ESBD_428726_1750181472425_Attachment B-Terms and Conditions.pdf

ATTACHMENT B

TERMS AND CONDITIONS

Terms and Conditions

Updated April 15, 2022

Table of Contents

ARTICLE 1. INTRODUCTION

GLOBAL DRAFTING CONVENTIONS

HEADINGS

AUTHORIZED REPRESENTATIVES

SEVERABILITY

GOVERNING LAW AND VENUE

EXCEPTIONS

TERMS AND CONDITIONS ATTACHED TO RESPONSE

ARTICLE 2. REMEDIES AND DISPUTES

TERMINATION

CURE; DISPUTE RESOLUTION

ROLLING ESTOPPEL

SURVIVAL OF OBLIGATIONS

NO WAIVER OF DEFENSES

FORCE MAJEURE

FORESEEABLE DELAY

NOTICES

NO LIABILITY FOR INCREASED COSTS OR DAMAGES

ARTICLE 3. AMENDMENTS AND CONTRACTOR CHANGES

AMENDMENTS

NO AMOUNTS PAID FOR UNAUTHORIZED PERFORMANCE

NO CONFLICT WITH LAWS OF THE STATE OF TEXAS

OPTION TO EXTEND THE TERM OF THE CONTRACT

OPTION TO EXTEND SERVICES

ASSIGNMENT

ARTICLE 4. INDEMNIFICATION

INDEMNIFICATION (GENERAL)

INDEMNIFICATION (INTELLECTUAL PROPERTY)

ARTICLE 5. CONTRACT PERFORMANCE

MOST FAVORED CUSTOMER

NO SUBSTITUTIONS, CANCELLATIONS AND DELIVERY TIMES

TITLE AND RISK OF LOSS

RECALL NOTICE

TESTING; ACCEPTANCE; RETURN; REVOCATION

INSPECTION OF SERVICES

INSPECTION BY STATE EMPLOYEES

APPROVAL OF EMPLOYEES

PERSONNEL

WARRANTIES

SUSPENSION OF WORK

STOP-WORK ORDER

MONITORING CRITERIA

SUBCONTRACTS

WORK MADE FOR HIRE

TAHC OWNERSHIP

OTHER CONTRACTS

INDEPENDENT CONTRACTOR

ARTICLE 6. PUBLICITY AND PUBLIC INFORMATION

NEWS RELEASES, ADVERTISEMENTS, AND PUBLICITY

PUBLIC INFORMATION ACT

ARTICLE 7. STATE AND FEDERAL LAW, RULES, AND REGULATIONS

COMPLIANCE WITH STATE, FEDERAL, AND LOCAL LAWS, RULES, AND REGULATIONS

APPLICABLE LAW AND CONFORMING AMENDMENTS

NOTICE UNDER TEX. GOV'T CODE § 2261.252

DISCLOSURE OF INTERESTED PARTIES

NON-DISCRIMINATION

DRUG-FREE WORKPLACE

FELONY CRIMINAL CONVICTIONS

BOOKS AND RECORDS

DISASTER RECOVERY PLAN

TAXES; UNEMPLOYMENT; WORKERS COMPENSATION

FRAUD, WASTE, OR ABUSE

STATE AUDITOR’S RIGHT TO AUDIT

TECHNOLOGY ACCESS CLAUSE

CONSTITUTIONAL AND STATUTORY LIMITATIONS

ANTITRUST AFFIRMATION

BUY TEXAS

CHILD SUPPORT OBLIGATION

COVID-19 VACCINE PASSPORT PROHIBITION

DEALINGS WITH PUBLIC SERVANTS AFFIRMATION

DEBTS AND DELINQUENCIES AFFIRMATION

ENERGY COMPANY BOYCOTTS

ENTITIES THAT BOYCOTT ISRAEL

EXCESS OBLIGATIONS PROHIBITED

EXECUTIVE HEAD OF A STATE AGENCY AFFIRMATION

FALSE STATEMENTS

FINANCIAL PARTICIPATION PROHIBITED AFFIMATION

FIREARM ENTITITES AND TRADE ASSOCIATIONS DISCRIMINATION

FOREIGN TERRORIST ORGANIZATIONS

FORMER AGENCY EMPLOYEES

HUMAN TRAFFICKING PROHIBITION

PRIOR DISASTER RELIEF CONTRACT VIOLATION

SIGNATURE AUTHORITY

TEXAS BIDDER AFFIRMATION

ARTICLE 1. INTRODUCTION

Any Contract resulting from this solicitation will include the following Standard Terms and Conditions. Subcontractors must also comply with these provisions.

GLOBAL DRAFTING CONVENTIONS

1.1.1 "Includes" and "including" are terms of enlargement and not of limitation or exclusive enumeration. Use of the terms does not create a presumption that components not expressed are excluded.

1.1.2 Any references to laws, rules, regulations, and guidance in this Contract are references as they exist at the time of execution and as they may be amended, modified, or supplemented during the life of the Contract.

HEADINGS

The headings, captions, and arrangements used in this Contract are, unless specified otherwise, for reference and convenience only and do not alter the interpretation of this Contract.

