obligation each bears under this Agreement for the particular
Liabilities to which the insurance recoveries are applicable.
ARTICLE III
CLOSING AND CLOSING DATE
Section 3.1. Closing. Subject to the terms and
conditions of this Agreement, the closing of the transactions
contemplated in Article II and Article VI (the "Closing") shall
take place at a place to be mutually agreed by CSX and NSC on the
third business day following the date on which all of the
conditions set forth in Article IX shall have been satisfied or
waived, or at such other time, date and place as the parties
shall agree upon (the "Closing Date").
Section 3.2. Pre-Closing Actions. Prior to the
Closing, CRR shall cause CRC to establish NYC and PRR as wholly
owned Subsidiaries of CRC and shall cause CRC and NYC to enter
into the NYC LLC Agreement and shall cause CRC and PRR to enter
into the PRR LLC Agreement.
Section 3.3. Closing Deliveries. At the Closing:
(a) CSX and CSXT shall deliver or cause to be
delivered to NSC the following documents:
(i) an executed counterpart of the CSXT Equipment
Agreement;
(ii) an executed counterpart of the CSXT Operating
Agreement;
(iii) an executed counterpart of each of the Trackage
Rights Agreements to which CSXT or its Affiliates is to be a
party;
(iv) an executed counterpart of each of the CSXT/NSR
Haulage Agreements to which CSXT or its Affiliates is to be
a party;
(v) an executed counterpart of each of the Shared
Assets Agreements and Other Operating Agreements to which
CSXT or its Affiliates is to be a party; and
(vi) such other and further certificates, assurances
and documents otherwise necessary for the consummation of
the transactions contemplated by this Agreement and the
Ancillary Agreements.
(b) NSC and NSR shall deliver or cause to be delivered
to CSX the following documents:
(i) an executed counterpart of the NSR Equipment
Agreement;
(ii) an executed counterpart of the NSR Operating
Agreement;
(iii) an executed counterpart of each of the Trackage
Rights Agreements to which NSR or its Affiliates is to be a
party;
(iv) an executed counterpart of each of the CSXT/NSR
Haulage Agreements to which NSR or its Affiliates is to be a
party;
(v) an executed counterpart of each of the Shared
Assets Agreements and Other Operating Agreements to which
NSR or its Affiliates is to be a party; and
(vi) such other and further certificates, assurances
and documents otherwise necessary for the consummation of
the transactions contemplated by this Agreement and the
Ancillary Agreements.
(c) CRR Parent, CRR and CRC (for itself and, if
applicable, as CRR's successor entity) shall deliver or cause to
be delivered to each of CSX and NSC:
(i) the NYC Equipment Agreement executed by CRC and
NYC;
(ii) a counterpart of the CSXT Equipment Agreement
executed by NYC;
(iii) the PRR Equipment Agreement executed by CRC and
PRR;
(iv) a counterpart of the NSR Equipment Agreement
executed by PRR;
(v) a counterpart of the CSXT Operating Agreement
executed by NYC;
(vi) a counterpart of the NSR Operating Agreement
executed by PRR;
(vii) an executed counterpart of each of the Trackage
Rights Agreements, the CSXT/NSC Haulage Agreements, the
Shared Assets Agreements and the Other Operating Agreements
to which CRC or its Affiliates is a party;
(viii) the Tax Allocation Agreement executed by Green,
CRR, CRC, CRR Industries, PRR and NYC;
(ix) the NYC LLC Agreement executed by CRC;
(x) the PRR LLC Agreement executed by CRC;
(xi) a Capital Contribution, Assignment and Assumption
Agreement executed by CRC and NYC to effectuate the
transfer of the NYC Allocated Assets and the NYC Allocated
Liabilities to NYC;
(xii) a Capital Contribution, Assignment and
Assumption Agreement executed by CRC and PRR to effectuate
the transfer of the PRR Allocated Assets and the PRR
Allocated Liabilities to PRR; and
(xiii) such other and further certificates, assurances
and documents otherwise necessary for the consummation of
the transactions contemplated by this Agreement and the
Ancillary Agreements.
ARTICLE IV
CRR PARENT, CRR AND CRC GOVERNANCE AND FUNDING
Section 4.1. Pre-Control Date Matters. (a) Unless
expressly permitted in another agreement between CSX and NSC,
neither CSX nor NSC will, without the prior agreement of the
other, agree to any modifications of the terms and conditions of,
or give any consent or waiver under, the Merger Agreement,
including without limitation under Section 4.1 of the Merger
Agreement. Without limiting the foregoing, neither CSX nor NSC
will, without the other's prior consent, agree to any
determinations with respect to, direct CRR to take any action
with respect to, or object to or prohibit any action with respect
to CRR's employee stock ownership plan, pension plan, stock
employee compensation trust or any other CRR benefit plan,
program, arrangement or other contract, or any trust or other
funding arrangement that is intended to be used in whole or in
part to provide or fund benefits under any CRR or CRC benefit
plans, programs, arrangements or contracts. In addition, CSX
will consult and agree with NSC prior to providing any notices to
CRR under the Merger Agreement and shall promptly provide NSC
with copies of all written notices provided by CSX to CRR or
received by CSX from CRR under the Merger Agreement.
(b) Prior to the Control Date CRR shall be governed in
accordance with the terms of the Amended and Restated Voting
Trust Agreement.
Section 4.2. Post-Control Date CRC Governance. CRR
Parent shall vote all of the shares in the capital stock of CRC
and all of the parties shall take all other necessary or
desirable action within their respective control to effectuate
the following:
(a) Following the Control Date, the business and
affairs of CRC shall be managed under the direction of the CRC
Board consisting of six persons divided into two classes of three
directors. Three directors shall be designated by CSX (the "CSX
Directors") and three directors shall be designated by NSC (the
"NSC Directors").
(b) Approval of the CRC Board shall be required for
all Major Decisions of CRC. The power of the CRC Board to
approve such actions and decisions shall be exclusive to the CRC
Board, and no officer may take any such action or make any such
decision without the approval of the CRC Board. Any action or
decision of the CRC Board, whether at a meeting of the CRC Board
or by written consent, may only be taken if approved by a
majority of CSX Directors and a majority of NSC Directors.
(c) The CSX Directors may appoint by majority vote one
Co-Chairman (the "CSX Co-Chairman") and the NSC Directors may
appoint by majority vote one Co-Chairman (the "NSC Co-Chairman").
The Co-Chairmen shall preside at all meetings of the CRC Board
and shall have and perform such other duties as may be assigned
to them by the CRC Board.
(d) If the office of any CSX Director becomes vacant,
the remaining CSX Directors by a majority vote may appoint any
qualified individual to fill such vacancy, and such individual
shall hold office for the unexpired term and until his or her
successor shall be duly chosen. If the office of any CSX
Director becomes vacant and there are no remaining CSX Directors,
CSX may appoint any qualified individuals to fill the CSX
Directors vacancies by a writing to such effect. If the office
of any NSC Director becomes vacant, the remaining NSC Directors
by a majority vote may appoint any qualified individual to fill
such vacancy, and such individual shall hold office for the
unexpired term and until his or her successor shall be duly
chosen. If the office of any NSC Director becomes vacant and
there are no remaining NSC Directors, NSC may appoint any
qualified individuals to fill the NSC Directors vacancies by a
writing to such effect.
(e) Any CSX Director may be removed either for or
without cause at any time, but only by CSX in a writing to such
effect. Any NSC Director may be removed either for or without
cause at any time, but only by NSC in a writing to such effect.
(f) In addition to the two Co-Chairmen of the CRC
Board, the officers of CRC may include a chief executive officer,
one or more vice presidents, a treasurer and a secretary, all of
whom shall be elected by and shall serve at the direction of the
CRC Board.
(g) The parties agree to take all necessary action
such that each of CSX and NSC shall have rights identical to
those set forth in paragraphs (a) through (f) above with respect
to the Boards of Directors and management of CRR and each of its
Affiliates in addition to CRC other than NYC and PRR.
Section 4.3. Post-Closing Date CRC Funding. (a) From
and after the Closing Date, CSX and NSC shall ensure that CRR,
CRC and their Affiliates have sufficient cash to satisfy the
Retained Liabilities as they become due and any operating and
other expenses incurred by CRR, CRC and their Affiliates in the
conduct of their business consistent with this Agreement and the
Ancillary Agreements after giving effect to any Distributions
received or to be received from NYC and PRR. In furtherance of
the foregoing sentence, following receipt by CRR Parent of
written notice from CRC of a CRC Board decision that CRC requires
such cash, CRR Parent shall provide such cash to CRC by capital
contribution, loan or advance to be made on the next business day
following the expiration of 30 days after receipt of such notice,
unless a later date is determined by the CRC Board or another
date is agreed in writing by CRC and CRR Parent.
(b) It is the intent of the parties that the economic
burden of the Corporate Level Liabilities will be borne, directly
or indirectly, by CSX or NSC in accordance with their respective
Percentage.
Section 4.4. Post-Control Date CRC and Other
Distributions. Following the Control Date, subject to any legal
and contractual restrictions, the CRC Board shall cause CRC to
make a Distribution to CRR Parent as soon as is practical and in
any event within 45 days after each fiscal quarter of all cash
received by CRC from operations and any dividends, interest or
other cash Distributions from any Person in which CRC has an
interest which is in excess of 120% of the amount of cash
reasonably contemplated by the CRC Board as being necessary for
the cash payment of CRC's operating expenses (net of receipts),
debt service, contingencies, budgeted capital expenditures and
working capital requirements (all of which shall take into
account cash on hand and future expected cash surpluses and cash
requirements). Notwithstanding the foregoing, no Distribution
shall be made which would render CRC insolvent or which is
prohibited by the terms of any Indebtedness of CRC or its
Affiliates.
Section 4.5. Operating Fees, Interest Rentals and Base
Rent. The parties anticipate that as of the Closing Date, the
sum of the following amounts will total seven hundred and fifty
million dollars: (i) Interest Rentals payable under the Shared
Assets Agreements, (ii) Operating Fees payable under the CSXT
Operating Agreement and the NSR Operating Agreement and (iii)
Base Rent payable under the CSXT Equipment Agreement and the NSR
Equipment Agreement. The parties acknowledge that as of a
Valuation Date, (i) the Interest Rentals, Operating Fees and Base
Rent shall be determined as set forth in the CSXT Operating
Agreement, the NSR Operating Agreement, the CSXT Equipment
Agreement, the NSR Equipment Agreement and the Shared Assets
Agreements and (ii) the allocation between CSXT and NSR of the
Operating Fees and Base Rent payable under the CSXT Operating
Agreement, the NSR Operating Agreement, the CSXT Equipment
Agreement and the NSR Equipment Agreement shall reflect the then
relative Fair Market Rental Values of the NYC Allocated Assets,
the PRR Allocated Assets, the CSXT Equipment and the NSR
Equipment as of the most recent Valuation Date (which allocation,
in the case of a Valuation Date that is also the Closing Date,
shall be a 58% allocation to NSR and a 42% allocation to CSXT).
ARTICLE V
NYC and PRR GOVERNANCE AND CONDUCT
Section 5.1. NYC Governance. From and after the
Control Date, CSX shall have exclusive authority to direct the
appointment of the officers and directors of NYC who shall in
their discretion, but subject to the provisions of this
Agreement, direct the operation of NYC. Without limiting the
foregoing but subject to Section 5.3, CRC, in its capacity as the
sole member of NYC, shall follow CSX's directions with respect to
the management and operation of NYC to the extent that such
directions are not inconsistent with the terms of this Agreement,
the NYC LLC Agreement or any applicable laws and do not involve
the transfer, sale, conveyance, distribution, pledge,
hypothecation, encumbrance or assignment of such membership
interest (other than in connection with a Restructuring).
Section 5.2. PRR Governance. From and after the
Control Date, NSC shall have exclusive authority to direct the
appointment of the officers and directors of PRR, who shall in
their discretion, but subject to the provisions of this
Agreement, direct the operation of PRR. Without limiting the
foregoing but subject to Section 5.3, CRC, in its capacity as the
sole member of PRR, shall follow NSC's directions with respect to
the management and operation of PRR to the extent that such
directions are not inconsistent with the terms of this Agreement,
the PRR LLC Agreement or any applicable laws and do not involve
the transfer, sale, conveyance, distribution, pledge,
hypothecation, encumbrance or assignment of such membership
interest (other than in connection with a Restructuring).
Section 5.3. NYC and PRR Actions. Notwithstanding
anything to the contrary contained in Section 5.1 or Section 5.2,
unless it receives the prior written consent of CSX and NSC to
the contrary, CRC, as the sole member of each of NYC and PRR,
shall cause NYC and PRR respectively to enforce, to the fullest
extent permitted by law or Contract, their rights under the
Ancillary Agreements, including any right to receive payments or
any indemnities thereunder.
Section 5.4. NYC and PRR Distributions. The parties
agree that, from and after the Control Date, other than
Distributions made by NYC and PRR contemporaneously and in
proportion to the respective Percentage of CSX and NSC, NYC and
PRR shall not be required, without the consent of CSX or NSC,
respectively, to make any Distributions to CRC or its Affiliates.
Section 5.5. Actions. CRC shall exercise its
ownership interest in NYC and PRR, respectively, and all of the
parties shall take all other necessary or desirable action within
their respective control, in order to effectuate the provisions
of this Article V.
ARTICLE VI
EMPLOYEE MATTERS
Section 6.1. Employees of CRR and CRC. (a) On the
Closing Date, or as soon thereafter as any applicable labor
agreements, statutes, regulations and STB conditions, and
implementing agreements thereunder, may permit or require, each
of CSX, NSC, NYC or PRR or their respective Affiliates shall make
employment available to CRR and CRC agreement employees pursuant
to the requirements and procedures under the said applicable
labor agreements, statutes, regulations, conditions and
implementing agreements.
(b) Prior to the Closing Date, each of CSX and NSC and
their respective Affiliates shall comply with the Staffing
Process Guidelines dated June 1, 1997 as adopted by CSX and NSC.
(c) Not later than thirty days prior to the Closing
Date, CSX and NSC jointly shall determine the location, functions
to be performed by, resources and positions required by, and
methodology for cost determination for Continuing CRC Management.
Each function shall be defined in terms of a description of the
function, the number of positions required to perform the
function and general descriptions of the nature of each function,
including whether it is intended to be performed on an interim or
on-going basis. CSX and NSC jointly may enter into one or more
agency agreements by which CSX or NSC or their respective
Affiliates may perform any Continuing CRC Management functions.
(d) To the extent implementing agreements are required by
STB-imposed conditions in order to effect the transactions
contemplated by Article II and Article VI, each party agrees to
use its commercially reasonable efforts to obtain implementing
agreements reasonably determined by the parties to be necessary
to effect such transactions. Where necessary to effect the
transactions contemplated by Article II and Article VI, the
parties will jointly negotiate (and if no agreement is reached
will jointly arbitrate to reach an agreement) an implementing
agreement to which they will be parties with the employee
representative(s) of the appropriate craft or class of employees
of each carrier. Notwithstanding the foregoing, no party shall
be required by this Section 6.1(d) to agree to implementing
agreements which it, in its reasonable judgment, determines to be
contrary to its business interests.
Section 6.2. Employee Related Liabilities. Employee
Related Liabilities shall be designated as follows:
(a) Separation Costs subsequent to the Control Date
associated with agreement employees at CRC's or its Affiliates'
shops in Altoona and Hollidaysburg shall be the responsibility of
NSR. Separation Costs subsequent to the Control Date associated
with agreement employees at CRC's or its Affiliates' headquarters
in Philadelphia, technology center in Philadelphia, and customer
service center in Pittsburgh (notwithstanding its joint use as a
SSO Facility) will be the responsibility of CSXT.
(b) The on-going employee expenses related to
Continuing CRC Management after the Control Date shall be
Corporate Level Liabilities; provided that (i) each of CSX and
NSC shall have the right pursuant to Section 2.3 to discontinue
use of a Continuing CRC Management function or a position related
to a SSO Facility and (ii) each of CSX and NSC shall have the
right pursuant to Section 2.4 to discontinue use of a function
performed by, or a position occupied by, an employee identified
pursuant to clause (b) of the definition of Continuing CRC
Management. Notwithstanding the foregoing, Separation Costs
associated with Continuing CRC Management employees after the
Closing Date shall be allocated as otherwise provided in this
Agreement.
(c) In each instance subsequent to the Control Date
and subject to the provisions of Section 6.2(a) above, (i)
Separation Costs associated with CRC agreement employees working
jobs at or in respect of NYC Allocated Assets will be the sole
responsibility of CSXT, (ii) Separation Costs associated with CRC
agreement employees working jobs at or in respect of PRR
Allocated Assets will be the sole responsibility of NSR, (iii)
for each CRC agreement employee working a job at or in respect of
Retained Assets, Separation Costs will be a Corporate Level
Liability, and (iv) Separation Costs associated with CRC or CRR
agreement employees working jobs at or in respect of two or more
such properties (i.e., NYC Allocated Assets, PRR Allocated Assets
and Retained Assets) will be treated as the responsibility of
CSXT, NSR, or as a Corporate Level Liability, depending upon the
Asset at or in respect of which the employee predominantly works.
