Silverliner-VI-RFP-Contract_Redline-August-2026-Addendum-12-1.pdf

CONTRACT DOCUMENTSAND GENERAL CONDITIONS

AND

SPECIFICATIONS

FOR

SILVERLINER VI RAIL CARS

CONTRACT

FOR SUPPLY OF EQUIPMENT

MANUFACTURED SPECIFICALLY FOR SEPTA

TABLE OF CONTENTS

I. CONTRACTOR’S OBLIGATION

II. SEPTA’S OBLIGATION

III. THE CONTRACT

IV. CONTRACT STANDARD

V. TIME OF PERFORMANCE

VI. LIQUIDATED DAMAGES

VII. DELAY IN COMPLETION BEYOND CONTRACTOR'S CONTROL

VIII. EXTENSION OF TIME, NOT WAIVER OF TIMELY PERFORMANCE

IX. INSPECTION

X. DELIVERY

XI. RISK OF LOSS

XII. ACCEPTANCE

XIII. PAYMENT

XIV. ASSIGNMENT OF RIGHTS: DELEGATION OF DUTIES

XV. TERMINATION FOR CAUSE

XVI. TERMINATION FOR CONVENIENCE

XVII. WARRANTIES

XVIII. SUBCONTRACTS

XIX. CHANGES

XX. CONTRACT SECURITY

XXI. INDEMNIFICATION

XXII. INSURANCE

XXIII. FEDERAL, STATE AND LOCAL CONTRACT REQUIREMENTS

XXIV. COMPLIANCE WITH FEDERAL, STATE, AND LOCAL LAWS

XXV. TAXES

XXVI. NOTICES

XXVII. FINANCING

XXVIII. CLAIM AGAINST MEMBER OF SEPTA BOARD OR SEPTA EMPLOYEE

XXIX. GOVERNING LAW/JURISDICTION

XXX. SEPTA AUDIT RIGHTS

XXXI. PROHIBITED INTEREST

XXXII. DISPUTES

XXXIII. LABELS

XXXIV. USE OF "SEPTA" NAME IN CONTRACTOR ADVERTISING OR PUBLIC RELATIONS

XXXV. SEPTA'S RIGHTS IN PROPERTY

XXXVI. SOFTWARE WARRANTY

XXXVII. CONTRACTOR'S PROGRAM MANAGEMENT OFFICE

XXXVIII. CONTRACT OPTION FOR ADDITIONAL SILVERLINER VI RAIL CARS

XXXIX. CONTRACT OPTION PRICE ADJUSTMENT AND PAYMENT TERMS FOR OPTION FOR ADDITIONAL

SILVERLINER VI RAIL CARS

XL. DOCUMENTS AND SPARE PARTS

XLI. INTEGRATION

XLII. SEVERABILITY

XLIII. JOINT AND SEVERAL LIABILITY

XLIV. SEAT BELT USE

XLV. DISTRACTED DRIVING, INCLUDING TEXT MESSAGING WHILE DRIVING

XLVI. INFRASTRUCTURE INVESTMENT AND JOBS ACT

XLVII. AVAILABILITY OF FUNDS

The following referencesAPPENDICES:

EXHIBIT - I PRICING / BAFOE SCHEDULE

EXHIBIT - II MILESTONE AND PROJECT PROGRESS PAYMENT SCHEDULE

EXHIBIT – III SPARE PARTS PRICE SCHEDULE

EXHIBIT - IV FINAL SILVERLINER VI RAIL CARS SPECIFICATION

EXHIBIT – A FEDERAL CONTRACT REQUIREMENTS

EXHIBIT - B STATE & LOCAL CONTRACT REQUIREMENTS

EXHIBIT - C SEPTA EEO/AA EQUAL EMPLOYMENT OPPORTUNITY CONTRACTUAL REQUIREMENTS

EXHIBIT - D CERTIFICATIONS

• BUY AMERICA CERTIFICATE

• DBE APPROVAL CERTIFICATION

• CERTIFICATE OF COMPLIANCE WITH IMMIGRATION REFORM AND CONTROL ACT OF 1986

• CERTIFICATION REGARDING LOBBYING

EXHIBIT - E FORMS AND - SAMPLES

• PROPOSAL COVER FORM

• ACKNOWLEDGEMENT OF ADDENDA

• PERFORMANCE BOND SAMPLE

• MAINTENANCE BOND SAMPLE

• NON-COLLUSION AFFIDAVIT SAMPLE

• CHANGE ORDER FORM SAMPLE

EXHIBIT F TECHNICAL PROPOSAL

EXHIBIT G ADDENDA ACKNOWLEDGEMENT

EXHIBIT H ADDENDA

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CONTRACT

FOR SUPPLY OF EQUIPMENT

MANUFACTURED SPECIFICALLY FOR SEPTA

THIS AGREEMENT, entered into the day of, 20__, by and between the

Southeastern Pennsylvania Transportation Authority (hereinafter called "SEPTA"), a body corporate and politic exercising the power of the Commonwealth of Pennsylvania as an agency and instrumentality thereof, with offices located at 1234 Market Street, Philadelphia, Pennsylvania, and

(hereinafter called

("Contractor"), a organized under the laws of , with principal offices located at .

WITNESSETH:

WHEREAS, SEPTA needs to acquire, and, if required by the Specifications, have installed, certain equipment hereinafter more fully described and set forth in the Specifications attached hereto and incorporated herein, in connection with an undertaking known as SILVERLINER VI RAIL CARS as set forth in the SCHEDULE AExhibit I (hereinafter called the "Project");

WHEREAS, the Contractor, pursuant to SEPTA's Request for Proposal, has submitted a Proposal to furnish all the Material and/or Equipment described in the Specification, as such term is hereinafter defined

(hereinafter called “Cars” or “Material and/or Equipment”).

