AMENDMENT NO. 2 TO
                   TRANSACTION AGREEMENT

       THIS AMENDMENT NO. 2 TO THE TRANSACTION AGREEMENT (this
"Amendment"), dated as of June 1, 1999, by and among CSX
CORPORATION, a Virginia corporation ("CSX"), CSX TRANSPORTATION,
INC., a Virginia corporation, for itself and on behalf of its
controlled Subsidiaries (collectively, "CSXT"), NORFOLK SOUTHERN
CORPORATION, a Virginia corporation ("NSC"), NORFOLK SOUTHERN
RAILWAY COMPANY, a Virginia corporation, for itself and on behalf
of its controlled Subsidiaries (collectively, "NSR"), CONRAIL
INC., a Pennsylvania corporation, for itself and on behalf of its
controlled Subsidiaries (collectively, "CRR"), CONSOLIDATED RAIL
CORPORATION, a Pennsylvania corporation ("CRC"), and CRR HOLDINGS
LLC, a Delaware limited liability company ("CRR Parent").

     WHEREAS, the parties have previously entered into that
certain Transaction Agreement, dated as of June 10, 1997, as
amended by Amendment No. 1 to Transaction Agreement, dated as of
August 22, 1998 and the System Support Operations Agreement dated
as of May 15, 1999, relating to Section 2.3 hereof (the
"Transaction Agreement");

       WHEREAS, the parties are on the date hereof consummating
the Closing (as defined in the Transaction Agreement) and
entering into various documents and instruments to effectuate the
same, including Ancillary Agreements ("Closing Documents");

       WHEREAS, in connection with the parties' preparations for
the Closing, the parties have identified certain provisions of
the Transaction Agreement for which the Parties desire to clarify
their understandings and agreements with respect to such
provisions and to make interim provisions with respect to certain
Transaction Agreement matters which are currently in dispute;

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

       WHEREAS, it is the intent of the parties that, except as
expressly amended hereby, the Transaction Agreement shall remain
unamended and in full force and effect;

       NOW, THEREFORE, the parties hereby amend the Transaction
Agreement as follows:

          SECTION 1.  References; Interpretation.

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

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          (b)  The parties hereby expressly agree that the
Closing is being consummated, and the Closing Documents are being
delivered, pursuant to and in furtherance of the Transaction
Agreement and shall be interpreted as such consistent with the
terms of the Transaction Agreement and in furtherance of the
terms of the Transaction Agreement to the greatest extent
possible.  Therefore, in the event of any inconsistency between
the terms of the Transaction Agreement and any Closing Document,
the terms of the Transaction Agreement shall prevail, except to
the extent such Closing Document provides otherwise.

          SECTION 2.  Transportation Contracts.

          (a)  The beginning of the first sentence of Subsection
2.2(c)(iii) of the Transaction Agreement is amended to read as
follows:

               "(iii)  The following decision rules shall be
          applied on an annual basis with tentative settlements
          to the extent required by subsection (c)(ii) on a
          quarterly basis 90 days after the end of the quarter
          and an annual true-up 90 days after the end of the
          year:"

          (b)  Subsection 2.2(c)(iii)(C)(aa)(x) of the
Transaction Agreement is hereby amended and restated in its
entirety by deleting the existing provision and inserting the
following:

               "(x)  If the origin station is Local to NSR
          and the destination station is on the NYC Allocated
          Assets and Local to CSXT, then the allocation shall be
          on a joint line basis between NSR and CSXT with the
          interchange to be negotiated between NSR and CSXT and
          the revenues to be split based upon an ICC Docket 28300
          mileage prorate with a minimum division of 25% to each
          of NSR and CSXT; and"

          (c)  Subsection 2.2 (c) (iii) (C) (bb) (x) of the
Transaction Agreement is hereby amended and restated in its
entirety by deleting the existing provision and inserting the
following:

               "(x)  If the origin station is Local to CSXT
          and the destination station is on the PRR Allocated
          Assets and Local to NSR, then the allocation shall be
          on a joint line basis between CSXT and NSR with the
          interchange to be negotiated between CSXT and NSR and
          the revenues to be split based upon an ICC Docket 28300
          mileage prorate with a minimum division of 25% to each
          of CSXT and NSR; and"

          SECTION 3.  FELA Matters.

