<PAGE>   1
                                                                  EXHIBIT 10.5.2


                        TRANSPORTATION SERVICES AGREEMENT

                             DATED DECEMBER 29, 1998

                                 BY AND BETWEEN

                             USS/KOBE STEEL COMPANY

                                       AND

                                 TRANSTAR, INC.











<PAGE>   2



                        TRANSPORTATION SERVICES AGREEMENT
                         BETWEEN USS/KOBE STEEL COMPANY
                                       AND
                                 TRANSTAR, INC.
                                      INDEX

<TABLE>
<CAPTION>
Section                                          Title                                             Page
-------                                          -----                                             ----
<S>               <C>                                                                              <C>
1                 SCOPE                                                                              2

2                 TERM                                                                               2

3                 COMPETITIVE ACCESS                                                                 2

4                 INTENT OF AGREEMENT                                                                3

5                 EXISTING CONTRACTS                                                                 4

6                 RATES, TERMS AND/OR CONDITIONS FOR SERVICE                                         4

6(a)              Rail Service by Sole Service Carriers                                              4

6(b)              In-Plant Rubber Tire Service                                                       5

6(c)              Miscellaneous In-Plant Services                                                    5

6(d)              Adjustments to Initial Base Rates, Terms and Conditions and Base Rates,            6
                  Terms and Conditions on Absorbed Switching

6(e)              Car Hire Adjustments to Rail Earnings                                              8

7                 TRANSPORTATION COMMITMENTS                                                         8

7(a)              Rail Service by Sole Service Carrier                                               8

7(b)              In-Plant Rail Switching Service                                                    9

7(c)              In-Plant Rubber Tire Service                                                       9

7(d)              Miscellaneous In-Plant Services                                                    9

7(e)              Bid Terms                                                                          9

8                 SERVICE LEVELS                                                                    11

9                 MAINTENANCE OF TRANSPORTATION ASSETS                                              11

10                MAINTENANCE OF INTERCHANGES                                                       11

11                AUDIT                                                                             12

12                SEVERABILITY                                                                      12
</TABLE>




<PAGE>   3

<TABLE>
<CAPTION>
Section                                          Title                                            Page
-------                                          -----                                            ----
<S>               <C>                                                                             <C>
13                INEQUITIES                                                                        13

14                MEDIATION                                                                         14

15                ARBITRATION                                                                       15

16                ASSIGNMENT                                                                        17

17                NOTICES                                                                           17

18                LAW GOVERNING                                                                     18

19                RELATIONSHIP OF PARTIES                                                           18

20                INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES                                        19

21                ENTIRETY OF AGREEMENT; AMENDMENTS                                                 19

22                MUTUAL RELEASE                                                                    19

23                ALLOCATION OF FINANCIAL RESPONSIBILITY                                            19

24                FORCE MAJEURE                                                                     21
</TABLE>





<PAGE>   4



                        TRANSPORTATION SERVICES AGREEMENT



         This Agreement, made and concluded as of the 29th day of December 1998,
by and between USS/KOBE STEEL COMPANY (hereinafter "USS/KOBE"), an Ohio General
Partnership with offices at 1807 East 28th Street, Lorain, Ohio 44055, and
TRANSTAR, INC. (hereinafter "Transtar"), a Delaware corporation with offices at
135 Jamison Lane, Monroeville, Pennsylvania 15146.

                              W I T N E S S E T H:

         WHEREAS, Transtar is the shareholder of certain transportation
operating companies including The Lake Terminal Railroad Company (hereinafter
"Lake Terminal"); and

         WHEREAS, USS/KOBE and Transtar are parties to a Transportation Services
Agreement dated December 28, 1988 (hereinafter the "1988 TSA"); and

         WHEREAS, USS/KOBE and Transtar desire to enter into a new
Transportation Services Agreement to set forth the terms of a commercial
business relationship between USS/KOBE and Lake Terminal and to replace the 1988
TSA;

         NOW, THEREFORE, the parties hereto, intending to be legally bound, and
in consideration of the mutual agreements herein contained, hereby agree as
follows:


                                       1
<PAGE>   5


         1. SCOPE. This Agreement sets forth the understanding of the parties
concerning transportation and transportation-related services to be provided to
USS/KOBE by Lake Terminal. More specific transportation contracts, tariffs,
purchase orders or other agreements may be executed, issued and/or published by
USS/KOBE and Lake Terminal in order to implement this Agreement. To the extent
required by law, such individual agreements shall be filed with the Surface
Transportation Board ("STB") and/or the appropriate state agency.

