OGC CONTRACT NO.

0814/F15

SC NO.: 573035 & 573036

ABC CODE: 1100-007-9400-1125-3311

AGREEMENT FOR SERVICES

Project:
RFP No. 460:
Substitute Staffing and Management Services

In consideration of the mutual promises set forth below, intending to be legally

bound, THE SCHOOL DISTRICT OF PHILADELPHIA, a body corporate and political
subdivision formed and existing under the laws of the Commonwealth of Pennsylvania (the
"School District"), located at the Education Center, 440 North Broad Street, Philadelphia,
Pennsylvania 19130-4015, and S4TEACHERS LLC, a Delaware limited liability company (the
"Contractor"), doing business as Source4Teachers, located at 800 Kings Highway North, Suite
405, Cherry Hill, New Jersey 08034, have executed and delivered this Agreement for Services
(the "Contract") as of July 1, 2015.

1.
The Engagement, the Work, the Standard Terms and Conditions. Subject to the
terms and conditions set forth in this Contract, the School District engages the Contractor to
carry out the work (the "Work") set forth in (a) the attached Exhibit "A-1" - School District
Statement of Work; (b) Exhibit "A-2" - School District Request for Proposals No. RFP - 460;
and (c) the attached Exhibit "A-3", the Contractor's Proposal submitted in response to RFP - 460
(each of which includes any sub-exhibits, attachments or addenda incorporated therein), and
Exhibit "B" - the Contractor's Budget (the "Budget"). The Work includes all Materials the
Contractor has agreed to provide, the time frames in which the Contractor has agreed to complete
the Work, and all other requirements the Contractor must satisfy in order to complete the Work
during the Term (defined in Section 3 below). The terms and conditions of this Contract include
the School District Standard Terms and Conditions (the "Standard Terms and Conditions")
attached hereto as Exhibit "C".
2.
Resolution. The School Reform Commission authorized this Contract by its
resolution number A-24, dated June 18, 2015. The Parties have attached the resolution to this
Contract as Exhibit "D" for reference but have not made the resolution a part of this Contract.
The School District has no power to contract for the Work outside the scope of the resolution.
3.
Contract Term. The term of the Contract shall begin July 1, 2015 and end June
30, 2017 (the "Term"), unless terminated sooner by the School District as provided in this
Contract. The Contractor shall commence the Work promptly on the first day of the Term and
complete the Work not later than the last day of the Term, except for those matters which
contemplate performance after the expiration or termination of this Contract.

2013, The School District of Philadelphia

4.
Compensation. As compensation for the satisfactory performance of the Work
carried out by the Contractor hereunder, the School District shall pay the Contractor, in arrears, a
total fee not to exceed Thirty Four Million Dollars ($34,000,000.00), conditioned, however,
upon the continued availability of funds, as set forth in Sections 6 and 7 of the Standard
Terms and Conditions (the "Compensation").
a.
Budget. The Contractor shall carry out the Work and bill the School
District strictly in conformity with the Contractor's Budget attached as Exhibit "B", and the
School District shall pay the Contractor strictly in conformity with the Contractor's Budget.
b.
Fee Structure. The Contractor shall earn the Compensation on the
following basis (check one):

D
D

flat fee, pro-rated and billed monthly, or otherwise, as provided in Section

5 below;
at the hourly rate or rates per hour of labor specified in Exhibit "B" or
Exhibit "A", and billed monthly, or otherwise, as provided in Section 5
below; or
on such other basis as the Parties have specified, if any, in Exhibit "B" or
Exhibit "A", and billed monthly, or otherwise, as provided in Section 5
below.

Invoices. The Contractor shall submit timely invoices to the School District
5.
Responsible Official named in Section 7 below and, unless the Parties have agreed to a different
schedule as set forth in Exhibit "A" or Exhibit "B" hereto, the Contractor shall submit not more
than one invoice per month. The Contractor shall submit its final invoice not later than ten (10)
business days after the last day of the Term. The Contractor shall submit invoices in accordance
with Section 3 of the Standard Terms and Conditions. All invoices shall include an itemization
of charges and, at a minimum, a detailed description of the Work performed. The School District
shall have no obligation to make any payment to the Contractor before receipt of an invoice that
conforms to the requirements of this Contract.
6.
Federal Employer Identification Number. The Contractor's federal employer
identification number is: 27-0223984.
7.
Notices. The Parties shall give notices and other communications required under
this Contract in conformity with Section 21 of the Standard Terms and Conditions, and shall
send all notices to:

