PRELIMINARY MEMORANDUM OF UNDERSTANDING

This PRELIMINARY MEMORANDUM OF UNDERSTANDING (this “MOU”) is made as of the 17th day of February, 2010, by and among the NEW YORK STATE URBAN DEVELOPMENT CORPORATION, doing business as Empire State Development Corporation (“ESDC”), a corporate governmental agency of the State of New York, constituting a political subdivision and a public benefit corporation and having an office at 633 Third Avenue, New York, New York 10017, MOYNIHAN STATION DEVELOPMENT CORPORATION, formerly known as Pennsylvania Station Redevelopment Corporation (“MSDC”), a New York Corporation and a subsidiary of ESDC having an office at 633 Third Avenue, New York, New York 10017 (MSDC together with ESDC, the “Project Sponsors”), and NATIONAL RAILROAD PASSENGER CORPORATION, a corporation organized under the laws of the District of Columbia, with its principal office at 60 Massachusetts Avenue, NE, Washington, DC 20002 (“Amtrak”) (ESDC, MSDC and Amtrak being collectively referred to herein as the “Parties”).

RECITALS

WHEREAS, ESDC is the principal economic development agency of the State of New York (the “State”) and is the owner of the land and improvements commonly known as the James A. Farley Post Office Building and the James A. Farley Annex Building, both located between Eighth and Ninth Avenues and between West 31st and 33rd Streets, New York, New York (collectively, the “Farley Building”); and

WHEREAS, ESDC acquired ownership of the Farley Building from the United States Postal Service (“USPS”) in March 2007 to facilitate the redevelopment of the Farley Building to accommodate a combination of transportation, public, commercial and other facilities (such redevelopment being referred to as the “Project”), which is intended to include the creation of the new Daniel Patrick Moynihan Station, an intermodal transportation facility (“Moynihan Station”). Moynihan Station will be physically connected to the existing Pennsylvania Station (“Penn Station”) and is intended to include the elements described as Phase 2 under this MOU. Moynihan Station will provide, among other things, new facilities for rail passengers, a public station hall, an extension of the Penn Station’s West End Concourse, new entrances to the Farley Building from Eighth and Ninth Avenues, and enhanced subway and street access; and

WHEREAS, MSDC was established specifically to advance the Project and has worked to develop plans in furtherance of the Project, and to secure public and private partners to assist in the financing of the Project; and

WHEREAS, the Port Authority of New York and New Jersey (the “Port Authority”), subject to the approval of its Board of Directors, expects to participate in the design and construction of, and to provide funding for a portion of the costs of, Moynihan Station. Any such Port Authority involvement with Moynihan Station will be

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on terms consistent with this MOU, and the Port Authority may become a party to the MOU in the future; and

WHEREAS, Amtrak was established by federal statute to operate the nation’s intercity passenger rail network, including service to and from the City of New York (the “City”), and owns and uses Penn Station as a major transportation hub in Amtrak's Northeast Corridor service; and

WHEREAS, Amtrak has a fee ownership interest in, or a perpetual exclusive easement right to occupy and use for railroad and station purposes, the subsurface and train shed areas below the Farley Building, subject to certain rights of the State. Amtrak also owns Penn Station, including without limitation, the subsurface, train shed areas and equipment, and Levels A, B and C (including the existing Amtrak retail space that is currently leased to third parties), subject to certain rights of the Long Island Rail Road (“LIRR”) and New Jersey Transit (“NJT”) to occupy certain space within Penn Station and to conduct commuter rail operations therein; and

WHEREAS, Penn Station: (a) hosts, in addition to Amtrak intercity passenger trains, commuter trains operated by the LIRR and NJT, two of the nation’s largest commuter rail carriers; (b) is overcrowded and subject to severe congestion, particularly during morning and evening peak travel periods; (c) has limited amenities to attract passengers and encourage travel by rail as opposed to other, less efficient and more polluting modes of transportation; and (d) is operating at its maximum capacity, leaving little or no room for additional services, including enhanced high speed intercity passenger rail service; and

WHEREAS, ESDC previously approved a General Project Plan (“GPP”) for the adaptive reuse of the Farley Building and in furtherance of the Project, intends to prepare and seek approval of one or more revised GPP’s providing for the development of the Project in two or more phases as an intercity passenger rail station; and

WHEREAS, the Project Sponsors contemplate that the construction and development of the Project will be undertaken either by (i) a private sector developer (the “Developer”), to be designated by the Project Sponsors, or (ii) the Port Authority, or (iii) the Project Sponsors themselves or (iv) a combination of the Developer, the Project Sponsors and the Port Authority, all as determined by the Project Sponsors and, with respect to Moynihan Station, by the Project Sponsors and Amtrak; and

WHEREAS, subject to the principles set out in Section C(3) and resolution of the terms and conditions set out in Section C(4) below, Amtrak desires to move the majority of its intercity passenger rail operations and services from Penn Station to Moynihan Station, and would occupy and use Moynihan Station for such related operations and services.

With that background and understanding, the Parties are entering into this MOU:

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A. Description of the Project, Definitions of Phase 1 and Phase 2 of the Project

The current draft preliminary plans for Phase 1 are attached as Exhibit A; the current draft preliminary plans for Phase 2 are attached as Exhibit C; and the preliminary cost estimate and sources of funding for Phase 1 are attached hereto as Exhibit B. (Exhibit A and Exhibit C are hereinafter collectively referred to as the “Plans”.) Exhibit C includes space in the Farley Building for the United States Postal Service and private commercial development. The Plans and the coloring of and designation of spaces on the Plans are preliminary and conceptual, and are subject to approval of the Parties.