         2. TERM. This Agreement shall become effective on December 29, 1998 and
shall remain in effect through December 31, 2008.

         3. COMPETITIVE ACCESS. During the Term of this Agreement, USS/KOBE
shall not take any action which would in any way, either directly or indirectly,
encourage any non-Transtar rail carrier to attempt to obtain access to the
USS/KOBE Works or which would in any way assist and/or support any such rail
carrier in any efforts to obtain such access, provided however, that after
January 1, 2007, USS/KOBE is permitted to take any action necessary to enable it
to evaluate the transportation service options and to make arrangements for the
continuation of such services following the Term of this Agreement, provided
further, that such


                                       2
<PAGE>   6

actions would have no effect upon the transportation services provided under
this Agreement during its Term.

         4. INTENT OF AGREEMENT. The parties hereto intend that they shall
mutually benefit from the Base Rates, terms, conditions and provisions of this
Agreement and that no party shall be either unreasonably enriched or
unreasonably harmed by any implementation and/or interpretation of said Base
Rates, terms, conditions and provisions. In addition, the parties hereto agree
and intend that the rates, terms and conditions (including, but not limited to,
payment terms) in effect as of the effective date of this Agreement shall
continue in effect except as modified by this or other agreements of the parties
and that no party to this Agreement shall seek to change Base Rates, terms and
conditions through the arbitration procedures set forth in Section 15 hereof,
unless there is a material change in existing facts and circumstances that
causes the party seeking such change to suffer a gross inequity. This Agreement,
and all agreements implementing this Agreement, shall be administered and
interpreted in order to fulfill the intent stated in this Section 4. Any
arbitrator considering disputes pursuant to Section 15 hereof shall render a
decision which fulfills the intent stated in this Section 4.


                                       3
<PAGE>   7


         5. EXISTING CONTRACTS. All existing contracts, purchase orders and
other agreements between USS/KOBE and Lake Terminal shall remain in effect for
the terms stated therein. To the extent that any conflict exists between
Sections 6 or 7 of this Agreement and the rates or service provisions of any
such contract, purchase order or other agreement, the terms of this Agreement
shall supersede and take precedence, provided, however, that every reasonable
effort shall be made to construe such provisions consistently, and that nothing
contained in this Agreement shall be construed or implemented to shorten the
term of any such contract, purchase order or other agreement. A list of existing
Purchase Orders, Contracts and Agreements is attached to this Agreement and
marked Exhibit I.

         6. RATES, TERMS AND/OR CONDITIONS FOR SERVICE.

            (a) Rail Service by Sole Service Carrier. Initial Base Rates, terms
and/or conditions for all Sole Service Carrier services shall be those in effect
in contracts, tariffs or other agreements as of the effective date of this
Agreement. The rates between USS/KOBE and Sole Service Carrier set forth in
Exhibits II and III attached to this Agreement (including absorbed switching,
single-line movements and other related transportation services) shall be
referred to herein as "Initial Base Rates." Any new rates



                                       4
<PAGE>   8


established during the term of this Agreement shall be deemed "Base Rates" as of
the date they are established. Unless otherwise agreed by the parties, the Base
RCAF-U for any such Base Rate shall be the most recent RCAF-U published prior to
agreement upon the Base Rate.

            Initial Base Rates and Base Rates for absorbed switching movements
shall be adjusted annually to be effective January 1, 2000 and each January 1
thereafter in accordance with the procedures set forth in Section 6(d) herein.

            (b) In-Plant Rubber Tire Service. The in-plant rubber tire services
identified on Exhibit IV shall be provided pursuant to the terms and conditions
of the purchase orders or other agreements in effect as of the effective date of
this Agreement. Upon the expiration of any such purchase order or agreement,
USS/KOBE shall have the option to subject the rubber tire service involved to
competitive bidding; provided, however, that Lake Terminal shall be offered an
opportunity to participate in any competitive bidding of such services. 

