Exhibit 4.2
FIRST SUPPLEMENTAL INDENTURE
among
PRR NEWCO, INC.,
Issuer
NORFOLK SOUTHERN RAILWAY COMPANY
Guarantor
and
THE BANK OF NEW YORK
Dated [____________, 2004]
FIRST SUPPLEMENTAL INDENTURE, dated as of [ ], 2004 (the "First
Supplemental Indenture"), by and among PRR Newco, Inc. (the "Company"), a
Virginia corporation and wholly-owned subsidiary of Norfolk Southern Railway
Company, as Issuer, Norfolk Southern Railway Company ("NSR" or the "Guarantor"),
a Virginia corporation, as Guarantor, and The Bank of New York, as trustee (the
"Trustee"), under the Indenture, dated as of [_______________, 2004], by and
among the Company, NSR and the Trustee (the "Base Indenture").
WHEREAS, each of the Company and the Guarantor executed and delivered the
Base Indenture to the Trustee to provide for the future issuance of the
Company's unsecured debt securities (the "Securities") to be issued from time to
time in one or more series as might be determined by the Company and the
Guarantor under the Base Indenture, in an unlimited aggregate principal amount,
which may be authenticated and delivered as provided in the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company desires
to provide for the establishment, and the Guarantor desires to provide for the
full and unconditional guarantee, of two new separate series of Securities
designated the Company's 9 3/4% Senior Notes due 2020 (the "2020 Notes") and
7 7/8% Senior Notes due 2043 (the "2043 Notes" and, together with the 2020
Notes, the "Notes"), the form and substance of the Notes and the terms,
provisions and conditions thereof to be set forth as provided in the Base
Indenture and this First Supplemental Indenture;
WHEREAS, (a) the Company has requested that the Trustee execute and
deliver this First Supplemental Indenture pursuant to Sections 301 and 801 of
the Base Indenture, (b) all requirements necessary to make this First
Supplemental Indenture a valid instrument in accordance with its terms, and to
make the Notes, when executed by the Company and the Guarantor and authenticated
and delivered by the Trustee, the valid obligations of the Company and the
Guarantor, have been performed, and (c) the execution and delivery of this First
Supplemental Indenture have been duly authorized in all respects; and
WHEREAS, the Company and the Guarantor are each party to a distribution
agreement pursuant to which, among other things, upon the completion of certain
conditions the Company will be merged with and into the Guarantor, at which time
the Guarantor will assume all of the obligations of the Company under the Base
Indenture and this First Supplemental Indenture and the Guarantee will cease to
exist.
NOW THEREFORE, in consideration of the premises and purchase and
acceptance of the Notes by the Holders thereof, and for the purpose of setting
forth, as provided in the Base Indenture, the form and substance of the Notes
and the terms, provisions and conditions thereof, each of the Company and the
Guarantor mutually covenants and agrees with the Trustee as follows:
ARTICLE I
DEFINITIONS
Section 101 Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Base Indenture has the same meaning when used in
this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture has the
same meaning throughout this First Supplemental Indenture;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or Article of this
First Supplemental Indenture;
(e) headings are for convenience of reference only and do not affect
interpretation; and
(f) the following terms have the meanings given to them in this Section
101(f):
"Capital Lease Obligation" means any obligation arising out of any lease
of property which is required to be classified and accounted for by the lessee
as a capitalized lease on a balance sheet of such lessee under generally
accepted accounting principles.
"Conrail Spin Off Transactions" means any merger, consolidation,
conveyance, lease, transfer, sublease or other transaction which is described in
or contemplated by the Distribution Agreement or the Form S-4 filed with the
Commission by the Company and Guarantor on [ ], 2004, as the same may be amended
from time to time.
"Consolidated Net Tangible Assets" means, at any date, the total assets
appearing on the most recent consolidated balance sheet of the Company, the
Guarantor and their respective Restricted Subsidiaries as at the end of the
fiscal quarter of the Company or the Guarantor ending not more than 135 days
prior to such date, prepared in accordance with generally accepted accounting
principles of the United States, less (i) all current liabilities (due within
one year) as shown on such balance sheet, (ii) applicable reserves, (iii)
investments in and advances to Securitization Subsidiaries and Subsidiaries of
Securitization Subsidiaries that are consolidated on the consolidated balance
sheet of the Company, the Guarantor and their respective Subsidiaries, and (iv)
Intangible Assets and liabilities relating thereto.
"Depositary," with respect to the Notes, means The Depository Trust
Company or any successor thereto.
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"Funded Debt" means (i) any indebtedness of the Company, the Guarantor or
a Restricted Subsidiary maturing more than 12 months after the time of
computation thereof, (ii) guarantees by the Company, the Guarantor or a
Restricted Subsidiary of Funded Debt or of dividends of others (except
guarantees in connection with the sale or discount of accounts receivable, trade
acceptances and other paper arising in the ordinary course of business), (iii)
all preferred stock of the Company, the Guarantor or such Restricted
Subsidiaries and (iv) all Capital Lease Obligations of the Company, the
Guarantor or a Restricted Subsidiary.
"Global Note" shall have the meaning set forth in Section 203.
"Guarantee" shall have the meaning set forth in Section 701.
"Guaranteed Obligations" shall have the meaning set forth in Section 701.
"Indebtedness" means, at any date, without duplication, (i) all
obligations for borrowed money of the Company, the Guarantor or a Restricted
Subsidiary or any other indebtedness of the Company, the Guarantor or a
Restricted Subsidiary, evidenced by bonds, debentures, notes or other similar
instruments and (ii) Funded Debt, except such obligations and other indebtedness
of the Company, the Guarantor or a Restricted Subsidiary and Funded Debt, if
any, incurred as part of a Securitization Transaction.
"Intangible Assets" means at any date, the value (net of any applicable
reserves) as shown on or reflected in the most recent consolidated balance sheet
of the Company, the Guarantor and the Restricted Subsidiaries at the end of the
fiscal quarter of the Company or the Guarantor ending not more than 135 days
prior to such date, prepared in accordance with generally accepted accounting
principles, of: (i) all trade names, trademarks, licenses, patents, copyrights,
service marks, goodwill and other like intangibles; (ii) organizational and
development costs; (iii) deferred charges (other than prepaid items, such as
insurance, taxes, interest, commissions, rents, deferred interest waiver,
compensation and similar items and tangible assets being amortized); and (iv)
unamortized debt discount and expense, less unamortized premium.