(d) Subject to Sections 6.2(a) and (e), if an employee
of CRR, CRC or their respective Affiliates on the Control Date
who is subject to any protective conditions imposed by the STB
pursuant to the transactions contemplated by this Agreement or
the Ancillary Agreements cannot obtain employment with CRC, PRR,
NYC, CSX, NSC or their respective Affiliates after the Control
Date, then the Separation Costs in respect of such employee shall
be included among Corporate Level Liabilities, NYC Allocated
Liabilities or PRR Allocated Liabilities on the basis of whether
the employee performed the preponderance of his or her service in
the six months preceding the first day of the month in which the
Control Date occurred at or in respect of a Retained Asset, an
NYC Allocated Asset or a PRR Allocated Asset. The Separation
Costs of employees as to whom no reasonable determination can be
made shall be Corporate Level Liabilities, but shall be assigned
on an alternating basis to NYC and PRR for the purpose of
administering the claims.
(e) If an employee of CRC, CSX, NSC, PRR, NYC or their
respective Affiliates who is subject to any protective conditions
imposed by the STB pursuant to the transactions contemplated by
this Agreement or the Ancillary Agreements moves his or her
employment from one of such parties to another of such parties on
or after the Control Date (including any employee in respect of
whom the Separation Costs have already been allocated to one of
CRC, PRR, NYC, CSX, NSC or their respective Affiliates),
responsibility for such employee's Separation Costs arising
thereafter shall be assumed by the new employer; provided that
any relocation costs shall be the responsibility of the first
employer.
(f) Separation Costs associated with employees who
were employed by CSX or NSC or their Affiliates on the day
preceding the Control Date will be the sole responsibility of
such employer.
(g) Separation Costs associated with employees who
are, as of the Control Date, non-agreement employees of CRR or
CRC (including payments to be made by CSX, CRR or the Surviving
Corporation under the Merger Agreement) shall be Corporate Level
Liabilities. Compensation and other expenses after the Control
Date associated with those non-agreement CRC employees who are
not designated as Continuing CRC Management and who are not
employed by either CSX or NSC, or their respective Affiliates,
shall be Corporate Level Liabilities until such time as such
employees are no longer employed by CRC.
(h) Compensation and other expenses (excluding
Separation Costs) for agreement employees (other than Continuing
CRC Management) working jobs at or in respect of NYC Allocated
Assets shall be the sole responsibility of CSXT. Compensation
and other expenses (excluding Separation Costs) for agreement
employees (other than Continuing CRC Management) working jobs at
or in respect of PRR Allocated Assets shall be the sole
responsibility of NSR.
(i) Notwithstanding anything in this Section 6.2 to
the contrary, Separation Costs (other than payments made pursuant
to the CRR Stay Bonus Program) under CRR or CRC plans and
agreements (including the Third Amendment) for a CRC
non-agreement employee who becomes employed after the Control
Date by CSX or its Affiliates or NSC or its Affiliates, which
Separation Costs arise subsequent to the date of such employment,
will be borne by the employing party.
Section 6.3. Non-Agreement Employee Benefit Plans.
(a) The employee benefit plans, programs and policies which
currently are provided to the non-agreement employees of CRR, CRC
or their respective Affiliates will continue to be provided to
the non-agreement employees of CRC and its Affiliates and to
non-agreement Continuing CRC Management on and after the Control
Date, unless it is determined jointly by CSX and NSC that such
benefits shall be changed; provided that CSX and NSC shall not
make any changes in such plans, programs or policies that
contravene Attachment A to the CRR Disclosure Schedule delivered
in connection with the Third Amendment. The costs associated
with such plans, programs and policies shall be Corporate Level
Liabilities, except that Separation Costs shall be allocated and
paid as otherwise provided herein. CSX and NSC jointly may enter
into one or more agency agreements with CRR, CRC or their
respective Affiliates for CSX or NSC to provide any of such
benefits, programs or policies.
(b) Any employee benefit plans, programs and policies
for the employees of NYC and its Subsidiaries shall be the sole
responsibility of NYC and included in the NYC Allocated
Liabilities. Any employee benefit plans, programs and policies
for the employees of PRR and its Subsidiaries shall be the sole
responsibility of PRR and included in the PRR Allocated
Liabilities. However, notwithstanding the foregoing, NYC, PRR
and CRC shall provide to each other any information that is
necessary to determine whether any benefit plan is or continues
to be tax qualified, and in the event that NYC, PRR or CRC
reasonably determines that the benefit plans of NYC, PRR and CRC,
when considered together, may cause one or more benefit plans to
lose or fail to obtain their tax qualification, NYC, PRR and CRC
shall agree to appropriate changes to prevent such loss of tax
qualification.
(c) CSX, NSC and CRC agree to take any actions
permitted by law that are necessary or appropriate to determine
the amount of excess assets in CRC benefit plans and to allow
allocation to CSX and NSC or their respective Affiliates in
proportion to their respective Percentage; provided that no such
transfer shall reduce the assets remaining in any CRC defined
benefit plans to a level that is less than 100% of the
Liabilities for benefits on a termination basis as reasonably
calculated by Price Waterhouse employing usual and customary
methodology and assumptions and; provided further that no such
transfer shall reduce the assets remaining in any other CRC
benefit plan to a level that is less than 100% of the Liabilities
for those other CRC benefit plans as reasonably calculated by
Price Waterhouse. CSX, NSC and CRC shall reach an agreement as
to the transfer of accrued benefits and related assets with
respect to employees that are transferred.
(d) Any Liabilities incurred prior to the Closing Date
by CRR, CRC or any of their respective Affiliates with respect to
any employee benefit plan, program, policy or arrangement, other
than to the extent a Liability is funded under a CRC benefit
plan, shall be Corporate Level Liabilities.
Section 6.4 Residual Liability. The allocation of
liabilities associated with the employees of CRR, CRC or any of
their respective Affiliates hereunder is intended merely to
assign primary responsibility for such liabilities among the
parties. Nothing in the Agreement shall be interpreted or
construed as a restriction or limitation of the duties and
responsibilities of CRR, CRC, their respective Affiliates and CSX
with respect to employee-related liabilities as set forth in the
Merger Agreement and Attachment A to the CRR Disclosure Schedule
delivered in connection with the Third Amendment.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1. CSX. CSX represents and warrants to
NSC, CRR and CRR Parent as of the date hereof and as of the
Closing Date as follows:
(a) Organization and Good Standing. CSX is a
corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Virginia.
(b) Authority. CSX has full corporate power and
authority to execute and deliver this Agreement and the Ancillary
Agreements and to consummate the transactions contemplated hereby
and thereby. All corporate acts and other corporate proceedings
required to be taken by or on the part of CSX to authorize CSX to
execute, deliver and authorize the performance of this Agreement
and the Ancillary Agreements and the transactions contemplated
hereby and thereby have been duly and properly taken.
(c) Enforceability. This Agreement has been and each
of the Ancillary Agreements will be duly executed and delivered
by CSX and, when duly executed and delivered by NSC and (to the
extent such agreement is not being entered into as of the date
hereof) CSX, will constitute the legal, valid and binding
obligation of CSX enforceable in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency,
reorganization and other laws of general application relating to
or affecting enforcement of creditors' rights and except that the
availability of equitable remedies, including specific
performance, is subject to the discretion of the court before
which any proceeding therefor may be brought.
(d) No Violation. The execution and delivery by CSX
of this Agreement and the Ancillary Agreements will not violate
in any material respect any law, or in any material respect
conflict with, result in any breach of, constitute a default (or
any event which with notice or lapse of time or both would become
a default) under the Articles of Incorporation or Bylaws of CSX
or any material Contract to which CSX is a party or by which it
or its property or assets is bound.
(e) No Approvals. Except for required approvals by
the STB and filings required under the Securities Exchange Act of
1934, as amended (the "Required Approvals"), no declaration,
filing or registration with, or notice to, or authorization,
consent or approval of, any Governmental Entity is necessary for
the consummation by CSX of the transactions contemplated hereby
or by the Ancillary Agreements, other than such filings,
registrations, authorizations, consents or approvals which, if
not obtained or made, will not, in the aggregate, materially
adversely affect the ability of CSX to consummate the
transactions contemplated hereby or by the Ancillary Agreements.
Section 7.2. NSC. NSC represents and warrants to CSX,
CRR and CRR Parent as of the date hereof and as of the Closing
Date as follows:
(a) Organization and Good Standing. NSC is a
corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Virginia.
(b) Authority. NSC has full corporate power and
authority to execute and deliver this Agreement and the Ancillary
Agreements and to consummate the transactions contemplated hereby
and thereby. All corporate acts and other corporate proceedings
required to be taken by or on the part of NSC to authorize NSC to
execute, deliver and authorize the performance of this Agreement
and the Ancillary Agreements and the transactions contemplated
hereby and thereby have been duly and properly taken.
(c) Enforceability. This Agreement has been and each
of the Ancillary Agreements will be duly executed and delivered
by NSC and, when duly executed and delivered by CSX and (to the
extent such agreement is not being entered into as of the date
hereof) NSC, will constitute the legal, valid and binding
obligation of NSC enforceable in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency,
reorganization and other laws of general application relating to
or affecting the enforcement of creditors' rights and except that
the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before
which any proceeding therefor may be brought.
(d) No Violation. The execution and delivery by NSC
of this Agreement and the Ancillary Agreements will not violate
in any material respect any law, or in any material respect
conflict with, result in any breach of, constitute a default (or
any event which with notice or lapse of time or both would become
a default) under the Articles of Incorporation or Bylaws of NSC
or any material Contract to which NSC is a party or by which it
or its property or assets is bound.
(e) No Approvals. Except for the Required Approvals,
no declaration, filing or registration with, or notice to, or
authorization, consent or approval of, any Governmental Entity is
necessary for the consummation by NSC of the transactions
contemplated hereby or by the Ancillary Agreements, other than
such filings, registrations, authorizations, consents or
approvals which, if not obtained or made, will not, in the
aggregate, materially adversely affect the ability of NSC to
consummate the transactions contemplated hereby or by the
Ancillary Agreements.
ARTICLE VIII
COVENANTS
Section 8.1. Conduct of Business. Except as provided
for in this Agreement or as otherwise consented to by CSX and NSC
in writing, between the Control Date and the Closing Date, the
parties will use reasonable commercial efforts to cause the
Assets to be operated by CRR, CRC and their respective Affiliates
in the ordinary course consistent with past practice and in
compliance in all material respects with all applicable laws and
regulations and will use their reasonable commercial efforts to
preserve intact the Assets, use reasonable efforts to keep
available the services of CRR's, CRC's and their respective
Affiliates' current officers and other key employees as a group
and preserve CRR's, CRC's and their respective Affiliates'
relationships with those Persons having business dealings with
CRR, CRC and their respective Affiliates to the end that their
goodwill and ongoing businesses shall be unimpaired at the
Closing Date. Without limiting the foregoing, between the
Control Date and the Closing Date, the parties will use
reasonable commercial efforts to ensure that CRR, CRC and their
respective Affiliates continue their maintenance and improvement
of Assets in the ordinary course in accordance with past practice
without discriminating between Assets on the basis of whether
they are or will be NYC Allocated Assets, PRR Allocated Assets or
Retained Assets.
Section 8.2. Best Efforts. Subject to the terms and
conditions of this Agreement, each party agrees to use best
efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things reasonably necessary, proper or
advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement
and the Ancillary Agreements. No party shall knowingly take any
action in contravention of, or which is inconsistent with, the
transactions contemplated by this Agreement.
Section 8.3. Further Assurances; Consents. (a) From
time to time after the Closing Date, each of the parties will
execute and deliver such further instruments and will take such
other actions as CSX, on the one hand, or NSC, on the other hand,
may reasonably request in order to effectuate the purposes of
this Agreement and the Ancillary Agreements and to carry out the
terms hereof and thereof. To the extent that any consent or
concurrence is required under this Agreement by any party or its
Affiliates, such consent or concurrence shall not be unreasonably
withheld.
(b) If any of the Allocated Assets cannot be
transferred as contemplated by this Agreement (other than
Contracts which are dealt with in Section 8.5), the parties will
cooperate to make the Allocated Asset available through whatever
alternative arrangements will best carry out the purpose and
accomplish the intent of this Agreement, except that this
requirement shall not apply to Allocated Assets which cannot be
transferred because of regulatory constraints.
Section 8.4. STB Approval. (a) The parties will as
expeditiously as possible seek STB approval necessary for the
consummation of the transactions contemplated by this Agreement
and the Ancillary Agreements. The parties will use their
reasonable best efforts to obtain such approvals, and no party
will take any position (at the STB or with any other Governmental
Entity or elsewhere) inconsistent with this Agreement and the
Ancillary Agreements.
(b) Each of CSX and NSC shall (i) coordinate and
cooperate with one another to prepare and present to the STB, as
soon as practicable, all applications, petitions, notices,
filings and other presentations in connection with seeking all
STB approvals, exemptions or other authorizations necessary to
consummate the transactions contemplated by this Agreement and by
the Ancillary Agreements, using, to the extent practicable, joint
legal counsel and expert witnesses, (ii) prosecute such
applications, petitions, notices, filings and other
presentations with diligence, (iii) diligently oppose any
objections to, appeals from or petitions to reconsider or reopen
any such STB approval, (iv) take all such further action as in
their judgment may facilitate obtaining a final order or orders
of the STB approving the transactions contemplated by this
Agreement and the Ancillary Agreements and (v) bear the burden,
without adjustment in the Percentage or other consideration, of
any STB imposed condition it accepts.
(c) Each of CSX and NSC shall coordinate and consult
with one another with respect to all settlements involving the
STB approval process. The parties further agree that, (i) any
settlement or agreement pertaining to the Shared Assets Areas and
the Shared Assets Agreements will require the joint approval of
CSX and NSC; (ii) none of CRR, CRC nor CSX shall make any
settlement or agreement with respect to any PRR Allocated Asset
without NSC's prior written consent; (iii) none of CRR, CRC nor
NSC shall make any settlement or agreement with respect to any
NYC Allocated Asset without CSX's prior written consent and (iv)
nothing contained herein shall require joint action for either
CSX or NSC to enter into any settlement or Transportation
Contract with any shipper or receiver of freight. CSX and NSC
may act in their sole discretion in respect of the matters set
forth in this Section 8.4(c).
(d) If the STB, as a condition to its approval of the
transactions contemplated by this Agreement and the Ancillary
Agreements, imposes a non-standard condition which would
materially reduce the benefits to either CSX or NSC from the
transactions contemplated by this Agreement and the Ancillary
Agreements, then the materially affected party may in its sole
discretion (i) accept such condition and proceed with the
transactions contemplated by this Agreement and the Ancillary
Agreements, or (ii) appeal such condition to the courts and
postpone the Closing Date for up to thirty months (and its
election under this Section 8.4(d)) until final action on its
appeal, and (iii) if such appeal is unsuccessful, reject the
condition and proceed in accordance with the terms of the Amended
and Restated Voting Trust Agreement.
Section 8.5. Other Approvals. (a) The parties shall
as expeditiously as possible use their reasonable best efforts to
obtain any consent, authorization, order or approval of, or any
exemption by, any Governmental Entity (other than the STB which
is covered by Section 8.4) or private Person required to be
obtained or made by the parties or their respective Affiliates to
effectuate the purposes of this Agreement or the Ancillary
Agreements and the transactions contemplated herein and therein,
which actions shall include, without limitation, furnishing all
information required under or in connection with approvals of or
filings with any such Governmental Entity or private Person.
Each party shall reasonably cooperate with each other in
connection with the foregoing. CRC will use reasonable
commercial efforts to transfer and assign to NYC and PRR all
Contracts which are to be transferred pursuant to Article II, it
being understood that CRC shall not seek any consents of any
third party unless requested to do so by NYC, in the case of a
Contract that is a NYC Allocated Asset, or PRR, in the case of a
Contract that is a PRR Allocated Asset, and in no event shall CRC
be obligated to make payments to third parties in order to obtain
such consents.
(b) All Contracts and rights which are Allocated
Assets and are not transferred pursuant to Section 8.5(a) shall
be handled in accordance with the following procedure: (i) CRC
or its Affiliates shall continue to be bound thereby and to hold
the rights thereunder and (ii) NYC, in the case of a Contract
that is a NYC Allocated Asset, and PRR, in the case of a Contract
that is a PRR Allocated Asset, shall pay, perform and discharge
fully all of the obligations of CRC or its Affiliates thereunder
from and after the Closing Date. CRC or its Affiliates shall,
without further consideration therefor, pay, assign and remit
promptly to NYC or PRR, as appropriate, all monies, rights and
other consideration received in respect of such performance. CRC
or its Affiliates shall exercise or exploit the rights and
options under all such Contracts only as reasonably directed by
NYC, in the case of a Contract that is a NYC Allocated Asset, and
PRR, in the case of a Contract that is a PRR Allocated Asset, and
at NYC's or PRR's expense.
Section 8.6. [Intentionally Omitted.]
Section 8.7. Risk of Loss; Forced Disposal. (a) In
the event of any loss or damage to or destruction of, prior to
the Closing, any or all of the Allocated Assets by fire or other
casualty, the title to and other rights associated with such
Allocated Assets shall nevertheless pass to NYC or PRR as
provided for herein without any liability or obligation on the
part of any of the parties or their respective Affiliates as a
result of such loss, damage or destruction and without any
adjustment of the Percentage; provided, however, that at the
Closing, CRC shall transfer to NYC or PRR, as the case may be,
CRC's or its Affiliates' rights to any proceeds of any casualty
insurance policies covering such damage or destruction plus the
net proceeds, if any, actually collected by CRC or its Affiliates
under the provisions of the casualty insurance policies, if any,
covering such loss, damage or destruction.