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July 2013

School District Responsible Official:

Kendra-Lee Rosati
Acting Chief Talent Officer
The School District of Philadelphia
The Education Center
440 North Broad Street
Philadelphia, PA 19130-4015
(215) 400-4690
Telephone:
(215) 400-4601
Fax:
Email address: krosati@philasd.org
Program Office Talent Administration

Name:
Title:
Party:
Address:

Contractor:

Kendley Davenport
President
S4Teachers LLC
800 Kings Highway North
Suite 405
Cherry Hill, NJ 08034
(856) 482-0300 Ext. 3333
(856) 334-1722
KDavenport@Source4Teachers.com

(School District):

Order of Precedence. The Parties have attached the following Exhibits to this
8.
Contract, each of which the Parties have agreed to incorporate in and make a part of this
Contract:
Exhibit

"A-1"
"A-2"
"A-3"
"B"
"C"

Exhibit Name

The Contractor's Statement of Work

Request for Proposals No. RFP - 460
The Contractor's Proposal
The Contractor's Budget
School District Standard Terms and Conditions

In the event of conflict between any Exhibit and another Exhibit, or this Agreement for Services,
the following order of precedence shall apply: first, this Agreement for Services; second, Exhibit
"C"; third, Exhibit "A-1"; fourth, Exhibit "A-2"; fifth, Exhibit "A-3"; and sixth, Exhibit "B".
The Parties acknowledge and agree that each shall construe the terms, covenants and conditions
set forth in this Contract, including each Exhibit hereto, as consistent with one another insofar as
possible, so as to give effect to the fullest extent possible to each particular clause; where more
than one clause, covenant or term may address the same subject matter the Parties shall comply
with the most restrictive of the pertinent clauses, covenants or terms. The Parties shall not
construe particular clauses, covenants or terms to conflict with one another if, in light of the
terms of the Contract taken as a whole, the Parties can reasonably construe the clauses, covenants
or terms in a manner which does not give rise to a conflict.
Modifications. The Parties have agreed to the following modifications to the
9.
terms and conditions set forth elsewhere in this Contract.

a.
Options to Extend the Term. The School District shall have the right to
extend the Term of this Contract for two (2) additional periods of one (1) year each, to June 30 of
the following calendar year. The School District shall exercise each option by giving notice to
the Contractor not later than May 1 of the calendar year in which the Term of the Contract is then
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scheduled to expire. Exercise of each such option requires prior authorization by the School
Reform Commission, acting in its sole discretion.
b.
Standard of Performance. Strike subsection I .a., Standard of
Performance, page 1, Exhibit "C", the Standard Terms and Conditions, and substitute:
a. Standard of Performance. The Contractor shall carry out the Work in conformity
with the requirements set forth in this Contract. The Contractor shall cooperate with the School
District and all other Persons contracting with the School District whose work affects the
Contractor's Work, or whose work the Contractor's Work affects.
c.
Best Pricing. Strike Section 5, Best Pricing, page 3, Exhibit "C", the
Standard Terms and Conditions.
d.
Non-Assignment. Anything set forth in Section 11, Non-Assignment,
page 4, the Standard Terms and Conditions to the contrary notwithstanding, the School District
shall not unreasonably withhold, condition or delay its consent to the acquisition of the
Contractor, or a controlling interest therein, through an asset sale or a corporate or other merger
to or with an entity controlling, controlled by or under common control with the Contractor.
e.
Indemnification; the Contractor's Employees. Strike the last sentence of
subsection 13. b., Indemnification; the Contractor's Employees, pages 5 - 6, the Standard Terms
and Conditions, and substitute:
The Contractor and all of its Subcontractors, and all of their respective officers, agents,
representatives and employees, shall have no claim against the School District, its
officers, employees and agents and the members of the School Reform Commission and
the Board of Education for the acts, failures to act or negligence of the School District, or
its officers, employees and members of the School Reform Commission or Board of
Education, to the extent the underlying claim in whole or in any part falls subject to or
under any obligation or duty of the Contractor or any Subcontractor under any workers
compensation law, including but not limited to the Workers Compensation Law of the
Commonwealth of Pennsylvania.
f.
Insurance - Excess/Umbrella Liability. The Parties supplement Section
15, Insurance, pages 6 -7, of Exhibit "C", the Standard Terms and Conditions, by adding a new
subsection e., after subsection d.i., as follows.