1. The Project will be divided into two phases. “Phase 1” is located primarily below grade in the train shed owned by Amtrak. Portions of the below-grade Phase 1 work will be located in space controlled by the LIRR, NJT or the New York City Transit Authority (“NYCTA”). Phase 1 has independent utility and can be used and operated, whether or not Phase 2 is completed. Construction of Phase 1 is expected to start before Phase 2 and may be completed and put into operation prior to Phase 2. Phase 1 consists of the following:

• Expand the existing West End Concourse (“WEC”) by doubling its length and width, thereby providing access to eight tracks that are not currently served by the WEC, enhancing passenger circulation space, and providing space for the sale of tickets (by vending machine) on the WEC;

• Provide new vertical access points to and from station platforms, reducing the time required for passengers to clear the platforms, and six new vertical access points from the WEC to the street;

• Provide two above-grade entrances through the Farley Building at the corners of 8th Avenue and West 31st and 33rd Streets;

• Expand the existing passageway below West 33rd Street (the “33rd Street Connector”) between Penn Station and the WEC, increasing capacity, providing access to the subways, and facilitating compliance with the Americans with Disabilities Act; and

• Improve Penn Station safety and security by adding new platform ventilation fan rooms beneath the Farley Building (the “Platform Ventilation”).

2. “Phase 2” is located primarily in the Farley Building, which is owned by ESDC, but critical elements of Phase 2 are located in the train shed owned by Amtrak. Phase 2 consists of a public station hall and public circulation space, waiting

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areas, space for Amtrak operations, back-office and other non-public support spaces, a baggage handling facility, vertical circulation from the public station hall to the station platforms and the WEC, and retail space immediately surrounding the public station hall/passenger waiting areas. Subject to further development, the terms “Amtrak Space,” “Station Retail,” “Public Station Hall,” “Common Area” and “Amtrak Common Area” shall mean the spaces so designated on Exhibit C. “Amtrak Area” shall mean (i) the “Amtrak Common Area”, (ii) the “Amtrak Space”, (iii) the “Public Station Hall”, (iv) “Common Area” (to the extent the parties agree the same is within the Amtrak Area)” (v) the “Platform Area”; and (vi) the Baggage Corridor. “Platform Area” shall mean the platforms and tracks located beneath Penn Station and the Farley Building. “Baggage Corridor” shall mean the baggage handling facility, the details and design of which are to be agreed upon by the Parties.

B. Phase 1

1. The Parties agree to move forward with the design, development and construction of Phase 1, subject to the following terms and conditions:

• Development of Phase 1 is subject to adoption of a revised GPP by the ESDC and MSDC Directors, approval of the New York State Public Authorities Control Board, completion of state and federal environmental reviews, and securing by the Project Sponsors of the funding sources outlined in Exhibit B.

• The Project Sponsors will pay the costs of the design and construction of Phase 1 and will be responsible for constructing and completing Phase 1. If the funding sources described in Exhibit B do not cover the Phase 1 costs, the Project Sponsors may cancel the Project or the Parties may mutually agree to scale back the scope of Phase 1.

• The Parties will develop and agree upon a process for determining when substantial completion of Phase 1 has occurred, for acceptance of the Phase 1 improvements, and for dispute resolution. Upon substantial completion of Phase 1, pursuant to such process, Amtrak will own and take possession of the Phase 1 improvements.

• Amtrak will operate and maintain the Platform Ventilation, subject to Amtrak review and approval of the design and operating cost estimates. Amtrak, together with NJT and LIRR (collectively, Amtrak, NJT and LIRR are referred to as the “Railroads”), are expected to operate and maintain the other Phase 1 improvements (not including Platform Ventilation). Costs of the operation and maintenance of these other Phase 1 improvements are expected to be shared by the Railroads pursuant to an agreement to be worked out among the Railroads. The Parties intend that the obligations of each Railroad with respect to such costs will bear a relationship to the benefits accruing to each Railroad from the Phase 1 improvements. The Project Sponsors, if requested

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by Amtrak, will assist Amtrak in working with the Railroads towards this end. It will be a condition to completion of the binding agreements for Phase I that Amtrak shall obtain such agreements as may be necessary from LIRR and NJT to the extent that their consents may be required and to reflect, also, appropriate allocations of cost and responsibility among the Railroads.

• The Parties will cooperate in the development and review of plans and specifications for Phase 1, which shall be subject to Amtrak’s approval to the extent the design of the Phase I improvements could impact operational flexibility and reliability, the safety of and levels of service currently provided by Amtrak to its intercity rail passengers, and/or the use and configuration of the Amtrak Area as shown on Exhibit C. As noted above, certain elements of Phase 1 will also be subject to approval by LIRR and NJT.

• The Parties agree to cooperate in the negotiation of a time schedule for Phase 1 and certain binding agreements required in connection with Phase 1, which must be satisfactory to each of the Parties thereto, including (i) a written agreement for the design, construction, ownership and operation of the Phase 1 improvements, including provisions for completion, acceptance, dispute resolution, insurance and indemnity of Amtrak, (ii) a force account agreement for work in the train shed to be undertaken by Amtrak personnel, at the expense of Project Sponsors, and (iii) a construction license agreement with respect to the construction and installation of the Phase 1 improvements in space owned by Amtrak.

