<PAGE>
Exhibit 2.1
DISTRIBUTION AGREEMENT
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.,
GREEN ACQUISITION CORP.,
CONSOLIDATED RAIL CORPORATION,
CRR HOLDINGS LLC,
NYC NEWCO, INC.
and
PRR NEWCO, INC.
Dated as of July 26, 2004
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.1.
General...............................................................
2
ARTICLE II
DISTRIBUTION AND RELATED TRANSACTIONS
Section 2.1 Transfer of
Securities................................................
7
Section 2.2 Method of
Transfer....................................................
8
Section 2.3 The
Mergers...........................................................
8
Section 2.4 True
Up...............................................................
9
Section 2.5 Equipment Obligation
Agreements....................................... 9
Section 2.6
Debentures............................................................
10
Section 2.7 Tax Allocation
Agreement..............................................
11
Section 2.8
Timing................................................................
11
Section 2.9 New Amendment to the 1997
Transaction Agreement....................... 11
ARTICLE III
ADDITIONAL COVENANTS
Section 3.1 Cooperation Prior to the
Closing...................................... 11
Section 3.2 Private Letter Rulings from
the IRS................................... 12
Section 3.3 STB
Approval..........................................................
12
Section 3.4 Cooperation Between the
Parties Hereto................................ 12
ARTICLE IV
INDEMNIFICATION
Section 4.1 CSX and CSXT Agreement to
Indemnify................................... 13
Section 4.2 NSC and NSR Agreement to
Indemnify.................................... 13
Section 4.3 CRR Parent, Green
Acquisition, CRR and CRC Agreement to Indemnify..... 14
Section 4.4 Procedure for
Indemnification.........................................
15
Section 4.5
Contribution..........................................................
16
Section 4.6
Scope.................................................................
16
Section 4.7 Construction of
Agreements............................................ 16
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Section 4.8
Remedies..............................................................
17
ARTICLE V
CLOSING
Section 5.1
Closing...............................................................
17
Section 5.2 Conditions Precedent to the
Closing................................... 17
Section 5.3 Further Assurances;
Subsequent Transfers.............................. 18
ARTICLE VI
TERMINATION; AMENDMENTS; WAIVERS
Section 6.1
Termination...........................................................
19
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1 Representations and
Warranties........................................ 20
ARTICLE VIII
MISCELLANEOUS
Section 8.1
Amendment.............................................................
21
Section 8.2 Extension;
Waiver.....................................................
22
Section 8.3
Notices...............................................................
22
Section 8.4
Interpretation........................................................
23
Section 8.5 Entire
Agreement......................................................
23
Section 8.6 Parties in
Interest...................................................
23
Section 8.7 Governing
Law.........................................................
23
Section 8.8
Counterparts..........................................................
23
Section 8.9
Assignment............................................................
24
Section 8.10
Severability..........................................................
24
Section 8.11
Survival..............................................................
24
Section 8.12
Confidentiality.......................................................
24
Section 8.13 Fees and
Expenses.....................................................
25
Section 8.14 Jurisdiction and
Forum................................................ 25
</TABLE>
EXHIBITS
Exhibit A Equipment
Obligation Agreements
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<PAGE>
Exhibit B Equipment
Obligation Agreements Amendments
Exhibit C Related
Agreements
Exhibit D Form of Tax
Allocation Agreement
Exhibit E New Amendment to
the 1997 Transaction Agreement
-iii-
<PAGE>
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT (this "Agreement"), dated as of July 26,
2004
by and among CSX CORPORATION, a Virginia
corporation ("CSX"), CSX
TRANSPORTATION, INC., a Virginia
corporation and wholly-owned subsidiary of CSX,
for itself and on behalf of its controlled
Subsidiaries (collectively, "CSXT"),
CSX RAIL HOLDING CORPORATION, a Delaware
corporation and wholly-owned subsidiary
of CSX ("CSX Rail"), CSX NORTHEAST HOLDING
CORPORATION, a Delaware corporation
and wholly-owned subsidiary of CSX ("CSX
Northeast"), NORFOLK SOUTHERN
CORPORATION, a Virginia corporation
("NSC"), NORFOLK SOUTHERN RAILWAY COMPANY, a
Virginia corporation and a subsidiary of
NSC, for itself and on behalf of its
controlled Subsidiaries (collectively,
"NSR"), CRR HOLDINGS LLC, a Delaware
limited liability company ("CRR Parent"),
GREEN ACQUISITION CORP., a
Pennsylvania corporation and a wholly-owned
Subsidiary of CRR Parent ("Green
Acquisition"), CONRAIL INC., a Pennsylvania
corporation and wholly-owned
subsidiary of Green Acquisition, for itself
and on behalf of its controlled
Subsidiaries (collectively, "CRR"),
CONSOLIDATED RAIL CORPORATION, a
Pennsylvania corporation and wholly-owned
subsidiary of CRR ("CRC"), 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"), 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").
