Document:

Exhibit 10.14

 

	
  

  	
  NEW YORK
  CITY TRANSIT AUTHORITY

  
	
   

  	
   

  
	
   

  	
  Contract #00D7815B

  
	
   

  	
   

  
	
   

  	
  Access-A-Ride Paratransit
  Transportation Service

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Contractor:

  	
  Atlantic
  Paratrans, Inc.

  
	
   

  	
   

  	
  7 North Street

  
	
   

  	
   

  	
  Staten Island, NY 10302

  
	
   

  	
   

  	
  (718) 556-8077

  
	
   

  	
   

  	
  (718) 448-5679

  

 

 

NEW YORK
CITY TRANSIT AUTHORITY

 

CONTRACT
NO. 00D7815B 

ACCESS-A-RIDE
PARATRANSIT TRANSPORTATION SERVICE

 

TABLE OF
CONTENTS

 

IMPORTANT
NOTICE TO ALL CONTRACTORS AND CONSULTANTS

 

AWARD
LETTER

 

SPECIFIC
CONTRACT PROVISIONS

 

	
  ARTICLE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  101

  	
  DEFINITIONS

  	
   

  
	
  102

  	
  PROJECT DESCRIPTION

  	
   

  
	
  103

  	
  TERM
  OF AGREEMENT

  	
   

  
	
  104

  	
  STANDARDS OF PERFORMANCE

  	
   

  
	
  105

  	
  DELIVERY OF
  WORK PRODUCTS AND MATERIALS

  	
   

  
	
  106

  	
  SUSPENSION OF PERFORMANCE

  	
   

  
	
  107

  	
  PERMITS

  	
   

  
	
  108

  	
  PRICE TO
  INCLUDE/INVOICES AND PAYMENT

  	
   

  
	
  109

  	
  DRUG AND ALCOHOL TESTING

  	
   

  
	
  110

  	
  PRIVACY
  ACT

  	
   

  
	
  111

  	
  LIQUIDATED
  DAMAGES

  	
   

  
	
  112

  	
  VEHICLE
  LEASES

  	
   

  
	
  113

  	
  PROSECUTION
  OF THE WORK

  	
   

  
	
  114

  	
  INSURANCE

  	
   

  
	
  115

  	
  RISK OF
  LOSS

  	
   

  
	
  116

  	
  SUBCONTRACTORS

  	
   

  
	
  117

  	
  RELATIONSHIP
  OF CONTRACTOR TO THE AUTHORITY

  	
   

  
	
  118

  	
  DISCLOSURE

  	
   

  
	
  119

  	
  PUBLICITY

  	
   

  
	
  120

  	
  VEHICLES
  LEASED BY CONTRACTOR FROM THIRD PARTIES

  	
   

  
	
  121

  	
  AMENDMENTS

  	
   

  
	
  122

  	
  ATTACHMENTS

  	
   

  
	
  123

  	
  RESCISSION

  	
   

  
	
  124

  	
  EXTENSION
  OF TERM

  	
   

  
	
  125

  	
  ORDER OF
  PRECEDENCE

  	
   

  

 

1

 

GENERAL
CONTRACT PROVISIONS (SCP)

 

	
  ARTICLE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  201

  	
  Agreement

  	
   

  
	
  202

  	
  Notices

  	
   

  
	
  203

  	
  General
  Rules Of Interpretation

  	
   

  
	
  204

  	
  Consent
  of Authority Required For Subcontracting, Subletting, Or Assignment

  	
   

  
	
  205

  	
  Coordination
  with Other Contractors

  	
   

  
	
  206

  	
  Changes

  	
   

  
	
  207

  	
  Extensions
  Of Time

  	
   

  
	
  208

  	
  Remedies
  In Case Of Default & Termination for Cause

  	
   

  
	
  209

  	
  Termination
  For Convenience

  	
   

  
	
  210

  	
  Authority
  Of The Project Manager

  	
   

  
	
  211

  	
  Disputes

  	
   

  
	
  212

  	
  Withholding
  Money Due Contractor to Meet Claims or Liens

  	
   

  
	
  213

  	
  Claims
  By Contractor

  	
   

  
	
  214

  	
  Substitution
  of Approved Securities

  	
   

  
	
  215

  	
  Use Of
  Monies Withheld

  	
   

  
	
  216

  	
  New York
  Laws/Choice of Law, Consent to Jurisdiction & Venue

  	
   

  
	
  217

  	
  Statute Of Limitations On Right To Sue
  The Authority / No Claim Against Authority Officers, Agents or Employees

  	
   

  
	
  218

  	
  Authority
  May Avail Itself of All Remedies

  	
   

  
	
  219

  	
  Relationship
  between the Authority and Others

  	
   

  
	
  220

  	
  Liability
  And Indemnification

  	
   

  
	
  221

  	
  Patents,
  Copyrights And Infringement Claims

  	
   

  
	
  222

  	
  Quantities
  Are Approximate / Variable Quantities Clause

  	
   

  
	
  223

  	
  General
  Representations and Warranties

  	
   

  
	
  224

  	
  No
  Estoppel And No Waiver

  	
   

  
	
  225

  	
  Severability

  	
   

  
	
  226

  	
  Safety
  Precautions

  	
   

  
	
  227

  	
  Inspection
  and Evaluation

  	
   

  
	
  228

  	
  Books
  And Records / Audit And Examination

  	
   

  
	
  229

  	
  Subcontractor/Supplier
  Books and Records

  	
   

  
	
  230

  	
  Brand
  Names / Substitution Of Specified Material

  	
   

  
	
  231

  	
  Removal
  Of Material / Waste Material

  	
   

  
	
  232

  	
  Quality
  Assurance

  	
   

  
	
  233

  	
  Compliance
  With Applicable Laws, Regulations /Environmental Matters

  	
   

  
	
  234

  	
  Final
  Payment To Act As Release

  	
   

  
	
  235

  	
  Independent
  Contractor

  	
   

  
	
  236

  	
  Contractor’s
  Employees

  	
   

  
					

 

2

 

	
  ARTICLE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  237

  	
  Confidentiality
  / Advertising Limitation

  	
   

  
	
  238

  	
  Tax
  Exemption

  	
   

  
	
  239

  	
  Equal
  Opportunity for Minority Group Members & Women

  	
   

  
	
  240

  	
  Antitrust
  Assignment

  	
   

  
	
  241

  	
  Grand
  Jury Testimony

  	
   

  
	
  242

  	
  Year 2000
  Compliance

  	
   

  
	
  243

  	
  Contract
  Documents Contain All Terms / Contractor Has Examined Contract

  	
   

  
	
  244

  	
  All
  Legal Provisions Included

  	
   

  
					

 

ATTACHMENTS

 

	
  Attachment No.  1.

  	
  Scope of Work

  
	
   

  	
   

  
	
  Attachment No.  2.

  	
  Price Schedule

  
	
   

  	
   

  
	
  Attachment No.  3.

  	
  Vehicle Lease Agreement

  
	
   

  	
   

  
	
  Attachment No.  4.

  	
  Schedule A, Insurance Requirements

  
	
   

  	
   

  
	
  Attachment No.  5.

  	
  Schedule G, Rider to Contract Documents

  
	
   

  	
   

  
	
  Attachment No.  6.

  	
  Schedule J, Responsibility Questionnaire

  
	
   

  	
   

  
	
  Attachment No.  7.

  	
  Schedule K, Opportunities for Minority and Women Owned Business
  Enterprises.

  
	
   

  	
   

  
	
  Attachment No.  8.

  	
  Federal Drug and Alcohol Testing Certification

  
	
   

  	
   

  
	
  Attachment No.  9.

  	
  Sample Trip Ticket

  
	
   

  	
   

  
	
  Attachment No. 10.

  	
  Current Paratransit Fleet

  
	
   

  	
   

  
	
  Attachment No. 11.

  	
  Operator Vehicle Condition Report

  
	
   

  	
   

  
	
  Attachment No. 12.

  	
  Preventive Maintenance Program

  
	
   

  	
   

  
	
  Attachment No. 13.

  	
  DMV Approved Accident Prevention Contractors

  
	
   

  	
   

  
	
  Attachment No. 14.

  	
  Daily Road Call Reports

  

 

3

 

	
  Attachment No. 15.

  	
  Daily Accident Reports

  
	
   

  	
   

  
	
  Attachment No. 16.

  	
  Incident Reports

  
	
   

  	
   

  
	
  Attachment No. 17.

  	
  Vehicle Lettering or Logo

  
	
   

  	
   

  
	
  Attachment No. 18.

  	
  Sample FTA Section 15 Reporting Forms

  
	
   

  	
   

  
	
  Attachment No. 19.

  	
  Estimated Paratransit Growth

  
	
   

  	
   

  
	
  Attachment No. 20

  	
  Actual Trip Volume Information for 1999 and 2000

  
	
   

  	
   

  
	
  Attachment No. 21

  	
  All Carrier Vehicles on Road

  
	
   

  	
   

  
	
  Attachment No. 22

  	
  Fleet Mileage and Age Information for Vehicles Put Into Service From
  April 1999 to May 2000

  

 

	
  FORM
  EEO-1

  	
  Employer Information Report

  	
   

  

 

4

 

CONTRACT
TERMS AND CONDITIONS

 

AGREEMENT made this 4th day of October, 2001
between the NEW YORK CITY TRANSIT AUTHORITY (hereinafter
the “Authority” or “NYCT”), with offices at 370 Jay Street, Brooklyn, NY 11201
and ATLANTIC PARATRANS, INC.,  with
offices 7 North Street, Staten Island, NY 10302.

 

W I T N E S
S E T H:

 

WHEREAS, the Authority desires to retain a Contractor
to provide Paratransit service in accordance with the Federal Americans with
Disabilities Act of 1990 (ADA) for the five boroughs of the City of New York
and known as Access-A-Ride;

 

WHEREAS, the Contractor represents that it possesses
the necessary knowledge and experience to perform the work and services herein
described; and

 

WHEREAS, the Authority desires to retain the
Contractor on the terms and conditions set forth in this Agreement and the
Contractor has agreed to  accept
such terms and conditions including compensation based upon the rates set forth
in the Price Schedule designated herein;

 

NOW,
THEREFORE, in
consideration of the mutual covenants and agreements hereinafter contained, the
parties hereto do hereby agree as follows:

 

1

 

NEW YORK
CITY TRANSIT AUTHORITY

 

CONTRACT
NO. 00D7815B

ACCESS-A-RIDE
PARATRANSIT TRANSPORTATION SERVICE

 

SPECIFIC
CONTRACT PROVISIONS

 

ARTICLE 101                  DEFINITIONS

 

The following terms used in this Contract
shall, except where, by the context, it is clear that another meaning is
intended, be construed as follows:

 

1.               “Access-A-Ride” or “AAR”
shall mean New York City Transit Authority paratransit service.

 

2.               “Accident” shall mean an event causing property damage
in excess of $1,000 or any personal injury that occurs during the carrier’s
operation of any Revenue or Non-Revenue Vehicles in AAR service.

 

3.               “Accident Damage” shall mean any property damage caused as a
result of an Accident.

 

4.               “Addenda” or “Addendum”
shall mean the additional Contract provisions relating to the Contract issued
in writing by the Authority prior to the Award Date.

 

5.               “Add-On Trips” or “Trip
Insertions” shall mean trips not included in the daily Manifest that
are dispatched real-time to the Vehicle Operator.

 

6.               “Americans with Disabilities
Act of 1990” or “ADA” shall mean the Federal civil rights
legislation requiring, among other things, that paratransit service comparable
to fixed route service be provided to persons with disabilities who meet ADA
paratransit eligibility criteria.

 

7.               “Assistive Device” shall mean devices used by physically
disabled persons for mobility and/or communication, such as canes, walkers,
oxygen equipment, etc.

 

8.               “Authority” or “NYCT”
(or the initials “T.A.” or “NYCTA” or “NYCT”) shall mean the New York City
Transit Authority, a public benefit corporation existing by virtue of the
Public Authorities Law, Title 9 of Article 5, and any other authority,
board, body, commission, official or officials to which or to whom the powers
now belonging to the said Authority with respect to the location, construction,
equipment, maintenance and operation of transit facilities shall by virtue of
any act or acts hereinafter passed or be held to appertain.

 

9.               “Automatic Vehicle Location
and Monitoring System”
(or  “AVLM”) shall mean a computerized
system that utilizes a global positioning system with mobile data terminals to
produce two-way wireless data communication concerning the speed and
directional movement of subject vehicle(s) via dynamic, graphic display screen
at remote dispatch/control location(s).

 

2

 

10.         “Borough” shall mean one of the five (5) political
jurisdictions (counties) comprising the City of New York.  They are the Bronx, Brooklyn, Manhattan,
Queens, and Staten Island.

 

11.         “Brochure Rack” shall mean pamphlet racks installed in
paratransit vehicles where customers may pick up brochures, fliers and
pamphlets issued by NYCT.

 

12.         “Carrier” shall mean an operator of the Access-A-Ride
service; also referred to as the Contractor.

 

13.         “City” shall mean the City of New York.

 

14.         “Command Center,” a/k/a “Paratransit Command Center” shall
mean a New York City Transit Authority site for operating Access-A-Ride
reservations, scheduling and customer assistance functions.

 

15.         “Contract,” “Contract
Documents” or “Agreement” shall mean the Attachments,
Appendix, Contractor’s Proposal, Contract Testimonium, General Contract
Provisions, Information For Proposers, Specific Contract Provisions, Schedules
deemed included (if any), Technical Specifications (if any), Scope of Work,
Forms of Bonds (if any), Contract Drawings (if Any), all Addenda hereafter
issued (if any), and the Notice of Award.

 

16.         “Contract Manager” shall mean the NYCT employee assigned to
serve as the liaison to the Contractor for purposes of contract administration
and daily operations.

 

17.         “Contractor” shall mean the Proposer to whom this
Contract is awarded, its successors and assignees and is also referred to as
the Carrier.  For convenience, the
Contractor may be hereinafter referred to as if the Contractor were an
individual.  The word “he” shall, as the
sense may require include “she,” “it” and “they”; the word “him” shall include
“her,” “it” and “them”; and the word “his” shall include “her,” “its” and “their”.

 

18.         “Contractor Early” shall mean the Vehicle Operator arrives more
than 5 minutes before the Scheduled Pick-Up Time.

 

19.         “Contractor No-Show,” a/k/a “Missed
Trip” shall mean any trip not performed, other than a Customer “Late
Trip Cancellation,” “Customer No-Show” or “No-Fault No-Show.”

 

20.         “Customer” shall mean an individual with disabilities
who NYCT has determined meets ADA paratransit eligibility criteria and has been
issued an AAR identification card, also known as Access-A-Ride or AAR
registrant.

 

21.         “Customer Assistance
Division” shall mean a
division of NYCT, which provides customer information and complaint management.

 

22.         “Customer No-Show” shall mean the Customer has not presented
him/herself, declines the trip or is unable for any reason to take the trip
when the Vehicle Operator has arrived and waited for the Customer in accordance
with the Contract standards and procedures.

 

23.         “DMV” shall mean the New York State Department of
Motor Vehicles.

 

3

 

24.         “Depot” shall mean the Carrier’s operation facility.

 

25.         “Directed,”  “required,” 
“permitted,” “ordered,” “designated,” 
“selected,”  “prescribed,” or words of like import used in the
specifications or upon the drawings (if any) shall mean, respectively, the
direction, requirement, permission, order, designation, selection or
prescription of the Project Manager; and similarly the words “approved,”
“approved manner,”  “approval,”
“acceptable,” “satisfactory,” “equal,” “necessary,” or words of like import
shall mean, respectively, approved by, or acceptable or satisfactory to, or
equal, or necessary in the opinion of the Project Manager.

 

26.         “Dispatcher” shall mean the individual responsible for
directing, monitoring and communicating with Vehicle Operators and coordinating
with the Command Center.

 

27.         “Dispatch Log” shall mean the Dispatcher’s daily record of service and vehicle information.

 

28.         “Disputes Resolution
Officer” or “DRO” shall mean
the individual designated by the Authority to resolve contract disputes between
the parties.

 

29.         “En-route Relief” shall mean a change in Vehicle Operators in
the field during a Revenue Service Tour.

 

30.         “Federal” or words of like import shall mean the
United States of America.

 

31.         “FTA” shall mean the Federal Transit
Administration of USDOT, and is the federal agency that, inter alia, promulgates and enforces drug
and alcohol testing program regulations for public transportation providers,
including their contractors, pursuant to the Federal Omnibus Transportation
Employee Testing Act of 1991.  The
regulations are set forth at 49 C.F.R. Parts 653 and 654.  FTA also promulgates and enforces
regulations implementing the Americans with Disabilities Act of 1990, including
regulations applicable to the provision of paratransit services.  These regulations are set forth at 49 C.F.R.
Part 37, Subpart F.

 

32.         “Guest” shall mean any person accompanying an AAR
Customer other than the Personal Care Attendant.

 

33.         “Holiday” shall mean New Year’s Day, Martin Luther
King Day, President’s Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.

 

34.         “Incident” shall mean an event impacting the quality or
timeliness of the service that occurs during the carrier’s operation of any
Revenue or Non-Revenue Vehicles in AAR service that does not cause property
damage in excess of $1,000 or personal injury.

 

35.         “Large Vans” shall mean vehicles having ten (10) seats
(excluding the driver), three (3) wheelchair securement positions and a dual
rear axle.

 

36.         “Late Pick-Up” shall mean any AAR pick-up that occurs past
the Scheduled Pick-Up Window.

 

37.         “Late Trip Cancellation” shall mean Customer cancellation after 5:00
p.m. the night before a scheduled trip.

 

4

 

38.         “Law” shall mean the Constitution and laws of the
United States and of the State of New York, the New York City Charter, the New
York City Administrative Code, and each and every other law, rule, regulation,
requirement, order, judgment, decree, or ordinance of every kind whatsoever
issued by any government entity, applicable to or affecting the Contract, the
Work and all persons engaged in the Work (including any of the foregoing which
concern health, safety, environmental protection, and non-discrimination).

 

39.         “Legal Proceeding” shall mean every action, litigation,
arbitration, administrative proceeding, and other legal or equitable proceeding
of any kind whatsoever.

 

40.         “Liens” shall mean any and every lien of any kind
whatsoever against the Work, against any monies due or to become due from the
Authority to Contractor, and/or against any other property of the Authority,
for or on account of the Work, including any Public Lien.

 

41.         “Manifest” shall mean the schedule provided to a
Vehicle Operator listing all stops and time points during a vehicle tour or
route.

 

42.         “MTA” shall mean the Metropolitan Transportation
Authority and any other board, body, commission, official or officials to which
or to whom the powers now belonging to the said Authority under the provisions
of Article 5, Title 11 of the Public Authorities Law of the State of New
York shall, by virtue of any act or acts, hereafter passed or be held to
appertain.

 

43.         “New York State” or “NYS”
shall mean the State of New York.

 

44.         “NYS DOT” shall mean the New York State Department of
Transportation.

 

45.         “No-Fault No-Show” shall mean the Contractor fails to provide
the scheduled trip to a Customer for documented reasons beyond the control of
the Contractor, as determined by the Project Manager.  For example, Fire/Police EMS activity, water main breaks, closing
of a major bridge/tunnel, extremely adverse weather conditions, unusually heavy
traffic conditions, and reservation errors may be grounds for considering the
Contractor’s failure to provide a scheduled trip to be a No-Fault No-Show.  Conversely, vehicle breakdowns or instances
when a Vehicle Operator is unable to find a particular location are not
considered to be occurrences that are beyond the Contractor’s ability to control.

 

46.         “Non-Revenue Vehicles” shall mean vehicles used by the Contractor to
perform Contract requirements other than customer transportation; it may
include vehicles used for supervisory and maintenance functions.

 

47.         “Notice” or “notice”
shall mean a written notice.

 

48.         “Notice of Award” shall mean a document that apprises the
Contractor that this Contract has been approved by the NYCTA.

 

49.         “Office Equipment” shall mean standard office furnishings and
equipment such as telephones, computers, fax machines and supplies used by the
Contractor to perform the Contract.

 

5

 

50.         “On-Time Performance” shall mean a measure of service reliability
based on the percentage of completed trips in which the Contractor has picked
up a Customer within the Scheduled Pick-Up Window.

 

51.         “Paratransit Automated Scheduling
System” or “PASS” shall
mean the automated reservation, scheduling and dispatch software system,
presently used by NYCTA to provide centralized AAR trip reservation and
scheduling at the Command Center.

 

52.         “Paratransit Division” shall mean the NYCTA Division responsible
for administration and operation of Access-a-Ride.

 

53.         “Passenger” shall mean all persons other than the ADA
eligible Customer who are authorized to travel with the Customer, such as,
Personal Care Attendants or Guests.

 

54.         “Preventive Maintenance” shall mean maintenance Types A, B and C
described in Attachment 12 of this Contract.

 

55.         “Personal Care Attendant” or “PCA”
shall mean a person who is authorized or required by the NYCT to accompany the
Customer for the purpose of providing travel and other assistance to the
Customer.

 

56.         “Pigtail” shall mean a long cord used in the remote
control operation of a wheelchair lift in a lift vehicle.

 

57.         “Post-Trip Revenue Vehicle
Inspection” shall mean the
inspection of a Revenue Vehicle immediately following completion of the Revenue
Service Tour.

 

58.         “Pre-Trip Revenue Vehicle
Inspection” shall mean
inspection of a Revenue Vehicle immediately preceding the Revenue Service Tour.

 

59.         “Project Manager” shall mean an individual designated as such
by the Authority to administer this Contract or his duly authorized
representative.

 

60.         “Pull-In” shall mean the return of a Revenue Vehicle
to the assigned Depot upon completion of a Revenue Service Tour.

 

61.         “Pull-Out” shall mean the Revenue Vehicle’s departure
from the assigned Depot to perform a Revenue Service Tour.

 

62.         “Pull-Out/Pull-In Logs” shall mean Dispatcher records of vehicle
Pull-Outs and Pull-Ins.

 

63.         “Pull-Out Ready Line” shall mean the Revenue Vehicles available
for Revenue Service Pull-Out.

 

64.         “Revenue Service” shall mean any period of time the Vehicle
Operator is performing the Customer transportation services required under this
Contract, including authorized deadheading time from Pull-Out to first Customer
pick-up and from last Customer drop-off to Pull-In, and any contractually
agreed upon lunch interval.

 

6

 

65.         “Revenue Service Tour” shall mean the period of time from authorized
Pull-Out to authorized Pull-In.

 

66.         “Revenue Service Start Date” shall mean the date on which the Contractor
places its first vehicle into Revenue Service.”

 

67.         “Revenue Vehicles” shall mean the vehicles used by the
Contractor to perform the Customer transportation services required under this
Contract.

 

68.         “Routed Service” or “Service
Route” or “Route” shall
mean Revenue Service performed according to the time schedule and order of
pick-ups and drop-offs listed in the Manifest.

 

69.         “Scheduled Pick-Up Time” shall mean the confirmed pick-up time as
agreed upon by the Customer and the Command Center and that appears on the
Manifest.

 

70.         “Scheduled Pick-Up Window” shall mean the period from five minutes
before to twenty-five minutes after the Scheduled Pick-Up Time.

 

71.         “Service Hour” or “Vehicle
Service Hour” shall mean each hour of a Revenue Service Tour.

 

72.         “Service Ready” shall mean that the vehicle is clean,
mechanically safe and reliable, and all accessories are operable.

 

73.         “Small Van” shall mean vehicles having five (5) seats
(excluding the driver), two (2) wheelchair securement positions and a single
rear axle.

 

74.         “State” — See “New York State.”

 

75.         “Subcontractor” shall mean an individual or organization who
enters into a contract to furnish labor services only or labor and materials or
apparatus in connection with the Work directly or indirectly for or on behalf
of the Contractor and whether or not in privity of contract with the
Contractor.

 

76.         “Supplier” shall mean an individual or organization
that furnishes materials, equipment or supplies to the Contractor either
directly or indirectly, for incorporation in the Work.

 

77.         “Trip Confirmation Ticket” or “Trip
Ticket” shall mean a document that includes the date of the trip,
pick-up and destination locations, beginning and ending odometer readings, and
the Trip Identification Number.

 

78.         “Trip Identification Number” shall mean the individual number generated
and assigned by PASS to a scheduled trip.

 

79.         “USDOT” shall mean the United States Department of
Transportation.

 

80.         “Vehicle Operator” shall mean the Contractor’s driver of a
Revenue Vehicle.

 

7

 

81.         “Work” or “Project”
shall be defined as all the required obligations of the Contractor hereunder,
including but not limited to, the performance of any labor or services, the
supplying of any goods or materials, the furnishing or repair and/or
remanufacture of any equipment or any other resources or requirements or
deliverables necessary to perform, construct, accomplish and complete this
Contract’s objectives as stated in Article 102 below.

 

ARTICLE 102                 PROJECT DESCRIPTION

 

A.           The Work to be performed may be briefly described as the provision of
demand-responsive, origin-to-destination, shared-ride transportation services
for people with disabilities who are Access-A-Ride registrants within the five
boroughs of the City of New York, as mandated by the Americans with
Disabilities Act, and furnishing all resources necessary to provide such
services in accordance with the service criteria specified in the Scope of
Work, Attachment 1, and all other terms and conditions of the Contract.

 

B.             The New York City Transit Authority hereby
retains the Contractor, and the Contractor hereby agrees to perform the Work as
more particularly described in Article 104 below and in the Scope of Work,
Attachment No. 1.

 

ARTICLE 103                  TERM OF AGREEMENT

 

This Agreement shall become
effective upon the date of the Notice of Award and shall continue in effect for
a period of five (5) years from the date of commencement of AAR service
hereunder (described in the Scope of Work, Section 4, as “Phase II,
Operations”), and as such term may be extended by the Authority in accordance
with Article 124 below.

 

ARTICLE 104                  STANDARDS OF PERFORMANCE

 

A.           The requirements set forth in this Article are material provisions
of the Contract and a breach thereof may result in the assessment of liquidated
damages as set forth in Article 111 or in the Authority availing itself of
any other remedy existing herein, including termination, or any such remedy as
may exist in law or equity.

 

B.             The Contractor shall complete all scheduled
trips except in the event of a Late Cancellation by a Customer or a Customer
No-Show, or unless otherwise authorized by NYCT.  The Contractor shall provide timely service and promptly respond
to Customer complaints.

 

C.             The Contractor shall be responsible for
service quality, Revenue Vehicle and Vehicle Operator availability, and
coordination of all services furnished under this Contract.  The Contractor is responsible to perform
safe, reliable and on-time transportation service in a customer-friendly manner
as such performance is defined by this Contract and shall adhere to the
following minimum standards:

 

8

 

1.               Contractor No-Shows

 

a.               Contractor No-Shows are prohibited except
when due to circumstances beyond the control of the Contractor (No-Fault
No-Show), as determined by the Project Manager.

 

b.              NYCT reserves the right to declare a
Contractor No-Show or No-Fault No-Show, as applicable, for a pick-up(s) where,
based upon the circumstances, NYCT determines that the Contractor will be
unable to appear at the designated location within forty-five minutes after the
Scheduled Pick-Up Time.

 

c.               In addition to any other remedies provided
elsewhere in this Contract, Contractor shall reimburse the Authority for the
actual cost of any reasonable expense incurred by the Customer or NYCT to
perform the trip independently of the Contractor.  Such reimbursement will apply when the Customer has called NYCT
and NYCT either dispatches another service provider to perform the trip, or
authorizes the Customer to use a taxi or livery for the trip.

 

2.               On-Time Performance

 

The Contractor shall arrive
for a Customer pick-up within the Scheduled Pick-Up Window for 95% of all of
the Contractor’s scheduled trips.  NYCT
reserves the right to shorten or change the Scheduled Pick-Up Window upon
notice to the Contractor.

 

3.               Revenue Vehicle Availability

 

The Contractor shall assure
the availability of safe, fully operational, clean, temperature-controlled
Revenue Vehicles in the numbers required to service each route assigned to the
Contractor on each service day.  To meet
this performance standard, the Contractor shall perform all of the requirements
as set forth in the Scope of Work, Attachment No. 1, Section 7, and take
all other reasonable and necessary actions to meet the Revenue Vehicle
availability standard as set forth herein. 
In the event that Contractor does not meet this performance standard
because of a failure to meet the vehicle maintenance requirements of the Scope
of Work, in addition to any other remedies provided elsewhere in this Contract,
the Authority shall have the right to perform the maintenance, and charge the
Contractor for the costs thereof.

