DRAFT

LEASE AGREEMENT

This is a lease of real property (the "Lease") between the State of Ohio, Ohio Rail Development Commission, 50 West Broad Street, Suite 1510, Columbus, Ohio 43215 (hereinafter referred to as "ORDC"), and The Columbus & Ohio River Rail Company ("C&OR").

WHEREAS, pursuant to the provisions of Sections 4981.06(A) and 4981.08(A), the ORDC may lease rail property considered necessary by the ORDC for the operation of rail service; and

WHEREAS, Lessee applied to ORDC for a lease on the hereinafter described real property for the continuous operation of a rail freight business, which is described as follows:

DESCRIPTION
"Panhandle Mainline" shall mean the real estate comprised of the Weirton Secondary track located between Milepost 157.8 at Newark, Ohio, and Milepost 49.5 at the east side of Gould's Tunnel and the Columbus & Newark ("C&N") track between Milepost 191.0 at Columbus and Milepost 157.8 at Newark, consisting of a total of 141.50 route miles of railroad line. The Panhandle Mainline is shown in the attached track charts identified as Exhibit "A", which is attached hereto and incorporated as if fully rewritten herein.

"Panhandle Branchlines" shall mean any and all the side track real estate including the Cadiz Running Track situated between Milepost 0.0 at Cadiz Junction to Milepost 12.8 at the Georgetown Mine; the Hebron Industrial Track between Milepost 133.0 at Hebron and Milepost 138.5 at Heath, Ohio; and the Trinway Secondary Track situated between Milepost 0.3 at its connection to the Panhandle main line, and Milepost 1.43 at Trinway, Ohio, consisting of a total of 19.43 route miles of railroad line. The Panhandle Branchlines are shown in the attached track charts identified as Exhibit "B", which is attached hereto and incorporated as if fully rewritten herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, ORDC hereby leases, lets and demises to Lessee the Panhandle Mainline and Panhandle Branchlines, hereinafter referred to as the "Leased Premises", subject to all legal highways, easements, restrictions of record, existing leases and zoning ordinances, under the following terms and conditions:

1. TERM:
This lease shall be for a period of thirty (30) years, commencing --------2005, and expiring on --------------- 2025, unless otherwise terminated in accordance with the termination provisions herein.

2. RENEWAL OPTIONS:
If Lessee has complied with all the terms and conditions of this Lease, Lessee shall be entitled to one (1) successive renewal for a term of thirty (30) years upon the same terms and conditions set forth herein, except that the rent may be modified by the ORDC. Renewal may be exercised by Lessee mailing written notice to the ORDC at least sixty (60) days prior to the expiration of the original term.

3. CONSIDERATION:
Lessee shall pay as rent for the Leased Premises the sum of FOUR HUNDRED FORTY THOUSAND DOLLARS ($440,000.00) annually. Payment shall be made payable to Treasurer, State of Ohio, and delivered to the ORDC pursuant to the notice provisions of this Lease.

4. RIGHT OF FIRST REFUSAL TO PURCHASE LEASED PREMISES:

A. If, during the term of this Lease, ORDC receives and desires to accept or desires to make any bona fide offer (an "Offer") for the sale of the Leased Premises in whole or in part, ORDC shall notify Lessee in writing of each Offer. This notice (the "Notice of Offer") shall contain a copy of the Offer and all other terms and conditions applicable to the Offer. The whole or that part of the Leased Premises to which the Offer applies is referred to as the "Offer Leased Premises." Lessee shall have the right to purchase ("Right of First Refusal") the Offer Leased Premises at the purchase price set forth in the Offer. Lessee shall exercise its Right of First Refusal, if at all, by giving written notice of exercise to ORDC no later than the date five (5) days after Lessee’s receipt of the Notice of Offer.

