ex4-3.htm


     

    Exhibit
4.3

     

     

    
      


      
        


         

          
            

          

        

        


      

       

      CSX
TRANSPORTATION, INC., as Issuer

       

      CSX
CORPORATION, as Guarantor

       

      AND

       

      THE BANK
OF NEW YORK MELLON TRUST COMPANY, N.A.,

       

      Trustee

       

      _________________

       

      SECOND
SUPPLEMENTAL

      INDENTURE

       

      Dated as
of October 24, 2008

      _________________

       

      8.375%
Secured Equipment Notes due 2014

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
 

      SECOND
SUPPLEMENTAL INDENTURE dated as of October 24, 2008 among CSX Transportation,
Inc., a Virginia corporation (the “Company”), CSX
Corporation, a Virginia corporation (the “Guarantor”), and The
Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New
York Trust Company, N.A.), a national banking association, Trustee (the “Trustee”).

       

      RECITALS
OF THE COMPANY

       

      WHEREAS,
the Company has heretofore executed and delivered to the Trustee a certain
indenture, dated as of December 13, 2007 (such indenture being herein referred
to as the “Base
Indenture”; the Base Indenture, as supplemented hereby, is herein called
the “Indenture”), pursuant
to which one or more series of debentures, notes or other evidences of
indebtedness of the Company (herein called the “Securities”), may be
issued from time to time;

       

      WHEREAS,
Sections 901(4), 901(10) and 901(11) of the Base Indenture provide that the
Company, when authorized by a Board Resolution, the Guarantor and the Trustee
may at any time and from time to time enter into one or more indentures
supplemental to the Base Indenture for the purpose, among other things, of
(i) establishing the form or terms of Securities of any series and any
related coupons as permitted by Sections 201 and 301 of the Base Indenture, (ii)
securing the Securities and (iii) issuing a Guarantee with respect to the
Securities of any series;

       

      WHEREAS,
the Company desires to issue and has duly authorized the execution and delivery
of this second supplemental indenture (the “Second Supplemental
Indenture”) to provide for the issuance of a series of securities to be
designated the 8.375% Secured Equipment Notes due 2014 (the “Equipment Notes”), to
be guaranteed as to the payment of principal, premium and interest by the
Guarantor;

       

      WHEREAS,
the Guarantor has duly authorized the execution and delivery of this Second
Supplemental Indenture as guarantor of the Equipment Notes, and Guarantor has
done all things necessary to make the Guarantee, when the Securities are
executed by the Company and authenticated and delivered by the Trustee and duly
issued by the Company, the valid obligations of Guarantor as hereinafter
provided;

       

      WHEREAS,
the Company and the Guarantor, pursuant to the foregoing authority, propose in
and by this Second Supplemental Indenture to amend and supplement the Base
Indenture to, among other things, provide for (i) the issuance by the Company of
the Equipment Notes, (ii) the guarantee by the Guarantor of the Company’s
obligations in respect of the Equipment Notes and under the Indenture, and (iii)
the assignment, mortgage and pledge by the Company to the Trustee, as part of
the Indenture Estate hereunder, among other things, of, and the grant of a
security interest in, all of the Company’s right, title and interest in and to
the Items of Equipment, in accordance with the terms hereof, in trust, as
security for, among other things, the Company’s obligations to the Holders of
the Equipment Notes for the equal and ratable benefit of such
Holders;

       

      WHEREAS,
the Company and the Guarantor propose to make the terms, provisions and
conditions of this Second Supplemental Indenture applicable to the issuance of
the Equipment Notes; and

       

      WHEREAS,
all things necessary to make this Second Supplemental Indenture a valid
agreement of the Company, the Guarantor and the Trustee and a valid amendment of
and supplement to the Base Indenture have been done.

       

       

       

      
        
          
          

        

        
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      GRANTING
CLAUSE

       

      NOW,
THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH that, to secure the
prompt payment of the principal of and interest and premium, if any, on and all
other amounts due with respect to, the Equipment Notes from time to time
outstanding hereunder and the performance and observance by the Company of all
the agreements, covenants and provisions herein and in the Equipment Notes all
for the benefit of the Holders of the Equipment Notes, and for the uses and
purposes and subject to the terms and provisions hereof, and in consideration of
the premises and of the covenants herein contained, the Company does hereby
sell, assign, transfer, convey, mortgage, pledge and confirm unto the Trustee,
its successors and assigns, for the security and benefit of the Holders of the
Equipment Notes from time to time, a first priority security interest in and
mortgage lien on all right, title and interest of the Company in and to the
following described property, rights, interests and privileges (which
collectively, including all property hereafter specifically subjected to the
Lien of this Indenture by any instrument supplemental hereto, being herein
called the “Indenture
Estate”), to wit:

       

      a.           all
Items of Equipment including, without limitation, all additions, alterations or
modifications thereto or replacements of any part thereof, whenever made or
performed or acquired and all other items of tangible personal property of any
kind acquired by the Company in connection with the acquisition of the Items of
Equipment, in each case whether acquired at the time of acquisition of the Items
of Equipment or thereafter acquired pursuant to this Indenture or
otherwise;

       

      b.           all
monies and securities now or hereafter paid or deposited or required to be paid
or deposited with the Trustee pursuant to any provision of this Indenture, or
required to be held by the Trustee hereunder or thereunder; and

       

      c.           all
right, title and interest of the Company in and to all proceeds, rents, issues,
profits, products, revenues and other income, from and on account of the
property, rights and privileges subjected or required to be subjected to the
Lien of this Indenture.

       

      TO HAVE
AND TO HOLD all and singular the aforesaid property unto the Trustee, its
successors and assigns, in trust for the benefit and security of the Holders of
the Equipment Notes from time to time, without any priority of any one Equipment
Note over any other Equipment Note, and for the uses and purposes, and subject
to the terms and provisions, set forth in this Second Supplemental
Indenture.

       

      UPON
CONDITION that, unless and until an Event of Default shall have occurred and be
continuing, the Company shall be permitted, to the exclusion of the Trustee and
all other persons, to possess and use the Indenture Estate and exercise all
rights with respect thereto.

       

      It is
expressly agreed that anything herein contained to the contrary notwithstanding,
the Company shall remain liable under each of the Operative Documents to which
it is a party to perform all of the obligations, if any, assumed by it
thereunder, all in accordance with and pursuant to the terms and provisions
thereof, and the Trustee and the Holders shall have no obligation or liability
under any of the Operative Documents to which the Company is a party by reason
of or arising out of this assignment, nor shall the Trustee or the Holders of
Equipment Notes be required or obligated in any manner to perform or fulfill any
obligations of the Company under or pursuant to any of the Operative Documents
to which the Company is a party or, except as herein expressly provided, to make
any payment, or to make any inquiry as to the nature or sufficiency of any
payment received by it, or present or file any claim, or take any action to
collect or enforce the payment of any amounts which may have been assigned to it
or to which it may be entitled at any time or times.

       

       

      
        
          
          

        

        
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      The
Company does hereby constitute the Trustee the true and lawful attorney of the
Company, irrevocably, with full power (in the name of the Company or otherwise)
to ask, require, demand, receive, compound and give acquittance for any and all
money and claims for money due and to become due to the Company which are part
of the Indenture Estate, to endorse any checks or other instruments or orders in
connection therewith and to file any notices or claims or take any action or
institute any proceedings which the Trustee may deem to be necessary or
advisable in the premises to enable the Trustee to fulfill its duties under the
Indenture.

       

      The
Company agrees that at any time and from time to time, the Company will promptly
and duly execute, deliver and file or cause to be executed, delivered and filed
any and all such further instruments and documents as may be necessary or as the
Trustee may reasonably request in order to obtain the full benefits of this
assignment and of the rights and powers herein granted.

       

      The
Company does hereby warrant and represent that it has not assigned or pledged,
and hereby covenants that it will not assign or pledge, so long as the
assignment hereunder shall remain in effect, any of its right, title or interest
hereby assigned to anyone other than the Trustee and that it will not, except as
provided in or permitted by this Indenture, accept any payment constituting part
of the Indenture Estate or enter into an agreement amending or supplementing any
of the Operative Documents, execute any waiver or modification of, or consent
under the terms of any of the Operative Documents, settle or compromise any
claim arising under any of the Operative Documents, or submit or consent to the
submission of any dispute, difference or other matter arising under or in
respect of any of the Operative Documents to arbitration
thereunder.

       

      NOW,
THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:

       

      For and
in consideration of the premises and the purchase of the Equipment Notes by the
Holders thereof and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is mutually covenanted and
agreed as follows: 

       

      ARTICLE
ONE

       

      RELATION
TO INDENTURE; DEFINITIONS

       

      Section
1.1 Definitions.  For
all purposes of this Second Supplemental Indenture:

       

      (a)    Capitalized
terms used herein without definition shall have the meanings specified in the
Base Indenture, unless otherwise defined in this Second Supplemental Indenture,
in which case definitions set forth in this Second Supplemental Indenture shall
govern; and

       

      (b)    The terms
“herein,” “hereof,” “hereunder” and other words of similar import refer to this
Second Supplemental Indenture.

       

      (c)    All
references herein to Articles and Sections, unless otherwise specified, refer to
the corresponding Articles and Sections of this Second Supplemental Indenture;
and

       

      (d) All other
terms used in this Second Supplemental Indenture, which are defined in the Trust
Indenture Act or which are by reference therein defined in the Securities Act
(except as herein otherwise expressly provided or unless the context otherwise
requires) shall have the meanings assigned to such terms in said Trust Indenture
Act and in said Securities Act as in force at the date of the execution of this
Second Supplemental Indenture.

       

       

       

      
        
          
          

        

        
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      “Affected Item of
Equipment” shall have the meaning specified in Section 4.1(a)
hereof.

       

      “Applicable Laws”
shall mean all applicable laws (foreign or domestic), treaties, judgments,
decrees, injunctions, writs and orders of any court, governmental agency or
authority and rules, regulations, orders, directives, licenses and permits of
(i) any Federal, state or local governmental body, instrumentality, agency or
authority, including all rules and regulations of the United States Department
of Transportation, the Federal Railroad Administration (including the Federal
Railroad Administration Railroad Freight Car Safety Standards) and the STB and
(ii) the Association of American Railroads (including the then applicable
Interchange Rules and Supplements thereto of the Mechanical Division,
Association of American Railroads).

       

      “Applicable
Percentage” shall have the meaning specified in Section 4.1(a)
hereof.

       

      “Bankruptcy Code”
shall mean the United States Bankruptcy Reform Act of 1978, as amended from time
to time, 11 U.S.C. § 101 et seq.

       

      “Bill of Sale” shall
mean, with respect to any Item of Equipment, a full warranty bill of sale
executed by the manufacturer thereof in favor of the Company for such Item of
Equipment, or by the manufacturer thereof in favor of the first owner of such
Item of Equipment who shall thereafter have executed such a Bill of Sale in
favor of the Company.

       

      “Casualty Occurrence”
shall mean any occurrence specified in Section 5.2 to be a Casualty
Occurrence.

       

      “Closing Date” shall
mean October 24, 2008.

       

      “Depositary” shall
have the meaning specified in Section 3.8 hereof.

       

      “Equipment” shall mean
collectively railroad equipment described in Schedule A hereto and in any
supplement hereto as applicable, together with any and all accessions,
additions, improvements and replacements from time to time incorporated or
installed in any item thereof which are subject to the Lien of the
Indenture.

       

      “Equipment Group”
shall mean, (a) with respect to each Item of Equipment, the “Group” to which
such Item of Equipment belongs as specified in Schedule A to this Second
Supplemental Indenture, and (b) with respect to any Item of Equipment subjected
to the Lien of the Indenture pursuant to Section 5.2 or 5.4 hereof in
substitution for an Item of Equipment that shall have suffered a Casualty
Occurrence or shall have become worn out or unsuitable for use, the Equipment
Group of the Item of Equipment for which substitution shall then be
made.

       

      “Equipment Group Redemption
Amount” shall have the meaning specified in Section 4.1(a)
hereof.

       

      “Equipment Notes”
shall have the meaning specified in the Recitals hereof.

       

      “Federal Funds” shall
mean unsecured loans of reserve balances at Federal Reserve Banks that
depository institutions make to one another on an overnight basis.

       

      “Global Note” shall
have the meaning specified in Section 3.8 hereof.

       

       

       

      
        
          
          

        

        
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      “Guarantee” means the
guarantee of the Equipment Notes by Guarantor pursuant to Article Nine
hereof.

       

      “Guarantor” has the
meaning specified in the first paragraph of this Second Supplemental Indenture
and includes any successor to Guarantor.

       

      “Indenture Estate”
shall have the meaning specified in the Granting Clause of this Second
Supplemental Indenture.

       

      “Item of Equipment”
shall mean each unit of Equipment then subject to the Lien of the
Indenture.

       

      “Maturity Date” shall
have the meaning specified in Section 3.4 hereof.

       

      “Memorandum of Supplemental
Indenture” shall mean a Memorandum of Supplemental Indenture
substantially in the form attached as Exhibit B hereto.

       

      “Moody’s” shall mean
Moody’s Investors Service, Inc. or any successor thereto.

       

      “Operative Documents”
shall mean each of the Indenture and each Bill of Sale.

       

      “Released Item of
Equipment” shall have the meaning specified in Section 4.1(b)
hereof.

       

      “Replacement Funds”
shall mean any moneys specified in Section 5.4 hereof to be Replacement
Funds.

       

      “Replacement Unit”
shall have the meaning specified in Section 5.2(b) hereof.

       

      “Securities” shall
have the meaning specified in the Recitals hereof.

       

      “S&P” shall mean
Standard & Poor’s Ratings Services, a division of the McGraw Hill Companies
Inc., or any successor thereto.

       

      “Specified
Investments” shall mean (a) direct obligations of the United States of
America and agencies thereof for which the full faith and credit of the United
States is pledged, (b) obligations fully guaranteed by the United States of
America, (c) certificates of deposit issued by, or bankers’ acceptances of, or
time deposits with, any bank, trust company or national banking association
incorporated or doing business under the laws of the United States of America or
one of the States thereof having combined capital and surplus and retained
earnings of at least five hundred million dollars ($500,000,000) (including the
Trustee if such conditions are met), (d) commercial paper of companies (which
may include the Company or the Guarantor), banks, trust companies or national
banking associations incorporated or doing business under the laws of the United
States of America or one of the States thereof and in each case having a rating
assigned to such commercial paper by S&P or Moody’s or, if neither such
organization shall rate such commercial paper at any time, by any nationally
recognized rating organization in the United States of America) equal to the
highest rating assigned by such organization, (e) purchase agreements with any
financial institution having a combined capital and surplus of at least seven
hundred fifty million dollars ($750,000,000) fully collateralized by obligations
of the type described in clauses (a) through (d) above and (f) money market
funds having a rating in the highest investment category granted thereto by a
recognized credit rating agency at the time of acquisition, including any fund
for which the Trustee or an Affiliate of the Trustee serves as an investment
advisor, administrator, shareholder servicing agent, custodian or subcustodian,
notwithstanding that (i) the Trustee or an Affiliate of the Trustee charges and
collects fees and expenses from such funds for services rendered (provided that
such charges, fees and expenses are on terms consistent with terms negotiated at
arm’s length) and (ii) the Trustee charges and collects fees and expenses for
services rendered pursuant to the Indenture; provided that if all of the above
investments are unavailable, the entire amount to be invested may be used to
purchase Federal Funds from an entity described in (c) above; and provided
further that no investment shall be eligible as a “Specified Investment” unless
the final maturity or date of return of such investment is 91 days or less from
the date of purchase thereof.

