party at such other address as such party shall hereinafter furnish to the other party in writing

1. This Lease, and any lease supplemental hereto, may be executed in several counterparts, each of which so executed shall be deemed to be an original, and in each such case such counterparts together shall constitute but one and the same instrument.

2. LESSOR and LESSEE agree that the rights and obligations under this Lease shall inure to and be binding on their respective successors and assigns.

3. This Lease embodies the entire agreement between the parties relating to this Lease. No oral statement or prior written matter will have any force or effect. The parties hereby acknowledge that they are not relying on any representations or agreements other than those contained in this Lease. This Lease shall not be modified except in writing subscribed to by both parties.

OVERVIEW

General

The Operator shall inspect, manage, service, repair, replace and maintain the Service Property (including, for avoidance of doubt, the Worcester Line) and Support Property, including without limitation, as set forth in this Schedule 3.2 (Engineering Services) and except where such obligations are currently performed pursuant to third party agreements. Except as specifically set forth in this Schedule 3.2 (Engineering Services), the performance of all Engineering Services shall be included within the Annual Fee.

comply fully with the terms of any manufacturer’s warranty on the Service Property and Support Property and any other property used in the provision of Agreement Services;

cooperate with the MBTA regarding the fulfillment of any warranty obligations; and administer such warranties on behalf of the MBTA; and

provide the MBTA with any information necessary to the administration of any such warranties at the Termination Date of this Agreement.

The Operator shall comply with all applicable federal, state, local, industry and MBTA safety requirements, regulations, or guidelines relating to the maintenance of the Service Property and the Support Property including but not limited to safety, environmental and other requirements, regulations, standards, or guidelines promulgated by FRA, U.S. Coast Guard, EPA, MDEP, APTA, Massachusetts Department of Public Utilities, (“Mass DPU”), PU, MassDOT, ADA, FTA, or DOT.

The Operator shall operate and maintain all Environmental Systems in existence on or in the Service Property or Support Property, as required by Schedule 3.8 (Environmental Services) of this Agreement.

Engineering Maintenance Services

The Operator shall inspect service, repair and maintain the Service Property and the Support Property owned and controlled by the MBTA in accordance with the procedures and standards set forth in this Agreement. The Service Property and Support Property must at all times be suitable for the provision of Commuter Rail Services.

The Operator shall provide commuter Rail Services every day of each year in accordance with the terms of this Agreement. The Operator shall comply with the requirements of this Schedule 3.2 (Engineering Services) under all weather conditions and in compliance with all Third Party Railroad Agreements and all applicable laws.

The Operator shall maintain the condition and availability of the infrastructure assets of the MBTA for the operation of Commuter Rail Services, and shall not defer maintenance of these assets so as to reduce the Operator’s costs, or for any other reason to the detriment of the MBTA or the performance of the Agreement Services. These assets include the Service Property and the Support Property assets themselves; the inventories of material and spares; the intellectual and engineering property; the control of the assets’ configuration; and the information required for a safe, quality, and cost effective commuter rail service.

In addition to the foregoing activities, the MBTA from time to time may require other Supplemental Work as provided for in this Agreement.

The Operator shall cooperate with the other MBTA contractors; with the MBTA’s efforts to procure, renew, and dispose of Service Property and Support Property; and with various public agencies and communities.

GENERAL PROVISIONS

Administration

The Operator shall perform and oversee these Engineering Services from 32 Cobble Hill Road, 1^st Floor Rear; Somerville, MA 02143.

The Operator’s Chief Engineer shall have his/her office located at CROCC along with his/her staff and technical managers. The Operator’s Chief Engineer shall be dedicated to ensuring the provision of the Engineering Services and any replacement must be approved, in writing, by the MBTA in accordance with Schedule 3.9 (Management and Personnel) of this Agreement.

The Operator shall not establish any reporting location or staging area, nor set up any office or storage trailer on the Service Property or any other property without the prior written approval of the MBTA’s Chief Engineer. The Operator shall not increase, decrease or delete the level of utility of any existing location without similar approval.