            (c) Miscellaneous In-Plant Services. During the Term of this
Agreement, Lake Terminal shall be offered an opportunity to participate in any
competitive bidding for any additional transportation and transportation related
services required by USS/KOBE.




                                       5
<PAGE>   9



            (d) Adjustments to Initial Base Rates, Terms and Conditions and Base
Rates, Terms and Conditions on Absorbed Switching Rail Rates, Single-Line Rates
and Other Related Transportation Service Rates. The Initial Base Rates and Base
Rates for absorbed switching, single-line and other related transportation
service for Sole Service Carrier services shall be adjusted annually, to be
effective January 1, 2000 and each January 1 thereafter. Such adjustments, as
well as any other increases, decreases, changes, modifications, additions and/or
deletions to Initial Base Rates, terms and/or conditions and Base Rates, terms
and/or conditions for any such rail service shall be negotiated in good faith by
the parties and upon agreement implemented either through tariffs, contracts or
other agreements. If, after good faith negotiation the parties fail to reach
agreement on the amount of the annual adjustment to the Initial Base Rates and
Base Rates, then such (1) Initial Base Rates shall be adjusted up or down by one
hundred percent (100%) during the Term of this Agreement of the amount of the
percentage change between the 4th quarter 1998 Rail Cost Adjustment Factor,
unadjusted for productivity ("RCAF-U") of 1.003, as rebased by the STB and
published in Ex Parte No. 290 (Sub No. 5)(98-1) Table A decided on or about
December 12, 1997 ("Base RCAF-U") and the most recent 4th quarter RCAF-U
published prior to the January 1 effective date



                                       6
<PAGE>   10


of the adjusted Initial Base Rate, provided however, that the adjusted Initial
Base Rate shall never fall below the Initial Base Rate and (2) Base Rates shall
be adjusted up or down by one hundred (100%) during the Term of this Agreement
of the amount of the percentage change between the most recent RCAF-U published
prior to the time that the Base Rate was established and the most recent 4th
quarter RCAF-U published prior to the January 1 effective date of the adjusted
Base Rate, provided, however, that the Adjusted Base Rate shall never fall below
its original established level. (See examples in Exhibits V and VI attached to
this Agreement.)

            Such adjusted Initial Base Rates and adjusted Base Rates shall be
implemented effective each January 1 for the ensuing year. Neither party shall
have the right to invoke the dispute resolution procedures set forth in Sections
14 and 15 to request an appropriate rate adjustment be determined through these
procedures, unless the party is able to prove it has suffered a gross inequity
as a result of the implementation of the adjusted Initial Base Rate or the
adjusted Base Rate. In no event shall the dispute resolution procedures result
in the adjusted Initial Base Rate ever falling below the Initial Base Rate or
the adjusted Base Rate ever falling below its original established level.
Through December 31, 2004, per car rates reflected in this Agreement



                                       7
<PAGE>   11



may be adjusted upward proportionally to the increase in car carrying capacity
or cube size whenever such car carrying capacity or cube size increases by more
than five percent (5%). After December 31, 2004, such adjustments may only be
implemented if mutually agreed upon by the parties or, failing such agreement,
shall be established pursuant to the dispute resolution procedures set forth in
Sections 14 and 15 of this Agreement. Any arbitrator considering a request for
such an adjustment shall attempt to follow prevailing practice in the rail
industry. 

            (e) Car Hire Adjustments to Rail Earnings. With respect to Sole
Service Carrier earnings for services specified in this Agreement, Lake Terminal
shall have the right to make adjustments as necessary for increases in cost of
rail cars forced upon Transtar or Lake Terminal by others pursuant to car hire
deprescription or revisions to Car Hire Rules or Car Service Regulations.
Transtar shall provide USS/KOBE with reasonable supporting documentation for any
adjustment pursuant to this Section at the time such adjustment is proposed. 

         7. TRANSPORTATION COMMITMENTS.

            (a) Rail Service by Sole Service Carrier. During the Term of this
Agreement, USS/KOBE shall ship via rail Lake Terminal one hundred percent (100%)
of the rail traffic originating or terminating at the USS/KOBE Works.