 

4.               Vehicle Operator Availability

 

a.               The Contractor shall assure that there are
sufficient numbers of Vehicle Operators available to service each Route
assigned to the Contractor on each service day.  To meet this performance standard, the Contractor shall implement
the qualification and training requirements for Vehicle Operators set forth in
the Scope of Work, Attachment No. 1, Section 9, prior to placement of
Vehicle Operators in Revenue Service; and the Contractor shall timely hire and
train individuals in sufficient numbers to meet the Vehicle Operator
availability standard set forth herein. 
In the event that NYCT determines that a Vehicle Operator in Revenue
Service does not meet the qualifications or has not completed the

 

9

 

required training, the
Project Manager may direct that the Vehicle Operator be removed from service
until such time as the NYCT is satisfied that the requirements of the Contract
have been met.

 

b.              The Contractor shall observe each Vehicle
Operator to ensure that he is fit for duty before his vehicle Pull-Out, and
monitor each Vehicle Operator’s continued fitness throughout the Revenue
Service Tour.

 

c.               The Contractor shall implement a program for
retraining and/or disciplining Vehicle Operators who fail to perform their
duties in accordance with Contract requirements.

 

d.              The Contractor shall not assign a Vehicle
Operator to operate an AAR Revenue Vehicle after notification by NYCT to the
Contractor that the Vehicle Operator is to be removed pursuant to a removal
determination as set forth in the Scope of Work, Attachment I,
Section 8.20.

 

5.               Safe Conduct:

 

The Contractor shall
implement a safety program in accordance with the requirements of this Contract
to prevent conduct or actions by Vehicle Operators or other field staff which
creates a safety hazard to Customers or the public at large.

 

6.               Use of Vehicles:

 

The Contractor shall use AAR
vehicles solely for the purpose described in the Scope of Work, Attachment No.
1, or otherwise authorized in writing by NYCT. 
Any unauthorized use is prohibited.

 

7.               Record Keeping:

 

The Contractor shall
accurately keep, complete, and/or submit trip reconciliation data, invoices and
all other paperwork as required by and within the time periods set forth in the
Scope of Work, Attachment No. 1.

 

D.            Performance Incentives:

 

1.               In any month in which the Contractor exceeds
95% On-Time Performance, Contractor will be paid an incentive payment of ten
cents per completed trip for all completed trips for the month.

 

2.               In any month in which the Contractor’s
No-Shows are less than 0.2% of all trips assigned to the Contractor, Contractor
will be paid an incentive payment of ten cents per completed trip for all
completed trips for the month.

 

3.               A Contractor is eligible for the incentive
payments set forth herein only upon approval by the Authority of an
incentive-sharing plan whereby at least half of the incentive payments received
by the Contractor is shared with Vehicle Operators, dispatchers and/or
maintenance personnel whose performance assisted the Contractor in earning the
incentive.

 

10

 

E.              Force Majeure:

 

A Contractor’s failure to
meet the standards of performance set forth in this Article 104 may be
excused when the failure is caused by forces beyond the control of the
Contractor, as determined by the Project Manager.  On a service-day basis with respect to the performance of routes
assigned to the Contractor, the Authority has established a set of “mitigation
codes” which the Contractor is authorized to use, as applicable, in its
performance of Trip Reconciliation as described in the Scope of Work,
Attachment No. 1, Section 3.5.

 

F.              Annual Performance Review and Rating/ Default:

 

Two months before the
expiration of each Contract Year, NYCT shall provide Contractor with a
Performance Review and Rating for that Contract Year.  The form of review and the rating system shall be provided to the
Contractor prior to commencement of the Operations Phase of the Contract.  Contractor shall have an opportunity to
comment upon the review before it becomes final.  If Contractor’s final performance rating is not satisfactory,
NYCT may determine that the Contractor is in default of the Contract and may
proceed to enforce the Contract remedies for default.  In addition to remedies set forth in Article 208 of the
General Provisions (“Remedies in the Event of Default and Termination for
Cause”), NYCT may determine to reduce the service to be provided by the
Contractor by transferring Routes to another contractor and reducing the
Contract Price accordingly.

 

ARTICLE 105                  DELIVERY OF WORK PRODUCTS AND MATERIALS

 

Upon request of the Authority, the Contractor
shall deliver forthwith to the Authority any Work products produced and all
data, studies, reports, material, specifications, plans, charts, photographs,
exhibits prepared, developed or kept in connection with, or as part of this
project, and all their material and records of whatsoever nature prepared,
developed or kept in connection with, or as part of, this project (“Work
Products”).  Without the necessity of
any demand by the Authority, Contractor shall deliver to the Authority, prior
to the expiration or upon the earlier termination of this Agreement, all Work
Products, which shall become the property of the Authority.  This Article does not apply to any
records or documents pertaining to the operation of Contractor’s business.  The Contractor may retain copies of those
records or documents, which it considers necessary for proof of performance.

 

ARTICLE 106                  SUSPENSION OF PERFORMANCE

 

The Authority may at any time, and without
cause, direct the Contractor to stop Work under this Contract for a period of
time.  Such direction shall be given by
notice in writing, which shall specify the period during which Work shall be
stopped.  The Contractor shall resume
Work upon the date specified in such direction, or upon such other date as the
Authority may thereafter specify in writing. 
The period during which Work shall have been stopped may be deemed added
to the contract term at the sole discretion of the Authority.  Stoppage of Work under this
Article shall not give rise to any claim against the Authority.

 

11

 

ARTICLE 107                  PERMITS

 

A.           The Contractor, at its own expense, shall apply for, request, process
and obtain all permits and approvals that may be required for, or in connection
with the Work pursuant to Federal, State and City regulations.

 

B.             The Contractor is required to comply with
Article 19-A of the New York State Vehicle and Traffic Law and the DMV’s
19-A implementing regulations, published at 15 NYCRR Part 6.

 

C.             Prior to commencing Revenue Service hereunder,
the Contractor must have obtained a NYS DOT contract carrier operating
authority permit and ensure that each Revenue Service Vehicle has been
inspected by NYS DOT and issued proper license plates by DMV.

 

ARTICLE 108                  PRICE TO INCLUDE/INVOICES AND PAYMENTS

 

A.          Price to Include: The Authority shall pay and the Contractor
shall accept the amounts set forth in the Price Schedule, Attachment No. 2, as
full compensation for all costs and expenses of completing the Work in
accordance with the Contract, including, but not limited to, all labor and
material required to be done or furnished under this Contract; all overhead,
expenses, fees and profits including the cost of providing storage yard or
facilities; all risks and obligations set forth in the Contract; any applicable
fees or taxes; and all expenses due to any unforeseen difficulty encountered in
the prosecution of the Work (collectively referred to as “the Contract Price”).

 

B.             Payments: 
Subject to the Contractor’s compliance with the submission requirements
contained hereunder and all other provisions of the Contract Documents, payment
will be made at the rates specified in the Price Proposal, Attachment 2, as
follows:

 

1.               Fixed Costs:

 

a.               Commencing in the first full month after the
Revenue Service Start Date, on a monthly basis, the Authority shall pay the
following “Fixed Costs:”

 

(i)             One-twelfth (1/12) of the Total Annual
Non-Vehicle Fixed Cost amount stated in the Price Schedule, Line Item 3.

 

(ii)          One-twelfth (1/12) of the Annual Per-Vehicle Fixed Costs rate specified
in the Price Schedule, Line Item 4, for each Revenue Vehicle in the
Contractor’s fleet on the last day of the billing month.

 

b.              Effective on the first month of Year 2 of
commencement of AAR service (as described in the Scope of Work, Attachment 1,
Section 4, as “Phase II, Operations”), Fixed Costs shall be adjusted
annually in accordance with Table 10 of the Consumer
Price Index for All Urban Consumers (CPI-U) using the selected local
area of New York – Northern NJ – Long Island, NY-NJ-CT-PA.  It is the Contractor’s obligation to submit
for the first month in which an adjustment is available an invoice in an amount
that accurately reflects the

 

12

 

adjustment, if any, that is
due.  Absent such invoice, it shall be
within the Authority’s discretion whether to adjust Fixed Costs for that
Contract Year.

 

c.               The Contractor may shift funds as necessary
among items in the Fixed Costs category to meet operational needs, so long as
the services required hereunder are in no way diminished and Contractor can
justify the action upon request by the Authority or upon audit.  This paragraph shall not be construed to
permit the Contractor to exceed the total annual allowable Fixed Costs.

 

d.              NYCT may adjust the Fixed Costs if it is
determined that the Contractor has not provided the services related thereto.

 

2.               Variable Costs

 

The Authority shall pay the
Contractor each month a varying amount calculated at the rates specified in the
Price Schedule for “Per-Vehicle Mobilization Costs,” if any, “Maintenance
Costs,” and “Vehicle Service Hour Costs,” including fuel costs collectively
referred to as “Variable Costs.”

 

a.               The Authority shall pay the Contractor the
one-time “Per-Vehicle Mobilization Costs,” Price Schedule, Line Item 2, D, for
each Revenue Vehicle, if any, that the Authority assigns to the Contractor
during the billing month.  Contractors
with vehicles in Revenue Service pursuant to prior contracts are not eligible
for this payment to the extent that this Contract assigns them the same number
or fewer vehicles.  These Contractors
are eligible for this payment thereafter, if they are assigned additional
vehicles for Revenue Service expansion.

 

b.              The Authority shall pay the Contractor each
month 1/12 of the Maintenance Costs, Price Schedule, Line Item 5 or 6, as
applicable, based upon the actual number, type and age of Revenue Vehicles in
the Contractor’s fleet on the last day of the billing month.  Once each year, effective the first of the
month after the Contractor’s anniversary of its Revenue Service Start Date, the
Authority will adjust the age category (i.e. A, B, or C) of all Revenue
Vehicles in the Contractor’s fleet, based on the mileage and age of each
vehicle at the time of adjustment.

 

c.               The Authority shall pay the Contractor each
month for the actual number of Vehicle Service Hours as reconciled by the
Contractor and approved by the Authority at the rate specified in the Price
Schedule.  The Authority will not
approve payment for any time included in the Vehicle Service Hours which is
either: (i) in excess of 15 minutes more than the authorized deadheading from
Pull-Out to the first actual Customer pickup, or (ii) in excess of fifteen
minutes more than the authorized deadheading from the last actual Customer
drop-off to Pull-In.

 

d.              The Authority shall pay the Contractor each
month a varying amount for fuel used in Revenue Service which shall be equal to
the product of the total number of Vehicle Service Hours performed (as
determined for payments

 

13

 

pursuant to
Article 108.B.2.c, above) (“VSH”) times 1.5 gallons per Vehicle Service
Hour times the Contractor’s Fuel Price Per Gallon, Price Schedule Line
Item 8, as adjusted pursuant to Article 108.B.2.f (“Contractor’s Fuel
Price, or “CFP”) (VSH x 1.5 x CFP).

 

e.               The Variable Costs shall be adjusted annually
in accordance with the same terms and conditions for adjustment set forth in
Article l08.B.l.b, above, for Fixed Costs except for Fuel Costs, which
shall be adjusted in accordance with the terms and conditions for adjustment
set forth in Article 108.B.2.f, below.

 

f.                 The price per gallon for fuel used in Revenue
Service shall be adjusted quarterly on a calendar quarter basis, as follows:

 

i.                  The index to be used to calculate the change
in the Contractor’s Fuel Price (“CFP”) (whether diesel or gasoline) for each
quarterly adjustment is the average per-gallon diesel price reported by the
U.S. Department of Energy Information Administration’s “Retail On-Highway
Diesel Prices for the Central Atlantic Area” (“Fuel Price Index” or “FPI”) for
the last Monday immediately preceding each Adjustment Date.

 

ii.               An initial adjustment to the Contractor’s
Fuel Price Per Gallon (CFP), as set forth in the Price Schedule, Line Item 8,
will be made for the period from the time of award of this Contract to the
Revenue Service Start Date, based on any change in price that occurred between
the FPI price on January 1, 2001 of $1.665 (“Base Fuel Price Index Amount,”
or “BFPI”) and the first day of the first month of the calendar quarter in
which the Revenue Service Start Date occurs. 
Thereafter, the CFP will be adjusted quarterly effective on the first
date of the first month of each calendar quarter (“Adjustment Date”).  For each Adjustment Date, including the
Revenue Service Start Date Adjustment, the price to be utilized to determine
the amount of change in price will be that reported by the FPI for the last
Monday of the month preceding the Adjustment Date (“Adjustment Date Fuel Price
Amount” or “AFPI”).

 

iii.            All prices used to calculate the amount of
adjustment will be rounded to the third decimal place.

 

iv.           The Adjusted Contractor’s Fuel Price (“ACFP”) shall be equal to the
product of the Adjustment Date Fuel Price Index Amount (“AFPI”) divided by the
Base Fuel Price Index Amount (“BFPI”) of $1.665 times the Contractor’s Fuel
Price ([AFPI/BFPI] X CFP = ACFP). 
Thereafter, the most recent ACFP shall be the Contractor’s Fuel Price
(“CFP”) for calculating quarterly adjustments.

 

g.              The Authority, in its sole discretion, may,
at the commencement of the Contract or at any time thereafter, purchase tax
exempt fuel for the Work.  In such
event, the Contract will be modified to eliminate fuel costs from the Contract
Price.

 

14

 

3.               Reimbursable Costs (Pass-Through Costs):

 

The Authority shall
reimburse the Contractor for its actual costs and expenses as follows: 

 

a.               Insurance Costs

 

i.                  No more frequently than once monthly, the
Authority will pay the actual insurance premium costs paid by the Contractor
for the contractually required automobile liability insurance including
comprehensive collision insurance or Garage Keepers Legal Liability Insurance,
as applicable.  Additionally, the
Authority will pay actual premium costs for all required and permitted
automobile insurance coverage, as well as premium financing costs, if the
Project Manager expressly authorizes the Contractor to finance any or all
premium costs.  The total annual payment
for all such costs shall not exceed the amount stated in the Price
Schedule for auto insurance reimbursable costs for each Revenue
Vehicle.  No reimbursement shall be made
to the Contractor for any item that has not been approved by the Authority
prior to the Contractor having entered into a legal commitment for the
expenditure.  In the event that the
Contractor’s fleet is reduced, rebates on premiums and financing charges, if
applicable, shall be obtained by the Contractor and refunded to NYCT.

 

ii.               On an annual basis the scheduled reimbursable
amount will be adjusted by the Authority to reflect the Contractor’s actual
insurance premium costs for the upcoming insurance coverage year.  However, in no event shall the adjusted
scheduled reimbursable amount be greater than $12,000 in the first year of the
contract, $13,200 in the second year, $14,520 in the third year, $15,970 in the
fourth year, $17,570 in the fifth year, $19,326 (or the corresponding pro-rated
amount) in the first option year in the event the Authority exercises its
option pursuant to Article 124 of the contract and $21,258 (or the
corresponding pro-rated amount) in the second option year in the event the
Authority exercises its option pursuant to Article 124.  Each year, upon the Contractor’s receipt of
any renewal notice for insurance coverage to be paid as a reimbursable cost by
the Authority, the Contractor shall submit a copy of such notice and all
requested documentation to the Authority including policy declaration pages,
premium notices and/or invoices from the Contractor’s insurance company
itemizing the premiums and corresponding insurance coverage to be provided.

 

iii.            The Authority, in its sole discretion, may,
at the commencement of the Contract or at any time thereafter, purchase vehicle
insurance for the Work.  In such event,
the Contract will be modified to eliminate such insurance costs from the
Contract Price.

 

b.              Tolls.

 

On a monthly basis, the
Authority shall reimburse the Contractor’s actual expenses for tolls “ paid for
operation of Revenue Vehicles in the course of providing Revenue Service.

 

c.               Third Party Lease Costs.  On
a monthly basis, the Authority shall reimburse the Contractor’s approved
monthly vehicle leasing costs for any Revenue Vehicle or Non-Revenue Vehicle
leased from a third party.

 

d.              Non-Vehicle Mobilization Costs.  The
Authority shall pay the Contractor’s “Non-Vehicle Mobilisation” costs upon
submission of an invoice and adequate documentation to confirm that the
Contractor has incurred such costs.  In
no event shall the Contractor be paid for any amount expended that is in excess
of the total amount specified in the Price

 

15

 

Schedule, Line Item 1,
“Non-Vehicle Mobilization” costs.  The
Contractor shall allocate its expenditures for mobilization costs in accordance
with its Authority-approved Start-Up Plan and in a manner to assure that
sufficient monies are available to pay all mobilization costs.  The Authority’s Project Manager may question
and reject any mobilization cost if it appears that the expenditure will
adversely affect the Contractor’s ability to effect mobilization.

 

4.               Date of Payment:

 

All monthly payments to the
Contractor will be made net 30 calendar days of receipt by NYCT of a complete
and proper invoice.

 

5.               The Contractor warrants that the costs set
forth in the Price Schedule are in current U.S. dollars and do not include
any allowance for any contingency to cover anticipated increased cost of
performance, which are covered by the economic adjustment clauses contained in
subparagraphs B.1.b. and B.2.b. above. 
These provisions shall be the sole and exclusive measure of adjustment
to the costs specified in the Price Schedule of this Contract without
regard to actual changes in the cost or use of labor or materials since the
Notice of Award of this Contract.

 

C.             Proper Invoice:

 

1.               In order to allow appropriate time to
complete the reconciliation process, the Contractor shall not submit my  invoice prior to 15 calendar days after
the end of each month that constitutes the billing period.  In addition to any other requirement set
forth in this Contract with respect to what constitutes a proper invoice or for
the Contractor to be entitled to receive payment, the Contractor’s invoice, in
triplicate, must set forth (1) a description, with specificity, of the goods
delivered, Work performed, services rendered, or other event initiating
entitlement to payment pursuant to the terms of this Contract; (2) that portion
of the Contract price related to such payment less any deductions such as
retainage required pursuant to the terms hereof (if any); and (3) the Contract
number.  Should the invoice not be
calculated correctly, such as not taking into account retainage as a deduction,
the Authority may either reject the invoice or treat the invoice as proper only
to the extent of the correct calculation of the amount thereof.

 

2.               NYCT will return incomplete or improper
invoices to the Contractor.  In the
event that an invoice is returned to the Contractor because it is incomplete or
improper, the imposition of net 30 calendar day terms on NYCT will not begin
until a complete and proper invoice is returned to NYCT.

 

3.               The Contractor shall provide a monthly bill
itemized by the components of the Contract Price in paragraph B, above,
“Payments.” (Variable Costs will be itemized by type of Revenue Vehicle, for
each Revenue Vehicle operated by the Contractor).

 

D.            Supporting Documentation: The following are in addition to any other
requirement set forth in this Contract with respect to supporting documentation
that must accompany an invoice:

 

16

 

1.               The Contractor’s invoice must be accompanied
by appropriate documentation that the deliverable has been delivered in
accordance with the Contract, and if this Contract requires acceptance thereof
as a condition precedent to payment, that the deliverable has been so accepted.

 

a.               All invoices for Vehicle Service Hours must
be supported by complete and adequate documentation sufficient to permit NYCT
to confirm that the Vehicle Service Hours were provided.

 

b.              All invoices for vehicle insurance costs
shall be accompanied by a copy of the original invoice from the insurance
company and a copy of the Contractor’s check for payment, and any other
supporting documentation that NYCT directs.

 

c.               All invoices for any leased vehicles shall be
accompanied by the leasing company’s invoice and a copy of the Contractor’s
check for payment.

 

2.               Invoices must also be accompanied by all
affidavits, time records, staffing and other records, as applicable, including
E-Z Pass billing records in disk form, and applicable third-party lease
invoices with their supporting documentation, provided for or required by the
Contract to establish the amount of payment and/or performance of the Work
billed, as well as a statement with sufficient specificity which establishes
the basis on which the payment is due according to the Contract.  Any documentation generated by the
Authority, such as certificates of acceptance, will be issued in accordance
with the terms of the Contract.

 

3.               A sworn certificate or equivalent document
signed by a knowledgeable officer of the Contractor that the services covered
by the Contract have been performed for the period covered by the invoice.  Any false certification shall render the
invoice void, and the Authority shall be entitled to recover immediately any
monies paid on such invoices.

 

E.              Inspection, Review and Audit: In addition to any other requirements pertaining
to the right of the Authority or other entity to perform inspections, reviews
or audits with respect to any payment or to the Contract as a whole, the
Authority reserves the right to inspect, review and/or audit each invoice for
payment to verify that the invoice amount is consistent with the materials,
labor, goods, and/or services provided and is in accordance with the provisions
of the Contract, as well as to determine the resources applied or used by the
Contractor in fulfilling the terms of the Contract or otherwise to verify that
the Work, goods or services billed for were provided in accordance
therewith.  The Authority will require
ten (10) Authority business days from the Receipt of Invoice Date within which
to perform this function.

 

Set-off: The Authority shall have the right to
set-off against any payment due the Contractor under this Contract any unpaid
legally enforceable debt owed by the Contractor to the Authority as outlined in
Authority’s Prompt Payment Rules (21 NYCRR §1002).  Liquidated Damages as well as monies equal to the fare revenue
that should have been collected, calculated as the number of Customer and Guest
trips performed times the then applicable fare, shall be deducted by NYCT from
the payments made to the Contractor each month.

 

17

 

F.              Designated Payment Office:  The
Designated Payment Office, to which all invoices and supporting documentation
are required to be submitted under this Contract, is as follows:

 

Original and (1) copy of all
invoices to:

 

New York
City Transit Authority

Disbursements Section

Room 780, Seventh Floor

130 Livingston Street

Brooklyn, New York 11201

 

In addition, one (1) copy of
all invoices is required to be submitted simultaneously to:

 

Michael Cosgrove,
Project Manager

New York City Transit Authority

Paratransit Division,

2 Broadway, 11th Floor

New York, New York 10004

 

G.             Conditions Precedent to
Payment: Unless otherwise
stipulated in writing by the parties, the Authority shall make payment subject
to the following conditions, which are, unless waived in whole or in part by
the Authority in writing, conditions precedent to payment:

 

1.               The Contractor is not, in the Project
Manager’s and/or Procurement Sub-Division’s opinion, in material breach of this
Contract;

 

2.               The Project Manager has accepted the Work.

 

3.               All records required to be submitted to the
Authority have been received by the Authority, unless the Project Manager has,
in writing, granted an extension of time.

 

H.            Withholding Payment: The Authority may withhold sums equal to any
claims of the Authority against the Contractor, for indemnification or
otherwise, pending settlement or other disposition of such claim.  The Authority may withhold from any payment
otherwise due the Contractor as much as may be necessary to protect the
Authority and if it so elects may also withhold any amounts due from the
Contractor to any Subcontractors or Suppliers for work performed or material
furnished by them.  The foregoing
provisions shall be construed solely for the benefit of the Authority and will
not require the Authority to determine or adjust any claims or disputes between
the Contractor and his Subcontractors or Suppliers, or to withhold any moneys
for their protection unless the Authority elects to do so.  The failure or refusal of the Authority to
withhold any moneys from the Contractor shall in no way impair the obligations
of any surety or sureties under any bond or bonds furnished under this
Contract.  The Authority may withhold
payment to the Contractor, if the Contractor fails to remedy unsuitable
conditions.  The Contractor shall be
given written notice of any unsuitable conditions.

 

18

 

I.                 Prompt Payment Rules and
Regulations: The Authority will
pay proper invoices within the time periods provided in the Prompt Payment
Rules and Regulations (21 NYCRR §1002). 
Payment will be deemed to have been made upon being mailed by the
Authority.

 

J.                Final Payment: After the expiration of the Contract, or its
termination, the Contractor shall submit an invoice marked “Invoice for Final
Payment” covering all items not previously invoiced.  This “Invoice for Final Payment” shall contain or be accompanied
by the information or supporting documentation, and shall otherwise be in the
form, described in this Article or elsewhere in this Contract.  Any dispute over the proper amount of the
Final Payment is subject to the dispute resolution provisions (Article 211)
of this Contract.

 

K.            Audit and Adjustment: All payments are subject to audit and
adjustment by the Authority, Contractor shall make its records available for
three years (3) after the later of termination of or final payment under this
Agreement.

 

L.              Retainage: The Authority will retain an amount equal to
five percent (5%) of each monthly payment for the first year of the
contract.  In each subsequent month, the
Authority will retain an amount equal to 5%  of
each monthly payment minus an amount equal to the average of monthly retainages
for the prior Contract Years.  Such
retained monies shall be held as security for the full and faithful performance
by the Contractor of all the conditions, covenants and requirements contained
in this Agreement.

 

ARTICLE 109                  DRUG AND ALCOHOL TESTING

 

A.           The Contractor agrees to comply with the requirements of 49 CFR Parts
40, 653 and 654, promulgated by the U.S. 
Department of Transportation - Federal
Transit Administration to implement the Omnibus Transportation Employee Testing
Act.  These regulations require that
grantees of federal funds implement a program requiring Safety-Sensitive (as
defined in the regulations) employees, including those of the Authority’s
contractors (though not including subcontractors), to be subject to drug and
alcohol testing.  In addition to performing
such tests (including tests on a random basis), maintaining custody and control
over the results thereof and transmitting the results thereof as required by
the regulations, the Contractor will also be required to provide information
and training regarding the testing program to all of its affected employees,
including direct supervisors, and to certify that it has established and
implemented the required program.

 

B.             If the Safety-Sensitive Work will commence
within six months after the award of the Contract, the Contractor will submit
the documents listed below for the Authority’s approval within thirty (30) days
after Contract award.  If the
Safety-Sensitive Work will commence at least six months after Contract award,
the Contractor will submit the documents listed below for the Authority’s
approval at least sixty (60) days prior to the commencement of the
Safety-Sensitive Work.

 

1.               An initial certification of the Contractor’s
compliance with 49 CFR Parts 653 and 654 in the form set forth in Paragraph C
below.

 

19

 

2.               A copy of the Contractor’s Drug and Alcohol
Testing Program policy statement.

 

3.               A copy of the Contractor’s training program
for supervisors and employees.

 

4.               A copy of the Contractor’s drug and alcohol
testing procedures for the following:

 

a.               pre-employment or transfer testing (drug
testing only);

b.              random testing;

c.               reasonable suspicion;

d.              accident;

e.               return to work; and 

f.                 refusal to be tested.

 

5.               A copy of the Contractor’s Drug and Alcohol
Testing Program record keeping procedures.

 

6.               The name and location (address) of the
following:

 

a.               collection site(s);

b.              laboratory;

c.               Medical Review Officer (MRO);

d.              Breath Alcohol Technician (BAT); and

e.               Substance Abuse Professional (SAP).

 

C.             To certify compliance with 49 CFR Parts 653
and 654, the Contractor shall submit initially as required by Paragraph B and
annually thereafter while Safety-Sensitive work is performed, certifications in
the following form:

 

SUBSTANCE
ABUSE CERTIFICATIONS

 

	
  NYC Transit Authority
  Contract No.:

  	
   

  	
   

  
	
   

  
	
  Contract Description:

  	
   

  	
   

  
	
   

  
	
  Contractor’s Name:

  	
   

  	
   

  
					

 

Alcohol Testing
Certification

 

As required by FTA
regulations, “Prevention of Alcohol Misuse in Transit Operations,” at 49 CFR
654.83, Contractor certifies that it has established and implemented an alcohol
misuse prevention program complying with the requirements of 49 CFR Part 654.

 

and

 

20

 

Anti-Drug Program Certification

 

As required by FTA regulations, “Prevention of
Prohibited Drug Use in Transit Operations,” at 49 CFR 653.83, Contractor
certifies that it has established and implemented an anti-drug program and has
conducted employee training complying with the requirements of 49 CFR Part 653.

 

	
   

  	
  Date:

  	
   

  	
  , 20

  	
   

  	
   

  
	
   

  	
  Signature of Authorized Officer

  
	
   

  
	
   

  	
   

  	
   

  
	
  Title of Authorized Officer

  
								

 

The Contractor shall submit the FTA required Management Information
System (MIS) reports before February 1 of each year of the Contract. The
Contractor may obtain current versions of the MIS forms by contacting the FTA
at (617) 494-6336.

 

D.            The Contractor shall
submit a semi-annual MIS report summarizing its Drug and Alcohol Testing
Program results, if required by the Project Manager.

 

E.              The Contractor shall
submit one copy of all required documentation, reports and certifications,
other than the MIS report, to the Authority’s Project Manager and one copy to
the Senior Director, Medical Information Management Services. If the Contractor
elects to submit its MIS report using paper forms, the Contractor must submit
an original signed form to the Senior Director, Medical Information Management
Services, with a copy to the Authority’s Project Manager.  If the Contractor elects to submit its MIS
report using a CD diskette, the Contractor must submit an original signed front
page from the CD diskette form and the completed CD diskette to the Senior
Director, Medical Information Management Services, with a copy of the front
page from the CD diskette form to the Authority’s Project Manager.

