C.3.3_HSR13-76_(UPRR_Insurance_and_Indemnity).pdf

IFB No.: HSR25-12 Fresno Station Early Works

Railroad Agreement

C.3.3 HSR13-76 (UPRR Insurance and Indemnity)

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

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Insurance and Indemnity Agreement Related to High-Speed Rail Development in California

(Execution Copy)

Insurance and Indemnity Agreement

Between Union Pacific Railroad and the California High-Speed Rail Authority

Related to High-Speed Rail Development in California

This Insurance and Indemnity Agreement Related to High-Speed Rail Development in California is entered this 15th day of November, 2013 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 right 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. Under its organizing statutes, CHSRA directs the development and implementation of intercity high-speed rail service that is fully integrated with the state’s existing rail and bus network, consisting of interlinked conventional and high-speed rail lines and associated feeder buses. The intercity network in turn will be fully coordinated and connected with commuter rail lines and urban rail transit lines developed by local agencies. For purposes of this agreement, the “Project” means the high-speed rail system to be developed and implemented by or for CHSRA.

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 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 provide capacity enhancements and safety improvements. The federal government awarded $3.8 billion in grants under several federal grant cooperative agreements for the California High-Speed Train System. Proposition 1A bond proceeds will be used as federal grant matching funds.

D. The CHSRA Revised 2012 Business Plan (“Business Plan” ) proposes to incrementally develop the passenger rail network utilizing a phased blended approach, part of which is described as the Northern California Unified Service, which will coordinate the development of the operation of a high-speed rail (“HSR” ) system with existing expanded passenger rail corridors. (For purposes of this agreement, “HSR” trains are those that are electrified and capable of traveling 220 m.p.h.) This will require increased frequencies, new capacity investments, and possibly new routes for conventional passenger rail services. Regional passenger operators, including the Capitol Corridor Joint Powers Authority (“CCJPA” ), the San Joaquin Regional Rail Commission (“SJRRC” ), and the State of California acting through its Department of Transportation (“Caltrans” ) (collectively the “Passenger Operators” ) will contract and provide funds for the operation of the conventional passenger service. A portion of the increased service could be on property owned, operated, and maintained by UPRR.

E. UPRR believes that development and operation of the Project and the introduction of additional conventional passenger trains in support of it must not limit UPRR’s freight capacity, interfere with UPRR’s ability to serve current and future customers, expose UPRR to additional safety and liability risks, or cause UPRR to incur costs, including tax liabilities, which it would not incur but for the development and operation of the Project and improvements related to additional conventional passenger trains to be introduced in support of the Project.

F. UPRR, CHSRA, CCJPA, SJRRC, and Caltrans have executed a Memorandum of Understanding and Implementing Agreement Related to High-Speed Rail Development in California dated July 11, 2012 (as amended or restated)(the “MOU” ).

As set forth in the recitals to the MOU, the purpose of the MOU is to protect UPRR’s interests while permitting CHSRA and the Passenger Operators to proceed with planning for and implementing improvements related to additional conventional passenger trains or constructing the Project. Section 3 of the MOU states:

CHSRA acknowledges that UPRR’s willingness to help facilitate the design and construction of the Project and the implementation of CHSRA’s blended network is contingent upon UPRR being exposed to no additional safety and liability risk for doing so. CHSRA and UPRR will agree upon indemnity and insurance terms not prohibited by law that will apply to the Project. Indemnity and insurance terms will be negotiated and agreed upon as part of the negotiation of the first engineering agreement described in Section 4(A).

G. As set forth in Section 3 of the MOU, UPRR and CHSRA wish to enter this agreement to set forth the terms of indemnity and insurance that will apply between the parties in connection with all current and future discussions and agreements related to the Project (collectively, the “CHSRA Agreements” ).

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. Insurance and Indemnity .

2.1 Intent of the Parties. CHSRA acknowledges that UPRR’s willingness to help facilitate the design, construction, implementation, and operation of the Project (i) is voluntary on the part of UPRR and is not required by law, and (ii) is contingent upon UPRR being exposed to no additional safety and liability risk for doing so. It is therefore agreed, as one of the material considerations for the MOU, this agreement, and any subsequent CHSRA Agreements, that, to the fullest extent not prohibited by law, CHSRA will ensure that UPRR faces no greater exposure to safety and liability risks through CHSRA’s construction, maintenance, use, dispatch, and operation of the Project than existed before the accommodation of CHSRA’s Project.

2.2 Insurance.

2.2.1 CHSRA will purchase and keep in effect at all times during construction of the Project the insurance described in the attached Exhibit A.