                                       8

<PAGE>   12

            (b) In-Plant Rail Switching Service. During the Term of this
Agreement, Lake Terminal shall have the right to bid on any in-plant switching
services so long as such in-plant rail switching services are required by
USS/KOBE from any source.

            (c) In-Plant Rubber Tire Service. Lake Terminal shall have the right
to provide one hundred percent (100%) of the in-plant rubber tire services
identified on the attached Exhibit II pursuant to the terms and conditions of
the purchase orders or other agreements in existence on the effective date of
this Agreement. Following the expiration of any existing purchase orders or
other agreements, such services may be subject to competitive bid, provided,
however, Lake Terminal shall be permitted to participate in bidding. Lake
Terminal shall also be permitted to participate in bidding for new or additional
rubber tire services.

            (d) Miscellaneous In-Plant Services. Lake Terminal shall be
permitted to participate in bidding for miscellaneous transportation related
in-plant services.


            (e) Bid Terms. From and after the effective date of this Agreement,
neither Transtar nor Lake Terminal shall be required to indemnify or hold
harmless any party to this Agreement as a condition to bidding for, or being
awarded the



                                       9
<PAGE>   13



right to provide, transportation or transportation-related services, whether
such services are within the scope of any Transportation Services Agreement or
otherwise, and the absence of any such indemnity or hold harmless provision in
any such bid shall not be taken into consideration to determine the
competitiveness of such bid. The intent of this provision is (1) to relieve
Transtar and Lake Terminal from the requirement of indemnifying or holding
harmless any other party to this Agreement in contracts, agreements, sales and
purchase orders for transportation or transportation-related services that are
amended or entered into upon and after the effective date of this Agreement and
(2) to abolish the requirement that Transtar or Lake Terminal undertake such
indemnification or hold harmless obligations in order to be deemed competitive
in bidding for, or as a precondition to be awarded the right to provide, such
transportation and transportation-related services. In lieu of any such hold
harmless and indemnification agreements, Lake Terminal shall be obligated to
agree to apportion liability pursuant to the terms of that certain Memorandum of
Understanding Regarding Financial Responsibility (attached as Exhibit VII to
this Agreement) as such Memorandum may be amended from time to time.

         8. SERVICE LEVELS. During the Term of this Agreement,



                                       10
<PAGE>   14

Lake Terminal shall maintain service levels which are reasonably required to
provide service hereunder in a manner consistent with and competitive with other
carriers in the area. Lake Terminal shall be responsible for arranging for car
supply consistent with the availability of rail cars from other carriers,
provided that Lake Terminal shall have no car ownership obligations when it
functions as a switch carrier on interline freight movements. Any dispute
between the parties concerning service levels shall be referred to dispute
resolution in accordance with the provisions of Sections 14 and 15 hereof.

         9.  MAINTENANCE OF TRANSPORTATION ASSETS. Lake Terminal shall maintain
in good and serviceable condition those transportation assets used to provide
service to USS/KOBE pursuant to this Agreement, including, but not limited to,
way and structures, locomotives, railcars, signaling systems, and rubber tire
equipment.

             Any dispute between the parties concerning maintenance of
transportation assets shall be referred to the dispute resolution procedures in
accordance with the provisions of Sections 14 and 15 hereof.


         10. MAINTENANCE OF INTERCHANGES. Lake Terminal shall maintain
interchanges, gateways and/or terminals operable as of the date of this
Agreement which are reasonably required to


                                       11

<PAGE>   15


provide service hereunder. Any dispute between the parties concerning
maintenance of interchanges, gateways and/or terminals shall be referred to
dispute resolution in accordance with the provisions of Sections 14 and 15
hereof.

         11. AUDIT. Each party shall have the right to audit the other's records
insofar as necessary to ensure compliance with all of the terms and conditions
of this Agreement. Such audits shall be performed by an internal or external
auditor, provided however, that the party being audited shall have the right to
require that any audit be conducted by a mutually agreeable independent auditor
and that the details of the information examined in such audit be kept
confidential from the party requesting the audit, except to the extent necessary
to resolve any controversy that is pursued in good faith. The first $20,000 of
cumulative total audit expense annually incurred for audit services required by
either party to be performed by independent auditors shall be shared equally by
the parties. Thereafter, such audit expense shall be borne by the party
requesting the audit.


