Document:

Exhibit 10.4

 

Exhibit 10.4

BLACK BOX CORPORATION

1992 STOCK OPTION PLAN

(As Amended through August 9, 2005)

     I. PURPOSES

     BLACK BOX CORPORATION (the “Company”) desires to afford certain of its key employees and the
key employees of any subsidiary corporation or parent corporation of the Company now existing or
hereafter formed or acquired who are responsible for the continued growth of the Company an
opportunity to acquire a proprietary interest in the Company, and thus to create in such key
employees an increased interest in and a greater concern for the welfare of the Company and its
subsidiaries.

     The Company, by means of this 1992 Stock Option Plan as originally approved on November 11,
1992, and as further amended on May 10, 1994, August 9, 1994, August 7, 1995, August 12, 1996,
August 13, 1997, February 3, 1998, August 10, 1998, August 10, 1999, August 8, 2000, August 23,
2001, August 15, 2002, August 12, 2003, August 10, 2004, March 15, 2005, May 4, 2005 and August 9,
2005 (the “Plan”), seeks to retain the services of persons now holding key positions and to secure
the services of persons capable of filling such positions.

     The stock options (“Options”) and stock appreciation rights (“Rights”) offered pursuant to the
Plan are a matter of separate inducement and are not in lieu of any salary or other compensation
for the services of any key employee.

     The Options granted under the Plan are intended to be either incentive stock options
(“Incentive Options”) within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”), or options that do not meet the requirements for Incentive Options
(“Non-Qualified Options”), but the Company makes no warranty as to the qualification of any Option
as an Incentive Option.

     II. AMOUNT OF STOCK SUBJECT TO THE PLAN; PER PERSON LIMITATION

     The total number of shares of common stock of the Company which may be purchased or acquired
pursuant to the exercise of Options or Rights granted under the Plan shall not exceed, in the
aggregate, 9,200,000 shares of the authorized common stock, $.001 par value per share, of the
Company (the “Shares”), such number subject to adjustment as provided in Article XII hereof.
Shares that are the subject of Rights and related Options shall be counted only once in determining
whether the maximum number of Shares that may be purchased or awarded under the Plan has been
exceeded. No person may receive Options or Rights under the Plan for more than 500,000 Shares in
any given fiscal year.

     Shares acquired under the Plan may be either authorized but unissued Shares or Shares of
issued stock held in the Company’s treasury, or both, at the discretion of the Company. If and to
the extent that Options or Rights granted under the Plan expire or terminate without having been

 

 

exercised, the Shares covered by such expired or terminated Options or Rights shall again become
available for award under the Plan.

     Except as provided in Article XIX and subject to Article II, the Company may, from time to
time during the period beginning on the date on which the Company consummates an underwritten
initial public offering of Shares (the “Effective Date”) and originally ending on November 30, 2002
but amended to end on November 30, 2012 (the “Termination Date”), grant to certain key employees of
the Company, or of any subsidiary corporation or parent corporation of the Company now existing or
hereafter formed or acquired, Incentive Options and/or Non-Qualified Options and/or Rights under
the terms hereinafter set forth.

     Provisions of the Plan that pertain to Options or Rights granted to an employee shall apply to
Options, Rights or a combination thereof.

     As used in the Plan, the term “subsidiary corporation” and “parent corporation” shall mean,
respectively, a corporation coming within the definition of such terms contained in Sections 424(f)
and 424(e) of the Code.

     III. ADMINISTRATION

     The board of directors of the Company (the “Board of Directors”) shall designate from among
its members an option committee, which may be the Compensation Committee of the Board of Directors
(the “Committee”), to administer the Plan. The Committee shall consist of no fewer than two
members of the Board of Directors, each of whom shall be a “disinterested person” within the
meaning of Rule 16b-3 (or any successor rule or regulation) promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). A majority of the members of the Committee
shall constitute a quorum, and the act of a majority of the members of the Committee shall be the
act of the Committee. Any member of the Committee may be removed at any time either with or
without cause by resolution adopted by the Board of Directors, and any vacancy on the Committee at
any time may be filled by resolution adopted by the Board of Directors.

     Subject to the express provisions of the Plan, the Committee shall have authority, in its
discretion, to determine the employees to whom Options or Rights shall be granted, the time when
such Options or Rights shall be granted, the number of Shares which shall be subject to each Option
or Right, the purchase price or exercise price of each Option or Right, the period(s) during which
such Options or Rights shall become exercisable (whether in whole or in part) and the other terms
and provisions thereof (which need not be identical).

     Subject to the express provisions of the Plan, the Committee also shall have authority to
construe the Plan and the Options and Rights granted thereunder, to amend the Plan and the Options
and Rights granted thereunder, to prescribe, amend and rescind rules and regulations relating to
the Plan, to determine the terms and provisions of the Options (which need not be identical) and
Rights (which need not be identical) granted thereunder and to make all other determinations
necessary or advisable for administering the Plan. The Committee also shall have the authority to
require, in its discretion, as a condition of the granting of any such Option or Right, that the
employee agree (i) not to sell or otherwise dispose of Shares acquired pursuant to the exercise of
such Option or Right for a period of six (6) months following the date of the

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acquisition of such
Option or Right and (ii) that in the event of termination of employment of such employee, other
than as a result of dismissal without cause, such employee will not, for a
period to be fixed at the time of the grant of the Option or Right, enter into any other
employment or participate directly or indirectly in any other business or enterprise which is
competitive with the business of the Company or any subsidiary corporation or parent corporation of
the Company, or enter into any employment in which such employee will be called upon to utilize
special knowledge obtained through employment with the Company or any subsidiary corporation or
parent corporation thereof. In no event will an employee who is subject to the reporting
requirements of Section 16(a) of the Exchange Act be entitled to sell or otherwise dispose of any
Shares acquired pursuant to exercise of any such Options or Rights for a period of six (6) months
from the date of the acquisition of such Options or Rights. Notwithstanding the foregoing, the
Committee shall not have the authority to reprice any outstanding Option or Right without
stockholder approval.

     The determination of the Committee on matters referred to in this Article III shall be
conclusive.

     The Committee may employ such legal counsel, consultants and agents as it may deem desirable
for the administration of the Plan and may rely upon any opinion or computation received from any
such legal counsel, consultant or agent. Expenses incurred by the Committee in the engagement of
such counsel, consultant or agent shall be paid by the Company. No member or former member of the
Committee shall be liable for any action or determination made in good faith with respect to the
Plan or any award of Options or Rights granted hereunder.

     IV. ELIGIBILITY

     Options and Rights may be granted only to key employees of the Company or of any subsidiary
corporation or parent corporation of the Company, except as hereinafter provided, and shall not be
granted to any officer or director who is not also a key employee or to any member of the
Committee. Any person who shall have retired from active employment by the Company or a subsidiary
corporation or parent corporation thereof, although such person shall have entered into a
consulting contract with the Company or a subsidiary corporation or parent corporation thereof,
shall not be eligible to receive an Option or a Right.

     The Plan does not create a right in any employee to participate in the Plan, nor does it
create a right in any employee to have any Options or Rights granted to him or her.

     V. OPTION PRICE AND PAYMENT

     The price for each Share purchasable under any Option granted hereunder shall be such amount
as the Committee shall, in its best judgment, determine to be not less than one hundred percent
(100%) of the fair market value per Share at the date the Option is granted; provided,
however, that in the case of an Incentive Option granted to a person who, at the time such
Option is granted, owns shares of the Company or any subsidiary corporation or parent corporation
of the Company which possesses more than ten percent (10%) of the total combined voting power of
all classes of shares of the Company or of any subsidiary corporation or parent corporation of the
Company, the purchase price for each Share shall be such amount as the Committee in its best
judgment shall determine to be not less than one hundred ten percent (110%) of the fair

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market value per Share at the date the Option is granted. In determining stock ownership of an employee
for any purposes under the Plan, the rules of Section 424(d) of the Code shall be
applied, and the Committee may rely on representations of fact made to it by the employee and
believed by it to be true.

     If the Shares are listed on a national securities exchange in the United States (which, for
purposes of this Article V, shall be deemed to include any last sale reported over-the-counter
market), on any date on which the fair market value per Share is to be determined, the fair market
value per Share shall be deemed to be the average of the high and low quotations at which such
Shares are sold on such national securities exchange on the date such Option is granted. If the
Shares are listed on a national securities exchange in the United States on such date, but the
Shares are not traded on such date, or such national securities exchange is not open for business
on such date, the fair market value per Share shall be determined as of the closest preceding date
on which such exchange shall have been open for business and the Shares shall have been traded. If
the Shares are listed on more than one national securities exchange in the United States on the
date on which the fair market value per Share is to be determined, the Committee shall determine
which national securities exchange shall be used for the purpose of determining the fair market
value per Share.

     If a public market exists for the Shares on any date on which the fair market value per Share
is to be determined but the Shares are not listed on a national securities exchange in the United
States, the fair market value per Share shall be deemed to be the mean between the closing bid and
asked quotations in the over-the-counter market for the Shares on such date. If there are no bid
and asked quotations for the Shares on such date, the fair market value per Share shall be deemed
to be the mean between the closing bid and asked quotations in the over-the-counter market for the
Shares on the closest date preceding such date for which such quotations are available.

     If no public market exists for the Shares on any date on which the fair market value per Share
is to be determined, the Committee shall, in its sole discretion and best judgment, determine the
fair market value of a Share.

     For purposes of this Plan, the determination by the Committee of the fair market value of a
Share shall be conclusive.

     Upon the exercise of an Option granted hereunder, the Company shall cause the purchased Shares
to be issued only when it shall have received the full purchase price for the Shares in cash or by
certified check; provided, however, that in lieu of cash, the holder of an Option
may, if and to the extent the terms of such Option so provide and to the extent permitted by
applicable law, exercise an Option (i) in whole or in part, by delivering to the Company shares of
common stock of the Company (in proper form for transfer and accompanied by all requisite stock
transfer tax stamps or cash in lieu thereof) owned by such holder having a fair market value equal
to the exercise price applicable to that portion of the Option being exercised by the delivery of
such Shares or (ii) in part, by delivering to the Company an executed promissory note on such terms
and conditions as the Committee shall determine, at the time of grant, in its sole discretion;
provided, however, that the principal amount of such note shall not exceed eighty
percent (80%) (or such lesser percentage as would be permitted by applicable

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margin regulations) of
the aggregate purchase price of the Shares then being purchased pursuant to the exercise of such
Option. The fair market value of the stock so delivered shall be
determined as of the date immediately preceding the date on which the Option is exercised, or
as may be required in order to comply with or to conform to the requirements of any applicable laws
or regulations.

     VI. USE OF PROCEEDS

     The cash proceeds of the sale of Shares pursuant to the Plan are to be added to the general
funds of the Company and used for its general corporate purposes as the Board of Directors shall
determine.

     VII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE

     Any Option shall be exercisable at such times, in such amounts and during such period or
periods as the Committee shall determine at the date of the grant of such Option; provided,
however, that an Incentive Option shall not be exercisable after the expiration of ten (10)
years from the date such Option is granted; and provided further that, in the case
of an Incentive Option granted to a person who, at the time such Option is granted, owns stock of
the Company or any subsidiary corporation or parent corporation of the Company possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of the Company or of
any subsidiary corporation or parent corporation of the Company, such Option shall not be
exercisable after the expiration of five (5) years from the date such Option is granted.

     Except to the extent otherwise provided under the Code, to the extent that the aggregate fair
market value of stock for which Incentive Options are exercisable for the first time by an employee
during any calendar year (under all stock option plans of the Company and of any parent corporation
or subsidiary corporation of the Company) exceeds one hundred thousand dollars ($100,000), such
Options shall be treated as Non-Qualified Options. For purposes of this limitation, (i) the fair
market value of stock is determined as of the time the Option is granted, and (ii) the limitation
will be applied by taking into account Options in the order in which they were granted.

     Subject to the provisions of Article XVIII, the Committee shall have the right to accelerate,
in whole or in part, from time to time, conditionally or unconditionally, rights to exercise any
Option granted hereunder.

     To the extent that an Option is not exercised within the period of exercisability specified
therein, it shall expire as to the then unexercised part.

     In no event shall an Option granted hereunder be exercised for a fraction of a Share.

     VIII. EXERCISE OF OPTIONS

     Options granted under the Plan shall be exercised by the optionee as to all or part of the
Shares covered thereby by the giving of written notice of the exercise thereof to the Corporate
Secretary of the Company at the principal business office of the Company, specifying the number of
Shares to be purchased and specifying a business day not more than fifteen (15) days

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from the date
such notice is given for the payment of the purchase price against delivery of the Shares being
purchased. Subject to the terms of Articles XIV, XVI, and XVII, the Company
shall cause certificates for the Shares so purchased to be delivered to the optionee at the
principal business office of the Company, against payment of the full purchase price, on the date
specified in the notice of exercise.

     IX. STOCK APPRECIATION RIGHTS

     In the discretion of the Committee, a Right may be granted (i) alone, (ii) simultaneously with
the grant of an Option (either Incentive or Non-Qualified) and in conjunction therewith or in the
alternative thereto or (iii) subsequent to the grant of a Non-Qualified Option and in conjunction
therewith or in the alternative thereto.