 

F.              The Contractor shall
immediately notify the Project Manager, in writing, of any changes to the
documentation, reports or certifications previously submitted to the
Authority.  Notwithstanding this
requirement, the Contractor, unless otherwise required, does not have to report
statistical changes resulting from its drug and alcohol tests.

 

G.             If the Authority
determines after award that the Contractor is performing Safety-Sensitive Work,
Contractor shall be required to comply with the regulations. In the event such
compliance entails costs and expenses not otherwise being borne by the
Contractor, they will be eligible for reimbursement in accordance with
Article 206, “Changes.”

 

H.            The Contractor shall
make immediate notification to the Authority’s Project Manager if the
Contractor intends to use its employees to perform or performs Safety-Sensitive
Work previously performed by a subcontractor’s employees. The Contractor shall
submit copies of all documentation requiring Authority approval (as set forth in
Paragraph B) prior to commencement of the Safety-Sensitive Work by the
Contractor. If the Contractor assumes the performance of

 

21

 

Safety-Sensitive Work previously performed by a
subcontractor, the Contractor will not be eligible for reimbursement for extra
work as such term is defined in Article 206, “Changes.”

 

I.                 The Contractor
agrees to permit any authorized representative of the United States Department
of Transportation, the Federal Transit Administration, or the Authority, to
inspect the facilities and records associated with the implementation of the
drug and alcohol testing program as required under 49 CFR Parts 653 and 654 and
review the testing process.

 

J.                Compliance with
this Article 109 and Article 110 shall be deemed a material
obligation of this Contract.

 

ARTICLE 110                 PRIVACY ACT

 

A.           The Contractor agrees
to comply with, and assures the compliance of its employees with, the
information restrictions and other applicable requirements of the Privacy Act
of 1974, 5 USC §552a.  Among other
things, the Contractor agrees to obtain the express consent of the Federal
Government before the Contractor or its employees operate a system of records
on behalf of the Federal Government. 
The Contractor understands that the requirements of the Privacy Act,
including the civil and criminal penalties for violation of that Act, apply to
those individuals involved, and that failure to comply with the terms of the
Privacy Act may result in termination of the Contract.

 

B.             The Contractor also
agrees to include the requirements of this Article in all subcontracts to
administer any system of records on behalf of the Federal Government issued
pursuant to this Contract.

 

ARTICLE 111                 LIQUIDATED DAMAGES

 

A.

 

1.               The Contractor
acknowledges that strict adherence to the Contract terms and conditions is
necessary to provide safe, reliable, and on-time service to AAR Customers in a
Customer- friendly manner.  The
Contractor represents that it is qualified to and will perform transportation
services that comply with the Scope of Work and meet best paratransit industry
standards.

 

2.               NYCT will closely
monitor performance of this Work.  NYCT
has the right to enter the Contractor’s premises at any time without advance
notice to or authorization from the Contractor in order to observe the
Contractor’s operations.  Monitoring
methods that will be used to assess the Contractor’s performance include, but
are not limited to, radio monitoring, telephone monitoring and recording,
on-street service monitoring and random facility, vehicle and records
inspections.

 

22

 

3.               The Contractor
acknowledges that a pattern of deficient performance and inadequate response on
the Contractor’s part will cause the Authority to incur damages. Inasmuch as
the amount of such damages and the loss to the Authority will be extremely
difficult to ascertain, it is hereby expressly agreed that such damages will be
liquidated and paid not as a penalty, but as liquidated damages.

 

B.             Upon a determination
by the Project Manager that the Contractor has engaged in a pattern of
deficient performance and inadequate response with respect to the provision of
safe, reliable, or on-time performance, as defined below, not due to factors
outside the control of the Contractor, the following damages shall be assessed:

 

1.               Reliable
Service:

 

a.               Contractor
No-Shows:

 

Contractor No-Shows adversely affect the reliability
of AAR service. For each month in which Contractor No-Shows exceed .3% of all
trips assigned to the Contractor for a specified month, Contractor shall pay
the Authority the sum of $20.00 for each No-Show.

 

b.              Late/Failed
Pul1-Outs:

 

A failure of the Contractor to meet daily Pull-Outs
because of a failure to have sufficient Revenue Vehicles or Vehicle Operators
available for service adversely affects the reliability of AAR service. In any
month in which more than .3% of total Routes for the month failed to Pull-Out
within 45 minutes of the Pull-Out time for the Route, Contractor shall pay the
Authority the sum of $500,00 for each failed Pull-Out.

 

2.               On-Time
Performance:

 

Late pick-ups adversely affect the On-Time Performance
of AAR service. In any month in which Contractor fails to achieve 95% On-Time
Performance, the Contractor shall pay the Authority the sum of $10.00 for each
late pick-up that occurred 15 minutes or more past the Scheduled Pick-Up
Window.

 

3.               Safe
Service:

 

Inadequately maintained Revenue Service Vehicles,
inadequately trained Vehicle Operators, placement into service of Vehicle
Operators who do not meet the qualifications and training requirements of the
Scope of Work, Vehicle Operators who exhibit unsafe operation of Revenue
Vehicles, Vehicle Operators who are placed or allowed to remain in service when
they are unfit for duty, and failure to report Accidents as required by the
Scope of Work adversely affect the safe operation of the service. Upon a
determination of the Project Manager that Contractor’s record of performance of
the Scope of Work has caused the events described herein to occur at such a
level that the safe operation of AAR service has been placed at risk,
Contractor shall pay the Authority the sum of $250.00 per day until such time
as the Project

 

23

 

Manager determines that the Contractor has implemented
a plan that will cure the specified deficiencies.

 

4.               Quality
of Customer Service:

 

Customer service is adversely affected when Contractor
fails to keep Revenue Vehicles clean, fails to maintain and utilize heating and
air conditioning, as applicable, in the Revenue Vehicles, places Vehicle
Operators in service who do not adhere to the standards for Vehicle Operator
uniforms, permits Vehicle Operators to remain in service who are discourteous
or abusive to Customers or who violate the rules for Vehicle Operators when in
Revenue Service. Upon a determination of the Project Manager that Contractor’s
record of performance of the Scope of Work has caused the events described
herein to occur at a level such that AAR Customers’ satisfaction with service
quality has been placed at risk, Contractor shall pay the Authority the sum of
$10.00 per incident until such time as the Project Manager determines that the
Contractor has implemented a plan that will cure the specified deficiencies.

 

C.             Should the Contractor
wish to contest all or part of an assessment of liquidated damages, it must,
within ten (10) business days from the date of such notice, respond in writing
to the Project Manager stating the reasons why such assessment is in error. The
Project Manager may affirm, modify, or withdraw the assessment, as he deems
appropriate. If the Contractor fails to contest a notice of assessment of
liquidated damages within ten (10) business days from the date of such notice,
the assessment becomes final and binding upon the Contractor without further
notice from NYCT.

 

ARTICLE 112                  VEHICLE LEASES

 

A.           Unless otherwise
directed by the NYCT, the Contractor shall utilize NYCT-owned paratransit
vehicles to provide Revenue Service, and NYCT-owned Non-Revenue Vehicles which
shall be assigned and leased to the Contractor subject to the terms and
conditions of the lease that is appended hereto and incorporated herein as
Attachment No. 3.

 

B.             NYCT reserves the
right to direct the Contractor to lease Revenue and Non-Revenue Vehicles from
third parties in accordance with Article 120 below.

 

ARTICLE 113                  PROSECUTION OF THE WORK

 

A.           During the prosecution
of the Work, should unforeseen difficulties of any nature be encountered, the
Contractor shall promptly notify the Project Manager and take every necessary
or proper precaution to overcome the unforeseen difficulty according to the
direction of the Project Manager and as provided in these Contract Documents.

 

B.             All goods and workmanship
shall be of the best class in every respect, and the Project Manager shall be
the sole judge of quality and efficiency.

 

24

 

 

C.             In all operations
connected with the Work, the Contractor shall comply with applicable local laws
and ordinances of the City of New York, and all laws of the State of New York
which control or limit in any way the actions of those engaged in the Work, or
affecting the Work belonging to or used by them, shall be strictly complied
with, and further, the Contractor shall comply with all applicable Federal,
State and City regulations regarding the transportation of Customers and other
passengers.

 

D.            The Contractor shall
employ only competent, skillful, and faithful personnel to do the Work.

 

E.              The Contractor
hereby represents that prior to submitting his proposal, he examined the Scope
of Work in detail and satisfied himself as to the intent of the Scope of Work
relating to the Work to be performed, and he shall not at any time make any
claim for damage or extension of time, or any other demand because of any
misinterpretation or misunderstanding of the Scope of Work, or because of any
lack of information.

 

F.              All goods of
whatever kind, which, during their installation become damaged from any cause
whatsoever, shall be removed and shall be replaced by new, undamaged goods
without any additional cost to the Authority.

 

G.            The Contractor shall
furnish all labor, material, plant, tools, supplies and other means necessary
to perform the Work described in the Contract Documents in accordance with the
Scope of Work, and shall perform such Work within the direction and to the
satisfaction of the Project Manager.

 

H.            The Contractor agrees
to deliver and install conforming goods in accordance with the Scope of Work.

 

ARTICLE 114                  INSURANCE

 

The Contractor and any Subcontractor shall procure at a minimum, the
insurance coverage specified in Attachment 4. The Contractor or Subcontractor
shall be responsible for any deductible amount.

 

ARTICLE 115                  RISK OF LOSS

 

A.           The Contractor assumes
the risk of, and shall be responsible for, any loss or damage to Authority
property, including property and equipment leased by the Authority, used in the
performance of this Contract, and caused, either directly or indirectly by the
acts, conduct, omissions or lack of good faith of the Contractor, its officers,
managerial personnel, and employees or any person, firm, company, agent or
others engaged by the Contractor as expert, consultant, specialist, or subcontractor
hereunder.

 

B.             In the event that any
such Authority property is lost or damaged, except for normal wear and tear,
then the Authority shall have the right to withhold further payments hereunder
for the purpose of set-off, in sufficient sums to cover such-loss or damage.

 

25

 

C.             The Contractor agrees
to indemnify the Authority and hold it harmless from any and all liability or
claim for damages due to any such loss or damage to any such Authority property.

 

D.            The rights and
remedies of the Authority provided herein shall not be exclusive and are in
addition to any other rights and remedies provided by law or by the Contract.

 

ARTICLE 116                 SUBCONTRACTORS

 

A.           If the Contractor will
cause any part of this Contract to be performed by a Subcontractor, unless
otherwise expressly provided elsewhere in this Contract, the provisions of this
Contract will apply to such Subcontractor and its officers, agents and
employees in all respects as if it and they were employees of the Contractor;
and the Contractor will not be in any manner thereby discharged from its
obligations and liabilities hereunder, but will be liable hereunder for all
acts and negligence of the Subcontractor, its officers, agents and employees,
as if they were employees of the Contractor. The employees of the Subcontractor
will be subject to the same provisions hereof as the employees of the
Contractor; and the Work performed by the Subcontractor will be subject to the
provisions hereof as if performed directly by the Contractor.

 

B.             The Contractor,
before making any subcontract for any portion of the Work, will state in
writing to the Authority the name of the proposed subcontractor, the portion of
the Work which the proposed subcontractor is to do, its place of business, and
such other information as the Authority may require. The Authority will have
the right to require the Contractor not to award any subcontract to a person,
firm or corporation disapproved by the Authority.

 

C.             Before entering into
any subcontract hereunder, the Contractor will inform the proposed
subcontractor fully and completely of all provisions and requirements of this
Contract relating either directly or indirectly to the Work to be performed.
Any Work performed by a Subcontractor will strictly comply with the
requirements of this Contract.

 

D.            In order to qualify as
a Subcontractor satisfactory to the Authority, in addition to the other
requirements herein provided, the proposed subcontractor must be prepared to
prove to the satisfaction of the Authority that it has the necessary
facilities, skill and experience, and ample financial resources to perform the
Work in a satisfactory manner.  To be
considered skilled and experienced, the proposed subcontractor must show to the
satisfaction of the Authority that it has satisfactorily performed Work of the
same general type which is required to be performed under this Contract.

 

E.              If any proposed
subcontractor or supplier is a subsidiary or affiliate of Contractor, then NYCT
will require the submission of two (2) additional competitive bids (for a total
of three) from other potential subcontractors or suppliers for the Work
required to be performed under this Contract. The Contractor must provide
justification for the selection of its own subsidiary or affiliate and will be
subject to NYCT review and approval.

 

26

 

ARTICLE 117                  RELATIONSHIP OF CONTRACTOR TO THE
AUTHORITY

 

The relationship of Contractor to the Authority is
that of an independent Contractor, and said Contractor, in accordance with its
status as such, covenants and agrees that it will conduct itself consistent
with such status, that it will neither hold itself out as nor claim to be an
officer or employee of the Authority (or the MTA or the City) by reason hereof,
and that it will not, by reason hereof, make any claim, demand or application
to, or for any right or privilege applicable to an officer or employee of the
Authority (or the MTA or the City), including, but not limited to, Workers’
Compensation coverage, Unemployment Insurance Benefits, Social Security
coverage or retirement membership or credit.

 

ARTICLE 118                 DISCLOSURE

 

Contractor hereby represents that to the best of its
knowledge neither it nor any of its personnel has been the subject of any
investigation or has any of them been convicted or indicted for commission of
any crime involving misconduct, corruption, bribery, or fraud in connection
with any public contract in the State of New York or any other jurisdiction,
except as has been specifically disclosed in writing to the Authority, and
that, should any such conviction or indictment be obtained or any such
investigation commenced prior to the expiration of the term hereof, regardless
of the date of the occurrence giving rise to the subject matter of such
conviction, indictment or investigation, it will be disclosed in writing to the
Authority.  Breach of this provision is
expressly understood to constitute a material breach hereof.

 

ARTICLE 119                  PUBLICITY

 

A.           Prior written approval
of the Authority is required before the Contractor or any of its employees,
servants, agents or independent contractors may, at any time, either during or
after completion or termination of this Contract, make any statement to the
press or issue any material for publicity through any medium of communication
bearing on the Work performed or data collected under this Contract.

 

B.             If the Contractor
wishes to publish a work dealing with any aspect of performance under this
Contract, or of the results and accomplishments attained in such performance,
such publication requires the prior written approval of the Authority, which
approval may be conditioned upon the Authority’s obtaining royalties from the
Contractor, and also obtaining a non-exclusive and irrevocable license to
reproduce, publish, or otherwise use and authorize others to use the
publication.

 

27

 

ARTICLE 120               VEHICLES LEASED BY CONTRACTOR FROM
THIRD PARTIES

 

In the event that the Contractor is directed to lease
Revenue Vehicles from a third party in order to provide paratransit services
pursuant to this Agreement, the lease agreement must be approved in advance by
the Authority and the Authority will reimburse the approved leasing costs
pursuant to Article 108. The following provisions must be included in any
vehicle lease with a third party:

 

A.           Right of Assignment

 

1.               The vehicles leased
herein are procured for the purpose of fulfilling Lessee’s obligations pursuant
to a separate agreement with the New York City Transit Authority (“Transit
Authority”) that grants Lessee the right to provide public services on its
behalf. If said right is terminated, or if the Transit Authority reassigns any
of Lessee’s routes, the Transit Authority will exercise its right, granted by
this provision, to receive assignment of this Lease and reassign it according
to the following terms and conditions:

 

2.               The Transit
Authority shall send written notice of the assignment and assumption to the
Lessor and execute all documents reasonably required by the Lessor.  The Transit Authority shall be bound by all
of the covenants of this Lease, except, the insurance provisions, because the
Transit Authority is a self-insuring public benefit corporation created under the
New York Public Authorities Law.

 

3.               The Transit
Authority shall have the right upon written notice to the Lessor to reassign
the lease to any one of its paratransit contractors (proposed lessee). Any
reassignment shall be subject to the Lessor’s credit approval of the proposed
lessee.  Such credit approval may be
denied on the basis of the proposed lessee’s failure to satisfy the Lessor’s
standards of credit worthiness, as determined in the sole discretion of the
Lessor.

 

4.               The credit approval
shall be deemed granted thirty (30) days after the Transit Authority’s
assignment to the proposed lessee, unless the Lessor sends prior written notice
to the Transit Authority. Upon Lessor’s credit approval of the proposed lessee,
the reassignment of the lease to and assumption of the lease by the
Authority-designated paratransit contractor (Lessee) shall be deemed in effect,
and the Transit Authority shall have no further obligations to the Lessor.

 

5.               If the credit
approval is denied, the Transit Authority may guarantee in writing the proposed
lessee’s payments to the Lessor. Upon Lessor’s receipt of such guarantee, the
assignment of the lease to and assumption of the lease by the
Authority-designated paratransit contractor (Lessee) shall be deemed in effect,
and the Transit Authority shall have no further obligations to Lessor.

 

B.             Option to
Purchase:

 

1.               Upon payment in
full of all rents and obligations due under the lease by and between Lessor and
Lessee, the Transit Authority shall have the option to purchase the vehicle and
any equipment thereon (the “Equipment”) as more fully described herein, for the
sum of one and 00/100 dollars in United States Currency ($1.00) (the “Purchase
Price”) on an “as is, where is”

 

28

 

basis provided the Lessee is not then in default of
any material terms and conditions of this Lease, which default has not been
cured by the Transit Authority.

 

2.               In the event the
Transit Authority elects not to exercise this purchase option, the Lessee shall
have the option to purchase the Equipment for the Purchase Price plus all
applicable sales or use tax on an “as is, where is” basis provided the Lessee
is not then in default of any terms and conditions of this Agreement.

 

3.               With respect to the
Equipment at that time, Lessor makes no representation or warranty, express or
implied, as to any matter whatsoever, including the condition of the Equipment,
its merchantability, or its fitness for a particular purpose.

 

4.               Lessor shall
execute and deliver to Lessee, or the Authority, as applicable, all documents
necessary and proper to effect the transfer of ownership of the Equipment to
Lessee upon payment by Lessee of the Purchase Price.

 

C.             Transit
Authority-Third Party Beneficiary

 

Lessee and Lessor agree that the Transit Authority is
a third party beneficiary of the Lease for purposes of these special
conditions.

 

ARTICLE 121                 AMENDMENTS

 

This Contract may be amended only by an instrument in
writing executed by the Authority and Contractor.

 

Any and all notices under this Agreement, if to the
Contractor shall be delivered to:

 

Mr. David Kessler, Vice President

Atlantic Paratrans, Inc.

7 North Street,

Staten Island, NY 10302

718-556-8077

718-442-7672 (Fax)

 

and if to the Authority,

 

Michael Cosgrove, Project Manager

New York City Transit Authority

Paratransit Division,

2 Broadway, 11th Floor

New York, New York 10004

646-252-5041

646-252-5019(Fax)

 

29

 

ARTICLE 122                  ATTACHMENTS

 

Attachment numbers 1-22 are incorporated in this Contract and shall be
deemed to apply to the entire Contract.

 

ARTICLE 123                  RESCISSION

 

In the event that the Authority elects to execute this Contract prior
to submission by the Contractor and approval by the Authority of any required
document, such as an insurance policy, the Authority may, in its sole
discretion, rescind this Contract if all such matters have not been resolved to
the Authority’s satisfaction within thirty (30) days after execution hereof.

 

ARTICLE 124                  EXTENSION OF TERM

 

A.           The Authority has the
option to extend the term of the Contract with no change to the Contract Price,
except for those adjustments to the Contract Price which are set forth in the
Contract, for up to two (2) additional year(s). This option may be exercised,
in the sole discretion of the Authority, for a single or multiple term(s) of
four (4) or six (6) months, for a one-year or two one-year terms, or for a
two-year term.

 

B.             The option shall be
exercised by notification by the Authority to the Contractor, in writing, that
it is exercising the option to extend the term of the Contract, at any time
prior to three months in advance of the expiration of the Contract.

 

ARTICLE 125                  ORDER OF PRECEDENCE

 

If there is a conflict between provisions of this Agreement, the
following order of precedence shall apply:

 

A.           Terms
and Conditions

 

B.             Scope
of Work, Attachment No. 1

 

C.             Price
Schedule, Attachment No. 2

 

D.            Other
Attachments

 

30

 

IN WITNESS WHEREOF,  the parties hereto have executed this
Agreement to be effective with the date set forth in the Notice of Award.

 

	
  Contractor:

  	
  Atlantic
  Paratrans, Inc.

  	
  New
  York City Transit Authority:

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
  /s/ David S. Kessler

  	
   

  	
  Signature:

  	
  /s/ Timothy P. Rooney

  	
   

  
	
  Name:

  	
  David S. Kessler

  	
   

  	
  Name:

  	
  Timothy P.
  Rooney

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  Assistant Chief
  Procurement Officer

  	
   

  
	
  Date:

  	
  October 4,
  2001

  	
   

  	
  Date:

  	
  October 4,
  2001

  	
   

  

 

31

 

ACKNOWLEDGMENT FOR THE AUTHORITY

 

	
  STATE OF NEW
  YORK,

  	
  )

  
	
   

  	
  ) SS.:

  
	
  COUNTY OF Kings

  	
  )

  

 

On this 4th  day
of October, 2001, before me personally appeared Timothy P. Rooney to me
known, who, being by me first duly sworn, did depose and say: That he is the Assistant
Chief Procurement Officer of the New York City Transit Authority, the
public benefit corporation described in and which executed the foregoing
instrument and that he acknowledged to me that he signed his name thereto
pursuant to the authorization of said Authority.

 

 

	
   

  	
  /s/ Stacey A. Myers

  	
   

  
	
   

  	
  Stacey A.  Myers
 Notary Public, State of New York

  	
   

  
	
   

  	
  No. 24-5015180

  	
   

  
	
   

  	
  Qualified in Kings County

  	
   

  
	
   

  	
  Commission Expires: July 19, 2005

  	
   

  

 

32

 

ACKNOWLEDGMENT FOR CONTRACTOR, IF A
CORPORATION

 

	
  STATE OF NEW
  YORK,

  	
  )

  
	
   

  	
  ) SS.:

  
	
  COUNTY OF KINGS

  	
  )

  

 

On this 4th day of October 2001 ,
before me personally appeared David S.Kessler to me known, who, being by
me first duly sworn, did depose and say: That he resides at No. 7 North
Street, in the City of Staten Island, in the County of Richmond,
in the State of New York, that he is the Vice President of Atlantic
Paratrans, Inc., the corporation described in and which executed the
foregoing contract; that he/she knows the corporate seal of said corporation;
that one of the seals affixed to said contract is such corporate seal, that it
was affixed thereto by order of the Board of Directors of said corporation, and
that he/she signed his/her name thereto by like authority.

 

	
   

  	
  /s/ Stacey A. Myers

  	
   

  
	
  Stacey A. Myers

  Notary Public, State of New York

  
	
  No. 24-5015180

  
	
  Qualified in Kings County

  
	
  Commission Expires: July 19, 2005

  

 

33

 

NEW YORK CITY TRANSIT AUTHORITY

 

Division of Materiel

 

 

GENERAL CONTRACT PROVISIONS

 

 

ARTICLE 201                                          AGREEMENT

 

The Contractor agrees to perform the Work in accordance with
requirements and terms and provisions hereinafter set forth in the Contract
Documents.  In consideration for the
complete, satisfactory and proper performance thereof by the Contractor, the
Authority agrees to pay to the Contractor, and the Contractor agrees to accept
as full compensation therefor, the sums of money set forth in the Price
Schedule at the time and in the manner and upon the terms and conditions
hereinafter set forth in the Contract Documents.

 

ARTICLE 202                                          NOTICES

 

Except as otherwise specifically provided, the delivery of any notice,
direction or communication to the Contractor or the Authority shall be made by
hand, mail, or facsimile transmission directed to the Contractor at the address
set forth in the Bid and to the Authority to the attention of the Project
Manager at the address set forth in the Notice of Award, and shall be deemed to
be sufficient service thereof as of the date of such delivery by hand or
transmission or three (3) days after mailing. With respect to notices to the
Authority, the Contractor shall additionally send a copy of each notice sent to
the Project Manager to the Authority’s Division of Materiel to the attention of
the Procurement Representative. The addresses may be changed at any time by
notice in writing. Nothing contained herein shall be deemed to preclude or
render inoperative the service of any notice, direction or other communication
personally upon the Contractor, or if the Contractor is a corporation, upon any
officer or director thereof. Nothing in this article shall be deemed as a
waiver by the Authority of other requirements with respect to the service of
process upon it.

 

ARTICLE 203                                          GENERAL RULES
OF INTERPRETATION

 

A.                                   The
Information for Bidders, the Bid (including the Price Schedule), General
Contract Provisions, Specific Contract Provisions, Schedules (excluding
Schedule H, Bidder’s Qualification Questionnaire or Schedule J,
Responsibility questionnaire), all Addenda (if any), the Technical Specifications
(if any), the Contract Drawings (if any), the Attachments (if any), and the
Notice of Award, constitute the Contract and shall be referred to collectively
as the “Contract” or the “Contract Documents.”

 

B.                                     The
Contract is also deemed to include by reference those portions of the Bidder’s
Qualification Questionnaire or Responsibility Questionnaire which contain
additional conditions and obligations on the Contractor and rights in favor of
the Authority.

 

C.                                     References
to any agreement or other instrument shall be deemed to include such agreement
or other instrument as it may, from time to time, be modified, amended,
supplemented, or restated in accordance with its terms.

 

D.                                    The
word “Contractor” when used in this Contract, shall mean the Bidder to whom the
Authority awards this Contract.

 

1

 

E.                                 The
terms “hereof,” “herein,” “hereby, “herewith,” “hereto,” and “hereunder” shall
be deemed to refer to this Contract.

 

F.                                  The
headings of the paragraphs are inserted for convenience only and shall not
affect the construction or interpretation of this Contract.

 

K.                                Defined
terms appertaining to this Contract are set forth in the Specific Contract
Provisions.

 

G.                                 All
references to “days” shall be deemed to be calendar days, unless otherwise
expressly indicated.

 

H.                                All
references to “business days” shall be deemed to be references to the days of
Mondays through Fridays, exclusive of Authority observed holidays.

 

I.                                     All
notices hereunder must be in writing, in accordance with Article 202,
unless expressly indicated otherwise.

 

J.                                    As
used herein the singular shall mean and include the plural; the masculine
gender shall mean and include the feminine and neuter genders; and vice versa.

 

ARTICLE 204                                          CONSENT OF
AUTHORITY REQUIRED FOR SUBCONTRACTING, SUBLETTING OR ASSIGNMENT

 

The Contractor shall not subcontract, assign, transfer, convey, sublet
or otherwise dispose of this Contract or its right, title or interest in or to
the same or any part thereof without the prior written consent of the
Authority.  A violation of this
provision shall be deemed to be a material breach of the Contract.

 

ARTICLE 205                                          COORDINATION
WITH OTHER CONTRACTORS

 

During the progress of the Work, it may be necessary for other
contractors and/or other persons (including personnel of the Authority) to do
work in or about the work site. The Authority reserves the right to permit and
put such other contractors and such persons to work and to afford them access
to the Work Site (if applicable) at such time and under such conditions as does
not unreasonably interfere with Contractor. The Contractor shall prosecute its
Work continuously and diligently and shall conduct its Work so as to minimize
interference with such other work.

 

ARTICLE 206                                          CHANGES

 

A.                                   This
Contract may be modified and changed from time to time as agreed to in writing
between the parties hereto, in a manner not materially affecting the substance
hereof.

 

2

 

B.                                     No
change in or modification, termination or discharge of this Contract in any
form whatsoever, shall be valid or enforceable unless it is in writing and
signed by the party to be charged therewith or his duly authorized
representative; provided, however, that any change in or modification,
termination or discharge of this Contract expressly provided for in this
Contract shall be effective as so provided.

 

C.                                     It
is agreed by the Contractor that any change resulting in additional Work shall
be paid at the applicable rates set forth in the Price Schedule for
equivalent items as determined by the Project Manager. In the event that the
Authority shall order additional Work for which there are no applicable rates
set forth in the Price Schedule for equivalent items, it is understood and
agreed by Contractor that the Authority and Contractor shall negotiate a
mutually agreeable price to be paid by the Authority for Contractor’s
performance of such additional Work. In the event that the parties are unable
to agree upon a price for the additional Work, the Project Manager may
nevertheless direct the Contractor to proceed with the additional Work. The
Contractor shall diligently proceed with the additional Work, but may, initiate
a dispute within five (5) days of the Project Manager’s directive to proceed
pursuant to Article 211, DISPUTES, for a determination by the Disputes
Resolution Officer (DRO) as to a reasonable price therefor.

 

D.                                    If
as a result of the change or modification, the Authority determines that more
time is required for the Contractor to complete performance than is specified
within the Contract, the Authority will extend the time for Contractor’s
performance by the number of days actually required for Contractor to complete
the Work.

