Edifecs+-+API+Executed+Contract.pdf

TECHNOLOGY CONTRACT: APPLICATION PROGRAMMING INTERFACE

1. PARTIES

The parties to this contract (Contract) are the state of North Dakota, acting through its North Dakota Department of Human Services, Medical Services Division, (STATE), and Edifecs, Inc., a Washington corporation having its principal place of business at 1756 114th Ave SE, Bellevue, WA

98004 (CONTRACTOR).

2. DEFINITIONS

a. Authorized Contacts - means personnel designated by STATE in writing who are authorized to submit a service request.

b. Contractor Hosting - means the provision of products and services in a CONTRACTOR hosted, virtualized environment, accessible via the internet.

c. Contractor Software - means CONTRACTOR proprietary software applications and user interfaces made available to STATE as part of the Service. CONTRACTOR Software may contain third-party components licensed to CONTRACTOR.

d. Control Environment - is the set of standards, processes, and structures that provide the basis for carrying out internal control across the organization.

e. Customer Data - means all data, files, including hypertext markup language files, documents, audio and visual information, graphics, scripts, programs, applets, or servlets that STATE uploads or transfers in or through the Service or provides in the course of using the Service.

f. Data - means any information provided to, or collected, generated, stored, or processed by the system. Data includes user identification information and metadata which may contain Data or from which STATE’s Data may be ascertainable.

g. Data Breach - means any access, destruction, loss, theft, use, modification, or disclosure of Data by an unauthorized party or that is in violation of Contract terms and/or applicable state or federal law.

h. Data Classification - means the process of defining data into relevant categories so the information has the appropriate controls in place to protect confidentiality, integrity, and availability based on the type of information.

i. Documentation - means all technical user manuals provided by CONTRACTOR relating to the operation and use of Contractor Software.

j. Environment - means a collection of servers on which Software is deployed in a distributed configuration, representing one unit of installation. In one environment, various services and components that comprise Software are installed across multiple servers with each server performing a particular role. This distribution is based on solution design to provide required scalability, high availability and throughput. Examples of roles are XEngine Server (“XES”) profiles, Transaction Management (“TM”) Extract, Transform and Load (“ETL”), TM Service Manager, TM Web application, TM Business Item Service. Examples of possible Environments are “Production” and “Non-Production”.

k. Error - means failure of the Contractor Software to substantially conform to the Documentation, which materially impacts the Software’s operational performance or functional performance.

l. Infrastructure Support Services - means the support provided by CONTRACTOR for the maintenance and stability of the computer hardware and hosting environment provided as part of the Service.

m. Member - means any person who has coverage for healthcare in STATE’s healthcare insurance plan (including subscribers and dependents) and for and on behalf of whom related transactions will be processed by Customer Software. If a Member is enrolled with two or more programs (e.g., Medicare and Medicaid), enrollment in each program is counted distinctly.

n. Named User - means an individual employee of Customer identified by name who has been assigned the right to access the Customer Software using a specific Named User license.

o. New Release(s) - means one copy of all published revisions and corrections to the Documentation, and one copy of new releases that contain new features, product enhancements, revisions, upgrades, or corrections of Errors. New releases will be either minor or major releases, depending on the significance of the new functionality, enhancements, revisions, upgrades, or corrections.

p. Patch - means an unplanned repair or replacement of object or executable code versions of the Software to correct Errors. CONTRACTOR may provide a Workaround in lieu of a Patch, in CONTRACTOR’s sole discretion.

q. Personally Identifiable Information (PII) - information about an individual maintained by an agency, including that 1) can be used to distinguish or trace an individual‘s identity, such as name, social security number, date and place of birth, mother‘s maiden name, or biometric records; or (2) is linked or linkable to an individual, such as medical, educational, financial, and employment information.

r. Product Support Services - means the support provided by CONTRACTOR to remediate, correct, or abate errors in the out of the box CONTRACTOR Software that is provided as part of the Service as defined in Exhibit C. Support for customer specific configurations and customizations (if any) are handled by Application Support Services defined in Exhibit C.

s. Recovery Point Objective (RPO) - means the point in time to which Data can be recovered and/or systems restored when service is restored after an interruption. The RPO is expressed as a length of time between the interruption and the most proximate backup of Data immediately preceding the interruption. The RPO is detailed in the Service Level Agreement.

t. Recovery Time Objective (RTO) - means the period of time within which information technology services, systems, applications, and functions must be recovered following an unplanned interruption. The RTO is detailed in the Service Level Agreement.

u. Service - means the software and infrastructure in a hosted environment provided and maintained by CONTRACTOR to which STATE is being granted access under this Contract via a web site or another designated IP address. Service or Services includes Product Support Services, Infrastructure Support Services, and Application Support Services described in this Contract. Service is only made available to State for its Members.

v. Service Pack - means a planned repair or replacement of object or executable code versions of the Software to correct multiple Errors. CONTRACTOR may provide a Workaround in lieu of a Service Pack, in CONTRACTOR’s sole discretion.