WHEREAS, the Board of Directors of CRR Parent has determined to
transfer or cause to be transferred to CSX
Rail and CSX Northeast all of CRR
Parent's NYC Shares (as defined herein) and
CSX Rail and CSX Northeast are
willing to accept such transfer of all of
CRR Parent's NYC Shares;
WHEREAS, the Board of Directors of CRR Parent has determined to
transfer or cause to be transferred to NSC
all of CRR Parent's PRR Shares (as
defined herein) and NSC is willing to
accept such transfer of all of CRR
Parent's PRR Shares;
WHEREAS, the parties hereto have obtained private letter
rulings
from the Internal Revenue Service (the
"Service") substantially to the effect
that, among other matters, the transfers of
all of the NYC Shares and the PRR
Shares to CSX Rail and CSX Northeast and
NSC, respectively, as contemplated by
this Agreement (such transfers, the
"Distribution"), qualify as tax-free
transactions under the Code (as defined
herein);
WHEREAS, in order to undertake the transactions contemplated by
this
Agreement, the parties hereto have obtained
the approval of the STB (as defined
herein);
WHEREAS, in order to undertake the transactions contemplated by
this
Agreement, the Board of Directors of CRC
has further determined that it is
appropriate and desirable, on the terms and
subject to the conditions
contemplated hereby, for CRC to seek the
Secured Holders Required Consent (as
defined herein), the Lease Consents (as
defined herein) and the Debenture
Holders Required Consent (as defined
herein) to the transactions contemplated by
this Agreement and to make the Exchange
Offer (as defined herein);
<PAGE>
WHEREAS, in connection with the transactions contemplated
hereby,
the respective parties hereto shall enter
into the Tax Allocation Agreement (as
defined herein) and the New Amendment to
the 1997 Transaction Agreement (as
defined herein); and
WHEREAS, the parties hereto have determined that it is desirable
to
set forth the principal transactions
required to effectuate the Distribution and
to set forth other matters relating to the
relationship and the respective
rights and obligations of the parties
hereto prior to or following such
transactions.
NOW, THEREFORE, in consideration of the foregoing and the
covenants
and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 General. As used in this Agreement, the following
terms
shall have the following meanings (such
meanings to be equally applicable to
both the singular and plural forms of the
terms defined):
"Action" means 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 the transactions
contemplated by the Agreement.
"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
Article IV hereof (a) NYC shall be an
affiliate of CSX and its Subsidiaries and
not an affiliate of CRR, CRR Parent or NSC
and their respective Subsidiaries,
(b) PRR shall be an affiliate of NSC and
its Subsidiaries and not an affiliate
of CRR, CRR Parent or CSX and their
respective Subsidiaries, and (c) neither
CSX, NSC nor their respective Subsidiaries
shall be affiliates of CRR, CRR
Parent or their respective Subsidiaries and
vice versa.
"Business Day" means any day other than a Saturday, Sunday or
other
day on which commercial banks in New York,
New York are authorized or required
by law to close.
"Closing" shall have the meaning ascribed thereto in Section
5.1.
"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.
"CSXT Merger" shall have the meaning ascribed thereto in
Section
2.3(a).
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"Damages" means all assessments, losses, claims, damages,
Liabilities, judgments, costs and expenses,
including interest, penalties,
attorneys' and consultants' fees and any
legal or other expenses incurred in
connection with investigating or defending
any matter.
"Debenture Cash Payments" means the cash payments to be made to
the
holders of the Debentures tendered and
accepted in the Exchange Offer.