B. If Lessee does not exercise the Right of First Refusal in regard to an Offer of which it has been given notice in accordance with Section A above, and if within ninety (90) days after the date of the Notice of Offer, the Offer Leased Premises are conveyed in accordance with the Offer, Lessee’s Right of First Refusal shall terminate with respect to the Offer Leased Premises, so sold and conveyed, PROVIDED THAT:

(i) the Right of First Refusal shall remain in effect with respect to the balance of the Leased Premises, if any, not conveyed pursuant to the Offer;

(ii) once an Offer of which ORDC has given Lessee notice is accepted by ORDC, ORDC shall not agree to a reduction of the purchase price, more favorable terms or any change in the nature or amount of the consideration to be given in exchange for the Offer Leased Premises without first given Lessee notice of the reduction, more favorable term or change, and upon receipt of that notice, Lessee shall again, in accordance with the provisions of Section A above, have the Right of First Refusal to purchase the Offer Leased Premises at the new price and new terms; and

(iii) if any Offer is not accepted by ORDC or if the Offer Leased Premises are not conveyed in accordance with the accepted Offer within sixty (60) days after the date Lessee received the Notice of Offer, then Lessee’s Right of First Refusal shall be applicable to the Offer Leased Premises and to any subsequent Offer received by ORDC with respect to the Leased Premises or any part thereof during the term of this Lease. Nothing contained in this Section concerning either the termination of Lessee’s Right of First Refusal or Lessee’s failure to exercise the same shall in any way affect any of Lessee’s other rights and privileges under this Lease. Upon request of ORDC, Lessee shall furnish to ORDC or the purchaser of the Offer Leased Premises an affidavit in recordable form stating the extent to which Lessee’s Right of First Refusal has terminated in accordance with this Section and setting forth such other matters as Lessee shall deem necessary or appropriate.

C. (i) At the closing of the purchase of the Offer Leased Premises pursuant to Lessee’s exercise of the Right of First Refusal, ORDC shall deliver its transferable and recordable quitclaim deed conveying to Lessee title to the Offer Leased Premises. Real estate taxes and assessments, the rentals under this Lease (to the extent applicable to the Offer Leased Premises), and all other income and expenses of the Offer Leased Premises shall be prorated as of the date of closing.

(ii) The closing for the payment of the purchase price and for delivery of ORDC’s deed shall be held at a place in Columbus, Ohio, and at a time mutually agreed to by the parties within sixty (60) days after the date that Lessee exercises its Right of First Refusal.

5. USE:
Throughout the term hereof, the Lessee shall have, and hereby assumes, full right and responsibility to provide common carrier rail service on the Rail Property, and to use and manage the Rail Property for all purposes consistent with the duties, rights, obligations and responsibilities of a rail carrier under the jurisdiction of the Surface Transportation Board, the Federal Railroad Administration, and other governing bodies or laws. Such rights shall include, but shall not be limited to, all rights of a rail carrier under the Revised Interstate Commerce Act, 49 United States Code (U.S.C). S10101, et seq. and the Interstate Commerce Commission Termination Act (Public Law 104-88,109 Stat. 803). ORDC shall not undertake, and, subject to the terms of this Agreement, hereby waives any right it otherwise may have, to conduct or hold itself out to conduct common carrier rail operations on the Rail Property, for the term of this Agreement. Subject to the provisions of this Agreement, ORDC shall provide C&OR with quiet enjoyment of the Rail Property throughout the term of this Agreement.

Lessee shall use and occupy the Leased Premises for the operation of a rail freight unless otherwise permitted by the advance written consent of ORDC. Lessee agrees not to permit the Leased Premises to be used for any purpose inconsistent with any local, state, or federal laws or regulations, and shall be liable for any and all damages consequent upon such violation and subsequent cancellation of this Lease under the default provision therein.

Lessee may construct and maintain any structures or other improvements Lessee considers appropriate to carry out the purpose set forth herein. Any structures or other improvements placed on the Leased Premises by Lessee during the term of this Lease shall be at Lessee’s expense.

Lessee shall cause the improvements to be completed free and clear of any liens, claims or mechanic’s liens against the Leased Premises or the improvements, and Lessee shall defend, indemnify and hold ORDC harmless from any such claims or mechanic’s liens and or any expenses incurred in connection therewith including but not limited to damages, interest, court costs and reasonable attorney fees.

Should a claim adverse to ORDC’s title be asserted and/or proved, no recourse shall be had against ORDC by Lessee. This Lease is made subject to all prior leases or grants on any portion of the Leased Premises, and to the renewal thereof.

ORDC also reserves the right to grant utility easements, licences, or leases in, on, under or across the Leased Premises. The right to grant said easements, licences, or leases shall include but not be limited to such conveyances as: 1) both overhead and underground utility, sewer, and water; 2) both overhead and underground pipes, cables, conveyors, or other conduits; 3) both overhead and underground fiber optics, telecommunication, other communication, or other cables; and 4) any other overhead or underground conveyances deemed appropriate by the ORDC.