AUTHORIZED REPRESENTATIVES

1.3.1 Contractor must designate its authorized representative in writing to the Texas Animal Health Commission (TAHC) no later than the effective date of this Contract. Contractor's authorized representative may designate other people (such as a contract manager or project manager) to assist in the performance of certain obligations required by this Contract.

1.3.2 The TAHC's authorized representative is the only person authorized to make or approve changes in any Contract requirements. If Contractor makes any change at the direction of any person other than the Director or his legally designated representatives, the TAHC will consider the change to have been made without authority and no adjustment will be made in the Contract price to cover any increase in cost incurred as a result.

SEVERABILITY

If any provision of the contract is construed to be illegal, invalid or unenforceable, such construction will not affect the legality, validity or enforceability of any of its other provisions. It is the intent and agreement of the parties to this contract that this contract shall be deemed amended by modifying such provision to the extent necessary to render it valid, legal and enforceable while preserving its intent or, if such modification is not possible, by substituting another provision that is valid, legal and enforceable and that achieves the same objective. All other provisions of this contract will continue in full force and effect.

GOVERNING LAW AND VENUE

The contract shall be governed by and construed in accordance with the laws of the State of Texas, without regard to the conflicts of law provisions. The venue of any suit arising under the contract is fixed in any court of competent jurisdiction of Travis County, Texas, unless the specific venue is otherwise identified in a statute which directly names or otherwise identifies its applicability to the contracting Agency.

EXCEPTIONS

No exceptions should be included in Response. Responses received that take any exceptions to this solicitation will be disqualified and deemed non-responsive to the solicitation and the TAHC will remove the proposal from further consideration.

TERMS AND CONDITIONS ATTACHED TO RESPONSE

Any terms and conditions attached to a Response will not be considered unless specifically referred to in the Response.

ARTICLE 2. REMEDIES AND DISPUTES

TERMINATION

This Contract may be terminated or cancelled in any of the following circumstances.

2.1.1 Termination with Notification and Opportunity to Cure

The TAHC will notify Contractor in writing of any failure, cause, or default if Contractor fails to carry out or comply with any requirements of this Contract (including any statement, affirmation, disclosure, certification, representation, or warranty in this Contract that is false, misleading, or erroneous in any material respect). The TAHC's notification will demand that the failure, cause, or default be remedied within ten days.

The TAHC will have the right to cancel this Contract ten days from written notice if Contractor fails to remedy such failure, cause, or default within the ten days' period.

2.1.2 Termination for Unavailability of Funds

A. The Contract is subject to termination or cancellation, without penalty to the TAHC, either in whole or in part, subject to the availability of state funds, federal funds, or both. The TAHC is a state agency whose authority and appropriations are subject to actions of the Texas State Legislature. If the Agency becomes subject to a legislative change, revocation of statutory authority, or lack of appropriated funds that would render either the TAHC’s or the Contractor’s delivery or performance under the contract impossible or unnecessary, the Contract will be terminated or cancelled and be deemed null and void. In the event of a termination or cancellation under this Section, the TAHC will not be liable to the Contractor.

B. If the TAHC is unable to perform its obligations under this Contract as a result of the suspension, termination, or withdrawal of funding to the TAHC, the failure to fund TAHC, or lack of sufficient funding of the TAHC for any activities or functions contained within the scope of this Contract, the TAHC may immediately terminate this Contract without prior notice and without penalty to or any liability whatsoever on the part of the TAHC, the State of Texas, and the United States, if these funds become unavailable to the TAHC. The Contractor will have no right of action against the TAHC.

C. The TAHC will make its best efforts to provide reasonable written advance notice to

Contractor. In the event of a termination under this section, Contractor must, unless otherwise mutually agreed upon in writing, cease all work immediately upon the effective date of termination, either on the particular order if an order is being terminated, or this Contract if this Contract is being terminated. The TAHC will be liable for payments limited only to the portion of work the TAHC authorized in writing and which Contractor has completed, delivered to the TAHC, and which has been accepted by the TAHC in writing in accordance with all requirements of this Contract.

All such work must be completed, tested, and accepted in writing, per the requirements of this Contract, prior to the effective date of termination.

2.1.3 Termination for Convenience

The TAHC reserves the right to terminate the contract at any time, in whole or in part, without cost or penalty, by providing thirty (30) calendar days’ advance written notice, if the TAHC determines that such termination is in the best interest of the state. In the event of such a termination, Contractor must, unless otherwise mutually agreed upon in writing, cease all work immediately upon the effective date of termination. The TAHC will be liable for payments limited only to the portion of work the TAHC authorized in writing and which Contractor has completed, delivered to the TAHC, and which has been accepted by the TAHC. All such work shall have been completed, in accordance with contract requirements, prior to the effective date of termination. The TAHC shall have no other liability, including no liability for any costs associated with the termination.

2.1.4 Termination by Mutual Agreement

This Contract may be terminated upon by mutual written agreement.

2.1.5 Termination for Failure to Perform

This Contract may be terminated by the TAHC if Contractor fails to perform as agreed or is otherwise in default, without the necessity of complying with the requirements in the section entitled "Termination with Notification and Opportunity to Cure." The TAHC will provide the Contractor with written notice to terminate this Contract, the termination will become effective immediately upon Contractor's receipt of the written notice.