"Debenture Consent Solicitation" shall have the meaning
ascribed
thereto in Section 2.6.
"Debenture Holders Required Consent" means the consent of the
holders of a majority of the aggregate
principal amount of the Debentures voting
together as a single class pursuant to the
terms set forth in the Debenture
Consent Solicitation.
"Debentures" means the $550,000,000 principal amount of 9-3/4%
debentures of CRC due June 15, 2020 and the
$250,000,000 principal amount of
7-7/8% debentures of CRC due May 15, 2043
outstanding under the Indenture.
"Distribution" shall have the meaning ascribed hereto in the
recitals to this Agreement.
"Distribution Date" shall have the meaning ascribed thereto in
Section 5.1.
"Equipment Obligation Agreements" means the pass-through trust
agreements, equipment trust agreements,
lease agreements, trust indenture and
security agreements and participation
agreements and other related agreements
pursuant to which the equipment trust
certificates and pass-through certificates
of CRC have been issued, and pursuant to
which CRC has acquired rights in
equipment and undertaken obligations in
respect thereof, all as identified on
Exhibit A hereto.
"Equipment Obligation Agreements Amendments" shall have the
meaning
ascribed thereto in Section 2.5(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" shall have the meaning ascribed thereto in
Section
2.6.
"Exchange Offer Expiration Date" means the expiration date of
the
Exchange Offer as such date may be extended
pursuant to the terms of the
Exchange Offer as described in the
Registration Statement.
"FMVs" means the fair market values of each of PRR and NYC.
"Governmental Entity" means any federal, state, local or
foreign
court, administrative agency or commission
or other governmental or regulatory
authority or commission or any arbitration
tribunal, including, without
limitation, the Service and the STB.
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"Indemnifiable Losses" means, with respect to any claim by an
Indemnified Party for indemnification
pursuant to Article IV hereof, any and all
Damages, obligations, payments, costs and
expenses (including, without
limitation, the costs and expenses of any
and all Actions, demands, assessments,
judgments, settlements and compromises
relating thereto and reasonable
attorneys' fees and expenses in connection
therewith) suffered by such
Indemnified Party with respect to such
claim.
"Indemnified Party" means a Person who is entitled to
indemnification under Article IV.
"Indemnifying Party" means a Person who is required to
indemnify
another Person under Article IV.
"Indenture" means the indenture, dated as of May 1, 1990,
between
CRC and the Trustee, pursuant to which the
Debentures were issued, as such
Indenture has been amended, modified or
supplemented from time to time in
accordance with its terms.
"JP Morgan Chase" means J.P. Morgan Chase & Co.
"Lease Consent Payments" shall have the meaning ascribed thereto
in
Section 2.5.
"Lease Consents" shall have the meaning ascribed thereto in
Section
2.5(a).
"Liabilities" means any and all debts, liabilities and
obligations
of any kind whatsoever, whether or not
accrued, contingent or reflected on a
balance sheet, known or unknown, absolute,
determined, determinable or
otherwise, including, without limitation,
those arising under any law, rule,
regulation, action, order or consent decree
of any Governmental Entity or any
judgment in any Action of any kind or award
of any arbitrator of any kind and
those arising under any contract.
"Mergers" shall have the meaning ascribed thereto in Section
2.3(a).
"New Amendment to the 1997 Transaction Agreement" means the
amendment to the 1997 Transaction
Agreement, to be entered into by and among
CSX, CSXT, NSC, NSR, CRR and CRR Parent, in
the form attached hereto as Exhibit
E.
"New
Debentures" means collectively the NYC Newco Debentures and the
PRR Newco Debentures proposed to be issued
pursuant to the Exchange Offer, to be
fully and unconditionally guaranteed by
CSXT and NSR, respectively, and whose
maturity dates, interest payment dates and
interest rates are intended to be
identical in all respects to the
corresponding Debentures, except for the
identity of the issuer and the
aforementioned guarantees and the other terms,
conditions and covenants provided in the
NYC Newco Indenture and the PRR Newco
Indenture, respectively, with such other
changes as may be agreed to by CRC,
CSXT, NSR, NSC and CSX.
