EXHIBIT 2.6
10-13-2004
LEASE AND PURCHASE OF RAIL IMPROVEMENTS AGREEMENT
BETWEEN
CSX TRANSPORTATION, INC. AND
INDIANA & OHIO CENTRAL RAILROAD, INC.
COVERING
LAND FROM APPROXIMATELY MILEPOST BB 7.5 TO BR 114.55
(A/K/A THE MIDLAND SUBDIVISION)
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LEASE AND PURCHASE OF RAIL IMPROVEMENTS AGREEMENT
THIS LEASE AND PURCHASE OF RAIL IMPROVEMENTS AGREEMENT
("Lease") is made this 13th day of October, 2004, by and between CSX
TRANSPORTATION, INC., a Virginia corporation, along with its subsidiaries and
affiliates having an interest in the subject of this Lease(collectively,
"Lessor") and INDIANA & OHIO CENTRAL RAILROAD, INC., a Delaware corporation,
("Lessee").
WITNESSETH:
WHEREAS, Lessor is the owner of, or has an interest in, the
railroad right-of-way corridor and adjacent lands upon which railroad operations
are conducted, extending from Milepost BB 7.5 at or near CINCINNATI, OHIO, to
milepost BR 114.55 at or near COLUMBUS, OHIO, all as more particularly described
in Exhibit A, and in the Buildings as described below (collectively the "Land");
and
WHEREAS, Lessee desires to lease the Land from Lessor, in
accordance with the terms and conditions stated in this Lease, in order to
provide rail service to current and future customers located on or adjacent to
the Land and to provide common carrier rail services; and
WHEREAS, Lessor is also the owner of the tracks, rails, ties,
ballast, other track materials, switches, crossings, bridges, trestles,
culverts, crossing warning devices, signals and certain other improvements or
fixtures, affixed to the Land (collectively, the "Track"); and
WHEREAS, it is Lessor's desire to sell and Lessee's desire to
acquire the Track on the terms more fully described in Exhibit B "▇▇▇▇ of Sale";
WHEREAS, Lessor desires to retain certain trackage rights over
the Track, which will be used only to interchange unit grain trains between
Lessor and Lessee; and
WHEREAS, it is Lessor's goal in entering into this Lease and
selling the Track to reduce its capital needs, to rationalize its rail system,
and to restructure its business.
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NOW, THEREFORE, in consideration of the premises, the mutual
covenants, and the other good and valuable consideration set forth herein,
Lessor and Lessee agree as follows:
1. PROPERTY COVERED.
(a) Lessor hereby leases to Lessee, effective on the
Commencement Date as defined in Section 7 hereto, on an exclusive basis, subject
to the rights retained by Lessor herein, the Land in (except to the extent
provided otherwise in this Lease) "AS IS, WHERE IS" CONDITION AND WITHOUT ANY
EXPRESS OR IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF
TITLE, MERCHANTABILITY, HABITABILITY, OR FITNESS FOR A PARTICULAR PURPOSE,
except Lessor represents and warrants Lessor's legal right and authority to
lease a continuous and contiguous right of way corridor to Lessee suitable for
conducting railroad operations, and Lessor will protect and defend the
continuity and contiguity of that right of way except to the extent the same may
be affected by the acts or omissions of Lessee, its agents or invitees.
Lessee acknowledges that it has inspected the Land and accepts
it in its current condition as appropriate for all purposes, including Lessee's
intended use. Lessee leases the Land subject to all existing easements and other
impediments to the title of Lessor, whether or not this Lease provides actual
notice thereof.
2. RIGHT TO POSSESSION AND USE.
(a) On the Commencement Date, Lessor will deliver to Lessee
possession of the Land for the conduct by Lessee of rail operations and for no
other purpose except to the extent otherwise expressly provided in this Lease;
provided, however, that Lessor will have three (3) months after said
Commencement Date in which to remove, at its sole expense and without
interference with Lessee's operations, equipment, locomotives, other rolling
stock and inventories of Lessor located on, but not affixed to, the Land as of
the Commencement Date, which equipment, locomotives and other rolling stock are
more particularly described on Exhibit C.
(b) Subject to the provisions in Section 26, Lessee may not
grant trackage rights, haulage rights or any other rail operational rights over
the Land and Track to any other carrier or third party without the prior written
consent of Lessor, which consent shall not be unreasonably withheld, conditioned
or delayed.
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(c) Except as otherwise provided herein, and subject to the
limitations, terms, and conditions set forth in this Lease, during the term of
this Lease, Lessee shall have the exclusive right to conduct rail freight
operations on the Land and Lessor shall not grant to any third party any rights
whatsoever to conduct rail freight operations on the Land.
3. TERM.
(a) Unless otherwise terminated pursuant to Section 32, this
Lease shall be for a term of TWENTY-FIVE (25) YEARS from the Commencement Date
("Term".) Lessor shall, at the request of Lessee made no more than six (6)
months prior to expiration of the Term, meet with Lessee to discuss the
possibility and terms of an extension or renewal of this Lease; provided
however, that either may terminate the discussions at any time it chooses to do
so and neither party hereto shall, as a result thereof or otherwise, be
obligated to extend or renew this Lease unless and until the parties have agreed
to and executed final documents to that effect.
4. LEASE PAYMENTS.
(a) ANNUAL RENT. The annual rent shall consist of:
(i) TWO HUNDRED AND FIFTY THOUSAND and 00/100
($250,000.00) cash, payable, in advance, in annual
installments to be received by Lessor on or before
the Commencement Date of this Lease and each
anniversary date (the "Annual Rent"). If any
amount due pursuant to the terms of this Lease is
not paid by the due date, it will be subject to
Lessor's standard late charge and will also accrue
interest at nine percent (9%) per annum, unless
limited by local law, and then at the highest rate
so permitted.
(ii) The annual rent due shall be reduced by $45,000 as
long as the retained trackage rights reserved in
Section 25(a)(vii) are used to interchange unit
grain trains at ▇▇▇▇▇▇ siding (the "Annual Rent
Adjustment").
(iii) The net rental amount (Annual Rent less the Annual
Rent Adjustment) shall be adjusted on an annual
basis, by the same percentage of increase
reflected in the "Rail Cost Adjustment Factor -
Unadjusted for Productivity" compiled by the
Surface Transportation Board ("RCAF-U"). In no
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event, however, shall the adjusted rental be less
than the previous year's rental.
The rental shall be increased in accordance
with the following:
Current Price Index*
-------------------- X Rental = Adjusted Base
Base Price Index** Rental
* Effective RCAF-U in the fourth month prior to the
anniversary date of the Lease
** Effective RCAF-U at the time of the effective date of the
Lease
Should the RCAF-U index be re-based, the re-based
series will be used to calculate the annual
adjustments. If the RCAF-U is discontinued, the
parties will negotiate in good faith to agree upon
a substitute provision. If no agreement is reached
within thirty (30) days after negotiations start,
Lessor or the Lessee may elect either (1) to seek
arbitration of a substitute index that most
closely reflects the factors considered by RCAF-U
or (2) to substitute for the RCAF-U the Producer
Price Index (Finished Goods) published by the U.S.
Department of Labor.
(b) Failure of Lessee to receive any ▇▇▇▇ for periodic rent,
or receipt of a ▇▇▇▇ showing an incorrect rent, shall neither override the Lease
terms nor excuse or release Lessee from liability or responsibility for the
correct rent. Limitation on collection for any erroneous ▇▇▇▇▇▇▇▇ or payments
shall be three (3) years from the issuance of the erroneous ▇▇▇▇ or payment of
the Lease. In the event that the Lessor is required to employ an attorney to
collect the rent, Lessee agrees to reimburse the cost of the attorney employed
to collect the rent upon receipt of a statement from Lessor. If any amount due
to Lessor pursuant to the terms of this Lease is not paid by the due date, it
will be subject to Lessor's standard late charge and will also accrue interest
at nine percent (9%) per annum, unless limited by local law, and then at the
highest rate so permitted.
