C.3.1_HSR14-63_(UPRR_ECM).pdf

IFB No.: HSR25-12 Fresno Station Early Works

Railroad Agreement

C.3.1 HSR14-63 (UPRR ECM)

Revision(s) Date Description 0 12/10/2025 Initial Release

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Engineering, Construction, and Maintenance Agreement re CHSRA Project - Merced to Bakersfield Segment

December 23, 2014

California High-Speed Rail Authority Folder No. HSR14-63

Union Pacific Folder No. 2899-77

(Execution Copy)

Engineering, Construction, and Maintenance Agreement

Related to the California High-Speed Rail Authority Project

Merced to Bakersfield Segment

Project- Merced to Bakersfield Segment

TABLE OF CONTENTS

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UPRR Folder No. 2899-77

Page

Section 1. Incorporation of Recitals

Section 2. Defined Terms

Section 3. Design and Construction

Section 4. Procurement

Section 5. Wage and Labor Terms

Section 6. Payment of Costs

Section 7. Ownership of Improvements

Section 8. Maintenance

Section 9. Grade Separations

Section 10. Utility Crossings

Section 11. Removal of Advertising Signboards

Section 12. Reciprocal Access and Notice Rights

Section 13. No Connection With UPRR Tracks

Section 14. Flagging

Section 15. CHSRA Electrical Facilities

Section 16. Real Estate Transactions

Section 17. Future Modifications

Section 18. Record Keeping and Audits

Section 19. ARRA Reporting

Section 20. Compliance with Law

Section 21. No Rights to Goods or Services

Section 22. Memorandum of Understanding

Section 23. Additional Understandings

Section 24. Coordination Committee

Section 25. Indemnity and Insurance

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Section 26.

Section 27.

Section 28.

Section 29.

Section 30.

Section 31.

Section 32.

Section 33.

TABLE OF CONTENTS

(continued)

Page

Public Records Act

Confidentiality

Force Majeure

Alternative Dispute Resolution

Termination

Remedies

Notice of Litigation

Miscellaneous

December 23, 2014 CHSRA Folder No. HSR14-63

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Engineering, Construction, and Maintenance Agreement

Related to the

California High-Speed Rail Authority Project

Merced to Bakersfield Segment

This Engineering, Construction, and Maintenance Agreement Related to the California High-Speed Rail Authority Project Merced to Bakersfield Segment is entered this 23rd day of December, 2014 by and between Union Pacific Railroad Company ("UPRR") and the California High-Speed Rail Authority ("CHSRA") with respect to the following recitals:

RECITALS

A. UPRR owns, operates, maintains, and dispatches a significant network of critical freight rail routes in California that also host both intercity and commuter passenger rail service. UPRR plays a vital role for both the national and the state economies by maintaining and expanding its ability to move freight by rail; to serve the state's ports and other shippers; and to relieve the state's crowded highway network by facilitating the transportation of goods by rail rather than truck, thus reducing traffic congestion, air-pollutant emissions, greenhouse gas emissions, and energy consumption. UPRR operates on its own rights of way and under agreement on rights of way owned by other entities.

B. CHSRA is a state entity composed of nine members appointed by the Governor, the Senate Committee on Rules, and the Speaker of the Assembly. CHSRA intends that the development and implementation of intercity high-speed rail service will be integrated with the state's existing rail and bus network, consisting of interlinked conventional and high-speed rail lines and associated feeder buses. CHSRA expects that the intercity network in turn will be coordinated and connected with commuter rail lines and urban rail transit lines developed by local agencies.

C. In 2008, the Legislature and the people of California approved Proposition 1A, a $9.95 billion bond measure to initiate the construction of a high-speed train system that connects San Francisco Transbay Terminal to Los Angeles Union Station and Anaheim, and that links the state's major population centers, including Sacramento, the San Francisco Bay Area, the Central Valley, Los Angeles, the Inland Empire, Orange County, and San Diego. $9 billion of the Proposition 1A bond proceeds must be used for planning, engineering, and capital costs for the high-speed rail system. $950,000,000 of the Proposition 1A bond proceeds must be allocated to eligible recipients for capital improvements to intercity and commuter rail lines and urban systems that provide connectivity to the high-speed train system and its facilities, or that are part of the construction of the high-speed train system, or that provide capacity enhancements and safety improvements. The federal government has awarded $3.8 billion in grants under several federal grant cooperative agreements for the California high-speed train system. Proposition 1A bond proceeds can be used as federal grant matching funds.

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D. The CHSRA Revised 2012 Business Plan and 2014 Business Plan (collectively, and as revised from time to time, the "Business Plan") propose a route for the CHSRA system that will cross above or below or run adjacent to UPRR' s rights of way in some locations, including a portion of the route between Merced and Bakersfield by way of Fresno.

E. UPRR and CHSRA executed a Public Project Reimbursement Agreement for Union Pacific Railroad's Review of the California High-Speed Rail Authority Project Design dated June 6, 2012, as amended by a First Amendment to Public Project Reimbursement Agreement dated May 1, 2014 (the "Reimbursement Agreement").

F. UPRR, CHSRA, and certain regional commuter rail operators executed a Memorandum of Understanding and Implementing Agreement Related to High-Speed Rail Development in California dated July 11, 2012 (the "MOU"). A copy of the MOU is attached as Exhibit 2.