e.
Excess/Umbrella Liability. Excess/Umbrella liability coverage in an amount not
less than $5,000,000 per occurrence. The Excess/Umbrella policy shall schedule all
underlying liability coverages required under this Contract on a following form basis.
g.
Publication Rights. Anything set forth in subsection 16.c., Publication
Rights, page 7, the Standard Terms and Conditions to the contrary notwithstanding, the School
District shall not umeasonably withhold, condition or delay its consent to publication by the
Contractor.
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h.
Termination by the Contractor. Once annually by notice to the School
District delivered not later than April 1, the Contractor may terminate this Contract for its
convenience, that is, for any reason or for no reason at all, at any time, in its sole discretion,
without penalty, cost or liability to the Contractor. The termination of the Contract by the
Contractor shall take effect on the following June 30. On or prior to June 30, the Contractor
shall take appropriate actions to effect the orderly discontinuance of the Work. The Contractor
shall collect, assemble and transmit to the School District, at the Contractor's expense, all
Materials, other than proprietary information, such as software, developed under this Contract.
The Contractor shall clearly label and index to the satisfaction of the School District all such
Materials, and shall deliver all such Materials to the School District within thirty calendar (30)
days after receipt of a Termination Notice, or in such shorter period as the School District may
specify in its Termination Notice.

In witness whereof, the Parties, intending to be legally bound, have executed

and delivered this Contract as of the day and year set forth above.

S4TEACHERS LLC

By:

David Gold
Chief Executive Officer

Approved as to form:

THE SCHOOL DISTRICT OF PHILADELPHIA

Attorney, The School Dis ict

of Philadelphia

By:

William R. Hite, Jr., Ed.D.

Superintendent

2013, The School District of Philadelphia

Office of General Counsel

July 2013
S4TEACHERS LLC
OGC Contract No.: 814/FlS

Exhibit "A-1"
The Contractor's
Statement of Work

The School District engages the Contractor to carry out the Work set forth in this
Contract.
The Contractor's Statement of Work. This Exhibit "A-1 ",the Contractor's
Statement of Work, consists of:
1.

a.

these Sections 1 - 15, below;

b.
School District of Philadelphia Office of Procurement Services RFP-460
Pricing Template - Revised Pricing for Full Day Per-Diem, Revision 4 - Submitted on 2015-0519, and RFP-460 Pricing Template -Revised Pricing for Full Day Per-Diem, Revision 4Submitted on 2015-05-19, each as attached below and incorporated in this Exhibit "A-1"; and
c.
job descriptions for the classes of substitutes covered by this Contract,
attached to this Exhibit "A-1" as Schedule "l ". The Contractor shall deliver substitutes in
compliance with these job descriptions.
d.
The foregoing to the contrary notwithstanding, the Parties have agreed to
the following final, negotiated Full Day Billing Rates.

Bill Rate Updated 8.17.15

Substitute Teachers - Certified
Substitute Teachers - Non-certified
Substitute Teachers - Special Education
Long Term/Speech & Hearing Therapists
Substitute Counselors
Substitute Librarians

$ 139.74
$114.75
$ 139.74
$ 177.92
$ 108.41
$ 95.63
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Substitute School Psychologists

Substitute Classroom Asst and 1: 1 Aides
Substitute Food Services Workers (4hrs at $7.25hr)
Substitute Secretaries
Substitute Noon Time Aides (4hrs at $10.88 hr)
Substitute Support Service Assistants (4 hrs at $13.00 hr)
Substitute Teacher Assistants - PreK
Substitute Principals
Note: Principals handled by Contractor when absence is
less than 2 weeks or 10 days
Note: Psychologists, Nurses, General Cleaners handled
by District not S4T, use of AESOP only
Note: Farmers use of AESOP only.

