U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 1-8635
AMERICAN MEDICAL ALERT CORP.
----------------------------
(Name of Small Business Issuer in Its Charter)
New York 11-2571221
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
3265 Lawson Boulevard, Oceanside, New York 11572
- ------------------------------------------ -----
(Address of Principal Executive Offices) (Zip Code)
(516) 536-5850
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(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.01 per share
----------------------------
(Title of Class)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No____
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.
The issuer's revenues for its most recent fiscal year: $ 7,255,842.
The aggregate market value of the voting stock held by non-affiliates of
the registrant, as of March 26, 1997, was $11,286,475, computed by reference to
the average closing bid and asked prices of such stock as reported on the Nasdaq
on that date.
The aggregate number of shares of Common Stock outstanding as of March 26,
1996: 5,808,679
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the definitive Proxy Statement of the registrant, to be filed
within 120 days after the end of the registrant's fiscal year, are incorporated
by reference into Part III of this report.
<PAGE>
PART I
Item 1. Description of Business
General
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American Medical Alert Corp. (the "Company") is a corporation, formed under
the laws of the State of New York in 1981 and is engaged in the business of
designing, engineering, fabricating and marketing computerized Personal
Emergency Response Systems ("PERS") using proprietary and commercially available
technology. The Company markets to private-pay clients, not for profit consumer
agencies, health maintenance organizations, long-term care providers, retirement
communities, hospitals and government agencies. Part of the Company's strategy
is to capitalize on opportunities created by new federal policies affecting the
delivery of home healthcare services by HMOs and managed care groups. In order
to achieve its goals, the Company is participating in a study to prove the cost
effective benefits of PERS in home healthcare programs. During 1996, the Company
finalized plans with a national provider of geriatric services to offer its PERS
through their network of agencies, and launch its Model 700 (described below).
Several of the systems the Company markets enable PERS to be provided to a
wide range of individuals including; the medically at-risk, isolated and infirm,
elderly, disabled as well as persons receiving home care services and their
families, retirement and college campus sites, security/staff personnel who
maintain health facilities and places of internment (referred to individually as
the "Subscriber" and collectively as "Subscribers"). The Company's monitoring
centers are designed to simultaneously process signals from different systems.
Products and Services
- ---------------------
The Company's core business remains the development and marketing of
high-tech effective PERS, primarily used by the senior population. VOICE OF
HELP(R) Systems enable a person to remain independent and continue to enjoy the
comforts of living at home.
Models 500 and 1000 Personal Emergency Response Systems
-------------------------------------------------------
VOICE OF HELP(R) Systems have been designed to permit two-way (talk/listen)
voice communications between an individual and monitoring personnel located at
the Company's Monitoring Center (the "Center"). VOICE OF HELP(R) Systems are
currently available in two configurations. The stand alone Model 500 is utilized
by private-pay consumers, hospitals, home healthcare providers, government
agencies, third-party insurers, developers of retirement communities and certain
commercial applications, among others. The flush mounted Model 1000 is used in
new and rehabilitated multi-housing facilities.
The usual protocol associated with the use of the Company's VOICE OF
HELP(R) System is as follows:
<PAGE>
(1) The Subscriber activates the VOICE OF HELP(R) System by either pressing
a button located on the home unit or from a portable activator. There is no need
for the Subscriber to touch the telephone.
(2) When the VOICE OF HELP(R) System is activated, the Subscriber hears a
signal tone and sees a signal light on the home unit, indicating that the System
is processing the signal to the Center. The home unit, coupled with the proper
telephone connection, permits hands free communication between the Subscriber
and the Center. After the telephone connection has been established, a monitor
at the Center automatically displays relevant Subscriber information, including:
(i) the telephone numbers of the Subscriber's physician, local police
and fire departments, relatives and neighbors, etc.;
(ii) the Subscriber's vital medical history and current prescriptions
(if provided); and
(iii)other pertinent information that should assist in securing
appropriate action on behalf of the Subscriber.
The Company's Centers are capable of handling multiple requests for
assistance at any given time. The Company believes, based on its experience to
date, that each request for assistance is accepted within one minute of its
initiation. The Company makes available and believes that its back-up Center
provides a significant additional safeguard to the operations of its VOICE OF
HELP(R) Systems.
(3) After the Subscriber's personal data is displayed, the Company's
monitoring personnel and the Subscriber can talk and listen to each other. The
Subscriber need not touch the telephone. If no overriding noise or physical
sound barrier is present between the Subscriber and the VOICE OF HELP(R) System
home unit, the parties will normally be able to talk and listen to each other.
(4) Monitoring personnel at the Center will attempt to determine from the
Subscriber what aid is required. If the Subscriber is unable to communicate,
monitoring personnel will take actions pursuant to pre-designated instructions.
(5) VOICE OF HELP(R) Systems can monitor proprietary and certain
commercially available intrusion, fire detection and other similar devices.
Monitoring
- ----------
In addition to its voice systems, the Company makes available, as an
additional and integral part of the VOICE OF HELP(R) System, a unique monitoring
service. Personnel located at the Company's Monitoring Center utilize personal
computers, arranged in a local area network, to process alerts. Each of the
Company's monitoring personnel are certified as Emergency Medical Dispatchers.
All signals for assistance are programmed to access the Center's Subscriber data
base which enables monitoring personnel to take pre-determined actions quickly.
Relevant information
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<PAGE>
concerning the Subscriber is displayed on a monitor. Monitoring personnel are
trained to take appropriate action on behalf of all Subscribers. The technology
includes digital communicators, radio frequency devices and two-way voice
circuits. System activation may occur from a host of ancillary contacts,
switches or other devices. In most applications the Company provides long
distance, toll-free telephone lines for signal transmission.
Production/Purchasing
- ---------------------
The Company continues to utilize subcontractors to assemble its products.
These services are generally provided through verbal arrangements and Company
issued purchase orders. The Company has several principal subcontractors.
Although the Company currently maintains favorable relationships with its
subcontractors, the Company believes that in the event any such relationship
were to be terminated, the Company would be able to engage the services of
additional or different subcontractors as would be required to fulfill its needs
without any material adverse effect to the Company's operations.
With the exception of several proprietary components, which are
manufactured to the Company's specifications, the manufacturing of the Company's
product lines requires the use of generally available electronic components and
hardware.
Marketing/Customers
- -------------------
The Company markets its products and monitoring services to consumers,
hospitals, home healthcare providers, government agencies, third-party insurers,
developers of retirement communities and commercial applications, among others.
The Company believes that these markets offer the Company an opportunity for
significant growth.
Sales and leases of the Company's products and monitoring services are made
through the efforts of its own sales personnel, manufacturers' representatives
and independent distributors. The Company markets its products through sales and
various rental arrangements. The Company is an approved Medicaid Provider in the
States of New York, Georgia, Illinois and South Carolina. During the years ended
December 31, 1996, 1995 and 1994, the Company had revenues from one contract
with a municipality located in New York which represented 44%, 44% and 37%,
respectively, of its total revenue. On March 27, 1997, the Company was advised
that the Agreement will be extended through February 28, 1998.
The Company continues development on several new healthcare systems that it
plans to continue testing during 1997. Examples are:
a. MED PASS(R): The product will be used by home healthcare patients for
the purpose of insuring that prescribed medications are taken in accordance with
physicians' orders.
b. ACCUTROL(R): The Company, in conjunction with one of its customers, is
continuing its field testing of an access control version of its VOICE OF
HELP(R) System.
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<PAGE>
c. PERS Model 700: An updated version of the electronics used in the
Company's Models 500 and 1000. Production of the product is expected to begin
during the second quarter of 1997.
The Company continues to seek new applications for its interactive voice
technology.
Installation and Services
- -------------------------
The Company currently provides its own personnel or provides training for
customers' personnel for installation and servicing of its VOICE OF HELP(R)
Systems. In addition, telephone interconnect companies install VOICE OF HELP(R)
Systems for the Company in some areas.
Sales, Leasing and Monitoring Revenues
- --------------------------------------
The Company markets its products through sales and various rental
arrangements. The Company also offers VOICE OF HELP(R) Systems, including
monitoring center equipment for on-site monitoring, using similar purchase and
lease arrangements. The Company is an approved Medicaid Provider in the States
of Georgia, Illinois, New York, and South Carolina and continues to develop
similar relationships in several other states.
The Company offers monitoring service for its own, as well as personal
emergency response systems manufactured by others on a monthly fee basis.
Multi-user providers have the option of using the Company's monitoring services,
either as a primary or back-up center. The majority of customers have selected
the Company's Monitoring Center in Oceanside, NY to provide primary and back-up
monitoring on behalf of their clients. Monitoring fees are charged to
individuals and entities who utilize the Company's monitoring services, whether
on a primary basis in the case of individuals or on a back-up basis with respect
to those who purchase or lease complete VOICE OF HELP(R) Systems, electing to
provide their own on-site primary monitoring.
Patents and Trademarks
- ----------------------
The Company considers its trademarks to be an important element of its
marketing program. The Company's trademarks include "VOICE OF HELP(R)", "THE
VOICE OF HELP(R)", "ACCUTROL(R)", "MED PASS(R)", "ROOM MATE(R)", "VOICECARE(R)",
"SYSTEM-one(R)" and "HELPING PEOPLE LIVE BETTER(R)", each of which is registered
with the United States Patent and Trademark Office.
Competition
- -----------
The Company's competition includes manufacturers, distributors and
providers of personal emergency response equipment and services, and a limited
number of burglar and fire alarm companies. Certain of the Company's competitors
have more extensive manufacturing and marketing capabilities, as well as greater
financial, technological and personnel resources, than the Company. The
Company's competition focuses its marketing and sales efforts in two distinct
areas; hospital/private-pay, and multi-housing applications. The Company
believes that its experience and expertise give it a significant advantage over
its competitors.
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<PAGE>
Research and Development
- ------------------------
In a continuing effort by the Company to maintain state-of-the-art
technology, the Company conducts research and development through the ongoing
efforts of its employees and consulting groups. Expenditures for research and
development for the years ended December 31, 1996, 1995 and 1994 were $24,339,
$32,874 and $41,747, respectively.
Employees
- ---------
As of March 21, 1997, the Company employed 82 persons who perform functions
on behalf of the Company in the areas of administration, marketing, sales,
engineering, finance, purchasing, operations, quality control and research. The
Company is not a party to any collective bargaining agreement with its
employees. The Company considers its relations with its employees to be good.
Item 2. Description of Properties
The Company's executive offices and primary monitoring Center are located
in a 5,600 square foot facility at 3265 Lawson Boulevard, Oceanside, New York.
The Company leases this space and the adjoining 8,000 square foot parking lot
from Howard M. Siegel pursuant to a five-year lease which expires on December
31, 1999. The lease provides for a base annual rental of $74,600 plus certain
operating expenses, subject to a 5% annual increase. The Company believes that
the terms of this lease are no less favorable than could be obtained from an
unaffiliated third party.
The Company houses its Engineering, Research and Development, Quality
Control, Testing and Back-up Monitoring Departments in a 5,400 square foot
facility located in Mt. Laurel, New Jersey. The Company occupies this space
pursuant to a lease with an unaffiliated party. The lease expires on December
31, 1997 and provides for a current base annual rental, net of certain operating
expenses, of $33,534. The Company believes that it will be able to renew this
lease on terms equally favorable to the Company.
The Company maintains a satellite marketing and administrative office in
Decatur, Georgia. The Company leases approximately 1,200 square feet of space
from an unaffiliated party at an annual rental, plus certain operating charges,
of $16,694, pursuant to a lease which expires on April 30, 1997. The Company
believes that it will be able to renew this lease on terms equally favorable to
the Company.
The Company leases approximately 1,500 square feet of space in Flushing,
New York, pursuant to a three-year lease which expires on June 30, 1998, for
office, warehouse, storage, shipping and receiving purposes. The lease provides
for an annual rent of $13,200 during the first year of the term, $13,860 during
the second year of the term and $14,553 during the third year of the term.
The Company maintains a satellite marketing and administrative office in
Countryside, Illinois. The Company leases approximately 1,200 square feet of
space from an unaffiliated party pursuant to a two-year lease which expires on
July 9, 1997. The lease provides for an annual rent
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<PAGE>
of approximately $15,000. The Company believes that it will be able to renew
this lease on terms equally favorable to the Company.
The Company believes that these properties are suitable for their intended
uses and are adequate to meet its current requirements. The Company does not own
any property.
Item 3. Legal Proceedings
Although the Company is a party to certain routine litigations incidental
to its business, the Company believes that there are no material pending legal
proceedings to which it is a party or any of its properties are the subject.
Item 4. Submission of Matters to a Vote of Security-Holders
No matters were submitted, during the fourth quarter of the year covered by
this report, to a vote of the security holders through the solicitation of
proxies or otherwise.
Executive Officers of the Registrant
- ------------------------------------
Name Age Position
- ---- --- --------
Howard M. Siegel 63 Chairman of the Board, President,
Chief Executive Officer
Corey M. Aronin 43 Chief Financial Officer
Other Significant Officers
of the Registrant
- -----------------
John Lesher 42 President, Engineering
John Rogers 50 Vice President, Operations and
Secretary
Officers serve at the discretion of the Board of Directors.
Howard M. Siegel has been the Company's Chairman of the Board, President,
Chief Executive Officer, and a Director for more than the past six years. He
also served as Chief Financial Officer until September 1996.
Corey M. Aronin joined the Company in September 1996, as Chief Financial
Officer. Previously, Mr. Aronin held senior financial positions. From December
1995 to May 1996, he served as Executive Vice President of Finance at Affiliated
Island Grocers, Inc. From August 1982 until November 1995, Mr. Aronin served as
Chief Financial Officer and Treasurer at Golden Simcha Poultry, Inc., a local
major food distributor.
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<PAGE>
John Lesher was elected Vice President, Engineering by the Company in March
1991. Prior thereto and from 1989, Mr. Lesher served as a senior engineer at the
Company's former Bristol, PA facility. From May 1984 to November 1988, Mr.
Lesher served as the Operations and Manufacturing Director of Advanced Graphic
Systems, Inc. (a subsidiary of Automation and Printing International Technology,
Inc.), a company engaged in the sale and marketing of computerized printing
equipment.
John Rogers joined the Company in July 1984. He has served in a variety of
capacities and was appointed to be Vice President, Operations in July 1993.
Additionally, he has been the Secretary since July 1993.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
The Company's Common Stock is traded on Nasdaq (Symbol: AMAC). The high and
low bid prices for the Common Stock, as furnished by Nasdaq, are shown for the
fiscal years indicated. The quotations set forth below do not include retail
markups, markdowns or commissions and may not represent actual transactions.
High Low
---- ---
1995 First Quarter $ 2 15/16 $ 2
Second Quarter 3 1/2 2 9/16
Third Quarter 4 1/4 3
Fourth Quarter 4 2 1/8
1996 First Quarter $ 3 1/8 $ 2 1/8
Second Quarter 3 2
Third Quarter 4 1/16 2 5/16
Fourth Quarter 4 3/16 2 9/16
As of March 26, 1996, there were 514 recordholders of the Company's Common
Stock.
The Company did not pay dividends on its Common Stock during the two years
ended December 31, 1996 and does not anticipate paying dividends in the
foreseeable future.
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<PAGE>
SELECTED FINANCIAL DATA - AMERICAN MEDICAL ALERT CORP.
The following table summarizes certain financial data and should be read in
conjunction with the detailed financial information set forth elsewhere herein.
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Selected Statement of Operations Data:
<S> <C> <C> <C> <C> <C>
Revenues $ 7,255,842 $ 6,177,302 $ 5,384,671 $ 3,918,203 $ 3,558,749
Income before extraordinary item
and cumulative effect of
accounting change $ 918,893 $ 741,736 $ 727,166 $ 204,218 $ 230,410
Net income $ 918,893 $ 741,736 $ 727,166 $ 880,218 $ 335,410
Income per share before
extraordinary item and cumulative
effect of accounting change $ .16 $ .13 $ .13 $ .04 $ .04
========== ============ ============ ============= ============
Net income per share $ .16 $ .13 $ .13 $ .16 $ .06
========== ============ ============ ============= ============
Weighted average number of common
shares 5,852,553 5,867,555 5,751,453 5,659,486 5,646,219
Selected Balance Sheet Data as of
December 31:
Total Assets $ 6,784,014 $ 5,750,042 $ 4,983,393 $ 3,583,991 $ 2,416,837
Long-term liabilities $ 719,849 $ 653,949 $ 93,276 $ 313,779 $ 26,293
Shareholders' equity $ 5,533,858 $ 4,407,350 $ 3,646,366 $ 2,856,689 $ 1,928,126
</TABLE>
-8-
<PAGE>
Item 6. Managements's Discussion and Analysis or Plan of Operation
The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's results
of operations and financial condition. This discussion should be read in
conjunction with the consolidated financial statements and notes hereto.
Results of Operations
- ---------------------
The Company's gross revenues increased from $ 6,177,302 in 1995 to $
7,255,842 in 1996, an increase of 17% and increased from $ 5,384,671 in 1994 to
$ 6,177,302 in 1995, an increase of 15%. The increase in gross revenues from
1995 to 1996 and 1994 to 1995 resulted from continued growth of the Company's
existing customer bases as well as the addition of new customers.
Revenues from services increased from $ 5,288,046 in 1995 to $ 6,119,946 in
1996, an increase of 16% and increased from $ 4,546,991 in 1994 to $ 5,288,046
in 1995, an increase of 16%. These increases resulted from continued expansion
of the Company's customer base for monthly monitoring and leasing services.
Costs related to services for 1996, 1995, and 1994 were 34%, 35% and 32%,
respectively. In 1996, costs as a percentage of revenue decreased due to greater
operational efficiency.
Revenues from product sales increased from $ 889,256 in 1995 to $ 1,135,896
in 1996, an increase of 28% and increased from $ 837,680 in 1994 to $ 889,256 in
1995, an increase of 6%. These increases were primarily due to the increase in
sales to retirement facilities and distributors. The gross profit on product
sales in 1996, 1995, and 1994 was 30%, 39% and 30%, respectively. Gross profit
on product sales decreased in 1996, in part, due to sales incentives given to
large retirement communities. Gross profits increased in 1995 due to effective
use of purchase discounts and lower unit costs relating to past production
efficiencies.
Selling, general and administrative expenses increased from $ 2,422,972 in
1995 to $ 2,705,525 in 1996, an increase of 12% and increased from $ 1,987,034
in 1994 to $ 2,422,972 in 1995, an increase of 22%. Additional expenses incurred
in 1996 were the result of increased sales and marketing expenses, radio
advertising campaigns, expansion of sales department and hiring of additional
management personnel. Expenses in 1995 as compared to 1994 increased for similar
reasons.
Interest expense for 1996, 1995 and 1994 were $ 46,965, $ 55,694 and
$46,233, respectively. Interest expense decreased in 1996 due to improved cash
flow and decreases in average monthly borrowing. Interest expense in 1995
increased from 1994 due to increases in the average monthly borrowing.
The Company's income before provision for income taxes in 1996 was $
1,638,893, an increase of $ 311,157 from 1995, or 23%. The increase in 1996
resulted from an increase in the Company's revenues and greater operational
efficiencies. Income before provision for income taxes in 1995 was $ 1,327,736,
an increase of $ 26,570 from 1994. The increase in 1995 resulted from an
increase in the Company's revenues offset by higher selling, general and
administrative expenses.
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<PAGE>
Liquidity and Capital Resources
- -------------------------------
During 1996, cash provided by operating activities was $1,319,517, as
compared to $1,433,585 in 1995. Cash paid for income taxes in 1996 was $ 594,036
as compared to $457,284 in 1995. This increase was primarily due to an increase
in income before provision for income taxes. Expenditures for fixed assets and
medical devices held for lease, aggregated $1,535,703 in 1996, an increase from
$1,184,141, the amount purchased in 1995. During 1996, cash decreased by
$18,976, as compared to an increase in cash of $162,554 in 1995.
On December 1, 1995, the Company renegotiated its $ 1,500,000 credit note
(based upon 75% of eligible accounts receivable and 25% of inventory, as
defined) and extended it until April 30, 1997. As of March 13, 1997, $ 450,000
was outstanding under this note. The credit note was recently extended to and it
will expire on April 30, 1998. The Company's working capital on December 31,
1996 was $ 2,460,773 as compared to $ 2,188,303 on December 31, 1995. During
1997, the Company anticipates that it will make capital investments of
approximately $ 1,000,000 for the production and purchase of additional systems
which the Company intends to rent and to enhance management information systems.
The Company believes that its present cash and working capital position, its
borrowing availability and future anticipated income will be sufficient to meet
its cash and working capital needs for the foreseeable future.
Item 7. Financial Statements
Financial Statements Page Number
-------------------- -----------
Report of Independent Accountants F-1
Report of Independent Accountants F-2
Balance Sheets at December 31, 1996 and 1995 F-3 & F-4
Statements of Income for the years ended December 31,
1996, 1995 and 1994 F-5
Statements of Shareholders' Equity for the years ended
December 31, 1996, 1995 and 1994 F-6
Statements of Cash Flows for the years ended December 31,
1996, 1995 and 1994 F-7 & F-8
Notes to Financial Statements F-9 - F-17
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<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
On August 17, 1995, the Company's Board of Directors approved the dismissal
of Deloitte & Touche LLP as its independent public accountants, which dismissal
would take effect simultaneously with the Company's appointment of a new
independent public accountant. There was no adverse opinion or disclaimer of
opinion, or modification as to uncertainty, audit scope or accounting principles
contained in the reports of Deloitte & Touche LLP for the past fiscal year ended
December 31, 1994.
During the Company's two previous fiscal years ended December 31, 1994 and
the subsequent interim period preceding Deloitte & Touche LLP's dismissal on
August 17, 1995, there were no disagreements with Deloitte & Touche LLP on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Deloitte & Touche LLP, would have caused Deloitte & Touche LLP
to make reference in connection with its report concerning the Company's
financial statements to the subject matter of the disagreements.
On August 17, 1995, the Company's Board of Directors approved the proposal
to engage Margolin, Winer & Evens LLP to be the Company's independent public
accountants for its fiscal years ending December 31, 1996 and 1995.
PART III
The information called for by Part III (Items 9, 10, 11 and 12 of Form
10-KSB) is incorporated herein by reference to the Company's definitive Proxy
Statement to be filed pursuant to Regulation 14A of the Securities Exchange Act
of 1934 with respect to the Company's 1997 Annual Meeting of Shareholders.
Item 13. Exhibits, List, and Reports on Form 8-K
(a) Exhibits
--------
Exhibit No. Identification of Exhibit
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3(a) Articles of Incorporation of Company, as amended.
(Incorporated by reference to Exhibit 3(a) to the
Company's Form S-1 Registration Statement under the
Securities Act of 1933, filed on September 30, 1983 - File
No. 2-86862).
3(b) Amended and Restated By-Laws of Company. (Incorporated
by reference to Exhibit 4(b) to the Company's Form S-3
Registration Statement under the Securities Act of 1933,
Commission File No. 333-6159).
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<PAGE>
Exhibit No. Identification of Exhibit
----------- -------------------------
4(a) Warrant Agreement between the Company and Continental
Stock Transfer & Trust Company, the Company's transfer
agent, with the Company's form of Warrant Certificate
attached thereto. (Incorporated by reference to Exhibit 4(a)
to the Company's Form S-1 Registration Statement under the
Securities Act of 1933, filed on September 30, 1983 - File
No. 2-86862).
4(b) Amendment, dated December 22, 1988, to the Warrant
Agreement between the Company and Continental Stock Transfer
& Trust Company. (Incorporated by reference to Exhibit 4(c)
to the Company's Form 10-K for the year ended December 31,
1988).
4(c) Amendment, dated October 26, 1990, to the Warrant
Agreement between the Company and Continental Stock Transfer
& Trust Company. (Incorporated by reference to Exhibit 4(c)
to the Company's Form 10-K for the year ended December 31,
1990).
4(d) Amendment, dated November 30, 1994, to the Warrant
Agreement between the Company and Continental Stock Transfer
& Trust Company. (Incorporated by reference to Exhibit 4(d)
to the Company's Form 10-KSB for the year ended December 31,
1994).
4(e) Amendment, dated November 20, 1995, to the Warrant
Agreement between the Company and Continental Stock Transfer
& Trust Company. (Incorporated by reference to Exhibit 4(e)
to the Company's Form 10-KSB for the year ended December 31,
1995).
4(f) Amendment, dated December 20, 1996, to the Warrant
Agreement between the Company and Continental Stock Transfer
& Trust Company. (Incorporated by reference to Exhibit 4(h)
to the Company's Registration Statement on Form S-3,
Commission File No. 333-6159).
10(a) Employment Agreement, dated January 1, 1997 between the
Company and Howard M. Siegel.*
10(b) Employment Agreement, dated August 28, 1989 between the
Company and John Lesher. (Incorporated by reference to
Exhibit 10(c) to the Company's Form 10-K for the year ended
December 31, 1990).
10(c) Amendment, dated March 4, 1992, to the Employment
Agreement between the Company and John Lesher. (Incorporated
by reference to Exhibit 10(d) to the Company's Form 10-K for
the year ended December 31, 1991).
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<PAGE>
Exhibit No. Identification of Exhibit
----------- -------------------------
10(d) Lease for the premises located at 520 Fellowship Road,
Suite C301, Mt. Laurel, New Jersey ("Mt. Laurel Lease").
(Incorporated by reference to Exhibit 10(e) to the Company's
Form 10-K for the year ended December 31, 1991).
10(e) First Amendment to the Mt. Laurel Lease. (Incorporated
by reference to Exhibit 10(f) to the Company's Form 10-KSB
for the year ended December 31, 1993).
10(f) Second Amendment to the Mt. Laurel Lease.*
10(g) Leases for the premises located at 3265 Lawson
Boulevard, Oceanside, New York. (Incorporated by reference
to Exhibit 10(h) to the Company's Form 10-KSB for the year
ended December 31, 1994).
10(h) Lease for the premises located at 910 Church Street,
Decatur, Georgia. (Incorporated by reference to Exhibit
10(i) to the Company's Form 10- KSB for the year ended
December 31, 1995).
10(i) Lease for the premises located at 169-10 Crocheron
Avenue, Flushing, New York. (Incorporated by reference to
Exhibit 10(j) to the Company's Form 10-KSB for the year
ended December 31, 1995.)
10(j) Lease for the premises located at 475 West 55th
Street, Contryside, Illinois. (Incorporated by reference to
Exhibit 10(k) to the Company's Form 10-KSB for the year
ended December 31, 1995.)
10(k) 1984 Incentive Stock Option Plan, as amended.
(Incorporated by ref erence to Exhibit 10(e) to the
Company's Form 10-K for the year ended December 31, 1990).
10(l) Amended 1991 Stock Option Plan. (Incorporated by
reference to Exhibit 10(l) to the Company's Form 10-KSB for
the year ended December 31, 1994).
10(m) Restated and Amended Revolving Credit Note with North Fork
Bank, dated December 1, 1995 (the "Revolving Credit Note").*
10(n) Letter from North Fork Bank extending the Revolving Credit
Note until April 30, 1998.*
10(o) Agreement between the Company and the City of New York, as
extended through February 18, 1998.*
23(a) Consent of Deloitte & Touche LLP.*
23(b) Consent of Margolin, Winer & Evens LLP.*
27 Financial Data Schedule.*
-------------------
* Filed herewith.
-13-
<PAGE>
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the last quarter of
the period covered by this report.
-14-
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AMERICAN MEDICAL ALERT CORP.
March 31, 1997 By: /s/ Howard M. Siegel
---------------------
Howard M. Siegel
Chairman of the Board and President
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
/s/ Howard M. Siegel Chairman of the Board, March 31, 1997
- ------------------------------ President Chief Executive
Howard M. Siegel Officer, and Director
(Principal Executive Officer)
/s/ Corey M. Aronin Chief Financial Officer March 31, 1997
- ------------------------------
Corey M. Aronin
/s/ Peter Breitstone Director March 31, 1997
- ------------------------------
Peter Breitstone
Director
- ------------------------------
Eli S. Feldman
/s/ Leonard Herz Director March 31, 1997
- ------------------------------
Leonard Herz
/s/ Myron Segal Director
- ------------------------------ March 31, 1997
Myron Segal, M.D.
<PAGE>
AMERICAN MEDICAL ALERT CORP.
----------------------------------------------------------
FINANCIAL STATEMENTS
Years Ended December 31, 1996, 1995 and 1994
<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONTENTS
- -------------------------------------------------------------------------------
Report of Independent Accountants F-1
Report of Independent Accountants F-2
Balance Sheets F-3 & F-4
Statements of Income F-5
Statements of Shareholders' Equity F-6
Statements of Cash Flows F-7 & F-8
Notes to Financial Statements F-9 - F-17
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
American Medical Alert Corp.
Oceanside, New York
We have audited the accompanying statement of income, sharholders' equity and
cash flows of American Medical Alert Corp. for the year ended December 31, 1994.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the result of operations and cash flows of American Medical Alert
Corp. for the year ended December 31, 1994, in conformity with generally
accepted accounting principles.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
New York, New York
March 3, 1995
F-1
<PAGE>
Report of Independent Accountants
Board of Directors and Shareholders
American Medical Alert Corp.
Oceanside, New York
We have audited the accompanying balance sheets of American Medical Alert Corp.
as of December 31, 1996 and 1995 and the related statements of income,
shareholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of American Medical Alert Corp. as
of December 31, 1996 and 1995 and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/ Margolin, Winer & Evens LLP
Garden City, New York
March 7, 1997, except for Notes 3 and 11
as to which the date is March 27, 1997
F-2
<PAGE>
AMERICAN MEDICAL ALERT CORP.
<TABLE>
<CAPTION>
BALANCE SHEETS
- ----------------------------------------------------------------------------------------------------
December 31, 1996 1995
- ----------------------------------------------------------------------------------------------------
ASSETS (Note 3)
Current Assets:
<S> <C> <C>
Cash $ 301,013 $319,989
Accounts and notes receivable (net of allowance for
doubtful accounts of $30,000 in 1996 and 1995)
(Notes 1, 2 and 11) 1,327,799 1,236,938
Inventory (Note 1) 1,171,021 1,116,810
Prepaid expenses and taxes and other current assets 137,247 149,309
Deferred income taxes (Notes 1 and 6) 54,000 54,000
------------ -----------
Total Current Assets 2,991,080 2,877,046
---------- -----------
Inventory of Medical Devices Held For Lease- at cost 637,000 -
----------- -----------
Notes Receivable (Notes 2 and 8) 15,956 -
------------ -----------
Fixed Assets - at cost:
Leased medical devices 4,985,543 4,216,128
Monitoring equipment 192,290 172,815
Furniture and equipment 263,711 228,413
Leasehold improvements 151,825 146,467
Automobiles 27,182 21,932
------------- ----------
5,620,551 4,785,755
Less accumulated depreciation and amortization (Note 1) 2,505,441 1,937,646
----------- ----------
3,115,110 2,848,109
----------- ----------
Other Assets 24,868 24,887
------------- ----------
Total Assets $6,784,014 $5,750,042
========== ==========
(continued on next page)
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
AMERICAN MEDICAL ALERT CORP.
<TABLE>
<CAPTION>
BALANCE SHEETS
- ------------------------------------------------------------------------------------------------
December 31, 1996 1995
- ------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
<S> <C> <C>
Accounts payable $192,707 $467,300
Accrued expenses 311,954 214,092
Taxes payable 16,464 -
Current portion of long-term debt (Note 4) 9,182 7,351
------------- ------------
Total Current Liabilities 530,307 688,743
Deferred Income Tax Liability (Notes 1 and 6) 258,000 195,000
Notes Payable - Bank (Note 3) 450,000 450,000
Long-Term Debt - Less Current Maturities (Note 4) 11,849 8,949
------------- ------------
Total Liabilities 1,250,156 1,342,692
------------- ------------
Commitments (Notes 7, 8 and 10) - -
Shareholders' Equity (Notes 8 and 10):
Common stock, $.01 par value-
authorized, 10,000,000 shares;
issued 5,843,276 shares in 1996
and 5,504,741 shares in 1995 58,432 55,047
Additional paid-in capital 4,391,990 4,088,212
Retained earnings 1,189,468 270,575
-------------- ------------
5,639,890 4,413,834
Less treasury stock, at cost (43,910 shares
in 1996 and 1,995 shares in 1995) (106,032) (6,484)
-------------- -------------
Total Shareholders' Equity 5,533,858 4,407,350
-------------- -------------
Total Liabilities and Shareholders' Equity $ 6,784,014 $ 5,750,042
============== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
AMERICAN MEDICAL ALERT CORP.
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
- --------------------------------------------------------------------------------------------------
Years Ended December 31, 1996 1995 1994
- --------------------------------------------------------------------------------------------------
Revenue (Notes 1 and 11):
<S> <C> <C> <C>
Services $6,119,946 $5,288,046 $4,546,991
Product sales 1,135,896 889,256 837,680
----------- ----------- -----------
7,255,842 6,177,302 5,384,671
----------- ----------- -----------
Costs and Expenses (Income):
Costs related to services 2,075,819 1,826,036 1,468,477
Costs of products sold (Note 1) 789,878 545,231 584,684
Selling, general and
administrative expenses 2,705,525 2,422,972 1,987,034
Interest expense 46,965 55,694 46,233
Other income (1,238) (367) (2,923)
---------- ---------- -----------
5,616,949 4,849,566 4,083,505
---------- ---------- ----------
Income Before Provision for Income Taxes 1,638,893 1,327,736 1,301,166
Provision for Income Taxes (Notes 1 and 6) 720,000 586,000 574,000
---------- ---------- ----------
Net Income $918,893 $741,736 $727,166
========== ========== ==========
Net Income Per Share (Note 1) $.16 $.13 $.13
========== ========== ==========
Weighted Average Number of
Common Shares (Note 1) 5,852,553 5,867,555 5,751,453
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
AMERICAN MEDICAL ALERT CORP.
