Exhibit 10(i)

                            ASSET PURCHASE AGREEMENT



                                     BETWEEN



                         UNION PACIFIC RAILROAD COMPANY



                                       AND



                         SAULT STE. MARIE BRIDGE COMPANY




                                   DATED AS OF


                                NOVEMBER 30, 1996










<PAGE>



                                TABLE OF CONTENTS


1.   DEFINITIONS....................................................    1
2.   PURCHASE AND SALE OF ASSETS
         2.1      General...........................................    4
         2.2      Special Inventory.................................    4
3.   EXCLUSION OF ASSETS
         3.1      Contracts.........................................    4
         3.2      Current Assets....................................    5
         3.3      Corporate Records.................................    5
         3.4      Claims And Litigation.............................    5
4.   PURCHASE PRICE
         4.1      Amount Of Cash Purchase Price.....................    5
         4.2      Adjustment Of Purchase Price......................    5
         4.3      Payment Of Purchase Price.........................    5
         4.4      Allocation Of Purchase Price......................    5
         4.5      Qualified Intermediary............................    6
5.   CHANGES IN ASSETS
         5.1      Loss Of And Damage To Assets......................    6
         5.2      Determination Of Value Absent Agreement...........    7
         5.3      Estimation And Final Determination Procedures.....    7
6.   TAX ALLOCATION, LEASE INCOME, CAPITALIZED
     LEASES AND LABOR PROTECTION
         6.1      Proration Of Taxes................................    8
         6.2      Lease Rentals And License Income..................    8
         6.3      Labor Protection..................................    9
7.   ASSUMPTION OF LIABILITIES AND OBLIGATIONS
         7.1      Liabilities To Be Assumed.........................    9
         7.2      Liabilities Not To Be Assumed.....................   10
         7.3      Insurance.........................................   10
         7.4      No Third Party Rights.............................   10
8.   REPRESENTATIONS AND WARRANTIES
         8.1      Disclaimer Of Representations And Warranties......   11
         8.2      General Representations And Warranties Of Seller..   11
         8.3      Environmental Representations And
                  Warranties Of Seller..............................   13
         8.4      Representations And Warranties By Purchaser.......   14
         8.5      Survival..........................................   15
         8.6      Condition Of Assets...............................   15
9.   CONDITIONS TO THE CLOSING
         9.1      Obligation Of Purchaser To Close..................   16
         9.2      Obligation Of Seller To Close.....................   17
10.      CLOSING
         10.1     Place Of Closing..................................   18
         10.2     Time Of Closing...................................   18
         10.3     Deliveries By Purchaser At Closing................   18

                                        i

<PAGE>



         10.4     Deliveries By Seller At Closing...................   19
11.      BOOKS AND RECORDS
         11.1     Access To Books And Records.......................   19
         11.2     Securities Law Compliance.........................   20
12.      OPERATIONS PRIOR TO CLOSING
         12.1     Operations Prior To Closing.......................   21
13.      EMPLOYEES..................................................   22
14.      CONSENTS AND APPROVALS
         14.1     Board and HSR Approvals...........................   22
15.      INDEMNIFICATION
         15.1     Purchaser's Indemnification.......................   23
         15.2     Seller's Indemnification..........................   23
         15.3     Procedures........................................   23
16.      TERMINATION
         16.1 Grounds For Termination...............................   25
17.      MISCELLANEOUS
         17.1 Title And Other Descriptions..........................   26
         17.2 Waiver................................................   26
         17.3 Expenses..............................................   26
         17.4 Transitional Matters..................................   26
         17.5 Car Supply............................................   27
         17.6 Entire Agreement......................................   27
         17.7 Choice Of Law.........................................   27
         17.8 Severability..........................................   27
         17.9 Counterparts..........................................   27
         17.10 Headings.............................................   28
         17.11 Successors And Assigns...............................   28
         17.12 Notice...............................................   28

Appendix A -  Description  of Assets
  Appendix A-1 - Legal  Description  of Real Estate  
  Appendix  A-2  -  Personal  Property  Excluding  Special  Inventory
  Schedule I - Operating  Contracts  
  Schedule II -  Transportation  Contracts
  Schedule III - Excluded Contracts
Appendix B -  Allocation  of  Purchase  Price  
Appendix C -  Administration  and Proration  Procedures  
Appendix D - Special Inventory 
Appendix E - Environmental Operations  Obligations  Schedule
Appendix F - Map 
Exhibit 1 - Form of Sellers' Counsel's Opinion 
Exhibit 2 - Form of Purchaser's  Counsel's Opinion 
Exhibit 3 - Disclosure  Schedule  
Exhibit 4 - Form of Quit  Claim  Deed  
Exhibit 5 - Form of Personal Property Sale Order

                                       ii

<PAGE>



                            ASSET PURCHASE AGREEMENT


Sault Ste. Marie Bridge Company ("Purchaser"), a Michigan corporation, and Union
Pacific Railroad Company ("Seller"), a Utah corporation agree as follows:


1.       DEFINITIONS

         The  following  terms  when used with  initial  capitalization  in this
         Agreement,  whether in the  singular or the plural,  have the  meanings
         ascribed to them below:

         "Agreement"  means  this  Asset  Purchase   Agreement,   including  its
         Appendices and Exhibits.

         "Assets"  means the assets of Seller  identified  in Appendix A to this
         Agreement.

         "CERCLA" means the Comprehensive Environmental Response,  Compensation,
         and Liability Act of 1980, as amended, 42 U.S.C. ss.9601 et seq.

         "Closing  Place" has the  meaning  given to it in Section  10.1 of this
         Agreement.

         "Closing  Date" has the  meaning  given to it in  Section  10.2 of this
         Agreement.

         "Board" means the Surface  Transportation  Board  established  under 49
         U.S.C. ss.10101 et seq. or any successor agency.

         "Contracts"  means  contracts,  rate  contracts,  leases,  commitments,
         agreements and arrangements.

         "Designated Qualified Intermediary" means a "qualified intermediary" as
         defined in United States Treasury  Regulations  under Internal  Revenue
         Code Section 1031  designated by Seller pursuant to Section 4.5 of this
         Agreement.

         "Environmental Law" means any law, judgment,  decree,  order,  license,
         rule or  regulation  pertaining  to  environmental  matters,  including
         without limitation,  those arising under the Resource  Conservation and
         Recovery Act of 1976, as amended (42 U.S.C.  ss.6901 et seq.),  CERCLA,
         the Superfund  Amendments and  Reauthorization  Act of 1986, as amended
         (Pub. L. 99-499,  Pub. L. 99563,  Pub. L. 100-202 and Pub. L. 101-144),
         the Clean Water Act, as amended (33 U.S.C.  ss.1251 et seq.), the Clean
         Air Act, as amended (42 U.S.C.  ss.7401 et seq.),  the Toxic Substances
         Control Act, as amended (15 U.S.C.  ss.2601 et seq.), the Safe Drinking
         Water  Act,  as  amended  (42  U.S.C.  ss.300 et seq.),  the  Emergency
         Planning and Community Right-to-Know Act of 1986, as amended (42 U.S.C.
         ss.1101 et seq.) and

                                        1

<PAGE>



         any other federal, state or local statute, regulation, ordinance, order
         or decree pertaining to the environment.

         "Hazardous  Substances"  means any  "hazardous  waste" as defined by 42
         U.S.C.  ss.6903(5),  any  "medical  waste"  as  defined  by  42  U.S.C.
         ss.6903(40),   any  "hazardous  substance"  as  defined  by  42  U.S.C.
         ss.9601(14),  any  "pollutant or  contaminant"  as defined by 42 U.S.C.
         ss.9601(33),   any  "hazardous   chemical"   pursuant  to  29  CFR  ss.
         1910.1200(c), any substance designated pursuant to 40 CFR Part 302, any
         "extremely hazardous substance" pursuant to 40 CFR Part 355, any "toxic
         chemical"  pursuant to 40 CFR Part 372, and any toxic  substance,  oil,
         petroleum,  hazardous  material or other  chemical or substance  deemed
         hazardous by an Environmental Law.

         "HSR Act" means the  Hart-Scott-Rodino  Antitrust  Improvements  Act of
         1976, as amended, 15 U.S.C. ss.18a.

         "Special  Inventory" means inventory and miscellaneous tools associated
         with the normal  operation and  maintenance  of the ore cars, ore docks
         and  associated ore dock  facilities  and other  materials and supplies
         unique  to the  current  operations  on the  Rail  Lines.  All  Special
         Inventory is listed on Appendix D.

         "Knowledge"  and  "Known"  when  used in this  Agreement  to  modify  a
         representation,  warranty or other statement of a party, means that the
         facts or situations described in the representation,  warranty or other
         statement  as being to the  knowledge  of such party are believed to be
         true and  correct  by the  president,  each vice  president  (including
         senior vice presidents,  executive vice presidents, and vice presidents
         with other similar designations), and each senior officer or such party
         who is principally responsible for the subject matter involved, and, if
         an additional  person is  specified,  also by such  additional  person,
         after suitable investigation.

         "Labor  Protection" means those reasonable and necessary costs incurred
         in connection with the affected  employees  relative to the transaction
         contemplated  by this  Agreement,  but which are  limited to: (1) labor
         protection costs which may be mandated by any governmental  agency; (2)
         contractual  obligations of the Seller to affected  employees as of the
         date of  execution  of the  Agreement  to the extent  such  obligations
         necessarily  arise as a result of the transaction and are not mitigated
         by any governmental  agency action;  and (3) any portion of labor costs
         related to this  transaction  which may be  incurred  by the Seller and
         which Purchaser agrees in writing to reimburse Seller.



                                        2

<PAGE>



         "Permitted Encumbrances" means any

                  A.       liens for taxes, assessments, levies, fees and other
                           governmental charges not yet due or payable or which,
                           if due and unpaid, are being contested in good faith
                           and by appropriate proceedings,

                  B.       mechanics' and materialmen's liens and similar
                           charges incurred in the ordinary course of Seller's
                           business,

                  C.       utility easements, licenses or permits located on or
                           crossing any portion of the Assets that do not
                           materially interfere with railroad operations on the
                           Rail Lines,

                  D.       road crossing agreements with governmental
                           authorities or private parties that do not materially
                           interfere with railroad operations on the Rail Lines,

                  E.       leases, easements, trackage rights agreements and
                           tenancy agreements existing as of the date of this
                           Agreement which are assumed by Purchaser in
                           accordance with this Agreement,

                  F.       easements, licenses, permits, or similar rights of
                           others that do not materially affect the value, use,
                           enjoyment or occupancy of the real or personal
                           property so encumbered,

                  G.       rights of reverter which have not been violated and
                           will not be violated as long as the affected real
                           property is used for railroad purposes,

                  H.       encumbrances specifically agreed to by Purchaser in a
                           separate writing delivered to the Seller,

                  I.       matters customarily excepted by title companies in
                           their commitments for title insurance or title
                           policies as "standard exceptions",

                  J.       minor defects or irregularities of title or interest,

                  K.       rights reserved to or vested in any governmental
                           authority with respect to the Assets or their
                           regulation, and

                  L.       acts done by, through or under Purchaser, its
                           employees, agents and contractors.



                                        3

<PAGE>



         "Purchase  Price" has the  meaning  given to it in Section  4.1 of this
         Agreement.

         "Purchaser"   means  Sault  Ste.  Marie  Bridge  Company,   a  Michigan
         corporation.

         "Quit  Claim  Deed"  means the Quit  Claim  Deed for the real  property
         included in the Assets,  the form of which is set forth as Exhibit 4 to
         this Agreement.