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

I. CONTRACTOR’S OBLIGATION

The Contractor shall furnish the Material and/or Equipment described in the Technical

Specifications for the Purchase of Silverliner VI Rail Cars Technical Specification

(“Specification”) which is attached hereto and made a part of the Contract as Exhibit IV.

II. SEPTA’S OBLIGATION

SEPTA shall pay to the Contractor, in consideration for furnishing the Material and/or Equipment in conformity with the Specification, the Firm Fixed Price(s) as set forth in the Best and Final Offer

Pricing Schedule, attached hereto and made a part hereof as Exhibit I, in a total amount not to exceed $_______________, Base Order and Associated Equipment, Items 1A, 2, 3, 4, & 5 of

Pricing Schedule (hereinafter called the "Contract Sum").

III. THE CONTRACT

A. The Contract Documents form the Contract and represent the entire and integrated Contract between the parties and, except for substantial representations made by the Contractor upon which SEPTA was entitled to rely in making the decision to award the Contract to the

Contractor, supersede all prior negotiations, representations, or Contracts, either written or oral. The Contract Documents which form the Contract consist of the following:

1. This Contract, including any amendment, modification or change order (as defined in

Section Article XIX) to this Contract mutually agreed to in writing and signed by proper officials of both parties;

2. RFP 25-00300-AMJP Request for Proposal for the Purchase of Silverliner VI Rail

Cars, Section 12 – Instructions and Information forto Proposers RFP 25-00300-AMJP

3. Performance Bond, and Maintenance (or Guarantee) Bond;

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4. Technical Specification, including any drawings (collectively referred to as the

"Specification");

5. Any other attachment or exhibit attached hereto, including but not limited to: Exhibit

A – Federal Contract Requirements; Exhibit B – State and Local Contract

Requirements; Exhibit C – SEPTA EEO/AA Equal Employment Opportunity

Contractual Requirements; and Exhibit D – Buy AmericaCertifications;

6. Proposal Documents as follows:

a. Addenda

b. Technical Proposal b.c. Price Proposal

B. Order of Precedence: In the event of any conflicts among the Contract Documents listed in Paragraph III. A above, the terms and requirements of the document which appears earliest in the listing shall govern.

C. Responsibility for Those Performing Work: The Contractor agrees that all personnel used in performance of the Contract shall be considered employees of the Contractor or its subcontractors, and in no event shall any of the personnel employed in the performance of the Contract be considered employees of SEPTA.

D. The Contractor shall cooperate with SEPTA's Project Representatives, namely the Project

Manager of SEPTA, or his/her representative(s) designated in writing (hereinafter called the "Project Manager"), who shall be responsible for technical direction provided by

SEPTA, and the Contract Administrator of SEPTA, or his/her representative(s) designated in writing (hereinafter called the "Contract Administrator"), who shall be responsible for the administration of the Contract on SEPTA's behalf.

IV. CONTRACT STANDARD

A. The Specification, and Technical Proposal including any addenda and modifications issued thereto, shall provide the standard for determining whether the Material and/or Equipment meets the Contract requirements.

B. Viewed individually and as a finished product, all material, components and parts installed in or on the Rail Cars during its manufacture shall be newly made of the current model year under standard production by the manufacturer. Used, reconditioned or obsolete parts or components are not to be used in the assembly of the Rail Cars or to be installed in or on it under any circumstances. Components or parts damaged prior to or during delivery are not acceptable and shall be replaced at the Contractor's own expense with a new component or part. The Rail Cars and all its components and parts shall be designed to permit ready accessibility for maintenance purposes with minimal disturbances of other components or parts. The term “days” where used in this Contract shall be defined to mean “calendar days” unless otherwise specified.The term "heavy duty" where used in the Specification to describe a part or component shall be defined to mean "in excess of the usual or normal quantity, quality, or capacity that is supplied or manufactured."

V. TIME OF PERFORMANCE

A. The Contractor shall commence performance under the Contract within five (5) working days of issuance of SEPTA's Notice to Proceed and shall fully complete performance of the Contract within the time specified in Exhibit II. All time limits contained in the

Contract Documents are of the essence.

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VI. LIQUIDATED DAMAGES

A. Delay

1. In the event that the Cars to be furnished under the Contract are not furnished and delivered in accordance with the Specifications, on the dateswithin the month identified as set forth in the attached Exhibit II, values per the following Liquidated

Damages table shall be paid to SEPTA by the Contractor, or shall be deducted from any amount due to the Contractor by SEPTA, as liquidated damages for every day or part thereof that the performance of the Contract shall remain uncompleted in accordance with the delivery requirements (delivery schedule) as set forth in Exhibit

II. The total amount of liquidated damages due to time delay only payable under

Articles VI.A and XVII.G shall not exceed 10% of the Contract Sum (“Delay LD

Cap”).

Liquidated Damages Daily Damages (Calendar Day)

SEPTA's written acceptance or conditional acceptance of the Pilot Married Pairs #1, #2, and #3 after Contractual date

$6,980

SEPTA’s acceptance or conditional acceptance of the production cars (per married pair) after Contractual date

$270

SEPTA’s acceptance or conditional acceptance of the Last Production Married Pair after Contractual date

$7,722

2. Costs are incremental and additive, so that the last production pair has both

“[…]production cars (per married pair)” and “[…]Last Production Married Pair” running simultaneously. As the pilot cars are not production cars, only the first line applies to them.