In addition, ORDC reserves the right to grant rights to other parties for the recovery of minerals including but not limited to coal, gas, and oil under the Leased Premises. These rights include the right to use the Leased Premises for assemblage of property needed for the drilling of gas and oil wells.

ORDC also reserves the rights to use the Leased Premises for outdoor advertising, so long as the advertising does not impair the ability of the Lessee to conduct rail service.

ORDC shall solely have all rights to privileges and payments resulting from Lessors conveyances described above.

In the exercise of providing the overhead and underground conveyances described above, the ORDC shall ensure that said conveyances are installed and maintained in accordance with the appropriate standards established by the American Railway Engineering and Maintenance of Way ("AREMA"), or if such AREMA standards are not available, in accordance to the reasonable standards established by the Lessee.

The ORDC shall require that any additional bike path plans on the Leased Premises generally conform to reasonable safety standards for trails with rails as presented in the Federal Highway Administration commissioned study entitled Rails to Trails: Lessons Learned. Further, the ORDC will require that trail planners reach an agreement with the C&OR concerning how the trail will be built and operated, and how the C&OR will be indemnified from liability.

6 NON-EXCLUSIVE OPERATIONS:
A) This Agreement does not convey to C&OR exclusive rights to use the Rail Property. ORDC, in its sole discretion, may grant access to another rail carrier(s) on all, or any portion of, the Rail Property as provided in this Article 4 and as stated below.

1) ORDC may grant access to another rail carrier if C&OR has petitioned the Surface Transportation Board (STB) for authority to abandon or discontinue operations over all, or any portion of the Rail Property, or has ceased to provide common carrier rail service over all, or a portion of the Rail Property for a period of six (6) consecutive months, other than pursuant to a lawful embargo; or because of lack of demand for service; or

2) ORDC may grant another rail carrier access to use any portion of the Rail Property, if such other carrier:

(i) agrees in writing to indemnify C&OR and hold it harmless against any and all liability arising in any way whatsoever from the other carrier(s) use of the Rail Property, except that of normal track wear and tear which shall be addressed in part (iv) below;

(ii) is an existing rail carrier or, if newly created, can demonstrate its financial and operational capabilities to competently operate a railroad (which determination will be solely within the discretion of ORDC);

(iii) agrees that at all times, the operations of the other rail carrier(s) shall be conducted in a manner which does not unduly interfere with the C&OR's operations and shall be in compliance with all dispatching orders, operating rules, directives and schedules of the C∨

(iv) agrees to pay a users fee or trackage rights charge to the C&OR of not less than thirty point four nine cents ($0.3049) per car mile for movement of any locomotive or car, loaded or empty, subject to annual escalation from July 1, 2002, based upon the Rail Cost Adjustment Factor, Unadjusted, published by the Association of American Railroads for the normal wear and tear on Rail Property track and other purposes.

B) In the event another rail carrier(s) agrees to meet and comply with sections (A)(2), (i),( ii), (iii), and (iv) above, the C&OR will make reasonable good faith efforts to accommodate the other carrier(s) operational requests.

C) Any other provision of this Article notwithstanding, the use of or operations over the Rail Property by any carrier other than C&OR shall be subject to such prior approval of the STB or other governmental bodies with jurisdiction over the premises as may be required under otherwise applicable law.

D) Any other provision of this Article notwithstanding, ORDC shall in no event grant any rail carrier other than C&OR the right to use or operate over the Rail Property during the term of

this Agreement for the purpose of (1) providing transportation service of any kind to an Existing Rail User: or (2) transporting traffic that is the subject of a valid contract between the C&OR and a shipper. For purpose of this Agreement, "Existing Rail User" is defined as any shipper presently located along the Rail Property that shipped or received a rail car or cars via the C&OR over the Rail Property at any time during the three years prior to the execution of this Agreement.

E) Nothing in this Article shall be construed as permitting ORDC to grant any carrier the right to operate over any line of railroad other than the Rail Property, except as stipulated herein in Article 5, "ORDC Rights on Contiguous Lines/Right of First Refusal."

F) The procedure by which ORDC will determine whether to grant operating rights or trackage rights to a rail carrier other than the C&OR pursuant to this Article shall be as follows:

1) Upon receipt of a written request for operating or trackage rights, ORDC will provide a copy of the request to the C&OR.