"Newco Shares" shall have the meaning ascribed thereto in
Section
2.1(a).
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"1997 Transaction Agreement" means the Transaction Agreement,
dated
as of June 10, 1997, and as now in effect,
by and among CSX, CSXT, NSC, NSR,
CRR, CRC and CRR Parent.
"NSR Merger" shall have the meaning ascribed thereto in Section
2.3(a).
"NYC Allocated Liabilities" shall have the meaning ascribed
thereto
under the 1997 Transaction Agreement.
"NYC Membership Interest" means all limited liability company
interests of NYC.
"NYC Newco Debentures" shall have the meaning ascribed thereto
in
Section 2.6(c).
"NYC Newco Indenture" means the indenture, to be dated as of
the
Distribution Date, by and among NYC Newco,
CSXT (as guarantor), and The Bank of
New York, as trustee, pursuant to which the
NYC Newco Debentures are expected to
be issued.
"NYC Shares" shall have the meaning ascribed thereto in Section
2.1(a).
"Person" includes any individual, corporation, association,
partnership (general or limited), joint
venture, trust, estate, limited
liability company or other legal entity or
organization.
"Prospectus" means any prospectus included in any Registration
Statement, as amended or supplemented by
any prospectus supplement, and all
other amendments and supplements to the
prospectus included in any Registration
Statement, including post-effective
amendments and all material incorporated
therein by reference.
"PRR Allocated Liabilities" shall have the meaning ascribed
thereto
under the 1997 Transaction Agreement.
"PRR Membership Interest" means all limited liability company
interests of PRR.
"PRR Newco Debentures" shall have the meaning ascribed thereto
in
Section 2.6(c).
"PRR Newco Indenture" means the base indenture and a first
supplemental indenture, to be dated as of
the Distribution Date, by and among
PRR Newco, NSR (as guarantor) and The Bank
of New York, as trustee, pursuant to
which the PRR Newco Debentures are expected
to be issued.
"PRR Shares" shall have the meaning ascribed thereto in Section
2.1(a).
"Registration Statement" means the registration statement(s)
filed
by certain of the parties hereto, including
NYC Newco and PRR Newco, to register
under the Securities Act the New Debentures
and the corresponding guarantees
pursuant to the Exchange Offer,
including
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<PAGE>
the Prospectus which is part of such
Registration Statement, amendments
(including post-effective amendments) and
supplements to such Registration
Statement and all exhibits and appendices
to any of the foregoing.
"Related Agreements" means those new agreements and amended
agreements, as set forth in Exhibit C, as
shall be necessary and appropriate
under the Equipment Obligation Agreements
or the Equipment Obligation Agreements
Amendments to provide payment flows to CRC
after the Distribution to enable CRC
to satisfy its ongoing obligations under
the Equipment Obligation Agreements.
"Rulings" shall have the meaning ascribed thereto in Section
3.2.
"SEC" means the Securities and Exchange Commission.
"Secured Cash Payments" means the cash payments to be made to
holders of equipment trust certificates and
pass-through certificates set forth
in Part I, Sections I and II in Exhibit A
hereto who consent in the Secured
Holders Consent Solicitation.
"Secured Holders Consent Solicitation" shall have the meaning
ascribed thereto in Section 2.5(a).
"Secured Holders Required Consent" means the consent of the
holders
of a majority of the aggregate principal
amount of each issue of equipment trust
certificates and each issue of pass-through
certificates set forth in Part I,
Sections I and II in Exhibit A hereto
pursuant to the terms set forth in the
Secured Holders Consent Solicitation.
"Securities Act" means the Securities Act of 1933, as amended.
"Service" shall have the meaning ascribed thereto in the recitals
to
this Agreement.
"STB" means the Surface Transportation Board or, if there shall
be
no Surface Transportation Board, any
federal agency which is charged with the
function of approving combinations by rail
carriers or persons controlling them,
or of other arrangements between such rail
carriers, and granting exemptions
from other laws with respect thereto or
regulating other specific functions with
respect to the context in which such term
is employed or any successor entity
thereof.