       

       

       

      
        
          
          

        

        
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      “STB” shall mean the
Surface Transportation Board of the United States Department of Transportation
and any agency or instrumentality of the United States government succeeding to
its functions.

       

      ARTICLE
TWO

       

      SCOPES OF
APPLICABILITY

       

      Section
2.1 Applicability of This Second
Supplemental Indenture.  Except
as otherwise provided herein, the provisions of this Second Supplemental
Indenture shall be applicable, and the Base Indenture is hereby amended and
supplemented as specified herein, solely with respect to the Equipment Notes and
not with respect to any other series of Securities to be issued under the Base
Indenture, unless such series of Securities is being issued after the date
hereof and reference the applicability of this Second Supplemental Indenture in
the Officers’ Certificate pursuant to Section 301 of the Base Indenture which
establishes the terms of such series.

       

      Section
2.2 Applicability of Base
Indenture.  Except
as otherwise provided herein, the Equipment Notes shall be subject to the
provisions of the Base Indenture.

       

      Section
2.3 Second Supplemental
Indenture Shall Govern.  In
the event of a conflict between any provisions of the Base Indenture and this
Second Supplemental Indenture, the relevant provision or provisions of this
Second Supplemental Indenture shall govern.

       

      ARTICLE
THREE

       

      GENERAL
TERMS AND CONDITIONS OF THE NOTES

       

      There is
hereby established a series of Securities pursuant to the Indenture with the
following terms:

       

      Section
3.1 Title of the
Securities.  The
series of Securities shall be designated the 8.375% Secured Equipment Notes due
2014.

       

      Section
3.2 Form of Equipment
Notes.  The
Equipment Notes and Trustee’s certificate of authentication to be borne by such
Equipment Notes shall be substantially in the form set forth in Exhibit A
hereto.

       

      Section
3.3 Aggregate Principal
Amount.  The
Equipment Notes will be initially issued in an aggregate principal amount of
$350,538,000, payable in installments as set forth in the form of Equipment
Notes attached hereto as Exhibit A.

       

      Section
3.4 Maturity
Date.  The
date on which the Equipment Notes shall mature is October 15, 2014 (the “Maturity
Date”).

       

       

      
        
          
          

        

        
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      Section
3.5 Interest.  The
Equipment Notes will bear interest from the Closing Date, or from the most
recent interest payment date to which interest has been paid or duly provided
for, at a rate of 8.375% per annum, payable semi-annually on April 15 and
October 15 of each year, commencing April 15, 2009.  The Regular
Record Date for interest payable on any Equipment Note is the close of business
on the April 1 or October 1 immediately preceding the applicable
Interest Payment Date, whether or not that day is a Business Day. The Company
will compute interest on the basis of a 360-day year consisting of twelve 30-day
months.

       

      Section
3.6 Application of Payments to
Principal Amount and Interest.  Except
after the occurrence and during the continuance of an Event of Default, in the
case of each Equipment Note, each payment of principal thereof and premium, if
any, and interest thereon shall be applied, first, to the payment of accrued but
unpaid interest on such Equipment Note then due thereunder (as well as any
interest on any overdue principal amount) and (to the extent permitted by law)
any overdue premium, if any, any overdue interest and any other overdue amounts
thereunder to the date of such payment, second, to the payment of any premium
then due thereon, and third, to the payment of the principal amount of such
Equipment Note then due thereunder.

       

      Section
3.7 Issuance
Price.  The
purchase price to be paid to the Company for the sale of the Equipment Notes
pursuant to the terms of the Underwriting Agreement, dated October
21, 2008, among the Company, the Guarantor and Citigroup Global Markets
Inc., Credit Suisse Securities (USA) LLC and J.P. Morgan Securities
Inc., as Representatives of the several Underwriters named in Schedule II
thereto, shall be 99.40% of the principal amount of the Equipment
Notes.

       

      Section
3.8 Global
Notes.  The
Equipment Notes will be represented by one or more Registered Securities in
permanent global form without Coupons (the “Global
Note”).  Each beneficial interest in a Global Note is referred
to as a book-entry Equipment Note.  Each Global Note representing
book-entry Equipment Notes will be deposited with the Trustee, as custodian for,
and registered in the name of, a nominee of The Depository Trust Company, as
depositary, located in the Borough of Manhattan, The City of New York (the
“Depositary”).  A
Holder may register the transfer of, or exchange, the Global Note in accordance
with the Indenture and the Equipment Notes.

       

      Section
3.9 Authorized
Denominations.  The
Equipment Notes shall be issuable in denominations of $2,000 and integral
multiples of $1,000 in excess thereof.

       

      Section
3.10 Release of
Property.  With
respect to each Item of Equipment, this Indenture shall terminate without
further action and this Indenture shall be of no further force or effect upon
the earliest to occur of (i) the release of such Item of Equipment from the Lien
of this Indenture by the Trustee pursuant to Section 4.1(a), 4.1(b), 5.2(b) or
5.4, (ii) the payment in full of the principal amount of, interest and any
premium on, all Equipment Notes outstanding hereunder and all other sums payable
to the Trustee and the Holders of the Equipment Notes hereunder and under such
Equipment Notes, and (iii) the date on which all conditions to the defeasance of
the Equipment Notes under Section 402 of the Base Indenture are
satisfied.  The Trustee shall, upon the written request and at the
expense of the Company, execute and deliver to the Person(s) specified by the
Company, a release (in due form for recording) substantially in the form set
forth in Exhibit C hereof furnished by the Company or such Person(s) to the
Trustee, releasing the appropriate Items of Equipment from the Lien of this
Indenture.

       

      Section
3.11 Defeasance and Covenant
Defeasance.

       

      (a)    Defeasance.

       

       

      
        
          
          

        

        
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      (1)    Pursuant
to Section 301 of the Base Indenture, the Equipment Notes shall be subject to
defeasance pursuant to Section 402(2) of the Base Indenture subject to Section
3.11(a)(2) hereof.

       

      (2)    In
addition to the conditions to be satisfied prior to effecting a defeasance
pursuant to Section 402(2) of the Base Indenture that are set forth in Section
402(4) of the Base Indenture, the Company shall not effect a defeasance of the
Equipment Notes unless the Company first delivers to the Trustee a letter from
each of Moody’s and S&P stating that immediately after giving effect to such
defeasance its ratings of the Equipment Notes will not be withdrawn, suspended
or reduced from the ratings in effect immediately before such
defeasance.

       

      (b)    Covenant
Defeasance.  Pursuant to Section 301 of the Base Indenture and for the
avoidance of doubt, the Equipment Notes shall not be subject to covenant
defeasance pursuant to Section 402(3) of the Base Indenture.

       

      ARTICLE
FOUR

       

      REDEMPTION

       

      Section
4.1 Equipment Notes Subject to
Redemption.  The
Equipment Notes shall, in the manner specified and subject to the provisions set
forth in this Article Four, be redeemable as follows:

       

      (a)    Redemption
upon Casualty Occurrence or Obsolescence.  Each Equipment Note shall
be redeemed in part following (i) a Casualty Occurrence with respect to an
Item of Equipment if such Item of Equipment is not replaced pursuant to Section
5.2(b) hereof or (ii) the occurrence of an event described in the first
paragraph of Section 5.4 hereof with respect to an Item of Equipment upon a
Company Request if such Item of Equipment is not replaced pursuant to
Section 5.4 hereof (each Item of Equipment described in clause (i)
or (ii), an “Affected Item of
Equipment”), on the date payment in cash is required pursuant to
Section 5.2 or Section 5.4 hereof, at a redemption price equal to the
sum of (1) as to principal thereof, an amount equal to the sum of the
Equipment Group Redemption Amounts for all Equipment Groups to which the
Affected Items of Equipment belong, and (2) as to interest, the interest
accrued and unpaid in respect of the principal amount to be redeemed pursuant to
clause (1) above on the date of such redemption. Any redemption resulting
from a Casualty Occurrence shall not require the payment of any
premium.  Any redemption resulting from the occurrence of an event
described in the first paragraph of Section 5.4 hereof shall require the
payment of premium, if any, in the amount specified in Section 4.2
hereof.

       

      “Equipment Group Redemption
Amount” means, for any Equipment Group, the product derived by
multiplying (x) the Applicable Percentage (as defined below) for such
Equipment Group by (y) the sum of the portions of the remaining scheduled
installments of principal attributable to the Equipment Group (the portions of
the scheduled principal installments attributable to each Equipment Group as of
the Closing Date are set forth in Schedule B hereto).

       

      “Applicable
Percentage” means, for any Equipment Group in the case of any partial
redemption of the Equipment Notes, the quotient derived by dividing (x) the
number of Affected Items of Equipment, in the case of partial redemption
pursuant to Section 4.1(a), or Released Items of Equipment, in the case of
partial redemption pursuant to Section 4.1(b), belonging to such Equipment Group
by (y) the total number of Items of Equipment belonging to such Equipment Group
on the Closing Date.

       

       

      
        
          
          

        

        
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      The
scheduled installment of principal on the Equipment Notes (which as of the
Closing Date are set forth in Schedule A to the Equipment Note, as such Schedule
A may be replaced from time to time pursuant to the immediately following
paragraph) on each payment date occurring after a redemption pursuant to this
Section 4.1 shall be reduced by the sum for all Equipment Groups to which an
Affected Item of Equipment belongs of the products of (w) the Applicable
Percentage for each such Equipment Group multiplied by (x) the portion of such
scheduled installment of principal for such payment date attributable to such
Equipment Group (which as of the Closing Date is set forth in Schedule B
hereto).

       

      In the
event of any redemption of Equipment Notes pursuant to this Section 4.1(a) or
Section 4.1(b) below, the Company shall provide the Trustee with an Officers’
Certificate calculating (i) the Applicable Percentage for each affected
Equipment Group, (ii) the Equipment Group Redemption Amount for each affected
Equipment Group, (iii) the total principal amount of Equipment Notes to be
redeemed and (iv) the amounts of the scheduled principal installments to be
reduced (and the payment dates affected) as a result of the redemption and
attaching a revised schedule of remaining principal installments and pool
factors, which revised Schedule shall replace Schedule A to the Equipment Note
as then in effect, and the Trustee will be entitled to rely on such Officers’
Certificate.

       

      Upon the
redemption of any Equipment Notes pursuant to this Section 4.1(a) as the result
of a Casualty Occurrence, the Trustee shall, in accordance with Section 3.10,
release from the Lien of the Indenture the Affected Items of Equipment in
respect of which such Casualty Occurrence has occurred and specified by the
Company in the Officers’ Certificate delivered pursuant to the first sentence of
Section 5.2(b), and the Trustee shall execute and deliver all documents
reasonably requested by the Company to effect and evidence such
release.

       

      (b)    Optional
Redemption.  Equipment Notes may be redeemed in whole or in part upon
a Company Request at any time on a date selected by the Company at a redemption
price equal to the unpaid principal amount thereof together with accrued and
unpaid interest thereon to the date of such redemption, plus premium in the
amount specified in Section 4.2 hereof, if any, applicable in respect of the
principal amount to be redeemed.

       

      If the
Equipment Notes are redeemed in part pursuant to this Section 4.1(b), the
Company shall specify in a Company Order the Items of Equipment to be released
from the Lien of the Indenture upon consummation of such redemption (each such
Item of Equipment, a “Released Item of
Equipment”) and the principal amount of the Equipment Notes to be
redeemed shall be the aggregate Equipment Group Redemption Amount for the
Equipment Groups to which such Released Items of Equipment
belong.  The scheduled installment of principal on the Equipment Notes
shall be reduced as set forth above in Section 4.1(a) as if the Released Items
of Equipment had suffered a Casualty Occurrence.

       

      Upon the
redemption of any Equipment Notes pursuant to this Section 4.1(b), the
Trustee shall, in accordance with Section 3.10, release from the Lien of the
Indenture the Released Items of Equipment specified by the Company in the
Company Order delivered pursuant to the preceding paragraph, and the Trustee
shall execute and deliver all documents reasonably requested by the Company to
effect and evidence such release.

       

       

      
        
          
          

        

        
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      Section
4.2 Premium.  To
the extent premium is payable with respect to the principal amount of any
Equipment Notes to be redeemed pursuant to Section 4.1 hereof, such premium
shall be equal to the amount that an independent investment banking institution
of national standing appointed by the Company determines as of the third
Business Day prior to the date for such redemption to equal the excess, if any,
of (i) the sum of the present values of all the remaining scheduled
payments of principal to be reduced in connection with such redemption and
interest that would be payable on such principal to be reduced from (but not
including) such date for redemption to the applicable payment date discounted
semiannually on each April 15 and October 15, at a rate equal to the “Treasury
Rate” (as defined below) plus 50 basis points, based on a 360-day year of twelve
30-day months, over (ii) the aggregate unpaid principal amount of such Equipment
Notes to be redeemed plus any accrued but unpaid interest
thereon.  The aggregate unpaid principal amount of such Equipment
Notes and accrued but unpaid interest for the purposes of this clause shall be
determined after deducting the installments of principal and interest, if any,
due on such date for redemption.  The premium may in no event be less
than zero.  The Company shall deliver an Officers’ Certificate to the
Trustee stating the premium payable on $1,000 in aggregate principal amount of
Equipment Notes.

       

      “Treasury Rate” means,
with respect to redemption of an Equipment Note, a per annum rate (expressed as
a semiannual equivalent and as a decimal and, in the case of United States
Treasury bills, converted to a bond equivalent yield) determined to be the per
annum rate equal to the semiannual yield to maturity for United States Treasury
securities maturing on the “Average Life Date” (as defined below) of such
Equipment Note, as determined by interpolation, if necessary, between the most
recent weekly average yields to maturity for two series of United States
Treasury securities, (A) one maturing as close as possible to, but earlier than,
the Average Life Date of such Equipment Note and (B) the other maturing as close
as possible to, but later than, the Average Life Date of such Equipment Note, in
each case as published as of 10:00 A.M. (New York City time) on the second
Business Day preceding the scheduled date for redemption on the display
designated as “Page PX-l” on the Bloomberg Financial Markets (or such other
display as may replace Page PX-l on the Bloomberg Financial Markets) for
actively traded U.S. Treasury Securities or if such yields are not reported as
of such time or are not ascertainable, as published in the most recent
H.15(519). H.15(519) means “Statistical Release H.15(519), Selected Interest
Rates,” or any successor publication, published by the Board of Governors of the
Federal Reserve System.  The most recent H.15(519) means the latest
H.15(519) which is published prior to the close of business on the third
Business Day preceding the scheduled date for redemption.

       

      “Average Life Date”
means, with respect to any Equipment Note subject to a redemption, the date that
follows the date for redemption by a period equal to the number of days equal to
the quotient obtained by dividing (a) the sum of the products obtained by
multiplying (i) the amount of each remaining principal payment on such Equipment
Note to be redeemed in connection with any such redemption by (ii) the number of
days from and including the date for redemption to but excluding the scheduled
payment date of such principal payment by (b) the unpaid principal amount of
such Equipment Note to be redeemed.

       

      Section
4.3 Notice of
Redemption.  For
purposes of this Second Supplemental Indenture:

       

      (a)    The
following provision shall apply with respect to the Equipment Notes in lieu of
the first paragraph of text appearing in Section 1102 of the Base
Indenture:

       

      The
election of the Company to redeem any Equipment Notes shall be evidenced by or
pursuant to a Board Resolution.  In case of any redemption of the
Company of Equipment Notes, the Company shall, not less than 45 days prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Equipment Notes to be redeemed.