         12. SEVERABILITY. It is the desire of the parties hereto that this
Agreement be enforced to the fullest extent permissible under the laws and
public policies to be applied thereto. Accordingly, if any particular portion of
this Agreement shall be adjudicated to be void, invalid or unenforceable, this
Agreement shall be deemed to be amended to delete herefrom the portion thus
adjudicated to be void,


                                       12

<PAGE>   16


invalid, or unenforceable, unless such change alters the purpose and intent of
this Agreement, in which case this Agreement shall be null and void.

         13. INEQUITIES. The parties intend that they shall mutually benefit
from the terms, conditions and provisions of this Agreement. If any party
suffers a gross inequity resulting from such terms, conditions or provisions, or
from a substantial change in circumstances or conditions, the parties shall
negotiate in good faith to resolve or remove such inequity. In the event the
parties fail to reach an agreement concerning any alleged gross inequity, the
dispute shall be referred to the dispute resolution procedures of Sections 14
and 15 hereof. It is mutually understood and agreed, however, that nothing
herein shall be construed to relieve any party of any of its obligations under
this Agreement or under any related transportation contract, purchase order or
other agreement. The parties further agree that, unless otherwise required by
law, no party shall assert or cause to be asserted in any suit, action,
proceeding or other adjudication that any of the terms, conditions or provisions
of this Agreement are or will be unenforceable, unjust, unreasonable,
unreasonably discriminatory, preferential or prejudicial, or otherwise in
violation of any provision of any act or statute or any rule, order or
regulation thereof.


                                       13

<PAGE>   17

         14. MEDIATION. At any time prior to the start of sworn testimony in
arbitration, provided under Section 15 of this Agreement, a party may submit a
dispute arising hereunder to non-binding mediation. The mediator shall be
selected by the party submitting the dispute with or without the concurrence of
the other party. Neither submission of a dispute to mediation nor conclusion of
the mediation process shall be a condition precedent to exercise of the
arbitration procedures available to the parties under this Agreement. If a
dispute is submitted to mediation:

   1)    the parties shall mediate the dispute in good faith;

   2)    mediation shall occur in Lorain County, Ohio;

   3)    final decision makers for each party on any matter in dispute shall
personally attend all mediation sessions; 

   4)    the mediator shall have complete control of the mediation timing and
process, provided, however, that the mediation shall conclude no later than
fourteen (14) calendar days from the day of the initial meeting between the
mediator and the parties;

   5)    all agreements reached in mediation shall be reduced to writing before
concluding the mediation process;

   6)    the parties may jointly agree to have the mediator make a final and
binding decision;

   7)    no discovery will be taken during the mediation process;


                                       14

<PAGE>   18


   8)    the mediation process shall be confidential and each party
participating shall have the right to designate any information provided to the
mediator as "Confidential and Proprietary."

         15. ARBITRATION. All disputes arising under this Agreement shall be
referred to binding arbitration conducted expeditiously in accordance with
Center for Public Resources Rules for Non-Administered Arbitration of Business
Disputes ("CPR Rules") by a three person panel of arbitrators, each party
choosing one arbitrator and the two arbitrators so chosen selecting a third,
neutral arbitrator. The failure or inability of either party to choose an
arbitrator or of the arbitrators chosen by the parties to select a third neutral
arbitrator shall be resolved in accordance with the CPR Rules. Arbitration shall
be conducted at a mutually convenient location in Lorain County, Ohio or at such
other location as the parties may agree. The award in writing signed by any two
of the arbitrators shall be final and binding. In order to resolve any disputes
hereunder, the arbitrators shall implement the specific rights and obligations
set forth in this Agreement while fulfilling the intent stated in Section 4
hereof. Either party shall have the right to seek, and the arbitrators shall
determine, declaratory relief of the nature generally set forth in the Uniform
Declaratory Judgments Act (as in effect in the State of Ohio and as the same may
be