          (a) Section 2.8(c) of the Transaction Agreement is
hereby amended and restated in its entirety by deleting the
existing provision and inserting the following:

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               "(c) Except for liabilities that are the
          responsibility of any Person pursuant to any of the
          Ancillary Agreements, all liabilities associated with
          the handling and disposition of FELA Claims ("FELA
          Liabilities") of CRR, CRC and their Affiliates shall be
          allocated as follows: (i) FELA Liabilities that arise
          from incidents or exposures occurring prior to the
          Closing Date shall be Retained Liabilities; (ii) to the
          extent FELA Liabilities arise from incidents or
          exposures occurring in part prior, and in part on or
          after, the Closing Date, that portion of the FELA
          Liability arising prior to the Closing Date shall be
          Retained Liability; and, (iii) to the extent FELA
          Liabilities arise from incidents or exposures occurring
          on or after the Closing Date, they shall be the
          responsibility of the party then employing the injured
          employee.  Notwithstanding the provisions of the
          foregoing sentence, if any single incident occurring
          between the Control Date and the Closing Date results
          in FELA Liability which exceeds CRC's insurance
          coverage by $10 million or more, the amount by which
          such liability exceeds $10 million in excess of CRC's
          insurance coverage shall be a PRR Allocated Liability
          if the incident occurred on or relates primarily to PRR
          Allocated Assets and shall be a NYC Allocated Liability
          if the incident occurred on or relates primarily to NYC
          Allocated Assets.  CRC will obtain insurance, in form
          and amount satisfactory to the parties hereto,
          indemnifying PRR and NYC against the liability to which
          either may be subject under this paragraph.

          (b)  Section 8.15 of the Transaction Agreement is
hereby deleted in its entirety and the following is substituted
therefor:

               "Section 8.15.  Administration of Actions.
          After the Closing Date, (a) NYC shall have exclusive
          authority and control over the investigation,
          prosecution, defense and appeal of all Actions relating
          primarily to NYC, the NYC Allocated Assets, the NYC
          Allocated Liabilities or a Retained Liability (except
          for Retained Liabilities for which the monetary claim
          is more than $500,000 or injunctive relief is sought)
          which arose at the location of a NYC Allocated Asset,
          or with which a NYC Allocated Asset is most
          significantly involved (each, an "NYC Action"), and may
          settle or compromise, or consent to the entry of any
          judgment with respect to, any such NYC Action without
          the consent of CRC, NSC or PRR and (b) PRR shall have
          exclusive authority and control over the investigation,
          prosecution, defense and appeal of all Actions relating
          primarily to PRR, the PRR Allocated Assets, the PRR
          Allocated Liabilities, or a Retained Liability (except
          for Retained Liabilities for which the monetary claim
          is more than $500,000 or injunctive relief is sought),
          which arose at the location of a PRR Allocated Asset or
          with which a PRR Allocated Asset is most significantly
          involved (each a "PRR Action"), and may settle or
          compromise, or consent to the entry of any judgment
          with respect to, any such PRR Action without the
          consent of CRC, CSX or NYC.

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<PAGE>

               "Notwithstanding the foregoing, neither NYC
          or PRR may settle or compromise, or consent to the
          entry of any judgment with respect to, any such Action
          without the prior written consent of the other if such
          settlement, compromise or consent to such judgment (i)
          includes any form of injunctive relief binding upon
          such other party or CRC or (ii) does not include as an
          unconditional term thereof the giving by the claimant
          or plaintiff to such other party or CRC and any
          Affiliates of CRC subject to such Action of a full and
          final release from all liability in respect to such
          claim or litigation.  After the Closing Date with
          respect to an Action not covered under clauses (a) and
          (b) of the foregoing sentence (including Actions
          relating to Retained Liabilities), the handling,
          administration and disposition of such Actions shall be
          the joint responsibility of CSX and NSC and the costs
          thereof shall be Corporate Level Liabilities.  In
          assigning joint responsibility for the administration,
          handling and disposition of Actions to CSX and NSC,
          hereunder it is not the parties' intent that CSX and
          NSC will actually administer, handle and dispose of
          such Actions jointly, but rather that CSX and NSC will
          agree on the most practical and efficient arrangements
          with the objective of eliminating unnecessary
          duplication of effort and minimizing overall costs.
          The costs and expenses of the administration and
          handling of such Actions shall be Corporate Level
          Liabilities; provided that salaries and overheads
          associated with the salaries of full time employees of
          CSX or NSC while engaged in investigation or handling
          such Actions shall be the responsibility of the
          employing party and are Corporate Level Liabilities
          only to the extent that they are covered by insurance
          or are otherwise reimbursable by CRR or CRC pursuant to
          a separate agreement with CSX or NSC.

               "The provisions of this Section 8.15 shall
          apply except as may be otherwise provided in a separate
          agreement among CRC, CSX and/or NSC and except as may
          be provided by action of the CRC Board."

          (c)  Section 8.16 of the Transaction Agreement is
hereby deleted in its entirety and the following is substituted
therefor:

               "Section 8.16.  Administration of FELA
          Claims.  (a) Except as provided pursuant to separate
          agreement between CSX and NSC, the administration,
          handling and disposition of FELA Claims (whenever made)
          that arise from incidents or exposures occurring prior
          to the Closing Date shall be (i) the responsibility of
          the parent of the party operating the Allocated Asset
          where the incident or incidents giving rise to the FELA
          Claim occurred, or (ii) the responsibility of the
          parent of the party operating the Allocated Asset most
          significantly involved if the FELA Claim arises from an
          incident or incidents occurring at multiple locations