(b) If any of the Allocated Assets are disposed of by
CRR, CRC or their respective Affiliates because of conditions
imposed by the STB prior to the Closing, in lieu of the transfer
of such Allocated Assets, CRR, CRC or their respective Affiliates
shall deliver to NYC or PRR, as the case may be, the benefit of
any net after-tax consideration attributable to any such
Allocated Assets received by CRR, CRC or their respective
Affiliates pursuant to such disposition.
Section 8.8. Public Statements; Public Filings. Any
written news releases prior to the Closing and any other
disclosure required to be filed prior to the Closing with any
Governmental Entity (other than routine information and filings
with the Securities and Exchange Commission) pertaining to this
Agreement, the Ancillary Agreements or the transactions
contemplated hereby or thereby will be subject to prior review by
both CSX and NSC prior to release.
Section 8.9. Restructuring of CRC. (a) It is the
parties' intent that, at some time after the Closing Date, CRC
will transfer PRR or the assets and liabilities of PRR to NSC,
transfer NYC or the assets and liabilities of NYC to CSX or
otherwise separate PRR (for the benefit of NSC) and NYC (for the
benefit of CSX) from CRC in the most efficient manner for U.S.
federal income tax purposes (the transaction separating PRR from
CRC for the benefit of NSC hereinafter referred to as the "PRR
Restructuring", and the transaction separating NYC from CRC for
the benefit of CSX hereinafter referred to as the "NYC
Restructuring"). A Restructuring shall not be consummated unless
(i) CRC obtains a private letter ruling from the Internal Revenue
Service (the "Service") substantially to the effect that such
Restructuring qualifies as a tax-free transaction (except with
respect to gain or income required to be recognized with respect
to intercompany items or excess loss accounts pursuant to
regulations under Section 1502 of the Code or with respect to
gain or income recognized in the Restructuring under Section 356
or Section 361 of the Code as the result of the receipt of "other
property or money" within the meaning of such sections, provided
that the amount of such gain or income recognized by CRR or its
Affiliates is not substantial) under the Code (the "Ruling"), or
the parties otherwise agree to proceed with such Restructuring on
the basis of an opinion of tax counsel generally to the same
effect, (ii) any required approval of the STB is obtained, (iii)
Tax indemnities mutually satisfactory to CSX and NSC have been
agreed to and (iv) the conveyance of the CRR Parent interests is
structured in a way to ensure to the mutual satisfaction of CSX
and NSC that after a Restructuring, NSC (in the case of the PRR
Restructuring) and CSX (in the case of the NYC Restructuring)
continue to hold their respective Percentage of the equity and 50
percent of the vote with respect to the Retained Assets and the
Retained Liabilities and NSC (in the case of the PRR
Restructuring) has no continuing interest whatsoever in NYC and
CSX (in the case of the NYC Restructuring) has no continuing
interest whatsoever in PRR. In addition, a PRR Restructuring
shall not be consummated if, based upon the written opinion of
outside tax counsel to CSX, such Restructuring would more likely
than not impair the ability to consummate a subsequent NYC
Restructuring, and a NYC Restructuring shall not be consummated
if, based upon the written opinion of outside tax counsel to NSC,
such Restructuring would more likely than not impair the ability
to consummate a subsequent PRR Restructuring. The parties agree
that the application referred to in Section 8.4(b) shall not seek
the authority to effect any transaction referred to in this
Section 8.5.
(b) CRC shall seek a Ruling at the request of either
CSX or NSC or both of them. If CRC seeks a Ruling at the request
of either CSX or NSC or both of them, after consultation with the
party or parties requesting the Ruling, CRC shall prepare the
Ruling request and any supplements or materials relating thereto
that are required to be submitted to the Service in connection
with the Ruling request (each, an "IRS Submission"). Each IRS
Submission shall be true and correct in all material respects,
and all material facts relating to the requested Ruling shall be
disclosed to the Service. CRC shall provide CSX and NSC with a
reasonable opportunity to review and comment on each IRS
Submission prior to the filing of such IRS Submission with the
Service, and no IRS Submission shall be filed with the Service
unless the party or parties requesting the Ruling have agreed in
writing as to the contents of such IRS Submission prior to such
filing. CRC shall provide CSX and NSC with copies of each IRS
Submission as filed with the Service. Neither CRC nor its
Affiliates or representatives shall conduct any communications
with the Service concerning the Ruling request, including
meetings or conferences with personnel from the Service, whether
in person, telephonically or otherwise, without notifying CSX and
NSC and giving CSX and NSC the opportunity to participate. CRC
shall provide CSX and NSC with copies of any correspondence
between CRC and the Service with respect to the Ruling request.
(c) If the requirements of clauses (i), (ii), (iii)
and (iv) of the second sentence of Section 8.9(a) are satisfied
and no opinion meeting the requirements of the third sentence of
Section 8.9(a) is delivered with respect to a Restructuring, NSC
(in the case of the PRR Restructuring) and CSX (in the case of
the NYC Restructuring) shall have the right, consistent with the
Ruling (or opinion of counsel, if applicable), to exchange some
or all of its interests in CRR Parent for PRR (in the case of the
PRR Restructuring) and NYC (in the case of the NYC
Restructuring). At the request of PRR (in the case of a PRR
Restructuring) or NYC (in the case of a NYC Restructuring) CRR
Parent, CRR, CRC and their respective Affiliates shall take all
action necessary or convenient in the reasonable opinion of PRR
(in the case of a PRR Restructuring) or NYC (in the case of a NYC
Restructuring) to effect a Restructuring that is permitted under
Section 8.9(a).
Section 8.10. Provision of Corporate Records. As soon
as practicable after the Closing Date CRC shall (a) deliver to or
to the order of NYC all NYC Books and Records in the possession
of CRC or its Affiliates and (b) deliver to or to the order of
PRR all PRR Books and Records in the possession of CRC or its
Affiliates; provided that Books and Records that relate to and
are necessary for the operation of both the NYC Allocated Assets
and the PRR Allocated Assets will be duplicated and included in
both the NYC Books and Records and the PRR Books and Records; and
provided further that copies of Books and Records necessary or
useful to the operation of Shared Assets Areas, Continuing CRC
Management, SSO Facilities and other Retained Assets shall be
maintained at CRC. Such NYC Books and Records and PRR Books and
Records shall be the property of NYC and PRR, respectively, but
shall be retained and made available readily to CRC for review
and duplication, subject to the limitations set forth in Section
8.11, until the earlier of notice from CRC that such records are
no longer needed by CRC and the seventh anniversary of the
Closing Date, but in all events until the tax year to which the
Books and Records pertain is closed or settled with the Service
and/or state tax authorities, unless a longer retention period is
otherwise required by law.
Section 8.11. Access to Information. From and after
the Closing Date, the parties shall afford (and CSX and NSC shall
cause NYC and PRR to afford) each other and each other's
authorized accountants, counsel and other designated
representatives reasonable access and duplicating rights (with
copying costs to be borne by the requesting party) during normal
business hours and at such other times as may be agreed upon to
all books and records and documents, communications, items and
matters, including computer programs and data within each other's
knowledge, possession or control relating to the Assets, the
Allocated Liabilities, the Retained Liabilities or the conduct of
CRC's and its Affiliates' businesses, insofar as such access is
reasonably required by a party or NYC or PRR and is consistent
with applicable law (and shall use reasonable efforts to cause
persons or firms possessing relevant items or information to give
similar access). Items or information may be requested under
this Section 8.11 only for the following purposes: audit,
accounting, legal proceedings, litigation, tax preparation,
transition planning and implementation planning purposes, as well
as for purposes of fulfilling disclosure and reporting
obligations. Information shall be provided pursuant to this
Section 8.11 in accordance with reasonable procedures established
by the parties in order to ensure compliance with the provisions
of Section 8.13 and 8.14.
Section 8.12. Production of Witnesses and Individuals.
From and after the Closing Date, CRR Parent, CRC, NYC, PRR, CSX
and NSC shall use reasonable efforts to make available to each
other, upon written request, their respective officers,
directors, employees and agents for fact finding, consultation
and interviews and as witnesses to the extent that any such
person may reasonably be required in connection with any Action
in which the requesting party may from time to time be involved
relating to the transactions contemplated by this Agreement and
the Ancillary Agreements, the Assets, the Allocated Liabilities,
the Retained Liabilities or the conduct of CRC's and its
Affiliates' business. Except as otherwise agreed between the
parties, the parties agree to reimburse each other for reasonable
documented out-of-pocket expenses (but not labor charges, salary
payments or overheads) incurred by the other in connection with
providing individuals and witnesses pursuant to this Section
8.12.
Section 8.13. Confidentiality. The parties shall hold
(and CSX and NSC shall cause NYC and PRR to hold), and shall
cause their respective officers, employees, agents, consultants
and advisors to hold, in strict confidence, unless compelled to
disclose by judicial or administrative process or, in the opinion
of its independent legal counsel, by other requirements of law,
all information furnished it by another party, NYC or PRR or
their respective representatives pursuant to this Agreement or
the Ancillary Agreements (except to the extent that such
information can be shown to have been (i) available to such
Person on a non-confidential basis prior to its disclosure by the
other Person, (ii) in the public domain through no fault of such
Person or (iii) later lawfully acquired from other sources by the
Person to which it was furnished), and no Person shall release or
disclose such information to any other person, except its
auditors, attorneys, financial advisors, bankers and other
consultants and advisors who shall be bound by the provisions of
this Section 8.13. In the event that a subpoena, discovery or
other request that arguably calls for production or disclosure of
such confidential information is received, the Person receiving
such request must promptly notify in writing the Person whose
information has been requested. The Person receiving such
request shall provide the Person whose confidential information
has been requested, a reasonable opportunity to review such
information and to assert any rights it may have with respect to
the potential disclosure of such confidential information. Each
party shall be deemed to have satisfied its obligation to hold
confidential information concerning or supplied by the other
parties, NYC or PRR if it exercises the same care as it takes to
preserve confidentiality for its own similar information.
Section 8.14. Privileged Matters. (a) The parties
agree that from and after the Control Date CRC and its Affiliates
will maintain, preserve and assert all privileges, including,
without limitation, privileges arising under or relating to the
attorney-client relationship (which shall include, without
limitation, the attorney-client and work product privileges) that
relate directly or indirectly to the Assets, the Allocated
Liabilities or the Retained Liabilities or CRC's and its
Affiliates' business for any period prior to the Closing Date
("Privileges"). CRC shall not waive any Privilege that could be
asserted under applicable law without the prior written consent
of CSX and NSC. The rights and obligations created by this
Section 8.14 shall apply to all information as to which, but for
the transactions contemplated by this Agreement and the Ancillary
Agreements, CRC would have been entitled to assert or did assert
the protection of a Privilege ("Privileged Information"),
including but not limited to (i) any and all information
generated prior to the Closing Date but which, after the Closing,
is in the possession of CSX, NSC, NYC or PRR (ii) all
communications subject to a Privilege occurring prior to the
Closing Date between counsel for CRC and any person who, at the
time of the communication, was an employee of CRC, regardless of
whether such employee is or becomes an employee of CSX, NSC, NYC
or PRR and (iii) all information generated, received or arising
after the Closing that refers or relates to Privileged
Information generated, received or arising prior to the Closing.
(b) From and after the Control Date, upon receipt by
CRC or any of its Affiliates of any subpoena, discovery or other
request that arguably calls for the production or disclosure of
Privileged Information or if CRC or any of its Affiliates obtains
knowledge that any current or former employee of CRC or any of
its Affiliates has received any subpoena, discovery or other
request which arguably calls for the production or disclosure of
Privileged Information, CRC shall promptly notify in writing CSX,
NSC, NYC and PRR of the existence of the request and shall
provide CSX and NSC a reasonable opportunity to review the
information and to assert any rights it may have under this
Section 8.14 or otherwise to prevent the production or disclosure
of Privileged Information. CRC will not produce or disclose any
information arguably covered by a Privilege under this Section
8.13 unless (i) CSX and NSC have both provided their written
consent to such production or disclosure or (ii) a court of
competent jurisdiction has entered a final, nonappealable order
finding that the information is not entitled to protection under
any applicable privilege.
(c) If there is a reasonable likelihood that the
waiver by CRC of any Privilege could expose CSX, NSC, NYC or PRR
to Liability or could prejudice the other party's position in
pending or threatened litigation, otherwise adversely affect CSX,
NSC, NYC or PRR, CRC will promptly notify in writing CSX and NSC
prior to such waiver, and, at CSX's and NSC's request, CRC will
assert or preserve the Privilege, as applicable, if CRC's
interests will not be adversely affected by its assertion or
preservation of the Privilege.
Section 8.15. Administration of Actions. After the
Closing Date, (a) NYC shall have exclusive authority and control
over the investigation, prosecution, defense and appeal of all
Actions relating primarily to NYC, the NYC Allocated Assets, the
NYC Allocated Liabilities or a Retained Liability (except for
Retained Liabilities for which the monetary claim is more than
$500,000 or injunctive relief is sought) which arose at the
location of a NYC Allocated Asset, or with which a NYC Allocated
Asset is most significantly involved (each, an "NYC Action"), and
may settle or compromise, or consent to the entry of any judgment
with respect to, any such NYC Action without the consent of CRC,
NSC or PRR and (b) PRR shall have exclusive authority and control
over the investigation, prosecution, defense and appeal of all
Actions relating primarily to PRR, the PRR Allocated Assets, the
PRR Allocated Liabilities, or a Retained Liability (except for
Retained Liabilities for which the monetary claim is more than
$500,000 or injunctive relief is sought), which arose at the
location of a PRR Allocated Asset or with which a PRR Allocated
Asset is most significantly involved (each a "PRR Action"), and
may settle or compromise, or consent to the entry of any judgment
with respect to, any such PRR Action without the consent of CRC,
CSX or NYC; provided that neither NYC or PRR may settle or
compromise, or consent to the entry of any judgment with respect
to, any such Action without the prior written consent of the
other if such settlement, compromise or consent to such judgment
(i) includes any form of injunctive relief binding upon such
other party or CRC or (ii) does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such
other party or CRC and any Affiliates of CRC subject to such
Action of a full and final release from all liability in respect
to such claim or litigation. After the Closing Date with respect
to an Action not covered under clauses (a) or (b) of the
foregoing sentence (including Actions relating to Corporate Level
Liabilities), the handling, administration and disposition of
such Actions shall be the joint responsibility of CSX and NSC and
the costs thereof shall be Corporate Level Liabilities. In
assigning joint responsibility for the administration, handling
and disposition of Actions to CSX and NSC, hereunder it is not
the parties' intent that CSX and NSC will actually administer,
handle and dispose of such Actions jointly, but rather that CSX
and NSR will agree on the most practical and efficient
arrangements with the objective of eliminating unnecessary
duplication of effort and minimizing overall costs. The costs
and expenses of the administration and handling of such Actions
shall be Corporate Level Liabilities; provided that the salaries
of, expenses incurred by and overheads associated with full-time
employees of CSX or NSC while engaged in investigating or
handling such Actions shall be the responsibility of the
employing party and shall not be Corporate Level Liabilities.
Section 8.16. Administration of FELA Claims. (a)
The administration, handling and disposition of FELA Claims
(whenever made) that are Corporate Level Liabilities shall be (i)
the responsibility of the party controlling the Allocated Asset
where the incident or incidents giving rise to the FELA Claim
occurred, or (ii) the responsibility of the party controlling the
Allocated Asset most significantly involved if the FELA Claim
arises from an incident or incidents occurring at multiple
locations on Allocated Assets, or (iii) the joint responsibility
of CSX and NSC if the FELA Claim arises from an incident or
incidents occurring at unknown locations or a location not
otherwise covered by clauses (i) or (ii) of this sentence. In
assigning joint responsibility for the administration, handling
and disposition of FELA Claims to CSX and NSC under the foregoing
clause (iii), it is not the parties' intent that CSX and NSC will
actually administer, handle and dispose of such actions jointly,
but rather that CSX and NSR will agree on the most practical and
efficient arrangements with the objective of eliminating
unnecessary duplication of effort and minimizing overall costs.
The costs and expenses of the administration, handling and
disposition of (A) FELA Claims made prior to the Closing Date and
(B) all other FELA Claims that are Corporate Level Liabilities,
shall be Corporate Level Liabilities and shall be borne by CSX
and NSC in proportion to their respective Percentages; provided
that the salaries of, expenses incurred by and overheads
associated with full-time employees of CSX or NSC while engaged
in investigating or handling such FELA Claims shall be the
responsibility of the employing party and shall not be Corporate
Level Liabilities; provided, further that the party responsible
for the administration of FELA Claims which are Retained
Liabilities shall, before agreeing to any single settlement of a
FELA Claim or group of related FELA Claims, involving a payment
of more than $1 million, obtain the written consent of the other
party. Failure of either party to respond to such a request for
consent within fourteen days of receipt of such request shall be
deemed to constitute consent.
(b) The administration, handling and disposition of
FELA Claims (and the costs and expenses thereof) that are made on
or after the Control Date and that are NYC Allocated Liabilities
pursuant to Section 2.8(c) hereof shall be the responsibility of
CSX. The administration, handling and disposition of FELA Claims
(and the costs and expenses thereof) that are made on or after
the Control Date and that are PRR Allocated Liabilities pursuant
to Section 2.8(c) hereof shall be the responsibility of NSC.
