Business Investment Criteria

1.Private Industrial Rail Divestitures: Industrial companies across North America own and operate billions of dollars of rail assets including rail lines (in and outside plants and to the main line), terminals, yards, switching, and other facilities. These are all small but often complex railroads. As managing rail assets is not the core competency of an industrial company, we believe our operating team can run and manage these assets more safely and efficiently. We are actively seeking to acquire, invest, and operate various private industrial rail assets. Types of projects include: (i) applying Precision Railroading to rail assets critical to an industrial company's operations; purchasing/developing rail lines between industrial plants and industrial parks and major freight lines and terminals; (ii) reconstructing, rehabilitating, and upgrading current low-capacity or dormant lines; and (iii) developing profitable intermodal models to provide short haul and smaller tonnage with reserved cars and continuous service formerly dependent upon truck unit convoys.

2.Shared Operating Assets of Class I’s: Often railroads are locked into offsetting shared ownership positions of centrally located assets. We provide the ability to independently operate such assets and purchase the ownership positions, thereby providing top management expertise and freeing capital.

3.Short Lines: We are seeking to partner with short line operators to invest in their growth plans. Our short line strategy is to: (i) provide growth and buy-out capital for controlling minority/majority ownership or recapitalizations of existing business lines, short lines and regional railroads; (ii) construct or rehabilitate interchange lines between existing Class I and Class II lines currently lacking such connections; and (iii) invest in equipment, infrastructure, and development along rail lines, including but not limited to, rolling stock, bridges, terminals, sidings, safer crossings and developed technology.

4.Class I Spin-offs:We believe the current market is the most favorable environment during the last 10 years to selectively acquire or long lease smaller, strategic and non-strategic lines and/or related assets of Class I and Class II railroads.

5.Rail Yards and Terminals: We are seeking to invest and support independently owned rail yards, terminals, transloading, switching, and storage facilities. These are all railroads we believe our capital and industry expertise combined with current owners' intimate knowledge of local markets can transform into larger players.

6.Other Rail Operations: We will invest in rail operating companies across the entire outsourced rail and support services landscape. Additionally, we intend to pursue the large insourced segments to create outsourcing companies. Due to the unique nature of the rail sector, we believe that there is a lack of capital to support rail services companies.

7.Rail Technologies:We are seeking to invest in high growth, overlooked markets in emerging equipment, services, and technology companies focused on rail:

• (i) Efficiency - Technology solutions for interline, management labor intensive car inspections, repairs, terminal offloading, and yard management
• (ii) Security - Trains and terminals, under carriages of cars, and intermodal centers and trucks
• (iii) Next-Gen - Artificial intelligence, high-resolution video, and camera technology that can monitor and track rail cars in transit
• (iv) Productivity and Safety - Fuel efficiency, crew management, inspection and repair technology, and synthetic rail ties (due to lack of proper wood and alternative equal performers, chemicals, disposal costs)

8.Logistics and Transportation Assets: We are seeking to invest in logistic park development, supply chain management, intermodal terminals and select trucking to provide full end-to-end service.

Investment Structure:Flexible. Controlling or minority interests. All investment will be made through MidRail as wholly or partially owned subsidiaries and/or corporate portfolio investments. We are willing to exchange equity in MidRail as well.

Investment Focus:Freight rail and related sub-segments.

Company/Project Size:Up to $500 million in revenue; Flexible on EBITDA; will do rail start-up projects and project financings

Investment Size:Usually opportunities to invest $25-$500 million of equity/debt. Capacity to do up to $1 billion investment size and develop and implement operating plans for larger rail projects and assets.

Geography:North America.

Other:Seek and develop female, minority-owned / led or green rail projects/companies.