       

       

      
        
          
          

        

        
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      (b)    The
number “20” appearing in the first sentence of Section 1104 of the Base
Indenture shall be deleted and replaced with “30”.

       

      ARTICLE
FIVE

       

      ADDITIONAL
COVENANTS

       

      In
addition to the covenants set forth in Article Seven of the Base Indenture, the
following covenants shall be applicable with respect to the Equipment
Notes:

       

      Section
5.1 Marking of Equipment;
Permissible Markings.  With
respect to each Item of Equipment subject to the Lien of this Indenture on the
Closing Date, the Company has caused and, on or prior to the date on which a
supplement to this Second Supplemental Indenture is executed and delivered in
respect of a Replacement Unit pursuant to Section 5.2 or 5.4, the Company shall
cause each Item of Equipment to be numbered with the reporting mark, if any, and
identification number listed in Schedule A hereto.  The Company shall
not change the identification number of any Item of Equipment unless and until
(i) a statement of new number or numbers to be substituted therefor shall have
been filed with the Trustee and duly filed, recorded or deposited, as the case
may be, by the Company in all public offices where this Indenture shall have
been filed, recorded or deposited and (ii) the Company shall have furnished the
Trustee with an Opinion of Counsel to the effect that such statement has been so
filed, recorded or deposited, and that no other filing, recordation, deposit or
giving of notice with or to any Federal, District of Columbia, state, provincial
or local government or agency thereof is necessary to protect the rights of the
Trustee in such Item of Equipment.

       

      Each Item
of Equipment may be lettered with the name, initials or insignia of the Company,
or of any Affiliate or any lessee of the Company which is permitted to use such
Item of Equipment as herein provided, or may be lettered in some other
appropriate manner, for convenience of identification of the interest of the
Company, or such Affiliate or lessee therein.  Except as aforesaid,
the Company shall not allow the name of any Person to be placed on any Item of
Equipment as a designation if the right, title and interest of the Trustee
therein would thereby be impaired or invalidated.

       

      Section
5.2 Maintenance of Equipment;
Casualty Occurrences.

       

      (a)    Maintenance of
Equipment.  The Company shall maintain each Item of Equipment
(i) in good repair and operating condition, ordinary wear and tear
excepted, (ii) in a manner consistent with maintenance practices used by the
Company in respect of other equipment owned or leased by the Company similar in
type to such Item of Equipment, (iii) in compliance, in all material respects,
with all Applicable Laws and (iv) in compliance with any maintenance
requirements, if any, contained in policies of insurance maintained by the
Company pursuant to Section 5.5; provided, however, that the Company may, in
good faith and by appropriate proceedings diligently conducted, contest the
validity or application of any such Applicable Laws in any reasonable manner
which does not materially adversely affect the rights or interest of the Trustee
or the Holders of the Equipment Notes in the Equipment, the Indenture Estate or
under this Second Supplemental Indenture, create any material risk of the sale,
forfeiture or loss of any Item of Equipment or otherwise expose the Trustee to
criminal sanctions or material civil penalty. The Company shall maintain or
cause to be maintained all records, logs and other documents required by
Applicable Laws to be maintained with respect to each Item of Equipment, and
will maintain such records and logs on a non-discriminatory basis and in
accordance with the Company’s normal record-keeping procedures.  The
Company will not discriminate against any Item of Equipment (as compared to
other similar equipment owned or leased by the Company) with respect to its use,
operation or maintenance.

       

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

       

      (b)    Casualty
Occurrences.  Whenever any Item of Equipment shall be lost,
stolen, destroyed, irreparably damaged, or otherwise rendered permanently unfit
for use by the Company from any cause whatsoever in the good faith opinion of a
responsible officer of the Company (such occurrences being herein called “Casualty
Occurrences”), the Company shall promptly, upon being advised of such
Casualty Occurrence, deliver to the Trustee an Officers’ Certificate describing
such Equipment and, shall on or prior to the Interest Payment Date next
succeeding the delivery of such Officers’ Certificate (or, if the next Interest
Payment Date shall be less than 60 days from such delivery, on the second
succeeding Interest Payment Date) either (i)  deposit with the Trustee an
amount in cash equal to the amount required to redeem that portion of the
Equipment Notes that are to be redeemed on account of such Casualty Occurrence
on such Interest Payment Date pursuant to Section 4.1(a) hereof, but only
after such amount theretofore undeposited shall exceed $1,000,000 in the
aggregate (until which time the Company shall not be obligated to redeem the
Equipment Notes pursuant to this Section 4.1(b)) or in such event, (ii) subject
to the Lien of the Indenture, as replacement for such unit, title to a
replacement unit of similar type and capable of performing comparable function
as the replaced unit (a “Replacement Unit”)
free and clear of all Liens other than permitted Liens under the Indenture and
having a fair market value, utility and remaining useful life at least equal to,
and being in as good operating condition as, such replaced unit, assuming such
replaced unit was in the condition and repair required by the terms hereof
immediately prior to such Casualty Occurrence.  Prior to or at the
time of and as a condition to such replacement, the Company will, at its own
expense,

       

      (A)    duly
execute a supplement to this Second Supplemental Indenture which shall subject
such Replacement Unit to this Second Supplemental Indenture and the Lien of the
Indenture and cause such supplement to be delivered to the Trustee for execution
and, upon such execution, cause such supplement or appropriate evidence thereof
(including, if required, a Memorandum of Supplemental Indenture) to be filed,
recorded or deposited in every public office where this Second Supplemental
Indenture (or appropriate evidence thereof, which may include a Memorandum of
Supplemental Indenture) covering the replaced unit shall have been filed,
recorded or deposited;

       

      (B)    furnish
to the Trustee an Officers’ Certificate certifying that the Replacement Unit is
free and clear of all Liens other than permitted Liens under the
Indenture;

       

      (C)    furnish
to the Trustee an Opinion or Opinions of Counsel to the effect that (x) the
Replacement Unit is subject to the Lien of the Indenture, (y) all filings,
recordings and other action necessary to perfect the Trustee’s security
interests in the United States of America and Canada in the Replacement Unit
have been accomplished and (z) the protection of Section 1168 of the Bankruptcy
Code (or any successor provision then in effect) shall be applicable to such
Replacement Unit;

       

      (D)    furnish to the Trustee a certificate of
a qualified engineer (who may be the chief mechanical officer employed by
the Company) certifying that the Replacement Unit has a fair market value,
utility and remaining economic useful life at least equal to the Item of
Equipment replaced thereby (assuming that such replaced unit was maintained in
the condition required by the terms of this Second Supplemental Indenture) and
setting forth a reasonable basis for such conclusion in reasonable detail;
and

       

      (E)    pay all
of the Trustee’s reasonable costs and expenses (including reasonable attorney’s
fees) incurred in connection with such substitution.

       

       

      
        
          
          

        

        
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      Upon full
compliance by the Company with the terms of this Section 5.2(b), the Trustee
shall, in accordance with Section 3.10 hereof, release such replaced Items of
Equipment from the Lien of the Indenture, and the Trustee shall execute and
deliver all documents reasonably requested by the Company to effect and evidence
such release.  For all purposes hereof, each such Replacement Unit
shall, after such conveyance, be deemed an Item of Equipment belonging to the
same Equipment Group as the unit it replaced.

       

      The
rights and remedies of the Trustee to enforce or to recover any payment of
principal, premium or interest on the Equipment Notes shall not be affected by
reason of any Casualty Occurrence.  Cash paid to the Trustee pursuant
to this Section 5.2 shall be held and applied as provided in Section 5.4
hereof.  Promptly after being advised of a Casualty Occurrence, the
Company shall furnish to the Trustee an Officers’ Certificate stating the
amount, description and numbers of all the Equipment that have suffered a
Casualty Occurrence.  Upon written request, the Company will provide
such other information as to the condition and state of repair of the Equipment
as the Trustee may reasonably request.  The Trustee, by its agents,
shall have the right once in each calendar year, but shall be under no duty, to
inspect, at the Company’s expense, each Item of Equipment, and the Company shall
in that event to furnish to the Trustee all reasonable facilities for the making
of such inspection.  In exercising such right of inspection, the
Trustee and its authorized representatives shall not unreasonably interfere with
the Company’s normal business operations, shall abide by all the Company’s rules
and regulations regarding safety and operation and shall not unreasonably
interfere with any repairs or maintenance or the use and operation of the
Equipment.

       

      Section
5.3 Possession of Equipment;
Assignments.  The
Company, so long as no Event of Default shall have occurred and be continuing
hereunder, shall be entitled to the possession, use and operation of the
Equipment in any lawful trade or commerce in the United States, Canada and
Mexico and the use thereof upon the lines of railroad owned or operated by the
Company (either alone or jointly with another) or by any Affiliate, or upon
lines over which the Company or any Affiliate shall have trackage or other
operating rights, and the Company shall also be entitled to permit the use of
the Equipment upon connecting and other railroads in the usual interchange of
traffic and upon connecting railroads and other railroads over which through
service may from time to time be afforded, but only upon and subject to all the
terms and conditions of the Indenture.

       

      The
Company shall not, without first obtaining the written consent of the Trustee,
assign or transfer its rights hereunder or transfer any Item of Equipment or any
part thereof except to an Affiliate (and then only subject to the Indenture and
without releasing the Company from its obligations hereunder), and the Company
shall not, without such written consent, except as provided in this Section 5.3,
part with the possession of, or suffer or allow to pass out of its possession or
control, any Item of Equipment; provided, however, that the
Company, so long as no Event of Default shall have occurred and be continuing
under the terms of the Indenture, shall be entitled to lease the Equipment or
any part thereof without the prior written consent of the Trustee to or permit
its use by a solvent, non-bankrupt user organized under the Federal laws of, or
the laws of any state of, the United States or the District of Columbia,
organized under the federal laws of, or the laws of any province of, Canada or
organized under the federal laws of, or the laws of any state of, Mexico upon
lines of railroad owned or operated by the Company, any Affiliate of the
Company, such lessee or by a railroad company or companies organized under the
Federal laws of, or laws of any state of, the United States, organized under the
federal laws of, or the laws of any province of, Canada or organized under the
federal laws of, or the laws of any state of, Mexico, over which the Company,
such Affiliate of the Company, such lessee or such railroad company or companies
has trackage or other operating rights, and upon lines of railroad of connecting
and other carriers in the usual interchange of traffic or pursuant to through or
run-through service agreements. Each lease shall be consistent with and subject
and subordinate to the Lien of the Indenture (excluding the duration of the
lease term, which term may expire after the final Maturity Date of the Equipment
Notes).  No lease shall in any way discharge or diminish any of the
Company’s obligations under the Equipment Notes or the Indenture, and the
Company shall remain primarily liable hereunder for the performance of all the
terms, conditions and provisions of the Indenture to the same extent as if such
lease had not been entered into, and the Company’s liability and obligation
hereunder shall be and remain those of a principal and not a
surety.  Nothing in this paragraph shall be deemed to constitute
permission to any Person in possession of any Item of Equipment pursuant to any
such lease to take any action inconsistent with the terms and provisions of the
Indenture.

       

       

      
        
          
          

        

        
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      An
assignment or transfer to a railroad company or other purchaser that shall
acquire, directly or indirectly, all or substantially all the lines of railroad
of the Company, and that, by execution of an appropriate instrument satisfactory
to the Trustee, shall assume and agree to perform each and all of the
obligations and covenants of the Company contained in the Indenture, shall not
be deemed a breach of this covenant.

       

      Section
5.4 Release and Replacement of
Equipment; Replacement Funds.  Any
Items of Equipment that shall have become worn out or unsuitable in any respect
for the use of the Company in the good faith opinion of a responsible Officer of
the Company may be released from the Lien of the Indenture, and the Trustee will
enter into a supplemental indenture to release any such Items of Equipment from
the Lien of the Indenture upon the filing with it of a Company Request and an
Officers’ Certificate which shall describe such Items of Equipment, shall state
that they have become worn out or unsuitable for the use of the Company, shall
state the selling price thereof, and shall specify the Equipment Groups to which
such Items of Equipment belong.  No such release shall be made unless
and until the Company shall have, on or prior to the Interest Payment Date next
succeeding the delivery of such Officers’ Certificate (or, if the next Interest
Payment Date shall be less than 60 days from such delivery, on the second
succeeding Interest Payment Date) either (i) paid to the Trustee an amount in
cash equal to the amount required to redeem that portion of the Equipment Notes
that may be redeemable on account of such Equipment becoming worn out or
unsuitable for use on such Interest Payment Date pursuant to Section 4.1(a)
hereof, or (ii) subject to the Lien of the Indenture Replacement Units in
accordance with all of the conditions for replacement set forth in Section
5.2(b)(ii).  Any moneys paid to the Trustee pursuant to this Section
5.4 or Section 5.2 hereof (such moneys being herein called “Replacement Funds”)
shall be received and held by the Trustee in trust hereunder pending delivery of
Replacement Units, or redemption of Equipment Notes on the applicable Interest
Payment Date pursuant to Article Four hereof, and may be invested and reinvested
as provided in Section 7.3 hereof.  Upon the filing with the Trustee
of a Company Request and an Officers’ Certificate which shall specify the kind
and number of Replacement Units to be added hereunder and the Equipment Group to
which such Items of Equipment belong or the principal amount of Equipment Notes
to be redeemed, or both, such moneys shall be applied by the Trustee
to:

       

      (a)    reimburse
the Company for Replacement Units to be added hereunder, upon receipt by the
Trustee of certificates, invoices, bills of sale and Opinions of Counsel, and
satisfaction of all other conditions for replacement, all in like manner as is
provided in Section 5.2(b)(ii) hereof, or

       

      (b)    redeem
such Equipment Notes as provided in Article Four hereof.

       

      Upon
compliance with the provisions of this Section 5.4 with respect to any Item of
Equipment having been declared worn out or unsuitable for use, the Trustee
shall, in accordance with Section 3.10 hereof, release from the Lien of this
Indenture such Item of Equipment, and the Trustee shall execute and deliver all
documents reasonably requested by the Company to effect and evidence such
release.

       

       

      
        
          
          

        

        
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      Section
5.5 Insurance.

       

      (a)    Coverages.  The
Company will, at its own expense, cause to be carried and maintained such
insurance in such amounts, against such risks, with such insurance companies and
with such terms (including co-insurance, deductibles, limits of liability and
loss payment provisions) as are customary under the Company’s risk management
program and that do not discriminate among the Items of Equipment, including:
(i) all risk property insurance in respect of the Items of Equipment and (ii)
public liability insurance against loss or damage for third-party personal
injury, death or property damage suffered upon, in or about any premises
occupied by the Company or occurring as a result of the use, maintenance or
operation of the Items of Equipment, both insurances with such insurance
companies of recognized responsibility or insurance companies that maintain
reinsurance policies with reinsurers of recognized responsibility; provided, however, that the
Company may self-insure with respect to any or all of the above if customary
under such risk management program.  Such coverage may provide for
deductible amounts as are customary under the Company’s risk management
program.  Notwithstanding the foregoing, all insurance coverage
(including, without limitation, self-insurance) with respect to the Items of
Equipment required under this Second Supplemental Indenture shall be comparable
to, and no less favorable than, insurance coverage applicable to equipment owned
or leased by the Company which is comparable to the Equipment.  The
Company shall, at its own expense, be entitled to make all proofs of loss and
take all other steps necessary to collect the proceeds of such
insurance.

