LEASE

This Lease entered into this 29th day of August, 2011 by and between Louisiana
and North West Railroad Company, Inc., a Louisiana Corporation (“Lessor”) and
Wood Energy Group, Inc. (“Lessee”).

1.  Premises:  On the terms expressed in this Lease, Lessor leases the Premises
to Lessee, and Lessee leases the approximately Ten (10) acre parcel of land
described on Exhibit “A” to this Lease (the “Premises”) for the Term, subject to
the terms and conditions in this Lease.  By taking of possession of the
Premises, Lessee (a) except as set forth in Section 3 herein, accepts the
Premises as is; (b) waives any implied warranties of suitability, habitability,
merchantability, and fitness for a particular purpose; and (c) waives all claims
based on any defect in the Premises that could have been discovered by Lessee’s
reasonable inspection.
 
2.  Term:  The term of this lease shall commence on the date site preparation is
complete and accepated by Lessee in writing and shall continue thereafter for a
period of Five (5) years.

3.  Site Preparation:  Upon execution hereof Lessor shall prepare the site for
the uses as set forth in Section 5 hereof including, but not limited to soil
stabilization and preparation for installation of a concrete pad as depicted on
Exhibit A, which pad will be paid for and installed by contractors retained by
Lessee

4.  Rent:  Rent for the premises shall be Ten Thousand Dollars ($10,000) per
year payable in equal monthly installments on the first (1st) business day of
each month during the term hereof, provided that on each anniversary of the date
hereof during the Term, the amount of the rent shall be adjusted upwards to take
into account any aggregate increase in the Rail Cost Adjustment Factor (RCAF)
during the previous year.

5.  Use:  The Premises shall be used only for purposes consistent and compatible
with Lessee’s business as a tie reclamation, grinding and disposal service.
Lessee shall be permitted to build a rail spur line on the property as depicted
in Exhibit A.  Lessee shall be solely responsible for complying with all Laws
applicable to the use, occupancy, and condition of the Premises.  Lessee shall
not engage in any activity that would constitute a nuisance or would disturb,
unreasonably interfere with, or endanger Lessor or any other person. Lessee may
place a modular office on the Premises, provided that this structure is skirted,
and Lessee shall pay all costs of the structure, including without limitation,
utility installation, grading, and any other costs.
 
6.  Switch Fees:  During the term hereof Lessee shall pay switch fees to Lessor
for movement of railcars to and from the Premises as follows:  Four Hundred
Dollars ($400) per car for movement of railcars both to and from the interchange
point between Lessor and Union Pacific Railroad and Two Hundred Dollars ($200)
per car for movement of railcars both to and from the interchange point between
Lessor and Kansas City Southern Railroad;  provided that on each anniversary of
the date hereof during the Term, the amount of the switch fees as set forth
herein shall be adjusted upwards to take into account any aggregate increase in
the RCAF during the previous year.
 
 
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7.  Utilities and Taxes:  Lessee shall be responsible to arrange for and pay for
all utilities for the premises.  Lessee shall be responsible to pay all taxes
levied against the premises during the term hereof.  Lessee shall be responsible
to pay sales and/or rent taxes if applicable.

8.  Condition of Premises and Maintenance:  Except as set forth in Section 3
hereof Lessee will be soley responsible for renovations to the premises to make
it fit for its intended use at Lessee’s sole cost and expense.  Improvements to
the premises will become the property of the Lessor at such time as the Lease is
terminated unless removed by Lessee within a reasonable period following
termination.  During the term of the lease Lessee shall be responsible for all
maintenance to the premises at Lessee’s sole cost and expense; provided,
however, that Lessor shall maintain the roadway providing ingress and egress to
the Premises. Lessee shall not change, or permit any change of the existing
grade or topography of the premises without the prior approval of Lessor.

9.  Compliance with Law:  Lessee shall, at its own cost and expense, promptly
comply with all present and future laws, regulations and orders of all
governmental authorities in any way applicable to or affecting the premises as a
result of Lessee’s use thereof.  Lessee shall indemnify, defend and save
harmless Lessor from and against, and shall pay, all expenses, damages,
penalties, and claims, including without limitation reasonable attorney fees
that may arise from, or be imposed because of the failure of Lessee to comply
with this Section.

10.  Liability:  Lessee shall indemnify, hold harmless and defend Lessor from
and against all loss, damage, liability, claims, actions, causes of action,
expenses, damages, fines, penalties, judgments, settlements and demands of every
kind or nature, including reasonable attorney fees, and investigator and expert
fees, arising from or in any way connected with or related to Lessee’s use and
occupancy of the premises, the operation of its business thereon or out of any
failure by Lessee to perform any of the agreements, terms, covenants, or
conditions of this Lease.

11.  Insurance:  Lessee shall maintain continuously in effect a policy of
comprehensive Commercial General Liability Insurance, including contractual
liability assumed by Lessee under this Lease.  Such insurance shall be in limits
of not les than $1,000,000.00 per occurrence and $2,000,000.00 in the General
Aggregate.  In addition Lessee shall maintain continuously in effect a policy of
Automobile Liability Insurance in the amount of not less than $1,000,000.00. 
 Such insurance shall name Lessor as “Additional Insured” under such policies
and state clearly that underwriters specifically agree to “waive rights of
subrogation” against Lessor.
 
 
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Lessee shall maintain continuously in effect Workers Compensation Insurance with
part A specified as “Statutory” and part B with limits of
$500,000/$500,000/$500,000.  Coverage must include Waiver of Subrogation and
contain Alternate Employers Endorsement in favor of Lessor.

12.  Assignment and Subletting:  Lessee shall not assign this Lease or any
interest therein at any time without the express written consent of the Lessor
which consent may be withheld at Lessor’s reasonable discretion. Lessee shall
not permit any security interest in any third party to attach to the premises or
any part thereof, or to any improvements or to any personal property now or
hereafter placed or kept thereon, without the prior consent of Lessor, and any
attempt to do so without such consent shall render same null and void.

13.  Successors and Assigns:  The covenants and agreements herein contained
shall inure to the benefit of and be binding upon the successors, heirs,
personal representatives, and assigns of the parties hereto, subject to the
provisions of Paragraph 12 of this Lease.

14.  Entire Agreement:  The entire Agreement between Lessor and Lessee is set
forth in  this Lease and there are no understandings, agreements, or
representations of any kind between the parties, verbal or otherwise, other than
as set forth in this lease.  No change or modification of any of the covenants,
terms or provisions hereof shall be valid unless in writing and signed by the
parties hereto.

15.  Applicable Law:  This lease and the rights and obligations of the parties
hereunder shall be construed in accordance with the laws of the State in which
the premises are located.

In Witness Whereof, the parties have caused this Lease to be executed effective
the date first above written.

Lessor:
 
Louisiana and North West Railroad Company, Inc.
 
By:
/s/ Johnnie Raab
       
Its:
GM
   
Lessee:
 
Wood Energy Group, Inc.
 
By:
/s/ Jon Ryan
       
Its:
CFO
 

 
 
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