"Liens" means pledges, mortgages, security interests and other liens,
including purchase money liens, on property of the Company, the Guarantor or any
Restricted Subsidiary which secure Funded Debt.
"Obligation" shall mean any indebtedness for money borrowed or
indebtedness evidenced by a bond, note, debenture or other evidence of
indebtedness.
"Preferential Payment" shall have the meaning set forth in Section 701.
"Principal Subsidiary" shall mean The Alabama Great Southern Railroad
Company.
"Purchase Money Lien" shall mean any mortgage, pledge, lien, encumbrance,
charge or security interest of any kind upon any indebtedness of any Principal
Subsidiary acquired after the date any Notes are first issued if such Purchase
Money Lien is for the
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purpose of financing, and does not exceed, the cost to the Company or any
Subsidiary of acquiring the indebtedness of such Principal Subsidiary and such
financing is effected concurrently with, or within 180 days after, the date of
such acquisition.
"Receivables" mean any right of payment from or on behalf of any obligor,
whether constituting an account, chattel paper, instrument, general intangible
or otherwise, arising, either directly or indirectly, from the financing by the
Company, the Guarantor or any Subsidiary of the Company or the Guarantor of
property or services, monies due thereunder, security interests in the property
and services financed thereby and any and all other related rights.
"Restricted Subsidiary" means each Subsidiary of the Company or the
Guarantor other than Securitization Subsidiaries and Subsidiaries of
Securitization Subsidiaries.
"Securitization Subsidiary" means a Subsidiary of the Company or the
Guarantor (i) which is formed for the purpose of effecting one or more
Securitization Transactions and engaging in other activities reasonably related
thereto and (ii) as to which no portion of the Indebtedness or any other
obligations (a) is guaranteed by any Restricted Subsidiary, or (b) subjects any
property or assets of any Restricted Subsidiary, directly or indirectly,
contingently or otherwise, to any lien, other than pursuant to representations,
warranties and covenants (including those related to servicing) entered into in
the ordinary course of business in connection with a Securitization Transaction
and inter-company notes and other forms of capital or credit support relating to
the transfer or sale of Receivables or asset-backed securities to such
Securitization Subsidiary and customarily necessary or desirable in connection
with such transactions.
"Securitization Transaction" means any transaction or series of
transactions that have been or may be entered into by the Company, the Guarantor
or any of their respective Subsidiaries in connection with or reasonably related
to a transaction or series of transactions in which the Company, the Guarantor
or any of their respective Subsidiaries may sell, convey or otherwise transfer
to (i) a Securitization Subsidiary or (ii) any other Person, or may grant a
security interest in, any Receivables or asset-backed securities or interest
therein (whether such Receivables or securities are then existing or arising in
the future) of the Company, the Guarantor or any of their respective
Subsidiaries, and any assets related thereto, including, without limitation, all
security interests in the property or services financed thereby, the proceeds of
such Receivables or asset-backed securities and any other assets which are sold
in respect of which security interests are granted in connection with
securitization transactions involving such assets.
"Subsidiary" means a Person a majority of the outstanding voting stock of
which is owned, directly or indirectly, by the Company, the Guarantor or by one
or more other Subsidiaries, or by the Company, the Guarantor and one or more
other Subsidiaries, but does not include CRR Holdings LLC or its Subsidiaries.
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ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 201 Designation and Principal Amount.
There shall be two new separate series of Securities designated the
Company's 9 3/4% Senior Notes due 2020 and 7 7/8% Senior Notes due 2043. The
aggregate principal amount of the two new separate series of Securities
authorized by this First Supplemental Indenture shall be limited to
$[464,000,000], with the aggregate principal amount of the respective Securities
limited to $[319,000,000] for the 2020 Notes and $[145,000,000] for the 2043
Notes (unless the issue of either series of Securities is "reopened" pursuant to
Section 801(9) of the Base Indenture (as set forth therein) by issuing
additional debt Securities of such series), in an amount or amounts and
registered in the names of such Persons as shall be set forth in any written
order of the Company for the authentication and delivery of Notes pursuant to
Section 303 of the Base Indenture.
Section 202 Place of Payment: Security Register for Notes.
The Company selects New York, New York as the Place of Payment for the
Notes and hereby appoints the Trustee as Security Registrar for the Notes.
Section 203 Global Note.
(a) Each series of the Notes shall be issued in the form of one or more
global Notes in an aggregate principal amount equal to the aggregate principal
amount of all outstanding Notes of that series (each, a "Global Note" and
together, the "Global Notes"), to be registered in the name of the Depositary,
or its nominee, and delivered by the Trustee to or upon the order of the
Depositary for crediting to the accounts of its participants pursuant to the
instructions of the Company. The Company upon any such presentation shall
execute one or more Global Notes in such aggregate principal amount and deliver
the same to the Trustee for authentication and delivery in accordance with the
Base Indenture and this First Supplemental Indenture. Payments on Notes issued
as one or more Global Notes will be made to the Depositary.
(b) A Global Note may be transferred, in whole but not in part, only to
another nominee of the Depositary, or to a successor Depositary selected or
approved by the Company or to a nominee of such successor Depositary.
Section 204 Interest.
(a) The interest rate in respect of the 2020 Notes will be 9 3/4% per
annum (the "2020 Interest Rate") and the interest rate in respect of the 2043
Notes will be 7 7/8% per annum (the "2043 Interest Rate" and collectively with
the 2020 Interest Rate, the "Interest Rates").
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(b) The 2020 Notes will bear interest at the 2020 Interest Rate from
[CLOSING DATE], until the principal thereof becomes due and payable. The 2043
Notes will bear interest at the 2043 Interest Rate from [CLOSING DATE], until
the principal thereof becomes due and payable. Interest on the Notes will be
payable semi-annually in arrears on June 15 and December 15 of each year,
commencing [December 15, 2004], in the case of the 2020 Notes, and on May 15 and
November 15 of each year, commencing [November 15, 2004], in the case of the
2043 Notes, to the Person in whose name any such Note or any predecessor Note is
registered, at the close of business on the regular record date for such
interest installment, which shall be the close of business on the June 1 and
December 1 next preceding such Interest Payment Date in the case of the 2020
Notes, and shall be the close of business on the May 1 and November 1 next
preceding such Interest Payment Date in the case of the 2043 Notes.