Section 8.17. Tax Matters. (a) From the date hereof
until the Closing Date, CRR and Green (i) shall timely and duly
file, or cause to be timely and duly filed, all Tax Returns of
CRR, CRC and their respective Affiliates required to be filed on
or prior to the Closing Date and (ii) other than Taxes being
contested in good faith, shall timely pay, or cause to be timely
paid, all Taxes required to be paid by CRR, CRC or their
respective Affiliates. From the Control Date until the Closing
Date, CRR and Green, with respect to each of CRR, CRC and their
respective Affiliates, shall not settle or compromise any Tax
Liability, agree to any adjustment to any Tax attribute, change
any method of accounting or make any election with respect to
Taxes without first obtaining the prior written consent of CSX
and NSC. CRR and its Subsidiaries agree to be included in a
consolidated federal income tax return of Green.
(b) From and after the Closing Date, the Tax
Allocation Agreement shall govern the rights and obligations of
Green, CRR, CRC, CRR Industries, PRR and NYC with respect to Tax
matters involving the operations of CRC, PRR and NYC.
Section 8.18. Committees. Within 90 days following
the execution of this Agreement, two committees shall be
established by CSX and NSC: the "Buffalo Committee" and the
"▇▇▇▇▇▇▇ Committee". Both committees shall consist of
representatives appointed by CSX and representatives appointed by
NSC. The Buffalo Committee will examine the CP-Draw drawbridge
and interlocking in Buffalo, New York and will investigate ways
of minimizing or eliminating conflict between CSX and NSC traffic
flows through the area after the Closing Date. The ▇▇▇▇▇▇▇
Committee will examine the ▇▇▇▇▇▇▇ crossing in Toledo, Ohio and
will investigate ways of minimizing or eliminating conflict
between CSX and NSC traffic flows through the area after the
Closing Date. Within 90 days of appointment, each such committee
will prepare a report detailing options for solving the traffic
conflict problems, along with cost estimates for each such
option.
Section 8.19. Chicago Gateway Access. CSXT and NSR
will preserve and enhance the independent competitive capability
of each to move traffic to and through the Chicago Gateway (as
defined in Schedule 3) by adhering to the requirements of
Schedule 3.
Section 8.20. Car Hire and Car Service. The parties
recognize that industry rules, including the AAR Car Service
Rules, may pose problems with respect to the payment and
collection of car hire in connection with Equipment that is
included in Retained Assets and that is used or operated with the
Allocated Assets and with the Shared Assets Areas. The parties
shall use their reasonable best efforts and take all actions,
including seeking changes in industry rules, as may be necessary
or appropriate to allow each party, in the most favorable manner
possible, to collect car hire on the Equipment allocated to it
pursuant to Section 2.6 hereof and to pay the car hire due for
cars used or operated with Allocated Assets and with the Shared
Assets Areas.
ARTICLE IX
CONDITIONS PRECEDENT TO THE CLOSING
Section 9.1. Conditions Precedent to Obligations.
The respective obligations of CSX, NSC, CRR Parent, CRR and CRC
to effect the transactions contemplated by Article II shall be
subject to the fulfillment or mutual waiver at or prior to the
Closing Date of the following conditions:
(a) No preliminary or permanent injunction or other
order or decree issued by a court of competent jurisdiction or
any other legal restraint or prohibition which prevents the
consummation of the transactions contemplated by this Agreement
or the Ancillary Agreements shall be in effect and no statute,
rule or regulation shall have been enacted by any Governmental
Entity prohibiting the consummation of the transactions
contemplated by this Agreement or the Ancillary Agreements.
(b) The STB shall have issued a decision (which
decision shall not have been stayed or enjoined) that constitutes
a final order approving, exempting or otherwise authorizing, as
of such date, consummation of the transactions contemplated by
this Agreement and the Ancillary Agreements as may require such
authorization and neither party shall have exercised a right to
postpone pursuant to Section 8.4(c).
(c) Each of CSX and NSC shall have reasonably
determined that it has obtained sufficient labor implementing
agreements so as to be authorized by law to effect the
transactions contemplated by Article II and Article VI.
ARTICLE X
INDEMNIFICATION
Section 10.1. Indemnification. (a) Subject to the
provisions of this Article X, CRR Parent and CRR jointly and
severally shall indemnify, defend and hold harmless the other
parties and any director, officer, employee or agent of any of
them from and against any and all Damages asserted against,
relating to, imposed upon or incurred by any such Person,
directly or indirectly, by reason of or resulting from:
(i) the breach or nonperformance of any agreement of
CRR Parent, CRR, CRC or any of their respective Affiliates
(other than NYC and PRR) contained in or made pursuant to
this Agreement or any of the Ancillary Agreements; and
(ii) any Retained Liability.
(b) Subject to the provisions of this Article X, CSX
and CSXT jointly and severally shall indemnify, defend and hold
harmless the other parties and any director, officer, employee or
agent of any of them from and against any and all Damages
asserted against, relating to, imposed upon or incurred by any
such Person, directly or indirectly, by reason of or resulting
from:
(i) the untruth or inaccuracy of any representation or
warranty of CSX, CSXT or their respective Affiliates
contained in or made pursuant to this Agreement or any of
the Ancillary Agreements; and
(ii) the breach or non-performance of any agreement of
CSX, CSXT or their respective Affiliates contained in or
made pursuant to this Agreement or any of the Ancillary
Agreements.
(c) Subject to the provisions of this Article X, NSC and
NSR jointly and severally shall indemnify, defend and hold
harmless the other parties and any director, officer, employee or
agent of any of them from and against any and all Damages
asserted against, relating to, imposed upon or incurred by any
such Person, directly or indirectly, by reason of or resulting
from:
(i) the untruth or inaccuracy of any representation or
warranty of NSC, NSR or their respective Affiliates
contained in or made pursuant to this Agreement or any of
the Ancillary Agreements; and
(ii) the breach or non-performance of any agreement of
NSC, NSR or their respective Affiliates contained in or
made pursuant to this Agreement or any of the Ancillary
Agreements.
Section 10.2. Indemnification Procedures. (a) If any
Action shall be threatened or instituted or any claim or demand
shall be asserted against any Indemnified Party in respect of
which indemnification may be sought under the provisions of this
Agreement, the Indemnified Party shall promptly cause written
notice of the assertion of any such claim, demand or Action of
which it has knowledge to be forwarded to the Indemnifying Party.
Such notice shall contain a reference to the provisions hereof or
of such other agreement, instrument or certificate delivered
pursuant hereto, in respect of which such claim is being made.
The Indemnified Party's failure to give the Indemnifying Party
prompt notice shall not preclude the Indemnified Party from
obtaining indemnification from the Indemnifying Party under this
Article X unless the Indemnified Party's failure has materially
prejudiced the Indemnifying Party's ability to defend the claim,
demand or Action.
(b) If the Indemnified Party seeks indemnification
from the Indemnifying Party as a result of a claim or demand
being made by a third party (a "Third Party Claim"), the
Indemnifying Party shall have the right to promptly assume the
control of the defense of any Action with respect to such Third
Party Claim, including, at its own expense, employment by it of
counsel reasonably satisfactory to the Indemnified Party. The
Indemnified Party may, in its sole discretion and at its own
expense, employ counsel to represent it in the defense of the
Third Party Claim, and in such event counsel for the Indemnifying
Party shall cooperate with counsel for the Indemnified Party in
such defense, provided that the Indemnifying Party shall direct
and control the defense of such Third Party Claim or proceeding.
The Indemnifying Party shall not consent to the entry of any
judgment, except with the written consent of the Indemnified
Party, and shall not enter into any settlement of such Third
Party Claim without the written consent of the Indemnified Party
which does not include as an unconditional term thereof the
release of the Indemnified Party from all Liability in respect of
such Third Party Claim.
Section 10.3. 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.
(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, the Assets, the
Retained Liabilities, the Allocated Liabilities, the Ancillary
Agreements, the transactions contemplated herein or therein or
any matter or theory concerning or relating to any of the
foregoing, under any form or theory of action whatsoever whether
in contract, tort or otherwise.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Amendment. This Agreement may be
amended by the parties at any time by an instrument in writing
signed on behalf of each party.
Section 11.2. Extension; Waiver. At any time prior to
the Closing Date the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other
parties, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant
hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid if
set forth in an instrument in writing signed on behalf of such
party.
Section 11.3. Notices. All notices and other
communications hereunder shall be in writing and shall be deemed
given on the date delivered if delivered personally (including by
reputable overnight courier), on the date transmitted if sent by
telecopy (which is confirmed) or on the date received if mailed
by registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
(a) If to CSX, CSXT or CRR Parent, to:
CSX Corporation
One ▇▇▇▇▇ Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy number: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
CSX Transportation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy number: ▇▇▇-▇▇▇-▇▇▇▇
Attention: P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
with a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy number: 212-403-2000
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(b) If to NSC, NSR or CRR Parent, to:
Norfolk Southern Corporation
Three ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy number: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy number: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
(c) If to CRR or CRC, to:
Conrail Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy number: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
All notices regarding matters requiring handling within thirty
days will be given by overnight mail or confirmed telecopy.
Section 11.4. Interpretation. When a reference is
made in this Agreement to Sections, such reference shall be to a
Section of this Agreement unless otherwise indicated. The
headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 11.5. Entire Agreement. This Agreement
(including the Exhibits and Schedules hereto and the Ancillary
Agreements and other documents and instruments referred to
herein) and the Merger Agreement, collectively, 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 April 8
Agreement to the extent the April 8 Agreement covers matters not
addressed or amended hereby and the CRR Holdings LLC Agreement;
provided that it is the intent of the parties hereto that this
Agreement shall be an effectuation of the April 8 Agreement
consistent with the terms of the April 8 Agreement and that the
provisions of this Agreement should be interpreted to give effect
to the April 8 Agreement; and provided further that in the event
of any inconsistency between the terms of this Agreement and the
April 8 Agreement this Agreement shall prevail; and provided
further that CSX and NSC agree that the fourth paragraph of Item
III of Exhibit A to the April 8 Agreement (at page two thereof)
in respect of Lake Erie coal dock capacity is rescinded and no
longer in effect.
Section 11.6. Parties in Interest. This Agreement
shall be binding upon and inure solely to the benefit of each
party and their respective successors and assigns and is not
intended to confer upon any other Person any rights or remedies,
except for the rights of an Indemnified Party as contemplated by
Article X.
Section 11.7. Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the State
of New York, regardless of the laws that might otherwise govern
under applicable principles of conflicts of law thereof;
provided, however, that the laws of the respective jurisdictions
of incorporation of each of the parties shall govern the relative
rights, obligations, powers, duties and other internal affairs of
such party and its board of directors.
Section 11.8. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one
and the same agreement.
Section 11.9. Assignment. (a) Except as provided in
Section 11.9(b), 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 which may be withheld at the sole
discretion of the relevant party.
(b) Any party without the consent of the other parties
may assign all or any part of its rights and obligations under
this Agreement to (i) any of its controlled Subsidiaries or (ii)
any successor in the event of a merger, consolidation, sale of
all or substantially all its assets, liquidation or dissolution,
if such assignee executes and delivers to the other parties
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.
(c) This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective permitted
assignees.
Section 11.10. 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 11.11. Lack of Control; Effect on CRR and its
Controlled Subsidiaries. (a) None of CSX, CSXT, NSC or NSR
shall be liable for failing to take any action which they are
required to take under this Agreement if the time when CSX, CSXT,
NSC or NSR is required to take such action occurs prior to the
Control Date and such action requires the assistance or
cooperation of CRR or its Board of Directors, which assistance is
requested but not provided; provided, however, that CSX and NSC
shall use their best efforts to obtain such assistance or
cooperation and, after the Control Date, will be required to take
such action if, as and when required by this Agreement.
(b) Notwithstanding anything to the contrary contained
in this Agreement (which term for purposes of this Section
11.11(b) shall include the Exhibits and Schedules hereto and the
Ancillary Agreements and other documents and instruments referred
to herein), except as expressly set forth in Section 3.2, neither
CRR nor any of its controlled Subsidiaries shall be bound by the
terms of this Agreement (other than Section 8.17) or subject to
any Liabilities or obligations hereunder (other than under
Section 8.17) at any time prior to the Control Date. CRR and CSX
shall continue to be bound by those terms of the Merger Agreement
that by their terms survive beyond June 2, 1997, including,
without limitation, Attachment A to the CRR Disclosure Schedule
delivered in connection with the Third Amendment; provided that
in the event of any inconsistency between the terms of this
Agreement and the terms of such Attachment A, the terms of such
Attachment A shall prevail.
Section 11.12. Dispute Resolution. 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 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 American Arbitration
Association. The arbitrator shall be jointly selected by the
parties but, if the parties do not agree on an arbitrator within
thirty days after demand for arbitration is made by a party, they
shall request that the arbitrator be designated by the American
Arbitration Association. The award of the arbitrator shall be
final 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. The
arbitrator's award shall be binding and conclusive upon the
parties to the fullest extent permitted by law. Judgement upon
the award rendered may be entered in any court having
jurisdiction thereof, which court may order appropriate relief at
law or 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 among
the parties, and shall not be disclosed to any other Person,
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.
Section 11.13. CRC Status. The parties intend that
after the Closing Date CRC and its Affiliates shall be a rail
carrier that performs transportation services for the account of
CSXT or NSR, as the case may be, or as agent or subcontractor of
CSXT or NSR, as the case may be.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
CSX CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
Name:
Title:
CSX TRANSPORTATION, INC. (for
itself and on behalf of its
controlled Subsidiaries)
By: ________________________
Name:
Title:
NORFOLK SOUTHERN CORPORATION
By: ________________________
Name:
Title:
NORFOLK SOUTHERN RAILWAY COMPANY
(for itself and on behalf of its
controlled Subsidiaries)
By: ________________________
Name:
Title:
CONRAIL INC. (for itself and on
behalf of its controlled
Subsidiaries)
By: ________________________
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
CSX CORPORATION
By: ___________________
Name:
Title:
CSX TRANSPORTATION, INC. (for
itself and on behalf of its
controlled Subsidiaries)
By: /s/ A. R. ▇▇▇▇▇▇▇▇▇
Name: A. R. ▇▇▇▇▇▇▇▇▇
Title: President and CEO
NORFOLK SOUTHERN CORPORATION
By: ________________________
Name:
Title:
NORFOLK SOUTHERN RAILWAY COMPANY
(for itself and on behalf of its
controlled Subsidiaries)
By: ________________________
Name:
Title:
CONRAIL INC. (for itself and on
behalf of its controlled
Subsidiaries)
By: ________________________
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
CSX CORPORATION
By: ________________________
Name:
Title:
CSX TRANSPORTATION, INC. (for
itself and on behalf of its
controlled Subsidiaries)
By: ________________________
Name:
Title:
NORFOLK SOUTHERN CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name:
Title:
NORFOLK SOUTHERN RAILWAY COMPANY
(for itself and on behalf of its
controlled Subsidiaries)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name:
Title:
CONRAIL INC. (for itself and on
behalf of its controlled
Subsidiaries)
By: ________________________
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
CSX CORPORATION
By: ________________________
Name:
Title:
CSX TRANSPORTATION, INC. (for
itself and on behalf of its
controlled Subsidiaries)
By: ________________________
Name:
Title:
NORFOLK SOUTHERN CORPORATION
By: ________________________
Name:
Title:
NORFOLK SOUTHERN RAILWAY COMPANY
(for itself and on behalf of its
controlled Subsidiaries)
By: ________________________
Name:
Title:
CONRAIL INC. (for itself and on
behalf of its controlled
Subsidiaries)
By: /s/ ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
Name:
Title:
CONSOLIDATED RAIL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
Name:
Title:
CRR HOLDINGS LLC
By: _________________________
Name:
Title:
CONSOLIDATED RAIL CORPORATION
By: ________________________
Name:
Title:
CRR HOLDINGS LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
Name:
Title:
SCHEDULE 1
ASSETS
Attached to and incorporated in this Schedule 1 are the
following attachments:
(i) Attachment I, which is the line segment allocation
list identifying each Route owned, operated or used by CRC
and its Affiliates and indicating as to each Route whether
it is included in the NYC Allocated Assets, the PRR
Allocated Assets or the Retained Assets; and
(ii) Attachment II, which is a system map showing all
Routes comprising the CRC rail system and indicating by
color coding the Routes which are to be NYC Allocated
Assets, PRR Allocated Assets and Retained Assets,
respectively; Attachment II is intended to show graphically
the Routes described in Attachment I.
ITEM 1 - NYC ALLOCATED ASSETS
The "NYC Allocated Assets" shall include all of CRR's, CRC's
and their respective Affiliates' right, title and interest in and
to the following Assets:
(A) Routes and Assets Related to Routes. All Routes
identified as NYC Allocated Assets in Attachment I and Attachment
II (i.e., those lines colored in red and/or orange on Attachment
II, except for those lines already owned by CSXT or its
Affiliates), together with the following Assets that are related
to such Routes (except as otherwise expressly provided in this
Schedule 1 or the Ancillary Agreements):
(1) the track structure (rails, ties, other track
material, grading, bridges, tunnels, culverts,
etc.);
(2) the underlying right-of-way, operating and
non-operating, regardless of its width, and
associated structures and fixtures;
(3) except in the areas where the parties' respective
Routes are approximately equidistant from the
Asset in question (where in each case other
arrangements are made pursuant to one or more
Ancillary Agreements), appurtenant yards, sidings,
switch tracks and repair or other maintenance
facilities;
(4) real estate (whether or not used for operating
purposes) adjacent or in proximity to the Routes
included in the NYC Allocated Assets, or
underlying, adjacent or in proximity to those
structures or facilities described in the
preceding clauses (2) and (3) and the following
clause (5);
(5) signal, communications and computer facilities and
equipment on the right-of-way and (to the extent
used to operate the Routes included in the NYC
Allocated Assets) off the right-of-way;
(6) tools and supplies located on and along, and
automobiles, hi-rail cars and trucks assigned to,
the Routes included in the NYC Allocated Assets,
including repair materials and local repair
equipment, except system stockpiles of inventory,
material and supplies and Work Equipment;
(7) Contracts (other than Transportation Contracts)
relating to a Route included in NYC Allocated
Assets, including without limitation trackage and
other operating rights, public and private grade
crossing agreements, side track and industrial
track agreements, pipeline and wireline
agreements, building and yard maintenance
agreements, leases, licenses, reversions,
longitudinal easements and other occupancy
agreements, and the rents, security deposits and
profits arising therefrom or in connection
therewith;
(8) muniments of title, all original valuation maps,
land schedules, track charts, surveys, bridge and
other drawings, bridge inspection reports,
environmental reports, permits, signal and
communications plans, other engineering
documentation, deeds (including such originals of
acquisition or out-conveyances as may be in CRC's
possession), current billing records (including
billing addresses and, if in a computer format,
the data and the programs), real estate work
files, property tax records (and any computer
database for such records), and all other Books
and Records relating to a Route included in NYC
Allocated Assets;
(9) mineral rights or easements of any sort held by
CRR, CRC or their respective Affiliates located
on, over, across and/or in the real estate or
property heretofore described in this paragraph
(A); and
(10) royalties or other payments in respect of real
estate or other Assets heretofore described in
this paragraph (A).