2) Within forty-five (45) days after receipt of the request, the C&OR shall (i) provide ORDC and the requesting railroad with a written explanation of the terms and conditions that will apply to the requesting railroad’s operations over the Rail Property, consistent with this Article; and (ii) at the C&OR’s option, provide ORDC with a confidential proposal of terms, including, where appropriate, rates or division of rates under which the C&OR would agree to provide the service proposed to be provided by the requesting railroad.

3) If the requesting railroad objects to terms or conditions provided by the C&OR under Paragraph 2(i), above, it shall so inform ORDC and promptly thereafter ORDC shall confer with the C&OR with respect to the establishment of revised terms and conditions. If the C&OR and ORDC have not agreed upon such revised terms or conditions within thirty (30) days after the requesting railroad’s notice hereunder, then subject to Paragraph 5, below, ORDC may determine the revised terms and conditions that will apply.

4) In making its determination whether to grant trackage or operating rights to a requesting railroad under this Article, ORDC shall at a minimum consider the following:

(i) The impact that granting the trackage or operating rights would have on the C&OR’s ability to continue to operate profitably.

(ii) The comparative efficiency and value to the shipping public of any proposal submitted by the C&OR under Paragraph 2(ii), above.

(iii) Whether the fee to be paid to the C&OR under Part A(2)(iv) of this Article is adequate to cover any increase in the cost of maintaining the Rail Property resulting from a granting of trackage or operating rights.

(iv) Any increase in operating costs that would be incurred by the C&OR as a result of accommodating the requesting railroad’s operations.

(v) Whether and on what terms the requesting railroad will agree to grant the C&OR or its affiliates rights to operate over the requesting railroad’s lines.

(vi) The impact that the requesting railroad’s operations over the Rail Property would have on the quality of transportation service available to the public, including shippers that would continue to be served by the C&OR.

5) Any other provision of this Agreement notwithstanding, and subject to any necessary regulatory approval, in the event that ORDC grants trackage or operating rights to another rail carrier under this Article 4 over the C&OR’s objection, the C&OR shall have the right to terminate this Agreement without further obligation to ORDC, except for the duty to facilitate the orderly change in service from the C&OR to another carrier, and cease to operate over the Panhandle, upon one hundred eighty (180) days prior written notice to ORDC.

6) Any grant of trackage or operating rights to another rail carrier under this Article shall be a matter of agreement exclusively between ORDC and such other rail carrier, which shall be solely responsible for procuring any regulatory approvals necessary for the exercise of such trackage or operating rights. No privity of contract shall be deemed to exist between the C&OR and a rail carrier granted trackage or operating rights by ORDC under this Article with respect to such rights, or any claims or liability that may arise thereunder or in connection therewith. C&OR agrees, however, that C&OR shall fully cooperate as needed with ORDC before the Surface Transportation Board, and/or any other federal or state entity with jurisdiction over the granting of trackage or operating rights, to provide any C&OR filings or documentation which is required for ORDC to provide trackage or operating rights as described in this Article.

G) ORDC shall retain the absolute right to grant trackage or operating rights to railroads other than the C&OR under the terms and conditions of this Article.

ORDC RIGHTS ON CONTIGUOUS LINES/RIGHT OF FIRST REFUSAL:

A) The C&OR currently owns and operates a rail line which connects to the western most end of the Rail Property at approximately Mile Post 191 in Columbus, and which connects to CSX Transportation and Norfolk Southern at CP 138 in Columbus (hereinafter known as the Neilston Connector); and may in the future own, lease, or otherwise control and operate a rail line from MP P-49.5 at Gould Tunnel east to a connection with Norfolk Southern in Mingo Junction (hereinafter the Mingo Connector).

B) The C&OR acknowledges that it may be necessary for trains to move over the Neilston Connector or the Mingo Connector to connect the Rail Property with CSX Transportation and Norfolk Southern or successor railroads at Columbus or at Mingo Junction. The C&OR therefore agrees that in the event the ORDC grants trackage or operating rights over the Rail Property to another rail carrier in accordance with Article 4 hereof, and this Agreement remains in effect, the C&OR will enter into an appropriate interchange access agreement with such other carrier allowing the carrier direct access to interchange of traffic with CSX Transportation and Norfolk Southern or their successors at Columbus or Mingo Junction. The terms of such agreement shall be negotiated by the C&OR with the tenant rail carrier; provided, however, that the C&OR shall not require compensation or terms for use of the Connection Tracks that exceed the level of compensation or terms determined in accordance with Article 4, "Non Exclusive Operations" of this Agreement.