(c) In the event that any date on which interest is payable on the Notes
is not a Business Day, then payment of interest payable on such date will be
made on the next succeeding day which is a Business Day, with the same force and
effect as if made on such date, and no interest shall accrue on the amount so
payable from the period from and after such Interest Payment Date or Maturity
Date, as the case may be (each date on which interest is actually payable, an
"Interest Payment Date").
ARTICLE III
COVENANTS
Section 301 Limitations on Liens on Stock or Indebtedness of Principal
Subsidiaries.
For so long as any Notes issued pursuant to this First Supplemental
Indenture are Outstanding, other than in connection with the Conrail Spin Off
Transactions, the Company and the Guarantor shall not, nor shall either of them
permit, any Subsidiary to, create, assume, incur or suffer to exist any
mortgage, pledge, lien, encumbrance, charge or security interest of any kind,
other than a Purchase Money Lien, upon any stock or indebtedness, whether owned
on the date any Notes are first issued or thereafter acquired, of any Principal
Subsidiary, to secure any Obligation (other than the Notes) of the Company, the
Guarantor, any Subsidiary of the Company or the Guarantor or any other Person,
without in any such case making effective provision whereby all of the
outstanding Notes shall be directly secured equally and ratably with such
Obligation. This Section 301 shall not (i) apply to any mortgage, pledge, lien,
encumbrance, charge or security interest on any stock or indebtedness of a
Person existing at the time such Person becomes a Subsidiary, (ii) restrict any
other property of the Company, the Guarantor or their respective Subsidiaries or
(iii) restrict the sale by the Company, the Guarantor or any Subsidiary of any
stock or indebtedness of any Subsidiary.
Section 302 Limitations on Funded Debt.
For so long as any Notes issued pursuant to this First Supplemental
Indenture are Outstanding, other than in connection with the Conrail Spin Off
Transactions, neither the Company nor the Guarantor shall, nor
shall either of them permit,
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any Restricted Subsidiary to incur, issue, guarantee or create any Funded Debt
unless, after giving effect thereto, the sum of the aggregate amount of all
outstanding Funded Debt of the Company, the Guarantor and the Restricted
Subsidiaries would not exceed an amount equal to 15% of Consolidated Net
Tangible Assets.
This Section 302 shall not apply to, and there shall be excluded from
Funded Debt in any computation pursuant hereto, Funded Debt secured by: (i)
Liens on real or physical property of any Person existing at the time such
Person becomes a Subsidiary; (ii) Liens on real or physical property existing at
the time of acquisition thereof incurred within 180 days of the time of
acquisition thereof (including, without limitation, acquisition through merger
or consolidation) by the Company, the Guarantor or any Restricted Subsidiary;
(iii) Liens on real or physical property thereafter acquired (or constructed) by
the Company, the Guarantor or any Restricted Subsidiary and created prior to, at
the time of, or within 270 days after such acquisition (including, without
limitation, acquisition through merger or consolidation) (or the completion of
such construction or commencement of commercial operation of such property,
whichever is later) to secure or provide for the payment of all or any part of
the purchase price (or the construction price) thereof; (iv) Liens in favor of
the Company, the Guarantor or any Restricted Subsidiary; (v) Liens in favor of
the United States of America, any State thereof or the District of Columbia, or
any agency, department or other instrumentality thereof, to secure partial,
progress, advance or other payments pursuant to any contract or the provisions
of any statute, (vi) Liens incurred or assumed in connection with the issuance
of revenue bonds the interest on which is exempt from federal income taxation
pursuant to Section 103(b) of the Internal Revenue Code of 1954, as amended;
(vii) Liens securing the performance of any contract or undertaking not directly
or indirectly in connection with the borrowing of money, the obtaining of
advances or credit or the securing of Funded Debt, if made and continuing in the
ordinary course of business; (viii) Liens incurred (no matter when created) in
connection with the Company, the Guarantor or a Restricted Subsidiary engaging
in a leveraged or single-investor lease transaction; provided, however, that the
instrument creating or evidencing any borrowings secured by such Lien will
provide that such borrowings are payable solely out of the income and proceeds
of the property subject to such Lien and are not a general obligation of the
Company, the Guarantor or such Restricted Subsidiary; (ix) Liens under workers'
compensation laws, unemployment insurance laws or similar legislation, or good
faith deposits in connection with bids, tenders, contracts or deposits to secure
public or statutory obligations of the Company, the Guarantor or any Restricted
Subsidiary, or deposits of cash or obligations of the United States of America
to secure surety, repletion and appeal bonds to which the Company, the Guarantor
or any Restricted Subsidiary is a party or in lieu of such bonds, or pledges or
deposits for similar purposes in the ordinary course of business, or Liens
imposed by law, such as laborers' or other employees', carriers',
warehousemen's, mechanics', materialmen's and vendors' Liens and Liens arising
out of judgments or awards against the Company, the Guarantor or any Restricted
Subsidiary with respect to which the Company, the Guarantor or such Restricted
Subsidiary at the time shall be prosecuting an appeal or proceedings for review
and with respect to which it shall have secured a stay of execution pending such
appeal or proceedings for review, or Liens for taxes not yet subject to
penalties for nonpayment or the amount or validity of which is being in good
faith contested by
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appropriate proceedings by the Company, the Guarantor or any Restricted
Subsidiary, as the case may be, or minor survey exceptions, minor encumbrances,
easement or reservations of, or rights of others for, rights-of-way, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions or Liens on the use of real properties which Liens,
exceptions, encumbrances, easements, reservations, rights and restrictions do
not, in the opinion of the Company, in the aggregate materially detract from the
value of said properties or materially impair their use in the operation of the
business of the Company and its Subsidiaries; (x) Liens incurred to finance
construction, alteration or repair of any real or physical property and
improvements thereto prior to or within 270 days after completion of such
construction, alteration or repair; (xi) Liens incurred (no matter when created)
in connection with a Securitization Transaction; (xii) Liens on property (or any
Receivable arising in connection with the lease thereof) acquired by the
Company, the Guarantor or a Restricted Subsidiary through repossession,
foreclosure or like proceeding and existing at the time of the repossession,
foreclosure, or like proceeding; (xiii) Liens on deposits of the Company, the
Guarantor or a Restricted Subsidiary with banks (in the aggregate, not exceeding
$50 million), in accordance with customary banking practice, in connection with
the providing by the Company, the Guarantor or a Restricted Subsidiary of
financial accommodations to any Person in the ordinary course of business; or
(xiv) any extension, renewal, refunding or replacement of the foregoing.
