NORFOLK SOUTHERN RAILWAY CO /VA/
AMENDMENT NO. 5 TO TRANSACTION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>y01612aexv10w1.txt
<DESCRIPTION>AMENDMENT NO. 5 TO TRANSACTION AGREEMENT
<TEXT>
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                                                                    EXHIBIT 10.1

                    AMENDMENT NO. 5 TO TRANSACTION AGREEMENT

      THIS AMENDMENT NO. 5 to the Transaction Agreement (this "Amendment") is
made as of August 27, 2004 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"). CSX, CSXT, NSC, NSR, CRR, CRC
and CRR Parent are sometimes individually referred to herein as a "Party" and
collectively as the "Parties."

      WHEREAS, the Parties have previously entered into that certain Transaction
Agreement, dated as of June 10, 1997, as amended by Amendment No. 1 to
Transaction Agreement, dated as of August 22, 1998; Amendment No. 2 to
Transaction Agreement, dated as of June 1, 1999; Amendment No. 3 to Transaction
Agreement, which is also referred to as the Environmental Amendment, dated as of
June 1, 1999; and Amendment No. 4 to Transaction Agreement, previously referred
to as Amendment No. 3, pertaining to the size of the CRC Board, dated as of
August 1, 2000 (the "Transaction Agreement"); and the Ancillary Agreements (as
defined in the Transaction Agreement) related thereto;

      WHEREAS, the Parties, CSX RAIL HOLDING CORPORATION, a Delaware corporation
("CSX Rail"), CSX NORTHEAST HOLDING CORPORATION, a Delaware corporation ("CSX
Northeast"), NEW YORK CENTRAL LINES LLC, a Delaware limited liability company
and a wholly-owned Subsidiary of CRC ("NYC"), PENNSYLVANIA LINES LLC, a Delaware
limited liability company and wholly-owned Subsidiary of CRC ("PRR"), GREEN
ACQUISITION CORP., a Pennsylvania corporation and a wholly-owned Subsidiary of
CRR Parent ("Green Acquisition"), NYC Newco, Inc., a Virginia corporation and
wholly-owned Subsidiary of CSXT ("NYC Newco"), and PRR Newco, Inc., a Virginia
corporation and wholly-owned Subsidiary of NSR ("PRR Newco"), are the parties to
that certain Distribution Agreement, dated as of July 26, 2004 (the
"Distribution Agreement");

      WHEREAS, the parties to the Distribution Agreement are on the date hereof
consummating the Closing (as defined in the Distribution Agreement) and entering
into various documents and instruments to effectuate the same;

      WHEREAS, in connection with the Parties' preparations for the Closing and
as required under the terms of the Distribution Agreement, the Parties have
identified certain provisions of the Transaction Agreement and the Ancillary
Agreements for which the Parties desire to clarify their understandings and
agreements with respect to certain matters related to the Transaction Agreement
and the Ancillary Agreements in order to effectuate the Distribution Agreement;

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      WHEREAS, the Parties have determined that it is in the best interests of
their respective companies to amend the Transaction Agreement and the Ancillary
Agreements as set forth in this Amendment; and

      WHEREAS, it is the intent of the Parties that, except as expressly amended
hereby, the Transaction Agreement and the Ancillary Agreements as in effect
immediately prior to the execution and delivery of this Amendment shall remain
in full force and effect;

      NOW, THEREFORE, the Parties hereby amend the Transaction Agreement and the
Ancillary Agreements as follows:

1.    References; Interpretation.

      Unless otherwise specifically defined herein, each term used herein which
      is defined in the Transaction Agreement has the meaning assigned to such
      term in the Transaction Agreement. Each reference in the Transaction
      Agreement, as now in effect, to "hereof," "hereunder," "herein," "hereby"
      or words of similar import and each reference to "this Agreement" and each
      other similar reference contained in the Transaction Agreement, or in
      Ancillary Agreements, as now in effect, shall from and after the date of
      this Amendment refer to the Transaction Agreement as amended hereby.

      Nothing contained in the reaffirmations in this Amendment shall prejudice
      or otherwise affect the position of any Party hereto in any dispute as to
      interpretation of the Transaction Agreement or any Ancillary Agreement.