G. UPRR and CHSRA executed an Insurance and Indemnity Agreement Related to High- Speed Rail Development in California dated November 15, 2013 (the "Insurance and Indemnity Agreement"). A copy of the Insurance and Indemnity Agreement is attached as Exhibit 3.

H. The Project includes the Fresno to Bakersfield section of the California high-speed train system. On October 12, 2011 and October 19, 2012, UPRR submitted comments on drafts of the Environmental Impact Report/Environmental Impact Statement ("EIRJEIS") for the Fresno to Bakersfield Section. UPRR's comments are contained in the Final EIRIEIS in Vol. V, pages 40- 964 through 40-974 and Vol. VI, pages 54-183 through 54-185. CHSRA's responses to UPRR's comments are contained in the Final EIRIEIS in Vol. V, pages 40-975 through 40-983 and Vol. VI, pages 54-186 through 54-188. On May 7, 2014, CHSRA certified the Final EIRIEIS for the Fresno to Bakersfield section (the "Fresno-Bakersfield EIRJEIS"). CHSRA's responses stated its intent to utilize this agreement as the means of addressing many of the issues raised in UPRR's comments. During negotiation of this agreement, UPRR indicated that it relied on CHSRA's responses to comments, including its stated intent to address certain issues by means of this agreement, in electing not to challenge the Fresno-Bakersfield EIRIEIS in litigation.

I. CHSRA and UPRR now wish to enter this agreement to describe further terms related to engineering, construction, and maintenance of CHSRA's Project (as defined below) to be built between Merced and Bakersfield.

AGREEMENT

Now, therefore, the parties agree as follows:

Section 1. Incorporation of Recitals.

The recitals set forth above are hereby incorporated into the terms of this agreement.

Section 2. Defined Terms.

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2.1 "60% Design Plans" means the engineering drawings at 60% nominal design for a Mutual Interest Improvement that includes all applicable design sheets represented, with an outline of construction specifications and engineering calculations.

2.2 "90% Design Plans" means the engineering drawings at 90% nominal design for a Mutual Interest Improvement that includes all applicable design sheets represented, with an outline of construction specifications and engineering calculations.

2.3 "Access Plan" has the meaning set forth in Section 3.15.

2.4 "Accessing Party" has the meaning set forth in Section 12.1.

2.5 "Adverse Impact" means a disruption of normal operation or the creation of an unsafe condition arising from electromagnetic interference created by a nearby generator of electromagnetic fields.

2.6 "Arbitration Panel" has the meaning set forth in Section 3.2.5.2.

2.7 "Arbitrator" has the meaning set forth in Section 3.2.5.2.

2.8 "AREMA" means the American Railway Engineering and Maintenance-of-Way Association.

2.9 "ARRA" means the American Recovery and Reinvestment Act of 2009.

2.10 "Assumed Condition" has the meaning set forth in Section 15.4.1.

2.11 "Barrier" means a wall and any associated features, such as a trench or berm, designed to prevent high-speed and conventional locomotives, railcars, and other on-track equipment from entering the other party's property in the event of a derailment on either side of the Barrier.

2.12 "Base Line Design Report" The Baseline Design Report defines the major design elements of one or more Mutual Interest Improvements included in a Construction Package to be progressed to design and construction, and confirms technical feasibility, constructability, and compliance with the approved final environmental documents, including the following, to the extent applicable:

2.12.1

2.12.2

2.12.3 locations.

2.12.4

Proposed high-speed rail track alignment and limits of construction activities.

Trackside access for construction and maintenance of CHSRA facilities.

Clearances as required by UPRR and CHSRA at structures and restricted

Structure plans, profiles, elevations, and typical sections.

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2.12.5 Freight railroads -For relocation of, or modification to, existing freight railroad track and other facilities per agreements between CHSRA and the entities that own or control the freight railroad track and other facilities.

2.12.6 Utilities- Relocation of utilities within rights of way of CHSRA, state and local jurisdictions, and freight railroads in accordance with applicable state and federal regulations.

2.12.7 Geometric approval drawings- For relocation of, or modification to, state highway facilities, local roadways, and railroads, as agreed with the affected third-party entity.

2.12.8 Future systems works- Will demonstrate provisions for future systems elements such as TES (including approximate locations of OCS poles); and train control, operations, and maintenance facilities. The Base Line Report will include within these demonstrated provisions a layout plan and sections, inclusive of foundations, to validate the future installation of these systems.

2.13 "Business Plan" has the meaning set forth in Recital D.

2.14 "CAD" means Computer Aided Design.

2.15 "CHSRA" means the California High-Speed Rail Authority.

2.16 "CHSRA property" and similar phrases or references means (i) property for which CHSRA owns an exclusive easement for use in connection with the Project which CHSRA acquired via a separate Easement Acquisition Agreement with UPRR, (ii) property for which CHSRA owns an easement or other non-fee interest which CHSRA acquired via agreement with a party other than UPRR, or (iii) property which CHSRA owns in fee title.

2.17 "CHSRA Project Coordinator" has the meaning set forth in Section 3 .1.3.

2.18 "Clear Channel" has the meaning set forth in Section 11.1.

2.19 "Clear Channel Agreement" has the meaning set forth in Section 11.1.

2.20 "Confidential Information" has the meaning set forth in Section 27.