"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 corporation or other
organization is directly or indirectly
owned or controlled by such Person or by
any one or more of its subsidiaries or by
such Person and one or more of its
subsidiaries; provided that CRR Parent and
any Person in which CRR Parent owns,
directly or indirectly, an interest (it
being assumed for the purposes of this
Agreement that CRR Parent does not own,
directly or indirectly, an interest in
either CSX or NSC) shall not be considered
a subsidiary of either CSX or NSC for
purposes of this Agreement; provided
further that, for purposes of Article
-6-
<PAGE>
IV hereof (a) NYC shall be deemed a
subsidiary of CSX and not a subsidiary of
CRR, CRR Parent or NSC, and (b) PRR shall
be deemed a subsidiary of NSC and not
a subsidiary of CRR, CRR Parent or CSX.
"Supplemental Indenture" means the supplemental indenture to be
dated as of the Distribution Date, between
CRC and the Trustee which is expected
to set forth the changes delineated in the
Debenture Consent Solicitation, with
such further amendments as may be agreed by
CRC, NSC, CSXT, NSR and CSX as
necessary or appropriate to permit the
consummation of the Distribution and the
other transactions provided herein.
"Tax Allocation Agreement" means the Tax Allocation Agreement to
be
entered into by and among the parties
hereto, substantially in the form attached
hereto as Exhibit D.
"Third Party Claim" shall have the meaning ascribed thereto in
Section 4.4(b).
"Transfer" means to assign, convey, transfer and deliver.
"True Up" shall have the meaning ascribed thereto in Section
2.4.
"Trustee"
means The First National Bank of Chicago or any successor
thereto, as trustee pursuant to the
Indenture.
ARTICLE II
DISTRIBUTION AND RELATED TRANSACTIONS
Section 2.1 Transfer of Securities. Until the Closing, NYC Newco
and
PRR Newco shall conduct no business and
shall have no assets or liabilities,
except as expressly provided for in this
Agreement. Upon the terms and subject
to the conditions set forth herein, on the
Distribution Date, the following
shall occur at substantially the same point
in time:
(a) CRC shall Transfer the NYC Membership Interest and the PRR
Membership Interest to NYC Newco and PRR
Newco, respectively, in exchange for
(i) the issuance by NYC Newco and PRR Newco
of shares of common stock, par value
$.01 per share, of each of NYC Newco (the
"NYC Shares") and PRR Newco (the "PRR
Shares," collectively with the NYC Shares,
the "Newco Shares"), respectively,
which, after giving effect to such
issuances, will represent 99.9% of each of
the NYC Shares and the PRR Shares then
issued and outstanding, (ii) the New
Debentures issued to CRC by each of NYC
Newco and PRR Newco, respectively and
(iii) the assumption of certain
liabilities, including equipment obligations, by
each of NYC Newco and PRR Newco,
(b) CRC shall then Transfer the Newco Shares to CRR,
(c) CRR shall then Transfer the Newco Shares to Green
Acquisition,
(d) CRC shall exchange the New Debentures and the Debenture
Cash Payments for the Debentures pursuant
to the Exchange Offer (as provided
below),
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<PAGE>
(e) Green Acquisition shall then Transfer the Newco Shares to
CRR Parent,
(f) CRR Parent shall then Transfer the NYC Shares to CSX Rail
and CSX Northeast, and the PRR Shares to
NSC,
(g) CSX Rail and CSX Northeast shall then Transfer the NYC
Shares to CSX, which shall in turn Transfer
the NYC Shares to CSXT,
(h) NSC shall then Transfer the PRR Shares to NSR,
(i) PRR shall be merged into PRR Newco and NYC shall be merged
into NYC Newco, and
(j) PRR Newco shall be merged into NSR and NYC Newco shall be
merged into CSXT.
Section 2.2 Method of Transfer. The parties hereto agree that
the
Transfers of the securities contemplated
pursuant to Section 2.1 hereof shall be
effected by delivery by the transferor to
the transferee of such good and
sufficient instruments of assignment,
conveyance, transfer and delivery, in form
and substance reasonably satisfactory to
CRC, CSX and NSC, as the case may be,
as shall be necessary to vest in the
transferee good title thereto, free and
clear of any lien, encumbrance, security
interest, claim or other restriction on
title or transfer whatsoever and without
any liability attaching thereto.
Section 2.3 The Mergers.