w. Severity 1 Error - means the Software contains an Error during production usage that renders STATE’s use of any material component of the Software impracticable or impossible. Severity 1 Errors have a critical business impact. Examples of Severity 1 Errors include crash/hang with no auto-recovery; critical loss or corruption of data; severe performance related issues that cause significant impact on STATE’s production systems; critical security issues causing unauthorized/preventing authorized access; major feature failure or major usability problems;

and serious security issues.

x. Severity 2 Error - means an Error in the Software during production usage that has a serious adverse impact on the performance of the Software, but does not render STATE’s use of any material component of the Software impossible or impracticable. Severity 2 Errors have a significant business impact. Examples of Severity 2 Errors include frequent crash/hang with auto recovery; critical installation/upgrade/migration issues, and major performance related issues – Software is impacted but usable.

y. Severity 3 Error - means the Error does not have a serious adverse impact on the performance of the Software. Examples of Severity 3 Errors include pre-production installation/upgrade/migration failures; filter update issues (i.e., anti-spam, antivirus); feature failure or deviation from the Documentation; moderate usability problems; errors, warnings, performance issues or restarts not causing serious impact; and configuration changes or customization/branding issues.

z. Severity 4 Error - means a question that relates to use of the Software or configuration issues, or other issues not categorized as Severity 1, Severity 2 or Severity 3. Examples of Severity 4 Errors include user interface and navigation issues; all “how to” questions; configuration and usability issues; and root cause analysis or post-mortem of previous issues.

aa. Software as a Service (SaaS). The capability provided to the consumer is to use the provider’s applications running on a provider’s infrastructure. The applications are accessible from various client devices through interfaces such as a web browser (e.g., web-based email), or a program interface. The consumer does not manage or control the underlying infrastructure including network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user-specific application configuration settings. This definition is based on and consistent with National Institute of Standards and Technology (NIST) Special Publication 800-145.s) Third Party Products - means application software products provided by third-party contractors, including operating system and application software with which CONTRACTOR Software interfaces and which provides certain functionality essential to the operation of CONTRACTOR Software. Third Party Products are licensed to CONTRACTOR for incorporation and use in the hosted environment as part of the Service as set forth in the Scope of Work (SOW). For the sake of clarity, the term Third-Party Products does not refer to third-party software components, if any, incorporated into CONTRACTOR Software.

bb. SaaS Materials - means the written materials relating to the operation and use of CONTRACTOR Software, including user manuals, user guides, technical manuals, and online help files regarding use of CONTRACTOR Software provided as part of the Service, and any other materials prepared in connection with any CONTRACTOR Software modification, correction, or enhancement, and shall include any updated versions of SaaS Materials as may be provided by CONTRACTOR from time to time (1) in the course of providing the Service; (2) as part of an online tutorials or help files provided with the Service; or (3) in the course of providing web seminars in which STATE or STATE Users enroll.

cc. Users – means contractors, subcontractors, outsourcing vendors, consultants, and others who have a need to use the software for the benefit of STATE.

dd. Workaround - means a change in the procedures followed or data supplied by Customer to avoid an Error without substantially impairing Customer’s use of the Software.

3. SCOPE OF WORK

CONTRACTOR, in exchange for the compensation paid by STATE under this Contract, shall provide services as defined in Exhibit A: Scope of Work and Exhibit C: Software as a Service (SaaS) Service Level Agreement (SLA).

4. COMPENSATION

a. Contractual Amount

STATE shall pay for the accepted services provided by CONTRACTOR under this Contract an amount not to exceed $1,708,142.00 (Contractual Amount). The Contractual Amount shall be paid according to the Compensation Details document attached as Exhibit B.

The Contractual Amount is firm for the duration of this Contract and constitutes the entire compensation due CONTRACTOR for performance of its obligations under this Contract regardless of the difficulty, materials, or equipment required, including fees, licenses, overhead, profit, and all other direct and indirect costs or expenses incurred by CONTRACTOR except as provided by an amendment to this Contract.

b. Retainage

All deliverable payments shall be subject to 15% retainage, except payments related to licenses. Retained amounts due to CONTRACTOR shall be paid upon Final Acceptance.

c. Request for Reimbursement

The final cost set forth on each Request for Reimbursement shall be equivalent to the cost for each deliverable or service as specified in the Scope of Work. CONTRACTOR shall not submit a request for any deliverable or service specified in the Scope of Work that STATE has not fully accepted. STATE, upon receipt and approval of SFN 1763 Request for Reimbursement or other form required by STATE, shall pay Vendor as defined in Section 4.d.

d. Payment

Payment made in accordance with this Compensation section shall constitute payment in full for the services and work performed and the deliverables provided under this Contract and CONTRACTOR shall not receive any additional compensation hereunder.

STATE shall make payment under this Contract within forty-five (45) calendar days after receipt of an approved SFN 1763 Request for Reimbursement.

Payment of a Request for Reimbursement by STATE will not prejudice STATE’s right to object to or question that or any other Request for Reimbursement or matter in relation thereto.

CONTRACTOR's Request for Reimbursement will be subject to reduction for amounts included in any invoice or payment made, which are determined by STATE not to constitute allowable costs, on the basis of audits conducted in accordance with the terms of this Contract. At STATE’s sole discretion, all payments shall be subject to reduction for amounts equal to prior overpayments to CONTRACTOR.