(c) The rent stated in this Section shall be due irrespective
of the Lessee's abandonment or cessation of use of any portion of the Land,
unless the Lease is terminated hereunder subject to, provisions of Section
28(c).
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5. BUILDING MAINTENANCE.
(a) Lessee shall be solely responsible for and shall bear all
the risk, cost and expense of use and maintenance of the yard office building in
Washington Court House, Ohio, and the maintenance-of-way buildings in
Blanchester, East ▇▇▇▇▇▇▇ and Mt. Sterling, Ohio, all of which are considered to
be part of the Land (the "Buildings") using Lessee's own labor and/or
contractor(s).
(b) During the Term of this Lease, Lessee shall maintain, keep
and repair the Buildings in substantially the same condition as the same existed
on the Commencement Date, and as may be required under any applicable federal,
state or local law(s), ordinance(s) and regulation(s).
(c) Lessee shall not be responsible for and shall bear no cost
and expense of the maintenance of any portion of the Buildings or for any
fixtures, structures or appurtenances placed thereon by Lessor or any third
parties pursuant to any exceptions, reservations, rights and/or privileges under
this Lease. Should Lessee fail to maintain the Buildings in accordance with the
standards of this Section, Lessor shall have the right, but not the obligation,
and only after thirty (30) days' written notice and failure by Lessee to
initiate repairs, to make the repairs necessary to bring the Buildings into
conformance with the requirements of this Section, and Lessee shall reimburse
Lessor for the reasonable cost of making such repairs.
(d) Lessee acknowledges receipt of asbestos and/or lead-based
paint surveys or similar environmental documentation ("Surveys") for the
Buildings
6. INSPECTION OF LAND.
Lessor (or its agent) shall have the right to inspect the Land
including Buildings annually and at such other times as it reasonably deems
necessary to monitor compliance with this Lease. Lessor shall have the right to
enter the Land to conduct such inspections; however, Lessor will comply with any
instructions of Lessee reasonably designed to insure the safety of the personnel
and property of Lessee and Lessor. At Lessee's option, a Lessee representative
shall accompany Lessor (or its agent) during the inspection, PROVIDED HOWEVER,
that the Lessee representative does so at his or her own risk. Lessor will
provide Lessee five (5) days advance notice before entering the Land to conduct
an inspection.
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7. COMMENCEMENT DATE AND STB REVIEW.
(a) Lessee shall file with the Surface Transportation Board
("STB") and any other governmental authority with jurisdiction over the railroad
operations conducted upon the Land, any and all applications, petitions,
notices, and/or secure any and all approvals or exemptions from the STB and
other such governmental authorities, that may be required for the lease of the
Land and Lessee's rail operations on the Land. Lessee shall be responsible for
any and all filing fees and other costs and expenses with respect to the
aforesaid filings and approvals.
(b) Lessee's lease of the Land shall commence on the later of
October 16, 2004, or the effective date of any decision or notice of exemption
or approval published by the STB authorizing the consummation hereof (the
"Commencement Date"). Such exemption shall be obtained by Lessee from the STB
from the requirements of 49 U.S.C. ss. 10902. Lessee agrees to comply with the
requirements of 49 C.F.R. ss. 1150.41 to 1150.44 in obtaining this exemption. As
of the Commencement Date, Lessee and Lessor shall have jointly determined that
they have complied with all the conditions precedent set forth in the
Transaction Agreement, incorporated by reference and all STB conditions imposed
on this transaction, if any, so as to be authorized by law to commence the
Lease. Lessor shall have also delivered the ▇▇▇▇ of Sale and possession and use
of the Track described therein.
8. LABOR.
(a) In the event the STB approves or exempts the lease of, and
rail operations on, the Land under 49 U.S.C. ss. 10902, Lessee is responsible
for compliance with the employee protective conditions imposed or required by
the STB pursuant to that Section. Lessee is also responsible for compliance with
the requirements in 49 C.F.R. ss. 1150.42(E).
(b) Lessee and Lessor are responsible for their own employee
protection costs. Lessee shall be solely responsible for any protective
conditions or benefits imposed by any judicial, regulatory or governmental body,
for the benefit of Lessee's employees or the employees of any subsidiary or
affiliate of Lessee, or are otherwise required to be paid to such employees
under Lessee's collective bargaining or other agreements, howsoever arising,
including as a consequence of the approval of this Lease, the exercise or
performance by Lessor or Lessee of any rights or obligations hereunder, the
termination of this Lease, or Lessee's abandonment or discontinuance of
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operations conducted upon the Land. Lessee hereby agrees to indemnify and hold
Lessor harmless from and against any and all liability, claims, costs (including
attorneys' fees), damages and expenses arising in any manner out of its failure
to comply with such protective conditions, benefits or agreements.
9. RESERVED
10. COMPLIANCE WITH LAWS.
Lessee shall comply with all applicable Federal, State and
local laws, ordinances and regulations in its use of and operations conducted
upon the Land, Lessee hereby agrees to indemnify and hold Lessor harmless from
and against any and all liability, claims, costs (including attorney's fees),
damages and expenses arising in any manner out of its failure to comply with
such laws, ordinances, or regulations.
11. PUBLIC FUNDS
If Lessee desires to seek public funding that could result in
a lien, encumbrance or any other obligation with respect to Lessor's interest in
the Land other than Lessee's leasehold interest pursuant to this Lease, Lessee
shall first give Lessor notice of its intent to seek such public funding and
obtain Lessor's prior written approval, which may be withheld in Lessor's sole
and absolute discretion.
12. RESERVED
13. AUTHORITY TO LEASE
As of the Commencement Date, Lessee and Lessor will have the
necessary corporate authority and approval to enter this Lease. Lessee
represents and warrants that: (a) it has secured all requisite corporate and
governmental authority to enter into this Lease and conduct operations upon the
Track and Land; and (b) it has secured all requisite governmental authority to
conduct common carrier railroad freight operations upon the Track and Land.
