AGREEMENT

This agreement is entered into by the City of Portland Bureau of Environmental Services (BES) and the Portland Terminal Railroad Company (PTRC).

RECITALS

BES is constructing the West Side CSO Tunnel, Pump Station, and Pipeline Project (Project), a new combined sewer and associated utility relocations located on/across /near PTRC property as follows:

•  Tanner Extension: Sta. 11+50 to 16+00, and 22+00 to 23+67 (Upshur Shaft)

West side of NW Naito Pkwy/NW Front Avenue – Includes Microtunneling of pipeline crossing under mainlines and 100 Lead

•  Outfall 12A: South of NW 15^th Avenue – Crossing under 100 Lead, ML#2, ML#1, 173 Run Around Rail, 173 Rail

•  Outfall 13 By-Pass: Located north of NW 15^th Avenue, crossing 100 Lead. Temporary pipeline.

•  Permanent maintenance access for Upshur Shaft, from NW 15^th Avenue, per Plan Sheet C-150. This access does not require crossing of any rail.

•  Temporary construction access to NW Front Avenue, crossing 100 lead, per Plan Sheet CT-111. This crossing is within C.O.P. Public Right-of-Way.

•  The West Side CSO Tunnel: Station 142+50 to 159+50 is located within City of Portland Public Right-of-way. As part of the work, instrumentation and monitoring will be completed per the approved plans.

The parties desire to enter into an agreement to address work protocols within areas under the jurisdiction of the railroad and to provide for protection of railroad facilities during construction of the project, which is expected to extend from approximately December 1, 2002 to December 30, 2006.

The representative for BES with regards to this agreement shall be Patty Nelson, City of Portland Bureau of Environmental Services, 2730 NW Front Avenue, Portland, Oregon 97210. The representative for PTRC with regard to this agreement shall be Tom Simon, Manager, Portland Terminal Railroad Company, 3500 NW Yeon Avenue, Portland, OR 97210.

AGREEMENTS

BES will:

1.  Through its Owner Controlled Insurance Program (OCIP), provide and maintain during the life of this Agreement (a) general liability insurance providing bodily injury, personal injury and property damage coverage with a combined single limit of $1,000,000 each occurrence or claim and an agreement limit of $4,000,000 and (b) worker’s compensation insurance for its employees and the employees of its contractor covering statutory liability under the worker’s compensation laws of the state and employers’ liability. BES will also procure railroad protective liability insurance naming PTRC as the insured with a combined single limit of $2,000,000 per occurrence with a $6,000,000 aggregate unless coverage is otherwise provided by PTRC, as agreed in writing by PTRC under a separate document.

2.  Require its contractor to maintain in force and effect during the course of the contractor’s work within the PTRC property automobile liability insurance providing bodily injury and property damage coverage with a combined single limit of at least $2,000,000 each occurrence or claim, covering all motor vehicles including hiring and non-owned.

3.  Provide notice to PTRC 24 hours in advance of BES or BES contractor personnel and equipment working within 24 feet of railroad tracks.

4.  Reimburse PTRC for the cost of providing flaggers anytime BES or BES contractor personnel and equipment are within 25 feet of the active railroad tracks and the subject work area and rail is not separated by barricades/fencing. It is agreed that the cost of the flaggers is $220 per day per flagger. It is estimated one flagger will be required 245 days for a total cost to BES of $53,900.

5.  Monitor settlement every four hours during tunneling operations at locations within 500 feet ahead of or behind the tunneling heading and weekly for four weeks after tunneling is completed on PTRC property. Advise PTRC of the readings.

6.  Reimburse PTRC for the cost of reballasting and resurfacing if settlement exceeds 2 ¼ inch over 60 feet in length above the project or more than 1 ¾ inch differential settlement (from the top of one rail to the top of the adjacent rail) within 30 feet on either side of the project, and other work to be performed by PTRC requested by the City of Portland.

PTRC will:

1.  Work with BES and the BES contractor regarding placement of settlement monitors on railroad property.

2.  Provide access for BES and BES contractor personnel to read and review the settlement monitors.

3.  Provide flagging services as necessary for BES to perform work within 25 feet of active railroad tracks where work area and rail are not separated by barricades/fencing.

4.  Provide services to remove and replace rail as agreed in areas where BES work will require rail removal to cross railroad facilities.

In witness whereof, the parties have hereby agreed by signature on the dates shown:

PORTLAND TERMINAL RAILROAD CO.    PORTLAND BUREAU OF

ENVIRONMENTAL SERVICES

Tom E. Simon, Manager          Dean Marriott, Director

Date   Date