Removed
$ 63.75
$ 37.67
$ 77.60
$ 55.57
$ 66.35
$ 64.72
$ 498.88

In addition to the foregoing daily Full Day billing rates, the Contractor shall have the right to
invoice the School District, as part of the Compensation, a fee of $2. 00 for the placement of
substitute psychologists, nurses and general cleaners, whom the School District may employ on a
per diem basis as substitutes, in conformity with School District policies and procedures for such
positions. This represents a one-time fee accruing on the first day of substitute service provided
by each such individual and engagement on a per diem basis by the School District remains
subject to the discretion of the School District respecting each individual and to compliance by
the individual with the School District's requirements for substitute staff.
2.
Exhibit "A". References throughout this Contract to "Exhibit' A' "shall mean,
collectively, Exhibits "A-1 ", "A-2" and "A-3" to this Contract; please refer to Section 8, Order
of Precedence, page 3 of the Agreement for Services, above, if necessary to interpret the terms of
Exhibits "A-1 ", "A-2" and "A-3".
3.
Compensation Incentive Factors. Strike subsection VLF., Penalties, pages 11 12 of the RFP, and substitute the following.
a.
The Parties shall calculate the Contractor's aggregate average fill rate on a
monthly basis. The Contractor shall provide the School District with the fill rate results for each
calendar month within thirty (30) days after each month closes. In the event that the Contractor
fails to achieve a fill rate of ninety percent (90.0%) for a calendar month, the Contractor shall
reduce the immediately following invoice any an amount calculated on the Compensation
Incentive Factors set forth in the tables below, from sums otherwise accruing as Compensation to
the Contractor.
Nomenclature. Strike all references elsewhere in this Contract, including
b.
the RFP and the Contractor's Proposal to any "Penalty" or "Penalties"; and substitute for each
such term the Compensation Incentive Factors set forth above, as applied to Compensation
otherwise accruing under this Contract.

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c.
Incentives. The Contractor agrees to and shall place at-risk twenty percent
(20.0%) of its annual operating net income, based on its performance under this Contract as to (i)
fill rate, and (ii) monthly satisfaction survey results, as set forth below in this Section 3. Note
accelerated incentive commencing in the second year of the Term and set forth in the two (2)
incentive tables, below.

Fill Rate. The Contractor accepts the fill rate incentive schedule
set forth in the chart below. Monthly compensation incentive applies only if all outstanding
invoices are current within forty-five (45) days of billing, as to all undisputed portions of the
invoiced charges. Accrual of incentives based on fill rate and satisfaction surveys commences
January 1, 2016. For periods of the Term through December 31, 2015 the Contractor shall seek
to achieve a monthly fill rate for all substitute positions to fill under this Contract of not less than
seventy-five percent (75.0%); for periods of the Term on and after January 1, 2016 through the
end of the Term, the Contractor shall seek to achieve a monthly fill rate for all substitute
positions to fill under this Contract of not less than ninety percent (90.0%). The Parties shall
calculate actual fill rates based on all positions the Contractor must fill during the applicable pay
period. The Parties shall calculate the fill rate incentive on requests entered into Contractor's
automated system, SAMS, prior to 5:30 am on the date of each absence occurring through June
30, 2016, and 6:00 am for each absence occurring during the remainder of the Term,
commencing July 1, 2016. The incentive also excludes requests made in the AESOP system
which do not require a substitute. Additionally, AESOP has added a new charge for all
customers requiring system access where absences are reported but no substitute is required. The
Contractor may bill the School District One Dollar ($1.00) per transaction, totaling about
$9,964.50, based on estimating 2014-2015 results of 13,286 reported absences not requiring a
substitute.
L

Scale for Fill Rate incentives:

Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16

Below 60%
0
0
0
0
5686
5686
5686
5686
5686
5686
0
0
8528
8528
8528

Below 70%
0
0
0
0
4264
4264
4264
4264
4264
4264
0
0
6396
6396
6396

Below 80%
0
0
0
0
2843
2843
2843
2843
2843
2843
0
0
4264
4264
4264

Below 89%
0
0
0
0
1421
1421
1421
1421
1421
1421
0
0
2132
2132
2132

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Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17

8528
8528
8528
8528
8528
8528
8528

4264
4264
4264
4264
4264
4264
4264

6396
6396
6396
6396
6396
6396
6396

2132
2132
2132
2132
2132
2132
2132

Example:
Billing Period:

1/1/2016 ~ 1/31/2016

Total Billing Amount (All Positions)