         "Rail Lines" means the lines of railroad shown generally on Appendix F,
         railroad track and the handling,  storage, loading,  unloading and dock
         facilities  included  in the  Assets  which  are owned or  operated  by
         Seller.

         "Seller" means Union Pacific Railroad Company, a Utah corporation.

         "Special  Inventory" means inventory and miscellaneous tools associated
         with the normal  operation and  maintenance  of the ore cars, ore docks
         and  associated ore dock  facilities  and other  materials and supplies
         unique  to the  current  operations  on the  Rail  Lines.  All  Special
         Inventory is listed on Appendix D.


2.       PURCHASE AND SALE OF ASSETS

         2.1      GENERAL

         Under  the  terms  and  subject  to the  conditions  contained  in this
         Agreement,  Seller  agrees to sell and transfer to  Purchaser  free and
         clear  of  all   liens   and   encumbrances   (other   than   Permitted
         Encumbrances), and Purchaser agrees to purchase on an "as is, where is"
         basis, on the Closing Date all of the Assets.

         2.2      SPECIAL INVENTORY

         Purchaser agrees to purchase from Seller, in addition to the Assets, on
         or before the Closing Date, not less than $500,000 worth of the Special
         Inventory from that listed on Appendix D.


3.       EXCLUSION OF ASSETS

         3.1      CONTRACTS

                  The Assets do not  include  any  rights  under  Contracts  not
                  assumed by Purchaser  under this  Agreement and all records of
                  Seller relating to such Contracts.

                                        4

<PAGE>

         3.2      CURRENT ASSETS

                  The Assets do not include  any  accounts  receivable,  cash on
                  hand or  deposit  and cash  equivalents,  inventory  and other
                  current  assets  of  the  Seller,   except  Special  Inventory
                  purchased  pursuant to Section 2.2 above,  and  Contracts  and
                  intangibles specifically identified in Appendix A-2.

         3.3      CORPORATE RECORDS

                  The Assets do not include general  ledgers,  minute books, tax
                  returns  and  similar   records   required  for  the  Seller's
                  corporate and tax purposes.

         3.4      CLAIMS AND LITIGATION

                  The Assets do not include  rights under claims and  litigation
                  or  settlements  of such claims and  litigation  by or against
                  Seller.


4.       PURCHASE PRICE

         4.1      AMOUNT OF CASH PURCHASE PRICE

                  The  purchase  price  ("Purchase  Price")  for the  Assets  is
                  $85,000,000  in cash  plus  the  price  of  Special  Inventory
                  purchased pursuant to Section 2.2 above.

         4.2      ADJUSTMENT OF PURCHASE PRICE

                  The Purchase Price is subject to adjustment in accordance with
                  Sections 5 and 6 below.

         4.3      PAYMENT OF PURCHASE PRICE

                  The Purchase Price, as adjusted,  shall be paid at the Closing
                  by wire transfer of immediately available funds to one or more
                  bank  accounts  designated  by Seller's  Designated  Qualified
                  Intermediary   prior  to  the  Closing  or,  at  the  Seller's
                  Designated Qualified  Intermediary's sole election,  by one or
                  more cashier's checks.

         4.4      ALLOCATION OF PURCHASE PRICE

                  The  Purchase  Price shall be  allocated  to the Assets as set
                  forth  on  Appendix  B. In  order to  facilitate  a like  kind
                  exchange  under  I.R.C.  1031,  the  Purchaser  agrees to make
                  payment to the Designated  Qualified  Intermediary.  Purchaser
                  shall have no responsibility to the Seller for the application
                  of the  Purchase  Price paid  pursuant to  instructions  given
                  pursuant to this Section.


                                        5

<PAGE>



         4.5      QUALIFIED INTERMEDIARY

                  Notwithstanding any other term or condition of this Agreement,
                  if so required by Seller,  Purchaser will fully cooperate with
                  Seller in all respects in structuring and completing this sale
                  pursuant to this  Agreement so as to effect a  disposition  of
                  Relinquished  Property,  as hereinafter defined, in connection
                  with a multiple party deferred like-kind exchange  transaction
                  for Seller's purposes pursuant to Section 1031 of the Internal
                  Revenue Code of 1986, as amended ("Code"). In particular,  but
                  not  by way  of  limitation,  Purchaser  will  consent  to the
                  assignment  by Seller of Seller's  rights with  respect to the
                  transfer of the property  described in this  Agreement (or any
                  portion  thereof)  to a  Qualified  Intermediary  prior to the
                  closing of this sale,  including  the  Assignment by Seller to
                  such Qualified  Intermediary  of Seller's right to receive the
                  Purchase Price. The terms Relinquished  Property and Qualified
                  Intermediary  as used herein shall have the meanings  ascribed
                  to them in  Treasury  regulations  under  Code  Section  1031.
                  Transfer of any rights or interest to a Qualified Intermediary
                  should not relieve either party of its obligations  under this
                  Agreement.


5.       CHANGES IN ASSETS

         5.1      LOSS OF AND DAMAGE TO ASSETS

                  If between the date of this  Agreement  and the Closing  Date,
                  Assets with a fair  market  value in excess of $100,000 in the
                  aggregate are sold,  lost,  destroyed or condemned,  or suffer
                  any material  damage and are not replaced or repaired prior to
                  the Closing Date, then,

                  A.       at the option of Seller, Seller may cancel this
                           Agreement.

                  B.       if Seller does not cancel this Agreement, at the
                           option of Purchaser, either

                           (i)      the Cash Purchase Price shall be reduced by
                                    the excess of

                                    (a)     the fair market value of the Assets
                                            immediately prior to the sale, loss,
                                            destruction, condemnation or damage,
                                            over

                                    (b)     the salvage value, if any, of the
                                            Assets immediately following the
                                            sale, loss, destruction,
                                            condemnation or damage, or


                                        6

<PAGE>



                           (ii)     no reduction to the Cash Purchase Price
                                    shall be made, and the Seller shall, on the
                                    Closing Date, assign to Purchaser all sale,
                                    insurance or condemnation proceeds payable
                                    to the Seller on account of the loss,
                                    destruction, condemnation or damage pursuant
                                    to an assignment reasonably satisfactory to
                                    Purchaser and pay to Purchaser that portion,
                                    if any, of any deductible amount under any
                                    insurance applicable to the claim for loss,
                                    destruction or damage.

         5.2      DETERMINATION OF VALUE ABSENT AGREEMENT

                  If the parties cannot agree upon the fair market value and the
                  salvage value of the Assets which are sold, lost, destroyed or
                  condemned or suffer  material  damage  prior to Closing,  such
                  amounts  shall be  estimated  for the  purpose of Closing  and
                  determined by an independent  appraiser as provided in Section
                  5.3.

         5.3      ESTIMATION AND FINAL DETERMINATION PROCEDURES

                  If the fair market value and the salvage  value of Assets need
                  to be estimated for purposes of Closing,  Purchaser and Seller
                  shall each deliver to the other within 30 days after Closing a
                  written  estimate of the fair market value and salvage  value,
                  and for purposes of Closing the Cash  Purchase  Price shall be
                  provisionally  adjusted based upon the arithmetic  mean of the
                  two  written  estimates.  Within 30 days  after  the  Closing,
                  Purchaser and Seller shall  jointly  designate an appraiser or
                  other expert  ("Expert").  The Expert so selected shall sit in
                  Chicago,  Illinois,  and may hear  evidence  and  examine  any
                  property or equipment he considers appropriate for purposes of
                  rendering a  decision.  Except as  otherwise  provided in this
                  Agreement,  the rules of the American Arbitration  Association
                  shall  control the  proceedings.  After hearing or viewing any
                  evidence he considers  appropriate (but in any event within 90
                  days after the  designation  of the Expert),  the Expert shall
                  render a decision,  which shall  consist of the  selection  of
                  either  Purchaser's  or  Seller's  written  estimate  (and the
                  Expert shall not render any decision  other than the selection
                  of one of the two  written  estimates).  The  decision  of the
                  Expert  shall be final  and shall not be  subject  to  appeal.
                  After the decision has been  rendered,  the losing party shall
                  pay in immediately  available funds the difference between the
                  amount paid at Closing based upon the  provisional  adjustment
                  and the amount that should have been paid based upon the final
                  decision,  together with interest on the  difference  from the
                  Closing  Date  until  paid,  calculated  on the  basis  of the
                  variable prime rate (corporate  base rate)  established by The
                  First National Bank of Chicago plus 150 basis points. The fees
                  and  costs  of the  Expert  shall  be  shared  equally  by the
                  parties.


                                        7

<PAGE>




6.       TAX ALLOCATION, LEASE INCOME,
         CAPITALIZED LEASES AND LABOR PROTECTION

         6.1      PRORATION OF TAXES

                  Purchaser shall declare and pay any and all applicable  sales,
                  use or property taxes, fees or assessments  payable by a buyer
                  in the  jurisdictions  in which the Rail Lines are located and
                  shall reimburse  Seller for any such payments  required of and
                  made by  Seller  (if any) as a result  of the sale of the Rail
                  Lines.  Real property ad valorem  taxes,  franchise  fees, and
                  special assessments,  if any, shall be prorated between Seller
                  and  Purchaser as of the date of Closing.  Purchaser  shall be
                  responsible  for  paying  any  and  all  such  taxes,  fees or
                  assessments  accruing  for the  period on or after the date of
                  Closing.   Seller  shall  pay  or  reimburse   Purchaser   for
                  Purchaser's  payment,  if any, of 1996 ad valorem taxes,  1996
                  franchise fees and the pro rata portion of special assessments
                  attributable  to 1996. In addition,  Seller shall be liable to
                  Purchaser  for  Seller's  pro-rata  portion  of the ad valorem
                  taxes,  franchise  fees and  special  assessments  on the Rail
                  Lines as determined by the formula in the following  sentence.
                  On or before the Closing  Date,  Seller shall pay to Purchaser
                  an amount equal to Seller's 1995 ad valorem  taxes,  franchise
                  fees and  special  assessments  as the case may be on the Rail
                  Lines multiplied by a fraction,  the numerator of which is the
                  number  of days from  January  1,  1997 to and  including  the
                  Closing Date and the denominator of which is 365. The Seller's
                  pro rata portion  shall be  recalculated  when 1997 ad valorem
                  taxes, franchise fees and special assessments, as the case may
                  be, are known,  and the parties  shall settle any  differences
                  owing  within 30 days.  Notwithstanding  the  foregoing,  with
                  respect to any abandoned right-of-way transferred by Seller to
                  Purchaser   by  this   Agreement,   Purchaser   shall   assume
                  responsibility  for the payment of any unpaid locally assessed
                  property taxes,  special assessments or similar unpaid charges
                  with respect to such abandoned right-of-way.

         6.2      LEASE RENTALS AND LICENSE INCOME

                  Lease  rentals  and  license  income  received  by  Seller  or
                  expected to be received by Seller (which is not already by its
                  terms calculated on a per diem basis) shall be prorated to the
                  Closing Date and the amount due Purchaser, if any, paid within
                  90 days after Closing.