3. In the event of delays which are not subject to Paragraph Article VII, Delay in

Completion Beyond Contractor's Control, in delivery of certain items other than the railcars, namely:

a. Milestone 6.0 Delivery and Approval of Draft Technical Manuals

b. Milestone 11.0 Completion of Delivery of Capital Spare Parts

c. Milestone 12.0 Delivery and Acceptance Approval of Final Manuals

d. Milestone 13.0 Completion of Delivery of Special Tools

e. Milestone 16.0 Completion of Delivery of Bench Test Equipment

f. Milestone 18.0 Successful Ffulfillment and Ccompletion of Aall Ttraining

Cclasses

4. , both the approved drafts and the final completed versions of the Operator’s Manual, Running Maintenance Manual, Heavy Repair Manual, Engineering Data Book, Illustrated Parts Catalog, Maintenance Parts Price List, the completion of the Education

Program (other than the overhaul modules), Spare Parts, and Portable Test Equipment, all Bench Test Equipment, the Air Brake Test Rack, and all computer Software and

Special Test Equipment Manuals beyond the dates and schedule specified in the

Contract Documents, SEPTA shall assess liquidated damages in the amount of $

100.00 per calendar day for each of the above listed item or service not delivered or accomplished.

B. Weight

1. In the event that the Cars to be furnished under the Contract are not furnished and delivered in accordance with the Specifications and are heavier than the Target

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Weights identified in Exhibit IV, values per the following Liquidated Damages table shall be paid to SEPTA by the Contractor, or shall be deducted from any amount due to the Contractor by SEPTA, as liquidated damages for excess weight.

Liquidated Damages Damages (per pound, per car)

Married Pair Weight in excess of the AW0 target, 1-up to1000 lbs overweight

$13

Married Pair Weight in excess of the AW0 target, greater than 1001+0 lbs overweight, applied marginally (ex: the 1001st pound per car incurs $26, not $39)

$26

C. Energy Efficiency

1. In the event that the Cars to be furnished under the Contract are not furnished and delivered in accordance with the Specifications and consume more energy than identified in the table below, values per the following Liquidated Damages table shall be paid to SEPTA by the Contractor, or shall be deducted from any amount due to the

Contractor by SEPTA, as liquidated damages for excess energy consumption.

2. Damages will be via one-time assessment using seasonally-adjusted analysis (e.g., accounting for all heating and cooling modes and averaging HVAC consumption) after completion of testing per Exhibit IV Section 15.8.8.8 Power and Energy Consumption.

Contractor may elect to repeat testing for purposes of Liquidated Damages assessment after making approved changes to improve efficiency. Modifications to the cars after completion of testing that decrease energy efficiency shall result in a revised assessment.

Liquidated Damages Damages

Net Wh consumed while operating in excess of the proposed energy consumption prediction 3.1125 kWh/mile averaged per car

$231.80/Wh/mile per car

Net kW consumed by auxiliary loads in excess of 45.895kW per carthe proposed energy consumption prediction per car

$33,311 per kW averaged per car

D. D. Reliability, Availability, and Maintainability

E.

In the event that the Cars to be furnished under the Contract are not furnished and delivered in accordance with the Specifications and fail to meet reliability, availability, and maintainability requirements identified in Exhibit IV, values per the following Liquidated

Damages table shall be paid to SEPTA by the Contractor, or shall be deducted from any amount due to the Contractor by SEPTA, as liquidated damages for failure to meet reliability, availability, and maintainability requirements.

F.

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Liquidated Damages Assessment Period Damages

MDBD lower than requirement

Per Month, beginning with the first month One year after 10% of base order cars have entered the reliability demonstration period, until Reliability and Availability Test Completion

$7 per mile below requirement

Car Level MDBF- ALL lower than requirement

Per Month, beginning with the first month of the Reliability and Availability Test, until Reliability and Availability Test Completion

$7 per mile below requirement

Fleet availability lower than requirement

Per Peak Period, beginning with the first month of the Reliability and Availability Test, until Reliability and Availability Test Completion

$2,352 per pair below required level

MTTR above requirement via one-time assessment after completion of Fleet Maintainability Monitoring per Exhibit IV Section 21.7.2.3

Modeled over service life of cars using actual time to repair less requirement multiplied by craft hourly rate

G.D. Limitation on Liquidated Damages

1. The total amount of liquidated damages due to time delay only payable under

Paragraph VI.A and Paragraph XVII.G shall not exceed 10% of the Contract Sum

(“Delay LD Cap”).

2. The total amount of liquidated damages payable under Articles Paragraphs VI.

subparagraphs B through and VI.CD shall not exceed 10% of the Contract Sum

(“Functional LD Cap”).

1. The total amount of liquidated damages payable under Articles VI subparagraphs A through D shall not exceed 20% of the Contract Sum (“Delay LD Cap” + “Functional

LD Cap”)

VII. DELAY IN COMPLETION BEYOND CONTRACTOR'S CONTROL

A. If the Contractor shall be delayed in the completion and performance under the Contract by reason of unforeseeable causes beyond its control and without its contribution, neglect, SEPTA Silverliner VI Rail Cars Page 6 of 37 fault, or negligence, including but not restricted to acts of God, acts of neglect of SEPTA, acts of neglect of any other contractor, fires, floods, epidemics, quarantines, strikes, or freight embargoes, the time herein specified for completion of Contract performance may be extended, without penalty, at the reasonable discretion of SEPTA, by such time as shall be fixed by SEPTA in writing. The Contractor shall not be entitled to any damages, compensation, or adjustment from SEPTA on account of any delay or delays, including delays in payment to Contractor, resulting from any of the aforesaid causes, except for delays caused by the negligent acts of SEPTA and the negligent acts of any SEPTA contractor.