2.21 "Construction Approved Plans" means the 60% Design Plans for the particular Mutual Interest Improvement (including, for purposes of clarity, Barriers), with the exception of Mutual Interest Improvements that are either (i) a UPRR Track Support Structure or (ii) any portion of a road underpass grade separation improvement (including approaches), in which case the Construction Approved Plans means the Final Plans.

2.22 "Construction Package" means the scope of work for a segment or component of the Project identified in a request for proposals issued by CHSRA.

2.23 "Construction Schedule" has the meaning set forth in Section 3.6.1.

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2.24 "Coordination Committee" has the meaning set forth in Section 24.

2.25 "Costs" has the meaning set forth in Section 6.2.1.

2.26 "CPUC" means the California Public Utilities Commission.

2.27 "CPUC Rulemaking" has the meaning set forth in Section 15.1.

2.28 "DOT" means the United States Department of Transportation.

2.29 "EIRIEIS" has the meaning set forth in Recital H.

2.30 "Final Plans" means the plans for each Mutual Interest Improvement in a Construction Package that are designed to 100% that are ready and should be used during construction, including:

2.30.1 Packages).

Electronic files (certified as representing the designs in the Construction

2.30.2 Engineering calculations (certified as representing the designs in the Construction Packages).

2.30.3 Survey reports (signed and sealed).

2.30.4 Drainage reports (signed and sealed).

2.31 "Final Model" has the meaning set forth in Section 15.4.4.

2.32 "Force Majeure Event" has the meaning set forth in Section 28.

2.33 "FRA" means the Federal Railroad Administration.

2.34 "Fresno-Bakersfield EIR/EIS" has the meaning set forth in Recital H.

2.35 "Initial Model" has the meaning set forth in Section 15.4.2.

2.36 "Insurance and Indemnity Agreement" has the meaning set forth in Recital G.

2.37 "MOU" has the meaning set forth in Recital F.

2.38 "Mutual Interest Improvements" means any structure or facility (including substructures, superstructures, and waterproofing), whether permanent or temporary, including grade separations, that will be modified or constructed by CHSRA or UPRR (or any contractors or subcontractors of either) as part of or in connection with the Project (1) on UPRR property;

(2) within one hundred two (102) feet of UPRR property; or (3) when required pursuant to this agreement, as a Barrier between UPRR property and CHSRA facilities. Notwithstanding the foregoing, Mutual Interest Improvements include utility lines, crossings, or relocations only if the applicable utility provides service to the Project.

2.39 "OCIP" means Owner-Controlled Insurance Plan.

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2.40 "Overhead Contact System" or "OCS" means the system that comprises the aerial supply system that delivers 25 kV traction power from the substations to the pantographs of the electric trains, and includes the catenary system messenger and contact wires, auxiliary wires and hangers, associated supports and structures (including poles, portals, headspans, and their foundations), manual and/or motor operated isolators, insulators, phase breaks, conductor terminations and tensioning devices, downguys, and other overhead line hardware and fittings.

2.41 "PRA" has the meaning set forth in Section 26.

2.42 "Preliminary Engineering Documents" means drawings that demonstrate technical feasibility and constructability at the 15% design level for the Mutual Interest Improvements in the applicable Construction Package. All or portions of the Preliminary Engineering Documents may be at a higher percentage design level at CHSRA's discretion, but in no case to exceed 30% design level.

2.43 "Project" means that part of the CHSRA system to be constructed by or on behalf of CHSRA between a proposed CHSRA station in downtown Merced in the north and an end of track at the Amtrak station in downtown Bakersfield in the south, as more specifically detailed on the map attached as Exhibit 4. In addition, CHSRA may include as part of the Project connecting track to existing rail lines not owned or leased by UPRR to allow interim passenger rail operations over all or a portion of the Project.

2.44 "Project Work" means all materials acquired and all work done by UPRR or UPRR contractors in relation to the design, construction, and maintenance of the Project, including design review, construction of Mutual Interest Improvements, construction of temporary track and other temporary or permanent railroad facilities, flagging, inspections, mobilization and demobilization pursuant to Section 3.16, work of an emergency nature pursuant to Section 6.3, assistance provided by UPRR in connection with permits and government approvals pursuant to Section 3.4, and all other activities that arise within the scope of this agreement, all to the extent the same (other than emergency work) are included in one or more task orders approved and executed by both parties.

2.45 "Providing Party" has the meaning set forth in Section 27.

2.46 "PTC" has the meaning set forth in Section 15.2.

2.47 "Rail Safety Act" has the meaning set forth in Section 15.2.

2.48 "Receiving Party" has the meaning set forth in Section 27.

2.49 "Reimbursement Agreement" has the meaning set forth in Recital E.

2.50 "Related Persons" means the officers, agents, employees, representatives, affiliates, assigns, and successors of UPRR.

2.51 "Removal Sign" has the meaning set forth in Section 11.2.

2.52 "Revised Model" has the meaning set forth in Section 15.4.3.

2.53 "Signboards" has the meaning set forth in Section 11.1.

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2.54 "Signboard Removal Fee" has the meaning set forth in Section 11.2.

2.55 "Sign Removal Date" has the meaning set forth in Section 11.2.

2.56 "Sublicense" has the meaning set forth in Section 11.1.

2.57 "TES" means the OCS, negative feeders, and traction power return system used to power electrified trains for the Project. Traction power substations, switching stations, paralleling stations, and electrical supply stations are not included in this definition.