<TABLE>
<CAPTION>
STATEMENTS OF SHAREHOLDERS' EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Years Ended December 31, 1996,1995 and 1994
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK
--------------- ADDITIONAL RETAINED
NUMBER OF PAID-IN EARNINGS UNEARNED TREASURY
SHARES AMOUNT CAPITAL (DEFICIT) COMPENSATION STOCK TOTAL
------ ------ ------- --------- ------------ ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance - January 1, 1994 5,329,871 $53,298 $4,002,448 $(1,198,327) $ (730) $ - 2,856,689
Amortization of Unearned Compensation - - - - 730 - 730
Common Stock Issued (Note 8) 12,500 125 14,719 - - - 14,844
Exercise of Stock Options (Note 8) 120,341 1,204 52,217 - - (6,484) 46,937
Net Income for the Year Ended December 31, 1994 - - - 727,166 - - 727,166
----------- -------- ---------- ----------- -------- -------- ---------
Balance - December 31, 1994 5,462,712 54,627 4,069,384 (471,161) - (6,484) 3,646,366
Exercise of Stock Options (Note 8) 42,029 420 18,828 - - - 19,248
Net Income for the Year Ended December 31, 1995 - - - 741,736 - - 741,736
----------- -------- ---------- ----------- -------- ------- ---------
Balance - December 31, 1995 5,504,741 55,047 4,088,212 270,575 - (6,484) 4,407,350
Exercise of Stock Options (Note 8) 338,535 3,385 303,778 - - (99,548) 207,615
Net Income for the Year Ended December 31, 1996 - - - 918,893 - - 918,893
----------- -------- ---------- ----------- -------- -------- ----------
Balance - December 31, 1996 5,843,276 $58,432 $4,391,990 $1,189,468 $ - $(106,032) $5,533,858
=========== ======== ========== =========== ======== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
AMERICAN MEDICAL ALERT CORP.
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------------------------
Years Ended December 31, 1996 1995 1994
- --------------------------------------------------------------------------------------------------
Cash Flows from Operating Activities:
<S> <C> <C> <C>
Net income $918,893 $741,736 $727,166
Adjustments to reconcile net income
to net cash provided by
operating activities:
Provision for deferred income taxes 63,000 234,000 493,000
Issuance of common stock in connection
with consulting services performed
(Note 8) - - 14,844
Depreciation and amortization 646,838 542,914 408,127
Amortization of deferred charges - - 730
Changes in operating assets
and liabilities:
(Increase) decrease in receivables (106,817) 60,520 (519,837)
Increase in inventory (54,211) (32,425) (1,796)
Decrease (increase) in prepaid
expenses and taxes
and other assets 12,081 (109,963) (16,888)
(Decrease) increase in accounts
payable, accrued expenses
and taxes payable (160,267) (3,197) 290,636
------- ---------- ---------
Net Cash Provided by Operating Activities 1,319,517 1,433,585 1,395,982
--------- --------- ---------
Cash Flows from Investing Activities:
Expenditures for fixed assets and medical
devices held for lease (1,535,703) (1,184,141) (1,757,849)
----------- --------- ---------
Net Cash Used in Investing Activities (1,535,703) (1,184,141) (1,757,849)
----------- --------- ---------
Cash Flows from Financing Activities:
Net (repayments) proceeds on
bank borrowings - (100,000) 300,000
Repayments of capital lease obligations - - (12,808)
Proceeds of loans payable - 3,805 13,020
Repayments of loans payable (10,405) (9,943) (8,123)
Proceeds upon exercise of stock options 207,615 19,248 46,937
------- ------ ------
Net Cash Provided by (Used in)
Financing Activities 197,210 (86,890) 339,026
------- ------ -------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
AMERICAN MEDICAL ALERT CORP.
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
- ---------------------------------------------------------------------------------------------------
Years Ended December 31, 1996 1995 1994
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net (Decrease) Increase In Cash $ (18,976) $162,554 $ (22,841)
Cash - beginning of year 319,989 157,435 180,276
-------------- ---------- -------------
Cash - end of year $301,013 $319,989 $157,435
============== ========== =============
Supplemental Disclosure of Cash Flow
Information -
Cash paid during the year for:
Interest $ 46,965 $ 55,694 $ 46,233
Income taxes 594,036 457,284 28,120
Supplemental Schedule of Noncash Investing
and Financing Activities:
Fixed assets purchased under notes and
loans payable and capital lease
obligations $ 15,136 $ - $16,139
During 1996, an employee satisfied the
exercise price of certain stock options by
exchanging shares already owned with a
fair market value of $99,548. The fair value
of the shares receivedwas recorded
as treasury stock.
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-8
<PAGE>
AMERICAN MEDICAL ALERT CORP.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Summary of Scope of business - The Company's business is to sell, rent,
Significant install, service and monitor remote communication systems
Accounting with personal security and smoke/fire detection
Policies capabilities, linked to an emergency response monitoring
center. The Company markets its products primarily to
institutional customers, including long-term care providers,
retirement communities, hospitals, and government agencies
across the United States. (See Note 11.)
Inventory valuation - Inventory, consisting of medical alert
devices and component parts, is valued at the lower of cost
(first-in, first-out) or market. Finished goods were
approximately $894,000 and $731,600 at December 31, 1996 and
1995, respectively, and the remaining inventory consists of
component parts.
Fixed assets - Depreciation is computed by accelerated and
straight-line methods at rates adequate to allocate the cost
of applicable assets over their expected useful lives.
Leased medical devices are depreciated on a straight line
basis over seven years. Amortization of leasehold
improvements is provided on a straight-line basis over the
shorter of the useful life of the asset or the term of the
lease.
On January 1, 1996, the Company adopted the accounting
requirements of Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long- Lived
Assets and for Long-Lived Assets to be Disposed Of " (SFAS
No. 121). SFAS No. 121 requires that long-lived assets and
certain identifiable intangibles be reviewed for impairment
whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable.
Measurement of the impairment loss, if any, is based on the
fair value of the asset. The statement also requires that
certain long-lived assets and identifiable intangibles that
are to be disposed of be reported at the lower of their
carrying amount or fair value less cost to sell. The
application of SFAS No. 121 did not have a significant
impact on the Company's results of operations or financial
condition.
Income taxes - The Company accounts for income taxes in
accordance with Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes," pursuant to which
deferred taxes are determined based on the difference
between the financial statement and tax basis of assets and
liabilities, using enacted tax rates, as well as any net
operating loss or tax credit carryforwards expected to
reduce taxes payable in future years.
Revenue recognition - Revenue from the sale of medical alert
devices is recognized upon delivery. Revenue from renting,
installation and monitoring services is recognized upon
performance of such services.
F-9
<PAGE>
AMERICAN MEDICAL ALERT CORP.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Research and development costs - Research and development
costs, which are expensed and included in cost of products
sold, were $24,339, $32,874, and $41,747 for the years ended
December 31, 1996, 1995, and 1994, respectively.
Income per share - Income per share is computed using the
weighted average number of common shares and common share
equivalents outstanding during each period.
Concentration of credit risk - Financial instruments which
potentially subject the Company to concentration of credit
risk principally consist of accounts receivable from state
and local government agencies. The risk is mitigated by the
Company's procedures for extending credit, follow-up of
disputes and receivable collection procedures.
Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Fair value of financial instruments - Statement of Financial
Accounting Standards No. 107, "Disclosures about Fair Value
of Financial Instruments," requires all entities to disclose
the fair value of certain financial instruments in their
financial statements. The Company estimates that the fair
value of its cash, accounts and notes receivable, accounts
payable, accrued expenses, taxes payable and notes payable
approximates their carrying amounts due to the short
maturity of these instruments.
Accounting for stock-based compensation - Recently, the
Financial Accounting Standards Board issued Statement No.
123, "Accounting for Stock-Based Compensation" (SFAS No.
123). As permitted by SFAS No. 123, the Company has elected
to continue to account for employee stock options under
Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees." Accordingly, compensation cost
for stock options is measured as the excess, if any, of the
quoted market price of the Company's stock at the date of
grant over the amount an employee must pay to acquire the
stock.
2. Notes In November 1993 an employee borrowed $30,000 and issued a
Receivable promissory note to the Company originally scheduled to
mature during 1996. The note, as amended during 1996, bears
interest at 7.5% per annum and the outstanding balance at
December 31, 1996 of $18,687 is payable in monthly
installments of $337 (principal and interest), with a final
installment of $15,241 due April 1, 1998. In the event that
F-10
<PAGE>
AMERICAN MEDICAL ALERT CORP.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
the employee defaults on the promissory note, certain
options granted to the employee will terminate (see Note 8).
3. Notes Payable- Effective December 1, 1995, the Company's restated and
Bank amended revolving credit note permits maximum borrowings up
to $1,500,000 (based on 75% of eligible accounts receivable
and 25% of inventory, as defined), and matures on April 30,
1997. The note bears interest at the prime rate (8.25% at
December 31, 1996) plus 1% per annum and is collateralized
by the Company's assets. In addition, the note requires an
unused commitment fee of 1/2 of 1% per annum on the daily
average amount of unused commitment. At December 31, 1996
and 1995, $450,000 was outstanding. Borrowings outstanding
prior to December 1, 1995 bore interest at the prime rate
plus 1-1/2%. On March 27, 1997, the maturity date of the
revolving credit note was extended until April 30, 1998 and
the interest rate was changed to prime plus 3/4%.
Accordingly, the amount outstanding at December 31, 1996 has
been classified as long-term.
The agreement provides for negative and affirmative
covenants including those related to tangible net worth,
working capital and other borrowings.
4. Long-Term Long-term debt at December 31, 1996 consists of an
Debt automobile loan and two loans financing the purchase of
equipment. The outstanding balance on these loans at
December 31, 1996 was $21,031.
Long-term debt (including the notes payable discussed in
Note 3) matures in each of the years subsequent to December
31, 1996 as follows:
Year ending December 31,
1997 $ 9,182
1998 459,056
1999 2,793
-----------
$ 471,031
===========
5. Related Party A Director of the Company has an ownership interest in an
Transactions insurance agency that has written policies for the Company
with premiums of $153,856, $155,432, and $112,358 in fiscal
1996, 1995 and 1994, respectively.
(See Notes 7 and 8.)
F-11
<PAGE>
AMERICAN MEDICAL ALERT CORP.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
6. Income Taxes The provision for income taxes consists of the following:
Years Ended December 31,
------------------------
1996 1995 1994
---- ---- ----
Current:
Federal $469,000 $222,000 $24,000
State 188,000 130,000 57,000
-------- -------- -------
657,000 352,000 81,000
-------- -------- -------
Deferred:
Federal 54,000 219,000 382,500
State 9,000 15,000 110,500
-------- -------- --------
63,000 234,000 493,000
-------- -------- --------
Total $720,000 $586,000 $574,000
======== ======== ========
The following is a reconciliation of the statutory federal income tax rate and
the effective rate of the provision for income taxes:
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Statutory federal income tax rate 34.0% 34.0% 34.0%
State and local taxes 8.0 8.0 6.0
Other 2.0 2.0 4.0
----- ----- -----
Effective income tax rate 44.0% 44.0% 44.0%
==== ==== ====
The tax effects of significant items comprising the Company's deferred taxes at
December 31, 1996 and 1995 are as follows:
December 31,
------------
1996 1995
---- ----
Deferred tax liabilities:
Difference between book and
tax bases of property $ (258,000) $ (195,000)
----------- -----------
Deferred tax assets:
Accrued compensation - 15,000
Reserves not currently deductible 13,000 13,000
Capitalization of inventory 41,000 26,000
----------- ----------
Total 54,000 54,000
----------- ----------
Net deferred tax liabilities $ (204,000) $ (141,000)
=========== ==========
</TABLE>
F-12
<PAGE>
AMERICAN MEDICAL ALERT CORP.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
For the years ended December 31, 1995 and 1994, the Company
utilized net operating loss carryforward benefits of
$121,000 and $508,000, respectively.
7.Commitments In January 1990, the Company entered into a five year
operating lease for offices owned by its principal
shareholder with an initial minimum annual rental of
$55,200, subject to a 5% annual increase. On January 1,
1995, the lease was renewed for a five year period expiring
December 31, 1999. The new lease calls for an initial
minimum annual rental of $74,600, subject to a 5% annual
increase plus reimbursements for real estate taxes and other
operating expenses. The Company has also entered into
various other operating leases for warehouse and office
space in Flushing, New York, Mt. Laurel, New Jersey,
Decatur, Georgia and Countryside, Illinois. Rent expense was
$182,179 in 1996, $169,824 in 1995, and $142,639 in 1994,
which includes $100,835, $94,969 and $75,145, respectively,
paid in connection with the above noted lease with the
principal shareholder.
The aggregate minimum annual rental commitments under
non-cancelable operating leases are as follows:
Year ending December 31,
1997 $ 143,107
1998 93,628
1999 90,669
-----------
$ 327,404
===========
The Company has entered into a three year employment
agreement with its president (who is also the principal
shareholder) which commences January 1, 1997. In addition to
an annual base salary starting at $200,000, increasing to
$215,000 in the second year and $230,000 in the third year,
the agreement, among other things, provides for additional
compensation which is based on the Company's pre-tax income,
as defined. The employee may elect to receive the additional
compensation either in cash or in the form of the Company's
common stock. The agreement also provides for a termination
payment, under certain circumstances, if a change in control
(as defined) occurs. The termination payment is equal to
2.99 times the base amount, as defined.
8. Common Stock, The Company has two Stock Option Plans, an Incentive Stock
Warrants and Option Plan ("1984 Plan") and a 1991 Stock Option Plan
Options ("1991 Plan"). Under the 1984 and 1991 plans, as amended, a
maximum of 500,000 and 750,000 options, respectively, may be
granted as either Incentive Stock Options or Nonstatutory
Stock Options. Stock options granted under the plans vest
immediately and have a term not greater than ten years from
the date the option is granted or five years for a holder of
more than 10% of the Company's common stock. Incentive Stock
Options may be granted at an exercise price not less than
the fair market value of the underlying shares at the date
of grant subject to certain other limitations specified in
Section 422 of the Internal Revenue Code. The per share
price of Nonstatutory Stock Options granted to Non- Insiders
(as defined) shall be determined by the Board of Directors
or the Stock
F-13
<PAGE>
AMERICAN MEDICAL ALERT CORP.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Option Committee of the Board. All options under the above
plans have been granted at exercise prices equal to the fair
market value of the underlying common shares at the date of
the grant. The 1984 Plan term expired in May 1994.
The Company has adopted the disclosure-only provisions of
Statement of Financial Accounting Standards (SFAS) No. 123,
"Accounting for Stock Based Compensation." Accordingly, no
compensation expense has been recognized for the stock
option plan. Had compensation cost for the Company's stock
option plan been determined based on the fair value at the
grant date for awards in 1996 and 1995 consistent with the
provisions of SFAS No. 123, the Company's net income and
earnings per share would have been reduced to the pro forma
amounts indicated below:
1996 1995
---- ----
Pro forma net income $ 744,700 $ 579,180
Pro forma net income per share $.13 $.10
The weighted average grant date fair value of options
granted in 1996 and 1995 was $174,193 and $162,556,
respectively.
The fair value of options at date of grant was estimated
using the Black-Scholes model with the following weighted
average assumptions:
1996 1995
---- ----
Expected life (years) 4 4
Risk free interest rate 5.69% 7.17%
Expected volatility 52.6% 52.6%
Expected dividend yield - -
Information with respect to options under plans is as
follows:
<TABLE>
<CAPTION>
Weighted
Average
Number of Exercise
Shares Price
------ -----
<S> <C> <C> <C>
Balance - January 1, 1994 717,657 $1.16
Granted during 1994 235,410 2.63
Forfeitures/expirations during 1994 (59,001) 2.07
Exercised during 1994 (120,341) .44
--------
Balance - December 31, 1994 773,725 1.65
Granted during 1995 89,513 2.90
Forfeitures/expirations during 1995 (14,422) 2.48
</TABLE>
F-14
<PAGE>
AMERICAN MEDICAL ALERT CORP.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Exercised during 1995 (42,029) .46
-------
Balance - December 31, 1995 806,787 1.84
Granted during 1996 120,220 2.45
Forfeitures/expirations during 1996 (14,115) 2.24
Exercised during 1996 (338,535) .91
--------
Balance - December 31, 1996 574,357 2.50
=======
529,480 and 706,900 options were exercisable at December 31,
1996 and 1995, respectively.
F-15
<PAGE>
AMERICAN MEDICAL ALERT CORP.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The following table summarizes information about the stock
options outstanding at December 31, 1996:
Options Outstanding Options Exercisable
------------------- -------------------
Weighted-
Average Weighted- Weighted-
Range of Remaining Average Average
Exercise Number Contractual Exercise Number Exercise
Prices Outstanding Life Price Exercisable Price
------ ----------- ---- ----- ----------- -----
$1.5125-
$1.9375 81,153 .83 years $1.89 81,153 $1.89
$2.1313-
$2.8875 473,581 2.19 years $2.53 428,704 $2.55
$3.000 -
$3.4375 19,623 1.83 years $3.11 19,623 $3.11
As of December 31, 1996, 574,533 options have been exercised
under both plans and 83,795 options are available for future
grants under the 1991 Plan.
The Company has agreed to grant options to its management
and employees in January and July of each year. The number
of options to be granted is equal to 5% of the dollar amount
of compensation during the two calendar quarters preceding
the grant date. To the extent permitted by law, such options
will be granted as Incentive Stock Options. Each nonemployee
director will receive options for 2,500 shares of common
stock on each grant date.
In December 1983, the Company sold units that contained
warrants to purchase 850,000 shares of the Company's common
stock at $3.50 per share. The Company may, at its option,
upon not less than 90 days written notice to warrant
holders, terminate all outstanding warrants without payment,
provided the market price of the common stock exceeds $7.00
per share during any 20 consecutive trading days. The
warrants expire on December 27, 1997.
In November 1994, the Company granted to legal counsel
options to purchase 25,000 shares of common stock at $2.00
per share (the fair market value at the date of grant), such
options being exercisable for a period of five years from
the date of grant.
During 1994, the Company issued 12,500 common shares to a
director of the Company in consideration of services
performed. These shares were charged to expense in the
amount of $14,844.
F-16
<PAGE>
AMERICAN MEDICAL ALERT CORP.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
9. Employee Effective January 1997, the Company will sponsor a 401(k)
Savings Plan savings plan which will be available to all eligible
employees. Participants may elect to defer from 1% to 15% of
their compensation, subject to an annual limitation provided
by the Internal Revenue Service. The Company may make
matching and/or profit sharing contributions to the plan at
its discretion.
10. Consulting On December 1, 1994, the Company entered into a financial
Agreement advisory and investment banking agreement. The Company will
receive advice regarding certain internal operating matters,
as well as certain corporate finance issues. In addition,
the Company may pay certain fees (as defined) for
transactions consummated by the Company that are either
originated by the consultant or the Company. The agreement,
which is for a term of 24 months, has annual fees of
$30,000. In addition, the Company granted 150,000 warrants
exercisable for a period of four years commencing one year
from the date of the agreement at an exercise price of $2.00
per share (the fair market value at the date of grant). On
January 1, 1997 the agreement was renewed for a term of 12
months. In addition to the annual fees of $30,000, the
Company has agreed to grant to the consultant 50,000
warrants exercisable for a period of four years at an
exercise price of $4.50.
11. Major The Company is an approved Medicaid Provider in the states
Customers of New York and Georgia. During the years ended December 31,
1996, 1995 and 1994, the Company had revenue from one
contract with a municipality in New York State which
represented 44%, 44%, and 37% of total revenue,
respectively. This contract is effective through June 30,
1997. On March 27, 1997, the Company was notified by the
municipality that they are currently processing the renewal
of the Company's contract which would extend it through
February 28, 1998. During the years ended December 31, 1996,
1995 and 1994, the Company had revenue from the State of
Georgia which represents 5%, 6%, and 7%, respectively, of
total revenue. As of December 31, 1996 and 1995, accounts
receivable from the one contract referred to above
represented 39% and 46%, respectively, of accounts
receivable.
F-17
<PAGE>
Exhibit Index
-------------
3(a) Articles of Incorporation of Company, as amended. (Incorporated
by reference to Exhibit 3(a) to the Company's Form S-1 Registration
Statement under the Securities Act of 1933, filed on September 30,
1983 - File No. 2-86862).
3(b) By-Laws of Company. (Incorporated by reference to Exhibit 4(b) to
the Company's Form S-3 Registration Statement under the Securities Act
of 1933, Commission File No. 333-6159).
4(a) Warrant Agreement between the Company and Continental Stock
Transfer & Trust Company, the Company's transfer agent, with the
Company's form of Warrant Certificate attached thereto. (Incorpo rated
by reference to Exhibit 4(a) to the Company's Form S-1 Registration
Statement under the Securities Act of 1933, filed on September 30,
1983 - File No. 2-86862).
4(b) Amendment, dated December 22, 1988, to the Warrant Agreement
between the Company and Continental Stock Transfer & Trust Company.
(Incorporated by reference to Exhibit 4(c) to the Company's Form 10-K
for the year ended December 31, 1988).
4(c) Amendment, dated October 26, 1990, to the Warrant Agreement
between the Company and Continental Stock Transfer & Trust Company.
(Incorporated by reference to Exhibit 4(c) to the Company's Form 10-K
for the year ended December 31, 1990).
4(d) Amendment, dated November 30, 1994, to the Warrant Agreement
between the Company and Continental Stock Transfers & Trust Company.
(Incorporated by reference to Exhibit 4(d) to the Company's Form
10-KSB for the year ended December 31, 1994).
4(e) Amendment, dated November 20, 1995, to the Warrant Agreement
between the Company and Continental Stock Transfer & Trust Company.
(Incorporated by reference to Exhibit 4(e) to the Company's Form
10-KSB for the year ended December 31, 1995).
4(f) Amendment, dated December 20, 1996, to the Warrant Agreement
between the Company and Continental Stock Transfer & Trust Company.
(Incorporated by reference to Exhibit 4(h) to the Company's
Registration Statement on Form S-3, Commission File No. 333-6159).
10(a) Employment Agreement, dated January 1, 1997 between the Company
and Howard M. Siegel.*
10(b) Employment Agreement, dated August 28, 1989 between the Company
and John Lesher. (Incorporated by reference to Exhibit 10(c) to the
Company's Form 10-K for the year ended December 31, 1990).
10(c) Amendment, dated March 4, 1992, to the Employment Agreement
between the Company and John Lesher. (Incorporated by reference to
Exhibit 10(d) to the Company's Form 10-K for the year ended December
31, 1991).
10(d) Lease for the premises located at 520 Fellowship Road, Suite
C301, Mt. Laurel, New Jersey ("Mt. Laurel Lease"). (Incorporated by
reference to Exhibit 10(e) to the Company's Form 10-K for the year
ended December 31, 1991).
10(e) First Amendment to the Mt. Laurel Lease. (Incorporated by
reference to Exhibit 10(f) to the Company's Form 10-KSB for the year
ended December 31, 1993).
10(f) Second Amendment to the Mt. Laurel Lease.*
<PAGE>
10(g) Leases for the premises located at 3265 Lawson Boulevard,
Oceanside, New York. (Incorporated by reference to Exhibit 10(h) to
the Company's Form 10-KSB for the year ended December 31, 1994).
10(h) Lease for the premises located at 910 Church Street, Decatur,
Georgia. (Incorporated by reference to Exhibit 10(i) to the Company's
Form 10-KSB for the year ended December 31, 1995).
10(i) Lease for the premises located at 169-10 Crocheron Avenue,
Flushing, New York. (Incorporated by reference to Exhibit 10(j) to the
Company's Form 10-KSB for the year ended December 31, 1994).
10(j) Lease for the premises located at 475 West 55th Street,
Contryside, Illinois. (Incorporated by reference to Exhibit 10(k) to
the Company's Form 10-KSB for the year ended December 31, 1994).
10(k) 1984 Incentive Stock Option Plan, as amended. (Incorporated by
reference to Exhibit 10(e) to the Company's Form 10-K for the year
ended December 31, 1990).
10(l) Amended 1991 Stock Option Plan. (Incorporated by reference to
Exhibit 10(l) to the Company's Form 10-KSB for the year ended December
31, 1994).
10(m) Restated and Amended Revolving Credit Note with North Fork Bank, dated
December 1, 1995 (the "Revolving Credit Note").*
10(n) Letter from North Fork Bank extending the Revolving Credit Note until
April 30, 1998.*
10(o) Agreement between the Company and the City of New York, as extended
through February 18, 1998.*
23(a) Consent of Deloitte & Touche LLP.*
23(b) Consent of Margolin, Winer & Evens LLP.*
27 Financial Data Schedule.*
- -------------------
* Filed herewith.
EXHIBIT 10(a)
-------------
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT dated as of January 1, 1997 between AMERICAN MEDICAL
ALERT CORP., a New York corporation (the "Company"), with offices located at
3265 Lawson Boulevard, Oceanside, New York 11572, and HOWARD M. SIEGEL, an
individual having an address at 3429 Westminster Road, Oceanside, New York 11572
("Employee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company desires to obtain the services of Employee upon the
terms and conditions stated herein; and
WHEREAS, Employee desires to be employed by the Company upon the terms and
conditions stated herein.
NOW, THEREFORE, in consideration of the mutual covenants, conditions and
promises contained herein, the parties hereby agree as follows:
1. Employment. The Company hereby employs Employee for the period beginning
as of the date hereof and ending December 31, 1999, unless earlier terminated
pursuant hereto (the "Employment Period").
2. Duties. Subject to the authority of the Board of Directors of the
Company, Employee shall be employed as the Company's Chairman of the Board,
President and Chief Executive Officer. Employee will perform such duties and
services of an executive nature, commensurate with his position as the Chairman
of the Board, President and Chief Executive Officer, as may from time to time be
assigned to him by the Board of Directors.
-1-
<PAGE>
3. Full Time. Employee agrees that he will devote his full time and
attention during regular business hours to the business and affairs of the
Company. The foregoing shall not prevent the purchase, ownership or sale by
Employee of investments or securities of publicly held companies and any other
business that is not competitive with the Company or any subsidiary of the
Company so long as such investment does not require active participation of
Employee in the management of the business of such publicly held companies, does
not interfere or conflict with the performance of Employee's duties hereunder
and does not otherwise violate any of the provisions of this Agreement, or
Employee's participation in philanthropic organizations to the extent that such
participation does not interfere or conflict with the performance of Employee's
duties hereunder and does not otherwise violate any provision of this Agreement.
4. Compensation. In consideration of the duties and services to be
performed by Employee hereunder, the Company agrees to pay, and Employee agrees
to accept the amounts set forth below:
(a) A base salary, to be paid on a weekly basis, at the rate of
$200,000, $215,000 and $230,000 per annum, for the first, second and third
years, respectively, of the Employment Period.
(b) As additional compensation, with respect to each fiscal year of
the Company during the Employment Period during which the Company's Pre-Tax
Income (as hereinafter defined) exceeds $2,000,000, an amount equal to a
percentage of the Company's Pre- Tax Income, as follows: (i) 8% of the
Company's Pre-Tax Income between $2,000,000 and 3,000,000, (ii) 9% of the
Company's Pre-Tax Income between $3,000,000 and $4,000,000, and
-2-
<PAGE>
(iii) 10% of the Company's Pre-Tax Income in excess of $4,000,000. No
additional compensation shall be paid for any fiscal year in which Pre-Tax
Income is less than $2,000,000.
(c) In lieu of part or all of the additional compensation payable in
cash under paragraph 4(b), Employee may elect to receive, as of December 31
of the year for which Pre- Tax Profits are determined, such number of
shares of the Company's Common Stock as the Board of Directors may
determine has a fair market value equal to such additional compensation. If
the Company's Common Stock is listed on a national securities exchange or
traded on the Over-the- Counter market, the fair market value of a share of
such Common Stock shall be the closing selling price or the mean of the
closing bid and asked prices of the Company's Common Stock quoted on such
exchange, or on the Over-the-Counter market as reported by the National
Association of Securities Dealers Automated Quotation ("NASDAQ") system, or
if the Company's Common Stock is not traded on NASDAQ, then as reported by
the National Quotation Bureau, Incorporated, on the day on which such
election is made, or, if there is no trading or bid or asked price on that
day, the closing selling price or the mean of the closing bid and asked
prices on the nearest trading date before that day and for which such
prices are available, and if the Company's Common Stock is not listed on
such exchange or traded in such market, then the fair market value shall be
determined by an independent appraiser, selected by the Board of Directors,
whose opinion shall be binding on the parties. The Company may require, as
a condition to issuing shares of the Company's Common Stock pursuant to
this paragraph 4(c), that it receive an opinion of its counsel that such
securities may be issued pursuant to an exemption from registration under
the Securities Act of 1933, as amended, and applicable state law. Each
certificate for such securities shall bear a legend as follows:
-3-
<PAGE>
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"),
or applicable state law. The securities may not be offered for sale,
sold or otherwise transferred except pursuant to an effective
registration statement under the Act, or pursuant to an exemption from
registration under the Act and applicable state law."
(d) The additional compensation to be paid pursuant to paragraph 4(b)
hereof and/or the shares of the Company's Common Stock, if any, issuable
pursuant to paragraph 4(c) hereof shall be payable and/or issuable, as the
case may be, promptly following the availability of the audited financial
statements relating to the applicable fiscal year of Company. To the extent
any such fiscal year is not entirely included in the Employment Period,
because for example Employee is terminated by the Company other than in
accordance with paragraph 9(a) hereof, Employee shall receive the pro rata
portion of such additional compensation determined by multiplying the
additional compensation, computed for the applicable fiscal year, by a
fraction whose numerator is the number of days in such fiscal year included
in the Employment Period and whose denominator is the total number of days
in such fiscal year.
(e) The compensation provided for herein shall be in addition to any
retirement, profit sharing, insurance or similar benefit which may at any
time be payable to Employee pursuant to any plan or policy of the Company
relating to such benefits, which additional benefits shall be made
available to Employee on the same basis as they are generally made
available to other executive officers of the Company. Such compensation
shall be in addition to any options which may be granted under any stock
option plan of the Company.
-4-
<PAGE>
(f) The Company shall reimburse Employee in accordance with the
Company's normal policies for all reasonable travel, hotel, meal and other
expenses properly incurred by him in the performance of his duties
hereunder.
(g) The Company shall provide Employee with the use of an automobile,
selected by Employee and leased by the Company, with all expenses of
operation, such as insurance, gas, oil and repair, paid for by the Company
and having a cost to the Company of up to $1,250 per month.
(h) For the purposes of this Agreement, "Pre-Tax Income" shall mean
for each fiscal year the net income of the Company and its consolidated
subsidiaries, as set forth in the audited financial statements of the
Company, for such fiscal year before any adjustment for the effect of the
additional compensation pursuant to paragraph 4(b) hereof, determined in
accordance with generally accepted accounting principles, as consistently
applied by the Company.
5. Vacation. Employee shall be entitled to four (4) weeks vacation each
fiscal year, to be taken at such time as is mutually convenient to the Company
and Employee.
6. Death. In the event of the death of Employee during the Employment
Period, this Agreement and the employment of Employee hereunder shall terminate
on the date of the death of Employee. The estate of Employee (or such person(s)
as Employee shall designate in writing) shall be entitled to receive, and the
Company agrees to continue to pay, in accordance with the normal pay practice of
the Company, the base salary of Employee provided by paragraph 4(a), for a
period of one (1) year following the date of death of Employee.
7. Disability. In the event that Employee shall be unable to perform
because of illness or incapacity, physical or mental, the duties and services to
be performed by him
-5-
<PAGE>
hereunder for a period of one hundred and eighty (180) consecutive days or an
aggregate period of more than one hundred and eighty (180) days in any 12-month
period, the Company may terminate this Agreement after the expiration of such
period. Upon such termination, Employee shall be entitled to receive the base
salary provided by paragraph 4(a), the additional compensation provided by
paragraphs 4(b) and 4(c) and payable in accordance with paragraph 4(d), and the
additional benefits, if any, provided by paragraph 4(e), in each instance
computed up to the date of termination.
8. Non-Competition and Non-Disclosure. (a) Employee covenants and agrees
that, throughout the Employment Period and for a period of eighteen (18) months
thereafter, he will not, directly or indirectly, own, manage, operate or
control, or participate in the ownership, management, operation or control of,
any business competing directly in the United States of America with the
business conducted by the Company or any subsidiary of the Company on the date
of termination hereof; provided, however, that Employee may own not more than 5%
of the outstanding securities of any class of any corporation engaged in any
such business, if such securities are listed on a national securities exchange
or regularly traded in the Over-the-Counter market by a member of a national
securities association.
(b) Employee covenants and agrees that, throughout the Employment
Period and for a period of eighteen (18) months thereafter, he will not
directly or indirectly solicit, entice or induce any person who on the date
of termination of employment of Employee is, or within the last three
months of Employee's employment by the Company was, associated with or
employed by the Company or any subsidiary of the Company to leave the
employ of or terminate
-6-
<PAGE>
his association with the Company, or any subsidiary of the Company, solicit
the employment of any such person on his own behalf or on behalf of any
other business enterprise.
(c) Employee covenants and agrees that, throughout the Employment
Period and at all times thereafter, he will not use, or disclose to any
third party, trade secrets or confidential information of the Company,
including, but not limited to, confidential information or trade secrets
belonging or relating to the Company, its subsidiaries, affiliates,
customers and clients or proprietary processes or procedures of the
Company, its subsidiaries, affiliates, customers and clients. Proprietary
processes and procedures shall include, but shall not be limited to, all
information which is known or intended to be known only to employees of the
Company, its respective subsidiaries and affiliates or others in a
confidential relationship with the Company or its respective subsidiaries
and affiliates which relates to business matters.
(d) If any term of this paragraph 8 is found by any court having
jurisdiction to be too broad, then and in that case, such term shall
nevertheless remain effective, but shall be considered amended (as to the
time or area or otherwise, as the case may be) to a point considered by
said court as reasonable, and as so amended shall be fully enforceable.
(e) In the event that Employee shall violate any provision of this
Agreement (including but not limited to the provisions of this paragraph
8), then Employee hereby consents to the granting of a temporary or
permanent injunction against him by a court of competent jurisdiction
prohibiting him from violating any provision of this Agreement. In any
proceeding for an injunction and upon any motion for a temporary or
permanent injunction, Employee agrees that his ability to answer in damages
shall not be a bar or interposed as a defense to the granting of such
temporary or permanent injunction against Employee. Employee further
-7-
<PAGE>
agrees that the Company will not have an adequate remedy at law in the
event of any breach by Employee hereunder and that the Company will suffer
irreparable damage and injury if Employee breaches any of the provisions of
this Agreement.