• Project Sponsors agree to provide funding to Amtrak for force account work necessitated by the construction of Phase 1. The amount of Project Sponsors’ payment obligations will be calculated using Amtrak’s most favorable internal rates. If Amtrak intends to use outside counsel or consultants in connection with Phase 1 and to seek reimbursement from Project Sponsors, Amtrak will provide a description of the consultants and the consultants’ work, together with a proposed budget. The Project Sponsors will reimburse Amtrak for such counsel’s and consultants’ reasonable fees up to a reasonable cap, to be agreed upon by the Parties.

• Project Sponsors will provide funding to Amtrak for the cost of the salary and benefits (using Amtrak’s standard benefit package for an employee of that level) of an Amtrak employee, based in New York City, who will work fulltime as Amtrak’s project manager for the Project (Phases 1 and 2). The Parties will agree on the duration of the project manager’s employment.

• Recognizing the Project Sponsors schedule and budget, Amtrak will endeavor to promptly review Project Sponsor’s engineering submissions and to cooperate in scheduling track outages and force account work.

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C. Phase 2

1. The Parties agree, subject to the availability of funding and to the Parties making significant progress in reaching agreement on the issues listed in section C(4) of this MOU, to proceed with planning, design and cost estimating for Phase 2 through the 70% design development phase, while endeavoring to negotiate a time schedule and binding agreement for Phase 2 that addresses the matters listed in Sections C(2) – (4) in a manner satisfactory to the Project Sponsors and Amtrak.

2. The following principles are critical elements for the Project Sponsors’ participation in Phase 2 of the Project (as indicated in Section C(4) of this MOU, the Parties have not yet reached agreement on all these principles):

a. Creation of a major transportation hub that improves circulation and relieves capacity constraints at Penn Station, without obligating the State for long-term operating cost liabilities;

b. Restoration and preservation of the Farley Building using a federal historic rehabilitation tax credit; and

c. Amtrak’s commitment to relocate a majority of its intercity passenger railroad services and operations from Penn Station to Moynihan Station.

3. The following principles are critical elements for Amtrak’s participation in Phase 2 of the Project (as indicated in Section C(4) of this MOU, the Parties have not yet reached agreement on all these principles):

a. Amtrak retains title to and control of Penn Station and revenues generated from Penn Station Commercial Activities (defined below), with a reservation of space for certain designated services;

b. Amtrak receives fee title to and control of Moynihan Station or some other form of perpetual and irrevocable interest.

c. Moynihan Station meets Amtrak’s requirements for intercity rail passenger service, including Amtrak’s Functionality Standard (defined below);

d. Provision of a far west end baggage handling system satisfactory to Amtrak built by Project Sponsors;

e. After relocation to Moynihan Station, Amtrak incurs no increase in aggregate operating costs for Penn Station and Moynihan Station, including Phase 1 and the Amtrak Service Building, over its current operating costs for Penn Station, including the Service Building, (the concept of “operating costs neutrality”);

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f. The Project Sponsors and/or Port Authority underwriting (as a Project expense) Amtrak’s predevelopment and development soft costs, subject to Amtrak’s payment of certain such costs above a predetermined cap;

g. The Project Sponsors and/or Port Authority paying and being responsible for the fit-out of the Amtrak Space, including the Public Station Hall, excluding only the FF&E for Amtrak’s “back office” space labeled “Training/Security/IT Support/ Diversity/Fire Line” and “Training/Securing/ Support/Diversity/Fire/Life Safety” on Exhibit C (“Amtrak’s back office space”); and

h. The State and Port Authority’s support in the preservation and development of opportunities for increasing intercity passenger rail and transit service capacity (including tunnel capacity) for the Penn/Moynihan terminal.

4. The Parties acknowledge that development of Phase 2 and Amtrak’s relocation of the majority of its intercity passenger rail operations and services from Penn Station to Moynihan Station upon completion of Phase 2 are subject to the following terms and conditions, which must be resolved in a manner satisfactory to the Project Sponsors and Amtrak before Phase 2 moves forward and which are the subject of ongoing discussions between the Parties:

a. Agreement regarding the nature of Amtrak’s property interest in Moynihan Station;

b. Agreement regarding the share of Amtrak’s predevelopment and development soft costs to be paid by the Project Sponsors, subject to terms to be defined – including a cap on the amount of Project Sponsor’s payments for such Amtrak costs;

c. Agreement regarding the sources of funding for the Project, including federal, state, local and Port Authority funding;

d. Agreement as to who will pay the costs of and be responsible for the fit-out (and the definition of such “fit-out”) of the Amtrak Space and the furniture and equipment in the Public Station Hall;

e. Agreement as to who will pay the costs of Amtrak’s move from Penn Station to Moynihan Station;

f. Agreement as to Amtrak’s condition of “operating cost neutrality” (including agreement as to what constitutes operating costs under the definition of “operating cost neutrality” and the situations in which the term “operating cost neutrality” will apply) and Amtrak’s Functionality Standard (defined below);

g. Agreement on a Moynihan Station design, including a mechanism for obtaining Amtrak’s approval of the design as it progresses, that (i) meets

