Attachment F - IM RFR Draft Scope of Services FINAL 12 10 15.docx

RFR ATTACHMENT F

DRAFT Scope of Services

For The Emissions & Safety Vehicle Inspection Program Commonwealth of Massachusetts Executive Office of Energy & Environmental Affairs Department of Environmental Protection And Massachusetts Department of Transportation Registry of Motor Vehicles Division And

[NAME OF CONTRACTOR]

[DATE]

TABLE OF CONTENTS

The following items are proposed and may be finalized during contract negotiations:

Exhibit C: Implementation Schedule [To Be Determined] Exhibit D: Required Plans, Procedures, Protocols, Reports, Specifications, Test Results, and Materials to be Submitted to Agencies [To Be Determined] Exhibit E: Fee Schedule [To Be Determined] Exhibit F: Contractor and Third Party Software List [To Be Determined] Exhibit G: AT/IT Environment List [To Be Determined] Exhibit H: Service Response Time and Effectiveness Performance Standard

This SCOPE OF SERVICES is made and entered into by and between THE COMMONWEALTH OF MASSACHUSETTS, through its Department of Environmental Protection (“Department”), having its principal place of business at One Winter Street, Boston, MA 02108, and its Registry of Motor Vehicles Division (“Registry”), a Division of the Massachusetts Department of Transportation (“MassDOT”), having its principal place of business at Ten Park Plaza, Boston, MA 02116; and [CONTRACTOR NAME] (“Contractor”), [a corporation] having its principal place of business at [ADDRESS] (collectively hereinafter referred to as the “Parties”).

WHEREAS, pursuant to the Federal Clean Air Act Amendments of 1990, 42 U.S.C. § 4701 et seq., and regulations promulgated by the United States Environmental Protection Agency ("EPA") thereunder, the Department and the Registry have established an enhanced vehicle emissions inspection and maintenance program ("I&M Program") for the Commonwealth of Massachusetts; and WHEREAS, c. 240 of the 1997 Acts and Resolves of Massachusetts requires the Commonwealth to establish a statewide network of motor vehicle inspection stations (“Inspection Stations” or “Stations”) in compliance with the Federal Clean Air Act Amendments of 1990 and EPA regulations; and WHEREAS, the Department and the Registry (the “Agencies”) are responsible for selecting and contracting through a competitive procurement process with a private entity who shall contract with Stations within the Commonwealth and implement and otherwise administer the I&M Program; and WHEREAS, on [DATE], the Agencies issued a Request for Responses ("RFR") to continue the implementation of the I&M Program, and the Contractor submitted a response on [DATE] in accordance with the provisions of the RFR; and WHEREAS, in accordance with the requirements of the RFR, the Agencies have determined that the Contractor's Response is the most qualified, responsive, and advantageous to the Commonwealth, and provides the best value overall with respect to the needs of the I&M Program;

NOW THEREFORE, the Agencies and the Contractor, for and in consideration of mutual covenants and other good and valuable consideration, do hereby agree to this SCOPE OF SERVICES, as follows.

ARTICLE I.

CONTRACT DOCUMENTS

The following documents (collectively the “Contract”) represent the entire and integrated agreement between the Parties hereto and supersede prior negotiations, representations, or agreements, either written or oral. Capitalized terms used herein are defined in the RFR, the body of this Scope of Services, or Exhibit A hereto. The order of precedence for interpretation of this Contract shall be as follows:

The MassDOT and The Commonwealth Terms and Conditions;

The MassDOT and the Commonwealth Standard Contract Form;

The RFR;

This Scope of Services, Articles I through XXIII, including all Exhibits and Plans attached to or referenced by this Scope of Services, as amended by any properly executed amendments and change orders to this Scope of Services as agreed upon by the Parties; and The Contractor’s Response to the RFR, excluding any language stricken by the Agencies as unacceptable and including any negotiated terms and conditions allowable pursuant to law or regulation.

ARTICLE II.

PERIOD OF PERFORMANCE

Time is of the essence for performance of this Contract by all Parties.

Notice to Proceed. The Agencies shall issue a written Notice to Proceed to the Contractor forthwith after execution of the Contract by all parties.

Term.

Initial Term. The initial term of this Contract shall expire at midnight on September 30, 2022.

Extensions. The Agencies may extend this initial Contract term for up to three additional periods, with each extension lasting for up to three (3) years. All extensions of the Contract term shall be through executed Contract Amendment. The calculation of the Contractor's Fee for any Contract extension period shall exclude startup-related costs recovered during the initial five-year Contract term. Examples of such startup-related costs include, but may not be limited to: the development of Program software and Database; the purchase of capital equipment such as servers and dynamometers; and the cost of equipment provided to the Agencies such as tablets and workstations. Unless otherwise agreed to by the Parties, any increase in the Contractor's Fee shall not be greater than the CPI-U when the Contractor’s Fee is calculated, excluding startup-related costs.

