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The Agency authorizes and agrees to reimburse the Railroad for its expenses and actual costs that are incurred for collaborating in the development of the project's preliminary engineering and other preliminary activities. The Railroad has estimated that these preliminary engineering and other preliminary costs will be $25,000. Payment will be made within forty-five (45) days from the Agency's receipt and approval of the Railroad's request for reimbursement. Railroad will refer to Agency's Project Number (18-6901 Warner Ph2 Oak to Grand) and forward Invoices to Public Works Agency — Design Engineering at the address stated on the letterhead. Additionally, attached for your company's review and approval is one (1) set of half -scale prints of the concept plans marked Exhibit A, which are the 5% complete plans and show the basic features of the proposed highway project at the location referenced above. Please review and provide comment on the basic features of the Exhibit A as soon as possible. Also enclosed is one (1) set of photos of the project area. The project may require the Railroad to incur costs for force account activities. Please prepare the railroad force account cost estimate for work activities to be provided by your company, as identified in Exhibit A and submit them at your earliest convenience so that they may be attached to the railroad generated Construction & Maintenance (C&M) agreement. Please verify the number of current regular train (4) and switching movements (4) with a Maximum Speed of (40 MPH) at this location as currently shown in our inventory records. This information will be used by the Agency's Contractor to obtain Railroad Protective Liability Insurance. This agreement is intended to address Preliminary Engineering. It is understood by both parties that railroad may withhold its approval for any reason directly or Indirectly related to safety or its operations, property issues or effect to its facilities. If the Project is approved, Union Pacific will continue to work with the Agency to develop Final Plans, Specifications and prepare Material and Cost Estimates for Railroad Construction Work associated with the project. It is also understood that if the project is constructed, if at all, at no cost to the railroad. The Agency and the Railroad will enter into separate License, Right of Entry, Construction and Maintenance Agreements associated with the actual construction of the project if the project is accepted and approved by the railroad. The Agreements will be drafted by Union Pacific and forwarded to the Agency after the Exhibit A and cost estimates have been approved. Please contact David Ramirez at telephone number (714)-647-5641 via email at dramireza@santa-ana.org should you have any questions. Your assistance in this matter is appreciated. Sincerely, Steven Mendoza Acting City Manager City of Santa Ana