The MBTA shall provide the existing 222 voice telephone exchange extensions, with dial tone service and wiring at no cost to the Operator. The MBTA may provide certain existing telephone handsets for the Operator’s use in performing Agreement Services. Any additional phone services, such as long distance service, shall be at the Operator’s expense. The Operator may elect to install its own telephone system, switch, wiring, telephone handsets and external trunk lines. The MBTA will assume ownership of the Operator-installed equipment and the Operator will transfer external trunk telephone extensions to its control at the termination of this Agreement.

The Operator shall pay the costs associated with all cellular telephones, including 50 mobile telephones as specified by the MBTA for MBTA staff use. At the Operator's request, the MBTA shall conduct an audit on the use of these phones to determine excessive or unnecessary usage. All mobile telephones provided to the MBTA shall be equivalent to and compatible with the Operator’s mobile telephones. All mobile telephones provided to the MBTA and the Operator use shall be defined to a common private calling circle.

The Operator shall maintain a membership in the AAR, AREMA and the Massachusetts Railroad Association, in the name of the MBTA during the Term.

The Operator shall provide certain materials for approximately 50 MBTA Railroad Operations staff including: technical and reference books and materials, industry reference manuals and documents, Personal Protective Equipment (“PPE”) deemed necessary by the MBTA and any other equipment and materials that the Operator may provide Operator Personnel, and as may be required by the MBTA to verify compliance with, and oversee, the Agreement Services. Updates shall be provided to the MBTA concurrently with distribution to Operator Personnel so that the MBTA materials are up-to-date at all times.

The Operator shall provide, maintain and service 20 All Wheel Drive utility vehicles with seating for no less than five adult passengers for the use of MBTA Railroad Operations staff.

The Operator shall maintain all records necessary to provide and support Agreement Services. The Operator reporting and record keeping requirements are summarized in Schedule 3.14 (Reporting and Submittals) of this Agreement.

The Operator shall enter five years of historical maintenance data into the Commuter Rail IT Environment. This information currently resides in several different databases and, in some cases, hardcopy form.

Where additional historical data is required for scheduling of tests, inspections, and maintenance activities, such as rail and tie maintenance, the Operator shall be required to enter data from manual records.

All required tests, inspections, and preventive maintenance activities shall be scheduled from the historical last-occurrence date for each Service Property and Support Property item.

The Operator shall establish computerized work orders and shall establish the method of responding to them in terms of a prioritized ranking system. Rankings shall be established for Service Property and Support Property assets based on its importance to providing safe transportation services.

The Operator shall operate and maintain the Maintenance Operations Control Office (the “Radio Room”) located at CROCC, continuously (24 hours per day, 7 days per week, and 365 days per year).

The Operator shall operate and maintain all communications and control systems located in the Radio Room, including radio, security monitoring, video recording, data transmitting, and other devices and systems that may be added at any time. Custody of video recordings and other potential evidence must be controlled per MBTA Security Policies. The Operator requirements relating to communications and control systems are further detailed in Section 6 (Signals and Communications) of this Schedule 3.2 (Engineering Services).

The Radio Room shall be supervised by management-level Operator Personnel at all times. Such supervisory personnel shall be:

duly authorized to make decisions in the absence of the Operator’s senior engineering management personnel;

familiar with the physical characteristics of the Service Property; and

sufficiently qualified.

The Operator shall enter all communications regarding trouble calls, equipment failures, alarms, or any unusual occurrence into the Commuter Rail IT Environment.

The Operator shall document all responses to calls for assistance in the appropriate Commuter Rail IT Environment element, and the Operator shall conduct follow-up investigations to determine the root cause for any equipment failures.

The Operator shall provide a full-time dedicated manager at CRMF and a full-time dedicated manager at the Southside S&I Facility. These facilities managers shall oversee the Operator’s facility maintenance activities at these facilities, including those described in this Schedule 3.2 (Engineering Services) and elsewhere in this Agreement. These managers shall investigate and be responsible for producing reports on all damage to CRMF, the Southside S&I Facility and Support Property contained therein.