 

ARTICLE 207                                          EXTENSIONS OF
TIME

 

A.                                   If
the Contractor is delayed at any time during the progress of the Work by the
neglect or failure of the Authority or by a Force Majeure, then the time for
completion and/or affected delivery date(s) shall be extended by the Authority
subject to the following conditions:

 

1.                                       the
cause of the delay arises after the Notice of Award and neither was nor could
have been anticipated by the Contractor by reasonable investigation before such
award;

 

2.                                       the
Contractor demonstrates that the completion of the Work and/or affected
delivery(s) will be actually and necessarily delayed;

 

3.                                       the
effect of such cause cannot be avoided or mitigated by the exercise of all
reasonable precautions, efforts and measures whether before or after the
occurrence of the cause of delay; and

 

4.                                       the
Contractor makes written request and provides other information to the
Authority as described in paragraph (D) below.

 

A delay meeting all the conditions of this paragraph
(A) shall be deemed an excusable delay. Any concurrent delay which does not
constitute an excusable delay shall not be the sole basis for denying a request
hereunder.

 

3

 

B.                                     Any
reference in this Article to the Contractor shall be deemed to include
materialmen, Suppliers and Subcontractors, whether or not in privity of
contract with the Contractor, all of whom shall be considered as agents of the
Contractor for the purpose of this Article.

 

C.                                     The
Authority reserves the right to rescind or shorten any extension previously
granted, if subsequently the Authority determines that any information provided
by Contractor in support of a request for an extension of time was erroneous;
provided however, that such information or facts, if known, would have resulted
in a denial of the request for an excusable delay.  Notwithstanding the above, the Authority will not rescind or
shorten any extension previously granted if the Contractor acted in reliance
upon the granting of such extension and such extension was based on information
which, although later found to have been erroneous, was submitted in good faith
by the Contractor.

 

D.                                    The
request for an extension of time pursuant to paragraph (A) above, shall be made
within ten (10) days after the time when Contractor knows or should know any
cause for which it may claim an excusable delay and shall provide any actual or
potential basis for an extension of time, identifying such cause and
describing, as fully as practicable at that time the nature and expected
duration of the delay and its effect on the completion of that part of the Work
identified in the request.  Contractor
shall not be entitled to an extension of time unless it affirmatively
demonstrates that it is entitled to such extension.  The Authority may require the Contractor to furnish such additional
information or documentation as the Authority shall reasonably deem necessary
or helpful in considering the requested extension.  The Contractor must also comply with requirements sets forth in  the Specifications (if any) regarding
Contractor’s detailed schedule for performance.

 

E.                                      Within
thirty (30) days of its receipt of all such information and documentation (or
within thirty (30) days of Contractor’s filing of the original request in the
event the Authority requires no such additional material] the Authority shall
advise the Contractor of its decision on such requested extension; except that,
where it is not reasonably practicable for the Authority to render such
decision in the thirty (30) day period, it shall, prior to the expiration of
such period, advise the Contractor that it will require additional time and the
approximate date upon which it expects to render such decision.

 

F.                                      In
regard to an injunction, strike or interference of public authority which may
delay the Work, the Contractor shall promptly give the Authority a copy of the
injunction or other order and copies of the papers upon which the same shall
have been granted. The Authority shall be accorded the right to intervene or
become a party to any suit or proceeding in which any such injunction shall be
obtained and to move to vacate the same or otherwise, as the Authority may deem
proper.

 

G.                                     Neither
the permitting of the Contractor to proceed with the Work subsequent to the
date specified in the Contract (as such date may have been extended pursuant to
this Article), the making of any payments to the Contractor thereafter, nor the
issuance of any Change Order thereafter, shall operate as a waiver on the part
of the Authority of any rights under this Contract, including but not limited
to the assessment of liquidated damages (if any) or declaring Contractor in
default.

 

H.                                    In
case the Contractor shall be delayed at any time or for any period by two or
more of the causes above-mentioned in this Article, the Contractor shall not be
entitled to a separate extension for each one of the causes but only one period
of extension shall be granted for the delay.

 

4

 

I.                                         The
Contractor agrees to make no claim for damages for delay of any kind in the performance
of this Contract whether occasioned by any act or omission of the Authority or
any of its representatives and Contractor agrees that any such claim shall be
compensated for solely by an extension of time to complete performance of the
Work as provided herein.

 

ARTICLE 208                                          REMEDIES IN
CASE OF DEFAULT & TERMINATION FOR CAUSE

 

A.                                   The
Contractor shall be in default if it commits a breach of the Contract deemed
material by the Authority.  Without
limiting the generality of the foregoing and in addition to those instances
specifically referred to in the Contract, the Contractor shall be in such
default if: (i) it fails to begin the Work in accordance with the requirements
of the Contract; (ii) it abandons the Work; (iii) it assigns or subcontracts the
Work other than as provided in the Contract; (iv) at any time the Project
Manager shall be of the opinion that performance of this Contract is
unnecessarily or unreasonably delayed, or that the Contractor is willfully
violating any of the provisions or covenants of this Contract or is not
executing the same in good faith or in accordance with its terms; (v) the Work
is not completed within the time prescribed, as may be extended by the
Authority; or (vi) the Contractor becomes insolvent (other than as a bankrupt),
or assigns for the benefit of creditors, or takes advantage of any insolvency
statute or debtor or creditor law or if its property of affairs are put in the
hands of a receiver; or (vii) the Project Manager shall be of the opinion that
the Work cannot be completed within the time herein provided therefor or within
the time to which such completion may have been extended provided, however,
that the impossibility of timely completion is in the Project Manager’s
opinion, attributable to conditions within the Contractor’s control.

 

B.                                     In
the event of a default by the Contractor, the Authority will notify the
Contractor of the default, in writing, and the Contractor shall immediately
cease performance of the Work or any part thereof under this Contract.  The Authority shall thereupon have the right
to take any action necessary to complete the Work, including performing the
Work itself, or contracting with another individual or entity.  In the event the Work is completed by the
Authority or others, Contractor shall be liable for the costs and expense of
said labor, materials, plant, tools, equipment, supplies and property.  The costs and expenses so charged may be
deducted by the Authority and paid out of any monies otherwise payable to the
Contractor.

 

C.                                     The
Authority may also bring any suit or proceeding to recover damages or to obtain
any other relief or for any other purpose proper under this Contract.

 

D.                                    The
Authority may, in its sole discretion, waive a default by the Contractor, but
such waiver, and failure by the Authority to take action in respect to any
default, shall not be deemed a waiver of any subsequent default.

 

E.                                      In
case the Authority shall by Contract or otherwise complete the Work or any part
thereof under the provisions of Paragraph B above, the Project Manager from
time to time during the course of the completion of the Work or such part
thereof or at any time thereafter, shall certify to the amount of the expense
incurred by the Authority in the completion of the Work or such part thereof.

 

5

 

Said certificate shall be final and conclusive upon the Contractor and
admissible in evidence against the Contractor, and his legal representatives,
in any litigation arising or growing out of this Contract.

 

F.                                      In
the event that the Authority wrongfully terminates the Contract for default,
such termination shall be deemed to be a termination for convenience in
accordance with Article 209.

 

ARTICLE 209                                          TERMINATION
FOR CONVENIENCE

 

A.                                   In
addition to any rights of termination by the Authority which may exist pursuant
to this Contract or by law, the Authority may terminate performance of this
Contract at any time for its own convenience upon giving written notice thereof
specifying the effective date, whereupon all further liability of the Authority
to the Contractor under this Contract shall cease.  In the event of such termination, a proportionate part of the
compensation due for Contract Work performed prior to the effective date of
such termination and deemed acceptable to the Authority, will be paid to the
Contractor as determined by the Authority.

 

B.                                     Upon
receipt of a notice of termination under this article, the Contractor shall
cease performance of the Contract Work, shall cancel all cancelable orders and
place no further orders.  The
Authority’s only obligation with respect to such termination for convenience is
to compensate the Contractor for the goods/services supplied up until the
effective date of termination, provided, however, that in the event the
termination for convenience is predicated on a cessation or reduction of
funding carmarked for purposes hereof, the Authority’s payment obligations with
respect to such termination for convenience will be limited to the amount of
such funding actually received herefor. The Contractor shall not be entitled to
any other payment by virtue of the Authority’s exercise of its right of
termination as provided in Paragraph A of this Article and expressly
waives and relinquishes any right to claim damages or pursue any other remedy
at law or relief in equity including specific performance, by virtue of the
Authority’s exercise of such right of termination.

 

C.                                     The
Authority at its discretion may terminate the Contract for convenience without
payment for profit and overhead for work not performed if, during the Contract
term: i) the Contractor, a Contractor director, officer, principal, or
managerial employees or owner of a ten percent (10%) or more interest in the
Contractor, is convicted of a crime involving a public contract; or ii)
significant concerns about the Contractor’s integrity are raised based upon an
evaluation of the events underlying any other determination, or an indictment
or other allegation, that the Contractor or a Contractor’s director, officer,
principal, or managerial employee, or owner of a ten percent (10%) or more
interest in the Contractor, is involved in a criminal or other unlawful
activity.

 

6

 

ARTICLE 210                                          AUTHORITY OF
THE PROJECT MANAGER

 

A.                                   The
Project Manager shall have general authority to give the Contractor orders and
directions with respect to this Contract, including but not limited to, the
right at any time to direct the return of any Authority material or equipment
removed by the Contractor as part of the Work. 
The Project Manager shall in all cases have the authority to initially
determine the value, acceptability and fitness of the Work under this Contract,
and to determine every question which may arise relative to the Contract and to
the fulfillment of the Contract on the part of the Contractor.  Any and all material or equipment required
or proposed to be incorporated in the Work shall be subject to the approval of
the Project Manager and shall not be incorporated in the Work until such
approval has been given.

 

B.                                     The
Project Manager shall make all necessary explanations as to the meaning and
intention of the Technical Specifications or Contract Drawings, shall give all
orders and directions contemplated therein or thereby and also such orders and
directions as may be necessary in every case in which difficult or unforeseen
conditions shall arise in performance of the Work required by this
Contract.  The Project Manager will
provide appropriate explanations and reasons for his decisions if requested by
the Contractor.

 

C.                                     The
Contractor shall be bound by and promptly obey and follow every direction or
order given by the Project Manager regarding the performance and the nature and
manner of performance arising out of, under, or in connection with, or related
to or on account of, this Contract whether in writing or orally and confirmed
in writing, including any direction which the Project Manager may give by way
of withdrawal, modification or reversal of any previous direction given by him,
and regardless of whether the Contractor agrees with the Project Manager’s
determination. This Article shall not include such directions which by
their nature are change orders and which require that the procedures for change
orders be followed prior to the effectiveness of such directions.

 

D.                                    The
Contractor shall have a representative at its plant and the work site at all
times during performance of the Work authorized to receive orders and
directions from the Project Manager.

 

ARTICLE 211                                       DISPUTES

 

A.                                   In
the event the Contractor and the Authority are unable to resolve their
differences concerning a determination by the Project Manager, the Contractor
may initiate a dispute in accordance with the procedure set forth in this
Article.  Exhaustion of these dispute
resolution procedures shall be a precondition to any lawsuit permitted
hereunder.

 

B.                                     The
parties to this Contract authorize the Disputes Resolution Officer (DRO),
identified in Schedule G, acting personally, to decide all questions of any
nature whatsoever arising out of, under or in connection with, or in any way
related to or on account of, this Contract (including claims in the nature of
breach of Contract or fraud or misrepresentation before or subsequent to
Contract award) and his decision shall be conclusive, final and binding on the
parties.  His decision may be based on
such assistance as he may Find desirable, including advice of engineering or
other experts. The effect of his decision shall not be impaired or waived by
any negotiations or settlement offers in connection therewith, or by any prior
decision of others, which prior decisions shall be deemed subject to review,

 

7

 

or by any termination or cancellation of this Contract.  All such disputes shall be submitted in
writing by either party (to the DRO, acting personally, for his decision,
together with all evidence and other pertinent information in regard to such
questions, in order that a  fair
and impartial decision may be made. The DRO shall render his decision in
writing and deliver a copy of the same to the parties.

 

C.                                     If
the Contractor protests the determination of the DRO, the Contractor may
commence a lawsuit in Supreme Court, Kings County under Article 78 of the
New York Civil Practice Law and Rules, it being understood the review of the
Court shall be limited to the question of whether or not the DRO’s
determination is arbitrary, capricious or so grossly erroneous as to evidence
bad faith.  No evidence or information shall
be introduced or relied upon in such an action or proceeding that has not been
presented to the DRO personally prior to the DRO making his decision.

 

D.                                    Neither
the requirements of this Article nor the time necessary for compliance
therewith, however, shall affect the time to have accrued for purpose of any
statute controlling actions/proceedings against the Authority and the time of
such accrual shall be determined without reference to this Article.

 

ARTICLE 212                                          WITHHOLDING
MONEY DUE CONTRACTOR TO MEET CLAIMS OR LIENS

 

A.                                   If
at any time a claim, lien or judgment shall be made by any person or
corporation against the Authority, for which Contractor is liable under this
Contract or, otherwise by law, with respect to matters pertaining to the Work
of this Contract, the Authority shall have the right to withhold an amount it
deems reasonably necessary to satisfy such claim, in addition to the other sums
herein authorized by the Contract to be so retained, out of any monies then due
or thereafter becoming due to the Contractor hereunder, as security for the
payment of such claim. If the liability of any such party on such claim or
claims shall have been finally adjudicated by a judgment of a court of
competent jurisdiction or such claim or claims shall have been admitted by the
Contractor to be valid, then the claim may, if determined by the Authority to
be in its best interest, be paid from the amount so retained hereunder,
credited against the payments due Contractor, and the balance, if any, paid to
the Contractor.

 

B.                                     Should
any such claim remain unsatisfied at the time the final payment is due the
Contractor, the Authority shall have the right to retain out of said final
payment a sum in its judgment sufficient to protect the Authority in regard to
all unsatisfied claims. In lieu of the foregoing, the Authority may require
other security.

 

C.                                     In
case the amount thus retained should be insufficient to pay the amount
adjudicated to be due upon such claim, the Contractor shall pay the amount of
the deficiency to the Authority.  Upon
the failure of the Contractor so to do, the Authority may sue for and recover
from the Contractor the amount or balance as a debt from the Contractor.

 

8

 

D.                                    Notwithstanding
anything in this Article to the contrary, in the event of a claim for
injury to persons or damage to property by persons or corporations other than
the Authority, the Authority shall not withhold money due the Contractor
provided the Authority receives adequate written assurance from the
Contractor’s insurance carrier that it will assume all responsibility in
connection with the claim including defending the Contractor or the Authority
in any lawsuit, and paying any judgment based on said claim. The Authority shall
have sole discretion to determine the adequacy of the assurance furnished.

 

ARTICLE 213                                          CLAIMS BY
CONTRACTOR

 

If the Contractor shall have a claim for compensation against the
Authority for any loss or damage of any nature arising under this Contract by reason
of any act, neglect, fault or default of the Authority or its agents, the
Contractor shall, within fifteen (15) days after the sustaining of such damage,
furnish a written statement to the Project Manager detailing the nature and
amount of damage sustained. This written notice shall constitute a request for
a determination by the Project Manager pursuant to Article 210(A).
Compliance with the provisions hereof shall constitute a condition to
Contractor’s submission of a dispute pursuant to Article 211 with respect
to any claim for compensation and the Contractor shall be deemed to have waived
any claim not submitted in accordance therewith. The provisions of this
Article shall not be construed as a recognition or admission of any legal
liability on the part of the Authority to pay any sum on account of any damage
suffered in connection with or arising out of the performance of this Contract
or any part thereof.

 

ARTICLE 214                                          SUBSTITUTION
OF APPROVED SECURITIES

 

A.                                   In
the event that this Contract provides for retainage by the Authority of monies
due the Contractor as security for its full and timely completion, the
Contractor may from time to time withdraw portions of the amounts so retained,
or monies otherwise withheld for any other reasons under the Contract provided
any such monies have not been applied by the Authority for reimbursement to
itself or a third party in accordance with applicable provisions of the
Contract by depositing with the Chief Financial Officer of the Authority
approved securities with a market value equal to the amount to be withdrawn.

 

B.                                     The
Contractor shall pay to the Authority the service charges then in effect for
the custodial safekeeping of securities deposited with the Authority by the
Contractor pursuant to the terms of this Contract.

 

C.                                     Approved
securities are: securities of the United States Government, State of New York,
City of New York, New York City Transit Authority, Metropolitan Transportation
Authority or Triborough Bridge and Tunnel Authority.  Other securities may be submitted for Authority approval.  All such securities must be payable to, run
in favor of, or be transferred to, the Authority. In case the securities shall,
during the term of the Contract, diminish in market value in the opinion of the
Authority, or are sold as set forth in Article 215, then, within ten (10)
days after notice, the Contractor shall deposit cash or securities to restore
the value to that originally stated.  A
failure by the Contractor to deposit such cash or securities in accordance herewith
shall be a cause for default.

 

9

 

In lieu of defaulting the Contractor, the Authority may allow the
Contractor to proceed with the Work and may deduct from any monies then due or
which Thereafter may become due to the Contractor the amount necessary to
restore the original valuation of such securities, and to hold such amount in
lieu thereof.

 

D.                                    The
Authority shall pay to the Contractor all interest, dividends and other income
on the securities, when and as collected. If the securities are in the form of
coupon bonds, the coupons as they respectively become due shall be delivered to
the Contractor; provided, however, that the Contractor shall not be entitled to
interest, dividends or other income on any securities the proceeds of which
shall be used or applied as authorized under the Contract.

 

ARTICLE 215                                          USE OF MONIES
WITHHELD

 

Deposits, retainage (if any) or any other monies withheld, whether in
cash or securities substituted shall be security for the faithful performance
of the Contract by the Contractor. In case any default causes loss, damage or
expense to the Authority, then the Authority may apply the amount necessary to
restore such loss, damage or expense including liquidated damages, out of the
said securities (which may be sold), deposits, retainage or other monies.

 

ARTICLE 216                                          NEW YORK LAWS
/ CHOICE OF LAW, CONSENT TO JURISDICTION AND VENUE

 

A.                                   This
Contract shall be deemed to be executed in the City of New York, State of New
York, regardless of the domicile of the Contractor and shall be governed by and
construed in accordance with the laws of the State of New York.

 

B.                                     The
parties agree that any and all claims asserted by or against the Authority
arising hereunder or related hereto shall be heard and determined either in the
courts of the United States located in New York City (“Federal Courts”) or in
the courts of the State of New York (“New York State Courts”) located in Kings
County. To effect this agreement and intent, the Contractor agrees:

 

1.                                       If
the Authority initiates any action against the Contractor in Federal Court or
in New York State Court, service of process may be made on the Contractor
either in person, wherever such Contractor may be found, or by Certified Mail
addressed to the Contractor at its address as set forth herein or to such other
address as the Contractor may provide to the Authority in writing.

 

2.                                       With
respect to any action between the Authority and the Contractor in a New York
State Court, the Contractor hereby expressly waives and relinquishes any rights
he may otherwise have (a) to move to dismiss on grounds of forum non
conveniens, (b) to remove to Federal Court; and (c) to move for a change of
venue to a New York State Court outside Kings County.

 

10

 

3.                                       With
respect to any action between the Authority and the Contractor in Federal Court
located in New York City, the Contractor expressly waives and relinquishes any
right it might otherwise have to move to transfer the action to a Federal Court
outside the City of New York.

 

4.                                       If
the Contractor commences any action against the Authority in a court located
other than as provided for herein, upon request, the Contractor shall either
consent to a transfer of the action to a court of competent jurisdiction, as
set forth herein, or, if the court where the action is initially brought will
not or cannot transfer the action, shall consent to dismiss such action without
prejudice and thereafter reinstitute the action in a court of competent
jurisdiction as provided for herein.

 

ARTICLE 217                                          STATUTE OF
LIMITATIONS ON RIGHT TO SUE THE AUTHORITY / NO CLAIM AGAINST AUTHORITY
OFFICERS, AGENTS OR EMPLOYEES

 

A.                                   No
action shall lie or be maintained by the Contractor against the Authority upon
any claim arising out of or based upon this Contract or by reason of any act or
omission or requirement of the Authority or its agents, unless such action
shall be commenced within six (6) months after the completion of the Work,
other than Warranty Work, or earlier termination of the Contract.  No additional time shall be allowed to begin
anew any other action if an action commenced within the time herein limited be
dismissed or discontinued, notwithstanding any provision in the New York Civil
Practice Law and Rules (“CPLR”) to the contrary. Nothing herein shall extend
the time, as provided in the CPLR, to commence a lawsuit.

 

In the event that the Contractor has filed with the Authority a
statement of claim pursuant to Article 213, the Contractor’s statute of
limitations with respect to said claim(s) only shall be tolled until the final
determination by the Authority under Article 211.

 

B.                                     No
member, officer, agent or employee of the Authority shall be liable personally
hereunder or by reason hereof.

 

ARTICLE 218                                          AUTHORITY MAY
AVAIL ITSELF OF ALL REMEDIES

 

The Authority may avail itself of each and every remedy herein
specifically given to it or now or hereafter existing at law or in equity, and
each and every such remedy shall be in addition to every other remedy so
specifically given or otherwise so existing and may be exercised from time to
time and as often and in such order as may be deemed expedient by the
Authority, and the exercise of one remedy shall not be deemed to be waiver of
the right to exercise, at the same time or thereafter, any other remedy.

 

ARTICLE 219                                          RELATIONSHIP
BETWEEN THE AUTHORITY AND OTHERS

 

Nothing contained herein shall be deemed to give any third party a
claim or cause of action against the Authority beyond such as may otherwise
exist without regard to this Contract.

 

11

 

 

ARTICLE 220                                       LIABILITY AND
INDEMNIFICATION

 

A.                                   The term “Indemnified Parties,” whenever
referred to in this Article, shall be deemed to mean the Authority, the MTA,
its affiliate agencies, New York State and their members, officers, employees,
and agents.

 

B.                                     The Contractor shall be solely responsible
for all physical injuries (including death) to person(s) (including, but not
limited to, employees of the Authority, Contractor or Subcontractors) and
damage to property (including, but not limited to, property of the Authority or
the Contractor or Subcontractors), occurring on account of or in connection
with the performance of the Work hereunder or sustained by any employee of the
Authority or Contractor or of Subcontractor. The Contractor shall indemnify and
save harmless the Indemnified Parties, to the fullest extent permitted by law,
from loss and liability upon any and all claims and expenses, including but not
limited to attorneys’ fees, on account of such injuries to persons or such
damage to property, irrespective of the actual cause of the accident,
irrespective of whether it shall have been due in part to negligence of the
Contractor or its subcontractors or negligence of the Indemnified Parties, or
of any other persons, but excepting bodily injuries and property damage to the
extent caused by the negligence of the Authority.

 

C.                                     The term “loss and liability,” as used
herein, shall be deemed to include, but not be limited to, liability for the
payment of Workers’ Compensation and disability benefits under the Workers’
Compensation Law of the State of New York or similar statutes.

 

D.                                    Except as otherwise provided in (B) above,
the liability of the Contractor under this Article is absolute and is not
dependent upon any question of negligence on its part or on the part of its
agents, officers or employees. The approval of the Authority of the methods of
doing the Work or the failure of the Authority to call attention to improper or
inadequate methods or to require a change in methods or to direct the
Contractor to take any particular precautions or to refrain from doing any
particular thing shall not excuse the Contractor in case of any such injury to
person or damage to property.

 

E.                                      In case any damage shall occur to any part of
the Authority or New York City Transit System (except only for the removal of
such parts thereof as the Contractor is specifically required by this Contract
to remove) on account of the Work, and the Contractor is responsible therefor,
the Authority shall have the right to cause such damage to be repaired and to
charge the expense of such repairs to the Contractor.  In the event that such work is performed by the Authority, then
the Authority shall deduct the amount of such expense that may be incurred in
repairing any such damage from any monies due or to become due to the
Contractor under this Contract or any other agreement between the Contractor
and the Authority.

 

ARTICLE 221                                       PATENTS, COPYRIGHTS AND
INFRINGEMENT CLAIMS

 

A.                                   All inventions, ideas, designs and methods
contained in the Contract Documents in which the Authority has, or acquires
patent, copyright or other intellectual property rights (hereinafter referred
to as “IPR”) shall remain reserved for the exclusive use of the Authority and
may not be utilized, reproduced or distributed by or on behalf of the
Contractor, or any employee, Subcontractor or agent without the prior written
consent of the Authority except to the extent necessarily required in
connection with performance of the Work.

 

12

 

B.                                     If, pursuant to performance of the Work, the
Contractor or any of its agents, officers, employees or subcontractors shall
produce any patentable or copyrightable subject matter as to which the
Authority does not gain ownership rights, the Authority and its affiliates
shall thereupon have, without cost or expense, an irrevocable, non-exclusive,
royalty-free license to make, have made or use, either themselves or by another
contractor or other party on their behalf, such subject matter in connection
with any work or any activity now or hereafter undertaken by or on behalf of
the Authority or any of its affiliates or subsidiaries. The license herein
granted shall not be transferable and shall not extend to contractors or other
parties except to the extent of their work or activity on behalf of the
Authority or such affiliates or subsidiaries.

 

C.                                     Except to the extent that rights are held by
Contractor or others under existing valid patents or copyrights and are not
given to the Authority, the Authority shall have the right to use or permit the
use of all such drawings, data, and other papers, and also any oral information
of any nature whatsoever received by the Authority, and any ideas or methods
represented by such papers and information, for any purposes and at any time
without other compensation than that specifically provided herein, and no such
papers or information shall be deemed to have been given in confidence and any
statement or legend to the contrary on any of said drawings, data, or other
papers shall be void and of no effect.

 

D.                                    The Contractor warrants that all Work
performed shall be free from any claims made against the Authority or
Indemnified Parties of IPR from any other person or entity. The Contractor
shall save harmless and indemnify the Indemnified Parties from and against all
costs, expenses and damages which any of them shall incur or be obligated to
pay by reason of any such infringement or claim of infringement, and shall, at
the election of the Authority, defend at the Contractor’s sole expense all such
claims in connection with any alleged infringement.

 

E.                                      If the Authority be enjoined from using any
portion of the Work as to which the Contractor is to indemnify the Authority
against IPR claims, the Authority may at its option and without thereby
limiting any other right it may have hereunder or at law or in equity, require
the Contractor to supply at its own expense, temporarily or permanently,
facilities not subject to such injunction and not infringing any IPR, and if
the Contractor shall fail to do so, the Contractor shall, at its expense,
remove such offending facilities and refund the cost thereof to the Authority
or take such steps as may be necessary to ensure compliance by the Authority
with such injunction, to the satisfaction of the Authority.

 

F.                                      The Contractor is responsible to determine
whether a prospective Supplier or Subcontractor is a party to any litigation
involving IPR infringement claims, including antitrust or other trade
regulation claims, or is subject to any injunction which may prohibit it under
certain circumstances from selling equipment to be used or installed under this
Contract. The Contractor enters into any agreement with a party to such
litigation at its own risk and the Authority will not undertake to determine
the merits of such litigation. The Authority, however, reserves the right to
reject any article which is the subject of such litigation or injunction,
or in its judgment use of such article as a result of such circumstances,
would delay the Work or be unlawful.

 

13

 

ARTICLE 222                                       QUANTITIES ARE APPROXIMATE /
VARIABLE QUANTITIES CLAUSE

 

A.                                   The Contractor understands that the
quantities of the various unit price items specified in the Bid (if any) are
the approximate quantities of such items for the Work as estimated by the
Authority, and are not in any way guaranteed or represented as correct or
intended to be relied upon and they shall not be taken as final and shall form
no basis for any claims for damages including, but not limited to anticipated
profits in case they do not correspond with the final quantities actually
ordered and that the Authority reserves the right to increase or to diminish or
to omit entirely any of the quantities or items as therein stated in the Price
Schedule or these Contract Documents.

 

B.                                     With respect to any unit price item as to
which an estimated quantity is set forth in the Price Schedule, such unit price
shall apply regardless of the actual quantity of such item ultimately utilized
in, or required by, the Work; except that, if the actual quantity for a unit
price item differs from the estimated quantity in the Price Schedule by
more than twenty percent (20%), then the Project Manager shall review whether
application of the unit price would cause a substantial inequity to either
party, and, if so, the unit price for such item will be equitably adjusted,
upward or downward, as determined by the Project Manager.

 

C.                                     This is not an exclusive contract, and does
not obligate the Authority to fill through the Contractor all its needs for the
goods or services covered by the Contract. 
The Authority is free to obtain these goods or services from other
sources to the extent it sees fit.