For any amounts that are or will become due and payable to STATE by CONTRACTOR, STATE reserves the right to deduct the amount owed from payments that are or will become due and payable to CONTRACTOR under this Contract.

e. Travel

CONTRACTOR acknowledges travel expenses are covered by the Contractual Amount and shall not invoice STATE for travel expenses.

f. Prepayment

STATE will not make any advance payments before performance by CONTRACTOR under this Contract.

g. Payment of Taxes by STATE

STATE is not responsible for and will not pay local, state, or federal taxes. STATE sales tax exemption number is E-2001. STATE will furnish certificates of exemption upon request by

CONTRACTOR.

h. Taxpayer ID

CONTRACTOR’s federal employer ID number is: 20-4516419.

5. EQUIPMENT, MATERIALS, AND WORKSPACE – RESOURCES PROVIDED BY PARTIES

For periods during which the parties mutually agree that CONTRACTOR’s assigned staff is on site:

On site means Bismarck, North Dakota.

STATE agrees to provide an adequate working space, when required.

Equipment and software for on-site CONTRACTOR personnel is to be provided by CONTRACTOR.

When STATE and CONTRACTOR agree that remote access to systems is required, STATE shall provide the necessary supervised remote access security to enable CONTRACTOR access to the appropriate STATE systems.

6. TERM OF CONTRACT

This Contract term (TERM) begins on its Effective Date and ends three years from contract execution. In the event the CMS Interoperability Mandate for Patient Access and Provider Directory APIs is eliminated, STATE may terminate this Agreement with 60 days’ written notice, when possible. CONTRACTOR shall receive payment for all accepted services performed prior to the effective day of termination and have no refund obligations to the STATE.

a. No Automatic Renewal

This Contract will not automatically renew.

b. Extension Option

STATE reserves the right to extend this Contract for an additional period of time, not to exceed 12 months, beyond the current termination date of this Contract.

c. Renewal Option

STATE may renew this Contract upon satisfactory completion of the initial Contract term.

STATE reserves the right to execute up to one option to renew this Contract under the same terms and conditions for a period of 24 months.

d. Renegotiation Option

In view of the fact that it is unknown how long the products and services will be used by STATE and that STATE will require ongoing maintenance and support of the products for as long as the system is operational, therefore after completion of the initial term (Term) of this Contract, including any extensions and renewals, STATE and CONTRACTOR may renegotiate this Contract upon mutual agreement of the parties.

7. TERMINATION

a. Termination by Mutual Agreement

This Contract may be terminated at any time by mutual consent of both parties executed in writing.

b. Early Termination in the Public Interest

STATE is entering into this Contract for the purpose of carrying out the public policy of the state of North Dakota, as determined by its Governor, Legislative Assembly, Agencies, and Courts. If this Contract ceases to further the public policy of the state of North Dakota, STATE, in its sole discretion, by 60 days’ prior, when possible, written notice to CONTRACTOR specifying the extent to which performance under this Contract is terminated either in whole or part and the date on which such termination becomes effective, may terminate this Contract in whole or in part. CONTRACTOR shall receive payment for all accepted services performed prior to the effective day of termination and have no refund obligations to the STATE.

c. Termination for Lack of Funding or Authority

STATE, by written notice to CONTRACTOR, may terminate the whole or any part of this Contract under any of the following conditions:

1) If funding from federal, state, or other sources is not obtained and continued at levels sufficient to allow for purchase of the services or supplies in the indicated quantities or term.

2) If federal or state laws or rules are modified or interpreted in a way that the services are no longer allowable or appropriate for purchase under this Contract or are no longer eligible for the funding proposed for payments authorized by this Contract.

3) If any license, permit, or certificate required by law or rule, or by the terms of this Contract, is for any reason denied, revoked, suspended, or not renewed.

Termination of this Contract under this subsection is without prejudice to any obligations or liabilities of either party already accrued prior to termination. CONTRACTOR shall receive payment for all accepted services performed prior to the effective day of termination and have no refund obligations to the STATE.

d. Termination for Cause

STATE may terminate this Contract upon delivery of 30 days’ written notice to CONTRACTOR, or any later date stated in the notice:

1) If CONTRACTOR fails to provide services required by this Contract within the time specified or any extension agreed to by STATE; or

2) If CONTRACTOR fails to perform any of the other provisions of this Contract, or so fails to pursue the work as to endanger performance of this Contract in accordance with its terms.

Upon receipt of the above written notice, CONTRACTOR has 30 days to provide the services or otherwise cure the cause of the termination, unless a later date is stated in the notice. The rights and remedies of STATE provided in this section are not exclusive and are in addition to any other rights and remedies provided by law or under this Contract.

If STATE exercises its right to terminate for cause prior to Final Acceptance, STATE shall be entitled to a pro-rata refund of the Year One SAAS Fee as set forth in Exhibit B; Table 2.