2.2.2 CHSRA will purchase and keep in effect at all times during its ownership, use, maintenance, dispatch, or operation of the Project the insurance described in the attached Exhibit B. This requirement applies at all times during which CHSRA property or facilities are used or contracted for use for rail purposes of any kind, including conventional passenger rail, higher-speed rail, or high-speed rail operations, whether such operations are performed by CHSRA or any other entity. The insurance limits are subject to adjustment to the extent of any change in 49 U.S.C. 28103 or enactment of any other laws that affect the cap on damages related to passenger operations.

2.2.3 The parties intend that the insurance described in Sections 2.2.1 and 2.2.2 will provide protection to UPRR and its officers, agents, employees, and successors against and from all Claims as defined and to the extent set forth in Section 2.3.1.

CHSRA will be solely responsible for the payment of all premiums, deductible amounts, and self-insured retentions under any such insurance policies. CHSRA’s policies will be primary to any insurance coverage directly procured by UPRR.

2.2.4 To the extent CHSRA uses an Owner Controlled Insurance Program (“OCIP” ), as described in Exhibit A, to comply with these requirements, the OCIP policy will not contain any language or endorsement that provides less, or limits, coverage to UPRR than the insurance that otherwise would have been provided as required under Exhibit A.

2.2.5 On or before the first day of February each year, CHSRA will deliver documentation of proof of insurance that fully complies with the requirements of this agreement to UPRR at the address for notices herein. Upon request, CHSRA will provide UPRR with complete copies of all policies procured by CHSRA or its contractors. Neither failure by CHSRA to provide annual documentation of proof of insurance nor failure by UPRR to request copies of policies will constitute a waiver of CHSRA’s insurance obligations.

2.2.6 CHSRA will promptly notify UPRR of any expectation that any of the policies described in Exhibit A and Exhibit B may lapse, be materially modified, canceled, or not renewed by an insurance carrier. Upon such notice, the parties will meet in good faith to discuss options available to CHSRA to retain insurance or equivalent financial protection to meet CHSRA’s obligations under this agreement.

UPRR will have sole discretion to approve any solution other than CHSRA consistently retaining the required insurance coverage. UPRR will not unreasonably withhold, condition, or delay its decision regarding CHSRA’s proposals. The obligations of CHSRA to procure or maintain the required insurance or other approved financial protection or any breach of those requirements will not affect CHSRA’s obligations or the obligations of others to indemnify, hold harmless, and defend UPRR pursuant to Section 2.3 below.

2.2.7 During any period of time when CHSRA does not procure or maintain the insurance coverage or UPPR-approved equivalent financial protection as required by this agreement, and without limiting any other rights or remedies of UPRR under this agreement or under applicable law, CHSRA will ensure that all trains of any kind operating in HSR service and trains of any kind operating on tracks that CHSRA owns or controls will operate at restricted speed not to exceed twenty (20) miles per hour at all of the following locations: (i) where CHSRA tracks cross directly above or below property owned by UPRR; (ii) where the centerline of the closest CHSRA track is 102 feet or closer to property owned or controlled by UPRR; and (iii) where CHSRA operates on tracks on which UPRR has rights to operate and does in fact operate during the period of no insurance and no UPRR-approved equivalent financial protection. The purpose of this requirement is to protect safety and reduce risk. In its sole discretion, CHSRA may elect to stop trains that fall within the scope of this requirement instead of requiring those trains to operate at restricted speed. The parties agree that enforcement of the terms of this section lies exclusively within the jurisdiction of the Superior Court of Sacramento County, California or the Sacramento Division of the Federal Court of the Eastern District of California.

2.3 Indemnification.

2.3.1 Scope of Indemnifcation.

2.3.1.1 Except when a Claim (defined below) is caused by the sole negligence of UPRR or its Related Persons (defined below) and to the fullest extent not otherwise prohibited by law, CHSRA covenants and agrees that it will indemnify, defend, and hold harmless UPRR and its officers, agents, employees, representatives, affiliates, assigns, and successors (collectively, “Related Persons” ) from and against any and all fines, penalties, judgments, awards, settlements, claims, demands, liabilities, obligations, losses, damages, and expenses, including but not limited to reasonable attorney fees and costs (including all reasonable litigation costs incurred by UPRR, including without limitation costs of experts and consultants)(collectively a “Claim” or “Claims” ), for (i) injury or death to all persons, including employees or representatives of UPRR or CHSRA; (ii) loss or damage to or diminution in value of property belonging to any person or entity, including but not limited to UPRR or CHSRA (including any fire damage, archaeological or cultural Claims, and environmental or hazardous waste Claims)(provided, however, that the obligation to indemnify, defend, and hold harmless UPRR for any Claims for diminution in value of property under this Section 2.3.1.1 will only apply in the case of third-party Claims and not to any direct Claims between the parties); (iii) liabilities or losses related to evacuations; (iv) liabilities or losses to UPRR due to business interruptions; and (v) any other Claim of any kind (other than those described in clauses (i) through (iv) above) by a third party against UPRR or its Related Persons, in each case under clauses (i) through (v) above when such a Claim arises from, is due to, or results from, in whole or in part: (a) the ownership, construction, operation, use, dispatch, or maintenance of the Project for rail purposes of any kind, including conventional passenger rail, higher-speed rail, or high-speed rail operations, whether such operations are performed by CHSRA or any other operator or entity; (b) CHSRA’s failure to comply with any federal, state, or local law, regulation, or enactment; (c) the breach of any provision, covenant, or obligation assumed by or imposed on CHSRA under this agreement or any other agreement with UPRR; or (d) any negligent act or omission of CHSRA or a CHSRA contractor or subcontractor.