2.58 "UPRR" means Union Pacific Railroad Company.

2.59 "UPRR Project Coordinator" has the meaning set forth in Section 3.1.2.

2.60 "UPRR Facilities" has the meaning set forth in Section 15.4.1.

2.61 "UPRR property" and similar phrases or references means property owned, in fee or easement, by UPRR, with the exception in each case of property that is CHSRA property.

UPRR property includes property on which UPRR operates under a franchise with a public entity.

2.62 "UPRR Track Support Structure" means those Mutual Interest Improvements that are tracks, or that are bridges, piers, or other structures that support the railroad tracks, upon which freight trains operate.

2.63 "Withdrawal Fee" has the meaning set forth in Section 11.2.

2.64 "Withdrawal Site" has the meaning set forth in Section 11.2.

Section 3. Design and Construction.

3.1 Planning and Design.

3 .1.1 Relationship with Reimbursement Agreement. The terms of the Reimbursement Agreement will continue to govern UPRR' s review of the design and construction plans for those portions of the California high-speed rail system that are not within the boundaries of the Project. Any work that UPRR began under the terms of the Reimbursement Agreement in relation to the Project will continue under the terms of this agreement and not the terms of the Reimbursement Agreement, effective beginning on the date of this agreement. In the event of a conflict between the terms of the Reimbursement Agreement

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UPRR Folder No. 2899-77 and the terms of this agreement with respect to the Project, the terms of this agreement will govern.

3.1.2 UPRR Project Coordinator. UPRR will designate an individual whose office is located in California to serve as the day-to-day coordinator for design and construction and other activities contemplated by this agreement (the "UPRR Project Coordinator").

Unless otherwise expressly provided herein or expressly directed in writing by the UPRR Project Coordinator, the UPRR Project Coordinator will be the first point of contact for CHSRA with respect to any issue or question arising under this agreement. CHSRA will reimburse UPRR for all actual costs associated with the UPRR Project Coordinator's work related to the Project, including wages, standard additives, travel, relocation if applicable, and the pro rata cost of office space.

3.1.3 CHSRA Project Coordinator. CHSRA will designate an individual whose office is located in California to serve as the day-to-day coordinator for design and construction and other activities contemplated by this agreement (the "CHSRA Project Coordinator").

Unless otherwise expressly provided herein or expressly directed in writing by the CHSRA Project Coordinator, the CHSRA Project Coordinator will be the first point of contact for UPRR with respect to any issue or question arising under this agreement. CHSRA will be solely responsible for all costs associated with the CHSRA Project Coordinator's work.

3.1.4 Design of Mutual Interest Improvements. CHSRA will design and construct (except as otherwise expressly provided herein), and obtain all required permits or other governmental approvals required for, all Mutual Interest Improvements. All Mutual Interest Improvements will be planned, designed, and constructed at CHSRA's sole cost and expense, except as provided in Section 9.1.5. CHSRA intends to use one or more design/build contractors for the Project.

3.1.5 Design Standards for Mutual Interest Improvements. Mutual Interest Improvements must be designed and constructed in accordance with all applicable laws, rules, regulations, AREMA guidelines, and UPRR standards and specifications. A copy ofUPRR's current standards and specifications is attached as Exhibit 5. As between AREMA guidelines and UPRR standards, the higher guideline or standard will apply. UPRR will give CHSRA copies of changes to UPRR's standards and specifications within a reasonable time after the changes become effective. The design of each Mutual Interest Improvement will comply with the most current UPRR standards and specifications provided to CHSRA or the most current AREMA guidelines, as required by this paragraph; provided that CHSRA will not be obligated to modify the Construction Approved Plans or Final Plans, as applicable, for such Mutual Interest Improvement to conform to changed UPRR standards and specifications provided to CHSRA after approval of the Construction Approved Plans or Final Plans, as applicable, or changed AREMA guidelines adopted after approval of the Construction Approved Plans or Final Plans, as applicable, unless (i) the change to the applicable Mutual Interest Improvement is required by applicable laws, rules, or regulations; (ii) with regard to a UPRR Track Support Structure, CHSRA does not begin construction of such Track Support Structure within twelve

(12) months after UPRR approves the Final Plans; or (iii) with regard to all other Mutual Interest

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Improvements, CHSRA does not begin construction of such Mutual Interest Improvement within twenty-four (24) months after UPRR approves the Final Plans.

3 .1. 6 Placement of Mutual Interest Improvements. All Mutual Interest Improvements must (i) clear-span UPRR's right of way if part of a flyover structure; (ii) except as provided in Exhibit 8, be designed and placed in a manner that allows CHSRA to inspect and maintain the Mutual Interest Improvements without entering UPRR property; and (iii) be constructed a sufficient distance away from UPRR property to permit UPRR's full utilization of its property for railroad purposes. All requests for a variation from these requirements must be in writing from the CHSRA Project Coordinator. All permission granting a variance must be in writing and signed by UPRR's Assistant Vice President, Engineering- Design and will apply only to the specific location in question.

3.1. 7 Approval of Plans Prior to Construction. CHSRA may not perform any construction work within one hundred two (102) feet of any UPRR property (excluding utility relocation and facility demolition) until after UPRR approves CHSRA's Construction Approved Plans applicable to the improvements to which the work relates. Standard cross section drawings showing minimum clearances are attached as Exhibit 6. Any modifications, for any reason, to work undertaken by CHSRA based on 60% Design Plans will be at CHSRA's sole expense.