8. SUSPENSION FOR CONVENIENCE

STATE shall have the right at any time to order the services of CONTRACTOR fully or partially stopped for STATE’s own convenience. STATE shall provide CONTRACTOR written notice of the reason for and duration of the suspension. The schedule shall be delayed on a day-for-day basis to the extent STATE has issued a stop work order to CONTRACTOR and such stop work order is causing delays in completing services in accordance with the schedule. CONTRACTOR shall have the right to submit claims in accordance with the terms of this Contract as a result of stop work orders issued under this section and have no refund obligations to the STATE.

9. FORCE MAJEURE

Neither party shall be held responsible for delay or default caused by fire, riot, terrorism, acts of God, or war if the event is beyond the party’s reasonable control and the affected party gives notice to the other party promptly upon occurrence of the event causing the delay or default or that is reasonably expected to cause a delay or default.

10. LIQUIDATED DAMAGES

The parties agree that STATE may suffer damages due to a failure by CONTRACTOR to provide deliverables or services under this Contract. Because it is difficult to fix the actual damages sustained in the event of such delays, STATE and CONTRACTOR agree that the amount of damages will be determined as per this section. In the event of any non-performance, CONTRACTOR shall pay that amount as liquidated damages and not as a penalty. Amounts due to STATE as liquidated damages may be deducted by STATE from any amounts payable to CONTRACTOR, and any amount outstanding over and above the amounts deducted from the invoice will be promptly tendered by check from CONTRACTOR to STATE after Final Acceptance of the Project Deliverables identified in Exhibit A.

Delays due to causes of Force Majeure or due to the responsibility of STATE shall extend the time for performance on a day-for-day basis. STATE will not assess liquidated damages against CONTRACTOR when the delay in delivery or performance is beyond the control and without the fault or negligence of CONTRACTOR.

a. Failure to Complete Major Deliverable on Schedule:

If CONTRACTOR fails to complete a Major Deliverable identified in Exhibit A: Scope of Work by the specified deadline (or revised deadline as agreed upon between the parties through the Integrated Change Control Process), CONTRACTOR shall pay liquidated damages to STATE in the amount of $1,000 per calendar day for each day the Major Deliverable is delayed. Major Deliverable means: (1) Project Kick Off Meeting; (2) Project Management Plan Delivery; (3) Gap Analysis/Design Delivery; and (4) System Configuration. CONTRACTOR may recoup the total amount of liquidated damages assessed against previous Major Deliverables if the Contractor accelerates progress towards future Major Deliverables and meets the final project completion date set out in the Contract. In no event will the total amount of liquidated damages assessed under this Contract in any given month, exceed 10 percent of the Project Deliverable Total amount in Exhibit B.

b. Failure to Complete Project on Schedule:

If CONTRACTOR fails to complete the project per the approved project schedule by the specified deadline (or revised deadline as agreed upon between the parties through the Integrated Change Control Process), STATE will deduct liquidated damages from amounts payable to CONTRACTOR in the amount of $1,000 per calendar day for each day the project is delayed. In no event will the total amount of liquidated damages assessed under this Contract in any given month, exceed 10 percent of the Project Deliverable Total in Exhibit B.

11. INJUNCTIVE RELIEF

CONTRACTOR shall immediately report to STATE any and all unauthorized disclosures or uses of STATE’s Confidential Information or Proprietary Information of which CONTRACTOR or its staff is aware or has knowledge. CONTRACTOR acknowledges that any unauthorized publication or disclosure of STATE’s Confidential Information or Proprietary Information to others may cause immediate and irreparable harm to STATE. If CONTRACTOR should publish or disclose such Confidential Information or Proprietary Information without authorization, STATE shall immediately be entitled to injunctive relief or any other remedies to which it is entitled under law or equity without requiring a cure period. CONTRACTOR shall indemnify, defend, and hold harmless STATE from all damages, costs, liabilities, and expenses (including without limitation reasonable attorneys’ fees) caused by or arising from CONTRACTOR’s unauthorized use or disclosure of STATE’s Confidential Information or Proprietary Information. As a condition to these indemnity obligations, STATE will provide CONTRACTOR with prompt notice of any claim of which STATE is aware and for which indemnification shall be sought under this Contract and shall cooperate in all reasonable respects with CONTRACTOR in connection with any such claim.

STATE shall immediately report to CONTRACTOR any and all unauthorized disclosures or uses of CONTRACTOR’s Confidential Information or Proprietary Information of which STATE or its staff is aware or has knowledge.

12. RIGHT OF SETOFF DAMAGES

Amounts due STATE by CONTRACTOR, including liquidated or other damages, or claims for damages, may be deducted or set-off by STATE from any money payable to CONTRACTOR pursuant to this Contract.

13. RIGHT TO WITHHOLD AMOUNTS OTHERWISE DUE IF THE CONTRACTOR IS IN BREACH

If CONTRACTOR fails to deliver Deliverables or to provide Services which satisfy CONTRACTOR’s obligations under this Contract, STATE shall have the right to withhold any and all payments due under this Contract. STATE may withhold any and all such payments due under this Contract to CONTRACTOR without penalty or work stoppage by CONTRACTOR, until such failure to perform is cured.

14. RIGHT TO REMEDIES AND CUMULATION OF RIGHTS

No remedy conferred by any of the specific provisions of this Contract is intended to be exclusive of any other remedy, and each and every remedy shall be cumulative and shall be in addition to every other remedy given under this Contract, now or in the future existing at law or in equity or by statute or otherwise.