Section 303 Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 301 or 302 of this First
Supplemental Indenture with respect to the Notes of any series if before the
time for such compliance the Holders of at least a majority in principal amount
of the Outstanding Notes of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect. The rights of the Company set forth in this
Section 303 shall be in addition to the rights of the Company set forth in
Section 908 of the Base Indenture.
ARTICLE IV
REDEMPTION OF THE NOTES
Section 401 No Redemption.
The Notes will not be subject to redemption of any kind at any time prior
to maturity.
Section 402 No Sinking Fund.
The Notes are not entitled to the benefit of any sinking fund.
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ARTICLE V
FORMS OF NOTES
Section 501 Form of Notes.
The 2020 Notes, along with the Trustee's Certificate of Authentication to
be endorsed thereon, are to be substantially in the form attached hereto as
Exhibit A. The 2043 Notes, along with the Trustee's Certificate of
Authentication to be endorsed thereon, are to be substantially in the form
attached hereto as Exhibit B.
ARTICLE VI
ORIGINAL ISSUE OF NOTES
Section 601 Original Issue of Notes.
The 2020 Notes in the aggregate principal amount of $319,000,000 may, upon
execution of this First Supplemental Indenture, be executed by the Company and
the Guarantor and delivered to the Trustee for authentication as provided in
Sections 301 and 303 of the Base Indenture, in the maximum principal amount of
$319,000,000.
The 2043 Notes in the aggregate principal amount of $145,000,000 may, upon
execution of this First Supplemental Indenture, be executed by the Company and
the Guarantor and delivered to the Trustee for authentication as provided in
Sections 301 and 303 of the Base Indenture, in the maximum principal amount of
$145,000,000.
ARTICLE VII
GUARANTEE
Section 701 Unconditional Guarantee.
The Guarantor hereby fully and unconditionally guarantees (such guarantee
to be referred to herein as the "Guarantee") to the Holders of the Notes and to
the Trustee and its successors and assigns that: (i) the principal of and
interest on the Notes will be promptly paid in full when due, subject to any
applicable grace period, whether at maturity, by acceleration or otherwise and
interest on the overdue principal, if any, and interest on any interest on the
Notes and all other obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (ii) in case of any extension
of time of payment or renewal of any Notes or of any such other obligations, the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, subject to an applicable grace period,
whether at stated maturity, by acceleration or otherwise (collectively, the
"Guaranteed Obligations"). The Guarantor hereby agrees that its obligations
hereunder
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shall be full, irrevocable, unconditional and absolute, irrespective of the
validity, regularity or enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of Notes with respect to any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor.
The obligations of the Guarantor hereunder are separate and independent of
the obligations of the Company, and a separate action or actions may be brought
and prosecuted against the Guarantor whether action is brought against the
Company or whether the Company is joined in any action or actions. The
obligations of the Guarantor hereunder shall survive and continue in full force
and effect until the earlier of (i) such time as the Guarantee shall cease to
exist pursuant to the terms of Section 704 hereof, or (ii) payment in full of
the Guaranteed Obligations is actually received by the Holders or the Trustee on
behalf of the Holders and the period of time has expired during which any
payment made by the Company or the Guarantor may be determined to be a
Preferential Payment (defined below), notwithstanding any release or termination
of the Company's liability by express or implied agreement or by operation of
law and notwithstanding that the Guaranteed Obligations or any part thereof are
deemed to have been paid or discharged by operation of law or by some act or
agreement. For purposes of this Guarantee, the Guaranteed Obligations shall be
deemed to be paid only to the extent that the Holders, or the Trustee on behalf
of the Holders, actually receive immediately available funds.
The Guarantor agrees that to the extent the Company makes any payment to
the Holders, or to the Trustee on behalf of the Holders, in connection with the
Guaranteed Obligations, and all or any part of such payment is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid by the Holders or the Trustee or paid over to a trustee, receiver or
any other entity, whether under any bankruptcy act or otherwise (any such
payment is hereinafter referred to as a "Preferential Payment"), then this
Guarantee shall continue to be effective or shall be reinstated, as the case may
be, and, to the extent of such payment or repayment by the Holders or Trustee,
the Guaranteed Obligations or part thereof intended to be satisfied by such
Preferential Payment shall be revived and continued in full force and effect as
if said Preferential Payment had not been made.
Section 702 Waiver.
To the fullest extent permitted by applicable law, the Guarantor waives
and agrees not to assert: (a) any right to require the Holders or Trustee to
proceed against the Company, to pursue any other remedy available to the Holders
or Trustee or to pursue any remedy in any particular order or manner; (b) assert
the benefit of any statute of limitations affecting the Guarantor's liability
hereunder or the enforcement hereof; (c) demand, diligence, presentment for
payment, protest and demand, and notice of extension, dishonor, protest, demand,
nonpayment and acceptance of this Guarantee; (d) notice of the existence,
creation or incurring of new or additional indebtedness of the Company to the
Holders; and (e) any defense arising by reason of any disability or other
defense of the Company or by reason of the cessation from any cause whatsoever
(other than payment in full of all amounts demanded
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to be paid by the Guarantor under this Guarantee) of the liability of the
Company for the Guaranteed Obligations. Until payment in full of the Guaranteed
Obligations, the Guarantor shall have no right of subrogation and hereby waives
any right to enforce any remedy which the Holders or the Trustee now have, or
may hereafter have, against the Company, and waives any benefit of, or any right
to participate in, any security now or hereafter held on behalf of the Holders.
Section 703 Execution of Guarantee.
The Guarantor hereby agrees to execute a notation of Guarantee in
substantially the form attached to the form of Note, and to deliver such
notation to the Trustee.
The Guarantor hereby agrees that its Guarantee of Securities of a series
to which this Article VII has been made applicable shall remain in full force
and effect notwithstanding any failure to endorse on any such Security a
notation relating to the Guarantee thereof.