     The exercise price of a Right granted alone shall be determined by the Committee but shall not
be less than one hundred percent (100%) of the fair market value of one Share on the date of grant
of such Right. A Right granted simultaneously with or subsequent to the grant of an Option and in
conjunction therewith or in the alternative thereto shall have the same exercise price as the
related Option, shall be transferable only upon the same terms and conditions as the related
Option, and shall be exercisable only to the same extent as the related Option; provided,
however, that a Right, by its terms, shall be exercisable only when the fair market value
of the Shares subject to the Right and related Option exceeds the exercise price thereof.

     Upon exercise of a Right granted simultaneously with or subsequent to an Option and in the
alternative thereto, the number of Shares for which the related Option shall be exercisable shall
be reduced by the number of Shares for which the Right shall have been exercised. The number of
Shares for which a Right shall be exercisable shall be reduced upon any exercise of a related
Option by the number of Shares for which such Option shall have been exercised.

     Any Right shall be exercisable upon such additional terms and conditions as may from time to
time be prescribed by the Committee.

     A Right shall entitle the holder upon exercise thereof to receive from the Company, upon a
written request filed with the Corporate Secretary of the Company at its principal offices (the
“Request”), a number of Shares (with or without restrictions as to substantial risk of forfeiture
and transferability, as determined by the Committee in its sole discretion), an amount of cash, or
any combination of Shares and cash, as specified in the Request (but subject to the approval of the
Committee in its sole discretion, at any time up to and including the time of payment, as to the
making of any cash payment), having an aggregate fair market value equal to the product of (i) the
excess of the fair market value, on the day of such Request, of one Share over the exercise price
per Share specified in such Right or its related Option, multiplied by (ii) the number of Shares
for which such Right shall be exercised.

     Any election by a holder of a Right to receive cash in full or partial settlement of such
Right, and any exercise of such Right for cash, may be made only by a Request filed with the
Corporate Secretary of the Company during the period beginning on the third business day following
the date of release for publication by the Company of quarterly or annual summary statements of
sales and earnings and ending on the twelfth business day following such date. Within thirty (30)
days of the receipt by the Company of a Request to receive cash in full or

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partial settlement of a
Right or to exercise such Right for cash, the Committee shall, in its sole discretion, either
consent to or disapprove, in whole or in part, such Request. A Request to
receive cash in full or partial settlement of a Right or to exercise a Right for cash may
provide that, in the event the Committee shall disapprove such Request, such Request shall be
deemed to be an exercise of such Right for Shares.

     If the Committee disapproves in whole or in part any election by a holder to receive cash in
full or partial settlement of a Right or to exercise such Right for cash, such disapproval shall
not affect such holder’s right to exercise such Right at a later date, to the extent that such
Right shall be otherwise exercisable, or to elect the form of payment at a later date, provided
that an election to receive cash upon such later exercise shall be subject to the approval of the
Committee. Additionally, such disapproval shall not affect such holder’s right to exercise any
related Option or Options granted to such holder under the Plan.

     A holder of a Right shall not be entitled to request or receive cash in full or partial
payment of such Right unless such Right shall have been held for six (6) months from the date of
acquisition to the date of cash settlement thereof; provided, however, that such
prohibition shall not apply if the holder of such Right is not subject to the reporting
requirements of Section 16(a) of the Exchange Act. In no event will a holder of a Right who is
subject to the reporting requirements of Section 16(a) of the Exchange Act be entitled to make such
a request or receive cash in full or partial payment of such Right until the Company shall have
satisfied the informational requirements of Rule 16b-3(e)(1) promulgated under the Exchange Act for
the specified one year period.

     A Right shall be deemed exercised on the last day of its term, if not otherwise exercised by
the holder thereof, provided that the fair market value of the Shares subject to the Right exceeds
the exercise price thereof on such date.

     For all purposes of this Article IX, the fair market value of Shares shall be determined in
accordance with the principles set forth in the Article V.

     X. NON-TRANSFERABILITY OF OPTIONS AND STOCK APPRECIATION RIGHTS 

     Neither an Option nor a Right granted hereunder shall be transferable, whether by operation of
law or otherwise, other than by will or the laws of descent and distribution, and any Option or
Right granted hereunder shall be exercisable during the lifetime of the holder only by such holder.
Except to the extent provided above, Options and Rights may not be assigned, transferred, pledged,
hypothecated or disposed of in any way (whether by operation of law or otherwise) and shall not be
subject to execution, attachment or similar process.

     XI. TERMINATION OF EMPLOYMENT

     Upon termination of employment of any employee with the Company and all subsidiary
corporations and parent corporations of the Company, an Option or Right previously granted to the
employee, unless otherwise specified by the Committee in the Option or Right, shall, to the extent
not theretofore exercised, terminate and become null and void, provided that:

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     (a) if the employee shall die while in the employ of such corporation or during either
the three (3) month or one (1) year period, whichever is applicable, specified in
clause (b) below and at a time when such employee was entitled to exercise an Option or
Right as herein provided, the legal representative of such employee, or such person who
acquired such Option or Right by bequest or inheritance or by reason of the death of the
employee, may, not later than one (1) year from the date of death, exercise such Option or
Right, to the extent not theretofore exercised, in respect of any or all of such number of
Shares as specified by the Committee in such Option or Right; and

     (b) if the employment of an employee to whom such Option or Right shall have been
granted shall terminate by reason of the employee’s retirement (at such age or upon such
conditions as shall be specified by the Board of Directors), disability (as described in
Section 22(e)(3) of the Code) or dismissal by the employer other than for cause (as defined
below), and while such employee is entitled to exercise such Option or Right as herein
provided, such employee shall have the right to exercise such Option or Right so granted, to
the extent not theretofore exercised, in respect of any or all of such number of Shares as
specified by the Committee in such Option or Right, at any time up to and including (i)
three (3) months after the date of such termination of employment in the case of termination
by reason of retirement or dismissal other than for cause and (ii) one (1) year after the
date of termination of employment in the case of termination by reason of disability.

     If an employee voluntarily terminates his or her employment, or is discharged for cause, any
Option or Right granted hereunder shall, unless otherwise specified by the Committee in the Option
or Right, forthwith terminate with respect to any unexercised portion thereof.

     If an Option or Right granted hereunder shall be exercised by the legal representative of a
deceased or disabled employee or former employee, or by a person who acquired an Option or Right
granted hereunder by bequest or inheritance or by reason of death of any employee or former
employee, written notice of such exercise shall be accompanied by a certified copy of letters
testamentary or equivalent proof of the right of such legal representative or other person to
exercise such Option or Right.

     For the purposes of the Plan, the term “for cause” shall mean (i) with respect to an employee
who is party to a written agreement with, or, alternatively, participates in a compensation or
benefit plan of the Company or a subsidiary corporation or parent corporation of the Company, which
agreement or plan contains a definition of “for cause” or “cause” (or words of like import) for
purposes of termination of employment thereunder by the Company or such subsidiary corporation or
parent corporation of the Company, “for cause” or “cause” as defined in the most recent of such
agreements or plans, or (ii) in all other cases, (a) the willful commission by an employee of a
criminal or other act that causes substantial economic damage to the Company or a subsidiary
corporation or parent corporation of the Company or substantial injury to the business reputation
of the Company or a subsidiary corporation or parent corporation of the Company; (b) the commission
by an employee of an act of fraud in the performance of such employee’s duties on behalf of the
Company or a subsidiary corporation or parent corporation of the Company; or (c) the continuing
willful failure of an employee to perform the duties of such employee to the Company or a
subsidiary corporation or parent

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corporation of the Company (other than such failure resulting from
the employee’s incapacity due to physical or mental illness) after written notice thereof
(specifying the particulars thereof in
reasonable detail) and a reasonable opportunity to be heard and cure such failure are given to
the employee by the Board of Directors or the Committee. For purposes of the Plan, no act, or
failure to act, on the employee’s part shall be considered “willful” unless done or omitted to be
done by the employee not in good faith and without reasonable belief that the employee’s action or
omission was in the best interest of the Company or a subsidiary corporation or parent corporation
of the Company.

     For the purposes of the Plan, an employment relationship shall be deemed to exist between an
individual and a corporation if, at the time of the determination, the individual was an “employee”
of such corporation for purposes of Section 422(a) of the Code. If an individual is on military,
sick leave or other bona fide leave of absence, such individual shall be considered an “employee”
for purposes of the exercise of an Option or Right and shall be entitled to exercise such Option or
Right during such leave if the period of such leave does not exceed ninety (90) days, or, if
longer, so long as the individual’s right to reemployment with the corporation granting the option
(or a related corporation) is guaranteed either by statute or by contract. If the period of leave
exceeds ninety (90) days, the employment relationship shall be deemed to have terminated on the
ninety-first (91st) day of such leave, unless the individual’s right to reemployment is guaranteed
by statute or contract.

     A termination of employment shall not be deemed to occur by reason of (i) the transfer of an
employee from employment by the Company to employment by a subsidiary corporation or a parent
corporation of the Company or (ii) the transfer of an employee from employment by a subsidiary
corporation or a parent corporation of the Company to employment by the Company or by another
subsidiary corporation or parent corporation of the Company. Furthermore, solely for purposes of
determining the rights and obligations under any outstanding Options or Rights theretofore granted,
in the event that the Company ceases to own, directly or indirectly, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock of a subsidiary company by
virtue of a recapitalization, stock dividend, stock split, split-up, spin-off, combination of
shares or other like change in capital structure of the Company, the Committee may determine that
employment by such former subsidiary (or any parent or subsidiary company of such subsidiary) shall
continue to be deemed to be employment by the Company for purposes of the Plan.

     In the event of the complete liquidation or dissolution of a subsidiary corporation, or in the
event that the Company ceases to own, directly or indirectly, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock of such corporation, any
unexercised Options or Rights theretofore granted to any person employed by such subsidiary
corporation will be deemed canceled unless such person is employed by the Company or by any parent
corporation or another subsidiary corporation after the occurrence of such event. In the event an
Option or Right is to be canceled pursuant to the provisions of the previous sentence, notice of
such cancellation will be given to each employee holding unexercised Options or Rights and such
holder will have the right to exercise such Options or Rights in full (without regard to any
limitation set forth or imposed pursuant to Article VII) during the thirty (30) day period
following notice of such cancellation.

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     Notwithstanding anything to the contrary contained in this Article XI, in no event, however,
shall any person be entitled to exercise any Option or Right after the expiration of the period of
exercisability of such Option or Right as specified therein.

     XII. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS

     In the event of any change in the outstanding Shares through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares, issuance of rights to subscribe for Shares, or other
like change in capital structure of the Company, the Committee shall make such adjustment to each
outstanding Option and Right that it, in its sole discretion, deems appropriate. The term “Shares”
after any such change shall refer to the securities, cash and/or property then receivable upon
exercise of an Option or Right. In addition, in the event of any such change, the Committee shall
make any further adjustments as may be appropriate to the maximum number of Shares which may be
acquired under the Plan pursuant to the exercise of Options and Rights, the maximum number of
Shares which may be so acquired by one employee and the number of Shares and prices per Share
subject to outstanding Options and Rights as shall be equitable to prevent dilution or enlargement
of rights under such Options or Rights, and the determination of the Committee as to these matters
shall be conclusive. Notwithstanding the foregoing, (i) each such adjustment with respect to an
Incentive Option and any related Right shall comply with the rules of Section 424(a) of the Code
and (ii) in no event shall any adjustment be made which would render any Incentive Option granted
hereunder to be other than an “incentive stock option” for purposes of Section 422 of the Code.

     In the event of a “change in control” of the Company, all then outstanding Options and Rights
shall immediately become exercisable. For purposes of the Plan, a “change in control” of the
Company occurs if: (a) any “Person” (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act), other than Odyssey Partners, L.P. and its affiliates (which, for purposes of this
Article XII only, is deemed to include E.R. Yost) is or becomes the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly of securities of the Company
representing (i) fifty percent (50%) or more of the combined voting power of the Company’s
then-outstanding securities; or (ii) twenty-five percent (25%) or more but less than fifty percent
(50%) of the combined voting power of the Company’s then-outstanding securities if such
transaction(s) giving rise to such beneficial ownership are not approved by the Company’s Board of
Directors; or (b) at any time a majority of the members of the Board of Directors has been elected
or designated by any Person, other than Odyssey Partners, L.P. and its affiliates (which, for
purposes of this Article XII only, is deemed to include E.R. Yost); or (c) the Board of Directors
shall approve a sale of all or substantially all of the assets of the Company or any merger,
consolidation, issuance of securities or purchase of assets, in all cases other than to or with
Odyssey Partners, L.P. or its affiliates (which, for purposes of this Article XII only, is deemed
to include E.R. Yost), the result of which would be the occurrence of any event described in clause
(a) or (b) above.

     The Committee, in its discretion, may determine that, upon the occurrence of a transaction
described in the preceding paragraph, each Option or Right outstanding hereunder shall terminate
within a specified number of days after notice to the holder, and such holder shall receive, with
respect to each Share subject to such Option or Right, cash in an amount equal to

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the excess of the fair market value of such Shares immediately prior to the occurrence of such
transaction over the exercise price per Share of such Option or Right. The provisions contained in
the preceding sentence shall be inapplicable to an Option or Right granted within six (6) months
before the occurrence of a transaction described above if the holder of such Option or Right is
subject to the reporting requirements of Section 16(a) of the Exchange Act.

     XIII. RIGHT TO TERMINATE EMPLOYMENT

     The Plan shall not impose any obligation on the Company or on any subsidiary corporation or
parent corporation thereof to continue the employment of any holder of Options or Rights and it
shall not impose any obligation on the part of any holder of Options or Rights to remain in the
employ of the Company or of any subsidiary corporation or parent corporation thereof.