VIII. EXTENSION OF TIME, NOT WAIVER OF TIMELY PERFORMANCE

A. Any extension of time granted by SEPTA pursuant to Paragraph Article VII above shall operate only to mitigate liquidated damages contained in Paragraph Article VI, no such extension of time shall be deemed a waiver by SEPTA of its right to terminate the Contract for delay by the Contractor, nor shall such extension relieve the Contractor from full responsibility for performance of its obligations hereunder.

B. If the Contractor desires to apply for an extension of time pursuant to Paragraph Article

VII above, the Contractor shall notify SEPTA in writing within fourteen (14) days after becoming aware of the possibility of delay and include any reasons for the delay, and its estimated duration, the effect or the anticipated effect of such delay on the Contractor’s obligations herein, and a description of the steps that the Contractor has taken and proposes to take in order to mitigate the effects of the delay.

IX. INSPECTION

A. Definition. “Material and/or Equipment” or “Cars” as used in this paragrapharticle, includes but is not limited to raw materials, components, intermediate assemblies, end products and supplies.

B. The Contractor shall provide and maintain an inspection system acceptable to SEPTA covering Material and/or Equipment under the Contract and shall tender to SEPTA for acceptance only Material and/or Equipment that has been inspected in accordance with the inspection system and has been found by the Contractor to be in conformity with Contract requirements. As part of the system, the Contractor shall prepare records evidencing all inspections made under the system and the outcome. These records shall be kept complete and made available to SEPTA. SEPTA, or its agents, may perform reviews and evaluations as reasonably necessary to ascertain compliance with this paragrapharticle. These reviews and evaluations shall be conducted in a manner that will not unduly delay the Contract work. The right of review, whether exercised or not, does not relieve the Contractor of the obligations under the Contract.

C. SEPTA, or its agents, has the right to inspect and test all Material and/or Equipment called for by the Contract, to the extent practicable at all places and times, including the period of manufacture, and in any event before acceptance. SEPTA shall perform inspections and tests in a manner that will not unduly delay the work. SEPTA assumes no contractual obligation to perform any inspection and test for the benefit of the Contractor.

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D. In the event SEPTA, or its agents, performs inspection or tests on the premises of the

Contractor or a subcontractor, the Contractor shall furnish, and shall require subcontractors to furnish, without additional charge all necessary facilities and assistance for the safe and effective performance of these duties.

E. When Material and/or Equipment is not ready at the time specified by the Contractor for inspection or test, SEPTA may charge the Contractor for the additional cost of inspection or test. SEPTA may also charge the Contractor for any additional cost of inspection or test when prior rejection makes re-inspection or retest necessary.

F. SEPTA, or its agents, has the right either to reject or to require correction of nonconforming

Material and/or Equipment. Material and/or Equipment is nonconforming when it is defective in material or workmanship or is otherwise not in conformity with Contract requirements. SEPTA may reject nonconforming Material and/or Equipment with or without disposition instructions.

G. The Contractor shall remove Material and/or Equipment rejected or required to be corrected. However, SEPTA may require or permit correction in place, promptly after notice, by and at the expense of the Contractor. The Contractor shall not tender for acceptance any corrected or rejected Material and/or Equipment without disclosing the former rejection or requirement for correction, and, when required, shall disclose the corrective action taken.

H. In the event the Contractor fails to promptly remove, replace, or correct rejected Material and/or Equipment that is required to be removed or to be replaced or corrected, SEPTA may either (1) by contract or otherwise, remove, replace, or correct the Material and/or

Equipment and charge the cost to the Contractor; or (2) terminate the Contract for default.

Unless the Contractor corrects or replaces the Material and/or Equipment within the delivery schedule SEPTA may require their delivery and make an equitable price reduction in accordance with Paragraph Article XIX, Changes.

I. In the event the Contract provides for the performance of SEPTA quality assurance at the source, and if requested by SEPTA, the Contractor shall furnish advance notification of the time (i) when Contractor inspection or tests will be performed in accordance with the terms and conditions of the Contract and (ii) when the Material and/or Equipment will be ready for SEPTA inspection. SEPTA's request shall specify the period and method of the advance notification and the SEPTA representative to whom it shall be furnished. Requests shall not require more than two (2) workdays of advance notification if a SEPTA representative is in residence in the Contractor's plant, nor more than seven (7) workdays in other instances.

J. SEPTA shall accept or reject Material and/or Equipment as promptly as practicable after delivery. SEPTA's failure to inspect and accept or reject the Material and/or Equipment shall not relieve the Contractor from responsibility, nor impose liability on SEPTA for nonconforming Material and/or Equipment.

K. Approvals, inspections and tests by SEPTA do not relieve the Contractor of responsibility for defects or other failures to meet Contract requirements discovered before acceptance.

Acceptance shall be conclusive, except for latent defects, fraud, gross mistakes, or as otherwise provided in the Contract.