$1,400.000.00
4,970
3,956
79.60%

Aggregate Available Positions

Aggregate Filled Positions
Aggregate Fill Rate

2,843.00

Deduction Amount

-$

Net Payment Amount

$1,397,157.00

ii.
Survey-based Incentives. The School District shall in addition
have the right to assess a deduction from payments of the Compensation otherwise accruing to
the Contractor for poor quality in carrying out the Work, as determined by a satisfaction survey
completed by the full-time assigned teacher or Principal. The School District will complete these
surveys on a regular basis; these surveys shall measure multiple factors in the substitute teacher's
performance.
The table below at Schedule 1 to this Exhibit "A-1" details the elements of the satisfaction
survey.
The Contractor shall submit a survey tool to each teacher and principal who uses a Contractor
employee, excluding custodial and food service Substitute Staff, and shall provide results for the
School District each month, thirty (30) days after each month closes. The School District agrees
to migrate or exclude specific schools or situations that might drive results for any given month
based upon unusual circumstances. The Contractor shall submit to the School District a
suggested survey form not later than August 28, 2015.
Fixed scale for survey satisfaction incentives
Below70%
Sep-15
Oct-15

I ~
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Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May17
Jun-17

0
0
711
711
711
711
711
711
0
0
1066
1066
1066
1066
1066
1066
1066
1066
1066
1066

4.
Exclusive. The School District agrees that the Contractor shall serve as the
exclusive contract provider of substitute staffing services (RFP No. 460) to the School District.
All or any placement of substitute staffing ("Substitute Staffing"; such personnel "Substitute
Staff') shall take place solely under and pursuant to this Contract. The foregoing to the contrary
notwithstanding, the School District retains (a) the right to act under Section 19, Default, Notice
and Cure; Remedies, pages 8 - 10 of Exhibit "C", the Standard Terms and Conditions, as set
forth therein; and (b) the right use Substitute Staff as set forth below in Section 11 of this
Exhibit "A-1 ".
5.
Substitute Staff Referred by the School District. The School District may provide
to the Contractor a list of Substitute Staff whom the School District has employed prior to the
commencement of the Term of this Contract, and whom the School District wishes the
Contractor to consider for inclusion in its pool of Substitute Staff for assignment by the
Contractor to the School District as part of the Work set forth in this Contract. The School
District shall provide to the Contractor a written list of these proposed Substitute Staff and may
supplement or update this list or lists, in writing, with additions or deletions, as appropriate.
Subject to all of the Contractor's hiring-related requirements, including the interview, training,
background checks and certification requirements as set forth elsewhere in this Contract, or
otherwise required by the Contractor, and subject further to ordinary employee responsibilities
attendant to employment, the Contractor will consider and, acting reasonably, if appropriate,
accept such proposed Substitute Staff for employment and assignment to the School District.
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The School District acknowledges that these Substitute Staff will be ineligible to accept
substitute assignments if the Contractor finds them non-compliant with the laws governing
educational employees in the Commonwealth of Pennsylvania, as determined by the Contractor
pursuant to Applicable Law. The School District further agrees to forward to the Contractor any
report of criminal activity regarding Substitute Staff from the Pennsylvania State Police or any
other governmental authority, and from any Substitute Staff.
a.
Applicants to the School District. From time to time upon request by the
Contractor the School District shall deliver in excel or other agreed format information, including
contact information, as appropriate to maintain applicant privacy, of applicants for School
District employment, to facilitate marketing and recruitment efforts of the Contractor.
6.
The School District's Obligations. In connection with Substitute Staff provided
by the Contractor pursuant to this Contract, the School District shall:
a.
provide information to the Substitute Staff as needed to allow the
Substitute Staff to fully understand the duties and responsibilities of the placement, and promptly
report to the Contractor any suspicious, unusual, inappropriate behavior or unsatisfactory
performance; provided that the Contractor shall give its Substitute Staff a basic familiarity with
School District policies, procedures and practices pertinent to its classrooms and substitute staff
functions.
b.
provide a safe and suitable workplace that complies with all Applicable
Law concerning safety and health standards, statutes, and regulations, on the same basis and to
the same extent that the School District achieves regarding its sites and its own employees;
c.
provide Substitute Staff with adequate information, training, and safety
equipment with respect to hazardous substances and any inherent dangers of the workplace,
including emergency procedures, school rules and protocols, policies and procedures regarding
student disciplinary actions, and confidentiality of student records, on the same basis, in the same
manner, and to the same extent that the School District does regarding its sites and its own
employees;
d.
ensure that Substitute Staff do not (i) except with respect to substitute
nurses, if any, provided under this Contract, administer or maintain custody of any student
medications, (iii) have custody of cash, negotiable valuables, merchandise, credit cards, check
writing materials, or similar property, except for student lunch money that may be collected in
the normal course of business, or (iv) use any vehicle on behalf of the School District;
e.
assign Substitute Staff only to tasks for which they have been requested
and in conformity with the applicable job description, unless the Contractor consents to the
contrary in writing. Heavy labor, lifting, or physical activity is prohibited unless required and
accepted in the job description.
f.
not assign Substitute Staffto travel or perform duties off the normal
school premises of the School District, except for class trips which are supervised by School
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District staff;
g.
if the School District assigns to Substitute Staff duties in connection with
the School District's computer systems, maintain appropriate pass word security and backup
copies of all data; provided, however, that the Contractor shall appropriately train Substitute Staff
concerning the need for data security, student rights under FERP A and other appropriate policies,
practices and protocols respecting FERP A;
h.
maintain appropriate written internal control policies and procedures to
ensure the confidentiality of all student records and appropriately limit the access of Substitute
Staff to such records provided, however, that the Contractor shall appropriately train Substitute
Staff concerning the need for data security, student rights under FERP A and other appropriate
policies, practices and protocols respecting FERP A;
i.
not promise any Substitute Staff an increased rate of compensation, or
disclose to any Substitute Staff the compensation rates or fringe benefits of other personnel;
j.
approve and sign forms supplied by the Contractor and subject to prior
review and approval by the School District, documenting the amount of time worked by
Substitute Staff;
k.
be responsible for keeping the Contractor promptly informed including by
e-mail, of all Substitute Staff on-site changes and any changes in School District or building
supervisory contact information;
I.
comply with all reasonable Contractor policies and procedures to
accurately invoice the School District, process the daily recordkeeping and other tasks necessary
for the Contractor to administer and track Substitute Staff, including but not limited to, sign-in
and sign-out procedures and related records.