 

ARTICLE 223                                       GENERAL REPRESENTATIONS AND
WARRANTIES

 

In order to induce the Authority to enter
into and perform this Contract, Contractor represents and warrants to the
Authority that:

 

A.                                   Existence; Compliance with Law. The Contractor (i) if it is a corporation
is duly incorporated, organized, validly existing and in good standing as a
corporation under the laws of the jurisdiction of its incorporation; (ii) if it
is a partnership, non-profit organization, individual or sole proprietorship is
duly organized and validly existing under the laws of the jurisdiction in which
it was organized; (iii) is duly qualified and in good standing under the laws
of each jurisdiction where its existing ownership, lease, or operation of
property in the conduct of its business requires, and (iv) has the power and
authority and the legal right to conduct the business in which it is currently
engaged and to enter into this Contract.

 

B.                                     Authority.  The Contractor has full
power, authority and legal right to execute, deliver and perform this
Contract.  The Contractor has taken all
necessary action to authorize the execution, delivery and performance of this
Contract.

 

14

 

C.                                     No Legal Bar.  The
execution, delivery and performance of the Contract do not and will not violate
any provision of any existing law, regulation, or of any order, judgment, award
or decree of any court or government applicable to the Contractor or the
charter or by-laws of the Contractor or any mortgage, indenture, lease,
contract, or other agreement or undertaking to which the Contractor is a party
or by which the Contractor or any of its properties or assets may be bound, and
will not result in the creation or imposition of any lien on any of its
respective properties or assets pursuant to the provisions of any such
mortgage, indenture, lease, contract or other agreement or undertaking.

 

D.                                    No Litigation. 
Except as specifically disclosed to the Authority in writing prior to
the date hereof, no claim, litigation, investigation or proceeding of or before
any court, arbitrator or governmental authority is currently pending nor, to
the knowledge of the Contractor, is any claim, litigation or proceeding
threatening against the Contractor or against its properties or revenues (i)
which involves a claim of defective design or workmanship in connection with
any contract entered into by the Contractor or (ii) which, if adversely
determined, would have an adverse effect on the business, operations, property
or financial or other condition of the Contractor.  For purposes of this paragraph, a claim, litigation,
investigation or proceeding may be deemed disclosed to the Authority if the
Authority has received, prior to the date hereof, detailed information
concerning the nature of the matter involved, the relief requested, and a
description of the intention of the Contractor to controvert or respond to such
matter.

 

E.                                      No Default. The Contractor is not in default in any respect in the payment or
performance of any of its obligations or in the performance of any mortgage,
indenture, lease, contract or other agreement or undertaking to which it is a
party or by which it or any of its properties or assets may be bound, and no
such default or Event of Default (as defined in any such mortgage, indenture,
lease, contract, or other agreement or undertaking) has occurred and is
continuing or would occur solely as a result of the execution and performance
of this Contract. The Contractor is not in default under any order, award, or
decree of any court, arbitrator, or government binding upon or affecting it or
by which any of its properties or assets may be bound or affected, and no such
order, award or decree would affect the ability of the Contractor to carry on
its business as presently conducted or the ability of the Contractor to perform
its obligations under this Contract or any of the other financing to which it
is a party.

 

F.                                      No Inducement or Gratuities.

 

1.                                       Contractor warrants that no person or selling
agency has been employed or retained to solicit or secure this Contract upon
any agreement or understanding for a commission, percentage, brokerage, or
contingent fee, excepting bona fide employees or bona fide established
commercial or selling agencies maintained by Contractor for the purpose of
securing business.

 

2.                                       Additionally, Contractor warrants that no
gratuities or other inducements have been offered or given or will be offered
or given (in the form of entertainment, gifts, offers of employment, or any
other thing of value) to any official or employee of the Authority.  The Contractor further warrants that during
the term of the contract it shall not make any offers of employment to any
Authority employee, or solicit or interview therefor, without obtaining the
written approval of the employee’s Department Head.

 

15

 

3.                                       For breach or violation of the foregoing
warranties, the Authority shall have the right to cancel the Contract without
liability or, at its discretion, to deduct from the Total Contract Price or
otherwise to recover the full amount of such commission, percentage, brokerage
or contingent fee, or gratuities, and to include the occurrence of such a
breach or violation in assessments of the Contractor’s responsibility in future
bids.

 

G.                                     Conflict of Interest. Contractor covenants that neither it, nor
any officer of the corporation or partner of the partnership, as the case may
be if Contractor be a corporation or partnership, has any interest, nor shall
it acquire any interest, either directly or indirectly, which would conflict in
any manner or degree with the performance of the Work hereunder. It further
covenants that, in the performance hereof, no person having such interest shall
be employed by it. It is expressly understood that breach of any of the
covenants contained in this paragraph is a material breach hereof and shall
entitle the Authority to recover damages immediately, as well as all monies
paid hereunder.

 

H.                                    No Conviction or Indictment. 
Contractor hereby represents that to the best of its knowledge neither
it, nor any of its personnel or shareholders has been the subject of any
investigation nor has any of them been convicted or indicted for commission of
any crime involving misconduct, corruption, bribery, or fraud in connection
with any public contract in the State of New York or any other jurisdiction,
except as has been specifically disclosed in writing to the Authority, and that,
should any such conviction or indictment be obtained or any such investigation
commenced prior to the expiration of the term hereof, regardless of the date of
the occurrence giving rise to the subject matter of such conviction, indictment
or investigation, it will be disclosed in writing to the Authority.

 

ARTICLE 224                                       NO ESTOPPEL AND NO WAIVER

 

A.                                   The Authority shall not, nor shall any
department or officer thereof be precluded or estopped by any return or
certificate made or given by the Authority, the Project Manager or other
officer, agent, or appointee thereof under any provision of this Contract from
at any time either before or after the final completion and acceptance of the
Work and payment therefor pursuant to any such return or certificate, showing
the true and correct classification, amount, quality and character of the Work
done and materials furnished by the Contractor or any other person under this
Contract or from showing at any time that such return or certificate is untrue
and incorrect or improperly made in any particular, or that the Work and
materials, or any part thereof, do not in fact conform to the Contract; and the
Authority shall not be precluded or estopped, notwithstanding any such return
or certificate and payment in accordance therewith, from demanding and
recovering from the Contractor such damages as it may sustain by reason of his
failure to comply with this Contract.

 

B.                                     Neither the acceptance of the Authority or
the Project Manager or any of the employees of the Authority, nor any order,
measurement or certificate by the Project Manager nor any order by the
Authority for payment of money nor any payment for, nor acceptance of, the
whole or part of the Work nor any extension of time, nor any possession taken
by the Authority or the employees of the Authority shall operate as a waiver of
any portion of this Contract or of any power herein reserved to the Authority
or of any right to damages herein provided; nor shall any waiver of any breach
of this Contract be held to be a waiver of any other or subsequent breach.

 

16

 

C.                                     In the event that the Authority is entitled
to any rights under any statute, whether or not expressly referenced in the
Contract Documents, nothing shall be deemed to constitute a waiver by the
Authority thereof.

 

ARTICLE 225                                       SEVERABILITY

 

If the Contract contains any unlawful
provisions, the same shall be deemed of no effect, and shall upon the
application of either party be stricken from the Contract without affecting the
binding force of the Contract as it shall remain after omitting such provision.

 

ARTICLE 226                                       SAFETY PRECAUTIONS

 

The Contractor will provide at his own cost
and expense such safety devices for the protection of his employees, and those
of the Subcontractor(s), the Authority, the public and any other persons as may
be necessary and as may be required by the Project Manager. Any failure to
provide such proper protection for his employees, and those of the
Subcontractor(s), the Authority, the public and any other persons whether or
not required by the Project Manager, will be deemed to be a material violation
by the Contractor of his responsibility and obligation hereunder. The
Contractor shall comply with all pertinent regulations of the Occupational
Safety and Health Act (OSHA).

 

ARTICLE 227                                       INSPECTION AND EVALUATION

 

A.                                   The Authority shall have the right to inspect
the Work hereunder. If any such inspection shows that the Work does not conform
to the Contract Documents including, but not limited to, the Technical
Specifications, the Authority shall so notify the Contractor and the Contractor
shall replace or repair the Work at no additional cost to the Authority so that
the Work conforms to the Contract Documents. The Authority’s failure to draw
the Contractor’s attention to any such failure to conform shall not relieve the
Contractor of any of its obligations under this Contract.

 

B.                                     Upon completion of the Work, the Contractor
shall notify the Project Manager in writing that the Work has been completed.
An Authority inspector will inspect the Work and if such Work is deemed
unsatisfactory in any respect, the Contractor, at no additional cost to the
Authority, will replace the goods or repair or correct such Work and, if
applicable, correct the installation all to the satisfaction of the Project
Manager. The Contractor must notify the Project Manager in writing that all
Work has been completed.

 

ARTICLE 228                                       BOOKS AND RECORDS / AUDIT
AND EXAMINATION

 

The Contractor shall permit authorized
representatives of the Authority and of the State and Government having
jurisdiction over this Contract, to examine and review all of Contractor’s
books and records, including but not limited to payrolls, records of personnel,
invoices and other relevant data, and to audit the books and records pertaining
to this Contract. All such books and records shall be retained for such
examination, review and audit for a period of three (3) years from the earlier
of termination of the Contract or completion of the Work.

 

17

 

ARTICLE 229                                       SUBCONTRACTOR/SUPPLIER BOOKS
AND RECORDS

 

The Contractor shall keep and shall cause
each Subcontractor/Supplier to keep accurate books and records in accordance
with “generally accepted accounting principles.”

 

ARTICLE 230                                       BRAND NAMES / SUBSTITUTION
OF SPECIFIED MATERIAL

 

A.                                   Wherever in the Contract a particular brand,
or make of material, or equipment is shown or specified, such material or
equipment is to be regarded merely as a standard for the purpose of concisely
indicating the requirements as to type, quality, performance, design and
finish. Any material or equipment other than that specified will be acceptable
if, in the opinion of the Project Manager, it is as satisfactory for the
particular work for which it was intended as the material or equipment
specified. Complete documentation in support of an “or equal” contention will
be required. The Project Manager may require that a presentation be made for
any proposed substitution.  The Authority
reserves the right to reject any such other material or equipment offered which
is not approved by the Project Manager as being in all respects equal to the
named material or equipment for the work for which it is to be used.  Such rejection may be for any reason
including without limitation the Project Manager’s determination that the
evaluation would result in excessive expense and/or time needed to evaluate
such material or equipment.

 

B.                                     Unless there is a specific statement to the
contrary, the Contractor understands that requests for such approval of any
alternative material or equipment shall be submitted within thirty (30) days
after Contract Award.

 

C.                                     The Contractor is obligated to furnish all
data and information as the Authority in its discretion deems necessary to
establish the equality of the alternative material or equipment. If the
Contractor seeks reconsideration of any determination with respect to
equivalency, the Authority shall have discretion to reconsider the matter. In
the event of a reconsideration the Contractor shall be obligated to pay all
Authority expenses in connection therewith.

 

D.                                    The Authority shall be the sole judge of the
acceptability of items offered as equal to that specified and may reject any
item not considered as equal thereto. 
The Contractor must submit proof satisfactory to the Authority,
including a non-returnable sample if requested by the Authority, that the item
the Contractor offers is equal to the material or equipment specified in
quality, performance and such other characteristics as the Authority may deem
relevant.

 

E.                                      The Authority will consider as evidence of
equivalency an independent laboratory certification concluding that the
Contractor’s proposed item meets or exceeds all requirements and standards,
including performance criteria, of the particular brand or make of material or
equipment specified by the Authority. 
The laboratory must be accredited by the American Association for
Laboratory Accreditation or be otherwise acceptable to the Authority.

 

18

 

ARTICLE 231                                       REMOVAL OF MATERIAL / WASTE
MATERIAL

 

A.                                   Unless otherwise specified for return to the
Authority, all scrap material (if any) shall become the property of the
Contractor.  It is presumed that the
scrap credit value is reflected in the Price Schedule.  The Contractor, at its own cost and expense,
shall be responsible for removal and proper disposal of all scrap material, in
accordance with all applicable federal, state and local laws, rules and regulations.
The Contractor shall defend, indemnify and hold harmless the Authority for any
and all claims relating to said scrap material.

 

B.                                     Waste material of any character will under no
conditions be permitted to remain on the site of the Work but must be
immediately on it becoming unfit for use in the Work be carted away and
disposed of by the Contractor at his own expense.  The Contractor shall thoroughly clean and keep clean the areas in
which the Work hereunder is to be done or which are to be used in connection
herewith.

 

ARTICLE 232                                       QUALITY ASSURANCE

 

The Contractor shall be responsible for
quality assurance and for assuring that the Work conforms to Specifications.
The Contractor shall maintain an effective and economical quality control
program planned and developed in conjunction with other Contractor functions
necessary to satisfy the Contract requirements. The quality control program
shall establish and implement procedures to ensure that only acceptable
supplies are presented to the Project Manager, and shall demonstrate both
recognition of the quality requirements of the Contract and an organized
approach to satisfy these requirements. The program shall ensure that quality
requirements are determined and satisfied throughout all phases of Contract
performance, including, as applicable, design development, purchasing,
fabrication, processing, assembly, inspection, testing, packaging, delivery,
storage and systems check and shall provide for the early and prompt detection
of actual or potential deficiencies, trends, or conditions which could result
in unsatisfactory quality and the Contractor must be prepared to demonstrate to
the Project Manager’s satisfaction the program is effective and in operation.

 

ARTICLE 233                                       COMPLIANCE WITH APPLICABLE
LAWS, REGULATIONS/ENVIRONMENTAL MATTERS

 

A.                                   The Contractor and all persons employed upon
the Work, including its Subcontractors, agents, officers, and employees shall
comply with all applicable laws, rules and regulations, including all
applicable requirements of governmental agencies and departments in the
jurisdiction in which the Work is performed, and all safety regulations of the
Authority.

 

B.                                     The Contractor, Subcontractor and all
Suppliers must submit evidence that all standards, orders and regulations issued
pursuant to the Clean Air Act of 1970 will be met. If either the State or City
air pollution control agency has more restrictive standards, they shall be
enforced.  The evidence and related
documents will be retained by the Authority for on-site examination by
appropriate enforcement agencies.

 

19

 

C.                                     The Contractor, and any Subcontractor must
comply with all local, State and Federal laws, rules and regulations applicable
to this Contract and to the Work to be done hereunder, including but not
limited to the Federal Occupational Safety and Health Act of 1970 and the
Construction Safety Act of 1969, as amended.

 

D.                                    Attention is called regarding environmental
matters that must be observed by the Contractor in the prosecution of the Work,
consisting, among others, of safety of operations, noise control, prevention
and/or control of air pollution, removal of waste materials, storage of
construction materials, protection against fire, minimum disturbance to pedestrian
and vehicular traffic, maintaining use of public facilities, and protection
against dust hazards. These matters are specifically enumerated merely as a
guide. The enumeration is not a complete list of environmental matters to be
observed and does not exclude matters contained in this Contract or matters
applicable by virtue of City, State or Federal law, rule or regulation which
are not specifically designated in this paragraph.  All environmental provisions will be strictly enforced.

 

E.                                      As between inconsistent provisions among
Federal State and local laws, the Contractor should generally comply with the
more stringent requirement, unless a Federal law, rule or regulation requires
that the affected Federal provision be observed, notwithstanding the existence
of a more stringent applicable State or local requirement.

 

F.                                      Prohibition on Purchase of Tropical Hardwoods

 

1.                                       Except as hereinafter provided, New York
State Finance Law §165-2, prohibits public benefit corporations (the Authority)
from purchasing or obtaining for any purpose any tropical hardwoods or tropical
hardwood products in any form.

 

2.                                       The provisions of the subsection F of
this Article shall not apply to:

 

a.                                       any hardwoods purchased from a sustained,
managed forest; or

 

b.                                      the purchase of any tropical hardwood or
tropical hardwood product for which there is no acceptable non-tropical
hardwood species; or

 

c.                                       where the Contracting Officer finds that no
person or entity doing business in the state is capable of providing acceptable
non-tropical hardwood species sufficient to meet these particular contract
requirements; or

 

d.                                      the restriction would violate the terms of a
grant to the Authority from the Federal Government; or

 

e.                                       Where the inclusion of such provisions
results in a substantial cost increase to the Authority.

 

20

 

3.                                       As used in this Article:

 

a.                                       “Non-tropical hardwood species” shall mean
any and all hardwood that grows in any geographically temperate regions, as
defined by the United States Forest Service, and is similar to tropical
hardwood in density, texture, grain, stability or durability. Non-tropical
hardwood, the use or purchase of which is preferred under this Article, shall
include, but not be limited to the following species:

 

	
  Scientific Name

  	
   

  	
  Common
  Name

  
	
   

  	
   

  	
   

  
	
  Fraxinus americana

  	
   

  	
  Ash

  
	
  Tilia americana

  	
   

  	
  Basswood

  
	
  Fagus grandifolia

  	
   

  	
  Beech

  
	
  Betula papyrifera

  	
   

  	
  Birch

  
	
  Jugians cinerea

  	
   

  	
  Butternut

  
	
  Prunus serotina

  	
   

  	
  Cherry

  
	
  Poulus spp.

  	
   

  	
  Cottonwood

  
	
  Ulmus spp.

  	
   

  	
  Elms

  
	
  Nyssa sylvatica

  	
   

  	
  Black gum

  
	
  Liquidambar styracifula

  	
   

  	
  Red gum

  
	
  Celtis laevigata

  	
   

  	
  Hackberry

  
	
  Hicoria spp.

  	
   

  	
  Hickory

  
	
  Acer spp.

  	
   

  	
  Maples

  
	
  Quercus spp.

  	
   

  	
  Oaks

  
	
  Hicoria spp.

  	
   

  	
  Pecan

  
	
  Liriodendron tulipi fera

  	
   

  	
  Yellow poplar

  
	
  Platanus occidentalis

  	
   

  	
  Sycamore

  
	
  Juglans nigra

  	
   

  	
  Black Walnut

  

 

b.                                      “Tropical hardwood” shall mean any and all
hardwood, scientifically classified as angiosperme, that grows in any tropical
moist forest.  Tropical hardwoods shall
be the following species:

 

	
  Scientific Name

  	
   

  	
  Common
  Name

  
	
   

  	
   

  	
   

  
	
  Vouacapous americana

  	
   

  	
  Acapu

  
	
  Pericopsis elata

  	
   

  	
  Afrormosis

  
	
  Shorea almon

  	
   

  	
  Almon

  
	
  Peltogyne spp.

  	
   

  	
  Amaranth

  
	
  Guibourtia ehie

  	
   

  	
  Amazaque

  
	
  Aningeris spp.

  	
   

  	
  Aningeria

  
	
  Dipterocarpus grandiflorus

  	
   

  	
  Apilong

  
	
  Ochroma lagopus

  	
   

  	
  Balsa

  
	
  Virola spp.

  	
   

  	
  Banak

  

 

21

 

	
  Scientific Name

  	
   

  	
  Common
  Name

  
	
   

  	
   

  	
   

  
	
  Anisoptera thurifera

  	
   

  	
  Bella Rose

  
	
  Guibourtis amoldiana

  	
   

  	
  Benge

  
	
  Deterium Senegalese

  	
   

  	
  Boire

  
	
  Guibourtis demeusil

  	
   

  	
  Bubinga

  
	
  Prioria copaifera

  	
   

  	
  Cativo

  
	
  Antiaris africana

  	
   

  	
  Chenchen

  
	
  Dalbergis retusa

  	
   

  	
  Concobola

  
	
  Cordia spp.

  	
   

  	
  Corida

  
	
  Diospyros spp.

  	
   

  	
  Ebony

  
	
  Aucoumes klaineana

  	
   

  	
  Gaboon

  
	
  Chlorophors excelsa

  	
   

  	
  Iroko

  
	
  Acacia koa

  	
   

  	
  Koa

  
	
  Pterygota macrocarpa

  	
   

  	
  Koto

  
	
  Shorea negrosensis

  	
   

  	
  Red Lauan

  
	
  Pentacme contorta

  	
   

  	
  White Lauan

  
	
  Shores ploysprma

  	
   

  	
  Tanquile

  
	
  Terminalia superba

  	
   

  	
  Limba

  
	
  Aniba duckel

  	
   

  	
  Louro

  
	
  Kyaya ivorensis

  	
   

  	
  Africa Mahogany

  
	
  Swletenia macrophylla

  	
   

  	
  Amer. Mahogany

  
	
  Tieghemella leckellii

  	
   

  	
  Makora

  
	
  Distemonanthus benthamianus

  	
   

  	
  Movinqui

  
	
  Pterocarpus soyauxii

  	
   

  	
  African Padauk

  
	
  Pterocarpus angolensis

  	
   

  	
  Angola Padauk

  
	
  Peltogyne spp.

  	
   

  	
  Purpleheart

  
	
  Dalbergia spp.

  	
   

  	
  Rosewood

  
	
  Entandrophragma cylindricum

  	
   

  	
  Sapela

  
	
  Shores philippinensis

  	
   

  	
  Sonora

  
	
  Tectona grandis

  	
   

  	
  Teak

  
	
  Lovoa trichilloides

  	
   

  	
  Tigerwood

  
	
  Milletia laurentii

  	
   

  	
  Wenge

  
	
  Microberlinia brazzavillensis

  	
   

  	
  Zebrawood

  

 

c.                                       “Tropical rain forests” shall mean any and
all forests classified by the scientific term “Tropical moist forests,” the
classification determined by the equatorial region of the forest and average
rainfall.

 

d.                                      “Tropical wood products” shall mean any wood
products, wholesale or retail, in any form, including but not limited to
veneer, furniture, cabinets, paneling, moldings, doorskins, joinery, or
sawnwood, which are composed of tropical hardwood except plywood.

 

22

 

G.                                     Omnibus Procurement Act of 1992

 

1.                                       If this Contract is awarded in an amount
equal to or greater than one million dollars, the Contractor will be required
to document its efforts to encourage the participation of New York State
business enterprises as suppliers and subcontractors by showing that the
Contractor has:

 

a.                                       solicited bids, in a timely and adequate
manner, from New York State business enterprises including certified
minority-owned business,

 

b.                                      contacted the New York State Department of
Economic Development to obtain listings of New York State business enterprises,

 

c.                                       placed notices for subcontractors and
suppliers in newspapers, journals and other trade publications distributed in
New York State, or

 

d.                                      participated in bid outreach conferences.

 

If the Contractor determines
that the New York State business enterprises are not available to participate
on the Contract as subcontractors or suppliers, the Contractor shall provide a
statement indicating the method by which such determination was made. If the
Contractor does not intend to use subcontractors, the Contractor shall provide
a statement verifying such.

 

2.                                       If this Contract is awarded in an amount
equal to or greater than one million dollars, the Contractor will be required
to notify New York State residents of employment opportunities through listing
any such positions with Community Services Division of the New York Department
of Labor, or providing for such notification in such manner as is consistent
with existing collective bargaining contracts or agreements.

 

ARTICLE 234                                       FINAL PAYMENT TO ACT AS
RELEASE

 

The acceptance by Contractor or any person
claiming under Contractor of the final payment hereunder, whether such payment
be made pursuant to any judgment or order of any court or otherwise, shall be
and shall operate as a release to the Authority from all claim and liability to
Contractor for anything theretofore done or furnished for or related to the
Work or for any prior act, neglect, fault or default of the Authority or of any
person relating to or affecting the Work, except only such claims against the
Authority as have been asserted in accordance with Article 213 “Claims by
Contractor” above, or as are specifically reserved in writing prior to
accepting the final payment hereunder.

 

23

 

ARTICLE 235                                       INDEPENDENT CONTRACTOR

 

The Contractor agrees that, in accordance
with its status as an independent contractor, it will conduct itself consistent
with such status, that it will neither hold itself out as nor claim to be an
officer or employee of the Authority, State or City, by reason hereof, and that
it will not by reason hereof, make any claim, demand or application to or for
any right or privilege applicable to an officer or employee of the Authority,
State or City, including, but not limited to, Worker’s Compensation coverage,
Unemployment Insurance Benefits, Social Security coverage or Retirement
membership or credit.

 

ARTICLE 236                                       CONTRACTOR’S EMPLOYEES

 

A.                                   All experts or consultants or employees of
the Contractor who are employed by the Contractor to perform Work under this
Agreement are neither employees of the Authority nor under contract to the
Authority and the Contractor alone is responsible for their work, direction,
compensation and personal conduct while engaged under this Agreement.  Nothing in this Agreement shall impose any
liability or duty on the Authority for the acts, omissions, liabilities or
obligations of the Contractor or any other person, firm, company, agency,
association, corporation, or organization engaged by the Contractor as expert,
consultant, independent contractor, specialist, trainee, employee, servant, or
agent, or for taxes of any nature including but not limited to unemployment
insurance, workers’ compensation, disability benefits and social security, or,
except as specifically stated in this Agreement, to any person, firm or
corporation.

 

B.                                     All employees of the Contractor or
Subcontractor shall wear a visible identification badge at all times while on
Authority property and shall observe all rules and regulations applicable to
Authority employees. The identification badge shall contain the employee’s
name, picture, title of position, name of company and address of company.

 

C.                                     Employees of the Contractor who are found to
be intoxicated, or who have been found partaking of or appear to be under the
influence of intoxicating or alcoholic beverages or controlled substances while
engaged in the performance of their duties or during their break period shall
be summarily removed by the Contractor from the project for the duration of the
Contract because of the stringent safety precautions required.

 

D.                                    Whenever the Project Manager shall notify the
Contractor in writing that in his/her opinion any worker employed for this
Contract is incompetent, unfaithful or disorderly, such individual shall be
discharged from the Work and shall not again be employed on it.

 

ARTICLE 237                                       CONFIDENTIALITY /
ADVERTISING LIMITATION

 

A.                                   Contractor, its employees, and Subcontractors
shall keep confidential all information furnished to it (them) by the Authority
or otherwise learned by it (them) in the course of performance hereunder.

 

B.                                     Except as may be required by law, Contractor
shall not make any announcement or release any information concerning this
Contract or any part thereof to any member of the public, press, or any
official body, unless prior written consent is obtained from the Authority.

 

24

 

ARTICLE 238                                       TAX EXEMPTION

 

The Contractor is advised that the Authority
is exempt from sales and compensating use taxes on all tangible personal
property (materials, equipment and components) pursuant to Section 1216 of
the Public Authorities Law of the State of New York, and the Contractor shall not
include any charges representing such taxes on any invoices hereunder.  Contractor shall be responsible for all
franchise fees and taxes of any kind whatsoever.

 

ARTICLE 239                                       EQUAL OPPORTUNITY FOR
MINORITY GROUP MEMBERS AND WOMEN

 

The provisions of this Article apply if
the award for this contract is in excess of $25,000 for labor, services,
supplies, equipment, material or any combination of the foregoing; or in excess
of $100,000 for the acquisition, construction, demolition, replacement, major repair
or renovation of real property and improvement thereon.

 

A.                                   The Contractor will not discriminate against
employees or applicants for employment because of race, creed, color, national
origin, sex, age, disability or marital status, and will undertake or continue
existing programs of affirmative action to ensure that minority group members
and women are afforded equal employment opportunities without
discrimination.  For purposes of this
Article affirmative action shall mean recruitment, employment, job assignment,
promotion, upgrading, demotion, transfer, layoff, or termination and rates of
pay or other form of compensation.

 

B.                                     At the request of the Authority, the
Contractor shall request each employment agency, labor union, or authorized
representative of workers with which it has a collective bargaining or other
agreement or understanding to furnish a written statement that such employment
agency, labor union or representative will not discriminate on the basis of
race, creed, color, national origin, sex, age, disability or marital status and
the such union or representative will affirmatively cooperate in the
implementation of the Contractor’s obligations herein.

 

C.                                     The Contractor shall state, in all
solicitations or advertisements for employees, that, in the performance of this
Contract, all qualified applicants will be afforded equal employment
opportunities without discrimination because of race, creed, color, national
origin, sex, age, disability or marital status.

 

D.                                    After award of this Contract, the Contractor
shall submit to the Authority a work force utilization report, in a form and
manner required by the Authority, of the work force actually utilized on this
Contract, broken down by specified ethnic background, gender, and Federal
Occupational Categories or other appropriate categories specified by the
Authority.

 

E.                                      Within sixty (60) days of the execution of
this Contract, the Contractor shall submit a staffing plan, in a form and
manner required by the Authority, which shall contain information on employees
projected to work on activities related to the contract. This information must
be broken down by specified ethnic background, gender and related job titles.

 

25

 

 

F.                                      For construction contracts, after the award
of the Contract, the Contractor shall submit on a monthly basis, in a form and
manner required by the Authority, throughout the life of the Contract, a work
force utilization report which details employee’s hours worked on activities
related to this Contract.  This
information must be broken down by specified ethnic background, gender and
related job titles.