                                       15

<PAGE>   19


amended from time to time) including, but not limited to, questions of
construction of this Agreement, or a declaration of rights, status or other
legal relations hereunder. The arbitrators shall apply the substantive statutory
and common law of the State of Ohio to the dispute and the evidentiary laws of
the State of Ohio to the arbitration proceeding. The arbitration shall be
governed by the United States Arbitration Act, 9 U.S.C. Sections 1-16, and
judgment upon the award entered by the arbitrators may be entered by any court
having jurisdiction thereof. The arbitrators shall not award damages in excess
of compensatory damages. The costs and expenses of the arbitration (other than
attorneys' fees, if any) shall be borne one-half by USS/KOBE and one-half by
Lake Terminal. The arbitrators shall be permitted to review existing documents
or records of any party to the extent that, in the sole discretion of the
neutral arbitrator, such documents and/or records are deemed to be relevant and
to the extent the parties are permitted by law or by contract to convey such
documents or records to the arbitrator. Either party shall have the right to
designate any information sought in discovery or provided to the arbitrators at
their request as confidential and/or proprietary in which case the neutral
arbitrator shall determine whether the information sought shall be disclosed in
discovery or, if such information is 



                                       16
<PAGE>   20



provided to the arbitrators at their request, shall not convey such information
to the other party.

         16. ASSIGNMENT. No party to this Agreement shall assign or transfer
this Agreement or any interest herein, other than to the lenders providing
financing to Transtar, Inc. (which lenders will act through a single agent)
without the prior written consent of the other party, which consent shall not be
unreasonably withheld. Subject to the provisions of this Section 16, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns to the parties. USS/KOBE shall not directly or indirectly sell, transfer
or otherwise dispose of all or a substantial portion of the assets of any
facility served by Lake Terminal during the term of this Agreement to any party
which intends to operate a facility at that location for the production of steel
or steel-related products, unless the purchaser, acquiror or other transferee of
such facility assumes, in a writing reasonably satisfactory to Lake Terminal,
all of the rights and obligations set forth in this Agreement.

         17. NOTICES. Unless otherwise specified herein, any and all notices
under this Agreement shall be in writing and shall be delivered to the party
entitled to receive the same: (1) by hand delivery; (2) by registered or
certified mail, return receipt requested; (3) by overnight delivery service
which provides proof of delivery; or (4) by telecopy, with a




                                       17
<PAGE>   21


duplicate copy sent via first class mail, postage pre-paid addressed as follows:

   If to USS/KOBE:

         USS/KOBE Steel Company
         1807 East 28th Street
         Lorain, Ohio 44055
         Attention: Vice President Finance & Administration
         Phone:     440-277-2401
         Fax:       440-277-3552

   If to a Transtar Unit:

         Transtar, Inc.
         135 Jamison Lane
         Monroeville, Pennsylvania 15146
         Attention: Director of Marketing
         Phone:     412-829-3434
         Fax:       412-829-6603

         18. LAW GOVERNING. This Agreement shall be construed in accordance with
the laws of the State of Ohio excluding its conflict of laws provision.

         19. RELATIONSHIP OF PARTIES. The relationship between USS/KOBE and Lake
Terminal under this Agreement shall be that of independent contractors. Nothing
in this Agreement shall be deemed to constitute a relationship of agency, joint
venture, partnership, or any relationship other than that specified.


                                       18
<PAGE>   22

         20. INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES. In no event shall a 
party be liable for any indirect, special or consequential damages as a result
of a breach of any provision of this Agreement.

         21. ENTIRETY OF AGREEMENT; AMENDMENTS. This Agreement constitutes the
entire agreement of the parties with respect to the subject matter hereof. No
change, modification, or alteration of this Agreement shall be effective unless
reduced to writing and signed by the parties. Waiver of any breach of the
Agreement by a party shall not be construed as a waiver of any other breach.

         22. MUTUAL RELEASE. The parties fully release and discharge each other
from all claims, known and unknown, arising under the 1988 Agreement which any
party may have against any other party to this Agreement. This provision is not
intended to apply to personal injury or property damage claims that either party
may have against the other.