(a) On the Distribution Date, immediately following the
consummation of the Distribution and the
transfers described in Sections 2.1(e),
(f), (g) and (h), the parties shall file or
cause to be filed Articles of Merger
with the State Corporation Commission of
the Commonwealth of Virginia providing
for (a)(i) PRR to be merged with and into
PRR Newco and (ii) PRR Newco to be
then merged with and into NSR and (b)(i)
NYC to be merged with and into NYC
Newco and (ii) NYC Newco to be then merged
with and into CSXT, in accordance
with the provisions of the Code of
Virginia. The separate corporate existence of
each of (i) PRR and PRR Newco and (ii) NYC
and NYC Newco shall thereupon cease
and each of NSR and CSXT, respectively,
shall be the surviving entity. The
transactions contemplated by this Section
2.3 are sometimes herein referred to
as the "Mergers" and separately as the "NSR
Merger" and the "CSXT Merger,"
respectively.
(b) By virtue of the Mergers and without any action on the
part of the holders thereof, the equity
interests of NSR and CSXT outstanding
immediately prior to the Mergers shall
automatically become an equal number of
equity interests of NSR and CSXT,
respectively, as the respective surviving
corporation in the Mergers, and the equity
interests of PRR, PRR Newco, NYC and
NYC Newco outstanding immediately prior to
the Mergers shall be cancelled.
Accordingly, the parties hereto acknowledge
and agree that there will be no
change in the respective capitalization of
NSR and CSXT as a result of the
Mergers.
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Section 2.4 True Up. (a) If there shall have been any
condition,
circumstance, event or occurrence occurring
or existing, individually or in the
aggregate, that has resulted or could
result in a change in the percentage
allocation to NYC of 42%, and to PRR of
58%, of the FMVs of NYC and PRR taken
together, then NSC and CSX may, in their
sole discretion, discuss the means and
nature of the consideration to be paid or
furnished such that the percentage
allocation to NYC is 42% and the percentage
allocation to PRR is 58%, after
reviewing and analyzing the various
applicable tax, financial and other business
concerns, and may seek to mutually agree in
their respective sole discretion
upon such consideration that will permit an
economically balanced solution
acceptable to the parties, taking into
account NSC's and CSX's ongoing ownership
interest in CRC and CRR ("True Up"). The
parties hereto agree that such True Up,
if agreed to in their respective sole
discretion, shall be consummated on the
Distribution Date prior to the
Distribution.
(b) If there shall not have been any condition, circumstance,
event or occurrence occurring or existing
that, individually or in the
aggregate, has resulted or could result in
a change in the percentage allocation
to NYC of 42%, and to PRR of 58%, of the
FMVs of NYC and PRR taken together,
then NSC and CSX shall reconfirm in writing
on or prior to the Distribution Date
that (i) a True Up is not required, (ii)
the percentage allocation of the FMVs
to NYC is 42% and the percentage allocation
of the FMVs to PRR is 58%, and (iii)
it is the intent of the parties that
responsibility for the Retained Liabilities
will continue to be borne without change,
indirectly, 42% by CSX and 58% by NSC.
The parties hereto agree that as of the
date of this Agreement the percentage
allocation to NYC is 42% and the percentage
allocation to PRR is 58%.