Manual or facsimile signatures of individuals, on this First Supplemental
Indenture and the Base Indenture, who were at any time the proper officers of
the Guarantor, shall bind the Guarantor, notwithstanding that such individuals
or any of them have ceased to hold such offices prior to or at the time of the
authentication and delivery of such Securities by the Trustee or did not hold
such offices at the date of such Securities.
The delivery by the Trustee of any Security of a series to which this
Article VII has been made applicable, after the authentication thereof under
this Indenture, shall constitute due delivery of the Guarantee set forth in this
Indenture on behalf of the Guarantor.
Section 704 Cessation of Guarantee.
The Guarantee under this First Supplemental Indenture will automatically
cease to exist upon the merger of the Company with and into the Guarantor, at
which point the Guarantor will succeed to, and be substituted for, and may
exercise every right and power of, the Company under the Base Indenture, this
First Supplemental Indenture and the Notes.
ARTICLE VIII
MISCELLANEOUS
Section 801 Ratification of Base Indenture.
The Base Indenture, as supplemented by this First Supplemental Indenture,
is in all respects ratified and confirmed, and this First Supplemental Indenture
shall be deemed part of the Base Indenture in the manner and to the extent
herein and therein provided.
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Section 802 Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and the Guarantor
and not by the Trustee, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representation as to the validity or
sufficiency of this First Supplemental Indenture.
Section 803 Governing Law.
This First Supplemental Indenture, the Guarantee and the Notes shall be
construed in accordance with and governed by the laws of the State of New York.
Section 804 Separability.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Notes shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this First
Supplemental Indenture or of the Notes, but this First Supplemental Indenture
and the Notes shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
Section 805 Counterparts.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
12
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed and attested, as of the day and year first above
written.
PRR NEWCO, INC.
By:
-----------------------------
Name:
Title:
Attest:
By:
-----------------------------
Name:
Title:
NORFOLK SOUTHERN RAILWAY COMPANY
By:
-----------------------------
Name:
Title:
Attest:
By:
-----------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:
-----------------------------
Name:
Title:
Attest:
By:
-----------------------------
Name:
Title:
13
EXHIBIT A
FORM ONLY
FACE OF NOTE
This Note is a Global Note within the meaning of the Base
Indenture hereinafter referred to and is registered in the name of a Depositary
or a nominee of a Depositary. This Note is exchangeable for Notes registered in
the name of a person other than the Depositary or its nominee only in the
limited circumstances described in the Base Indenture, and no transfer of this
Note (other than a transfer of this Note as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary) may be registered except in limited
circumstances.
Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the issuer
or its agent for registration of transfer, exchange or payment, and any Note
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
No. CUSIP No. [ ]
PRR NEWCO, INC.
Issuer
NORFOLK SOUTHERN RAILWAY COMPANY
Guarantor
NOTE
DUE DECEMBER 15, 2020
PRR NEWCO, INC., a corporation organized under the laws of the
Commonwealth of Virginia (herein called the "Company," which term includes any
successor corporation under the Base Indenture hereinafter referred to), for
value received, hereby promises to pay, and Norfolk Southern Railway Company, a
corporation organized under the laws of the Commonwealth of Virginia
(hereinafter called "NSR" or the "Guarantor") hereby promises to fully and
unconditionally guarantee such payment, to Cede & Co., or registered assigns,
the principal sum of [Three-Hundred-Nineteen Million Dollars ($319,000,000)] on
June 15, 2020 and the Company hereby promises to pay, and NSR promises to
guarantee, the payment of interest thereon from [closing date] or from the most
recent interest payment date to which interest has been paid or duly provided
for, semi-annually in arrears on June 15 and December 15 of each year,
commencing June 15, 2004, at a rate of 9-3/4% per annum until the principal
hereof is paid or made available for payment, and on any overdue principal and
premium, if any, at a rate of 9-3/4% per annum and (without duplication and to
the extent that
A-1
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at a rate of 9-3/4% per annum compounded semi-annually.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date (as defined below) shall be calculated as provided in the
Base Indenture. In the event that any date on which interest is payable on this
Note is not a Business Day, then payment of interest payable on such date will
be made on the next succeeding day that is a Business Day, with the same force
and effect as if made on such date and no interest shall accrue on the amount so
payable from the period from and after such Interest Payment Date or Maturity
Date, as the case may be (each date on which interest is actually payable, an
"Interest Payment Date"). The interest installment so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in the
Base Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Security, as defined in said Base Indenture) is registered at the
close of business on the regular record date for such interest installment,
which shall be the close of business on the June 1 and December 1 next preceding
such Interest Payment Date. Any such interest installment not punctually paid or
duly provided for shall forthwith cease to be payable to the registered Holders
on such regular record date and may be paid to the Person in whose name this
Note (or one or more Predecessor Security) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the registered Holders
of Notes not less than 10 days prior to such special record date, or may be paid
at any time in any other lawful manner, all as more fully provided in the Base
Indenture. The principal of and premium, if any, and the interest on this Note
shall be payable at the office or agency of the Trustee maintained for that
purpose in any coin or currency of the United States of America that at the time
of payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made, at the option of the Company and
upon prior notice to the Trustee, by check mailed to the registered Holder at
such address as shall appear in the Security Register or by wire transfer to an
account designated by a Holder in writing not less than ten days prior to the
date of payment.
The indebtedness evidenced by this Note is, to the extent
provided in the Base Indenture, equal in right of payment with all other
unsecured and unsubordinated indebtedness of each of the Company and the
Guarantor, and this Note is issued subject to the provisions of the Base
Indenture and the First Supplemental Indenture hereinafter referred to with
respect thereto. Each Holder of this Note, by accepting the same, agrees to and
shall be bound by such provisions, and authorizes and directs the Trustee on his
or her behalf to be bound by such provisions. Each Holder hereof, by his or her
acceptance hereof, hereby waives all notice of the acceptance of the provisions
contained herein and in the Base Indenture and the First Supplemental Indenture
by each Holder of unsecured and unsubordinated indebtedness of the Company,
whether now outstanding or hereafter incurred, and waives reliance by each such
Holder or creditor upon said provisions.
This Note shall not be entitled to any benefit under the Base
Indenture or the First Supplemental Indenture, or be valid or become obligatory
for any purpose until the Certificate of Authentication hereon shall have been
signed by or on behalf of the Trustee.
