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BID TERMS & CONDITIONS

2.1 Inspection and Reports

ARRC may inspect all the Contractor's facilities and activities under this contract in accordance with the provisions of ARRC Procurement Rule 1600.9. The Contractor shall make progress reports as required by the ARRC.

2.2 Disputes

All disputes arising under this contract which are not disposed of my mutual agreement shall be resolved in accordance with the procedures set forth in ARRC Procurement Rule 1800.12.

2.3 Equal Employment Opportunity

2.3.1

The Contractor may not discriminate against any employee or applicant for employment because of race, religion, color, national origin, or because of age, disability, sex, marital status, change in marital status, pregnancy or parenthood when the reasonable demands of the positions do not require distinction on the basis of age, physical handicap, sex, marital status, changes in marital status, pregnancy, or parenthood, insofar as required by applicable law. The Contractor shall take affirmative action to insure that the applicants are considered for employment without unlawful regard to their race, color, religion, national origin, ancestry, disability, age, sex, marital status, changes in marital status, pregnancy or parenthood, insofar as required by applicable law. The Contractor shall post in conspicuous places, available to employees and applicants for employment, notices setting out the provisions of this paragraph.

2.3.2

The Contractor shall state, in all solicitations or advertisements for employees to work on ARRC contract jobs, that it is an equal opportunity employer and that all qualified applicants will receive consideration for employment without regard to race, religion, color, national origin, age, disability, sex, marital status, changes in marital status, pregnancy or parenthood, insofar as required by applicable law.

2.3.3

The Contractor shall send to each labor union or representative of workers with which the Contractor has a collective bargaining agreement or other contract or understanding a notice advising the labor union or worker's representatives of the Contractor's commitments under this article and post copies of the notice in conspicuous places available to all employees and applicants for employment.

2.3.4

The Contractor shall include the provisions of this article in every subcontract hereunder, and shallrequire the inclusion of these provisions in every contract entered into by any of its subcontractors, so that those provisions will be binding upon each subcontractor. For the purpose of including these provisions in any contract or subcontract, as required by this contract, "Contractor" and "Subcontractor" may be changed to reflect appropriately the name of designation of the contract or subcontract.

2.3.5

The Contractor shall cooperate fully with ARRC efforts which seek to deal with the problem of unlawful discrimination, and with all other ARRC efforts to guarantee fair employment practices under this contract, and promptly comply with all requests and directions from the State Commission for Human Rights or any of its officers or agents relating to prevention of discriminatory employment practices.

2.3.6

Full cooperation includes, but is not limited to, being a witness in any proceeding involving questions of unlawful discrimination if that is requested by any official or agency of the State of Alaska; permitting employees of the Contractor to be witnesses or complainants in any proceeding involving unlawful discrimination, if that is requested by any official or agency of the State of Alaska; participating in meetings; submitting periodic reports on the equal aspects of present and future employment; assisting inspection of the Contractor's facilities; and promptly complying with all State directives considered essential by any office or agency of the State of Alaska to insure compliance with all federal and state laws, regulations, and policies pertaining to the prevention of discriminatory employment practices.

2.3.7

Failure to perform under this article constitutes a material breach of the contract.