Section 2.5 Equipment Obligation Agreements. The parties intend
to
seek the Secured Holders Required Consent
and the Lease Consents in connection
with, and to permit, the Distribution and
certain of the other transactions
contemplated hereby. The parties shall seek
such consents on the terms and
subject to the conditions set forth herein
and/or on such other terms as may be
agreed by CRC, NSC and CSX as necessary or
appropriate in order to facilitate
obtaining such consents, including without
limitation, the amount of the Secured
Cash Payments and any payments required to
obtain the Lease Consents (the "Lease
Consent Payments"). It is the intent of the
parties that, in connection with
obtaining such consents, following the
Closing, CRC shall remain directly
obligated with respect to all obligations
evidenced by the Equipment Obligation
Agreements and on the Distribution Date,
the respective parties shall enter into
the Equipment Obligation Agreements
Amendments and the Related Agreements. In
order to obtain the Secured Holders
Required Consent and the Lease Consents, the
parties shall undertake the following
transactions:
(a) Prior to the Closing, on a timetable agreed by the parties
to most expeditiously lead to the Closing,
CRC, in consultation with NSC and
CSX, shall (i) prepare a consent
solicitation to seek the Secured Holders
Required Consent, pursuant to which CRC
will solicit consents (as amended from
time to time, the "Secured Holders Consent
Solicitation") to the amendments to
the Equipment Obligation Agreements
identified in Part I, Sections I and II of
Exhibit B and/or such other amendments as
may be agreed by CRC, NSC and CSX as
necessary or appropriate to permit the
consummation of the Distribution and the
other transactions contemplated hereby and
(ii) privately negotiate with the
lessor and other counterparties to CRC's
equipment leases identified in Part II
of Exhibit B for their respective consents
(the
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"Lease Consents") to the amendments to the
Equipment Obligation Agreements
identified in Part II of Exhibit B and/or
such other amendments as may be agreed
by CRC, NSC and CSX as necessary or
appropriate to effectuate the Distribution
and the transactions related thereto (the
amendments contemplated by clauses (i)
and (ii) being collectively referred to
herein as the "Equipment Obligation
Agreements Amendments"). Subject to the
satisfaction of the conditions set forth
in Section 5.2 hereof, NSC and CSX shall
ensure that CRC has sufficient cash to
make, and CRC shall make, the Secured Cash
Payments and the Lease Consent
Payments at the Closing. CRC shall comply
with all applicable laws or
regulations in connection with the Secured
Holders Consent Solicitation.
(b) Subject to the satisfaction of the conditions of Section
5.2 hereof, on the Distribution Date, (i)
CRC, in consultation with CSX and NSC,
shall execute and deliver the Equipment
Obligation Agreements Amendments and may
request any other applicable parties to
execute the same and (ii) CRC, NSR, PRR
Newco, CSXT and NYC Newco shall execute
their respective Related Agreements and
any ancillary agreements thereto. The
parties agree to execute and deliver all
reasonable and necessary opinions,
officer's certificates and other documents in
connection with the execution of the
Equipment Obligation Agreements Amendments,
the Related Agreements and any other
ancillary agreements thereto.
Section 2.6 Debentures. The parties intend to seek the
Debenture
Holders Required Consent in connection
with, and to permit, the Distribution and
certain of the other transactions
contemplated hereby. It is the intent of the
parties that, in connection with obtaining
such consent, prior to the Closing,
CRC will conduct a consent solicitation to
seek the Debenture Holders Required
Consent (as amended from time to time, the
"Debenture Consent Solicitation")
and, in connection therewith, prior to the
Closing, CSXT, NYC Newco, NSR, PRR
Newco and CRC will conduct an offer to
exchange New Debentures initially issued
by each of NYC Newco and PRR Newco for the
Debentures on the terms and subject
to the conditions set forth herein and/or
on such other terms as may be agreed
by CRC, NSC and CSX as necessary or
appropriate in order to facilitate obtaining
the Debenture Holders Required Consent,
including without limitation, the amount
of the Debenture Cash Payments (the
"Exchange Offer"). The Exchange Offer shall
be on the basis that each holder of
Debentures accepting the New Debentures in
exchange for such holder's Debentures must
grant a consent in respect of the
Debenture Holders Required Consent. In
connection with the foregoing, the
parties shall undertake the following
transactions:
(a) Prior to the Closing, on a timetable agreed by the parties
to most expeditiously lead to the Closing,
CRC, in consultation with NSC and
CSX, shall prepare a consent solicitation,
which consent solicitation shall form
part of the Registration Statement, to seek
the Debenture Holders Required
Consent in connection with the Distribution
and certain other transactions
contemplated hereby and to the execution of
the Supplemental Indenture. CRC
shall comply with all applicable laws or
regulations in connection with the
Debenture Consent Solicitation.
(b) Subject to the satisfaction of the conditions set forth in
Section 5.2 hereof, on the Distribution
Date, CRC shall execute and deliver the
Supplemental Indenture and such other
necessary documents and request the
Trustee to execute the same. The parties
agree
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to execute and deliver all reasonable and
necessary opinions, officer's
certificates and o