 

G.                                     Except for construction contracts, after the
award of the Contract, the Contractor shall submit on a semi-annual basis, in a
form and manner required by the Authority, throughout the life of the Contract,
a work force utilization report which details the number of employees that
worked on activities related to this Contract. This information must be broken
down by specified ethnic background, gender and related job titles. In
instances where a contractor’s work force cannot be broken out, the Contractor
must affirm such and submit, an EEO-1 Form detailing its current work force.

 

H.                                    The Contractor will include the provision of
paragraphs A through G above, in every subcontract in such a manner that the
provisions will be binding upon each subcontractor as to work in connection
with this Contract, including the requirement that subcontractors and parties
to this Contract shall undertake or continue existing programs of affirmative
action to ensure that minority group members and women are afforded equal
employment opportunities without discrimination, and, when requested, provide
to the Contractor information on the ethnic background, gender, and Federal
Occupational Categories of the employees to be utilized on this Contract.

 

ARTICLE 240                                       ANTITRUST ASSIGNMENT

 

The Contractor hereby assigns, sells and
transfers to the Authority all right, title and interest in and to any claims
and causes of action arising under the antitrust laws of New York State or of
the United States relating to the particular goods or services purchased or
procured by the Authority under this Contract.

 

ARTICLE 241                                       GRAND JURY TESTIMONY

 

Upon refusal of the Contractor as an
individual or as member, partner, director or officer of the Contractor, if the
Contractor be a firm, partnership or corporation, when called before a grand
jury, governmental department, commission, agency or any other body which is
empowered to compel the attendance of witnesses and examine them under oath, to
testify in an investigation or to answer any relevant questions concerning any
transaction or contract entered into with the State, or any political
subdivision thereof, or a public authority or with any public department,
agency or official of the State or any political subdivision thereof, when
immunity has been granted to the witness against subsequent use of such
testimony, or any evidence derived therefrom in any subsequent criminal proceeding:

 

26

 

(a)                                  Such individual, or any firm, partnership or
corporation of which he is a member, partner, director or officer shall be
disqualified for a period of five (5) years after such refusal from submitting
bids for, or entering into or obtaining any contracts, leases, permits or
licenses with the City of New York, the Metropolitan Transportation Authority
or the New York City Transit Authority or submitting bids for or entering into,
or obtaining any contracts, leases, permits or licenses which will be paid out
of any monies under the control of or collected by the City, the Metropolitan
Transportation Authority, the New York City Transit Authority and/or shall be
subject to such other action appropriate under the circumstances; and

 

(b)                                 this Contract and any and all such existing
contracts, leases, permits or licenses made with or obtained by any such
individual or with or by the firm, partnership, or corporation of which he/she
is a member, partner, director or officer may be cancelled or terminated by the
City, the Metropolitan Transportation Authority or the New York City Transit
Authority or the contracting agency or be subject to such action appropriate
under the circumstances thereto without incurring any penalty or damages on
account of such cancellation or termination, but any monies owing for goods
delivered, work done, or rentals, permit or license fees due, prior to the
cancellation or termination, shall be paid.

 

ARTICLE 242                                       YEAR 2000 COMPLIANCE

 

A.                                   The Contractor represents and warrants that
the Product shall be Year 2000 Compliant. 
For purposes of this representation and warranty,

 

1.                                       the term “Product” means (a) each piece or
component of equipment, hardware, custom or commercial software, firmware,
middleware, or other information technology, or internal components, routines
or subroutines therein which perform any date/time recognition function,
calculation, comparing or sequencing, that is being delivered, developed, or
modified under this Contract, (b) any system being provided by the Contractor
and all interfaces to such system that the Contractor is providing under this
Contract, including but not limited to data entry interfaces for such system
and interfaces with other systems, and (c) where services are being furnished,
(e.g., consulting, system, integration, code or data conversion or data entry),
the resulting deliverables; and

 

2.                                       the term “Year 2000 Compliant” means that the
Product being provided by the Contractor under this Contract, individually or
in combination, shall, without human intervention, (a) accurately process all
date/time related data (including, but not limited to, calculating, comparing,
and sequencing) from, into, and between centuries, including, without limitation,
the twentieth and twenty-first centuries, and the years 1999 and 2000 and all
leap year calculations, (b) either includes data structures that utilize a four
digit year format or, at a minimum, operates so that all import and export data
is in a four digit year format, and (c) when used in combination with other
information technology, accurately process date/time related data to the extent
that other information technology being used in combination with the Product
(i) was specified in the Contract as being information technology with which
the Product must be compatible, (ii) was otherwise warranted by the Contractor
as being compatible, or (iii) properly exchanges date/time related data with
the Product.

 

27

 

B.                                     The Contractor shall promptly notify the
Authority if the Contractor knows or has reason to believe that the Product is
not or  may not be Year 2000
Compliant.  Notwithstanding any other
provision of this Contract to the contrary, in the event that the Product fails
to perform in a Year 2000 Compliant manner or the Contractor knows that the
Product is not Year 2000 Compliant, the Contractor agrees that it will make all
adjustments, modifications, repairs or replacements necessary to bring the Product
within compliance and shall thereafter thoroughly test the Product to ensure
such compliance, at no additional cost to the Authority and with minimal
interference to the operations and functions of the Authority, time being of
the essence.  In addition to the
specific obligations of the Contractor set forth above, the Authority shall be
entitled to exercise any and all other remedies provided under law and this
Contract for breach of this representation and warranty, which, for purposes of
Article 208, shall be deemed a material breach of this Contract.

 

C.                                     If any part of the Work to be performed
requires that the Contractor utilize its own hardware, custom or commercial
software, firmware, middleware, or other information technology, or internal
components, routines or subroutines therein which perform any date/time
recognition function, calculation, comparing or sequencing, the Contractor
represents and warrants that: (1) such items are Year 2000 Compliant, as
defined in this Article; or (2) will be Year 2000 Compliant in advance of
January 1, 2000; and/or (3) the Contractor has contingency plans in place
in the event of a Year 2000 disruption in its hardware, software, etc., such
that there will be no interruption or disruption of such Work or the Contractor’s
performance thereof.

 

D.                                    In addition to all other provisions of this
Contract which, by their nature, survive expiration and termination, it is
expressly understood that this representation and warranty shall survive the
expiration or termination of this Contract.

 

ARTICLE 243                                       CONTRACT DOCUMENTS CONTAIN
ALL TERMS / CONTRACTOR HAS EXAMINED CONTRACT

 

A.                                   These Contract Documents contain all the
terms and conditions agreed upon by the parties hereto, and no other agreement,
oral or otherwise, regarding the subject matter of this Contract shall be
deemed to exist or to bind any of the parties hereto, or to vary any of the
terms contained herein.

 

B.                                     The Contractor hereby represents that prior
to the execution of this Contract he read each and every clause and
section of the Contract and had full opportunity to consider the same and
make necessary investigations relating thereto; and he shall not make any claim
for, or have any right to, damages or an extension of time for completion of
the Contract or any other concession because of any misinterpretation or
misunderstanding of this Contract or because of any lack of information.

 

ARTICLE 244                                       ALL LEGAL PROVISIONS
INCLUDED

 

It is the intent of the parties that each and
every provision of law required to be inserted in this Contract should be and
is inserted herein. Every such provision is to be deemed to be inserted herein,
and if any such provision is not inserted or is not inserted in correct form,
then this contract shall be deemed amended by such insertion so as to comply
strictly with the law and without prejudice to the rights of either party
hereunder.

 

28

 

NEW YORK
CITY TRANSIT AUTHORITY

CONTRACT MODIFICATION/CHANGE ORDER

 

 

	
  Contract Number:

  	
   

  	
  00D7815B

  	
  Modification/Change Order No.:   001

  
	
   

  	
   

  	
   

  
	
  Purchase Order #:

  	
   

  	
  A1235

  
	
   

  	
   

  	
   

  
	
  Contract Title:

  	
   

  	
  Access-A-Ride Paratransit Transportation Service

  
	
   

  	
   

  	
   

  
	
  Contractor:

  	
   

  	
  Atlantic Paratrans, Inc.

  

 

This Modification/Change Order, when properly
executed, constitutes, authorization to proceed with the changes described
below and changes the amount of the contract as noted.

 

DESCRIPTION
OF CHANGE

 

	
  A.

  	
   

  	
  Original Contract Amount:

  	
   

  	
  $

  	
  190,460,786

  	
   

  
	
  B.

  	
   

  	
  Previous Changes Amount (Estimated):

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  C.

  	
   

  	
  This Change Amount (Estimated):

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  D.

  	
   

  	
  New Contract Amount (A+B+C) (Estimated):

  	
   

  	
  $

  	
  190,460,786

  	
   

  

 

WHEREAS, the Contractor, under the terms of Agreement
00D7815B, dated October 4, 2001, (hereinafter the “Contract” or the
“Agreement”) and including all terms, covenants and conditions as
changed/modified/supplemented to date remain in full force and effect, except
as herein stated, has contracted to provide Access-A-Ride Paratransit
Transportation Service for the Primary Service Area of
Brooklyn/Queens/Overnight and citywide service in the five boroughs; and

 

WHEREAS, the New York City Transit Authority
(hereinafter the “Authority” or “NYC Transit”) and the Contractor have agreed
to revise certain provisions of the Contract;

 

NOW,
THEREFORE, the
parties agree to modify the Contract as follows:

 

1.               The execution of this Modification Agreement
shall not operate as a modification, waiver, or rescission of any provision of
the Contract, or as a waiver of any rights under any Article of said
Contract, except as expressly provided herein.

 

2.               Consistent with the Authority’s Consent to
Assignment of this Contract from Atlantic Paratrans, Inc. to Atlantic Paratrans of NYC, Inc., on
January 2, 2002, this Contract is modified to formally name Atlantic
Paratrans of NYC, Inc. as the Contractor.

 

1

 

	
  Contractor:

  	
  Atlantic
  Paratrans of NYC, Inc.

  	
  New
  York City Transit Authority:

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
  /s/ Domenic Gatto

  	
   

  	
  Signature:

  	
  /s/ Ira Tillman

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Domenic Gatto

  	
   

  	
  Name:

  	
  Ira Tillman

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President

  	
   

  	
  Title:

  	
  Senior Director

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  January 9, 2002

  	
   

  	
  Date:

  	
  1/11/02

  

 

CONTRACTOR:  PLEASE RETURN EXECUTED COPIES TO:

 

New York
City Transit

130 Livingston Street, Room 6004B, Brooklyn, NY 11201

Attn: Gail L. Anderson, 718-694-5267

 

2

 

ACKNOWLEDGMENT
OF CORPORATION

 

	
  STATE OF

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  )

  	
  ss:

  
	
   

  	
   

  	
   

  
	
  COUNTY OF

  	
  )

  	
   

  

 

On this 9th day of January, 2002 before me
personally appeared Domenic Gatto to me known, who, being
by me first duly sworn, did depose and say: That he/she resides at No. 7 North
Street, Staten Island in the City of New York, in the County of
Richmond, in the State of New York, that
he/she is the President of Atlantic
Paratrans of NYC, Inc., the
corporation described in and which executed the foregoing Contract; that he/she
knows the corporate seal of said corporation; that one of the seals affixed to
said Contract is such corporate seal; that it was affixed thereto by order of
the Board of Directors of said corporation, and that he/she signed his/her name
thereto by like authority.

 

 

	
  /s/ Robert W.
  Reichenbach

  

 

	
  Notary
  Public

  
	
  Robert W. Reichenbach

  
	
  Notary
  Public, State of New York

  
	
  No.
  41-8526165

  
	
  Qualified
  in Nassau County

  
	
  Certificate
  Fled in Nassau County

  
	
  Commission
  Expires Sept. 30, 2002

  

 

3

 

ACKNOWLEDGMENT
FOR THE AUTHORITY

 

	
  STATE OF NEW YORK

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  )

  	
  ss:

  
	
   

  	
   

  	
   

  
	
  COUNTY OF KINGS

  	
  )

  	
   

  

 

On this 11th day of January, 2002,
before me personally appeared Ira Tillman to
me known, who, being by me first duly sworn, did depose and say: That he is the
Senior Director of the Materiel Division, New York City Transit Authority, the
public benefit corporation described in and which executed the foregoing
instrument and that he acknowledged to me that he signed his name thereto
pursuant to the authorization of said Authority.

 

 

	
   

  	
  /s/ Stacey A. Myers

  	
   

  
	
   

  	
  Stacey A. Myers

  	
   

  
	
   

  	
  Notary Public, State of
  New York

  	
   

  
	
   

  	
  No. 24-5015180

  	
   

  
	
   

  	
  Qualified in Kings County

  	
   

  
	
   

  	
  Commission Expires
  July 19, 2005

  	
   

  

 

4

 

CONSENT TO
ASSIGNMENT

 

The New York City Transit Authority
(hereinafter, “NYCT”) hereby consents to the assignment set forth in the
attached Assignment Agreement, such consent being expressly conditioned upon
the following terms:

 

1.                                       NYCT agrees that the Assignee may relieve the
Assignor from and the Assignee shall itself assume all duties, liabilities and
obligations under the Contract, provided that Assignee fully performs all such
duties, liabilities and obligations. Notwithstanding any provisions to the
contrary in the Assignment Agreement, the Assignor is not otherwise released by
virtue of the assignment or by this consent from any obligations to NYCT under
the Contract.

 

2.                                       Notwithstanding any provisions to the
contrary in the Assignment Agreement, the Assignor shall guarantee to NYCT full
performance by the Assignee of all duties and obligations assumed by the
Assignee.

 

3.                                       No documents subsequently issued to either
the Assignor or the Assignee to facilitate payment or to otherwise effectuate
the assignment, irrespective of how such documents may be characterized
(including, but not limited to, any notice purporting to cancel the Contract
awarded to the Assignor), shall be construed to relieve the Assignor from any
obligation to NYCT, unless otherwise expressly provided in a separate release
executed by NYCT.

 

CONDITIONS
ACCEPTED:

 

	
  Assignor:

  	
   

  	
  Assignee:

  
	
   

  	
   

  	
   

  
	
  ATLANTIC PARATRANS, INC.

  	
   

  	
  ATLANTIC PARATRANS OF NYC, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Domenic Gatto

  	
   

  	
   

  	
  By:

  	
  /s/ Domenic Gatto

  	
   

  
	
   

  	
   

  	
   

  
	
  Domenic Gatto, President

  	
   

  	
   

  	
  Domenic Gatto, President

  	
   

  
	
  (signature)

  	
   

  	
   

  	
  (signature)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  December 28, 2001

  	
   

  	
   

  	
  December 28, 2001

  	
   

  
	
  (date)

  	
   

  	
   

  	
  (date)

  	
   

  

 

 

NYCT
CONSENT:

 

	
  /s/ Ira Tillman

  	
   

  	
   

  	
  No Legal Objection:

  	
   

  
	
  Assistant Chief
  Procurement Officer

  	
   

  	
   

  	
  General Counsel NYCT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Wendy
  Feldman

  	
   

  
	
  1/7/02

  	
   

  	
   

  	
  1/02/02

  	
   

  
	
  (date)

  	
   

  	
   

  	
  (date)

  	
   

  
							

 

 

ASSIGNMENT
OF PARATRANSIT SERVICES CONTRACT

 

Assignment Agreement (this
“Agreement”) made as of this 28th day of December 2001, by and between:

 

ATLANTIC PARATRANS, INC., a
New York corporation with offices located at 7 North Street, Staten Island, New
York 10302 (“Assignor”); and

 

ATLANTIC PARATRANS OF NYC,
INC., a New York corporation with offices located at 7  North Street, Staten Island, New York
10302 (“Assignee”);

 

WHEREAS, Assignor has
entered into a contract (No. 00D7815B) with the New York City Transit Authority
to provide paratransit services in the City of New York (the “Paratransit
Contract”); and

 

WHEREAS, the Assignor has
agreed to assign the Paratransit Contract to the Assignee, which is an
affiliated company of the Assignor, subject to the terms and conditions set
forth herein:

 

NOW, THEREFORE, in
consideration of the premises and mutual representations, warranties and
covenants contained herein and intending to be legally bound hereby, the
parties agree as follows:

 

1.                                       Assignment of Paratransit Contract. Assignor, effective as of January 1,
2001 (the “Effective Date”), the Assignor hereby grants, transfers and assigns
unto Assignee, and the Assignee hereby takes, accepts and assumes, all of the
Assignor=s rights, obligations and interest in, to and under the Paratransit
Contract, including, without limitation, the performance of the paratransit
services.  Except as specifically set forth
in this Agreement, the foregoing grant, transfer and assignment is made without
recourse whatsoever to the Assignor.

 

2.                                       Consideration. In consideration of the assignment of the
Paratransit Contract, the Assignee shall pay to the Assignor $1.00.

 

3.                                       Indemnification. The Assignee shall indemnify and save the
Assignor and its agents, employees, officers and affiliates harmless from any
and all claims, demands, actions, causes of action, suits, proceedings,
damages, liabilities and costs and expenses, including reasonable attorneys
fees, of every nature whatsoever arising out of (i) the performance by Assignee
of the paratransit services under the Paratransit Contract; (ii) breach of the
Paratransit Contract by the Assignee, on or after the Effective Date,
including, without limitation, any penalties or liquidated damages assessed by
New York City Transit Authority on account of Assignee=s breach; or (iii)
breach of this Agreement.

 

 

4.                                       Miscellaneous.

 

(a)                                  Governing Law. This Agreement will be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to conflict of law principles.

 

(b)                                 Assignment. This Agreement and all the rights and powers granted hereby shall
bind and inure to the benefit of the parties hereto and their respective
permitted successors, heirs, personal representatives and permitted assigns.
This Agreement and the rights, interests and obligations hereunder may not be
assigned by any party hereto without the prior written consent of the other
parties hereto.

 

(c)                                  Amendment and Waiver; Cumulative Effect.  To
be effective, any amendment or waiver under this Agreement must be in writing
and be signed by the party against whom enforcement of the same is sought. No
party shall, by any act, delay, omission or otherwise be deemed have expressly
or impliedly waived any of its rights, powers and/or remedies unless such
waiver shall be in writing.  A waiver by
a party of any right, power and/or remedy on any one occasion shall not be
construed as a bar to or a waiver of any such right, power and/or remedy which
such party would otherwise have on any future occasion, whether similar in kind
or otherwise. The rights, powers and remedies of the parties hereto are
cumulative and not exclusive of the rights, powers and remedies that they
otherwise might have now or hereafter, at law, in equity, by statute or
otherwise.

 

(d)                                 Entire Agreement: No Third Party
Beneficiaries. This
Agreement sets forth all of the promises, covenants, agreements, conditions and
undertakings between the parties hereto with respect to the subject matter
hereof, and supersedes all prior or contemporaneous agreements and
understandings, negotiations, inducements or conditions, express or implied,
oral or written, including any letter of intent, as amended. This Agreement is
not intended to confer upon any person other than the parties hereto any rights
or remedies hereunder.

 

(e)                                  Severability. If any term or other provision of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal
or incapable of being enforced under any rule of law in any particular respect
or under any particular circumstances, such term or provision shall
nevertheless remain in full force and effect in all other respects and under
all other circumstances, and all other terms, conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party.  Upon final determination by a court of
competent jurisdiction that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner.

 

(f)                                    Counterparts. 
This Agreement may be executed in two or more facsimile counterparts,
each of which shall be deemed to be an original but all of which together shall
be deemed to be one and the same instrument followed by exchange of original
execution documents between the parties.

 

2

 

IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the year  and date first above written.

 

	
   

  	
  ATLANTIC PARATRANS, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Domenic
  Gatto

  	
   

  
	
   

  	
  Name:

  	
    Domenic Gatto

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  ATLANTIC PARATRANS OF NYC, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Domenic
  Gatto

  	
   

  
	
   

  	
  Name:

  	
  Domenic GAtto

  
	
   

  	
  Title:

  	
  President

  
					

 

3

 

NEW YORK
CITY TRANSIT AUTHORITY

CONTRACT MODIFICATION/CHANGE ORDER

 

	
  Contract Number:

  	
  00D7815B

  	
  Modification/Change Order No.:    002

  
	
   

  	
   

  	
   

  
	
  Purchase Order #:

  	
  Al235.02

  	
   

  
	
   

  	
   

  	
   

  
	
  Contract Title:

  	
  Access-A-Ride Paratransit Transportation Service

  
	
   

  	
   

  	
   

  
	
  Contractor:

  	
  Atlantic Paratrans of NYC, Inc.

  	
   

  

 

This Modification/Change
Order, when properly executed, constitutes authorization to proceed with the
changes described below and changes the amount of the contract as noted.

 

DESCRIPTION
OF CHANGE

 

	
  A.   Original Contract Amount: 

  	
   

  	
  $

  	
  190,460,786.00

  	
   

  
	
  B.   Previous Changes Amount
  (Estimated):

  	
   

  	
   

  	
   

  
	
  Modification 1

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  C.   Contract
  Amount Subtotal:

  	
   

  	
  $

  	
  190,460,786.00

  	
   

  
	
  D.   This Change Amount (Estimated):

  	
   

  	
   

  	
   

  
	
  Modification 2

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  E.   New
  Contract Amount (A+B+D):

  	
   

  	
  $

  	
  190,460,786.00

  	
   

  

 

WHEREAS, the Contractor, under the terms of Agreement
00D7815B, dated October 4, 2001, as modified by Modification Agreement
00D7815B.001, dated January 11, 2002 (hereinafter the “Contract” or the
“Agreement”) and including all terms, covenants and conditions as
changed/modified/supplemented to date remain in full force and effect, except
as herein stated, has contracted to provide Access-A-Ride Paratransit
Transportation Service for the Primary Service Area of Brooklyn/Queens and
Citywide service in the five boroughs; and

 

WHEREAS, the New York City Transit Authority
(hereinafter the “Authority” or “NYC Transit”) has requested and the Contractor
has agreed to revise and clarify certain provisions of the Contract;

 

NOW,
THEREFORE, the
parties agree to modify the Contract as follows:

 

1.             The execution of this Modification Agreement
shall not operate as a modification, waiver, or rescission of any provision of
the Contract, or as a waiver of any rights under any Article of said
Contract, except as expressly provided herein.

 

2.             Changes in the terms and conditions of the
Contract that are set forth in this modification are effective October 4,
2001, and shall have prospective application only, unless a provision expressly
provides otherwise.

 

3.             Modify the Specific Contract Provisions to
incorporate the following revisions to Article 108B.2 which are shown in
underlined bold lettering and deletions are shown as a strikethrough:

 

1

 

A.           Revise Article 108B.2d to:

 

d.              The Authority shall pay the Contractor each
month a varying amount for fuel used in Revenue Service which shall be equal to
the product of the total number of Vehicle Service Hours performed (as
determined for payments pursuant to Article 108.B.2.c, above) (“VSH”)
times 1.5 gallons per Vehicle Service Hour times the Contractor’s Fuel Price
Per Gallon, Price Schedule Line Item 8. The formula for calculating the fuel payment is: VSH x 1.5 x CFP,
as adjusted pursuant to Article 108.B.2.f (“Contractor’s Fuel Price, or
“CFP”) (VSH x 1.5 x CFP).

 

B.             Delete Article 108B.2f and insert:

 

f.                 The price per gallon for
fuel used in Revenue Service shall be adjusted as follows:

 

i.                 The index to be used to
calculate the adjustment to the CFP (whether diesel or gasoline) is the average
per-gallon diesel price reported by the U.S. Department of Energy Information
Administration “Retail On-Highway Diesel Prices for the Central Atlantic Area”
(“Fuel Price Index” or “FPI”).

 

ii.             An initial adjustment to the
CFP will be made from the time of award of this Contract to the Revenue Service
Start Date, based on any change in the index from the FPI reported on
January 1, 2001, which was $1.665, and the first FPI reported during the
first month of the calendar Quarter in which the Revenue Service Start Date
occurs.

 

iii.         After the initial adjustment
described above, an adjustment to the CFP will be made quarterly on the first
date of the first month of each calendar quarter (“the Quarterly Adjustment”).
The date of the FPI to be used for the Quarterly Adjustment (“the Current FPI”)
shall be the last Monday immediately preceding such adjustment. The formula for
calculating the Quarterly Adjustment is:

 

	
  CFP

  	
     X

  	
  Current
  FPI

  	
   

  
	
   

  	
  Base FPI:
  $1.665

  	
   

  

 

The CFP to
be used for this calculation shall remain constant and shall be the fuel price
per gallon set forth in the Price Schedule, Line Item 8. The FPI to be used for
this calculation shall remain constant and shall be the FPI reported on
January 1, 2001, which was $1.665 (“the Base FPI”).

 

iv.            All prices used to calculate
the amount of adjustment will be rounded to the third decimal place.

 

2

 

4.               During the period from January 1, 2002
through January 31, 2002, the Contractor shall be reimbursed via an
administrative adjustment, in the amount of $0.00, in accordance with the Fuel
Adjustment Worksheet set forth in Attachment 1 hereto and incorporated herein.

 

 

* * * * *

 

 

	
  Contractor:

  	
  Atlantic Paratrans of NYC, Inc.:

  	
  New York City Transit Authority:

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
  /s/ Brian Smith

  	
   

  	
  Signature:

  	
  /s/ Ira Tillman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Brian Smith

  	
   

  	
  Name:

  	
  Ira Tillman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  Senior Director, Materiel

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  5/7/02

  	
   

  	
  Date:

  	
  5/10/02

  	
   

  

 

 

CONTRACTOR: PLEASE RETURN EXECUTED
COPIES TO:

 

New York
City Transit

130
Livingston Street, Room 6003E, Brooklyn, NY 11201

Attn:
Stacey Myers, Procurement Manager, 718-694-4140

 

3

 

ACKNOWLEDGMENT
OF CORPORATION

 

	
  STATE OF

  	
   

  	
  )

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  )

  	
  ss:

  
	
   

  	
   

  	
   

  
	
  COUNTY OF

  	
   

  	
  )

  

 

On this 7th  day of May, 2002 before me personally
appeared Brian Smith to me known, who, being by me first duly sworn, did depose
and say: That he/she resides at No. 7 North Street, Staten Island in the City of New York, in the County of Richmond, in the State of New York,
that he/she is the Vice President of Atlantic Paratrans of NYC, Inc., the corporation described in and which
executed the foregoing Contract; that he/she knows the corporate seal of said
corporation; that one of the seals affixed to said Contract is such corporate
seal; that it was affixed thereto by order of the Board of Directors of said
corporation, and that he/she signed his/her name thereto by like authority.

 

Robert W. Reichenbach

Notary
Public, State of New York

No.
41-8526165

Qualified
in Nassau County

Certificate
Filed in Nassau County

Commission
Expires Sept. 30, 2003

 

	
   

  	
  /s/ Robert W. Reichenbach

  	
   

  
	
   

  
	
  Notary
  Public

  

 

4

 

ACKNOWLEDGMENT
FOR THE AUTHORITY

 

	
  STATE OF NEW YORK

  	
   

  	
  )

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  )

  	
  ss:

  
	
   

  	
   

  	
   

  
	
  COUNTY OF KINGS

  	
   

  	
  )

  

 

 

On this 10th  day of May, 2002, before me personally
appeared Ira Tillman to me known,
who, being by me first duly sworn, did depose and say: That he is the Senior
Director of the Materiel Division, New York City Transit Authority, the public
benefit corporation described in and which executed the foregoing instrument
and that he acknowledged to me that he signed his name thereto pursuant to the
authorization of said Authority.

 

 

	
   

  	
   

  	
  /s/ Stacey A. Myers

  	
   

  
	
   

  	
   

  	
  Stacey A. Myers

  	
   

  
	
   

  	
   

  	
  Notary Public, State of
  New York

  	
   

  
	
   

  	
   

  	
  No. 24-5015180

  	
   

  
	
   

  	
   

  	
  Qualified in Kings County

  	
   

  
	
   

  	
   

  	
  Commission Expires
  July 19, 2005

  	
   

  

 

5

 

NEW YORK
CITY TRANSIT AUTHORITY

CONTRACT MODIFICATION/CHANGE ORDER

 

	
  Contract Number:

  	
  00D7815B

  	
  Modification/Change Order No.:    003

  
	
   

  	
   

  	
   

  
	
  Purchase Order #:

  	
  A1235.03

  	
   

  
	
   

  	
   

  	
   

  
	
  Contract Title:

  	
  Access-A-Ride Paratransit Transportation Service

  
	
   

  	
   

  	
   

  
	
  Contractor:

  	
  Atlantic Paratrans of NYC, Inc.

  	
   

  

 

This Modification/Change Order, when properly
executed, constitutes authorization to proceed with the changes described below
and changes the amount of the contract as noted.