9. Termination. (a) The Company may terminate this Agreement without
liability (other than for the base salary provided in paragraph 4(a) accrued to
the date of termination) in the event of (i) a material breach by Employee of
the provisions of this Agreement, which breach shall not have been cured by
Employee within sixty (60) days following notice thereof by the Company to
Employee, (ii) the commission of gross negligence or bad faith by Employee in
the course of his employment hereunder, which commission has a material adverse
effect on the Company, (iii) the commission by Employee of a criminal act of
fraud, theft or dishonesty causing material damages to the Company or any of its
subsidiaries or (iv) Employee shall be convicted of (or plead nolo contendere
to) any felony, or misdemeanor involving moral turpitude if such misdemeanor
results in material financial harm to or materially adversely affects the
goodwill of the Company.
(b) Employee may terminate this Agreement without liability at any
time upon at least one (1) year prior written notice.
(c) After a Change in Control (as hereinafter defined) has occurred,
Employee may terminate his employment at any time upon written notice of
the Company within six (6) months after he has obtained actual knowledge of
the occurrence of any of the following events:
(i) Failure to elect or appoint, or re-elect or re-appoint,
Employee to, or removal of Employee from, his office and/or position
with the Company as
-8-
<PAGE>
constituted prior to the Change in Control, except in connection with
the termination of Employee's employment pursuant to paragraph 9(a)
hereof;
(ii) A reduction in Employee's overall compensation (including
any reduction in pension or other benefit programs or perquisites) or
a material adverse change in the nature or scope of the authorities,
powers, functions or duties normally attached to Employee's position
with the Company as referred to in paragraph 2 hereof;
(iii) A determination by Employee made in good faith that, as a
result of a Change in Control, he is unable effectively to carry out
the authorities, powers, func tions or duties attached to his position
with the Company as referred to in paragraph 2 hereof, and the
situation is not remedied within thirty (30) days after receipt by the
Company of written notice from Employee of such determination;
(iv) A breach by the Company of any provision of this Agreement
not covered by clauses (i), (ii) or (iii) of this paragraph 9(c),
which is not remedied within thirty (30) days after receipt by the
Company of written notice from Employee of such breach;
(v) A change in the location at which substantially all of
Employee's duties with the Company are to be performed to a location
which is not within a 50- mile radius of the address of the place
where Employee is performing services prior to the date of the Change
in Control; or
(vi) failure by the Company to obtain the assumption of, and the
agreement to perform, this Agreement by any successor (pursuant to a
transfer described in paragraph 15).
-9-
<PAGE>
An election by Employee to terminate his employment under the
provisions of this paragraph 9(c) shall not be deemed a voluntary
termination of employment by Employee for the purpose of interpreting
the provisions of any of the Company's employee benefit plans,
programs or policies. Employee's right to terminate his employment
pursuant to this paragraph 9(c) shall not be affected by his illness
or incapacity, whether physical or mental, unless the Company shall at
the time be entitled to terminate his employment under paragraph 7 of
this Agreement. Employee's continued employment with the Company for
any period of time less than six (6) months after a Change in Control
shall not be considered a waiver of any right he may have to terminate
his employment pursuant to this paragraph 9(c).
(d) After a Change in Control has occurred, if Employee terminates his
employment with the Company pursuant to paragraph 9(c) hereof or if
Employee's employment is terminated by the Company for any reason other
than pursuant to paragraph 9(a) hereof, Employee (i) shall be entitled to
his base salary, the additional compensation determined in accordance with
paragraph 4(b) hereof and/or the shares of the Company's Common Stock, if
any, issuable pursuant to paragraph 4(c) hereof, bonuses, awards,
perquisites and benefits, including, without limitation, benefits and
awards under the Company's stock option plans and the Company's pension and
retirement plans and programs, through the date specified in the notice of
termination as the last day of Employee's employment by the Company (the
"Termination Date") and, in addition thereto, (ii) shall be entitled to be
paid in a lump-sum, on the Termination Date, an amount of cash (to be
computed, at the expense of the Company, by the independent certified
public accountants utilized by the Company immediately prior to the Change
of Control (the "Accountants"), whose computation shall be conclusive and
binding upon Employee and the
-10-
<PAGE>
Company) equal to 2.99 times Employee's "base amount" as defined in Section
280G(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code").
Such lump-sum payment is hereinafter referred to as the "Termination
Compensation."
(e) Notwithstanding anything in this Agreement to the contrary,
Employee shall have the right, prior to the receipt by him of any amounts
due hereunder, to waive the receipt thereof or, subsequent to the receipt
by him of any amounts due hereunder, to treat some or all of such amounts
as a loan from the Company which Employee shall repay to the Company,
within ninety (90) days from the date of receipt, with interest at the rate
provided in Section 7872 of the Code. Notice of any such waiver or
treatment of amounts received as a loan shall be given by Employee to the
Company in writing and shall be binding upon the Company.
(f) It is intended that the "present value" of the payments and
benefits to Employee, whether under this Agreement or otherwise, which are
includable in the computation of "parachute payments" shall not, in the
aggregate, exceed 2.99 times the "base amount" (the terms "present value",
"parachute payments" and "base amount" being determined in accordance with
Section 280G of the Code). Accordingly, if Employee receives payments or
benefits from the Company prior to payment of the Termination Compensation
which, when added to the Termination Compensation, would, in the opinion of
the Accountants, subject any of the payments or benefits to Employee to the
excise tax imposed by Section 4999 of the Code, the Termination
Compensation shall be reduced by the smallest amount necessary, in the
opinion of the Accountants, to avoid such tax. In addition, the Company
shall have no obligation to make any payment or provide any benefit to
Employee subsequent to payment of the Termination Compensation which, in
the opinion of the Accountants, would subject any of the payments or
-11-
<PAGE>
benefits to Employee to the excise tax imposed by Section 4999 of the Code.
No reduction in Termination Compensation or release of the Company from any
payment or benefit obligation in reliance upon any aforesaid opinion of the
Accountants shall be permitted unless the Company shall have provided to
Employee a copy of any such opinion that specifically entitles Employee to
rely thereon, no later than the date otherwise required for payment of the
Termination Compensa tion or any such later payment or benefit.
(g) "Change of Control" as used in this Agreement shall mean the
occurrence of any of the following:
(i) any "person" or "group" (as such terms are used in Section
3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Act")), except for an employee stock ownership trust (or
any of the trustees thereof), becomes a "beneficial owner" (as such
term in used in Rule 13d-3 promulgated under the Act), after the date
hereof, directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company's
then outstanding securities;
(ii) a change in "control" of the Company (as the term "control"
is defined in Rule 12b-2 or any successor rule promulgated under the
Act) shall have occurred;
(iii) the majority of the Board of Directors, as such entire
Board of Directors is composed at the date of this Agreement, no
longer serve as directors of the Company, except that there shall not
be counted toward such majority who no longer serve as directors any
director who ceased to serve prior to the date of a Change in Control,
for any reason, or at any other time due to his death, disability or
termination for cause;
-12-
<PAGE>
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets; or
(v) the shareholders of the Company approve a merger or
consolidation of the Company with any other company, other than a
merger or consolidation which would result in the combined voting
power of the Company's voting securities outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more
than 70% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation. Notwithstanding the foregoing, any
transaction involving a leveraged buyout or other acquisition of the
Company which would otherwise constitute a Change in Control, in which
Employee participates in the surviving or successor entity (other than
solely as an employee or consultant), shall not constitute a Change in
Control.
10. No Impediments. Employee warrants and represents that he is free to
enter into this Agreement and to perform the services contemplated thereby and
that such actions will not constitute a breach of, or default under, any
existing agreement.
11. No Waiver. The failure of any of the parties hereto to enforce any
provision hereof on any occasion shall not be deemed to be a waiver of any
preceding or succeeding breach of such provision or of any other provision.
12. Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties hereto and no amendment, modification or waiver of
any provision herein shall be effective unless in writing, executed by the party
charged therewith.
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<PAGE>
13. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with and shall be governed by the laws of the State of
New York applicable to agreements to be wholly performed therein without giving
effect to principles of conflicts of law.
14. Binding Effect. This Agreement shall bind and inure to the benefit of
the parties, their successors and assigns.
15. Assignment and Delegation of Duties. This Agreement may not be assigned
by the parties hereto except that the Company shall have the right to assign
this Agreement to any successor in connection with a sale or transfer of all or
substantially all of its assets, a merger or consolidation. This Agreement is in
the nature of a personal services contract and the duties imposed hereby are
non-delegable.
16. Paragraph Headings. The paragraph headings herein have been inserted
for convenience of reference only and shall in no way modify or restrict any of
the terms or provisions hereof.
17. Notices. Any notice under the provisions of this Agreement shall be in
writing, shall be sent by one of the following means, directed to the address
set forth on the first page of this Agreement or to such other address as shall
be designated hereunder by notice to the other party, effective upon actual
receipt and shall be deemed conclusively to have been given: (i) on the first
business day following the day timely deposited for overnight delivery with
Federal Express (or other equivalent national overnight courier service) or
United States Express Mail, with the cost of delivery prepaid or for the account
of the sender; (ii) on the fifth business day following the day duly sent by
certified or registered United States mail, postage prepaid and
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<PAGE>
return receipt requested; or (iii) when otherwise actually received by the
addressee on a business day (or on the next business day if received after the
close of normal business hours or on any non-business day).
18. Unenforceability; Severability. If any provision of this Agreement is
found to be void or unenforceable by a court of competent jurisdiction, the
remaining provisions of this Agreement shall, nevertheless, be binding upon the
parties with the same force and effect as though the unenforceable part has been
severed and deleted.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
EMPLOYEE:
/s/ Howard M. Siegel
--------------------
Howard M. Siegel
COMPANY:
AMERICAN MEDICAL ALERT CORP.
By:/s/ John Rogers
---------------------------------
Name: John Rogers
Title: Vice President of Operations
-15-
EXHIBIT 10 (f)
--------------
SECOND AMENDMENT TO LEASE
DATED JANUARY 15, 1997
BETWEEN
FELLOWSHIP BUSINESS CENTER (LANDLORD)
AND
AMERICAN MEDICAL ALERT CORPORATION (TENANT)
- -------------------------------------------------------------------------------
PURSUANT to a Lease dated April 8, 1991 for 2,100 square feet of space
known as 520 Fellowship Road, Suite C-301, Mt. Laurel, New Jersey; and First
Amendment to Lease dated November 18, 1993 (relocating to A-106/107 and 5,400
SF), between the aforementioned parties, the following changes shall be made:
1. TERM: The term of the Lease shall be extended for an
additional one (1) year commencing January 1, 1997
and terminating December 31, 1997.
2. RENTAL: $33,534.00 per year, net; $2,794.50 per month, net.
All other terms and conditions of the original Lease will remain in full
force and effect.
FELLOWSHIP BUSINESS CENTER, (Landlord)
By: /s/ Steven Bloom
-----------------
Steven Bloom
AMERICAN MEDICAL ALERT CORPORATION,
(Tenant)
By: /s/ John Rogers
------------------------------
Name: John Lesher
Title: Vice President of Engineering
-1-
EXHIBIT 10 (m)
--------------
NORTH FORK BANK
RESTATED AND AMENDED
REVOLVING CREDIT NOTE
The within is a further restatement and amendment and
continuation of that certain Promissory Note from American
Medical Alert Corp. to North Fork Bank dated October 31, 1991 in
the original principal amount of $450,000; as modified by that
certain Promissory Note from American Medical Alert Corp. to
North Fork Bank in the original principal amount of $500,000
dated April 30, 1993.
BORROWER: AMERICAN MEDICAL ALERT CORP.
PRINCIPAL: $1,500,000.00 Date: As of December 1, 1995
PROMISE TO PAY: The undersigned (the "Borrower"), for value received, does
hereby promise to pay to the order of NORTH FORK BANK (the "Bank") at its
offices at 245 Love Lane, Mattituck, New York 11952, or at any of its branches,
the sum of ONE MILLION FIVE HUNDRED THOUSAND ($1,500,000) DOLLARS plus interest
thereon from the date hereof as set forth herein.
RATE AND PAYMENT: The Borrower shall pay said sum, or such lesser amount as may
then be the aggregate unpaid principal balance of all loans made by the Bank to
the Borrower hereunder, (each a "Loan" and collectively the "Loans") on or
before April 30, 1997 (the "Maturity Date").
The Borrower also promises to pay interest (computed on the basis of a 360 day
year for actual days elapsed) at said office on the unpaid principal amount
hereof from time to time outstanding from the date hereof until the Maturity
Date at the rate of one (1%) percent per annum in excess of that rate stated by
the Bank to be its Prime Rate from time to time in effect, which interest rate
shall change when and as said Prime Rate changes. Prime Rate as referred to
herein shall refer to the rate of interest determined or announced by the Bank
from time to time as its Prime Rate and the Prime Rate is not necessarily the
lowest rate of interest charged by the Bank on loans and other credit
relationships. Each change in the Prime Rate shall effect a simultaneous and
corresponding change in the interest rate hereunder without notice to the
Borrower. Interest shall be payable monthly on the last day of each month
commencing on the first such day to occur after the date hereof and upon payment
in full of unpaid principal amount hereof.
UNUSED FEE: The Borrower agrees to pay a fee at the rate of one half of one (1/2
of 1%) percent per annum, payable on the 1st day of each April, July, October
and January commencing April 1, 1996 and on the termination date (a) on the
difference between $1,500,000.00 and the average daily amount outstanding.
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<PAGE>
The Borrower further agrees that this Note shall bear interest at any stated or
accelerated maturity hereof at a rate of five (5%) percent in excess of the rate
hereinbefore provided for, payable on demand. In no event shall the rate either
before or after the occurrence of any such default exceed the highest rate of
interest, if any, permitted under applicable New York or Federal law.
If any payment is not made within ten (10) days of its respective due date as
set forth herein, or if the entire balance becomes due and payable and is not
paid, all or part of the amount due may be offset out of any account or other
property which the Borrower has at the Bank or any affiliate of the Bank without
prior notice or demand.
The Bank may charge any account of the Borrower for any payment due to the Bank
hereunder.
LATE CHARGES: The Borrower will pay a charge of four (4%) percent of the amount
of any payment which is not made within ten (10) days of its respective due
date, or, if applicable, which cannot be debited from its account due to
insufficient balance on the debit date.
ATTORNEYS FEES: In the event the Bank retains counsel with respect to
enforcement of this Note or any other document or instrument given to the Bank,
the Borrower agrees to pay the Bank's reasonable attorneys fees (whether or not
an action is commenced and whether or not in the court of original jurisdiction,
appellate court, bankruptcy court, or otherwise).
SUBSEQUENT AGREEMENTS: The Borrower shall be bound by any agreement extending
the time or modifying the above terms of payment made by the Bank without notice
to the Borrower, and the Borrower shall continue to be liable to pay all amounts
due hereunder, but at an interest rate not exceeding the rate set forth herein,
according to the terms of any such agreement of extension or modification.
In consideration of the granting of the Loans evidenced by this Note, the
Borrower hereby agrees as follows:
REVOLVING CREDIT COMMITMENT:
(a) The Loans evidenced by this Note are available in one or more advances
during the period which commences on the date hereof and ends on April 30, 1997
(the "Credit Period") in an aggregate principal amount up to, but not exceeding
at any time the outstanding principal sum of One Million Five Hundred Thousand
($1,500,000) Dollars (the "Commitment"). During the Credit Period, the Borrower
may use the Commitment by borrowing, prepaying in whole or in part and
reborrowing, on a revolving basis, all in accordance with the terms and
conditions hereof; provided, however, that each Loan or prepayment be in a
minimum amount of $10,000. Notwithstanding the aforestated availability in the
aggregate amount of One Million Five Hundred Thousand ($1,500,000) Dollars,
advances hereunder shall be limited to, and the outstanding principal balance
hereof shall at no time be greater than the following: (a) seventy-five (75%)
percent of the Borrower's Eligible Accounts Receivable outstanding for less than
ninety (90) days and 25% on inventory not to exceed
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<PAGE>
$400,000.00. The Borrower shall submit to the Bank at the time of each request
for an advance hereunder, but not less than one time per month, a Borrowing Base
Certificate in the form annexed hereto as Exhibit "A", certified by an officer
of the Borrower, verifying the amounts of Eligible Accounts Receivable and
Eligible Inventory, of the Borrower as of the date of said Certificate.
(b) The date and amount of each Loan and of each payment of principal shall
be maintained by the Bank in its books and records at the time of each Loan or
payment. All such notations shall be presumed to be correct and the aggregate
net unpaid amount of Loans set forth therein shall be presumed to be the
principal balance hereof.
(c) Each request for a Loan shall be subject to the satisfaction of the
following conditions precedent:
(i) The Borrower shall have given the Bank notice of such request,
setting forth the amount of the Loan requested and the date thereof. In
addition to the aforementioned, the Borrower shall have submitted to the
Bank for the month in which such request is made, a completed Borrowing
Base Certificate satisfactory in form and substance to the Bank. Such
notice may be written or oral and shall be sufficient if received by 1 p.m.
of the date the Loan is requested. If the request is oral, it shall be
thereafter confirmed in writing delivered by the Borrower to the Bank.
(ii) No Event of Default, or event which would be an Event of Default
but for the giving of notice or the passage of time or both, has occurred
and is continuing; and all of the representations and warranties made by
the Borrower herein shall be true and correct on and as of the date of such
request as if made on and as of such date.
(d) The outstanding principal balance of the Loans shall at no time exceed
the amount of the Commitment.
CONDITIONS PRECEDENT:
(a) Prior to funding the first Loan, the Borrower shall satisfy the
following conditions precedent including delivery to the Bank of the following:
(i) An executed copy of this Note;
(ii) The Bank shall receive a first perfected security interest in
certain assets of the Borrower (the "Collateral") pursuant to the general
security agreement (the "Security Agreement") to be evidenced and delivered
in connection herewith;
(iii) A copy of the resolutions passed by the Borrower's Board of
Directors certified by its Secretary or Assistant Secretary as being in
full force and effect on the date of this Agreement, authorizing the loan
herein provided for, the execution, delivery and performance of this
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<PAGE>
Note and any other instrument or agreement required hereunder and containing a
certificate of incumbency as to the person or persons authorized to execute and
deliver the same;
(iv) A favorable written opinion, dated of even date herewith, of the
Borrower's counsel (which counsel must be satisfactory to the Bank) with
respect to the matters set forth in the Representations and Warranties
section hereof with the exceptions of subsections (g) and (h); and
(v) All other documents reasonably required by the Bank and/or its
counsel in order to evidence and/or secure the Bank's position as set forth
herein.
REPRESENTATIONS AND WARRANTIES: The Borrower hereby represents and warrants to
the Bank that:
(a) The Borrower is duly organized, validly existing and in good standing
under the laws of the State of its formation and is qualified to do business and
in good standing under the laws of each state where its failure to so qualify
would have a material adverse effect on its business, operations or properties.
(b) This Note, the Security Agreement and all other documents executed and
delivered herewith have been duly authorized, executed and delivered and
constitute the valid and legally binding obligations of the Borrower,
enforceable in accordance with their respective terms, including the granting to
the Bank of a first perfected security interest in the Collateral.
(c) The execution and delivery of this Note, the Security Agreement and all
other documents executed and delivered herewith and performance hereunder and
thereunder, will not violate any provision of law.
(d) There are no actions or proceedings pending before any court or
governmental authority, bureau or agency, with respect to or threatened against
or affecting the Borrower, or any Subsidiary, which if determined adversely
would have a material adverse effect on the business, the assets or the
financial condition of the Borrower or any Subsidiary. As used herein, the term
"Subsidiary" or "Subsidiaries" means any corporation or corporations of which
the Borrower alone, or the Borrower and/or one or more of its Subsidiaries,
owns, directly or indirectly, at least a majority of the securities having
ordinary voting power for the election of directors.
(e) The Borrower is not in default under, or in violation of, any term of
any agreement, ordinance, resolution, decree, bond, note, indenture, order or
judgment to which it is a party or by which it is bound, or by which any of the
properties or assets owned by or used in the conduct of its business is
affected, which default or violation may have a material adverse effect on its
business, assets or financial condition. The operations of the Borrower comply
in all material respects with all laws, ordinances and regulations applicable to
them.
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<PAGE>
(f) The Borrower is not a party to or bound by, nor are any of the
properties or assets owned by it or used in the conduct of its business affected
by any financial agreement, ordinance, resolution, decree, bond, note,
indenture, order or judgment, or subject to any charter or other corporate
restriction, which materially and adversely affects its business, assets or
financial condition.
(g) All balance sheets, profit and loss statements and other financial
information heretofore furnished to the Bank are complete and present fairly the
financial condition of the Borrower and its Subsidiaries as at the dates thereof
and for the periods covered thereby, including contingent liabilities of every
kind, which financial conditions has not materially adversely changed since the
date of the most recent dated balance sheet of the Borrower heretofore furnished
to the Bank.
(h) No part of the proceeds of the loan which is evidenced by this Note
will be used directly or indirectly for the purpose of purchasing or carrying,
or for payment in full or in part of indebtedness which was incurred for the
purpose of purchasing or carrying, any margin stock as such term is defined in
Sec. 221.3 of Regulation U of the Board of Governors of the Federal Reserve
System.
(i) The Borrower and its Subsidiaries are in compliance in all material
respects with the Employees Retirement Income Security Act of 1974 ("ERISA") and
all rules and regulations thereunder. Neither the Borrower nor any of its
Subsidiaries has any unfunded vested liability under any type of plan described
in Section 4021(a) of ERISA ("Pension Plan") and no reportable event, as set
forth in Section 4043(b) of ERISA, has occurred or is continuing with respect to
any Plan.
FINANCIAL STATEMENTS: The Borrower shall deliver to the Bank:
(a) Annually, as soon as available, but in any event within one hundred
twenty (120) days after the last day of each fiscal year, audited financial
statements, including balance sheets as of the last day of the fiscal year and
statements of income and retained earnings and changes in financial condition
for such fiscal year each prepared in accordance with generally accepted
accounting principles, consistently applied for the period and prior periods by
independent Certified Public Accountants satisfactory to the Bank.
(b) Quarterly 10-Q Reports of the Borrower within sixty (60) days after the
end of each fiscal quarter.
(c) Monthly Accounts Receivable aging and Borrowing Base Certificate within
ten (10) days after the end of each month.
(d) Within a reasonable time after a written request therefor, such other
financial data or information as the Bank may reasonably request from time to
time.
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<PAGE>
(e) At the same time as it delivers the financial statements required under
the provisions of subsections (a) and (b) hereof, a certificate signed by the
president or the chief financial, or accounting, officer or the Borrower, to the
effect that no Event of Default hereunder or materially default under any other
agreement to which the Borrower or any Subsidiary is a party or by which it is
bound, or by which any of its properties or assets may be affected, and no event
which, with the giving of notice or the lapse of time, or both, would constitute
such an Event of Default, has occurred.
AFFIRMATIVE COVENANTS: The Borrower will, and with respect to the agreements set
forth in subsections (a) through (f) hereof, will cause each Subsidiary to:
(a) With respect to its properties, assets and business, maintain insurance
against loss or damage, to the extent that property, assets and businesses of
similar character are usually so insured by companies similarly situated and
operating like properties, assets or businesses with responsible insurance
companies satisfactory to the Bank, said insurance to be assigned to the Bank at
closing;
(b) Duly pay and discharge all taxes or other claims which might become a
lien upon any of its properties except to the extent that such items are being
in good faith appropriately contested;
(c) Maintain, preserve and keep its properties in good repair, working
order and condition, and make all reasonable repairs, replacements, additions,
betterment and improvements thereto;
(d) Conduct its business in substantially the same manner and in
substantially the same fields as such business is now carried on and conducted;
(e) Comply with all statutes, rules and regulations and maintains its
corporate existence;
(f) Permit the Bank to make or cause to be made, inspections and audits of
any financial books, records and papers of the Borrower and of any parent or
subsidiary and each endorser or guarantor hereof and to make extracts therefrom
at all such reasonable times and as often as the Bank may reasonably require;
(g) Immediately give notice to the Bank that an Event of Default has
occurred or that an event which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default, has occurred and specifying the
action which the Borrower has taken and proposes to take with respect thereto;
and
(h) In addition to the aforementioned, the Borrower agrees that the
following financial covenants are upon which the Bank relies the extension of
the obligation evidenced hereby and that any violation or default under same
shall constitute an Event of Default under the terms hereof:
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<PAGE>
(1) at all times during the term hereof, the Borrower shall maintain a
ratio of Total Liabilities to Tangible Net Worth of not greater than .60:1;
(2) at all times during the term hereof, the Borrower shall maintain a
ratio of Current Assets to Current Liabilities of not less than 1.40:1;
(3) The Borrower shall maintain a Minimum Tangible Net worth (A) at
December 31, 1994 + 50% of 1995 net income should equal the minimum net
worth as of December 31, 1995.
NEGATIVE COVENANTS: The Borrower will not, and will not permit any Parent or
Subsidiary to:
(a) Create, incur, assume or suffer to exist any liability for borrowed
money, except (i) indebtedness to the Bank; (ii) existing debt as reflected on
the most recent balance sheet provided to the Bank and further incurred through
the date of this Agreement, which further incurred debt has been acknowledged by
the Borrower to the Bank in writing prior to the execution hereof; and (iii)
other indebtedness for borrowed money (whether or not constituting a refinancing
of existing indebtedness) so long as such indebtedness is not secured by
collateral securing repayment of this loan and the incurrence of which will not
cause a default hereunder. The Borrower agrees to provide the Bank an
opportunity to finance any additional borrowing needs in excess of $100,000
during the term of this Note;
(b) enter into any merger or consolidation or liquidate, wind-up or
dissolve itself or sell, transfer or lease or otherwise dispose of all or any
substantial part of its assets;
(c) lend or advance money, credit or property to or invest in (by capital
contribution, loan, purchase or otherwise) any firm, corporation, or other
person in an amount greater than $250,000 in the aggregate except (i)
investments in United States Government obligations and certificates of deposit
of any bank institution with combined capital and surplus of at least
$200,000,000, (ii) trade credit, and (iii) security deposits;
(d) create, assume or permit to exist, any mortgage, pledge, lien or
encumbrance of or upon or security interest in, any of its property or assets
now owned or hereafter acquired except (i) mortgages, liens, pledges and
security interests in favor of the Bank; (ii) other liens, charges and
encumbrances incidental to the conduct of its business or the ownership of its
property and assets which were not incurred in connection with the borrowing of
money or the obtaining of advances or credit and which do not materially impair
the use thereof in the operation of its business; (iii) liens for taxes or other
governmental charges which are not delinquent or which are being contested in
good faith and for which a reserve shall have been established in accordance
with generally accepted accounting principles; and (iv) liens granted to secure
purchase money financing of equipment, provided such liens are limited to the
equipment financed; (v) liens granted to refinance unencumbered equipment
provided such liens are limited to the equipment refinanced and the
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<PAGE>
incurrence of which will not cause a default hereunder or in any other loan
agreements or notes with the Bank;
(e) assume, endorse, be or become liable for or guarantee the obligations
of any person except by the endorsement of negotiable instruments for deposit or
collection in the ordinary course of business; or
(f) (i) terminate any Pension Plan so as to result in any material
liability to The Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (the "PBCG"), (ii) engage in or permit any
person to engage in any "prohibited transaction" (as defined in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1954, as amended)
involving any Pension Plan which would subject the Borrower to any material tax,
penalty or other liability, (iii) incur or suffer to exist any material
"accumulated funding deficiency" (as defined in Section 302 of ERISA), whether
or not waived, involving any Pension Plan, or (iv) allow or suffer to exist any
event or condition, which presents a material risk of incurring a material
liability to the PBCG by reason of termination of any Pension Plan.
COLLATERAL SECURITY:
(a) As collateral security for the payment of any and all sums owing under
this Note and all other obligations, direct or contingent, joint, several or
independent, of the Borrower and of any Parent or Subsidiary and each endorser
or guarantor hereof now or hereafter existing, due or to become due, or held, or
to be held by, the Bank, whether created directly or acquired by assignment or
otherwise (all of such obligations, including this Note, are hereinafter called
the "Obligations"), the Borrower hereby grants to the Bank a lien on and
security interest in any and all deposits or other sums at any time credited by
or due from the Bank to the Borrower, whether in regular or special depository
accounts or otherwise, and any and all monies, securities and other property of
the Borrower, and the proceeds thereof, now or hereafter held or received by or
in transit to the Bank from or for the Borrower, whether for safekeeping,
custody, pledge, transmission, collection or otherwise, and any such deposits,
sums, monies, securities and other property, may at any time after the
occurrence of any Event of Default by set-off, appropriated and applied by the
Bank against any of the Obligations whether or not such Obligations are then due
or are secured by any collateral, or, if they are so secured, whether or not
such collateral held by the Bank is considered to be adequate and with respect
to all collateral security the Bank shall have all the rights and remedies
available to it under the Uniform Commercial Code of New York and other
applicable law.
(b) This Note is also secured by the Collateral.
EVENTS OF DEFAULT: If any one or more of the following events ("Events of
Default") shall occur (and with the exception of subsection (c) hereof, shall
have continued uncured for a period of ten (10) days after written notice
thereof), the entire unpaid balance of the principal of and interest on the
Obligations shall immediately become due and payable:
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<PAGE>
(a) Failure to pay any amount required by this Note within ten (10) days of
its respective due date, or any other obligation owed to the Bank by Borrower or
any Guarantor, or, if applicable, failure to have sufficient funds in its
account for loan payments to be debited on the due date:
(b) Failure to perform or keep or abide by any term, covenant or condition
contained in this Note, any Guaranty or any other document or instrument given
to the Bank in connection with this loan;
(c) The filing of a bankruptcy proceeding, assignment for the benefit of
creditors, issuance of any execution, garnishment, or levy against, or the
commencement of any proceeding for relief from indebtedness by or against the
Borrower or any Guarantor;
(d) The happening of any event which, in the reasonable judgment of the
Bank, adversely affects the Borrower's or guarantor's ability to repay or the
value of any collateral;
(e) If any written representation or statement made to the Bank by the
Borrower or guarantors is untrue;
(f) If any written representation, covenant or warranty made to the Bank by
the Borrower or guarantors is breached;
(g) The occurrence of a default under the Security Agreement or any other
document or instrument given to the Bank in connection with this loan;
(h) Failure to provide any financial information on request or permit an
examination of books and records;
MISCELLANEOUS:
(a) Only those agreements, representations and warranties made expressly
herein shall survive the delivery of this Note. The Borrower waives trial by
jury, set-off and counterclaim of any nature or description in any litigation in
any court with respect to, in connection with, or arising out of, this Note or
any instrument or document delivered pursuant hereto or the validity,
protection, interpretation, collection or enforcement hereof;
(b) No modification or waiver of or with respect to any provision of this
Note, or consent to any departure by the Borrower from any of the terms or
conditions hereof, shall in any event be effective unless it shall be in writing
and signed by the Bank, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice to or
demand on the Borrower in any case shall, of itself, entitle it to any other or
further notice or demand in similar or other circumstances;
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<PAGE>
(c) Each and every right granted to the Bank hereunder or under any other
document delivered hereunder or in connection herewith, or allowed it by law or
equity, shall be cumulative and may be exercised from time to time. No failure
on the part of the Bank or the holder of this Note to exercise, and no delay in
exercising, any right shall operate as a waiver thereof, nor shall any single or
partial exercise of any right preclude any other or future exercise thereof or
the exercise of any other right;
(d) In the event that this Note is placed in the hands of an attorney for
collection by reason of any default hereunder, the Borrower agrees to pay
reasonable attorney's fees so incurred. The Borrower promises to pay all
expenses of any nature as soon as incurred whether in or out of court and
whether incurred before or after this Note shall become due at its maturity date
or otherwise and costs which the Bank may deem necessary or proper in connection
with the satisfaction of the indebtedness or the administration, supervision,
preservation, protection (including but not limited to maintenance of adequate
insurance) of or the realization upon the collateral;
(e) The Borrower hereby waives presentment, demand for payment, protest,
notice of protest, notice of dishonor, and any or all other notices or demands
except as otherwise expressly provided for herein;
(f) All accounting terms not otherwise defined in this Note shall have the
meanings ascribed thereto under generally accepted accounting principles;
(g) Delay or failure of the Bank to exercise any of its rights under this
Note shall not be deemed a waiver thereof. No waiver of any condition or
requirement shall operate as a waiver of any other or subsequent condition or
requirement. The Bank or any other holder of this Note need not present it
before requiring payment. The Borrower waives trial by jury, offset, and
counterclaim with respect to any action arising out of or relating to this Note.
This Note may not be modified or terminated orally. This Note shall be governed
by the laws of the State of New York without regard to its conflicts of laws
rules. The Borrower irrevocably consents to the jurisdiction and venue of the
New York State Supreme Court, Suffolk County in any action concerning this Note.
This Note is binding upon the Borrower, its heirs, successors and assigns;
(h) The Borrower expressly warrants and represents that no statements,
agreements or representations, whether oral or written, have been made by the
Bank, or by any employee, agent or broker of the Bank with respect to the
obligation or debt evidenced by this Note. The Borrower further expressly
warrants and represents that (i) no oral commitment has been made by the Bank to
extend or continue any credit to the Borrower or any party other than as
expressly stated herein or in those certain documents executed in connection
herewith, (ii) no representation or agreement has been made by or with the Bank,
or any employee, agent or broker of the Bank, to forebear or refrain in any way
from exercising any right or remedy in its favor hereunder or otherwise unless
expressly set forth herein, and (iii) the Borrower and Guarantors have not and
will not rely on any commitment to extend or continue any credit, nor on any
agreement to forebear or refrain from exercising rights
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<PAGE>
or remedies unless such commitment or agreement shall be in writing and duly
executed by an authorized of officer of the Bank.
NOTICES: All notices, requests and other communications pursuant to this Note
shall be in writing, either by letter (delivered by hand or sent by certified
mail, return receipt requested) or telegram, addressed as follows:
(a) if to the Borrower:
American Medical Alert Corp.