A-2
The provisions of this Note are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company and the Guarantor have caused
this instrument to be executed.
PRR NEWCO, INC.
By:
------------------------------
Name:
Title:
Attest:
By:
---------------------------------
Name:
Title: Secretary or Assistant
Secretary
NORFOLK SOUTHERN RAILWAY COMPANY
By:
------------------------------
Name:
Title:
Attest:
By:
---------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities (as defined below) of the series
designated therein referred to in the within-mentioned Base Indenture.
THE BANK OF NEW YORK
as Trustee
By:
--------------------------------
Authorized Signatory
Dated:______________________
A-3
(FORM OF REVERSE OF NOTE)
This Note is one of a duly authorized series of securities of
the Company (herein sometimes referred to as the "Security"), issued or to be
issued in one or more series under and pursuant to an Indenture, dated as of
[__________, 2004] (the "Base Indenture"), duly executed and delivered by and
among the Company, the Guarantor and The Bank of New York (the "Trustee"), as
supplemented by the First Supplemental Indenture, dated as of [__________, 2004]
(the "First Supplemental Indenture"), by and among the Company, the Guarantor
and the Trustee to which Base Indenture and First Supplemental Indenture
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company, the
Guarantor and the Holders of the Security. By the terms of the Base Indenture,
the Securities are issuable in series that may vary as to amount, date of
maturity, rate of interest and in other respects as provided in the Base
Indenture. This Security is the series designated on the face hereof (the
"Notes") and is limited in aggregate principal amount as specified in said First
Supplemental Indenture.
In case an Event of Default, as defined in the Base Indenture,
shall have occurred and be continuing, the principal of all of the Notes may be
declared due and payable, in the manner, with the effect and subject to the
conditions provided in the Base Indenture.
The Base Indenture contains provisions permitting the Company
and the Trustee, with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Security of each series affected, to execute
supplemental indentures for the purpose of adding any provisions to the Base
Indenture or of modifying in any manner the rights of the Holders of the
Security; provided, however, that no such supplemental indenture shall (i)
change the Stated Maturity of the principal of, or any installment of principal
of or interest on, any Security, or reduce the principal amount thereof or any
premium payable upon the redemption thereof or the rate of interest thereof to
reduce the amount of principal of an Original Issue Discount Security that would
be due and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502 of the Base Indenture, or change any Place of Payment
where, or the coin or currency in which, any Security (or premium, if any,
thereon) or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date); or
(ii) reduce the percentage in principal amount of the Outstanding Security of
any series, the Holders of which are required to consent to any such
supplemental indenture or to waive certain defaults thereunder and their
consequences provided for in the Base Indenture; or (iii) modify any of the
provisions of the Base Indenture relating to supplemental indentures that
require consent of Holders, the waiver of past defaults or the waiver of certain
covenants, except to increase any such percentage or to provide that certain
other provisions of the Base Indenture cannot be modified or waived, without the
consent of the Holders of each Outstanding Security affected thereby, provided,
however, that the consent of the Holders shall not be required with respect to
changes in the references to "the Trustee" in Sections 802 and 908 of the Base
Indenture or with respect to the deletion of this proviso from the Base
Indenture, in accordance with Sections 608(b) and 801(7) of the Base Indenture.
The Base Indenture also contains provisions permitting the Holders of not less
than a majority in principal amount of the Outstanding Security of any series
affected thereby, on behalf of all of the Holders of the
A-4
Security of such series, to waive any past Default under the Base Indenture, and
its consequences, except a Default in the payment of the principal of, premium,
if any, or interest on any Security of such series or a Default in respect of a
covenant or provision of the Base Indenture which cannot be modified or amended
without the consent of the Holder of each Outstanding Security of such series
affected. Any such consent or waiver by the registered Holder of this Note
(unless revoked as provided in the Base Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this Note and
of any Note issued in exchange therefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Note.
No reference herein to the Base Indenture or First
Supplemental Indenture and no provision of this Note or of the Base Indenture or
First Supplemental Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Note at the time and place and at the rate
and in the money herein prescribed.
As provided in the Base Indenture and subject to certain
limitations therein set forth, this Note is transferable by the registered
Holder hereof on the Security Register of the Company, upon surrender of this
Note for registration of transfer at the office or agency of the Trustee in New
York, New York duly endorsed by the registered Holder hereof or accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the registered Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new Notes
of this series of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees.
No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment of this Note for registration of
transfer of this Note, the Company, the Trustee, and any agent of the Company or
the Trustee may treat the registered Holder hereof as the owner hereof (whether
or not this Note shall be overdue) and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Base Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company, the Guarantor or of any predecessor or successor
corporation of either the Company or the Guarantor, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly waived and
released. Such waiver may not be effective to waive liabilities under the
federal securities laws.
A-5
The Notes are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. This Global Note
is exchangeable for Notes in definitive form only under certain limited
circumstances set forth in the Base Indenture. Notes so issued are issuable only
in registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Base Indenture and subject to certain
limitations herein and therein set forth, Notes of this series so issued are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
All terms used in this Note that are defined in the Base
Indenture or the First Supplemental Indenture shall have the meanings assigned
to them therein.
THE BASE INDENTURE, THE FIRST SUPPLEMENTAL INDENTURE AND THE
NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
A-6
FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE
GUARANTEE
For value received, the undersigned Guarantor has fully and
unconditionally guaranteed (i) the due and punctual payment of the principal of
and interest on the Notes, whether at maturity, by acceleration or otherwise,
the due and punctual payment of interest on the overdue principal and interest,
if any, on the Notes, to the extent lawful, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms set forth in Article VII of the First Supplemental
Indenture and (ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Each Holder of a Note by accepting a Note agrees that the
Guarantor shall have no further liability with respect to its Guarantee if the
Guarantor otherwise ceases to be liable in respect of its Guarantee in
accordance with the terms of the Section 704 of First Supplemental Indenture.
The Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Securities upon which the
Guarantee is noted shall have been executed by the Trustee under the First
Supplemental Indenture by the manual signature of one of its authorized
officers.
Captialized terms used but not defined in this Notation of
Guarantee shall have the meanings assigned to them in the Base Indenture or the
First Supplemental Indenture.
