CSX TRANSPORTATION, INC. NORFOLK SOUTHERN RAILWAY COMPANY
CONSOLIDATED RAIL CORPORATION
EXCHANGE OFFER FOR ALL
OUTSTANDING 9 3/4% DEBENTURES DUE 2020 OF
CONSOLIDATED RAIL CORPORATION (CUSIP NO. 209864AT4) AND
OUTSTANDING 7 7/8% DEBENTURES DUE 2043 OF
CONSOLIDATED RAIL CORPORATION (CUSIP NO. 209864AU1)
AND SOLICITATION OF CONSENTS TO CERTAIN AMENDMENTS TO THE INDENTURE RELATED
THERETO PURSUANT TO THE EXCHANGE OFFER AND CONSENT SOLICITATIONDESCRIBED IN THE
PROSPECTUS AND CONSENT SOLICITATION STATEMENT
DATED JULY 26, 2004 AND THE FIRST SUPPLEMENT THERETO DATED AUGUST 9, 2004
AUGUST 9, 2004
To Our Clients:
As described in the Prospectus and Consent Solicitation Statement (as
defined herein) and the related Letter of Consent/Transmittal, Consolidated Rail
Corporation ("Conrail"), CSX Transportation, Inc. ("CSXT"), NYC Newco, Inc.
("NYC Newco"), Norfolk Southern Railway Company ("NSR") and PRR Newco, Inc.
("PRR Newco," and together with Conrail, CSXT, NYC Newco and NSR, the
"Companies") have commenced an offer to exchange all outstanding 9 3/4%
Debentures of Conrail due June 15, 2020 (the "9 3/4% Conrail Debentures") and
all outstanding 7 7/8% Debentures of Conrail due May 15, 2043 (the "7 7/8%
Conrail Debentures" and, together with the 9 3/4% Conrail Debentures, the
"Conrail Debentures") for a combination of (i) (x) 9 3/4% Notes due June 15,
2020 issued by NYC Newco and fully and unconditionally guaranteed by CSXT and
9 3/4% Notes due June 15, 2020 issued by PRR Newco and fully and unconditionally
guaranteed by NSR and (y) a cash payment of $15.00 per $1,000 principal amount
of 9 3/4% Conrail Debentures validly tendered, and (ii) (x) 7 7/8% Notes due May
15, 2043 issued by NYC Newco and fully and unconditionally guaranteed by CSXT
and 7 7/8% Notes due May 15, 2043 issued by PRR Newco and fully and
unconditionally guaranteed by NSR and (y) a cash payment of $22.25 per $1,000
principal amount of 7 7/8% Conrail Debentures validly tendered, upon the terms
and subject to the conditions set forth in the Prospectus and Consent
Solicitation Statement dated July 26, 2004 (as the same may be amended or
supplemented from time to time, the "Prospectus and Consent Solicitation
Statement"), the First Supplement thereto dated August 9, 2004 (the "First
Supplement") and in the accompanying revised Letter of Consent/Transmittal dated
August 9, 2004 (the "Letter of Consent/Transmittal").
Holders may validly tender their Conrail Debentures using either the July
26, 2004 or August 9, 2004 letter of consent/transmittal. All holders who
validly tender their Conrail Debentures in accordance with the terms of the
Exchange Offer and Consent Solicitation (as defined below) and are eligible to
receive a cash payment will receive the increased cash payment, including those
who have tendered on or prior to the date hereof using the original Letter of
Consent/Transmittal dated July 26, 2004.
The Companies are also soliciting (the "Consent Solicitation" and, together
with the Exchange Offer, the "Exchange Offer and Consent Solicitation") consents
(the "Consents") to certain proposed amendments as described in the Prospectus
and Consent Solicitation Statement (the "Proposed Amendments") to the Indenture
(as supplemented and amended, the "Conrail Indenture") dated as of May 1, 1990,
by Conrail and J.P. Morgan Trust Company, as successor Trustee, pursuant to
which the Conrail Debentures were issued. By validly tendering their Conrail
Debentures pursuant to the Exchange Offer and Consent Solicitation, Holders will
be concurrently consenting to the Proposed Amendments with respect to the full
principal amount of the Conrail Debentures so tendered on or prior to the
Expiration Date. On or promptly following receipt of the requisite consents,
Conrail and J.P. Morgan Trust Company, as successor Trustee, will execute an
amendment to the Conrail Indenture (the "Supplemental Indenture") containing the
Proposed Amendments.
All capitalized terms used but not defined herein have the meanings
assigned to them in the Prospectus and Consent Solicitation Statement.