         6.3      LABOR PROTECTION

                  The parties acknowledge that they anticipate that Purchaser, a
                  Class III carrier, shall acquire the Assets pursuant to 49 USC
                  ss.10902  and will not be subject to the  imposition  of labor
                  protection on the transaction  under that section.  Seller may
                  separately provide labor protection,  including relocation and
                  severance  costs,  under  applicable   collective   bargaining
                  agreements

                                        8

<PAGE>



                  between Seller and various  representatives  of certain of its
                  employees or other labor  protection  actions deemed necessary
                  by the Seller, in Seller's sole determination,  as a result of
                  this transaction.  Purchaser agrees to reimburse Seller for up
                  to but no more than  $1,000,000 of the Labor  Protection  cost
                  actually  paid by  Seller  as a  result  of this  transaction.
                  Payment  shall be made by  Purchaser  to  Seller  no more than
                  monthly  on the basis of  written  statements  indicating  the
                  aggregate  amount  and  character  of Labor  Protection  costs
                  actually paid.  Purchaser  shall be  responsible  for no Labor
                  Protection  reimbursement  to Seller  submitted  later than 24
                  months after the Closing.  If this  transaction  is subject to
                  the  imposition  of Labor  Protection  in  excess of Class III
                  labor protection, Purchaser agrees to reimburse Seller for the
                  first  $1,000,000  of Labor  Protection  cost actually paid by
                  Seller  as a  result  of this  transaction.  Seller  will  use
                  reasonable  efforts to minimize  all Labor  Protection  costs.
                  Purchaser will seek to fill its job  requirements  on the Rail
                  Lines first from employees of Seller currently  working on the
                  Rail  Lines  provided,   however,   Purchaser  shall  have  no
                  obligation   to  hire  any   individual   who  does  not  meet
                  Purchaser's  employment standards as established solely at the
                  discretion of Purchaser.


7.       ASSUMPTION OF LIABILITIES AND OBLIGATIONS

         7.1      LIABILITIES TO BE ASSUMED

                  As of the Closing,  Purchaser agrees to assume,  discharge and
                  pay in accor dance with their  respective  terms and to become
                  responsible  for the liabilities and obligations of the Seller
                  associated  with the Assets  including  but not limited to all
                  orders, licenses,  permits and ordinances issued by any court,
                  governmental  entity,  body,  agency, or commission related to
                  the liabilities and obligations of the Seller  associated with
                  the Assets  and which  have been  disclosed  to  Purchaser  in
                  writing,  and under all executory  Contracts expressly assumed
                  by Purchaser,  to the extent those liabilities and obligations
                  accrue  or  apply  after  the  Closing.   Notwithstanding  the
                  foregoing,  Purchaser shall (i) assume  responsibility for all
                  claims,  loss, damage and liability with respect to the Assets
                  which  occurs,  is  discovered or is claimed after the Closing
                  which  arises  out of any action or failure to act on the part
                  of  Purchaser  which  subsequently  results in a violation  of
                  Environmental  Law; and (ii) abide by all court orders and all
                  amendments thereto as they apply to Seller as scheduled on the
                  Environmental  Operations Obligations Schedule attached hereto
                  as  Appendix  E and  hereby  made a part  of  this  Agreement.
                  Purchaser  shall not be responsible  for any monetary  damages
                  specified in such orders.


                                        9

<PAGE>

         7.2      LIABILITIES NOT TO BE ASSUMED

                  Except as  expressly  provided  elsewhere  in this  Agreement,
                  Purchaser  shall not be obligated  to assume any  liability or
                  obligation  in  connection  with the matters  described in the
                  following clauses:

                  A.       any   litigation,   arbitration,   claim  or  similar
                           liability  of any type with  respect to the Assets or
                           Seller's  ownership  thereof,  which  is  based on or
                           arises  out of an  event  or  circumstance  occurring
                           prior to the Closing;

                  B.       obligations  under  any  plan  to  which  the  Seller
                           contributes pursuant to the applicable  provisions of
                           the Employee  Retirement Income Security Act of 1974,
                           as amended, or under any other employee benefit plan,
                           pension plan or similar plan;

                  C.       all claims  against or  obligations of Seller arising
                           out of or in connec tion with any labor  agreement or
                           arrangement; and

                  D.       any other liability not specifically assumed pursuant
                           to the terms of this Agreement.

         7.3      INSURANCE

                  The  provisions  of this  Section  shall not be  construed  to
                  constitute the assumption of any liabilities or obligations in
                  a manner which would avoid the  applicability of any insurance
                  policy with respect to any event or circumstance arising prior
                  to the Closing.

         7.4      NO THIRD PARTY RIGHTS

                  This  Section is not intended to create any rights in favor of
                  any person other than Purchaser and Seller.


8.       REPRESENTATIONS AND WARRANTIES

         8.1      DISCLAIMER OF REPRESENTATIONS AND WARRANTIES

                  THE SALE AND PURCHASE AND THE OTHER TRANSACTIONS  CONTEMPLATED
                  BY THIS AGREEMENT SHALL BE WITHOUT REPRE SENTATION OR WARRANTY
                  OF ANY KIND BY THE SELLER,  EXCEPT FOR THE REPRESENTATIONS AND
                  WARRANTIES  OF THE  SELLER SET FORTH IN  SECTIONS  8.2 AND 8.3
                  BELOW.  WITHOUT  LIMITING  THE  GENERALITY  OF  THE  PRECEDING
                  SENTENCE, THE SELLER DISCLAIMS ANY REPRESENTATION OR WARRANTY,
                  EXPRESS OR

                                       10

<PAGE>



                  IMPLIED,  OF  MERCHANTABILITY  OR  FITNESS  FOR  A  PARTICULAR
                  PURPOSE WITH RESPECT TO THE ASSETS, AND AVERS THAT SUCH ASSETS
                  ARE BEING SOLD "AS IS, WHERE IS". All  instruments of transfer
                  may  negate  all   express  or  implied   representations   or
                  warranties (except those contained in this Agreement).

         8.2      GENERAL REPRESENTATIONS AND WARRANTIES OF SELLER

                  Seller represents and warrants to Purchaser as follows:

                  A.       Seller   is  a   validly   organized   and   existing
                           corporation,  in good standing  under the laws of the
                           State of Utah. Seller has the necessary  authority to
                           own   property   and  conduct  its  business  as  now
                           conducted in the States of Wisconsin and Michigan.

                  B.       All necessary  corporate action of Seller required in
                           connection  with the  execution  and delivery of this
                           Agreement and the  consummation  of the  transactions
                           contemplated  by this  Agreement has been author ized
                           and  obtained.  Subject to the  effectiveness  of the
                           exemption or approval by the Board and any applicable
                           requirements  under  the  HSR  Act,  (i)  Seller  has
                           obtained all  necessary  governmental  authorizations
                           and approvals (or waivers of such  authorizations  or
                           approvals)   required   in   connection   with   this
                           Agreement,  and (ii) this Agreement  constitutes  the
                           valid and binding  obligation  of Seller  enforceable
                           against Seller in accordance  with its terms,  except
                           as such  enforcement  may be  limited  by  applicable
                           bankruptcy,  insolvency,  moratorium  or similar laws
                           affecting  rights of creditors  generally and general
                           principles of equity.

                  C.       Except  as set  forth on  Exhibit  3, the sale of the
                           Assets and the consummation of the other transactions
                           contemplated by this Agreement will not result in any
                           breach of or default  under,  violate the  conditions
                           of,  or  accelerate  any  obligation  under,   either
                           Seller's  articles of  incorporation or bylaws or any
                           agreement,   mortgage,   lease,   deed,  order,  law,
                           judgment or rule to which either Seller is a party or
                           by which  either  Seller  or its  property  is bound,
                           which  breach,  default,  violation  or  acceleration
                           would  have  a  materially  adverse  effect  on  that
                           Seller,   the  Assets  or  the   business   currently
                           conducted with the Assets.

                  D.       No agent,  broker or other person acting  pursuant to
                           the  authority  or direction of Seller is entitled to
                           any commission or finder's fee in connection with the
                           transactions contemplated by this Agreement for which
                           Purchaser is or may become liable.


                                       11

<PAGE>



                  E.       Except  as set  forth  on  Exhibit  3,  there  are no
                           actions,  suits,  or  proceedings  pending or, to the
                           Knowledge of Seller, threatened against Seller or its
                           properties in any court or before any federal, state,
                           local or other governmental  agency which, if decided
                           adversely to Seller,  would  prohibit the  execution,
                           delivery and  performance of this Agreement by Seller
                           or would  materially  adversely  affect the Assets or
                           the business currently conducted with the Assets.

                  F.       As of the Closing,  the Assets will not be subject to
                           any liens,  security interests or other encumbrances,
                           except for Permitted Encumbrances.

                  G.       Seller  has  sufficient  interest  in the  Assets  to
                           permit the  operation  of the Rail Lines as presently
                           conducted,  and to the  Knowledge of Seller there are
                           no claims which would affect in any material  respect
                           its  interest  in  the  Assets  so as  to  materially
                           adversely  affect  Purchaser's   ability  to  conduct
                           operations  with the Assets  following the Closing as
                           currently conducted.

                  H.       To the Knowledge of Seller, each material Contract to
                           be assigned to  Purchaser is in full force and effect
                           and no default has occurred  under the Contract which
                           would have a materially  adverse effect on the Assets
                           or Purchaser's ability to conduct operations with the
                           Assets as currently  conducted following the Closing.
                           Seller has not  expressly  waived or  assigned to any
                           other  person  any of  its  rights  under  any of the
                           Contracts,  and each of the Contracts may be assigned
                           to Purchaser  without  impairment of any rights under
                           the  Contract,  except  (1) as set forth on Exhibit 3
                           and (2)  those  Contracts  the loss of  rights  under
                           which would not have a materially  adverse  effect on
                           the   Assets  or   Purchaser's   ability  to  conduct
                           operations  following  the Closing with the Assets as
                           currently conducted.

                  I.       The traffic  and revenue  data for the Rail Lines for
                           the 1994 and 1995 calendar  years of Seller  provided
                           to  Purchaser  by Seller  accurately  reflect  in all
                           material  respects actual operating history of Seller
                           for the periods indicated.

                  J.       To the Knowledge of Seller,  Seller is not a party to
                           any indenture,  security, contract or other agreement
                           or subject  to any  judgment,  order,  writ or decree
                           which  would  (1)  impose  any   materially   adverse
                           condition upon Purchaser, the Assets or the operation
                           of the  Rail  Lines  or  result  in the  loss  of any
                           material rights currently possessed or used by Seller
                           or   otherwise   materially   adversely   affect   or
                           materially  restrict  the Assets or the  operation of
                           the Rail  Lines as a result of the sale of the Assets
                           to Purchaser as contemplated by this Agreement

                                       12

<PAGE>



                           or  (2)  materially   adversely  affect   Purchaser's
                           ability to conduct the  operations  of the Rail Lines
                           following Closing as currently conducted.

         8.3      ENVIRONMENTAL REPRESENTATIONS  OF SELLER

                  Seller  represents  as  follows,  except  as set  forth on the
                  Disclosure  Schedule which is attached hereto as Exhibit 3 and
                  hereby   made   a  part   of   this   Agreement   and  on  the
                  Environmental-Operations   Obligations   Schedule   which   is
                  attached hereto as Appendix E and hereby made a part of this
                  Agreement:

                  A.       There are no actions,  suits or  proceedings  pending
                           or, to the Knowl edge of Seller,  threatened  against
                           Seller with respect to the Assets or the operation of
                           the Rail  Lines in any court or before  any  federal,
                           state, local or other  governmental  agency under any
                           Environmental Law.

                  B.       Seller is in material  compliance with all applicable
                           Environmental Laws with respect to the Assets and the
                           operation of the Rail Lines.