2.3.1.2 Nothing in Section 2.3.1.1 is intended to or will constitute a waiver of Claims or other rights or remedies by UPRR or any of its Related Persons against CHSRA or any other person or entity under this agreement or under applicable law. Any limitation of the indemnity rights of UPRR and its Related Persons set forth above does not serve and will not be construed as any limitation, or constitute a waiver, of Claims or other rights or remedies of UPRR or any of its Related Persons. To the extent it may lawfully do so, and as among UPRR and its Related Persons and CHSRA only, CHSRA waives any and all defenses under worker’s compensation laws, industrial insurance laws, the Government Claims Act (Cal Govt. Code §810 et seq), statutory immunities, and procedural defenses to so indemnify, defend, and hold harmless UPRR and its Related Persons. The parties agree and acknowledge that, other than to the extent that any CHSRA Agreements provide for construction to be performed by or under the direction of UPRR, the CHSRA Agreements will not constitute construction contracts for purposes of application and enforcement of the obligations set forth in this Section 2.3.

2.3.2 UPRR will cooperate fully with CHSRA in the defense of all Claims.

UPRR has the right, in its sole discretion, to appoint independent and separate defense counsel, at CHSRA’s expense pursuant to its obligations under Section 2.3.1, for the defense of any Claim made against UPRR or any of its Related Persons. UPRR will notify CHSRA prior to appointing separate defense counsel. UPRR’s election to appoint defense counsel will not affect CHSRA’s obligation to indemnify, defend, and hold harmless UPRR and its Related Persons from and against all Claims to the extent set forth in this agreement. CHSRA will not settle any Claims in a manner that would impose any expense, cost, penalty, fine, obligation, liability, or other limitation on UPRR or any of UPRR’s Related Persons without UPRR’s prior written consent.

2.3.3 Contractors and Subcontractors Indemnification.

2.3.3.1 Without limiting Section 2.3.1.1, and to the fullest extent not otherwise prohibited by law, CHSRA further will require its contractors and subcontractors, as a condition of any work to be performed on or about UPPR’s property, to indemnify, defend, and hold harmless UPRR and its Related Persons from all Claims (i) for injury or death to all persons, including employees or representatives of UPRR, CHSRA, or the contractor or subcontractor; and (ii) for loss of, damage to, or diminution in value of property belonging to any person or entity, including but not limited to UPRR and CHSRA (including any fire damage, archaeological or cultural Claims, and environmental or hazardous waste Claims)(provided, however, that the obligation to indemnify, defend, and hold harmless UPRR for any Claims for diminution in value of property under this Section 2.3.3.1 will only apply in the case of third-party Claims and not to any direct Claims between the parties,) in each case under clauses (i) and (ii) above when such a Claim arises from, is due to, or results from, in whole or in part, the contractor’s or subcontractor’s activities on, about, or near property owned, operated upon, or used by UPRR and except in each case when a Claim is caused by the sole negligence of UPRR or its Related Persons.

2.3.3.2 Nothing in Section 2.3.3.1 is intended to or will constitute a waiver of Claims or other rights or remedies by UPRR or any of its Related Persons against CHSRA’s contractors or subcontractors or any other entity under this agreement or under applicable law. Any limitation of the indemnity rights of UPRR and its Related Persons set forth above does not serve and will not be construed as any limitation, or constitute a waiver, of Claims or other rights or remedies of UPRR or any Related Persons. CHSRA will require its contractors and subcontractors, to the extent they may lawfully do so, to waive any and all defenses under workers’ compensation and industrial insurance acts to so indemnify UPRR and its Related Persons. Employees of CHSRA and employees of CHSRA’s contractors and subcontractors will not be deemed joint, dual, or direct employees of UPRR for purposes of the Federal Employers’ Liability Act, 45 U.S.C. §51. CHSRA will also require its contractors and subcontractors to execute a separate right of entry agreement with UPRR prior to entering UPRR’s property.

2.4 Notwithstanding anything to the contrary in this agreement, the indemnification provided in Sections 2.3.1 and 2.3.3 will not include payment of attorney fees and costs incurred by or on behalf of UPRR or any of its Related Persons directly relating to the assertion of direct Claims for indemnification against CHSRA (as opposed to Claims for indemnification arising as third-party Claims), provided that if UPRR or any of its Related Persons is the prevailing party with respect to such Claims, then the provisions of Section 5.3 will apply.