     XIV. PURCHASE FOR INVESTMENT

     Except for hereinafter provided, the Committee may require an employee, as a condition upon
exercise of any Option or Right granted hereunder, to execute and deliver to the Company (a) stock
powers with respect to Shares underlying a particular Option or Right and required to be held by a
custodian, and (b) a written statement, in form satisfactory to the Committee in which the employee
represents and warrants that Shares are being acquired for such person’s own account for investment
only and not with a view to the resale or distribution thereof. The employee shall, at the request
of the Committee, be required to represent and warrant in writing that any subsequent resale or
distribution of Shares by the Employee shall be made only pursuant to either (i) a Registration
Statement on an appropriate form under the Securities Act of 1933, as amended (the “Securities
Act”), which Registration Statement has become effective and is current with regard to the Shares
being sold, or (ii) a specific exemption from the registration requirements of the Securities Act,
but in claiming such exemption the employee shall, prior to any offer of sale or sale of such
Shares, obtain a prior favorable written opinion of counsel, in form and substance satisfactory to
counsel for the Company, as to the application of such exemption thereto. The foregoing
restriction shall not apply to (i) issuances by the Company so long as the Shares being issued are
registered under the Securities Act and a prospectus in respect thereof is current or (ii)
re-offerings of Shares by affiliates of the Company (as defined in Rule 405 or any successor rule
or regulation promulgated under the Securities Act) if the Shares being re-offered are registered
under the Securities Act and a prospectus in respect thereof is current.

     XV. ISSUE OF CERTIFICATES, LEGENDS, PAYMENT OF EXPENSES

     Upon any exercise of an Option or Right which may be granted hereunder and, in the case of an
Option, payment of the purchase price, a certificate or certificates for the Shares shall be issued
by the Company in the name of the person exercising the Option or Right and shall be delivered to
or upon the order of such person.

     The Company may endorse such legend or legends upon the certificates for Shares issued
pursuant to the Plan and may issue such “stop transfer” instructions to its transfer agent in
respect of such Shares as, in its discretion, it determines to be necessary or appropriate to (i)
prevent a violation of, or to perfect an exemption from, the registration requirements of the
Securities Act,

11

 

(ii) implement the provisions of the Plan and any agreement between the Company and the
optionee or grantee with respect to such Shares, or (iii) permit the Company to determine the
occurrence of a disqualifying disposition, as described in Section 421(b) of the Code, of Shares
transferred upon exercise of an Incentive Option granted under the Plan.

     The Company shall pay all issue or transfer taxes with respect to the issuance of transfer of
Shares, as well as all fees and expenses necessarily incurred by the Company in connection with
such issuance or transfer, except fees and expenses which may be necessitated by the filing or
amending of a Registration Statement under the Securities Act, which fees and expenses shall be
borne by the recipient of the Shares unless such Registration Statement has been filed by the
Company for its own corporate purposes (and the Company so states) in which event the recipient of
the Shares shall bear only fees and expenses as are attributable solely to the inclusion of the
Shares he or she received in the Registration Statement.

     All Shares issued as provided herein shall be fully paid and non-assessable to the extent
permitted by law.

     XVI. WITHHOLDING TAXES

     The Company may require an employee exercising a Right or Non-Qualified Option granted
hereunder, or disposing of Shares acquired pursuant to the exercise of an Incentive Option in a
disqualifying disposition (within the meaning of Section 421(b) of the Code), to reimburse the
corporation that employs such employee for any taxes required by any government to be withheld or
otherwise deducted and paid by such corporation in respect of the issuance or disposition of such
Shares. In lieu thereof, the corporation that employs such employee shall have the right to
withhold the amount of such taxes from any other sums due or to become due from such corporation to
the employee upon such terms and conditions as the Committee shall prescribe. The corporation that
employs such employee may, in its discretion, hold the stock certificate to which such employee is
entitled upon the exercise of an Option as security for the payment of such withholding tax
liability, until cash sufficient to pay that liability has been accumulated. In addition, at any
time that the Company becomes subject to a withholding obligation under applicable law with respect
to the exercise of a Right or Non-Qualified Option (the “Tax Date”), except as set forth below, a
holder of a Right or Non-Qualified Option may elect to satisfy, in whole or in part, the holder’s
related personal tax liabilities (an “Election”) by (i) directing the Company to withhold from
Shares issuable in the related exercise either a specified number of Shares or Shares having a
specified value (in each case not in excess of the related personal tax liabilities), (ii)
tendering Shares previously issued pursuant to the exercise of an Option or Right or other Shares
of the Company’s common stock owned by the holder or (iii) combining any or all of the foregoing
options in any fashion. An Election shall be irrevocable. The withheld Shares and other Shares
tendered in payment shall be valued at their fair market value (determined in accordance with the
principles set forth in Article V of the Plan) on the Tax Date. The Committee may disapprove of
any Election, suspend or terminate the right to make Elections or provide that the right to make
Elections shall not apply to particular Shares or exercises. The Committee may prescribe
additional rules, in its discretion, to permit a holder of an Option or Right who is subject to the
reporting requirements of Section 16(a) of the Exchange Act to effect such tax withholding in
compliance with the Rules promulgated under Section 16 of the Exchange Act and the positions of the
staff of the Securities and Exchange Commission

12

 

expressed in no-action or interpretative letters exempting such tax withholding transactions
from liability under Section 16(b) of the Exchange Act. The Committee may also impose any
additional conditions or restrictions on the right to make an Election as it shall deem
appropriate.

     XVII. LISTING OF SHARES AND RELATED MATTERS

     The Committee may delay any award, issuance or delivery of Shares if it determines that
listing, registration or qualification of Shares or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection with, the sale or
purchase of Shares under the Plan, until such listing, registration, qualification, consent or
approval shall have been effected or obtained, or otherwise provided for, free of any conditions
not acceptable to the Committee.

     XVIII. AMENDMENT OF THE PLAN

     The Board of Directors or the Committee, as the case may be, may, from time to time, amend the
Plan, provided that no amendment shall be made, without the approval of the stockholders of the
Company, that will (i) increase the total number of Shares reserved for Options under the Plan
(other than an increase resulting from an adjustment provided for in Article XII), (ii) reduce the
exercise price of any Incentive Option granted hereunder below the price required by Article V,
(iii) modify the provisions of the Plan relating to eligibility, or (iv) materially increase the
benefits accruing to participants under the Plan. The Board of Directors or the Committee, as the
case may be, shall be authorized to amend the Plan and the Options granted thereunder to permit the
Incentive Options granted thereunder to qualify as incentive stock options within the meaning of
Section 422 of the Code. The rights and obligations under any Option or Right granted before
amendment of the Plan or any unexercised portion of such Option or Right shall not be adversely
affected by amendment of the Plan, Option or Right without the consent of the holder of such Option
or Right.

     XIX. TERMINATION OR SUSPENSION OF THE PLAN

     The Board of Directors may at any time suspend or terminate the Plan. The Plan, unless sooner
terminated by action of the Board of Directors, shall terminate at the close of business on the
Termination Date. Options and Rights may not be granted while the Plan is suspended or after it is
terminated. Rights and obligations under any Option or Right granted while the Plan is in effect
shall not be altered or impaired by suspension or termination of the Plan, except upon the consent
of the person to whom the Option or Right was granted. The power of the Committee to construe and
administer any Options or Rights granted prior to the termination or suspension of the Plan under
Article III nevertheless shall continue after such termination or during such suspension.

     XX. GOVERNING LAW

     The Plan, such Options and Rights as may be granted thereunder and all related matters shall
be governed by, and construed and enforced in accordance with, the laws of the State of Delaware
from time to time obtaining.

13

 

     XXI. PARTIAL INVALIDITY

     The invalidity or illegibility of any provision hereof shall not be deemed to affect the
validity of any other provision.

     XXII. EFFECTIVE DATE

     This Plan became effective at 5:30 P.M., New York City Time, on the Effective Date.

14<PAGE>
                                                                    EXHIBIT 10.1

                       STOCK AND ASSET PURCHASE AGREEMENT

                                  BY AND AMONG

                           GJ RAILCO ACQUISITION, LLC

                                       AND

                       NEW YORK REGIONAL RAIL CORPORATION

                             DATED NOVEMBER 6, 2005

                                       -1-

<PAGE>

                       STOCK AND ASSET PURCHASE AGREEMENT

     THIS STOCK AND ASSET PURCHASE AGREEMENT (the "AGREEMENT") dated November 6,
2005 is by and among GJ RAILCO ACQUISITION, LLC ("BUYER") , a New York limited
liability company with a place of business at 2370 Transit Road, West Seneca,
New York 14224, and NEW YORK REGIONAL RAIL CORPORATION ("SELLER"), a Delaware
corporation with a place of business at 5266 Seneca Street, West Seneca, New
York 14224. BUYER and SELLER are sometimes referred to separately as a "Party"
and collectively as the "Parties".

RECITALS:

     A. BUYER desires to purchase 93.4% of the stock of New York Cross Harbor
Terminal Corporation ("Corporation") owned by SELLER ("Transferred Shares"); and

     B. BUYER desires to purchase that certain barge "(Barge") owned by SELLER;
and

     C. SELLER desires to sell the Transferred Shares and the Barge to BUYER;
and

     D. The Parties are entering into this Agreement to confirm the terms and
conditions upon which BUYER shall acquire the Transferred Shares and the Barge
from SELLER:

     NOW, THEREFORE, in consideration of the mutual covenants and promises
contained in this Agreement, and for other valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

     1.1 Defined Terms. As used in this Agreement, the following terms, not
elsewhere defined in this Agreement, shall have the following meanings:

          (a) "ACCOUNTS RECEIVABLE" means all accounts receivable of the
Business, as reflected on its books and records.

          (b) "AFFILIATE" means, as to any Person, any other Person who directly
or indirectly controls, is under common control with or is controlled by such
Person. As used in this definition, "control" (including, with its correlative
meanings, "controlled by" and "under common control with") means possession,
directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise).

                                      -29-

<PAGE>

          (c) "AGREEMENT" means, unless the context otherwise requires, this
Stock Purchase Agreement together with the Schedules and Exhibits attached
hereto, and the certificates and instruments to be executed and delivered in
connection herewith.

          (d) "BARGE" has the meaning set forth in the Preamble of this
Agreement.

          (e) "BUSINESS" means all activities which the Corporation is
presently, or is presently contemplating, conducting or pursuing.

          (f) "BUSINESS RECORDS" means originals or true copies of all operating
data and records of the Corporation and the Business, including financial,
accounting and bookkeeping books and records, purchase and sale orders and
invoices, sales and sales promotional data, advertising materials, marketing
analyses, past and present price lists, past and present customer service files,
credit files, client lists, claims files, written operating methods and
procedures, other information related to the Corporation's assets, reference
catalogues, insurance files, personnel records, Tax Returns, Tax Return
workpapers, and other records, on whatever media, pertaining to the Corporation
or the Business.

          (g) "BUYER" has the meaning set forth in the Preamble of this
Agreement.

          (h) "CLAIMS PERIOD" means the period beginning on the Closing Date and
ending on the date that is two years after the Closing Date.

          (i) "CLOSING CERTIFICATE" has the meaning set forth in Section 2.3(a).

          (j) "CLOSING DATE" means that date agreed upon by the Parties for the
Closing to occur, provided such date shall be no later than October 31, 2005.

          (k) "CONTRACTS" means the Material Contracts and the Minor Contracts.

          (l) "CURRENT REAL PROPERTY" means the real property leased by the
Corporation and commonly known as the Bush Rail Terminal in Brooklyn, NY and the
Greenville Railyard in Jersey City, NJ..

          (m) "EMPLOYEE BENEFIT PLAN" means any: (i) deferred compensation or
retirement plan or arrangement; (ii) defined contribution retirement plan or
arrangement; (iii) fringe benefit plan or program; or (v) any similar plan,
arrangement or program which is maintained, administered or contributed to by
the Corporation, or which covers any employee or former employee of the
Corporation by reason of such employee's employment by the Corporation.

          (n) "ENCUMBRANCE" means any claim, lien, pledge, option, charge,
easement, security interest, right-of-way, restriction, encumbrance, or other
right of any Person, or any other restriction or limitation of any nature
whatsoever, affecting title to any of the Corporation's assets.

          (o) "ENFORCEABILITY LIMITATIONS" means: (i) bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors' rights;

                                       -2-

<PAGE>

and (ii) the discretion of the appropriate Governmental Authority with respect
to specific performance, injunctive relief or other terms of equitable remedies.

          (p) "ENVIRONMENTAL CLAIMS" means any notice of violation, notice of
potential or actual responsibility or liability, or written Proceeding
(including those for contribution and/or indemnity) by any Governmental
Authority or other Person for any damage (including personal injury, tangible or
intangible property damage, natural resource damage, indirect or consequential
damages, investigative costs, removal, response or remediation costs, nuisance,
pollution, contamination or other adverse effects on the environment or for
fines, penalties or restrictions or conditions on environmental Permits)
resulting from or relating to the following conditions, circumstances or acts
existing or occurring before the Closing Date: (i) the presence of, a Release or
threatened Release into the environment of, or exposure to, any Hazardous
Substances; (ii) the generation, manufacture, processing, distribution, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Substances; (iii) the violation, or alleged violation, of any Environmental
Laws; or (iv) the non-compliance or alleged non-compliance with any
Environmental Laws.