       

      (b)    Required Insurance
Terms.  All policies of insurance maintained pursuant to
Section 5.5(a) shall: (i) name the Trustee as additional insured, (ii) provide
that the insurers waive any right of subrogation against the Trustee, and
(iii) require
thirty (30) days’ prior notice of cancellation or lapse or material change in
coverage to the Trustee.

       

      (c)    Proceeds of
Insurance.  The entire proceeds of any property or casualty
insurance or third-party payments for damages or a Casualty Occurrence with
respect to any Item of Equipment (including any Association of American
Railroads interline settlements) received by the Trustee shall be promptly paid
over to, and retained by, the Company.

       

      (d)    Additional
Insurance.  At any time the Trustee may but shall not be
required to at its own expense carry insurance with respect to its interest in
the Equipment, provided that such insurance does not interfere with the
Company’s ability to insure the units as required by this Section 5.5 or
adversely affect the Company’s insurance or the cost thereof, it being
understood that all salvage rights to each Item of Equipment and all primary
subrogation rights shall remain with the Company’s insurers at all times. Any
insurance payments received from policies maintained by the Trustee pursuant to
the previous sentence shall be retained by the Trustee without reducing or
otherwise affecting the Company’s obligations hereunder.

       

      (e)    Insurance
Documentation.  The Trustee may, but not more than once in any
twelve-month period, request from the Company and the Company shall promptly
thereafter furnish to the Trustee an Officers’ Certificate setting forth all
insurance maintained by the Company pursuant to this Section 5.5 and describing
such policies, if any, including the amounts of coverage, any deductible
amounts, the names of the insurance providers and a general description of each
such policy’s terms.

       

      Section
5.6 Entitlement to §1168
Benefits.  It
is the intent of the parties that the Trustee shall be entitled to the benefits
of Section 1168 of the Bankruptcy Code with respect to the right to repossess
any Item of Equipment and to enforce any of its other rights or remedies as
provided herein during any period in which and for as long as the Company shall
be a debtor in a case under the Bankruptcy Code, and in any circumstances where
more than one construction of the terms and conditions of the Indenture is
possible, a construction which would preserve such benefits shall control over
any construction which would not preserve such benefits or would render them
doubtful.  To the extent consistent with the provisions of Section
1168 of the Bankruptcy Code or any analogous section of the Bankruptcy Code or
other Applicable Laws, it is hereby expressly agreed and provided that,
notwithstanding any other provision of the Bankruptcy Code, any right of the
Trustee to take possession of any Item of Equipment and to enforce any of its
other rights or remedies in compliance with the provisions of this Second
Supplemental Indenture shall not be affected by the provisions of Section 362 or
363 of the Bankruptcy Code or any analogous provision of any superseding statute
or any power of a bankruptcy court to enjoin such undertaking or
possession.

       

       

       

      
        
          
          

        

        
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      Section
5.7 Liens.  The
Company shall not, directly or indirectly, create, incur, assume, permit, or
suffer to exist any Lien on or with respect to any Item of Equipment or any
other portion of the Indenture Estate, title thereto or any interest therein
except (a) the rights of the Trustee as provided in the Indenture,
(b) Liens for taxes either not yet due and payable or being contested in
good faith by appropriate proceedings, (c) materialmen’s, mechanics’, workmen’s,
repairmen’s, employees’ or other like Liens arising in the ordinary course of
business for payment of which is either not yet delinquent or is being contested
in good faith by appropriate proceedings, (d) Liens (other than Liens for taxes)
arising out of judgments or awards against the Company with respect to which an
appeal or proceeding for review is being prosecuted in good faith and for the
payment of which adequate reserves have been provided or other appropriate
provisions have been made and with respect to which there shall have been
secured a stay of execution pending such appeal or proceeding for review, and
(e) salvage or similar rights of insurers under insurance policies maintained
pursuant to Section 5.5 hereof.  The Company will promptly, at its own
expense, take such action as may be necessary by bonding or otherwise duly to
discharge any such Lien not excepted above if the same shall arise at any
time.

       

      Section
5.8 Filings and
Opinions.

       

      (a)    On or
prior to the Closing Date, the Company will cause this Second Supplemental
Indenture and all existing and executed supplements hereto or appropriate
evidence thereof (which may include a Memorandum of Supplemental Indenture, if
required) to be duly filed and recorded with the STB pursuant to 49 U.S.C.
§11301 and deposited in the office of the Registrar General of Canada pursuant
to Section 105 of the Canada Transportation Act.  The Company will
furnish to the Trustee evidence of such filing and recordation.

       

      (b)    The
Company agrees to record and file in accordance with the terms of this Second
Supplemental Indenture, at its own expense, financing statements (and
continuation statements when applicable) with respect to the Indenture Estate
now existing or hereafter created meeting the requirements, if any, of
Applicable Laws in such manner and in such jurisdictions as are necessary to
perfect and maintain the perfection of the Lien created hereunder in the
Indenture Estate, and to promptly deliver a filed stamped copy of each such
financing statement or other evidence of filing or recordation to the
Trustee.

       

      (c)    The
Company shall deliver to the Trustee (i) promptly after the execution and
delivery of the Indenture, an Opinion of Counsel or Opinions of Counsel either
stating that in the opinion of such counsel the Indenture has been properly
recorded and filed (including, to the extent required, with the STB pursuant to
49 U.S.C. §11301 or with the Registrar General of Canada pursuant to Section 105
of the Canada Transportation Act) so as to make effective the Lien of the
Indenture, and reciting the details of such action, or stating that in the
opinion of such counsel no such action is necessary to make such Lien effective;
and (ii) at least annually after the execution and delivery of the Indenture, an
Opinion of Counsel or Opinions of Counsel either stating that in the opinion of
such counsel such action has been taken with respect to the recording, filing,
rerecording and refiling of the Indenture (including, to the extent required,
with the STB pursuant to 49 U.S.C. §11301 or with the Registrar General of
Canada pursuant to Section 105 of the Canada Transportation Act) as is necessary
to maintain the Lien of the  Indenture, and reciting the details of
such action, or stating that in the opinion of such counsel no such action is
necessary to maintain such Lien.

       

       

       

      
        
          
          

        

        
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      (d)    If at any
time Mexico, one or more states in Mexico, or any of the Canadian provinces
establishes a state or provincial or other system for filing and perfecting the
security interests of entities such as the Trustee in the Items of Equipment, at
the time that the Company takes such action with respect to other equipment
similar to the Items of Equipment and also upon the request of the Trustee
(given at the request of the Holders of a majority in principal amount of the
Outstanding Equipment Notes), the Company shall cause the Operative Document to
be recorded with or under such system and shall cause all other filings and
recordings and all such other action required under such system to be effected
and taken, in order to perfect and protect the right, title and interests of the
Trustee in the Indenture Estate.

       

      Section
5.9 Consolidation, Merger,
Conveyance, Transfer or Lease.  The following provisions shall
apply with respect to the Equipment Notes in lieu of Section 801 of the Base
Indenture.

       

      The Company shall not consolidate with
or merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company,
unless:

       

      (a)    the
successor entity is a “railroad” (as defined in section 101(44) of the
Bankruptcy Code) to the extent necessary to entitle the Trustee to the benefits
of section 1168 of the Bankruptcy Code with respect to the Items of
Equipment;

       

      (b)    in case
the Company shall consolidate with or merge into another Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, the Person formed by such consolidation or into which the Company is
merged or the Person which acquired by conveyance, transfer or lease the
properties and assets of the Company substantially as an entirety shall be a
legal entity organized and existing under the laws of any domestic or foreign
jurisdiction, and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of and any premium and interest, if
any, on all the Equipment Notes and the performance of every covenant of this
Indenture on the part of the Company to be performed or observed;

       

      (c)    immediately
after giving effect to such transaction, no Event of Default, and no event
which, after notice or lapse of time, or both, would become an Event of Default,
shall have happened and be continuing; and

       

      (d)    the
Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel each stating that such consolidation, merger, conveyance, transfer or
lease and such supplemental indenture, if any, comply with this Section 5.9 and
that all conditions precedent herein provided for relating to such transaction
have been complied with.

       

       

       

      
        
          
          

        

        
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      ARTICLE
SIX

       

      EVENTS OF
DEFAULT; REMEDIES

       

      Section
6.1 Events of
Default.  The
following shall constitute “Events of Default” with respect to the Equipment
Notes in lieu of those set forth in Section 501(1) through (7) of the Base
Indenture:

       

      (1)    default
by the Company in making any payment when due of any principal of or interest or
premium on any Equipment Note, and the continuance of such default unremedied
for 10 Business Days after the same shall have become due and payable (the
Trustee shall provide the Company with written notice of any such failure under
this paragraph (1); provided that the
giving of such notice by the Trustee shall not be a condition to the start of
the ten (10) Business Days period referred to in this paragraph (1), and the
failure or delay in giving such notice shall not affect the occurrence of an
Event of Default under this paragraph or the exercise of any right or remedy and
the Trustee shall not incur any liability nor be in breach hereunder for failure
or delay in giving such notice); or

       

      (2)    the
Company shall fail to make any other payment required to be made under the
Indenture after the same shall have become due and such failure shall continue
unremedied for a period of thirty (30) days after receipt by the Company of
written notice of such failure from the Trustee; or

       

      (3)    the
Company shall operate any Item of Equipment in service when public liability
insurance required by Section 5.5 hereof, if any, with respect to such unit
shall fail to be in effect and such failure shall continue for a period of
thirty (30) days following the date of the lapse of any such public liability
insurance; or

       

      (4)    the
Company shall make any unauthorized transfer or lease of any of the Equipment,
or, except as herein authorized, shall part with the possession of any of the
Equipment, and shall fail or refuse either to cause such transfer or lease to be
cancelled by agreement of all parties having any interest therein and recover
possession of such Equipment within thirty (30) days after the Trustee shall
have demanded in writing such cancellation and recovery of possession, or within
said thirty (30) days to deposit with the Trustee a sum in cash equal to the
Fair Value, as of the date of such unauthorized action, of the Equipment so
transferred or leased or the possession of which shall have been parted with
otherwise than as herein authorized (any sum so deposited to be returned to the
Company upon the cancellation of such transfer or lease and the recovery of
possession by the Company of such Equipment); or

       

      (5)    default
in the performance, or breach, of any covenant or warranty of the Company in
this Indenture or any Equipment Note (other than a covenant or warranty for
which the consequences of breach or nonperformance are addressed elsewhere in
this Section 6.1), and continuance of such default or breach for a period of
ninety (90) days after there has been given to the Company a written notice by
the Trustee; provided that, other
than a breach of the covenant specified in Section 5.7, if such default is
capable of being remedied, no such default shall constitute an Event of Default
hereunder for a period of three hundred sixty-five (365) days after receipt of
such notice so long as the Company is diligently proceeding to remedy such
failure; or

       

      (6)    the
Company or Guarantor pursuant to or under or within the meaning of any
Bankruptcy Law:

       

      (a)    commences
a voluntary case or proceeding;

       

      (b)    consents
to the entry of an order for relief against it in an involuntary case or
proceeding or the commencement of any case against it;

       

      (c)    consents
to the appointment of a Custodian of it or for any substantial part of its
property;

       

       

      
        
          
          

        

        
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      (d)    makes a
general assignment for the benefit of its creditors;

       

      (e)    files a
petition in bankruptcy or answer or consent seeking reorganization or relief;
or

              

      (f)    consents
to the filing of such petition or the appointment of or taking possession by a
Custodian; or

       

      (7)    a court
of competent jurisdiction enters an order or decree under any Bankruptcy Law
that:

       

      (a)    is for
relief against the Company or Guarantor in an involuntary case or proceeding, or
adjudicates the Company or Guarantor insolvent or bankrupt;

       

      (b)    appoints
a Custodian of the Company or Guarantor or for any substantial part of its
property; or

       

      (c)    orders
the winding up or liquidation of the Company or Guarantor; and the order or
decree remains unstayed and in effect for 90 days; or

       

      (8)    subject
to Section 9.6 hereof, the Guarantee shall not be in full force and effect
(or any responsible officer of the Guarantor denies that the Guarantor has any
further liability under the Guarantee or gives notice to such
effect).

       

      “Bankruptcy Law” means
the Bankruptcy Code, or any similar Federal or state law for the relief of
debtors.

       

      Notwithstanding
anything to the contrary contained in this Indenture, any failure of the Company
to perform or observe any covenant or agreement herein (other than any of the
Company’s obligations to pay principal, premium and interest, if any, on the
Equipment Notes) shall not constitute an Event of Default if such failure is
caused solely by reason of an event referred to in the definition of “Casualty
Occurrence” so long as the Company is continuing to comply with the applicable
terms of Section 5.2(b) hereof.

       

      Section
6.2 Application of Money
Collected.  The following provisions shall apply with respect
to the Equipment Notes in lieu of Section 506 of the Base
Indenture:

       

      (a)    All
payments received and amounts realized by the Trustee after an Event of Default
shall have occurred and be continuing and after the Equipment Notes shall have
been accelerated pursuant to Section 502 of the Base Indenture or the Trustee
has elected to foreclose or otherwise enforce its rights under the Indenture
(including any amounts realized by the Trustee from the exercise of any remedies
pursuant to Article Five of the Base Indenture or Article Six hereof), as well
as all payments or amounts then held or thereafter received by the Trustee as
part of the Indenture Estate while such Event of Default shall be continuing,
shall be distributed forthwith by the Trustee in the following order of
priority:  first, so much of
such payments or amounts as shall be required to pay or reimburse the Trustee
for any unpaid fees for its services under this Indenture and any tax,
liability, expense (including reasonable attorneys’ and agents’ fees) or other
loss incurred by the Trustee (to the extent reimbursable and not previously
reimbursed and to the extent reasonably incurred in connection with its duties
as Trustee) shall be distributed to the Trustee; second, so much of
such payments or amounts as shall be required to reimburse the Holders of the
Equipment Notes for payments made by them to the Trustee pursuant to Article Six
of the Base Indenture (to the extent not previously reimbursed), shall be
distributed to such Holders of the Equipment Notes, without priority of one over
the other, in accordance with the amount of the payment or payments made by, or
payable to, each such Holder; third, so much of
such payments or amounts as shall be required to pay in full the aggregate
unpaid principal amount of all Equipment Notes, plus the accrued but unpaid
interest thereon to the date of distribution, shall be distributed to the
Holders of the Equipment Notes, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full the aforesaid amounts, then,
ratably, without priority of one over another, in the proportion that the
aggregate unpaid principal amount of all Equipment Notes held by each such
Holder, plus the accrued but unpaid interest thereon to the date of
distribution, bears to the aggregate unpaid principal amount of all Equipment
Notes, plus the accrued but unpaid interest thereon to the date of
distribution.

       

       

      
        
          
          

        

        
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      After all
such payments shall have been made in full, the title to any of the Equipment
remaining unsold shall be conveyed by the Trustee to the Company free from any
further liabilities or obligations to the Trustee hereunder.  If after
applying all such sums of money realized by the Trustee as aforesaid there shall
remain any amount due to the Trustee under the provisions hereof, the Company
shall pay the amount of such deficit to the Trustee. If after applying as
aforesaid the sums of money realized by the Trustee there shall remain a surplus
in the possession of the Trustee, such surplus shall be paid to the
Company.

       

      (b)    If an
Event of Default shall have occurred and be continuing, the Trustee shall not
make any distribution to the Company but shall hold amounts otherwise
distributable to the Company as collateral security for the obligations secured
hereby until such time as no Event of Default shall be continuing hereunder or
such amounts are applied pursuant to Section 6.2(a).