Annual Engineering Services Plan

The Operator shall establish, prepare and implement upon approval from the MBTA an annual Engineering Services Plan. The MBTA will have up to thirty (30) days after receipt of the plan to review and approve or return the plan for amendment. The Operator shall then have twenty (20) days to make necessary changes to the plan and resubmit it to the MBTA. If the plan is disapproved a second time, the Operator shall immediately convene a meeting with MBTA officials to resolve any issues of contention.

The Engineering Services Plan shall include a number of component plans, cost estimates and programs relating to functional areas of the Engineering Services. These component plans, cost estimates and programs together will constitute the Engineering Services Plan. The Operator shall submit the initial Engineering Services Plan to the MBTA for review and approval within 90 days after NTP (ODRL 3.2-001). Thereafter, the Operator shall submit a preliminary draft of the proposed Engineering Services Plan on or before December 1^st of each year and the final draft on February 1st of each year (ODRL 3.2-002). The interim period between preliminary and final drafts will allow the MBTA time to work with the Operator and review, amend and approve the proposed schedules and plans for the next Agreement Year except where alternative submission dates are provided herein for specific components of the Engineering Services Plan. It is the intention of the parties that the annual engineering services plan will support the normal needs of service as required by this Agreement and coordinate with the project support needs of the MBTA Capital Improvement Program (“CIP”) for the Capital Year beginning on July 1^st of each year.

The Engineering Services Plan shall identify the inspection and maintenance activities to be undertaken by the Operator; major maintenance operations; maintenance performance standards; frequencies of tasks; staffing plan; specific work schedules; schedule of values for various maintenance operations and proposed work windows, track outages or service diversions; and flagging requirements.

Each component of the Engineering Services Plan shall include a breakdown of all costs associated with this work including, labor and staffing, materials, services and other costs associated with the proposed work.

The annual Engineering Services Plan shall include, but not be limited to, the following components:

A plan recommending capital improvements (See Section 2.3.1 of this Schedule 3.2 (Engineering Services)).

Three Year Work and Material Forecast (See Section 2.3.2 of this Schedule 3.2 (Engineering Services)).

Rail Grinding Program (See Section 4.2.7 of this Schedule 3.2 (Engineering Services)).

Rail Replacement Plan (See Section 4.2.8 of this Schedule 3.2 (Engineering Services)).

Tie Replacement Plan (See Section 4.3.1 of this Schedule 3.2 (Engineering Services)).

Switch Replacement Plan (this activity shall be included as part of Rail and Tie Replacement Plans).

Grade Crossing Improvement Plan (See Section 4.4.10 of this Schedule 3.2 (Engineering Services)).

Drainage Pumping Plan (See Section 4.5.2 of this Schedule 3.2 (Engineering Services)).

Drainage Ditch Reshaping Plan (See Section 4.5.4 of this Schedule 3.2 (Engineering Services)).

Fencing Installation Plan (See Section 4.5.17 of this Schedule 3.2 (Engineering Services)).

Support Property and Facilities Maintenance Plan (See Section 5.5.1 of this Schedule 3.2 (Engineering Services)).

Rolling Stock Support Equipment Condition Assessment, Repair Program and Normal Replacement Program (see Section 5.6 (Rolling Stock Support Equipment) of this Schedule 3.2 (Engineering Services)).

Escalator & Elevator Inspection and Maintenance Program (See Section 5.9.8 of this Schedule 3.2 (Engineering Services)).

Station, Building, and Facility Maintenance Program (See Section 5.9.10 of this Schedule 3.2 (Engineering Services)).

Bridge Maintenance Plan (See Section 5.13.11 of this Schedule 3.2 (Engineering Services)).

Drawbridge Maintenance Plan (See Section 5.13.12 of this Schedule 3.2 (Engineering Services)).

Drawbridge Operation and Maintenance Manual (See Section 5.13.13 of this Schedule 3.2 (Engineering Services)).

Timber Bridge Deck Replacement Plan (See Section 5.13.16 of this Schedule 3.2 (Engineering Services)).

Tunnel Operation and Maintenance Manual (See Section 5.19.8 of this Schedule 3.2 (Engineering Services)).