3265 Lawson Boulevard
Oceanside, New York 11572
Attention: Howard M. Siegel, President
(b) if to the Bank:
North Fork Bank
275 Broad Hollow Road
Melville, New York 11747
Attention: Bruce A. Salmon
Vice President
Any notice, request or communication hereunder shall be deemed to have been
given when deposited in the mails, postage prepaid, or in the case of
telegraphic notice, when delivered to the telegraph company, addressed as
aforesaid. Any party may change the person or address to whom or which the
notice are to be given hereunder, but any such notice shall be effective only
when actually received by the party to whom it is addressed.
IN WITNESS WHEREOF, the Borrower has signed this Note as of the 1st day of
December , 1995.
AMERICAN MEDICAL ALERT CORP.
By: /s/ Howard M. Siegel
--------------------
Howard M. Siegel, President
STATE OF NEW YORK )
COUNTY OF NASSAU )
On this 1st day of December, 1995 before me personally came Howard M. Siegel, to
me known, who, being by me duly sworn, did depose and say that he has an address
at c/o AMERICAN MEDICAL
-11-
<PAGE>
ALERT CORP., 3265 Lawson Boulevard, Oceanside, New York 11572, that he is the
President of AMERICAN MEDICAL ALERT CORP., the corporation described in, and
which executed, the foregoing instrument; and that he signed his name thereto by
order of the Board of Directors of said corporation.
GABRIEL E. MERLE
/s/ Gabriel E. Merle
- -------------------- Notary Public, State of New York
Notary Public No. 30-4745569 - Nassau County
Commission Expires January 31, 1996
-12-
EXHIBIT 10 (n)
--------------
[NORTH FORK BANK LETTERHEAD]
March 27, 1997
Mr. Howard Siegel
President
American Medical Alert Corp.
3265 Lawson Boulevard
Oceanside, NY 11572-3723
Dear Mr. Siegel:
We are pleased to confirm for you that North Fork Bank has re-approved for your
company's use a $1,500,000, secured, Revolving Line of Credit.
It is our understanding that borrowings under this facility will be used for
general working capital needs and are secured by a blanket lien on corporate
assets and will bear interest at North Fork Bank's Prime plus 3/4%. The facility
will expire on April 30, 1998.
Advances under this facility are subject to a monthly borrowing base as follows:
75% on receivables aged less than 90 days, 25% on total inventory capped at
$400,000.
Among other terms and conditions of this facility, as contained in the note and
security agreement, all advances are subject to the continued satisfactory
operations and financial condition of American Medical Alert Corp. as determined
by the Bank in its sole discretion.
We trust this information will be satisfactory to you and look forward to a
continued relationship with you and your company.
Very truly yours,
/s/ Linda G. Orth
Linda G. Orth
Assistant Vice President
cc: Bruce A. Salmon
Vice President
EXHIBIT 10 (o)
--------------
March 27, 1997
Corey M. Aronin
Chief Financial Officer
American Medical Alert Corporation
3265 Lawson Boulevard
Oceanside, New York 11572
Dear Mr. Aronin:
Please be advised that the Home Care Services Program is currently
processing the renewal of the contact for the provision of the Personal
Emergency Response Services (PERS) with provider, American Medical Alert
Corporation of Oceanside, New York.
This renewal agreement will extend the current contract through
February 28, 1998.
If you have any questions, please contact me at (212) 835-7246.
Sincerely,
/s/ Rockie Ojomo-Kayoes
-----------------------
Rockie Ojomo-Kayoes
PERS Project Manager
<PAGE>
RENEWAL OF AGREEMENT FOR PROVIDING
HOME CARE SERVICES (PERS)
THIS RENEWAL AGREEMENT, dated as of this 27 day of May, 1994 between
the City of New York acting through the Department of Social Services of the
Human Resources Administration ("Department"), located at 250 Church Street, New
York, New York 10013 and American Medical Alert Corp. ("Contractor") with
offices at 3265 Lawson Boulevard, Oceanside, New York 11572.
W I T N E S S E T H :
---------------------
WHEREAS, the Department, pursuant to Section 367-g of the Social
Services Law ("SSL") and the New York State Department of Social Services
Regulations at Section 505.33 of Title 18 NYCRR, may authorize personal
emergency response services ("PERS") to be provided to Medical Assistance ("MA")
recipients whom the Department has determined eligible to receive these
services; and
WHEREAS, the parties hereto entered into an Agreement for the period
from July 1, 1991 through June 30, 1994 to which the Contractor provided PERS;
and
WHEREAS, the contract was subsequently modified to give the
Department the option to renew the Agreement upon the terms and conditions
contained herein; and
WHEREAS, the contract was further modified by having the Contractor
provide a remote door release in order to expand PERS and include bedridden home
care clients; and
WHEREAS, the contract was further modified to include new language
reflecting the new directives and policies issued by the New York State
Department of Social Services; and
WHEREAS, the Department desire to exercise its option to renew the
Agreement for the periods from July 1, 1994 through June 30, 1995; July 1, 1995
through June 30, 1996; and from July 1, 1996 through June 30, 1997; and
WHEREAS, the Contractor has the necessary expertise and experience to
continue to provide the required services; and
WHEREAS, the Department has requested that the Contractor continue to
provide such services and the Contractor has agreed to do so.
NOW, THEREFORE, the parties hereto agree a follows:
1. Except as modified herein all the terms and conditions of the
Agreement shall remain in full force and effect.
<PAGE>
2. Pursuant to Part I, Article I of the Agreement, the Department hereby
exercises its option to renew and hereby renews the Agreement for the
periods July 1, 1994 through June 30, 1995; July 1, 1995 through June
30, 1996; and from July 1, 1996 through June 30, 1997 unless sooner
terminated pursuant to the terms of the Agreement.
3. Article VI (A) of Part I of the Agreement is hereby revised to read
as follows:
1. Total payments to be made to the Contractor shall not
exceed $560,000 for one year.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the date first above written.
CITY OF NEW YORK
DEPARTMENT OF SOCIAL SERVICES
HUMAN RESOURCES ADMINISTRATION
COMMISSIONER
By /s/ David Lopez
------------------------------
Corporate Contractor
Affix Corporate Seal: AMERICAN MEDICAL ALERT CORP.
---------------------------------
CONTRACTOR
By /s/ Howard M. Siegel
------------------------------
Title PRESIDENT
---------------------------
11 25 71 221
---------------------------------
Fed. Employer I.D. No. or Soc. Sec. No.
Approval as to form and certification as to legal authority was
granted by the Corporation Counsel on: _____________________________.
-2-
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this 27th day of May 1994, before me personally came David Lopez, to me known
and known to me to be Executive Deputy Administrator of the HUMAN RESOURCES
ADMINISTRATION DEPARTMENT OF SOCIAL SERVICES of the CITY OF NEW YORK, the person
described in and who executed the foregoing instrument, and he acknowledged to
me that he executed the same for the purpose therein mentioned.
/s/ Janet Smith
------------------------
NOTARY PUBLIC
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this 26th day of May 1994, before me personally came Howard M. Siegel, to me
known to be the individual described in and who executed the foregoing
instrument, acknowledged that he executed the same.
/s/ Janet Smith
------------------------
NOTARY PUBLIC
-3-
<PAGE>
THIS LEASE AGREEMENT dated this 18 day of July, 1991, between the
Department of Social Services of the Human Resources Administration
("Department") with offices at 250 Church Street, New York, New York 10013 and
American Medical Alert Corp. ("Contractor") with offices at 3265 Lawson
Boulevard, Oceanside, New York 11572.
W I T N E S S E T H:
WHEREAS, the Department's Home Care Services Program ("HCSF")
provides a program of personal home care service for individuals eligible for
such services, pursuant to applicable Federal and State laws and regulations;
and
WHEREAS, a significant number of the individuals served by HCSP
require regular custodial care; and
WHEREAS, in order to reduce the costs of such custodial care
service, HCSP instituted a program designed to allow home care service clients,
living alone, to call for assistance, via an electronic call service; and
WHEREAS, the Contractor markets an electronic call device ("ECD")
known as the Voice of Help System.
WHEREAS, the Department desires to lease the Voice of Help System
and the Contractor agrees to lease said System.
NOW THEREFORE, the parties hereto agree as follows:
PART I
------
ARTICLE I
TERM OF AGREEMENT
The term of this Agreement shall be from July 1, 1991 to June 30,
1994 unless sooner terminated pursuant to the terms hereof.
ARTICLE II
DEFINITIONS
A. Voice of Help System" ("VHS") - the Contractors upgraded
electronic call service system, which consists of the Voice of Help console,
with provisions for remote activator, panic button at primary entrance,
activator counted in bathroom and smoke detector (the "Upgraded System").
<PAGE>
B. Emergency Response Center ("ERC") - the Contractor's central
facilities for storing and retrieving client data and for responding to all
ECDS.
C. Client - the individual selected by the Department to receive the
equipment and services described herein.
ARTICLE III
EQUIPMENT
A. The Department agrees to lease from the Contractor and the
Contractor agrees to lease to the Department as many VHS's as may be required by
the Department.
B. The Contractor shall be responsible for installing the VHS at the
client's premises. Installation shall consist of all work that may be required
to utilize a Client's existing telephone system. In no event shall the
Contractor be responsible to perform such work that is required to be performed
by the New York Telephone Company. If an installation cannot be completed, the
Contractor shall immediately notify the Department contact, indicating why said
installation cannot be completed.
C. The Client shall be responsible for ensuring that the Contractor
is provided:
a) proper telephone equipment which enables Contractor to
install an RJ31X connector in the Client's residence.
b) properly functioning telephone service.
c) twenty-four (24) hour, AC 110 volt circuit as required to
power the Voice of Help Unit console.
D. At the option of the Department, the Contractor shall install a
VHS, at no cost to the Department, at a location to be selected by the
Department for purposes of monitoring the Contractor's services.
E. The parties agree that the VHS's previously installed under
earlier lease agreements with the Contractor and any renewals thereof shall
remain in place, unless removal and/or replacement of a System is requested by
the Department, and shall be subject to the terms and conditions herein.
2
<PAGE>
ARTICLE IV
SERVICES
The Contractor shall be responsible for the following services:
1. Install a VHS in a client's residence within seven (7) working
days of telephone notification by authorized HCSP staff.
a. The Contractor shall provide all parts and equipment
necessary for installing the VHS into a functioning telephone system.
b. The Contractor shall instruct the client in the use and
maintenance of the VHS ard shall provide the client with simple written
instructions, including how to report a malfunction of the unit.
c. The Contractor shall forward to HCSP within (5) five
working days of such installation, a form signed by a Contractor representative
or employee are by the client or client's representative confirming the date of
the installation and the client's understanding of the use and maintenance of
the unit.
2. Maintain all installed VHS units in proper working order.
a. The Contractor shall repair or replace with a VHS within
24 hours of notification any unit in place and installed under this Agreement
that is not functioning properly.
b. The Contractor shall notify HCSP immediately upon
repairing or replacing a malfunctioning unit.
3. Monitor each VHS at least once every 24 hours to insure that the
device is operating properly. The Contractor shall follow up immediately or any
unit is not operating properly. Malfunctioning Equipment shall be repaired, or
replaced within 24 hours of the Contractor's becoming aware of the malfunction.
4. Maintain a 24-hour emergency response center staffed with trained
emergency response operators.
a. The Contractor shall establish and maintain a 24-hour
monitoring center for all installed VHS's.
b. The Contractor shall insure 24-hour staffing of the
emergency response center with trained operators.
3
<PAGE>
5. Respond immediately to any and all signals from clients' VHS's
and maintain appropriate contact until termination of the emergency situation.
a. The Contractor, immediately upon receiving a signal from
a client's VHS, shall retrieve the client's automated data records and contact
the client or the client's representative, or take other emergency action as
prescribed in the client's record.
b. The emergency response operator shall monitor the
provision of emergency service to verify that it has been provided and that the
emergency situation no longer exists at the client's residence.
c. The Contractor shall notify HCSP by telephone, or the
working day following the emergency, of the nature and resolution of the
emergency. The Contractor shall submit to HCSP a written summary of the
emergency within five (5) working days of the incident.
6. Insure continuous monitoring and response capabilities during
power failures, mechanical malfunction or other emergencies.
7. Create, maintain and protect automated client data records.
a. The Contractor shall operate an automated client data
storage and retrieval system which shall include all pertinent client
information.
b. Contractor shall notify the client to update client data
every six (6) months by sending to each client by October 1 and April 1 a notice
to update the clients information and shall perform such update immediately upon
receipt of such data. The Department shall be notified of all such updates
within seven (7) working days of the Contractor's report of such data.
c. The Contractor shall protect client records from
alteration or destruction, and shall protect the confidentiality of client
records.
8. Maintain written records of all emergency response system (ERS)
activities, including all activations of VHS's.
9. Devise and provide all client data, activity, and billing forms.
10. Submit detailed monthly billings within ten (10) working days of
the end of the month.
11. Remove the VHS from a client's residence within seven (7)
working days of telephone notification by authorized HCSP staff.
4
<PAGE>
a. The Contractor shall, upon instruction by HCSP, arrange
with the client or client's representative for a mutually convenient appointment
within five (5) working days.
b. The Contractor shall verify to HCSP by telephone and in
writing that the unit has been removed.
12. The Contractor will provide a full time installer/service person
to provide service for the HCSP/ECD clients at no additional cost to the
Department.
13. All equipment installed by the Contractor shall have an adhesive
label affixed to it displaying as follows:
"-warning do not discard- Property of American Medical Alert Corp.
3265 Larsen Blvd., Oceanside, New York 11572 (Call 1-800-632-6729)"
All equipment not so identified shall not be reimbursable to
Contractor if deemed unrecoverable.
ARTICLE V
DEPRECIATION AND RECOVERY OF EQUIPMENT
A. Each "VHS" which shall be or shall have been, installed shall be
ascribed a certain agreed value, by unit (console) and component parts in
accordance with the schedule of values as shown in Subsection 1 below, which
values shall be used for the purposes of establishing depreciated values as
described in Subsection 2 below.
1. a) Central unit (console)................... $395.00
b) Activators (3) each at................... $ 45.00
c) Smoke detector........................... $ 60.00
2. In the event, despite the good faith efforts of both the
Department and the Contractor, the above mentioned unit and/or its respective
component part is (are) not recoverable from the client, the Contractor, with
the consent of the Department, shall be entitled to recover the depreciated
value of such unit and/or component part. For the purposes of establishing such
depreciated value the central unit (console) shall be depreciated at the rate of
$9.00 per month; the activators shall be depreciated at the rate of $1.00 per
month each; and the smoke detector shall be depreciated at the rate of $1.33 per
month.
5
<PAGE>
ARTICLE VI
CHARGES AND TERMS OF PAYMENT
A. Notwithstanding any other provision to this Lease Agreement,
total payments to be made to the Contractor shall not exceed $1,564,000.00.
B. The Department agrees to pay the following fees and charges for
the equipment and services provided by the Contractor herein.
1. A one time fee of $50 for the installation of each VHS
unit and a fee of $25.00 for the removal of each VHS unit.
2. For each VHS unit, a monthly monitoring/leasing fee of
$30.00 per client; and for those units which have been in place for more than 24
months/a monthly monitoring/leasing fee of $25.00.
3. Billing for a partial month, irrespective of the number
of days of service provided during any such partial month shall be in the sum of
$15.00.
C. The Contractor shall submit monthly statements to the Department
setting forth the monthly rental and installation charges, if any, and the name
and address of each client, for the month which payment is being requested.
D. The Contractor and the Department shall jointly review, at such
time or times as the Department deems necessary but not less than once during
each fiscal year, the amount of payments made pursuant to this Agreement to
determine the appropriateness of each fiscal year's budget in light of any
program increases/reductions, operating cost increases/reductions and wage and
salary increases/decreases. The Department, in its sole discretion, may then
modify the Agreement in accordance with its determination, subject to all the
appropriate approvals and the Procurement Policy Board Rules.
E. As the period of performance contemplated by this Agreement
involves performance by the Contractor in a subsequent City Fiscal Year(s),
funding for such period is subject to the appropriation of funds for such
subsequent City Fiscal Year(s) and the availability thereof.
F. REDUCTION OF FEDERAL OR STATE FUNDING
1. The Contractor, acknowledging that this Agreement is
funded in whole or in part by funds secured from the Federal Government, or New
York State Government, or New York City Government, agrees that should there be
a reduction or discontinuance of such funds by action of the Federal or New York
State Government, or New York City Government, the
6
<PAGE>
City of New York and the Department shall have, in their sole discretion, the
right to terminate this Agreement in whole or in part, or to reduce the funding
and level of services of this Agreement caused by such action by the Federal,
State, or City Governments, including, in the case of the reduction option, but
not limited to, the reduction or elimination of programs, services or service
components; the reduction or elimination of contract-reimbursable staff or
staff-hours, are the corresponding reductions in the Agreement budget and in the
total amount payable under the Agreement.
2. In the case of the termination option referred to in
subdivision 1, above, any such termination shall take effect immediately upon
written notice thereof to the Contractor. In the case of the reduction option
referred to in subdivision 1, above, any such reduction shall be effective as of
the date set forth in a written notice thereof to the Contractor, which shall be
not less than thirty (30) calendar days from the date of such notice. Prior to
sending such notice of reduction, the Department shall advise the Contractor
that such option is being exercised and affording the Contractor an opportunity
to make within seven (7) calendar days any suggestion(s) it may have as to which
program(s), service(s), service component(s), staff or staff-hours might be
reduced or eliminated, PROVIDED, HOWEVER, that the Contractor expressly
understands and agrees that the Department shall not be bound to utilize any of
the Contractor's suggestions and that the Department shall have sole and
exclusive discretion to decide how to effectuate the reductions.
3. The termination and reduction options of the Department
and City set forth in subdivisions 1 and 2, above, are independent and separate
rights in addition to any other rights of termination or modification provided
by this Agreement, by law or by relevant regulation, and supersede any and all
rights or actions the Contractor may have under any provision of this Agreement
to the contrary.
ARTICLE VII
LIQUIDATED DAMAGES
A. If the Contractor is not able to:
(i) respond to a Client's or the Department's request for
maintenance and service within 24 hours following
receipt of such notification or
(ii) get the VHS operating or supply a properly functioning
VHS within 24 hours following receipt of said
notification.
B. The Contractor at the discretion of the Department shall pay to
the Department, or at its option, the Department may deduct from any payment due
or to become due to the Contractor, the monthly charge for the VHS, as fixed and
agreed liquidated damages are not as a penalty.
7
<PAGE>
C. If there are interruptions in the monitoring services provided by
the Contractor pursuant to Article IV of Part I of this Lease Agreement,
totaling 24 hours or more during a monthly billing period that are not the
result of an improper, faulty or non-operational phone system, the Contractor at
the discretion of the Department, shall pay to the Department, or at its option,
the Department may deduct from any payment due or to become due to the
Contractor, the monthly charge under this Lease Agreement for the month said
interruptions occurred as fixed and agreed liquidated damages and not as a
penalty.
ARTICLE VIII
MOST FAVORED CUSTOMER
The Contractor warrants and represents that the prices, warranties,
benefits and terms set forth herein are at least equal to or more favorable to
the City than the prices, warranties, benefits, are terms now charged or offered
by the Contractor to other customers under similar circumstances and terms and
conditions, or that may be charged or offered during the term hereof for the
same or substantially similar products or services defined in this Agreement. If
at any time during the term hereof, the Contractor enters into an agreement or a
basis that provides prices, warranties, benefits, or terms more favorable than
those provided the City hereunder, then the Contractor shall within thirty (30)
calendar days thereafter notify the City of such facts, and regardless of
whether such notice is sent by the Contractor or received by the City, this
Agreement shall be deemed to be amended, effective retroactively to the
effective date of the more favorable agreement, to provide the same prices,
warranties, benefits, or terms to the City; provided that the City shall have
the right and option at any time to decline, to accept any such change, in which
event such amendment shall be deemed null and void. If the Contractor is of the
opinion that an apparently more favorable price, warranty, benefit or term
charged or offered a customer during the term hereof is not in fact more
favorable treatment, the Contractor shall promptly notify the Commissioner in
writing setting forth in detail reasons that it believes said apparently more
favorable treatment is in fact not more favorable treatment. The Commissioner,
after due consideration of such written explanation, may decline to accept such
explanation and thereupon this Agreement shall be deemed to be automatically
amended effective retroactively to the effective date of the more favorable
agreement, to provide the same prices, warranties, benefits, and/or terms to the
City.
ARTICLE IX
INDIVIDUAL FILES
The Contractor will keep separate files and records for each
recipient of the services so that they may be readily identifiable from those
relating to other activities of the Contractor. In
8
<PAGE>
addition to information normally kept by the Contractor in individual files,
such as basic information about the individual, describing and recording each
use of the services by the individual, and the individual's progress, the
Contractor will include such other information in individual files as the
Department shall request.
9
<PAGE>
PART II: GENERAL PROVISIONS
---------------------------
ARTICLE I
DEFINITIONS
As used throughout this Agreement, the following terms shall have
the meaning set forth below:
a. "City" shall mean the City of New York, its departments
and political subdivisions.
b. "Comptroller" shall mean the Comptroller of the City of
New York.
c. "Department" shall mean the Department of Social
Services of the Human Resources Administration including its constituent
agencies, departments, bureaus and their subdivisions.
d. "Administrator" or "Commissioner" or "Agency Head" shall
mean the Administrator of the Human Resources Administration/Commissioner of the
Department of Social Services or his duly authorized representative. The term
"duly authorized representative" shall include any person or persons acting
within the limits of his authority.
e. "Law" or "Laws" shall include but not be limited to the
New York City Charger, the New York City Administrative Code, a Local Law of the
City of New York, and any ordinance, rule or regulation having the force of law.
f. When referring to the Contractor, the pronoun "it",
shall also mean he or she, and the adjective "its" shall also mean his or her,
as the case may be.
g. "Agency Chief Contracting Officer" shall mean the
position delegated authority by the Agency Head to organize and supervise the
procurement activity of subordinate agency staff in conjunction with the City
Chief Procurement Officer.
ARTICLE II
INSURANCE
2.1 The Contractor shall carry paid up insurance in the sum of not
less than One Million ($1,000,000) Dollars per occurrence to protect the
Department and the City of New York, as their interests may appear, against any
and all claims, loss or damage, whether in
10
<PAGE>
contract or tort, including claims for injuries to, or death of persons, or
damage to property whether such injuries, death or damages be attributable to
the negligence or any other acts of the Contractor, its employees, or otherwise.
Such policy or policies of insurance shall be obtained from a company, or
companies, duly licensed to do business in the State of New York and shall name
the Department and the City of New York as additional parties insured
thereunder, and shall provide that in the event of cancellation thereof the
Department shall be notified at least fifteen (15) days in advance thereof. Two
(2) executed copies of all insurance policies shall be delivered to the
Department for approval as to form prior to the effective date of this
Agreement.
2.2 WORKER'S COMPENSATION AND DISABILITY BENEFITS. If this Agreement
be of such a character that the employees engaged thereon are required to be
insured by the provisions of Chapter 615 of the Laws of 1922, known as the
"Worker's Compensation Law" and acts amendatory thereto, the Agreement shall be
void and of no effect or less the Contractor shall secure compensation for the
benefit of, and keep insured during the life of this Agreement such employees in
compliance with the provisions of said law, inclusive of Disability Benefits;
and, shall furnish the Department with two (2) certificates of these insurance
coverages.
2.3 UNEMPLOYMENT INSURANCE. Unemployment Insurance coverage shall be
obtained and provided by the Contractor of its employees.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 PROCUREMENT OF AGREEMENT.
A. The Contractor represents and warrants that no person or selling
agency has been employed or retained to elicit or secure this Agreement upon an
agreement or understanding for a commission, percentage, brokerage fee,
contingent fee or any other compensation. The Contractor further represents and
warrants that no [payment], gift or thing of value has been made, given or
promised to obtain this or any other agreement between the parties. The
Contractor makes such representations and warranties to induce the City to enter
into this Agreement and the City relies upon such representations and warranties
in the execution hereof.
B. For a breach or violation of such representations or warranties,
the Administrator shall have the right to annul this Agreement without
liability, entitling the City to recover all monies paid hereunder and the
Contractor shall not make claim for, or be entitled to recover, any sum or sums
due under this Agreement. This remedy, if effected, shall not constitute the
sole remedy afforded the City for the falsity or breach, nor shall it constitute
a waiver of the City's right to claim damages or refuse payment or to take any
other action provided for by law or pursuant to this Agreement.
11
<PAGE>
3.2 CONFLICT OF INTEREST
A. The Contractor represents and warrants that neither it nor any of
its directors, officers, members, partners or employees, has any interest nor
shall they acquire any interest, directly or indirectly, which would or may
conflict in any manner or degree with the performance or rendering of the
services herein provided. The Contractor further represents and warranties that
in the performance of this Agreement no person having such interest or possible
interest shall be employed by it. An elected official or other officer or
employee of the city or Department, nor any person whose salary is payable, in
whole or in part, from the City Treasury, shall participate in any decision
relating to this Agreement which affects his personal interest or the interest
of any corporation, partnership or association in which he is, directly or
indirectly, interested nor shall any such person have any interest, direct or
indirect, in this Agreement or in the proceeds thereof.
B. The names addresses of the members of the Board of Directors of
the Contractor shall be delivered to the Department upon execution of this
Agreement. Any changes in the makeup of the Board shall be reported to the
Department within 10 working days of such change.
C. The Contractor's employees and members of their immediate
families may not serve on:
1. The Board of Directors of the Contractor, or
2. Any committee with authority to order personnel actions
affecting his or her job, or which, either by rule or by practice, regularly
nominates, recommends or screens candidates for employment in the program.
3.3 FAIR PRACTICES
The Contractor and each person signing on behalf of any Contractor
represents and warrants and certifies, under penalty of perjury, that to the
best of its knowledge and belief:
A. The prices in this Agreement have been arrived at independently
without collusion, consultation, communication, or agreement, for the purpose of
restricting competition, as to any matter relating to such prices with any other
bidder or with any competitor;
B. Unless otherwise required by law, the prices which have been
quoted in this Agreement and or the proposal submitted by the Contractor have
not been knowingly disclosed by the Contractor prior to the proposal opening,
directly or indirectly, to any other bidder or to any competitor; and
C. No attempt has been made or will be made by the Contractor to
induce any other person, partnership or corporation to submit or not to submit a
proposal for the purpose of restricting competition.
12
<PAGE>
The fact that the Contractor (a) as published price lists, rates, or
tariffs covering items being procured, (b) has informed prospective customers of
proposed or pending publication of new or revised price lists for such items, or
(c) has sold the same items to other customers at the same prices being bid,
does not constitute, without more, a disclosure within the meaning of the above.
3.4 AFFIRMATION OF RESPONSIBILITY AND PAID TAXES
The Contractor affirms and declares that said Contractor is not in
arrears to the City of New York upon any debt, contract or taxes and is not a
defaulter, as a surety or otherwise, upon any obligation to the City of New
York, and has not been declared not responsible, or disqualified, by any agency
of the City of New York, nor is there any proceeding pending relating to the
responsibility or qualification of the Contractor to receive public contracts
except as otherwise stated in the affirmation pertaining to the foregoing which
has been furnished to the Department.
ARTICLE IV
AUDIT BY THE DEPARTMENT AND CITY
4.1 All vouchers or invoices presented for payment to be made
hereunder, and the books, records and accounts upon which said vouchers or
invoices are based are subject to audit by the Department and by the Comptroller
of the City of New York pursuant to the powers and responsibilities as conferred
upon said Department and said Comptroller by the New York City Charter and the
Administrative Code of the City of New York, as well as all orders and
regulations promulgated pursuant thereto.
4.2 The Contractor shall submit any and all documentation and
justification in support of expenditures or fees under this Agreement as may be
required by said Department and said Comptroller so that they may evaluate the
reasonableness of the charges and shall make its records available to the
Department and to the Comptroller as they consider necessary.
4.3 To the extent that the Contractor receives as payment hereunder
the amount of $25,000 or more the source of which is derived from federal
funding, the Contractor shall be subject to any agency wide audit at least
annually, but not less frequently than every two years. Such audit shall be in
accordance with the directive of the Comptroller of the City of New York and/or
the Human Resources Administration, are Federal Office of Management and Budget
Circular A-133, "Audits of Institutions of Higher Education and other Nonprofit
Organizations."
4.4 All books, vouchers, records, reports, cancelled checks and any
and all similar material related to this contract and the work thereunder may be
subject to periodic inspection,
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review and audit by the State of New York, Federal Government and other persons
only authorized by the City including the Department's Office of the Inspector
General. Such audit may include examination and review of the source and
application of all funds whether from the City, any State, the Federal
Government, private sources or otherwise.
4.5 The Contractor shall not be entitled to final payment under the
Agreement until all requirements have been satisfactorily met.
ARTICLE V
COVENANTS OF THE CONTRACTOR
5.1 EMPLOYEES. 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 City nor under contract to the City 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 city for the acts, omissions,
liabilities or obligations of the Contractor or any 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, worker's compensation, disability benefits and social
security.
5.2 LIABILITY
A. The Contractor shall be solely responsible for all physical
injuries or death to its agents, servants, or employees or to any other person
and for all damage to any property sustained during its operations and work
under this Agreement resulting from any act of commission or omission or error
in judgment of any of its officers, trustees, employees, agents, servants, or
independent contractors, and shall hold harmless and indemnify the City from
liability upon any and all claims for damages on account of such injuries or
death to any such person or damages to property or account of any neglect, fault
or default of the Contractor, its officers, trustees, employees, agents,
servants, or independent contractors. The Contractor shall be solely responsible
for the safety and protection of all of its employees whether due to the
negligence, fault or default of the Contractor or not.
B. In the event that any claim is made or any action is brought
against the City arising out of negligent or careless acts of an employee of the
Contractor, either within or without the scope of his employment, or arising out
of Contractor's negligent performance of this Agreement, then the City shall
have the right to withhold further payments hereunder for the purpose of set-off
in sufficient sums to cover the said claim or action. The rights and remedies of
the City provided for in this clause shall not be exclusive and are in addition
to any other rights and remedies provided by law or this Agreement.
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5.3 MINIMUM WAGE. Except for those employees whose minimum wage is
required to be fixed pursuant to Section 220 of the Labor Law of the State of
New York, all persons employed by the Contractor in the performance of this
Agreement shall be paid, without subsequent deduction or rebate, unless
expressly authorized by law, nor less than the minimum wage as prescribed by
law. Any breach or violation of the foregoing shall be deemed a breach or
violation of a material provision of this Agreement.
5.4 INDEPENDENT CONTRACTOR STATUS. The Contractor and the Department
agree that the Contractor is an independent contractor, and not an employee of
the Department or the City of New York, and that in accordance with such status
as independent Contractor covenants and agrees that neither it nor its employees
or agents will hold themselves out as, nor claim to be, officers or employees of
the City of New York, or of any department, agency or unit thereof, by reason
hereof, and that they 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 City of New York, including, but not limited to, Worker's
Compensation coverage, Unemployment Insurance Benefits, Social Security coverage
or employee retirement membership or credit.
5.5 CONFIDENTIALITY
A. All information obtained, learned, developed or filed by the
Contractor in connection with public assistance recipients or their relatives or
in connection with other recipients of services, including data contained in
official Department files or records, shall be held confidential by the
Contractor pursuant to the provisions of the Social Services Law of the State of
New York, the Federal Social Security Act, and any applicable regulations
promulgated thereunder and shall not be disclosed by the Contractor to any
person, organization, agency or other entity except as authorized or required by
law.
B. All of the reports, information or data, furnished to or
prepared, assembled or used by the Contractor under this Agreement are to be
held confidential, and the Contractor agrees that the same shall not be made
available to any individual organization without the prior written approval of
the Department.
C. The provisions of this Section shall remain in full force and
effect following termination of, or cessation of the services rendered by, this
Agreement.
5.6 BOOKS AND RECORDS. The Contractor agrees to maintain separate
and accurate books, records, documents and other evidence of accounting
procedures and practices which sufficiently and properly reflect all direct and
indirect costs of any nature expenses in the performance of this Agreement. Such
records shall be subject to review, audit and inspection by City, State and
Federal personnel, including the Department's Office of the Inspector General.
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5.7 RETENTION OF RECORDS. The Contractor agrees to retain all books,
records, and other documents relevant to this Agreement for six years after the
final payment or termination of this Agreement, whichever is later. City, State
and Federal auditors and any other persons duly authorized by the Department
shall have full access to and the right to examine any of said materials during
said period.
5.8 COMPLIANCE WITH LAW. Contractor shall render all services under
this Agreement in accordance with the applicable provisions of Federal, State
and local laws, rules and regulations as are in effect at the time such services
are rendered.
5.9 FEDERAL EMPLOYMENT FACILITIES. The Contractor and its
subcontractors shall comply with the Civil Rights Act of 1964 and any amendment
thereto, and the rules and regulations promulgated thereunder.
5.10 NON-DISCRIMINATION AGAINST THE HANDICAPPED. The Contractor
agrees that it will comply with the provisions of Section 504 of the
Rehabilitation Act of 1973, as amended, and all regulations, guidelines and
interpretations issued pursuant thereto.
5.11 INVESTIGATION
A. The parties to this Agreement agree to cooperate fully and
faithfully with any investigation, audit or inquiry conducted by a State of New
York (State) or City of New York (City) governmental agency or authority that is
empowered directly or by designation to compel the attendance of witnesses and
to examine witnesses under oath, or conducted by the Inspector General of a
governmental agency that is a party in interest to the transaction, submitted
bid, submitted proposal, contract, lease, permit, or license that is the subject
of the investigation, audit or inquiry.
B. 1. If any person who has been advised that his or her
statement, and any information from such statement, will not be used against him
or her in any subsequent criminal proceedings refuses to testify before a grand
jury or other governmental agency or authority empowered directly or by
designation to compel the attendance of witnesses and to examine witnesses under
oath concerning the award of or performance under any transaction, agreement,
lease, permit, contract, or license entered into with the City, the State, or
any political subdivision or public authority thereof, or the Port Authority of
New York and New Jersey, or any local development corporation within the City,
or any public benefit corporation organized under the laws of the State of New
York, or;
2. If any person refuses to testify for a reason other than
the assertion of his or her privilege against self incrimination in an
investigation, audit or inquiry conducted by a City or State governmental agency
or authority empowered directly or by designation to compel the attendance of
witnesses and to take testimony under oath, or by the Inspector General of the
governmental agency that is a party in interest in, and is seeking testimony
concerning the award
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of, or performance under, any transaction, agreement, lease, permit, contract,
or license entered into with the City, the State, or any political subdivision
thereof or any local development corporation within the City, then;
C. 1. The commissioner or agency head whose agency is a party
in interest to the transaction, submitted bid, submitted proposal, contract,
lease, permit, or license shall convene a hearing, upon not less than five (5)
days written notice to the parties involved to determine if any penalties should
attach for the failure of a person to testify.
