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;
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
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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).
* * * * * * * *
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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
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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
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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]
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]
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
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
(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
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