First Extension. No later than April 1, 2020, the Contractor shall furnish the Agencies with updated cost information as required by the Contract, thirty months prior to the end of the initial Contract term. The first extension of the Contract will be conditioned, in part, upon the Parties reaching mutually acceptable Contract extension terms including, but not limited to, the Contractor Fee (see Article VI below), no later than September 1, 2020.

Second Extension. If the Contract is extended a first time, the Contractor shall furnish the Agencies with updated cost information for the second extension period as required by the Contract, no later than thirty (30) months prior to the end of the first Contract extension term. The second extension of the Contract shall be conditioned in part upon the Parties reaching mutually acceptable contract extension terms, including but not limited to the Contractor fee, to be effective during the second extension period, no later than twenty-four (24) months prior to the end of the first Contract extension term.

Third Extension. If the Contract is extended by the Agencies for a second time, the Contractor shall furnish the Agencies with updated cost information for the third extension period as required by the Contract, no later than thirty (30) months prior to the end of the second Contract extension term. The third extension of the Contract shall be conditioned in part upon the Parties reaching mutually acceptable contract extension terms, including but not limited to the Contractor fee, to be effective during the third extension period, no later than twenty-four (24) months prior to the end of the second Contract extension term.

ARTICLE III.

GENERAL PERFORMANCE OBLIGATIONS

The Contractor shall take all actions in accordance with the Contract and the Plans identified in this Scope of Services and approved by the Agencies to meet the requirements set forth in the Contract. The Contractor will manage the I&M Program and create the infrastructure to support the I&M Program.

The Contractor's responsibilities include, but are not limited to, the following tasks throughout the term of the Contract:

Manage and implement the I&M Program in accordance with the Agencies’ approved and written schedule (the “Implementation Schedule”), including developing and managing the Inspection Station network; developing and implementing Inspection protocols; and acquiring, providing, and maintaining Inspection Stations, Workstations, and data systems. The Contractor will also train Inspectors and repairers and provide communications to the public, Inspectors, and repairers;

Promote effective repairs by providing assistance to Stations and motorists for Vehicles that fail the emissions test under the Program and provide training for emissions-related repairs;

Conduct covert Vehicle and visual audits of Inspection Stations performing emissions and safety tests;

Train Inspectors to correctly and efficiently perform Inspections;

Collect and manage Network Fees; and Any other purpose related to the development and implementation of the I&M Program as described in and required by the Contract.

As a routine part of its management responsibilities, the Contractor shall propose improvements that increase the effectiveness, efficiency, and convenience of any aspect of the I&M Program throughout the term of the Contract. Implementation of such improvements shall be done in consultation with the Agencies.

Contract Plans. The Contractor’s Plans, as described in the RFR, when finalized by the Contractor and approved by the Agencies in writing, will be incorporated by reference into the Contract. The Contractor shall notify the Agencies in writing on a monthly basis about its progress in developing and implementing the Plans for which it is responsible by indicating which tasks it has completed. In addition, the Contractor shall review the Plans as needed to recommend changes or improvements to such Plans. No modifications to the Contract shall be required upon Agencies’ written approval of a Plan, provided that the actions required pursuant to said approved Plan are within the scope of the Contract.

Contractor Progress Updates.

Upon receiving a Written Notice To Proceed from the Agencies, the Contractor shall discuss its progress with the Agencies in person on a weekly basis at a location to be determined by the Agencies, unless otherwise agreed to by the Agencies, describing the Contractor's implementation of the I&M Program in accordance with the Implementation Schedule, the Supplier Diversity Plan, and any other Deliverables developed and approved in accordance with the Contract. The Contractor shall notify the Agencies in writing (email is permissible) and orally of any actual or anticipated delays and how these delays may affect compliance with the Implementation Schedule and the start of Inspections and the Contractor’s recommended or actual solution(s) to any delays or problems. The Agencies may, on written notice to the Contractor, adjust the frequency and format of the weekly meetings.

As promptly as practicable after an incident occurs, the Contractor shall notify the Agencies orally of any incidents that occur during the Inspection process that result in any injuries to workers (including Inspectors or other Station personnel), customers, or third parties, or in damage to a motor vehicle or property. After the Contractor provides oral notification to the Agencies, the Contractor shall provide the Agencies with a written report of the incident as soon as reasonably practicable, but no later than five (5) days after occurrence of the incident in question.

As part of its Network management responsibilities, the Contractor shall deliver a written Quarterly Performance Report to the Agencies not later than thirty (30) days after the end of each quarter of the calendar year (i.e., January 30th, April 30th, July 30th, and October 30th). The first part of the Quarterly Performance Report shall assess the I&M Program’s ability to identify safety and emissions failures, track failure rates, identify failure trends by model year and Program year, identify the number of Vehicles that need more than one Inspection to pass the Inspection, and identify the number of times Vehicles needed to pass the Inspection. If appropriate, the second part of the Quarterly Performance Report shall propose changes to and an implementation process for, the improvement of the I&M Program’s effectiveness. If the Contractor’s proposed changes are deemed acceptable by the Agencies, the Agencies and the Contractor shall negotiate the Contractor’s implementation of these changes with the Contractor pursuant to Article XIII (Changes) and/or as a Contract amendment if necessary.