3 .1.8 Review of Preliminary Engineering Documents. CHSRA will provide UPRR with a copy of the Preliminary Engineering Documents for each Construction Package as soon as the Preliminary Engineering Documents are available. UPRR will provide CHSRA with any written review comments on the Mutual Interest Improvements included in Preliminary Engineering Documents within forty-five (45) days of receipt, including any time before execution of this agreement or within five (5) days of execution if more than forty-five (45) days pass between such receipt and execution. UPRR and CHSRA will use the Coordination Committee process to discuss and endeavor in good faith to resolve UPRR's comments.

3.1.9 Review of Base Line Design Report. CHSRA will provide UPRR with a Base Line Design Report that includes the Mutual Interest Improvements in a Construction Package as soon as each Base Line Design Report is available. (CHSRA may submit a separate Base Line Design Report for an individual Mutual Interest Improvement in a Construction Package if that report is ready for review independently of other Base Line Design Reports.)

UPRR will review each Base Line Design Report and provide CHSRA with approval of, or written review comments on, the applicable Base Line Design Report within forty-five (45) days of receipt. If UPRR does not approve a Base Line Design Report, UPRR and CHSRA will use the Coordination Committee process to discuss and resolve any review comments and to endeavor in good faith to make any changes necessary to secure UPRR's approval. UPRR will not unreasonably withhold, condition, or delay its approval. UPRR will confirm its approval by having its Assistant Vice President, Engineering - Design stamp each page of a Base Line Design Report that UPRR approves. CHSRA may not rely on portions of a Base Line Design Report that have not been stamped with approval by UPRR's Assistant Vice President, Engineering - Design.

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3 .1.1 0 Review of 60% Design Plans. CHSRA will provide UPRR with CHSRA' s draft 60% Design Plans for each Mutual Interest Improvement as soon as such plans are available. UPRR will provide CHSRA with approval of, or written review comments on, the draft 60% Design Plans within forty-five ( 45) days of receipt. If UPRR does not approve the draft 60% Design Plans, UPRR and CHSRA will use the Coordination Committee process to discuss and resolve any review comments and endeavor in good faith to make any changes necessary to secure UPRR's approval. UPRR will not unreasonably withhold, condition, or delay its approval. UPRR will confirm its approval by having its Assistant Vice President, Engineering - Design stamp each page of the approved 60% Design Plans that UPRR approves.

CHSRA may not rely on portions of the 60% Design Plans that have not been stamped with approval by UPRR's Assistant Vice President, Engineering- Design.

3 .1.11 Review of Final Plans. CHSRA will provide UPRR with CHSRA' s Final Plans for each Mutual Interest Improvement as soon as Final Plans are available. UPRR will provide CHSRA with approval of, or written review comments on, the Final Plans within forty five ( 45) days of receipt. If UPRR does not approve the Final Plans, UPRR and CHSRA will use the Coordination Committee process to discuss and resolve any review comments and endeavor in good faith to make any changes necessary to secure UPRR's approval. UPRR will not unreasonably withhold, condition, or delay its approval. After approval of the Final Plans, no change will be made in the structural elements or clearances of a corresponding Mutual Interest Improvement unless approved in writing by UPRR. UPRR will not unreasonably withhold, condition, or delay its approval. UPRR will confirm its approval by having its Assistant Vice President, Engineering - Design stamp each page of the Final Plans that UPRR approves.

CHSRA may not rely on portions of Final Plans that have not been stamped with approval by UPRR's Assistant Vice President, Engineering- Design. CHSRA will provide UPRR with copies of all changes to the design of the Final Plans for Mutual Interest Improvements at the Coordination Committee meetings.

3.1.12 Review of 90% Design Plans. To assist in expediting UPRR approval of the Final Plans, CHSRA will provide UPRR with CHSRA's 90% Design Plans for each Mutual Interest Improvement as soon as such plans are available. UPRR and CHSRA will meet promptly, and no later than thirty (30) days after UPRR's receipt of the plans, to discuss the review of such 90% Design Plans if either party reasonably believes that doing so will expedite approval of the Final Plans.

3.1.13 No Construction Prior to Construction Approved Plans. Except as may be otherwise agreed by the parties in writing or as otherwise allowed by this agreement, CHSRA will not commence construction of a Mutual Interest Improvement before UPRR approves the Construction Approved Plans for that Mutual Interest Improvement. CHSRA may seek such exceptions when it reasonably believes that commencement of construction of a Mutual Interest Improvement before UPRR's approval of the Construction Approved Plans would not have an adverse impact on safe or efficient freight rail operations. UPRR will consider any such requests in good faith but will have sole discretion in its own judgment whether to grant an exception.

CHSRA must make all requests for an exception in writing addressed to the UPRR Project Coordinator. An exception will be valid only if approved in writing by the UPRR Project Coordinator.

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3 .1.14 Timely Review of Design Plans. UPRR will use reasonable efforts to make resources available to ensure timely completion of its work related to design review. As part of this effort, UPRR may hire or assign a member of its engineering staff or its contractor to be dedicated full time to design and construction issues related to the CHSRA system. Following the terms of Section 6, CHSRA will reimburse UPRR for all Costs associated with this person's employment, including wages, standard additives, travel, relocation, and the pro rata cost of office space. At each monthly Coordination Committee meeting, the parties will discuss pending and upcoming submittals of design plans to prioritize review and, when needed, discuss adjustments in the time for UPRR to complete its review and potential increases in staffing to process submittals.