       

      Section
6.3 Remedies with Respect to
Indenture Estate.

       

      (a)    If an
Event of Default described in Section 6.1(6) or (7) hereof shall have occurred
and be continuing, the unpaid principal amount of all Equipment Notes then
outstanding, together with all accrued and unpaid interest thereon and all other
amounts due thereunder, shall immediately become due and payable, without any
notice or action by the Trustee or any Holder of Equipment Notes.

       

      (b)    If an
Event of Default shall have occurred and be continuing, and the Equipment Notes
shall have been accelerated (and such acceleration shall not have been
rescinded) pursuant to Section 502 of the Base Indenture or Section 6.3(a)
hereof, then and in every such case the Trustee shall be entitled to exercise
any or all of the rights and powers and pursue any and all of the remedies
pursuant to Article Five of the Base Indenture and Article Six hereof and may
recover judgment in its own name as Trustee against the Company and Indenture
Estate and may take possession of all or any part of the Indenture Estate, and
may exclude the Company and all persons claiming under the Company wholly or
partly therefrom.

       

      (c)    The
Trustee may, if at the time such action may be lawful and always subject to
compliance with any mandatory legal requirements, either with or without taking
possession, and either before or after taking possession, and without
instituting any legal proceedings whatsoever, and having first given written
notice of such sale to the Company at least thirty (30) days prior to the date
of such sale or the date on which the Trustee enters into a binding contract for
a private sale, and any other notice which may be required by law, sell and
dispose of the Indenture Estate, or any part thereof, or interest therein, at
public auction to the highest bidder or at private sale in one lot as an
entirety or in separate lots, and either for cash or on credit and on such terms
as the Trustee may determine, and at any place (whether or not it be the
location of the Indenture Estate or any part thereof) and time designated in the
notice above referred to.  Any such public sale or sales may be
adjourned from time to time by announcement at the time and place appointed for
such sale or sales, or for any such adjourned sale or sales, without further
notice, and the Trustee or the Holder or Holders of any Equipment Notes, or any
interest therein, may bid and become the purchaser at any such public
sale.  The Trustee may exercise such right without possession or
production of the Equipment Notes or proof of ownership thereof, and as
representative of the Holders may exercise such right without including the
Holders as parties to any suit or proceeding relating to foreclosure of any
property in the Indenture Estate.  The Company hereby irrevocably
constitutes the Trustee the true and lawful attorney-in-fact of the Company (in
the name of the Company or otherwise) for the purpose of effecting any sale,
assignment, transfer or delivery for enforcement of the Lien of the Indenture,
whether pursuant to foreclosure or power of sale or otherwise, to execute and
deliver all such bills of sale, assignments and other instruments as the Trustee
may consider necessary or appropriate, with full power of substitution, the
Company hereby ratifying and confirming all that such attorney or any substitute
shall lawfully do by virtue hereof.  Nevertheless, if so requested by
the Trustee or any purchaser, the Company shall ratify and confirm any such
sale, assignment, transfer or delivery, by executing and delivering to the
Trustee or such purchaser all bills of sale, assignments, releases and other
proper instruments to effect such ratification and confirmation as may be
designated in any such request.

       

       

      
        
          
          

        

        
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      (d)    The
Company agrees, to the fullest extent that it lawfully may, that, in case one or
more of the Events of Default shall have occurred and be continuing, then, in
every such case, the Trustee may take possession of all or any part of the
Indenture Estate and may exclude the Company and all persons claiming under any
of them wholly or partly therefrom.  At the request of the Trustee,
the Company shall promptly execute and deliver to the Trustee such instruments
of title and other documents as the Trustee may deem necessary or advisable to
enable the Trustee or an agent or representative designated by the Trustee, at
such time or times and place or places as the Trustee may specify, to obtain
possession of all or any part of the Indenture Estate.  If the Company
shall fail for any reason to execute and deliver such instruments and documents
to the Trustee, the Trustee may pursue all or part of the Indenture Estate
wherever it may be found and may enter any of the premises of the Company
wherever the Indenture Estate may be or be supposed to be and search for the
Indenture Estate and take possession of and remove the Indenture
Estate.  Upon every such taking of possession, the Trustee may, from
time to time, at the expense of the Indenture Estate, make all such expenditures
for maintenance, insurance, repairs, replacements, alterations, additions and
improvements to any of the Indenture Estate, as it may deem proper or as it may
otherwise be directed to do so by the Holders of a majority in principal amount
of the Outstanding Equipment Notes.  In each such case, the Trustee
shall have the right to use, operate, store, control or manage the Indenture
Estate, and to carry on the business and to exercise all rights and powers of
the Company relating to the Indenture Estate, including the right to enter into
any and all such agreements with respect to the maintenance, operation, leasing
or storage of the Indenture Estate or any part thereof; and the Trustee shall be
entitled to collect and receive all tolls, rents, revenues, issues, income,
products and profits of the Indenture Estate and every part thereof, without
prejudice, however, to the right of the Trustee under any provision of this
Indenture to collect and receive all cash held by, or required to be deposited
with, the Trustee hereunder.  Such tolls, rents, revenues, issues,
income, products and profits shall be applied to pay the expenses of holding and
operating the Indenture Estate and of conducting the business thereof, and of
all maintenance, repairs, replacements, alterations, additions and improvements,
and to make all payments which the Trustee may be required or may elect to make,
if any, for taxes, assessments, insurance or other proper charges upon the
Indenture Estate or any part thereof (including the employment of engineers and
accountants to examine, inspect and make reports upon the properties and books
and records of the Company), and all other payments which the Trustee may be
required or authorized to make under any provision of this Indenture, as well as
just and reasonable compensation for the services of the Trustee, and of all
persons properly engaged and employed by the Trustee, including the reasonable
expenses of the Trustee.  Any action by the Trustee pursuant to this
Section 6.3(d) will in all respects be subject to compliance with any mandatory
legal requirements applicable to any such action.

       

       

      
        
          
          

        

        
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      (e)    If an
Event of Default occurs and is continuing and the Trustee shall have obtained
possession of an Item of Equipment, the Trustee shall not be obligated to cause
any Person to use or operate such Item of Equipment or cause such Item of
Equipment to be used or operated directly or indirectly by itself or through
agents or other representatives or to lease, license or otherwise permit or
provide for the use or operation of such Item of Equipment by any other Person
unless (i) the Trustee, as directed by the Holders of a majority in principal
amount of the Outstanding Equipment Notes, shall have been able to obtain
insurance in kinds, at rates and in amounts satisfactory to the Holders of a
majority in principal amount of the Outstanding Equipment Notes to protect the
Indenture Estate and the Trustee, as trustee and individually, against any and
all liability for loss or damage to such Item of Equipment and for public
liability and property damage resulting from use or operation of such Item of
Equipment and (ii) funds are available in the Indenture Estate to pay for all
such insurance or, in lieu of such insurance, the Trustee is furnished with
indemnification from the holders of the Equipment Notes or any other Person upon
terms and in amounts satisfactory to the Trustee in its discretion to protect
the Indenture Estate and the Trustee, as trustee and individually, against any
and all such liabilities.

       

      (f)    If an
Event of Default shall occur and be continuing, the Trustee may proceed to
protect and enforce the Indenture and the Equipment Notes by suits or
proceedings in equity, at law or in bankruptcy, and whether for specific
performance of any covenant or agreement or in execution or aid of any power
herein granted, or for foreclosure hereunder, or the appointment of a receiver
or receivers for the Indenture Estate or any part thereof, or for the recovery
of a judgment for the indebtedness secured hereby, or the enforcement of any
other legal or equitable remedy available to a mortgagee or a secured party
under the Uniform Commercial Code of the relevant jurisdiction or any other
Applicable Laws.

       

      Section
6.4 Company to Deliver Equipment
to Trustee.  In
case the Trustee shall demand possession of the Equipment pursuant to the
provisions hereof and shall reasonably designate a point or points upon the
railroad of the Company or of any Affiliate or lessee for the delivery of the
Equipment to it, the Company shall, at its own expense forthwith and in the
usual manner, cause the Equipment to be moved to such point or points on such
railroads as shall be designated by the Trustee and shall there deliver or cause
to be delivered the same to the Trustee, or the Trustee may at its option keep
the Equipment on any of the lines of railroad or premises of the Company or of
any Affiliate or lessee until the Trustee shall have leased, sold or otherwise
disposed of the same, and for such purpose the Company agrees to furnish,
without charge for rent or storage, the necessary facilities at any convenient
point or points reasonably selected by the Trustee. It is hereby expressly
covenanted and agreed that the performance of this covenant is of the essence of
the Indenture and that, upon application to any court having jurisdiction in the
premises, the Trustee shall be entitled to a decree against the Company
requiring the specific performance thereof.

       

      ARTICLE
SEVEN

       

      TRUSTEE

       

      Section
7.1 No Representations or
Warranties as to the Items of Equipment or Documents.  THE
TRUSTEE NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE (i) ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION, DESIGN, OPERATION,
MERCHANTABILITY OR FITNESS FOR USE OF THE ITEMS OF EQUIPMENT OR AS TO THE TITLE
THERETO, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE ITEMS OF
EQUIPMENT WHATSOEVER, or (ii) any representation or warranty as to the validity,
legality or enforceability of the Indenture, the Equipment Notes, or any
supplemental indenture or any other document or instrument or as to the
correctness of any statement contained in any thereof (except as to the
representations and warranties made by the Trustee herein).

       

       

      
        
          
          

        

        
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      Section
7.2 Limitation on Duty of
Trustee in Respect of Indenture Estate.

       

      (a)    Except as
otherwise provided in the Indenture, the Trustee shall have no duty as to any
Indenture Estate in its possession or control or in the possession or control of
any agent or bailee or any income thereon or as to preservation of rights
against prior parties or any other rights pertaining thereto and the Trustee
shall not be responsible for filing any financing or continuation statements or
recording any documents or instruments in any public office at any time or times
or otherwise perfecting or maintaining the perfection of any security interest
in the Indenture Estate.

       

      (b)    The
Trustee shall not be responsible for (i) the existence, genuineness or value of
any of the Indenture Estate or for the validity, perfection, priority or
enforceability of the Liens in any of the Indenture Estate, whether impaired by
operation of law or by reason of any action or omission to act on its part
hereunder, except to the extent such action or omission constitutes negligence,
bad faith or willful misconduct on the part of the Trustee, (ii) for the
validity or sufficiency of the Indenture Estate or any agreement or assignment
contained therein, (iii) for the validity of the title of the Company to the
Indenture Estate, (iv) for insuring the Indenture Estate or (v) for the payment
of taxes, charges, assessments or Liens upon the Indenture Estate or otherwise
as to the maintenance of the Indenture Estate.

       

      Section
7.3 Money Held in
Trust.  The
following provisions shall apply with respect to the Equipment Notes in lieu of
Section 606 of the Base Indenture:

       

      (a)    Except as
provided in Section 403 and Section 1003 of the Base Indenture or as provided in
paragraph (b) below, money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law and shall be
held uninvested.  The Trustee shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed in writing with
the Company.

       

      (b)    Any
amounts held by the Trustee pursuant to the express terms of the Indenture and
not required to be distributed as herein provided shall be invested and
reinvested by the Trustee from time to time in Specified Investments at the
written direction and at the risk and expense of the Company, except that in the
absence of any such direction or after an Event of Default shall have occurred
and be continuing, such amounts shall be so invested by the Trustee in Specified
Investments of the type specified in clause (f) of the definition thereof,
except as provided below, and the Trustee shall hold any such Specified
Investments until maturity.  Any net income or gain realized as a
result of any such investments shall be held as part of the Indenture Estate and
shall be applied by the Trustee at the same times, on the same conditions and in
the same manner as the amounts in respect of which such income or gain was
realized are required to be distributed in accordance with the provisions hereof
pursuant to which such amounts were required to be held and if no Event of
Default shall have occurred and be continuing any excess shall be paid to the
Company upon its request.  Any such Specified Investments may be sold
or otherwise reduced to cash (without regard to maturity date) by the Trustee
whenever necessary to make any application as required by such
provision.  The Trustee shall have no liability for any loss of
principal, interest, or any penalty or breakage fee resulting from any such
investment other than by reason of the willful misconduct, bad faith or
negligence of the Trustee.

       

       

      
        
          
          

        

        
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      ARTICLE
EIGHT

       

      SUPPLEMENTS
AND AMENDMENTS

       

      Section
8.1 Supplemental Indentures
Without Consent of Holders.  In
addition to the purposes set forth in Section 901(1) through 901(13) of the Base
Indenture, without the consent of any Holder of Equipment Notes, the Company
(when authorized by or pursuant to a Board Resolution), Guarantor and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for the
purpose of correcting or amplifying the description of any property at any time
subject to the Lien of the Indenture or better to assure, convey and confirm
unto the Trustee any property subject or required to be subject to the Lien of
the Indenture or to subject to the Lien of the Indenture any Item of Equipment
in accordance with the provisions of the Indenture; provided, however, that any
supplemental indenture entered into for the purpose of subjecting to the Lien of
the Indenture any Item of Equipment need only be executed by the
Company.

       

      Section
8.2 Supplemental Indentures with
Consent of Holders.   In
addition to the items set forth in Section 902(1) through 902(6) of the Base
Indenture, no supplemental indenture hereto or to the Base Indenture shall
create any Lien with respect to the Indenture Estate ranking prior to, or on a
parity with, the security interest created by the Indenture except such as
permitted by the Indenture, or deprive any Holder of an Equipment Note of the
benefit of the Lien on the Indenture Estate created by the
Indenture.

       

      ARTICLE
NINE

       

      GUARANTEE

       

      Section
9.1 Guarantee.

       

      Subject
to the provisions of this Article Nine, the Guarantor hereby fully,
unconditionally and irrevocably guarantees on a senior unsecured basis to each
Holder of the Equipment Notes and to the Trustee on behalf of the Holders of the
Equipment Notes, the full and punctual payment (whether at maturity, upon
redemption, or otherwise) of the principal of, any premium and interest on the
Equipment Notes in accordance with the terms of such Equipment Notes and the
Indenture.  Upon failure by the Company to pay punctually any such
amount with respect to the Equipment Notes, the Guarantor shall forthwith on
demand pay the amount not so paid with respect to such Equipment Notes at the
place and in the manner specified in this Second Supplemental
Indenture.  Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of bankruptcy of the
Company, any right to require a proceeding first against the Company, the
benefit of discussion, protest or notice with respect to any such Equipment Note
or the debt evidenced thereby and all demands whatsoever, and covenants that its
Guarantee will not be discharged as to any such Equipment Notes except by
payment in full of the principal of, any premium and interest on such Equipment
Notes in accordance with the terms of such Equipment Notes and the Indenture or
by discharge and/or defeasance pursuant to Section 401 or 402(2) of the
Base Indenture, as applicable; provided, however, for the avoidance of doubt,
the Guarantor shall be entitled to assert the same defenses, rights and remedies
on its own behalf as otherwise would be available to the Company.  The
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article Five of the Base Indenture and Article Six hereof for the purposes of
this Article Nine.  In the event of any declaration of acceleration of
such obligations as provided in Article Five of the Base Indenture and Article
Six hereof which is not thereafter rescinded or annulled or otherwise waived
pursuant to this Indenture or the Equipment Notes, such obligations (whether or
not due and payable) shall forthwith become due and payable by Guarantor for the
purpose of this Article Nine, for so long as such declaration of acceleration
with respect to the Equipment Notes has not been rescinded or annulled or such
default has not been waived.