C) In the event the C&OR, or a related entity, decides to sell or abandon either the Neilston Connector or the Mingo Connector (in the event that C&OR, or a related entity, has acquired the latter), the C&OR, or a related entity, shall first offer the ORDC the opportunity to purchase the Neilston Connector and/or the Mingo Connector for Fair Market Value. In the event this Agreement expires or is terminated and the C&OR, or a related entity, no longer conducts rail freight operations over the Rail Property, the C&OR, or a related entity, shall agree to sell to ORDC and ORDC reserves the right to purchase from the C&OR, or a related entity, the Neilston Connector and/or the Mingo Connector for Fair Market Value.

8. MAINTENANCE/REPAIRS:
Lessee shall maintain the Leased Premises in good order and safe condition, and not commit or suffer waste on the Leased Premises. The C&OR shall clear the Leased Premises of vegetation and obstructions to comply with federal and state requirements for train clearances. Lessee shall not deposit any debris on the adjacent real estate nor do anything that would interfere with the maintenance of any part of the adjacent real estate.

The Lessee has inspected and accepts the Leased Premises in their present condition and agrees that no representations or warranties with regard to condition and fitness for use of the premises have been made that are not specifically expressed herein.

Included in the Lessee’s responsibility for the maintenance of the Leased Premises is the control of vegetation and noxious weeds along portions of the line where there is active rail service, which for the purposes of this Lease shall mean revenue rail cars being handled by the Lessee or its agents and assigns at least once a month. In addition, the Lessee shall be responsible for the maintenance of all drainage ditches, culverts, and related issues along portions of the Leased Premises where there is active rail service. Further, the Lessee shall be responsible for maintenance of any and all overhead highway bridges on the Leased Premises where there is active rail service.

9. ACCESS:
ORDC may have access to the Leased Premises at all reasonable times and in a manner which does not unduly interfere with Lessee’s use of the Leased Premises, to make such changes and improvements as ORDC may deem necessary, and to determine whether Lessee is complying with the terms of this Lease.

10. ASSIGNMENT/SUBLETTING:
Lessee shall not assign this Lease or sublet the Leased Premises or any part thereof without the prior written consent of the ORDC. Any assignment or transfer or merger, consolidation, operation of law or proceeding in equity, bankruptcy, insolvency or reorganization, or any transfer of any controlling interest of the Lessee’s stock to persons not now in control, shall be deemed to be an assignment within the meaning of this provision and shall be sufficient cause for immediate termination of this Lease.

11. TERMINATION:
ORDC and Lessee agree that this Lease shall terminate at the conclusion of the term (Article 1), provided Lessee does not renew the Lease in accordance with Article 2 of this Lease. The parties further agree that ORDC may terminate this Lease upon Lessee’s failure to comply with any material, term, condition or covenant of this Lease in accordance with Article 10 of this Agreement. Further, ORDC may terminate the Lease in the event that Lessee does not timely exercise its option of purchase when called upon to do so by ORDC.

The Lessee shall remove any buildings, structures or improvements constructed by the Lessee on the Leased Premises on or before the expiration or termination of this Lease, or that title to same will be transferred to the ORDC if the ORDC so requests.

The Lessee further agrees upon the expiration or other termination of this Lease to peaceably quit and deliver possession of the premises to ORDC in as good order and condition as the premises now are, or may be put by the ORDC, reasonable use and natural wear and tear expected.

12. DEFAULT:
If Lessee breaches or defaults on any of the terms or condition of this Lease, and if that breach or default is not remedied within thirty (30) days after written notification by ORDC of that Breach or default, ORDC may terminate this Lease. Lessee shall have thirty (30) days from the date on the written notice of termination, to remove all personal property and movable fixtures placed on the Leased Premises by Lessee, and to restore the Leased Premises to a condition satisfactory to the ORDC. Lessee shall then surrender possession to ORDC. If such removals and restoration are not effected within the specified time, ORDC may elect to restore the Leased Premises at Lessee’s expense.

13. LIABILITY:
Lessee shall indemnify and hold harmless ORDC from and against any and all claims, demands, damages, actions, or causes of action, together with any and all losses, costs, or related expenses asserted by any person or persons for bodily injury, death, or property damage ensuing from Lessee’s occupation or use of any portion of the Leased Premises.