3.1.15 UPRR Comments on Plans Prevail. In all cases, to the extent consistent with this agreement and applicable law, UPRR's comments on design and construction plans will prevail in matters pertaining to the maintenance of the integrity of UPRR' s existing and future freight rail operations and rights of way, and CHSRA will revise its construction plans as reasonably necessary to address such UPRR comments.

3.1.16 Plans Impacting Future Grade Separations. CHSRA acknowledges that, to the extent consistent with this agreement and applicable law, UPRR may withhold approval of the design of elements of the Project if UPRR concludes that those elements will be built in a manner that will preclude future grade separations of UPRR tracks at crossing locations (whether at-grade or grade-separated) existing or planned at the time of UPRR's review.

3.1.17 UPRR's Election to Design. Following discussion and agreement by the Coordination Committee, UPRR may elect to design, or complete the design of, UPRR Track Support Structures or other Mutual Interest Improvements to be constructed by UPRR or on UPRR property. When UPRR elects to undertake such design work, UPRR will provide written notice to the CHSRA Project Coordinator. After such election, UPRR will present its design plans for the Mutual Interest Improvement to CHSRA for CHSRA's review, comment, and approval. All such plans designed by UPRR will be stamped by a professional engineer. All Mutual Interest Improvements, including those designed in whole or in part by UPRR, will be subject to Section 3.18 of this agreement.

3.2 Barriers.

3.2.1 Need for Barriers. The parties have established a clearance standard of a minimum of one hundred two (102) feet between the nearest UPRR property line and the centerline of the nearest CHSRA track. At any location where the centerline of the closest CHSRA track will be one hundred two (102) feet or closer to UPRR property, CHSRA must design, construct, and maintain Barriers at no cost to UPRR between the CHSRA tracks and UPRR property. CHSRA will develop performance standards for Barrier design using a process facilitated by the FRA. The process for developing performance standards will be subject to review and comment by the freight railroads that operate adjacent to the Project. CHSRA will design Barriers to meet the established performance standards.

December 23, 2014 CHSRA Folder No. HSR14-63

UPRR Folder No. 2899-77

3.2.2 Placement of Barrier. Except as provided in Exhibit 8, Barriers must be designed, constructed, and placed in a manner that allows CHSRA to inspect and maintain the Barriers after construction without entering UPRR property. CHSRA is solely responsible for determining how much setback it will require between the UPRR property line and a Barrier to comply with this requirement but will in no event provide a setback of less than five (5) feet from the UPRR property line, except as specifically provided in Exhibit 8 and subject to the conditions set forth in Exhibit 8. Where a Barrier is constructed with a setback of less than five

(5) feet between MP 205.4 and 206.1 on the Fresno Subdivision (as shown in Exhibit 8B), a material consideration for the exception is the preservation of no less than 65 feet of width on the UPRR operating corridor between the same mileposts measured from the centerline of closest UPRR track to the boundary line between UPRR property and CHSRA property. All Barriers will include an intrusion detection system that is available for connection to both parties' signal systems. CHSRA will, as part of the Project, install the intrusion detection system on the Barriers and will make available for UPRR connection points or wires that UPRR may use, if it desires, to connect the intrusion detection system to UPRR's signal system. UPRR will be solely responsible for any work necessary to integrate data or signals from the intrusion detection system with UPRR's signal or other systems, and CHSRA will reimburse UPRR for the Costs of such integration work. Both parties acknowledge that intrusion detection systems may generate false intrusion warnings; neither party will be liable to the other for any false intrusion warnings generated by such systems.

3.2.3 No CHSRA Operation Without Barrier. No high-speed, conventional, or test train operations may begin on CHSRA right of way at locations where a Barrier is required until the Barrier has been constructed. During any periods when a Barrier has been damaged or compromised, UPRR and CHSRA will work together in good faith to remove involved equipment and to provide interim protection of their property and train operations, including but not limited to reduced speed of operations on one or both systems, until CHSRA completes the repair or replacement of the Barrier. When repair or replacement of a Barrier is necessary, CHSRA will take all reasonable steps available to perform the work promptly. Nothing in this paragraph will limit CHSRA's ability to seek recovery from third parties to the extent those third parties contributed to the damage or compromise of a Barrier.

3.2.4 Request to Modify Barrier. At any time, including during construction of a Barrier, UPRR may request in writing that CHSRA (a) modify or extend a planned or existing Barrier, or (b) construct additional Barriers at locations that exceed the minimum requirements set forth in Sections 3.2.1 and 3.2.2. UPRR's request must describe the basis for the proposed change in Barriers, including changes in law, changes in industry or company standards, changes in operations on either party's property, changes in the features or use of adjacent property owned by third parties, availability of new technology, publication of relevant scientific or engineering studies, or the occurrence of events that may inform the parties about the adequacy of planned or existing Barriers. CHSRA will consider such requests in good faith and respond in writing to UPRR's request with a decision within sixty (60) days of receipt of the request. If CHSRA determines that a change in Barriers is warranted, it will design, construct, and maintain appropriate changes in the Barriers at no cost to UPRR. If CHSRA declines UPRR's request, it will include in its written response a description of its reasons for rejecting the request.