7.
School District Collective Bargaining Agreements. The Contractor shall have no
liability or responsibility in the event a court of law or other tribunal having jurisdiction
determines that the execution, delivery or performance of this Contract by either Party constitutes
a breach of, or an event of default under, any collective bargaining agreement binding on the
School District.
8.
Mandated Pricing Plan Changes. The Contractor may propose changes to the
Pricing Template for the current year of the Term and set forth in the Pricing Template, in the
event that local, state or federally mandated employer payroll taxes or contributions, healthcare
benefits or other benefit programs, including but not limited to family leave benefits which are
required or permitted by local, state or federal law, regulation or mandate are enacted,
implemented, become effective or are increased after the first day of the Term of this Contract.
The Pricing Plan shall be adjusted to reflect the actual cost increase to the Contractor reasonably
calculated on a direct or pro rata basis. In the event that Applicable Law mandates an increase to
the minimum wage payable to Substitute Staff, the Contractor may modify the Pricing Table to
reflect the applicable actual cost increase.
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9.
Affordable Care Act. The Parties may at any time exchange lists of Substitute
Staff and otherwise reasonably coordinate with one another respecting Substitute Staff and the
application and applicability of the Patient Protection and Affordable Care Act ("Act").
10.
Use of Substitute Staff by the School District Directly. The Contractor maintains
the right to manage the schedule of its employees. Accordingly, if the School District engages
the services of any Substitute Staff other than through the Contractor on a per-diem, hourly or
other basis, whether for services covered in this Contract or otherwise, the School District shall
promptly notify the Contractor and provide all information the Contractor may reasonably
request. Furthermore, if the School District hires Substitute Staff for services provided by the
Contractor in accordance with this Contract, then, for the lesser of the period for which such
Contractor employee is engaged, or the remainder of the Term of this Contract, the School
District shall calculate and pay to the Contractor any amounts due by using the rates set forth in
the Pricing Template, below. This section shall not apply to any Substitute Staff hired by the
School District as a full-time, permanent employee of the School District.