Culvert Replacement Plan (See Section 5.16.5 of this Schedule 3.2 (Engineering Services)).

Signal Failure Reduction Program (See Section 6.1.17 of this Schedule 3.2 (Engineering Services)).

Grade Crossing Event Recorder Program (See Section 6.6.6 of this Schedule 3.2 (Engineering Services)).

Interlocking Event Recorder Program (See Section 6.7.7 of this Schedule 3.2 (Engineering Services).

Pole Replacement Program (See Section 6.8.5 of this Schedule 3.2 (Engineering Services)).

Pole Line Retirement and Replacement Program (See Section 6.8.4 of this Schedule 3.2 (Engineering Services)).

Switch Machine Replacement Plan (See Section 6.7.10 of this Schedule 3.2 (Engineering Services)).

Energy Consumption Minimization Plan (See Section 7.4 ((Energy Conservation and Utilization) of this Schedule 3.2 (Engineering Services)).

The MBTA at its sole discretion, after consultation with the Operator, may reallocate planned maintenance costs within the items enumerated within Section 2.2.5 of this Schedule 3.2 (Engineering Services), or to other Operator obligations established by this Agreement, without a change in the Annual Fee (including through a Service Change) with the goal, if possible, of avoiding or minimizing additional financial consequences to the Operator (each, an "MBTA Reallocation Item"). The MBTA shall make a reasonable effort to provide the Operator with at least sixty (60) days prior notice of an MBTA Reallocation Item; provided, however, that failure to provide such prior notice shall not excuse the Operator's compliance with its obligations under this Agreement.

The Operator shall provide updates to the Engineering Services Plan on a quarterly basis beginning May 1^st each year (ODRL 3.2-108) or more frequently as required by significant changes to the Agreement Services, or as directed by the MBTA’s Senior Director. The Operator shall be prepared to meet with the MBTA within two weeks of its submission of the annual Engineering Services Plan, or any update to review the plan and revise as may be required by the MBTA. In the event that the MBTA requests changes to the quarterly updates of the Engineering Services Plan, the Operator shall make and agree to implement such proposed changes within ten (10) days of the MBTA’s request.

Capital and Productivity Improvement

As part of the Engineering Services Plan, the Operator shall develop a plan of recommended capital improvements (ODRL 3.2-004). This plan shall include capital improvements that will enhance Customer Service.

The Operator shall also prepare and submit, as part of the annual Engineering Services Plan, a three-year work and material forecast (ODRL 3.2-107) for use by the MBTA in planning capital and productivity improvements. The three-year work and material forecast shall identify anticipated locations of regular maintenance operations (rail replacement, tie replacements, switch replacement, rail grinding, etc). It shall also identify long lead time material items and required procurements as well as address anticipated labor needs.

The Operator shall test potential improvements to work methods used on the Service Property.

The Operator shall work cooperatively with the MBTA to conduct tests on new or prototype materials or equipment. The Operator shall purchase the required materials or equipment as well as provide the necessary labor and non-prototype materials and equipment.

The Operator shall work with the MBTA to identify areas that can result in cost savings, such as but not limited to, maintenance materials, construction techniques or use of third party vendors.

Materials Management

The Operator shall provide all materials management services necessary for the performance of the Engineering Services described in this Schedule 3.2 (Engineering Services) and Schedule 3.4 (Materials Management and Procurement) of this Agreement.

The MBTA shall provide limited storage facilities and the Operator shall ensure that Support Property and Support Inventory are stored only in areas approved by the MBTA, and under security appropriate for the nature of the materials.

The Operator shall keep the material yards and any other storage facilities neat and in an orderly fashion at all times. All surplus materials or quantities above the minimum needed for routine maintenance shall be stored at the material yards unless otherwise approved by the MBTA.

Warranty Provisions

The Operator shall not jeopardize any warranty covering any portion of the Commuter Rail Property. The Operator shall comply with the terms and conditions of any manufacturer’s maintenance and service schedules, except as otherwise modified by industry standards or otherwise explicitly directed in writing by the MBTA. The Operator senior manager responsible for management of warranty compliance shall also be responsible for all work effort detailed in this Schedule 3.2 (Engineering Services). The MBTA shall make reasonable effects to make available all such warranties.