          (q) "ENVIRONMENTAL LAWS" means any applicable Governmental
Requirements and any licenses, permits, notices or other requirements issued
pursuant thereto, enacted, promulgated or issued by any Governmental Authority
in any jurisdiction, in effect as of the Closing Date, relating to pollution or
protection of public health or the environment (including any air, surface
water, groundwater, land surface or sub-surface strata, whether outside, inside
or under any structure), or to the identification, reporting, generation,
manufacture, processing, distribution, use, handling, treatment, storage,
disposal, transporting, presence, Release or threatened Release of, any
Hazardous Substances.

          (r) "FINANCIAL STATEMENTS" means the financial statements of the
Corporation consisting of the annual report on form 10KSB of New York Regional
Rail Corporation for the year ended December 31, 2004 which consolidate the
financial results of the Corporation with those of the Seller, and the unaudited
financial statements of the Corporation for the nine months ending October 31,
2005.

          (s) "GAAP" means, with respect to all accounting matters and issues,
generally accepted accounting principles as in effect from time to time in the
United States applied (to the extent applicable) consistent with the Financial
Statements.

          (t) "GOVERNMENTAL AUTHORITY" means any federal, state, local or
foreign government, or any political subdivision of any of the foregoing, or any
court, agency or other entity, body, organization or group, exercising any
executive, legislative, judicial, quasi-judicial, regulatory or administrative
function of government, or any supranational body.

          (u) "GOVERNMENTAL REQUIREMENT" means any published law, statute,
regulation, ordinance, rule, directive, code, order, judgment, writ, injunction,
decree or award of any Governmental Authority now in effect.

          (v) "HAZARDOUS SUBSTANCES" means any pollutants, contaminants,
substances, hazardous and/or toxic chemicals, carcinogens, wastes, and any
ignitable, corrosive, reactive,

                                       -3-

<PAGE>

toxic or other hazardous substances or materials, whether solids, liquids or
gases (including petroleum and its derivatives, PCBs, asbestos, radioactive
materials, waste waters, sludge, slag and any other substance, material or
waste), as defined in or regulated by any Environmental Laws or as determined by
any Governmental Authority.

          (w) "INCOME TAX LIABILITY" means liability for any federal, state,
local or foreign income, business and occupation or similar Taxes owing by the
Corporation to any Governmental Authority attributable to the operations and
activities of, or otherwise incurred by or existing with respect to, the
Corporation for any period ending on or prior to the Closing Date, including
Taxes computed through the day before the Closing Date with respect to any
partial year on a closing-of-the-books basis as if such partial year ended at
the close of business on the day before the Closing Date.

          (x) "INDEBTEDNESS" means all: (i) obligations for borrowed money,
including all obligations for principal and interest, and for prepayment and
other penalties, fees, costs and charges of whatsoever nature with respect
thereto; (ii) obligations under conditional sale or other title retention
agreements relating to property purchased by such Person; (iii) obligations
issued or assumed as the deferred purchase price of property or services (other
than accounts payable to suppliers and similar accrued liabilities incurred in
the ordinary course of business and paid in a manner consistent with past and
industry practice and other than any such obligations for services to be
rendered in the future); (iv) indebtedness of others secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Encumbrance on property owned or acquired, whether or not
the obligations secured thereby have been assumed; (v) capitalized lease
obligations; (vi) obligations guaranteeing, or in effect guaranteeing, any
indebtedness, dividend or other obligation of any other Person; (vii)
obligations (including reimbursement obligations) relating to the issuance of
letters of credit, and (viii) obligations arising out of foreign exchange
contracts.

          (y) "INSURANCE" means any fire, product liability, automobile
liability, general liability, worker's compensation, medical insurance or other
form of insurance maintained by the Business.

          (z) "INTELLECTUAL PROPERTY" means all intellectual property used to
conduct the Business, including: (i) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto
and all patents, patent applications and patent disclosures; (ii) all
trademarks, service marks, trade dress, logos, trade names and corporate names
(including the name "New York Cross Harbor Terminal Corporation" or any other
derivative or similar name), together with all translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith, and all applications, registrations and renewals in connection
therewith; (iii) all copyrightable works, copyrights and all applications,
registrations and renewals in connection therewith; (iv) all mask works and all
applications, registrations and renewals in connection therewith; (v) all trade
secrets and confidential business information (including ideas, know-how,
compositions, supplier lists, pricing and cost information and business and
marketing plans and proposals); (vi) all computer software (including data and
related documentation and software installed on hard disk drives) other than
off-the-shelf computer software subject to shrinkwrap or clickwrap licenses; and
(vii) all copies and tangible embodiments of any of the foregoing (in whatever
form or medium).

                                       -4-

<PAGE>

          (aa) "KNOWLEDGE" means the knowledge, information or belief, as
appropriate to the context of the statement in which the term is used, of the
applicable Party, following inquiry of all appropriate employees and other
personnel and a review of all appropriate files and records.

          (bb) "LIABILITIES" has the meaning set forth in Section 2.2(b).

          (cc) "LOSSES" means all losses, liabilities, deficiencies, damages,
encumbrances, fines, penalties, claims, costs and expenses (including all fines,
penalties and other amounts paid pursuant to a judgment, compromise or
settlement), court costs and reasonable legal and accounting fees and
disbursements.

          (dd) "MATERIAL" and MATERIAL ADVERSE AFFECT" means, as the context
reasonably requires, $25,000, or an act, omission, or default which would result
in a Loss of $25,000 or more.

          (ee) "MATERIAL CONTRACTS" means the following contracts and other
agreements, whether written or oral, which are currently in effect and to which
the Corporation is a party or by which the Corporation is bound relating to or
affecting the Business:

               (i) any agreement for the lease of real or personal property
providing for lease payments in excess of $1,000 per year;

               (ii) any agreement for the purchase or sale of supplies, products
or other personal property, or for the furnishing or receipt of services, the
performance of which will extend over a period of more than one year, involves
consideration in excess of $5,000 or is anticipated to result in a loss to the
Corporation exceeding $5,000;

               (iii) any agreement concerning the Corporation's ownership of any
capital stock of any corporation or the Corporation's membership in a limited
liability company, partnership, joint venture or similar arrangement;

               (iv) any agreement under which the Corporation has created,
incurred or assumed any Indebtedness;

               (v) any agreement under which there has been imposed an
Encumbrance on any of the Corporation's assets;

               (vi) any letter of credit or performance bond;

               (vii) any confidentiality, non-piracy, non-solicitation or
non-competition agreement;

               (viii) any agreement with any Affiliate of the Corporation or
with any Related Person;

                                       -5-

<PAGE>

               (ix) any profit sharing, deferred compensation, severance or
other plan or arrangement for the benefit of the Corporation's current or former
shareholders, directors, officers or employees or any other direct or indirect
beneficial owners;

               (x) any collective bargaining agreement;

               (xi) any agreement for the employment of any individual on a
full-time, part-time, consulting or other basis;

               (xii) any agreement or instrument reflecting outstanding loans or
advances from the Corporation to its directors, officers or employees;

               (xiii) any agreement for the prospective acquisition of any
business or product line of the Corporation or any other Person;

               (xiv) any sales representative, brokerage, agency or franchise
agreement involving commission revenues of at least $5,000 per year or which is
anticipated to result in a loss to the Corporation exceeding $5,000;

               (xv) any Intellectual Property license or royalty agreement;

               (xvi) any independent contractor agreement;

               (xvii) any agreement providing for indemnification by the
Corporation other than indemnification agreements contained in any agreement
constituting a Contract under any other provision of this subsection; and

               (xviii) any other contract, agreement or commitment not
cancelable by the Corporation without penalty the performance of which will
extend over a period of more than one year, involves consideration in excess of
$5,000 or is anticipated to result in a loss to the Corporation exceeding
$5,000.

          (ff) "MINOR CONTRACTS" means any contracts or other agreements other
than the Material Contracts, whether written or oral, to which the Corporation
is a party or by which the Corporation is bound relating to or affecting the
Business.

          (gg) "PERMITS" means all permits, licenses, consents, franchises,
approvals and other authorizations required from any Governmental Authority in
connection with the operation of the Business and necessary to conduct the
Business as presently conducted.

          (hh) "PERSON" means any Governmental Authority, individual,
association, joint venture, partnership, corporation, limited liability company,
trust or other entity.

          (ii) "PREDECESSOR" means a Person, if any, whose status or activities
could give rise to an Environmental Claim against the Corporation as a successor
in interest to such Person.

                                       -6-

<PAGE>

          (jj) "PROCEEDING" means any claim, demand, action, suit, litigation,
dispute, audit, inquiry, order, writ, injunction, judgment, assessment, decree,
grievance, arbitral action, investigation or other proceeding.

          (kk) "RELATED PERSON" means any member, partner, shareholder,
director, officer or employee of the Corporation or any other direct or indirect
beneficial owner of the Corporation, any Person related to any such member,
partner, shareholder, director, officer, employee or beneficial owner by blood
or marriage, or any limited liability company, partnership, corporation, trust
or other entity in which any such person has an ownership interest of 30% or
more, as a member, partner, shareholder, trustee or otherwise.

          (ll) "RELEASE" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, migrating,
dumping or disposing into the environment.

          (mm) "REPRESENTATIVE" means any officer, director, principal,
attorney, accountant, agent, employee or other representative of any Person.

          (nn) "REQUIRED CONSENTS AND FILINGS" has the meaning set forth in
Section 6.1.

          (oo) "SELLER" has the meaning set forth in the Preamble to this
Agreement.

          (pp) "STOCK CASH CONSIDERATION" has the meaning set forth in Section
2.2(a).

          (qq) "TRANSFERRED SHARES" means 8,410 shares of the voting common
stock, par value $0.01 per share, of the Corporation owned by SELLER.

          (rr) "TANGIBLE PERSONAL PROPERTY" means all tangible personal property
owned or leased by the Corporation or in which the Corporation has any interest,
including manufacturing equipment, computer hardware, furniture and fixtures,
leasehold improvements, supplies and other tangible assets, together with any
transferable manufacturer or vendor warranties related thereto, but shall not
include the Transferred Shares.

          (ss) "TAX" means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, startup, occupation,
premium, environmental, customs duties, capital stock, franchise, profits,
withholding, social security (or similar), health, unemployment, disability,
real property, personal property, intangible property, sales, use, transfer,
registration, value added, goods and services, alternative or add-on minimum,
estimated, or other tax or similar obligation of any kind whatsoever, including
any interest, penalty or addition thereto, whether disputed or not.

          (tt) "TAX RETURN" means any return, declaration, report, claim for
refund or information return or statement relating to Taxes, including any
schedule or attachment thereto, and any amendment thereof.

          (uu) "TRANSACTION DOCUMENTS" means this Agreement and the instruments,
certificates and other documents described in Section 3.2(a).

                                       -7-

<PAGE>

     1.2 Usage of Terms. Except where the context otherwise requires, words
importing the singular number include the plural number and vice versa. Use of
the word "including" means "including, without limitation".

     1.3 References to Articles, Sections, Exhibits and Schedules. All
references in this Agreement to Articles, Sections (and other subdivisions),
Exhibits and Schedules refer to the corresponding Articles, Sections (and other
subdivisions), Exhibits and Schedules of or attached to this Agreement, unless
the context expressly, or by necessary implication, otherwise requires.

                                    ARTICLE 2
                    PURCHASE OF TRANSFERRED SHARES AND BARGE

     2.1 Purchase of Transferred Shares. At the Closing, BUYER shall purchase
the Transferred Shares from SELLER and SELLER shall sell the Transferred Shares
to BUYER, free and clear of all Encumbrances, fully paid, non-assessable and
free of preemptive rights. As a result, BUYER shall own 93.4% of all of the
issued and outstanding stock of the Corporation.

     2.2 Consideration. In consideration for the Transferred Shares:

          (a) BUYER shall pay to SELLER $50,000.00 ("Stock Cash Consideration"),
which shall be payable to SELLER upon delivery to BUYER of one or more
certificates for the Transferred Shares, duly issued by the Corporation, and a
bill of sale, as follows:

               (i) A down payment of $25,000.00; and

               (ii) The delivery of BUYER'S Promissory Note in the original
principal amount of $25,000.00, which shall be payable in 20 equal monthly
principal installments of $1,250.00, together with simple interest thereon at an
annual rate of 6.00%; and

          (b) BUYER acknowledges those certain liabilities of the Corporation in
an aggregate amount of $3,788,610.26, as more particularly described on Schedule
2.2(b), which liabilities will remain outstanding at the time of
Closing("Liabilities").

     2.3 Purchase of Barge. At the Closing, BUYER shall purchase the Barge from
SELLER and SELLER shall sell the Barge to BUYER, free and clear of all
Encumbrances, except for (i) those disclosed in Schedule 2.3; (ii) the lien of
current taxes not yet due and payable, and (iii) those duly recorded in the
public record. Buyer acknowledges that the Barge is in poor condition, and may
be inadequate for continued use in place without significant rehabilitation and
repair. Buyer accepts the Barge in "As-Is" condition in all respects.