14. ENVIRONMENTAL.
(a) Beginning on the Commencement Date, and throughout the
Term, Lessee shall:
(1) operate upon and maintain the Land in compliance
in all material respects with any applicable Environmental Law
and be responsible for making any notification or report
concerning the Land or operating thereon required to be made
by any applicable Environmental Law;
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(2) maintain in full force and effect all permits or
approvals required by any applicable Environmental Law for
operations of the Land;
(3) expeditiously cure at its own expense to the
reasonable satisfaction of Lessor any material violation of
applicable Environmental Laws at the Land to the extent such
violation is attributable to events or conditions which arose
on or after the Commencement Date;
(4) not create or operate upon the Land any (i)
nuisance, (ii) landfill or dump, or (iii) hazardous waste
management facility or solid waste disposal facility as
defined by Environmental Law;
(5) not manufacture, use, generate, transport, treat,
store, Release, dispose, or handle any hazardous substance
upon the Land except in the ordinary course of its business;
(6) within ten (10) business days notify Lessor in
writing of and provide reasonably requested documents upon
learning of any of the following which arise in connection
with the Land: any liability for response or corrective
action, natural resource damage, or other harm pursuant to
CERCLA, RCRA, or any comparable state law; any Environmental
Claim; any violation of an Environmental Law or Release,
threatened Release, or disposal of a hazardous substance; any
restriction on the ownership, occupancy, use, or
transferability arising pursuant to any (i) Release,
threatened Release, or disposal of a hazardous substance or
(ii) Environmental Law; or any environmental, natural
resource, health, or safety condition which could materially
impair the condition of the Land;
(7) conduct expeditiously at its expense to the
reasonable satisfaction of Lessor and in accordance with any
applicable Environmental Law response action necessary to
remove, remediate, clean up, or ▇▇▇▇▇ any significant Release,
on or after the Commencement Date; upon the written request of
Lessor, timely provide at Lessee's expense a report of an
environmental assessment of reasonable scope, form, and depth
(including, where appropriate, invasive soil or groundwater
sampling) by a consultant reasonably approved by Lessor as to
(1) any matter to the extent such matter arises during the
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Lease term and for which notice is provided pursuant to the
above requirements; and (2) the general environmental
condition of the Land within three hundred and sixty-five
(365) days of the termination date. If such a requested
environmental report is not delivered within seventy-five (75)
days after receipt of Lessor's request, then Lessor may
arrange for same. The reasonable cost of any assessment
arranged for by Lessor pursuant to this provision shall be
payable by Lessee on demand;
(8) allow Lessor or its representatives from time to
time at Lessor's reasonable discretion and expense to inspect
the Land and conduct an environmental audit or assessment
(including invasive soil or groundwater sampling), including,
without limitation, to facilitate any other sale or lease of
the Land;
(9) remove from the Land at Lessee's expense by the
termination date any hazardous substances or equipment to
manufacture, generate, transport, treat, store, Release,
dispose or handle any hazardous substance used by Lessee or in
the course of Lessee's business; and
(10) provide Lessor financial assurances adequate to
secure the eventual satisfaction of any of Lessee's
obligations pursuant to this section which have not been
satisfied as of the termination date.
(b) Lessee shall take reasonable precautions against, or
notify Lessor of, any Release of a Hazardous Substance upon adjacent
lands where Lessee has actual knowledge that the Release presents a
foreseeable risk of migration onto the Land.
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(c) Lessee shall be responsible to Lessor and shall defend,
indemnify and hold harmless Lessor, and its parent corporations,
subsidiaries and affiliates, and all of its and their directors,
officers, agents or employees, from and against any Environmental
Claims which at any time or from time to time may be claimed, suffered
or incurred in connection with Environmental Contamination occurring
after the Commencement Date, violation after the Commencement Date of
any Environmental Law, or the breach of any provision of subsection (a)
or (b) of this Section 14. This obligation to indemnify Lessor shall
survive the term of this Lease.
(d) Lessor shall be responsible to Lessee and shall defend,
indemnify and hold harmless Lessee, and its parent corporation,
subsidiaries and affiliates, and all of its and their directors and
officers, agents or employees from and against any costs which at any
time or from time to time may be claimed, suffered or incurred in
connection with Environmental Contamination existing as of the
Commencement Date, any Environmental Claim arising from conditions that
existed or activities that were conducted on or before the Commencement
Date, the violation before the commencement date of any requirement of
Environmental Law. The obligation to indemnify Lessee shall survive the
terms of this Lease.
(e) As to the provisions of this Section 14 only, Lessee and
Lessor waive any statute of limitations defense, provided, however,
that if one party gives the other party written notice of Environmental
Contamination of the Land, the waiver of the statute of limitations
shall cease, but only as to the Environmental Contamination which is
the subject of the written notice, and as to such contamination, the
parties shall then be subject from the date of receipt of such written
notice to the times then provided in the then-applicable statute of
limitations. The waiver of statute of limitations for any matter not
covered in said written notice shall continue.
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(f) For purposes of this Section,
(i) "Costs" means all liabilities, losses, costs,
damages, punitive damages, Natural Resource
damages, expenses, claims, diminution in value,
attorneys' fees, experts' fees, consultants' fees,
penalties, fines, obligations, judgments and
disbursements, as well as expenses of Remediation
and any other remedial, removal, response,
abatement, cleanup, legal, investigative,
monitoring, or record keeping costs and all
expenses related thereto, whether incurred
voluntarily or mandated by Requirements of
Environmental Law.
(ii) "Disposal" (or "disposed") shall have the meaning
specified in RCRA.
(iii) "Environmental Claim" means any claim; loss;
demand; action; cause of action; suit or other
legal proceeding which seeks to impose or leads to
the imposition of any Cost; damage assessment;
punitive damage assessment; fine, penalty,
expense, liability, criminal liability, judgment,
governmental or private investigation relating to
Remediation or compliance with Requirements of
Environmental Laws; proceeding; lien; personal
injury, Natural Resource damage or Land damage,
whether threatened, sought, brought or imposed,
that is related to or that in any way seeks to
impose liability regarding the Land or operations
conducted at the Land, including, but not limited
to, matters concerning (i) improper use of
wetlands or other protected land or wildlife; (ii)
noise; (iii) pollution, contamination, damage,
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impairment, preservation, protection, Remediation
or clean-up (on-site or off-site) of air, surface
water, ground water, sediments, soil, wetlands or
other Natural Resources; (iv) generation,
handling, discharge, Release, threatened Release,
treatment, storage, disposal or transportation of
solid, gaseous or liquid waste; (v) exposure,
injury to, death of or threat to the health or
safety of any person or persons or damage to Land
caused directly or indirectly by Hazardous
Substances; (vi) the manufacture, processing,
distribution in commerce, use, treatment, storage,
disposal or Remediation of Hazardous Substances;
(vii) destruction caused directly or indirectly by
Hazardous Substances or the release of any
Hazardous Substance on any Land (whether real or
personal); (viii) the implementation of spill
prevention plans relating to Hazardous Substances;
(ix) community right-to-know and other disclosure
laws; (x) maintaining, disclosing or reporting
information to governmental authorities under any
Environmental Law; or (xi) failure to hold,
maintain or comply with any Environmental Permit.
The term "Environmental Claim" also includes any
Costs incurred in responding to efforts to require
Remediation and any claim based upon any asserted
or actual breach or violation of any Requirements
of Environmental Law, or upon any event,
occurrence or condition as a consequence of which,
pursuant to any Requirements of Environmental Law,
(y) any owner, operator or person having any
interest in the Land, including, without
limitation, any mortgagee of the Land or the
beneficiary of any deed of trust of the Land,
shall be liable with respect to any Environmental
Claim or otherwise suffer any loss or disability
or (z) the Land shall be subject to any
restriction on use, ownership or transferability.
An "Environmental Claim" further includes a
proceeding to issue, modify, revoke or terminate
an Environmental Permit.
(iv) "Environmental Contamination" means any land,
sediment, surface water, ground water, structure
or location that has been contaminated or
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adversely affected by Hazardous Substances.
(v) "Environmental Laws" or "Requirements of
Environmental Laws" means any and all laws, rules,
permits, regulations, ordinances, judgments, or
orders now or hereafter in effect of any federal,
state or local executive, legislative, judicial,
regulatory or administrative agency, board or
authority or any judicial or administrative
decision relating thereto that could give rise to
or form the basis for any Environmental Claim.
(vi) "Environmental Matters" means any matter, dispute,
proceeding or obligation of any nature falling
within the scope of this Section 14.
(vii) "Environmental Permits" means any permit, license,
registration, waste identification number,
approval or other authorization relating to
business activities or operations on the Land
required by any Environmental Law.
(viii) "Governmental Authority" means any federal, state
or local government or any subdivision, agency,
instrumentality, authority, department,
commission, board or bureau thereof or any
federal, state or local court or tribunal.