(B) Philadelphia Offices. The CRC headquarters office
building located at Philadelphia, PA, and the CRC information
technology center building located at Philadelphia, PA and all
FF&E located at such facilities.
(C) Yards and Yard Access. The following CRC yards, land
and yard access tracks:
(1) Seneca Yard (Buffalo, NY) (subject to access and
use by NSR pursuant to Ancillary Agreement);
(2) 59th Street ("Panhandle") Yard site (Chicago, IL);
(3) Collinwood Yard (Cleveland, OH);
(4) Former "local yard" and intermodal terminal at
Buckeye (Columbus, OH);
(5) Buckeye Yard Lead track from the north limit of
"CP Buckeye" to "▇▇ ▇▇▇▇▇" (Columbus, OH);
(6) West track between "CP 138" and "CP 136"
(Columbus, OH);
(7) Portion of Piqua Yard (Fort ▇▇▇▇▇, IN) to be
agreed upon between NSR and CSXT;
(8) Hawthorne Yard (Indianapolis, IN) (subject to
access and use by NSR pursuant to Ancillary
Agreement);
(9) North Bergen intermodal terminal (New Jersey);
(10) South Kearny intermodal terminal including APL
leased areas; however, NSR to have access to the
APL leased terminal and NSR to have the right to
serve APL and any successor lessee to APL using
such leased premises;
(11) Greenwich Yard (Philadelphia), but excluding yard
tracks and areas used to support the movement of
local freight (including port traffic, but
excluding intermodal) and to support the movement
of rail traffic to and from the ore pier, which
tracks and areas will be included in Retained
Assets;
(12) Track from CP Field to ▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇);
(13) ▇▇▇▇▇▇▇ Yard (Toledo, OH);
(14) ▇▇▇▇▇▇▇▇▇ Yard (Trumbull Street Yard), but subject
to use of and access to two tracks by NSR to
support E-Rail Intermodal Facility as provided in
Ancillary Agreements; and
(15) Manville Yard (subject to use by CRC, CSX and NSR
pursuant to Ancillary Agreements).
(D) Miscellaneous Property. The following Assets:
(1) Developable property west of CRC's Chemical Coast
Secondary in northern New Jersey in the vicinity
of the current CRC Elizabethport Yard (Trumbull
St. Yard);
(2) Indianapolis Division headquarters building,
offices and land; and
(3) Albany Division headquarters building, offices and
land.
(E) Stock Ownership and Other Interests. The following
interests:
(1) 50% of the issued and outstanding capital stock in
Lakefront Dock & Railroad Terminal Company;
(2) 100% of the issued and outstanding capital stock
in St. ▇▇▇▇▇▇▇▇ & Adirondack Railway;
(3) 50% of the issued and outstanding capital stock in
Albany Port Railroad Corp.; and
(4) 10.125% of the issued and outstanding capital
stock in TTX Company.
ITEM 2 - PRR ALLOCATED ASSETS
The "PRR Allocated Assets" shall include all of CRR's, CRC's
and their respective Affiliates' right, title and interest in and
to the following Assets:
(A) Routes and Assets Related to Routes. All Routes
identified as PRR Allocated Assets in Attachment I and Attachment
II (i.e., those lines colored in green and/or yellow on
Attachment II, except for those lines already owned by NSR or its
Affiliates), together with the following Assets that are related
to such Routes (except as otherwise expressly provided in this
Schedule 1 or the Ancillary Agreements):
(1) the track structure (rails, ties, other track
material, grading, bridges, tunnels, culverts,
etc.);
(2) the underlying right-of-way, operating and
non-operating, regardless of its width, and
associated structures and fixtures;
(3) except in the areas where the parties' respective
Routes are approximately equidistant from the
Asset in question (where in each case other
arrangements are made pursuant to one or more
Ancillary Agreements), appurtenant yards, sidings,
switch tracks and repair or other maintenance
facilities;
(4) real estate (whether or not used for operating
purposes) adjacent or in proximity to the Routes
included in the PRR Allocated Assets, or
underlying, adjacent or in proximity to those
structures or facilities described in the
preceding clauses (2) and (3) and the following
clause (5);
(5) signal, communications and computer facilities and
equipment on the right-of-way and (to the extent
used to operate the Routes included in the PRR
Allocated Assets) off the right-of-way;
(6) tools and supplies located on and along, and
automobiles, hi-rail cars and trucks assigned to,
the Routes included in the PRR Allocated Assets,
including repair materials and local repair
equipment, except system stockpiles of inventory,
material and supplies and Work Equipment;
(7) Contracts (other than Transportation Contracts)
relating to a Route included in PRR Allocated
Assets, including without limitation trackage and
other operating rights, public and private grade
crossing agreements, side track and industrial
track agreements, pipeline and wireline
agreements, building and yard maintenance
agreements, leases, licenses, reversions,
longitudinal easements and other occupancy
agreements, and the rents, security deposits and
profits arising therefrom or in connection
therewith;
(8) muniments of title, all original valuation maps,
land schedules, track charts, surveys, bridge and
other drawings, bridge inspection reports,
environmental reports, permits, signal and
communications plans, other engineering
documentation, deeds (including such originals of
acquisition or out-conveyances as may be in CRC's
possession), current billing records (including
billing addresses and, if in a computer format,
the data and the programs), real estate work
files, property tax records (and any computer
database for such records), and all other Books
and Records relating to a Route included in PRR
Allocated Assets;
(9) mineral rights or easements of any sort held by
CRR, CRC or their respective Affiliates located
on, over, across and/or in the real estate or
property heretofore described in this paragraph
(A); and
(10) royalties or other payments in respect of real
estate or other Assets heretofore described in
this paragraph (A).
(B) Altoona and Hollidaysburg Shops. The CRC car and
locomotive repair shops located at Altoona, PA and Hollidaysburg,
PA and all rolling-stock-related and locomotive-related inventory
and supplies (including rolling-stock-related and
locomotive-related system stockpiles) located at such facilities
(subject to provisions of Section 2.7 of the Agreement) and all FF&E located
on or at such facilities.
(C) Yards and Yard Access. The following CRC yards, land
and yard access tracks:
(1) Ashtabula Harbor facilities (subject to access and
use by CSX pursuant to Ancillary Agreements);
(2) Rockport Yard (Cleveland, OH);
(3) Buckeye Hump Yard (Columbus, OH);
(4) East track between "CP ▇▇▇" ▇▇▇ "▇▇ ▇▇▇"
(▇▇▇▇▇▇▇▇, ▇▇);
(5) the right of way east of and parallel to the
single track portion of the Columbus Line
immediately north of "CP 136" (the current end of
double track), and the Clintonville Siding east of
the single track portion;
(6) portion of Piqua Yard (Fort ▇▇▇▇▇, IN) used by or
for Triple Crown Services Company, together with
portion of Piqua Yard to be agreed upon between
NSR and CSXT;
(7) ▇▇▇▇▇▇▇ Yard (New Jersey);
(8) E-Rail intermodal facility (New Jersey);
(9) Morrisville intermodal facility;
(10) Airline Jct. Yard (Toledo, OH); and
(11) ▇▇▇▇▇▇▇ E Yard (Toledo, OH).
(D) Miscellaneous Property. The following CRC assets and
properties:
(1) Developable property east of CRC's Chemical Coast
Secondary in the vicinity of the E-Rail intermodal
facility (northern New Jersey);
(2) real estate comprising a portion of the right-of-way
(east of the current single track) between
PRR's Clintonville Siding and the north end of the
double track at CP 136 on which NSR may construct
new track;
(3) real estate comprising a portion of the right-of-way
on which the Buckeye Yard lead track is
located to enable NSR to construct a parallel
track to the Buckeye Yard lead track (Buckeye
Yard, Columbus, OH) (constructions to be governed
by an Ancillary Agreement);
(4) Pittsburgh Division headquarters building, offices
and land;
(5) Dearborn Division headquarters building, offices
and land; and
(6) All undeveloped property that is part of, adjacent
to or in the vicinity of Lincoln Yard (Detroit,
MI).
(7) All real estate, trackage, track material and
other Assets comprising CRC's abandoned Danville
Secondary, together with all other Assets lying
on, adjacent to or in the vicinity of the CRC
right-of-way between ▇▇▇▇▇▇▇▇▇ and Danville, IL,
including without limitation all Assets comprising
such Danville Secondary thereon or adjacent
thereto necessary for construction of connections
at ▇▇▇▇▇▇▇▇▇ and Danville (excluding any NYC
Allocated Assets). (If NSR elects to restore the
line between ▇▇▇▇▇▇▇▇▇ and Danville, CSXT shall
have the option to share in the costs of the line
restoration on a reasonable basis that is mutually
agreeable and, if CSXT elects so to share in such
restoration costs, CSXT shall be granted overhead
trackage rights on such line on a fair basis
taking into consideration the cost paid by CSXT
for such restoration.)
(E) Stock Ownership and Other Interests. The following
interests:
(1) 16.67% of the issued and outstanding capital stock
in The Belt Railway Company of Chicago;
(2) 25.64% of the issued and outstanding capital stock
in Peoria and Pekin Union Railway Company;
(3) 100% of the issued and outstanding capital stock
in TCV, Inc. (which owns a 50% partnership
interest in Triple Crown Services Company); and
(4) 11.682% of the issued and outstanding capital
stock in TTX Company.
ITEM 3 - RETAINED ASSETS
The "Retained Assets" shall include all of CRR's, CRC's and
their respective Affiliates' right, title and interest in and to
the following Assets:
(A) Routes and Assets Related to Routes. Routes within the
Shared Asset Areas identified as Retained Assets in Attachment I
and Attachment II (i.e., those lines colored in blue on
Attachment II), together with the following Assets within the
Shared Asset Areas that are related to such Routes (except as
otherwise expressly provided in this Schedule 1 or the Ancillary
Agreements):
(1) the track structure (rails, ties, other track
material, grading, bridges, tunnels, culverts,
etc.);
(2) the underlying right-of-way, operating and
non-operating, regardless of its width, and
associated structures and fixtures;
(3) appurtenant yards, sidings, switch tracks and
repair or other maintenance facilities (including
but not limited to Oak Island Yard, auto terminals
at ▇▇▇▇▇▇▇ Avenue, Greenville and Ridgefield
Heights);
(4) real estate (whether or not used for operating
purposes) adjacent or in proximity to the Routes
included in the Retained Assets, or underlying,
adjacent or in proximity to those structures or
facilities described in the preceding clauses (2)
and (3) and the following clause (5);
(5) signal, communications and computer facilities and
equipment on the right-of-way and (to the extent
used to operate the Routes included in Retained
Assets) off the right-of-way;
(6) tools and supplies located on and along, and
automobiles, hi-rail cars and trucks assigned to,
the Routes included in the Retained Assets,
including repair materials and local repair equip-
ment, except system stockpiles of inventory,
material and supplies and Work Equipment;
(7) Contracts (other than Transportation Contracts)
relating to a Route included in Retained Assets,
including without limitation trackage and other
operating rights, public and private grade
crossing agreements, side track and industrial
track agreements, pipeline and wireline
agreements, building and yard maintenance
agreements, leases, licenses, reversions,
longitudinal easements and other occupancy
agreements, and the rents, security deposits and
profits arising therefrom or in connection
therewith;
(8) muniments of title, all original valuation maps,
land schedules, track charts, surveys, bridge and
other drawings, bridge inspection reports,
environmental reports, permits, signal and
communications plans, other engineering
documentation, deeds (including such originals of
acquisition or out-conveyances as may be in CRC's
possession), current billing records (including
billing addresses and, if in a computer format,
the data and the programs), real estate work
files, property tax records (and any computer
database for such records), and all other Books
and Records relating to a Route included in
Retained Assets;
(9) mineral rights or easements of any sort held by
CRR, CRC or any of their respective Affiliates
located on, over, across and/or in the real estate
or property heretofore described in this paragraph
(A); and
(10) royalties or other payments in respect of real
estate or other Assets heretofore described in
this paragraph (A).
(B) The "Retained Assets" shall include the SSO Facilities
which shall be as follows:
(1) the building and offices, together with underlying
land, of the Philadelphia Division headquarters
located at Mt. Laurel, NJ within the
Philadelphia/South Jersey Shared Assets Area;
(2) the Customer Service Center building and offices,
together with underlying land, located at
Pittsburgh, PA;
(3) use of the office space in the Dearborn Division
headquarters building (the building and land are
included in the PRR Allocated Assets) currently
used for the crew management facility until the
crew management facility is discontinued;
(4) the system maintenance-of-way equipment center
building located adjacent to Canton Yard in
Canton, OH on land included in the PRR Allocated
Assets;
(5) the signal repair center building located within
Buckeye Yard at Columbus, OH on land included in
the PRR Allocated Assets;
(6) the offices of the system freight claims facility
located at Buffalo, NY on land included in the NYC
Allocated Assets;
(7) the offices of the system non-revenue billing
facility and land located at Bethlehem, PA;
(8) the system rail welding plant building located at
Lucknow (Harrisburg, PA) on land at Harrisburg
Yard that is included in the PRR Allocated Assets;
(9) use of the offices located at ▇▇▇▇▇▇ Yard,
Pittsburgh, PA (the building and land are included
in the PRR Allocated Assets), for the system road
▇▇▇▇▇▇▇/engineer training center until such center
is discontinued; and
(10) the police operations center offices and land at
Mt. Laurel, NJ.
(C) 51% of the issued and outstanding capital stock in
Indiana Harbor Belt Railroad Co. (subject to provisions of
Ancillary Agreement referred to in Schedule 4, Item 4(E)(1)).
ITEM 4 - POOLED ASSETS
The "Pooled Assets" shall include the following Assets of
CRR, CRC and their respective Affiliates:
(A) Non-Operating property and improvements not in
proximity to an Allocated Asset or a Retained Asset.
(B) Employee benefit plans and Assets of such plans.
(C) System stockpiles of inventory, materials and supplies
regardless of location (other than those at Hollidaysburg and
Altoona shops which shall be subject to Section 2.7 of the
Agreement).
(D) The following interests:
(1) 100% of the issued and outstanding capital stock
in Merchants Despatch Trans. Corp.;
(2) 100% of the issued and outstanding capital stock
in CRC Properties, Inc.; and
(3) 100% of the issued and outstanding capital stock
in CRR Investments, Inc.
However, if any of the Assets of the entities
identified in clauses (D)(1) through (3) above are part of the
Routes included in the NYC Allocated Assets (Item 1(A) above) or
the PRR Allocated Assets (Item 2(A) above), then the Assets of
such entity will be designated as and included in the NYC
Allocated Assets or the PRR Allocated Assets, as the case may be;
provided that if such assets are valued at greater than $1
million, then there shall be an equitable adjustment by way of a
cash payment from NYC or PRR, as the case may be, to the other
equal to the CSX's or NSC's respective Percentage, as the case
may be, applied against the value of such Assets or failing such
payment, by way of including CRC cash equal to the value of such
Assets in the NYC Allocated Assets or the PRR Allocated Assets
as the case may be.
(E) The following interests:
(1) 100% of the issued and outstanding capital stock
in CRR Industries, Inc.;
(2) 100% of the issued and outstanding capital stock
in Conrail Direct, Inc.;
(3) 100% of the issued and outstanding capital stock
in CG Projects, Inc.;
(4) 100% of the issued and outstanding capital stock
in PennCentral Comm. Co.;
(5) 100% of the issued and outstanding capital stock
in General American Ins. Co.; and
(6) 19.136% of the issued and outstanding capital
stock in Amtech Logistics Corp.
(F) CRC's rights and interests in and with respect to the
following:
(1) Locomotive Management Services Partnership (a
partnership with General Electric relating to use
of locomotives); and
(2) EMP (bilateral agreements relating to use of
containers by CRC, NSR and UP).
The parties intend that CRC's rights and interests with respect
to LMS and EMP will be shared based on their respective
Percentage, that both CSXT and NSR will participate therein and
that, in the case of EMP, CSX will participate as a partner.
NOTE: Notwithstanding any provision of this Schedule, to the
extent an item herein describes an Ancillary Agreement between
the parties the form of which is set forth as an Exhibit to this
Agreement, such description shall be for purposes of
identification only, and the terms of such Ancillary Agreement
shall control.