2.    Integration. The Parties to the Transaction Agreement which execute this
      Amendment hereby reaffirm the Transaction Agreement and the Ancillary
      Agreements referred to therein so that the Transaction Agreement and the
      Ancillary Agreements, each as presently in effect, and the conforming
      changes set forth in Schedule A to this Amendment and contemplated by
      Section 5 of this Agreement shall be read as integrated documents from and
      after the Distribution Date (as defined in the Distribution Agreement).

3.    No Changes to Shared Assets. Notwithstanding any provision of this
      Amendment, or of Schedule A hereto, or any action taken in connection with
      the transactions contemplated by the Distribution Agreement or by this
      Amendment, no changes, modifications or amendments to the North Jersey,
      South Jersey/Philadelphia, or Detroit Shared Assets Operating Agreements,
      or to those Shared Assets Areas, are being made by this Amendment, any
      Schedule hereto or those transactions, and none shall be implied.

4.    Reaffirmation. Except as specifically amended as set forth in this
      Amendment or the instruments or documents provided for herein including
      Schedule A hereto, all other terms and provisions of the Transaction
      Agreement and the Ancillary Agreements, as now in effect, subject to the
      conforming changes provided for herein or set forth in Schedule A hereto,
      shall continue in full force and effect and unchanged as now in effect and
      are hereby confirmed in all respects, including, without limitation, all
      of the Allocations of CRC lines, equipment and other property made in
      Article II, all of the trackage and other operating agreements referred to
      in Section 2.5 and listed in

                                      -2-

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      Schedule 4, all of the allocation and retentions of liabilities provided
      for in Section 2.8, the provisions of Section 4.3(a) with respect to the
      "keepwell" therein provided, and the Percentage allocation provided for in
      Section 4.3(b), in each case of the Transaction Agreement as now in
      effect.

5.    Required Modifications. In order to consummate the transactions
      contemplated in the Distribution Agreement, the Parties shall cooperate to
      modify the Transaction Agreement and the Schedules thereto and other
      agreements contemplated thereby, including without limitation, any
      Ancillary Agreements so as to permit the transfer of properties and other
      actions contemplated by the Distribution Agreement in order to reflect
      changes to rentals and the flow of funds resulting from the restructuring
      of debt obligations in accordance with the terms and subject to the
      conditions of the Distribution Agreement, all in accordance with the
      Percentage principles contained in the Transaction Agreement.

6.    Miscellaneous. The provisions of Article XI of the Transaction Agreement
      are hereby expressly incorporated by reference into this Amendment, and
      each provision thereof shall have the same force and effect as if fully
      set forth herein (except to the extent such provision is amended,
      modified, supplemented, altered, rescinded or superseded by this
      Amendment).

                                 * * * * * * * *

                                      -3-

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      IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
duly executed as of the date and year first above written.

                              CSX CORPORATION

                              By:   /s/ Peter J. Shudtz
                                  ----------------------------------------------
                                  Name: Peter J. Shudtz
                                  Title: VP - Regulatory Affairs & Washington
                                         Counsel

                              CSX TRANSPORTATION, INC., for itself and on behalf
                              of its controlled Subsidiaries

                              By:   /s/ Peter J. Shudtz
                                  ----------------------------------------------
                                  Name: Peter J. Shudtz
                                  Title: Authorized Signatory

                              NORFOLK SOUTHERN CORPORATION

                              By:   /s/ William J. Romig
                                 -----------------------------------------------
                                  Name: William J. Romig
                                  Title: Vice President and Treasurer

                              NORFOLK SOUTHERN RAILWAY COMPANY, for itself and
                              on behalf of its controlled Subsidiaries

                              By:   /s/ William J. Romig
                                  ----------------------------------------------
                                  Name: William J. Romig
                                  Title: Vice President and Treasurer





















































                  [Signature Page to Amendment No. 5]

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                              CONRAIL INC., for itself and on behalf of its
                              controlled Subsidiaries

                              By:   /s/ Joseph W. Rogers
                                  -----------------------------
                                  Name:  Joseph W. Rogers
                                  Title: Assistant Treasurer