L. If acceptance is not conclusive for any of the reasons in Paragraph IX.K above, SEPTA, in addition to any other rights and remedies provided by law, or under other provisions of the

Contract, shall have the right to require the Contractor (1) at no increase in Contract Sum, to correct or replace the defective or nonconforming Material and/or Equipment at the original point of delivery or at the Contractor's plant at SEPTA's election, and in accordance with a reasonable delivery schedule as may be agreed upon between the

Contractor and SEPTA; provided, that SEPTA may require a reduction in the contract price

SEPTA Silverliner VI Rail Cars Page 8 of 37 if the Contractor fails to meet such delivery schedule, or (2) within a reasonable time after receipt by the Contractor of notice of defects or nonconformance, to repay such portion of the Contract as is equitable under the circumstances if the Contract Administrator elects not to require correction or replacement.

M. When Material and/or Equipment is returned to the Contractor, the Contractor shall bear the transportation cost from the original point of delivery to the Contractor's plant and return to the original point of delivery. If the Contractor fails to perform or act as required in (1) or (2) above and does not provide a plan to cure such failure to SEPTA’s satisfaction within a period of ten (10) calendar days (or such longer period as SEPTA may authorize in writing) after receipt of notice from SEPTA specifying such failure, SEPTA shall have the right by contract or otherwise to replace or correct such Material and/or Equipment and charge to the Contractor the cost occasioned SEPTA thereby.

X. DELIVERY

A. Delivery shall be as required as set forth in Exhibit II. All Cars are to be delivered in good condition, complete, ready for operation or use as specified, and in conformity with the

Specifications and all other terms and conditions of the Contract.

B. Delivery shall not be construed to have occurred until SEPTA has been furnished with acceptable documentation demonstrating the car’s delivery and readiness, including but not limited to:

1. Contractor Certification that it has found the car to be in conformity with Contract requirements except:

a. Requirements evaluated by testing after Delivery

b. Specific open items identified on the Certificate of In-Plant Inspection and Release for Shipment

c. Specific open items identified through Inspection and recorded via the system maintained by the Contractor as described in Paragraph Article IX

2. Contractor’s plan for remedying open items that prevent acceptance testing within the time limit for beginning testing identified in Paragraph Article XII

3. Car History Book travelling with the car as required by Exhibit IV TS 25.18Section 25

C. The number of Cars on SEPTA property, whether Delivered or not, that have not achieved

Acceptance or Conditional Acceptance shall not exceed ten (10) cars. SEPTA may choose to waive this and allow more cars to be delivered at SEPTA’s sole discretion. SEPTA allowance of this limit from time to time to be exceeded does not waive SEPTA’s right to halt further shipments to enforce this limit.

D. Cars in excess of the rejection weight as detailed in Exhibit IV will not be permitted onto

SEPTA property.

XI. RISK OF LOSS

A. All risk of loss or damage to the Cars or any part thereof, prior to delivery and acceptance by SEPTA shall be borne by the Contractor. The Contractor shall pay all transportation and unloading costs to the designated delivery site and shall provide and pay for all insurance as outlined in Paragraph Article XXII "Insurance" of the Contract. Risk of loss will be passed to SEPTA at the time of delivery and acceptance of each Rail Car by SEPTA.

B. Any loss or damage to the Material and/or Equipment prior to delivery to SEPTA shall be made good by the Contractor at its own cost and the performance of the Contract shall be carried forward in accordance with its terms and conditions at no additional cost to SEPTA.

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SEPTA may, however, grant reasonable extensions to the completion date where loss or damage is not the result of the negligence of the Contractor, its employees or agents.

XII. ACCEPTANCE

A. Within fifteen (15) calendar days after arrival at the designated point of delivery and being placed by the Contractor in a ready-to-run condition, the Cars shall undergo tests as defined in the Specifications. If a Car passes these tests, the Car shall receive final written acceptance by SEPTA on the fifteenth calendar day after completion of testing, except that

SEPTA reserves the right to accept the Car earlier if SEPTA notifies the Contractor in writing of early acceptance or places the Car in revenue service. If a Car fails these tests, SEPTA shall notify the Contractor that the Car shall not be accepted until the repair procedures defined in Paragraph XII.B.D have been carried out and the Car has been retested and subsequently passes all required tests to SEPTA's satisfaction. Similar procedures shall be followed for items of non-acceptance for Material and/or Equipment other than the Cars.

B. Subject to SEPTA's sole discretion and terms, SEPTA may conditionally accept a Car.

SEPTA will not unreasonably withhold the consent to conditionally accept a Car that has been delivered with minor defects which, in SEPTA’s sole opinion, does not render the

Car unfit for revenue service.

C. Acceptance of all or part of the Material and/or Equipment delivered to SEPTA is conditioned upon SEPTA's final determination that said Material and/or Equipment, as installed if required by the Contract Documents, conforms to the requirements of the

Contract.

D. In the event that SEPTA does not accept a Car, the Contractor must begin work to repair all items of non-acceptance within two (2) working days after receiving notification from

SEPTA of the Car having failed to pass the acceptance tests. SEPTA shall make the Car available to the Contractor for repairs. The Contractor shall provide, at its sole expense, all spare parts, tools, personnel and space required to complete the repairs. At SEPTA's sole option, the Contractor may be required to remove the Car from SEPTA property for repair work. Repair procedures must be diligently pursued by the Contractor, and the

Contractor shall continue to have all risk of loss until SEPTA's written conditional or final acceptance of the Rail Car. Similar procedures shall be followed for items of non-acceptance for Material and/or Equipment other than the Cars. The Contractor shall be liable for all costs associated with the required repairs.

XIII. PAYMENT

A. SEPTA shall pay invoices submitted by the Contractor within thirty (30) days after approval of an invoice by the Project Manager. SEPTA shall make progress payments for the discrete deliverables for which payment is requested and the associated payment amount as shown in Exhibit II.