2.5 The parties acknowledge that future changes in the law or judicial interpretations of the law may affect UPRR’s liability exposure or safety risks in relation to CHSRA’s construction, operation, use, dispatch, or maintenance of the Project. If either UPRR or CHSRA sends a notice to the other regarding a change in the law or a new interpretation of the law that could potentially affect the scope, performance, or enforceability of the indemnification or insurance or related protections afforded UPRR under this agreement, the parties will meet and negotiate in good faith any amendments to this agreement or other steps, including pursuit of legislation, that may be necessary to achieve the intent set forth in Section 2.1.

2.6 The parties acknowledge that in addition to other state and federal laws that allow indemnity agreements, 49 USC 28103(b) specifically authorizes providers of rail passenger transportation to enter into contracts that allocate financial responsibility for claims.

2.7 Except when a Claim is caused by the sole negligence of UPRR or its Related Persons, neither UPRR nor any of its Related Persons will have any obligation or duty of express, implied, or equitable indemnification of any kind to CHSRA or any of its related persons or entities, whether under this agreement or under applicable law, all of which are hereby disclaimed and excluded.

2.8 The terms of this Section 2 will survive any termination of this agreement and the termination or expiration of any and all other CHSRA Agreements and remain in full force and effect thereafter.

Section 3. Tax Indemnification

3.1 On demand and on an after tax basis, CHSRA will indemnify, defend, and hold UPRR harmless for each federal, state, and local income tax, value added tax, sales, use, or excise tax, franchise tax, property tax, and any other tax, duty, and levy, including additions to tax, interest, and penalties (collectively, “Taxes” ), imposed by any taxing or governmental authority in connection with the Project and transactions contemplated by this agreement, including but not limited to Taxes imposed as a result of:

3.1.1 Entering into this agreement or any other agreement related to the Project;

3.1.2 Receiving or accruing any amount or payment made pursuant to this agreement or any other agreement related to the Project, including, but not limited to all receipts, proceeds, and payments related to:

3.1.2.1 Grant agreements or other funding agreements between CHSRA and the federal government or other parties, and

3.1.2.2 The award of funds from any source whatsoever for the Project, and

3.1.2.3 Acquiring, using, or consuming services, tangible property, and intangible property for the Project.

3.2 At CHSRA’s expense, when CHSRA has previously approved the contest, UPPR may contest any Tax indemnifiable hereunder, which contest will be under UPRR’s exclusive control, and CHSRA will advance any deposit necessary to conduct such contest subject to the previous approval described above.

3.3 The terms of this Section 3 will survive any termination of this agreement and the termination or expiration of any other CHSRA Agreements and remain in full force and effect thereafter.

3.4 Notwithstanding the foregoing, the parties understand and agree that:

3.4.1 CHSRA will not be required to indemnify, defend, or hold UPPR harmless under this Section 3 for any Tax that would be imposed without regard to whether UPRR entered into this agreement or otherwise participated in the Project;

3.4.2 Sales and use taxes will constitute eligible project costs payable from the proceeds of any award of funds for the Project; and

3.4.3 This agreement is being entered into with the understanding that UPRR will not, at any time, be required to include any amounts in its taxable income as a result of improvements made to its property in connection with the Project. With respect to income taxes, CHSRA will only be required to make a payment under this Section 3 in the event that UPRR is required to include the value of property improvements made with respect to the Project in its taxable income and CHSRA will only be required to pay to UPRR the sum of: (1) the excess of (a) the gross amount of all additional Federal and state income taxes required to be paid by UPRR with respect to including the value of any such property improvements in its taxable income, less (b) the net present value (computed using a 15% discount rate) of any deductions, credits or other income tax benefits that UPRR becomes entitled to claim as a result of including the value of any such property improvements in its taxable income; and (2) an amount equal to any interest, penalties, or additions to tax UPRR must pay to a tax authority as a result of including the value of any such property improvements in UPRR’s taxable income. Any income tax indemnity payment made under this agreement will not be “grossed-up” to cover any income taxes owed by UPRR on the indemnity payment itself.

3.5 CHSRA intends to make a public benefit investment for the public gain for high-speed rail and conventional passenger rail on a cost reimbursement basis and not as payment in exchange for services or property.

3.6 CHSRA acknowledges that UPRR will require the same tax indemnification terms set forth in this agreement to be included in any agreements related to the addition of conventional passenger trains on UPRR’s system in relation to the blended service and Northern California Unified Service described in the Business Plan. CHSRA will support this requirement in discussions with the Passenger Operators; provided, however, that CHSRA will not be required to incur any costs or expend any money in providing such support.

Section 4. Remedies .