During the term of this Lease (including successive terms per Section 2), Lessee shall at its sole cost and expense carry and maintain a broad form policy of property insurance including fire, extended coverage, vandalism and malicious mischief insuring all additions, alterations and improvements for replacement cost and insuring all personal and real property subject to this Lease in the amount of 100% of the insurable value.

Such policy of insurance shall designate as an additional named insured the "ORDC, as its interest may appear" and shall bear an endorsement to the effect that the insurer agrees to notify the ORDC in writing not less than thirty (30) days in advance of cancellation, nonrenewal, or decrease in coverage. Such policy of insurance shall be issued by an insurance company licensed by the State of Ohio and shall be in a form acceptable to the ORDC. Upon the execution of this Lease, Lessee shall deposit with the ORDC a certificate of evidence of such policy of insurance.

The following special clause shall be made a part of such policy of insurance:

"As it applies to the interest of the ORDC, this insurance shall not be affected by any of the following:

(a) any act or neglect of Lessee;

(b) use of the Leased Premises for purposes more hazardous than are permitted by this policy;

(c) failure of Lessee to comply with any warranty or condition contained in any endorsement attached to this policy.

In the event payment is made to the ORDC and such payment is necessitated by this clause but would not otherwise be payable, the Company may subrogate against Lessee."

During the term of this Lease, Lessee at its sole cost and expense shall carry and maintain a policy of Comprehensive General Liability with the broad form endorsement against claims for bodily injury, personal injury, wrongful death and property damage coverage together with all costs of defense.

Said policy shall designate as an additional named insured the State of Ohio as its interest may appear. The policy limits shall be no less than the following:

Bodily Injury $1,000,000 per person $5,000,000 per occurrence

Property Damage $1,000,000 per occurrence $5,000,000 aggregate

The Lessee acknowledges that the prudent level of insurance required for rail operations over leased property will change, most likely becoming higher, throughout the term of this Lease. ORDC reserves the right to require that the Lessee raise its level of insurance as outlined above to a "level which conforms to the level of insurance commonly provided to short line and regional railroads with operations similar to that of the Lessee on the Leased Premises, or the "Comparable Insurance Level".

Upon the execution of this Lease, a copy of the insurance policy shall be deposited with and is subject to the approval of the ORDC. Said policy shall contain a clause providing that thirty (30) days advance written notice of cancellation, nonrenewal, or decrease in coverage shall be provided to the ORDC.

14. TAXES:
Lessee shall be responsible for any federal, state and/or local taxes and assessments levied against ORDC resulting from this Lease of the Leased Premises. Lessee shall pay the same directly to the taxing or assessing authority before becoming delinquent and notify the ORDC in writing that the obligations have been met. It is expressly agreed that Lessee is not responsible to pay prior financial obligations incurred by any previous use or operation of the Leased Premises by a party other than the Lessee.

Lessee further agrees to purchase a guaranty or surety bond in the amount of Twenty-five Thousand Dollars ($25,000) payable to the ORDC in the event that Lessee fails to make payment of all real estate taxes and other taxes and assessments, including without limitation liens of any type, within ninety (90) days from the date the obligation became due. Further, the guaranty or surety bond shall become payable to ORDC in the event Lessee destroys or causes to be removed from the premises any permanent fixtures. Lessee shall furnish a copy of the guaranty or surety bond to the ORDC upon the execution date of this Lease.

15. QUIET ENJOYMENT:
ORDC covenants that if, and so long as, Lessee pays the rent when due and performs the covenants hereof, Lessee may quietly occupy the premises, during the term, without any hindrance by the ORDC or any person or persons lawfully claiming under the ORDC. The ORDC will not warrant and defend against any claim asserted by any other person or entity.

16. REPRESENTATIVES/AGENTS:
Where this Lease refers to either the ORDC or Lessee, those terms shall include the agents, employees, or other authorized representatives of each party.

17. NOTICES:
All notices, demands, requests, consents, approvals and other instruments required or permitted to be given pursuant to the terms of this Lease shall be in writing and shall be deemed to have been properly given when hand-delivered or sent by U.S. registered or certified mail, postage paid, to the addresses set forth hereunder or to such other address as the other party hereto may designate in written notice transmitted in accordance with this provision:

(a) with respect to ORDC, addressed to:

Mr. James E. Seney
Executive Director
Ohio Rail Development Commission
50 West Broad Street, Suite 1510
Columbus, Ohio 43215

(b) with respect to Lessee, addressed to:

C&OR
47849 Papermill Road
Coshoton, Ohio 43812

ATTN: William A. Strawn, II

18. LEGAL COMPLIANCE:
Lessee shall comply with any applicable statutes, ordinance, orders, rules or regulations issued by federal, state or local authorities relating to the Lessee’s use and occupancy of the Leased Premises.