(ix) "Hazardous Substances" means (i) those substances
included within the statutory and/or regulatory
definitions of "hazardous substance," "hazardous
waste," "extremely hazardous substance,"
"regulated substance," "contaminant," "hazardous
materials" or "toxic substances," under any
Environmental Law, (ii) those substances listed in
49 C.F.R. 172.101 and in 40 C.F.R. Part 302; (iii)
any material, waste or substance which is (A)
petroleum, oil or a fraction thereof, (B) asbestos
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or asbestos containing material, (C)
polychlorinated biphenyls, (D) formaldehyde, (E)
designated as a "hazardous substance" pursuant to
33 U.S.C.ss.321 or listed pursuant to 33
U.S.C.ss.317, (F) explosives, (G) radioactive
materials (including naturally occurring
radioactive materials), (H) chemicals used to
treat or coat wood or wood that has been so
treated or coated, or (I) Solid Wastes; (iv) radon
gas in an ambient air concentration exceeding four
picocuries per liter (4 pCi/1); (v) such other
substances, materials, or wastes that are or
become classified or regulated as hazardous or
toxic under any federal, state or local law or
regulation.
(x) "Natural Resources" shall have the meaning
specified in CERCLA.
(xi) "RCRA" means the Resource Conservation and
Recovery Act, 42 U.S.C.ss.6901, et. seq.
(xii) "Release" (or "released") shall have the meaning
specified in CERCLA.
(xiii) "Remediation" means a type of action required by a
Governmental Authority or necessary to ensure
compliance with the Requirements of Environmental
Law, including by way of example (i) the removal
and disposal or containment (if containment is
practical under the circumstances and is
permissible within Requirements of Environmental
Law) or monitoring of any and all Hazardous
Substances at the Land; (ii) the taking of
reasonably necessary precautions to protect
against the Release or threatened Release of
Hazardous Substances at, on, in, about, under,
within or near the air, soil, surface water,
groundwater or soil vapor at the Land or any
public domain affected by the Land or any
surrounding areas thereof; (iii) any action
necessary to mitigate damage to wetlands,
pinelands or other protected land or reclaim the
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same or to protect and preserve wildlife species;
(iv) any action necessary to meet the requirements
of an Environmental Permit; (v) any action
required to satisfy Requirements of Environmental
Law; and (vi) any action required to redress or
restore damages to or achieve restoration of
Natural Resources as a result of Releases from the
Land.
(xiv) "Solid Waste" shall have the meaning ascribed to
it in RCRA.
15. ASSIGNMENT AND SUBLEASE/SUBLICENSE.
(a) ASSIGNMENT. This Lease may not be assigned, or in any
manner transferred, nor shall the Land be sublet by Lessee, other than to a
subsidiary of Lessee, without the advance written consent of Lessor, signed by
an authorized officer, which consent shall not be unreasonably withheld, except
that if the assignment or sublet involves a Class I railroad or an affiliate
thereof, in which case the Lessor may withhold consent in its sole discretion.
No such consent shall be required in the event of a merger with or the sale of
the stock shares of Lessee, or of Lessee's parent company, RailAmerica, Inc., to
a third party unless such third party is a Class I Railroad (and in such event,
the first sentence of this Section 15(a) shall control). In addition to other
conditions as may be placed on any such assignment, transfer or sublease, as a
condition to obtaining Lessor's consent for assignment, Lessee will provide
written notice to Lessor of its desire to assign this Lease, together with an
agreement, in form and substance acceptable to Lessor, signed by the intended
assignee and agreeing that the intended assignee will be bound by all provisions
of this Lease.
(b) TRACK LEASES, PUBLIC/PRIVATE ROAD/PEDESTRIAN CROSSINGS,
AND PRIVATE SIDETRACKS. Lessee shall hereby be solely responsible for the
approval and preparation of new track lease agreements with customers,
public/private road/pedestrian crossing agreements, and private sidetrack
agreements on the Land, whether overhead, underpass or at grade. Lessee hereby
has the right with respect to the foregoing agreements to sublease any portion
of Lessor's property covered by this Lease for railroad operations only
(including track lease agreements and sidetrack agreements) and for no other
purpose. Any new agreement prepared for the purposes stated in this Section,
shall be prepared in the form of a sublease/sublicense subject to the terms of
this Lease and a copy of each executed agreement shall be promptly forwarded to
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Lessor. In relation to the purposes stated in this Section, Lessee shall not
allow the placement of any permanent structures on Lessor's property, and shall
not grant any type of access/occupancy to Lessor's property that would extend
beyond the termination of this Lease. Lessee hereby acknowledges that any new
track lease agreements, public/private road/pedestrian crossing agreements, and
private sidetrack agreements, as well as the existing assigned agreements listed
in Exhibit D, are not considered Reserved Rights, as described in Section 25 of
this Lease, by Lessor, and shall be subject to Section 36 of this Lease.
(c) POOLS. Notwithstanding any provision hereof, Lessee may
enter into contracts for the joint use of equipment and pooling.
(d) ASSIGNMENT OF LESSOR'S CONTRACTS. Associated with this
Lease, Lessor shall assign certain agreements to Lessee pursuant to the terms
and conditions of and as listed in Exhibit D.
16. SOLE BENEFIT.
This Lease is intended for the sole benefit of the parties
hereto. Nothing in this Lease is intended or may be construed to give any
person, firm, corporation, or other entity, other than the parties hereto and
their respective officers, agents, employees, parent corporation, subsidiaries,
affiliates, successors, and permitted assigns, any right or benefit pursuant to
any provision or term of this Lease, and all provisions and terms of this Lease
are and will be for the sole and exclusive benefit of the parties to this Lease.
17. WAIVER.
Any waiver at any time by one party of a breach hereof by the
other party will extend only to the particular breach so waived and will not
impair or affect the existence of any provision, condition, obligation, or
requirement of this Lease or the right of either party hereto thereafter to
avail itself of any rights under this Lease with respect to a subsequent breach.
No provision of this Lease shall be waived by any act or knowledge of the
parties hereto, but only by a written instrument signed by the party waiving a
right hereunder.
Page 17 of 34
18. AMENDMENT.
No provision of this Lease shall be modified without the
written concurrence of the parties hereto. This Lease includes attachments and
exhibits appended hereto and represents the entire understanding of the parties
hereto, and to that extent supersedes any prior understandings, written or oral.
19. NOTICES.
All notices required to be given under this Lease shall be in
writing, signed by or on behalf of the party giving the same, and transmitted to
the addresses shown on Exhibit E or such successor addresses as that party may
specify by notice hereunder. Such notices shall be transmitted by United States
registered or certified mail return receipt requested or by facsimile, with
confirmed receipt, addressed to the officers and addresses shown on Exhibit E.
All notices shall be effective on the day following confirmed receipt of the
letter or facsimile.
20. HEADINGS.
The headings of the Sections of this Lease are inserted for
convenience only and are not intended to govern, limit or aid in the
construction of any term or provision of this Lease.
21. TAXES.
(a) Lessee shall be responsible for and pay all sales and use
taxes, transfer taxes, and property taxes relating to the transfer of the Track,
to the rentals paid under this Lease, or to the conveyance of the property
contemplated hereunder as set forth in Exhibit B. Lessee shall also be
responsible for and pay and indemnify Lessor with respect to gross receipts
taxes, licenses, taxes, ad valorem taxes, levies and assessments, including
property taxes, relating to the Land (except for portions of the Land leased by
Lessor to other tenants) and Track, after the Commencement Date. Lessor shall
remain responsible for and pay and indemnify Lessee with respect to gross
receipts, licenses, taxes, ad valorem taxes, levies and assessments, including
property taxes, relating to the Land prior to the Commencement Date..
(b) All taxes in the nature of ad valorem or property taxes
relating to the Land and Track will be prorated for the first year of the Lease
as of the Commencement Date and paid by Lessee thereafter; provided, however,
that if this Lease is terminated for reasons other than breach of its term by
Lessee, the foregoing items shall be prorated for the final year of this Lease
as of the date of termination .