If Contractor fails to provide the deliverables or other performance in accordance with the provisions of this Contract, or fails to comply with any of the terms or conditions of this Contract, the TAHC may, upon written notice of default to Contractor, immediately terminate all or any part of this Contract. Termination is not an exclusive remedy, but will be in addition to any other rights and remedies provided in equity, by law or under the Contract.

The TAHC may exercise any other right, remedy, or privilege which may be available to it under applicable law of the State and any other applicable law or may proceed by appropriate court action to enforce the provisions of this Contract, or to recover damages for the breach of this Contract. The exercise of any of the foregoing remedies will not constitute a termination of this Contract unless the TAHC notifies Contractor in writing prior to the exercise of such remedy.

Contractor must remain liable for all covenants and indemnities under this Contract.

Contractor must be liable for all costs and expenses, including court costs and attorney fees, incurred by the TAHC with respect to the enforcement of any of the remedies listed in this Contract.

2.1.6 Termination for Listing on Federal Excluded Party List, the Terrorism List (Executive Order 13224) or on the State of Texas Debarred Contractor List The TAHC will have the absolute right to terminate this Contract without recourse as follows: (a) if Contractor becomes listed on the prohibited Contractor list authorized by Executive Order 13224 "Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism," published by the United

States Department of Treasury, Office of Foreign Assets Control; (b) if Contractor becomes suspended or debarred from doing business with the federal government as listed in the System for Award Management (SAM) maintained by the General Services Administration; or (c) if Contractor becomes listed on the Texas Debarred Vendor List.

The TAHC will provide Contractor with written notice to terminate this Contract, the termination will become effective immediately upon Contractor's receipt of the written notice.

2.1.7 Termination by Change of Law

The TAHC may immediately terminate this Contract, in whole or in part, without penalty to, or any liability whatsoever on the part of the TAHC, the State of Texas, and the United States if the TAHC or the subject matter of this Contract become subject to a legislative or regulatory change or the revocation of statutory or regulatory authority that would render the deliverables to be provided under this Contract impossible, unnecessary, void, or substantially amended or that would terminate the appropriations for this Contract. The TAHC is not required to provide 30 days' written notice as termination under this section is immediate.

2.1.8 General Termination Provisions; All Contracts are Non-Exclusive The termination of this Contract, under any circumstances, will not affect or relieve Contractor from any that may have been incurred under this Contract, and such cancellation by the TAHC will not limit any other right or remedy available to the TAHC at law or in equity.

This Contract does not grant Contractor a vested property right and Contractor has no guarantee of exclusivity. The TAHC reserves the right, in its sole discretion, to solicit or contract with other contractors for similar subject matter, services, or deliverables to those under this Contract at any time. Additionally, Contractor is not guaranteed any minimum amount of compensation.

The TAHC will not be considered in default or breach of this Contract, nor will it give rise to any liability whatsoever on the part of the TAHC whether such claims of Contractor are for compensation of anticipated profits, unabsorbed overhead, interest on borrowing, or for any other reason in the event of termination.

Contractor must, unless mutually agreed upon in writing, cease all work immediately upon the effective date of termination. The TAHC will be liable for payments limited only to the portion of the work the TAHC authorized in writing and which Contractor has completed, delivered to the TAHC, and which have been accepted by the TAHC. All such work will have been completed, per this Contract's requirements, prior to the effective date of termination.

Contractor must deliver to the TAHC all completed, or partially completed work and any and all documentation or other products and results of these services no later than the first day after the termination of this Contract, or at the TAHC's request. Failure to timely deliver such work or any and all documentation or other products and results of the services will be considered a material breach of this Contract. Contractor will not make or retain any copies of the work or any and all documentation or other products and results of the services without the prior written consent of the TAHC.

The TAHC reserves the right to recover reasonable costs, fees, expenses, and other amounts or damages available to the TAHC under this Contract or under applicable law, including, attorneys' fees and court costs, if termination is at Contractor's request or if termination is for cause. This right is in addition to any other remedies available to the TAHC under this Contract or applicable law. The TAHC reserves the right to pursue any and all applicable rights and remedies if this Contract is terminated for any reason and the TAHC expressly waives no such rights or remedies.

The TAHC reserves the right to cancel this Contract without notice and either re-solicit or re-award this Contract to the next best responsive and responsible Contractor if Contractor defaults on this Contract. The TAHC will not consider the defaulting Contractor in the re-solicitation and the TAHC may not consider the defaulting Contractor in future solicitations for the same type of work, unless the specification or scope of work significantly changes. The TAHC will determine the period of suspension based on the seriousness of the default.

The TAHC and the State of Texas will not be liable to Contractor for any damages, claims, losses, or any other amounts arising from or related to any such termination if this Contract is terminated for any reason. However, Contractor may be entitled to the remedies provided in Tex. Gov't Code Chapter 2260.

The transition duties of Contractor survive the termination of this Contract, regardless of the reason for the termination.

CURE; DISPUTE RESOLUTION

2.2.1 Further Opportunity to Cure

A. If an Event of Default of the type specified in the section entitled "Termination with

Notification and Opportunity to Cure" occurs and if Contractor reasonably believes that such Event of Default cannot be cured within the ten business days allowed in the section entitled "Inspection of Services" but that such Event of Default can be cured through a diligent, on-going, and conscientious effort on the part of Contractor, within a reasonable period not to exceed three months, then Contractor may, within the ten-day cure period, submit a detailed plan for curing the Event of Default to the

TAHC.