B. Unless otherwise agreed, the Contractor shall submit only one invoice per month, excluding any corrected invoices. Multiple payment milestones are permitted within the same invoice provided each is itemized. All payments require written approval of the

Project Manager, and in addition any progress payments involving Car assembly at the

Contractor’s plant require written approval by the SEPTA Resident Inspector. All invoices shall be accompanied with appropriate back-up material to document the discrete deliverables and to substantiate the work for which progress payment is requested have been achieved and document that costs have been incurred. The Contractor shall submit invoices within 30 days of the completion of the deliverable associated with the progress payment. In the event that an invoice is submitted late, SEPTA reserves the right to

SEPTA Silverliner VI Rail Cars Page 10 of 37 consider the invoice date as the date of deliverable completion with respect to Economic

Price Adjustment in Paragraph XIII.BE.

C. The unit price for the base order married pair purchased, as set forth in Exhibit I, shall be adjusted as outlined in Paragraph XIII.EB.

D. Refer to Paragraph XX.C regarding additional payment security, if required, and Paragraph

XXX.B regarding SEPTA Audit Rights.

E. Economic Price Adjustment

1. Definitions:

a. Base Month as used in this section article means the month prior to the submission of the later of Contractor’s Proposal or Contractor’s BAFO.

b. Escalated Month used in this section means:

i. For progress payments related to release of shipment of each production car/pair, the month three months prior to the release for shipment of each production cars/pair.

ii. For all other progress payments, the month three months prior to the invoice date.

c. Base Price as used in this section article means payment in the progress payment schedule, specifically the amount as of Notice to Proceed.

d. Adjusted Price as used in this section article means Base Price with the Economic

Adjustment included via addition or subtraction.

2. The Base Price for each progress payment related to line 1A through 1C of the price form shall be escalated or deescalated as follows:

a. Only progress payments associated with material delivery to SEPTA are subject to

Economic Price Adjustment. As identified in Exhibit II, the following progress payments are applicable: 8.1.1, 9.1.1, 9.2, 19.3.1, and all progress payments beginning with 10, 11, 13, and 16.

b. Change Orders are not subject to Economic Price Adjustment; however, the cost of the Change Order may include costs associated with projected escalation..

c. Adjustments in the Base Price shall be computed as:

i. 100% of the Base Price shall be deemed to be subject to adjustment.

ii. The total accumulated economic adjustment of the base price shall not exceed 20% of the Base Price (additive or reductive).

d. The adjustment is based on indices determined and reported monthly by the Bureau of Labor Statistics of the U.S. Department of Labor in the monthly Producer Prices and Price Indexes; PCU3365103365108.

e. The Contractor will submit invoices detailing the Base Price, Economic

Adjustment, and Adjusted Price when invoicing for production car/trainset items.

f. The calculation for the Economic Adjustment can only be made when the final indices for the escalated month have been published. If invoices have been submitted prior to the finalization of indices, then the Contractor shall separately invoice for the Economic Adjustment appropriate to the previous invoices, including the relevant calculation detail.

g. In the event the US Department of Labor discontinues an index or indices cited in this Contract or alters its method of calculating an index or indices cited in this

Contract (including a change in the base period), SEPTA, at its sole discretion, SEPTA Silverliner VI Rail Cars Page 11 of 37 shall determine the appropriate substitute index or indices or adjustment for use in determining the price adjustments described in this Contract.

h. A true up of the PPI adjustments costs (additive or deductive) shall occur no more than on a quarterly basis or no less than on a yearly basis. The calculation of the

Economic Adjustment is as follows:

Economic Adjustment = ( (Index for Escalated Month) − (Index for Base Month)

(Index for Base Month) × (Base Price))

F. SEPTA shall have the right, to require the Contractor to furnish proof that all suppliers and workmen employed in connection with the performance of the Contract or any part thereof have been fully compensated by the Contractor.

G. SEPTA shall have the right to take advantage of any discounts offered by the Contractor for prompt payment, less retainage, of full invoiced amounts.

H. The Contractor agrees that as of Contract Award, any negotiated Progress Payment

Schedule is not anticipated to result in a payment which exceeds its actual contract costs incurred since award, inclusive of overhead and profit, as of the invoice date.

I. SEPTA shall have the right to withhold all or part of a payment to the extent deemed necessary by SEPTA to protect SEPTA from loss because of:

1. Nonconforming Material and/or Equipment not corrected as required by Paragraph

Article IX;

2. Inconclusive Acceptance as stated in Paragraph Article IX;

3. Third party claims filed, or evidence reasonably indicating that a third-party claim will be filed;

4. Failure of the Contractor to make payments properly to subcontractors or suppliers, or for labor, materials, or equipment;

5. Reasonable evidence that the work cannot be completed for the unpaid balance of the

Contract sum;

6. Damage to SEPTA;

7. Reasonable evidence that the work or any portion of work will not be completed in accordance with Exhibit II;

8. The Contractor's failure to carry out the work in accordance with the Contract; or

9. The Contractor's failure to comply with any provision or requirement of the Contract.

J. SEPTA shall have the right to withhold all or part of a payment to the extent deemed necessary by SEPTA due to failure of the Contractor to comply with the requirements of

Exhibit IVI TS Section 25.5.2, Master Program Schedule. Failure to provide baseline, monthly updates, or revised schedules in accordance with that section shall be sufficient cause to withhold payments until such delinquent submittal is made and accepted by

SEPTA.