                              CONSOLIDATED RAIL CORPORATION

                              By:   /s/ Joseph W. Rogers
                                  -----------------------------
                                  Name: Joseph W. Rogers
                                  Title: Chief Financial Officer & Corporate
                                         Treasurer

                              CRR HOLDINGS LLC

                              By:   /s/ Peter J. Shudtz
                                  -----------------------------
                                  Name: Peter J. Shudtz
                                  Title: VP




























































                      [Signature Page to Amendment No. 5]

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                                                                      SCHEDULE A

                        AMENDMENTS AND CONFORMING CHANGES

1.    Transaction Agreement Amendments.

      1.1   Section 1.1 of the Transaction Agreement is hereby amended by
            inserting the following definition:

                  "Distribution Agreement" means the Agreement of that name
            dated as of July 26, 2004, by and among CSX Corporation, CSX
            Transportation, Inc., CSX Rail Holding Corporation, CSX Northeast
            Holding Corporation, New York Central Lines LLC, Norfolk Southern
            Corporation, Norfolk Southern Railway Company, Pennsylvania Lines
            LLC, Conrail Inc., Consolidated Rail Corporation, CRR Holdings LLC,
            Green Acquisition Corp., NYC Newco, Inc. and PRR Newco, Inc.

      1.2   Section 4.5 of the Transaction Agreement is hereby amended to read
            in its entirety as set forth below:

            (a)   Historically, Section 4.5 read as follows:

                  "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)."

            (b)   As a consequence of the transactions contemplated by the
                  Distribution Agreement, the rentals provided for under
                  paragraph (a) above will change as follows: (i) NSR and CSXT
                  shall no

                                    SCH. A-1

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                  longer pay rents under the NSR and CSXT Operating Agreements
                  and the NSR and CSXT Equipment Agreements and the parties
                  hereto shall take all actions necessary to terminate such
                  agreements, (ii) PRR Newco and NYC Newco (each as defined in
                  the Distribution Agreement) or their successors will pay rents
                  to CRC pursuant to certain Related Agreement Amendments
                  relating to the Equipment Obligation Agreements, as amended,
                  as defined in the Distribution Agreement, and (iii) NSR and
                  CSXT will continue to pay Interest Rentals to CRC under the
                  Shared Assets Agreements in accordance with Section 9(a)(i)
                  thereof. Notwithstanding anything to the contrary in the
                  Distribution Agreement or any other document or instrument
                  contemplated thereby, the costs and expenses set forth in
                  subpart (ii) (to the extent not specified in the Related
                  Agreement Amendments) and subpart (iii) above shall be borne
                  by CSXT and NSR in accordance with the Percentage. The parties
                  acknowledge and agree that (x) NSR and CSXT will be obligated
                  to the holders of CRC's unsecured debt pursuant to the New
                  Debentures (as defined in the Distribution Agreement) to the
                  extent such debt is tendered and accepted in the Exchange
                  Offer (as defined in the Distribution Agreement) and (y) CRC
                  shall continue to be obligated to the holders of CRC's
                  unsecured debt to the extent such debt is not tendered and
                  accepted in the Exchange Offer. The parties further
                  acknowledge and agree that, notwithstanding anything to the
                  contrary set forth in the Distribution Agreement or any other
                  document or instrument contemplated thereby, any category of
                  cost or expense which was borne by CSXT and NSR in accordance
                  with the Percentage prior to the Closing of the Transactions
                  contemplated thereby will continue to be borne in accordance
                  with the Percentage after the Closing of the Distribution
                  Agreement.

      1.3   Article V of the Transaction Agreement is hereby amended to read in
            its entirety as set forth below:

                  [Intentionally omitted.]

      1.4   The introductory paragraph of Part 1 to Schedule 2 of the
            Transaction Agreement is hereby amended to delete the words "(other
            than NYC and PRR)."

      1.5   Schedule 2 of the Transaction Agreement is hereby amended as
            follows:

            (i)   Paragraph (a) of Part 1 to Schedule 2 of the Transaction
                  Agreement is hereby amended to read in its entirety as set
                  forth below:

                  (a)   [Intentionally omitted.]

                                    SCH. A-2

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            (ii)  Paragraph (b) of Part 1 to Schedule 2 of the Transaction
                  Agreement is hereby amended to delete the words "(other than
                  NYC and PRR)."