ARTICLE IV.

I&M PROGRAM PERFORMANCE REQUIREMENTS

At the initiation of the Contract term, the Contractor is required to meet all Program requirements set forth in Section 6 of the RFR, including, but not limited to, all references to Appendices and Attachments referenced therein. All requirements of Section 6 are incorporated by reference into this Scope of Services, and shall be defined as “I&M Program Performance Requirements” that shall be in full force and effect for the entire duration of this Contract, including any and all Contract extensions. In addition, during the Contract Term, the Agencies and the Contractor shall refine and further elaborate on the Contractor’s I&M Program Performance Requirements within the scope of the Contract, and, to the extent necessary, memorialize any I&M Program Performance Requirements through Contract Amendment or Change Order, as appropriate.

[RESERVED FOR CONTRACT NEGOTIATION]

ARTICLE V.

APPROVAL OF DELIVERABLES

The Contractor shall submit each Deliverable to the Agencies for approval. If required, submission of any Deliverable must include both Source Materials (if such Source Materials are to be owned by the Agencies) and Documentation. Each accepted Deliverable must conform to the Requirements and shall:

contain, at a minimum, those requirements more particularly set forth in Article IV. (I&M Program Performance Requirements);

be developed consistently with the RFR Response submitted by the Contractor on [INSERT DATE OF RFR SUBMITTAL] unless otherwise indicated in the Contract or mutually agreed by the Parties; and include sufficient detail to allow the Agencies to monitor the progress of the Contractor in the development, implementation, and administration of the Deliverable.

The approval of such Deliverables, and the Contractor’s submittal of other Deliverables, shall be in accordance with and so as not to delay the schedule established by the Parties in the Implementation Schedule. Any Deliverable not previously approved by the Parties concurrently with the execution of this Contract shall be subject to the approval process described below.

Contractor will submit the required Deliverables to the Agencies’ Contract Officers for approval. The Agencies will review the submissions and evaluate whether each submission has clearly met, in all material respects, the criteria established in this Contract. Once reviewed and favorably evaluated, the submissions will be deemed approved upon completion of the process set forth in the rest of this section.

The Parties regard the requirements contained in Deliverables, once approved by the Agencies, as Contract provisions as if fully set forth in this Contract; and a material or substantial violation of any such provisions of an approved Deliverable may subject the Contractor to the provisions of Article VII (Liquidated Damages) or termination for cause (Article XIV) by the Agencies.

Any work undertaken by the Contractor prior to obtaining the Agencies’ written approval of a Deliverable as required by the Contract shall not entitle the Contractor to a Claim, Change Order or per Inspection Fee adjustment. Unless otherwise agreed to by the Parties in writing, the Contractor shall not commence Inspections pursuant to this Contract until the Agencies have reviewed and accepted the Contractor’s reports indicating that the Contractor has successfully completed acceptance testing for the Database and Workstation design, and shall not allow Inspections at any Station until the Contractor has completed and documented successful acceptance testing of the Workstation installation using Workstation installation acceptance testing procedures approved by the Agencies.

Approval Process: Within ten (10) business days of receipt of each submission, the Agencies’ Contract Officers will notify the Contractor, in writing (email is permissible), of the approval or rejection of said submission using the criteria specified in this subsection. An approval form signed by the Agencies shall indicate approval. The Contractor shall acknowledge receipt of approval forms in writing. Any rejection will include a written description of the defects of the submission.

The Contractor will, upon receipt of any rejection, act diligently so as not to delay the schedule established in the Implementation Schedule, to correct the specified defects and to deliver an updated version of the submission to the Agencies. The Agencies will then have an additional five (5) business days from receipt of the updated Deliverable to notify the Contractor, in writing, of the approval or rejection of the updated submission. Any such rejections will include a description of the way in which the updated Deliverable fails to correct the previously reported deficiency. The Contractor will correct any defect in its deliverables at no additional cost to the Agencies, and without the requirement of a Contract Change or Contract Amendment. If the Agencies do not act on corrected submissions within ten (10) business days and as a result, the Contractor notifies the Agencies that it expects that it will be unable to meet the October 1, 2017 program startup date, the Parties agree to negotiate the implementation tasks so that the October 1, 2017 Program startup date may be met to the maximum extent feasible.

ARTICLE VI.

COLLECTION OF FEES & PAYMENT TO CONTRACTOR

In General: During the term of the Contract, the Contractor is required to collect fees and make payments in accordance with the requirements set forth in RFR Section 6.12. To the extent that the requirements for the collection of fees and payments need further elaboration or refinement during the course of the Contract the Parties shall negotiate these changes and document any agreed upon terms through either a Change Order or Contract Amendment.