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XIV. ASSIGNMENT OF RIGHTS: DELEGATION OF DUTIES

A. The Contractor shall not sell, assign, transfer, or dispose of any interest in the Contract without the prior written consent of SEPTA thereto. SEPTA shall not be obligated to give such consent.

B. The Contractor shall not delegate its duties to be performed under the Contract as the prime contractor without prior written consent of SEPTA thereto. SEPTA shall not be obligated to give such consent.

C. Any attempt by the Contractor to make such assignment or delegation prior to obtaining

SEPTA's written consent shall give SEPTA the right to terminate the Contract with no further obligation to the Contractor or to anyone to whom the Contractor has attempted to assign, transfer, or delegate rights or obligations under the Contract.

D. Notwithstanding the above, SEPTA hereby authorizes the assignment by the Contractor of any Contractor’s receivables and/or credit rights to any money due or which may become due and/or entitlements under this Contract to a bank or financial institution. For avoidance of doubt, this authorization includes the delivery by the Contractor of the contractual documentation reasonably requested by the bank or financial institution exclusively for such assignment (as part of a factoring agreement or otherwise).

E. For purposes of Paragraph Article XIV, a change in control of Contractor, however effected, including by operation of law, shall be deemed to be a transfer or delegation of this Contract. For the purposes of this Article XIVParagraph, the term “control” shall mean the possession of the power to direct or cause the direction of the management and policies of Contractor, whether through ownership of voting securities, by contract or otherwise.

The change in control provisions of this Article XIVParagraph, however, shall not apply if the Contractor is a corporation, the outstanding voting stock of which is listed on a national securities exchange or actively over-the-counter.

XV. TERMINATION FOR CAUSE

A. Default Event. A "Default Event" means the Contractor's material breach of any requirement herein. In addition to any event that the Project Manager determines to be a material breach of this Contract, the following events constitute a material breach of this

Contract: (i) the Contractor has failed to begin the Work, the Contractor's performance of any Work has been unnecessarily or unreasonably delayed, or the Contractor has abandoned the Work; (ii) the Contractor has willfully violated any requirement herein or has not executed the same in good faith; (iii) the Contractor or the Guarantor has become insolvent (other than by reason of bankruptcy), or has assigned the proceeds of this

Contract for the benefit of creditors, or taken advantage of any insolvency statute or debtor or creditor law or if its property or affairs have been put in the hands of a receiver; (iv) the

Contractor has failed to obtain an approval required herein; (v) the Contractor has failed to provide the Authority the required insurances; (vi) either (a) the Contractor, a Contractor director, officer, principal, managerial employee, or owner of a ten percent (10%) or more interest in the Contractor, is convicted of a crime involving a public contract; or (b) 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 the Contractor's director, officer, principal, managerial employee, or owner of a ten percent (10%) or more interest in the Contractor, is involved in a criminal or other unlawful activity; or (vii) any event identified herein as a Default Event.

B. Notice of Default; Opportunity to Cure. If a Default Event occurs, then the Authority shall have the right to notify the Contractor of the Default Event (each, a "Default Notice").

The Default Notice shall specify the basis for such default. The Contractor shall submit to the Authority a written plan to remedy such Default Event (each, a "Remedial Plan") within

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SEPTA Silverliner VI Rail Cars Page 13 of 37 fourteen (14) days of the Contractor receiving the Default Notice. If the Contractor fails to timely submit a Remedial Plan to the Authority, then the Authority shall have the right to immediately terminate the Contract for cause by providing the Contractor with written notice of such termination.

1. Remedial Plan Content. The Remedial Plan shall include: (i) an explanation of the reasons for the Default Event; (ii) the remedial steps the Contractor proposes to cure such Default Event; and (iii) the schedule within which the Contractor shall implement such remedial steps. The Remedial Plan must take into consideration all of the

Authority's operational needs, including preserving the Delivery Schedule to the greatest extent possible, completing the Work, and avoiding unnecessary delays.

1. Authority Review of Remedial Plan. The Authority shall review the submitted

Remedial Plan within a reasonable time after receipt, and notify the Contractor whether the Authority accepts or rejects the Remedial Plan. If the Authority accepts the

Remedial Plan, then it shall notify the Contractor of such acceptance in writing (each, a "Remedial Plan Acceptance Notice"), and the Contractor shall immediately implement the accepted Remedial Plan. If the Authority rejects the Remedial Plan, then the Authority shall have the right to either: (i) terminate the Contract for cause by providing the Contractor with written notice of such termination; or (ii) notify the

Contractor of its rejection, identify deficiencies in the Remedial Plan, and provide a time limit within which the Contractor can submit a revised Remedial Plan to the

Authority for further review pursuant to this Paragraph XV.B.2.

2. Effect of Remedial Plan Completion. If the Contractor completes the Remedial Plan requirements and the Authority determines that the Default Event identified in the

Default Notice has been sufficiently cured, then the Authority shall rescind the Default

Notice in writing. The Authority shall have the right to terminate the Contract for cause by providing the Contractor with written notice of termination if: (i) the Authority determines that the Contractor is failing to diligently perform the requirements included in the Authority-accepted Remedial Plan; (ii) the Authority determines that the Default Event has not been sufficiently cured after the Contractor has completed the Remedial Plan requirements; or (iii) the Contractor has failed to complete the

Remedial Plan within the schedule set out in the Authority-accepted Remedial Plan.

3. Obligation to Perform Pending Termination. The Authority's notice of termination of the Contract shall specify the date of termination and the Contractor shall immediately discontinue all Work upon receipt of such notice, unless otherwise the

Authority directs otherwise in writing.