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<PAGE>

          on Allocated Assets, or (iii) the joint responsibility
          of CSX and NSC if the FELA Claim arises from an
          incident or incidents occurring at unknown locations or
          a location not otherwise covered by clauses (i) or (ii)
          of this sentence.  In assigning joint responsibility
          for the administration, handling and disposition of
          FELA Claims to CSX and NSC under the foregoing clause
          (iii), it is not the parties' intent that CSX and NSC
          will actually administer, handle and dispose of such
          actions jointly, but rather that CSX and NSC will agree
          on the most practical and efficient arrangements with
          the objective of eliminating unnecessary duplication of
          effort and minimizing overall costs.  The costs and
          expenses associated with the administration, handling
          and disposition of FELA Claims that arise from
          incidents or exposures occurring prior to the Closing
          Date shall be borne by CRR; provided that salaries and
          overheads associated with the salaries of full time
          employees of CSX or NSC while engaged in investigation
          or handling such FELA Claims shall be the
          responsibility of the employing party and are Corporate
          Level Liabilities only to the extent that they are
          covered by insurance or are otherwise reimbursable by
          CRR or CRC pursuant to a separate agreement with CSX or
          NSC; provided, further that the party responsible for
          the administration of FELA Claims which are Retained
          Liabilities shall, before agreeing to any single
          settlement of a FELA Claim or group of related FELA
          Claims, involving a payment of more than $1 million,
          obtain the written consent of the other party.  Failure
          of either party to respond to such a request for
          consent within fourteen days of receipt of such request
          shall be deemed to constitute consent."

          SECTION 4.  CRC Pension Plan Matters.

          (a)  Section 6.3(c) of the Transaction Agreement is
hereby amended by inserting the following after the word
"Percentage":

               ", as adjusted to reflect any Separation
          Costs required to be borne by CSX or NSC pursuant to
          Section 6.2(i) and to reflect any timing differences in
          the transfers of assets and liabilities to CSX and NSC
          pension plans based on actual investment experience."

          (b)  Section 6.3(c) of the Transaction Agreement is
further amended by deleting the last sentence thereof and
replacing it with the following:

               "The Consolidated Rail Corporation Pension Fund
          Investment Committee shall approve the manner and
          amounts to be transferred to CSX and NSC pension plans
          with respect to transfers of employees to CSX and NSC
          payrolls and this Section 6.3(c)."

          SECTION 5.  Insurance Matters.  Section 2.11 of the
Transaction Agreement is hereby deleted in its entirety and the
following is substituted therefor:

                         "2.11  Insurance Proceeds: Except as otherwise
          provided in this Agreement, the proceeds of any
          insurance recoveries from insurance carried by CRR,

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<PAGE>

          CRC or their respective Affiliates on or prior to the
          Closing Date and third party recoveries in the nature
          of insurance or indemnity covering Assets, Retained
          Liabilities or Allocated Liabilities, which are
          received on or after the Closing Date, shall accrue to
          the benefit of and be held by or paid over to CRC, NYC
          or PRR in proportion to the obligation each bears under
          this Agreement for the particular Liabilities to which
          the recoveries are applicable."

          SECTION 6.  Confirmation of Transaction Agreement.  In
all respects not inconsistent with the terms and provisions of
this Amendment, the Transaction Agreement is hereby ratified,
adopted, approved and confirmed.

          SECTION 7.  Miscellaneous.  The provisions of Article
XI of the Transaction Agreement are hereby expressly incorporated
by reference into this Amendment, and each provision thereof
shall have the same force and effect as if fully set forth herein
(except to the extent such provision is amended, modified,
supplemented, altered, rescinded or superseded by this
Amendment).

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

                         CSX CORPORATION

                         By:  /s/ G. R. Weber
                              Name:  Gregory R. Weber
                              Title: Vice President and Treasurer


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

                         By:  /s/ Peter J. Shudtz
                              Name: Peter J. Shudtz
                              Title: Vice President - Law &
                                     General Counsel - CSX
                                     Corporation, authorized
                                  agent for CSX
                                  Transportation, Inc.


                         NORFOLK SOUTHERN CORPORATION

                         By:  /s/ Stephen C. Tobias
                              Name: Stephen C. Tobias
                              Title: Vice Chairman and Chief
                                     Operating Officer


                         NORFOLK SOUTHERN RAILWAY COMPANY
                         (for itself and behalf of its controlled
                         Subsidiaries)

                         By:  /s/ J. L. Manetta
                              Name: J. L. Manetta
                              Title: Senior Vice President -
                                  Operations


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

                         By:  /s/ Timothy O'Toole
                              Name: Timothy O'Toole
                              Title: President and Chief
                                  Executive Officer


                         CONSOLIDATED RAIL CORPORATION

                         By:  /s/ John McKelvey
                              Name: John McKelvey
                              Title: Chief Financial Officer


                         CRR HOLDINGS LLC

                         By:  /s/ D. R. Goode
                              Name: D. R. Goode
                              Title:  Co-Chairman and Company
                                   Chief Executive Officer