The parties acknowledge that there will be irreparable harm and that there will be no adequate remedy at law for a breach of the terms of this agreement. Therefore, the parties agree that the harmed party will have the right to enforce this agreement through specific performance, injunctive relief, and by any other means available at law or in equity.

Section 5. Miscellaneous .

5.1 Governing Law. Except on subjects preempted by federal law, this agreement will be governed by and construed in accordance with the laws of the State of California, without reference to conflicts of law principles. Nothing herein is meant to be or will be interpreted to be a waiver of principles of legal preemption or preclusion that may apply to UPRR because of its status as a common carrier regulated by the federal government. Venue for any lawsuit arising between the parties in relation to this agreement will be in the Superior Court of Sacramento County, California or the Sacramento Division of the Federal Court of the Eastern District of California. The parties hereby waive any defenses based upon venue, inconvenience of forum, or lack of personal jurisdiction in any action or suit filed in accordance with this Section.

5.2 Relationship of the Parties. Each party is and will at all times be and remain independent from the other party and will not be deemed an agent, fiduciary, partner, joint-venturer, employee, or employer of the other party. Nothing contained herein will have the effect of creating a trust, joint venture, partnership, or employment relationship between the parties. Neither party has any right or power to obligate or bind the other party in any manner whatsoever.

5.3 Attorneys’ Fees. In the event of any litigation involving the parties to enforce any provision of this agreement, to enforce any remedy available upon default under this agreement, or to seek a declaration of the rights of any party under this agreement, the prevailing party will be entitled to recover from the other parties to the litigation such attorneys’ fees and costs (including the costs of experts and consultants) as may be reasonably incurred. The provisions of this Section will survive the entry of any judgment, and will not merge, or be deemed to have merged, into any judgment.

5.4 Severability. If any provision of this agreement, or the application of a provision to any person, place, or circumstance, is held by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, such provision will be enforced to the maximum extent possible so as to effect the intent of the parties; or, if incapable of such enforcement or unable to achieve the intent of the parties, will be deemed to be deleted from this agreement, and the remainder of this agreement and such provisions as applied to other persons, places, and circumstances will remain in full force and effect.

In such an event, the parties agree to negotiate and enter into an amendment to replace or modify any invalid or illegal or unenforceable provision and related provisions with valid, legal, and enforceable provisions that most closely and reasonably approximate the intent and economic effect of the invalid, illegal, or unenforceable provision.

5.5 Interpretation. The section and paragraph headings in this agreement are for convenience only and will not be used for any purpose in the interpretation of this agreement. When the context requires, the plural will include the singular and the singular the plural, and a gender will include the other gender. The parties acknowledge that each party and its respective counsel participated in the drafting of this agreement, and that neither party shall be deemed to be the drafting party of this agreement for purposes of any rule of construction that disfavors the drafting party.

5.6 Amendments. This agreement may only be modified or changed by written amendment signed by authorized representatives of the parties.

5.7 Assignment. Except as provided in this Section, this agreement and any rights and obligations created by it may not be assigned in whole or in part by either party without the prior written consent of the other party. In the event of an assignment, this agreement will be binding upon and inure to the benefit of each of the transferees, successors, and assigns. Any purported assignment, transfer, or delegation except as provided in this section will be null and void.

5.8 Waivers. Any waiver, modification, consent, or acquiescence with respect to any provision of this agreement must be set forth in writing and duly executed by or on behalf of the party to be bound by it. No waiver by any party of any breach will be deemed a waiver of any other or subsequent breach.

5.9 Notices. Any communication, notice, or demand of any kind whatsoever which any party may be required or may desire to give to or serve upon another must be in writing and delivered by personal service (including express or courier service) or by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

UPRR: Union Pacific Railroad Company Attn: Executive Vice President Operations 1400 Douglas Street, Stop 1120 Omaha, Nebraska 68179 Telephone: (402) 544-5000

With a copy to:

David M. Pickett Law Department Union Pacific Railroad Company 10031 Foothills Blvd.

Roseville, CA 95747 Telephone: (916) 789-6400

CHSRA: California High Speed Rail Authority

770 L Street, Suite 800 Sacramento, CA 95814 Telephone: (916) 324-1541

With a copy to:

Thomas Fellenz Chief Counsel California High Speed Rail Authority 770 L Street, Suite 800 Sacramento, CA 95814 Telephone: (916) 322-1237

Either party may change its address for notice by written notice given to the other party in the manner provided in this Section. Any such communication, notice, or demand will be deemed to have been duly given or served on the date personally served, if by personal service, or three days after being placed in the U.S. Mail, if mailed.

5.10 Third-Party Beneficiaries. UPRR’s Related Persons are third-party beneficiaries of this agreement. In all other circumstances, this agreement is for the exclusive benefit of the parties to it and not for the benefit of any third party.