                  C.       To the Knowledge of Seller's Assistant Vice President
                           Environmental  Management,  Seller  has  received  no
                           written  notice  from  any  third  party  (including,
                           without  limitation,  any  federal,  state  or  local
                           govern mental agency) (1) that it has been identified
                           by the United States Environmental  Protection Agency
                           as a potentially  responsible party under CERCLA with
                           respect to a site  included  within the Assets listed
                           on the  National  Priorities  List  (40 CFR  Part 300
                           Appendix B (1990));  (2) that any Hazardous Substance
                           has been  discovered  on a site  included  within the
                           Assets;  or (3)  that any site  included  within  the
                           Assets  is the  subject  of any  ongoing  or  ordered
                           remedial  investigation,  removal  or other  response
                           action pursuant to any Environmental Law.

                  D.       Seller  has   undertaken   a  review  of  assets  and
                           operations, the results of which are reflected in the
                           Disclosure  Schedule to  determine  whether;  (1) any
                           portion of the Assets has been used for the handling,
                           storage,   disposal  or   processing   of   Hazardous
                           Substances   except  in  material   compliance   with
                           applicable  Environmental  Laws, (2) any  underground
                           storage  tanks for Hazardous  Substances  are located
                           in, on or about the  Assets,  (3) the Assets  contain
                           asbestos,   urea   formaldehyde  foam  insulation  or
                           transformers    or   other    equipment    containing
                           polychlorinated  biphenyls,  and (4) there  have been
                           releases of  Hazardous  Substances  in, on,  under or
                           from the Assets  except in material  compliance  with
                           Environmental   Laws.  The  Disclosure   Schedule  is
                           Seller's good faith effort to identify any such

                                       13

<PAGE>



                           Assets or operations.  Seller specifically  disclaims
                           any representation with respect to such matters.

         8.4      REPRESENTATIONS AND WARRANTIES BY PURCHASER

                  Purchaser represents and warrants to Seller as follows:

                  A.       Purchaser  is  a  validly   organized   and  existing
                           Michigan corporation, in good standing. Purchaser has
                           the necessary  authority to purchase and own property
                           and conduct  its  business  as now  conducted  in the
                           states of Michigan and Wisconsin.

                  B.       All necessary  corporate action of Purchaser required
                           in connection with the execution and delivery of this
                           Agreement and the consumma  tion of the  transactions
                           contemplated  by this  Agreement has been  authorized
                           and  obtained.  Subject to the  effectiveness  of the
                           exemp  tion  or   approval   by  the  Board  and  any
                           applicable   requirements  under  the  HSR  Act,  (i)
                           Purchaser  has  obtained all  necessary  governmental
                           authorizations  and  approvals  (or  waivers  of such
                           authorizations  or approvals)  required in connection
                           with  this   Agreement,   and  (ii)  this   Agreement
                           constitutes  the  valid  and  binding  obligation  of
                           Purchaser enforceable against Purchaser in accordance
                           with its terms,  except as enforcement may be limited
                           by applicable bankruptcy,  insolvency,  moratorium or
                           similar laws affecting rights of creditors  generally
                           and general principles of equity.

                  C.       The  purchase of the Assets and the  consummation  of
                           the transactions  contemplated by this Agreement will
                           not  result  in  any  default   under,   violate  the
                           conditions of or accelerate any obligation  under any
                           material  agreement,  order, law, judgment or rule to
                           which Purchaser is a party or by which it is bound.

                  D.       No agent,  broker or other person acting  pursuant to
                           the  authority  or direction of Purchaser is entitled
                           to any commission or finder's fee in connection  with
                           the  transactions  contemplated by this Agreement for
                           which Sellers are or may become liable.

                  E.       There are no actions,  suits or  proceedings  pending
                           or,  to  the  Knowl  edge  of  Purchaser,  threatened
                           against Purchaser in any court or before any federal,
                           state, local or other  governmental  agency which, if
                           decided  adversely to the  Purchaser,  would prohibit
                           the  execution,  delivery  and  performance  of  this
                           Agreement by Purchaser.

                  F.       The sale of the  Assets and the  consummation  of the
                           other  transactions  contemplated  by this  Agreement
                           will not result in any

                                       14

<PAGE>



                           breach of or default  under,  violate the  conditions
                           of,  or  accelerate  any  obligation  under,   either
                           Purchaser's  articles of  incorporation  or bylaws or
                           any agreement,  mortgage,  lease,  deed,  order, law,
                           judgment or rule to which either Purchaser is a party
                           or by  which  either  Purchaser  or its  property  is
                           bound,   which   breach,   default,    violation   or
                           acceleration  would have a materially  adverse effect
                           on  the   Purchaser,   the  Assets  or  the  business
                           currently  conducted  with the  Assets  or any  other
                           assets of the Purchaser.

         8.5      SURVIVAL

                  The representations and warranties contained in this Agreement
                  shall  survive  the  Closing  and  any   termination  of  this
                  Agreement  and shall remain in full force and effect for three
                  years  after the Closing  (five  years after the Closing  with
                  respect to the  representations  and  warranties  contained in
                  Sections 8.3 and 8.4).

         8.6      CONDITION OF ASSETS

                  Except as  specifically  provided in this  Section 8,  neither
                  Seller nor Purchaser makes, and each expressly disclaims,  any
                  representation  or warranty  regard ing the  condition  of the
                  Assets,  including  any  Hazardous  Substances  or  any  other
                  conditions, whether or not hazardous, affecting the surface or
                  subsur face (including groundwater) thereof.


9.       CONDITIONS TO THE CLOSING

         9.1      OBLIGATION OF PURCHASER TO CLOSE

                  The  obligation  of  Purchaser  to effect  the  Closing of the
                  transactions contem plated by this Agreement is subject to the
                  satisfaction  at or  prior  to the  Closing  of the  following
                  conditions:

                  A.       The   representations   and   warranties   of  Seller
                           contained in Section 8 of this  Agreement  shall have
                           been true in all material  respects  when made and at
                           the time of Closing as if those  representations  and
                           warranties had been made at that time.

                  B.       Seller  shall  have  performed  and  complied  in all
                           material  respects with all agreements and conditions
                           required  by  this   Agreement  to  be  performed  or
                           complied with by Seller prior to or at the Closing.


                                       15

<PAGE>



                  C.       Purchaser shall have received the opinion of Seller's
                           counsel dated as of the Closing  Date,  substantially
                           in the form attached to this Agreement as Exhibit 1.

                  D.       Any waiting period  (including any extensions)  under
                           the HSR Act  applicable  to the  consummation  of the
                           transactions  contemplated  by this  Agreement  shall
                           have expired or been terminated.

                  E.       The  Board  shall  have  approved  the   transactions
                           contemplated   by  this   Agreement   under  the  ICC
                           Termination Act of 1995 or exempted the  transactions
                           contemplated by this Agreement from the provisions of
                           the ICC  Termination  Act of 1995  requiring  Surface
                           Transportation  Board approval,  and that approval or
                           exemption  shall have become final or  effective  (as
                           the case may be).

                  F.       No condition, other than Labor Protection, shall have
                           been  imposed  by the  Board in  connection  with the
                           transactions contemplated by this Agreement which has
                           a material and significant adverse effect on the cost
                           of the  transaction  or value of the  transaction  to
                           Purchaser  or on  Purchaser's  ability to own, use or
                           operate the Assets taken as a whole in  substantially
                           the same manner as Seller owned, used or operated the
                           Assets.

                  G.       Between the date of this  Agreement  and the Closing,
                           no  unrepaired  physical  loss or damage  shall  have
                           occurred to the Assets  resulting  in a shut-down  of
                           any  material  portion of the  operation  of the Rail
                           Lines as of the Closing.

                  H.       Purchaser  shall have  received an  executed  copy of
                           each document,  agreement and instrument  referred to
                           in  this  Agreement   required  to  be  executed  and
                           delivered by Seller prior to or at the Closing.

                  The  satisfaction  of any of the  conditions set forth in this
                  subsection may be waived by Purchaser in writing  delivered at
                  or prior to the Closing.


         9.2      OBLIGATION OF SELLER TO CLOSE

                  The   obligation   of  Seller  to  effect   the   transactions
                  contemplated by this Agreement is subject to the  satisfaction
                  prior to or at the Closing of the following conditions:

                  A.       The  representations  and warranties of Purchaser set
                           forth in Section 8 of this Agreement  shall have been
                           true in all material respects when

                                       16

<PAGE>



                           made  and at the  time  of the  Closing  as if  those
                           representations  and warranties had been made at that
                           time.

                  B.       Purchaser  shall have  performed  and complied in all
                           material  respects with all agreements and conditions
                           required  by  this   Agreement  to  be  performed  or
                           complied with by them prior to or at the Closing.

                  C.       Any waiting period  (including any extensions)  under
                           the HSR Act  applicable  to the  consummation  of the
                           transactions  contemplated  by this  Agreement  shall
                           have expired or been terminated.

                  D.       The  Board  shall  have  approved  the   transactions
                           contemplated   by  this   Agreement   under  the  ICC
                           Termination Act of 1995 or exempted the  transactions
                           contemplated by this Agreement from the provisions of
                           the  ICC  Termination  Act of  1995  requiring  Board
                           approval,  and that approval or exemption  shall have
                           become final or effective (as the case may be).

                  E.       Seller shall have received the opinion of Purchaser's
                           counsel dated as of the Closing, substantially in the
                           form attached to this Agreement as Exhibit 2.

                  F.       Seller shall have  received an executed  copy of each
                           document,  agreement  and  instrument  referred to in
                           this Agreement  required to be executed and delivered
                           by Purchaser prior to or at the Closing.

                  G.       No condition other than Labor  Protection  shall have
                           been  imposed  by the  Board in  connection  with the
                           transactions contemplated by this Agreement which has
                           a significant  and adverse  effect on the cost of the
                           transaction or value of the transaction to Seller.

                  The satisfaction of any condition set forth in this subsection
                  may be waived by Seller in  writing  delivered  at or prior to
                  the Closing.


10.      CLOSING

         10.1     PLACE OF CLOSING

                  The Closing of the transactions contemplated by this Agreement
                  shall take place at the offices of Seller at Chicago, Illinois
                  or at such- other mutually  agreed upon location (the "Closing
                  Place").


                                       17

<PAGE>

         10.2     TIME OF CLOSING

                  The Closing shall take place on a mutually  agreeable date not
                  later than the 20th  business day  following the date on which
                  an order by the Board approv ing the acquisition of the Assets
                  by  Purchaser  has  become  final  or the  date  on  which  an
                  exemption from approval by the Board becomes effective, but in
                  no event shall the Closing Date, as hereinafter defined, occur
                  prior to January 2, 1997. The date on which the Closing occurs
                  is referred to in this Agreement as the "Closing Date".

         10.3     DELIVERIES BY PURCHASER AT CLOSING

                  At the  Closing,  Purchaser  shall  pay  to  Seller  the  Cash
                  Purchase  Price,   through   Seller's   Designated   Qualified
                  Intermediary,  if so requested, as adjusted, deliver to Seller
                  its   undertakings  to  assume,   perform  and  discharge  the
                  liabilities and obligations of Seller to the extent assumed by
                  Purchaser  under  this  Agreement,   and  deliver  such  other
                  documents or instruments as are required of Purchaser in order
                  to  effect  or  evidence  the   consummation  of  the  actions
                  contemplated by this Agreement.