 

DESCRIPTION
OF CHANGE

 

	
  A.

  	
  Original Contract
  Amount:           -

  	
   

  	
  $

  	
  190,460,786.00

  	
   

  
	
  B.

  	
  Previous Changes Amount (Estimated):

  	
   

  	
   

  	
   

  
	
   

  	
  Modification 1

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
  Modification 2

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  C.

  	
  Contract Amount Subtotal:

  	
   

  	
  $

  	
  190,460,786.00

  	
   

  
	
  D.

  	
  This Change Amount (Estimated):

  	
   

  	
   

  	
   

  
	
   

  	
  Modification 3

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  E.

  	
  New Contract Amount (A+B+D):

  	
   

  	
  $

  	
  190,460,786.00

  	
   

  

 

WHEREAS, the Contractor, under the terms of Agreement
00D7815B, dated October 4, 2001, as modified by Modification Agreement
00D7815B.001, dated January 11, 2002, Modification Agreement 00D7815B.002,
dated May 10, 2002 (hereinafter the “Contract” or the “Agreement”) and
including all terms, covenants and conditions as changed/modified/supplemented
to date remain in full force and effect, except as herein stated, has
contracted to provide Access-A-Ride Paratransit Transportation Service for the
Primary Service Area of Brooklyn/Queens and Citywide service in the five
boroughs; and

 

WHEREAS, the New York City Transit Authority
(hereinafter the “Authority” or “NYC Transit”) has requested and the Contractor
has agreed to clarify certain provisions of the Contract;

 

NOW, THEREFORE,
the parties agree to
modify the Contract as follows:

 

1.               The execution of this Modification Agreement
shall not operate as a modification, waiver, or rescission of any provision of
the Contract, or as a waiver of any rights under any Article of said Contract,
except as expressly provided herein.

 

2.               Changes in the terms and conditions of the
Contract that are set forth in this modification are effective October 4,
2001, and shall have prospective application only, unless a provision expressly
provides otherwise.

 

1

 

3.               The purpose of this Modification is to
memorialize the justification for a particular payment made to the Contractor,
which is clearly contemplated by the Price Schedule, but, not specifically
provided for in the payment terms of the Contract, Article 108 Price to
Include.

 

In general, the Authority
did not intend to pay vehicle-related mobilization costs to those firms
receiving new awards, who had provided Revenue Service pursuant to prior
contracts with the Authority (“Prior Contractors”), unless and until vehicle
fleet size increased. Thus, the relevant payment provisions in the Contract
provide for reimbursement of mobilization costs on a per vehicle basis only
(“Per Vehicle Mobilization Costs”) tied to vehicle ramp-up and fleet growth,
and preclude such per-vehicle payments to the Prior Contractors in the absence
of fleet expansion under the new Contract (see Article 108).

 

However, in negotiating with
this Contractor, the parties were concerned that there would be a substantial
attrition of drivers to other firms receiving awards for the Work, particularly
because the Authority had determined to reduce this Contractor’s fleet.
Therefore, the Authority agreed to reimburse the retention incentive payments
to assist the Contractor in maintaining the necessary workforce. Specifically,
the Price Schedule includes a category labeled “Vehicle Mobilization”
under which the Price Schedule specifies a not to exceed amount of $89,500
for “Driver Retention Bonuses.” In addition, the Authority agreed to pay a de
minimus sum for the replacement of broken Nextel equipment. (See last page of
the Price Schedule, Attachment 2 to the Contract)

 

Therefore, based upon the
apparent agreement of the parties, notwithstanding the arguable discrepancy
between the Price Schedule and the payment provisions, the Authority has
reimbursed the Contractor for the Driver Retention Bonuses and upon proper
invoicing the Authority will reimburse the Contractor for Nextel Replacements.

 

4.               Modify the Specific Contract Provisions to
incorporate the following revisions to Article 121 which are shown in
underlined bold lettering and deletions are shown as a strikethrough:

 

ARTICLE 121                               AMENDMENTS

 

This Contract may be amended
only by an instrument in writing executed by the Authority and Contractor.

 

Any and all notices under
this Agreement, if to the Contractor shall be delivered to:

 

Mr. Brian
Smith, David Kessler,Vice President

Atlantic
Paratrans, Inc.

7 North
Street,

Staten Island,
NY 10302

718-556-805877

718-448-5679442
7672(Fax)

and if to the Authority,

 

Michael
Cosgrove, Project Manager

New York
City Transit Authority

Paratransit
Division,

2 Broadway,
11th Floor

New York,
New York 10004

646-252-27555041

646-252-28425019(Fax)

 

2

 

* * * * *

 

	
  Contractor:

  	
  Atlantic Paratrans of NYC, Inc.:

  	
  New York City Transit Authority

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
  /s/ Brian Smith

  	
   

  	
  Signature:

  	
  /s/ Ira Tillman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Brian Smith

  	
   

  	
  Name:

  	
  Ira Tillman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  Senior Director, Materiel

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  6/17/02

  	
   

  	
  Date:

  	
  6/18/02

  	
   

  

 

 

CONTRACTOR: PLEASE RETURN EXECUTED
COPIES TO:

 

New York
City Transit

130
Livingston Street, Room 6003E, Brooklyn, NY 11201

Attn:
Stacey Myers, Procurement Manager, 718-694-4140

 

3

 

ACKNOWLEDGMENT
OF CORPORATION

 

	
  STATE OF

  	
   

  	
  )

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  )

  	
  ss:

  
	
   

  	
   

  	
   

  
	
  COUNTY OF

  	
   

  	
  )

  

 

On this 17th day
of June, 2002 before me personally appeared Brian Smith to me known, who, being
by me first duly sworn, did depose and say: That he/she resides at No. 7 North Street in the City of Staten Island,
in the County of Richmond, in
the State of NY, that he/she is the Vice President of Atlantic Paratrans of NYC, Inc., the corporation
described in and which executed the foregoing Contract; that he/she knows the
corporate seal of said corporation; that one of the seals affixed to said
Contract is such corporate seal; that it was affixed thereto by order of the
Board of Directors of said corporation, and that he/she signed his/her name
thereto by like authority.

 

 

	
   

  	
  /s/ Robert W. Reichenbach

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary
  Public

  	
   

  

 

	
   

  	
  Robert W. Reichenbach

  
	
   

  	
  Notary
  Public, State of New York

  
	
   

  	
  No.
  41-8526165

  
	
   

  	
  Qualified
  in Nassau County

  
	
   

  	
  Certificate
  Filed in Nassau County

  
	
   

  	
  Commission
  Expires Sept. 30, 2003

  

 

4

 

ACKNOWLEDGMENT FOR THE AUTHORITY

 

	
  STATE OF NEW YORK

  	
   

  	
  )

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  )

  	
  ss:

  
	
   

  	
   

  	
   

  
	
  COUNTY OF KINGS

  	
   

  	
  )

  

 

 

On this 18th day of June, 2002,
before me personally appeared Ira Tillman to
me known, who, being by me first duly sworn, did depose and say: That he is the
Senior Director of the Materiel Division, New York City Transit Authority, the
public benefit corporation described in and which executed the foregoing
instrument and that he acknowledged to me that he signed his name thereto
pursuant to the authorization of said Authority.

 

 

	
   

  	
   

  	
  /s/ Stacey A. Myers

  	
   

  
	
   

  	
  Stacey A. Myers

  
	
   

  	
  Notary
  Public, State of New York

  
	
   

  	
  No. 24-5015180

  
	
   

  	
  Qualified in Kings County

  
	
   

  	
  Commission Expires
  July 19, 2005

  

 

5

 

NEW YORK
CITY TRANSIT AUTHORITY

CONTRACT MODIFICATION/CHANGE ORDER

 

	
  Contract Number:

  	
  00D7815B

  	
  Modification/Change Order No.:    004

  
	
   

  	
   

  
	
  Purchase Order #:

  	
  A1235.04

  
	
   

  	
   

  
	
  Contract Title:

  	
  Access-A-Ride Paratransit Transportation Service

  
	
   

  	
   

  
	
  Contractor:

  	
  Atlantic Paratrans of NYC, Inc.

  

 

This Modification/Change
Order, when properly executed, constitutes authorization to proceed with the
changes described below and changes the amount of the contract as noted.

 

DESCRIPTION
OF CHANGE

 

	
  A.   Original
  Contract Amount:

  	
   

  	
  $

  	
  190,460,786.00

  	
   

  
	
  B.   Previous Changes Amount
  (Estimated):

  	
   

  	
   

  	
   

  
	
  Modification 1

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Modification 2

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Modification 3

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  C.   Contract
  Amount Subtotal:

  	
   

  	
  $

  	
  190,460,786.00

  	
   

  
	
  D.   This Change Amount (Estimated):

  	
   

  	
   

  	
   

  
	
  Modification 4

  	
   

  	
  <$

  	
  11,873,400.00

  	
  >

  
	
  E.   New
  Contract Amount (A+B+D):

  	
   

  	
  $

  	
  178,587,386.00

  	
   

  

 

WHEREAS, the Contractor, under the terms of Agreement
00D7815B, dated October 4, 2001, as modified by Modification Agreement
00D7815B.001, dated January 11, 2002, as modified by Modification
Agreement 00D7815B.002, dated May 10, 2002, and as modified by Modification
Agreement dated June 18, 2002 (hereinafter the “Contract” or the
“Agreement”) has contracted to provide Access-A-Ride Paratransit Transportation
Service for the Primary Service Area of Brooklyn/Queens and Citywide service in
the five boroughs; and

 

WHEREAS, the Contract provides that the Authority may
purchase vehicle insurance for the Work and modify the Contract to eliminate
vehicle insurance costs from the Contract Price; and

 

WHEREAS, the Authority hereby exercises this option
to replace the Contract’s requirement that the Contractor maintain for its
Revenue Vehicles Automobile and Truck Liability Insurance in the amount of $3
million per occurrence/aggregate, by entering into a Central Insurance Program
administered by MTA Risk & Insurance Management to obtain such insurance
(“Replacement Coverage”) and other services.

 

NOW,
THEREFORE, the
parties agree to modify the Contract as follows:

 

1.               The execution of this Modification Agreement
shall not operate as a modification, waiver, or rescission of any provision of
the Contract, or as a waiver of any rights under any Article of said
Contract, except as expressly provided herein.

 

1

 

2.               Effective July 1, 2002, or such other
date as the Replacement Coverage is confirmed by MTA to be in effect, the
Reimbursable (Pass-Through) Insurance Costs for Automobile and Truck Liability
Insurance including Excess Liability, as applicable, for Revenue Vehicles shall
be eliminated from the Contract Price as of the effective date of the
replacement coverage. Thus, the total estimated Contract Price shall be reduced
in the amount of <$11,873,400.00>.

 

3.               As of the effective date of the Replacement
Coverage, the Contractor shall not be responsible to obtain such insurance for
its Revenue Vehicles.

 

4.               The Contractor will obtain all premium and/or
financing rebates applicable to its cancellation of the replaced insurance, and
refund such sums to the Authority for its payments to Contractor for the
replaced insurance pursuant to Article 108.B.3.a.

 

5.               Article 108 of the Contract, “Price to
Include/Invoice and Payments,” is amended to delete Section B.3.a in its
entirety and insert a new Section B.3.a, as follows:

 

i.                                          The Authority will pay actual premium costs
for Garage Keepers Legal Liability or collision coverage and associated premium
financing costs if the Project Manager expressly authorizes such costs in
advance of such costs being incurred.

 

ii.                                       The Authority will pay actual costs for
umbrella liability coverage if the Project Manager expressly authorizes such
costs in advance of such costs being incurred.

 

6.               Article 114 of the Contract,
“Insurance,” is deleted and a new Article 114 is inserted as follows:

 

A.           The Contractor and any Subcontractor shall procure at a minimum, the
insurance coverage specified in Attachment 4. The Contractor or Subcontractor
shall be responsible for any deductible amount.

 

B.             At the discretion of the Project Manager, the
Contractor shall procure collision insurance, in an amount prescribed by the
Project Manager, in lieu of Garage Keepers Legal Liability Insurance.

 

C.             The Authority has adopted a Central Insurance
Program to be administered by MTA Risk &
Insurance Management, which provides Automobile and Truck Liability
Insurance for all Revenue Vehicles used in the Authority’s paratransit service,
with limits and other provisions as set forth in Attachment No. 4,
“Schedule A.1 – Modified Insurance Requirements for Paratransit
Contracts,” and also provides a Third Party Administrator to process and
investigate claims and defend the Insureds with regard to all claims and
actions covered by such liability insurance. The Contractor is a Named Insured
under the aforesaid policy. In addition, the aforesaid policy shall name as
Additional Insureds the following parties, as applicable: (i) any corporate
parent of the Contractor which has provided a guarantee of Contractor’s
performance under this Contract; and (ii) any third-party lessor of Revenue
Vehicles to Contractor. It is the Contractor’s responsibility to timely notify
the Authority of any such parties to be named as Additional Insureds.

 

7.               Article 220 of the Contract, “Liability
and Indemnification,” is amended to add a new paragraph F, as follows:

 

F.              The above-stated indemnification requirements
apply only to the extent that any loss is not covered by the Replacement
Coverage. In connection with any claims to be defended and indemnified through
the insurance coverage secured by the Central Insurance Program, the Contractor
shall promptly give notice of the receipt of any such claim to the Third Party
Administrator (“TPA”) and shall fully

 

2

 

cooperate with the TPA in
its defense of such claim, as more fully described in Article 17 of the
Scope of Work.

 

8.               Section 17 of the Scope of Work,
“Accident/Incident Notification,” is amended to add new provisions at the end
of Section 17.1.1 and Section 17.1.6, as follows:

 

17.1.1...,simultaneously
sending a copy to the Authority’s Third Party Administrator for auto liability
insurance, Claims Service Bureau of New York, Inc., located at 21 Hempstead
Turnpike”, P.O. Box 805, Lynbrook, NY 11563. The Contractor also shall promptly
upon receipt transmit to the TPA any notice of claim, claim, summons and/or
complaint. The Contractor shall promptly supply all information, documentation,
witnesses or any other assistance requested by the Third Party Administrator,
and otherwise fully cooperate with the TPA with regard to all claims arising
from such Incidents or Accidents.

 

17.1.6....The
Contractor also shall send a copy of the DMV accident report to the Third Party
Administrator.

 

9.               Attachment No. 4 to the Contract,
“Schedule A, Insurance Requirements” is deleted in its entirety and
replaced with a new Attachment No. 4, “Schedule A.1, Modified Insurance
Requirements, for Paratransit Contracts,” attached hereto.

 

10.         Nothing herein shall prevent the Authority, upon sufficient notice to
the Contractor, to terminate the Central Insurance Program and require the
Contractor to resume Contractor-procured Automobile & Truck Liability
Insurance for Revenue Vehicles according to the terms and conditions set forth
in the Contract prior to this Modification Agreement.

 

* * * * *

 

	
  Contractor:

  	
  Atlantic
  Paratrans of NYC, Inc.:

  	
  New
  York City Transit Authority:

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
  /s/ Brian Smith

  	
   

  	
  Signature:

  	
  /s/ Louis A. Montanti

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Brian Smith

  	
   

  	
  Name:

  	
  Louis A. Montanti

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  Assistant Chief
  Procurement Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  9/12/03

  	
   

  	
  Date:

  	
  12/22/03

  

 

 

CONTRACTOR: PLEASE
RETURN EXECUTED COPIES TO:

 

 

New York City Transit

130 Livingston Street, Room 6003E,
Brooklyn, NY 11201

Attn: Stacey Myers, Procurement
Manager, 718-694-4140

 

3

 

ACKNOWLEDGMENT
OF CORPORATION

 

	
  STATE OF New York

  	
   

  	
  )

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  )

  	
  ss:

  
	
   

  	
   

  	
   

  
	
  COUNTY OF Richmond

  	
   

  	
  )

  

 

On this 12th day
of September, 2003, before me personally appeared Brian Smith to me known, who,
being by me first duly sworn, did depose and say: That he/she resides at No. 7
North Street in the City of Staten Island, in the County of Richmond, in the
State of NY, that he/she is the Vice President of Atlantic Paratrans of NYC,
Inc., the corporation described in and which executed the foregoing Contract;
that he/she knows the corporate seal of said corporation; that one of the seals
affixed to said Contract is such corporate seal; that it was affixed thereto by
order of the Board of Directors of said corporation, and that he/she signed
his/her name thereto by like authority.

 

Robert W. Reichenbach

Notary
Public, State of New York

No.
41-8526165

Qualified
in Nassau County

Certificate
Filed in Nassau County

Commission
Expires Sept. 30, 2004

 

	
   

  	
  /s/ Robert W. Reichenbach

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary
  Public

  	
   

  

 

4

 

ACKNOWLEDGMENT
FOR THE AUTHORITY

 

	
  STATE OF NEW YORK

  	
   

  	
  )

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  )

  	
  ss:

  
	
   

  	
   

  	
   

  
	
  COUNTY OF KINGS

  	
   

  	
  )

  

 

On this 22 day of
December, 2003, before me personally appeared Louis
A. Montanti to me known, who, being by me first duly sworn, did
depose and say: That he is the Assistant Chief Procurement Officer of the
Materiel Division, New York City Transit Authority, the public benefit
corporation described in and which executed the foregoing instrument and that
he acknowledged to me that he signed his name thereto pursuant to the
authorization of said Authority.

 

	
   

  	
   

  	
  /s/ Stacey A. Myers

  	
   

  
	
   

  	
   

  	
  Stacey A. Myers

  	
   

  
	
   

  	
   

  	
  Notary
  Public, State of New York

  	
   

  
	
   

  	
   

  	
  No. 24-5015180

  	
   

  
	
   

  	
   

  	
  Qualified in Queens County

  	
   

  
	
   

  	
   

  	
  Commission Expires
  July 19, 2005

  	
   

  

 

5

 

NEW YORK
CITY TRANSIT AUTHORITY

CONTRACT MODIFICATION/CHANGE ORDER

 

	
  Contract Number:

  	
  00D7815B

  	
  Modification/Change Order No.:    005

  
	
   

  	
   

  
	
  Purchase Order #:

  	
  A1235.05

  
	
   

  	
   

  
	
  Contract Title:

  	
  Access-A-Ride Paratransit Transportation Service

  
	
   

  	
   

  
	
  Contractor:

  	
  Atlantic Paratrans of NYC, Inc.

  

 

This Modification/Change
Order, when properly executed, constitutes authorization to proceed with the
changes described below and changes the amount of the Contract as noted.

 

DESCRIPTION
OF CHANGE

 

	
  A.

  	
  Original Contract Amount:
  (Estimated):

  	
   

  	
  $

  	
  190,460,786.00

  	
   

  
	
  B.

  	
  Previous Changes Amount (Estimated):

  	
   

  	
   

  	
   

  
	
   

  	
  Modification 1

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
  Modification 2

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
  Modification 3 *

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  C.

  	
  Contract Amount Subtotal (Estimated):

  	
   

  	
  $

  	
  190,460,786.00

  	
   

  
	
  D.

  	
  This Change Amount (Estimated):

  	
   

  	
   

  	
   

  
	
   

  	
  Modification 5

  	
   

  	
  $

  	
  144,272.50

  	
   

  
	
  E.

  	
  New Contract Amount (A+C+D):

  	
   

  	
  $

  	
  190,605,058.50

  	
   

  

 

*Modification 4 is pending.

 

WHEREAS, the Contractor, Atlantic Paratrans of NYC,
Inc. (hereafter “Atlantic”) under the terms of Agreement 00D7815B, dated
October 4, 2001 (hereinafter the “Contract” or the “Agreement”) as
modified by Modification Agreement 00D7815B.001 dated January 14, 2002, as
modified by Modification Agreement 00D7815B.002 dated May 10, 2002, and as
modified by Modification Agreement OOD7815B.003 dated June 18, 2002, has
contracted to provide Access-A-Ride Paratransit Transportation Service for the
primary service area of Brooklyn/Queens and citywide service in the five
boroughs; and

 

WHEREAS, the Authority has obtained a letter ruling
from the IRS which states that fuel for paratransit services provided by the
Contractor is exempt from federal fuel excise tax so long as the entire amount
of actual fuel costs is borne by the Authority; and

 

WHEREAS, the Contract provides for payment to the
Contractor for fuel used in providing Revenue Service based upon a mathematical
formula (Vehicle Service Hours x 1.5 Gallons per hour x Contractor’s fuel
price), not the Contractor’s actual fuel costs; and

 

WHEREAS, in order to qualify for fuel tax exemptions,
the Authority wishes to modify the Contract to provide for the reimbursement of
the Contractor’s total actual fuel costs for Revenue Service and to establish
an “On Site Fuel Program” including a system (automated and/or manual) for
accurate and reliable recording and reporting of fuel usage (“Fuel Management
System”).

 

1

 

NOW,
THEREFORE, the
parties agree to modify the Contract as follows:

 

1.               The execution of this Modification Agreement
shall not operate as a modification, waiver, or rescission of any provision of
the Contract, or as a waiver of any rights under any Article of said
Contract, except as expressly provided herein.

 

2.               The Contractor agrees to commence
participation in the On-Site Fuel Program on such date as specified by written
notice from the NYCT Project Manager.

 

3.               The Contractor has installed and shall
utilize and maintain a dedicated fuel tank located at its paratransit facility
for the purpose of fueling all diesel-fueled Revenue Service Vehicles. The
Authority shall reimburse the Contractor for one-half (1/2) of its actual
approved cost of the fuel tank as stated in the Price Schedule, Attachment No.
1 to this Modification. The Authority shall reimburse this cost in two equal
payments, the first payment (25% of the total price of the fuel tank) upon
execution of this Modification and the second payment (25% of the total price
of the fuel tank) upon approval of its reorganization plan by the Unites States
Bankruptcy Court. The invoices for such cost shall be accompanied by a copy of
the original invoice for the fuel tank and a copy of the Contractor’s cancelled
check for payment. In addition, the invoice for the second payment shall
include proof of the requisite approval by the Bankruptcy Court.

 

4.               The Contractor shall purchase Ultra Low
Sulfur Diesel (ULSD) red dyed fuel, exempt from federal fuel tax, at the most
favorable price available.  If for
commercial reasons the Contractor is unable to obtain ULSD at the time of
execution of this Modification, the Contractor must seek a waiver by the Authority
of this directive by documenting to NYCT’s satisfaction the specific reasons
why such fuel is unobtainable.  The
Authority shall have the right to review on an annual basis any waiver it
grants to the Contractor concerning compliance with this requirement to
purchase ULSD fuel. The Authority shall have the right to review and approve
the Contractor’s agreement with its fuel provider prior to execution.

 

5.               Within 90 days of the execution of this
Modification the Contractor agrees to install, utilize and maintain an approved
automated Fuel Management System including a wireless fuel island unit,
on-board vehicle transmitters, system software and one dedicated personal
computer for purposes of tracking and reporting its fuel usage. The Authority
shall reimburse the Contractor’s actual cost for the purchase and installation
of the automated Fuel Management System in amounts not to exceed the unit
prices stated in the Price Schedule, Attachment No. 1 to this
Modification.  Reimbursement for
additional on-board vehicle transmitters installed on additional or replacement
Revenue Vehicles leased to the Contractor subsequent to the initial
installation of the Fuel Management System shall be paid at the unit price set
forth for such transmitters in the Price Schedule, which amount shall be added
to and made part of the Per-Vehicle Mobilization Cost payment to the Contractor
as applicable.

 

6.               The Contractor shall purchase a maintenance
contract for the Fuel Management System subject to the approval of the
Authority.  The Authority shall
reimburse the Contractor’s actual cost and expense for such maintenance
Contract pursuant to Article 108 of the Contract as further provided in
paragraph 8 below.

 

7.               During the term of this Contract the
Contractor is prohibited from disposing of any Fuel Management System equipment
or software without the approval of the Project Manager.  Each on-board vehicle transmitter shall be
deemed a part of the Revenue Vehicle upon which it is

 

2

 

installed and subject to the
Authority’s right of reassignment under the Vehicle Lease Agreement (Attachment
No. 3 to the Contract).

 

8.               The Authority reserves the right to require,
upon termination of this Contract, that all Fuel Management System equipment
and software shall be delivered to NYCT upon written request by the Authority
Project Manager.

 

9.               “The Authority shall obtain any and all tax
refunds that may be available based on the purchase of fuel by the Contractor
under this Contract”

 

10.         Article 108 “Price to Include/Invoices and Payments” is amended to
delete Section B.2.d B.2.e and B.2.f. and insert new sections B.2.e.,
B.3.e., B.3.f., D.1.d. and D.1.e. as follows:

 

B.2.e.

 

The Variable Costs shall be
adjusted annually in accordance with the same terms and conditions for adjustment
set forth in Article 108 B.l.b., above, for Fixed Costs.

 

B.3.e. Diesel Fuel Costs

 

On a monthly basis the
Authority shall reimburse Contractor’s actual costs for diesel bulk fuel
purchased to be utilized for diesel powered Revenue Vehicles in provision of
Revenue Service. The Authority agrees to reimburse Contractor eight percent
(8%) administrative fee on the actual cost of fuel purchased (not including any
taxes and/or other fees) and utilized for provision of Revenue Service.

 

B.3.f. Fuel Management System
Maintenance Contract

 

On an annual basis the
Authority shall reimburse Contractor’s actual approved costs for a maintainance
contract for the Fuel Management System.

 

D.l.d.

 

All invoices for diesel fuel
shall be accompanied by copies of the monthly invoice received the Contractor
from its fuel provider, the check(s) to pay such invoices, all Fuel Tank
Delivery Control Records (required by Section 22.2.1 of the Scope of Work)
for the billing month and the fuel usage report (required by Section 22.2.3
of the Scope of Work) for the billing month. Contractor shall ensure that all
fuel invoices clearly delineate the type and amount of taxes charged.

 

D.l.e.

 

All invoices for the cost of
the maintenance contract for the Fuel Management System shall be accompanied by
the invoice received by the Contractor from its maintenance provider and the
check to pay such invoices.

 

11.         The Scope of Work is amended to add a new Section 22 as follows:

 

3

 

SECTION 22
- FUELING OF REVENUE VEHICLES

 

22.1                        General:

 

Contractors are responsible
for all aspects of fueling Revenue Vehicles operated under this Contract.
Contractor shall ensure that its supply of fuel is sufficient to provide
uninterrupted Revenue Service.

 

The Contractor shall provide
and maintain a dedicated fuel tank to be utilized for the fueling of all diesel
fueled Revenue Vehicles and an automated or manual Fuel Management System for
purposes of recording and reporting fuel use (the “On-Site Fuel Program”). The
Contractor shall be paid its actual costs for fuel deliveries under the On-Site
Fuel Program.  Gasoline fueled Revenue
Service Vehicles shall be fueled under the Fuel Card Program described in
Section 22.2.4 below.

 

22.2                      The On-Site Fuel Program

 

22.2.1              System Security

 

22.2.1.1    General

 

The Contractor shall
maintain strict controls to safeguard the integrity of fuel usage and prevent
fraud. The Contractor shall ensure that all equipment utilized in the On-Site
Fuel Program is properly calibrated to ensure the accuracy of fuel deliveries
and fuel dispensing. The Contractor shall be liable for any unauthorized fuel
use.

 

22.2.1.2    Fuel Tank Capacity

 

The capacity of the fuel
tank is eight thousand (8,000) gallons, The Contractor shall not replace the
fuel tank without the written permission of the NYCT Project Manager.

 

22.2.1.3    Fuel Tank Delivery Procedures

 

The Contractor shall monitor
the amount of each fuel delivery made to its fuel tank to ensure the accuracy
of the quantity and type of fuel invoiced by its fuel provider in accordance
with the following procedure.

 

•        Immediately prior to each fuel delivery the Contractor shall measure
the number of gallons in the fuel tank and record such measurement.

•        Immediately prior to each fuel delivery the Contractor shall ensure
that its fuel provider’s delivery truck meter is properly calibrated and reset.

•        Immediately upon completion of each fuel delivery the Contractor shall
obtain from its fuel provider a record of the delivery truck meter reading of
the amount of fuel delivered.

•        Immediately upon completion of each fuel delivery the Contractor shall
measure the number of gallons in the fuel tank and record such
measurement.  The Contractor shall then
compare the pre-delivery measurement, the post-delivery measurement and

 

4

 

the delivery truck meter
reading.  The Contractor shall not sign
for a fuel delivery where the Contractor finds any discrepancy in amount of
fuel delivered.

•        The Contractor shall maintain a record of monthly starting and ending
pump counter readings and monthly starting and closing tank balances.

 

The records required by this
section collectively referred to as “Fuel Tank Delivery Control Records,”
shall be retained by the Contractor for a period of three (3) years from the
termination of the Contract.