       

       

       

      
        
          
          

        

        
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      If the
Trustee or the Holder of any Equipment Note is required by any court or
otherwise to return to the Company or Guarantor, or any custodian, receiver,
liquidator, trustee, sequestrator or other similar official acting in relation
to the Company or Guarantor, any amount paid to the Trustee or such Holder in
respect of an Equipment Note, this Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect with respect to such
Equipment Notes.  Guarantor further agrees, to the fullest extent that
it may lawfully do so, that, as between it, on the one hand, and the Holders of
such Equipment Notes and the Trustee, on the other hand, the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Five of
the Base Indenture and Article Six hereof for the purposes of its Guarantee,
notwithstanding any stay, injunction or other prohibition existing under any
applicable bankruptcy law preventing such acceleration in respect of the
obligations guaranteed hereby.

       

      Guarantor
hereby further agrees that its obligations under the Indenture and the Equipment
Notes shall be unconditional, regardless of the validity, regularity or
enforceability of the Indenture or the Equipment Notes, the absence of any
action to enforce the Indenture or the Equipment Notes, any waiver or consent by
any Holder of the Equipment Notes with respect to any provisions of the
Indenture or the Equipment Notes, any modification or amendment of, or
supplement to, the Indenture or the Equipment Notes, the recovery of any
judgment against the Company or any action to enforce any such judgment, or any
other circumstance that might otherwise constitute a legal or equitable
discharge or defense of a Guarantor; provided, however, for the avoidance of
doubt, the Guarantor shall be entitled to assert the same defenses, rights and
remedies on its own behalf as otherwise would be available to the
Company.

       

      Guarantor
hereby irrevocably defers, until the principal of, any premium and interest on
the Equipment Notes shall have been paid in full, any claim or other rights
which it may now have or hereafter acquire against the Company that arise from
the existence, payment, performance or enforcement of its obligations under its
Guarantee and the Indenture, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, any
right to participate in any claim or remedy of the Holders of such Equipment
Notes against the Company or any collateral which any such Holder of such
Equipment Notes or the Trustee on behalf of such Holder of such Equipment Notes
hereafter acquires, whether or not such claim, remedy or right arises in equity,
or under contract, statute or common law, including, without limitation, the
right to take or receive from the Company, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim or other rights.  If any amount shall be paid to
Guarantor in violation of the preceding sentence and the principal of, any
premium and interest on the Equipment Notes shall not have been paid in full,
such amount shall be deemed to have been paid to Guarantor for the benefit of,
and held in trust for the benefit of, the Holders of such Equipment Notes, and
shall forthwith be paid to the Trustee for the benefit of the Holders of such
Equipment Notes to be credited and applied upon the principal of, any premium
and interest on each of such Equipment Notes.  Guarantor acknowledges
that it will receive direct and indirect benefits from the issuance of the
Equipment Notes pursuant to the Indenture and that the waivers set forth in this
Section 9.1 are knowingly made in contemplation of such
benefits.

       

      The
Guarantee set forth in this Section 9.1 shall not be valid or become
obligatory for any purpose with respect to an Equipment Note until the
certificate of authentication on such Equipment Notes shall have been signed by
or on behalf of the Trustee.

       

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

       

      Section
9.2 Guarantor May Consolidate,
etc., Only on Certain Terms.

       

      The
Guarantor shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, unless:

       

      (1)           in
case the Guarantor shall consolidate with or merge into another Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, the Person formed by such consolidation or into which the
Guarantor is merged or the Person which acquired by conveyance, transfer or
lease the properties and assets of the Guarantor substantially as an entirety
shall be a legal entity organized and existing under the laws of any domestic or
foreign jurisdiction, and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of and any premium and
interest, if any, on all the Equipment Notes and the performance of every
covenant of the Indenture and the Guarantee set forth herein on the part of the
Guarantor to be performed or observed;

       

      (2)           immediately
after giving effect to such transaction, no Event of Default, and no event
which, after notice or lapse of time, or both, would become an Event of Default,
shall have happened and be continuing; and

       

      (3)           the
Guarantor has delivered to the Trustee an Officers’ Certificate and an Opinion
of Counsel each stating that such consolidation, merger, conveyance, transfer or
lease and such supplemental indenture, if any, comply with this Article and that
all conditions precedent herein provided for relating to such transaction have
been complied with and that such supplemental indenture constitutes the legal,
valid and binding obligation of the Guarantor subject to customary
exceptions.

       

      Section
9.3 Successor Person Substituted
for Guarantor.

       

      Upon any
consolidation or merger by the Guarantor with or into any other Person, or any
conveyance, transfer or lease by the Guarantor of its properties and assets
substantially as an entirety to any Person in accordance with Section 9.2,
the successor Person formed by such consolidation or into which the Guarantor is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Guarantor
under the Indenture with the same effect as if such successor Person had been
named as the Guarantor herein; and in the event of any such conveyance, transfer
or lease, the Guarantor (which term shall for this purpose mean the Person named
as the “Guarantor” in the first paragraph of this Second Supplemental Indenture
or any other successor Person which shall become such in the manner described in
Section 9.2 hereof) shall be discharged from all obligations and covenants
under the Indenture and the Equipment Notes and may be dissolved and
liquidated.

       

      Section
9.4 Notice to
Trustee.

       

      Guarantor
shall give prompt written notice to the Trustee of any fact known to Guarantor
which would prohibit the making of any payment to or by the Trustee in respect
of its Guarantee pursuant to the provisions of this Article Nine.

       

      Section
9.5 Limitation on Amount of
Guarantee.

       

      Notwithstanding
anything to the contrary in this Article, Guarantor, and by its acceptance of
Equipment Notes, each Holder of Equipment Notes, hereby confirms that it is the
intention of all such parties that the Guarantee of Guarantor not constitute a
fraudulent conveyance under applicable fraudulent conveyance provisions of the
United States Bankruptcy Code or any comparable provision of other U.S. and
non-U.S. law.  To effectuate that intention, the Trustee, the Holders
of Equipment Notes and Guarantor hereby irrevocably agree that the obligations
of Guarantor under the Guarantee are limited to the maximum amount that would
not render Guarantor’s obligations subject to avoidance under applicable
fraudulent conveyance provisions of the United States Bankruptcy Code or any
comparable provision of other U.S. and non-U.S. law.

       

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

       

       

       

      Section
9.6 Release of
Guarantee.

       

      This
Guarantee of Guarantor will terminate and Guarantor shall be released from all
of its obligations under this Article Nine (1) upon the defeasance or
discharge of the Equipment Notes, as provided in Article Four of the Base
Indenture and Section 3.11 hereof, (2) upon the assumption of the Guarantee by a
successor Guarantor pursuant to Sections 9.2 and 9.3 hereof, or (3) at such time
as the Company is no longer required to file information, documents and other
reports with the Commission pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended.

       

      Upon
delivery by the Company to the Trustee of the Officers’ Certificate and Opinion
of Counsel contemplated by Section 401 or 402 of the Base Indenture, the
Trustee will in each case execute any documents reasonably required in order to
evidence the release of Guarantor from its obligations under the
Guarantee.

       

      


      ARTICLE
TEN

       

      MISCELLANEOUS
PROVISIONS

       

      Section
10.1 Incorporation of
Indenture.  All
provisions of this Second Supplemental Indenture shall be deemed to be
incorporated in, and made a part of, the Indenture; and the Indenture, as
supplemented by this Second Supplemental Indenture, shall be read, taken and
construed as one and the same instrument and shall be binding upon all the
Holders of the Equipment Notes.

       

      Section
10.2 Counterparts.  This
Second Supplemental Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same
instrument.

       

      Section
10.3 Separability
Clause.  In
case any provision of this Second Supplemental Indenture shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby.

       

      Section
10.4 Successors and
Assigns.  All
covenants and agreements in this Second Supplemental Indenture by the Company,
the Guarantor and the Trustee shall bind their respective successors and
assigns, whether so expressed or not.

       

      Section
10.5 Benefits of Second
Supplemental Indenture.  Nothing
in this Second Supplemental Indenture, express or implied, shall give any
person, other than the parties hereto and their successors hereunder and the
Holders of the Equipment Notes, any benefit or any legal or equitable right,
remedy or claim under this Second Supplemental Indenture.  Except as
expressly supplemented or amended as set forth in this Second Supplemental
Indenture, the Indenture is hereby ratified and confirmed, and all the terms,
provisions and conditions thereof shall be and continue in full force and
effect.  The Trustee accepts the trusts created by the Indenture, as
amended and supplemented by this Second Supplemental Indenture, and agrees to
perform the same upon the terms and conditions in the Indenture as amended and
supplemented by this Second Supplemental Indenture.

       

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

       

       

      Section
10.6 Notices, Etc. to
Guarantor.  Any request, demand, authorization, direction,
notice, consent, waiver or other Act of Holders or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with, Guarantor by the Trustee, the Company or any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, or delivered by guaranteed
overnight courier to Guarantor addressed to the attention of its Treasurer at
the address of its principal or other office at 500 Water Street, 2d Floor, SC
C-110, Jacksonville, FL 32202 or at any other address previously furnished in
writing to the Trustee by Guarantor or sent by facsimile transmission to
904-366-5176 (with written confirmation of actual receipt from the
Guarantor).

       

       

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

       

      


      IN
WITNESS WHEREOF, the undersigned, being duly authorized, have executed this
Second Supplemental Indenture on behalf of the respective parties hereto as of
the date first above written.

       

      


      
        	
                CSX
      TRANSPORTATION, INC., as Issuer

              
	 
      
	
                By:

              	 
      /s/ Carolyn T. Sizemore
	 
      	
                Name:                          
      Carolyn T. Sizemore

              
	 
      	
                Title:                      Vice
      President and Controller

              
	 
      
	
                CSX
      CORPORATION, as Guarantor

              
	 
      
	
                By:

              	 
      /s/ David A. Boor
	 
      	
                Name:                               
      David A. Boor

              
	 
      	
                Title:                      Vice
      President – Tax and Treasurer

              
	 
      
	
                THE
      BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

              
	 
      
	
                By:

              	 
      /s/ Geraldine Creswell
	 
      	
                Name:                            
      Geraldine Creswell

              
	 
      	
                Title:                              Assistant
      Treasurer

              


      

       

       

       

      
        
          
          

        

        
          CSX
Transportation, Inc. –
Second Supplemental Indenture –
Signature Page

          
            

          

        

        
          
          

        

      

       

      
 

      Schedule
A

       

      Equipment

       

      
        	
                
                  Equipment
      Group

                

              	 
      	
                
                  Year
      of

                  Delivery

                

              	 
      	
                
                  Quantity

                

              	 
      
	
                Equipment
      Group 1:

              	 
      	
                2002

              	 
      	
                65

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                Equipment
      Group 2:

              	 
      	
                2004

              	 
      	
                20

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                Equipment
      Group 3:

              	 
      	
                2005

              	 
      	
                34

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                Equipment
      Group 4:

              	 
      	
                2007

              	 
      	
                32

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                Equipment
      Group 5:

              	 
      	
                2008

              	 
      	
                108

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                Total

              	 
      	 
      	 
      	
                259

              	 
      


      

      


       

       

      
        
          
          

        

        
          Sch.
A-1

          
            

          

        

        
          
          

        

      

       

       

      Road Numbers of Items of
Equipment

      


      
        	
                
                  Equipment
      

                  Group
      1

                

              	 
      	
                
                  Equipment
      

                  Group
      2

                

              	 
      	
                
                  Equipment
      

                  Group
      3

                

              	 
      	
                
                  Equipment
      

                  Group
      4

                

              	 
      	
                
                  Equipment
      

                  Group
      5

                

              
	
                CSXT5121

              	 
      	
                CSXT4776

              	 
      	
                CSXT5221

              	 
      	
                CSXT0760

              	 
      	
                CSXT0792

              
	
                CSXT5122

              	 
      	
                CSXT4777

              	 
      	
                CSXT5222

              	 
      	
                CSXT0761

              	 
      	
                CSXT0793

              
	
                CSXT0557

              	 
      	
                CSXT4778

              	 
      	
                CSXT5223

              	 
      	
                CSXT0762

              	 
      	
                CSXT0794

              
	
                CSXT0558

              	 
      	
                CSXT4779

              	 
      	
                CSXT5224

              	 
      	
                CSXT0763

              	 
      	
                CSXT0795

              
	
                CSXT0559

              	 
      	
                CSXT4780

              	 
      	
                CSXT5225

              	 
      	
                CSXT0764

              	 
      	
                CSXT0796

              
	
                CSXT0560

              	 
      	
                CSXT4781

              	 
      	
                CSXT5226

              	 
      	
                CSXT0765

              	 
      	
                CSXT0797

              
	
                CSXT0561

              	 
      	
                CSXT4782

              	 
      	
                CSXT5227

              	 
      	
                CSXT0766

              	 
      	
                CSXT0798

              
	
                CSXT0562

              	 
      	
                CSXT4783

              	 
      	
                CSXT5228

              	 
      	
                CSXT0767

              	 
      	
                CSXT0799

              
	
                CSXT0563

              	 
      	
                CSXT4784

              	 
      	
                CSXT5229

              	 
      	
                CSXT0768

              	 
      	
                CSXT0800

              
	
                CSXT0564

              	 
      	
                CSXT4785

              	 
      	
                CSXT5230

              	 
      	
                CSXT0769

              	 
      	
                CSXT0801

              
	
                CSXT0565

              	 
      	
                CSXT4786

              	 
      	
                CSXT5231

              	 
      	
                CSXT0770

              	 
      	
                CSXT0802

              
	
                CSXT0566

              	 
      	
                CSXT4787

              	 
      	
                CSXT5232

              	 
      	
                CSXT0771

              	 
      	
                CSXT0803

              
	
                CSXT0567

              	 
      	
                CSXT4775

              	 
      	
                CSXT5233

              	 
      	
                CSXT0772

              	 
      	
                CSXT0804

              
	
                CSXT0568

              	 
      	
                CSXT4768

              	 
      	
                CSXT5234

              	 
      	
                CSXT0773

              	 
      	
                CSXT0805

              
	
                CSXT0569

              	 
      	
                CSXT4769

              	 
      	
                CSXT5235

              	 
      	
                CSXT0775

              	 
      	
                CSXT0806

              
	
                CSXT0570

              	 
      	
                CSXT4770

              	 
      	
                CSXT5236

              	 
      	
                CSXT0776

              	 
      	
                CSXT0807

              
	
                CSXT0571

              	 
      	
                CSXT4771

              	 
      	
                CSXT5237

              	 
      	
                CSXT0777

              	 
      	
                CSXT0808

              
	
                CSXT0572

              	 
      	
                CSXT4772

              	 
      	
                CSXT5238

              	 
      	
                CSXT0778

              	 
      	
                CSXT0809

              
	
                CSXT0573

              	 
      	
                CSXT4773

              	 
      	
                CSXT5239

              	 
      	
                CSXT0779

              	 
      	
                CSXT0810

              
	
                CSXT0574

              	 
      	
                CSXT4774

              	 
      	
                CSXT5240

              	 
      	
                CSXT0780

              	 
      	
                CSXT0811

              
	
                CSXT0575

              	 
      	 
      	 
      	
                CSXT5241

              	 
      	
                CSXT0781

              	 
      	
                CSXT0812

              
	
                CSXT0576

              	 
      	 
      	 
      	
                CSXT5242

              	 
      	
                CSXT0782

              	 
      	
                CSXT0813

              
	
                CSXT0577

              	 
      	 
      	 
      	