         23. ALLOCATION OF FINANCIAL RESPONSIBILITY. During the Term of this
Agreement and notwithstanding any provision set forth in any of the Real Estate
Agreements referenced in the Agreement Concerning Leases, Licenses and Easements
(attached as an Exhibit to this Agreement) to the contrary, financial
responsibility for personal injuries (including death) and property damage
sustained by employees of USS/KOBE and Lake Terminal shall be allocated among
the parties to this


                                       19
<PAGE>   23



Agreement according to the terms of that certain Memorandum of Understanding
Regarding Financial Responsibility (attached as an Exhibit to this Agreement) as
such Memorandum may be amended from time to time.

             Lake Terminal and USS/KOBE will each indemnify and save harmless
the other, from and against any and all obligations, liabilities, claims and
demands for damage to property or injuries to any persons (other than employees
of the Lake Terminal or USS/KOBE), which may be asserted against the party
indemnified hereunder to have arisen as a result, in whole or in part, of the
negligent acts or omissions of the party providing such indemnity. Nothing set
forth herein is intended to indemnify Lake Terminal or USS/KOBE for its own
causal negligence or other legal fault, nor to require either Lake Terminal or
USS/KOBE to extend indemnity beyond the pro rata portion of its causal
negligence or other legal fault, nor is anything set forth herein intended to
modify the preceding paragraph of this Section 23 of this Agreement or the
Memorandum of Understanding Regarding Financial Responsibility (MOU) previously
entered into between Lake Terminal and USS/KOBE.

            Lake Terminal and USS/KOBE acknowledge that the MOU addresses only
those situations where property damage or personal injury is sustained by an
employee of either the Lake


                                       20
<PAGE>   24



Terminal or USS/KOBE and that this provision of the Agreement applies only to
those incidents which occur within the confines of the USS/KOBE Works.

         24. FORCE MAJEURE. The parties understand that performance by a party
may be interrupted or delayed by an occurrence outside of its control, including
but not limited to the following: an act of God, war, riot, sovereign conduct,
equipment failure, conduct of third parties, or other similar causes beyond the
reasonable control of the parties. If that should occur, such party shall be
excused from performance for as long as it is reasonably necessary to complete
performance. In case of any dispute as to the reasonableness of a resulting
delay in performance, the parties shall submit the matter to dispute resolution
in accordance with the procedures set forth in Sections 14 and 15.

             In the event of any concerted action by Lake Terminal organized 
labor that results in an interruption to the interchange services ("Service")
performed by Lake Terminal at the USS/KOBE Works pursuant to this Agreement,
Lake Terminal will employ reasonable best efforts to continue to provide Service
to USS/KOBE during the interruption.

             Such "reasonable best efforts" include, but are not necessarily
limited to (1) cooperation and communication with USS/KOBE aimed at efficiently
and effectively restoring



                                       21
<PAGE>   25



uninterrupted Service to the USS/KOBE Works; (2) pursuit of those legal actions
and remedies which, in the reasonable opinion of counsel for Lake Terminal,
would prove prudent for Lake Terminal to exercise under the circumstances; (3)
having due regard for its own management and labor relations policies, pursuing
resolution of the underlying dispute, if any, which gives rise to the
interruption of Service; (4) exercise of reasonable best efforts to provide
qualified management or other personnel available to perform the service; and
(5) in the unlikely event of a secondary boycott, picketing or related
activities directed at USS/KOBE, Lake Terminal or any of its contractors which
spreads beyond Lake Terminal, using its influence and contacts in the railroad
and transportation industries to discourage, limit, work around or terminate
such activity.

             Nothing set forth in this Agreement is intended as a guarantee by
Lake Terminal of uninterrupted Service to the USS/KOBE Works nor is anything set
forth in this Agreement intended as agreement by the parties that strikes,
lockouts or similar events are not events of force majeure for purposes of this
Section 24 of this Agreement.



                                       22
<PAGE>   26



            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.

                                         USS/KOBE STEEL COMPANY



                                         By   /s/ George F. Babcoke
                                           -----------------------------------
                                         Title: President


                                         THE LAKE TERMINAL RAILROAD COMPANY

                                         By   /s/ Rade Vignovic  
                                           -----------------------------------
                                         Title: V.P. - Marketing




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