15. NON-WAIVER

Either party’s failure to exercise any of its rights under this Contract, its delay in enforcing any right, or its waiver of its rights on any occasion, shall not constitute a waiver of such rights on any other occasion. No course of dealing by either party in exercising any of its rights shall constitute a waiver thereof. No waiver of any provision of this Contract shall be effective unless it is in writing and signed by the party against whom the waiver is sought to be enforced.

16. INDEMNIFICATION AND LIMITATION OF LIABILITY

a. Indemnification

CONTRACTOR agrees to defend, indemnify, and hold harmless the state of North Dakota, its agencies, officers, and employees (State), from and against claims based on the vicarious liability of the State or its agents resulting solely from any intentional, willful or negligent acts or omissions of the CONTRACTOR, but not against claims based on the State’s contributory negligence, comparative and/or contributory negligence or fault, sole negligence, or intentional misconduct. This obligation to defend, indemnify, and hold harmless does not extend to professional liability claims arising from professional errors and omissions. The legal defense provided by CONTRACTOR to the State under this provision must be free of any conflicts of interest, even if retention of separate legal counsel for the State is necessary. Any attorney appointed to represent the State must first qualify as and be appointed by the North Dakota Attorney General as a Special Assistant Attorney General as required under N.D.C.C. § 54-12-

08. CONTRACTOR also agrees to reimburse the State for all costs, expenses, and attorneys' fees incurred if the State prevails in an action against CONTRACTOR in establishing and litigating the indemnification coverage provided herein. This obligation shall continue after the termination of this Contract.

b. Limitation of Liability

i. Limitation on Indirect Consequential Damages: EXCEPT FOR SECTION 10 ABOVE, IN NO

EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD

PARTY FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR

EXEMPLARY DAMAGES (WHETHER FORESEEABLE OR NOT, INCLUDING WITHOUT

LIMITATION DAMAGES FOR LOSS OF DATA, GOODWILL, PROFITS, INVESTMENTS,

USE OF MONEY OR USE OF FACILITIES; INTERRUPTION IN USE OR AVAILABILITY

OF DATA; STOPPAGE OF OTHER WORK OR IMPAIRMENT OF OTHER ASSETS). THIS

EXCLUSION OF DAMAGES APPLIES EVEN IF THE DEFENDING PARTY HAS BEEN

ADVISED OR IS OTHERWISE AWARE OF THE POSSIBILITY OF SUCH DAMAGES, AND

HOWEVER THE DAMAGES HAVE ARISEN (WHETHER OUT OF THE PERFORMANCE

OR NON-PERFORMANCE OF THIS AGREEMENT, THE SOFTWARE OR SERVICES; OR

ANY CLAIM, CAUSE OF ACTION, BREACH OF CONTRACT OR EXPRESS OR IMPLIED

WARRANTY UNDER THIS AGREEMENT OR ANY THEORY OF LAW SUCH AS

MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY, OR OTHER TORT).

ii. Limitation on Direct Loss: Except for loss to the STATE resulting from fraud or other intentional or willful misconduct, breach of confidentiality obligations, or loss resulting from tangible property or personal injury, none of which may be limited pursuant to NDCC § 32- 12.2-15(4), CONTRACTOR’S liability for direct loss to the STATE is equal to twice the total value of the Contract.

17. INTELLECTUAL PROPERTY INFRINGEMENT INDEMNIFICATION

CONTRACTOR, at its own expense, shall defend, indemnify, save, and hold harmless STATE against all liabilities, damages, loses, costs, or expenses, including, without limitation, attorney fees and expenses, arising out of any suit, claims, or proceedings alleging that products furnished under this Contract violate, infringe, or misappropriate a United States patent, copyright, trade secret, trademark, or any other proprietary rights of a third party protected under United States law.

As to any product which is subject to a claim of infringement or misappropriation, CONTRACTOR may (a) obtain the right of continued use of the product for STATE or (b) replace or modify the product to avoid the claim. If neither alternative is available on commercially reasonable terms then, at the request of CONTRACTOR, any applicable Software license and its charges will end, STATE will stop using the product, and will return the product to CONTRACTOR. Upon return of the product, CONTRACTOR will give STATE a credit for the price paid to CONTRACTOR, less a reasonable offset for use and obsolescence.

18. REPRESENTATIONS AND WARRANTIES

a. CONTRACTOR represents and warrants to STATE that neither CONTRACTOR, in connection with performing the services in performance of this Contract, nor the completed product delivered by CONTRACTOR, will infringe any patent, copyright, trademark, trade secret, or other proprietary right of any person. CONTRACTOR further represents and warrants to STATE that it will not use any trade secrets or confidential or proprietary information owned by any third party in performing the services related to this Contract or in delivery of the completed product unless CONTRACTOR has the authority to license, use, or provide those trade secrets or confidential or proprietary information to STATE.

b. CONTRACTOR further represents and warrants to STATE that neither CONTRACTOR nor any other company or individual performing services pursuant to this Contract is under any obligation to assign or give any work done under this Contract to any third party.

c. CONTRACTOR represents and warrants to STATE that the service will comply with the material functionality described in the SaaS Materials and that such functionality will be maintained in all material respects in subsequent upgrades to the Service for the duration of this Contract.

d. CONTRATOR represents and warrants to STATE that the base components will comply with the material functionality as described in Exhibit C: Software as a Service (SaaS) Service Level Agreement (SLA) and Exhibit E: TSM Plan, and that such functionality will be maintained in all material respects in subsequent upgrades to the Service for the duration of this Contract.