Compensation. Compensation accruing under this Contract shall not exceed

11.
Seventeen Million Dollars ($17,000,000.00) per year.
a.

Intentionally Omitted

b.
Payment. The School District shall use all commercially reasonable
efforts to make payments of the Compensation to the Contractor monthly in United States
currency by check regularly payable in the normal course of U.S. banking transactions, or
electronic transfer, monthly, within forty-five (45) days after receipt of the Contractor's invoice
therefor, with respect to the undisputed portion of the invoice or invoices. If the School District
fails to pay any portion of the Compensation due and owing to the Contractor when due then (i)
the amount due and owing by the School District to the Contractor shall bear interest at a rate of
interest equal to the Prime Rate oflnterest as published in the Wall Street Journal, plus five
percent (5.0%), until paid.
c.
Annual Compensation Increases. The Parties have agreed to annual
increases in the Compensation, as follows.
i.
Consumer Price Index. As used in this Contract, "Consumer Price
Index" or "CPI" means the Consumer Price Index for All Urban Consumers (1982- 1984 =
100) (CPI-U), as calculated and published by the U.S. Department of Labor, Bureau of Labor
Statistics for the Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD CMSA, All Items (see
http://www.bls.gov/cpi/tables.htm (2014)). The Parties acknowledge that the U.S. Department of
Labor determines the statistical and other methods, including the stated base year or years, used
to calculate the CPI from time to time, and may from time to time alter these methods. If the
United States Department of Labor ceases to publish the CPI, then the School District shall
designate by notice to the Contractor another published index generally recognized as
authoritative, serving as nearly as reasonably practicable the same purposes as the CPI, which,
the Parties agree, shall thereafter substitute as the CPI hereunder.
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ii.
Annual Adjustment to the Compensation. Provided that no uncured
Event of Default then exists, beginning on and effective for the years of the Term commencing
July 1, 2015, and on each July 1 thereafter, including any extensions of the Term pursuant to
subsection 9.b. of the Agreement for Services, the Parties shall adjust the Compensation rates set
forth in this Exhibit "A-1 ",once annually effective July 1 of each such year, by increasing the
rates to amounts, respectively, equal to the rates then in effect, multiplied by the lesser of:
A.

1.03; or

B.
the sum of 1.00 plus a figure equal to the difference
between the CPI for the immediately preceding month of April and the CPI for the month of
April of the calendar year immediate preceding the current calendar year, as set forth in the ihencurrent edition ofhttp://www.bls.gov/cpi/tables.htm.
C.

By way of example:

CPl-U: Philadelphia-Wilmington-Atlantic City

July 2015
Annually

Contract Anniversary Month begins:

Adjustment Frequency:
CPI-U: Philadelphia-Wilmington-Atlantic City
Evaluation Period
First Adjustment Period (July 2015 - June 2016)
Current Index (April 2016)
Base Index (July 2015)
Subtract the base index from the current index
Divide the result by the base index
Convert the result into a percentage

Apr 15 to Apr 16

245.123
240.235
4.888
0.020346744
2.03%

Result: apply 2.03% additional charge to the base pricing

Note: Index prices used above are examples only.

12.
The Contractor's Employee-Related Plans. All of the Contractor's employee
incentive plans, employee bonuses, and employee recognition programs are administered by the
Contractor in its sole discretion.
13.
Force Majeure. Neither party shall be responsible for delays, failure to perform or
incentive penalties caused by acts of God (including fire, flood, storm, or other natural
disturbances), war, civil war, riot, epidemic, acts of foreign enemies, terrorist activities,
government sanction, strikes or other labor disputes (it being specifically understood that the
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existence of any picket line by a collective bargaining unit shall be considered as within this
definition of force majeure), interruption or failure of electric, telephone or similar service or
other causes beyond such party's control. The foregoing sentence to the contrary
notwithstanding, the Contractor acknowledges and agrees that the School District and only the
School District determines whether to open or close schools in the event of, e.g., inclement
weather, and when the School District determines to open its schools, the Contractor shall deliver
all required Substitute Staff as set forth in this Contract.

Long Term Substitutes. The School District shall in general handle

14.
responsibilities for long term substitute arrangements, defined as absences reasonably known of
in advance and likely to last longer than three (3) months. Where long term substitute needs
arise, the School District shall retain responsibility for covering the absence. If a substitute
position starts out as a day-to-day or other less-than-long-term assignment, and has to be
extended such that it then may qualify as long term, then the Contractor shall not later than the
eighty-ninth (891h) day of the absence provide a new Substitute Staff to cover the need.
15.
Certified Teachers. The Contractor shall use commercially reasonable efforts to
assign Substitute Staff in conformity with each individual's certification and the School District's
daily substitute staffing needs.

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2013, The School District of Philadelphia
Office of General Counsel
July 2013