(c) Lessee shall have the right to contest any tax in good
faith, subject to the requirements of this Section 21.
Page 18 of 34
(d) Upon request, Lessee will present to Lessor for inspection
the documentation (or photocopies thereof) showing the payment of any of such
licenses, taxes, levies, and assessments. Promptly upon receipt of an itemized
statement, Lessee will reimburse Lessor for any such licenses, taxes, levies, or
assessments paid by Lessor, and upon request by Lessee, Lessor will present to
Lessee for inspection the documentation (or photocopies thereof) showing the
payment thereof.
(e) The parties shall, in good faith, cooperate, work
together, and sign documentation to support qualifying the Track sale, evidenced
by the ▇▇▇▇ of Sale, for exemption from State of Ohio sales taxes pursuant to
either the isolated or casual sale exemption or the public utility purposes
exemption.
22. ALLOCATION OF INCOME AND EXPENSES.
(a) The lease of the Land is an absolute net lease; and,
except as otherwise expressly provided in this Lease, Lessee shall have and
hereby assumes all duties and obligations with relation to the repair,
maintenance, existence and operation of the Land and all other improvements or
fixtures now or hereafter located by Lessee on or within the Land during the
Term of this Lease, irrespective of law or custom.
(b) Except as otherwise expressly provided in this Lease,
Lessee shall reimburse and defend, indemnify and hold Lessor harmless for/from
any expense, cost, liability or obligation whatsoever which arises solely out of
the use of the Land and any other improvements or fixtures hereafter located by
Lessee on or within the Land during the Term of this Lease.
23. UTILITIES.
Lessee shall initiate, contract for and obtain in its sole
name all utility services required for its use of or operations conducted upon
the Land, including gas, electricity, telephone, water and sewer connections and
services. Lessor shall cooperate in transferring utility services to Lessee, to
the extent required. Lessee shall pay all charges for such services as they
become due, and shall defend, indemnify and hold Lessor (and the Land) harmless
from costs of such services.
24. LIENS.
(a) Lessee expressly agrees that it will not allow any lien on
or encumbrance against Lessor's interest in the Land other than Lessee's
leasehold interest pursuant to this Lease, or any portion thereof, without first
obtaining Lessor's express written consent, which may be withheld in Lessor's
Page 19 of 34
sole and absolute discretion. Lessee shall have the right to encumber the
leasehold interest created hereby in favor of Lessee's global credit facility or
for purposes of securing the financing necessary to consummate the transaction
contemplated hereunder
(b) Lessee will pay, satisfy, and discharge all claims or
liens for material and labor or either of them used, contracted for, or employed
by Lessee during the term of this Lease in the construction, repair,
maintenance, or removal of any improvements located upon or within the Land and
any improvements located thereon, whether said improvements are the property of
Lessor or of Lessee. Lessee will defend, indemnify and save harmless Lessor from
all such claims, liens, or demands whatsoever. In the event the Lease is
terminated or expires, Lessee shall return the Land to Lessor free and clear of
any such liens, claims and demands. Notwithstanding the foregoing, in the event
that Lessee participates in any federal or state funding programs after
receiving the written consent of Lessor for such participation, Lessor shall
comply with all obligations to which it is subject under any such federal or
state funding programs.
(c) Lessor shall defend Lessee's quiet enjoyment of the Land.
25. RESERVED PROPERTY RIGHTS.
(a) Lessor reserves unto itself, its affiliates, subsidiaries,
parents, successors and/or assigns, the following property rights hereinafter
collectively referred to as the "Reserved Rights"
(i) Certain existing agreements, leases, licenses or
occupations with third parties, including any
affiliates of Lessor, whether or not recorded,
except those assigned to Lessee pursuant to
Section 15(d) and Exhibit D hereof;
(ii) Except as otherwise provided in Section 15(b)
hereof, the exclusive right to prepare and enter
into future agreements, leases, licenses or
occupations with third parties;
(iii) The right, by any commercially reasonable means,
to install, construct, operate, maintain, repair,
renew, replace, and remove utility systems and
their associated and appurtenant equipment and
facilities as well as the right to attach the
utility systems and related facilities to existing
Page 20 of 34
bridges and to install them in existing tunnels;
and the right of ingress and egress for access
purposes;
(iv) The right, by any commercially reasonable means,
to install, construct, operate, maintain, repair,
renew, replace, and remove commercial poster
panels and towers and their associated and
appurtenant equipment and facilities as well as
the right to attach the commercial poster panels
and towers and related facilities to existing
bridges and to install them in existing tunnels;
and the right of ingress and egress for access
purposes;
(v) The right to amend this Lease at any time, subject
to Sections 25 (d) and (e) below, to exclude from
the Land any portion thereof located more than 25
feet from the track centerline and that does not
materially interfere with Lessee's continuing
railroad operations for the purpose of conveying
such properties to third parties;
(vi) The right to convey all minerals, mineral rights
and air rights in, on or under the Land; and
(vii) The right to operate certain of its unit grain
trains over the Track under a reservation of
trackage rights between milepost BR 114.55 and
milepost 85.9 for the purposes and pursuant to the
terms more fully set forth in Exhibit F hereto and
under certain other separate agreements which may
be entered into by the parties from time to time
during the term hereof.
(b) Lessor shall retain any rentals, fees or other payments
associated with the Reserved Rights, except as provided for in Section 15(b) or
any rentals associated with agreements assigned to Lessee pursuant to Section
15(d) and Exhibit D.
(c) Lessee shall have the right and obligation to review any
application by a third party, or by Lessor or Lessor's affiliates, to cross over
or under the Land or to utilize any portion of the Land pursuant to this Section
25 that is located within 25-feet of the centerline of any existing operating
track. Lessee shall have sixty (60) days from the date Lessee receives the
application or proposal to review plans and any other related information, to
Page 21 of 34
evaluate the proposed use(s) contemplated in the application and advise Lessor
if the application is approved or denied. In the event Lessor is contractually
obligated to respond to an application or proposal by a third party in less than
sixty (60) days, Lessor shall so notify Lessee and Lessee agrees to shorten its
time to respond accordingly (but no less than 15 days). Lessee shall be entitled
to charge and collect reasonable processing and engineering review fees as part
of this process. If Lessee has not responded to the application within such
sixty (60) day period (as it may be shortened in the manner noted above), after
delivery of formal written notice (return receipt requested) to Lessee as per
Exhibit E attached, Lessee shall be presumed to have approved the application
and Lessor shall be free to enter into the appropriate agreement, lease, license
or occupation. Lessee's approval of any application shall not be unreasonably
withheld, conditioned or delayed.
(d) Lessor shall have the right to exclude from the Land
pursuant to this Section 25 any portion of the Land that is 25-feet or more from
the centerline of any existing operating track (25-feet from the centerline of
the outside track in the event of double tracks or sidings) for the purpose of
conveying, leasing or licensing, such properties to third parties (each a
"Transfer"). Lessor shall provide written notice to Lessee of any such sale to a
third party following closing. The notice shall include the name and address of
Grantee and a map showing the Transfer area.
(e) Lessee shall have the right and obligation to review any
request by Lessor, or Lessor's affiliates, to exclude from the Land any portion
of the Land that is located within 25-feet of the centerline of any existing
operating track for the purpose of making a Transfer. Lessee may review the
proposed sale area and any other related information, including the proposed
intended use, evaluating the proposed sale and determining if the proposal is
approved or denied. Lessee shall have sixty (60) days from the date Lessee
receives the application or proposal to review plans and any other related
information, to evaluate the proposed use(s) contemplated in the application and
advise Lessor if the application is approved or denied. In the event Lessor is
contractually obligated to respond to an application or proposal by a third
party in less than sixty (60) days, Lessor shall so notify Lessee and Lessee
agrees to shorten its time to respond accordingly, (but no less than 15 days).