[RESERVED FOR CONTRACT NEGOTIATION]

ARTICLE VII.

LIQUIDATED DAMAGES

The parties agree that if the Contractor fails to meet the performance standards set forth in this Article (the “Performance Standards”), the Commonwealth and the Agencies will be presumed to have suffered significant and unquantifiable damages due to substandard performance. Such damages caused by the Contractor’s failure to perform under the Contract cannot be easily ascertained, and the amount fixed by the liquidated damages provisions is a reasonable forecast by the Parties of just compensation if the Contractor is in breach of any of the Performance Standards. Furthermore, the Parties agree that prompt completion for subject Deliverables under the Contract is critical to achieving and maintaining the needs and goals of the Program, and the harm that will flow from failure to complete promptly and competently the Performance Standards and/or Deliverables will be severe. Therefore, the Contractor will be subject to liquidated damages for failure to perform established standards and criteria set forth in this Contract (the “Liquidated Damages”). The Parties further agree and stipulate that the Liquidated Damages provisions of the Contract are fair, reasonable and enforceable.

To compensate the Commonwealth and the Agencies for such Liquidated Damages, the Contractor shall, by March 1, 2017, establish a Security Fund in either the form of (1) an Escrow Agreement in a form acceptable to the Agencies, or (2) a letter of credit in a form acceptable to the Agencies (“Security Fund”), which may be accessed by the Commonwealth and the Agencies who may withdraw funds from the Security Fund in accordance with this Article and the terms of the applicable instrument. The Security Fund shall be established at the amount of [To Be Determined]. The terms of the Security Fund shall include a provision requiring the Contractor to replenish the Security Fund in full within thirty (30) days of the date that the Commonwealth and the Agencies withdraw funds from the Security Fund. If the Contractor fails to meet any minimum performance standards or criteria specified in the Contract, the Contractor will be subject to the Liquidated Damages procedure set forth in Paragraphs C-F below.

If the Contractor fails to meet any Performance Standard set forth in the Scope of Services, for reasons solely attributed to Contractor or any of its subcontractors or vendors (excluding Inspection stations), the Agencies may impose Liquidated Damages by notifying the Contractor in writing of the amount of Liquidated Damages being assessed and the reason(s) therefore (the “Notice”). In the event that the Contractor fails to pay the Liquidated Damages assessed within thirty (30) days of receipt of the Notice, or fails to appeal the assessment in accordance with Paragraph E. below, the Commonwealth and the Agencies may withdraw the amount of Liquidated Damages from the Security Fund. Notwithstanding the foregoing, the Agencies shall be deemed to have waived their rights to impose Liquidated Damages one hundred and twenty (120) days following the expiration or termination of the Contract with respect to any Liquidated Damages for which a Notice has not been issued by the Agencies provided, however, that this timeline will be extended one calendar day for each day following the expiration or termination of the Contract that the Contractor fails to submit to the Agencies data or other documentation by the applicable submission deadline under the Contract. Contractor shall not be responsible for any delays resulting from any third party not under the Contractor’s reasonable control or the Agencies’ reviews or approvals.

The Performance Standards and associated Liquidated Damages are set forth below:

[TO BE FINALIZED AT CONTRACT EXECUTION; SEE RFR SECTION 6.13.2.6 FOR LIST OF CRITERIA] The Contractor may appeal any assessment of Liquidated Damages that may be imposed to the Contract Officers of the Agencies. Unless the Contractor files such appeal within 30 days after receipt of the Notice, the assessment shall be deemed final and the Commonwealth and the Agencies may withdraw the amount imposed from the Security Fund. If the Contractor files an appeal of any assessed Liquidated Damages within said thirty (30) day period, prior to issuing a final determination on the Contractor’s appeal, the Commonwealth and the Agencies shall forebear from withdrawing the Liquidated Damages at issue. The Agencies’ failure to act within thirty (30) days after receiving the Contractor’s appeal shall be considered a final determination denying the Contractor’s appeal, and if the Contractor does not pay the assessment within five (5) days of the final determination of the appeal, the Commonwealth and the Agencies may withdraw the amount imposed from the Security Fund. Any dispute as to the Liquidated Damages withdrawn shall be governed by Article XIX. (Disputes).

Any Liquidated Damages assessed pursuant to the Contract may be unilaterally imposed by the Agencies and shall not require a Contract amendment or Change Order to the Contract. The payment of Liquidated Damages shall not be the sole and exclusive remedy for the Agencies due to the Contractor’s failure to meet the Performance Standards under this Article of the Contract. The Parties agree that the Agencies’ imposition, and the payment of, Liquidated Damages by the Contractor shall in no way constitute an express or implied limitation or waiver with respect to any other rights of the Agencies as set forth in this Scope of Services, including but not limited to the Agencies’ exercise of its legal rights as contained in Article XIV. (Termination).