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Amtrak’s requirements for intercity rail passenger service and Amtrak’s Functionality Standard and (ii) preserves the ability of the Project Sponsors to keep the Project on budget and successfully implement the other (i.e., non train station-related) aspects of the Project, as shown on Exhibit C;

h. Collaboration in identifying and considering reasonable efforts, initiatives, and plans to reduce, offset, or contain the outlays and costs of Phase 2 of the Project, including through the generation of new revenues at Moynihan Station (and, at the Project Sponsors’ sole discretion, the possible use of a portion of revenue from Moynihan Station Commercial Activities to achieve Amtrak’s operating cost neutrality requirement) and/or Penn Station, consistent with Amtrak’s Functionality Standard;

i. Agreement on the extent to which commuter rail passengers will use the Public Station Hall and where information about commuter rail trains will be posted;

j. Agreement on the business terms relating to any increase in the size of Amtrak’s premises in the Farley Building if the USPS or the private developers of the Farley Building use less space in the Farley Building than currently shown on Exhibit C;

k. Agreement on a definition of substantial completion of an individual space or spaces within the new Moynihan Station; a formal acceptance procedure with clear criteria; and a staged dispute resolution process;

l. Commitments by the Parties (including the Port Authority, if the Port Authority will be responsible for construction) to initiate and complete (within a given time period) their respective work described in Section F (1) below;

m. Agreement on an overall schedule for the Project, including, e.g., deadlines for substantial completion of each element of Phase 2, a deadline for Amtrak to move the majority of its intercity passenger railroad services and operations from Penn Station to Moynihan Station upon Amtrak’s acceptance of Phase 2 as complete, etc., and a mechanism for updating the schedule; and

n. Approval by each Party’s respective Board of Directors or Commissioners of the terms and conditions of such Party’s participation in the Project.

o. Agreement on a formula for sharing the costs of common elements and common areas in and around the Farley Building.

p. Agreement on the scope and design of the West End Concourse passenger waiting areas for LIRR passengers and agreement on the 33rd St. Corridor improvements, including those located under the 8th Ave. Subway and for the balance of Penn Station, upon completion of all pedestrian modeling activities.

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It is a condition to proceeding with Phase 2 beyond the 70% design development phase that the Parties reach a mutually satisfactory agreement on the matters set forth in this Section C and elsewhere in this MOU (the "Definitive Agreement").

D. Station Design & Function; Northeast Corridor Improvements

1. This Section D describes the current plans for the adaptive reuse of the Farley Building, which remain subject to reaching agreement as set forth in Section C above, and are expected to include:

a. Approximately 267,000 gross square feet comprising Moynihan Station, which consists of (i) the Amtrak Common Areas, the Common Area, the Amtrak Space, the Public Station Hall and the Station Retail space, together with space for a future branded Port Authority AirTrain presence, as described below;

b. Up to 265,000 square feet of United States Postal Service (“USPS”) space pursuant to a lease between ESDC and the USPS; and

c. The use of the balance of the space in the Farley Building (over 800,000 gross square feet), not occupied by Moynihan Station, the USPS or common areas, for lease or sale to one or more private developers for retail, office, hotel, educational or other uses.

2. The parties will continue to work together to develop detailed plans for Moynihan Station, complete necessary reviews, obtain necessary approvals and complete the Definitive Agreement, all consistent with the attached Plans and this MOU.

3. The Project Sponsors commit to a Moynihan Station design that satisfies Amtrak’s Functionality Standard. The term “Amtrak’s Functionality Standard” shall mean a standard to be agreed to by the Parties that addresses Amtrak’s goals of (a) accommodating all necessary Amtrak functions and preserving Amtrak’s overall operational functionality and flexibility (as determined by Amtrak, in its sole discretion), (b) ensuring adherence to the principle of “operating costs neutrality”, and (c) being consistent with public safety and transportation reliability. Reaching agreement among the Parties on Amtrak’s Functionality Standard will require resolution of number of issues in Section C(4) of this MOU. It is understood that in order to plan for development of the balance of the Farley Building (i.e., those uses other than Moynihan Station), the total amount of space in the Amtrak Area and the general location of that space will be substantially in accord with Exhibit C to the extent the Exhibit C plans, as amended, do not decrease Moynihan Station below approximately 267,000 gross square feet.

4. The Amtrak operations expected to be located in Moynihan Station include (but are not limited to):

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a. In-person ticketing for all passengers

b. Ticket Vending Machines

c. Arrival and Departure Signage and Monitors

d. Concierge Services

e. Red Cap

f. Baggage

g. Club Acela

h. Passenger Waiting Areas

i. Amtrak Police

j. Amtrak Station Services

k. Outreach

l. Station Cleaning

m. Locker Room Facilities

n. Lost & Found

o. Training / Diversity / IT Support

p. Fire & Life Safety

5. Amtrak will reprogram the space Amtrak will vacate at Penn Station when it moves into Moynihan Station (the “Amtrak Vacated Space”), as set forth in Section F (7) below. The existing central sign announcing Amtrak arrivals and departures will be de-commissioned, and directional signage will be provided for Amtrak passengers. Except as described below, there will be no regular Amtrak boarding announcements, ticket-taking and waiting areas at Penn Station after a reasonable transition period once Amtrak moves to Moynihan Station (during predominant travel times). However, Amtrak will maintain ticket vending machines and monitors showing Amtrak service arrival and departure information and will permit its passengers to board and disembark from trains within Penn Station. Amtrak will retain space in the Penn Station upper concourse suitable for installing automated ticket vending equipment, establishing “concierge services”, and meeting special train movement and emergency service requirements, etc., at its discretion. Amtrak will also, at its discretion, operate all of its station services from Penn Station during late evening / post midnight periods when travel demand is historically low. During

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such periods, to minimize the costs of operation, Moynihan Station may be closed and passengers will be redirected by Amtrak to Penn Station.