2.4 Cancellation/Termination 2.4.1 ARRC may at any time cancel this contract in whole or in part for its convenience upon thirty (30) days written notice to Contractor. Upon cancellation, (a) as to supplies or services completed prior to receipt of notice, ARRC shall pay Contractor the prorated portion of the total contract price and (b) as to work in progress prior to receipt of notice, ARRC shall pay Contractor only for direct expenditures on work specifically identified to this contract. However, in no event shall ARRC be liable for incidental, consequential. or punitive damages, overhead or other direct or indirect costs, or lost profits. Payments made under this contract shall not exceed the aggregate price specified in this contract 2.4.2 If the Contractor refuses or fails to timely perform as specified in this contract and does not cure such failure within a period of ten (10) days after ARRC provides notice of such failure, ARRC may, at its option, terminate in whole or in part this contract In this event, ARRC may take over the work and complete it by contract or otherwise, and may take possession of and use any materials, tools and machinery on the work site necessary for completing the work. Contractor and its sureties shall beliable for any damage to the ARRC resulting from the Contractor's refusal to complete the work within the specified time, whether or not the Contractor's right to proceed with the work is terminated. This liability includes any increased costs incurred by the ARRC in completing the work. 2.5 No Assignment or Delegation The Contractor may not assign or delegate this contract, or any part of it, or any right to any of the money to be paid under it, except upon the prior written consent of ARRC. 2.6 No Additional Work or Material ARRC will not pay for additional work or material not specifically required in this contract unless the extra work or material is authorized in writing by ARRC. 2.7 Independent Contractor The Contractor and all of its agents and employees act in an independent capacity and are not officers, employees, or agents of ARRC in the performance of this contract. 2.8 Payment of Taxes As a condition of contract performance, the Contractor shall timely pay all federal, state, and local taxes incurred by the Contractor and shall require their payment by any Subcontractor in the performance of this contract. Satisfactory performance of this paragraph is a condition precedent to payment by ARRC under this contract. 2.9 Ownership of Work Products All exhibits, drawings, specifications, notes, artwork, pleadings, and memoranda and other work products and non-expendable property produced or purchased under this contract are the property of ARRC, except as otherwise stated in the contract. Payments to the Contractor include full compensation for all such products produced or acquired by Contractor and its subcontractors.

2.10 Governing Law This contract is governed by the laws of the State of Alaska. All legal actions concerning this contract shall be brought in the Superior Court of the State of Alaska. 2.11 Officials Not to Benefit No officer or employee of the State of Alaska or of the ARRC and no director of the ARRC or legislator of the state shall be admitted to any share or part of this contract or to any benefit that may arise therefrom. Contractor must comply with all applicable federal or state laws regulating ethical conduct of public officers and employees. 2.12 Covenant Against Contingent Fees The Contractor warrants that it has not employed or retained any company or person. other than a bona fide employee working solely for Contractor, to solicit or secure this contract, and that it has not paid or agreed to pay any person, company, individual, or firm any commission, gift, percentage, fee, contingent upon or resulting from the award or making of this contract. For the breach or violation of this warranty, ARRC may terminate this contract without liability and, at its discretion, deduct from the contract price or otherwise recover the full amount of the commission, percentage, gift, or fee. 2.13 Nondisclosure of Confidential Information Contractor acknowledges and agrees that any information, data, figures, projections, estimates, reports, and the like, received, obtained, or generated by contractor in the performance of this contract shall be considered and kept as the private, confidential and privileged records of ARRC and will not be divulged to any person, firm, corporation, regulatory agency, or any other entity except upon the express written consent of ARRC. 2.14 Notice Where these terms and conditions require written notice such notice may be sent by fax or by certified mail-return receipt requested. 2.15 Entire Agreement These general terms and conditions along with those contained in any bid/proposal accepted by ARRC, the solicitation specifications, the purchase order, award notice, and any documents referred to therein, constitute the entire agreement between Contractor and ARRC, and supersedes all prior understandings, transactions, and communications, whether oral or written, with respect to the matters referred to herein. No modification, alteration, or amendment of this agreement shall be binding upon ARRC unless in writing and signed by ARRC's authorized representative.