B. The TAHC will promptly review Contractor's plan for curing an Event of Default and may, at its discretion, allow Contractor to pursue such plan of cure.

C. The TAHC will communicate its decision in writing to Contractor.

D. The TAHC may not exercise its remedies hereunder with respect to such Event of

Default while the Contractor diligently, conscientiously, and timely undertakes the approved plan to cure the Event of Default.

E. The ten-day time period will be tolled during the time the request was pending, if the

TAHC does not allow Contractor an extension of the cure period.

2.2.2 Dispute Resolution

The dispute resolution process provided for in Chapter 2260 of the Texas Government Code must be used to attempt to resolve any dispute arising under the contract.

Subject to Texas Government Code, Section 2260.002, the dispute resolution process provided for in Chapter 2260 of the Texas Government Code and set forth below in subsections (a)-(d) shall be used by the parties to attempt to resolve all disputes arising under this contract. In accordance with the Texas Civil Practice and Remedies Code, Section 114.005, the parties agree claims encompassed by Texas Government Code, Section 2260.002(3) and Texas Civil Practice and Remedies Code Section 114.002 shall be governed by the dispute resolution process set forth below in subsections (a)- (d).

A. Notwithstanding Texas Government Code, Chapter 2260.002(3) and Chapter 114.012 and any other statute or applicable law, if the Contractor’s claim for breach of contract cannot be resolved by the parties in the ordinary course of business, Contractor may make a claim against the TAHC for breach of contract and the TAHC may assert a counterclaim against the Contractor as is contemplated by Texas Government Code, Chapter 2260, Subchapter B. In such event, Contractor must provide written notice to the TAHC of a claim for breach of the contract not later than the 180th day after the date of the event giving rise to the claim. The notice must state with particularity: (1) the nature of the alleged breach; (2) the amount the Contractor seeks as damages;

and (3) the legal theory of recovery.

B. The chief administrative officer, or if designated in the contract, another officer of the

TAHC, shall examine the claim and any counterclaim and negotiate with the Contractor in an effort to resolve them. The negotiation must begin no later than the 120th day after the date the claim is received, as is contemplated by Texas Government Code, Chapter 2260, Section 2260.052.

C. If the negotiation under paragraph (b) above results in the resolution of some disputed issues by agreement or in a settlement, the parties shall reduce the agreement or settlement to writing and each party shall sign the agreement or settlement. A partial settlement or resolution of a claim does not waive a party’s rights under this contract as to the parts of the claim that are not resolved.

D. If a claim is not entirely resolved under paragraph (b) above, on or before the 270th day after the date the claim is filed with the TAHC, unless the parties agree in writing to an extension of time, the parties may agree to mediate a claim made under this dispute resolution procedure. This dispute resolution procedure is the Contractor’s sole and exclusive process for seeking a remedy for an alleged breach of contract by the TAHC if the parties are unable to resolve their disputes as described in this section.

E. Nothing in the Contract shall be construed as a waiver of the State’s or the TAHC’s sovereign immunity. This Contract shall not constitute or be construed as a waiver of any of the privileges, rights, defenses, remedies, or immunities available to the State of Texas. The failure to enforce, or any delay in the enforcement, of any privileges, rights, defenses, remedies, or immunities available to the State of Texas under this contract or under applicable law shall not constitute a waiver of such privileges, rights, defenses, remedies or immunities or be considered as a basis for estoppel. The TAHC does not waive any privileges, rights, defenses, or immunities available to the TAHC by entering into this contract or by its conduct, or by the conduct of any representative of the TAHC, prior to or subsequent to entering into this Contract.

F. Compliance with the dispute resolution process provided for in Texas Government Code, Chapter 2260, subchapter B and incorporated by reference in subsection (a)-

(d) above is a condition precedent to the Contractor:

1. filing suit pursuant to Chapter 114 of the Civil Practices and Remedies Code;

or

2. initiating a contested case hearing pursuant to Subchapter C of Chapter 2260 of the Texas Government Code.

ROLLING ESTOPPEL

A. The TAHC will be conclusively deemed to have fulfilled its obligations under this Contract, unless the TAHC receives a deficiency report from Contractor within five business days of the occurrence of the alleged deficiencies and Contractor identifies specific deficiencies in the TAHC's fulfillment of its obligations in that report.

Deficiencies will be described in terms of how they have impacted the specific performance requirements of Contractor.

Contractor is estopped from claiming that a situation has arisen that might otherwise justify changes in the project timetable, the standards of performance under this Contract, or the project cost, if Contractor knew of that problem and failed to include it in the applicable report. The deficiency report will be sent to the TAHC's point of contact for this Contract.

B. In the event Contractor identifies a situation in which the TAHC is impairing

Contractor's ability to perform for any reason, Contractor's deficiency report will contain Contractor's suggested solutions to the situation(s). These suggestions should be in sufficient detail so that the TAHC can make a prompt decision as to the best method of dealing with the problem and continuing the project in an unimpeded fashion.