IN WITNESS WHEREOF, the Guarantor has caused this instrument
to be duly executed under its corporate seal.
NORFOLK SOUTHERN RAILWAY COMPANY
By: _________________________
Name:
Title:
A-7
EXHIBIT B
FORM ONLY
FACE OF NOTE
This Note is a Global Note within the meaning of the Base
Indenture hereinafter referred to and is registered in the name of a Depositary
or a nominee of a Depositary. This Note is exchangeable for Notes registered in
the name of a person other than the Depositary or its nominee only in the
limited circumstances described in the Base Indenture, and no transfer of this
Note (other than a transfer of this Note as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary) may be registered except in limited
circumstances.
Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the issuer
or its agent for registration of transfer, exchange or payment, and any Note
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
No. CUSIP No. [ ]
PRR NEWCO, INC.
Issuer
NORFOLK SOUTHERN RAILWAY COMPANY
Guarantor
NOTE
DUE NOVEMBER 15, 2043
PRR NEWCO, INC., a corporation organized under the laws of the
Commonwealth of Virginia (herein called the "Company", which term includes any
successor corporation under the Base Indenture hereinafter referred to), for
value received, hereby promises to pay, and Norfolk Southern Railway Company, a
corporation organized under the laws of the Commonwealth of Virginia
(hereinafter called "NSR" or the "Guarantor") hereby promises to fully and
unconditionally guarantee such payment, to Cede & Co., or registered assigns,
the principal sum of [One-Hundred Forty-Five Million Dollars ($145,000,000)] on
May 15, 2043 and the Company hereby promises to pay, and NSR promises to
guarantee, the payment of interest thereon from [closing date] or from the most
recent interest payment date to which interest has been paid or duly provided
for, semi-annually in arrears on May 15 and November 15 of each year, commencing
May 15, 2004, at a rate of 7-7/8% per annum until the principal hereof is paid
or made available for payment, and on any overdue principal and premium, if any,
at a rate of 7-7/8% per annum and (without duplication and to the extent that
B-1
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at a rate of 7-7/8% per annum compounded semi-annually.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date (as defined below) shall be calculated as provided in the
Base Indenture. In the event that any date on which interest is payable on this
Note is not a Business Day, then payment of interest payable on such date will
be made on the next succeeding day that is a Business Day, with the same force
and effect as if made on such date and no interest shall accrue on the amount so
payable from the period from and after such Interest Payment Date or Maturity
Date, as the case may be (each date on which interest is actually payable, an
"Interest Payment Date"). The interest installment so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in the
Base Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Security, as defined in said Base Indenture) is registered at the
close of business on the regular record date for such interest installment,
which shall be the close of business on the May 1 and November 1 next preceding
such Interest Payment Date. Any such interest installment not punctually paid or
duly provided for shall forthwith cease to be payable to the registered Holders
on such regular record date and may be paid to the Person in whose name this
Note (or one or more Predecessor Security) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the registered Holders
of Notes not less than 10 days prior to such special record date, or may be paid
at any time in any other lawful manner, all as more fully provided in the Base
Indenture. The principal of and premium, if any, and the interest on this Note
shall be payable at the office or agency of the Trustee maintained for that
purpose in any coin or currency of the United States of America that at the time
of payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made, at the option of the Company and
upon prior notice to the Trustee, by check mailed to the registered Holder at
such address as shall appear in the Security Register or by wire transfer to an
account designated by a Holder in writing not less than ten days prior to the
date of payment.
The indebtedness evidenced by this Note is, to the extent
provided in the Base Indenture, equal in right of payment with all other
unsecured and unsubordinated indebtedness of each of the Company and the
Guarantor, and this Note is issued subject to the provisions of the Base
Indenture and the First Supplemental Indenture hereinafter referred to with
respect thereto. Each Holder of this Note, by accepting the same, agrees to and
shall be bound by such provisions, and authorizes and directs the Trustee on his
or her behalf to be bound by such provisions. Each Holder hereof, by his or her
acceptance hereof, hereby waives all notice of the acceptance of the provisions
contained herein and in the Base Indenture and the First Supplemental Indenture
by each Holder of unsecured and unsubordinated indebtedness of the Company,
whether now outstanding or hereafter incurred, and waives reliance by each such
Holder or creditor upon said provisions.
This Note shall not be entitled to any benefit under the Base
Indenture or the First Supplemental Indenture, or be valid or become obligatory
for any purpose until the Certificate of Authentication hereon shall have been
signed by or on behalf of the Trustee.
B-2
The provisions of this Note are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company and the Guarantor have caused
this instrument to be executed.
PRR NEWCO, INC.
By:
-----------------------------
Name:
Title:
Attest:
By:
-------------------------------
Name:
Title: Secretary or Assistant
Secretary
NORFOLK SOUTHERN RAILWAY COMPANY
By:
-----------------------------
Name:
Title:
Attest:
By:
-------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities (as defined below) of the series
designated therein referred to in the within-mentioned Base Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------
Authorized Signatory
Dated:______________________
B-3
(FORM OF REVERSE OF NOTE)
This Note is one of a duly authorized series of securities of
the Company (herein sometimes referred to as the "Security"), issued or to be
issued in one or more series under and pursuant to an Indenture, dated as of
[________, 2004] (the "Base Indenture"), duly executed and delivered by and
among the Company, the Guarantor and The Bank of New York (the "Trustee"), as
supplemented by the First Supplemental Indenture, dated as of [____________,
2004] (the "First Supplemental Indenture"), by and among the Company, the
Guarantor and the Trustee to which Base Indenture and First Supplemental
Indenture reference is hereby made for a description of the rights, limitations
of rights, obligations, duties and immunities thereunder of the Trustee, the
Company, the Guarantor and the Holders of the Security. By the terms of the Base
Indenture, the Securities are issuable in series that may vary as to amount,
date of maturity, rate of interest and in other respects as provided in the Base
Indenture. This Security is the series designated on the face hereof (the
"Notes") and is limited in aggregate principal amount as specified in said First
Supplemental Indenture.
In case an Event of Default, as defined in the Base Indenture,
shall have occurred and be continuing, the principal of all of the Notes may be
declared due and payable, in the manner, with the effect and subject to the
conditions provided in the Base Indenture.