2.16 Indemnification The Contractor shall indemnify, save harmless and defend ARRC, its officers, agents and employeesfrom all liability of any nature or kind, including costs and expenses, for all actions or claims resulting from injuries or damages sustained by any person or property arising directly or indirectly as a result of any error, omission, or negligent or wrongful acts of the Contractor, subcontractor or anyone directly or indirectly employed by them in the performance of this contract. 2.17 Insurance (Service Contracts Only) Without limiting Contractor's obligation to indemnify ARRC, it is agreed that Contractor shall purchase at its own expense and maintain in force at all times during the performance of services under this contract the following policies of insurance. Where specific limits are shown, it is understood that they shall be the minimum acceptable limits. If the Contractor's policy contains higher limits, ARRC shall be entitled to coverage to the extent of such higher limits. Certificates of Insurance must be furnished to ARRC prior to beginning work and must provide for a thirty (30) day prior notice of cancellation, nonrenewal or material change. Failure to furnish satisfactory evidence of insurance or lapse of the policy is a material breach and grounds for termination of the Contractor's services. 2.17.1 Workers' Compensation Insurance The Contractor shall provide and maintain, for all employees of the Contractor engaged in work under this contract, workers' compensation insurance as required by AS 23.30.045. The Contractor shall be responsible for Workers' Compensation Insurance for any subcontractor who directly or indirectly provides services under this contract This coverage must include statutory coverage for states in which employees are engaging in work and employer's liability protection not less that $100,000 per person, $100,000 per occurrence. Where applicable, coverage mandated by federal statutes (e.g. U.S.L& H. and Jones Acts) must also be included. 2.17.2 Comprehensive (Commercial) General Liability Insurance: With coverage limits not less than $1,000,000 combined single limit per occurrence and $2,000,000 annual aggregate where generally applicable and shall include premises-operations, independent contractors, products/completed operations, broad form property damage, blanket contractual and personal injury endorsements. 2.17.3 Comprehensive Automobile Liability Insurance: Covering all owned, hired, and non-owned vehicles with coverage limits not less than $100,000 per person/$300,000 per occurrence bodily injury and $50,000 property damage. 2.17.4 Professional Liability Insurance: Covering all errors, omissions or negligent or wrongful acts of the Contractor, subcontractor or anyone directly or indirectly employed by them, made in the performance of this contract which result in financial loss to ARRC. Limits required are per the following schedule: Under $100,000 $500,000 per Occurrence/Annual Aggregate $100,000 to $499,999 $1,000,000 per Occurrence/Annual Aggregate $500,000 to $999,999 $2,000,000 per Occurrence/Annual Aggregate $1,000,000 or over Negotiable - Refer to Risk Management

2.17.5 Sudden and Accidental Pollution Insurance: Coverage (minimum of $1,000,000) will be required as well as any other liability insurance coverage that is required by Federal, State and local laws, in addition to the insurance above for all contracts that pose a risk of environmental pollution or contamination. 2.17.6 Railroad Protective Insurance Policy Where the contract requires work on ARRC property, Contractor shall obtain, at its own expense, a Railroad Protective Insurance Policy naming ARRC as the insured with limits of $2,000,000 for bodily injury, each occurrence and $2,000,000 for property damage, each occurrence. 2.18 Conflict of Interest Contractor shall act to prevent any actions or conditions which could result in a conflict with ARRC's best interests. This obligation shall apply to the activities of Contractor's employees and agents in their relationships with ARRC's employees, their families, vendors, subcontractors and third parties accomplishing work under this contract. Contractor's efforts shall include, but shall not be limited to, establishing precautions to prevent its employees or agents from making, providing or offering gifts, entertainment, payments, loans or other considerations to ARRC employees for any purpose whatsoever. 2.19 Publicity Contractor shall not release any information for publication or advertising purposes relative to this contract or to the material, equipment and/or services furnished under this contract without the prior written consent of the ARRC. 2.20 Audit The ARRC has the right to audit at reasonable times the accounts and books of the Contractor in accordance with the provisions of ARRC Procurement Rule 1600.10. 2.21 Internal Controls and Record Keeping Contractor shall keep full and accurate records and accounts of all of its activities in connectionwith this contract, including, without limitation, reasonable substantiation of all expenses incurred and all property acquired hereunder. In addition, Contractor shall cause its affiliated or associatedcompanies and its agents and/or subcontractors to maintain such controls, records and accounts. 2.22 Labor Disputes 2.22.1 If the Contractor has knowledge that any actual or potential labor dispute is delaying or threatens to delay the timely performance of this contract, Contractor shall immediately provide all relevant information to ARRC. 2.22.2 In the event of a strike, slow down, "sick out" or work stoppage for any reason, ARRC shall have the right to immediately terminate this contract. 2.22.3 Contractor shall include the substance of this clause in any subcontract to which a labor dispute may delay the timely performance of this contract. 2.23 Force Majeure Neither ARRC nor Contractor shall be responsible for failure to perform the terms of this contract when performance is prevented by force majeure, provided that: 1) notice and reasonably detailed particulars are given to the other party, and 2) the cause of such failure or omission is remedied so far as possible with reasonable dispatch. The term force majeure shall mean acts of God, earthquakes, fire, flood, war, civil disturbances, governmentally imposed rules, regulations or other causes whatsoever, whether similar or dissimilar to the causes herein enumerated, which is not within the reasonable control of either party and which, through the exercise of due diligence, a party is unable to foresee or overcome. In no event shall the term force majeure include normal or reasonably foreseeable or reasonably avoidable operational delays.