5.11 Other Agreements. Except to the extent specifically described in this agreement, execution of this agreement will not alter or affect the terms of any other agreements or MOUs that may exist between or among the parties or among UP and any third party, including but not limited to any conventional passenger operator. In the event of a conflict between the terms of this agreement and either the MOU or another CHSRA Agreement, the terms of this agreement will govern.

5.12 Representations and Warranties. CHSRA and UPRR each represents, warrants, agrees, and acknowledges that it has the full power and authority and necessary approvals to execute and deliver this agreement and to grant the rights and consummate and perform its obligations set forth in this agreement, and that this agreement when executed and delivered on its behalf will constitute its valid and legally binding agreement and obligation, enforceable in accordance with its terms. Without limiting the generality of the foregoing, CHSRA further represents, warrants, agrees, and acknowledges that (i) no additional approvals from any state or other agency or governing body are required for this agreement to be a fully valid, legally binding, and enforceable agreement; (ii) this agreement, authorized, inter alia, pursuant to California Government Code section 14662.5, and the other CHSRA Agreements to which it relates, are multi-year contracts between UPRR and CHSRA; and (iii) this agreement and the respective rights and obligations of each of the parties to it are authorized and valid pursuant to legally recognized exceptions to the limitations of Article XVI of the California Constitution and the State Budget Act and related statues and rules with respect to full and timely performance and payments by CHSRA.

5.13 Authority and Binding Effect. Each individual executing this agreement affirms that he or she has the capacity set forth on the signature pages and has full power and authority to execute this agreement and bind the party on whose behalf he or she is executing the agreement.

5.14 Counterparts. This agreement may be signed in counterparts, each of which will be deemed an original but all of which will together constitute one and the same instrument.

[Signature Page Follows]

The parties have executed this agreement effective as of the date first written above.

UNION PACIFIC RAILROAD COMPANY CALIFORNIA HIGH-SPEED RAIL

AUTHORITY

By ~ t.p, 1 &c.o; rz Cameron A. Scott J Vice President Network Planning · and Operations Union Pacific Railroad Company

Approved as to form:

By ~if/'-4{ Ga}llaLha1 Senior Vice-President Law and General Counsel Union Pacific Railroad Company

By: k.~ Jeff Morae Executive Director California High-Speed Rail Authority

Approved as to form:

By:~ Thomas Fellenz Chief Counsel California High-Speed Rail Authority

Exhibit A – Insurance During Construction (Execution Form)

EXHIBIT A

Insurance During Construction

CHSRA shall, at its sole cost and expense, procure or cause to be procured and maintain or cause to be maintained during the life of this agreement the following insurance coverage:

A. Liability Insurance. Commercial general liability (CGL) with a limit of not less than $200,000,000 each occurrence and an aggregate limit of not less than $200,000,000 to be provided through any combination of primary and excess or umbrella liability insurance policies. These limits may be attained by CHSRA through use of an Owner Controlled Insurance Program (“OCIP” ) or provided by the general contractor or construction manager hired by CHSRA to oversee the construction. CGL insurance must be written on ISO occurrence form CG 00 01 12 04 (or substitute forms providing equivalent coverage). If CHSRA utilizes a claims made form to meet this requirement, CHSRA warrants that any retroactive date applicable to coverage under the policy precedes the effective date of this contract. CHSRA also agrees to purchase an extended reporting period if the retroactive date is advanced or if the policy is canceled or not renewed and not replaced by another claims-made policy with the same (or an earlier) retroactive date during the term of the agreement. The policy must also contain the following endorsement, which must be stated on the certificate of insurance:

“Contractual Liability Railroads” ISO form CG 24 17 10 01 (or a substitute form providing equivalent coverage) showing “Union Pacific Railroad Company Property” as the Designated Job Site, unless an OCIP is issued and “Designated Construction Project(s) General Aggregate Limit” ISO Form CG 25 03 03 97 (or substitute form providing equivalent coverage) showing the project location as described in the agreement on the form schedule. If an OCIP is used, such a program shall not limit coverage to UPRR because the owner of the OCIP provides Railroad Protective Liability Insurance to UPRR.

B. Automobile Insurance. To the extent not covered by other insurance policies required herein, business auto coverage written on ISO form CA 00 01 10 01 (or substitute form providing equivalent liability coverage) with a limit not less than $25,000,000 for each accident. Such insurance shall cover liability arising out of any auto (including owned, hired, and non-owned autos). The policy must contain the following endorsements, which must be stated on the certificate of insurance: “Coverage For Certain Operations In Connection With Railroads” ISO form CA 20 70 10 01 (or substitute form providing equivalent coverage) showing “Union Pacific Railroad Company Property” as the Designated Job Site, and Motor Carrier Act Endorsement - Hazardous materials clean up (MCS-90) if required by law.