     2.4 Consideration. In consideration for the Barge:

          (a) BUYER shall pay to SELLER $50,000.00 ("Barge Consideration"),
which shall be payable to SELLER upon delivery to BUYER of a bill of sale, as
follows:

               (i) A down payment of $25,000.00; and

                                       -8-

<PAGE>

               (ii) The delivery of BUYER'S Promissory Note in the original
principal amount of $25,000.00, which shall be payable in 20 equal monthly
principal installments of $1,250.00, together with simple interest thereon at an
annual rate of 6.00%

                                    ARTICLE 3
                                     CLOSING

     3.1 Closing. The closing of the transactions contemplated by this Agreement
will be held at 10:00 a.m. local time on the Closing Date at the offices of
Hiscock & Barclay, LLP in Buffalo, New York or any other place as the Parties
mutually agree in writing ("Closing").

     3.2 Instruments and Possession. Upon the terms and conditions contained in
this Agreement, on the Closing Date, and upon delivery of the BUYER's Stock Cash
Consideration and Barge Consideration, SELLER's Transferred Shares, Barge, bills
of sale and the other closing documents and instruments to be delivered by the
respective Parties hereto, as described in Articles 6, 7 and 8 below, BUYER
shall be entitled to possession of the Transferred Shares and the Barge,. All of
such instruments will be in form and substance, and will be executed and
delivered in a manner, reasonably satisfactory to the Parties and their legal
Representatives.

                                    ARTICLE 4
                      REPRESENTATIONS AND WARRANTIES SELLER

     SELLER represents and warrants to BUYER that, to its Knowledge and except
as a breach of any such representations and warranties would not constitute a
Material Adverse Effect:

     4.1 Organization and Authority of SELLER and the Corporation to Conduct
Business. Each of the SELLER and the Corporation is duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
organization, except for the matters set forth on Schedule 4.1 relating to the
Corporation. Each of the SELLER and the Corporation is duly qualified and
registered to do business in each jurisdiction and municipality where such
qualification or registration is required. Each of the SELLER and the
Corporation has full corporate power and authority to conduct its business as it
is presently being conducted and to own and lease its properties and assets.
Neither the SELLER nor the Corporation has any stock or equity interest in any
other Person, other than the stock of CH Partners, Inc. and OSK Capital 1 Corp.

     4.2 Power and Authority; Binding Effect. Each of SELLER and the Corporation
has all necessary power and authority and has taken all action necessary to
authorize, execute and deliver this Agreement, to consummate the transactions
contemplated by this Agreement and to perform its obligations under this
Agreement. This Agreement has been duly executed and delivered by each of SELLER
and the Corporation, and constitutes the legal, valid and binding obligations of
each of SELLER and the Corporation, enforceable against each of them in

                                       -9-

<PAGE>

accordance with its terms, except as such enforcement may be limited by the
Enforceability Limitations.

     4.3 Title; Capitalization.

          (a) The Corporation has title to all of its assets and other property
subject to the Encumbrances set forth on Schedule 4.3(a) and Encumbrances duly
recorded in the public record. Neither Seller or Corporation make any warranty
or representation with respect to the condition or marketability of title to the
assets. The assets are conveyed "As-Is" in all respects.

          (b) The Corporation owns or leases pursuant to leases described on
Schedule 4.3(b) the Tangible Personal Property and all other tangible personal
property used in the Business and owns or otherwise has sufficient rights with
respect to all intangible property used in connection with the Business
necessary to carry on the Business in the manner in which it is currently
operated.

          (c) The Corporation leases pursuant to leases described on Schedule
4.3(c) the Current Real Property and all other real property used in the
Business and owns or otherwise has sufficient rights with respect to all real
property used in connection with the Business necessary to carry on the Business
in the manner in which it is currently operated.

          (d) The authorized equity securities of the Corporation consist of
10,000 shares of voting common stock, $0.01 par value per share. SELLER owns
8,410 of the shares of the Corporation, being 93.41% of the issued and
outstanding shares of the Corporation, and being the Transferred Shares
hereinbefore defined. None of the Transferred Shares were issued in violation of
any Governmental Requirement. SELLER is, and will be on the Closing Date the
exclusive record and beneficial owner and holder of all of the Transferred
Shares free and clear of all Encumbrances, fully paid, non-assessable and free
of preemptive rights. There are no outstanding subscriptions, options, warrants,
calls, rights, agreements or commitments: (i) restricting the transferability of
the Transferred Shares or the consummation of the transfer of the Transferred
Shares to BUYER; (ii) by which the Transferred Shares are bound; or (iii)
obligating SELLER or the Corporation to sell or issue any new equity interests
or any instrument convertible into or exchangeable for any equity interest or to
purchase or redeem any equity interest.

     4.4 No Conflict or Violation.

          (a) The execution and delivery of this Agreement, the consummation of
the sale of the Transferred Shares contemplated by this Agreement and the
fulfillment of the terms of this Agreement regarding the sale of the Transferred
Shares do not and will not result in or constitute: (a) a violation of or
conflict with any provision of the organizational or other governing documents
of SELLER or the Corporation; (b) a breach of, a loss of rights under or an
event, occurrence, condition or act which is or, with the giving of notice or
the lapse of time, would become, a default under, or result in the acceleration
of any obligations under, any term or provision of, any Contract, Indebtedness
or Permit to which SELLER or the Corporation is a party or by which either of
them is bound; (c) a violation by SELLER or the Corporation of any Governmental
Requirement.

                                      -10-

<PAGE>

          (b) Except as set forth on Schedule 2.3 (Encumbrances), the
consummation of the sale of the Barge contemplated by this Agreement and the
fulfillment of the terms of this Agreement regarding the sale of the Barge do
not and will not result in or constitute: (a) a violation of or conflict with
any provision of the organizational or other governing documents of SELLER or
the Corporation; (b) a breach of, a loss of rights under or an event,
occurrence, condition or act which is or, with the giving of notice or the lapse
of time, would become, a default under, or result in the acceleration of any
obligations under, any term or provision of, any Contract, Indebtedness or
Permit to which SELLER or the Corporation is a party or by which either of them
is bound; (c) a violation by SELLER or the Corporation of any Governmental
Requirement.

     4.5 Consents and Approvals. No consent, approval or authorization of, or
declaration, filing or registration with, any Person is required to be made or
obtained by SELLER or the Corporation in connection with the execution, delivery
and performance of this Agreement or the consummation of the transactions
contemplated by this Agreement, other than as set forth on Schedule 4.5.

     4.6 No Proceedings. There is no Proceeding pending or, to the Knowledge of
SELLER and the Corporation, threatened against, relating to or affecting in any
adverse manner the transactions contemplated by this Agreement, except as set
forth in Schedule 4.6.

     4.7 Financial Statements; Liabilities.

          (a) SELLER has delivered to BUYER the Financial Statements. The
Financial Statements fairly present the financial condition and the results of
operations of the Corporation as of their respective dates and for the periods
then ended in accordance with GAAP. The books and records of the Corporation
from which the Financial Statements were prepared fairly reflect the assets,
liabilities and operations of the Corporation, and the Financial Statements are
in conformity therewith. The Corporation has numerous liabilities to third
parties, including those reflected in the Financial Statements and Schedule 4.7,
wherein the amount claimed to be due by the creditor may differ materially from
the amounts otherwise reflected in the books and records of the Corporation.
BUYER acknowledges that it has had adequate opportunity to examine the books and
records of the Corporation in all respects, that it has satisfied itself with
respect to the financial condition of the Corporation, and shall not assert any
claim, offset or deduction against SELLER as a result of inconsistencies or
inaccurate reflection of the extent or amount of assets or liabilities of the
Corporation.

          (b) SELLER, except as provided above, is unaware of the existence of
any other material liabilities or obligations of any nature, whether absolute,
accrued, contingent, known, unknown, matured, unmatured or otherwise, and
whether or not required to be disclosed or provided for in financial statements
in accordance with GAAP, of the Corporation except: (i) liabilities and
obligations reflected in the Financial Statements; (ii) the Contracts; (iii) the
Proceedings set forth on Schedule 4.13; (iv) liabilities and obligations
incurred between the date of the Financial Statements and the Closing Date in
the ordinary course of business of the Corporation (none of which results from,
arises out of or relates to any breach of contract, breach of contractual
warranty, tort, infringement or violation of any Governmental Requirement).

                                      -11-

<PAGE>

     4.8 Tax Matters.

          (a) Since December 31, 2004, (i) the Corporation has filed all Tax
Returns that it was required to file for periods after December 31, 2004, (ii)
all Taxes required to have been withheld in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
third party have been withheld, (iii) all such Tax Returns were correct and
complete in all material respects when filed, (iv) all Taxes required to have
been paid by the Corporation (whether or not shown on any Tax Return) have been
paid, and (v) the Corporation is not currently the beneficiary of any extension
of time within which to file any Tax Return except in connection with the
consolidated Tax Return of SELLER for the year ended December, 31, 2004, which
has not been filed.

          (b) There are numerous disputes or claims concerning any Tax liability
of the Corporation claimed or raised by Governmental Authority to which SELLER
has Knowledge and has disclosed to BUYER. Such disputes or claims are set forth
on Schedule 4.13 and Schedule 4.3(a).

     4.9 Tangible Personal Property. SELLER has delivered or will make available
to BUYER: (a) a depreciation list of each item of Tangible Personal Property
owned by the Corporation having a value in excess of $1,000; and (b) a list of
each item of Tangible Personal Property leased by the Corporation having an
annual rental in excess of $1,000. There is no tangible personal property used
in the operation of the Business other than the Tangible Personal Property. All
of the Tangible Personal Property is located at the Current Real Property and
there is no tangible personal property used in the operation of the Business
located at the Current Real Property which is not owned or leased by the
Corporation. The Tangible Personal Property is, taken as a whole, in poor repair
and may be inoperable and/or unsafe and inadequate for its intended use. BUYER
accepts the Tangible Personal Property in "As-Is" condition in all respects.

     4.10 Current Real Property. SELLER have delivered or will make available to
BUYER a list of each piece of Current Real Property leased by the Corporation.
There is no real property used in the operation of the Business other than the
Current Real Property.

     4.11 Intellectual Property.

          (a) (i) There is no Intellectual Property necessary to or used in the
Business other than the Intellectual Property owned by, leased by or licensed to
the Corporation; (ii) each item of Intellectual Property owned or used by the
Corporation immediately prior to the Closing Date will be owned or available for
use by BUYER on substantially similar terms and conditions immediately
subsequent to the Closing Date; and (iii) the Corporation has taken reasonable
commercial actions to maintain and protect each item of Intellectual Property.

          (b) (i) the Corporation has not interfered with, infringed upon,
misappropriated or otherwise come into conflict with any intellectual property
rights of third parties, and neither

                                      -12-

<PAGE>

of SELLER or the Corporation has received any charge, complaint, claim, demand
or notice alleging any such interference, infringement, misappropriation or
violation (including any claim that the Corporation must license or refrain from
using any intangible property rights of any third party) which has not been
resolved; and (ii) to the Knowledge of SELLER and the Corporation, no third
party has interfered with, infringed upon, misappropriated or otherwise come
into conflict with any Intellectual Property owned by or used by the
Corporation.

          (c) Schedule 4.11(c) identifies each patent or registration which has
been issued to the Corporation with respect to any of the Intellectual Property,
each pending patent application or application for registration which the
Corporation has made with respect to any of the Intellectual Property and each
license, sublicense or other agreement which the Corporation has granted to any
third party with respect to any of the Intellectual Property. SELLER has
delivered to BUYER correct and complete copies of all such patents,
registrations, applications, licenses and agreements (as amended to date) and
has made available to BUYER correct and complete copies of all other written
documentation evidencing ownership and prosecution (if applicable) of each such
patent, registration, application, license or agreement. Schedule 4.11(c)
identifies each trademark, trade name or unregistered trademark used by the
Corporation in connection with the Business. With respect to each item of
Intellectual Property required to be identified in Schedule 4.11(c): (i) SELLER
has no Knowledge of any reason why the Corporation would be unable to register
the same with the appropriate Governmental Authority each item which is an
unregistered trademark; (ii) the Corporation possesses all right, title and
interest in and to the item, free and clear of any Encumbrances or licenses;
(iii) the item is not subject to any outstanding Governmental Requirement; (iv)
no Proceeding is pending or, to the Knowledge of SELLER and the Corporation,
threatened which challenges the legality, validity, enforceability, use or
ownership of the item; and (v) other than routine indemnities given to
distributors, sales representatives, dealers and customers, the Corporation does
not have any current obligations to indemnify any Person for or against any
interference, infringement, misappropriation or other conflict with respect to
the item.

          (d) Schedule 4.11(d) identifies each item of Intellectual Property
that any third party owns and that the Corporation uses pursuant to a license,
sublicense or other agreement. SELLER has delivered to BUYER correct and
complete copies of all such licenses, sublicenses and other agreements (as
amended to date). With respect to each item of Intellectual Property required to
be identified in Schedule 4.11(d): (i) each license, sublicense or other
agreement covering the item is enforceable by the Corporation, except as may be
limited by Enforceability Limitations; (ii) following the Closing, each license,
sublicense or other agreement will continue to be enforceable on substantially
similar terms and conditions, except as may be limited by Enforceability
Limitations; (iii) neither the Corporation nor, to the Knowledge of SELLER and
the Corporation, any other party to a license, sublicense or other agreement is
in breach or default, and no event has occurred which, with notice or lapse of
time, would constitute a breach or default or permit early termination,
modification or acceleration thereunder; (iv) neither the Corporation nor, to
the Knowledge of SELLER and the Corporation, any other party to a license,
sublicense or other agreement has repudiated any provision thereof; (v) the
underlying item of Intellectual Property is not, to the Knowledge of SELLER and
the Corporation, subject to any outstanding Governmental Requirement; (vi) no
Proceeding is pending or, to the Knowledge of SELLER and the Corporation,
threatened which challenges the legality, validity, enforceability

                                      -13-

<PAGE>

or use of the underlying item of Intellectual Property; and (vii) the
Corporation has not granted any sublicense or similar right with respect to any
license, sublicense or other agreement.