SURVIVAL OF OBLIGATIONS

Termination of this Contract for any reason will not release Contractor from any liability or obligation set forth in this Contract that is expressly stated to survive any such termination or by its nature would be intended to be applicable following any such termination, including the provisions regarding confidentiality, indemnification, warranty, transition, records, audit, property rights, dispute resolution, invoice and fees verification, and any other provisions of this Contract that impose continuing obligations on either of the parties or that govern the rights and limitations of either of the parties after the expiration or termination of this Contract.

NO WAIVER OF DEFENSES

Nothing in this Contract shall be construed as a waiver of the State's or the TAHC’s sovereign immunity. This Contract shall not constitute or be construed as a waiver of any of the privileges, rights, defenses, remedies, or immunities available to the State of Texas. The failure to enforce, or any delay in the enforcement, of any privileges, rights, defenses, remedies, or immunities available to the State of Texas under this Contract or under applicable law shall not constitute a waiver of such privileges, rights, defenses, remedies, or immunities or to be considered as a basis for estoppel. The TAHC does not waive any privileges, rights, defenses, or immunities available to the TAHC by entering into this Contract or by its conduct, or by the conduct of any representative of the TAHC, prior to or subsequent to entering into this Contract.

FORCE MAJEURE

Neither Contractor nor the TAHC will be liable to the other for any delay in, or failure of performance, of any requirement included in this Contract caused by Force Majeure.

The existence of such causes of delay or failure will extend the period of performance until after the causes of delay or failure have been removed provided the non-performing party exercises all reasonable due diligence to perform. Force Majeure is defined as acts of God, war, fires, explosions, hurricanes, floods, failure of transportation, or other causes that are beyond the reasonable control of either party and that by exercise of due foresight such party could not reasonably have been expected to avoid, and which by the exercise of all reasonable due diligence, such party is unable to overcome. Each party must inform the other in writing, with proof of receipt, within three business days of the existence of such force majeure, or otherwise waive this right as a defense.

FORESEEABLE DELAY

If a delay in delivery of a deadline or other performance under this Contract is foreseeable and the delay is not caused by a Force Majeure event, Contractor must give written notice to the TAHC. The TAHC has the right, in its sole discretion, to extend the delivery date if the TAHC determines the reasons for the delay are acceptable to the TAHC. Contractor must keep the TAHC advised at all times of the status of the delay.

Contractor's failure to perform under this Contract and failure to meet the requirements of this Contract, including Contractor delays not accepted by the TAHC, may result in the TAHC issuing a new solicitation or entering into another contract for the subject matter of this Contract.

Contractor must pay all costs to the TAHC due to a re-solicitation or contracting under this section.

NOTICES

Any notice required or permitted under this Contract will be directed to Contractor's Project Manager and TAHC's point of contact for this Contract and will be deemed received:

A. When delivered in hand and a receipt granted;

B. Three days after it is deposited in the United States mail by certified mail, return receipt requested; or

C. When received if sent by confirmed facsimile or confirmed email.

Either of the parties may change its address or designated individual(s) to receive notices by giving the other party written notice as provided above, specifying the new address or individual and the date upon which it will become effective.

NO LIABILITY FOR INCREASED COSTS OR DAMAGES

The TAHC shall not be liable to Contractor for any increased costs or expenses that may be incurred by Contractor, or for any other damages that may be suffered by Contractor as a result of any act or omission of any other contractor to the State of Texas or the

TAHC.

ARTICLE 3. AMENDMENTS AND CONTRACTOR CHANGES

AMENDMENTS

The TAHC and Contractor may amend this contract through a written amendment signed by an authorized signatory on behalf of the respective party.

NO AMOUNTS PAID FOR UNAUTHORIZED PERFORMANCE

Contractor will not receive compensation for performance not authorized under the Contract, including any performance prior to the effective date of a written Contract amendment signed by both parties. Any such performance is at the sole risk of Contractor.

NO CONFLICT WITH LAWS OF THE STATE OF TEXAS

Any subsequent addition to the solicitation or amended language to this Contract that conflicts with the laws of the State of Texas is void.

OPTION TO EXTEND THE TERM OF THE CONTRACT

A. The TAHC may, at its sole discretion, extend the term of this Contract by written Contract amendment to Contractor prior to this Contract's expiration.

B. The preliminary notice does not commit the TAHC to an extension.

C. If the TAHC exercises this option, the extended Contract will be considered to include this option provision.

OPTION TO EXTEND SERVICES

A. The TAHC may require continued performance of any services within the scope and at the rates specified in this Contract.

B. The TAHC reserves the right to extend this Contract by written Contract amendment for a 90-day period at the end of this Contract or extension period for the purpose of re-advertising the commodity or service, awarding a new Contract, or transitioning into a new Contract.

C. The TAHC may exercise this optional provision more than once, but the total extension of performance may not exceed six months.

ASSIGNMENT

Contractor may not assign the Contract or assign, transfer or delegate, in whole or in part, any of its interest in, or rights or obligations under, the contract without the prior written consent of the TAHC, and any attempted or purported assignment, transfer or delegation thereof without such consent shall be null and void.