6. The following Amtrak operations (in some cases, duplicative of similar operations at Moynihan Station) are expected (but not required) to retain a presence in or remain wholly in Penn Station; or at Amtrak’s discretion, may be moved, in whole or in part, to the Amtrak Service Building located at 232 West 31st Street, New York, N.Y. or other location(s) satisfactory to Amtrak; provided, that any such operation or function which may be moved from Penn Station but continues to support Penn Station shall remain an element of Amtrak’s Penn Station operating costs for purposes of the concept of “operating cost neutrality”:

a. Ticket Vending Machines

b. Limited Arrival and Departure Signage and Monitors

c. Concierge Services

d. Red Cap

e. Amtrak Police (reduced presence)

f. Train Operations Control (TOC)

g. Engineering

h. Crew Base

i. Commissary

j. Access for Limited Boarding and Disembarkation, including operation of all intercity passenger services during late night / post midnight periods when passenger demand historically is very low. During such periods, to minimize the cost of operations, Moynihan Station may be closed and passengers will be redirected by Amtrak to Penn Station.

k. Space for Special Train Movement and Emergency Service

7. Space for a future branded Port Authority AirTrain facility (most likely a kiosk or ticket sale desk) will be included in a to-be-determined part of either the Public Station Hall or the entrance ways to Moynihan Station accessed from midblock on 33rd Street or from the 8th Avenue corners of the building. This space will accommodate ticket-vending machines, video boards and/or personnel to enable passengers to purchase AirTrain tickets and obtain information about flight schedules. This use of this space for AirTrain operations shall be subject to separate agreement between the Port Authority, Amtrak and the Project Sponsors and/or the private developer chosen to implement Phase 2. This

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AirTrain space will be provided notwithstanding the fact that it is not shown on Exhibit C. The Project Sponsors understand that any future plans to expand JFK International Airport AirTrain service so as to provide a “one seat ride” to Moynihan Station/Penn Station will require separate agreements with Amtrak and Long Island Rail Road to address operational matters such as slots in tunnels and at platforms.

8. If, as design work progresses, the Project Sponsors or Amtrak conclude that modifications to the Plans will better maximize the value or functionality of spaces in Moynihan Station and Penn Station, including station retail space, pedestrian circulation space and railroad space, or improve connectivity between the Public Station Hall, the street level, the track and platform levels, and existing Penn Station, then the Parties will work cooperatively on design alternatives that realize these objectives, subject to Amtrak’s Functionality Standard.

9. Moynihan Station is a project with independent utility. The Parties acknowledge, however, that Amtrak’s move to Moynihan Station is the necessary first step to future efforts to expand and redevelop Penn Station and enhance high-speed rail service on the Northeast Corridor. Amtrak is proceeding with the Moynihan Station project based on an understanding that the Project Sponsors will support and participate in Amtrak’s efforts to plan and secure funding from other public and private sector sources for the future expansion of tunnel, track and platform capacity in and to both Penn Station and Moynihan Station (as described below). The Project Sponsors are proceeding with the Farley Project based on an understanding that, subject to available funding, Amtrak will reprogram and redevelop the space Amtrak is vacating in Penn Station for the purpose of enhancing commuter rail service and the overall operation of Penn Station, including potential enhanced retail services (as described below).

10. The parties acknowledge the importance of connectivity between Moynihan Station and Penn Station to preserve operational functionality and flexibility. The Plans are intended to preserve the option of a future passenger corridor below 31st Street ("31st Corridor"), which is not part of the Farley Project, and the parties further acknowledge that the Plans will not be modified nor will the Project Sponsors develop plans for any other project in a way that might preclude future development of the 31st Corridor.

11. The parties acknowledge the importance of connectivity between existing Platforms 1 & 2 and Moynihan Station. The Plans are intended to preserve the option of such connections, which are not part of the Farley Project, subject to Amtrak’s Functionality Standard.

12. The Parties agree to cooperate in the development of plans for the activation of the diagonal platform (Platform 12), as part of a future phase of the Farley Project, for use by Amtrak (on an interim basis, as part of a long-term Northeast Corridor development plan) and/or commuter railroads. The parties

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acknowledge that the activation of the diagonal platform may result in new equipment requirements and operational costs to the State’s Empire Corridor Service that must be addressed before any commitments to use the diagonal platform are made. Any commitment to develop the “Block 780” station or an equivalent project which requires use of the diagonal platform area will take precedence over a stand-alone use of the diagonal platform, including sole use for the State’s Empire Corridor service; provided, however, that stand-alone use of the diagonal platform may occur on an interim basis prior to long-term development of the “Block 780” station or the equivalent and Amtrak will not be obligated to reimburse the State for any investment in interim uses or improvements.

13. The Farley Building is a New York City landmark and is listed on the National Register of Historic Places. Accordingly, the Farley Project will be subject to the applicable federal review process for historic buildings. The parties acknowledge that obtaining a federal historic rehabilitation tax credit for the restoration of the Farley Building may be a critical element in financing the Farley Project, and Amtrak agrees to cooperate in making any necessary adjustments to the design to the extent it affects the historic fabric of the building, subject to Amtrak’s Functionality Standard.