Conrail Line Allocation
Attachment I
All CRC lines are not listed herein. Lines listed include main
line routes, primary branch lines and other lines which may need
clarification. Lines pertain to allocated CRC ownership or where
identified (TR) to assumed present CRC freight rights. Customer
access is attributed to the acquiror of the line on which the
customer is located, unless otherwise identified in the
Transaction Agreement. Lines not specifically listed are to be
acquired by the owner/acquirer of the CRC route/line to which
they connect. In the case that a line not listed connects to a
line allocated to PRR and to a line allocated to NYC, allocation
will be determined at a later date.
NYC ALLOCATED ASSETS
Primary Route And
Extension Acquisitions
NY/NJ to Cleveland - Water Level Route & Extensions
Segmt From To
▇ ▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇ ▇▇ Selkirk/Albany Term. NY
▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ TR
▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇
▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇ ▇▇▇▇. NY
1 Selkirk NY Poughkeepsie NY
2 Selkirk/Albany Term. NY Syracuse NY
3 Syracuse NY Buffalo NY
3 Lyons Yard NY
4 Buffalo NY Ashtabula OH
5 Ashtabula OH Cleveland Terminal OH
5 Portion of Kinsman OH
Conn.
5 Portion of 44 I.T OH
5 All of 45 I.T.(including
Dock 22, 24, & 26 Lds) OH
▇ ▇▇▇ ▇▇▇▇
▇▇▇▇(▇▇▇▇▇▇▇▇▇) ▇▇
▇▇ ▇▇▇▇▇▇ ▇▇ Selkirk/Albany Term. NY
41 Syracuse NY Adirondack Jct. PQ
41 Adirondack Jct. PQ Montreal (St. Luc) PQ TR
41 ▇▇▇▇▇▇▇ NY Oswego NY
41 Syracuse NY Hawk NY
▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇ TR
43 Frontier Yard NY
43 Belt Line Branch NY
42 Buffalo Terminal NY Niagra Falls/LockportNY
▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ TR
94 Syracuse NY NYSW/FL Connections NY
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇ Branch Lines MA
▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇ ▇▇▇▇ ▇▇ MA Branch ▇▇▇▇▇ ▇▇ ▇▇
▇ ▇▇▇▇ ▇▇▇▇ ▇▇. I.T. NY
1 Fremont Secondary NY
166 New York City NY Connecticut Branch
Lines TR
166 Connecticut Branch
Lines
166 Connecticut Branch
Lines (including Amtrak) TR
3 Churchville NY Wayneport NY
3 Mortimer NY Avon NY
3 Rochester Branch NY
Crestline to Chicago-Pennsylvania ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ Dunkirk OH
17 Bucyrus Yard Track and
Connector OH
18 Dunkirk OH Fort ▇▇▇▇▇ IN
18 Decatur Sec. & ▇▇▇▇
I.T. IN
From NS
via CR
19 Fort ▇▇▇▇▇ IN Warsaw IN
From NS
via CR
20 Warsaw IN Chicago Terminal
(▇▇▇▇▇▇ Jct.) IN
18 ▇▇▇▇▇ IN Decatur IN
Berea to E. St. Louis Route & Extensions
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
122 Crestline OH Galion OH
▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇ Indianapolis IN
24 Indianapolis IN ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ IN Effingham IL
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇. ▇▇▇▇ ▇▇
▇▇ ▇▇. ▇▇▇▇ ▇▇ ▇. ▇▇. ▇▇▇▇▇ ▇▇
27 ▇▇▇▇▇▇▇▇ IN Emporia IN
55 Columbus(CP138) OH Galion OH
55 Columbus(Hocking) OH Columbus(CP138) OH
55 ▇▇▇▇ I.T. OH
83 Terre Haute IN Danville IL
151 Danville IL ▇▇▇▇ IN
80 Pekin R.T IL
100 Indianapolis Terminal IN
99 Indianapolis IN Rock Island IN
100 Indianapolis IN Crawfordsville/
▇▇▇▇▇▇▇▇▇▇ st IN
154 Indianapolis IN Shelbyville IN
105 HN Cabin IL Valley Jct. IL
106 St. Elmo IL Salem IL TR
98 Terre Haute IN Beehunter IN TR
▇▇ ▇▇▇▇▇▇(▇▇▇▇▇▇ ▇▇▇▇▇▇) IN New Castle R.T. IN TR
28 New Castle RT IN
28 Muncie I.T. IN
Columbus to Toledo ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
53 Western Branch OH
53 Buckeye Yard Lead OH
53 Columbus OH ▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ OH
51 ▇▇▇▇▇▇▇▇▇ OH Toledo Terminal OH
51 Toledo Terminal OH Woodville OH
(▇▇▇▇▇▇▇▇▇ Sec. and
I.T.)
51 Toledo Terminal OH Stonyridge OH
51 Main Freight Tk. & Wye OH
51 ▇▇▇▇▇▇▇ Yard and
Interlocking OH
51 Eastern R.T. OH
51 Lakefront Docks Lead
Tracks OH
Bowie to ▇▇▇▇▇▇▇▇, MD
90 Bowie MD Morgantown MD
90 Brandywine MD Chalk Point MD
NY/NJ to Philadelphia (West Trenton Line)
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇ ▇▇
182 Drill Track Lead NJ
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇ Terminal NJ
Yd.
▇▇▇ ▇▇▇▇ ▇▇▇. ▇▇ ▇▇▇▇▇▇▇ ▇▇
182 Phil PA CP-Field/CP-▇▇▇▇ PA
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ Vicinity of CP- PA
Field/CP-▇▇▇▇
Washington, DC to Landover, MD
33 Washington Terminal DC TR
33 Washington (RO) DC Landover MD
Quakertown Branch
130 Philadelphia Terminal PA Quakertown PA TR
Chicago Area
192 ▇▇▇▇▇▇ IN Ivanhoe IN
190 Panhandle Stub IN South of 49th Street IL
190 Ivanhoe IN Westernmost point of IN
CR Ownership
Monongahela
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇/ ▇▇▇▇▇▇▇
▇▇ to joint
use
agreement
PRR ALLOCATED ASSETS
Primary Route And
Extension Acquisitions
Segmt From To
NJ Terminal to Crestline - Pennsylvania Route & Extensions
▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇
10 Somerville NJ Allentown PA
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇ TR
10 Orange NJ Denville NJ TR
▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇ TR
10 Rockport NJ Phillipsburg NJ
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
10 Allentown Terminal PA
186 Orange NJ North Jersey TerminalNJ TR
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ TR
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇ TR
11 Allentown PA Reading PA
12 Reading PA Harrisburg PA
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ Pittsburgh PA
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇ TR
13 Conemaugh Line via Saltsburg PA
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇/
▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ PA
14 Pittsburgh Terminal PA
14 Pittsburgh PA Salem OH
14 Salem OH Alliance OH
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ Wampum PA
15 Alliance OH Cleveland Terminal OH
▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
120 Portion of ▇▇▇▇▇▇▇ OH
Conn.
120 Portion of 44 I.T. OH
(including Dock 20 Ld.)
▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ Weirton WV
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
Bridge
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
45 Ashtabula OH Youngstown OH
162 Ashtabula Harbor OH Ashtabula OH
46 Niles OH ▇▇▇▇▇▇▇ OH
46 Alliance OH Youngstown OH
46 Gem I.T. - Lordstown OH
48 Youngstown OH Rochester PA
87 Allentown PA Hazelton PA
▇▇ ▇▇▇▇▇▇ PA Cloe PA ▇▇
▇▇▇▇ PA Shelocta PA
Tyrone PA Lock Haven PA TR
Cleveland to Chicago - Water Level Route
6 Cleveland Terminal OH Toledo ▇▇▇▇▇▇▇▇ ▇▇
▇ ▇▇▇▇▇▇ ▇▇ Lorain OH
159 Toledo Terminal OH Sylvania OH
7 Toledo Terminal OH Goshen IN
107 Elkhart IN Goshen IN
8 Elkhart IN ▇▇▇▇▇▇ IN
Philadelphia to Washington (NEC) ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ Perryville MD TR
31 Wilmington Terminal DE
32 Perryville MD Baltimore MD TR
32 Baltimore Terminal MD
32 Claremont R.T. MD
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Lead MD
32 Grays Yard MD TR
33 Balt. BayView MD Landover MD TR
33 Baltimore Terminal MD
33 Baltimore MD Cockeysville MD
▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ TR
34 Pocomoke MD New ▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇/ ▇▇
Indian River
▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇
Michigan Operations (Excluding Joint Detroit Area)
50 Toledo Terminal OH Detroit Terminal MI
60 Detroit Terminal MI Jackson MI
61 Jackson MI Kalamazoo MI
62 Kalamazoo MI Elkhart IN
70 Jackson MI Lansing MI
71 Kalamazoo MI Grand Rapids MI
71 Kalamazoo I.T. MI
71 Comstock I.T. MI
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇ Lines & Extensions
37 Philadelphia Terminal PA Reading PA
37 Reading Terminal
37 Thorndale PA Woodbourne PA
37 Portion of Stoney PA
Creek Branch
37 West Falls Yard PA
37 Venice I.T. PA
136 ▇▇▇▇▇/Chesterbrook PA
Lines
137 Philadelphia PA ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇
▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ Lititz/Columbia PA
Indiana Lines & Extensions
84 ▇▇▇▇▇▇▇▇ IN Warsaw IN
85 Warsaw IN Goshen IN
163 Marion IN Red Key IN
101 Layfayette I.T. IN Lancaster
Buffalo to NY/NJ Terminal Route & Extensions
44 NJ/NY Jct. NJ Suffern NY TR
44 Suffern NY Port Jervis NY
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇
44 Binghamton NY Waverly NY
▇▇ ▇▇/▇▇ ▇▇▇. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ TR
44 Paterson Jct. NJ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇ Buffalo NY
88 Waverly NY Mehoopany PA
89 ▇▇▇▇▇ PA ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇ ▇▇ Himrods Jct NY
95 Corning NY Himrods Jct NY
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ Paterson Jct NJ TR
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
171 NJ/NY Jct. NJ North Jersey TerminalNJ TR
Buffalo to Harrisburg and South
35 Perryville MD Harrisburg PA
▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ (▇▇▇▇) PA
35 Harrisburg PA Shocks PA
36 Williamsport MD ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ Buffalo NY
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
4 Ebenezer Jct. NY ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇ Corry PA
91 Corry PA ▇▇▇▇ ▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ Oil City PA
Cincinnati, OH to Columbus, OH to Charleston, WV
54 Columbus OH Cincinnati OH
54 Cincinnati Terminal OH
56 Columbus Terminal OH Truro OH
57 Truro OH Charleston WV
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇
Chicago South/Illinois Operations
193 ▇▇▇▇▇▇▇ IN Hartsdale IN
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
82 Hartsdale IN ▇▇▇▇▇▇▇▇▇ IN
81 ▇▇▇▇▇▇▇▇▇ IN Hennepin IL
97 Keensburg IL ▇▇▇▇▇ IL
152 ▇▇▇▇▇▇▇▇▇ IN Wheatfield IN
Chicago Market
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇▇ ▇▇
Operations/Loop
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇. I.T. IL
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇. I.T. IL
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
194 Elevator Lead & Tri- IL
River Dock
195 Chicago IL ▇▇▇▇▇▇ IN
196 ▇▇▇▇▇▇ Jct. IN CP501 IN
196 CP 509 IL Calumet Park IL
194 CR&I Branch IL
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ I.T. IL
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 51st Street IL TR
197 Port of Indiana IN
196 ▇▇▇▇▇▇▇ I.T. IL
190 CP502 IN ▇▇▇▇▇▇▇ IN
CRC RETAINED ASSETS - DETROIT SHARED ASSETS AREA
Segmt From To
Detroit Line Gibraltar(MP20) MI ▇▇ ▇▇▇▇ Detroit MI
Michigan Line CP Townline MI CP ▇▇▇▇ ▇▇▇▇▇▇ MI
Part TR
North Yard Branch CP Bay City Jct MI North Yard MI
Sterling Secondary North Yard MI Sterling Yard MI
Junction Yard
Secondary CP Townline MI River Rouge Yard MI
▇▇▇▇▇ Industrial River Rouge MI Tecumsah Yard MI
Track Yard
Lincoln Industrial Ecorse Jct. MI Carleton MI
Track
Term. East Ind. ▇▇▇▇ Yard MI North Yard MI
Track
Term. West Ind. North Yard MI Fullerton MI
Track
Highland Park Ind. Fullerton MI West Belt Jct. MI
Track
Utica Industrial Sterling Yard MI Ford Utica Plant MI
Track
▇▇▇▇▇▇ Wye Track Fort St - MI NS Drawbridge MI
Rougemere
Overhead Rights West Belt Jct. MI Delray MI TR
on CSXT
Local Rights on Oak MI End of Track - W. MI TR
CSXT Detroit
Rights on Delray Connecting RR
CRC RETAINED ASSETS - SOUTH JERSEY/PHILADELPHIA SHARED ASSETS
AREA
Segmt From To
NEC (Amtrak) Zoo PA Trenton NJ TR
Harrisburg Line Zoo PA Overbrook PA TR
(Amtrak)
Delair Branch CP Park PA Pavonia Yard NJ
West ▇▇▇▇▇▇▇ Line Arsenal PA Media PA TR
(SEPTA)
Chestnut Hill W. N. Philadelphia PA Midvale PA TR
Line (SEPTA)
Midvale Yard/ PA
Midvale I.T.
Main Line (SEPTA) Market East PA Newtown Jct. PA ▇▇
▇▇▇▇▇▇▇ Secondary Eastwick PA Essington PA
▇▇▇▇▇▇▇ Industrial Essington PA Marcus Hook PA
Track
Bordertown Pavonia NJ Trenton NJ
Secondary
▇▇▇▇▇▇▇'▇ Pt. ▇▇ ▇▇▇▇▇ NJ Palermo NJ
Secondary Part TR
Vineland Secondary ▇▇ ▇▇▇▇▇ NJ ▇▇▇▇▇▇ NJ
Millville ▇▇▇▇▇▇ NJ Manumiskin NJ
Industrial Track
Manumuskin Ind. Manumuskin NJ WW RR Connection NJ
Track
Penns Grove Woodbury NJ Deepwater NJ
Secondary
Salem Running Woodbury NJ Swedesboro NJ
Track
Pemberton Ind. CP Jersey NJ Mt. ▇▇▇▇▇ NJ
Track Part TR
Grenloch ▇▇ ▇▇▇▇▇ NJ Bellmawr NJ
Industrial Track
Shell Industrial Shell NJ End of Track NJ
Track
Bustleton Ind. Holmes PA Bustleton PA
Track
Morrisville Line CP "MA" PA ▇▇▇▇▇▇ PA
Fairless Spur Morrisville Yd. PA Fairless Works PA
Richmond Ind. Nice PA Pt. Richmond PA
Track
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇ End of Track PA
Track
Camden Running ▇▇ ▇▇▇▇▇ NJ Pavonia NJ
Track Part TR
Philadelphia Belt PA TR
Line
▇▇▇▇▇▇▇ St. IT South PA
Philadelphia
Port of Philadelphia PA
Pier I22 PA
Blue Line ▇▇▇▇▇ Jct. PA Nice PA
Connecting Track
CRC RETAINED ASSETS - NORTH JERSEY/NEW YORK SHARED ASSETS AREA
Segmt From To
NEC (Amtrak) Trenton NJ Penn Station NY NY TR
Raritan Valley ▇▇▇▇▇▇ NJ Bound Brook NJ TR
Line (NJT)
North Coast Line Rahway(Union) NJ Neptune Yard NJ TR
(NJT)
Bayonne Line (NJT) Bayonne NJ Greenville NJ TR
Southern Secondary Red Bank NJ ▇▇▇▇▇▇▇ NJ TR
(NJT)
Freehold Secondary Freehold NJ Farmingdale NJ TR
(NJT)
Lehigh Line CP Port Reading NJ Oak Island Yard NJ
Jct.
River Line ▇▇ ▇▇▇▇▇ NJ North Bergen NJ
Port Reading Bound Brook NJ PD Port Reading NJ
Secondary
Chemical Coast "PN" Oak Island NJ Perth Amboy NJ
Secondary
P&H Branch Lane NJ Hack NJ
▇▇▇▇ - ▇▇▇▇▇▇▇ ▇▇▇▇ NJ CP-Croxton NJ
Running Tk.
Northern Running CP-Croxton NJ North Bergen NJ
Track
▇▇▇▇▇▇ Running Hack NJ CP-Croxton NJ
Track
National Docks Oak Island NJ ▇▇▇▇ NJ
Secondary
Amboy Secondary South Amboy NJ Monmouth Jct. NJ
(Midway)
Bonhamton/Raritan Metuchen NJ Perth Amboy NJ
Ind. Tks.
Linden Industrial Carteret NJ Linden NJ
Track
Perth Amboy Center NJ
GSA Lead NS Lehigh Line NJ CSX Trenton Line NJ
Conn.
Reformatory Ind. Carteret NJ Chrome Yard NJ
Track
Elizabeth Ind. ▇▇▇▇▇▇ NJ Elizabeth NJ
Track
Hightstown Ind. Jamesburg NJ Hightstown NJ
Track
Toms River Ind. Lakehurst NJ Ciba NJ
Track
▇▇▇▇▇▇▇ #1 Track NJ NJ
Port Newark/Port NJ NJ
Elizabeth Access
Auto Terminal Lead Ridgefield NJ NJ
Heights
Greenville Yard Greenville NJ NJ
and Lead
ATTACHMENT II
[Attachment II - not provided in this filing - is a detailed map
of the entire Consolidated Rail Corporation (CRC) rail system,
indicating by color coding the Routes which are to be NYC
Allocated Assets, PRR Allocated Assets and Retained
Assets, respectively; Attachment II is intended to show
graphically the Routes described in Attachment I.]