ARTICLE 4. INDEMNIFICATION

INDEMNIFICATION (GENERAL)

Contractor shall defend, indemnify, and hold harmless the State of Texas and the TAHC, and their officers, agents, employees, representatives, contractors, assignees, or designees from any and all liability, actions, claims, demands, or suits, and all related costs, attorney’s fees, and expenses arising out of, or resulting from any acts or omissions of Contractor or its agents, employees, subcontractors, order fulfillers, or suppliers of subcontractors in the execution or performance of this Contract and any purchase orders issued under this Contract. The defense must be coordinated by the Contractor with the Office of the Texas Attorney General (OAG) when Texas state agencies are named as defendants in any lawsuit and Contractor may not agree to any settlement without first obtaining the concurrence from the OAG. The Contractor and the TAHC agree to furnish timely written notice to each other of any such claim.

INDEMNIFICATION (INTELLECTUAL PROPERTY)

Contractor shall defend, indemnify, and hold harmless the TAHC and the State of Texas from and against any and all claims, violations, misappropriations, or infringement of any patent, trademark, copyright, trade secret, or other intellectual property rights or other intangible property, publicity, or privacy rights or in connection with or arising from: (1) the performance or actions of Contractor under this Contract; (2) any deliverable, work product, configured service, or other service provided under this Contract; or the TAHC’s use of or acquisition of any requested services or other items provided to the TAHC by the Contractor or otherwise to which the TAHC has access as a result of the Contractor’s performance under the Contract. Contractor and the TAHC agree to furnish timely written notice to each other of any such claim. Contractor shall be liable to pay all costs of defense, including attorney’s fees. The defense will be coordinated by Contractor with the OAG when Texas state agencies are named defendants in any lawsuit and the Contractor may not agree to any settlement without first obtaining the concurrence from the OAG. In addition, Contractor will reimburse the TAHC and the State of Texas for any claims, damages, costs, expenses, or other amounts, including attorney’s fees and court costs arising from any such claim. If the TAHC determines that a conflict exists between its interests and those of the Contractor or if the TAHC is required by applicable law to select separate counsel, the TAHC will be permitted to select separate counsel and the Contractor will pay all reasonable costs of the TAHC’S counsel.

ARTICLE 5. CONTRACT PERFORMANCE

MOST FAVORED CUSTOMER

Contractor represents and warrants that all prices, charges, benefits, warranties and terms granted to the TAHC under this Contract are comparable to, or more favorable to, the TAHC than the price, charges, benefits, warranties, and terms that Contractor has previously offered to any person or entity for the products or services covered under any other agreement. If at any time during the term of this Contract, Contractor will contract with any other person or entity for prices, charges, benefits, warranties and terms more favorable to such person or entity, Contractor must notify the TAHC of such more favorable terms and the TAHC, in its sole discretion, may require that such more favorable prices, charges, benefits, warranties or other terms be made available to the TAHC under this Contract, and be retroactive to the effective date of this Contract.

NO SUBSTITUTIONS, CANCELLATIONS AND DELIVERY TIMES

No substitutions or cancellations are permitted without the prior written approval of an authorized representative of the TAHC. Delivery of services will be made during normal business hours only, unless prior written approval for late delivery of services has been obtained from the TAHC's authorized representative.

TITLE AND RISK OF LOSS

Title and risk of loss for deliverables will not pass to the TAHC until the TAHC actually receives, takes possession, and accepts the deliverables at the point or points of delivery.

RECALL NOTICE

Contractor must immediately upon discovery of same, advise the TAHC of any or all required replacements or modifications to any equipment or hardware provided under this Contract or the withdrawal of any such equipment or hardware by reason of safety hazard or recall regardless of the nature of same. Verbal notification will be confirmed in writing by the Contractor within 24 hours of such verbal notification. Contractor must submit all such formal notices to the TAHC’s point of contact for this Contract.

TESTING; ACCEPTANCE; RETURN; REVOCATION

All samples will be subject to inspection and testing by the TAHC or the State of Texas.

The TAHC reserves the right to test items/samples upon request and all costs of such testing will be paid by Contractor. After award and prior to payment, the TAHC may conduct acceptance testing on the requested items delivered under this Contract. If the delivered and installed items fail to meet the acceptance criteria or any other requirements, the TAHC may refuse to accept such items. Upon the TAHC's acceptance of deliverable(s) that meet or exceed all requirements, the TAHC will notify Contractor in writing that Contractor may submit an invoice to the TAHC's Accounts Payable Division for such deliverables. The TAHC reserves the right to revoke prior acceptance for, among other things, latent defects.

If relevant to the type of services provided under this Contract, Contractor must have a separate Production, Quality Assurance (QA), and User Acceptance (UAT) testing environment. Updates must be tested and approved by the TAHC prior to deployment to production.

INSPECTION OF SERVICES

A. Acceptance criteria for all deliverables under this Contract may be found in the solicitation.

B. The TAHC has the right to inspect and validate all products, services, and deliverables called for by this Contract, to the extent practicable at all times and places during this Contract. The TAHC will perform inspections in a manner that will not unduly interfere with Contractor's performance of this Contract. Contractor must furnish, and must require subcontractors to furnish, at no increase in this Contract's price, all reasonable assistance for the safe and convenient performance of these duties.

C. If any deliverables do not conform to this Contract's requirements, the TAHC will require Contractor to perform the deliverables or services again in conformity with this Contract's requirements, at no increase in this Contract's amount, in addition to all other legal and equitable remedies.