2. If any non-governmental party to the hearing requests an
adjournment, the commissioner or agency head who covered the hearing may, upon
granting the adjournment, suspend any contract, lease, permit, or license
pending the final determination pursuant to paragraph E, below, without the City
incurring any penalty or damages for delay or otherwise.
D. The penalties which may attach after a final determination by the
commissioner or agency head may include but shall not exceed:
1. The disqualification for a period not to exceed five (5)
years from the date of an adverse determination for any person, or any entity of
which such person was a member at the time the testimony was sought, from
submitting bios for, or transacting business with, or entering into or obtaining
any contract, lease, permit or license with or from the City; and/or
2. The cancellation or termination of any and all such
existing City contracts, leases, permits or licenses that the refusal to testify
concerns and that have not been assigned as permitted under this Agreement, nor
the proceeds of which pledged, to an unaffiliated and unrelated institutional
lender for fair value prior to the issuance of the notice scheduling the
hearing, without the City incurring any penalty or damages on account of such
cancellation or termination; monies lawfully due for goods delivered, work done,
rentals, or fees accrued prior to the cancellation or termination shall be paid
by the City.
E. The commissioner or agency head shall consider and address in
reaching his or her determination and in assessing an appropriate penalty, the
factors in paragraphs 1 and 2, below. He or she may also consider, if relevant
and appropriate, the criteria established in paragraphs 3 and 4, below, in
addition to any other information which may be relevant and appropriate;
1. The party's good faith endeavors or lack thereof to
cooperate fully and faithfully with any governmental investigation or audit,
including but not limited to the discipline, discharge, or disassociation of any
person failing to testify, the production of accurate and complete books and
records, and the forthcoming testimony of all other members, agents, assignees
or fiduciaries whose testimony is sought.
2. The relationship of the person who refused to testify to
any entity that is a party to the hearing, including, but not limited to,
whether the person whose testimony is sought
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has an ownership interest in the entity and/or the degree of authority and
responsibility the person has within the entity.
3. The nexus of the testimony sought to the subject entity
and its contracts, leases, permits or licenses with the City.
4. The effect a penalty may have on an unaffiliated and
unrelated party or entity that has a significant interest in an entity subject
to penalties under D, above, provided that the party or entity has given actual
notice to the commissioner or agency head upon the acquisition of the interest,
or at the hearing called for in C(1), above, gives notice and proves that such
interest was previously acquired. Under either circumstance, the party or entity
must present evidence at the haring demonstrating the potential adverse impact a
penalty will have or such person or entity.
F. 1. The term "license" or "permit" as used herein shall
be defined as a license, permit, franchise or concession not granted as a matter
of right.
2. The term "person" as used herein shall be defined as any
natural person doing business alone or associated with another person or entity
as a partner, director, officer, principal or employee.
3. The term "entity" as used herein shall be defined as any
firm, partnership, corporation, association, or person that receives monies,
benefits, licenses, leases, or permits from or through the City or otherwise
transact business with the City.
4. The term "member" as used herein shall be defined as any
person associated with another person or entity as a partner, director, officer,
principal or employee.
G. In addition to and notwithstanding any other provision of this
Agreement, the Commissioner or agency head may in his or her sole discretion
terminate this Agreement upon not less than three (3) days written notice in the
event Contractor fails to promptly report in writing to the Commissioner of
Investigation of the City of New York any solicitation of money, goods, requests
for future employment or other benefit or thing of value, by or on behalf of any
employee of the City or other person, firm, corporation or entity for any
purpose which may be related to the procurement or obtaining of this Agreement
by the Contractor, or affecting the performance of this contract.
5.12 ASSIGNMENT
A. The Contractor shall not assign, transfer, convey, sublet or
otherwise dispose of this Agreement, or of the Contractor's right, title,
interest obligations or duties herein, or the Contractor's power to execute such
Agreement, or assign, by power of attorney or otherwise, any of its rights to
receive monies due or to become due under this Agreement, unless the prior
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written consent of the Administrator shall be obtained. Any such assignment,
transfer, conveyance, sublease or other disposition without such consent shall
be void.
B. In the event that the Contractor assigns, transfers, conveys,
sublets or otherwise disposes of this Agreement as specified in subdivision A,
above, without the prior written consent of the Department, the Department shall
revoke and annul this Agreement and the Department shall be relieved and
discharged from any and all liability and obligations growing out of such
Agreement to the Contractor, its assignees, transferees or sublessees, and the
Contractor shall, lose all monies theretofore earned under this Agreement,
except so much thereof as may be required to pay the Contractor's employees. The
provisions of this section shall not hinder, prevent or affect an assignment by
the Contractor for the benefit of its creditors made pursuant to the laws of the
State of New York.
C. This Agreement may be assigned by the City to any corporation,
agency or instrumentality having authority to accept such assignment.
5.13 SUBCONTRACTOR
A. The Contractor agrees not to enter into any sub-contracts for the
performance of its obligations, in whole or in part, under this Agreement
without the prior written approval of the Department. Two copies of each such
proposed sub-contract shall be submitted to the Department with the Contractor's
written request for approval.
B. All such sub-contracts shall contain provisions specifying:
1. that the work performed by the sub-contractor must be in
accordance with the terms of the Agreement between the Department and the
Contractor;
2. that nothing contained in such contract shall impair the
rights of the Department;
3. that nothing contained therein, or in the Agreement
between the Department and the Contractor, shall create any contractual
relationship between the sub- contractor and the Department; and
4. that the sub-contractor specifically agrees to be bound
by the confidentiality provisions set forth in the Agreement between the
Department and the Contractor.
C. The Contractor agrees that it is fully responsible to the
Department for the acts and omissions of the sub-contractors and of persons
either directly or indirectly employed by them as it is for the acts and
omissions of persons directly employed by it.
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D. The aforesaid approval is required in all cases other than
individual employer- employee contracts.
E. The Contractor shall not in any way be relieved of any
responsibility under this Agreement by any sub-contract.
5.14 PARTICIPATION IN AN INTERNATIONAL BOYCOTT
A. The Contractor agrees that neither the Contractor nor any
substantially-owned affiliate company is participating or shall participate in
an international boycott in violation of the provisions of the Export
Administration Act of 1979, as amended, of the regulations of the United States
Department of Commerce promulgated thereunder.
B. Upon the final determination by the Commerce Department or any
other agency of the United States as to, or conviction of the Contractor or a
substantially-owned affiliated company thereof, of participation in an
international boycott in violation of the provisions of the Export
Administration Act of 1979, as amended, or the regulations promulgated
thereunder, the Comptroller may, at his option, render, forfeit and void this
contract.
C. The Contractor shall comply in all respects with the provisions
of Section 6-114 of the Administrative Code of the City of New York and the
rules and regulations issued by the Comptroller thereunder.
5.15 ANTI-TRUST. The Contractor hereby assigns, sells and transfers
to the City all right, title and interest in and to any claims and causes of
action arising under the anti-trust laws of the State of New York or of the
United States relating to the particular goods or services purchased or procured
by the City under this Agreement.
5.16 PUBLICITY
A. The prior written consent of the Department 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 Agreement, make any statement to the press or issue any material for
publication through any media of communication bearing on the work performed or
data collected under this Agreement.
B. If the Contractor publishes a work dealing with any aspect of
performance under this Agreement, or of the results and accomplishments attached
in such performance, the Department shall have a royalty free, non-exclusive and
irrevocable license to reproduce, publish or otherwise use and to authorize
others to use the publication.
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5.17 INVENTIONS, PATENTS AND COPYRIGHTS.
A. Any discovery or invention arising out of or developed in the
course of performance of this Agreement shall be promptly and fully reported to
the Department, and if this work is supported by a federal grant of funds, it
shall be promptly and fully reported to the Federal Government for determination
as to whether patent protection on such invention shall be sought and how the
rights in the invention or discovery, including rights under any patent issued
thereon, shall be disposed of and administered in order to protect the public
interest.
B. No report, document or other data produced in whole or in part
with contract funds shall be copyrighted by the Contractor nor shall any notice
of copyright be registered by the Contractor in connection with any report,
document or other data developed for the Agreement.
C. If any copyrightable material is developed under, or in the
course of performing this Agreement, any Federal Agency providing federal
financial participation for the Agreement, the New York State Department of
Social Services and the City of New York shall have a royalty-free,
non-exclusive and irrevocable right to reproduce, publish or otherwise use, and
to authorize others to use, the work for governmental purposes.
D. In no event shall Subsections A, B and C of this Section be
deemed to apply to any report, document or other data, or any invention of the
Contractor which existed prior to, or was developed or discovered independently
from, its activities related to or funded by this Agreement.
5.18 INFRINGEMENTS
The Contractor shall be liable to the Department and hereby agrees
to indemnify and hold the Department harmless for any damage or loss or expense
sustained by the Department from any infringement by the Contractor of any
copyright, trademark or patent rights of designs, systems, drawings, graphs,
charts, specifications or printed matter furnished or used by the Contractor in
the performance of this Agreement.
ARTICLE VI
TERMINATION
6.1 The Department and/or City shall have the right to terminate
this Agreement, in whole or in part:
A. Under any right to terminate as specified in any section of this
Agreement or for a material breach of this Agreement.
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B. Upon the failure of the Contractor to comply with any of the
terms and conditions of this Agreement which is not cured within ten (10) days
of the Department's request therefor.
C. Upon the Contractor's becoming insolvent.
D. Upon the commencement under the Bankruptcy Act of any proceeding
by or against the Contractor, either voluntarily or involuntarily.
E. Upon receipt of notification that State or Federal reimbursement
or funding is no longer available for services provided pursuant to this
Agreement.
F. Without cause or if the Department deems that termination would
be in the best interest of the City.
6.2 The Department or City shall give the Contractor written notice
of any termination of this Agreement specifying therein the applicable
provisions of Section 6.1 of this Article and the effective date thereof which
shall not be less than ten (10) days from the date the notice is received,
except if termination is based on paragraph B of Section 6.1 of this Article, in
which event notice shall be not less than thirty (30) days.
6.3 The Contractor shall be entitled to apply to the Department to
have this Agreement terminated by said Department by reason of any failure in
the performance of this Agreement (including any failure by the Contractor to
make progress in the prosecution of work hereunder which endangers such
performance), if such failure arises out of cause beyond the control and without
the fault or negligence of the Contractor. Such causes may include, but are not
restricted to: acts of God or of the public enemy; acts of the Government in
either its sovereign or contractual capacity; fires, floods; epidemics;
quarantine restrictions; strikes; freight embargoes, or any other cause beyond
the reasonable control of the Contractor. The determination that such failure
arises out of causes beyond the control and without the fault or negligence of
the Contractor shall be made by the Department which agrees to exercise
reasonable judgment therein. If such determination is made and the Agreement
terminated by the Department pursuant to such application by the Contractor,
such termination shall be deemed to be without cause.
6.4 Upon termination of this Agreement the Contractor shall comply
with the Department or the City close-out procedures, including but not limited
to:
A. Accounting for and refund to the Department or City, within
thirty (30) days, any unexpended funds which have been paid to the Contractor
pursuant to this Agreement.
B. Furnishing within thirty (30) days an inventory to the Department
or City of all equipment, appurtenances and property purchased through or
provided under this Agreement and carrying out any Department or City directive
concerning the disposition thereof.
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C. Not incurring or paying any further obligation pursuant to this
Agreement beyond the termination date. Any obligation necessarily incurred by
the Contractor on account of this Agreement prior to receipt of notice of
termination are falling due after such date shall be paid by the Department or
City in accordance with the terms of this Agreement. In no event shall the word
"obligation," as used herein, be construed as including any lease agreement,
oral or written, entered into between the Contractor and its Landlord.
D. Turn over to the Department or City or its designees all books,
records, documents and material specifically relating to this Agreement.
E. Submit, within ninety (90) days, a final statement and report
relating to this Agreement. The report shall be made by a certified public
accountant or a licensed public accountant.
6.5 In the event the Department or City shall terminate this
Agreement in whole or in part as provided in paragraphs A, B, C or D of Section
6.1 of this Article, the Department or City may procure, upon such terms and in
such manner as deemed appropriate services similar to those so terminated, and
the Contractor shall continue the performance of this Agreement to the extent
not terminated thereby.
6.6 Notwithstanding any other provisions of this Agreement, the
Contractor shall not be relieved of liability to the City for damages sustained
by the City by virtue of the Contractor's breach of the Contract, and the City
may withhold payments to the Contractor for the purpose of setoff until such
time as the exact amount of damages due to the City from the Contractor is
determined.
6.7 The provisions of the Agreement regarding confidentiality of
information shall remain in full force and effect following any termination.
6.8 The rights and remedies of the City provided in this Article
shall not be exclusive and are in addition to all other rights and remedies
provided by law or under this Agreement.
ARTICLE VII
CONTRACTOR'S HIRING COMMITMENT
7.1 Except as otherwise provided by Paragraph (7) of this Article,
Contractor agrees as a condition of this contract, to hire at least one Public
Assistance Recipient ("PA Recipient") for each $250,000 in value of this
contract, or to the extent that the Contractor enters into other contracts with
the Department, for each $250,000 of the cumulative value of contracts of the
Contractor during the term of this Agreement.
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7.2 Such hiring shall be for full-time employment of at least a
minimum of 35 hours per week. The rate of pay shall be at least 20% above the
federal minimum wage, and the duration of the employment shall be for at least
one year. In the event that a replacement of a PA Recipient is made by the
Contractor during the one year, such replacement shall not count as an
additional employee toward Contractor's hiring requirement set forth in
Paragraph (1) of this Article.
7.3 Within thirty days of the commencement date of this contract
("commencement date") or fifteen days following notice from the Department that
a request for an exemption from the provisions of this Rider has been denied,
Contractor shall submit, on forms specified by the Department, information and
specifications for the job(s) available.
7.4 The Contractor, may at its option, request the assistance of the
Department in identifying potential employees. In such case, the Department will
refer PA Recipients to the Contractor for employment interviews.
7.5 Contractor shall hire the number of employees agreed upon
pursuant to Paragraph (1) of this Article within ninety days of the commencement
date or such longer period as may be specified, in writing, by the Department.
7.6 In the event Contractor fails to hire [said] agreed upon number
of PA Recipients within the time required pursuant to Paragraph (5) of this
Article, and to pay or retain such employees pursuant to Paragraph (2) of this
Article, Contractor shall pay to the Department or the Department may at its
option, deduct from monies due or become due to Contractor, the amount of $19.18
per employee for each calendar day for which such PA Recipient(s) is/are not
employed by Contractor as required by this Article. Such amount is hereby fixed
and agreed as liquidated damages.
7.7 Contractor may apply to the Department for exemption from all or
part of the requirements of this Article. Any application for an exemption must
be made before the expiration of thirty days after the commencement date of this
contract, or any subsequent contract as discussed in Paragraph (1) herein, and
shall be in the form specified by the Department. Exemption may be granted upon
a showing that the operation of this Article will constitute an extreme
hardship, within the sole discretion of the Department; or to any Contractor not
employing twenty or more employees at a place of business within the City of New
York.
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ARTICLE VIII
MISCELLANEOUS
8.1 CHOICE OF LAW, CONSENT TO JURISDICTION AND VENUE. This Agreement
shall be deemed to be executed in the City 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.
The parties agree that any and all claims asserted by or against the
City arising under this Agreement or related thereto 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 the City and County of New York. To effectuate this
agreement and intent, the Contractor agrees:
A. If the City 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 Contract may be found, or by
registered mail addressed to the Contractor at its address as set forth in this
Agreement, or to such other address as the Contractor may provided to the City
in writing; and
B. With respect to any action between the City and the Contractor in
New York State Court, the Contractor hereby expressly waives and relinquishes
any rights it might otherwise have (i) to move to dismiss on grounds of
[FORUM-NON-CONVENIENS], (ii) to remove to Federal Court; and (iii) to move for a
change of venue to a New York State Court outside New York County.
C. With respect to any action between the City 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 United States Court outside the City of New York.
D. If the Contractor commences any action against the City in a
court located other than in the City and State of New York, upon request of the
City, the Contractor shall either consent to a transfer of the action to a court
of competent jurisdiction located in the City and State of New York or, if the
court where the action is initially brought will not or cannot transfer the
action, the Contractor shall consent to dismiss such action without prejudice
and may thereafter reinstitute the action in a court of competent jurisdiction
in New York City.
If any provision(s) of this Article is held unenforceable for any
reason, each and all other provision(s) shall nevertheless remain in full force
and effect.
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8.2 GENERAL RELEASE. The acceptance by the Contractor or its
assignees of the final payment under this Agreement, whether by voucher,
judgment of any court of competent jurisdiction or any other administrative
means, shall constitute and operate as a general release to the City from any
and all claims of and liability to the Contractor arising out of the performance
of this Agreement.
8.3 CLAIMS AND ACTIONS THEREON
A. No action at law or proceeding in equity against the City or
Department shall lie or be maintained upon any claim based upon this Agreement
or arising out of this Agreement or in any way connected with this Agreement
unless the Contractor shall have strictly complied with all requirements
relating to the giving of notice and of information with respect to such claims,
all as herein provided.
B. No action at law or proceeding in equity shall lie or be
maintained against the Department or the City upon any claim based upon this
Agreement or arising out of this Agreement unless such action shall be commenced
within six (6) months after the date of final payment hereunder, or within six
(6) months of termination or conclusion of this Agreement, or within six (6)
months of accrual of the cause of action, whichever is earliest.
C. In the event any claim is made or any action brought in any way
relating to the Agreement herein, the Contractor shall diligently render to the
Department and/or the City of New York without additional compensation any and
all assistance which the Department and/or the City of New York may require of
the Contractor.
D. The Contractor shall report to the Department in writing within
three (3) working days of the initiation by or against the Contractor of any
legal action or proceeding in connection with or relating to this Agreement.
8.4 NO CLAIM AGAINST OFFICERS, AGENTS OR EMPLOYEES. No claim
whatsoever shall be made by the Contractor against any officer, agent or
employee of the City for, or on account of, anything done or omitted in
connection with this Agreement.
8.5 WAIVER. Waiver by the Department of a breach of any provision of
this Agreement shall not be deemed to be a waiver of any other or subsequent
breach and shall not be construed to be a modification of the terms of the
Agreement unless and until the same shall be agreed to in writing by the
Department or City as required and attached to the original Agreement.
8.6 NOTICE. The Contractor and the Department hereby designate the
business addresses hereinabove specified as the places where all notices,
directions or communications from and such party to the other party shall be
delivered, or to which they shall be mailed. Actual delivery of any such notice,
direction or communication to a party at the aforesaid place, or delivery by
certified mail shall be conclusive and deemed to be sufficient service thereof
upon such
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party as of the date such notice direction or communication is received by the
party. Such address may be changed at any time by an instrument in writing
executed and acknowledged by the party making such change and delivered to the
other party in the manner as specified above. Nothing in this section shall be
deemed to serve as a waiver of any requirements for the service of notice or
process in the institution of an action or proceeding as provided by law.
8.7 ALL LEGAL PROVISIONS DEEMED INCLUDED. It is the intent and
understanding of the parties to this Agreement that each and every provision of
law required to be inserted in this Agreement shall be and is inserted herein.
Furthermore, it is hereby stipulated that every such provision is to be deemed
to be inserted herein, and if, through mistake or otherwise, any such provision
is not inserted, or is not inserted in correct form, then this Agreement shall
forthwith upon the application of either party be amended by such insertion so
as to comply strictly with the law and without prejudice to the rights of either
party hereunder.
8.8 SEVERABILITY. If this Agreement contains any unlawful provision
not an essential part of the Agreement and which shall not appear to have been a
controlling or material inducement to the making thereof, the same shall be
deemed no effect and shall, upon notice by either party, be deemed stricken from
the Agreement without affecting the binding force of the remainder.
8.9 MODIFICATION. This Agreement may be modified by the parties in
writing in a manner not materially affecting the substance hereof. It may not be
altered or modified orally.
8.10 PARAGRAPH HEADINGS. Paragraph headings are inserted only as a
matter of convenience and for reference and in no way define, limit or describe
the scope or intent of this Agreement and in no way affect this Agreement.
8.11 CONSULTANTS REPORTS. A copy of each consultant report submitted
by a consultant to any City official or to any officer, employee, agent or
representative of a City department, agency, commission or body or to any
corporation, association or entity whose expenses are paid in whole or in part
from the City treasury shall be furnished to the Commissioner of the department
to which such report was submitted or, if not a City department, then to the
chief controlling officer or officers of such other office or entity. A copy of
such report shall also be furnished to the Director of the Mayor's Office of
Construction for matter related to construction or to the Director of the
Mayor's Office of Operations for all other matters.
8.12 VENDEX QUESTIONNAIRES. The provision shall apply to contracts
valued at $100,000 or more:
A. The Contractor states that the Principal, Individual, Business
Entity and Non-for-Profit Organization Questionnaires (VENDEX Questionnaires),
as the case may be, required by Procurement Policy Board Rule 521 and any
regulations promulgated thereunder, have been duly executed and submitted to the
Department. The Contractor understands that the Department's
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reliance upon the veracity of the information stated therein is a material
condition to the execution of this Agreement, and that such information is in no
respect misleading.
B. The Contractor shall submit the applicable VENDEX Questionnaires,
or if applicable, an Affidavit of No Change at least annually or upon the
renewal of this Agreement. Any contractor for which submission requirements for
Business Entities and Not-for-Profit Organizations apply shall submit the
applicable new fully completed VENDEX Questionnaires to the Department every
three years.
C. This Agreement shall be a nullity until the Contractor complies
with any and all the requirements set forth in Procurement Policy Board Rule 521
and any regulations promulgated thereunder, and the VENDEX Questionnaires.
8.13 EXTENSION OF TIME - NON-CONSTRUCTION. Upon written application
by the Contractor, the Agency Chief Contracting Officer may grant an extension
of time for performance of the contract. Said application must state, at a
minimum, in detail, each cause for delay, the date the cause of the alleged
delay occurred, and the total number of delay in days attributable to such
cause.
The ruling of the Agency Chief Contracting Officer shall be final
and binding as to the allowance of an extension and the number of days allowed.
8.14 RESOLUTION OF DISPUTES
1. Any dispute arising out of the performance of this Agreement
between the Department and the Contractor shall be resolved in accordance with
this Section of the contract and with Section 741 of the Rules of the
Procurement Policy Board.
2. The procedure for resolving any dispute described in this Section
shall be the exclusive means of resolving any such dispute.
3. During the time the dispute is being presented, heard and
considered pursuant to this Section, the terms of the contract shall remain in
full force and effect and the Contractor shall continue to perform work in
accordance with the contract and as directed by the Agency Chief Contracting
Officer. Failure of the Contractor to continue the work as directed shall
constitute a waiver by the Contractor of any and all claims being presented
pursuant to this Section and a material breach of the contract.
4. PRESENTATION OF DISPUTES TO AGENCY HEAD
A. The Contractor shall present its dispute in a written
submission (hereinafter referred to as a "Notice of Dispute") to the
Commissioner, hereinafter Agency Head for an initial determination, in
accordance with the provisions of this Section.
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B. TIME, FORM AND CONTENT OF A CONTRACTOR'S NOTICE OF
DISPUTE AND THE AGENCY'S RESPONSE. The Notice shall be submitted by the
Contractor to the Agency Head within ten (10) days of receiving notice of the
determination or action which is the subject of the dispute. This notice
requirement shall not replace any other notice requirements contained in the
contract. The Contractor shall have an additional ten (10) days to submit a
detailed written submission pertaining to the dispute. The written submission
shall include all the facts, evidence, documents or other basis upon which the
Contractor relies in support of its position, as well as a detailed computation
demonstrating how the amount of money claimed by the Contractor in the dispute
was arrived at. Within ten (10) days after receipt of the detailed written
submission, the Agency Chief Contracting Officer shall submit to the Agency Head
all materials which he or she deems pertinent to the dispute. Thereafter, either
party may demand of the other the production of any documents or other material
not already produced which the demanding party believes may be relevant to the
dispute. The requested party shall produce all relevant documents. Any question
as to relevancy shall be determined by application to the Agency Head, whose
decision shall be final and conclusive as to both parties. Willful failure of
the Contractor to produce any requested material whose relevancy the contractor
has not disputed (or following a determination by the Agency Head that the
material should be produced) shall constitute a final waiver by the Contractor
of its claim.
C. AGENCY HEAD INQUIRY. The Agency Head shall examine the
material and may, in his or her exclusive discretion, convene an informal
conference with the Contractor and the Agency Chief Contracting Officer to
resolve the issue by mutual consent prior to reaching a determination. The
Agency Head may seek such technical or other expertise as he or she shall deem
appropriate, including the use of neutral mediators and require any such
additional material from either or both parties as he or she deems fit. The
Agency Head's ability to render, and the effect of a decision hereunder, shall
not be impaired by any negotiations in connection with the dispute presented,
whether or not the Agency Head participates therein. Any party to the dispute or
the Agency Head may compel the participation of any other contractor with a
contract related to project, and that Contractor shall be bound by the decision
of the Agency Head. Any Contractor [thus] brought into the dispute resolution
proceeding shall have the same rights to make presentations and to seek review
as the initiating Contractor.
D. AGENCY HEAD DETERMINATION. Within ten (10) days after
the receipt of all materials and information or such longer time as may be
agreed to by the parties, the Agency Head shall render its decision in writing
and shall deliver or send a copy of such decision to the Contractor and Agency
Chief Contracting Officer, together with a statement concerning how the decision
may be appealed. Failure to render a decision within twenty (20) days, or within
such longer time as is agreed to by the parties, shall be deemed rejection of
the claim for purposes of presenting the claim to the Contract Dispute
Resolution Board.
E. FINALITY OF AGENCY HEAD DECISION. The Agency Head's
decision shall be final and binding on both parties, unless presented to the
Contract Dispute Resolution
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Board pursuant to these rules. The City may not take a petition from a decision
of the Agency Head to the Contract Dispute Resolution Board. However, should the
Contractor take such a petition, the City may seek, and the Board may render, a
determination less favorable to the Contractor and more favorable to the City
than the decision of the Agency Head.
5. CONTRACT DISPUTES RESOLUTION BOARD. There shall be a Contract
Dispute Resolution Board composed of:
a. the City Chief Procurement Officer or a designee; who
shall be the Chairperson of the Board;
b. an employee of another City agency, having the requisite
background to consider and resolve the merits of the dispute (who shall be
selected by the City Chief Procurement Officer from a prequalified panel of such
employees); and
c. a neutral person with appropriate expertise. This person
shall be selected by the City Chief Procurement Officer from a prequalified
panel of individuals approved by the Procurement Policy Board with the
appropriate background to act as decision-makers in a dispute.
6. PRESENTATION OF DISPUTE TO THE COMPTROLLER. Before any dispute
may be brought by the Contractor to the Contract Dispute Resolution Board, the
Contractor must first present its claim to the Comptroller for his or her
review, investigation and possible adjustment.
A. TIME FORM AND CONTENT OF NOTICES. Within twenty (20)
days of its receipt of a decision by the Agency Head, the Contractor shall
submit to the Comptroller a Notice of Claim regarding its dispute with the
agency. The Notice of Claim shall consist of (i) a written statement of the
substance of the dispute and why the dispute was wrongly decided by the Agency
Head; (ii) a copy of the written decision of the Agency Head; (iii) copies of
all materials submitted by the Contractor to the agency, including the Notice of
Dispute and the detailed written submission pertaining to the dispute. The
Contractor may not present to the Comptroller in this Notice any material not
presented to the Agency Head, except at the request of the Comptroller.
B. AGENCY RESPONSE. The Comptroller shall notify the agency
of receipt of the notice of Claim. Within five (5) business days, the agency
shall make available to the Comptroller copies of all material submitted by the
agency to the Agency Head in connection with the dispute at issue.
C. COMPTROLLER INVESTIGATION. The Comptroller may
investigate the claim in dispute and, in the course of such investigation, may
exercise all powers provided in section 7-201 and 7-203 of the New York City
Administrative Code. In addition, the Comptroller may demand of either party,
and such party shall provide, whatever actional material the comptroller deems
pertinent to the claim, including original business records of the
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Contractor. Such demand shall be made within fifteen (15) days of receipt of
agency material. Willful failure of the Contractor to produce within ten (10)
days any material requested by the Comptroller shall constitute a waiver by the
Contractor of its claim. The Comptroller may also schedule an informal
conference to be attended by the Contractor, agency representatives, and any
other personnel desired by the Comptroller.
D. OPPORTUNITY OF COMPTROLLER TO COMPROMISE OR ADJUST
CLAIM. The Comptroller shall have forty-five (45) days from his or her receipt
of all materials referred to in paragraph (c) to investigate the dispute claim.
The period for investigation and compromise may be further extended by agreement
between the Contractor and the Comptroller, to a maximum of ninety (90) days
from the Comptroller's receipt of the materials. The Contractor may not present
its petition to the Contract Dispute Resolution Board until the period for
investigation and compromise delineated in this section has expired. In
compromise or adjusting any claim hereunder, the Comptroller may not revise or
disregard the terms of the contract between the parties.
7. PETITION TO CONTRACT DISPUTE RESOLUTION BOARD. In the event the
claim has not been settled or adjusted by the Comptroller within the period
provided in subsection (6) of this section, the Contractor, within ten (10) days
thereafter, may petition the Contract Dispute Resolution Board to review the
Agency Head determination.
A. FORM AND CONTENT PETITION BY CONTRACTOR. The Contractor
shall present its dispute to the Contract Dispute Resolution Board in the form
of a Petition, with copies to the Agency Head, Corporation Counsel and the
Comptroller. Such Petition shall include (i) a brief written statement of the
substance of the dispute and the reason(s) the dispute was wrongly decided by
the Agency Head; (ii) a copy of the written decision by the Agency Head; (iii)
copies of all material submitted by the Contractor to the Comptroller. Within
fifteen (15) days of its receipt of the Petition, the agency shall report to the
brief written statement of the Contractor and make available to the Board all
material it submitted to the Agency Head and Comptroller.
B. FURTHER PROCEEDINGS. The Board shall permit the
Contractor to present its case by the submission of memoranda, briefs and oral
argument. The Contractor may not however, support its case with any
documentation or other material which was not presented to the Agency Head or
the Comptroller. The Board shall also permit the Agency to present its case in
response to the Contractor by the submission of memoranda, briefs and oral
document. If requested by the Corporation Counsel, the Comptroller will provide
reasonable assistance in the preparation of the agency's case. The Board, at its
discretion, may seek such technical or other expertise as it shall deem
appropriate and any such additional material from either or both parties as it
deems fit.
C. CONTRACT DISPUTE RESOLUTION BOARD DETERMINATION. Within
thirty (30) days of the conclusion of all written submission and oral arguments,
the Board shall render a written decision resolving the dispute. In an unusually
complex case, the Board may render its
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decision in a longer period of time, not to exceed sixty (60) days, and shall so
advise the parties at the commencement of this period. The Board's decision must
be consistent with the terms of the contract between the parties. In reaching
its decision, the Board shall accord no precedential significance to prior
decisions of the Board involving other non-related contracts.
D. NOTIFICATION OF CONTRACT DISPUTE RESOLUTION BOARD
DECISION. The Board shall send a copy of its decision to the Contractor, the
Agency Chief Contracting Officer and the Comptroller.
E. FINALITY OF CONTRACT DISPUTE RESOLUTION BOARD DECISION.
The Board's decision of a Contractor's appeal shall be final and binding on both
parties, except to the extent that it may be reviewable in accordance with the
balance of this subsection. The Contractor may seek review of the Board's
decision solely in the form of a challenge, made within four months of the date
of the Board's decision, in a court of competent jurisdiction of the State of
New York, County of New York, under the procedures and rules applicable in the
Court, and the City may then cross-appeal. Such review by the Court shall be
limited to the question of whether or not the Board's decision was obtained or
affected by fraud, bad faith, or palpable error. No evidence or information
shall be introduced or relied upon in such proceeding which was not presented to
the Board in accordance with this rule. In any such proceeding the City may seek
and the Court may render a decision more favorable to the City than that
rendered by the Contract Dispute Resolution Board.
F. Any termination, cancellation, or alleged breach of the
contract prior to or during the pendency of any proceedings pursuant to this
Section shall not affect or impair the ability of the Agency Head or Dispute
Resolution Board to make a binding and final decision pursuant to this section.
8.15 CONTRACT NAMES
A. Changes may be made to this contract only as duly
authorized by the Agency Chief Contracting Office or his or her designee.
Vendors deviating from the requirements of an original purchase order or
contract without a duly approved change order document, or written contract
modification or amendment, do so at their own risk. All such changes,
modifications and amendments will become a part of the original contract.
B. Contract changes will be made only for work necessary to
complete the work included in the original scope of the contract, and for
non-material changes to the scope of the contract. Changes are not permitted for
any material alteration in the scope of work. Contract changes may include any
contract revision deemed necessary by the Contracting Officer.
C. The Contractor shall be entitled to a price adjustment
for extra work performed pursuant to a written change order. If any part of the
contract work is necessarily delayed by a charge order, the contractor will be
entitled to an extension of time for performance. Adjustments
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to price shall be computed in one or more of the following ways: (i) by
agreement of a fixed price; (ii) by unit process specified in the contract;
(iii) by time and material record; and/or (iv) in any other manner approved by
the City Chief Procurement Officer.
D. Where the cost of the charge order has been negotiated
in the absence of established cost history, the costs are subject to
verification by post audit. If the post-audit reveals that the Contractor's
costs for the change order work were inaccurately stated during negotiations,
the agency shall recoup the amount by which the costs were inaccurately stated
by proportionally reducing the price of the change order. This remedy is not
exclusive and in addition to all other rights and remedies of the City.