19. INSURANCE

a. CONTRACTOR shall secure and keep in force during the term of this Contract and CONTRACTOR shall require all subcontractors, prior to commencement of an agreement between CONTRACTOR and the subcontractor, to secure and keep in force during the term of this Contract, from insurance companies, government self-insurance pools, or government self-retention funds, authorized to do business in North Dakota, the following insurance coverages:

1) Commercial general liability, including premises or operations, contractual, and products or completed operations coverages (if applicable), with minimum liability limits of $1,000,000 per occurrence.

2) Automobile liability, including Owned (if any), Hired, and Non-Owned automobiles, with minimum liability limits of $250,000 per person and $1,000,000 per occurrence.

3) Workers compensation coverage meeting all statutory requirements. The policy shall provide coverage for all states of operation that apply to the performance of this Contract.

4) Employer’s liability or “stop gap” insurance of not less than $1,000,000 as an endorsement on the workers compensation or commercial general liability insurance.

5) Professional errors and omissions with minimum limits of $1,000,000 per claim and in the aggregate, CONTRACTOR shall continuously maintain such coverage during the Contract period and for three years thereafter. In the event of a change or cancellation of coverage, CONTRACTOR shall purchase an extended reporting period to meet the time periods required in this section.

b. The insurance coverages listed above must meet the following additional requirements:

1) Any deductible or self-insured retention amount or other similar obligation under the policies shall be the sole responsibility of the CONTRACTOR.

2) This insurance may be in policy or policies of insurance, primary and excess, including the so-called umbrella or catastrophe form and must be placed with insurers rated “A-” or better by A.M. Best Company, Inc., provided any excess policy follows form for coverage. Less than an “A-” rating must be approved by the State. The policies shall be in form and terms approved by the State.

3) The duty to defend, indemnify, save, and hold harmless the State under this Contract shall not be limited by the insurance required in this Contract.

4) The state of North Dakota and its agencies, officers, and employees (State) shall be endorsed on the commercial general liability policy, including any excess policies (to the extent applicable), as additional insured. The State shall have all the benefits, rights, and coverages of an additional insured under these policies that shall not be limited to the minimum limits of insurance required by this Contract or by the contractual indemnity obligations of the CONTRACTOR.

5) A Waiver of Subrogation waiving any right to recovery the insurance company may have against the State.

6) CONTRACTOR shall furnish a certificate of insurance to the undersigned STATE representative prior to commencement of this Contract. All endorsements shall be provided as soon as practicable.

7) Failure to provide insurance as required in this Contract is a material breach of contract entitling STATE to terminate this Contract immediately.

8) CONTRACTOR shall provide at least 30-day notice of any cancellation or material change to the policies or endorsements. CONTRACTOR shall provide on an ongoing basis, current certificates of insurance during the term of the Contract. A renewal certificate will be provided 10 days prior to coverage expiration.

20. CYBER LIABILITY AND SECURITY INSURANCE

In the event CONTRACTOR will host data, or provide for the hosting of data through a third-party entity, CONTRACTOR shall secure and maintain, throughout the term of this Contract and for a period of two years thereafter for services completed during the term of the Contract, Cyber Liability and Security Insurance or equivalent insurance product(s) that is valid at all locations where work is performed or data or other information concerning STATE is processed or stored, with STATE named as additional insured, with minimum liability limits of not less than $5,000,000 and data breach notification coverage of not less than $1,000,000 in the aggregate, resulting or arising from services or in connection with the specific services described in this Contract without cost to

STATE:

a. Violation or infringement of any right of privacy, including breach of security and breach of security/privacy laws, rules, or regulations globally, now, or hereinafter constituted or amended;

b. Data theft, damage, unauthorized disclosure, destruction, or corruption, including, without limitation, unauthorized access, unauthorized use, identity theft, theft of personally identifiable information, or confidential information in whatever form, transmission of a computer virus, or other type of malicious code; and participation in a denial of service attack on third party computer systems;

c. Loss or denial of service; and

d. No cyber terrorism exclusion.

Such coverage must include technology/professional liability, including privacy and security liability, privacy regulatory defense, and payment of civil fines, and breach response costs (including, without limitation, notification costs, forensics, credit protection/monitoring services for a minimum of one year for any affected individual as defined by N.D.C.C. § 51-30-1(4), call center services, identity theft protection services for a minimum of one year for any affected individual as defined by N.D.C.C. § 51-30-1(4), and crisis management/public relations services).

Such insurance must explicitly address all of the foregoing, without limitation, in performing services under this Contract.