D. The TAHC will, subject to limitations provided by law with respect to rights of privacy, have the right to reasonably prompt access and to examine all records of Contractor, including financial records, maintenance records, employee records including time, and attendance records generated by Contractor and its subcontractors in connection with the performance of this Contract.

E. If subject to the outcome of an audit, it is determined that Contractor is in non-compliance with any provisions of this Contract or that money is owed to the TAHC by Contractor, then the TAHC will exercise its rights of recovery of money owed as authorized by this Contract.

F. If any services are non-compliant with this Contract's requirements, Contractor will be notified describing specific areas of non-compliance. Contractor will have a ten-day period to file a written response detailing corrective action taken to address all such items of non-compliance. The response will include supporting documentation.

Unless otherwise specified, or previously agreed to by the TAHC, the submission of a corrective action plan will not be accepted as corrective action. For all items of non-compliance satisfactorily resolved by written agreement between Contractor and the TAHC, no further action regarding such items will be taken. If an item of non-compliance cannot be resolved between Contractor and the TAHC, and such item remains uncorrected for a period of ten days or longer after written notification to Contractor, then such item will be declared to be an "event of default."

INSPECTION BY STATE EMPLOYEES

A. Contractor shall maintain and retain all records relating to the performance of the contract including supporting fiscal documents adequate to ensure that claims for contract funds are in accordance with applicable State of Texas requirements. These records will be maintained and retained by Contractor for a period of seven (7) years after the contract expiration date or until all audit, claim, and litigation matters are resolved, whichever is later.

B. Contractor must provide entry at all times to the TAHC, or any authorized employee or agent for inspections and other official purposes. The Governor, members of the Legislature, and all other members of the Executive and Judicial Departments of the State of Texas, as well as any other persons designated by the TAHC, including the Office of the Inspector General, will be admitted to monitor the delivery of deliverables.

APPROVAL OF EMPLOYEES

A. Contractor must retain no upper level management personnel for administration of the contracted services without prior approval of each selection by the TAHC's authorized representative or his designee. The TAHC will not unreasonably withhold approval.

B. Contractor must provide the name of the employee, all pending investigations and disciplinary actions and previous disciplinary actions upon request by the TAHC.

PERSONNEL

5.9.1 Qualifications of Personnel

A. Contractor warrants that all persons assigned to this Contract are employees or subcontractors of Contractor and meet all qualifications as defined within this Contract to perform the work required.

B. Replacement of personnel, if approved by the TAHC, must be with personnel of equal or greater ability and qualifications. The TAHC will be the arbiter of whether the replacement personnel have equal or greater ability and qualifications than the personnel being replaced.

C. Contractor must assign all personnel identified in this Contract to complete all of its planned and assigned responsibilities in connection with performance of this Contract. The TAHC will have the right to approve the assignment and replacement by Contractor of all personnel assigned to provide deliverables or to provide on-site representation of Contractor.

D. Contractor must notify the TAHC before assigning a replacement individual for any of the personnel commitments identified in this Contract. Contractor must notify the TAHC of the proposed assignment, must introduce the individual to the appropriate representatives of the TAHC, must provide a transfer of knowledge validation, and must provide to the TAHC a resume and any other information about the individual reasonably requested by the TAHC. The TAHC reserves the right to interview the individual before granting approval. Contractor must obtain prior written approval for any replacement personnel from the TAHC before beginning any work assignments.

5.9.2 Replacement of Personnel at TAHC's Request

A. The TAHC reserves the right to require Contractor to replace Contractor's personnel whom the TAHC judges to be incompetent, careless, unsuitable or otherwise objectionable, or whose continued use is deemed contrary to the best interests of the TAHC or the State of Texas. Before a written request is issued, representatives of the TAHC and Contractor will discuss the circumstances of the proposed personnel replacement. Upon receipt of a written request from the TAHC, Contractor will be required to proceed with the replacement. The replacement request will include the desired replacement date and the reason for the request. Contractor must use its best efforts to effect the replacement in a manner that does not degrade performance of deliverable quality. Contractor must also provide the TAHC with evidence of a sufficient transfer of knowledge to the proposed replacement.

B. This provision will not give the TAHC the right to require Contractor to terminate any Contractor employee's employment. Rather, this provision gives the TAHC the right to require Contractor to discontinue using particular personnel in the performance of deliverables for the TAHC.

5.9.3 Unauthorized Removal of Personnel

It is critical to the overall success of the project that Contractor not remove or reassign, without the TAHC's prior written approval, any of the assigned personnel until such time as the personnel have completed all of their planned and assigned responsibilities in connection with performance of Contractor's obligations under this Contract. Without prior written approval from the TAHC, personnel must only be changed in the event of death, personal injury, debilitating illness, or termination of employment with Contractor.

The TAHC will consider the unauthorized removal of personnel by Contractor as a material breach of this Contract and grounds for termination.

WARRANTIES

5.10.1 Third-Party Warranties

If, under this Contract, Contractor procures any materials or products for the TAHC, Contractor must assign or otherwise transfer to the TAHC, or afford the TAHC the benefits of, any manufacturer's warranty for such materials or products. Contractor must create and deliver the deliverables in a manner that does not infringe the intellectual property or proprietary rights of any third party. In the course of performing work under this Contract, Contractor/subcontractor(s) will not use or copy any intellectual property owned by a third party without paying any required license fees or royalties.