December 23, 2014 CHSRA Folder No. HSR14-63

UPRR Folder No. 2899-77

3.2.5 Process for Adjudicating Request to Modify Barrier. If CHSRA declines a request from UPRR for a future modification, extension, or addition to Barriers, the parties will use the exclusive and mandatory process set forth in this Section 3.2.5 and its subparts to resolve the disagreement.

3.2.5.1 Within forty-five (45) days after UPRR receives CHSRA's written response, the parties will meet in Sacramento, California or another mutually agreeable location to discuss the request. Participants in the meeting will include each party's general counsel and senior members of each party's operating and engineering staffs. The parties will attend and participate in good faith with the intent to resolve the dispute.

3.2.5.2 If the meeting of party representatives does not resolve the dispute, the parties will submit the question to a mutually acceptable neutral arbitrator (the "Arbitrator"). In the event that the parties are unable to agree upon a neutral arbitrator within fourteen (14) days after the meeting of party representatives, each party will have no more than an additional five business (5) days to select one (1) non-neutral party arbitrator. Those two (2) non-neutral party arbitrators will, within fourteen ( 14) days of their selection, select a third neutral arbitrator who will serve as the chairperson of the panel (the "Arbitration Panel").

Once the Arbitration Panel has been selected, the non-neutral party arbitrators may continue to communicate with their respective parties until the hearing begins.

3.2.5.3 The Arbitrator or Arbitration Panel will schedule an arbitration hearing to take place in Sacramento, California or another mutually agreeable location within sixty (60) days after the meeting of party representatives. Expedited discovery will be allowed, provided that the sixty (60) day period in this section 3.2.5.3 will not be extended, and the schedule will include deadlines for submitting written evidence and briefs before and after the hearing. Parties may also submit written and oral testimony during the arbitration hearing.

3.2.5.4 The Arbitrator or Arbitration Panel will issue a written decision within sixty (60) days after the arbitration hearing. The sole issue for the Arbitrator or Arbitration Panel to determine will be what, if any, modifications or improvements to the Barriers are reasonably necessary to ensure the Barriers meet their purpose to prevent high-speed and conventional locomotives, railcars, and other on-track equipment from entering the other party's property in the event of a derailment on either side of the Barrier. In making its determination, the Arbitrator or Arbitration Panel may take into account all evidence the Arbitrator or Arbitration Panel determines to be relevant. CHSRA will promptly design, construct, and maintain any modifications or improvements to the Barriers determined by the Arbitrator or Arbitration Panel to be required, at no cost to UPRR.

3.2.5.5 The decision of the Arbitration Panel will be determined by consensus between at least two (2) panel members. In the event that at least two (2) panel members cannot reach agreement within thirty (30) days of the hearing, the issue will be decided by the chairperson, and the chairperson's decision will become the decision of the Arbitration Panel.

December 23, 2014 CHSRA Folder No. HSR14-63

UPRR Folder No. 2899-77

3.2.5.6 The Arbitrator or Arbitration Panel may not make any findings contrary to the terms of this agreement or any other agreement between the parties. The decision of the Arbitrator or Arbitration Panel will be conclusive with respect to the request at issue at that time but will not limit UPRR's ability to make additional future requests, including the same or a similar request under new circumstances.

3.2.5.7 The parties will share the fees and cost of the single or neutral arbitrator's services equally. Each party will bear its own costs and attorney fees with respect to all other aspects of the arbitration, including the fees and costs of their respective non-neutral party arbitrators.

3.2.6 Barriers Constructed After Original Mutual Interest Improvement. Any Barriers constructed pursuant to this agreement after the original Mutual Interest Improvements under any circumstance whatsoever will be designed, constructed, and maintained under the terms of this agreement applicable to the original Mutual Interest Improvements installed during the Project.

3.3 Fences.

At all locations where CHSRA and UPRR share a common property boundary other than between MP 194.5 and MP 209 on UPRR's Fresno Subdivision, CHSRA will install and maintain boundary fences that meet or exceed the standard attached as Exhibit 15B. CHSRA will maintain, repair, and replace such boundary fences as needed at no cost to UPRR. The requirement to install and maintain boundary fences is independent of and in addition to the requirement to install and maintain Barriers. No high-speed, conventional, or test train operations may begin on CHSRA right of way at locations where CHSRA and UPRR share a common property boundary until boundary fences have been constructed. Requirements related to fencing between MP 194.5 and MP 209 on UPRR's Fresno Subdivision are set forth as part of the mitigation measures described in Exhibit 8.

3.4 Permits.

CHSRA is solely responsible, at no cost to UPRR, for obtaining all permits or other governmental approvals required for the construction of the Project, including the Barriers and other safety or mitigation features and all other Mutual Interest Improvements. UPRR will work in good faith with CHSRA in relation to CHSRA's efforts to obtain permits or other governmental approvals, including applying for approvals or permits in UPRR's name, and CHSRA will reimburse UPRR for any costs incurred in preparing information for or otherwise assisting in CHSRA's efforts to obtain permits or governmental approvals.