CONTRACTOR, at its own expense, shall defend, indemnify, save, and hold harmless STATE, its officers, agents, and employees from and against any liabilities, damages, loses, costs and expenses, including, without limitation, attorney fees and expenses arising out of any suits, claims, or damages of any character whatsoever, resulting from injuries or damages sustained by any person or persons or property by virtue of performance of this contract, arising or resulting in whole or in part from the fault, negligence, wrongful act, or omission of CONTRACTOR, or any subcontractor, or their employees or agents.

21. WORKS FOR HIRE

Intentionally Blank.

22. WORK PRODUCT

Intentionally Blank.

23. TECHNOLOGY STANDARDS

CONTRACTOR shall comply with applicable state enterprise architecture technology guidelines listed at http://www.nd.gov/itd/standards and as provided for in Section 3.1: Applicable Directives of the RFP.

24. PERSONNEL

STATE will designate a Project Manager to serve as the primary project manager for this Contract.

If, during the course of this Contract, it becomes necessary for STATE to change the person assigned as STATE’s Project Manager, STATE will notify CONTRACTOR in writing, pursuant to the Notice section of this Contract.

Unless STATE otherwise notifies CONTRACTOR, STATE’s Project Manager shall carry out STATE’s administrative and management functions under this Contract, shall be responsible for acceptance of the Contract deliverables, and shall provide support and overall direction to

CONTRACTOR.

CONTRACTOR will designate a Project Manager and provide individuals to meet the requirements and accomplish the work as stated in this Contract, including any mutually agreed upon SOW.

CONTRACTOR agrees that:

1) Prior to assignment of personnel, CONTRACTOR shall obtain written approval from STATE for all personnel to be assigned to this project.

2) The personnel assigned must have the knowledge necessary to complete requirements as defined in this Contract.

3) CONTRACTOR shall warrant that all personnel assigned to perform tasks in response to this Contract will remain assigned for the agreed-upon length of time.

4) No replacement, reassignment, or substitution of any assigned individuals and personnel qualifications shall be made without the prior written approval of STATE and that such replacement, reassignment, or substitution shall be made at no additional cost to STATE.

5) Any substitution of personnel must be of equal or higher skills, knowledge, and abilities than those personnel initially approved, and that STATE’s approval of a substitution is not construed as an acceptance of the substitution’s performance potential. STATE agrees that an approval of a substitution will not be unreasonably withheld.

6) CONTRACTOR shall assign personnel on a full-time basis. In the event that a work assignment does not justify full-time participation, CONTRACTOR shall assign personnel on a part-time basis with prior written approval of STATE’s Project Manager. However, if the part-time assignments are specified in this Contract, no written approval from STATE’s Project Manager is necessary except for substitution of CONTRACTOR personnel.

7) Upon request by STATE, CONTRACTOR shall replace any CONTRACTOR personnel that STATE determines, in its sole discretion, to be unable to perform the responsibilities of this Contract acceptably, e.g., inappropriate or unprofessional personal conduct, professional inabilities, etc.

8) STATE's working hours are Monday through Friday from 8:00 AM until 5:00 PM (CST or CDT) with one hour for lunch. STATE Project Manager may approve alternate work schedules.

9) According to STATE policy, STATE personnel are only obligated to work a forty-hour work week, Monday through Friday, and are allowed reasonable vacation, sick, and educational absences.

10) CONTRACTOR’s personnel are not expected to work on state holidays or other mandatory leave days.

11) CONTRACTOR agrees that STATE may require contracted staff and subcontractors assigned by CONTRACTOR to perform work under this Contract to submit to a criminal history record check in accordance with N.D.C.C. § 54-59-20 and §12-60-24. STATE shall have the right to reject any individual assigned to perform work under this Contract if, in its sole discretion, it determines that the results of the criminal history record check make the individual unacceptable.

25. PROJECT MANAGEMENT

a. Reporting

1) CONTRACTOR’s Project Manager shall deliver to STATE’s Project Manager weekly reports of CONTRACTOR’s progress on the project and meeting the objective/deliverables as stated in the SOW. Each report must contain a description of the current status of the project, the tasks on which time was spent, the estimated progress to be made in the next reporting period, and the problems encountered the proposed solutions to them and their effect, if any, on the project budget/schedule.

2) Project Variance Reporting – CONTRACTOR must provide data to allow STATE’s Project Manager to calculate cost and schedule variance in accordance with N.D.C.C. § 54-59-23 as determined by STATE. If STATE’s analysis shows a negative cost or schedule variance exceeding 20%, a subsequent report must also provide proposed corrective measures to address the issues.

b. Integrated Change Control Process

CONTRACTOR and STATE will utilize an integrated change control process to manage changes during the life of a project.

1) A change request must be in writing to document the potential change. The write-up for the proposed change must be submitted to CONTRACTOR and STATE’s Project Manager who will in turn provide it to relevant parties for assessment.

2) All change requests will be logged and tracked. STATE’s Project Manager will record the request in the project repository and will update the repository throughout the process.

3) The change will be reviewed and, if acceptable to STATE, CONTRACTOR will submit to STATE an estimate of the impact to cost, schedule, scope, and quality.

4) CONTRACTOR will continue performing the services in accordance with the original Contract unless otherwise agreed upon by STATE’s Project Manager. Work shall not commence on any new activities related to the change request until all parties agree in writing.