5.10.2 Contractor Warranties

Contractor and any subcontractor represent and warrant that it has the requisite qualifications, experience, personnel, and other resources to provide goods or services in the manner required by the Contract.

SUSPENSION OF WORK

A. The TAHC may order Contractor, in writing, to suspend, delay, or interrupt all or any part of this Contract for the period of time that the TAHC determines appropriate for the convenience of the TAHC.

B. If the performance of all or any part of the work is, for an unreasonable period of time, suspended, delayed, or interrupted:

1. By an act of the TAHC in the administration of this Contract, or

2. By the TAHC’s failure to act within the time specified in this Contact (or within a reasonable time if not specified), an adjustment will be made for any increase in the cost of performance of this Contract (excluding profit) necessarily caused by the unreasonable suspension, delay, or interruption, and the Contract modified in writing accordingly.

C. A claim under this provision will not be allowed:

1. For any costs incurred more than 20 days before Contractor will have notified the

TAHC in writing of the act or failure to act involved (but this requirement will not apply as to a claim resulting from a suspension order); and

2. Unless the claim, in an amount stated, is asserted in writing as soon as practicable after the termination of the suspension, delay, or interruption, but not later than the date of final payment under this Contract.

STOP-WORK ORDER

A. The TAHC, at any time, by written order to Contractor, may require Contractor to stop all, or any part, of the work called for by this Contract for a period of up to 90 days after the order is delivered to Contractor, and for any further period to which the parties may agree. The order will be specifically identified as a stop-work order issued under this provision. Upon receipt of the order, Contractor must, at the TAHC's expense, immediately comply with its terms and take all reasonable steps to minimize the incurrence of cost allocable to the work covered by the order during the period of work stoppage. Within a period of up to 90 days after a stop-work order is delivered to Contractor, or within any extension of that period to which the parties must have agreed, the TAHC may either:

1. Cancel the stop-work order; or

2. Terminate the work covered by the order as provided in the stop-work order of this Contract.

B. If a stop-work order issued under this provision is canceled or the period of the order or any extension thereof expires, Contractor must resume work. The TAHC will make an equitable adjustment in the delivery completion schedule, the estimated cost, or both, and this Contract will be modified, in writing accordingly, if:

The stop-work order results in an increase in the time required for, or in Contractor's cost properly allocable to, the performance of any part of this Contract; and Contractor asserts its right to the adjustment within 30 days after the end of the period of work stoppage; provided that the TAHC decides the facts justify the action, the TAHC may receive and approve the claim submitted at any time before final payment under this Contract.

1. If a stop-work order is not canceled and the work covered by the order is terminated, the TAHC may allow reasonable cost resulting from the stop-work order in arriving at the termination settlement.

2. An appropriate equitable adjustment may be made in any related Contract of the

Contractor that provides for adjustment and is affected by any stop-work order under this provision. The TAHC will not be liable to Contractor for damages or loss of profits because of a stop-work order issued under this provision.

MONITORING CRITERIA

A. The TAHC will implement its own procedures for monitoring the quality of Contractor's performance under this Contract, and in accordance with the TAHC's Policies.

B. Contractor must cooperate fully with the TAHC in obtaining the requisite information needed to complete such audits and to assess the quality of Contractor's performance.

C. Monitoring may include document reviews and on-site audits conducted by the

TAHC. Such monitoring by the TAHC will not relieve Contractor of any of its obligations under this Contract.

D. The TAHC will provide written findings regarding non-compliant conditions, processes, procedures, and observations that could, if not addressed by Contractor, become an item of non-compliance.

SUBCONTRACTS

A. Contractor must assume full responsibility for all deliverables and performance under this Contract. The TAHC will consider Contractor to be the sole point of contact with regard to contractual matters, including payment of any and all charges under this Contract. If any part of this Contract is planned to be subcontracted, Contractor must include a list of all subcontractors, including the firm name, address, and contact person of each subcontractor, a complete description of the deliverables or other work to be subcontracted, financial statements for each subcontractor, and descriptive information concerning each subcontractor's qualifications.

B. Contractor may not delegate any duties under this Contract to a subcontractor unless the TAHC has given prior, written consent to the delegation. The TAHC will approve all subcontractors and will require Contractor to replace any subcontractor found, either initially or based on performance, to be unacceptable in the TAHC's opinion.

C. The management of any subcontractor will be the sole responsibility of Contractor, and failure by a subcontractor to perform will be deemed to be failure of Contractor.

Contractor must make all payments to subcontractors and suppliers. The TAHC will not direct payments for deliverables acquired in connection with this Contract other than to Contractor, nor will the TAHC release Contractor from having to perform any obligations under this Contract, notwithstanding the fact that a subcontractor may have been engaged by Contractor to perform those obligations.

D. Contractor will furnish to the TAHC copies of all subcontracts. All subcontracts will include all applicable provisions contained in this Contract and any provisions required by law.

E. Contractor is solely responsible and accountable for the completion of all work which

Contractor has subcontracted.

WORK MADE FOR HIRE

For the purposes of this Contract, the term "Work" is defined as all reports, statistical analyses, work papers, work products, materials, approaches, designs, specifications, systems, documentation, methodologies, concepts, research, materials, intellectual property or other property developed, produced, or generated in connection with this Contract.