2.24 Changes ARRC may at any time, by written notice to Contractor, and without notice to the sureties, if any, make changes within the general scope of this contract. These changes may include issuing additional instructions, requiring additional supplies/services or directing the deletion of supplies/services covered by this contract. If such changes result in an increase or decrease in Contractor's cost or in the time for performance, an equitable adjustment shall be made and this contract shall be modified in writing accordingly. 2.25 Permits and Licenses The Contractor shall, at its own expense, obtain all necessary permits, licenses, certifications and any other similar authorizations required or which may become required by the government of the United States or any state or by any political subdivision of the United States or of any state except where laws, rules or regulations expressly require the ARRC to obtain the same. 2.26 Environmental Protection When performing all obligations under the contract, Contractor shall comply with all specific instructions of ARRC with regard to environmental concerns, regardless of whether such instructions are based upon specific law, regulation or order of any governmental authority. 2.27 Nonwaiver ARRC's failure or delay (a) to insist upon strict performance of any of the provisions of this contract, (b) to exercise any rights or remedies provided by this contract or by law, or (c) to notify Contractor of any breach of or default under this contract (as well as the making of, or failure or delay to make any inspection, test, review, approval or acceptance of, or payment for, any contract performance) shall not release or relieve Contractor from any of its obligations or warranties under this contract and shall not be deemed a waiver of any right of ARRC to insist upon strict performance of this contract or any of the rights or remedies of ARRC; nor shall any purported oral modification or rescission of this contract by ARRC operate as a waiver of any of the provisions of this contract. The rights and remedies of ARRC set forth in any provision of this contract are in addition to any other rights or remedies afforded to ARRC by any other provisions of this contract, by suppliers or by law.

2.28 Invalid Provision The invalidity or unenforceability of any provision of this contract shall not affect the other provisions hereof, and this contract shall be construed in all respects as if such invalid or enforceable provisions were omitted. 2.29 Packing, Marking and Shipping 2.29.1 All supplies shall be properly packaged to prevent damage or deterioration and to obtain the lowest transportation rates. ARRC will pay no charge for preparation, crating, dunnage or other materials unless separately stated in this contract 2.29.2 Each Packing Slip, Bill of Lading, Invoice, Container, tag and correspondence shall bear the applicable contract number and the location to which the supplies are to be shipped. 2.29.3 A waterproof Master Packing Slip shall accompany each shipment and shall be included in one of the packages marked "Packing Slip Inside" or in the case of a carload shipment, be conspicuouslydisplayed on the inside of the freight car. 2.29.4 The original Bill of Lading shall be mailed to the attention of ARRC Financial Services on date of shipment. 2.30 Improper Delivery If for any reason the Contractor fails to make timely delivery, ARRC may, at its option, approve a revised delivery schedule, request shipment via air or expedited routing (at Contractor's expense) or terminate this contract without any liability. Contractor will not, however, be liable for damages resulting from delays in delivery due to causes beyond Contractor's reasonable control, provided Contractor promptly notifies ARRC in writing of any such delay or expected delay as soon as such delay or expected delay becomes or should have become apparent. The remedies provided in this paragraph shall be cumulative and in addition to any other or further remedies ARRC may have.