            (iii) Paragraph (k) of Part 1 to Schedule 2 of the Transaction
                  Agreement is hereby amended to delete the following words:

                  "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."

            (iv)  Paragraph (n) of Part 1 to Schedule 2 of the Transaction
                  Agreement is hereby amended to delete the words "(other than
                  NYC and PRR)."

            (v)   Paragraph (u) of Part 1 to Schedule 2 of the Transaction
                  Agreement is hereby amended to read in its entirety as set
                  forth below:

                  (u)   [Intentionally omitted.]

            (vi)  Part 2 to Schedule 2 of the Transaction Agreement is hereby
                  amended to read in its entirety as set forth below:

                  Except as approved by the CRC Board of Directors, neither CSX,
                  CSXT, NSC, nor NSR shall make, agree to make, or permit to be
                  made any transfer, easement, lease, license, sale of
                  improvements, trackage rights or operating rights or other
                  grant of the right to use any railroad line for railroad
                  service (other than to an entity controlling, controlled by,
                  or under common control with the grantor, such entity to be
                  thereafter bound by this provision) (regardless of whether the
                  grantor's rights depend on ownership or trackage rights or a
                  combination thereof) which is part of any Main Line until May
                  31, 2024, or thereafter for the duration of any renewal term
                  of the Shared Assets Operating Agreements for North Jersey and
                  South Jersey. Notwithstanding the foregoing or any contrary
                  provision herein, CSX, CSXT, NSC or NSR may make, agree to
                  make, or permit to be made, in their sole discretion, any
                  transfer, easement, lease, license, trackage rights, operating
                  rights, sale of improvements or other arrangement for rail
                  passenger service on any railroad line which is part of a Main
                  Line, so long as (A) such arrangement does not include
                  transferring fee ownership of such Main Line, and (B) CSX,
                  CSXT, NSC or NSR, as the case may be, retains the exclusive
                  right and obligation to

                                    SCH. A-3

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                  provide freight service on the railroad line for a term not
                  less than the term stated in the preceding sentence (including
                  any renewals) which is part of such Main Line. As used herein,
                  "Main Line" means a line of railroad held by NYC or PRR as of
                  the Distribution Date within the State of New Jersey or New
                  York, or the area within twenty-five miles of the City of
                  Philadelphia, PA, 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 Hudson River and
                  south of Selkirk, NY.

2.    Ancillary Agreement Amendments and Other Agreement Amendments.

      2.1   The following agreements will amend or terminate certain Ancillary
            Agreements and other agreements:

            (i)   AMENDED AND RESTATED EQUIPMENT ALLOCATION AGREEMENT between
                  Consolidated Rail Corporation and New York Central Lines LLC,
                  amending and restating the Equipment Allocation Agreement
                  dated as of June 1, 1999, between the parties.

            (ii)  AMENDED AND RESTATED EQUIPMENT ALLOCATION AGREEMENT between
                  Consolidated Rail Corporation and Pennsylvania Lines LLC,
                  amending and restating the Equipment Allocation Agreement
                  dated as of June 1, 1999, between the parties.

            (iii) TERMINATION AGREEMENT between New York Central Lines LLC and
                  CSX Transportation, Inc., terminating the Equipment Agreement
                  dated as of June 1, 1999, between the parties.

            (iv)  TERMINATION AGREEMENT between Pennsylvania Lines LLC and
                  Norfolk Southern Railway Company, terminating the Equipment
                  Agreement dated as of June 1, 1999, between the parties.

            (v)   TERMINATION AGREEMENT between New York Central Lines LLC and
                  CSX Transportation, Inc., terminating the Operating Agreement
                  dated as of June 1, 1999, between the parties.

            (vi)  TERMINATION AGREEMENT between Pennsylvania Lines LLC and
                  Norfolk Southern Railway Company, terminating the Operating
                  Agreement dated as of June 1, 1999, between the parties.

            (vii) AMENDED AND RESTATED LEASE ADMINISTRATION AGREEMENT among
                  Consolidated Rail Corporation, CSX Corporation and Norfolk
                  Southern Corporation, amending the Lease Administration
                  Agreement dated as of June 1, 1999, among the parties.

                                    SCH. A-4

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