C. Workers Compensation and Employers Liability Insurance. Coverage must include but not be limited to statutory benefits provided under the workers' compensation laws of the state of California, Employers' Liability (Part B) with limits of at least $1,000,000 each accident, $1,000,000 each employee for disease, and $1,000,000 policy limit for disease. Coverage must include liability arising out of the U. S. Longshoremen's and Harbor Workers' Act, the Jones Act, and the Outer Continental Shelf Land Act, if applicable.

D. Railroad Protective Liability Insurance. CHSRA must maintain “Railroad Protective Liability” insurance written on ISO occurrence form CG 00 35 12 04 (or substitute form providing equivalent coverage) on behalf of UPRR as Named Insured, with a limit of not less than $25,000,000 per occurrence and an aggregate of $25,000,000. A Binder of Insurance stating the policy is in place must be submitted to UPRR before work may be commenced and until the original policy is received by UPRR.

E. Umbrella or Excess Insurance. If CHSRA utilizes umbrella or excess policies, these policies must “follow form” or as acceptable to UPRR and afford no less coverage than the primary policy.

F. Contractor Pollution Liability Insurance. Contractor Pollution Liability coverage must be included when any “hazardous” material that is injurious in or upon land, the atmosphere, or any watercourses or may cause bodily injury at any time are upon UPRR property. If required, coverage may be provided by a separate policy or by endorsement to CHSRA’s (or CHSRA’s contractor’s) CGL policy. In either form, coverage must be equivalent to that provided in ISO form “Pollution Liability Coverage Form Designated Sites” CG 00 39 12 04 (or substitute form providing equivalent coverage) with limits of at least $5,000,000 per occurrence and an aggregate limit of $5,000,000. If the scope of work includes the disposal of any hazardous or non-hazardous materials from the job site, CHSRA must furnish UPRR evidence of pollution legal liability insurance maintained by the disposal site operator for losses arising from the insured facility accepting the materials, with coverage in minimum amounts of $5,000,000 per loss, and an annual aggregate of $5,000,000.

G. All policies required above (except railroad protective liability, worker’s compensation and employers liability) must include UPRR as “Additional Insured” using ISO Additional Insured Endorsements CG 20 26 (or 20 10 accompanied by 2037 (for Commercial General Liability or equivalent forms providing coverage to the additional insured for completed operations losses.) The coverage provided to UPRR as additional insured will, to the extent provided under ISO Additional Insured Endorsement CG 20 26 (or 20 10 accompanied by 2037 or equivalent forms providing coverage to the additional insured for completed operations losses,) provide coverage for UPRR’s negligence whether sole or partial, active or passive, and will not be limited to CHSRA's liability under the indemnity provisions of this agreement.

H. CHSRA waives all rights against UPRR and its agents, officers, directors, and employees for recovery of damages, whether by contribution, subrogation, or otherwise, to the extent these damages are covered by the workers compensation and employer’s liability or commercial umbrella or excess liability insurance obtained by CHSRA as required by this agreement.

I. Prior to commencing the work, CHSRA shall furnish UPRR, upon request, with certificates of insurance executed by a party authorized to issue evidence of insurance showing compliance with the insurance requirements in this agreement. CHSRA will maintain evidence of insurance for all required insurance throughout construction and for the first four years following completion of construction.

J. All insurance policies must be written by a reputable insurance company acceptable to UPRR or with a current Best's Insurance Guide Rating of A- and Class VII or better, and authorized to do business in the states in which the work is to be performed. These insurers may be admitted, non-admitted or alien insurers.

K. If, through no fault of CHSRA, any of the coverage required in this Exhibit A (or any of the required terms of such coverage, including policy limits) become unavailable, CHSRA will provide in good faith alternative insurance packages and programs, subject to prior approval by UPRR, with the goal of reaching agreement on a package providing coverage equivalent to that specified herein.

Exhibit B – Insurance During Operations

EXHIBIT B

Insurance During Operations

CHSRA shall, at its sole cost and expense, procure or cause to be procured and maintain or cause to be maintained during the life of this agreement the following commercial insurance coverage:

A. Liability insurance. Commercial general liability (CGL) with a limit of not less than $200,000,000 each occurrence and an aggregate limit of not less than $400,000,000 or in lieu of the above aggregate limits a “Policy Reinstatement Endorsement” that automatically replenishes the per occurrence limit required (either with or without premium consideration, i.e. a reinstatement premium) to be provided through any combination of primary and excess or umbrella liability insurance policies. If CHSRA elects the Policy Reinstatement Endorsement option in lieu of providing aggregate limits CHSRA will provide UPPR with a copy of the endorsement prior to beginning operations at each policy renewal anniversary. These limits may be obtained by CHSRA or provided by the operator hired by CHSRA to conduct conventional or high-speed rail operations on CHSRA facilities. CGL insurance must be written on ISO occurrence form CG 00 01 12 04 (or substitute forms providing equivalent coverage.) If CHSRA utilizes a claims made form to meet this requirement, CHSRA warrants that any retroactive date applicable to coverage under the policy precedes the effective date of this contract. CHSRA also agrees to purchase an extended reporting period if the retroactive date is advanced or if the policy is canceled or not renewed and not replaced by another claims-made policy with the same (or an earlier) retroactive date during the term of the agreement. The policy must also contain the following endorsements, which must be stated on the certificate of insurance: “Contractual Liability Railroads” ISO form CG 24 17 10 01 (or a substitute form providing equivalent coverage) showing “Union Pacific Railroad Company Property” as the Designated Job Site.