Page 22 of 34
If Lessee has not responded to the application within such sixty (60) day period
(as it may be shortened in the manner noted above), after delivery of formal
written notice (return receipt requested) to Lessee as per Exhibit E attached,
Lessee shall be presumed to have approved the application and Lessor shall be
free to enter into the appropriate agreement, lease, license or occupation.
Lessee's approval of any proposed sale shall not be unreasonably withheld,
conditioned or delayed.
(f) Lessor's exercise of the Reserved Rights in this Section
25 shall not unreasonably interfere with Lessee's present or reasonably
contemplated freight operations, and Lessor, its licensees and invitees shall be
required to provide reasonable notice to Lessee before entering onto the Land
for the purposes described in this Section 25, except that Lessor's entry onto
the Land pursuant to the retained trackage rights shall be governed by the
agreement in Exhibit F.
(g) The parties recognize that this Lease permits Lessor to
retain the following existing agreements, leases, and licenses with rail
customers pursuant to this Section 25 that generate rail revenues:
CONTRACT
NUMBER CUSTOMER NAME DATE MILEPOST
------ ------------- ---- --------
▇▇ ▇▇▇▇▇▇ PMC SPECIALTIES GROUP INC 03/10/1981 BB 7.54
BO L46053 ▇▇▇▇▇▇▇ ▇▇▇▇▇ AGRIBUSINESS INC 12/01/1963 BR 45.00
CSX 027361 ▇▇▇▇▇▇▇ ▇▇▇▇▇ AGRIBUSINESS INC 10/03/1994 BR 45.15
In an effort to satisfy Lessee's concerns that the rental under any of these
agreements will not be unjustifiably increased and be the sole cause for driving
away rail business, Lessor agrees that it shall not adjust any singular rental
with any of the above referenced rail customers by more than three percent (3%)
annually. Lessor shall not have any other obligation, liability or
responsibility to Lesse with regard to said agreements, leases and licenses.
26. PASSENGER RAIL USE
Lessee shall use the Land for freight rail transportation
purposes only. However, Lessee may operate or authorize the operation of
passenger excursion trains over the Land provided that each such train is (i)
covered by railroad liability insurance in the amount of not less than $500
million, or (ii) covered by a lesser amount of general liability insurance
Page 23 of 34
specified by Lessor in its sole and absolute discretion. With respect to
subsection (ii) above, if Lessor decides not to approve insurance coverage in an
amount less than $500 million, such decision shall not constitute a breach of
this Agreement, and such matter shall not be subject to arbitration. Lessor
retains the right to authorize passenger, special, commuter and excursion trains
over the tracks on the Land, with Lessee's reasonable consent and provided that
the exercise of such rights by Lessor does not materially interfere with
Lessee's continuing freight operations or the safety thereof, does not require
Lessee to incur or expend any incremental costs, and does not substantially
increase Lessee's risk (i.e. insurance and indemnity will be required for
Lessee's benefit). The insurance required under this Section 26 shall be
effected by valid and enforceable policies issued by insurer(s) of
responsibility and authorized to do business in the state(s) in which the
operations are to be conducted, all subject to the reasonable prior approval of
Lessor. All such policies must, (i) include Lessor as named insureds, and (ii)
provide for at least thirty (30) days notice to Lessor of any expiration,
termination or change in the policies. Prior to commencement of any operations
contemplated by this Section 26 and upon Lessor's request thereafter, Lessee
will provide Lessor with certificates of insurance (and, as requested by Lessor,
copies of the insurance policies) with respect to the insurance required
hereunder, and evidence of payment of all due premiums for such insurance.
27. EFFECT OF TERMINATION OR EXPIRATION OF LEASE.
(a) At least sixty (60) days prior to the expiration of this
Lease, or promptly upon the earlier termination of this Lease, in whole or in
part, Lessee shall submit all necessary applications, petitions and/or notices
to the STB or any successor agency to effectuate a termination of this Lease as
to the whole or affected portion and a discontinuance of its operations
hereunder. Upon expiration of Lessee's lease of the Land or if Lessee's lease of
the Land is terminated prior to expiration, Lessor shall have the option to
enter onto the Land and assume Lessee's railroad operations. Upon obtaining any
necessary regulatory authority or exemption, Lessee will forthwith vacate and
surrender the Land, Track, and any improvements made thereon to Lessor. Lessee
shall surrender the property in good order to Lessor. Should Lessor exercise its
Page 24 of 34
option to enter onto the Land and assume Lessee's railroad operations, Lessor
shall have the right to repurchase the Track and any other improvements related
to rail operations (the Track and improvements collectively referred to as the
"Improvements"). The price for the Improvements to be paid by Lessor shall be
the net liquidation value as calculated pursuant to 49 CFR ss. 1152.34 (c) (1)
(iii) at the time. Transfer of the Improvements to Lessor will be by a ▇▇▇▇ of
sale in a format comparable to or similar to the ▇▇▇▇ of sale whereby Lessor
transferred the Track to Lessee.
(b) In the event Lessor elects not to operate and repurchase
the Track and improvements as described in Section 27 (a), Lessee shall remove
said property within six (6) months of the STB or any successor agency's
authority to abandon or discontinue service.
(c) If, subject to the right of Lessor to seek removal of
Lessee from the Land by all applicable means, Lessee holds over or remains in
possession of the Land after the expiration of this Lease, such holding over or
continued possession will create a tenancy from month to month only, and monthly
rental for such period will be payable as a pro-rated share of the rent set
forth in Section 4 herein. Such monthly rental shall be due and payable on the
first of each month.
28. ABANDONMENT, DISCONTINUANCE OR OTHER REGULATORY ACTIVITIES.
(a) In the event Lessee desires to abandon its rail operations
or to discontinue rail service on or over the Land, Lessee shall first file for
necessary authorization from the STB or any successor agency to obtain
abandonment authority.
(b) Prior to filing for STB authorization, Lessee shall give
Lessor thirty (30) days' notice of its plan to seek such authorization.
(c) This Lease may be terminated as to any partial line
segment by Lessee prior to the expiration of the Term if Lessee files to abandon
rail service on such line segment(s) as provided by this Lease. In the event
that Lessee terminates this Lease Agreement for less than all of the Land, the
rental shall, if Lessor agrees to do so, be adjusted on a pro-rata mileage and
annual basis.
(d) If Lessee discontinues its permitted use of the entirety
of the Land, this Lease and all obligations hereunder which do not survive
termination shall terminate. Lessee shall, thereafter, remove said Track within
six (6) months of the STB or any successor agency's authority to abandon or
discontinue service.
(e) Lessee acknowledges that as part of the abandonment
process governed by the STB or any successor agency, a third party may make
application to the STB or other successor agency to request that interim trail
use/rail banking be imposed under the Trails Act. Lessee shall advise Lessor if
Page 25 of 34
such an application is made by a third party and shall cooperate with the STB or
other successor agency and Lessor, if desired by Lessor, to issue a public use
condition ("PUC") giving a public agency the exclusive right with the Lessor for
the purchase of the Land or a notice of interim trail use ("▇▇▇▇") permiting the
Lessor and trail manager to negotiate for railbanking and use of the Land for a
trail.