          (e) Except as set forth on Schedule 4.11(e), the Corporation's use of
the Intellectual Property will not, to the Knowledge of SELLER and the
Corporation, interfere with, infringe upon, misappropriate, or otherwise come
into conflict with, any intellectual property rights of third parties as a
result of the continued operation of the Business as presently conducted or as
contemplated to be conducted.

     4.12 Compliance with Laws and Permits. The Corporation and the conduct of
the Business are in material compliance with all applicable Governmental
Requirements and Permits. Neither the SELLER nor the Corporation has received
any notice (i.e. that has not been already responded to or corrected) to the
effect that, or otherwise been advised that the Corporation or the Business are
not in compliance with any applicable Governmental Requirement and there are no
presently existing facts, circumstances or events which, with notice or lapse of
time, would result in violations of any applicable Governmental Requirement or
Permit. Schedule 4.12 identifies all Permits issued to the Corporation and
currently in effect. To the Knowledge of SELLER and the Corporation, those
Permits constitute all permits, consents, licenses, franchises, authorizations
and approvals used in the operation of and necessary to conduct the Business.
All of those Permits are valid and in full force and effect, no violations have
been experienced, noted or recorded and no violations are expected, and no
Proceeding is pending or, to the Knowledge of SELLER and the Corporation,
threatened to revoke or limit any of those Permits.

     4.13 Litigation. Except as set forth in Schedule 4.13, there is no
Proceeding pending or, to the Knowledge of SELLER and the Corporation, currently
threatened which is: (a) a Proceeding against or relating to the Corporation, or
its properties, assets or business; (b) a Proceeding relating to the Business
and against or relating to any shareholder, director, officer or employee of the
Corporation; or (c) a Proceeding relating to the transactions contemplated by
this Agreement.

     4.14 Labor Matters.

          (a) SELLER has caused the Corporation to deliver to BUYER complete and
accurate schedules identifying the names of all current employee of the
Corporation, his or her name, position or job title, his or her base
compensation and bonus compensation earned in the last fiscal year of the
Corporation and his or her current base compensation. The Corporation has an
obligation under a written collective bargaining agreement with the Seafarers
International Union of North America Atlantic, Gulf, Lakes and Inland Waters
District AFL-CIO dated October 27, 2005 and extends until July 31, 2006, which
agreement has been provided to BUYER. There are no other oral or written
agreement with any labor organization or employee group. The Corporation is not
currently engaged in any unfair labor practice and there is no unfair labor
practice charge or other employee-related or employment-related complaint
against

                                      -14-

<PAGE>

the Corporation pending or, to the Knowledge of SELLER and the Corporation,
threatened before any Governmental Authority. There is currently no labor
strike, labor disturbance, slowdown, work stoppage or other material labor
dispute or arbitration pending or, to the Knowledge of SELLER and the
Corporation, threatened against the Corporation and no material grievance
currently being asserted. The Corporation has not experienced a labor strike,
labor disturbance, slowdown, work stoppage or other material labor dispute at
any time during the three years immediately preceding the date of this
Agreement. There is no organizational campaign being conducted or, to the
Knowledge of SELLER and the Corporation, contemplated and there is no pending
or, to the Knowledge of SELLER and the Corporation, threatened petition before
any Governmental Authority or other dispute as to the representation of any
employees of the Corporation. There are, to the Knowledge of SELLER and the
Corporation, no claims against the Corporation by employees or former employees
for unpaid wages, wrongful termination, accidental injury or death, sexual
harassment or discrimination or violation of any Governmental Requirement,
except as set forth in Schedule xx (summary of litigation). The Corporation has
complied with, and is currently in compliance with, all applicable Governmental
Requirements relating to any of its employees, consultants and independent
contractors.

     4.15 Employee Benefit Plans. With respect to the Employee Benefit Plans:

          (a) Schedule 4.15(a) sets forth a list identifying each Employee
Benefit Plan.

          (b) SELLER has caused the Corporation to deliver to BUYER true and
complete copies of: (i) the Employee Benefit Plans (including related trust
agreements, custodial agreements, insurance contracts, investment contracts and
other funding arrangements, if any); and (ii) any amendments to the Employee
Benefit Plans.

          (c) The execution of this Agreement and the consummation of the
transactions contemplated hereby do not and will not constitute an event under
any Employee Benefit Plan, which (either alone or upon the occurrence of a
subsequent event) will or may result in any payment, acceleration, vesting or
increase in benefits to any employee, former employee or director of the
Corporation.

          (d) Each Employee Benefit Plan has been maintained in compliance with
its terms and the requirements prescribed by any and all Governmental
Requirements.

          (e) There are no pending or, to the Knowledge of SELLER and the
Corporation, threatened: (i) Proceedings by any employees, former employees or
plan participants or the beneficiaries, spouses or representatives of any of
them, other than ordinary and usual claims for benefits by participants or
beneficiaries; or (ii) Proceedings by any Governmental Authority against the
Corporation relating to any Employee Benefit Plan.

          (f) The Corporation has made all required contributions under each
Employee Benefit Plan on a timely basis or, if not yet due, adequate accruals
therefor have been provided for in the Financial Statements.

     4.16 Transactions with Certain Persons. Other than any former shareholder,
director or officer or employee of SELLER or the Corporation, or any Person
related to such former shareholder, director, officer or employee of SELLER or
the Corporation by blood or marriage,

                                      -15-

<PAGE>

or any Person in which any such Person has an ownership interest of 30% or more,
as a member, partner, shareholder, trustee or otherwise, and except as publicly
disclosed in filings by SELLER with the U.S. Securities and Exchange Commission,
(a) no Related Person is presently or at any time during the past 12 months has
been a party to any transaction with the Corporation including any contract,
agreement or other arrangement (i) providing for the furnishing of services to
or by, (ii) providing for the rental or sale of real or personal property to or
from or (iii) otherwise requiring payments annually to or from (other than for
services as employees of the Corporation) such Related Person; and (b) no
shareholder, director, officer or employee or any other direct or indirect
beneficial owner of the Corporation is related to any other shareholder,
director, officer or employee or any other direct or indirect beneficial owner
of the Corporation by blood or marriage. All such transactions have been and are
on an arms-length basis providing for substantially the same payment and
performance terms as would reasonably be expected to be negotiated with an
independent third party.

     4.17 Insurance. Schedule 4.17 contains a complete and accurate list of all
current policies or binders of Insurance (showing as to each policy or binder
the carrier, policy number, coverage limits, expiration dates, annual premiums,
deductibles and a general description of the type of coverage provided and
policy exclusions) maintained by the Corporation and relating to properties,
assets and personnel of the Business. The Insurance is in full force and effect
and sufficient for compliance with all applicable Governmental Requirements and
of all contracts to which the Corporation is a party. The Corporation is not in
default under any of the Insurance, and the Corporation has not failed to give
any notice or to present any claim under any of the Insurance in a due and
timely manner. No notice of cancellation, termination, reduction in coverage or
increase in premium (other than reductions in coverage or increases in premiums
in the ordinary course) has been received with respect to any of the Insurance,
and all premiums with respect to any of the Insurance have been timely paid. The
Corporation has not experienced claims in excess of current coverage of the
Insurance. There will be no retrospective insurance premiums or charges or any
other similar adjustment on or with respect to any of the Insurance for any
period or occurrence prior to the Closing Date.

     4.18 Accounts Receivable. All of the Accounts Receivable are bona fide
receivables, are reflected on the books and records of the Corporation, arose in
the ordinary course of the Business and will be collected in the ordinary course
of business consistent with past collection practices at their full face value
net of reserves for doubtful accounts as reflected on the Closing Date Financial
Report. There are no Encumbrances on the Accounts Receivable, there is no right
of offset against any of the Accounts Receivable and no agreement for deduction
or discount has been made with respect to any of the Accounts Receivable other
than ordinary course trade discounts, except to the extent of an offset
agreement with Norfolk Southern Railroad to the benefit of the Port Authority of
New York and New Jersey in connection with liquidating the balance due under a
judgment rendered against the Corporation. (See Schedule xx summary of
litigation)

     4.19 Contracts. Schedule 4.19 contains a true and correct list or
description of the Material Contracts. SELLER has delivered or will make
available to BUYER true and correct copies of the Material Contracts. Each of
the Material Contracts is enforceable against the Corporation and each other
party thereto, in accordance with its terms, except as such

                                      -16-

<PAGE>

enforcement may be limited by Enforceability Limitations. To the Knowledge of
SELLER and the Corporation, there is no threatened default under any Material
Contract.

     4.20 Suppliers and Customers. None of the suppliers or customers of the
Business has informed SELLER or the Corporation that it intends to terminate or
materially reduce its relationship with the Corporation, and there is no
material problem or dispute with any supplier or customer of the Business. To
the Knowledge of SELLER and the Corporation, the Corporation has good business
relationships with each of its suppliers and customers. To the Knowledge of
SELLER and the Corporation, the consummation of the transactions provided for in
this Agreement will not or is not likely to disrupt the existing relationships
with any supplier or customer of the Business or the Corporation which would
have a Material Adverse Effect.

     4.21 Business Records. No material records of accounts, personnel records
or other business records for the past five years relating to the Business or
the Corporation have been destroyed and all such records are available to BUYER
on a best efforts and good faith basis upon request, subject to applicable
Governmental Requirements and contractual prohibitions or limitations.

     4.22 Powers of Attorney. The Corporation has not granted to any other
Person any power of attorney or other right to represent it or act on its
behalf.

     4.23 Environmental Matters.

          (a) Except for matters set forth in Schedule 4.23 (summary of
litigation)The Corporation and its assets, properties and operations are now and
at all times prior to the Closing Date have been in compliance with all
applicable Environmental Laws and, to the Knowledge of SELLER and the
Corporation, each Predecessor and its assets, properties and operations were in
compliance in all material respects with all applicable Environmental Laws; and

          (b) the Corporation does not own any real property.

     4.24 Absence of Certain Changes. Except as set forth on Schedule 4.24 or as
reflected in the Financial Statements, since April 1, 2005 there has not been
any:

          (a) material adverse change in the Business or in the financial
condition or operations of the Corporation;

          (b) sale or transfer by the Corporation of any tangible or intangible
asset having a value at the time of disposition greater than $5,000 or $10,000
in the aggregate for all such assets, any mortgage or pledge or creation of any
Encumbrance relating to any such asset, any lease of real property or equipment
or any cancellation of any debt or claim, except in the ordinary course of
business;

          (c) other material transaction not in the ordinary course of the
Business or not otherwise consistent with the Corporation's past practices
involving consideration in excess of $10,000;

                                      -17-

<PAGE>

          (d) change in the Corporation's authorized or issued capital stock;
grant of any stock option or right to purchase shares of capital stock of the
Corporation; issuance of any security convertible into such capital stock; grant
of any registration rights; purchase, redemption, retirement or other
acquisition by the Corporation of any shares of any capital stock; or
declaration or payment of any dividend or other distribution or payment in
respect of shares of capital stock;

          (e) amendment to the Corporation's articles of incorporation, by-laws
or other organizational documents; or

          (f) material change in accounting methods or principles.

     4.25 No Brokers. Neither of SELLER nor the Corporation has entered into any
agreement, arrangement or understanding with any Person which will result in the
obligation to pay any finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated by this Agreement.

     4.26 Absence of Certain Payments. Neither the Corporation, nor any
Affiliate of the Corporation, nor any of their respective partners,
shareholders, directors, officers, employees or agents, or other Persons acting
on behalf of any of them, have with respect to the Business, used any corporate
or other funds for unlawful contributions, payments, gifts or entertainment, or
made any unlawful expenditures relating to political activity to officials of
any Governmental Authority. To the Knowledge of SELLER and the Corporation,
neither the Corporation, nor any Affiliate of the Corporation, nor any of their
partners, shareholders, directors, officers, employees or agents, or other
Persons acting on behalf of any of them, has accepted or received any unlawful
contributions, payments, gifts or expenditures.

     4.27 All Necessary Assets of the Business. The assets and properties owned,
leased or licensed by the Corporation constitute all of the rights, properties
and assets (real, tangible and intangible) used in the Business as presently
conducted by the Corporation and necessary for the continued conduct of the
Business. There are no assets or properties used in the Business and owned by
any Person other than the Corporation which will not, upon the Closing, be owned
by the Corporation or leased or licensed by the Corporation.

     4.28 Material Misstatements or Omissions. None of the representations and
warranties by SELLER in this Agreement contains any untrue statement of a
material fact, or omits to state any material fact necessary to make the
statements or facts contained therein not misleading.

                                    ARTICLE 5
                     REPRESENTATIONS AND WARRANTIES OF BUYER

     BUYER hereby represents and warrants to SELLER that:

     5.1 Organization and Good Standing. BUYER is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of New York.

                                      -18-

<PAGE>

BUYER has full power and authority to conduct its business as presently being
conducted and to own and lease its properties and assets.