B. Automobile Insurance. Business auto coverage written on ISO form CA 00 01 10 01 (or a substitute form providing equivalent coverage) with a limit not less than $25,000,000 for each accident. Such insurance shall cover liability arising out of any auto (including owned, hired, and non-owned autos). The policy must contain the following endorsement (which must be shown on the certificate of insurance): “Coverage For Certain Operations In Connection With Railroads” ISO form CA 20 70 10 01 (or a substitute form providing equivalent coverage) showing “Union Pacific Railroad Company Property” as the Designated Job Site, and Motor Carrier Act Endorsement - Hazardous materials clean up (MCS-90).

C. Workers Compensation and Employers Liability Insurance. Coverage must include but not be limited to statutory benefits provided under the workers' compensation laws of the state of California and Employers' Liability (Part B) with limits of at least $1,000,000 each accident, $1,000,000 each employee by disease, and a policy limit of $1,000,000 by disease. Coverage must include liability arising out of the U. S. Longshoremen's and Harbor Workers' Act, the Jones Act, and the Outer Continental Shelf Land Act, if applicable.

D. Umbrella or Excess Insurance. If CHSRA utilizes umbrella or excess policies to comply with limits of coverage required, these policies must “follow form” or as acceptable to UPRR and afford no less coverage than the primary policy.

E. Environmental Legal Liability Insurance.

1. Environmental Legal Liability Insurance (ELL) applicable to bodily injury; property damage, including loss of use of damaged property or of property that has not been physically injured or destroyed; cleanup costs; and defense, including costs and expenses incurred in the investigation, defense, or settlement of claims, or compliance with statute; all in connection with any loss arising from the insured’s performance under this agreement. Except with respect to the limits of insurance, and any rights or duties specifically assigned to the first named insured, this insurance must apply as if each named insured were the only named insured; and separately to the additional insured against whom claim is made or suit is brought. Coverage will be maintained in an amount of at least $25,000,000 per loss, with an annual aggregate of at least $25,000,000. The ELL insurance policy must contain no exclusion for bodily injury, property damage, or environmental damage arising out of ownership, maintenance, use, or entrustment to others of any rolling stock owned or operated or rented or loaned to CHSRA. The ELL insurance must include UPRR as additional insured for its liability arising from CHSRA's operation, completed-operations, or transport of passengers or commodities; and the coverage provided to UPRR as additional insured must provide coverage for UPRR’s negligence whether sole or partial, active or passive, consistent with the indemnity portion of this agreement.

2. CHSRA warrants (a) that any retroactive date applicable to ELL insurance coverage under the policy is the same as or precedes the effective date of this agreement and (b) that continuous coverage will be maintained for a period of 5 years beginning from the time when rail operations on the CHSRA property ends, or, if coverage is cancelled for any reason, the policies extended discovery period, if any, will be exercised for the maximum time allowed.

F. All policies required above (except worker’s compensation and employers liability) must include UPRR as “Additional Insured” using ISO Additional Insured Endorsements CG 20 26 (for Commercial General Liability or substitute forms providing equivalent coverage). The coverage provided to UPRR as Additional Insured shall, to the extent provided under the Commercial General Liability policy shall, to the extent provided under ISO Additional Insured Endorsement CG 20 26 or substitute forms providing equivalent coverage, provide coverage for UPRR’s negligence whether sole or partial, active or passive, and will not be limited by CHSRA’s liability under the indemnity provisions of this agreement.

G. CHSRA waives all rights against UPRR and its agents, officers, directors, and employees for recovery of damages, whether by contribution, subrogation, or otherwise, to the extent these damages are covered by the workers compensation and employer’s liability or commercial umbrella or excess liability insurance obtained by CHSRA required by this agreement.

H. All insurance policies must be written by a reputable insurance company acceptable to UPRR or with a current Best's Insurance Guide Rating of A- and Class VII or better, and authorized to do business in the state of California.

These insurers may be admitted, non-admitted or alien insurers.

I. If, through no fault of CHSRA, any of the coverage required in this Exhibit B (or any of the required terms of such coverage, including policy limits) become unavailable, CHSRA will provide in good faith alternative insurance packages and programs, subject to prior approval by UPRR, with the goal of reaching agreement on a package providing coverage equivalent to that specified herein.