SCHEDULE 2
MAJOR DECISIONS
1. From and after the Control Date, except by
resolution of the CRC Board, none of CRR, CRC or any of their
respective Affiliates (other than NYC and PRR) shall (other than
as is necessary or convenient in connection with a Restructuring
or is expressly set forth in this Agreement or the Ancillary
Agreements), in any single transaction or series of transactions,
take or commit to take any of the following actions:
(a) any action which would require or cause NYC or PRR
to declare, make or pay any Distributions;
(b) conduct any business other than, or engage in any
transaction not substantially related to and in the ordinary
course of, the business of CRC and its Affiliates (other than NYC
and PRR) as contemplated under this Agreement and the Ancillary
Agreements (the "Continuing CRC Business");
(c) make any loans, advances or capital contributions
to, or investments in, any other Person except CRC's wholly owned
Subsidiaries;
(d) acquire any business or assets, other than assets
acquired in the ordinary course of the Continuing CRC Business;
(e) consolidate with or merge into any Person or
otherwise engage in any business combination;
(f) issue, sell, adjust, split, combine, subdivide,
reclassify, transfer, pledge, redeem or otherwise acquire any
shares of its capital stock;
(g) sell, transfer, lease, sublease, license or
otherwise dispose of any assets (including leasehold interests
and intangible assets) not in the ordinary course of the
Continuing CRC Business or in excess of $100,000 in aggregate
value in any 12 month period;
(h) commit to or make any capital expenditure other
than in compliance in all material respects with the capital
expenditure budget adopted by the CRC Board from time to time;
(i) commence or settle any litigation for equitable
relief or for an amount in excess of $100,000 in any such
commencement or settlement or series of related commencements or
settlements;
(j) form or participate in a joint venture or
partnership outside the ordinary course of the Continuing CRC
Business or involving over $100,000 in assets or over $100,000 in
revenues;
(k) enter into or amend Contracts outside the ordinary
course of the Continuing CRC Business or with a notional value in
excess of $100,000 or for a period in excess of 12 months;
provided that in respect of Contracts that are Allocated Assets,
CRC shall follow NYC's (in the case of Contracts that are NYC
Allocated Assets) or PRR's (in the case of Contracts that are PRR
Allocated Assets) reasonable instructions in respect of such
Contracts and no CRC Board approval shall be necessary for CRC to
take such actions;
(l) create liens on or encumbrances of assets outside
the ordinary course of the Continuing CRC Business or with an
aggregate net book value in excess of $50,000;
(m) incur, assume, pre-pay, guarantee, endorse or
otherwise become liable or responsible (whether directly,
contingently or otherwise) for any indebtedness for borrowed
money except in the ordinary course of the Continuing CRC
Business;
(n) declare, make or pay any Distributions, other than
Distributions to CRC by its wholly owned Subsidiaries (other than
NYC and PRR);
(o) appoint or terminate any executive management;
(p) enter into or amend any written employment
agreement or contract or employee benefit plan or employee
policy;
(q) appoint or replace the independent auditors of
CRR, CRC and their respective Affiliates;
(r) unless required by law or a change in generally
accepted accounting principles in the United States, make any
material change in the accounting methods of CRR, CRC and their
respective Affiliates;
(s) dissolve, liquidate or wind up CRR, CRC or their
respective Affiliates or commence a voluntary proceeding seeking
reorganization or similar relief;
(t) approve, enter into or perform any transactions
with any director, officer or employee of CRR, CRC or their
respective Affiliates, or with an Affiliate of CSX or NSC,
respectively, or with any partner, family member or other person
that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with any
such director, officer or employee;
(u) transfer, pledge, create a security interest, or
otherwise part with ownership or possession, in whole or part, of
its membership interest in NYC or PRR; or
(v) any other action that could be reasonably expected
to have a material impact on the performance, financial condition
or prospects of CRR, CRC or their respective Affiliates.
2. Except by resolution of the CRC Board, CRC shall
not (other than as is necessary or convenient in connection with
a Restructuring) in its capacity as the sole member of NYC and
PRR, respectively, amend or restate the NYC LLC Agreement or the
PRR LLC Agreement, or suffer or permit NYC or PRR, as the case
may be, to take or commit to any of the following actions:
(a) declare, make or pay any Distributions;
(b) conduct any business other than, or engage in any
transaction not substantially related to and in the ordinary
course of, the business of NYC or PRR, as the case may be, as
contemplated under the Transaction Agreement and the Ancillary
Agreements or the freight transportation business generally;
(c) consolidate with or merge into any Person or
otherwise engage in any business combination;
(d) issue, sell, adjust, split, combine, subdivide,
reclassify, transfer, pledge, redeem or otherwise acquire any
interest in NYC or PRR, as the case may be;
(e) sell, transfer, lease, sublease, license, exchange
or otherwise dispose of all or substantially all of their Assets,
respectively (including leasehold interests and intangible
Assets);
(f) dissolve, liquidate or wind up or commence a
voluntary proceeding seeking reorganization or similar relief;
(g) enter into any agreement or arrangement with
respect to, or engage in, any transaction (i) between NYC or PRR,
as the case may be, on the one hand, and CRC or its Affiliates,
on the other hand, and (ii) between the NYC or PRR, as the case
may be, on the one hand, and CSX or NSC and their respective
Affiliates, on the other hand, other than such a transaction
which is on arm's length terms;
(h) transfer, provide trackage or operating rights or
otherwise grant the right to use any railroad line (regardless of
whether the grantor's rights depend on ownership or trackage
rights or a combination thereof) which is part of any Main Line
within the States of New Jersey or New York, or the area within
twenty-five miles of the city of Philadelphia, PA (or consent to
any such action by the "Operator" under the CSXT Operating
Agreement or the NSR Operating Agreement). As used in the
preceding sentence, "Main Line" means a line of railroad that has
daily rail service, but does not include any branch line
connecting to a Main Line and does not include the Main Line that
lies east of the ▇▇▇▇▇▇ River and south of Selkirk, NY; or
(i) amend any material provision of the CSXT Operating
Agreement, the CSXT Equipment Lease, the NSR Operating Agreement
or the NSR Equipment Lease.
SCHEDULE 3
PRESERVATION OF FAIR ACCESS TO CHICAGO GATEWAY
(a) For purposes of this Schedule 3, the following
terms shall have the following meanings:
(i) "Chicago Area" means the geographic area in
the States of Illinois and Indiana located within a 100-mile
radius of the office building presently located at One First
National Plaza in Chicago, Illinois;
(ii) "Chicago Area Terminal Railroad" means any
railroad, whether currently in existence or later created,
whose primary business is the provision of terminal or
switching services within the Chicago Area including,
without limitation, the Indiana Harbor Belt Line Railroad
Company, the Belt Railway Company of Chicago, the Baltimore
and Ohio Chicago Terminal Railroad Company and the Elgin,
Joliet and Eastern Railroad Company; and
(iii) "Chicago Gateway" means railroad lines
and interchange, dispatching and other related facilities
necessary to the function of carrying by railroad freight
moving through the Chicago Area generally in the direction
from east to west or west to east, whether by interchange
between carriers in the Chicago Area or by single-line ser-
vice between points east of the Chicago Area and points west
of the Chicago Area and passing through the Chicago Area.
(b) If CSXT or NSR shall after the Control Date
acquire, directly or indirectly, ownership, or rights to exercise
effective voting control, of any voting stock in any Chicago Area
Terminal Railroad (the "Interests"), the party acquiring such
Interests (the "Acquiror") shall, at the request of the other
party, sell or transfer to the other party, on terms and condi-
tions substantially the same on a pro rata per Interest basis as
those governing the Acquiror's acquisition of Interests, one-half
of such newly acquired Interests, provided, however, that if the
Interests would give the Acquiror control, not theretofore held,
of a Chicago Area Terminal Railroad, the Acquiror's obligation to
sell or transfer shall attach to the lesser of (A) one-half of
all the Interests (not solely newly acquired Interests) it holds
in that Chicago Area Terminal Railroad, or (B) such portion of
all the Interests (not solely newly acquired Interests) it holds
in that Chicago Area Terminal Railroad as necessary to equalize
the Interests of each party. The sale or transfer price for each
such Interest shall be the per Interest price paid by the
Acquiror for the newly acquired Interests.
(c) Neither CSXT nor NSR shall, following the Control
Date, enter into any arrangement with any Chicago Area Terminal
Railroad, or any other railroad operating in the Chicago Area
related to the Chicago Gateway, under which, in connection with
the grant by such Chicago Area Terminal Railroad or such other
railroad of trackage rights or similar operating rights to either
CSXT or NSR, such Chicago Area Terminal Railroad or other
railroad shall agree not to grant trackage rights or similar
operating rights to the other of CSXT or NSR, with respect to
such Chicago Area Terminal Railroad or the lines of such other
railroad related to the Chicago Gateway.
(d) Should CSX or CSXT enter into a transaction in
which either one shall be acquired by Burlington Northern Santa
Fe Corporation ("BNSF"), or in which CSX or CSXT acquires BNSF,
or in which substantially all of the rail operations of CSXT and
BNSF shall be otherwise combined and put under common control or
be merged together in any manner, at the request of CSX and any
successor thereto made no later than one year following the
consummation of such transaction, NSR shall sell and transfer to
CSXT or its successor, at fair value, the Streator Line from
▇▇▇▇▇▇▇, IN to Streator, IL (being the rail line located between
▇▇▇▇▇▇▇, IN, and Schneider, IN, and Wheatfield, IN, and Moronts,
IL), including all dispatching control with respect to said line.
As used in this subsection, the term "fair value" shall mean the
fair market value as determined by the parties by agreement or,
failing agreement, as determined by binding arbitration. Any
such sale and transfer shall be subject to all requisite
governmental and regulatory approvals.
(e) Any dispute concerning the interpretation or
application of this Schedule 3 shall be finally settled by
binding arbitration pursuant to Section 11.12 of the Transaction
Agreement. In any such arbitration, the arbitrator(s) shall have
the authority to direct, subject to any required governmental or
regulatory approvals and in accordance with any contractual
limitations on transfer or assignment contained in any agreement
with third parties (except one made in contravention of this
Schedule 3), CSXT, NSR or both to transfer to each other owner-
ship or control of voting stock in any Chicago Area Terminal
Railroad, or to direct the release by a party violating
subsection (c) of any obligation of exclusivity made in such
violation, as are necessary to carry out the purposes of this
Schedule 3.
SCHEDULE 4
SCHEDULE OF TRACKAGE RIGHTS,
HAULAGE, SHARED ASSET AND OTHER OPERATING AGREEMENTS
ITEM 1 - TRACKAGE RIGHTS AGREEMENTS
All Trackage Rights Agreements referred to in Items 1.A and
1.B below will be substantially in the form of the Trackage
Rights Agreement attached hereto as Exhibit C-1 (in the case
of those referred to in Item 1.A.) or C-2 (in the case of
those referred to in Item 1.B.) and will be between the
operator of the involved rail line, the owner, and the
tenant road. Forms of addenda and/or assignments relating
to the trackage rights referred to in Item 1.A. are included
with Exhibit C-1 and forms of addenda and/or assignments
relating to the trackage rights referred to in Item 1.B. are
included with Exhibit C-2. Unless otherwise provided here-
in, a trackage rights tenant shall only have the right to
enter on and exit from the trackage rights lines at points
other than the endpoints where the tenant may make a
connection with its existing railroad line and joint
CSXT/NSR lines ("Point of Permitted Entry or Exit"). If, in
the opinion of the tenant, a new or upgraded connection is
required at a Point of Permitted Entry or Exit other than
the endpoints, or, if in the opinion of the tenant, other
upgrading, including but not limited to switches, power
switches, signals, communications, etc., is required for
operational efficiency, the landlord will, subject to its
own operational needs, cooperate and the tenant will be
responsible for funding that construction/upgrading at
actual cost or a cost mutually agreed to by CSXT and NSR.
Where a tenant has access to 2-to-1 points via trackage
rights, the tenant may at its option access the points via
haulage.
A. NSR on CSXT: CSXT will grant to NSR trackage rights on the
following rail lines which will be owned or operated by CSXT
after the Closing Date:
1. Junction - ▇▇▇▇▇▇ (Fort ▇▇▇▇▇, IN): NSR rights to
operate over and share with CSXT the former CRC line
between Junction and ▇▇▇▇▇▇ (the crossing of the former
Pennsylvania RR and NYC&SL west of Fort ▇▇▇▇▇).
2. Lafayette, IN - Crawfordsville (area): assignment of
overhead trackage rights on CSXT s Lafayette -
Crawfordsville, IN line to serve 2-to-1 shippers at
Crawfordsville, IN, and to move overhead between
Lafayette and ▇▇▇▇▇▇▇▇▇▇▇▇.
▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ - ▇▇▇▇▇▇▇▇▇▇▇▇ (▇▇▇▇): overhead
trackage rights on CRC's Crawfordsville - Indianapolis
line to serve 2-to-1 shippers, the GM metal fabrication
plant and the INRD via Hawthorne Yard.
4. Indianapolis: overhead trackage rights on CRC's
Crawfordsville Branch from ▇▇▇▇▇ to Washington Street
in Indianapolis to serve 2-to-1 shippers, the GM metal
fabrication plant and the INRD via Hawthorne Yard.
5. Indianapolis: overhead trackage rights on CSXT between
Washington Street and Pine in Indianapolis to serve
2-to-1 shippers, the GM metal fabrication plant and the
INRD via Hawthorne Yard.
6. Buffalo (CP 437) - Niagara Falls (Suspension Bridge):
overhead trackage rights on CRC s Belt Line Branch and
Niagara Branch to connect with, or with trackage of
Canadian carriers at Suspension Bridge.
7. Philadelphia(Park Jct.) - Anacostia Jct., MD: NSR is
assigned CRC s overhead trackage rights on CSXT.
8. Landover - RO (Alexandria, VA): overhead trackage
rights on CRC s Landover Line.
9. Cleveland, OH: overhead trackage rights on CRC s Short
Line from Quaker to Berea, OH.
10. Cleveland, OH: overhead trackage rights on CRC s
Chicago Line (allocated to CSXT) from CP 181 to
Collinwood Yard for purposes of interchange with CSXT.
11. Crestline, OH - Fort ▇▇▇▇▇ (▇▇▇▇), IN: overhead
trackage rights on CRC s Fort ▇▇▇▇▇ Line (which is to
be allocated to CSXT), with train limits as follows:
- 8 total trains/day between Crestline and
Bucyrus
- 6 total trains/day between Bucyrus and
Fort ▇▇▇▇▇ including rights to serve 2-1
customers at Upper Sandusky.
NSR trains over the above limits are subject to
negotiations between CSXT and NSR for NSR contribution
to CSXT investment needed for additional capacity. NS
will supervise the dispatching of the Ft. ▇▇▇▇▇ to
Crestline line until CSXT haulage over CRC Chicago Line
between Berea and Chicago is terminated. NS will
control the Bucyrus interlocking permanently.
12. Fort ▇▇▇▇▇(▇▇▇▇), IN - Chicago(▇▇▇▇▇▇ Jct., IN):
overhead trackage rights on former CRC Fort ▇▇▇▇▇ Line
(Ft. ▇▇▇▇▇ - Chicago, now NSR), with ten total
trains/day limit (limit does not apply in Fort ▇▇▇▇▇
terminal). NSR trains over the above limits are subject
to negotiations between CSXT and NSR for NSR
contribution to CSXT investment needed for additional
capacity. NSR will dispatch the line until CSXT
haulage over CRC Chicago Line between Berea and Chicago
is terminated.
13. ▇▇▇▇▇▇ - ▇▇▇▇▇▇ Interlocking, IN: overhead trackage
rights on CRC s ▇▇▇▇▇▇ Branch.
14. ▇▇ ▇▇▇▇▇▇▇ - CP 138 (Columbus, OH): overhead trackage
rights on CRC Buckeye Line from "▇▇ ▇▇▇▇▇▇▇" to "CP
138".
▇▇. ▇▇▇▇▇▇ - ▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇, ▇▇): overhead trackage
rights on CRC Western Branch from Scioto to "CP
Mounds," including the Mounds Connection.
16. CP Buckeye - ▇▇ ▇▇▇▇▇ (Columbus, OH): overhead
trackage rights on Buckeye Yard Lead from "CP Buckeye"
to "▇▇ ▇▇▇▇▇".
17. CP 138 - MP 133.5 (Columbus, OH): overhead trackage
rights on the CSXT - assigned west track of the CRC
Columbus Line from CP 138" to the vicinity of Milepost
133.5 (point of new NS connection).
18. ▇▇▇▇▇▇▇ Yard - Scioto (Columbus, OH): overhead
trackage rights on CSXT between the south end of
▇▇▇▇▇▇▇ Yard (connection with ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇
transfer track) and Scioto.
19. Lima, OH - Sidney, OH: overhead trackage rights on
CSXT's Toledo Subdivision to serve 2-to-1 customers at
▇▇▇▇▇▇.
20. Bound Brook, NJ - Woodbourne, PA: overhead trackage
rights for twelve total trains/day limit on CRC s
Trenton Line for dimensional trains until Pattenburg
Tunnel on CRC s Lehigh line is cleared of dimensional
restrictions, not to exceed three years.