WE ARE THE REGISTERED HOLDER OF THE CONRAIL DEBENTURES HELD BY US FOR YOUR
ACCOUNT. A TENDER OF SUCH CONRAIL DEBENTURES AND DELIVERY OF A CONSENT WITH
RESPECT TO THE PROPOSED AMENDMENTS CAN BE MADE ONLY BY US AS THE REGISTERED
HOLDER AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF CONSENT/TRANSMITTAL AND
THE ACCOMPANYING PROSPECTUS AND CONSENT SOLICITATION STATEMENT ARE FURNISHED TO
YOU FOR YOUR INFORMATION AND CANNOT BE USED BY YOU TO TENDER CONRAIL DEBENTURES,
OR DELIVER A CONSENT TO THE PROPOSED AMENDMENTS, WITH RESPECT TO CONRAIL
DEBENTURES HELD BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish us to tender
such Conrail Debentures held by us for your account pursuant to the Exchange
Offer and Consent Solicitation, which will also constitute a delivery of a
Consent. The Exchange Offer and Consent Solicitation is being made pursuant to
the terms and conditions set forth in the Prospectus and Consent Solicitation
Statement as supplemented by the First Supplement and the Letter of
Consent/Transmittal. We urge you to read the Prospectus and Consent Solicitation
Statement, the First Supplement and the Letter of Consent/ Transmittal carefully
before giving us your instructions.
Your instructions to us should be forwarded as promptly as possible to
permit us to tender Conrail Debentures and thereby deliver Consents on your
behalf in accordance with the provisions of the Prospectus and Consent
Solicitation Statement and the Letter of Consent/Transmittal. Holders who tender
Conrail Debentures in the Exchange Offer and Consent Solicitation will thereby
have delivered Consents to the Proposed Amendments to the Conrail Indenture.
Holders may not tender their Conrail Debentures without delivering such
Consents. Pursuant to the terms of the Letter of Consent/Transmittal, the
completion, execution and delivery thereof by a Holder in connection with the
tender of Conrail Debentures will constitute the Consent of such tendering
Holder to the Proposed Amendments with respect to the Conrail Debentures so
tendered. Tenders may be withdrawn and Consents may be revoked only in
accordance with the procedures set forth in the Prospectus and Consent
Solicitation Statement.
Any extension, termination or amendment will be followed as promptly as
practicable by press release or other public announcement. If the Companies make
a material change in the terms of the Exchange Offer and Consent Solicitation or
the information concerning the Exchange Offer and Consent Solicitation or waive
any condition of the Exchange Offer and Consent Solicitation that results in a
material change to the circumstances of the Exchange Offer and Consent
Solicitation, the Companies will circulate additional Exchange Offer and Consent
Solicitation materials if and to the extent required by applicable law. In those
circumstances, the Companies will also extend the Exchange Offer and Consent
Solicitation if, and to the extent required by applicable law, in order to
permit holders of the Conrail Debentures subject to the Exchange Offer and
Consent Solicitation adequate time to consider the additional materials.
Your attention is directed to the following:
1. The Exchange Offer is for any and all outstanding Conrail Debentures;
2. The tender of Conrail Debentures will constitute the Consent of such
tendering Holder to the Proposed Amendments with respect to the Conrail
Debentures so tendered;
3. The Companies do not currently intend to extend the Expiration Date,
which is currently AUGUST 23, 2004 at 5:00 p.m., New York City time;
4. The Companies' obligations regarding the Exchange Offer and Consent
Solicitation are subject to certain conditions set forth in the
Prospectus and Consent Solicitation Statement under the caption
"Description of This Exchange Offer and Consent
Solicitation -- Conditions to This Exchange Offer and Consent
Solicitation." The Companies reserve the right to jointly waive any and
all of such conditions;
5. Tendering Holders who tender their Conrail Debentures may withdraw any
tender of Conrail Debentures and revoke the related Consents at any
time prior to the Expiration Date, but not thereafter;
6. If the requisite consents are received and the Proposed Amendments
become effective, Holders of Conrail Debentures that are not tendered
and accepted for exchange pursuant to the Exchange Offer and Consent
Solicitation for any reason will no longer be entitled to the benefits
of most of the restrictive covenants in the Conrail Indenture as
currently in effect; and
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7. Any transfer taxes incident to the transfer of Conrail Debentures from
the tendering Holder to the Companies will be paid by Conrail, except
as provided in the Prospectus and Consent Solicitation Statement and
the Letter of Consent/Transmittal.