E. Except in the case of requirements contracts, any
contract increases which cumulatively exceed the greater of 10% or $50,000 must
be approved in writing by the City Chief Procurement Officer. Any contract
amendment which either amends a unit price, cancels required units, or adds a
new type of unit item to the contract must be approved in writing by the Agency
Chief Contracting Officer.
8.16 NO DAMAGE FOR DELAY. The Contractor agrees to make no claim for
damages for delay in the performance of this Contract occasioned by any act or
omission to act of the City or any of its representatives, and agrees that any
such claim shall be fully compensated for by an extension of time to complete
performance of the work as provided herein.
8.17 PROMPT PAYMENT
A. The Prompt Payment provisions set forth in Chapter 6,
Section 661 of the Procurement Policy Board Rules in effect at the time of this
solicitation will be applicable to payments made under this contract. The
provisions require the payment to contractors of interest on payments made after
the required payment date except as set forth in subdivisions c(3) and c(2), (3)
and (5) of Section 661 of the Rules.
B. The contractor must submit a proper invoice to receive
payment, except where the contract provides that the contractor will be paid at
predetermined intervals without having to submit an invoice for each scheduled
payment.
C. Determination of interest due will be made in accordance
with the provisions of Section 661 of the Procurement Policy Board Rules are
General Municipal Law 3-a.
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ARTICLE IX
EQUAL EMPLOYMENT
9.1 PAYOR'S EXECUTIVE ORDER NO. 50
A. This Agreement is subject to the requirements of
Executive Order No. 50 (1980) as revised ("E.O. 50") are the Rules and
Regulations promulgated thereunder. No Contract will be awarded unless and until
these requirements have been complied with in their entirety. By signing this
Contract, the Contractor agrees that it:
(1) will not engage in any unlawful discrimination against any
employee or applicant for employment because of race, creed, color, national
origin, sex, age, disability, marital status, or sexual orientation with respect
to all employment decisions including, but not limited to recruitment, hiring,
upgrading, demotion, downgrading, transfer, training, rates of pay or other
forms of compensation, layoff, termination, and all other terms and conditions
of employment;
(2) the Contractor agrees that when it subcontracts it will not
engage in any unlawful discrimination in the selection of subcontractors or the
basis of the owner's race, color, creed, national origin, sex, age, disability,
marital status or sexual orientation or that it is an equal opportunity
employer;
(3) will state in all solicitations or advertisements for
employees placed by or on behalf of the Contractor that all qualified applicants
will receive consideration for employment without regard to race, creed, color,
national origin, sex, age, disability, marital status or sexual discrimination;
or that it is an equal employment opportunity employer;
(4) will send to each labor organization or representative of
workers with which is has a collective bargaining agreement or other contract or
memorandum of understanding, written notification of its equal employment
opportunity commitments under E.O. 50 and the rules and regulations promulgated
thereunder; and
(5) will furnish all information and reports including an
Employment Report before the award of the Contract which are required by E.O.
50, the rules and regulations promulgated thereunder, and orders of the Director
of the Bureau of Labor Services ("Bureau"), and will permit access to its books,
records and accounts by the Bureau for the purposes of investigation to
ascertain compliance with such rules, regulations, and orders.
Nothing contained in this section shall be construed to bar any
religious or denominational institution or organization, or any organization
operated for charitable or educational purposes, which is operated, supervised
or controlled by or in connection with a religious organization, from limiting
employment or giving preference to persons of the same
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religious or denomination or from making such selection as is calculated by such
organization to promote the religious principles for which it is established or
maintained.
B. The Contractor understands that in the event of its
noncompliance with the nondiscrimination clauses of this Agreement or with any
such rules, regulations or orders, such noncompliance shall constitute a
material breach of this Agreement and noncompliance with E.O. 50 and the rules
and regulations promulgated thereunder. After a hearing held pursuant to the
rules of the Bureau, the Director may direct the imposition by the contracting
agency head of any or all of the following sanctions:
(1) disapproval of the Contractor;
(2) suspension or termination of the Agreement;
(3) declaring the Contractor in default; or
(4) in lieu of any of the foregoing sanctions,
the Director may impose an employment program.
C. The Director of the Bureau may recommend to the
contracting agency head that a Board of Responsibility be convened for purposes
of declaring a contractor who has repeatedly failed to comply with E.O. 50 and
the rules and regulations promulgated thereunder to be nonresponsible.
D. The Contractor agrees to include the provisions of the
foregoing paragraphs in every subcontract or purchase order in excess of $50,000
to which it becomes a party, unless exempted by E.O. 50 and the rules and
regulations promulgated thereunder, so that such provisions will be binding upon
each subcontractor or vendor. The Contractor will take such action with respect
to any subcontract or purchase order as may be directed by the Director of the
Bureau of Labor Services as a means of enforcing such provisions including
sanctions for noncompliance.
E. The Contractor further agrees that it will refrain from
entering into any contract or contract modification subject to E.O. 50 and the
rules and regulations promulgated thereunder with a subcontractor who is not in
compliance with the requirements of E.O. 50 and the rules and regulations
promulgated thereunder.
9.2 WHERE REQUIRED BY NEW YORK STATE LABOR LAW SECTION 220-E THE
CONTRACTOR AGREES:
A. That in the hiring of employees for the performance of
work under this Agreement or any subcontract hereunder, neither the Contractor,
subcontractor, nor any person acting on behalf of such Contractor or
subcontractor shall by reason of race, creed, color, sex or national origin
discriminate against any citizen of the State of New York who is qualified and
available to perform the work to which the employment relates;
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B. That neither the Contractor, subcontractor, nor any
person on behalf thereof shall, in any manner, discriminate against or
intimidate any employee hired for the performance of work under this Agreement
on account of race, creed, color, sex or national origin;
C. That there may be deducted from the amount payable to
the Contractor by the City under this Agreement a penalty of five dollars for
each person for each calendar day during which such person was discriminated
against or intimidated in violation of the provisions of this Agreement; and
D. That this Agreement may be canceled or terminated by the
City and all moneys due or to become due hereunder may be forfeited, for a
second on any subsequent violation of the terms and conditions of this section
of the Agreement.
E. The aforesaid provisions of this section covering every
contract for or on behalf of the State or a municipality for the manufacture,
sale or distribution of materials, equipment or supplies shall be limited to
operations performed with the territorial limits of the State of New York.
9.3 WHERE REQUIRED BY NEW YORK CITY ADMINISTRATIVE CODE SECTION
6-108 THE CONTRACTOR AGREES THAT:
A. It shall be unlawful for any person engaged in the
construction, alteration or repair of buildings or engaged in the construction
or repair of buildings or engaged in the construction or repair of streets or
highways pursuant to a contract with the City or engaged in the manufacture,
sale or distribution of materials, equipment or supplies pursuant to a contract
with the City to refuse to employ or to refuse to continue in any employment any
person on account of the race, color or creed of such person.
B. It shall be unlawful for any person or any servant,
agent, or employee of any person, described in subdivision (A) above, to ask,
indicate or transmit orally or in writing, directly or indirectly, the race,
color, or creed or religious affiliation of any person employed or seeking
employment from such person, firm or corporation.
C. Disobedience of the foregoing provisions shall be deemed
a violation of a material provision of this Agreement.
D. Any person, or the employee, manager or owner of or
officer of such firm or corporation who shall violate any of the provisions of
this section shall, upon conviction thereof, be punished by a fine of not more
than one hundred dollars or by imprisonment for not more than thirty days, or
both.
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ARTICLE X
APPROVALS
10.1 PROCUREMENT POLICY BOARD RULES. This contract is subject to the
Rules of the Procurement Policy Board of the City of New York dated August 1,
1990. In the event of a conflict between said Rules and a provision of this
contract, the Rules shall take precedence.
10.2 THE CITY OF NEW YORK. This Agreement shall not become effective
or binding unless:
A. authorized by the Mayor; approved pursuant to New York
City Charter and Procurement Policy Board Rules for contracts not subject to
public betting; and the Comptroller shall have endorsed his certificate that
there remains unexpended and unapplied a balance of the appropriation of funds
applicable hereto sufficient to pay the estimated expense of executing this
Agreement; and
B. approved by the Mayor pursuant to the provisions of
Executive Order No. 42, dated October 9, 1975 in the event the Executive Order
requires such approval; and
C. certified by the Mayor (Mayor's Fiscal Committee created
pursuant to Executive Order No. 43, dated October 14, 1975) that performance
thereof will be in accordance with the City's financial plan.
D. approved by the New York State Financial Control Board
("Board") pursuant to the New York State Financial Emergency Act for the City of
New York, as amended (the "Act"), in the event regulations of the Board pursuant
to the Act require such approval.
E. it has been authorized by the Mayor and the Comptroller
shall have endorsed his or her certificate that there remains unexpended and
unapplied a balance of the appropriation of funds applicable thereto sufficient
to pay the estimated expense of carrying out this Agreement.
The requirements of this section of the contract shall be in
addition to, and not in lieu of, any approval or authorization otherwise
required for this contract to be effective and for the expenditure of City
funds.
10.3 OTHER APPROVALS OR AUTHORIZATIONS. The requirement of this
Article shall be in addition to, and not in lieu of, any approval or
authorization otherwise required for this Agreement to be effective and for the
expenditure of City funds.
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ARTICLE XI
ANTI-APARTHEID PROVISION
I. ANTI-APARTHEID PROVISIONS FOR NON-COMPETITIVELY
BID CONTRACTS
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NOTICE FOR ALL PROSPECTIVE CONTRACTORS
--------------------------------------
Local Law No. 19 of 1985 became effective on July 13, 1985 and added
section 343-11.C (subsequently recodified as section 6-115) to the
Administrative Code of the City of New York. The Local Law provides for certain
restrictions on City contracts to express the opposition of the people of the
City of New York to the policy of apartheid and to encourage companies doing
business in South Africa and Namibia* support political and social change.
The City Council subsequently accepted amendments adding to the
provisions of Local Law No. 19, which were signed into law by the Mayor on
December 30, 1986, as Local Law No. 81 of 1986. On July 25, 1990, the Mayor
signed into law further amendments to the anti-apartheid law, as Local Law No.
49 of 1990.
Pursuant to the aforementioned Local Laws, prospective contractors
for contracts to provide goods,** services or construction involving
expenditures of an amount greater than the amounts established pursuant to City
Charter Section 314(b) and (c) are asked to sign a rider in which they covenant
and represent, as a material condition of their contract that they and their
affiliates*** do not engage in a number of specified activities related to South
Africa. In addition, in the case of contracts for the supply of motor vehicles,
heavy equipment, electronic data processing equipment and software, copying
machines and petroleum products, contractors are asked to certify or provide a
certification from the manufacturer or refiner does not engage in such South
Africa-related activities. (See Article I, Part B.)
Prospective contractors are not required to agree to these
conditions. However, if the lowest responsible bidder does not agree to the
conditions, the contracting agency shall not award
- -------------------
* Activity in Namibia that occurred on or after March 21, 1990 is no longer
covered by the City's anti-apartheid law.
** Local Law No. 49 amends the anti-apartheid law deleting the exemption
applicable to contractors whose sole activity in South Africa is the
manufacturing, processing and distribution of food and medical supplies.
*** Local Law No. 49 expands the applicability of the anti-apartheid order to
the contractor's corporate family.
38
<PAGE>
the contract to that bidder unless the agency head certifies in writing that the
contract is necessary for the agency to perform its functions and there is no
other responsible contractor who will supply such goods, services or
construction of comparable quality at a comparable price.
The City reserves the right to take into account the process of
selecting a contractor any direct or indirect relationship of a perspective
contractor may have related to business activity in South Africa. The right is
not limited to the consideration of specific south Africa-related activities
covered by the express terms of this Article.
Part A. In accordance with Section 6-115 of the Administrative
Code of the City of New York, the Contractor hereby
covenants and represents:
1) that the Contractor and its affiliates shall not during
the term of this contract sell or agree to sell, goods
or services directly to the following agencies of the
South African government or directly to a corporation
owned or controlled by such government and established
expressly for the purposes of procuring such goods and
services for such specific agencies.
(a) the police,
(b) the military
(c) the prison system
(d) the Ministry of Home Affairs and National
Education,
(e) the Ministry of Education and Development
Aid, including the development boards and
the rural development boards
(f) the Ministry of Justice
(g) the Ministry of Constitutional Development
and Planning,
(h) the Ministry of Law and Order,
(i) the Bureau for Information,
(j) the Ministry of Manpower,
(k) any other agency of the South African
government, including the governmental
agencies of the "homelands" are any other
political subdivisions of such government,
(l) the Armaments Development and Production
Corporation (ARMSCCR), and its subsidiaries
Nimrod, Atlas Aircraft Corporation, Eloptro
(Pty) Ltd., Kertser (Pty) Ltd., Infoplan
Ltd., Lyttleter Engineering Works (Pty)
Ltd., Naschem (Pty) Ltd., Pretoria Metal
Pressing (Pty) Ltd., Somchem (Pty) Ltd.,
Swartklip Products (Pty) Ltd., Telacast
(Pty) Ltd., and Musgrave Manufacturers and
Distributors,
(m) the national intelligence services,
(n) the Council for Scientific and Industrial
Research,
(o) the Electricity Supply Commission (ESCCM),
(p) the South African Coal, Oil and Gas
Corporation (Sasol Limited or Sasol 1, 2 or
3),
39
<PAGE>
(q) the Atomic Energy Corporation (Ltd.), or
(r) the Southern Oil Exploration Corporation
(Soeker).
2) In the case of a contract to supply goods, that none of
the goods to be supplied to the City originated in South
Africa.
3) That the Contractor and its affiliates do not do
business**** or that the Contractor and its affiliates
are actively engaged in the withdrawal of their
operations from South Africa and within six months,
provided, however, that if the Contractor and its
affiliates have withdrawn or are so engaged in
withdrawing their operations from South Africa and
maintain a presence in South Africa after such six month
period solely for the purpose of liquidating their
business, they shall not be eligible for that reason to
make the certification provided for in this Part.
4) That, except as provided in section 6 of this Part, the
Contractor shall not make new investments in South
Africa, and that if at any time during the course of the
contract the Contractor acquires an entity which is
doing business in South Africa, the Contractor shall
initiate withdrawal of its acquisition's operations from
South Africa.
5) That, except as provided in section 6 of this Part, the
Contractor shall not enter into any new agreement with a
South African entity allowing the use of its trademark,
copyright or patent by such entity; furthermore, that it
does not provide goods or services to any South African
entity pursuant to any non-equity agreement.
6) That the provisions of Sections 4 and 5 concerning
investments, agreements concerning trademarks,
copyrights and patents, and non-equity agreements shall
not apply to ownership of or agreements with entities
whose presence in South Africa is for the following
purposes: (i) the activities of religious, educational
or charitable organizations; (ii) activities intended to
promote the exchange of information, including the
publication or sale of newspapers, magazines, books,
films, television programming, photographs, microfilm,
microfiche and similar materials; (iii) the gathering or
dissemination of information by news media organizers;
and (iv) the providing of telecommunications and mail
services not involving the sale or leasing of equipment.
7) That this certification does not apply to the sale of
goods or services to an agency of the South African
government covered in subsections (a) through (o) of
section
- --------
**** A Contractor is not eligible to certify that it and its affiliates "do not
do business in South Africa" if the contractor or any of its affiliates is
involved in any of its activities covered by Section 1 of Part C.
40
<PAGE>
1 of this Part when such sale is provided for by the
terms of a contract entered into prior to July 13, 1985
(the effective date of Local Law 19), but it does apply
to any increase in the amount of goods or services
supplied to such a covered agency pursuant to any
amendment, modification or extension of such a contract
if the amendment, modification or extension was agreed
to on or after July 13, 1985.
8) That this certification does not apply to the sale of
goods or services to an agency of the South African
government covered in subsections (d) through (j) and
(i) through (4) of section 1 of this Part when such sale
is provided for by the terms of a contract entered into
prior to February 28, 1987 (the effective date of Local
Law 81), which amends Local Law 19 but it does apply to
any increase in the amount of goods or services supplied
to such a covered agency pursuant to any amendment,
modification or extension of such a contract if the
amendment, modification or extension was agreed to on or
after February 28, 1987.
Part B. The following provision applies only to contracts for
the supply of motor vehicles, heavy equipment,
electronic data processing equipment and software,
copying machines and petroleum products:
In order for the contractor to be eligible to sign this
anti-apartheid rider, the contractor must either certify
or provide a certificate to the Department from the
manufacturer or refiner or product to be supplied to the
City that such manufacturer or refiner and its
affiliates are in compliance with the terms set forth in
Article I and II of this rider. Any such contractor who
signs this rider shall be deemed to be certifying with
respect to such supplier or refiner unless such
contractor attaches to the contract a separate copy of
this rider signed by such manufacturer or refiner. For
the purpose of the certificate made by or with respect
to such refiner or manufacturer, the term "contractor"
as used in Articles I and II shall be deemed to refer to
such manufacturer or refiner.
Part C. For purposes of this anti-apartheid provision, the
following terms shall have the following meanings:
1. An entity shall be considered to have "withdrawn its
operations from South Africa" if:
(a) it does not maintain any office, plant or
employee in South Africa other than for the
following purposes: (i) the activities of
religious, educational or charitable
organizations; (ii) activities intended to
promote the exchange of information,
including the publication or sale of
newspapers, magazines, stocks, films,
televisions programming, photographs,
microfilm, microfiche, and similar
materials; (iii) the gathering or
dissemination of information by
41
<PAGE>
news media organizations; and (iv) the
providing of telecommunications and mail
services not involving the sale or leasing
of equipment.
(b) it has no investments in South Africa; and
(c) it does not provide goods or services to any
South African entity pursuant to any
non-equity agreement.
2. "Affiliates" of a Contractor shall mean the parent
company of the Contractor, and any subsidiaries of the
parent company, and any subsidiaries of the Contractor.
3. "Parent company" shall mean an entity that directly
controls the Contractor.
4. "Subsidiary" shall mean an entity that is controlled
directly, or indirectly through one or more
intermediaries, by a Contractor or the Contractor's
parent company.
5. "Control" shall mean holding five percent or more of the
outstanding voting securities of a corporation, or
having an interest of five percent or more in any other
entity.
6. "Entity" shall mean a partnership, association, join
venture, company, corporation or any other form of doing
business.
7. "South African entity" shall mean an entity organized in
South Africa, or a branch or office in South Africa of
an entity which is domiciled or organized outside South
Africa.
8. "Investment" shall mean the beneficial ownership or
control of a controlling interest in a South African
entity, but shall not include the purchase of securities
of a South African entity for a customer's account.
9. "non-equity agreement" shall mean a license, franchise,
distribution or other written agreement pursuant to
which an entity provides management, maintenance, or
training services directly to a South African entity, or
supplies goods directly to a South African entity for
distribution by such South African entity, or for use as
component parts in the manufacture of other goods by
such South African entity. In addition, a "non-equity
agreement" shall mean an original manufacturer agreement
("O.E.M. agreement") for equipment sold by a
manufacturer of computers, copiers, or
telecommunications equipment, which provides for or
authorizes the sale of such equipment, alone or as part
of a finished product, to a South Africa entity. A
company shall be deemed to be providing goods or
services to a South African entity pursuant to an
original equipment manufacturer
42
<PAGE>
agreement in accordance with the following definitions
and under the following circumstances:
a. "Company #1 includes the company which seeks
to enter a contract with a City agency, and
is determining whether it is qualified to
sign the City's anti-apartheid rider, and
all "affiliates" of that company as defined
in section 2 of this Part.
b. "Sale includes lease or rental of equipment.
c. An. O.E.M. agreement is an agreement between
a manufacturer (Company #1) and another
manufacturer, a distributor, or a
value-added reseller (Company #2), such that
Company #1 provides products (which may
include parts, components and/or
subassemblies) and authorized the sale of
such products Company #2 under any of the
following circumstances.
1) Company #1 makes a sale of its
equipment to Company #2, which,
with or without making minor
modifications to the equipment,
privately labels and seeks it.
An example would be an O.E.M.
agreement whereby Company #2
purchases a copier from Company
#1, and resells it as a copier
under its own brand name, with
or without having first made
minor modifications to the
copier's packaging.
2) Company #1 makes a sale of its
equipment to Company, which
provides substantial added value
to Company #2's added value may
be major application software
and/or special hardware
integrated into the product.
Examples include:
a) an O.E.M. agreement
whereby Company #2
adds banking
application software
to Company #1's
personal computer,
marketing the
resulting product as
a banking teller
station under
Company #2's brand
name.
b) an O.E.M. agreement
whereby Company #2
embeds a subassembly
purchased from
Company #1, such as
a disk drive or
telecommunications
multiplexor, into
Company #2's
computer system
under its own brand
name.
3) Company #1 makes a sale of
Company #2, which resells
Company #1's product with
Company #1's name still intact
on the product. An example would
be an O.E.M. agreement whereby
Company #2
43
<PAGE>
sells Company #1's word
processor and licensed software
as an authorized dealer
(exclusive or non-exclusive) of
Company #1.
d. An O.E.M. agreement for equipment sold by a
manufacturer of computers, copiers or
telecommunications equipment is considered
to provide for or authorize the sale of such
equipment, alone or as part of a furnished
product, to South African entity if any of
the following conditions is met:
1) The O.E.M. agreement states that
Company #2 may sell equipment
made by Company #1 (with or
without modification by Company
#2) in South Africa.
2) The equipment covered by the
agreement (as sold by Company #1
after modification by Company
#2, if any is made) falls under
one of the designated
classifications governed by the
Export Administration Act of
1979 (50 U.S.C. section 2401)
and the associated federal
regulations for Electronics and
Precision Instruments (15 C.F.R.
section 795.1, Supp. 1, Group
5), such that Company #1 knows
of resale or distribution of the
equipment to South Africa by
Company #2 and assists Company
#2 in procuring required
governmental authorizations for
such resale or distribution.
3) Company #1 has actual knowledge
of resale or distribution of the
equipment to South Africa by
Company #2 and has not either
terminated its contractual
arrangement with Company #2
concerning such equipment or
otherwise prohibited Company #2
from making further resale or
distribution of Company #1's
equipment to South Africa.
II. COMPREHENSIVE ANTI-APARTHEID ACT OF 1986, EXPORT
ADMINISTRATION ACT, AND ARMS EXPORT CONTROL ACT
PROVISIONS FOR COMPETITIVE BID CONTRACTS
----------------------------------------
The Contractor hereby covenants and represents that it and its
affiliates have not within the twelve months prior to the award of such contract
violated, and shall not during the period of this contract violate, the
provisions of the Comprehensive Anti-Apartheid Act of 1986, the Export
Administration Act of 1979 as amended (50) U.S.C. ss.2401, ET SEQ.) or the Arms
Export Control Act of 1976 as amended (22 U.S.C. ss.2778) respecting business
activity in the Republic of South Africa.
44
<PAGE>
III. ENFORCEMENT OF ARTICLES I AND II
A. The Contractor agrees that the covenants and representations in
Article I above are material conditions of this contract. In the event the
Department receives information that the Contractor, or a manufacturer or
refiner subject to such provisions in accordance with Part B of Article I, is in
violation of the provisions of such Article, the Department shall review such
information and give the Contractor and any such manufacturer or refiner an
opportunity to respond. If the Department fines that a violation has occurred,
to the Department shall have the right to terminate this contract and procure
the supplies, services or work from another source in any manner the Department
deems proper. In the event of such termination, the Contractor shall pay to the
Department, or the Department in its sole discretion may withhold from any
amounts otherwise payable to the Contractor the difference between the contract
price for the uncompleted portion of this contract and the cost to the
Department of completing performance of this contract either itself or by
engaging another contract or contractors. In the case of a requirements
contract, the Contractor shall be liable for such difference in price for the
entire amount of supplies required by the Department for the uncompleted term of
this contract. In the case of a construction contract, the Department shall also
have the right to hold the Contractor in partial or total default in accordance
with the default provisions of this contract. The rights and remedies of the
Department hereunder shall be in addition to, and not in lieu of, any rights and
remedies the Department has pursuant to this contract or by the operation of
law.
B. Upon a final determination by the United States Department of
Commerce or any other agency of the United States or a court that the Contractor
or a manufacturer or refiner subject to the provisions of Article II pursuant to
the provisions of Part B of Article I, or any affiliates of the contractor or
such a manufacturer or refiner, has violated any provisions of the Comprehensive
Anti-Apartheid Act, the Export Administration Act of the Arms Export Control Act
respecting business activity in the Republic of South Africa, the Department
shall have the right to terminate this contract and procure the supplies,
services or work from another source in any manner the Department deems proper.
In the event of such termination, the Contractor shall pay to the Department, or
the Department in its sole discretion may withhold from any amounts otherwise
payable to the Contractor the difference between the contract price for the
uncompleted portion of this contract and the cost to the Department of
completing performance of this contract either itself or by engaging another
Contractor or Contractors. In the case of a requirements contract, the
Contractor shall be liable for the difference in price for the entire amount of
supplies required by the Department for the uncompleted term of this contract.
In the case of a construction contract, the Department shall also have the right
to hold the Contractor in partial or total default in accordance with the
default provisions of this contract. The rights and remedies of the Department
hereunder shall be in addition to, and not in lieu of, any rights and remedies
the Department has pursuant to this contract or by operation of law.
45
<PAGE>
ARTICLE XII
ENTIRE AGREEMENT
This written Agreement contains all the terms and conditions agreed upon by the
parties hereto, and no other agreement, oral or otherwise, regarding the subject
matter of this Agreement shall be deemed to exist or to bind any of the parties
hereto, or to vary any of the terms contained herein.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the date first above written.
CITY OF NEW YORK
DEPARTMENT OF SOCIAL SERVICES
HUMAN RESOURCES ADMINISTRATION
COMMISSIONER
By /s/ Solomon Malach
_______________________________________
Corporate Contractor
Affix Corporate Seal:
American Meidcal Alert Corp.
_______________________________________
CONTRACTOR
By /s/ Wilfred L. Mossey
_____________________________________
Title Executive V.P.
__________________________________
11-2571221
_______________________________________
Fed. Employer I.D. No. or Soc. Sec. No.
Approval as to form and certification as to legal authority was
granted by the Corporation Counsel on:_______________________________________.
46
<PAGE>
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On this 27 day of June 1991, before me personally came Solomon Malach, to me
known to me to be Deputy commissioner of the HUMAN RESOURCES
ADMINISTRATION/DEPARTMENT OF SOCIAL SERVICES of the CITY OF NEW YORK, the person
described in and who is duly authorized to execute the foregoing instrument on
behalf of the Commissioner, and he acknowledge to me that he executed the same
for the purpose therein mentioned.
/s/ Janet Smith
______________________________
NOTARY PUBLIC
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On this 27th day of June 1991, before me personally came Wilfred L. Mossey, to
me known, who, being by me duly sworn, did deposes and say that he resides at
380 West Penn Street, he is the Exec. V.P. of the American Medical Alert Corp.,
the corporation described in and which executed the above instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the board of Directors
of said corporation, and that he signed his name thereto by like order.
/s/ Janet Smith
______________________________
NOTARY PUBLIC
47
<PAGE>
APPROVAL AS TO FROM OF A SINGLE CONTRACT
NAME OF CONTRACTOR: AMERICAN MEDICAL ALERT CORP.
Pursuant to the powers vested in me by Section 394, subd. b of the
New York City Charter, I hereby approve as to form the annexed contract to be
entered into by the Department of Social Services of the Human Resources
Administration on behalf of the City of New York.
Dated:
APPROVED AS TO FORM
CERTIFIED AS TO LEGAL AUTHORITY
* (Signature Illegible)
_______________________________
Acting Corporation Counsel
June 14, 1991
48
<PAGE>
THIS MODIFICATION AGREEMENT, dated this 8th day of May, 1989 between
the City of New York acting through the Department of Social Services of the
Human Resources Administration ("Department"), 250 Church Street, New York, New
York 10013 and American Medical Alert Corp. ("Contractor") with offices at 3265
Lawson Boulevard, Oceanside, New York 11572.
W I T N E S S E T H :
---------------------
WHEREAS, parties hereto entered into an Agreement for providing an
electronic call device system, known as the Voice of Help System ("Agreement")
for the period of July 1, 1988 through June 30, 1989, which Agreement was
approved pursuant to a Resolution adoption by the Board of Estimate on June 9,
1988 (Cal. No. 389); and
WHEREAS, the Department desires to modify the Agreement by having the
"Contractor" upgrade the present Voice of Help Units heretofore provided.
NOW, THEREFORE, the parties hereto agree as follows:
1. Except as modified to date and as modified herein all the terms,
conditions and covenants of the Agreement shall; remain in full force
and effect.
2. Article II of Part I is amended by inserting a new Section B as
follows:
"D. "Upgraded Voice of Help System" - The Contractors upgraded
electronic call device system, which consists of the Voice
of Help console, with provisions for remote activator,
panic button at primary entrance, activator mounted in
bathroom and smoke detector (the "Upgraded System")"
3. Article III of Part I Sections B, D and E; Article IV, Sections 1a,
1b, 2, 3, 5, 5a and 11; and VI A (ii); are amended by adding the
words and/or "the Upgrade System" after the words "Voice of Help
Unit" each time the words "Voice of Help Unit" appears in those
Articles and Sections.
4. Article III of Part I Section E is amended by inserting the words
"and under this Agreement" after the words "under an earlier lease
Agreement" on line 2 thereof.
5. Article IV of Part I is amended by adding Subsections 12, 13 and 14
as follows:
"12. The Contractor will provide a full time
installer/service person to provide service for
the Home Care Service Program/ECD clients at no
additional cost to the Department.
13. All equipment installed by the Contractor
subsequent to the effective date of the
modification shall have an adhesive label
affixed to it identifying it as:
<PAGE>
"Property of American Medical Alert
Corp." (Call 1-800-632-6729)
All equipment not so identified shall not be
reimbursable to Contractor if deemed
unrecoverable.
14. A. The Contractor shall, upon the execution of the
Modification Agreement and until the
termination date of this Agreement, as
modified, endeavor to change and/or modify, all
existing units and 131N units in place to the
"Upgraded System."
B. Installations and removals of the "Upgraded
System" shall be billed as hereinafter provided
in Section 9 of this Modification Agreement."
6. Article V of Part I is amended by deleting it in its entirety and
substituting in place and in lieu thereof a new Article V, Section A
as follows:
"A. 1. Each Voice of Help Unit (Models 131, 131N and
500) (activator and console) which shall have
been installed shall have ascribed to it a
value based on original equipment cost of
$429.00 per unit for the purpose of determining
depreciated value as provided for in Subsection
2 hereof.
2. In the event, despite the good faith efforts of
both the Department and the Contractor, the
above described unit is not recoverable from
the client, the Contractor shall, with the
consent of the Department, be entitled to
recover the depreciated value of such unit. For
the purpose of establishing undepreciated value
the voice of help unit (activator and console)
shall be depreciated at the rate of $9.00 per
month."
7. Article V of Part I is further amended by adding a new Section B as
follows:
"B. Each "Upgraded System" which shall be or shall
have been, installed shall be ascribed a
certain agreed value, by unit (console) and
component parts in accordance with the schedule
of values as shown in Subsection 1 below, which
values shall be used for the purposes of
establishing depreciated values as described in
Subsection 2 below.
1. a)Central unit (console).... $395.00
b)Activators (3) each at.... $ 45.00
c)Smoke detector............ $ 60.00
2. In the event, despite the good faith
efforts of both the Department and
the Contractor, the above mentioned
unit and/or its respective
-2-
<PAGE>
component parts is (are) not
recoverable from the client, the
Contractor, with the consent of the
Department, shall be entitled to
recover the undepreciated value of
such unit and/or component part. For
the purposes of establishing such
undepreciated value the central unit
(console) shall be depreciated at
the rate of $9.00 per month; the
activators shall be depreciated at
the rate of $1.00 per month each;
and the smoke detector shall be
depreciated at the rate of $1.33 per
month.
8. Amend Article VII, Section A of Part I by increasing the Agreement
amount of "not to exceed" $150,000, by $75,000 to a new amount of
"not to exceed $225,000.00."
9. Amend Article VII of Part I, Section B1 by deleting it in its
entirety and substituting in lieu and in place thereof as follows:
A. A one time fee of $50 for the installation of
the "Upgraded System" and a fee of $25.00 for
the removal of the "Upgrade System" and further
amend Article VII, Part I B2 by deleting it in
its entirety and substituting in lieu and in
place thereof the following:
B. A one time replacement fee of $75.00 for the
replacement of each model 131 unit with an
"UPgrade System."
2. a) For the Voice of Help Unit a
monthly monitoring/leasing fee of
$29.75 per client; and for those
units which have been in place for
more than 24 monthly a monthly
monitoring/leasing fee of $20.75,
and for the "upgraded system" a
monthly monitoring/leasing fee of
$30.00 per month.
b) Billing for a partial month,
irrespective of the number of days
of service provided during any such
partial month shall be in the sum of
$15.00
And further deleting Subsection C of Article
VII, Section A in its entirety.
10. APPROVALS
10.1 THE CITY OF NEW YORK
This Modification Agreement shall not become effective or binding
unless:
A. authorized by the Mayor; approved by the Board of Estimate
either pursuant to Section 349 of the New York City
Charter for contracts not subject to public letting
-3-
<PAGE>
if the amount to be paid hereunder exceeds $10,000, or for
amendments to a contract previously approved by the Board
of Estimate, if the amount to be paid hereunder exceeds
the lesser of $10,000 or fifteen per cent (15%) of the
original contract amount, or pursuant to Section 343(a) of
the New York City Charter for contracts subject to public
letting; and the Comptroller shall have endorsed his
certificate that there remains unexpended and unapplied a
balance of the appropriation of funds applicable hereto
sufficient to pay the estimated expense of executing this
Modification Agreement; and
B. approved by the Mayor pursuant to the provisions of
Executive Order No. 42, dated October 9, 1975 in the event
the Executive Order requires such approval; and
C. certified by the Mayor (Mayor's Fiscal Committee created
pursuant to Executive Order No. 43, dated October 14,
1975) that performance thereof will be in accordance with
the City's financial plan.
10.2 OTHER APPROVALS OR AUTHORIZATIONS
The requirement of this Article shall be in addition to, and not in
lieu of, any approval or authorization otherwise required for this
Modification Agreement to be effective and for the expenditure of
City funds.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the date first above written.