In addition, the Operator shall make all repairs to the Service Property and the Support Property using the Engineering Services Standards as defined in Section 2.10 (Engineering Services Standards) of this Schedule 3.2 (Engineering Services) as minimum standards. In the event that the Operator is found to be in violation of the Engineering Services Standards, the Operator shall rectify the incorrect work at no additional cost to the MBTA.

Warranty Provisions for Non-Operator Work

The Operator shall aggressively administer warranties owned by the MBTA. The Operator shall conduct inspections, troubleshooting, and repair work in a manner to reveal circumstances where the MBTA’s warranties apply. Such work shall be part of the Annual Fee and not considered Supplemental Work.

The Operator shall obtain all material and parts for warranty repairs from suppliers without cost to the MBTA. Where the warranty covers only material and parts, and not labor, the Operator shall only be reimbursed for direct labor costs.

The Operator shall prepare and maintain the data necessary to advance claims, and meet locally with vendors or contractors as the MBTA requests. The Operator shall use the Commuter Rail IT Environment to prepare and maintain data and claims.

Emergencies and Service Disruptions

The Operator shall ensure the readiness of and maintain standby power and back-up telephone systems for emergency use at 32 Cobble Hill Road, 1^st Floor Rear; Somerville, MA 02143 and at other Service Property locations as directed by the MBTA. This shall include back-up power supply apparatus for all drawbridges and testing requirements.

Upon the occurrence of an event which causes serious damage to the Service Property or the Support Property or obstructs railroad operations, the Operator shall immediately notify the MBTA following the Incident Management and Notification procedures outlined in Section 9 (Incident Management and Notifications) of Schedule 3.1 (Transportation Services) of this Agreement.

The management-level Operator Personnel authorized to conduct all phases of the operation shall be stationed in the Emergency Control Center located at 32 Cobble Hill Road, 1^st Floor Rear; Somerville, MA 02143 without interruption during storm events and Emergencies. At a minimum these management-level Operator Personnel shall include senior managers with oversight of track, signals, communications, materials, bridges and buildings.

The Operator shall respond to Emergencies and Service Disruptions with sufficient resources without regard for time, day or otherwise, to resolve all such situations. Overtime, night, weekend and holiday work is expected and shall not be restricted for economic reasons.

The Operator shall utilize Operator Personnel to the greatest extent possible, before utilizing subcontracted personnel to resolve such situations.

Where the Operator does not provide 24-hour on-duty coverage in any functional area, the Operator shall provide key Operator Personnel with the appropriate vehicles, equipment, tools and materials in order to respond directly to a service problem or interruption at all times, from locations including their primary residence. The Operator shall provide the MBTA with a list of key employees, assigned vehicles, and the reason for their inclusion on this list (ODRL 3.2-111).

The Operator shall provide a dedicated emergency response vehicle, ready for immediate deployment at all times, equipped for cleanup and containment of fuel, oil and hazardous materials spills. This is intended to be an initial response vehicle under the Operator’s control. The provision of this vehicle is not in the Environmental Subcontractor’s scope of service, and the Operator may not use subcontracted personnel for the deployment of the emergency response vehicle. The provision and deployment of the emergency response vehicle does not relieve the Operator or Environmental Subcontractor of responsibilities included in Schedule 3.8 (Environmental Services) of this Agreement.

Flag Protection and Track Outages

The Operator shall provide all flagging for its own workforce as well as the contractors engaged by the Operator for work associated with this Agreement at the Operator’s expense as part of the Annual Fee.

The Operator shall provide flagging services for work performed by other contractors engaged by the MBTA at the request of the MBTA or such other contractors. The MBTA will compensate the Operator for such flagging as Supplemental Work.

The Operator shall provide flagging services for work performed by Third Parties on the Service Property and adjacent rights of way (e.g. MBTA Subway). Flagging for bridge work and work done on adjacent rights of way by MBTA shall be performed by the Operator at the Operator’s expense as part of the Annual Fee. Flagging for any other work performed by Third Parties shall be compensated either by the MBTA as Supplemental Work or by the Third Party under separate agreement.