C. Default Event Remedies. In addition to the Authority's rights available at law, in equity, or as otherwise set out herein, upon the Contractor's default, the Authority shall have the right, at the Contractor's sole cost and expense, to either complete the Work with its own forces or those of a third party.

1. Contractor Liability for Default Event. The Contractor acknowledges and agrees that: (i) the Contractor shall be liable for all damages resulting from any Default Event, including the difference between the Gross Contract Price and the amount that the

Authority actually expends to complete the Work; (ii) the Contractor shall also remain liable for any other liabilities and claims related to the Contract; and (iii) the Authority shall have the right to deduct all such damages from monies due to the Contractor.

2. Retroactive Determination of Default Event. If the Authority terminates this

Contract due to a Default Event that is subsequently determined not to be a Default

Event, then both: (i) any such termination shall be deemed for all purposes to have been a Termination for Convenience; and (ii) the Contractor agrees that it shall not be

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SEPTA Silverliner VI Rail Cars Page 14 of 37 entitled to any consideration, damages, or expenses of any kind other those expressly permitted pursuant to Article XVI in connection with any such termination.

XV.

A. If the Contractor fails to make delivery of acceptable Material and/or Equipment or to perform the services within the time specified or any extension thereof and/or fails to remedy or does not take reasonable diligent steps towards remedy, to SEPTA’s satisfaction, the material breach or default of any of the terms, covenants, or conditions of this Contract within thirty (30) calendar days after receipt by Contractor of written notice from SEPTA setting forth the nature of said material breach or default, SEPTA shall have the right to terminate the Contract without any further obligation to Contractor other than payment for work satisfactorily performed. Any termination for cause shall not in any way operate to preclude SEPTA from also pursuing all available remedies against Contractor and its guarantors and/or sureties for said material breach or default, including recovery of any additional costs incurred by SEPTA in obtaining replacement Material and/or Equipment and services.

B.D. In the event that SEPTA elects to waive its remedies for any breach by the Contractor of any covenant, term or condition of the Contract, such waiver by SEPTA shall not limit

SEPTA's remedies for any succeeding breach of that or of any other term, covenant, or condition of the Contract.

XVI. TERMINATION FOR CONVENIENCE

A. In addition to any other rights of termination which may exist, SEPTA shall have the right to terminate the Contract for SEPTA's convenience. The termination notice shall specify the effective date of termination. Termination for convenience shall create no obligations on the part of SEPTA other than the following:

1. Payment to the Contractor for Material and/or Equipment delivered, and if required by the Specification, installed, in conformity with the Specification, prior to the effective date of termination.

2. Payment to the Contractor for Material and/or Equipment which conforms to the

Specification and is completed or in at the time the Contractor receives SEPTA's notice of termination for convenience, such payment being contingent upon inspection, acceptance and audit by SEPTA or its designated representatives.

3. Payment to the Contractor for labor, material and engineering costs identified solely to the Contract and incurred by the Contractor prior to the receipt of SEPTA's notice of termination, subject to audit by SEPTA or its representatives.

4. Payment to the Contractor for reasonable costs for termination of its subcontracts for the Project subject to audit by SEPTA or its representatives.

5. Payment to the Contractor for reasonable profit for Items A thru C above, subject to audit by SEPTA or its representatives.

XVII. WARRANTIES

A. Definitions:

1. "Acceptance" as used in this Paragraph Article XVII, means the act of an authorized representative of SEPTA by which SEPTA assumes ownership of existing and identified Material and/or Equipment, or approves specific services rendered, as partial or complete performance of the Contract.

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2. "Correction" as used in this Article XVIIparagraph, means the elimination of a defect.

3. "Defect" as used in this Article XVIIparagraph, means any condition or characteristic in any Material and/or Equipment or services furnished by the Contractor under the

Contract that is not in compliance with the requirements of the Contract.

B. Title: The Contractor covenants and warrants that good title to all the Material and/or

Equipment furnished under the Contract shall vest in SEPTA immediately upon final acceptance or conditional acceptance by SEPTA of the Material and/or Equipment, whichever comes first.

C. General: The Contractor warrants that all Material and/or Equipment, and installation thereof, meets all requirements and standards set by the Specifications. All Material and/or

Equipment shall be new, the best of its kind or quality, fit for its intended use as set forth in the Specification, and of safe, substantial, and durable construction.

All installation shall be done in a good and workmanlike manner and shall be safe and operate in the manner intended in the Specification. The Contractor further warrants that any Material and/or Equipment, and installation thereof, shall conform to representations and descriptions, or written, made by the Contractor and any literature, sample, or other vehicle of information supplied by the Contractor in its Technical Proposal prior to the time set for opening of Proposals for the Contract. The Contractor further warrants that any sample provided represents a minimum standard of quality for the Material and/or

Equipment, and installation thereof, furnished hereunder.

D. Payment of Suppliers and Subcontractors: The Contractor warrants that payment to all workmen, subcontractors and suppliers will be satisfied by the Contractor, in accordance with Paragraph XVIII.C so that, at the time SEPTA makes final payment to the Contractor, no part of the performance under the Contract shall be subject to any claim or lien.

E. Material and/or Workmanship: In addition to all warranties implied by law or required by the Specifications, the Contractor expressly warrants all Material and/or Equipment, and installation thereof, against any defect in design, material or workmanship which may be discovered by SEPTA within the periods specified below from the date of the Certificate of Acceptance, or Conditional Acceptance for each individual Car or item of Material and/or Equipment.