ARTICLE VIII.

FORCE MAJEURE

In addition to the provisions of the MassDOT and the Commonwealth’s Terms and Conditions, an event of force majeure may include, but is not limited to, acts of God or a public enemy, wars, fires, terrorism, floods, epidemics, quarantine restrictions, strikes, labor disputes, unforeseen freight embargoes, or unusually severe weather; any law, order or regulation of the United States Government or of any government having jurisdiction or of any agency, commission, court or other instrumentality of any one or more of such governments (excluding regulations which may be promulgated by the Department, the Registry and the Office of Administration and Finance pertaining to the Program), national or Commonwealth emergencies; cable cuts; or acts of the local telephone exchange company.

In no event shall the Contractor's failure to obtain necessary permits or approvals (excluding building or zoning permits for Inspection Stations only, which shall be acquired by the Inspection Stations) in a timely manner excuse it from meeting the dates or times of performance required by the Contract as an event of force majeure. The time of performance under the Contract may be extended to the extent of the delays excused by this section, provided that the party whose performance is affected notifies the other promptly of the existence and nature of such delay. The Agencies shall determine whether failure of a party to perform is caused by a force majeure event, and the Contractor reserves the right to invoke the provisions of Article XIX. (Disputes) regarding such determination. The failure to perform a requirement of this Contract shall be considered to have been caused by a force majeure event if the following criteria are met: (1) an event delays performance of a requirement of this Contract beyond the deadline established in the Contract Documents; (2) such event is beyond the control and without the fault of the Contractor and the Contractor’s employees, agents, consultants, and contractors; and (3) such delay could not have been prevented, avoided or minimized by the exercise of commercially reasonable care that reasonable prudent business people would take under the circumstances similar to those giving rise to the majeure event by Contractor or the Contractor’s employees, agents, consultants, and contractors.

If a force majeure event occurs that delays or may delay the performance of any requirement of this Contract, the Contractor shall immediately, but in no event later than five (5) business days after obtaining knowledge of such event, notify the Agencies in writing of such event. The notice shall describe in detail: (i) the reason for and the anticipated length of the delay or potential delay; (ii) the measures taken and to be taken to prevent, avoid, or minimize the delay or potential delay, if any are possible; and (iii) the timetable for taking such measures, if applicable. Such notice shall also include the rationale for attributing such delay or potential delay to a force majeure event and shall include all available documentation supporting a claim of force majeure for the event. Failure to comply with the notice requirements set forth herein shall constitute a waiver of Contractor’s right to request an extension based on the event.

If the Agencies determine that the Contractor’s failure to perform a requirement of this Contract is caused by a force majeure event, and the Contractor otherwise complies with the notice provisions set forth in paragraph C. above, the Agencies agree to extend in writing the time for performance of such requirement. The duration of this extension shall be equal to the period of time the failure to perform is caused by the force majeure event. No extension shall be provided for any period of time that Contractor’s failure to perform could have been prevented, avoided or minimized by the exercise of commercially reasonable care that reasonably prudent business people would take under the circumstances similar to those giving rise to the force majeure event. The Agencies will not impose liquidated damages for the Contractor’s failure to perform a requirement of Contract in accordance with the schedules set forth in this Contract as a result of a force majeure event during the extension of the time for performance resulting from a force majeure event.

A delay in the performance of a requirement of this Contract caused by a force majeure event shall not, of itself, extend the time for performance of any other requirement of this Contract.

ARTICLE IX.

CONFIDENTIALITY

Limits on Use. Confidential Information of the other party may be used by the receiving party and its Personnel only in connection with the performance of, or as specifically authorized by, this Agreement. Each party will protect the confidentiality of Confidential Information of the other party in the same manner that it protects the confidentiality of its own proprietary and confidential information, including, but not limited to, entering into appropriate confidentiality agreements with Personnel that provide that such Personnel maintain the confidentiality of the Confidential Information. Access to Confidential Information will be restricted to those of Contractor’s and Agencies’ Personnel engaged in a use permitted under this Agreement. Confidential Information may not be copied or reproduced without the disclosing party’s prior written consent, except as necessary for use in connection with this Agreement. Notwithstanding the foregoing, the Agencies’ obligation to maintain Contractor’s Confidential Information is subject to M.G.L. c. 66 s. 10.

Return of Confidential Information. Except as otherwise specified in this Contract, all Confidential Information made available under this Contract, including copies thereof, will be returned or destroyed upon the first to occur of: (a) the termination or expiration of this Agreement; or (b) a request by the disclosing party; provided, that, subject to the terms of this Article, each party may retain copies of the other party’s Confidential Information required for compliance with its recordkeeping or internal quality assurance requirements.

Other Information. Nothing in this Contract will prohibit or limit either party’s use of information that is: (a) previously known to it without obligation of confidence; (b) independently developed by it or for it without reference to the Confidential Information of the other party hereto; (c) acquired by it from a third party that is not under an obligation of confidence to the other party hereto with respect to such information; or (d) publicly known through no breach of this Agreement.