21. Piqua Yard - ▇▇▇▇ Interlocking (Fort ▇▇▇▇▇, IN): NSR
overhead rights to operate trains for Triple Crown
Services Company between Piqua Yard and ▇▇▇▇
interlocking (Fort ▇▇▇▇▇).
22. Muncie, IN - Indianapolis (area): overhead trackage
rights on CRC s Indianapolis Line, South ▇▇▇▇▇▇▇▇
Cutoff and part of Dow Secondary to serve 2-to-1 ship-
pers the GM metal fabrication plant and the INRD via
Hawthorne Yard.
23. Toledo Terminal: overhead rights on CSXT-controlled
portion of former Toledo Terminal Railroad.
24. Erie, PA: overhead trackage rights on CRC between
▇▇▇▇▇▇▇ Avenue and ▇▇▇▇▇▇▇ Street in Erie, PA, subject
to restriction against NSR use of CRC Chicago line main
tracks.
25. CP Short - Parma, OH: overhead trackage rights on CRC
Short Line from CP Short to Parma to serve but not
directly switch Parma auto plant.
26. McCook - Franklin Park, IL: overhead trackage rights
granted by B&OCT.
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ - ▇▇▇▇▇▇, ▇▇: overhead trackage
rights on B&OCT.
B. CSXT on NSR: NSR will grant to CSXT trackage rights on the
following rail lines which will be owned or operated by NSR
after the Closing Date:
1. CP River (West Falls), PA - ▇▇▇▇▇▇, PA: overhead
trackage rights on CRC s Harrisburg Line for
dimensional traffic.
2. ▇▇ ▇▇▇▇ (Norristown), PA - Woodbourne (▇▇ ▇▇▇▇), PA:
overhead trackage rights on CRC s Morrisville Line for
dimensional traffic plus incidental rights on short
portion of SEPTA s Norristown Line.
3. ▇▇▇▇▇, ▇▇ - ▇▇ ▇▇▇ (▇▇▇▇▇▇▇▇▇, ▇▇): overhead trackage
rights on CRC s existing Chicago Line.
4. CP Short - CP 190 (Cleveland, OH) and Berea, OH -
Lorain and Fairlane, OH: overhead trackage rights on
CRC's line allocated to NSR and rights to serve 2-to-1
Ford Motor plants at Avon Lake and Fairlane.
5. ▇▇ ▇▇▇▇▇▇▇ - Buckeye Yard: overhead trackage rights on
CRC Buckeye Line from "▇▇ ▇▇▇▇▇▇▇" to Buckeye Yard.
6. ▇▇▇▇▇▇ - Scioto, OH: overhead trackage rights on CRC
Western Branch from ▇▇▇▇▇▇ to Scioto.
7. CP 139 - Buckeye Yard: overhead trackage rights on CRC
Cincinnati Line from CP 139" to Buckeye Yard, via the
Miami Lead.
8. CP 138 - MP 133.5 (Columbus, OH): overhead trackage
rights on the NSR-assigned east track of the CRC
Columbus Line from CP 138 to the vicinity of MP 133.5
(point of new NSR connection).
9. CP Camp - CP 139 (Columbus): overhead trackage rights
on CRC Auburn Connection from "CP Camp" to "CP 139".
10. ▇▇▇▇▇▇ - ▇▇▇▇▇▇▇ Yard: overhead trackage rights on NSR
from ▇▇▇▇▇▇ to the south (RR east) end of NSR ▇▇▇▇▇▇▇
Yard (connection with ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇ transfer
track).
11. ▇▇▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇.) - ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇:
overhead trackage rights on CRC Youngstown Line to
access Ashtabula Harbor facilities and the Water Level
Route.
12. ▇▇▇▇▇▇▇, IN - Streator, IL: overhead trackage rights on
CRC Kankakee Line, Kankakee Secondary and Streator
Secondary for up to 8 total trains/day to connect with,
or with trackage of other intersecting railroads. CSXT
trains over the above limits are subject to
negotiations between CSXT and NSR for CSXT contribution
to investment needed for additional capacity.
13. ▇▇▇▇▇▇ Jct., IN - CP 501: overhead trackage rights on
CRC's Fort ▇▇▇▇▇ Line between Clarke Junction, IN and
CP 501.
14. Pine, IN - Rock Island Jct. (Chicago, IL): CSXT
overhead trackage rights on CRC's Chicago Line
(allocated to NSR).
15. CP Short - CP Belt, OH: CSXT overhead trackage rights
to allow CSXT to serve but not directly switch 2-to-1
Ford Motor Company plant at CP Belt, OH.
16. Ecorse Junction - Delray (Detroit, MI): overhead track-
age rights on existing NSR tracks in the Detroit area
from Ecorse Junction to Delray, MI.
17. Bucyrus - Sandusky: overhead trackage rights on NSR
between Bucyrus and Sandusky to serve a 2-to-1 shipper
at Sandusky, OH.
18. Brighton Park - Ash Street (Chicago IL): overhead
trackage rights on CRC's Western Avenue Industrial
Track from crossover connection with B&OCT at Brighton
Park to Ash Street (Chicago, IL).
19. CP 509 - 63rd Street (Chicago, IL): overhead trackage
rights on CRC's Chicago line limited, in combination
with NSR haulage of CSXT trains, to a total of 6
trains/day in each direction between the above points
for trains entering or leaving NSR trackage at Clarke
Junction up to a maximum of three years.
C. CRC ASSIGNMENTS TO NSR/CSXT: CRC will assign to NSR and
CSXT existing CRC rights with respect to the Northeast
Corridor as follows (see Ancillary Agreement governing
assignment of CRC rights as to Northeast Corridor):
NEC RIGHTS/OPERATING DEFINITION
1. Zoo Tower - Penn Station trackage: Rights shall be
shared equally by NSR and CSXT and, in the event of an
operating conflict, trains will be scheduled
alternately.
2. Baltimore - Zoo Tower Trackage: CSXT shall be limited
to 4 trains a day.
3. Landover - Baltimore: Rights will be shared equally by
NSR and CSXT and, in the event of an operating
conflict, trains will be scheduled alternately.
4. Washington Union Station - Landover, MD: Rights shall
be shared equally by NSR and CSXT and, in the event of
an operating conflict, trains will be scheduled
alternately.
NEC RIGHTS/COMMERCIAL DEFINITION
1. Philadelphia (Zoo) - New York (Penn Station): Will be
part of the North Jersey Shared Assets Area and the
South Jersey/Philadelphia Shared Assets Area where NSR
and CSXT will have equal customer access.
2. Washington, D.C. - Philadelphia (Zoo): Will be
exclusive to NSR.
3. North of New York (Penn Station): Will be exclusive to
CSXT.
ITEM 2 - CSX/NSC HAULAGE AGREEMENTS
The Haulage Agreement referred to in Item 2.A.1 will be
substantially in the form of the Haulage Agreement included
with Exhibit D and will be between the operator of the in-
volved rail line (and with the owner, if appropriate) and
the tenant road. The assignment of the Haulage Agreement
referred to in Item 2.A.2 will be in the form included with
Exhibit D.
A. NSR Haulage for CSXT on NSR Lines:
1. Berea, OH - Chicago (63rd St.): Overhead haulage for
CSXT by NSR on CRC s Chicago Line for maximum of six
merchandise and/or intermodal trains/day each way to
the Park Manor Yard at 63rd St. in Chicago, until CRC s
Ft. Wayne Line (Ft. Wayne - Chicago now NS) is
upgraded, up to a maximum of 3 years.
2. Normal, IL - Lafayette, IN: Assignment to CSXT of
CRC's Haulage Agreement with NSR for 2-to-1 automotive
traffic only.
ITEM 3 - SHARED ASSETS AGREEMENTS
1. North Jersey Shared Assets Agreement among CRC, CSXT
and NSR (attached as Exhibit G), covering the following
matters:
(1) North Jersey Shared Assets Area
(2) North Jersey CSXT/NSR Trackage
2. Philadelphia\Southern Jersey Shared Assets Agreement
among CRC, CSXT and NSR (attached as Exhibit H),
covering the following matters:
(1) Philadelphia/South Jersey Shared Assets
Area
(2) Philadelphia/South Jersey NS/CSXT
Trackage
3. Detroit Area Shared Assets Agreement among CRC, CSXT
and NSR (attached as Exhibit I), covering the following
matters:
(1) Detroit Shared Assets Area
(2) Detroit Dispatching
(3) NSR/CSXT trackage Rights - Detroit
ITEM 4 - OTHER OPERATING AGREEMENTS
A. INTERLOCKING AGREEMENTS (CSXT-Controlled) between CSXT and
NSR as to which the interlocking will be controlled by CSXT:
1. Ashtabula Interlocking (crossing of the existing CRC
Youngstown Line and Chicago Line at Ashtabula, OH)
2. CP-Mounds Interlocking (Columbus, OH)
3. Warsaw Interlocking (Warsaw, IN)
4. Crestline Interlocking (Crestline, OH)
B. INTERLOCKING AGREEMENTS (NSR-Controlled) between NSR and
CSXT as to which the interlocking will be controlled by NSR:
1. Buckeye Interlocking (Columbus, OH)
2. Mike Interlocking (Fort Wayne, IN)
3. Bucyrus Interlocking (Bucyrus, OH)
C. INTERLOCKING SEPARATION AGREEMENTS between NSR and CSXT as
to which the interlocking will be "separated" (i.e., divided
so that each operator is not subject to the control of the
other when making moves on the operator's own lines through
a point) prior to or as soon as possible after the Closing
Date:
1. CP 138 Interlocking (Columbus, OH)
2. Short Interlocking (Cleveland, OH)
3. Berea Interlocking (Berea, OH)
D. SWITCHING AND/OR YARD ACCESS AGREEMENTS between CSXT and
NSR:
1. Ashtabula - Agreement between NSR and CSXT providing
for CSXT use of and access to Ashtabula Harbor
facilities owned by CRC, up to a proportion of the
total ground storage, throughput and tonnage capacity
of the facilities equal to the Percentage
2. Yard Access Agreement - Agreement between CSXT and NSR
providing for access by NSR to yard tracks in Seneca
Yard at Buffalo, NY (yard to be assigned to CSXT)
sufficient for the origination and termination of
trains, at the end of the existing CRC Buffalo Line to
be assigned to NSR, for purposes of improved
interchange with the South Buffalo RR.
3. Ford (Rockport) - Agreement between NSR and CSXT
providing for NSR switching for CSXT at the Ford engine
plant in Cleveland (located on NSR portion of CRC lines
in Cleveland).
4. GM Parma - Agreement between CSXT and NSR providing for
CSXT switching for NSR at Parma auto plant located on
the CSXT Portion of CRC in Cleveland.
5. Indianapolis Switching - Agreement between CSXT and NSR
relating to NSR's use of Hawthorne Yard providing that
NSR will have sufficient tracks and space for the
arrival, departure and make-up of trains and will have
reasonable access to and from the designated tracks;
also providing for CSXT switching for NSR at 2-to-1
shippers in Indianpolis, the GM metal fabrication
plant, and the INRD.
6. GM Lordstown - Agreement between CSXT and NSR for
switching at GM assembly plant at Lordstown, OH.
7. Lorain Switching: Agreement between CSXT and NSR
providing for NSR switching for CSXT at Lorain/Avon
Lake auto plant located in Lorain, OH.
8. Fairlane Switching: Agreement between CSXT and NSR
providing for NSR switching for CSXT at Fairlane auto
plant located in Fairlane, OH.
9. Crawfordsville Switching: Agreement between CSXT and
NSR providing for CSXT switching for NSR at 2-to-1
customers located in Crawfordsville, IN.
10. Sidney Switching: Agreement between CSXT and NSR
providing for CSXT switching for NSR at 2-to-1
customers located in Sidney, OH.
11. Sandusky Switching: Agreement between CSXT and NSR
providing for NSR switching for CSXT at a 2-to-1
customer at Sandusky, OH.
12. Upper Sandusky Switching: Agreement between CSXT and
NSR providing for CSXT switching for NSR at 2-to-1
customers at Upper Sandusky, OH.
E. MISCELLANEOUS AGREEMENTS between NSR and CSXT:
1. IHB Agreement: Agreement among CRC, CSXT and NSR
covering matters relating to Indiana Harbor Belt.
2. Monongahela Agreement - Agreement among NSR and CSXT
providing for shared access to and joint use by CSXT of
NSR assigned, controlled, operated and maintained lines
serving the Monongahela coal fields' current and future
facilities.
3. Temporary Lease Agreement between NSR or its designee
and CSXT providing interim use by CSXT of the Park
Manor (63rd St., Chicago, IL) intermodal facility
during the period of CSXT's interim haulage between
Chicago and Berea.
4. Letter Agreement providing for NSR and CSXT
construction projects:
(a) NSR construction of connection in eastern
Cleveland, OH (granting to NSR rights to
construct a connection in eastern Cleveland to
make direct moves between NSR's Cleveland-Buffalo
Line and the CRC's existing Chicago
Line, using NSR rights over existing CRC
Cleveland Short Line to be assigned to CSXT)
(b) North of the current end of double track at CP
136 (Columbus, OH), NSR will be assigned the
right of way east of the single remaining track
and the Clintonville Siding (which is also east
of the single remaining track), with the right
to connect these two segments of track, at NSR's
expense, at CP 136 and the Clintonville Siding
into a continuous track east of and parallel to
the single remaining track. Another new con-
nection will be constructed, at NSR expense,
between the Clintonville Siding and the existing
NSR Bellevue - Portsmouth main line in the
vicinity of Milepost 133.5, where both the NSR
and CRC rights of way are parallel and level.
CSXT shall, at its option and expense, have the
right to construct a connection from its as-
signed track (i.e., the west located track of
the right of way) to the new NSR Clintonville
Siding, so that both tracks can be utilized for
operational flexibility between the vicinity of
Milepost 133.5 to CP 138, under the control of
the respective assignee of each track.
(c) Construction of Junction - Hadley trackage (a
line relocation project underway in Fort Wayne
will force NSR and CSXT to share the former CRC
line between Junction and Hadley (the crossing
of the former Pennsylvania RR and NYC&SL west of
Fort Wayne); if NSR and CSXT decide that capac-
ity needs mandate an additional track, NSR and
CSXT will equally share the cost of constructing
a new track between Junction and Hadley on the
north side of the existing track, and ownership
of the south track will revert to NSR and
ownership of the north track will revert to
CSXT).
5. Construction at Buckeye Yard - Letter Agreement
providing for NSR to have the right to construct a
parallel track to the Buckeye Yard lead track (at
Buckeye Yard, Columbus, OH) in order to provide for the
proper functioning of Buckeye Yard.
6. Construction from Field - Belmont - Letter Agreement
giving NSR the right to reconstruct, own and control an
additional track where practical between Belmont and CP
Field.
7. Deed of Easement between CSXT and NSR providing for
conveyance by CSXT to NSR of a free easement (for NSR
relocation of mainline in Erie, PA area) along existing
CRC right of way through Erie, PA (assigned to CSXT) to
replace NSR right of way through streets in downtown
Erie at its expense. NSR will have trackage rights in
Erie to connect its route from Corry to its existing
Buffalo - Cleveland line if such connection can be
achieved without using the CR Buffalo - Cleveland line.
8. Letter agreement between NSR and CSXT providing that
(i) NSR's existing Fort Wayne - to - Chicago (former
CRC line) line will be transferred to CSXT as part of a
like kind exchange transaction for the Streator line
and (ii) if CSXT were to merge with BNSF and if CSXT
requests, then NSR would transfer the Streator Line
from Osborne, IN including the dispatching control, for
fair value.
9. Piqua Yard (Fort Wayne) - Letter Agreement between NSR
and CSXT providing for division of space in Piqua Yard
and determine most efficient means of utilizing the
physical plant in Fort Wayne; Triple Crown Services
Company will retain its current space in Piqua Yard and
the right to have NSR operate its trains between Piqua
Yard and Mike interlocking.
10. E-Rail Support Tracks - Letter Agreement between CSXT
and NSR providing for access by NSR to use up to two
tracks located on NYC allocated property of
Elizabethport Yard (Trumbell St. Yard) for support of
PRR's E-Rail intermodal facility.
11. Agreement between CSXT and NSR providing for assignment
of CRC rights over CSXT lines to NSR (except as
otherwise provided in the Transaction Agreement) and
for assignment of CRC rights over NSR lines to CSXT
(except as otherwise provided in the Transaction
Agreement).
12. Letter Agreement between NSR and CSXT providing CSXT
the right to construct an Eastwick connection to
provide a contiguous route through Philadelphia, via CP
Field and portions of CR's Harrisburg and Trenton Lines
to CP River and points north.
13. Letter Agreement among CRC, NSR and CSXT providing for
assignment by CRC of rights relating to the Northeast
Corridor.
14. Letter Agreement between NSR and CSXT providing for
(i) assignment to both NSR and CSXT of CRC's trackage
rights over BNSF to access BNSF's Willow Springs Yard
(Chicago), subject to approval of BNSF, and (ii) if
such trackage rights are assigned, CSXT's right to
construct a connection in the vicinity of Ash Street
(Chicago) to enable CSXT to use these rights, if
necessary.
NOTE: Notwithstanding any provision of this Schedule, to the
extent an item herein describes an Ancillary Agreement between
the parties the form of which is set forth as an Exhibit to this
Agreement, such description shall be for purposes of
identification only, and the terms of such Ancillary Agreement
shall control.
CSXT and NSR will cooperate with one another for the construction
of various connections and improvements of the involved carriers
referred to in their respective Operating Plans.