CITY OF NEW YORK
DEPARTMENT OF SOCIAL SERVICES
HUMAN RESOURCES ADMINISTRATION
COMMISSIONER
By /s/ Thomas W. Bergdelf
-----------------------------
Corporate Contractor
Affix Corporate Seal: AMERICAN MEDICAL ALERT CORP.
-------------------------------
CONTRACTOR
By /S/ WILFRED L. MOSSEY
-----------------------------
Title EXECUTIVE VICE PRESIDENT
------------------------
11-2571221-C
---------------------------------------
Fed. Employer I.D. No. or Soc. Sec. No.
-4-
<PAGE>
Approval as to form and certification as to legal authority was
granted by the Corporation Counsel on: _____________________________.
-5-
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this 8th day of May 1989, before me personally came Thomas W. Bergdelf, to me
known and known to me to be General Counsel of the HUMAN RESOURCES
ADMINISTRATION DEPARTMENT OF SOCIAL SERVICES of the CITY OF NEW YORK, the person
described in and who is duly authorized to executed the foregoing instrument on
behalf of the Commissioner, and he acknowledged to me that he executed the same
for the purpose therein mentioned.
/s/ Mary J. Minor
-----------------------------
NOTARY PUBLIC
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this 8th day of May 1989, before me personally came Wilfred L. Mossey, to me
known, who, being by me duly sworn, did depose and say that he resides at 124
Grant Avenue, East Rockaway, New York; that he is the Executive Vice President
of American Medical Alert Corp., the corporation described in and which executed
the above instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation, and that he signed his name
thereto by like order.
/s/ Mary J. Minor
-----------------------------
NOTARY PUBLIC
-6-
<PAGE>
APPROVAL AS TO FORM OF A SINGLE CONTRACT
NAME OF CONTRACTOR: AMERICAN MEDICAL ALERT CORP.
Pursuant to the powers vested in me by Section 394, subd. b of the
New York City Charter, I hereby approve as to form the annexed contract to be
entered into by the Department of Social Services of the Human Resources
Administration on behalf of the City of New York.
Dated:
* (Signature Illegible)
--------------------------------
Acting Corporation Counsel
April 04, 1989
-7-
<PAGE>
THIS LEASE AGREEMENT dated this 23 day of June, 1988, between the
Department of Social Services of the Human Resources Administration
("Department") with offices at 250 Church Street, New York, New York 10013 and
American Medical Alert Corp. ("Contractor") with offices at 3265 Lawson
Boulevard, Oceanside, New York 11572.
W I T N E S S E T H
-------------------
WHEREAS, the Department's Medical Assistance Program/Office of Home
Care Services ("MAP/"OHCS") provides a program of personal home care service for
individuals eligible for such services, pursuant to applicable Federal and State
Laws and regulations; and
WHEREAS, a significant number of the individuals served by OHCS
require regular custodial care; and
WHEREAS, in order to reduce the costs of such custodial care service,
OHCS instituted a program designed to allow home care service clients, living
alone, to call for assistance, via an electronic call device; and
WHEREAS, the Contractor markets an electronic call device ("ECD")
known as the Voice of Help System.
WHEREAS, the Department desires to lease the Voice of Help System and
the Contractor agrees to lease said System.
NOW THEREFORE, the parties hereto agree as follows:
PART I
------
ARTICLE I
---------
TERM OF AGREEMENT
-----------------
A. The term of this Agreement shall be from July 1, 1988 to June 30,
1989.
B. The Department shall have the option to renew this Lease Agreement
upon the terms and conditions set-forth herein for an additional one year
period, provided that the Board of Estimate shall authorize such renewal and all
required approvals are obtained.
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ARTICLE II
----------
DEFINITIONS
-----------
A. Voice of Help System - the Contractor's electronic call device
system, consisting of the Voice of Help Activator and Voice of Help Console
(Voice of Help) and the Monitoring System.
B. Emergency Response Center ("ERC") - the Contractor's central
facilities for storing and retrieving client data and for responding to all
ECDS.
C. Client - the individual selected by the Department to receive the
equipment and services described herein.
ARTICLE III
-----------
EQUIPMENT
---------
A. The Department agrees to lease from the Contractor and the
Contractor agrees to lease from the Department as many Voice of Help Units may
be required by the Department.
B. The Contractor shall be responsible for installing the Voice of
Help Unit at the Client's premises. Installation shall consist of all work that
may be required to utilize a Client's existing telephone system. In no event
shall the Contractor be responsible to perform such work that is required to be
performed by the New York Telephone Company. If an installation cannot be
completed, the Contractor shall immediately notify the Department contract,
indicating why said installation cannot be completed.
C. The Client shall be responsible for ensuring that the Contractor is
provided:
(a) proper telephone equipment which enables Contractor to
install on RJ31X connector in the Client's residence.
(b) properly functioning telephone service.
(c) twenty-four (24) hour, AC 110 volt circuit as required to
power the Voice of Help Unit console.
D. At the option of the Department, the Contractor shall install a
Voice of Help Unit, at no cost to the Department, at a location to be selected
by the Department for purposes of monitoring the Contractor's services.
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E. The parties agree that the Voice of Help Units previously installed
under an earlier lease agreement with the Contractor and any renewals thereof
shall remain in place, unless removal of a Unit is requested by the Department,
and shall be subject to the terms and conditions herein.
ARTICLE IV
----------
SERVICES
--------
The Contractor shall be responsible for the following services:
1. Install a Voice of Help Unit in a client's residence within five
(5) working days of telephone notification by authorized MAP/OHCS staff.
(a) The Contractor shall provide all parts and equipment
necessary for installing the Voice of Help unit into a functioning telephone
system.
(b) The Contractor shall instruct the client in the use and
maintenance of the Voice of Help unit and shall provide the client with simple
written instructions, including how to report a malfunction of the unit.
(c) The Contractor shall forward to MAP/OHCS within (5) five
working days of the installation, a form signed by a Contractor representative
or employee and by the client or client's representative confirming the date of
the installation and the client's understanding of the use and maintenance of
the unit.
2. Maintain all installed Voice of Help units in proper working order.
(a) The Contractor shall repair or replace within 24 hours of
notification any unit that is not functioning properly.
(b) The Contractor shall notify MAP/OHCS immediately upon
repairing or replacing a malfunctioning unit.
3. Monitor each Voice of Help unit at least once every 24 hours to
insure that the device is operating properly. The Contractor shall follow up
immediately on any unit that is not operating properly. Malfunctioning equipment
shall be repaired or replaced within 24 hours of the Contractor's becoming aware
of the malfunction.
4. Maintain a 24-hour emergency response center staffed with trained
emergency response operators.
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(a) The Contractor shall establish and maintain a 24-hour
monitoring center for all installed Voice of Help units.
(b) The Contractor shall insure 24-hour staffing of the emergency
response center with trained operators.
5. Respond immediately to any and all signals from clients' Voice of
Help units and maintain appropriate contact until termination of the emergency
situation.
(a) The Contractor, immediately upon receiving a signal from a
client's Voice of Help unit, shall retrieve the client's automated data records
and contact the client or the client's representative, or take other emergency
action as prescribed in the client's record.
(b) The emergency response operator shall monitor the provision
of emergency service to verify that it has been provided and that the emergency
situation no longer exists at the client's residence.
(c) The Contractor shall notify MAP/OHCS by telephone, on the
working day following the emergency, of the nature and resolution of the
emergency. The Contractor shall submit to MAP/OHCS a written summary of the
emergency within five (5) working days of the incident.
6. Insure continuous monitoring and response capabilities during power
failures, mechanical malfunction or other emergencies.
7. Create, maintain and protect automated client data records.
(a) The Contractor shall operate an automated client data storage
and retrieval system which shall include all pertinent client information.
(b) The Contractor shall update client data every six (6) months.
(c) The Contractor shall protect client records from alteration
or destruction, and shall protect the confidentiality of client records.
8. Maintain written records of all emergency response system (ERS)
activities, including all activations of Voice of Help units.
9. Devise and provide all client data, activity, and billing forms.
10. Submit detailed monthly billings within ten (10) working days of
the end of the month.
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11. Remove the Voice of Help unit from a client's residence within
five (5) working days of telephone notification by authorized MAP/OHCS staff.
(a) The Contractor shall, upon instruction by MAP/OHCS, arrange
with the client or client's representative for a mutually convenient appointment
within five (5) working days.
(b) The Contractor shall verify to MAP/OHCS by telephone and in
writing that the unit has been removed.
ARTICLE V
---------
DEPRECIATION AND RECOVERY OF EQUIPMENT
--------------------------------------
Each Voice of Help unit shall be depreciated at the rate of $9.00 per
month, from the date of the first installation of the unit. In the event that,
despite the good faith efforts of both the Department and the Contractor, the
unit is not recoverable from the client the Contractor, with the consent of the
Department, shall be entitled to recover the depreciated value of the Voice of
Help unit. This value shall be based on an original equipment cost of $429.00
per unit (activator and console).
ARTICLE VI
----------
LIQUIDATED DAMAGES
------------------
A. If the Contractor is not able to:
(i) respond to Client's or the Department's request
for maintenance and service within 24 hours
following receipt of such notification or
(ii) get the Voice of Help unit operating or supply a
properly functioning Voicemitter within 24 hours
following receipt of said notification;
the Contractor at the discretion of the Department shall pay to the
Department, or at its option, the Department may deduct from any
payment due or to become due to the Contractor, the monthly charge for
the Voice of Help unit, as fixed and agreed liquidated damages.
B. If there are interruptions in the monitoring services provided by
the Contractor pursuant to Article IV of Part I of this Lease Agreement,
totaling 24 hours or more during a monthly billing period that are not the
result of an improper, faulty or non-operational phone system, the Contractor at
the discretion of the Department, shall pay to the Department, or at its
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option, the Department may deduct from any payment due or to become due to the
Contractor, the monthly charge under this Lease Agreement for the month said
interruptions occurred as fixed and agreed liquidated damages.
ARTICLE VII
-----------
CHARGES
-------
A. Notwithstanding any other provision to this Lease Agreement, total
payments to be made to the Contractor shall not exceed $150,000.00
B. The Department agrees to pay the following fees and charges for the
equipment and services provided by the Contractor herein.
1. A one time installation and removal fee per Voice of Help unit
of $75.00.
2. A monthly monitoring/leasing fee of $29.75 per client for each
of the first twenty-four months of service; all subsequent months for the client
shall be billed at a rate of $20.75 per month.
C. Billing for a partial month's monitoring/leasing resulting from an
installation or removal of a Voice of Help unit shall be prorated at $1.00 per
day for each day that the client received service during the billing month.
D. The Contractor shall submit monthly statements to the Department
setting forth the monthly rental and installation charges, if any, and the name
and address of each Client, for the month which payment is being requested.
ARTICLE VIII
------------
MOST FAVORED CUSTOMER
---------------------
The Contractor warrants and represents that the prices, warranties,
benefits and terms set forth herein are at least equal to or more favorable to
the City than the prices, warranties, benefits, and terms now charged or offered
by the Contractor to other customers under similar circumstances and terms and
conditions, or that may be charged or offered during the term hereof for the
same or substantially similar products or services defined in this Agreement. If
at any time during the term hereof, the COontractor enters into an agreement on
a basis that provides prices, warranties, benefits, or terms more favorable than
those provided the City hereunder, then the Contractor shall within thirty (30)
calendar days thereafter notify the City of such facts, and regardless of
whether such notice is sent by the Contractor or received by the City, this
Agreement shall be deemed to be amended, effective retroactively to the
effective date of the more favorable agreement, to provide the same prices,
warranties, benefits, or terms to the City;
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provided that the City shall have the right and option at any time to decline,
to accept any such change, in which event such amendment shall be deemed null
and void. If the Contractor is of the opinion that an apparently more favorable
price, warranty, benefit or term charged or offered a customer during the term
hereof is not in fact more favorable treatment, the Contractor shall promptly
notify the Commissioner in writing setting forth in detail the reasons that it
believes said apparently moe favorable treatment is not in fact more favorable
treatment. The Commissioner, after due consideration of such written
explanation, may decline to accept such explanation and thereupon this Agreement
shall be deemed to be automatically amended effective retroactively to the
effective date of the more favorable agreement, to provide the same prices,
warranties, benefits, and/or terms to the City.
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<PAGE>
PART II - GENERAL PROVISIONS
----------------------------
ARTICLE I
---------
DEFINITIONS
-----------
As used throughout this Agreement, the following terms shall have the
meaning set forth below:
(a) "City" shall mean the City of New York, its departments and
political subdivisions.
(b) "Comptroller" shall mean the Comptroller of the City of New
York.
(c) "Department" shall mean the Department of Social Services of
the Human Resources Administration including its constituent agencies,
departments, bureaus and their subdivisions.
(d) "Administrator" or "Commissioner" shall mean the
Administrator of the Human Resources Administration/Commissioner of the
Department of Social Services or his duly authorized representative. The term
"duly authorized representative" shall include any person or persons acting
within the limits of his authority.
(e) "Law" or "Laws" shall include but not be limited to the New
York City Charter, the New York City Administrative Code, a local law of the
City of New York, and any ordinance, rule or regulation having the force of law.
(f) When referring to the Contractor, the pronoun "it", shall
also mean he or she, and the adjective "its" shall also mean his or her, as the
case may be.
ARTICLE II
----------
REPRESENTATION AND WARRANTIES
-----------------------------
2.1 PROCUREMENT OF AGREEMENT
----------------------------------
A. The Contractor represents and warrants that no person or selling
agency has been employed or retained to solicit or secure this Agreement upon an
agreement or understanding for a commission, percentage, brokerage fee,
contingent fee or any other compensation. The Contractor further represents and
warrants that no payment, gift or thing of value has been made, given or
promised to obtain this or any other agreement between the parties. The
Contractor makes such representations and warranties to induce the City to enter
into this Agreement and the City relies upon such representations and warranties
in the execution hereof.
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B. For a breach or violation of such representations or warranties,
the Administrator shall have the right to annul this Agreement without
liability, entitling the City to recover all monies paid hereunder and the
Contractor shall not make claim for, or be entitled to recover, any sum or sums
due under this Agreement. This remedy, if effected, shall not constitute the
sole remedy afforced the City for the falsity or breach, nor shall it constitute
a waiver of the City's right to claim damages or refuse payment or to take any
other action provided for by law or pursuant to this Agreement.
2.2 CONFLICT OF INTEREST
------------------------
The Contractor represents and warrants that neither it nor any of its
directors, officers, members, partners or employees, has any interest nor shall
they acquire any interest, directly or indirectly, which would or may conflict
in any manner or degree with the performance or rendering of the services herein
provided. The Contractor further represents and warrants that in the performance
of this Agreement no person having such interest or possible interest shall be
employed by it. No elected official or other officer or employee of the City or
Department, nor any person whose salary is payable, in whole or in part, from
the City Treasury, shall participate in any cecision relating to this Agreement
which affects his personal interest or the interest of any corporation,
partnership or association in which he is, directly or indirectly, interested
nor shall any such person have any interest, direct or indirect, in this
Agreement or in the proceeds thereof.
2.3 FAIR PRACTICES
------------------
The Contractor and each person signing on behalf of any Contractor
represents and warrants and certifies, under penalty of perjury, that to the
best of its knowledge and belief:
A. The prices in this Agreement have been arrived at independently
without collusion, consultation, communication, or agreement, for the purpose of
restricting competition, as to any matter relating to such prices with any other
bidder or with any competitor;
B. Unless otherwise required by law, the prices which have been quoted
in this Agreement and on the proposal submitted by the Contractor have not been
knowingly disclosed by the Contractor prior to the proposal opening, directly or
indirectly, to any other bidder or to any competitor; and
C. No attempt has been made or will be made by the Contractor to
induce any other person, partnership or corporation to submit or not to submit a
proposal for the purpose of restricting competition.
The fact that the Contractor (a) has published price lists, rates, or
tariffs covering items being procured, (b) has informed prospective customers of
proposed or pending publication of new or revised price lists for such items, or
(c) has sold the same items to other customers at the
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same prices being bid, does not constitute, without more, a disclosure within
the meaning of the above.
2.4 Affirmation of Responsibility And Paid Taxes
------------------------------------------------
The Contractor affirms and declares that said Contractor is not in
arrears to the City of New York upon any debt, contract or taxes and is not a
defaulter, as a surety or otherwise, upon any obligation to the City of New
York, and has not been declared not responsible, or disqualified, by any agency
of the City of New York, nor is there any proceeding pending relating to the
responsibility or qualification of the Contractor to receive public contracts
except as otherwise stated in the affirmation pertaining to the foregoing which
has been furnished to the Department.
ARTICLE III
-----------
AUDIT BY THE DEPARTMENT AND CITY
--------------------------------
3.1 All vouchers or invoices presented for payment to be made
hereunder, and the books, records and accounts upon which said vouchers or
invoices are based are subject to audit by the Department and by the Comptroller
of the City of New York pursuant to the powers and responsibilities as conferred
upon said Department and said Comptroller by the New York City Charter and the
Administrative Code of the City of New York, as well as all orders and
regulations promulgated pursuant thereto.
3.2 The Contractor shall submit any and all documentation and
justification in support of expenditures or fees under this Agreement as may be
required by said Department and said Comptroller so that they may evaluate the
reasonableness of the charges and shall make its records available to the
Department and to the Comptroller as they consider necessary.
3.3 All books, vouchers, records, reports, cancelled checks and any
and all similar material related to this contract and the work thereunder may be
subject to periodic inspection, review and audit by the State of New York,
Federal Government and other persons duly authorized by the City including the
Department's Office of the Inspector General. Such audit may include examination
and review of the source and application of all funds whether from the City, any
State, the Federal Government, private sources or otherwise.
3.4 The Contractor shall not be entitled to final payment under the
Agreement until all requirements have been satisfactorily met.
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ARTICLE IV
COVENANTS OF THE CONTRACTOR
4.1 EMPLOYEES
-------------
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 City nor under contract to the City 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 City for the acts, omissions, liabilities or
obligations of the Contractor or any 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,
worker's compensation, disability benefits and social security.
4.2 LIABILITY
-------------
A. The Contractor shall be solely responsible for all physical
injuries or death to its agents, servants, or employees or to any other person
and for all damage to any property sustained during its operations and work
under this Agreement resulting from any act of omission or omission or error in
judgment of any of its officers, trustees, employees, agents, servants, or
independent contractors, and shall hold harmless and indemnify the City from
liability upon any and all claims for damages on account of such injuries or
death to any such person or damages to property on account of any neglect, fault
or default of the Contractor, its officers, trustees, employees, agents,
servants, or independent contractors. The Contractor shall be solely responsible
for the safety and protection of all of its employees whether due to the
negligence, fault or default of the Contractor or not.
B. In the event any claim is made or any action is brought against the
City arising out of negligent or careless acts of an employee of the Contractor,
either within or without the scope of his employment, or arising out of
Contractor's negligent performance of this Agreement, then the City shall have
the right to withhold further payments hereunder for the purpose of set-off in
sufficient sums to cover the said claim or action. The rights and remedies of
the City provided for in this clause shall not be exclusive and are in addition
to any other rights and remedies provided by law or this Agreement.
4.3 INSURANCE
-------------
The Contractor shall carry paid up insurance in the sum of not less
than One Million ($1,000,000) Dollars per occurrence to protect the Department
and the City of New York against any and all claims, loss or damage, whether in
contract or tort, including claims for injuries to, or death of persons, or
damage to property, whether such injuries, death or damages be attributable
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to the statutory or common law negligence or any other acts of the Contractor,
its employees, or otherwise. Said policy shall also cover loses, death or injury
due to failure of the Voice of Help System. Such policy or policies of insurance
shall be obtained from a company, or companies, duly licensed to do business in
the State of New York, shall name the Department and City of New York as
additional parties insured thereunder, shall provide that in the event of
cancellation thereof, the Department shall be notified at least fifteen (15)
days in advance thereof, and shall provide that the carrier shall appear, defend
and indemnify the Department and City, including the agents, servants and
employees of the Department and City, in connection with all such claims, loss
or damage. Two (2) executed copies of all insurance policies shall be delivered
to the Department for approval as to form prior to the effective date of this
Agreement.
4.4 WORKER'S COMPENSATION AND DISABILITY BENEFITS
-------------------------------------------------
If this Agreement be of such a character that the employees engaged
thereon are required to be insured by the provisions of Chapter 615 of the Laws
of 1922, known as the "Worker's Compensation Law" and acts amendatory thereto,
the Agreement shall be void and of no effect unless the Contractor shall secure
compensation for the benefit of, and keep insured during the life of this
Agreement such employees in compliance with the provisions of said law,
inclusive of Disability Benefits; and, shall furnish the Department with two (2)
certificates of these insurance coverages.
4.5 UNEMPLOYMENT INSURANCE
--------------------------
Unemployment Insurance coverage shall be obtained and provided by the
Contractor for its employees.
4.6 MINIMUM WAGE
----------------
Except for those employees whose minimum wage is required to be fixed
pursuant to Section 220 of the Labor Law of the State of New York, all persons
employed by the Contractor in the performance of this Agreement shall be paid,
without subsequent deduction or rebate, unless expressly authorized by law, not
less than the minimum wage as prescribed by law. Any breach or violation of the
foregoing shall be deemed a breach or violation of material provision of this
Agreement.
4.7 INDEPENDENT CONTRACTOR STATUS
---------------------------------
The Contractor and the Department agree that the Contractor is an
independent contractor, and not an employee of the Department or the City of New
York, and that in accordance with such status as independent contractor, the
Contractor covenants and agrees that neither it nor its employees or agents will
hold themselves out as, nor claim to be, officers or employees of the City of
New York, or of any department, agency or unit thereof, by reason hereof, and
that they will not, by reason hereof, make any claim, demand or application to
or for
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any right or privilege applicable to an officer or employee of the City of New
York, including, but not limited to, Worker's Compensation coverage,
Unemployment Insurance Benefits, Social Security coverage or employee retirement
membership or credit.
4.8 CONFIDENTIALITY
-------------------
A. All information obtained, learned, developed or filed by the
Contractor in connection with public assistance recipients or their relatives or
in connection with other recipients of services, including data contained in
official Department files or records, shall be held confidential by the
Contractor pursuant to the provisions of the Social Services Law of the State of
New York, the Federal Social Security Act, and any applicable regulations
promulgated thereunder and shall not be disclosed by the Contractor to any
person, organization, agency or other entity except as authorized or required by
law.
B. All of the reports, information or data, furnished to or prepared,
assembled or used by the Contractor under this Agreement are to be held
confidential, and the Contractor agrees that the same shall not be made
available to any individual or organization without the prior written approval
of the Department.
C. The provisions of this Section shall remain in full force and
effect following termination of, or cessation of the services required by, this
Agreement.
4.9 BOOKS AND RECORDS
---------------------
The Contractor agrees to maintain separate and accurate books,
records, documents and other evidence and accounting procedures and practices
which sufficiently and properly reflect all direct and indirect costs of any
nature expended in the performance of this Agreement. Such records shall be
subject to review, audit and inspection by City, State and Federal personnel,
including the Department's Office of the Inspector General.
4.10 RETENTION OF RECORDS
-------------------------
The Contractor agrees to retain all books, records, and other
documents relevant to this Agreement for six years after the final payment or
termination of this Agreement, whichever is later. City, State and Federal
auditors and any other persons duly authorized by the Department shall have full
access to and the right to examine any of said materials during said period.
4.11 COMPLIANCE WITH LAW
------------------------
The Contractor shall render all services under this Agreement in
accordance with the applicable provisions of Federal, State and local laws,
rules and regulations as are in effect at the time such services are rendered.
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4.12 FEDERAL EMPLOYMENT PRACTICES
---------------------------------
The Contractor and its subcontractors shall comply with the Civil
Rights Act of 1964 and any amendment thereto, and the rules and regulations
promulgated thereunder.
4.13 NON-DISCRIMINATION AGAINST THE HANDICAPPED
-----------------------------------------------
The Contractor agrees that it will comply with the provisions of
Section 504 of the Rehabilitation Act of 1973, as amended, and all regulations,
guidelines and interpretations issued pursuant thereto.
4.14 INVESTIGATIONS
-------------------
A. The parties to this Agreement agree to cooperate fully and
faithfully with any investigation, audit or inquiry conducted by a State of New
York (State) or City of New York (City) governmental agency or authority that is
empowered directly or by designation to compel the attendance of witnesses and
to examine witnesses under oath, or conducted by the Inspector General of a
governmental agency that is a party in interest to the transaction, submitted
bid, submitted proposal, contract, lease, permit, or license that is the subject
of the investigation, audit or inquiry.
B. 1. If any person who has been advised that his or her statement,
and any information from such statement, will not be used against him or her in
any subsequent criminal proceeding refuses to testify before a grand jury or
other governmental agency or authority empowered directly or by designation to
compel the attendance of witnesses and to examine witnesses under oath
concerning the award of or performance under any transaction, agreement, lease,
permit, contract, or license entered into with the City, the State, or any
political subdivision or public authority thereof, or the Port Authority of New
York and New Jersey, or any local development corporation within the City, or
any public benefit corporation organized under the laws of the State of New
York, or;
2. If any person refuses to testify for a reason other than the
assertion of his or her privilege against self incrimination in an
investigation, audit or inquiry conducted by a City or State governmental agency
or authority empowered directly or by designation to compel the attendance of
witnesses and to take testimony under oath, or by the Inspector General of the
governmental agency that is a party in interest in, and is seeking testimony
concerning the award of, or performance under, any transaction, agreement,
lease, permit, contract, or license entered into with the City, the State, or
any political subdivision thereof or any local development corporation within
the City, then;
C. 1. The commissioner or agency head whose agency is a party in
interest to the transaction, submitted bid, submitted proposal, contract, lease,
permit, or license shall convene a
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hearing, upon not less than five (5) days written notice to the parties involved
to determine if any penalties should attach for the failure of a person to
testify.
2. If any non-governmental party to the hearing requests an
adjournment, the commissioner or agency head who governed the hearing may, upon
granting the adjournment, suspend any contract, lease, permit, or license
pending the final determination pursuant to paragraph E, below, without the City
incurring any penalty or damages for delay or otherwise.
D. The penalties which may attach after a final determination by the
commissioner or agency head may include but shall not exceed:
1. The disqualification for a period not to exceed five (5) years
from the date of an adverse determination for any person, or any entity of which
such person was a member at the time the testimony was sought, from submitting
bids for, or transacting business with, or entering into or obtaining any
contract, lease, permit or license with or from the City; and/or
2. The cancellation or termination of any and all such existing
City contracts, leases, permits or licenses that the refusal to testify concerns
and that have not been assigned as permitted under this Agreement, nor the
proceeds of which pledged, to an unaffiliated and unrelated institutional lender
for fair value prior to the issuance of the notice scheduling the hearing,
without the City incurring any penalty or damages on account of such
cancellation or termination; monies lawfully due for goods delivered, work done,
rentals, or fees accrued prior to the cancellation or termination shall be paid
by the City.
E. The commissioner or agency head shall consider and address in
reaching his or her determination and in assessing an appropriate penalty, the
factors in paragraphs 1 and 2, below. He or she may also consider, if relevant
and appropriate, the criteria established in paragraphs 3 and 4, below, in
addition to any other information which may be relevant and appropriate;
1. The party's good faith endeavors or lack thereof to cooperate
fully and faithfully with any governmental investigation or audit, including but
not limited to the discipline, discharge, or disassociation of any person
failing to testify, the production of accurate and complete books and records,
and the forthcoming testimony of all other members, agents, assignees or
fiduciaries whose testimony is sought.
2. The relationship of the person who refused to testify to any
entity that is a party to the hearing, including, but not limited to, whether
the person whose testimony is sought has an ownership interest in the entity
and/or the degree of authority and responsibility the person has within the
entity.
3. The nexus of the testimony sought to the subject entity and
its contracts, leases, permits or licenses with the City.
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4. The effect a penalty may have on a unaffiliated and unrelated
party or entity that has a significant interest in an entity subject to
penalties under D, above, provided that the party or entity has given actual
notice to the commissioner or agency head upon the acquisition of the interest,
or at the hering called for in C(1), above, gives notice and proves that such
interest was previously acquired. Under either circumstance, the party or entity
must present evidence at the hearing demonstrating the potential adverse impact
a penalty will have or such person or entity.
F. 1. The term "license" or "permit" as used herein shall be defined
as a license, permit, franchise or concession not granted as a matter of right.
2. The term "person" as used herein shall be defined as any
natural person doing business alone or associated with another person or entity
as a partner, director, officer, principal or employee.
3. The term "entity" as used herein shall be defined as any firm,
partnership, corporation, association, or person that receives monies, benefits,
licenses, leases, or permits from or through the City or otherwise transacts
business with the City.
4. The term "member" as used herein shall be defined as any
person associated with another person or entity as a partner, director, officer,
principal or employee.
G. In addition to and notwithstanding any other provision of this
Agreement the Commissioner or agency head may in his or her sole discretion
terminate this Agreement upon not less than three (3) days written notice in the
event Contractor fails to promptly report in writing to the Commissioner of
Investigation of the City of New York any solicitation of money, goods, requests
for future employment or other benefit or thing of value, by or on behalf of any
employee of the City or other person, firm, corporation or entity for any
purpose which may be related to the procurement or obtaining of this Agreement
by the Contractor, or affecting the performance of this contract.
4.15 ASSIGNMENT
---------------
A. The Contractor shall not assign, transfer, convey, sublet or
otherwise dispose of this Agreement, or of the Contractor's right, title,
interest obligations or duties herein, or the Contractor's power to execute such
Agreement, or assign, by power of attorney or otherwise, any of its rights to
receive monies due or to become due under this Agreement, unless the prior
written consent of the Administrator shall be obtained. Any such assignment,
transfer, conveyance, sublease or other disposition without such consent shall
be void.
B. In the event that the Contractor assigns, transfers, conveys,
sublets or otherwise disposes of this Agreement as specified in subdivision A,
above, without the prior written consent of the Department, the Department shall
revoke and annul this Agreement and the Department
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shall be relieved and discharged from any and all liability and obligations
growing out of such Agreement to the Contractor, its assignees, transferees or
sublessees, and the Contractor, lose all monies theretofore earned under this
Agreement, except so much thereof as may be required to pay the Contractor's
employees. The provisions of this section shall not hinder, prevent or affect an
assignment by the Contractor for the benefit of its creditors made pursuant to
the laws of the State of New York.
C. This Agreement may be assigned by the City to any corporation,
agency or instrumentality having authority to accept such assignment.
4.16 SUBCONTRACTING
-------------------
A. The Contractor agrees not to enter into any sub-contracts for the
performance of its obligations, in whole or in part, under this Agreement
without the prior written approval of the Department. Two copies of each such
proposed sub-contact shall be submitted to the Department with the Contractor's
written request for approval.
B. All such sub-contracts shall contain provisions specifying:
1. that the work performed by the sub-contractor must be in
accordance with the terms of the Agreement between the Department and the
Contractor;
2. that nothing contained in such contract shall impair the
rights of the Department;
3. that nothing contained therein, or in the Agreement between
the Department and the Contractor, shall create any contractual relationship
between the sub- contractor and the Department; and
4. that the sub-contractor specifically agrees to be bound by the
confidentiality provisions set forth in the Agreement between the Department and
the Contractor.
C. The Contractor agrees that it is fully responsible to the
Department for the acts and omissions of the sub-contractors and of persons
either directly or indirectly employed by them as it is for the acts and
omissions of persons directly employed by it.
D. The aforesaid approval is required in all cases other than
individual employer- employee contracts.
E. The Contractor shall not in any way be relieved of any
responsibility under this Agreement by any sub-contract.
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4.17 PARTICIPATION IN AN INTERNATIONAL BOYCOTT
----------------------------------------------
A. The Contractor agrees that neither the Contractor nor any
substantially-owned affiliated company is participating or shall participate in
an international boycott in violation of the provisions of the Export
Administration Act of 1979, as amended, of the regulations of the United States
Department of Commerce promulgated thereunder.
B. Upon the final determination by the Commerce Department or any
other agency of the United States as to, or conviction of the Contractor or
substantially-owned affiliated company thereof, of participation in an
international boycott in violation of the provisions of the Export
Administration Act of 1979, as amended, or the regulations promulgated
thereunder, the Comptroller may, at his option, render forfeit and void this
contract.
C. The Contractor shall comply in all respects, with the provisions of
Section 343- 10.0 of the Administrative Code of the City of New York and the
rules and regulations issued by the Comptroller thereunder.
4.18 ANTI-TRUST
---------------
The Contractor hereby assigns, sells, and transfers to the City all
right, title and interest in and to any claims and causes of action arising
under the anti-trust laws of the State of New York or of the United States
relating to the particular goods or services purchased or procured by the City
under this Agreement.
4.19 PUBLICITY
--------------
A. The prior written approval of the Department 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
Agreement, make any statements to the press or issue any material for
publication through any media of communication bearing on the work performed or
data collected under this Agreement.
B. If the Contractor publishes a work dealing with any aspect of
performance under this Agreement, or of the results and accomplishments attached
in such performance, the Department shall have a royalty free, non-exclusive and
irrevocable license to reproduce, publish or otherwise use and to authorize
others to use the publication.
4.20 INVENTORY, PATENTS AND COPYRIGHTS
--------------------------------------
A. Any discovery or invention arising out of or developed in the
course of performance of this Agreement shall be promptly and fully reported to
the Department, and if this work is supported by a federal grant of funds, it
shall to promptly and fully reported to the Federal Government for determination
as to whether patent protection on such invention shall be sought
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and how the rights in the invention or discovery, including rights under any
patent issued thereon, shall be disposed of and administered in order to protect
the public interest.
B. No report, document or other data produced in whole or in part with
contract funds shall be copyrighted by the Contractor nor shall any notice of
copyright be registered by the Contractor in connection with any report,
document or other data developed for the Agreement.
C. If any copyrightable material is developed under, or in the course
of performing this Agreement, any Federal Agency providing federal financial
participation for the Agreement free, non-exclusive and irrevocable right to
reproduce, publish or otherwise use, and to authorize others to use, the work
for governmental purposes.
D. In no event shall Subsections A, B and C of this Section be deemed
to apply to any report, document or other data, or any invention of the
Contractor which existed prior to, or was developed or discovered independently
from, its activities related to or funded by this Agreement.
4.21 INFRINGEMENTS
------------------
The Contractor shall be liable to the Department and hereby agrees to
indemnify and hold the Department harmless for any damage or loss or expense
sustained by the Department from any infringement by the Contractor of any
copyright, trademark or patent rights of design, systems, drawings, graphs,
charts, specifications or printed matter furnished or used by the Contractor in
the performance of this Agreement.
4.22 INDIVIDUAL FILES
---------------------
The Contractor will keep separate files and records for each recipient
of the services so that they may be readily identifiable from those relating to
other activities of the Contractor. In addition to information normally kept by
the Contractor in individual files, such as basic information about the
individual, describing and recording each use of the services by the individual,
and the individual's progress, the Contractor will include such other
information in individual files as the Department shall request.
ARTICLE V
---------
TERMINATION
-----------
5.1 The Department and/or City shall have the right to terminate this
Agreement, in whole or in part:
A. Under any right to terminate as specified in any section of this
Agreement or for a material breach of this Agreement.
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B. Upon the failure of the Contractor to comply with any of the terms
and conditions of this Agreement which is not cured within ten (10) days of the
Department's request therefor.
C. Upon the Contractor's becoming insolvent.
D. Upon the commencement under the Bankruptcy Act of any proceeding by
or against the Contractor, either voluntarily or involuntarily.
E. Upon receipt of notification that State or Federal reimbursement or
funding is no longer available for services provided pursuant to this Agreement.
F. Without cause or if the Department deems that termination would be
in the best interest of the City.
5.2 The Department of City shall give the Contractor written notice of
any termination of this Agreement specifying therein the applicable provisions
of Section 5.1 of this Article and the effective date thereof which shall not be
less than ten (10) days from the date the notice is received, except if
termination is based on paragraph F of Section 5.1 of this Article, in which
event notice shall be not less than thirty (30) days.
5.3 The Contractor shall have the right to terminate this Agreement,
without cause, upon thirty (30) days written notice to the Department.
5.4 Upon termination of this Agreement the Contractor shall comply
with the Department or City close-out procedures, including but not limited to:
A. Accounting for and refund to the Department or City, within thirty
(30) days, any unexpended funds which have been paid to the Contractor pursuant
to this Agreement.
B. Furnishing within thirty (30) days an inventory to the Department
or City of all equipment, appurtenances and property purchased through or
provided under this Agreement and carrying out any Department or City directive
concerning the disposition thereof.
C. Not incurring or paying any further obligation pursuant to this
Agreement beyond the termination date. Any obligation necessarily incurred by
the Contractor on account of this Agreement prior to receipt of notice of
termination and falling due after such date shall be paid by the Department or
City in accordance with the terms of this Agreement. In no event shall the word
"obligation", as used herein, be construed as including any lease agreement,
oral or written, entered into between the Contractor and its Landlord.
D. Turn over to the Department or City or its designees all books,
records, documents and material specifically relating to this Agreement.
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E. Submit, within ninety (90) days, a final statement and report
relating to this Agreement. The report shall be made by a certified public
accountant or a licensed public accountant.
5.5 In the event the Department or City shall terminate this Agreement
in whole or in part as provided in paragraphs A, B, C, or D of Section 5.1 of
this Article, the Department or City may procure, upon such terms and in such
manner as deemed appropriate, services similar to those so terminated, and the
Contractor shall continue the performance of this Agreement to the extent not
terminated thereby.
5.6 Notwithstanding any other provisions of this Agreement, the
Contractor shall not be relieved of liability to the City for damages sustained
by the City by virtue of Contractor's breach of the Contract, and the City may
withhold payments to the Contractor for the purpose of setoff until such time as
the exact amount of damages due to the City from the Contractor is determined.
5.7 The provisions of this Agreement regarding confidentiality of
information shall remain in full force and effect following any termination.
5.8 The rights and remedies of the City provided in this Article shall
not be exclusive and are in addition to all other rights and remedies provided
by law or under this Agreement
ARTICLE VI
----------
MISCELLANEOUS
-------------
6.1 CHOICE OF LAW, CONSENT TO JURISDICTION A ND VENUE
-----------------------------------------------------------
This Agreement shall be deemed to be executed in the City 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.
The parties agree that any and all claims asserted by or against the
City arising under this Agreement or related thereto 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 the City and County of New York. To effectuate this
agreement and intent, the Contractor agrees:
A. If the City 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
registered mail addressed to the Contractor at its address as set forth in this
Agreement, or to such other address as the Contractor may provide to the City in
writing; and
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B. With respect to any action between the City and the Contractor in
New York State Court, the Contractor hereby expressly waives and relinquishes
any rights it might otherwise have (i) to move to dismiss on grounds of forum
non converiens, (ii) to remove to Federal Court; and (iii) to move for a change
of venue to a New York State Court outside New York County.
C. With respect to any action between the City 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 United States Court outside the City of New York.
D. If the Contractor commences any action against the City in a court
located other than in the City and State of New York, upon request of the City,
the Contractor shall either consent to a transfer of the action to a court of
competent jurisdiction located in the City and State of New York or, if the
court where the action is initially brought will not or cannot transfer the
action, the Contractor shall consent to dismiss such action without prejudice
and may thereafter reinstitute the action in a court of competent jurisdiction
in New York City.
If any provision(s) of this Article is held unenforceable for any
reason, each and all other provision(s) shall nevertheless remain in full force
and effect.
6.2 GENERAL RELEASE
-------------------
The acceptance by the Contractor or its assignees of the final payment
under this Agreement, whether by voucher, judgment of any court of competent
jurisdiction or any other administrative means, shall constitute and operate as
a general release to the City from any and all claims of and liability to the
Contractor arising out of the performance of this Agreement.
6.3 CLAIMS AND ACTIONS THEREON
------------------------------
A. No action at law or proceeding in equity against the City or
Department shall lie o be maintained upon any claim based upon this Agreement or
arising out of this Agreement or in any way connected with this Agreement unless
the Contractor shall have strictly complied with all requirements relating to
the giving of notice and of information with respect to such claims, all as
herein provided.
B. No action at law or proceeding in equity shall lie or be maintained
against the Department or the City upon any claim based upon this Agreement or
arising out of this Agreement unless such action shall be commenced within six
(6) months after the date of final payment hereunder, or within six (6) months
of termination or conclusion of this Agreement, or within six (6) months of
accrual of the cause of action, whichever is earliest.
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C. In the event any claim is made or any action brought in any way
relating to the Agreement herein, the Contractor shall diligently render to the
Department and/or the City of New York without additional compensation any and
all assistance which the Department and/or the City of New York may require of
the Contractor.
D. The Contractor shall report to the Department in writing within
three (3) working days of the initiation by or against the Contractor of any
legal action or proceeding in connection with or relating to this Agreement.
6.4 NO CLAIM AGAINST OFFICERS, AGENTS OR EMPLOYEES
--------------------------------------------------
No claim whatsoever shall be made by the Contractor against any
officer, agent or employee of the City for, or on account of, anything done or
omitted in connection with this Agreement.
6.5 WAIVER
----------
Waiver by the Department of a breach of any provision of this
Agreement shall not be deemed to be a waiver of any other or subsequent breach
and shall not be construed to be a modification of the terms of the Agreement
unless and until the same shall be agreed to in writing by the Department or
City as required and attached to the original Agreement.
6.6 NOTICE
----------
The Contractor and the Department hereby designate the business
addresses hereinabove specified as the places where all notices, directions or
communications from one such party to the other party shall be delivered, or to
which they shall be mailed. Actual delivery of any such notice, direction or
communication to a party at the aforesaid place, or delivery by certified mail
shall be conclusive and deemed to be sufficient service thereof upon such party
as of the date such notice, direction or communication is received by the party.
Such address may be charged at any time by an instrument in writing executed and
acknowledged by, the party making such change and delivered to the other party
in the manner as specified above. Nothing in this section shall be deemed to
serve as a waiver of any requirements for the service of notice or process in
the institution of an action or proceeding as provided by law.
6.7 ALL LEGAL PROVISIONS DEEMED INCLUDED
----------------------------------------
It is the intent and understanding of the parties to this Agreement
that each and every provision of law required to be inserted in this Agreement
shall be and is inserted herein. Furthermore, it is hereby stipulated that every
such provision is to be deemed to be inserted herein, and if, through mistake or
otherwise, any such provision is not inserted, or is not inserted in correct
form, then this Agreement shall forthwith upon the application of either party
be
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amended by such insertion so as to comply strictly with the law and without
prejudice to the rights of either party hereunder.
6.8 SEVERABILITY
----------------
If this Agreement contains any unlawful provision not an essential
part of the Agreement and which shall not appear to have been a controlling or
material inducement to the making thereof, the same shall be deemed of no effect
and shall, upon notice by either party, be deemed stricken from the Agreement
without affecting the binding force of the remainder.
6.9 MODIFICATION
----------------
This Agreement may be modified by the parties in writing in a manner
not materially affecting the substance hereof. It may not be altered or modified
orally.
6.10 PARAGRAPH HEADINGS
-----------------------
Paragraph headings are inserted only as a matter of convenience and
for reference and in no way define, limit or describe the scope or intent of
this Agreement and in no way affect this Agreement.
6.11 CETA AND PRIVATE SECTOR JOB DEVELOPMENT
--------------------------------------------
A. The Contractor shall, when hiring into unsubsidized jobs in its
workforce, give consideration to those persons presently employed in CETA public
service positions in the City of New York, whose qualifications and skills are
commensurate with those required for the positions to be filled.
B. In the event that there are no persons for CETA public service
positions who are available to fill the positions described in paragraph A
above, the Contractor shall give consideration in hiring to persons who are
enrolled in the Public Works Program of the Human Resources Administration and
who have been assessed as employable by the HRA Private Sector Job Development
Unit.
In order to facilitate the referral of persons for such entry level
positions, the Contractor shall notify the HRA Private Sector Job Development
Unit whenever such entry level positions are available, indicating the number
and types of positions to be filled. Additionally, the Contractor shall submit
quarterly reports with the Private Sector Job Development Unit listing all
unfilled, unsubsidized entry level positions available.
Notification of such positions and the quarterly reports shall be
addressed to the Director, HRA Private Sector Job Development Unit, 109 East
16th Street, New York, New York 10003.
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6.12 POOR PERFORMANCE
---------------------
A. If, in the sole judgment of the Commissioner's designee,
Contractor's performance of the work or other performance under the Contract is
improper, cilatory, or otherwise not in strict compliance with all requirements
of the Contract, the Commissioner's designee may, in addition to any other right
or remedy of the Commissioner or the City, issue a written warning to Contractor
that it is a poor performer, (the "Warning").
Such warning may be issued, at any time prior to the termination of
the Contract. If the contractor disputes such Warning, Contractor shall given
written notice (the "Protect Notice") to the Commissioner within fifteen (15)
business days of receipt of the Warning. Commissioner or his designee shall
review the matter and deliver a written determination to Contractor either
affirming, modifying or rescinding the Warning. If the Commissioner does not
give Contractor a determination within forty-five (45) days of receipt of the
Contractor's Protest Notice, the Warning shall be deemed rescinded on the forty
fifty (45) day following such receipt. Within ninety (90) days but not less than
thirty (30) days after the termination of the Contract (unless the poor
performer Warning was previously rescinded), the Commissioner shall review
Contractor's performance and shall either rescind such Warning or shall notify
Contractor of his right to appear at a hearing, on not less than five (5) days
notice, to determine if Contractor shall be classified as a poor performer. At
any such hearing, Contractor may be represented by counsel and present or refute
evidence and testimony relevant to the issue of Contractor's alleged poor
performance. The Commissioner, or his designee, shall issue a written decision
either classifying Contractor as a poor performer or rescinding the poor
performer Warning, as the case may be, with the reasons therefore.
B. If Contractor disputes the final poor performer classification by
Commissioner, Contractor may seek review of the decision by requesting the
Commissioner, in writing, within ten (10) business days of receipt of the final
poor performer classification, to convene a Review Board pursuant to the
Regulations of the Board of Estimate. The Commissioner's decision shall be final
and binding with respect to the classification of Contractor as a poor performer
if Contractor does not request a review as herein provided.
C. If Contractor does not dispute the final poor performer
classification by Commissioner, Commissioner shall upon five (5) days written
notice to Contractor and within fifteen (15) days of having delivered such
written notice to Contractor, convene a Board of responsibility pursuant to the
regulations of the Board of Estimate, to determine if Contractor is a
responsible bidder.
D. Contractor agrees to forebear from the commencement of any action
or proceeding regarding the Commissioner's classification of Contractor as a
poor performer, unless the Contractor has requested a Review Board pursuant to
subsection B, above and such Board has issued a final decision.
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E. Any notice to Contractor under this section shall be sufficient if
it complies with the notice provision of the Agreement.
6.13 VENDEX QUESTIONNAIRES
--------------------------
This provision shall apply to contracts in excess of $100,000: The
Contractor states that the Principal Questionnaire and the Business Entity
Questionnaire (Verdex Questionnaires) have been duly executed and submitted to
the Department. The Contractor understands that the Department's reliance upon
the veracity of the information stated therein is a material condition to the
execution of this Agreement. The Contractor further states that the information
stated therein is in no respect misleading. In the event any responses to the
Vendex Questionnaire changes in any material respect, the Contractor shall
promptly furnish the Department with a sworn statement setting forth the nature
of such changes. This contract shall be a nullity until the Contractor complies
with all the requirements set forth in the Vendex Questionnaires to the
satisfaction of the Department.
6.14 CONSULTANT REPORTS
-----------------------
A copy of each consultant report submitted by a consultant to any City
official or to any officer, employee, agent or representative of a City
department, agency, commission or body or to any corporation, association or
entity whose expenses are paid in whole or in part from the City treasury shall
be furnished to the Commissioner of the department to which such report was
submitted or, if not a City department, then to the chief controlling officer or
officers of such other office or entity. A copy of such report shall also be
furnished to the Director of the Mayor's Office of Construction for matters
related to construction or to the Director of the Mayor's Office of Operations
for all other matters.
ARTICLE VII.
------------
CONTRACTOR'S HIRING COMMITMENT
------------------------------
1. Except as otherwise provided by Paragraph (7) of this Article,
Contractor agrees as a condition of this contract, to hire at least one Public
Assistance Recipient ("PA Recipient") for each $250,000 in value of this
contract, or to the extent that the Contractor enters into other contracts with
the Department, for each $250,000 of the cumulative value of contracts of the
Contractor during the term of this Agreement.
2. Such hiring shall be for full-time employment of at least a
minimum of 35 hours per week. The rate of pay shall be at least 20% above the
federal minimum wage, and the duration of the employment shall be for at least
one year. In the event that a replacement of a PA Recipient is made by the
Contractor during the one year, such replacement shall not count as an
additional employee toward Contractor's hiring requirement set forth in
Paragraph (1) of this Article.
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3. Within thirty days of the commencement date of this contract
("commencement date") or fifteen days following notice from the Department that
a request for an exemption from the provisions of this Rider has been denied,
Contractor shall submit, on forms specified by the Department, information and
specifications for the job(s) available.
4. The Contractor, may at its option, request the assistance of
the Department in identifying potential employees. In such case, the Department
will refer PA Recipients to the Contractor for employment interviews.
5. Contractor shall hire the number of employees agreed upon
pursuant to Paragraph (1) of this Article within ninety days of the commencement
date or such longer period as may be specified, in writing, by the Department.
6. In the event Contractor fails to hire said agreed upon number
of PA Recipients within the time required pursuant to Paragraph (5) of this
Article, and to pay and retain such employees pursuant to Paragraph (2) of this
Article, Contractor shall pay to the Department or the Department may at its
option, deduct from monies due or become due to Contractor, the amount of $19.18
per employee for each calendar day for which such PA Recipient(s) is/are not
employed by Contractor as required by this Article. Such amount is hereby fixed
and agreed as liquidated damages.
7. Contractor may apply to the Department for exemption from all
or part of the requirements of this Article. Any application for an exemption
must be made before the expiration of thirty days after the commencement date of
this contract, or any subsequent contract as discussed in Paragraph (1) herein,
and shall be in the form specified by the Department. Exemption may be granted
upon a showing that the operation of this Article will constitute an extreme
hardship, within the sole discretion of the Department; or to any Contractor not
employing twenty or more employees at a place of business within the City of New
York.
ARTICLE VIII.
-------------
EQUAL EMPLOYMENT
----------------
8.1 Mayor's Executive Order No. 50
----------------------------------
A. This Agreement is subject to the requirements of Executive Order
No. 50 (1980) as revised ("E.O. 50") and the Rules and Regulations promulgated
thereunder. No Contract will be awarded unless and until these requirements have
been complied with in their entirety. By signing this Contract, the Contractor
agrees that it:
(1) will not engage in any unlawful discrimination
against any employee or applicant for employment
because of race, creed, color, national origin,
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sex, age, disability, marital status, or sexual
orientation with respect to all employment
decisions including, but not limited to
recruitment, hiring, upgrading, demotion,
downgrading, transfer, training, rates of pay or
other forms of compensation, layoff, termination,
and all other terms and conditions of employment;
(2) the Contractor agrees that when it subcontracts
it will not engage in any unlawful discrimination
in the selection of subcontractors on the basis
of the owner's race, color, creed, national
origin, sex, age, disability, marital status or
sexual orientation or that it is an equal
opportunity employer;
(3) will state in all solicitations or advertisements
for employees placed by or on behalf of the
Contractor that all qualified applicants will
receive consideration for employment without
regard to race, creed, color, national origin,
sex, age, disability, marital status or sexual
orientation; or that it is an equal employment
opportunity employer;
(4) will send to each labor organization or
representative of workers with which it has a
collective bargaining agreement or other contract
or memorandum of understanding, written
notification of its equal employment opportunity
commitments under E.O. 50 and the rules and
regulations promulgated thereunder; and
(5) will furnish all information and reports
including and Employment Report before the award
of the Contract which are required by E.O., 50,
the rules and regulations promulgated thereunder,
and orders of the Director of the Bureau of Labor
Services ("Bureau"), and will permit access to
its books, records and accounts by the Bureau for
the purposes of investigation to ascertain
compliance with such rules, regulations, and
orders.
B. The Contractor understands that in the event of its noncompliance
with the nondiscrimination clauses of this Agreement or with any of such rules,
regulations or orders, such noncompliance shall constitute a material breach of
this Agreement and noncompliance with E.O. 50 and the rules and regulations
promulgated thereunder. After a hearing held pursuant to the rules of the
Bureau, the Director may direct the imposition by the contracting agency head of
any or all of the following sanctions:
(1) disapproval of the Contractor;
(2) suspension or termination of the Agreement;
(3) declaring the Contractor in default; or
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(4) in lieu of any of the foregoing sanctions, the
Director may impose an employment program.
C. The Director of the Bureau may recommend to the contracting agency
head that a Board of Responsibility be convened for purposes of declaring a
contractor who has repeatedly failed to comply with E.O. 50 and the rules and
regulations promulgated thereunder to be nonresponsible.
D. The Contractor agrees to include the provisions of the foregoing
paragraphs in every subcontract or purchase order in excess of $50,000 to which
it becomes a party, unless exempted by E.O. 50 and the rules and regulations
promulgated thereunder, so that such provisions will be binding upon each
subcontractor or vendor. The Contractor will take such action with respect to
any subcontract or purchase order as may be directed by the Director of the
Bureau of Labor Services as a means of enforcing such provisions including
sanctions for noncompliance.
E. The Contractor further agrees that it will refrain from entering
into any contract or contract modification subject to E.O. 50 an the rules and
regulations promulgated thereunder with a subcontractor who is not in compliance
with the requirements of E.O. 50 and the rules and regulations promulgated
thereunder.
8.2 Where required by New York State Labor Law Section 220-e - the
------------------------------------------------------------------
Contractor agrees:
-----------------
A. That in the hiring of employees for the performance of work under
this Agreement or any subcontract hereunder, neither the Contractor,
subcontractor, nor any person acting on behalf of such Contractor or
subcontractor shall by reason of race, creed, color, sex or national origin
discriminate against any citizen of the State of New York who is qualified and
available to perform the work to which the employment relates;
B. That neither the Contractor, subcontractor, nor any person on
behalf thereof shall, in any manner, discriminate against or intimidate any
employee hired for the performance of work under this Agreement on account of
race, creed, color, sex or national origin;
C. That there may be deducted from the amount payable to the
Contractor by the City under this Agreement a penalty of five dollars for each
person for each calendar day during which such person was discriminated against
or intimidated in violation of the provisions of this Agreement; and
D. That this Agreement may be cancelled or terminated by the City and
all moneys due or to become due hereunder may be forfeited, for a second or any
subsequent violation of the terms or conditions of this section of the
Agreement.
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<PAGE>
E. The aforesaid provisions of this section covering every contract
for or on behalf of the State or a municipality for the manufacture, sale or
distribution of materials, equipment or supplies shall be limited to operations
performed within the territorial limits of the State of New York.
8.3 Where Required By New York City Administrative Code Section
-----------------------------------------------------------------
343-8.0 the Contractor Agrees That:
-----------------------------------
A. It shall be unlawful for any person engaged in the construction,
alteration or repair of buildings or engaged in the construction or repair of
streets or highways pursuant to a contract with the City or engaged in the
manufacture, sale or distribution of materials, equipment or supplies pursuant
to a contract with the City to refuse to employ or to refuse to continue in any
employment any person on account of the race, color or creed of such person.
B. It shall be unlawful for any person or any servant, agent, or
employee of any person, described in subdivision (A) above, to ask, indicate or
transmit orally or in writing, directly or indirectly, the race, color, or creed
or religious affiliation of any person employed or seeking employment from such
person, firm or corporation.
C. Disobedience of the foregoing provisions shall be deemed a
violation of a material provision of this Agreement.
D. Any person, or the employee, manager or owner of or officer of such
firm or corporation who shall violate any of the provisions of this section
shall, upon conviction thereof, be punished by a fine or not more than one
hundred dollars or by imprisonment for not more than thirty days, or both.
ARTICLE IX.
-----------
APPROVALS
---------
9.1 The City of New York
------------------------
This Agreement shall not become effective or binding unless:
A. authorized by the Mayor; approved by the Board of Estimate either
pursuant to Section 349 of the New York City Charter for contracts not subject
to public letting if the amount to be paid hereunder exceeds $10,000, or for
amendments to a contract previously approved by the Board of Estimate, if the
amount to be paid hereunder exceeds the lesser of $10,000 or fifteen per cent
(15%) of the original contract amount, or pursuant to Section 343(a) of the New
York City Charter for contracts subject to public letting; and the Comptroller
shall have endorsed his certificate that there remains unexpended and unapplied
a balance of the appropriation of funds applicable hereto sufficient to pay the
estimated expense of executing this Agreement; and
-30-
<PAGE>
B. approved by the Mayor pursuant to the provisions of Executive Order
No. 42, dated October 9, 1975 in the event the Executive Order requires such
approval; and
C. certified by the Mayor (Mayor's Fiscal Committee created pursuant
to Executive Order No. 43, dated October 14, 1975) that performance thereof will
be in accordance with the City's financial plan.
9.2 OTHER APPROVALS OR AUTHORIZATIONS
-------------------------------------
The requirement of this Article shall be in addition to, and not in
lieu of, any approval or authorization otherwise required for this Agreement to
be effective and for the expenditure of City funds.
ARTICLE X.
----------
ANTI-APARTHEID PROVISIONS
-------------------------
I. A. In accordance with Section 6-115 of the Administrative Code of
the City of New York, the Contractor hereby covenants and represents:
1) that the Contractor and its substantially owned
subsidiaries shall not during the term of this
contract, sell or agree to sell, goods or services
other than food or medical supplies directly to
the following agencies of the South African
government or directly to a corporation owned or
controlled by such government and established
expressly for the purposes of procuring such goods
and services for such specific agencies:
a) the police,
b) the military,
c) the prison system,
d) the ministry of home affairs and
national education,
e) the ministry of education and
development aid, including the
development boards and the rural
development boards,
f) the ministry of justice,
g) the ministry of constitutional
development and planning,
h) the ministry of law and order,
i) the bureau for information,
j) the ministry of manpower,
k) the Armaments Development and Production
Corporation (ARMSCOR), and its
subsidiaries Nimrod, Atlas Aircraft
Corporation, Eloptro (Pty) Ltd., Kentson
(Pty) Ltd., Infoplan Ltd., Lyttleton
Engineering Works (Pty) Ltd., Naschem
(Pty) Ltd.,
-31-
<PAGE>
Pretoria Metal Pressing (Pty) Ltd.,
Somohem (Pty) Ltd., Swartklip Products
(Pty) Ltd., Telacast (Pty) Ltd., and
Musgrave Manufacturers and
Distributions,
l) the national intelligence services,
m) the council for scientific and
industrial research,
n) the electricity supply commission
(ESCOM),
o) the South African Coal, Oil and Gas
Corporation (Sasol Limited or Sasol 1, 2
or 3),
p) the Automic Energy Corporation (Ltd.),
or
q) the Southern Oil Exploration Corporation
(Soekor).
2) In the case of a contract to supply goods, that
none of the goods to be supplied to the City
originated in the Republic of South Africa or
Namibia.
3) That the Contractor and its substantially owned
subsidiaries do not do business in the Republic of
South Africa or Namibia by maintaining any office,
plant or employee in the Republic of South Africa
or Namibia, or that the Contractor and its
substantially owned subsidiaries are actively
engaged in the withdrawal of their operations from
the Republic of South Africa and Namibia and
within six months will not maintain any office,
plant or employee in the Republic of South Africa
or Namibia, provided, however, that if the
Contractor and its substantially owned
subsidiaries have withdrawn or are so engaged in
withdrawing their operations from the Republic of
South Africa or Namibia and maintain a presence in
South Africa or Namibia after such six month
period solely for the purpose of liquidating their
business, the Contractor shall be eligible to make
the certification provided for in this section
three. This section three shall not apply to news
organizations, or to companies whose sole activity
in the Republic of South Africa or Namibia is the
manufacture, processing and distribution of food
or medical supplies.
4) This stipulation does not apply to the sale of
goods or services to an agency of the South
African government covered in subsections a
through c of section one when such sale is
provided for by the terms of a contract entered
into prior to July 13, 1985 (the effective date of
Local Law 19), but it does apply to any increase
in the amount of goods or services supplied to
such a covered agency pursuant to any amendment,
modification or extension of such a contract if
the amendment, modification or extension was
agreed to on or after July 13, 1985.
5) This stipulation does not apply to the sale of
goods or services to an agency of the South
African government covered in subsections d
through q of section one when such sale is
provided for by the terms of a contract
-32-
<PAGE>
entered into prior to February 28, 1987 (the
effective date of Local Law 81, which amends Local
Law 19), but it does not apply to any increase in
the amount of goods or services supplied to such a
covered agency pursuant to any amendment,
modification or extension of such a contract if
the amendment, modification or extension was
agreed to on or after February 28, 1987.
B. The Contractor agrees that the covenants and
representations in sub- section A above are
material conditions of this Agreement. In the
event that Department receives information that
the Contractor is in violation of sub-section A,
the Department shall review such information and
give the Contractor an opportunity to respond. If
the Department finds that a violation has
occurred, the Department shall have the right to
terminate this Agreement and procure the supplies,
services or work from another source in any manner
the Department deems proper. In the event of such
termination, the Contractor shall pay to the
Department, or the Department in its sole
discretion may withhold from any amounts otherwise
payable to the Contractor, the difference between
the contract price for the uncompleted portion of
this Agreement and the cost to the Department of
completing performance of this Agreement either
itself or by engaging another contractor or
contractors. In the case of a requirements
contract, the Contractor shall be liable for such
difference in price for the entire amount of
supplies required by the Department for the term
of this Agreement. In the case of a construction
contract, the Department shall also have the right
to hold the Contractor in partial or total default
in accordance with the default provisions of this
Agreement. The rights and remedies of the
Department hereunder shall be in addition to, and
not in lieu of, any rights and remedies the
Department has pursuant to the Agreement or by
operation of law.
II. The Contractor hereby covenants and represents that it and
its substantially owned subsidiaries have not within the
twelve months prior to the award of such contract violated,
and shall not during the period of this contract violated,
the provisions of the Comprehensive Anti-Apartheid Act of
1986, the Export Administration Act of 1979 as amended (50
U.S.C.ss.2401 et seq.) or the Arms Export Control Act of --
--- 1976 as amended (22 U.S.C.ss.2778) respecting business
activity in the Republic of South Africa or Namibia. Upon a
final determination by the United States Department of
Commerce or any other agency of the United States or a court
that the Contractor or its substantially owned subsidiary
has violated any provision of the Comprehensive
Anti-Apartheid Act, the Export Administration Act or the
Arms Export Control Act respecting business activity in the
Republic of South Africa or Namibia, the Department shall
have the right to terminate this contract and procure the
supplies, services or work from another source in any manner
the
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<PAGE>
Department deems proper. In the event of such termination,
the Contractor shall pay to the Department, or the
Department in its sole discretion may withhold from any
amounts otherwise payable to the Contractor, the difference
between the contract price for the uncompleted portion of
this contract and the cost to the Department of completing
performance of this contract either itself or by engaging
another contractor or contractors. In the case of a
requirements contract, the Contractor shall be liable for
the said difference in price for the entire amount of
supplies required by the Department for the uncompleted term
of this contract. In the case of a construction contract,
the Department shall also have the right to hold the
Contractor in partial or total default in accordance with
the default provisions of this contract. The rights and
remedies of the Department hereunder shall be in addition,
to, and not in lieu of, any rights and remedies the
Department has pursuant to this contract or by operation of
law.
ARTICLE XI.
-----------
ENTIRE AGREEMENT
----------------
This written Agreement contains all the terms and conditions agreed
upon by the parties hereto, and no other agreement, oral or otherwise, regarding
the subject matter of this Agreement shall be deemed to exist or to bind any of
the parties hereto, or to vary any of the terms contained herein.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the date first above written.
CITY OF NEW YORK
DEPARTMENT OF SOCIAL SERVICES
HUMAN RESOURCES ADMINISTRATION
COMMISSIONER
By /s/ Thomas W. Bugdall
---------------------
Corporate Contractor
Affix ____ Seal:
American Medical Alert Corp.
----------------------------
CONTRACTOR
-34-
<PAGE>
By /s/ Howard M. Siegel
-----------------------
Title President
---------------
112571221
---------
Fed. Employer I.D. No. or Soc. Sec. No.
Approval as to form was granted by the Corporation Counsel
on:________________.
-35-
<PAGE>
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On this 23 day of June, 1988, before me personally came Thomas W. Bugdall, to me
known and known to me to be General Counsel of the HUMAN RESOURCES
ADMINISTRATION/DEPARTMENT OF SOCIAL SERVICES of the CITY OF NEW YORK, the person
described in and who executed the foregoing instrument, and he acknowledged to
me that he executed the same for the purpose therein mentioned.
/s/ Janet Smith
---------------
NOTARY PUBLIC
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On this 23 day of June, 1988, before me personally came Howard M. Siegel, to me
known, who, being by me duly sworn, did depose and say that he resides at 31
Grand Blvd., Long Beach, New York, that he is the President of the American
Medical Alert Corp., the corporation described in and which executed the above
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation, and that he signed his name thereto by
like order.
/s/ Janet Smith
---------------
NOTARY PUBLIC
-36-
<PAGE>
Attachment 2 - Contracts
AFFIRMATION
The undersigned proposer or bidder affirms and declares that said proposer or
bidder is not in arrears to the City of New York upon debt, contract or taxes
and is not a defaulter, as surety or otherwise, upon obligation to the City of
New York, and has not been declared not responsible, or disqualified, by any
agency of the City of New York, nor is there any proceeding pending relating to
the responsibility or qualification of the proposer or bidder to receive public
contracts except_______________________________________________________________.
Full name of Proposer or Bidder ________________________________________________
Address_________________________________________________________________________
City ______________________________ State _________________ Zip Code ___________
CHECK ONE BOX AND INCLUDE APPROPRIATE NUMBER:
|_| A - Individual or Sole Proprietorship*
SOCIAL SECURITY NUMBER
-----------------------------
|_| B - Partnership, Joint Venture or other
unincorporated organization
EMPLOYER IDENTIFICATION NUMBER
-----------------------------
|_| C - Corporation
EMPLOYER IDENTIFICATION NUMBER
112571221
* Under the Federal Privacy Act the furnishing of Social Security
Numbers by bidders on City contracts is voluntary. Failure to provide
a Social Security Number will not result in a bidder's
disqualification. Social Security Numbers will be used to identify
bidders disqualification. Social Security Numbers will be used to
identify bidders, proposers or vendors to ensure their compliance
with laws, to assist the City in enforcement of laws as well as to
provide the City a means of identifying of businesses which seek City
contracts.
<PAGE>
By /s/ Howard M. Siegel
--------------------
Signature
President
---------
Title
If a corporation place seal here
Must be signed by an officer or duly authorized representative.
<PAGE>
APPROVAL AS TO FORM OF A SINGLE CONTRACT
Name of Contractor: AMERICAN MEDICAL ALERT CORP.
- ------------------
Pursuant to the powers vested in me by Section 394, subo. b of the
New York City Charter, I hereby approve as to form the annexed contract to be
entered into by the Department of Social Services of the Human Resources
Administration on behalf of the City of New York.
Dated: MAY 19 1988
/s/__________________________
Acting Corporation Counsel
EXHIBIT 23 (a)
--------------
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-48385, 33- 48297, and 33-91806 on Form S-8 and No. 333-6159 on Form S-3 of
American Medical Alert Corp. our report dated March 3, 1995 appearing in this
Annual Report on Form 10-KSB of American Medical Alert Corp. for the year ended
December 31, 1996.
/s/ Deloitte & Touche LLP
- -------------------------
DELOITTE & TOUCHE LLP
New York, New York
March 27, 1997
EXHIBIT 23 (b)
--------------
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-48385, 33- 91806, and 33-48297 on Form S-8 and Registration Statement No.
333-6159 on Form S-3 of American Medical Alert Corp. of our report dated March
7, 1997 (except for Notes 3 and 11, as to which the date is March 27, 1997)
appearing in this Annual Report on Form 10-KSB of American Medical Alert Corp.
for the year ended December 31, 1996.
/s/ Margolin, Winer & Evens LLP
Margolin, Winer & Evens LLP
Garden City, New York
March 27, 1997
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