Disclosure of the other Party’s Confidential Information. In the event either party receives a subpoena, validly-issued administrative or judicial process, or public records request requesting that Confidential Information of the other party be disclosed, it will promptly notify the other party of such receipt. The party receiving such request will thereafter be entitled to comply with such subpoena or other process or request, only to the extent required by law; provided, that, the Confidential Information so disclosed shall continue to be Confidential Information as between the parties hereto. Contractor shall immediately notify the Agencies, both orally and in writing if any information in Contractor’s possession is improperly used, copied or removed by anyone except an authorized representative of the Agencies or is requested by any federal or state agency or instrumentality other than the Agencies.

Equitable Relief. The parties agree that disclosure of the Agencies’ or Contractor’s Confidential Information by the other party, other than as permitted by this Article, will cause irreparable damage to Contractor or the Agencies and therefore, in addition to all other remedies available at law or in equity, each party shall have the right to seek equitable and injunctive relief, and to recover the amount of damages (including reasonable attorneys’ fees and expenses) incurred in connection with such unauthorized use. Each party shall be liable under this Agreement to the other party for any use or disclosure in violation of this Article by such party, its affiliates, contractors, subcontractors, or its or their respective Personnel, attorneys, accountants or other advisors.

ARTICLE X.

TITLE AND INTELLECTUAL PROPERTY RIGHTS

Definition of Property. The term “Property” as used in this Article includes the following forms of property: (1) confidential, proprietary, and trade secret information; (2) trademarks, trade names, discoveries, inventions processes, methods and improvements, whether or not patentable or subject to copyright protection and whether or not reduced to tangible form or reduced to practice; and (3) works of authorship, wherein such forms of property are required by Contractor to perform its work under the Contract that may consist of computer programs (in object and source code form), scripts, data, documentation, the audio, visual and audiovisual content related to layout and graphic presentation, text, photographs, video, pictures, animation, sound recordings, training materials, images, techniques, methods, algorithms, program images, text visible on the Internet, HTML code and images, illustrations, graphics, pages, storyboards, writings, drawings, sketches, models, samples, data, other technical or business information, reports, and other works of authorship fixed in any tangible medium.

Source of Property. Work under this Contract may involve intellectual property derived from four different sources: (1) developed for a third party, such as commercial off the shelf software owned by a third party; (2) developed by Contractor for the open market (e.g., Contractor’s commercial off the shelf software); (3) developed by Contractor for other individual clients, or for internal purposes prior to the Effective Date of this Contract and not delivered to any other client of Contractor’s; and (4) developed by Contractor specifically for the purposes of fulfilling its obligations to the Agencies under the terms of this Contract. Ownership of the first and second categories of intellectual property may be addressed in separate agreements between the Agencies and the contractors and resellers of work product. This Article addresses exclusively ownership rights in the third and fourth categories of intellectual property.

Contractor Property and License.

Contractor will retain all right, title and interest in and to all Property developed by it (i) for clients other than the Commonwealth, and (ii) for internal purposes and not yet delivered to any client, including all copyright (including the right to reproduce, distribute, publicly perform, publicly display, create derivative works of), patent (including the right to make, have made, use, sell, offer to sell and import), trade secret, trademark and other intellectual property rights created by Contractor in connection with such work (hereinafter the “Contractor Property”). The Agencies acknowledges that their possession, installation or use of Contractor Property will not transfer to them any title to such property.

The Agencies acknowledge that Contractor Property contains or constitutes commercially valuable and proprietary trade secrets of Contractor, the development of which involved the expenditure of substantial time and money and the use of skilled development experts. The Agencies acknowledge that Contractor Property is being disclosed to the Agencies to be used only as expressly permitted under the terms herein. The Agencies will take no affirmative steps to disclose such information to third parties, and, if required to do so under the Commonwealth’s Public Records Law, M.G.L. c. 66 § 10, or by legal process, will promptly notify Contractor of the imminent disclosure so that Contractor can take steps to defend itself against such disclosure.

Except as expressly authorized herein, the Agencies will not copy, modify, distribute or transfer by any means, display, sublicense, rent, or, except as authorized by law, reverse engineer, decompile or disassemble Contractor Property.

Contractor grants to the Agencies, a fully-paid, royalty-free, non-exclusive, non-transferable, worldwide, irrevocable, perpetual, assignable license to:

make, have made, use, sell, offer to sell and import; and reproduce, distribute, modify, publicly display, publicly perform, digitally perform, transmit, copy, sublicense (to any subcontractor of the Agencies for purposes of creating, implementing, maintaining or enhancing a Deliverable), and create derivative works based upon, Contractor Property, in any media now known or hereafter known, to the extent the same are embodied in the Deliverables, or otherwise required to exploit the Deliverables (the “Licensed Deliverables”). During the Term of this Contract and immediately upon any expiration or termination thereof for any reason, Contractor will provide to the Agencies the most current copies of any Licensed Deliverables to which the Agencies has rights pursuant to the foregoing, including any related documentation.