                CSXT5243

              	 
      	
                CSXT0783

              	 
      	
                CSXT0814

              
	
                CSXT0578

              	 
      	 
      	 
      	
                CSXT5244

              	 
      	
                CSXT0784

              	 
      	
                CSXT0815

              
	
                CSXT0579

              	 
      	 
      	 
      	
                CSXT5245

              	 
      	
                CSXT0785

              	 
      	
                CSXT0816

              
	
                CSXT0580

              	 
      	 
      	 
      	
                CSXT5246

              	 
      	
                CSXT0787

              	 
      	
                CSXT0817

              
	
                CSXT0581

              	 
      	 
      	 
      	
                CSXT5247

              	 
      	
                CSXT0788

              	 
      	
                CSXT0818

              
	
                CSXT0582

              	 
      	 
      	 
      	
                CSXT5248

              	 
      	
                CSXT0789

              	 
      	
                CSXT0819

              
	
                CSXT0583

              	 
      	 
      	 
      	
                CSXT5249

              	 
      	
                CSXT0790

              	 
      	
                CSXT0820

              
	
                CSXT0584

              	 
      	 
      	 
      	
                CSXT5250

              	 
      	
                CSXT0791

              	 
      	
                CSXT0821

              
	
                CSXT0585

              	 
      	 
      	 
      	
                CSXT5251

              	 
      	
                CSXT0774

              	 
      	
                CSXT0822

              
	
                CSXT0586

              	 
      	 
      	 
      	
                CSXT5252

              	 
      	
                CSXT0786

              	 
      	
                CSXT0823

              
	
                CSXT0587

              	 
      	 
      	 
      	
                CSXT5253

              	 
      	 
      	 
      	
                CSXT0824

              
	
                CSXT0588

              	 
      	 
      	 
      	
                CSXT5254

              	 
      	 
      	 
      	
                CSXT0825

              
	
                CSXT0589

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0826

              
	
                CSXT0590

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0827

              
	
                CSXT0591

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0828

              
	
                CSXT0592

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0829

              
	
                CSXT0593

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0830

              
	
                CSXT0594

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0831

              
	
                CSXT0595

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0832

              
	
                CSXT0596

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0833

              
	
                CSXT0597

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0834

              
	
                CSXT0598

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0835

              
	
                CSXT0599

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0836

              
	
                CSXT5101

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0837

              
	
                CSXT5102

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0838

              
	
                CSXT5103

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0839

              
	
                CSXT5104

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0840

              
	
                CSXT5105

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0841

              
	
                CSXT5106

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0842

              
	
                CSXT5107

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0843

              
	
                CSXT5108

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0844

              


      

       

       

      
        
          
          

        

        
          Sch.
A-2

          
            

          

        

        
          
          

        

      

       

       

       

      
        	
                Equipment

                Group 1

              	 	
                 Equipment

                Group 2

              	 	
                 Equipment

                Group 3

              	 	
                 Equipment

                Group 4

              	 	
                Equipment

                Group 5

              
	
                CSXT5109

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0845

              
	
                CSXT5110

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0846

              
	
                CSXT5111

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0847

              
	
                CSXT5112

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0848

              
	
                CSXT5113

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0849

              
	
                CSXT5114

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0850

              
	
                CSXT5115

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0851

              
	
                CSXT5116

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0852

              
	
                CSXT5117

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0853

              
	
                CSXT5118

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0854

              
	
                CSXT5119

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0855

              
	
                CSXT5120

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0856

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0857

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0858

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0859

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0860

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0861

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0862

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0863

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0864

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0865

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0866

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0867

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0868

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0869

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0870

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0871

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0872

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0873

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0874

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0875

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0876

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0877

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0878

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0879

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0880

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0881

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0882

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0883

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0884

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0885

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0886

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0887

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0888

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0889

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0890

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0891

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0892

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0893

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0894

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0895

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0896

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0898

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0899

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                CSXT0897

              


      

       

       

      
        
          
          

        

        
          Sch.
A-3

          
            

          

        

        
          
          

        

      

       

       

      Schedule
B

       

      Portion of Scheduled
Installments of Principal Attributable to Each Equipment Group as of the Closing
Date

       

      
        	
                
                  Payment Date

                

              	 	
                
                  Equipment
      Group 1

                

              	 	 	
                
                  Equipment
      Group 2

                

              	 	 	
                
                  Equipment
      Group 3

                

              	 	 	
                
                  Equipment

                  Group
      4

                

              	 	 	
                
                  Equipment

                  Group
      5

                

              	 
	
                April
      15, 2009

              	 	$	3,679,000.00	 	 	$	904,000.00	 	 	$	1,486,000.00	 	 	$	1,718,000.00	 	 	$	5,871,000.00	 
	
                October
      15, 2009

              	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 
	
                April
      15, 2010

              	 	 	3,679,000.00	 	 	 	1,164,000.00	 	 	 	1,486,000.00	 	 	 	1,718,000.00	 	 	 	5,871,000.00	 
	
                October
      15, 2010

              	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 
	
                April
      15, 2011

              	 	 	3,679,000.00	 	 	 	1,165,000.00	 	 	 	1,914,000.00	 	 	 	1,718,000.00	 	 	 	5,871,000.00	 
	
                October
      15, 2011

              	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 
	
                April
      15, 2012

              	 	 	3,679,000.00	 	 	 	1,165,000.00	 	 	 	1,914,000.00	 	 	 	1,718,000.00	 	 	 	5,870,000.00	 
	
                October
      15, 2012

              	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 
	
                April
      15, 2013

              	 	 	3,679,000.00	 	 	 	1,165,000.00	 	 	 	1,914,000.00	 	 	 	2,212,000.00	 	 	 	5,870,000.00	 
	
                October
      15, 2013

              	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 
	
                April
      15, 2014

              	 	 	3,679,000.00	 	 	 	1,165,000.00	 	 	 	1,914,000.00	 	 	 	2,213,000.00	 	 	 	7,560,000.00	 
	
                October
      15, 2014

              	 	 	44,152,000.00	 	 	 	16,306,000.00	 	 	 	28,709,000.00	 	 	 	37,617,000.00	 	 	 	136,114,000.00	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Total

              	 	$	66,226,000.00	 	 	$	23,034,000.00	 	 	$	39,337,000.00	 	 	$	48,914,000.00	 	 	$	173,027,000.00	 


      

       

       

       

      
        
          
          

        

        
          Sch.
B-1

          
            

          

        

        
          
          

        

      

      
 

       

      Exhibit
A

       

      UNLESS
THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

       

      TRANSFERS
OF THIS SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S
NOMINEE.

       

      CSX
TRANSPORTATION, INC.

       

      $350,538,000

       

      8.375%
SECURED EQUIPMENT NOTES DUE 2014

       

      


      
        	
                No.
      1-A 

              	
                CUSIP
      No. 126410 LN7 

                ISIN
      No. US126410LN72 

              


      

      


       

      This
security (the “Security”) is one of a duly authorized issue of securities
(herein called the “Securities”) of CSX Transportation, Inc., a Virginia
corporation (hereinafter called the “Company,” which term includes any successor
corporation under the Indenture hereinafter referred to), issued and to be
issued in one or more series under an indenture, unlimited as to aggregate
principal amount, dated as of December 13, 2007 (the “Base Indenture”), between
the Company and The Bank of New York Mellon Trust Company, N.A. (formerly known
as The Bank of New York Trust Company, N.A.), as trustee (herein called the
“Trustee,” which term includes any successor trustee under the Indenture (as
hereinafter defined)), as supplemented by a Second Supplemental Indenture dated
as of October 24, 2008, among the Company, CSX Corporation, a Virginia
corporation (the “Guarantor”) and the Trustee (the “Second Supplemental
Indenture”) (the Base Indenture, as supplemented by the Second Supplemental
Indenture being herein called the “Indenture”) to which indenture reference is
hereby made for a statement of the respective rights thereunder of the Company,
the Guarantor, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and
delivered.  This Security is one of the series designated on the face
hereof, which series has been issued in an aggregate principal amount of
$350,538,000 (THREE HUNDRED FIFTY MILLION FIVE HUNDRED THIRTY-EIGHT THOUSAND
DOLLARS) (as adjusted from time to time in accordance with the terms and
provisions hereof and as set forth on Schedule A hereto, the “Principal Amount”)
of the Securities of such series, with the dates for the payment of principal
and interest (each such date, a “Payment Date”), date of original issuance, and
Maturity Date specified herein and bearing interest on said Principal Amount at
the interest rate specified herein.

       

       

      
        
          
          

        

        
          Exh.
A-1

          
            

          

        

        
          
          

        

      

       

       

       

      The
Company, for value received, hereby promises to pay CEDE & CO., or its
registered assigns, the principal sum of $350,538,000 (THREE HUNDRED FIFTY
MILLION FIVE HUNDRED THIRTY-EIGHT THOUSAND DOLLARS), payable in installments of
principal commencing on April 15, 2009, and ending on October 15, 2014, as set
forth for each date in Schedule A hereto (as such Schedule A may be replaced
from time to time pursuant to Section 4.1 of the Second Supplemental Indenture),
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) thereon from October 24, 2008 or from the most recent Payment Date to
which interest has been paid or duly provided for, or, if the date of this
Security is a Payment Date to which interest has been paid or duly provided for,
then from the date hereof, semiannually in arrears on April 15 and October 15 of
each year, commencing April 15, 2009, and at the date of final Maturity at the
rate of 8.375% per annum, until the principal hereof is paid or duly made
available for payment.  The Company shall pay interest on overdue
principal and premium, if any, and (to the extent lawful) interest on overdue
installments of interest at the rate per annum borne by the
Security.  The interest so payable, and punctually paid or duly
provided for, together with the installment of principal, if any, to the extent
not in full payment of this Note, and any premium, on any Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the April 1 or
October 1 (whether or not a Business Day), as the case may be, next preceding
such Payment Date.  Except as otherwise provided in the Indenture, any
such interest not so punctually paid or duly provided for shall forthwith cease
to be payable to the Holder on such Regular Record Date and may be paid to the
Person in whose name this Security (or one or more Predecessor Securities) 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 Holder of this Security not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange or automated
quotation system on which the Securities of this series may be listed or quoted,
and upon such notice as may be required by such exchange or system, all as more
fully provided in the Indenture.  Notwithstanding the foregoing,
interest payable on this Security at the date of final Maturity will be payable
to the person to whom principal is payable.

       

      The
Indenture Estate is held by the Trustee as security for the Securities of this
series.  Reference is hereby made to the Indenture for a statement of
the rights of the Holder of, and the nature and extent of the security for, this
Security, as well as for a statement of the terms and conditions of the trusts
created by the Indenture, to all of which terms and conditions in the Indenture
each Holder hereof agrees by its acceptance of this Security.

       

      This
Security is exchangeable in whole or from time to time in part for definitive
Registered Securities of this series only as provided in this
paragraph.  If (x) the Depository with respect to the Securities of
this series (the “Depository”) notifies the Company that it is unwilling, unable
or ineligible to continue as Depository for this Security or if at any time the
Depository ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, and a successor Depository is not appointed by
the Company within 90 days, (y) the Company in its sole discretion determines
that this Security shall be exchangeable for definitive Registered Securities
and executes and delivers to the Trustee a Company Order providing that this
Security shall be so exchangeable with the registration information necessary to
prepare such definitive Registered Securities or (z) there shall have happened
and be continuing an Event of Default or any event which, after notice or lapse
of time, or both, would become an Event of Default with respect to the
Securities of the series of which this Security is a part, this Security or any
portion hereof shall, in the case of clause (x) above, be exchanged for
definitive Registered Securities of this series, and in the case of clauses (y)
and (z) above, be exchangeable for definitive Registered Securities of this
series, provided that the definitive Security so issued in exchange for this
Security shall be in authorized denominations and be of like tenor and of an
equal aggregate principal amount as the portion of the Security to be exchanged,
and provided further that, in the case of clauses (y) and (z) above, definitive
Registered Securities of this series will be issued in exchange for this
Security, or any portion hereof, only if such definitive Registered Securities
were requested by written notice to the Security Registrar by or on behalf of a
Person who is a beneficial owner of an interest herein given through the Holder
hereof.  Any definitive Registered Security of this series issued in
exchange for this Security, or any portion hereof, shall be registered in the
name or names of such Person or Persons as the Holder hereof shall instruct the
Security Registrar.  Except as provided above, owners of beneficial
interests in this Security will not be entitled to receive physical delivery of
Securities in definitive form and will not be considered the Holders thereof for
any purpose under the Indenture.

       

       

      
        
          
          

        

        
          Exh.
A-2

          
            

          

        

        
          
          

        

      

       

       

      Any
exchange of this Security or portion hereof for one or more definitive
Registered Securities of this series will be made at the New York office of the
Security Registrar or at the office of any transfer agent designated by the
Company for that purpose.  Upon exchange of any portion of this
Security for one or more definitive Registered Securities of this series, the
Trustee shall endorse Exhibit A of this Security to reflect the reduction of its
Principal Amount by an amount equal to the aggregate principal amount of the
definitive Registered Securities of this series so issued in exchange, whereupon
the Principal Amount hereof shall be reduced for all purposes by the amount so
exchanged and noted.  Except as otherwise provided herein or in the
Indenture, until exchanged in full for one or more definitive Registered
Securities of this series, this Security shall in all respects be subject to and
entitled to the same benefits and conditions under the Indenture as a duly
authenticated and delivered definitive Registered Security of this
series.

       

      The
principal and any interest in respect of any portion of this Security payable in
respect of a Payment Date or at the Stated Maturity thereof, in each case
occurring prior to the exchange of such portion for a definitive Registered
Security or Securities of this series, will be paid, as provided herein, to the
Holder hereof which will undertake in such circumstances to credit any such
principal and interest received by it in respect of this Security to the
respective accounts of the Persons who are the beneficial owners of such
interests on such Interest Payment Date or at Stated Maturity.  If a
definitive Registered Security or Registered Securities of this series are
issued in exchange for any portion of this Security after the close of business
at the office or agency where such exchange occurs on (i) any Regular Record
Date and before the opening of business at such office or agency on the relevant
Interest Payment Date, or (ii) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, then interest or Defaulted Interest, as the case may be,
will not be payable on such Interest Payment Date or proposed date for payment,
as the case may be, in respect of such Registered Security, but will be payable
on such Interest Payment Date or proposed date for payment, as the case may be,
only to the Holder hereof, and the Holder hereof will undertake in such
circumstances to credit such interest to the account or accounts of the Persons
who were the beneficial owners of such portion of this Security on such Regular
Record Date or Special Record Date, as the case may be.

       

      Payment
of the principal of and any such interest on this Security will be made at the
offices of The Bank of New York Mellon (formerly known as The Bank of New York)
as Paying Agent, in the Borough of Manhattan, The City of New York, or at such
other office or agency of the Company as may be designated by it for such
purpose in the Borough of Manhattan, The City of New York, in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts by check mailed to the
registered Holders thereof; provided, however, that at the
option of the Holder, payment of interest may be made by wire transfer of
immediately available funds to an account of the Person entitled hereto as such
account shall be provided to the Security Registrar and shall appear in the
Security Register.

       

      The
Securities shall be redeemable in accordance with Article Four of the Second
Supplemental Indenture.

       

       

      
        
          
          

        

        
          Exh.
A-3

          
            

          

        

        
          
          

        

      

       

       

       

      Notice of
redemption shall be given as provided in Section 1104 of the Base Indenture and
Section 4.3 of the Second Supplemental Indenture; provided, that such notice
shall not be required to include the Redemption Price but shall instead include
the manner of calculation of the Redemption Price.