14. The ongoing recession has created opportunities for federal funding, but has also placed constraints on government funding for Moynihan Station. The proposed phased construction of the Farley Project reflects and addresses such funding constraints. Each respective phase of construction will proceed as funding for that phase becomes available. The parties intend to work together throughout the design and engineering, pre-construction and construction periods to develop and implement the phased construction plan and to keep Moynihan Station on budget, including participating in value engineering, operational analysis, construction segmentation and phasing, and other cost mitigation efforts, subject to Amtrak’s Functionality Standard. In this regard, although Amtrak has advised the Project Sponsors that a far west end baggage handling system is essential to Amtrak operations in Moynihan Station and the Project Sponsors agree that a baggage handling system will be included as part of Moynihan Station, the parties have not agreed on the location or design of such a system. The Plans include the Baggage Corridor as part of Phase 2, which Amtrak has indicated would be a satisfactory means of addressing this requirement. However, no agreement has been reached on the inclusion of the Baggage Corridor as part of Moynihan Station. The parties therefore acknowledge that any commitment by the Project Sponsors to construct and/or fund the Baggage Corridor (or other baggage handling arrangements) is subject to further agreement between them, and that Amtrak’s relocation of operations to Moynihan Station, as contemplated herein, is contingent upon either an agreement being reached for the construction of the Baggage Corridor or the provision of other arrangements for baggage handling in Moynihan Station satisfactory to Amtrak in its sole discretion.

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15. Notwithstanding the proposed phasing of construction of the Project, Amtrak will not have any obligation to relocate any portion of its operations or service to the Farley Building until after Amtrak’s acceptance (in accordance with terms and conditions to be agreed) of the following Project elements of Moynihan Station:

a. the Amtrak Common Areas;

b. the Public Station Hall;

c. the Baggage Corridor or other baggage handling arrangements satisfactory to Amtrak;

d. the Amtrak Space;

e. Phase 1 improvements; and

f. an agreed upon amount of Station Retail space (locations and Retail Space uses to be determined by agreement between the Project Sponsors and Amtrak and intended to provide a basic level of service to intercity rail passengers upon the opening of Moynihan Station).

E. Long-term Planning

1. Penn Station is operating at capacity and, absent continued betterments, will not accommodate the projected future demand for commuter and intercity passenger rail.

2. The New Jersey Transit’s Access to the Region’s Core and the Long Island Railroad’s East Side Access projects will address, in part, capacity constraints, but additional improvements to Penn Station will be required to meet long-term demand.

3. In the interest of bettering passenger rail service into New York City and the passenger rail experience, the State agrees to cooperate with Amtrak on future planning for intercity passenger and commuter rail services into New York City and the Moynihan Station-Penn Station complex.

4. Amtrak and the State agree that there are two critical planning exercises that must be completed: (a) the Northeast Corridor Master Plan being coordinated by Amtrak; and (b) the Penn Station simulation effort being coordinated by the Metropolitan Transportation Authority.

5. Amtrak and the State agree that the Penn Station simulation effort must encompass a planning horizon for both 2017 and 2030.

6. Amtrak and the Project Sponsors agree in principle to the creation of a multi-party stakeholder task force to be charged with reviewing long-term capital and operating solutions to the rail station and tunnel capacity constraints facing New

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York City as identified by both the Northeast Corridor Master Plan and the Penn Station simulation effort, including the projects described below. In addition, Amtrak and the State agree that this task force should be created with the participation of the Port Authority, the Metropolitan Transportation Authority and its subsidiary agencies (collectively, the “MTA”), New Jersey Transit, Amtrak, the State of New Jersey, the State of Connecticut, and the City of New York. This task force will complement the work of the other government and railroad committees and commissions involved in planning efforts for the Northeast Corridor.

7. The Project Sponsors agree to work cooperatively with Amtrak and the MTA to secure and will not take any action that would preclude, an alignment for new Amtrak Hudson River tunnels for intercity and commuter passenger rail from Moynihan Station and Penn Station to the Hudson River. The foregoing notwithstanding, Amtrak acknowledges that the location and design of any such tunnels are subject to, and must be designed to avoid interference with, the location and design of the Hudson Yards development project being overseen by the MTA, including the location of foundations and columns for such project. Amtrak will conduct the required engineering work and other studies for the alignment, at Amtrak’s expense, and will purchase any required easements and pay the costs thereof (subject to seeking funding as set forth in Section E(11)).

8. The Project Sponsors agree to cooperate with Amtrak, the Port Authority, the City and other agencies on advancing a comprehensive planning and environmental process for the construction of added tunnel and station capacity.

9. The Projects Sponsors agree to work with the City, the Port Authority and Amtrak to identify zoning and other efforts that can be taken to not preclude future expansions of Moynihan Station/Penn Station and provide for increased tunnel capacity into the complex.

10. The Project Sponsors agree to work cooperatively with Amtrak and the Port Authority to advance planning, design and development of additional track and platform infrastructure capacity for expanded passenger rail services at Penn Station, such as, by way of example, additional platform and tracks under Block 780 (or the equivalent).

11. The Project Sponsors agree to actively support and join Amtrak and the Port Authority in seeking long-term funding and government approvals (i.e., zoning, permitting, etc.) for new Hudson River tunnels for Amtrak (including acquisition of necessary alignments and easements), development of Block 780 (or the equivalent), and the long-term development of the 31st Corridor and other capacity improvements identified by the long-term planning undertaken pursuant to this Section E, to the extent such efforts do not compete with the Project Sponsor’s efforts to secure funding for Moynihan Station.