Notwithstanding anything contained herein to the contrary, and notwithstanding the Agencies’ use of Licensed Deliverables under the license created herein, Contractor shall have all the rights and incidents of ownership with respect to Contractor Property, including the right to use such property for any purpose whatsoever and to grant licenses in the same to third parties. Contractor shall not encumber or otherwise transfer any rights that would preclude a free and clear license grant to the Commonwealth.

Commonwealth Property.

In conformance with the Commonwealth Terms and Conditions, all Deliverables created under this Agreement whether made by Contractor, subcontractor or both are the property of the Agencies, except for the Contractor Property embodied in the Deliverable (“Commonwealth Owned Deliverables”). Contractor irrevocably and unconditionally sells, transfers and assigns to the Agencies or their designee(s), the entire right, title, and interest in and to all intellectual property rights that it may now or hereafter possess in such Commonwealth Owned Deliverables, except for the Contractor Property embodied in the Commonwealth Owned Deliverables, and all derivative works thereof. This sale, transfer and assignment shall be effective immediately upon creation of each Deliverable and shall include all copyright, patent, trade secret, trademark and other intellectual property rights created by Contractor or Contractor’s subcontractor in connection with such work (hereinafter the “Commonwealth Property”).

All copyrightable material contained within a Deliverable and created under this Contract are works made for hire. Contractor bears the burden to prove that a work within a Deliverable was not created under this Contract. If work is determined to not be made for hire or that designation is not sufficient to secure rights, to the fullest extent allowable and for the full term of protection otherwise accorded to Contractor under such law, Contractor shall and hereby irrevocably does, assign and transfer to the Agencies free from all liens and other encumbrances or restrictions, all right, title and interest Contractor may have or come to have in and to such Deliverable. CONTRACTOR HEREBY WAIVES IN FAVOR OF THE AGENCIES (AND SHALL CAUSE ITS PERSONNEL TO WAIVE IN FAVOR OF THE AGENCIES IN WRITING SIGNED BY SUCH PERSONNEL) ANY AND ALL ARTIST’S OR MORAL RIGHTS (INCLUDING, WITHOUT LIMITATION, ALL RIGHTS OF INTEGRITY AND ATTRIBUTION) IT MAY HAVE PURSUANT TO ANY STATE OR FEDERAL LAWS OF THE UNITED STATES IN RESPECT TO ANY DELIVERABLE AND ALL SIMILAR RIGHTS UNDER THE LAWS OF ALL OTHER APPLICABLE JURISDICTIONS.

Contractor shall ensure that each of its Personnel providing services under this Contract, regardless of whether the individual is an employee, contractor, or agent of Contractor, shall, prior to rendering any services under this Contract, sign the “Intellectual Property and Work Effort Agreement for Contractor’s Employees, Contractors, and Agents” (the “IPAWE Agreement”) which is attached hereto as Exhibit B. If Contractor’s Personnel who will be rendering services under this Contract have already executed an agreement that, in the opinion of the Agencies’ counsel, provides legal protection to the Commonwealth as strong as that provided by the IPAWE Agreement, Contractor may substitute such agreement in place of the IPAWE Agreement for such personnel. Contractor shall return the signed copies of the IPAWE Agreement, or the Agencies’ Project Manager’s pre-approved substitute agreement, to the Agencies’ Project Manager prior to the rendering of any services under this Contract.

Contractor agrees to execute all documents and take all actions that may be reasonably requested by the Agencies to evidence the transfer of ownership of or license to intellectual property rights described in this Article, including providing any code used exclusively to develop such Deliverables for the Agencies and the documentation for such code. Contractor acknowledges that there are currently and that there may be future rights that the Commonwealth may otherwise become entitled to with respect to Commonwealth Property that does not yet exist, as well as new uses, media, means and forms of exploitation, current or future technology yet to be developed, and that Contractor specifically intends the foregoing ownership or rights by the Commonwealth to include all such now known or unknown uses, media and forms of exploitation.

The Commonwealth retains all right, title and interest in and to all derivative works of Commonwealth Property.

The Agencies hereby grant to Contractor a nonexclusive, revocable license to use, copy, modify and prepare derivative works of Commonwealth Property only during the Term and only for the purpose of performing services and developing Deliverables for the Agencies under this Agreement.

With respect to web site development, if any, the Agencies will bear sole responsibility for registering the software or system domain name or URL, applying for any trademark registration relating to the software or system domain name or URL and applying for any copyright registration related to its copyright ownership with respect to any Commonwealth Property.