3.5 Access to UPRR Property.

Prior to CHSRA accessing UPRR property for any purpose other than invasive environmental investigation (which access will be governed by an Environmental Right of Entry Agreement), each of CHSRA and its design-build contractors for the applicable Construction Package must execute and deliver to UPRR a Right of Entry Agreement in the form appropriate

December 23, 2014 CHSRA Folder No. HSR14-63

UPRR Folder No. 2899-77 to the right of access attached as Exhibit 9. Execution of such Right of Entry Agreement by a design-build contractor will be on behalf of itself and its contractors, subcontractors, officers, agents, and employees, and others acting under its or their authority; such additional persons or entities will not need to execute and deliver a Right of Entry Agreement or other document to access UPRR property covered by the applicable Right of Entry Agreement.

3.6 Construction Schedule.

3.6.1 CHSRA will develop a construction schedule for the Mutual Interest Improvements using critical path method (the "Construction Schedule"). The Construction Schedule will, to the extent reasonably possible, limit the time during which UPRR operates over temporary trackage. At no time will UPRR be prevented from operating over main line trackage (except with respect to permanent main line trackage when corresponding temporary main line trackage is available).

3.6.2 CHSRA will furnish to UPRR, and update on a weekly basis, a detailed Construction Schedule (typically 3-week look ahead) showing both sequence and location of construction work to assist both parties in the effective scheduling of resources necessary to accomplish the work.

3.7 Construction.

3. 7.1 UPRR or its contractor will construct those portions of the Mutual Interest Improvements listed on Exhibit 7. CHSRA will construct all other Mutual Interest Improvements. All work done on UPRR property will be consistent with UPRR's labor agreements, as required by 49 U.S.C. § 24405 or otherwise. UPRR will use reasonable efforts to make resources available to ensure timely completion of construction work to be conducted by UPRR forces or a UPRR contractor in accordance with the Project's schedule for such improvements. CHSRA will have the right to inspect Mutual Interest Improvements constructed by UPRR. CHSRA will commence construction of each applicable grade separation within twelve (12) months after commencement of use by UPRR of the related temporary trackage; if such construction has not commenced within that twelve (12)-month period, CHSRA will promptly restore the affected site and facilities to their prior condition at no cost to UPRR so that UPRR may resume normal operation of its main line trackage.

3.7.2 CHSRA will construct Mutual Interest Improvements in accordance with UPRR -approved Construction Approved Plans at times and in a manner as to not interfere with, delay, or endanger freight and passenger rail operations. CHSRA and UPRR will consult with each other to coordinate scheduling of construction work that could affect freight rail operations.

At no time will CHSRA's employees, contractors, or subcontractors foul UPRR track without specific, prior, written consent from UPRR.

3.7.3 For work on Mutual Interest Improvements, CHSRA must select experienced contractors that have bonding and insurance coverage consistent with reasonable and customary standards in the railroad industry. CHSRA will select contractors with Class 1 railroad construction experience. CHSRA and its contractors must execute a right of entry agreement

December 23, 2014 CHSRA Folder No. HSR14-63

UPRR Folder No. 2899-77 with UPRR (and, where applicable, with the San Joaquin Valley Railroad) before entering property owned or controlled by UPRR. UPRR's current form for Contractor Right of Entry Agreement is attached as part of Exhibit 9.

3.7.4 During construction of any Mutual Interest Improvement, CHSRA will not allow waste materials or rubbish, including surplus dirt and materials, to accumulate on UPRR property, and will comply with all housekeeping standards in effect at the property. CHSRA will

(i) remove all hazardous substances, waste materials, and rubbish from UPRR property generated in the course of CHSRA' s construction of the Mutual Interest Improvement, and (ii) handle, transport, and lawfully dispose of such materials or rubbish. Promptly following the completion of a Mutual Interest Improvement, CHSRA will remove all surplus materials from UPRR property and return the property to its pre-construction state. Notwithstanding the foregoing, the provisions of this Section 3.7.4 do not apply to Mutual Interest Improvements constructed by UPRR or its contractors.

3.8 Inspection of Mutual Interest Improvements. UPRR will use reasonable efforts to make resources available to ensure timely completion of construction work related to Mutual Interest Improvements. UPRR will have the right to monitor construction of Mutual Interest Improvements and may hire a firm to observe such construction on its behalf. The construction observers will not direct or control construction activities. CHSRA will respond in writing with a proposed course of action within ten (1 0) days of receiving a written complaint or concern from a construction observer that a Mutual Interest Improvement is being constructed in a manner that is inconsistent with the Construction Approved Plans, provided that such complaint or concern is presented to CHSRA within a reasonable time after discovery. UPRR construction observers will have the authority to stop anyone's work immediately on any Mutual Interest Improvement for reasons related to safety. CHSRA will reimburse UPRR for the actual costs (including standard additives) of using construction observers.

3.9 Methods and Procedures. CHSRA will provide copies of the methods and procedures of constructing Mutual Interest Improvements to UPRR for review as soon as available. If UPRR has any comments or concerns regarding such methods and procedures, the Coordination Committee will discuss such comments or concerns and endeavor in good faith to make any changes necessary to address UPRR's comments or concerns within thirty (30) days. CHSRA will also submit to UPRR for approval, prior to construction, plans and calculations certified by a licensed professional engineer of the State of California for falsework or shoring that provides lateral or subjacent support for UPRR property or facilities. Within forty-five (45) days of receipt of CHSRA's contractors' proposed methods and procedures and falsework/shoring plans and calculations, and demolition plans, UPRR will provide approval or written review comments on such methods, procedures, plans, and calculations.