29. EMINENT DOMAIN.
(a) During the Term of this Lease, if the whole or any part of
the Land shall be taken, condemned, expropriated or seized by any governmental
or lawful authority by the exercise of the right of eminent domain, for any
public or quasi-public purpose, use or benefit, the following provisions shall
be applicable:
(i) If such proceedings result in the taking of the
whole or a material portion of the Land (i.e.,
that which materially interferes with Lessee's use
of the Land for railroad purposes), Lessee shall
have the right, upon written notice to Lessor, to
terminate this Lease in its entirety as of the
date title to the Land, or such material portion,
vests in the condemning authority;
(ii) If such proceedings result in the taking of less
than all or a nonmaterial part of the Land, then
the Lease shall terminate only as to the part so
taken, and this Lease shall continue in full force
and effect as to that part of the Land remaining,
without any reduction, abatement or effect upon
any rental.
(b) If the temporary use (i.e., less than ninety (90)
consecutive days) of the whole or any part of the Land shall be taken at any
time during the Term of this Lease for any public or quasi-public use, purpose,
or benefit, Lessee shall give prompt notice thereof to Lessor and the Lease
shall be suspended for the duration of such temporary taking but continue for
the balance of its Term. In such case, rent shall ▇▇▇▇▇ on a pro rata basis
(based on track miles) as to the segment for which use is suspended and for the
duration of the temporary loss of use only if such loss results in the inability
of the Lessee to serve the rail customers along the corridor. Lessee shall
continue to pay all sums and charges attributable to all non-affected segments
of the Land and, upon resumption of full use of the Land, Lessee shall resume
full payment of rent under the provisions of this Lease. In the event that such
Page 26 of 34
temporary taking shall exceed such ninety (90) day period, then either Lessor or
Lessee may elect to treat such taking in accordance with the provisions of
Section 29(a) hereof. The provisions of this Section 29(b) shall not apply to
any temporary use of taking of the Land, or any portion thereof, involving or
incident to any of Lessor's exceptions, reservations, rights or privileges
contained herein.
(c) During the Term of this Lease, if: (i) any such proceeding
is instituted, or (ii) the exercise of such power is threatened, and (iii) if
such proceeding or threatened proceeding involves or affects any or all of
Lessor's exceptions, reservations, rights or privileges contained herein, Lessor
shall be entitled to any and all funds payable for the taking of or damage to
such exception, reservation, right or privilege; and Lessor shall be entitled to
prosecute and receive, as the case may be, any and all claims, causes of action
and awards for damages arising out of or connected therewith, except that Lessee
shall be entitled to prosecute and receive any and all claims, causes of action
and awards for loss of operating revenue or business damages associated with the
taking.
(d) Except as otherwise expressly provided in this Section 29,
Lessor shall be entitled to any and all funds payable for the total or partial
taking or temporary use of the Land, provided that nothing contained herein
shall be construed to preclude Lessee from prosecuting any claim directly
against the condemning authority for loss of its business or taking or damage to
the Track.
(e) During the Term of this Lease, each party shall provide
prompt notice to the other party of any and all proceedings for condemnation,
expropriation or seizure, or any and all threats of the exercise of the powers
to condemn, expropriate or seize all or any portion of the Land, by furnishing
the other party a copy of any and all documents and written communications with
respect thereto that may be received by the receiving party. Lessee shall make
all reasonable efforts to cooperate with Lessor in the defense of such
proceedings.
30. GOVERNING LAW.
This Lease will be construed in accordance with the laws of
Ohio, without regard to its conflict of law provisions.
31. INSURANCE.
(a) Prior to the Commencement Date of this Lease, Lessee, at
its sole cost and expense, shall procure, and thereafter shall maintain in full
force and effect at all times during the Term of this Lease, insurance meeting
the requirements of this Section 31.
Page 27 of 34
(b) Lessee shall have RAILROAD COMPREHENSIVE LIABILITY
INSURANCE with a Combined Single Limit of not less than Five Million Dollars
($5,000,000) per occurrence, subject to self-insured retention in an amount
satisfactory to Lessor as indicated from time to time during the Term of this
Lease. Such insurance shall: (a) specifically name Lessor as an "additional
insured" thereon; (b) include a "severability of interests" provision; and (c)
provide Contractual Liability Insurance specifically insuring liability assumed
by Lessee under this Lease. This insurance shall not be deemed a limitation on
Lessee's liability but shall be deemed to be additional security therefor.
(c) Lessee shall have PHYSICAL DAMAGE PROPERTY INSURANCE
covering all risk of loss or damage to the Buildings referred to in Section 5.
Such insurance shall be in amounts equal to the actual cash value of those
Buildings. The policy shall name both Lessee and Lessor as loss payees as their
interests may appear. The policy also shall waive subrogation against Lessor.
(d) Lessee shall furnish certificates of insurance evidencing
of the above policies to Lessor's Risk Management Department, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇/▇ ▇-▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Upon request from Lessor, Lessee shall
furnish copies of the insurance policies.
(e) Each policy shall provide for thirty (30) days' written
notice to said Risk Management Department prior to termination or material
change in the coverage provided.
32. DEFAULT.
(a) The occurrence of one or more of the following shall
constitute an Event of Default:
(i) a party fails to pay when due any rent or any
other payment due under this Lease and such
failure remains unremedied for more than ten (10)
days after the non-defaulting party has requested
the defaulting party to perform;
(ii) a party fails to perform any other term or
condition of this Lease and such failure remains
unremedied for more than sixty (60) days after the
non-defaulting party has requested the defaulting
party to perform. If a cure would reasonably take
more than 60 days, the cure period shall be
extended for a reasonable period of time to effect
Page 28 of 34
the cure, but only for so long as the cure is
diligently pursued and in no event more than an
additional 30 calendar days;
(b) Upon any Event of Default, the non-defaulting party may,
at its option, with 10-days notice, terminate this Lease; proceed by arbitration
or, where appropriate, court action, with at law or in equity (including an
action for specific performance), to enforce performance by the defaulting party
or to recover damages associated with such Event of Default; or exercise any
other right or remedy available to the non-defaulting party at law or equity.
(c) Neither party shall be liable to the other for
consequential, special or punitive damages arising from a dispute with respect
to any of the provisions hereof.
(d) The defaulting party shall be liable for all costs and
expenses, including but not limited to attorneys and consultants fees and
disbursements, incurred by the non-defaulting party because of an event of
default.
33. ARBITRATION.
Any dispute arising between the parties hereto with respect to
any of the provisions hereof which cannot be settled by the parties themselves
within sixty (60) calendar days of either party giving the other notice of the
dispute shall be settled under the Commercial Arbitration Rules of the American
Arbitration Association. The arbitration will be held in Washington DC. The
decision of the arbitrator(s) shall be final and conclusive upon the parties
hereto and shall be enforceable in a court of competent jurisdiction. Each party
to the arbitration shall pay the compensation, costs, fees and expenses of its
own witnesses, exhibits and counsel. The compensation, costs and expenses of the
arbitrator(s), if any, shall be borne equally by the parties hereto, and the
parties shall mutually agree to the selection of the arbitrator(s). In the event
the parties cannot agree, the arbitrator(s) shall be selected in the manner
prescribed by the Commercial Rules of the American Arbitration Association. The
arbitrator(s) shall not have the power to award consequential or punitive
damages or to determine violations of criminal laws or antitrust laws.
33. COUNTERPARTS.
This Lease may be executed in any number of counterparts, each
of which may be deemed an original for any purpose.
34. CONFIDENTIALITY.
(a) Each party hereto covenants that all information and
documents concerning the other party known to, or received or reviewed by, the
first party, its employees, agents or representatives, in connection with this
Page 29 of 34
Lease and the transactions contemplated hereby shall be maintained in confidence
and not disclosed or utilized (other than in connection with the transactions
contemplated hereby) by the first party, its employees, agents or
representatives, without the other party's prior written consent, unless (i)
such information and documents were, are now, or become generally available to
the public (but not as a result of a breach of any duty of confidentiality by
which the first party, or any of its employees, agents and representatives, is
bound), (ii) such information and documents were known to first party prior to
their disclosure to the first party by the other party in connection with this
Lease, as demonstrated by the first party's written records, (iii) such
information and documents are disclosed by a third party, or (iv) such items are
required to be disclosed pursuant to a judicial order or applicable law.