5) CONTRACTOR’s Project Manager and STATE’s Project Manager will adapt the Project Management Plan to incorporate approved changes.

6) Each change request duly authorized in writing by the parties shall be incorporated into and considered part of this Contract.

7) During the course of this Contract, if CONTRACTOR determines or could reasonably determine any STATE actions or directions constitute a requirement to perform additional work, CONTRACTOR shall notify STATE within thirty (30) calendar days that STATE has requested CONTRACTOR to perform additional work in the form of a change request utilizing the process above. CONTRACTOR understands that it waives the right to request additional time and reimbursable costs if CONTRACTOR fails to notify STATE within thirty

(30) calendar days of determining or reasonably being able to determine that any STATE actions or directions constitute a requirement to perform additional work under this Contract.

c. Deliverable Acceptance

1) Upon completion of a deliverable, CONTRACTOR will furnish STATE with the deliverable and associated documentation, the expected performance, and agreed upon Acceptance Criteria.

2) After receipt of items in Paragraph 25(c)(1), STATE will have five (5) working days or a different period of time as is agreed to by the parties, in which to accept or reject each item in writing. STATE will accept by signature. If STATE rejects it, STATE will specify in writing its grounds for rejection and CONTRACTOR shall use its best efforts to revise any issues for the deliverables to be acceptable to STATE within the following five (5) working days. If STATE rejects it a second time, STATE will have the option of repeating the procedure as described in this acceptance statement above, escalating the issue to the Executive Steering Committee, or terminating this Contract upon written notice to CONTRACTOR.

d. Final Acceptance

1) The successful completion of all deliverables as stated in the SOW in accordance with the deliverable acceptance process;

2) The final delivered product fully implemented in STATE’s live production environment; AND

3) STATE has thirty (30) calendar days thereafter in which to accept or reject it in writing. If STATE rejects it, STATE shall specify in writing its grounds for rejection and CONTRACTOR shall use its best efforts to make the product conform to the requirements of this Contract as soon as possible and at no additional cost to STATE. CONTRACTOR shall continue to use its best efforts to make the product conform to the requirements of this Contract until STATE accepts the product or terminates this Contract upon written notice to CONTRACTOR.

26. PRODUCT CONFORMITY

Services will comply with the material functionality described in the SaaS Materials and to the requirements of this Contract, and such functionality will be maintained in all material respects in subsequent upgrades to the service. Upon recognition of an error, deficiency, or defect, by STATE, CONTRACTOR shall be notified by STATE citing any specific deficiency (deficiency being defined as CONTRACTOR having performed incorrectly with the information provided by STATE, not CONTRACTOR having to modify a previous action due to additional and/or corrected information from STATE). CONTRACTOR, at no additional charge to STATE, shall provide a correction or provide a mutually acceptable plan for correction within 30 calendar days following the receipt of STATE’s notice to CONTRACTOR. If CONTRACTOR’s correction is inadequate to correct the deficiency, or defect, or the error recurs, STATE may, at its option, act to correct the problem.

CONTRACTOR shall be required to reimburse STATE for any such costs incurred or STATE may consider this to be cause for breach of contract.

27. WARRANTY

CONTRACTOR shall provide a 90-day warranty upon Final Acceptance on services defined in Exhibit B-Compensation Details that ensure the software will operate in accordance with the documentation and is free from defects. This warranty does not apply (a) if the STATE does not provide notice of non-conformance during the warranty period; (b) the Software has been damaged or modified by anyone other than CONTRACTOR, or (c) the Software has been combined with other software or hardware not approved in the Documentation. STATE’s exclusive remedy for breach of the warranty in this section is for CONTRACTOR, at CONTRACTOR’s option, to: (y) correct or replace, at no additional charge, the portion of the Software not conforming with the Documentation; (z) terminate the relevant Software license, and refund the fees paid for the non-conforming portion of the Software for the applicable License Term and any prepaid, unused fees for Services.

28. SOFTWARE LICENSE

The parties agree that the provisions of 45 C.F.R. § 95.617 apply to all software provided under this Contract. Accordingly, STATE will have all ownership rights in software, software modifications, and associated documentation designed, developed, or installed with Federal Financial Participation, and the Department of Health and Human Services will have a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, or otherwise use and to authorize others to use for Federal Government purposes, such software, modifications, and documentation. However, proprietary operating/vendor software packages, which are provided at established catalog or market prices and sold or leased to the general public, shall not be subject to the state ownership and federal license provisions as described in 45 C.F.R. § 95.617 paragraphs

(a) and (b), with the exception of any software configuration or minimal customization that is supported by Federal Financial Participation.

CONTRACTOR grants STATE a non-transferable, non-assignable, and non-exclusive license to use the Contractor Software during the license term and for the number, type, and scope of licenses specified in an order form attached to the Agreement, for State’s internal business purposes. The Software is licensed, not sold, to STATE. STATE does not acquire any rights, express or implied, in the Software, other than those specified in this Agreement. CONTRACTOR and its licensors own and retain all right, title, and interest in and to the Contractor Software. All rights not expressly granted in this Agreement are reserved by CONTRACTOR.