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F. Financial and Business Terms Related to Phase 2 Construction

1. This Section F describes certain proposed financial and business terms for the adaptive reuse of the Farley Building, which remain subject to reaching agreement as set forth in Section C above, and are expected to include the following allocation of responsibility for Moynihan Station design and construction costs:

a. The Project Sponsors will be solely responsible for the costs of the following elements of Moynihan Station, including any related force account costs in connection with subsurface work in, on, or adjacent to tracks/platforms (the “Base Station Work”):

(i) design and construction of the Amtrak Common Areas, Common Areas, and the Public Station Hall, public restrooms and public circulation space (including core, shell, fit-out work and fixtures , based on plans and fit-out standards to be negotiated and agreed upon), a central Amtrak train schedule message board to be located in the Public Station Hall (but not including Amtrak Work);

(ii) design and construction of core and shell (and only the core and shell) of the Station Retail space and the Amtrak Space;

(iii) design and construction of the Phase 1 Improvements; and (iv) design and construction of a baggage handling facility satisfactory to

Amtrak (the location and design of this facility are still to be determined and agreed upon by the Parties).

The Project Sponsors intend to seek federal funding for such costs, as set forth herein. Other sources of funding for such costs are expected to include the State, the City, the Port Authority, the Developer, and Moynihan Station Commercial Revenues.

b. Amtrak will be solely responsible for the costs of the following elements of Moynihan Station (the “Amtrak Work”):

(i) Installation of fixtures, furniture and equipment (“FF&E”) in the Amtrak Space; and

(ii) installation of Amtrak’s ticket vending machines and other Amtrak equipment to be located in the Public Station Hall and the Common Area.

c. It is expected that future retail tenants of the Station Retail space will receive their spaces as core and shell only and will be responsible for the costs of the subsequent fit-out of such spaces.

d. The Parties have yet to reach agreement on who is responsible for construction of the fit-out of the Amtrak Space (other than the public rest

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rooms) and certain furniture and equipment in the Common Area and Public Station Hall.

2. Phase 2 Design Review Costs and Other Project Planning Costs – Each Party will be responsible for, and shall pay, its own internal costs and expenses, and the fees and expenses of any consultants retained by it (including engineers, architects, legal and financial advisors), in connection with (i) such Party’s review and approval of any designs, plans, and specifications for Phase 2 of the Project, and (ii) such party’s participation in the drafting, negotiation, review, approval or execution of any agreements or other instruments necessary to effectuate Phase 2 of the Project. The Project Sponsors will reimburse Amtrak for a percentage (to be agreed upon by the Parties) of Amtrak’s costs for outside design and engineering consultants for Phase 2 subject to a dollar cap on such reimbursements.

3. Moynihan Station Operating Costs – Subject to an agreement being reached by the Parties on the condition of operating cost neutrality and the terms of such agreement, the Parties expect that Amtrak will pay the operating expenses and ongoing capital expenses (post-construction) of Moynihan Station (collectively, the “Amtrak Moynihan Operating Costs”), including the following:

(i) All costs and expenses associated with the operation, maintenance and repair, and ongoing capital repairs and replacements (post- construction) of the Amtrak Space, the baggage handling facility and other facilities located in the train shed, and the Public Station Hall , including Amtrak’s central message board for train schedules;

(ii) All costs of any utility or similar service furnished directly and exclusively to Amtrak Space, the baggage handling facility and other facilities located in the train shed, and the Public Station Hall , including Amtrak’s central message board for train schedules by any public utility, alternative service provider or similar entity; and

(iii) Subject to mutual agreement among the Parties, (see Section C(4)(o)) a contribution, to be determined on a fair and equitable basis, towards certain costs and expenses that remain to be identified associated with the operation, maintenance and repair, and ongoing capital repairs and replacements (post-construction) of, the Common Area, Amtrak Common Areas and those other common elements in, on and around the Farley Building (apart from the Common Area and Amtrak Common Areas) that generally support or serve Moynihan Station, as such areas are further developed and defined pursuant to this MOU.

4. Moynihan Station and Penn Station Retail Revenues –

a. Amtrak currently receives certain revenues from commercial activities at Penn Station ("Penn Station Commercial Activities"). Any Penn Station Commercial Activities existing at the time Amtrak occupies Moynihan Station for operational use are "Existing Penn Station Commercial

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Activities." Amtrak shall continue to manage and receive revenue from these Existing Penn Station Commercial Activities, unless otherwise determined by Amtrak.

b. The Project Sponsors shall manage and shall be entitled to receive all revenues from commercial activities at Moynihan Station, including the Station Retail space, and advertising in the Farley Building ("Moynihan Station Commercial Activities"), except that the Project Sponsors, at their sole discretion, may provide any portion of such revenues to Amtrak in order to help achieve “operating cost neutrality”. Amtrak shall have the right to approve the types of tenants in the Station Retail space and advertising to be located in the Public Station Hall, to make sure that such uses are compatible with the station and, in the case of the retail, provide customary train station amenities to passengers, such approval shall not be unreasonably withheld.

5. Farley Building ownership structure –The Farley Building ownership structure will be the subject of further negotiation.

6. Amtrak compensation for Moynihan Station space – Amtrak will not pay a purchase price for Moynihan Station but will be obligated to pay the costs of the Amtrak Work and, subject to an agreement being reached by the Parties on the condition of operating cost neutrality and the terms of such agreement, the Amtrak Moynihan Operating Costs.