19. EEO REQUIREMENTS:
In the hiring of employees for the performance of work on the Leased Premises under any contract or any subcontract, Lessee, contractor or subcontractor shall not, by reason of race, color, religion, sex, age, handicap, national origin, or ancestry, discriminate against any citizen of this State in the employment of a person qualified and available to perform the work to which the contract relates. Lessee, contractor, subcontractor, or any person acting on behalf of Lessee or any contractor or subcontractor shall not, in any manner, discriminate against, intimidate, or retaliate against any employee hired for the performance of work on the Leased Premises on account of race, color, religion, sex, age, handicap, national origin, or ancestry.

20. UTILITIES:
Lessee, at its sole cost and expense, shall arrange for, obtain, and be responsible for the payment of any necessary water, electricity and other utility services required for its use. ORDC shall not be liable for any temporary suspension of any such services.

21. CERTIFICATE OF LESSEE:
Lessee agrees to obtain all necessary Federal Certificates of Service or Operation prior to the execution of this Lease. Said certificates shall be retained in good standing throughout this term or renewal of this Lease. No less than sixty (60) days prior to the termination of this Lease, Lessee shall give notice to all appropriate federal, state, and local governmental agencies and timely relinquish all documents including its Certificate of Service or Operation.

22. LESSEE’S OFFICERS:
Lessee shall file a certified list of Lessee’s Officers with the ORDC upon the execution of this Lease.

23. LAW, FORUM AND VENUE:
This Lease shall be construed under and in accordance with the laws of the State of Ohio. Any action or proceeding against any of the parties hereto relating in any way to this Lease or the subject matter hereof shall be brought and enforced exclusively in a competent court of Franklin County, Ohio, and the parties hereto consent to the exclusive jurisdiction of such court in respect of any such action or proceeding.

24. SEPARABILITY OF PROVISIONS:
In case any one or more of the provisions contained in this Lease shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision thereof and this Lease shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.

25. ENTIRE AGREEMENT:
This Lease constitutes the sole and only agreement of the parties hereto and supersedes any prior understandings or written or oral agreements between the parties respecting the within subject matter.

26 PASSENGER SERVICE:
A) In recognition of the potential for rail passenger service on the Rail Property, ORDC encourages the C&OR to promote, develop and support safe and efficient rail passenger service.

B) The C&OR shall exercise the right to provide passenger service on the Rail Property by providing ORDC's Director a written notice Thirty (30) days in advance of any proposed rail passenger service. Such notice shall include, but not be limited to, evidence that C&OR has obtained all necessary Federal or other approvals to operate such service, and the location, times, schedules and dates of any and all passenger trains the C&OR proposes to operate. The C&OR may request blanket approvals from ORDC of certain types or classes of rail service over a specified time period.

C) Upon receiving the request from C&OR to operate passenger service on the Rail Property, ORDC's Director shall respond to the C&OR's request no later than thirty (30) days from ORDC's receipt of such notice. Further, ORDC reserves the right to request that the C&OR change, alter or amend such request so as to protect the public from damage and injury. ORDC reserves the right to reject C&OR requests under this Article; however, such requests shall not be unreasonably denied. ORDC may deny requests for passenger service on grounds that the C&OR is not in compliance with otherwise applicable safety regulations, or has failed to procure the insurance required in Paragraph "D" hereof.

D) Before approving any C&OR request to operate passenger service, ORDC will require that the C&OR demonstrate to the satisfaction of ORDC that the C&OR has the necessary liability coverage to operate passenger service on the Rail Property. ORDC shall be the Final Arbitor of the amount of insurance C&OR must obtain to operate passenger trains. In addition, the C&OR agrees to indemnify and hold ORDC and Caprail I, Inc. harmless from and against any loss, claim, damage, cause of action, destruction, liability, (including, without limitation, counsel fees) caused by the C&OR's negligent, intentional, willful or wanton actions or inactions, including such actions or the failures to act of any contractors, subcontractors or employees hired by the C&OR including independent contractors.