 

22.2.2            System Maintenance

 

The Contractor shall
maintain in good working order its fuel tank, its automated Fuel Management
System, if applicable, and all equipment required for on-site fueling, and
provide for prompt repair as needed.

 

22.2.3            Reports

 

22.2.3.1  Automated Fuel Management System

 

If the Contractor uses an
automated Fuel Management System, the Contractor shall ensure that such system
is fully operational at all times.

 

On a monthly basis and at
any time upon the request of the Project Manager, the Contractor shall produce
the standard fuel usage reports generated by such automated system including
the following information: Contractor name, NYCT Revenue Vehicle identification
numbers, license plate numbers; odometer readings at the first and last fueling
of each Revenue Vehicle during the reporting period, fuel dispensed for each
occasion for each Revenue Vehicle during the reporting period, average miles
per gallon for each Revenue Vehicle during the reporting period. At any time
NYCT may utilize  the remote
access capability of the automated Fuel Management-System.

 

If for any reason the
automated system is unavailable for use, the Contractor shall comply with the
requirements for the Manual Fuel Management System set forth below.

 

The Contractor shall
recalibrate each Revenue Vehicle’s on-board fuel management computer at least
once each calendar month to maintain accurate odometer readings supporting the
fuel management reporting function.

 

22.2.3.2    Manual Fuel Management System

 

If the Contractor utilizes a
manual Fuel Management System, the Contractor shall maintain a written log
including the following information about each instance of fueling: date and
time of each Revenue Vehicle fueling, NYCT Revenue Vehicle identification
numbers, odometer readings, gallons dispensed and name of Vehicle Operator.

 

5

 

On a monthly basis the
Contractor shall compile a fuel management report containing the information
recorded on the written log in a spreadsheet format using the Microsoft Excel
software program.

 

22.2.3.3    Monthly Submissions

 

The fuel usage report shall
be submitted electronically in support of monthly billing to the NYCT Project
Manager. By signing each report and submitting each invoice from its fuel
provider, the Contractor attests that it is a correct statement of the
Contractor’s diesel fuel usage and actual diesel fuel costs for the period. The
fuel usage reports should be sorted by vehicle.

 

22.2.4              Fuel Card Program

 

22.2.4.1    Background

 

NYCT has entered into a
contract with the Fuel Card Provider and has established a Paratransit Fuel
Card Program for fueling gasoline powered vehicles in Revenue service. Under
this program, NYCT designates the Revenue Vehicles in Contractor’s fleet to be
fueled under the Program and pays the fuel costs directly to the Fuel Card
Provider.

 

22.2.4.2    System Security

 

In order to prevent
unauthorized fuel usage, the Fuel Card Provider will provide a two tier
security system: individual Fuel Cards for each NYCT designated Revenue
Vehicle, programmed with data identifying each vehicle by Contractor name,
vehicle and license plate number; and a unique personal identification number
(“PIN”) identifying each Vehicle Operator authorized by the Contractor to use a
Fuel Card. This system will allow multiple authorized Vehicle Operators to fuel
each designated Revenue Vehicle. Fuel will not be dispensed under this program
without pre-authorization through the Fuel Card Provider’s identification
system, based upon the presentation of a valid Fuel Card and entry of a PIN
number by an authorized Vehicle Operator

 

The Fuel Card Provider’s
system is configured to preclude the procurement of any fuel or products other
than those that have been specified by the Authority.  However, should the system fail in this regard, the Contractor
shall be liable for any charges incurred by NYCT for any unauthorized purchase
made with any Fuel Card or PIN issued to the Contractor and its Vehicle
Operators.

 

22.2.4.3    Contractor’s Responsibilities

 

The Contractor’s PM shall
contact the Fuel Card Provider to obtain all Fuel Cards and all PINs. The Fuel
Card Provider will furnish to the Contractor a supply of cardholders, one per
vehicle, containing sleeves, to be used to secure the Fuel Cards to the Revenue
Vehicle. The Contractor may request additional cardholders as needed if

 

6

 

more Revenue Vehicles are added or replacements are necessary. The contact information for
the Fuel Card Provider is:

 

Sprague Energy Markets

4 New King Street

White Plains, NY 10604

Customer Service Telephone

(914) 328-6700

 

The Contractor’s PM shall
report any lost or stolen cards and any PIN that require cancellation for any
reason to the Fuel Card Provider and send written notice of any such event or change to the Authority PM.

 

Each month, the Fuel Card
Provider will provide replacement fuel cards to the Contractor as needed. Up to
five percent of the total number of Fuel Cards assigned to Contractor’s fleet
will be provided at no additional charge. Fuel Cards that are replaced in
excess of this amount are subject to a $2.50 fee plus Express Mail postage, if
requested. The Contractor shall be liable for these charges.

 

The Contractor’s PM shall
maintain the strict confidentiality of the master list of the PINs assigned to
the Vehicle Operators. The Contractor’s PM must monitor Fuel Card usage to
guard against fraud. The Contractor will be responsible for any unauthorized
charges. Vehicle Operators shall not share their PINs with any other person, at
any time for any reason. Vehicle Operators shall obtain the Fuel Card as part
of the Pre-Trip Revenue Vehicle Inspection.

 

Monthly reports showing fuel
usage itemized by Revenue Vehicle and by Vehicle Operator will be sent to the
Contractor (hereafter, the “Fuel Usage Report”). Within ten days of the date of
the Fuel Usage Report, the Contractor shall:

 

•        Compare it to the fuel receipts turned in by the Vehicle Operators to
verify the accuracy of the Fuel Usage Report; and

•        If the Fuel Usage Report is accurate, the Contractor’s PM shall sign
it, attesting to its accuracy and forward it to the Authority PM; or

•        If the Fuel Usage Report is inaccurate in any respect, the Contractor
PM must alert the Authority PM immediately of the discrepancy, make an
appropriate written notation on the Fuel Usage Report, sign it, attesting to
the accuracy of the report subject to the notation(s) and forward it to the
Authority PM.

 

22.2.4.4  Supervisor Cards

 

Supervisor’s Cards will be
issued to the Contractor for temporary use in the event of lost or stolen
cards. These cards are only to be used on an emergency basis to allow fueling
if a regular vehicle Fuel Card is lost or is inoperable. The Contractor Project
Manager is responsible for the safeguarding and use of these cards and for
designating specific supervisory personnel who are authorized to use these
cards. The Authority PM reserves the right to approve the number of Supervisory
Cards issued and which personnel may utilize them.

 

7

 

22.2.4.5    Fueling Locations

 

The Fuel Card Provider will
supply brochures, to be distributed to the Vehicle Operators by the Paratransit
Carrier PM, identifying authorized fueling locations citywide. Updated
brochures will be issued and updated as needed due to additions/deletions of
fueling locations.

 

The Fuel Card Provider, at its option, may provide additional fueling locations. At any time
when fueling locations are added or deleted, or upon Authority PM request, the
Fuel Card Provider shall supply an updated listing indicating any new locations
activated and any locations that have been deactivated.

 

22.2.4.6    Fleet Fuel Card Procedure

 

The procedure to be followed at a fueling location for use of the fuel card is as follows:

•        Present the vehicle Fuel Card to the gas station attendant.

•        Enter the odometer reading.

•        Enter his/her assigned PIN number.

•        Enter the pump number.

•        Fuel Vehicle.

•        Get receipt.

•        Turn in receipt to supervisor upon return to Contractor’s facility.

 

To assist the Vehicle
Operators the Fuel Card Provider will supply a customer service card containing
the above instructions. Upon completion of any Fuel Card transaction, the Vehicle
Operator must secure a receipt and present it to his/her supervisor. The
Contractor shall maintain these records for accounting and reconciliation
purposes to verify the accuracy of the Fuel Usage Reports issued at the end of
each month.

 

22.2.4.7    Transaction Limitations

 

The Contractor shall limit
its fuel purchases under the Program as follows:

 

For #87 Octane Fueled
Revenue Service Vehicles:

 

	
  Vehicle Type: Sedans

  	
   

  	
   

  
	
  By transaction (tank size)

  	
   

  	
  20 Gallons

  	
   

  
	
  Daily:

  	
   

  	
  40 Gallons

  	
   

  
	
  Monthly:

  	
   

  	
  1240 Gallons

  	
   

  
	
  Fuel:

  	
   

  	
  #87 Octane Gasoline

  	
   

  

 

The maximum charge on each
Fuel Card for each transaction day and month shall be in the amounts herein
designated. These amounts shall only be exceeded with written approval from the
Authority PM. The Fuel Card Provider shall temporarily suspend

 

8

 

the validity of a PIN or
Fuel Card after a transaction that results in exceeding the specified
limits in any one calendar month.

 

* * * *

 

	
  Contractor:

  	
  Atlantic
  Paratrans of NYC, Inc.

  	
  New
  York City Transit Authority:

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
  /s/ Brian Smith

  	
   

  	
  Signature:

  	
  /s/ Louis Montanti

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Brian Smith

  	
   

  	
  Name:

  	
  Louis Montanti

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  ACPO

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  3/26/03

  	
   

  	
  Date:

  	
  3/31/03

  	
   

  

 

CONTRACTOR: PLEASE
RETURN EXECUTED COPIES TO:

 

New York City Transit

130 Livingston Street, Room 6003A,
Brooklyn, NY 11201

Attn: Nicholas Villamagna,
718-694-4086

 

9

 

ACKNOWLEDGMENT
OF CORPORATION

 

	
  STATE OF New York

  	
   

  	
  )

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  )

  	
  ss:

  
	
   

  	
   

  	
   

  
	
  COUNTY OF Richmond

  	
   

  	
  )

  

 

On this 26th day of March, 2003,
before me personally appeared Brian Smith to me known, who, being by me first
duly sworn, did depose and say: That he/she resides at No. 7 North Street in the
City of Staten Island, in the County
of Richmond, in the State of New York, that he/she is the Vice President of Atlantic Paratians of NYC, Inc, the corporation described in and which
executed the foregoing Contract; that he/she knows the corporate seal of said
corporation; that one of the seals affixed to said Contract is such corporate
seal; that it was affixed thereto by order of the Board of Directors of said
corporation, and that he/she signed his/her name thereto by like authority.

 

 

	
   

  	
  /s/ Robert W. Reichenbach

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary
  Public

  	
   

  

 

 

	
   

  	
   

  	
  Robert
  W. Reichenbach

  	
   

  
	
   

  	
   

  	
  Notary
  Public, State of New York

  	
   

  
	
   

  	
   

  	
  No. 41-8526165

  	
   

  
	
   

  	
   

  	
  Qualified in Nassau County

  	
   

  
	
   

  	
   

  	
  Certified Filed in Nassau
  County

  	
   

  
	
   

  	
   

  	
  Commission Expires Sept.
  30, 2003

  	
   

  

 

10

 

ACKNOWLEDGMENT FOR THE
AUTHORITY

 

	
  STATE OF NEW YORK

  	
   

  	
  )

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  )

  	
  ss:

  
	
   

  	
   

  	
   

  
	
  COUNTY OF KINGS

  	
   

  	
  )

  

 

On this 31 day of March, 2003, before me
personally appeared Louis Montanti to
me known, who, being by me first duly sworn, did depose and say: That he is the
Assistant Chief Procurement Officer of the Materiel Division, New York City
Transit Authority, the public benefit corporation described in and which
executed the foregoing instrument and that he acknowledged to me that he signed
his name thereto pursuant to the authorization of said Authority.

 

 

	
   

  	
   

  	
  /s/ Stacey A. Myers

  	
   

  
	
   

  	
   

  	
  Stacey A. Myers

  	
   

  
	
   

  	
   

  	
  Notary Public, State of
  New York

  	
   

  
	
   

  	
   

  	
  No. 24-5015180

  	
   

  
	
   

  	
   

  	
  Qualified in Queens County

  	
   

  
	
   

  	
   

  	
  Commission Expires
  July 19, 2005

  	
   

  

 

11Exhibit 10.15

 

TAX SHARING AGREEMENT

 

TAX SHARING AGREEMENT (the “Agreement”), dated as of December 22,
2000, between Atlantic Express Transportation Group Inc., a New York
Corporation (“AETG”) and Atlantic Express Transportation Corp., a New York
Corporation (“AETC”).

 

W I T N E S S E T H:

 

WHEREAS, AETG is the common parent of an affiliated group of
corporations filing a consolidated federal income tax return which affiliated
group includes AETC and AETC’s subsidiaries.

 

WHEREAS, the parties hereto desire, to allocate liability for taxes
AETG Group (as defined below) on the one hand and AETC Group (as defined below)
on the other hand, and to agree as to certain other tax matters.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

1.                                       DEFINITIONS

 

For purposes of this Agreement, the following words and phrases have
the following meanings:

 

“AETC Group” means AETC and the AETC Subsidiaries.

 

“AETC Subsidiaries” means the Subsidiaries of AETC and any additional
Subsidiaries which are acquired by AETC during the term of this Agreement.

 

“AETG Group” means AETG and the AETG Subsidiaries.

 

“AETG Subsidiaries” means the Subsidiaries of AETG and any additional
Subsidiaries which are acquired by AETC during the term of this Agreement,
other than AETC and each of the AETC Subsidiaries..

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

 

“Consolidated Federal Income Tax” means the regular federal income tax
shown on the consolidated federal income tax return of the Consolidated Group,
including interest and penalties, if any, as last determined reflecting any
adjustment made by an amended return, claim for refund, carryback claim, or
examination by the Internal Revenue Service.

 

“Consolidated Group” means the group of affiliated companies of which
AETG is the common parent.

 

“Consolidated Return” means the consolidated U.S. federal income Tax or
any combined state and/or local tax return of AETG for the taxable period
commencing on
                 
and each consolidated U.S. Federal Income Tax Return of AETG for each
subsequent taxable period until the termination of this Agreement.

 

“Effective Date” means the date set forth herein above.

 

“Final Determination” means the final resolution of liability for tax
for any tax period or for any tax issue as a result of (i) a final and
unappealable judgment or other order of a court of competent jurisdiction, (ii)
a closing agreement or accepted offer in compromise under sections 7121 or 7122
of the Code, or a comparable agreement under the laws of other jurisdictions,
which resolves the entire liability for such tax or such issue for such tax
period, or (iii) any other final deposition, including by reason of the
expiration of the applicable statute of limitations.

 

“Group” means in the context used herein either the AETG Group or the
AETC Group.

 

“IRS” means the Internal Revenue Service.

 

“Member” means AETG. AETC or any of their Subsidiaries.

 

“Non-Consolidated Taxes” means all Taxes other than Consolidated Taxes.

 

“Subsidiary” means with respect to any Person, (i) any corporation,
association or other business entity of which more than 80% of the total voting
power of shares of voting stock thereof is at the time owned or controlled,
directly or indirectly, by such person or one or more of the other subsidiaries
of that person or a combination thereof and (ii) any partnership in which such person
or any of its subsidiaries is a general partner.

 

“Substantial Authority” has the meaning provided in the Treasury
Regulations under section 6662 of the Code.

 

“Tax Dispute Accountant” means the national office of an independent
accounting firm of national reputation selected by AETG and reasonably
acceptable to AETC.

 

“Tax” means any federal, state or local, income tax, franchise tax or
tax on capital.

 

2

 

2.                                       [INTENTIONALLY
OMITTED]

 

3.                                       FILING RESPONSIBILITY

 

3.1                                 Consolidated
Returns.  (a) AETG and AETC shall
and shall cause the AETC Subsidiaries and AETG Subsidiaries, respectively, to
join, in the Consolidated Returns to the extent each is eligible to join in
such return under the Code and the Treasury Regulations.  AETG shall cause the Consolidated Returns to
be timely prepared and filed, and shall timely prepare any consents and
requests for extension of time within which to file the Consolidated Returns or
any related information or similar returns. 
AETG shall make the Consolidated Returns available to AETC for review
prior to filing and shall furnish AETC with a copy of each such return promptly
after it is filed.

 

(b)                                 AETC
and the AETC Subsidiaries shall each furnish to AETG, on a timely basis, such
information, schedules, analysis and other items as may be reasonably requested
by AETG to prepare the Consolidated Returns.

 

(c)                                  AETC
and the AETC Subsidiaries shall execute and deliver all documentation
reasonably required (including powers of attorney) to enable AETG to timely
file, and take all actions necessary or incidental to the filing of, the
Consolidated Returns or any amendment of the Consolidated Returns.  AETG shall determine in its sole discretion
whether to file an amended return, and no consent of AETC or an AETC Subsidiary
shall be required for the filing of any such amended return.

 

(d)                                 AETG
shall pay or cause to be paid all Taxes with respect to the Consolidated
Returns, and shall act as the agent of AETC, the AETC Subsidiaries and the AETG
Subsidiaries in all Tax matters having to do with the Consolidated Returns.

 

4.                                       SHARING OF
CONSOLIDATED FEDERAL INCOME TAX

 

(A)                              Taxable
Income.  The AETC Group and AETG
Group shall pay to AETG for each taxable year during the term of this Agreement,
an amount equal to the result of the following equation:

 

(i)                                     the separate
taxable income of each Group (but not less than zero) divided by

 

(ii)                                  the sum of the
Separate Taxable Incomes of each Member of the Consolidated Group that has positive
Separate Taxable Income for the year, the resulting quotient multiplied by

 

(iii)                               the federal income tax
liability of the Consolidated Group, prior to the application of foreign tax
credits, if any, for the year.

 

3

 

(B)                                Separate Taxable
Income.  For purposes of this
Agreement, the Separate Taxable Income of each Member of the Consolidated Group
shall be determined under Treas. Reg. Section 1.1502-12 with the
adjustments provided in Treas. Reg. Section 1.1552-1(a)(1)(ii).

 

 

(C)                                Subsequent
Adjustments.  In the event that the
separate income of any Member of the AETG Group or AETC Group is adjusted by
reason of an amended return, claim for refund, or examination by the Internal
Revenue Service, the amount due from such Group under paragraph 4.A shall be
recomputed using the adjusted Separate Taxable Income and such Group shall pay
to AETG any additional amount owed with applicable interest (with full credit
given for any prior payments for the year), and AETG agrees to pay to AETC
Group or any AETG Subsidiary any overpayment made by AETC Group or such AETG
Subsidiary.

 

(D)                               Refunds.  In the event that the separate taxable
income of any Member of the Consolidated Group is negative (determined without
reference to the adjustments provided in Treas. Reg.
Section 1.1552-1(a)(1)(ii) and such Member would be entitled to
receive a refund for the year if the Member were not a member of the
Consolidated Group, AETG shall pay to such Member an amount equal to such
refund.  In no event, however, shall the
amount payable by AETG pursuant to this paragraph 4.D exceed the amount
previously paid by the Member to AETG during the relevant carryback period
under Section 172 of the Code, or any successor provision.

 

5.                                       PAYMENT
PROCEDURE

 

A.                                   Current Year Tax
Liability.  Payments to be made by
AETC Group and AETG Group to AETG pursuant to paragraph 4.A with respect to any
year shall be made in installments, as set forth in this paragraph.

 

1.                                       Quarterly
Installments.  Within 30 days afer
the close of each calendar quarter, AETC Group and AETG Group will pay to AETG
an amount equal to a percentage of the current estimated payment, which
percentage shall be the percentage of the Consolidated Tax paid by such Group
for the prior tax year.

 

2.                                       Final Installment.  Within 10 days after each Group has received
from AETG a copy of its separate federal income tax return for the relevant tax
year, such Group will pay to AETG the excess, if any, of such Group’s liability
over the sum of all payments with respect to such year made by such Group
pursuant to paragraph 5.A.1.  If the sum
of the payments with respect to such year made by the Group pursuant to
paragraph 5.A.1. plus the amount of fuel tax credit earned by such Group
exceeds such Group’s liability, then AETG shall refund the difference within 30
days to such Group.

 

B.                                     Payment of
Subsequent Adjustments.  Payments to
be made by each Group to AETG pursuant to paragraph 4.C. shall be made within
30 days after such Group has received from AETG a copy of the filed amended
return or an agreement in writing with the Internal Revenue Service on

 

4

 

proposed adjustments.  Payments
made by AETG to a Member or a Group pursuant to paragraph 4.C. or paragraph
4.D. shall be made within 30 days after receipt by AETG of a refund, or offset
against adjustments of the Consolidated Group, resulting from the filing of a
return, an amended return, Form 1139 Corporation Application for Tentative
Refund, claim for refund, or agreement in writing with the Internal Revenue
Service on proposed adjustments.

 

6.                                       STATE
TAXES.  To the extent appropriate, rules
similar to the provisions of Sections 4 and 5 of this Agreement shall be
applied to the payment of state and local franchise or income tax liabilities
to which any Member of the Consolidated Group is subject and which are required
to be determined on a unitary, combined or consolidated basis.

 

7.                                       OTHER
TAXES.  AETC shall pay or reimburse AETG
(but without duplication of any amounts that either is otherwise obligated to
pay to AETG under this Agreement) for its Pro Rata Share of any taxes, charges
or assessments (including but not limited to capital, net worth, gross
receipts, excise, intangibles or similar taxes, charges or assessments)
required to be paid by AETG by virtue of (a) its being incorporated or having
capital stock outstanding (but not by virtue of owning stock of any corporation
other than AETC), (b) being a holding company parent of AETC or receiving
dividends from or other distributions from ATEC or any subsidiary thereof.  For purposes of this Section, “Pro Rata
Share” shall mean, for AETC, the fraction obtained by dividing the book value
of such Company’s Group by the aggregate book value of the AETC.

 

8.                                       DISPUTE
RESOLUTION.  In the event of a dispute
between AETG and AETC as to any computation of federal, state, local income or
franchise Tax liability pursuant to this Agreement, or the amount of any
payment with respect thereto, the disputed item shall be submitted to the Tax
Dispute Accountants.  AETG and AETC
shall present their arguments to the Tax Dispute Accountants within 30 days
after such submission.  The Tax Dispute
Accountants shall resolve the dispute in a fair and equitable manner and in
accordance with applicable tax law, provided that the Tax Dispute
Accountants shall not resolve a legal issue against AETG unless the Tax Dispute
Accountants determines that AETG’s position with respect to such legal issue
does not have Substantial Authority. 
The Tax Dispute Accountants’ determination shall be binding on the
parties.  AETC shall be responsible for
the cost and fees of the Tax Dispute Accountants.

 

9.                                       TERM.  This Agreement shall be effective as of the
year and day first above written and shall continue thereafter until the
parties hereto terminate this Agreement by mutual consent.

 

10.                                 METHOD
OF ALLOCATION.  This Agreement shall
have no effect on, and shall not be affected by, the method of allocation of
tax liability between Members of the Consolidated Group selected by the
Consolidated Group pursuant to Section 1552 of the Internal Revenue Code.

 

11.                                 FINANCIAL
STATEMENT REPORTING.  For financial
statement reporting purposes, AETC Group shall record current and deferred tax
assets and liabilities in accordance with the Statement of Financial Accounting
Standards No. 109- Accounting For Income Taxes.

 

5

 

12.                                 GENERAL
PROVISIONS

 

12.1                           Notices.  Any notice or other communication required
or permitted to be given under this Agreement shall be sufficiently given if
sent by express, certified or registered mail, postage prepaid, or by an
independent next business day delivery service, or by telefax, addressed as
follows and shall be effective upon receipt, or if mailed, three days after
mailing:

 

(a)                                  If
to AETG, addressed to:

 

	
  Atlantic Express Transportation Group Inc.

  
	
  7 North Street

  
	
  Staten Island, NY 10302

  
	
  Fax:

  	
   

  	
  (718) 442-5105

  
	
  Telephone:

  	
   

  	
  (718) 442-7000

  
	
  Attention:

  	
   

  	
  President

  

 

With a copy to:

 

	
  Silverman, Collura & Chernis, P.C.

  
	
  381 Park Avenue South

  
	
  New York, NY 10016

  
	
  Fax:

  	
   

  	
  (212) 7798858

  
	
  Telephone:

  	
   

  	
  (212) 779-8600

  
	
  Attention:

  	
   

  	
  Peter R. Silverman

  

 

(b)                                 If to AETC, addressed
to:

 

	
  Atlantic Express Transportation Corp.

  
	
  7 North Street

  
	
  Staten Island, NY 10302

  
	
  Fax:

  	
   

  	
  (718) 442-5105

  
	
  Telephone:

  	
   

  	
  (718) 442-7000

  
	
  Attention:

  	
   

  	
  President

  

 

With a copy to:

 

	
  Silverman, Collura & Chernis, P.C.

  
	
  381 Park Avenue South

  
	
  New York, NY 10016

  
	
  Fax:

  	
   

  	
  (212) 7798858

  
	
  Telephone:

  	
   

  	
  (212) 779-8600

  
	
  Attention:

  	
   

  	
  Peter R. Silverman

  

 

or to such other address(es) as AETG or AETC shall give notice to the
other by like means.  Any such notice or
communication shall be deemed to have been given (i) if by personal delivery on
the day after such delivery, (ii) if by certified or registered mail, on the fifth
day after the mailing thereof, (iii) if by next-day or overnight mail or
delivery, on the day delivered, or (iv) if by fax on the next day following the
day on which such fax was sent.

 

6

 

12.2                           Parties in Interest.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and legal representatives.

 

12.3                           No Third Party
Beneficiaries.  Nothing in this
Agreement shall confer any rights upon any person or entity other than the
parties hereto and their respective heirs, successors and permitted assigns.

 

12.4                           Governing Law; Disputes.  (a) 
This Agreement shall be governed in all respects, including as to
validity, interpretation and effect, by the internal laws of the State of New
York, without giving effect to the conflict of laws rules thereof .

 

(b)                                 Each party
acknowledges and agrees that any controversy which may arise under this
Agreement is likely to involve complicated and difficult issues, and therefore
each such party hereby irrevocably and unconditionally waives any right such
party may have to a trial by jury in respect of any litigation directly or
indirectly arising out of or relating to this Agreement, or the breach,
termination or validity of this Agreement, or the transactions contemplated by
this Agreement.  Each party certifies
and acknowledges that (i) no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce the foregoing waiver, (ii) each
such party understands and has considered the implications of this waiver,
(iii) each such party makes this waiver voluntarily, and (iv) each such party
has been induced to enter into this Agreement by, among other things, the
mutual waivers and certifications in this Section.

 

12.5                           Assignment.  This Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
the other parties hereto, and any purported assignment or other transfer
without such consent shall be void and unenforceable.

 

12.6                           Amendment; Waivers, etc.  No amendment, modification or discharge of
this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought.  Any such waiver shall constitute a waiver
only with respect to the specific matter described in such writing and shall in
no way impair the rights of the party granting such waiver in any other respect
or at any other time.  Neither the
waiver by any of the parties hereto of a breach of or a default under any
occasions, to enforce any of the provisions of this Agreement or to exercise
any right or privilege hereunder, shall be construed as a waiver of any other
breach or default of a similar nature, or as a waiver of any of such
provisions, rights or privileges hereunder. 
The rights and remedies herein provided are cumulative and none is
exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.  The
rights and remedies of any party based upon, arising out of or otherwise in
respect of any breach of any covenant or agreement or failure to fulfill any
condition shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such breach is
based may also be the subject matter of any other covenant or agreement as to
which there is no breach.

 

12.7                           Severability.  If any provision, including any phase,
sentence, clause, section or subsection, of this Agreement is invalid,
inoperative or unenforceable for any reason, such provision shall be valid and
enforceable to the fullest extent permitted by law and such circumstances shall
not have the effect of rendering such provision in question invalid,
inoperative or unenforceable in any

 

7

 

other case or circumstance, or of rendering any other provision herein
contained invalid, inoperative, or unenforceable to any extent whatsoever.

 

12.8                           Headings.  The headings continued in this Agreement are
for purposes of convenience only and shall not affect the meaning or
interpretation of this Agreement.

 

12.9                           Entire Agreement.  All understandings and agreements between
the parties are merged into this Agreement, which fully and completely
expresses their agreement and supersedes any prior agreement or understanding
relating to the subject matter hereof.

 

12.10                     Counterparts.  This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute one
instrument.  A signature of a party
delivered by telecopy or other electronic communication shall constitute an
original signature of such party.

 

IN WITNESS WHEREOF, the undersigned have duly
executed this Agreement as of the date first above written.

 

 

	
   

  	
  ATLANTIC
  EXPRESS TRANSPORTATION

  GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DOMENIC
  GATTO

  
	
   

  	
  Name: 

  	
  Domenic
  Gatto

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  ATLANTIC
  EXPRESS TRANSPORTATION

  CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DOMENIC
  GATTO

  
	
   

  	
  Name:

  	
  Domenic
  Gatto

  
	
   

  	
  Title:

  	
  President

  
				

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}]]