(b) In the event that either party hereto, or any of its
employees, agents or representatives, becomes legally compelled to disclose any
such information or documents, the disclosing party shall provide the other
party with prompt notice before such disclosure so that the other party may seek
a protective order or other appropriate remedy or waive compliance with the
provisions of this Lease, or both. In the event that such protective order or
other remedy is not obtained, or that the other party waives compliance with the
provisions of this Lease, the disclosing party shall furnish only that portion
of the information or documents that it is advised by written opinion of counsel
is legally required.
(c) It is agreed that money damages would not be a sufficient
remedy for any breach of this Section 34 and that either party hereto shall be
entitled to specific performance as a remedy for any such breach. Such remedy
shall not be deemed to be the exclusive remedy for breach of this Section 34 but
shall be in addition to all other remedies available at law or in equity. Each
party hereto further agrees and covenants that it shall not use any information
or document that it obtains or has obtained in connection with this Lease in any
judicial or administrative proceeding brought against the other party, except in
a proceeding brought hereunder. With respect to any judicial or administrative
proceeding brought by a third party challenging any provision of this Lease or
relating to any action or inaction required by this Lease, the party against
whom such proceeding is brought may use for purposes of defending such
proceeding information or documents that it obtains or has obtained in
connection with this Lease; provided, however, that the party against whom such
proceeding is brought shall consult with and obtain the written consent of the
other party prior to such use of information or documents.
Page 30 of 34
35. FORCE MAJEURE.
(a) The prompt and timely performance of all obligations and
covenants under this Lease, including the obligation to make prompt and timely
payment of each installment of Rent or any other payment of any nature, is and
shall be of the essence of this Lease.
(b) A party shall be excused from prevention or delay in its
performance of a duty or obligation under this Lease, other than payment of
Rent, to the extent due to strikes, lockouts, casualties, acts of God, actual or
threatened terrorist acts, war, court orders, work stoppages, nuclear incidents,
riots, public disorder, criminal acts or acts or omissions of other parties or
entities, or other such causes beyond the reasonable control of said party (each
a "Force Majeure"). In the event of such Force Majeure, the time for performance
shall be extended for the amount of time said party is so delayed; provided,
however, that this Section 35(b) shall not be construed to affect the
responsibilities of said party hereunder to perform such act or thing once such
Force Majeure conditions have been removed.
36. LIABILITY.
(a) Except as otherwise provided herein, Lessor shall not be
liable for any loss, damage, or claim to or concerning the Land, any
improvements or fixtures located thereon, the property of Lessee or any third
party, or for personal injury or death of any person that may result from
Lessee's operation, use or interest in the Land, or from operations within, use
of, or an interest in the Land of third parties authorized or allowed by Lessee
or arising from the exercise by Lessee of one or more of its rights under this
Lease, or a breach of the Lease by Lessee, unless the same is due solely to
Lessor's gross negligence or willful misconduct. Lessee shall defend, indemnify
and hold harmless Lessor from and against any and all such loss, damage or
claims, including its reasonable attorneys' fees and costs.
(b) From and after expiration or earlier termination of this
Lease and resumption of Lessor's or its successor's operation, use or interest
in the Land, Lessee shall not be liable for any loss, damage, or claim to or
concerning the Land, any improvements or fixtures located thereon, the property
of Lessor or any third party, or for personal injury or death of any person that
may result from Lessor's operation, use or interest in the Land, unless the same
Page 31 of 34
is due solely to Lessee's gross negligence or willful misconduct. Lessor shall
defend, indemnify and hold harmless Lessee from and against any and all such
loss, damage or claims, including its reasonable attorneys' fees and costs.
37. SEVERABILITY
If any part of this Lease is determined to be invalid, illegal
or unenforceable, such determination shall not affect the validity, legality or
enforceability of any other part of this Lease and the remaining parts of this
Lease shall be enforced as if such invalid, illegal or unenforceable part were
not contained herein.
Page 32 of 34
IN WITNESS WHEREOF, the parties hereto have caused this Lease
to be executed in duplicate, each part being an original, as of the day and year
first above written.
CSX TRANSPORTATION, INC.
WITNESS:
/s/ ▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇
------------------------------- -------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇ Name: ▇▇▇ ▇▇▇▇▇
Title: DIRECTOR Title: VP - STRATEGIC PLANNING
INDIANA & OHIO CENTRAL RAILROAD, INC.
WITNESS:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------- -------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: SENIOR VICE PRESIDENT Title: VICE PRESIDENT
Page 33 of 34
EXHIBIT B
▇▇▇▇ OF SALE
THIS ▇▇▇▇ OF SALE, made as of this October 13, 2004, by and between CSX
TRANSPORTATION, INC., a Virginia corporation, whose mailing address is ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, hereinafter called "Vendor," and the
INDIANA & OHIO CENTRAL RAILROAD, INC., a Delaware corporation, whose mailing
address is ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
hereinafter called "Vendee"; WITNESSETH:
THAT Vendor, for and in consideration of the sum of EIGHT
MILLION FIVE HUNDRED SIXTY-FOUR THOUSAND AND 00/100 U. S. DOLLARS
($8,564,000.00), paid to Vendor by Vendee, the receipt whereof is hereby
acknowledged, does hereby BARGAIN, SELL, TRANSFER and DELIVER unto Vendee all of
Vendor's common carrier obligation associated with the Land and Track as
hereinafter described, and all of Vendor's right, title and interest in and to
tracks, rails, ties, ballast, other track materials, switches, crossings,
bridges, culverts, crossing warning devices, loose inventory materials and any
and all improvements or fixtures except the yard office building in Washington
Court House, Ohio, and the maintenance-of-way buildings in Blanchester, East
▇▇▇▇▇▇▇ and Mt. Sterling, Ohio (the "Buildings") and certain improvements
associated with the utility and other occupancies of the Land (hereinafter
subject to the foregoing exception "the Track") affixed to the Land as that term
is defined in the Lease and Purchase of Rail Improvements Agreement (the
"Lease") entered into by the parties hereto contemporaneously with this ▇▇▇▇ of
Sale.
TO HAVE AND TO HOLD the same unto Vendee, Vendee's successors and
assigns, forever.
Upon delivery of this ▇▇▇▇ of Sale, and acceptance thereof, said Track
shall be considered severed from the underlying real estate and it shall
thereafter be personal property. This instrument conveys no rights, title or
interest in any real estate of Vendor.
Said Track, related facilities and appurtenances are sold "as is, where
is," in place, in exactly the condition in which the same exist on the date of
this instrument, and without warranty as to the merchantability or fitness
thereof for any purpose, and without any other warranty by Vendor, expressed or
implied, except that Vendor warrants: that Vendor is the lawful owner of said
goods and chattels; that the goods and chattels are free from all liens and
encumbrances; and that Vendor has good right to sell its interest in the same as
aforesaid.
Vendee shall be and agrees to be responsible for all taxes on this
conveyance to the extent set forth in Section 21 of the Lease.
IN WITNESS WHEREOF, Vendor has hereunto affixed its corporate name by
the officer duly appointed and authorized to do so, the day and year first above
written.
Signed, sealed and delivered CSX TRANSPORTATION, INC.:
in the presence of:
▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇
----------------------------- ------------------------------------
Print Name: ▇▇▇ ▇▇▇▇▇
Print Title: VP - STRATEGIC PLANNING
Page 34 of 34
