R2005-77 ACCEPTING PROPOSAL FIRST TRANSIT, INC.

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4. COMMENCEMENT AND TERM The Effective Date of this Agreement is July 1,2004,regardless of the date of execution,and the Agreement shall continue from the Effective Date for a term of three (3)years from the Effective Date,ending at 11:59 p.m. (Central Time)on June 30,2007. This Agreement may be extended at the sole discretion of the CITY for two (2) additional one (1) year terms (option years). The first option year shall begin on July l, 2007 and end on June 30, 2008; the second option year shall begin on July 1, 2008 and end on June 30, 2009. This Agreement shall be automatically extended unless the CITY gives FIRST TRANSIT sixty (60)days written notice before expiration of the original or subsequent terms of the CITY's desire to terminate the contract. 5. OPERATING ENTITY AND PERSONNEL A. FIRST TRANSIT, subject to the laws of the State of Illinois, has formed a separate corporation, Decatur Transit Management, Inc. (DTM), which by assignment shall assume and perform all services and obligations, and accept all rights, which have been incurred or extended to FIRST TRANSIT under the terms and conditions of this Agreement. Subject to the provisions of subsection E.ofthis paragraph,said Decatur Transit Management,Inc. shall employ,and shall be the employer of,all employees required from time to time for the efficient operation of the Transit System. Decatur Transit Management, Inc. shall assume all contractual obligations incidental to the operation by FIRST TRANSIT to the extent that Decatur Transit Management, Inc. has agreed to be so obligated. B. Decatur Transit Management,Inc. (DTM) shall employ only persons of good moral character and reputation and shall conduct an investigation of all prospective employees considered for employment. DTM shall furnish to the CITY the name and resume of each prospective employee. Employees shall be selected with the approval of the CITY, which approval shall not be unreasonably withheld. The CITY shall have the right to require the removal,for any reason, of any employee of DTM from any work assignment or from employment under this Agreement. C. FIRST TRANSIT shall furnish a General Manager who shall be selected with the approval of the CITY,which approval shall not be unreasonably withheld,shall serve at the expense of FIRST TRANSIT,and shall provide the active management of the Transit System for and on behalf of the CITY. The General Manager shall reside in the Decatur area. Management of the Transit System shall be the full time j ob of the General Manager. Mr.Richard A.Foiles shall be the General Manager of the Transit System under this Agreement. Mr. Foiles shall not be transferred from this assignment without the written approval of the CITY. D. FIRST TRANSIT may also furnish,upon mutual agreement of the parties and for an additional fee,additional resident management personneL The terms of employment 4