7. Vacated Amtrak space at Penn Station – Amtrak expects to vacate, but retain ownership of, certain space in Penn Station (the “Vacated Space”) over a period of time, as and when Amtrak moves into Moynihan Station. The minimum square footage of the Vacated Space will be agreed to by the Parties. Subject to available funding, Amtrak will reprogram and redevelop the Vacated Space after completion of Moynihan Station and Amtrak’s relocation, with the following objectives:

a. Improve railroad operations and the passenger experience at Penn Station for all railroads using Penn Station.

b. Enhance retail and other revenue-generating potential of Penn Station to the extent consistent with (a) above.

c. Reduce Amtrak’s ongoing Operating Costs.

Amtrak intends to work cooperatively with the Project Sponsors, the Port Authority, LIRR and NJT to develop the best plan for achieving the foregoing objectives (the “Penn Station Project”). The design, cost and funding for the Penn Station Project are not determined.

8. Additional Penn Station Commercial Activities - If, as a result of the Penn Station Project, there is any increase in the square footage of Penn Station

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Commercial Activities (“Additional Penn Station Commercial Activities”) (regardless of where any Existing Penn Station Commercial Activities are located in any final design of the Penn Station Project), over and above Existing Penn Station Commercial Activities, Amtrak will own and manage, and retain the revenues from, such Additional Penn Station Commercial Activities. Amtrak will use the additional revenues generated by such Additional Penn Station Commercial Activities to cover the costs of the Amtrak Work, the Amtrak Moynihan Operating Costs and the Amtrak Penn Station Operating Costs (i.e., to help achieve “operating cost neutrality”). If there are any excess revenues generated by Additional Penn Station Commercial Activities, then Amtrak will consider using a portion of such excess revenues for a one-time financing of that portion of the costs of the Penn Station Project that is not funded through other sources (that is, federal, State, local, Port Authority, Amtrak or private sources). No debt will be secured by such excess revenues except with the approval of Amtrak.

9. Existing Rights and Consents -The parties acknowledge that the consent of Amtrak’s Penn Station mortgagees and lessees may be required in connection with Phase 1 and Phase 2 of the Project and the Penn Station Project. Except as provided herein, the parties do not intend, as part of the projects described herein, to modify the existing ownership and management of, or allocation and use of (or to reduce) revenues from, any Existing Penn Station Commercial Activities (regardless of where any Existing Penn Station Commercial Activities are located in any final design of the Penn Station Project), sales of tickets for Amtrak intercity passenger rail services, or any other property in which Amtrak has an interest, nor do the parties intend, as part of the projects described herein, to modify the existing ownership of Penn Station or any of Amtrak’s existing rights with respect to the space above or adjacent to Penn Station or the subsurface areas below Penn Station and the Farley Building. The parties recognize and acknowledge that the Penn Station Project, as contemplated herein, may require modification of existing leases or operating agreements between Amtrak and the LIRR, NJT and/or the MTA, in order to accomplish the objectives specified in Section F(7) above, with respect to the Vacated Space, and nothing in this Section F(9) is intended to preclude any such modification, subject to securing the consent of Amtrak’s Penn Station mortgagees (if required) and of the LIRR, NJT, and/or the MTA, as appropriate.

10. Federal Funding – Amtrak has and will continue to actively support the Project Sponsors’ efforts to obtain federal funding for Moynihan Station, provided such funding does not subtract from, and is additive to, Amtrak’s annual requested federal funding for capital and operating expenses. The current plan is for the State to apply for funding from at least the following sources:

a. FD/Construction: Either Track 2 of the High Speed Intercity Passenger Rail Program of the Federal Railroad Administration, as part of a Northeast or Empire Corridor application, or Track 1a (if appropriate) as a stand-alone project.

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b. Discretionary Grants for Capital Investments in Surface Transportation Infrastructure under the American Recovery and Reinvestment Act (TIGER).

Amtrak will write letters in support of the State’s applications for such funding and will make the case to the Federal Railroad Administration and the U.S. Department of Transportation that Moynihan Station is a necessary first step to enhancing high speed rail service on the Northeast Corridor and in any long-term plan to renovate and expand Penn Station.

G. Non-Binding; Term

1. None of the Parties is or will be legally bound with respect to any matter described or contemplated under this MOU, and the parties shall have no liability in respect thereof unless and until (and only to the extent) the Parties have approved, executed and delivered.

a. With respect to Phase 1 of the Project, a written agreement for the design, construction, ownership and operation of the Phase 1 improvements, consistent with terms and conditions of this MOU and the Plans, and which by its terms expressly states that the Parties intend to be bound thereby; and

b. With respect to Phase 2 of the Project, the Definitive Agreement, for the design, construction, ownership and operation of Moynihan Station, consistent with terms and conditions of this MOU and the Plans, and which by its terms expressly states that the Parties intend to be bound thereby.

The Parties agree that the agreement contemplated in 1(a) above may be combined into, and form part of, the Definitive Agreement in 1(b).

2. Unless the Parties otherwise agree, this MOU shall be deemed terminated and of no further force and effect if the Definitive Agreement has not been executed and delivered within five years after the date hereof. IN WITNESS WHEREOF, the Parties have caused this MOU to be executed by their duly authorized representatives as of the date first above written.

[SIGNATURES OCCUR ON THE FOLLOWING PAGE]

EXHIBIT A

Phase 1 Plans

EXHIBIT B

Sources and Uses of Funds

EXHIBIT C

Phase 2 Plans