The Base Indenture contains provisions permitting the Company
and the Trustee, with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Security of each series affected, to execute
supplemental indentures for the purpose of adding any provisions to the Base
Indenture or of modifying in any manner the rights of the Holders of this
Security; provided, however, that no such supplemental indenture shall (i)
change the Stated Maturity of the principal of, or any installment of principal
of or interest on, this Security, or reduce the principal amount thereof or any
premium payable upon the redemption thereof or the rate of interest thereon, or
to reduce the amount of principal of an Original Issue Discount Security that
would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 502 of the Base Indenture, or change any Place of
Payment where, or the coin or currency in which, any Security (or premium, if
any, thereon) or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date); or (ii) reduce the percentage in principal amount of the Outstanding
Security of any series, the Holders of which are required to consent to any such
supplemental indenture or to waive certain defaults thereunder and their
consequences provided for in the Base Indenture; or (iii) modify any of the
provisions of the Base Indenture relating to supplemental indentures that
require consent of Holders, the waiver of past defaults or the waiver of certain
covenants, except to increase any such percentage or to provide that certain
other provisions of the Base Indenture cannot be modified or waived, without the
consent of the Holders of each Outstanding Security affected thereby, provided,
however, that the consent of the Holders shall not be required with respect to
changes in the references to "the Trustee" in Sections 802 and 908 of the Base
Indenture with respect to the deletion of this proviso from the Base Indenture,
in accordance with Sections 608(b) and 801(7) of the Base Indenture. The Base
Indenture also contains provisions permitting the Holders of not less than a
majority in principal amount of the Outstanding Security of any series affected
thereby, on behalf of all of the Holders of the
B-4
Security of such series, to waive any past Default under the Base Indenture, and
its consequences, except a Default in the payment of the principal of, premium,
if any, or interest on any Security of such series or a Default in respect of a
covenant or provision of the Base Indenture which cannot be modified or amended
without the consent of the Holder of each Outstanding Security of such series
affected. Any such consent or waiver by the registered Holder of this Note
(unless revoked as provided in the Base Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this Note and
of any Note issued in exchange therefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Note.
No reference herein to the Base Indenture or First
Supplemental Indenture and no provision of this Note or of the Base Indenture or
First Supplemental Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Note at the time and place and at the rate
and in the money herein prescribed.
As provided in the Base Indenture and subject to certain
limitations therein set forth, this Note is transferable by the registered
Holder hereof on the Security Register of the Company, upon surrender of this
Note for registration of transfer at the office or agency of the Trustee in New
York, New York duly endorsed by the registered Holder hereof or accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the registered Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new Notes
of this series of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees.
No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment of this Note for registration of
transfer of this Note, the Company, the Trustee, and any agent of the Company or
the Trustee may treat the registered Holder hereof as the owner hereof (whether
or not this Note shall be overdue) and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on this Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Base Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company, the Guarantor or of any predecessor or successor
corporation of either the Company or the Guarantor, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly waived and
released. Such waiver may not be effective to waive liabilities under the
federal securities laws.
B-5
The Notes are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. This Global Note
is exchangeable for Notes in definitive form only under certain limited
circumstances set forth in the Base Indenture. Notes so issued are issuable only
in registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Base Indenture and subject to certain
limitations herein and therein set forth, Notes of this series so issued are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
All terms used in this Note that are defined in the Base
Indenture or the First Supplemental Indenture shall have the meanings assigned
to them therein.
THE BASE INDENTURE, THE FIRST SUPPLEMENTAL INDENTURE AND THE
NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
B-6
FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE
For value received, the undersigned Guarantor has fully and
unconditionally guaranteed (i) the due and punctual payment of the principal of
and interest on the Notes, whether at maturity, by acceleration or otherwise,
the due and punctual payment of interest on the overdue principal and interest,
if any, on the Notes, to the extent lawful, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms set forth in Article VII of the First Supplemental
Indenture and (ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Each Holder of a Note by accepting a Note agrees that the
Guarantor shall have no further liability with respect to its Guarantee if the
Guarantor otherwise ceases to be liable in respect of its Guarantee in
accordance with the terms of Section 704 of the First Supplemental Indenture.
The Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Securities upon which the
Guarantee is noted shall have been executed by the Trustee under the First
Supplemental Indenture by the manual signature of one of its authorized
officers.
Capitalized terms used but not defied in this Notation of
Guarantee shall have the meanings assigned to them in the Base Indenture or the
First Supplemental Indenture.
IN WITNESS WHEREOF, the Guarantor has caused this instrument
to be duly executed under its corporate seal.
NORFOLK SOUTHERN RAILWAY COMPANY
By: __________________________
Name:
Title:
B-7
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS .......................................................................................2
Section 101 Definition of Terms.............................................................2
ARTICLE II GENERAL TERMS AND CONDITIONS OF THE NOTES.........................................................5
Section 201 Designation and Principal Amount................................................5
Section 202 Place of Payment: Security Register for Notes...................................5
Section 203 Global Note.....................................................................5
Section 204 Interest........................................................................5
ARTICLE III COVENANTS .......................................................................................6
Section 301 Limitations on Liens on Stock or Indebtedness of Principal Subsidiaries.........6
Section 302 Limitations on Funded Debt......................................................6
Section 303 Waiver of Certain Covenants.....................................................8
ARTICLE IV REDEMPTION OF THE NOTES...........................................................................8
Section 401 No Redemption...................................................................8
Section 402 No Sinking Fund.................................................................8
ARTICLE V FORMS OF NOTES.....................................................................................9
Section 501 Form of Notes...................................................................9
ARTICLE VI ORIGINAL ISSUE OF NOTES...........................................................................9
Section 601 Original Issue of Notes.........................................................9
ARTICLE VII GUARANTEE .......................................................................................9
Section 701 Unconditional Guarantee.........................................................9
Section 702 Waiver.........................................................................10
Section 703 Execution of Guarantee.........................................................11
Section 704 Cessation of Guarantee.........................................................11
ARTICLE VIII MISCELLANEOUS..................................................................................11
Section 801 Ratification of Base Indenture.................................................11
Section 802 Trustee Not Responsible for Recitals...........................................12
Section 803 Governing Law..................................................................12
Section 804 Separability...................................................................12
Section 805 Counterparts...................................................................12
i
EXHIBIT A .......................................................................................1
EXHIBIT B .......................................................................................1
B-ii