E)

1) ORDC reserves the right to allow qualified rail passenger and excursion operators other than the C&OR to operate on the Rail Property. ORDC and the C&OR agree that provisions for initiating such passenger and excursion service shall be conducted under the same process and terms as established for other freight carriers using the Rail Property in Article 4, "Non-Exclusive Operations", of this Agreement.

2) ORDC agrees that ORDC, not the C&OR, shall be the party which contracts with said qualified passenger or excursion operator to operate on the Rail Property. ORDC agrees that said operating contract will, as a minimum, provide that:

i) Said qualified operator shall agree to indemnify the C&OR and hold it harmless from and against any loss, claim, damage, cause of action, destruction, or liability (including, without limitation, attorneys’ fees) which arises in any way from, during or in connection with said operator’s presence on, use of or operation over the Rail Property. ORDC further shall require said operator to provide and maintain insurance against the liability herein described, naming the C&OR as an additional insured, in the amount of at least Ten Million Dollars ($10,000,000). If at any time for any reason said insurance shall lapse, be canceled, or otherwise cease to be in effect, ORDC shall require the qualified operator to immediately vacate the Rail Property and refrain from any use thereof or operation thereover until said insurance is again full effective.

ii) Said qualified operator will abide by special operating terms and conditions concerning radios, telemetry, flagging, and other matters which the C&OR may from time-to-time bring to the ORDC’s attention.

3) ORDC agrees that the C&OR will not be compelled to operate or accept for operation passenger equipment which does not meet passenger car standards as determined by a qualified independent passenger car inspector who shall be selected by the ORDC and the C&OR. Charges of the inspector will be paid by the party offering the passenger equipment for operation. In no event shall passenger equipment which does not meet FRA standards be accepted for excursion operation nor shall equipment which does not meet Amtrak standards be accepted for regular scheduled intercity, commuter, or suburban service.

4) ORDC agrees that the C&OR will not be compelled to provide personnel, equipment, or services for the operation of passenger or excursion service by a third party.

5) ORDC agrees that in its considerations as to whether to allow another operator to conduct passenger or excursion services on the Rail Property, ORDC shall take into account whether that other operator and/or another railroad already sponsoring passenger excursion service on their lines, is willing to allow the C&OR, or its affiliated railroads and companies, to utilize their lines for excursion or passenger services under similar terms and conditions.

6) ORDC will make its good faith efforts to encourage Ohio railroads to allow C&OR to operate excursion or passenger services over their lines as a quid pro quo for other operator(s) seeking to use the Rail Property for passenger or excursion service.

7) Subject to section E (1) of this Article 26, the C&OR and the operator seeking to use the Rail Property will negotiate the compensation to be paid for allowing passenger service but such compensation shall be approximately equal to the actual costs to the C&OR caused by the passenger service on the Rail Property, including a management fee and other C&OR personnel costs. In no event will the C&OR be compelled to subsidize or otherwise underwrite expenses of the passenger or excursion service operator on the Rail Property. ORDC shall be the final arbiter in determining compensation to be paid to the C&OR in accordance with the terms and conditions of this Article 26.

8) In any grant of passenger or excursion service rights to an operator the ORDC will not require the C&OR to pay for or maintain the track at its expense to a higher standard than is noted in Article 10, "Maintenance and Repairs" of this Agreement.

 

27. AMENDMENT:
No amendment, modification, or alteration of the terms hereof shall be binding unless the same be in writing, dated subsequent to the date hereof, and duly executed by the parties hereto.

28. WAIVER:
No waiver by the parties hereto of any default or breach of any term, condition, or covenant of this Lease shall be deemed to be a waiver of any other breach of the same or any other term, condition, or covenant contained herein.

29. SURVIVAL:
The representations, warranties, covenants, indemnities and agreements of the parties contained in this Lease shall survive the expiration or termination of the term of this Lease and shall be and continue in effect notwithstanding the fact that Lessee may waive compliance with any of the other provisions of this Lease.

30. HEADINGS:
The headings to the various provisions to this Lease have been inserted for reference only and shall not to any extent have the effect of modifying, amending or changing the express terms, provisions and conditions of this Lease.

31. MULTIPLE COUNTERPARTS:
This Lease may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed by their duly authorized representatives as of the date written below.

OHIO RAIL DEVELOPMENT COMMISSION

By: _________________________________

James E. Seney, Executive Director

______________________________________
Date

Columbus and Ohio River Rail Road

By: _________________________________
Authorized Signature

_______________________________________
(Print Name)

____________________________________
(Title)

_______________________________________
(Date)