                                       18

<PAGE>



         10.4     DELIVERIES BY SELLER AT CLOSING

                  At the Closing, Seller shall:

                  A.       Effect the transfer of the Assets to Purchaser by the
                           Quit Claim Deed(s) in  recordable  form (as permitted
                           for  filing by a  railroad  or  transmitting  utility
                           where allowed) in substantially  the form attached as
                           Exhibit 4 to this Agreement,  Personal  Property Sale
                           Order in substantially the form attached as Exhibit 5
                           to this Agreement, assignments and other documents of
                           transfer   reasonably   required  to   transfer   the
                           interests  of  Seller  in  the  Assets  to  Purchaser
                           consistent  with the terms of this  Agreement  (which
                           deeds, Personal Property Sale Order,  assignments and
                           other  documents may reflect payment of such specific
                           portions  of  the  Purchase  Price  as  requested  by
                           Purchaser,   provided  that  such   allocations   and
                           direction will not be inconsistent with Appendix B or
                           the  provisions  of  Section  1060  of  the  Internal
                           Revenue Code of 1986, as amended).

                  B.       Furnish  to   Purchaser  an  affidavit  of  the  type
                           referred to in Section  1445 (b) (2) of the  Internal
                           Revenue Code of 1986, as amended, if Seller wishes to
                           avoid the withholding of taxes as provided in Section
                           1445.

                  C.       Take  all  other   reasonable  steps  that  Purchaser
                           reasonably   requests  in  order  to  effectuate  the
                           transactions    contemplated   by   this   Agreement,
                           including  the   assignment  of  all  Contracts  that
                           Purchaser is to assume pursuant to this Agreement.


11.      BOOKS AND RECORDS

         11.1     ACCESS TO BOOKS AND RECORDS

                  A.       Prior to Closing,  Seller will permit  employees  and
                           agents of Purchaser  (including  consultants) and its
                           lenders,   during  normal   business   hours  and  on
                           reasonable   notice,   to  have  access  to  Seller's
                           properties  for the purpose of inspecting  the Assets
                           and to inspect and copy Contracts, books, agreements,
                           plans,   reports  and  other  records  reflecting  or
                           reasonably  relating to the  Assets.  Seller may have
                           representatives  present during any  inspection,  and
                           may   obtain  any   written   reports   produced   by
                           environmental  consultants to Purchaser in connection
                           with inspections of the Assets. Seller will cooperate
                           with  Purchaser's and its lenders',  investigation of
                           the Assets and the status of title to the Assets, and
                           shall use its reasonable  efforts to obtain  consents
                           from third  parties  necessary  for  Purchaser or its
                           consultants to inspect

                                       19

<PAGE>



                           transportation  contracts  with those third  parties.
                           Prior to Closing (including if Closing never occurs),
                           Purchaser  agrees  that all  information  and records
                           obtained by Purchaser or its lenders pursuant to this
                           Section shall be maintained as confidential.  If, due
                           to  competitive  factors,  Seller  refuses to deliver
                           information  to  Purchaser  for review,  Seller shall
                           deliver such information to an independent consultant
                           retained  by  Purchaser   who  agrees  to  keep  such
                           information confidential from all parties,  including
                           Purchaser,   except  for  summaries  that  have  been
                           previously   reviewed   by  Seller   and   reasonably
                           determined  not to  have  a  competitive  impact.  If
                           Seller  does not  respond  to a  request  to review a
                           summary  within  three  days,  the  summary  will  be
                           considered   not  to  have  a   competitive   impact.
                           Purchaser  shall  not be  obligated  to  maintain  as
                           confidential or to require its lenders to maintain as
                           confidential  any  information  obtained  from Seller
                           which  is  publicly   available,   which  is  readily
                           ascertainable  from public  sources,  which is either
                           known  to  them  at  the  time  the  information  was
                           disclosed  or is  rightfully  obtained  from a  third
                           party,  and in  either  case  was not  subject  to an
                           obligation  of  confidentiality,   or  which  is  the
                           subject  of a subpoena  or other  legal  process.  No
                           investigation involving the collection of air, water,
                           soil  or  other  samples  or  any  other   physically
                           invasive or disruptive procedure,  shall be conducted
                           without Seller's prior consent.

                  B.       From and after the Closing,

                           (i)      Purchaser  will make  available  to  Seller,
                                    under reasonable conditions,  any records of
                                    Seller  transferred to Purchaser pursuant to
                                    this   Agreement   necessary   for  Seller's
                                    corporate or tax purposes; and

                           (ii)     Seller will cooperate with Purchaser to make
                                    available  to  Purchaser,  under  reasonable
                                    conditions,  any  records of Seller that may
                                    be useful to Purchaser  in the  ownership or
                                    operation  of the Assets or the  performance
                                    of obligations assumed by Purchaser.

         11.2     SECURITIES LAW COMPLIANCE

                  Seller  shall,  if requested  by  Purchaser  or its  corporate
                  parent in  connection  with any document  required to be filed
                  with the  Securities and Exchange  Commission  with respect to
                  the  transactions  contemplated  by  this  Agreement  (whether
                  before or after the  Closing  Date),  provide  Purchaser  with
                  financial  information and financial  statements  necessary to
                  permit  Purchaser  to comply  with its  obligations  under the
                  federal securities laws.


                                       20

<PAGE>



12.      OPERATIONS PRIOR TO CLOSING

         12.1     OPERATIONS PRIOR TO CLOSING

                  Seller  agrees  that,  except  with  the  written  consent  of
                  Purchaser, from the date of this Agreement to the Closing:

                  A.       Seller  shall  operate the Rail Lines in the ordinary
                           course  and  will  use  its  reasonable   efforts  to
                           preserve for  Purchaser  the good will of suppli ers,
                           customers  and others having  business  relationships
                           with Seller;

                  B.       Seller will not grant (or make any material amendment
                           to) any track age rights, operating rights, licenses,
                           permits,  easements or encum  brances  affecting  the
                           Assets;

                  C.       Seller  will  not  sell,  lease,  assign,   mortgage,
                           hypothecate  or otherwise  transfer or dispose of any
                           of the  Assets  (other  than  Inventory  used  in the
                           ordinary course of business);

                  D.       Seller shall maintain, repair and renew the Assets in
                           the ordinary  course,  consistent with past practices
                           (and in any  event  to a  condition  equal  to  their
                           condition  on the  date of this  Agreement,  ordinary
                           wear and tear excepted);

                  E.       Seller  shall  maintain  in  full  force  and  effect
                           insurance  coverage   (including  any  self-insurance
                           programs)   of  the  types  and  in  the  amounts  in
                           existence  on  April  1,  1996  with  respect  to the
                           Assets;

                  F.       Seller  shall  maintain  in full force and effect all
                           Contracts,  licenses,  authorizations  and  approvals
                           necessary  for or related to the operation and use of
                           the Assets as currently operated and used;  provided,
                           however,  that Seller may amend,  extend or terminate
                           Contracts, licenses,  authorizations and approvals in
                           the ordinary course of business; and

                  G.       Seller  shall  cause  all  transportation   contracts
                           entered  into  after  the date of this  Agreement  to
                           either specifically permit or not prohibit assignment
                           to a purchaser of the Rail Lines.


13.      EMPLOYEES

         Purchaser  shall  bear  the sole  obligation  of  negotiating  with and
         entering into employment  relationships  with prospective  employees of
         Purchaser,  and Seller shall have no obligation in that regard.  Seller
         agrees that Purchaser may solicit any of

                                       21

<PAGE>



         its  employees  on the Rail  Lines for  employment.    Nothing  in this
         Agreement  shall  be  interpreted  to  require  Purchaser  to hire  any
         specific  employee or any specific number of employees,  whether or not
         currently  covered by a collective  bargaining  agreement or employment
         contract.


14.      CONSENTS AND APPROVALS

         14.1     BOARD AND HSR APPROVALS

                  Purchaser and Seller each will  cooperate with one another and
                  use their  best  efforts  to take,  or cause to be taken,  all
                  actions, and to do, or cause to be done, all things necessary,
                  proper or advisable  under  applicable laws and regulations to
                  prepare  all  necessary  documentation   (including,   without
                  limitation,  furnishing all information required under the HSR
                  Act, if applica ble), to effect promptly all necessary filings
                  and to satisfy all other  conditions  and obtain all necessary
                  permits, consents, approvals, orders and authoriza tions of or
                  any  exemptions  by, all third  parties  and all  governmental
                  entities necessary to consummate the transactions contemplated
                  by this Agreement.  Purchaser shall be solely  responsible for
                  filings or  proceedings  before the Board with  respect to the
                  approval  of the  acquisition  of the  Assets or  securing  an
                  exemption from that approval and Purchaser's  corporate parent
                  shall be solely  responsible for filings or proceedings before
                  the Board with  respect to approval  of the common  control of
                  two or more carriers  following the  acquisition of the Assets
                  by  Purchaser  or securing an  exemption  from that  approval.
                  Seller  will,   without  cost  to  Purchaser  or  its  parent,
                  cooperate in the filings and proceedings  before the Board and
                  provide  any  necessary  data  in  connection   with  securing
                  approvals or exemptions.  Prior to filing any  application for
                  approval or exemption with the Board, Purchaser will deliver a
                  draft  copy to  Seller  with  sufficient  time for  Seller  to
                  comment  upon the  application.  Any costs,  including  filing
                  fees, associated with any filing before the Board or under the
                  HSR Act shall be borne solely by Purchaser.

                  Each party will keep the others  apprised of the status of any
                  inquiries  made of such party by the Board,  the Federal Trade
                  Commission,  the  Department of Justice,  the  Securities  and
                  Exchange  Commission  or  any  other  governmental  agency  or
                  authority (or members of their respective staffs) with respect
                  to this  Agreement or the  transactions  contemplated  by this
                  Agreement.


15.      INDEMNIFICATION

         15.1     PURCHASER'S INDEMNIFICATION

                                       22

<PAGE>



                  Purchaser shall defend, indemnify and hold harmless the Seller
                  from and  against  all  claims,  losses,  costs  and  expenses
                  (including  attorneys fees and expenses) which arise out of or
                  are based on (i) the  ownership  or  operation  of the  Assets
                  after the  Closing,  (ii) any  material  misrepresentation  or
                  material  breach  of  warranty  by  Purchaser  and  (iii)  all
                  liabilities  of Seller  assumed by Purchaser  pursuant to this
                  Agreement.

         15.2     SELLER'S INDEMNIFICATION

                  Subject  to  the  terms  of  all   Allocation   and  Proration
                  Agreements  and alloca tion and  proration  provisions in this
                  Agreement, and except to the extent liabilities are assumed by
                  Purchaser under paragraph 7.1 of this Agreement,  Seller shall
                  defend, indemnify and hold harmless Purchaser from and against
                  all claims,  losses, costs and expenses (including  attorneys,
                  fees and expenses)  which arise out of or are based on (i) the
                  ownership  or  operation  of the Assets by Seller prior to the
                  Closing;  (ii)  any  material  misrepresentation  or  material
                  breach of  warranty  by Seller;  (iii) any lien,  encumbrance,
                  claim or security interest (including  Permitted  Encumbrances
                  only to the  extent  described  in  clauses  A.  and B. of the
                  definition of Permitted  Encumbrances)  that arose or attached
                  as a result of events,  operations  or ownership  prior to the
                  Closing,  (iv) all  liabilities of Seller that are not assumed
                  by Purchaser  pursuant to this Agreement and (v) any breach of
                  an Environmental  Law by Seller or any  contamination  in, on,
                  about or under  the  Assets at any time  prior to the  Closing
                  (whether or not remaining after the Closing).

         15.3     PROCEDURES

                  The party seeking indemnification pursuant to Sections 15.1 or
                  15.2  above  (the  "Indemnified  Party')  shall give the party
                  obligated  to indemnify  (the  "Indemnifying  Party")  written
                  notice  in  accordance  with  Section  17.12  of any  claim or
                  assertion  of liability by a third party with respect to which
                  the Indemnified Party is seeking indemnification (a "Claim").