       

      Unless
the Company defaults in payment of the Redemption Price, on and after the
Redemption Date interest will cease to accrue on the Securities or portions
thereof called for redemption.

       

      If an
Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series (including this
Security and the interests represented hereby) may be declared due and payable
in the manner and with the effect provided in the Indenture.  Upon
payment (i) of the amount of principal so declared due and payable and (ii) of
interest on any overdue principal and overdue interest (in each case to the
extent that the payment of such interest shall be legally enforceable), all of
the Company’s obligations in respect of the payment of the principal of and any
interest on the Securities of this series (including this Security and the
interests represented hereby) shall terminate.

       

      The
Indenture contains provisions for defeasance at any time of the entire
indebtedness of the Company on this Security, upon compliance with certain
conditions set forth therein, which provisions shall apply to this
Security.

       

      Securities
of this series are entitled to the benefits of the Guarantee provided in Article
Nine of the Second Supplemental Indenture.

       

      The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
the rights of the Holders of the Securities of each series to be affected under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Securities at the
time Outstanding of each series affected thereby.  The Indenture also
contains provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities of each series at the time Outstanding on
behalf of the Holders of all Securities of such series to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences.  Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and the Persons who are
beneficial owners of interests represented hereby, and of any Security issued in
exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Security.

       

      As set
forth in, and subject to, the provisions of the Indenture, no Holder of any
Security of this series will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default with respect to the Securities of this series, the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of this
series shall have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, and the Trustee shall not have
received from the Holders of a majority in aggregate principal amount of the
Outstanding Securities of this series a direction inconsistent with such request
and shall have failed to institute such proceeding within 60 days; provided,
however, that such limitations do not apply to a suit instituted by the Holder
hereof for the enforcement of payment of the principal of (and premium, if any)
or interest on this Security on or after the respective due dates expressed
herein.

       

      No
reference herein to the Indenture and no provision of this Security or of the
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 Security at the time, place and rate, and in the coin or currency, herein
prescribed.

       

       

      
        
          
          

        

        
          Exh.
A-4

          
            

          

        

        
          
          

        

      

       

       

      As
provided in the Indenture and subject to certain limitations therein and herein
set forth, the transfer of Registered Securities of the series of which this
Security is a part may be registered on the Security Register of the Company,
upon surrender of such Securities for registration of transfer at the office of
the Security Registrar, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by the Holder thereof or his attorney duly authorized in writing, and
thereupon one or two more new Securities of this Series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

       

      No
service charge shall be made for any such registration of transfer or exchange
of Securities as provided above, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.

       

      Prior to
due presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.

       

      The
Securities of this series of which this Security is a part are issuable only in
registered form without coupons, in denominations of $2,000.00 and integral
multiples of $1,000.00.  As provided in the Indenture and subject to
certain limitations therein set forth, the Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.

       

      The
Securities of this series shall be dated the date of their
authentication.

       

      All terms
used in this Security which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.

       

      Unless
the certificate of authentication hereon has been executed by or on behalf of
the Trustee under the Indenture, or its successor thereunder, by the manual
signature of one of its authorized officers, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any
purpose.

       

       

      
        
          
          

        

        
          Exh.
A-5

          
            

          

        

        
          
          

        

      

       

       

      IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its corporate seal.

       

       

      Dated:  _____,
20__

       

      
        	
                CSX
      TRANSPORTATION, INC.

              
	 
      
	
                By:

              	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              


      

       

      Attest:

       

      ________________________________

      Assistant
Corporate Secretary

       

      
        	
                STATE
      OF

              	) 
      
	 
      	
                )
      ss.:

              
	
                COUNTY/CITY
      OF  

              	) 
      


      

       

      Before
me, a Notary Public in and for said State and County/City, personally appeared
__________, personally known to me or proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument, the company on behalf of which he acted
executed the instrument.

       

      WITNESS
my hand and official seal this _____ day of __________, 200___, in the State and
County/City aforesaid.

       

       

      ___________________________________________________

      Notary
Public in and for the State and County/City aforesaid

       

      My
commission expires:  ______________________________

       

      Printed
Name of Notary Public:

       

       

      
        
          
          

        

        
          Exh.
A-6

          
            

          

        

        
          
          

        

      

       

       

       

      TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

       

      This is
one of the Securities of a series issued under the Indenture described
herein.

       

      
        	
                THE
      BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

              
	 
      
	
                By:

              	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              


      

      


       

      
        
          
          

        

        
          Exh.
A-7

          
            

          

        

        
          
          

        

      

       

       

      


      FORM OF
TRANSFER NOTICE

       

      FOR VALUE
RECEIVED the undersigned registered holder hereby sell(s), assign(s) and
transfer(s) unto

       

      Insert Taxpayer
Identification No.

       

      
        
          

        

      

      Please
print or typewrite name and address including zip code of assignee

       

      
        
          

        

      

      the
within Security and all rights thereunder, hereby irrevocably constituting and
appointing

       

      ____________________________________________
attorney to transfer said Security on the books of the Security Registrar with
full power of substitution in the premises.

       

      
        	
                Date:  ___________________________

              	 
      
	 
      	
                NOTICE:  The
      signature to this assignment must correspond with the name as written upon
      the face of the within-mentioned instrument in every particular, without
      alteration or any change
whatsoever.

              


      

       

       

       

      
        
          
          

        

        
          Exh.
A-8

          
            

          

        

        
          
          

        

      

       

      
 

      SCHEDULE
A

       

      
        	
                
                  Payment
      Date

                

              	 	
                
                  Scheduled

                  Principal Repayment

                

              	 	 	
                
                  Pool
      Factor

                

              	 
	
                April
      15, 2009

              	 	$	13,658,000.00	 	 	 	0.96103703	 
	
                October
      15, 2009

              	 	 	0.00	 	 	 	0.96103703	 
	
                April
      15, 2010

              	 	 	13,918,000.00	 	 	 	0.92133235	 
	
                October
      15, 2010

              	 	 	0.00	 	 	 	0.92133235	 
	
                April
      15, 2011

              	 	 	14,347,000.00	 	 	 	0.88040384	 
	
                October
      15, 2011

              	 	 	0.00	 	 	 	0.88040384	 
	
                April
      15, 2012

              	 	 	14,346,000.00	 	 	 	0.83947817	 
	
                October
      15, 2012

              	 	 	0.00	 	 	 	0.83947817	 
	
                April
      15, 2013

              	 	 	14,840,000.00	 	 	 	0.79714325	 
	
                October
      15, 2013

              	 	 	0.00	 	 	 	0.79714325	 
	
                April
      15, 2014

              	 	 	16,531,000.00	 	 	 	0.74998431	 
	
                October
      15, 2014

              	 	 	262,898,000.00	 	 	 	0.00000000	 


      

      


       

       

       

      
        
          
          

        

        
          Exh.
A-9

          
            

          

        

        
          
          

        

      

      


       

      EXHIBIT
A

       

      Schedule of
Exchanges

       

       

      
        
          
          

        

        
          Exh.
A-10

          
            

          

        

        
          
          

        

      

       

       

      Exhibit
B

       

      


      Form of Memorandum of
Supplemental Indenture

       

      


      
        
          

        



      


      


      


      MEMORANDUM
OF [SECOND]1 SUPPLEMENTAL INDENTURE

      


      


      dated
as of __________    __, 20___

      


      


      among

      


      THE
BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

      as
Trustee,

      


      


      CSX
TRANSPORTATION, INC.

      as
Debtor

      


      and

      


      


      CSX
CORPORATION,

      as
Guarantor

      


      


      
        
          

        



       

       

       

       

      
        
          

        

      

      
        
          	
                   
      

                	
                  1 To
      be revised as necessary.

                


        

         

         

         

        
          
            
            

          

          
            Exh.
B-1

            
              

            

          

          
            
            

          

        

         

         

         

      

      MEMORANDUM
OF [SECOND] SUPPLEMENTAL INDENTURE

      


      


      THIS
MEMORANDUM OF [SECOND] SUPPLEMENTAL INDENTURE is made and entered into as of
__________   ___, 20___, by and among THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A. (the “Trustee”), CSX
TRANSPORTATION, INC. (the “Company”), and CSX CORPORATION (the
“Guarantor”).

      


      WITNESSETH:

      


      1.    The Trustee and the
Company have entered that certain Indenture, dated as of December 13, 2007 (the
“Indenture”).

      


      2.    A Memorandum of
Indenture with respect to the Indenture was  recorded with the Surface
Transportation Board pursuant to 49 U.S.C. §11301 on December 13, 2007 at 7:58
am under Recordation No. 27263.

      


      3.    The Trustee, Company,
and Guarantor have entered into that certain [Second] Supplemental Indenture,
dated as of __________ __, 20____, relating to the above-described Indenture and
extending the Company’s grant of security interest therein and the Guarantor’s
guarantee therein to certain locomotives identified on Exhibit A attached
hereto.

      


      4.    This Memorandum of
[Second] Supplemental Indenture shall be effective as of the date
hereof.

      


      5.    This Memorandum of
[Second] Supplemental Indenture may be executed in any number of counterparts,
each executed counterpart constituting an original but all together only one
Memorandum of [Second] Supplemental Indenture.

      


      


      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

       

       

       

      
        
          
          

        

        
          Exh.
B-2

          
            

          

        

        
          
          

        

      

       

       

       

      IN
WITNESS WHEREOF, the parties hereto have executed or caused this Memorandum of
[Second] Supplemental Indenture to be executed, under seal, as of the date first
above written.

       

       

      
        
          	 	
                  THE
      BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

                        
      as Trustee

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	 	 
	 	Name: 	 	 
	 	Title:	 	 
	 	 	 	 


        

      

      

         

        
          
            	 	
                    
                      CSX
      TRANSPORTATION, INC.

                            
      as Debtor

                    

                        

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	 	 
	 	Name: 	 	 
	 	Title:	 	 
	 	 	 	 


          

        

        
 

      

      
        
          
            	 	
                    CSX
      CORPORATION

                          
      as Guarantor

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	 	 
	 	Name: 	 	 
	 	Title:	 	 
	 	 	 	 


          

        

        



      

      


      
        
          
          

        

        
          Exh.
B-3

          
            

          

        

        
          
          

        

      

                                                                                   

       

      
         

        
          	
                  STATE
      OF FLORIDA

                	) 
      
	 
      	
                  )
      ss.:

                
	
                  COUNTY
      OF DUVAL 

                	) 
      


        

        
 

      

      On
this  ___ day of ____________, 20__, before me appeared
_________________________, the person who signed this instrument, who
acknowledged that (s)he is the ____________________ of THE BANK OF NEW YORK
MELLON TRUST COMPANY, N.A. and that, being duly authorized, (s)he signed such
instrument as a free act on behalf of said corporation.

      


      


      


      
         

        
          	 	 
	 	 Notary
      Public


        

         

      

      


      My
commission expires:

      


      _________________________,  ____

      


       

       

      
        
          
          

        

        
          Exh.
B-4

          
            

          

        

        
          
          

        

      

       

       

      
         

        
          	
                  STATE
      OF FLORIDA

                	) 
      
	 
      	
                  )
      ss.:

                
	
                  COUNTY
      OF DUVAL 

                	) 
      


        

        
 

      

      On
this  ___ day of _____________, 20__, before me appeared
_________________________, the person who signed this instrument, who
acknowledged that (s)he is the ____________________________ of CSX
TRANSPORTATION, INC. and that, being duly authorized, (s)he signed such
instrument as a free act on behalf of said corporation.

      


      


      
         

        
          	 	 
	 	 Notary
      Public


        



       

      


      My
commission expires:

      


      ______________________,
____

       

       

      
        
          
          

        

        
          Exh.
B-5

          
            

          

        

        
          
          

        

      

       

      
 

      
         

        
          	
                  STATE
      OF FLORIDA

                	) 
      
	 
      	
                  )
      ss.:

                
	
                  COUNTY
      OF DUVAL 

                	) 
      


        

        
 

      

      On
this  ___ day of ________________, 20__, before me appeared
_________________________, the person who signed this instrument, who
acknowledged that (s)he is the ____________________ of CSX CORPORATION and that,
being duly authorized, (s)he signed such instrument as a free act on behalf of
said corporation.

      


      


      
         

        
          	 	 
	 	 Notary
      Public


        



      


      My
commission expires:

      


      ______________________,
____

       

       

       

      
        
          
          

        

        
          Exh.
B-6

          
            

          

        

        
          
          

        

      

       

      
 

      EXHIBIT
A

      TO
MEMORANDUM OF SECOND SUPPLEMENTAL INDENTURE

      


      DESCRIPTION
OF LOCOMOTIVES AND REPORTING MARKS

       

       

       

       

      
        
          
          

        

        
          Exh.
B-7

          
            

          

        

        
          
          

        

      

       

       

      


      Exhibit
C

      


      


      
        
          

        



      


      


      


      


      PARTIAL
RELEASE

      


      


      dated
as of ________ __, 20__

      


      


      by

      


      THE
BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

      as
Trustee

      


      


      


      
        
          

        



      


      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      


      


      PARTIAL
RELEASE

      


      THIS
PARTIAL RELEASE is made as of ________ ___, 20__, by THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A. (the
“Trustee”).

      


      WITNESSETH:

      


      1.    The Trustee and CSX
Transportation, Inc. (the “Company”) have entered (i) that certain Indenture,
dated as of December 13, 2007 (the “Indenture”); and (ii) along with CSX
Corporation (the “Guarantor”), that certain Second Supplemental Indenture dated
as of October 24, 2008 (the “Second Supplemental Indenture”).

      


      2.    A Memorandum of
Indenture with respect to the Indenture was  recorded with the Surface
Transportation Board pursuant to 49 U.S.C. §11301 on December 13, 2007 at 7:58
am under Recordation No. 27263.

      


      3.    A Memorandum of
Second Supplemental Indenture was recorded with the Surface Transportation Board
on ______________, 2008 under Recordation No. _____-B.

      


      4.    Pursuant to Section
3.10 of the Second Supplemental Indenture, the Company has requested the Trustee
to execute this Partial Release to evidence for the public record the
termination of the Indenture and Second Supplemental Indenture with respect to
the Locomotives identified in Exhibit A attached hereto.

      


      5.    This Partial Release
shall be effective as of the date hereof.

      


      IN
WITNESS WHEREOF, the Trustee has executed or caused this Partial Release to be
executed, under seal, as of the date first above written.

       

      
         

        
          
            	 	
                    THE
      BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

                          
      as Trustee

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	 	 
	 	Name: 	 	 
	 	Title:	 	 
	 	 	 	 


          

        

        
                                                                                

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

         

        
          	
                  STATE
      OF FLORIDA

                	) 
      
	 
      	
                  )
      ss.:

                
	
                  COUNTY
      OF DUVAL 

                	) 
      


        

        



      

      On
this  ___ day of ________, 20__, before me appeared
_________________________, the person who signed this instrument, who
acknowledged that (s)he is the ____________________ of THE BANK OF NEW YORK
MELLON TRUST COMPANY, N.A. and that, being duly authorized, (s)he signed such
instrument as a free act on behalf of said corporation.

      


       

      
        
          	 	 
	 	 Notary
      Public


        




      My
commission expires:

      


      _________________________,  ____

      


       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

       

      
 

      


      EXHIBIT
A

      TO
PARTIAL RELEASE

      


      DESCRIPTION
OF LOCOMOTIVES AND REPORTING MARKS