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7 <br /> CITY'S EXERCISE OF CITY'S RESERVED RIGHTS AND THE EXISTENCE, USE <br /> AND OPERATION OF THE CITY RESERVED PROPERTY, EVEN IF CAUSED IN <br /> PART BY THE NEGLIGENCE OF BNSF OR ANOTHER PARTY INDEMNIFIED <br /> HEREUNDER. CITY'S OBLIGATION TO INDEMNIFY BNSF DOES NOT APPLY <br /> TO THE EXTENT CLAIMS ARE PROXIMATELY CAUSED BY THE GROSS <br /> NEGLIGENCE OR WILLFUL MISCONDUCT OF BNSF OR ARE WHOLLY <br /> CAUSED BY THE SOLE NEGLIGENCE OF BNSF. <br /> 9.4 Survival. The provisions of this Section 9 shall survive the Closing, bind each <br /> party and their respective heirs, successors and assigns, shall be included in the BNSF Property <br /> Deed and the City Property Deed and shall be covenants running with the land. <br /> Section 10 Construction of Replacement Facilities; Removal of Removal Tracks. <br /> 10.1 Construction of Replacement Facilities. In consideration for BNSF's loss of its <br /> Removal Tracks, BNSF shall have the right to build whatever facilities it deems appropriate, in <br /> its sole and absolute discretion, (collectively, the Replacement Facilities") between the Lowell <br /> River Road Crossing (MP 1781.2 of Scenic Sub) and the Pacific Avenue Crossing (MP 0.7, C- <br /> Line of Bellingham Sub), inclusive of such crossings a distance of approximately 9,400 feet (the <br /> "Construction Area"). The southern and northern limits of the Construction Area are shown on <br /> Exhibit A. The parties acknowledge and agree that BNSF has the right, in its sole and absolute <br /> discretion, to determine the design, engineering, and construction means and methods of <br /> constructing the Replacement Facilities. The Replacement Facilities may include but are not <br /> limited to the facilities shown on the preliminary drawings and specifications prepared by HDR <br /> (entitled "41st Street Everett, WA, Right of Way Exhibit, "dated December 17, 2002, and "40 <br /> Street Everett, WA Revised Cross Sections," dated December 17, 2002) and DMJM-Harris <br /> ( ), and attached to this Agreement as Exhibit 0 the "Preliminary Plans"). <br /> City has approved the Preliminary Plans; however, BNSF will have no obligation to obtain City's <br /> approval of any modifications, deletions or additions to the Preliminary Plans, so long as any <br /> modifications or additions to the Preliminary Plans (i) do not require additional property to be <br /> conveyed by City to BNSF, (ii) do not increase the Reimbursement Cap specified in <br /> Section 10.5 below, and (iii) are within the Construction Area. <br /> 10.2 City Responsibilities. <br /> 10.2.1 City shall be responsible, at its own expense, to encase and otherwise <br /> protect its existing underground sewer main, within the BNSF right-of-way at MP 1782.2 <br /> of Scenic Sub, in a manner acceptable to BNSF and in accordance with plans and <br /> specifications approved by BNSF in writing in advance in view of the construction and <br /> reconstruction by BNSF of one or more tracks above such existing sewer main. Such <br /> encasement and protection shall be performed in consistent with BNSF's utility <br /> accommodation policy and the following specifications: <br /> . The City's access to BNSF's right-of-way shall be as <br /> allowed and in accordance with the requirements of the easement agreement from BNSF <br /> to City dated November 22, 1991, and recorded as AF#0112020573. The City shall <br /> complete the encasement and protection of its sewer main as contemplated under this <br /> Section 10.2.1 on or before July 31, 2007. <br /> Exchange Agreement 4 4 -17- DRAFT 5/23/06 <br />