     5.2 Authority; Authorization; Binding Effect. BUYER has all necessary power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement and to perform its obligations under
this Agreement. BUYER has taken all action necessary to authorize the execution
and performance of this Agreement, and the transactions contemplated hereby.
This Agreement has been duly executed and delivered by BUYER and constitutes a
legal, valid and binding obligation of BUYER, enforceable against BUYER in
accordance with its terms, except as such enforcement may be limited by
Enforceability Limitations.

     5.3 No Conflict or Violation. The execution and delivery of this Agreement,
the consummation of the transactions contemplated by this Agreement and the
performance by BUYER of its obligations under this Agreement, do not and will
not result in or constitute: (a) a violation of or a conflict with any provision
of the articles of organization or operating agreement of BUYER; (b) a breach
of, a loss of rights under, or an event, occurrence, condition or act which is
or, with the giving of notice, the lapse of time or the happening of any future
event or condition, would become, a material default under, any term or
provision of any contract, agreement, indebtedness, lease, commitment, license,
franchise, permit, authorization or concession to which BUYER is a party; or (c)
a violation by BUYER of any Governmental Requirement.

     5.4 Consents and Approvals. No consent, approval or authorization of, or
declaration, filing or registration with, any Person is required to be made or
obtained by BUYER in connection with the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated by this
Agreement.

     5.5 No Proceedings. There is no Proceeding pending or, to the knowledge of
BUYER, threatened against, relating to or affecting in any adverse manner the
transactions contemplated by this Agreement.

     5.6 No Brokers. BUYER has not entered into any agreement, arrangement or
understanding with any Person which will result in the obligation to pay any
finder's fee, brokerage commission or similar payment in connection with the
transactions contemplated by this Agreement.

     5.7 Material Misstatements or Omissions. None of the representations and
warranties by BUYER in this Agreement contains any untrue statement of a
material fact, or omits to state any material fact necessary to make the
statements or facts contained therein not misleading.

                                    ARTICLE 6
                            COVENANTS AND CONDUCT OF
                     THE PARTIES PRIOR TO AND AFTER CLOSING

                                      -19-

<PAGE>

     SELLER (directly with respect to a personal obligation, and by means of
voting the Transferred Shares to cause the Corporation to take the applicable
corporate action described below), on the one hand, and BUYER on the other hand,
each covenant and agree with the other as follows:

     6.1 Notifications, Consents and Approvals. As soon as practicable, BUYER
and SELLER will commence all reasonable actions to obtain the consents and
approvals and to make the filings set forth on Schedule 6.1 (the "Required
Consents and Filings"), if any, required to consummate the transactions
contemplated by this Agreement.

     6.2 Notification of Certain Matters.

          (a) SELLER will give prompt written notice to BUYER of: (i) any fact
or circumstance, or any occurrence or failure to occur of any event of which
SELLER has Knowledge, which fact, circumstance, occurrence or failure causes or,
with notice or the lapse of time, would cause any representation or warranty of
SELLER contained in this Agreement to be breached or untrue or inaccurate in any
respect any time from the date of this Agreement to the Closing Date; and (ii)
any failure of SELLER to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by SELLER under this Agreement.

          (b) BUYER will give prompt written notice to SELLER of: (i) any fact
or circumstance, or any occurrence or failure to occur of any event of which
BUYER has knowledge, which fact, circumstance, occurrence or failure causes or,
with notice or the lapse of time, would cause any representation or warranty of
BUYER contained in this Agreement to be breached or untrue or inaccurate in any
respect any time from the date of this Agreement to the Closing Date; and (ii)
any failure of BUYER to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by BUYER under this Agreement.

     6.3 Use of Corporate Name or Trade Name. After the Closing, neither SELLER
nor any of its Affiliates will use the name "New York Cross Harbor Terminal
Corporation", any other trade name included within the Intellectual Property
being conveyed to BUYER, or any derivative or variation thereof or any name
similar thereto.

     6.4 Confidentiality. SELLER has had access to and have gained knowledge
with respect to the Corporation and the Business, including trade secrets,
financial results and information, processes and techniques, cost data, methods
of doing business and information concerning customers and suppliers and other
valuable and confidential information relating to the Corporation and the
Business (the "Confidential Information"). SELLER acknowledges that unauthorized
disclosure or misuse of the Confidential Information, whether before or after
Closing, may cause damage to the Corporation and/or BUYER subsequent to the
Closing. SELLER agrees and covenants not to make unauthorized disclosures of any
Confidential Information.

     6.5 Repayment of Employee and Related Person Advances. On or prior to the
Closing Date, SELLER will cause all outstanding employee advances and amounts
owing from Related Persons that accrued after April 1, 2005 to be repaid to the
Corporation in full, other than ordinary course travel advances in reasonable
amounts consistent with past practice.

                                      -20-

<PAGE>

     6.6 Tax Matters. The following provisions will govern the allocation of
responsibility as among BUYER and SELLER for certain Tax matters following the
Closing Date:

          (a) Transfer and other Taxes. All transfer, documentary, sales, use,
stamp, registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with the transfer of the Transferred Shares and
the Barge to BUYER will be paid by SELLER at the time of Closing and SELLER
will, at its own expense, file all necessary Tax Returns and other documentation
with respect to all such transfer, documentary, sales, use, stamp, registration
and other Taxes and fees.

                                    ARTICLE 7
                       CONDITIONS TO SELLER'S OBLIGATIONS

     The obligation of SELLER to consummate the transactions contemplated by
this Agreement is subject, in the discretion of SELLER, to the satisfaction, on
or prior to the Closing Date, of each of the following conditions (any of which,
in SELLER's absolute and sole discretion, may be waived in whole or in part
without impairing or affecting any right of indemnification or other right or
remedy under this Agreement):

     7.1 Representations, Warranties and Covenants. All representations and
warranties of BUYER contained in this Agreement will be true and correct in all
respects at and as of the Closing Date, except as and to the extent that the
facts and conditions upon which such representations and warranties are based
are expressly required or permitted to be changed by the terms of this
Agreement, and BUYER will have performed all agreements and covenants required
by this Agreement to be performed by it prior to or at the Closing Date.

     7.2 Required Consents and Filings. The Required Consents and Filings will
have been obtained or made and all applicable time periods thereunder will have
expired.

     7.3 Closing Certificate. BUYER will have furnished SELLER with a
certificate of an officer of BUYER, in form and substance reasonably
satisfactory to SELLER, to evidence compliance with the conditions set forth in
Sections 7.1 and 7.2.

                                    ARTICLE 8
                        CONDITIONS TO BUYER'S OBLIGATIONS

     The obligation of BUYER to consummate the transactions contemplated by this
Agreement is subject, in the discretion of BUYER, to the satisfaction, on or
prior to the Closing Date, of each of the following conditions (any of which, in
BUYER's absolute and sole discretion, may be waived in whole or in part without
impairing or affecting any right of indemnification or other right or remedy
under this Agreement):

     8.1 Representations, Warranties and Covenants. All representations and
warranties of SELLER contained in this Agreement will be true and correct in all
respects at and as of the

                                      -21-

<PAGE>

Closing Date, except as and to the extent that the facts and conditions upon
which such representations and warranties are based are expressly required or
permitted to be changed by the terms of this Agreement, and SELLER will have
performed or caused to be performed all agreements and covenants required by
this Agreement to be performed or caused to be performed by SELLER prior to or
at the Closing Date.

     8.2 Required Consents and Filings. The Required Consents and Filings will
have been obtained or made and all applicable time periods thereunder will have
expired.

     8.3 No Proceedings. No Proceeding will be pending, threatened or
anticipated against BUYER, SELLER or the Corporation seeking to enjoin, or
adversely affecting, the transactions contemplated by this Agreement.

     8.4 No Interruption or Adverse Change. No interruptions or suspensions of
the Business as now conducted will have occurred or, to the Knowledge of SELLER
and the Corporation, been threatened and no material adverse changes in the
Business or in the business, prospects, assets or financial condition of the
Corporation will have occurred or, to the Knowledge of SELLER and the
Corporation, been threatened.

     8.5 No Claim Regarding Share Ownership or Proceeds. There will not have
been made or threatened by any Person any claim asserting that such Person is
the holder or the beneficial owner of, or has the right to acquire or to obtain
beneficial ownership of, any stock of, or any other voting, equity or ownership
interest in, the Corporation.

     8.6 Closing Certificate. SELLER will have furnished or caused to be
furnished to BUYER a certificate of SELLER in form reasonably satisfactory to
BUYER to evidence compliance with the conditions set forth in Sections 8.1, 8.2,
8.3, 8.4 and 8.5.

     8.7 Deleted

     8.8 Consulting Agreement. SELLER will have executed and delivered to the
Corporation a Consulting Agreement whereby the services of NYRR personnel James
W. Cornell and Donald B. Hutton will be provided for an initial period of six
months to assist BUYER in transitioning ownership and operations of the
Corporation, in form and substance satisfactory to BUYER.

     8.9 deleted

     8.10 Due Diligence. BUYER's investigation and due diligence review will
have been completed to BUYER's satisfaction, in its sole discretion.

     8.11 Deleted

     8.12 Minute Book and Stock Records. SELLER will have delivered or have
caused to be delivered to BUYER the Corporation's original minute book and stock
records.

                                      -22-

<PAGE>

                                    ARTICLE 9
                                 INDEMNIFICATION

     9.1 Survival and Indemnifications.

          (a) Survival of Representations, Warranties, Covenants and Agreements.

               (i) All representations and warranties of SELLER contained in
this Agreement will survive the Closing Date for the duration of the Claims
Period. All of the representations and warranties of SELLER contained in this
Agreement will in no respect be limited or diminished by any future Knowledge,
inspection, investigation, examination or possession on the part of BUYER or its
Representatives or any notice pursuant to Section 6.2(a). All covenants and
agreements of SELLER contained in this Agreement (including the obligation of
SELLER to consummate the transactions provided for herein and the
indemnification obligations of SELLER set forth in this Section) will survive
the Closing Date until fully performed or discharged.

               (ii) All representations and warranties of BUYER contained in
this Agreement will survive the Closing Date for the duration of the Claims
Period. All of the representations and warranties of BUYER contained in this
Agreement will in no respect be limited or diminished by any past or future
Knowledge, inspection, investigation, examination or possession on the part of
SELLER or its Representatives or any notice pursuant to Section 6.2(b). All
covenants and agreements of BUYER contained in this Agreement (including BUYER's
obligation to pay the Purchase Price and the indemnification obligations of
BUYER set forth in this Section) will survive the Closing Date until fully
performed or discharged.

          (b) Indemnification by SELLER. SELLER hereby agrees to defend,
indemnify and hold harmless each of the Corporation, BUYER and their respective
Affiliates, from, against and in respect of any and all Losses suffered or
incurred by any of them:

               (i) by reason of any breached or untrue representation or
warranty of SELLER contained in this Agreement;

               (ii) by reason of the non-fulfillment of any covenant or
agreement by SELLER (before or after the Closing) or by the Corporation (before
the Closing or as caused, in whole or in part, by SELLER before or after the
Closing) contained in this Agreement;

               (iii) by reason of any Proceedings by any shareholder, former
shareholder or other equity owner of the Corporation, or any such Person's
personal representative or any other Person making a claim based on a
relationship with any other shareholder or other equity owner of the Corporation
to the extent such Proceeding relates to action or inaction on the part of
Seller or the Corporation before the Closing; or

               (iv) Other than with respect to the Transferred Shares, by reason
of any Proceeding by any Person, except to the extent such Proceeding relates to
any Encumbrance set forth on Schedule 4.3 or Encumbrance duly recorded in the
public record

                                      -23-

<PAGE>

          (c) Indemnification by BUYER. BUYER hereby agrees to indemnify and
hold harmless SELLER and its respective Affiliates from, against, and in respect
of any and all Losses suffered or incurred by any of them:

               (i) resulting from any breached or untrue representation or
warranty of BUYER contained in this Agreement;

               (ii) resulting from the non-fulfillment of any covenant or
agreement of BUYER (before or after the Closing) contained in this Agreement; or

               (iii) by reason of any Proceedings by any shareholder, former
shareholder or other equity owner of the Corporation, or any such Person's
personal representative or any other Person making a claim based on a
relationship with any other shareholder or other equity owner of the Corporation
to the extent such claim relates to action or inaction on the part of Buyer or
the Corporation after the Closing.

          (d) Notification and Defense of Claims or Actions.

               (i) As used in this Section, any party seeking indemnification
pursuant to this Section 9.1 is referred to as an "Indemnified Party" and any
party from whom indemnification is sought pursuant to this Section is referred
to as an "Indemnifying Party." An Indemnified Party which proposes to assert the
right to be indemnified under this Section 9.1 must submit a written demand for
indemnification to the Indemnifying Party setting forth in summary form the
facts as then known which form the basis for the claim for indemnification;
provided, however, that the failure to give this notice will not affect the
claim of indemnification except to the extent of actual prejudice to the
Indemnifying Party. With respect to claims based on actions by third parties, an
Indemnified Party must, within 15 business days after the receipt of notice of
the commencement of any Proceeding against it in respect of which a claim for
indemnification is to be made against an Indemnifying Party, notify the
Indemnifying Party in writing of the commencement of such Proceeding, enclosing
a copy of all papers served; provided, however, that the failure to so notify
the Indemnifying Party of any such Proceeding will not relieve the Indemnifying
Party from any liability which it may have to the Indemnified Party, except to
the extent that the Indemnifying Party is prejudiced thereby. Thereafter, the
Indemnified Party must deliver to the Indemnifying Party, within 15 days after
receipt by the Indemnified Party, copies of all further notices relating to such
claim.

               (ii) If an Indemnified Party gives notice to the Indemnifying
Party pursuant to Section 9.1(d)(i) of the assertion of a third-party claim, the
Indemnifying Party will be entitled to participate in the defense of such
third-party claim and, to the extent that it wishes (unless (A) the Indemnifying
Party is also a Person against whom the third-party claim is made and the
Indemnified Party determines in good faith that joint representation would be
inappropriate or (B) BUYER is the Indemnified Party and the Indemnifying Party
fails to provide assurance satisfactory to the Indemnified Party of its
financial capacity to defend the third-party claim and provide indemnification
with respect to the third-party claim or (C) SELLER is the Indemnified Party and
the Indemnifying Party fails to provide assurance satisfactory to the
Indemnified Party of its financial capacity to defend the third-party claim and
provide indemnification with respect to the third-party claim), to assume the
defense of the third-

                                      -24-

<PAGE>

party claim with counsel reasonably satisfactory to the Indemnified Party. After
notice from the Indemnifying Party to the Indemnified Party of its election to
assume the defense of the third-party claim, the Indemnifying Party will not, so
long as it diligently conducts such defense, be liable to the Indemnified Party
under this Article for any fees of other counsel or any other expenses with
respect to the defense of the third-party claim, in each case subsequently
incurred by the Indemnified Party in connection with the defense of the
third-party claim, other than reasonable costs of investigation incurred at the
request of the Indemnifying Party. If the Indemnifying Party assumes the defense
of a third-party claim, (A) this assumption will conclusively establish for
purposes of this Agreement that the claims made in that third-party claim are
within the scope of and subject to indemnification, (B) no compromise or
settlement of the third-party claims may be effected by the Indemnified Party
and (C) no compromise or settlement of such third-party claims may be effected
by the Indemnifying Party without the Indemnified Party's consent unless (I)
there is no finding or admission of any violation of Governmental Requirement or
any violation of the rights of any Person, (II) the sole relief provided is
monetary damages that are paid in full by the Indemnifying Party and (III) the
Indemnified Party will have no liability with respect to any compromise or
settlement of the third-party claims effected without its consent. If notice is
given to an Indemnifying Party of the assertion of any third-party claim and the
Indemnifying Party does not, within fifteen business days after the Indemnified
Party's notice is given, give notice to the Indemnified Party of its election to
assume the defense of such third-party claim, the Indemnifying Party will be
bound by any determination made in such third-party claim or any compromise or
settlement effected by the Indemnified Party. Any control of the defense of a
third-party claim given to an Indemnifying Party pursuant to this paragraph
will, upon notice from the Indemnified Party, be reversed and given back to the
Indemnified Party if, at any point during the course of the third-party claim
the conditions necessary to have been met to allow such Indemnifying Party to so
control the defense are no longer true whether because all unsatisfied claims
increase in amount or because any other factors described in Section 9.1(d)(iii)
arise or otherwise.

               (iii) Notwithstanding the foregoing, if an Indemnified Party
determines in good faith that there is a reasonable probability that a
third-party claim may adversely affect it or its Affiliates or Related Persons
other than as a result of monetary damages for which it would be entitled to
indemnification under this Agreement, the Indemnified Party may, by notice to
the Indemnifying Party, assume the exclusive right to defend, compromise or
settle the third-party claim, but the Indemnifying Party will not be bound by
any determination of any third-party claim so defended for the purposes of this
Agreement or any compromise or settlement effected without its consent (which
may not be unreasonably withheld).

In the event that any claim for indemnification is made with respect to any
third-party claim pursuant to this Section 9.1, (A) the party assuming primary
responsibility for the defense of the claim must at all times keep the other
party reasonably informed as to the status of such claim and (B) the party not
primarily responsible for the defense of such claim must cooperate fully with
the other party in connection with that defense.

                                      -25-

<PAGE>

                                   ARTICLE 10
                                 RIGHT OF OFFSET

     Deleted.

                                   ARTICLE 11
                                  MISCELLANEOUS

     11.1 Further Assurances; Information.

     Both before and after the Closing Date, each Party will cooperate in good
faith with each other parties and will take all appropriate action and execute
any agreement, instrument or other writing of any kind which may be reasonably
necessary or advisable to carry out and confirm the transactions contemplated by
this Agreement.

     11.2 Risk of Loss. Risk of loss with respect to any property or assets of
the Corporation will be borne by SELLER at all times prior to the Closing. If
any of the Current Real Property or the Tangible Personal Property is lost,
damaged or destroyed by fire, theft, casualty or any other cause or causes prior
to the Closing (a "Casualty"), SELLER will promptly notify BUYER in writing of
such Casualty and the details thereof and will answer promptly any reasonable
requests from BUYER for details or information. If the Casualties are in an
aggregate amount in excess of $25,000 from the date of this Agreement to the
Closing Date or materially interfere, in BUYER's discretion, with the operation
of the Business, BUYER may terminate this Agreement.

     11.3 Termination. This Agreement may be terminated at any time prior to the
Closing Date as follows:

          (a) by written agreement of BUYER and SELLER;

          (b) by BUYER, on the one hand, or SELLER, on the other hand, by
written notice to the other in the event that the other Party is in breach of,
or default under, any material representation, warranty or obligation herein
made or on its part to be performed.

In the event of the termination of this Agreement as provided in the preceding
sentence, no party will have any liability hereunder of any nature whatsoever,
other than for indemnification pursuant to Section 9.1; provided, however, in
the event the terminating Party has elected to so terminate this Agreement due
to the breach of the other Party of a material representation, warranty or
obligation herein made or on its part to be performed, then the breaching Party
shall be liable to the terminating Party to the extent of $100,000 as
liquidated damages, and not as a penalty. In the event that a condition
precedent to its obligations is not satisfied, nothing contained in this
Agreement will be deemed to require any party to terminate this Agreement,
rather than to waive such condition precedent and proceed with the Closing,
which waiver will not impair or affect any right of indemnification or other
right or remedy hereunder.

                                      -26-

<PAGE>

     11.4 Notices. Unless otherwise provided in this Agreement, any agreement,
notice, request, instruction or other communication to be given hereunder by any
party to another must be in writing and: (a) delivered personally (such
delivered notice to be effective on the date it is delivered); (b) mailed by
certified mail, postage prepaid (such mailed notice to be effective three
business days after the date it is mailed); (c) deposited with a reputable
overnight courier service (such couriered notice to be effective one business
day after the date it is sent by courier); or (d) sent by facsimile transmission
(such facsimile notice to be effective on the date that confirmation of such
facsimile transmission is received), with a confirmation sent by way of one of
the above methods, as follows:

          If to SELLER, addressed to:

               James W. Cornell
               New York Regional Rail Corp.
               5266 Seneca Street
               West Seneca, NY 14224
               Telephone: 716-675-6015
               Telecopier: 716-675-5434

          With a copy to:

               James Jenkins, Esq
               Harter, Secrest & Emery, LLP
               1600 Bausch & Lomb Place
               Rochester, NY 14604-2711
               Telephone: 585-232-6500
               Telecopier: 585-232-2152

          If to BUYER, addressed to:

               Mr. Gordon Reger
               2730 Transit Road
               West Seneca, NY 14224
               Telephone: 716-675-1200
               Telecopier: 716-674-2947

          With a copy to:

               Hiscock & Barclay, LLP
               1100 M&T Center
               3 Fountain Plaza
               Buffalo, New York 14203-1414
               Attention: Roger F. Cominsky, Esq.
               Telephone: (716) 566-1415
               Telecopier: (716) 566-4000

                                      -27-

<PAGE>

Any party may designate in a writing to any other party any other address or
telecopier number to which, and any other Person to whom or which, a copy of any
such notice, request, instruction or other communication should be sent.

     11.5 Public Statements. The Parties agree to cooperate, both prior to and
after the Closing, in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated by this Agreement
(including any statements to employees of the Corporation).

     11.6 Choice of Law. This Agreement is governed by and will be construed,
interpreted and the rights of the parties determined in accordance with the laws
of New York without regard to principles of conflicts of law, except that, with
respect to matters of law concerning the internal corporate affairs of any
corporate entity which is a party to or the subject of this Agreement, the law
of the jurisdiction under which the respective entity was organized will govern.

     11.7 Expenses. The Parties shall pay all of their respective legal,
accounting and other expenses incident to this Agreement.

     11.8 Titles. The headings of the articles and sections of this Agreement
are inserted for convenience of reference only and will not affect the meaning
or interpretation of this Agreement.

     11.9 Waiver. No failure of any party to this Agreement to require, and no
delay by any party to this Agreement in requiring, any other party to comply
with any provision of this Agreement will constitute a waiver of the right to
require such compliance. No failure of any party to this Agreement to exercise,
and no delay by any party to this Agreement in exercising, any right or remedy
under this Agreement will constitute a waiver of such right or remedy. No waiver
by any party to this Agreement of any right or remedy under this Agreement will
be effective unless made in writing. Any waiver by any party to this Agreement
of any right or remedy under this Agreement will be limited to the specific
instance and will not constitute a waiver of such right or remedy in the future.

     11.10 Effective; Binding. This Agreement will be effective upon the due
execution hereof by each party to this Agreement. Upon becoming effective, this
Agreement will be binding upon each party to this Agreement and upon each
successor and assignee of each party to this Agreement and will inure to the
benefit of, and be enforceable by, each party to this Agreement and each
successor and assignee of each party to this Agreement; provided, however, that
SELLER shall not assign any right or obligation arising pursuant to this
Agreement without the prior written consent of BUYER, and any attempted
delegation or assignment without BUYER's prior written consent will be null and
void.

     11.11 Entire Agreement. This Agreement contains the entire agreement
between the parties to this Agreement with respect to the subject matter of this
Agreement and supersedes each course of conduct previously pursued, accepted or
acquiesced in, and each written or oral

                                      -28-

<PAGE>

agreement and representation previously made, by the parties to this Agreement
with respect to the subject matter of this Agreement.

     11.12 Modification. No course of performance or other conduct hereafter
pursued, accepted or acquiesced in, and no oral agreement or representation made
in the future, by any party to this Agreement, whether or not relied or acted
upon, and no usage of trade, whether or not relied or acted upon, will modify or
terminate this Agreement, impair or otherwise affect any obligation of any party
pursuant to this Agreement or otherwise operate as a waiver of any such right or
remedy. No modification of this Agreement will be effective unless made in
writing duly executed by all of the Parties hereto.

     11.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which taken
together will constitute one and the same instrument. Any Party may execute this
Agreement by facsimile signature and the other parties will be entitled to rely
on such facsimile signature as evidence that this Agreement has been duly
executed by such Party. Any Party executing this Agreement by facsimile
signature will immediately forward to the other parties an original signature
page by overnight mail.

     11.14 Equitable Remedies. SELLER: (a) acknowledges that its failure to
comply with Section 6.6 will cause the Corporation and/or BUYER irrevocable harm
and that a remedy at law for such a failure would be an inadequate remedy; and
(b) consents to the Corporation's or BUYER's obtaining from a court having
jurisdiction specific performance, an injunction, a restraining order or any
other equitable relief in order to enforce such provision. The right of the
Corporation or BUYER to obtain such equitable relief is in addition to, and not
in lieu of, any other remedy (including monetary damages) to which the
Corporation or BUYER is entitled under applicable law.

     11.15 Independence of Covenants and Representations and Warranties. All
covenants under this Agreement will be given independent effect so that if a
certain action or condition constitutes a default under a certain covenant, the
fact that such action or condition is permitted by another covenant will not
affect the occurrence of such default, unless expressly permitted under an
exception to such initial covenant. In addition, all representations and
warranties under this Agreement will be given independent effect so that if a
particular representation or warranty proves to be incorrect or is breached, the
fact that another representation or warranty concerning the same or similar
subject matter is correct or is not breached will not affect the incorrectness
or a breach of such initial representation or warranty.

     11.16 Parties in Interest. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to it and their respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third persons to any party to this
Agreement, nor shall any provision give any third persons any right of
subrogation or action over against any party to this Agreement.

     11.17 Rule of Construction. The Parties acknowledge that each party and its
counsel have reviewed and have had input in the drafting of this Agreement, and
the parties hereby agree that the normal rules of construction to the effect
that any ambiguities are to be resolved against

                                      -29-

<PAGE>

the drafting party shall not be employed in the interpretation of this Agreement
or any amendments or exhibits hereto.

                            [Signature Page Follows]

                                      -30-

<PAGE>

     IN WITNESS WHEREOF, the parties have executed or caused to be executed this
Agreement on the day and year indicated at the beginning of this Agreement.

                                        GJ RAILCO ACQUISITION, LLC

                                        By: GJ RAILCO MANAGEMENT, LLC

                                        By: /s/ Gordon Reger
                                            ------------------------------------
                                            Gordon Reger, Manager

                                        NEW YORK REGIONAL RAIL CORPORATION

                                        By: /s/ James W. Cornell
                                            ------------------------------------
                                            James W. Cornell, Chairman

                                        NEW YORK CROSS HARBOR RAILROAD
                                        TERMINAL CORPORATION

                                        By: /s/ James W. Cornell
                                            ------------------------------------
                                            James W. Cornell, Chairman

                                      -31-

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