The Operator shall perform all maintenance and construction work so as to mitigate the impact on, and not delay or cause disruption to Commuter Rail Services to the extent practicable. Track outages for maintenance and construction work will only be approved by the MBTA when there are no other options. Track outages shall be requested by the Operator in writing to the MBTA at least 35 days in advance of the date needed. The track outage request shall identify any alternative transportation requirements, and shall be submitted in the form specified in Appendix 1 (Track Outage Request Form) to this Schedule 3.2 (Engineering Services).

The Operator shall explore all available alternatives to the track outages and shall provide the reasons that such alternatives are not viable. In the event a track outage is required to respond to an Emergency, the Operator may commence such work immediately, and shall approve notification to the MBTA Senior Director as soon as practicable. The refusal of the MBTA to approve requested track outages shall not reduce the Operator's obligations hereunder. The Operator shall provide a weekly report of scheduled track outages to the MBTA (ODRL 3.2-005).

Performance Standard

All activities undertaken in the performance of the Agreement Services shall further the MBTA's stated goal of 79 mile per hour track speeds on all of the rail lines used in the Commuter Rail Service. The MBTA reserves the right to establish maximum authorized speeds for specific track segments, based on the maintenance class of track as described in the Asset Register.

The Operator shall maintain the performance level of the Service Property to allow Transportation Services to be provided at speeds no less than the Maximum Authorized Speeds in existence on the date that the Agreement is executed, or higher as maximum authorized speeds are increased during the Term.

Engineering Services Standards

The Operator shall adhere to the following standards (collectively, the “Engineering Services Standards”) in the performance of inspection, maintenance, repair, replacement, and construction work pursuant to this Agreement. The standards appear in priority order. At a minimum, all Service Property and Support Property shall be maintained in a Good Working Condition. In the event of a conflict between one or more of the following standards, the safest or most restrictive standard shall govern until such time as the conflict is resolved. If safety is equal among the differing standards, the MBTA will indicate preference.

All applicable laws and regulations, including those specific to the railroad industry.

Standards specific to the MBTA’s commuter rail system, set forth in the following documents: MW-1; CS-1; Station and Facility Design Standards; Book of Standard Plans; Electrical Department Procedures Manual; NETA 2001 Maintenance Testing Specifications; material standards; policies and procedures (track buckling, rail grinding, field welding, etc.); and any revisions which may occur from time to time.

Rail Industry Standards: AREMA, AAR, AREA and the like.

The Operator standards as they currently exist and subsequent revisions which shall be subject to written MBTA approval, which will not be unreasonably withheld.

FRA: as a minimum, track safety standards.

All inspection and test cycles shall be tied to FRA regulations or MBTA standards, not to Agreement Year or MBTA fiscal year cycles. Inspection and test dates shall be scheduled from the last inspection date, not from the Agreement Services Commencement Date.

The levels of maintenance described herein for the Service Property are not all-inclusive and are intended to provide direction for the Operator to provide safe, high-quality maintenance with the intent to avoid the deferral of maintenance.

The Operator shall provide inspection and maintenance service for all aspects of the Service Property in order to maintain the Service Property in a condition equal to or greater than the Service Property’s condition on the Agreement Services Commencement Date. If a temporary speed restriction is imposed for any reason, the Operator shall submit to the MBTA a schedule to be approved by the MBTA for performing the work necessary to remedy the need for each such temporary speed restriction. The Operator shall perform the work in accordance with the approved schedule. Designation of a speed restriction as permanent requires prior written MBTA approval.

Maintenance of all Service Property and Support Property shall be the Operator’s responsibility. The entire Service Property shall be kept clean and all Service Property and Support Property shall be maintained in a Good Working Condition. The Operator shall maintain any new or reconstructed assets that are added or modified after the Agreement Services Commencement Date to the level at which the Operator received such property. In addition, the Operator shall be responsible for maintaining the following specialty vehicles: