Stipulation Agreement

For Ferryboat Operator Subsidy Funding

U.S. Virgin Islands



This agreement entered into on this_“/ 7 day of _OCTOM@evL _, 2014 between the

Government of the United States Virgin Islands through the Department of Public Works,

Division of Transportation, Charlotte Amalie, St. Thomas, Virgin Islands (hereinafter

referred to collectively as the Government) and Transportation Services of St. John, Inc.

d/b/a M/V Caribe Cay, M/V Caribe Tide, M/V Caribe Time, Cruz Bay I, (hereinafter

referred to as “Transportation Services” or ““Ferryboat Operator’).



WHEREAS, the Government recognizes the need for ferryboat transportation services

between the islands of St. Thomas and St. John;



WHEREAS, Transportation Services provides ferryboat transportation to residents and

visitors of the Virgin Islands;



WHEREAS, the Government desires to assist ferryboat operators in the operation of the

ferryboat service through certain appropriations when available;



WHEREAS, the Government considers these appropriations to be a “subsidy” upon the

receipt of which the Ferryboat Operator assumes certain rights from and obligations to

the Government;



WHEREAS, Transportation Services is presently on of the passenger ferryboat operators

that operates service between the islands of St. Thomas and St. John from Red Hook, St.

Thomas to Cruz Bay, St. John;



WHEREAS, the Ferryboat Operator acknowledges that as part of its obligations in

accepting the subsidy, it will abide by any rules and regulations promulgated by the

Virgin Islands Public Service Commission (“PSC”);



NOW, THEREFORE, in consideration of the mutual promises and covenants herein, the

parties agree as follows:



1. Subject to appropriations and availability of funds, Transportation

Services will receive a proportional share of subsidy funding pursuant to

Act No.7535, Bill No. 30-0209 from the Government of the Virgin Islands

through the Department of Public Works in an amount not to exceed

$191,250.00. The purpose of this subsidy is to subsidize operations

between the St. Thomas Red Hook and St. John Cruz Bay route only, for

the fiscal year to which the appropriation applies. No portion of the

subsidy funds shall be used for any capital acquisitions. With the

acceptance of this subsidy, the ferryboat operator is responsible for the

reporting requirements as stipulated in this document. The ferryboat

operator also shall open a separate bank account entitled “Subsidy

Account” to deposit any and all proceeds received from the Government

pursuant to this Agreement.



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The term of this agreement is one year from the execution of this

document by the Governor. This Agreement may be extended for an

additional year by executing an Exercise of Option To Renew.



Transportation Services agrees to comply with any and all requirements of

the PSC, which include, but is not limited to remaining in good standing

with the PSC and submitting any regulatory reports in a timely manner. In

addition to the termination provisions set forth in paragraph 15, failure to

adhere to all PSC requirements shall be cause to terminate this Agreement,

if after notice and an opportunity to cure any such failure, Transportation

Services fails to do so.



Transportation Services shall maintain at all times during the term of this

Agreement, insurance coverage acceptable to the Government. A copy

shall be provided to the Commissioner of Public Works prior to the receipt

of any of the subsidy funds.



Any and all disputes between the parties first shall be addressed throu gh

mediation. Each party shall contribute one-half the costs of any

mediation, if necessary. If the parties cannot resolve the dispute with

mediation, then the parties may pursue the appropriate legal action in a

court of law in the U.S. Virgin Islands.



Transportation Services is responsible for preparing a Subsidy

Disbursement Report which includes the following information:



Narrative of Subsidy Report

Expenditure Summary



Actual Cash Flow Statement

Outstanding Debts Report



Confirmation of Debt Service Payments



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The Subsidy Disbursement Report shall be submitted ninety (90) days

following receipt of any subsidy disbursement.



Upon 48 hours notice to the ferryboat operator, the Government may

inspect the books and records between the hours of 8 am and 5 pm,

Monday through Friday or upon the agreement of the parties.



In addition to the Subsidy Disbursement Report set forth in paragraph 6,

the ferryboat operator is required to submit an Annual Report which must

contain the following information:



a, Audited Financial Statements prepared by a CPA for the

past year Revenue Report; such expenses shall be borne by

the ferryboat operator;



Dd, Operating Expenses:



i Fuel consumption for each vessel used on the franchise

route;



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d. Ridership which shall include fee structure and number of

passengers traveled at each fee;



Si Schedules with Operating Hours; and



f. Missed Trips (Including those trips missed as a result of

unforeseen events).



The Annual Report should be submitted 180 days after January 1,



2015 or within sixty (60) days of the execution of this Agreement. In the event that

an audited financial statement is not available at the Annual Report is submitted, a

financial statement certified to be accurate by Transportation Services shall be

submitted until the audited financial statement is delivered by the company’s CPA.



8.



11.



Nothing in this subsidy agreement shall be construed to impose any

liability upon the Government to persons, firms, associations, or

corporation engaged by the ferryboat operator its servants, agents or

independent contractors, or in any other capacity whatsoever, or make the

Government liable to any such person, firms, associations, or corporations

for the acts, omissions, liabilities, obligations, and taxes of the ferryboat

operator of whatsoever nature, including by not limited to unemployment

insurance and social security taxes for the ferryboat operator, its servants,

agents or independent contractors.



This subsidy agreement shall not be subcontracted or assigned to any other

party.



Transportation Services agrees to investigate, defend, indemnify and hold

harmless the Government from and against all loss, damage, liability,

claims, suits, actions, judgments, demands, detriments, cost, charges and

expenses (including attorney fees) or which the Government may incur.

sustain or be subjected to, to the extent caused by or arising out of the

services to be performed by the ferryboat operator under this subsidy

agreement and arisen from any cause, except the sole negligence of the

Government.



This subsidy shall be governed by the laws of the U.S. Virgin Islands

without regard of conflict of laws principles. Any and all suits for the

enforcement of this subsidy agreement shall be filed and maintained in a

court of competent jurisdiction in the U.S. Virgin Islands.



No waiver, modification or amendment of any tem, condition or condition

of this subsidy agreement shall not be valid or of any force of effect unless

made in writing, signed by the parties hereto or their duly authorized

representatives, and specifying with particularity the nature and extent of

such waiver, modification or amendment. Any such waiver, modification

or amendment in any instance or instances shall in no event be construed

to be a general waiver, modification, or amendment of any of the terms.

conditions or provisions of this subsidy agreement, the same shall be

strictly limited and restricted to the extent and occasion specified in such a

signed writing or writings.



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14,



16.



17.



18.



19.



If any term or condition is not performed under this subsidy agreement,

the Government will have the right to withhold any payment or

appropriation due to the ferryboat operator. The Government will notify

the ferryboat operator in writing in the event that it elects to exercise its

right to withhold under this paragraph.



This subsidy agreement is expressly conditioned and subject to the

availability and appropriation of funds and to the approval of the

Governor.



The Government shall have the right to terminate this subsidy agreement

with or without cause upon thirty (30) days written notice to the ferryboat

operator specifying the date of termination. In the event of such a

termination, future distribution of subsidies shall be suspended but any

subsidy previously distributed shall be unaffected.



No person shall be excluded from participating in, be denied the proceeds

of, or be subject to discrimination in the performance of the subsidy

agreement on account of race, creed, color, sex, religion, disability or

national origin.



Transportation Services covenants that it has no interest and will not

acquire any interest, direct or indirect, which would conflict in any manner

or degree with the performance of services required to be performed under

this subsidy agreement. Transportation Services further covenants that it

is not a territorial officer or employee and none of its officers or

employees and that the ferryboat operator has read and familiarized itself

with V.I. Code Ann. Tit., 3, chapter 37, section 1108, and has not

influenced this agreement in any manner.



The effective date of this subsidy agreement shall be the day of execution

by the Governor.



All official documents must be addressed to or delivered to the following

parties:



Department of Public Works Darryl A. Smalls



Commissioner

8244 Subbase

St. Thomas, VI 00802-5805



Franchise Ferryboat Operator Loredon L. Boynes, Jr.



President



Transportation Services of St. John, Inc.

28 Cruz Bay



Cruz Bay



St. John, VI 00831-0028



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20. The ferryboat operator covenants that it has obtained all applicable

licenses or permits, permanent, temporary or otherwise as required by V.I.

Code Ann. tit. 27 pertaining to profession and occupations. The ferryboat

operator further covenants that it has obtained all federal and territorial

operating licenses or permits required for a business in the maritime

transportation operations.



In witness whereof, the parties have hereto set their signatures on the day written above.



2); Fay y Date: MY

Commissioner



Department of Public VY,



How 1) UL Van, LLL Dae: LY



Lynn A. Miflin-Maduro

mmissioner “

Department of Property and Procurement



Witnesses: Government of the Virgin Islands



IE



| ATS) ( Ve. rae Lose Date: bfe 2/7 7



¥ i eye ~Loredon L. Boynes, Jr.



President

Transportation Services of St. John, Inc.



t Ren Date: 10) n | ty

\ John P! de Jongh, Jr. a.

Governor oft irgin Islands



APPROVED AS TO LEGAL SUFFIC

DEPARTMENT OF JUSTICE BY:



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Ak) Date:_/0-f2-/4++



MED. NO. ACCOUNT CODE NO.



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