                  The  Indemnifying  Party shall have the right to undertake the
                  defense of such Claim (by counsel or other  representatives of
                  its own choosing and reasonably  acceptable to the Indemnified
                  Party)  at  the  Indemnifying  Party's  sole  risk  and  cost.
                  Notwithstanding   the  fact   that  the   Indemnifying   Party
                  undertakes  the defense of a Claim,  if there is a  reasonable
                  probability that the Claim may materially and adversely affect
                  the Indemnified  Party,  the Indemnified  Party (by counsel or
                  through other  representatives of its own choosing) shall have
                  the right,  at its  expense,  to  participate  in the defense,
                  compromise or settlement of the Claim.


                                       23

<PAGE>



                  If the  Indemnifying  Party undertakes the defense of a Claim,
                  (i) the Indemni fying Party shall keep the  Indemnified  Party
                  informed  of  the  status  of  the  defense  and  furnish  the
                  Indemnified  Party with copies of all  documents,  instruments
                  and information  reasonably requested by the Indemnified Party
                  in connection with the Claim;  (ii) the Indemnified  Party (by
                  counsel or other  representatives  of its own  choosing and at
                  its own  expense)  shall  have the right to  consult  with the
                  Indemnifying  Party (and its  counsel  and  representa  tives)
                  concerning  the  Claim,  and the  Indemnifying  Party  and the
                  Indemnified   Party  (and   their   respective   counsel   and
                  representatives)  shall  cooperate  with respect to the Claim;
                  and  (iii) the  Indemnifying  Party  shall  not,  without  the
                  written consent of the Indemnified Party, settle or compromise
                  a  Claim  or  consent  to  the  entry  of a  judgment  without
                  obtaining  from the  claimant or  plaintiff  an  unconditional
                  release of all liability of the  Indemnified  Party in respect
                  of such Claim in a form  satisfactory to the Indemnified Party
                  and under  circumstances  which do not require the Indemnified
                  Party to pay any money or consent to the taking or withholding
                  of any action affecting it or any of its properties, assets or
                  businesses.

                  If the  Indemnifying  Party  does not elect to  undertake  the
                  defense  of a Claim or  fails to  defend  the  Claim  within a
                  reasonable  time after  notice of the Claim,  the  Indemnified
                  Party  shall  have  the  right  to   undertake   the  defense,
                  compromise  or  settlement  of the Claim (by  counsel or other
                  representatives  of the  Indemnified  Party's own choosing) on
                  behalf of, for the  account of and at the risk and cost of the
                  Indemnifying  Party.  In such event,  the  Indemnify ing Party
                  shall pay (in  addition to any other sums  required to be paid
                  under the  terms of this  Agreement)  the  costs and  expenses
                  incurred  by the  Indemnified  Party  in  connection  with the
                  defense,  settlement  or  compromise  of the Claim as and when
                  those costs are incurred.


16.      TERMINATION

         16.1     GROUNDS FOR TERMINATION

                  This  Agreement  and  the  consummation  of  the  transactions
                  contemplated by this Agreement may be terminated  prior to the
                  Closing:

                  A.       By the  agreement in writing of Seller and  Purchaser
                           at any time,

                  B.       By either Purchaser or Seller if the Closing does not
                           occur  prior to March 31, 1997 and the failure of the
                           Closing  to  occur  is not due to the  fault  of,  or
                           breach of this Agreement by, any party,

                  C.       By   Purchaser,   if  Seller   has  made  a  material
                           misrepresentation  in,  or if  Seller  is guilty of a
                           material breach of the representations and

                                       24

<PAGE>



                           warranties of Seller contained in, this Agreement, or
                           if there has been a failure by Seller to comply  with
                           any of its material obligations under this Agreement,
                           and such  material  misrepresentation  or  breach  of
                           warranty or material failure has not been cured after
                           30 days' written notice from Purchaser to Seller,

                  D.       By  Seller,   if   Purchaser   has  made  a  material
                           misrepresentation  in, or if Purchaser is guilty of a
                           material breach of the representations and warranties
                           of  Purchaser  contained  in, this  Agreement,  or if
                           there has been a failure by  Purchaser to comply with
                           any  of  its   material   obliga   tions  under  this
                           Agreement,  and such  material  misrepresentation  or
                           breach of warranty  or material  failure has not been
                           cured  after 30 days  written  notice  from Seller to
                           Purchaser,

                  E.       By either Purchaser or Seller if the Board shall have
                           disapproved  the  transactions  contemplated  by this
                           Agreement  and such  disapproval  shall  have  become
                           final  and not  subject  to  further  proceedings  or
                           appeal, whether by lapse of time or otherwise, or

                  F.       By either  Purchaser  or  Seller,  if any  conditions
                           imposed by the Board materially  change the economics
                           of this transaction for that party.

                  Termination  by Purchaser or Seller  pursuant to paragraphs C.
                  or D. above shall not relieve the non-terminating party of any
                  liability for misrepresenta tion or breach.




                                       25

<PAGE>



17.      MISCELLANEOUS

         17.1     TITLE AND OTHER DESCRIPTIONS

                  Prior to the  Closing,  the  description  of the Assets may be
                  changed by mutual  agreement of Purchaser and Seller to add or
                  delete items of tangible  property or Contracts.  From time to
                  time after the  Closing,  at  Purchaser's  request and without
                  further  consideration,  Seller will execute and deliver other
                  instruments  of conveyance and transfer and take other actions
                  as Purchaser  reasonably  requires to convey,  transfer to and
                  vest in Purchaser whatever title Seller may have in and to the
                  Assets,  and to put Purchaser in possession of the Assets.  In
                  the case of  Contracts  and  rights,  if any,  that  cannot be
                  transferred  effectively without the consent of third parties,
                  Seller will request these consents  promptly and will make all
                  reasonable  efforts to obtain the consents.  From time to time
                  after the  Closing,  at Seller's  request and without  further
                  consideration,   Purchaser  will  execute  and  deliver  other
                  instruments  of  conveyance,  transfer and assumption and take
                  other  actions  as Seller  reasonably  requires  to assume the
                  liabilities  and  obligations  of  Seller  to  be  assumed  by
                  Purchaser pursuant to this Agreement.

         17.2     WAIVER

                  Purchaser  may  in  writing  extend  the  time  for  or  waive
                  performance  of  any of the  obligations,  representations  or
                  warranties  of Seller  under  this  Agreement.  Seller  may in
                  writing take similar  action with respect to the  obligations,
                  repre   sentations  or  warranties  of  Purchaser  under  this
                  Agreement.

         17.3     EXPENSES

                  Purchaser shall be responsible for and shall pay all expenses,
                  including attorney's fees, incurred by Purchaser in connection
                  with this Agreement and the  consummation of the  transactions
                  contemplated   by  this   Agreement,   and  Seller   shall  be
                  responsible   for  and  shall  pay  all  expenses,   including
                  attorney's  fees,  incurred by Seller in connection  with this
                  Agreement   and   the   consummation   of   the   transactions
                  contemplated by this Agreement.

         17.4     TRANSITIONAL MATTERS

                  A.       Seller and Purchaser agree to the  Administration and
                           Proration  Procedures  contained in attached Appendix
                           C.

                  B.       Prior to the Closing,  Purchaser and Seller may agree
                           on different or  additional  procedures  to implement
                           their respective  rights and obliga tions,  including
                           procedures  which are  required  to minimize or avoid
                           any   disruption  of  the   settlement  of  interline
                           accounts by draft in the normal course of business.

                                       26

<PAGE>




         17.5     CAR SUPPLY

                  Seller  will,  for a  period  of up to six  months  after  the
                  Closing  Date,  permit the non-ore cars  customarily  used for
                  loading  on the Rail  Lines to remain in  service  on the Rail
                  Lines on a normal car hire basis.  Purchaser will use its best
                  efforts to acquire  sufficient  replacement  equipment  during
                  that six month  period,  and  Seller  shall  have the right to
                  remove from  availability any non-ore cars that are not needed
                  to service shippers on the Rail Lines.

         17.6     ENTIRE AGREEMENT

                  This Agreement, including the Appendices and Exhibits attached
                  to  this  Agreement,  constitutes  the  entire  agreement  and
                  understanding between Seller and Purchaser with respect to the
                  sale and  purchase  of the Assets  and the other  transactions
                  contemplated  by this  Agreement.  All prior  representations,
                  understandings and agreements between the parties with respect
                  to the purchase  and sale of the Assets and the other  actions
                  contem plated by this Agreement are superseded by the terms of
                  this Agreement.

         17.7     CHOICE OF LAW

                  The  provisions  of this  Agreement  shall  be  construed  and
                  interpreted  in accor  dance  with  the  laws of the  State of
                  Illinois,  including  for the  purposes  of choice of law,  as
                  though  all  acts  and  omissions  related  to this  Agreement
                  occurred in that State.

         17.8     SEVERABILITY

                  The provisions of this Agreement  shall,  where  possible,  be
                  interpreted  in a manner  necessary to sustain their  legality
                  and enforceability;  the  unenforceability of any provision of
                  this  Agreement in a specific  situation  shall not affect the
                  enforceability  of that  provision in other  situations  or of
                  other provisions of this Agreement.

         17.9     COUNTERPARTS

                  This  Agreement  may  be  executed  in two  or  more  original
                  counterparts,   each  of  which  shall  for  all  purposes  be
                  considered an original of this Agreement.


         17.10    HEADINGS


                                       27

<PAGE>



                  Section and  subsection  headings  contained in this Agreement
                  are inserted for convenience of reference  only,  shall not be
                  deemed to be a part of this  Agreement  for any  purpose,  and
                  shall  not  in  any  way   define  or  affect   the   meaning,
                  construction  or  scope  of  any  of the  provisions  of  this
                  Agreement.

         17.11    SUCCESSORS AND ASSIGNS

                  This Agreement shall be binding upon, and inure to the benefit
                  of the respec  tive  successors  and  assigns of the  parties.
                  Purchaser may assign its rights under this Agreement, in whole
                  or in part, to a  wholly-owned  subsidiary of Purchaser or any
                  wholly-owned  subsidiary of Wisconsin Central  Transporta tion
                  Corporation.

         17.12    NOTICE

                  All  notices  given  pursuant  to  this  Agreement   shall  be
                  delivered  by  hand,  sent  by  United  States  registered  or
                  certified  mail,  postage  prepaid,  delivered  by  recognized
                  express mail or  overnight  courier  service,  or delivered by
                  electronic facsimile with a confirmation copy delivered by any
                  of the preced ing methods, addressed as follows (or to another
                  address  or  person as a party  may  specify  on notice to the
                  other):

                  A.       If to Seller:

                                    Union Pacific Railroad Company
                                    1416 Dodge Street
                                    Omaha, Nebraska 68179
                                    Attention: Warren Wilson,
                                               Senior Manager Rail Line Planning

                           with copies to:

                                    1416 Dodge Street
                                    Omaha, Nebraska 68179
                                    Attention: Director Joint Facilities



                                       28

<PAGE>



                  B.       If to Purchaser:

                                    Wisconsin Central Ltd.
                                    One O'Hare Centre
                                    Suite 9000
                                    6250 N. River Road
                                    Rosemont, Illinois 60017-5062
                                    Attention: Edward A. Burkhardt, 
                                               Thomas F. Power,
                                               William Schauer

                           with copies to:

                                    Thomas Rissman, Esq.
                                    McLachlan, Rissman & Doll
                                    6 West Hubbard Street
                                    Suite 500
                                    Chicago, Illinois 60610
                                    Attention: Thomas W. Rissman



                                       29

<PAGE>



         Dated as of November 30, 1996.

                                               UNION PACIFIC RAILROAD COMPANY


                                               /s/ Jerry Davis
                                               By:  Jerry Davis
                                               Its: President & Chief Operating
                                                    Officer
Attest:

By: /s/ C.W. Saylors
Title: Asst. Secretary

                                               SAULT STE.  MARIE BRIDGE COMPANY


                                               /s/ J. Reilly McCarren
                                               By:  J. Reilly McCarren
                                               Its:  EVP/COO

Attest:

By: /s/ Thomas W. Rissman
Title: Secretary


                                       30

<PAGE>



                                   APPENDIX A

                              DESCRIPTION OF ASSETS


The Assets  consist of the real estate  legally  described  in Appendix  A-1 and
personal property, rights, intangibles and interests described in Sections A and
B below, but exclude the assets described in Section C below. Section A contains
a general  description  of the Assets.  Section B more  specifically  identifies
certain Assets  described in Section A; however,  the omission of any Asset from
Section B shall not imply the exclusion of any Asset  described in Section A. If
there is any conflict or  contradiction  between  Sections A, B and C, Section C
shall in all cases supersede Sections A and B.

A.       GENERAL DESCRIPTION

The  Assets  consist  of  Seller's  estate,  right,  title and  interest  in the
following:

         1.       The Rail  Lines,  which  consist of the  following  continuous
                  lines of railroad:

                  (i)      The Escanaba Subdivision from North Green Bay, WI to
                           Ishpeming, MI;

                  (ii)     The Iron Mountain Branch and the Antoine Industrial
                           Lead from Powers, MI to Antoine, MI;

                  (iii)    The Niagara Industrial Lead from Quinnesec, MI to
                           Niagara, WI; and

                  (iv)     The Palmer Industrial Lead from Cascade, MI to
                           Palmer, MI.

         2.       All  written  interchange   agreements,   all  joint  facility
                  agreements,   all  trackage   agreements,   all  paired  track
                  agreements and all trackage and operating rights granted to or
                  otherwise  owned,  used,  held  for use or  otherwise  held by
                  Seller which relate to the Rail Lines;

         3.       All interests in and agreements  relating to industry and side
                  tracks  and  facilities  which form a part of or relate to the
                  Rail Lines;

         4.       All operating rail property, including without limitation, the
                  roadbed,  rail, track (including the main track,  side tracks,
                  spur tracks,  drill tracks,  connecting  tracks,  yard tracks,
                  industry  tracks  and  team  tracks),  connections,   bridges,
                  stations, culverts, structures, and signal facilities, parking
                  and storage areas, depots, yards, shops, signaling and related
                  equipment,  buildings  (including  fixtures) owned, used, held
                  for use or otherwise held by Seller in connection with or that
                  relate to the operation, use or enjoyment of the Rail Lines,

                                Appendix A-Page 1

<PAGE>



                  wherever located and any other personal property used for rail
                  operations  and not removed by Seller  within thirty (30) days
                  after Closing;

         5.       All  leases,  easements,  licenses,   rights-of-way  or  other
                  interests in real property owned,  leased,  used, held for use
                  or otherwise held by Seller in connection  with the operation,
                  use or enjoyment of the Rail Lines;

         6.       Personal Property as listed on Appendix A-2;

         7.       All  Contracts  in  connection  with  the  operation,  use  or
                  enjoyment  of the Rail Lines or the other  Assets  (including,
                  without   limitation,   public  and  private  grade   crossing
                  agreements,  and  pipeline,  wireline,  fiber  optic and other
                  utility service agreements);

         8.       All franchises,  privileges,  licenses and permits  conferred,
                  given, owned, acquired,  appropriated,  used or useful for any
                  purpose in connection with the operation,  use or enjoyment of
                  the  Rail  Lines  or  the  other  Assets  (including,  without
                  limitation, an assignment of the radio frequency licenses used
                  in operation of the Rail Lines);

         9.       All  manufacturers,  or other  third-party's  warranties  with
                  respect to the Assets;

         10.      All rights,  benefits and privileges of Seller in its capacity
                  as grantor,  licensor, lessor or franchiser, or in any similar
                  capacity,  arising  out of or under  any  Contract,  easement,
                  franchise, right-of-way, license or lease relating to the Rail
                  Lines or other Assets;

         11.      All Contracts  between  Seller and any receiver or shipper for
                  the movement of traffic over the Rail Lines, and any Contracts
                  with participating  transportation companies pertaining to the
                  movement  of  traffic;   to  the  extent  that  transportation
                  contracts  cover both the Rail Lines and  movements  by Seller
                  over other rail lines which it will  continue to operate after
                  closing,  all rights in such  contracts as related to the Rail
                  Lines;

         12.      All of Sellers'  rights relating to the ownership or operation
                  of  the  Rail  Lines  under  Contracts   (including,   without
                  limitation,  any  Contracts,  environmental  indemnifications,
                  trackage  rights,  joint facility or car agreements with other
                  railroads,  any transportation contracts with shippers and any
                  other  indemnification  and  similar  agreements  relating  to
                  environmental matters);

         13.      All yards,  intermodal terminals,  lumber transfer facilities,
                  bulk  transfer  facilities,   distribution  centers  or  other
                  facilities associated with the Rail Lines;

         14.      The current records for:  historical traffic and revenue data,
                  (in machine  readable form,  where  applicable),  customer and
                  supplier lists,

                                Appendix A-Page 2

<PAGE>



                  correspondence  and legal files,  freight  tariffs,  switching
                  tariffs,  demurrage  agreements,  track profiles,  schematics,
                  blueprints,   drawings,   valuation,  track  and  other  maps,
                  surveys, acquisition deeds, instruments,  diagrams of railroad
                  plant  and  structures,   specifications,   signal   diagrams,
                  engineering   photographs,   engineering  data,  easement  and
                  betterment   maps,   real  estate   documents   and   records,
                  construction,  repair,  maintenance and asset history records,
                  and  other  books,  papers,  appraisals,   files  and  records
                  pertaining  primarily  to the Rail Lines or the other  Assets,
                  wherever located;

         15.      The  Escanaba  Ore  Dock  including  all  fixtures,   material
                  handling facilities including but not limited to ore unloading
                  facilities,   conveyor   systems,   ore  storage  and  reclaim
                  equipment and ore vessel loading equipment.

         16.      All  other  real  and  personal  property  of  every  kind and
                  character whatsoever and every estate and interest therein.


B.       SPECIFIC IDENTIFICATION OF CERTAIN ASSETS

The Assets described  generally above include,  without  limitation,  the assets
identified in this Section B.

Purchaser shall acquire the following material Contracts:

         1.       Contracts   Relating  to  Rail   Operations,   Real   Property
                  Contracts,  Leases,  Licenses  and  Easements.  The  Contracts
                  listed on Attached Schedule I.

         2.       Transportation  Contracts.  Purchaser  shall  assume  Seller's
                  rights and  obligations  with  respect to the Rail Lines under
                  the Price Documents listed on Schedule II.

         3.       Contracts Relating to Environmental Matters. None. See Exhibit
                  3.


C.       EXCLUDED ASSETS

The Assets do not include the following assets:

         1.       Any labor or employment agreement;

         2.       Any lease of office space or other Contract with affiliates of
                  Seller providing for shared overhead  expense,  tax sharing or
                  similar inter-corporate matters;

         3.       The Contracts listed on attached Schedule III.


                                Appendix A-Page 3

<PAGE>



         4.       The exclusions of real property and real property interests as
                  set forth on Appendix A-1 and on Exhibit 4 to the Agreement.

         5.       Except as set forth on  Appendix  A-2,  all  inventory,  fuel,
                  supplies and other  materials  relating to or acquired or used
                  for locomotive or car repair, trackage,  signal, structure and
                  building  maintenance,  or  otherwise in  connection  with the
                  operation,  use or  enjoyment  of the Rail  Lines or the other
                  Assets;

         6.       Except as set forth on Appendix A-2, all  furniture,  fixtures
                  and  equipment,   signal  and  dispatching  equipment,   other
                  equipment,   tools  (both  heavy  and  light),   power  tools,
                  machinery,  and  maintenance of way equipment  owned,  used or
                  held for use or otherwise  held in, on or in  connection  with
                  the Rail Lines or the other Assets;

         7.       Except as set forth on Appendix  A-2,  the motor  vehicles and
                  maintenance  vehicles used on or in  connection  with the Rail
                  Lines;

         8.       Subsurface  and mineral  rights as  referenced  or excepted on
                  Exhibit 4 to the Agreement.


                                Appendix A-Page 4

<PAGE>



                                   APPENDIX C

                     ADMINISTRATION AND PRORATION PROCEDURES


1.       DEFINITIONS.

         In addition to the other  definitions  contained  in the  Agreement  to
         which this  Appendix is attached,  the  following  terms when used with
         initial capitalization in this Appendix, whether in the singular or the
         plural, have the meanings ascribed to them below:

         A.       "Closing Effectiveness" means 11:59 p.m. on the Closing Date.

         B.       "Waybill"  means a shipment  document  generated  from a valid
                  bill of lading tendered to the originating  railroad or from a
                  customarily equivalent industry practice.


2.       ALLOCATION OF REVENUES.

         A.       Seller shall be entitled to tariff,  division,  or contractual
                  share of all freight revenue,  switching revenue, and loss and
                  damage collectible,  and shall be liable for tariff, division,
                  or contractual share of all freight revenue (including shipper
                  allowances  and  interline   divisions),   switching  revenue,
                  switching  absorptions,  and loss  and  damage  payable,  with
                  respect to (i) revenue  freight  originated  on the Rail Lines
                  with a  bill  of  lading  date  on or  prior  to  the  Closing
                  Effectiveness  and (ii) revenue freight traffic  terminated at
                  Waybill destination by Seller on the Rail Lines on or prior to
                  the Closing Effectiveness. In all cases, the amounts described
                  in this subparagraph (a) shall include subsequent corrections,
                  statements  of  differences,   overcharge   claims  and  other
                  adjustments.

         B.       Purchaser   shall  be   entitled  to  tariff,   division,   or
                  contractual share of all freight revenue,  switching  revenue,
                  and loss and  damage  collectible,  and  shall be  liable  for
                  tariff,  division, or contractual share of all freight revenue
                  (including  shipper   allowances  and  interline   divisions),
                  switching revenue, switching absorptions,  and loss and damage
                  payable,   with  respect  to  (i)  revenue   freight   traffic
                  originated  on the  Rail  Lines  with a bill  of  lading  date
                  subsequent  to the  Closing  Effectiveness  and  (ii)  revenue
                  freight traffic terminated at Waybill destination by

                                Appendix C-Page 1

<PAGE>



                  Purchaser  on  the  Rail  Lines   subsequent  to  the  Closing
                  Effectiveness.  In all cases,  the amounts  described  in this
                  subparagraph   (b)  shall  include   subsequent   corrections,
                  statements of differences, overcharge
                  claims and other adjustments.


         C.       All Waybills and bills of lading for revenue  freight  traffic
                  located  on the  Rail  Lines as of the  Closing  Effectiveness
                  shall be the property of  Purchaser  and Seller will take such
                  steps as  necessary  to secure such  documents  for  Purchaser
                  prior  to  Closing   Effectiveness.   Following  the  Closing,
                  Purchaser  shall  provide  Seller  with such  copies as Seller
                  reasonably  requests for hazardous  material  documentation or
                  billing purposes.


3.       SHIPPER ALLOWANCES.

         Seller shall be responsible for all shipper allowances  accruing before
         the Closing  Effectiveness,  and Purchaser shall be responsible for all
         shipper  allowances  accruing  after  the  Closing  Effectiveness  with
         respect  to  movements  over the  Rail  Lines  (and  not over  Seller's
         remaining lines of railroad). Certain transportation contracts that are
         to be  assigned  to  and  assumed  by  Purchaser  may  include  shipper
         allowance  provisions that contain  incentive  payments or measurements
         affecting the ultimate amount that will be due to the shipper under the
         contract  that  cannot be  determined  at  Closing.  Examples  include,
         without  limitation,  shipper  allowances  based upon volume,  revenue,
         production  percentage  or  service  guarantees  during a  period  that
         extends  beyond the Closing Date. If the amount of a shipper  allowance
         becomes  determinable  after Closing and results in either a payment to
         or refund from a shipper,  such payment or refund,  as determined under
         the  contract  as in  effect  immediately  prior to  Closing,  shall be
         prorated  between  Seller  and  Purchaser  on the basis of the  factors
         affecting  such  allowance  (e.g.,  volume  or  revenue)  arising  from
         Waybills  dated before and after the Closing  Effectiveness.  Purchaser
         will settle with the shipper and pay or invoice Seller its proportional
         share of the  receivable or payable.  In addition,  with respect to any
         shipper  allowances  that  are  accrued  for  as of the  Closing  Date,
         Purchaser shall settle with the shipper and will invoice Seller for the
         amount due (unless  that amount was  included in an  adjustment  of the
         Purchase Price at Closing).


4.       DEMURRAGE AND DETENTION.


                                Appendix C-Page 2

<PAGE>



         For shippers other than "average agreement shippers," all demurrage and
         detention  revenue  accruing  on cars  released  prior  to the  Closing
         Effectiveness  will be Seller's.  All demurrage  and detention  revenue
         accruing  on cars  released  after the  Closing  Effectiveness  will be
         Purchaser's.  For "average agreement  shippers," any demurrage revenues
         on cars  relating  to any period in which the Closing  occurs  shall be
         prorated for such period on the basis of the actual  number of calendar
         days in such period before and after the Closing Effectiveness and will
         be settled upon collection from the shipper. Seller will provide copies
         of all demurrage and detention  agreements and related  records as soon
         as possible, and in any event within 5 days after Closing.

5.       EQUIPMENT RENTALS.

         For  purposes of  equipment  rentals,  all freight  cars,  trailers and
         containers that are not a part of the Assets  (equipment leased under a
         lease that is included in the Assets shall be considered equipment that
         is a part of the  Assets)  but that are located on the Rail Lines shall
         be  considered  interchanged  by Seller to  Purchaser as of the Closing
         Effectiveness.  Seller  shall be liable for or  entitled  to  equipment
         rentals for periods  before that time and  Purchaser  for periods after
         that time.


6.       PAYROLL TAXES.

         If Purchaser is able to, and elects to,  calculate  its  liability  for
         Railroad  Retirement  (Tiers  I  and  II),  Railroad  Unemployment  and
         Railroad Unemployment  Repayment taxes (collectively,  "Payroll Taxes")
         for the year in which the Closing  occurs and with respect to employees
         hired by Purchaser  who were former  Seller  employees,  by taking into
         account compensation paid to such employees by Seller prior to Closing,
         then  Purchaser  shall be liable to Seller for 50% of the  Payroll  Tax
         Savings (as defined  below).  The "Payroll  Tax  Savings"  shall be the
         amount equal to the excess,  if any, of (i) the  liability  for Payroll
         Taxes  Purchaser  would have been  required to pay with  respect to its
         employees who were former Seller  employees if Purchaser could not have
         calculated  such  liability  for Payroll  Taxes by taking into  account
         compensation  paid to such  employees  by Seller  prior to Closing over
         (ii) the actual  amount of liability  for such Payroll Taxes payable by
         Purchaser  with  respect  to  its  employees  who  were  former  Seller
         employees  for the year of Closing.  The amount  payable to Seller,  if
         any, will be paid no later than March 31 of the year following the year
         in which Closing  occurs.  Seller agrees to provide  Purchaser with all
         necessary information required to allow Purchaser

                                Appendix C-Page 3

<PAGE>



         to calculate  Payroll  Taxes by taking into account  compensation  paid
         prior to  Closing  to  Purchaser's  employees  who were  former  Seller
         employees.


7.       JOINT FACILITIES.

         Joint  facility  bills (both  payable and  receivable)  relating to any
         period in which the Closing occurs,  shall be prorated for that period,
         and liability or entitlement  shall be  apportioned  between Seller and
         Purchaser,  on the basis of the dates before and after the Closing Date
         on which the  underlying  work was performed,  if available,  or if not
         available  on the basis of the actual  number of  calendar  days in the
         applicable period occurring before and after the Closing Date.




                                Appendix C-Page 4

<PAGE>



8.       CASUALTIES TO FOREIGN EQUIPMENT.

         Liability  for repairs to, or the  casualty  value of,  foreign cars or
         locomotives  damaged  or  destroyed  while in service on the Rail Lines
         shall be  allocated  on the  basis of the  time and date  such  cars or
         locomotives were damaged or destroyed, with liability being Seller's if
         the damage or destruction  occurred in an incident prior to the Closing
         Effectiveness and Purchaser's if the damage or destruction  occurred in
         an incident after the Closing Effectiveness.


9.       ALLOCATION OF OTHER EXPENSES.

         All  other  expense  items  payable,   including  but  not  limited  to
         utilities,  patron  switching and purchased  services,  relating to any
         period in which the Closing occurs,  shall be prorated for that period,
         and liability shall be apportioned between Seller and Purchaser, on the
         basis of the  dates  before  and after  the  Closing  Date on which the
         underlying work was performed, if available, or if not available on the
         basis of the actual  number of calendar days in the  applicable  period
         occurring before and after the Closing Date.


10.      ACCOUNTS PAYABLE.

         Purchaser shall not be responsible  for any accounts  payable of Seller
         of any type  including,  but not  limited  to,  accounts  payable  with
         respect to interline  accounts,  joint  facilities and trackage  rights
         payments owed,  incurred or in any way in whole or in part expended but
         not yet paid as of the Closing Date.  Purchaser shall promptly  forward
         to Seller any  invoices  or  demands  with  respect  to those  accounts
         payable.  All accounts  payable of Seller with regard to goods received
         or services  rendered on or subsequent to the Closing Date shall be the
         responsibility of Purchaser. Seller shall promptly forward to Purchaser
         any invoices or demands with respect to those accounts. If Purchaser or
         Seller  receives an invoice or demand for payment for goods received in
         part by Seller and in part by Purchaser or services rendered in part to
         Seller and in part to the  Purchaser,  the  invoice or demand  shall be
         forwarded, if necessary,  to Purchaser,  and shall be paid by Purchaser
         on or before  its due date.  Purchaser  shall  invoice  Seller  for the
         portion of the  invoice or demand  that  relates to goods  received  or
         services rendered prior to the Closing Date.


11.      ACCOUNTS RECEIVABLE.


                                Appendix C-Page 5

<PAGE>



         All  accounts  receivable  of Seller,  of any type,  including  but not
         limited to accounts receivable  representing interline accounts,  joint
         facilities and trackage  rights  revenues owed,  incurred or in any way
         earned but not yet received as of the Closing  Date,  shall be Seller's
         property.  Purchaser  shall  promptly  forward  to Seller any checks or
         other payments it receives with respect to these accounts. If Purchaser
         receives a check or other payment for goods delivered in part by Seller
         and in part by the Purchaser or services rendered in part by Seller and
         in part by Purchaser,  Purchaser  shall  promptly  remit to Seller that
         portion of the payment  received  with  respect to goods  delivered  by
         Seller or services rendered by Seller.


12.       PAYMENT.

         Seller and Purchaser  shall each pay any invoice  rendered by the other
         pursuant to this Appendix within 30 days of receipt.



                                Appendix C-Page 6

<PAGE>



                                   APPENDIX E

                  ENVIRONMENTAL OPERATIONS OBLIGATIONS SCHEDULE



                  1.       Consent Order dated December 19, 1974.

                  2.       Amendment to consent order dated November 8, 1978.

                  3.       Order terminating jurisdiction of the federal court
                           dated January 5, 1984.




<PAGE>

                                    EXHIBIT 3

                               DISCLOSURE SCHEDULE


My name is Donald R. York and I am Manager  Environmental  Field  Operations for
the Union Pacific  Railroad  Company  (UPRR).  I have  conducted a survey of all
environmentally related activities or facilities on the following former Chicago
and North Western Railway Company  sub-divisions now owned and operated by Union
Pacific Railroad Company:

                  1.       Duck Creek North
                  2.       Oconto Falls
                  3.       Marinette
                  4.       Partridge (Including Ore Dock)
                  5.       Antoine
                  6.       Palmer Spur
                  7.       Niagara Spur

Based upon  system  surveys  conducted  by various  UPRR  personnel  in 1996 and
verified this year, the following are noted:

         Fueling Areas  (all tanks above ground)

                  Presently in operation

                           Escanaba -                50,700 gallon capacity
                                                     storage tank at P&H
                                                     Facility

                           Iron Mountain -           20,000 gallon storage tank

                  No longer in operation but still at site

                           Marinette -               20,000 gallon - empty

         Pollution Control Facilities

                  Escanaba - Gravity oil separator installed in leased facility.
                           - Baghouse filter system at dumper building, wet
                             suppressant spray systems at dumper, transfer 
                             point, and belts.

         Asbestos Locations

                  Marinette - Piping inside baggage room building next to depot.

                                Exhibit 3-Page 1

<PAGE>



                  No other reported asbestos locations.

         Hazardous Waste Generation

                  Escanaba       -  Mineral  spirits  used in parts  cleaning
                                    operations  - when  loaded  with oil,  mixed
                                    with waste oil and shipped to Proviso  Yard,
                                    Northlake,    Illinois    for   disposal -
                                    considered non-hazardous when spent.

                                 -  Chlorinated electrical parts cleaner sprayed
                                    on parts using aerosol cans - evaporates.

         Underground Storage Tanks

                  All known  underground  fuel storage tanks reported to me have
                  been  removed.   Two  underground   storage  tanks  remain  at
                  Escanaba,  one containing  Nalco  Magnesium  Chloride for road
                  spraying,  the other  containing  Nalco dust  suppressant  for
                  dumper building and conveyor belts.

         Noise/Dust Complaints

                  There have been periodic  complaints  from adjoining  property
                  owners of noise and dust from the Escanaba Ore Dock. There are
                  no  current  proceedings  relating  to  noise  or  dust.  (See
                  Appendix E to Asset  Purchase  Agreement  dated as of November
                  30, 1996 between Union Pacific Railroad Company and Sault Ste.
                  Marie Bridge Company.)

Based on  reports  provided  to me, I am not aware of any other  environmentally
related  activities or facilities in connection with the property subject to the
sale.

         Remediation Sites

                  In  compliance  with an order from the Michigan  Department of
                  National Resources, the UPRR is currently remediating property
                  in  Rock,  Michigan,  the  site of a  former  leased  bulk oil
                  facility.

         NIOSH

                  Employees at the Escanaba Ore Dock have filed a complaint with
                  NIOSH  complaining  of dust  generated by the handling of mine
                  tailings at the facility.  The UPRR is not aware of the status
                  of this complaint.



                                Exhibit 3-Page 2

<PAGE>