Third-Party Intellectual Property. All Third Party Software is listed on Exhibit F hereto, including (i) the name of such software, (ii) the version to be used in the System, (iii) the publisher, and (iv) whether the cost is included in the cost of the System or whether the Agencies will pay for such Third Party Software separately. Except as otherwise agreed between the parties in a Change Request, such Third Party Software shall be licensed to the Agencies by the applicable Third Party Software vendor by means of a license agreement. The Agencies shall have, in addition to their rights and remedies under this Contract, such license rights and remedies in the Third Party Software as are set forth in the applicable license agreements, and Contractor shall have all license rights needed to deliver the System under this Contract. Contractor shall conduct its negotiations with the third party licensors in accordance with the Agencies’ requirements. With respect to any Third Party Software that is (i) critical to the Agencies and/or the System; (ii) not widely commercially available; or (iii) not replaceable with a functionally equivalent alternative on terms commercially reasonable to Client ("Critical Third Party Software"), Contractor must obtain an option to access the source code for such Critical Third Party Software pursuant to a software escrow agreement meeting the requirements of subsection H below. If the Agencies and Contractor agree that acceptable terms cannot be negotiated with the Critical Third Party Software provider, Contractor shall substitute another provider to be approved in writing by the Agencies. Nothing in this subsection E shall relieve Contractor of its obligations under this Agreement with respect to the Services and System, including but not limited to, its warranty, support and indemnification obligations.

Equipment. Contractor shall acquire and pay for any hardware and equipment required under the Contract (“Equipment”), except for Equipment purchased or leased by Inspection Stations. During the Term, Contractor shall give the Agencies prompt notice of anticipated or actual substitution, obsolescence or discontinuance of, or modifications to all Equipment. During the Term, Contractor shall (A) test, and cause to be certified where appropriate, each substitution, modification or update to any Equipment for compatibility and suitability to unit and System installation, integration and performance; and (B) determine the quantity of any critical components incorporated into the Equipment to be ordered as last time buy to cover for spare maintenance, replacement and repair parts. Contractor shall ensure continuity of supply of such critical components until a replacement component is tested and found to be compatible with the System.

Bankruptcy. All rights and licenses granted under or pursuant to this Contract by Contractor to the Agencies are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code, licenses to rights to “intellectual property” as defined in the United States Bankruptcy Code. The Parties agree that the Agencies, as licensees of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the United States Bankruptcy Code. The Parties further agree that, in the event of the commencement of bankruptcy proceedings by or against Contractor under the United States Bankruptcy Code, the Agencies shall be entitled to retain all of its rights under the Agreement.

Source Materials; Escrow. Contractor shall at its own expense establish and maintain a software escrow naming the Agencies as beneficiaries for the Licensed Deliverables identified in each applicable task order, and shall cause the applicable provider of Critical Third Party Software to establish and maintain a software escrow naming the Agencies as a beneficiaries for the Critical Third Party Software identified in Exhibit F. Contractor shall present a copy of the escrow agreement to the Agencies at their request. Unless the Parties explicitly state in this Contractor that Contractor is not required to deposit Source Materials applicable to particular Licensed Deliverables and Critical Third Party Software, Contractor shall deposit such materials subject to the provisions contained in this subsection H as follows:

Then-current Source Materials will be deposited no less frequently than once per calendar quarter;

The Source Materials will be released upon demand by the Agencies in the event that:

Contractor fails in any material respect to comply with its obligations under the Contract, and any such failure is not remedied within a period of ten (10) days, or otherwise materially fails to promptly respond to and resolve support requests concerning the software; provided, that, in the event that Contractor disputes the release request within ten (10) days by delivering an affidavit stating that the release conditions have not been met, the matter will be resolved in accordance with ARTICLE XIX. DISPUTES; or Contractor becomes insolvent or ceases to exist or do business in the ordinary course.

Upon any release, the Agencies are permitted to use, modify, license to its hosting vendors and create derivative works from the Source Materials for the sole purpose of implementing, supporting and enhancing their permitted use of the Licensed Deliverables and Critical Third Party Software, subject in all cases to the terms and conditions of this Contract governing such Deliverables;

The Agencies shall be entitled to require at their own expense, except as provided herein, and at such intervals as the Agencies may elect, technical third party verification that the Source Materials in the possession of the escrow agent are sufficient to recreate and maintain the then-current release of the software as described above; provided, that if such technical verification demonstrates that the Source Materials are Insufficient:

Contractor shall promptly redeposit sufficient Source Materials;

Contractor shall pay for both the initial and subsequent verification; and the foregoing remedy shall apply to each instance of an Insufficient deposit;

the Source Materials are the Confidential Information of Contractor and the Agencies shall not disclose the Source Materials to any third party except for the purpose of verifying the sufficiency of the Source Material deposit in accordance with this subsection H, or, upon an escrow release, to contractors, in order to exercise the Agencies’ limited license to use such Source Materials solely for the permitted purposes hereunder; and the Agencies shall take reasonable precautions against unauthorized access to the Source Materials while such materials are in its possession.