The Companies expressly reserve the right, in their sole discretion: (i) to
amend the terms of the Exchange Offer and Consent Solicitation in any manner;
(ii) to waive, in whole or in part, any of the conditions to the Exchange Offer
and Consent Solicitation; (iii) to extend the period of time during which the
Exchange Offer and Consent Solicitation is open and thereby delay acceptance of
any of the Conrail Debentures to which the extension applies, by giving written
notice of any extension to the Exchange Agent and notice of that extension to
the Holders by press release or other public announcement; (iv) to extend or
terminate the Exchange Offer and Consent Solicitation and to refuse to accept
Conrail Debentures not previously accepted if any of the conditions set forth in
the Prospectus and Consent Solicitation Statement under "Description of This
Exchange Offer and Consent Solicitation -- Conditions to This Exchange Offer and
Consent Solicitation" have not been satisfied or waived by the Companies, by
giving written notice of such delay, extension or termination to the Exchange
Agent and written notice of such extension or termination to Holder by press
release or other public announcement; or (v) if, in the opinion of the
Companies' respective counsel, the consummation of the Exchange Offer and
Consent Solicitation would violate any law or interpretation of the Staff of the
Securities and Exchange Commission, to terminate or amend the Exchange Offer and
Consent Solicitation by giving written notice to the Exchange Agent.
All Conrail Debentures held by a single holder and not by a nominee,
trustee or other representative must all be tendered on a single Letter of
Consent/Transmittal.
IF YOU WISH TO HAVE US TENDER ANY CONRAIL DEBENTURES HELD BY US FOR YOUR
ACCOUNT, PURSUANT TO THE EXCHANGE OFFER AND CONSENT SOLICITATION, WHICH
CONSTITUTES A DELIVERY OF A CONSENT, PLEASE SO INSTRUCT US BY COMPLETING,
EXECUTING AND RETURNING TO US THE INSTRUCTION FORM THAT FOLLOWS IN THE ATTACHED,
PREPAID ENVELOPE.
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INSTRUCTION FORM
EXCHANGE OFFER FOR ALL
OUTSTANDING 9 3/4% DEBENTURES DUE 2020 OF
CONSOLIDATED RAIL CORPORATION (CUSIP NO. 209864AT4) AND
OUTSTANDING 7 7/8% DEBENTURES DUE 2043 OF
CONSOLIDATED RAIL CORPORATION (CUSIP NO. 209864AU1)
AND SOLICITATION OF CONSENTS TO CERTAIN AMENDMENTS TO THE INDENTURE RELATED
THERETO
PURSUANT TO THE EXCHANGE OFFER AND CONSENT SOLICITATION
DESCRIBED IN THE PROSPECTUS AND CONSENT SOLICITATION STATEMENT DATED JULY 26,
2004 AND THE FIRST SUPPLEMENT THERETO DATED AUGUST 9, 2004
The undersigned acknowledge(s) receipt of your letter and the enclosed
materials referred to therein and the Prospectus and Consent Solicitation
Statement of Consolidated Rail Corporation ("Conrail"), CSX Transportation, Inc.
("CSXT"), NYC Newco Inc. ("NYC Newco"), Norfolk Southern Railway Company ("NSR")
and PRR Newco, Inc. ("PRR Newco," and together with Conrail, CSXT, NYC Newco and
NSR, the "Companies"), dated July 26, 2004 (the "Prospectus and Consent
Solicitation Statement") and the First Supplement thereto, dated August 9, 2004
(the "First Supplement"), relating to the Exchange Offer and Consent
Solicitation described therein. All capitalized terms used and not defined in
this Instruction Form have the meanings assigned to them in the Prospectus and
Consent Solicitation Statement.
The undersigned, as the beneficial owner of the Conrail Debentures listed
below with respect to which you are the Holder, hereby authorizes and directs
you to tender the principal amount of Conrail Debentures indicated below, which
will constitute the delivery of Consents to the Proposed Amendments with respect
to such Conrail Debentures, held by you for the account of the undersigned,
pursuant to the terms and conditions set forth in the Prospectus and Consent
Solicitation Statement, the First Supplement and the Letter of
Consent/Transmittal including the representations and warranties contained
therein. You are further authorized and directed to take all other or further
action as may be necessary to carry out and effectuate the purpose and intent of
these instructions.
<Table>
<Caption>
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SERIES OF CONRAIL DEBENTURES PRINCIPAL AMOUNT TENDERED
---------------------------- -----------------------------------------------------------
9 3/4% Conrail Debentures due June 15, 2020 $
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Date: , 2004 $
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7 7/8% Conrail Debentures due May 15, 2043
Date: , 2004
- ----------------------------------------------------------------------------------------------------------------
</Table>
SIGN HERE
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SIGNATURE(S)
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PLEASE PRINT NAME(S) HERE
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ADDRESS
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AREA CODE AND TELEPHONE NUMBER
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TAXPAYER IDENTIFICATION NUMBER OR SOCIAL SECURITY NUMBER(S)
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ACCOUNT NUMBER
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(a) Failure to indicate the principal amount will be deemed to authorize, and
result in, the entire principal amount of Conrail Debentures held by us for
the account of the undersigned being tendered (and the corresponding
Consents with respect thereto being given).
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