2.31 Shipping Release The Contractor shall not ship any of the supplies covered by this contract unless specific delivery dates or written instructions are furnished to Contractor by ARRC. ARRC shall have no responsibility for supplies for which delivery dates or other written instructions have not been provided. Shipments in excess of those authorized may be returned to Contractor and Contractor shall pay ARRC for all expenses incurred in connection with such shipments. ARRC may change or temporarily suspend shipping schedules specified in this contract or written instructions. 2.32 Inspection/Rejection Notwithstanding prior shipment, all supplies are subject to inspection and acceptance by ARRC within a reasonable time after they arrive at destination. ARRC shall notify Contractor if any supplies are rejected for any reason. At ARRC's election, rejected supplies may be held for Contractor's account or returned to Contractor at Contractor's risk and expense. No replacement or correction of defective or nonconforming supplies shall be made by Contractor without written authorization from ARRC. 2.33 Compliance with Laws and Regulations Contractor agrees that in the performance of this contract it will comply with the requirements of all applicable Federal, State and local statutes, regulations and orders and will indemnify and save ARRC harmless from any claim, loss or damage arising from Contractor's violation or alleged violation of them. 2.34 Reduction in Contractor's Cost Any reduction in Contractor's costs resulting from a reduction in freight rates, custom duties, import taxes, excise taxes and/or sales taxes from those in force on the date of the contract is to be paid to ARRC by Contractor in reduction of the price of the ordered supplies or services.

2.35 Warranty The Contractor shall warrant the supplies offered as follows: 2.35.1 Contractor warrants that: (a) the supplies shall be of good quality and free from all defects and deficiencies in workmanship, material and design; (b) the supplies shall be fit, suitable and operate successfully for their intended purpose; (c) all equipment, components, parts, materials, goods and other items incorporated in the supplies shall be new; (d) the supplies shall be free from all liens, claims, demands, encumbrances and other defects in title; and (e) the supplies shall conform to the specifications of this contract. 2.35.2 ARRC requires that successful bidders/offerors honor all guarantees and warranties offered by the manufacturer of the supplies. 2.36 Claims Procedure Any claim of Contractor for damages, additional compensation, or extension of time, whether under this Contract or otherwise, against ARRC, shall be conclusively deemed to have been waived by Contractor unless a timely written claim therefore is made pursuant to and in strict accordance with the provisions of ARRC Procurement Rule 1800.12. 2.37 No Partnership This Contract shall not be interpreted or construed to create an association, joint venture or partnership between the parties or to impose any partnership obligations or liability upon either party. 2.38 Set Off If ARRC has any claim against a Contractor, it may set off the amount of such claim against any amount due or becoming due under this contract. 2.39 Payments Payments for supplies or services furnished under this contract will be due thirty (30) days after thelater of (1) receipt of the supplies or services established in the contract, (2) receipt of proper billing for such supplies or services, and (3) receipt of all documents required by this contract. ARRC shall not be liable for interest charges on late payments.

DEFINITIONS ARRC: Alaska Railroad Corporation, P.O. Box 107500, Anchorage, AK 99510-7500. ARRC Property: All lands owned or withdrawn for the use of ARRC, in and including the ARRC's track right-of-way and communications pole line right-of-way. Bidder: The party submitting a bid. Contract: The agreement to provide supplies or services to ARRC pursuant to these General Terms and Conditions and Specification, the attached appendices, purchase order, and all specifications, drawings and other provisions and documents attached to, incorporated into or otherwise made a part of this Contract, all as the same may be amended, modified or supplemented from time to time in accordance with the provisions hereof. Contractor: The company or entity set forth and named in the preamble to this contract and, where the context so admits, shall include its employees, agents and subcontractors. Offeror: The party submitting a proposal. Project Director or Procurement Officer: An ARRC employee with the authority to enter into, administer and/or terminate contracts and make related determinations and findings. The term includes certain authorized representatives or successor of the Project Director or Procurement Officer acting within the limits of their authority as delegated by the Procurement Officer. Solicitation: An Invitation to Bid, Request for Proposals, request for quotation, or any other document issued by ARRC for the purpose of soliciting bids or proposals to provide supplies or services to ARRC. Supplier: Contractor's suppliers and subcontractors of any tier; the respective officers, employees, agents and representatives of Contractor's suppliers and subcontractors of any tier; and any other person or entity acting under the direction or control or on behalf of Contractor or any of Contractor's suppliers or subcontractors of any tier in connection with or incident to the performance of this Contract. Supplies: The goods, materials, items, products, commodities or equipment to be delivered toARRC pursuant to the Contract.