State_of_Arizona_Amendment_25_Exhibit_A_-_Special_Terms_and_Conditions_-_clean.pdf

Special Terms and Conditions State of Arizona

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement

OF

1. Purpose

Pursuant to provisions of the Arizona Procurement Code, A.R.S. § 41-2501 et seq., the State of Arizona intends to establish a Contract for the materials or services as listed herein in service to the State.

2. Order Process

The award of a Contract shall be in accordance with the Arizona Procurement Code. Any attempt to represent any material and/or service not specifically awarded as being under contract with the State is a violation of the Contract and the Arizona Procurement Code. Any such action is subject to the legal and contractual remedies available to the State inclusive of, but not limited to, contract cancellation, suspension and/or debarment of the Contractor.

3. Non-Exclusive Contract

Any Contract resulting from this solicitation shall be awarded with the understanding and agreement that it is for the sole convenience of the State of Arizona. The State reserves the right to obtain like goods or services from another source, when necessary, or when determined to be in the best interest of the State.

4. Contract Type x Fixed Price

5. Term of Contract

The term of any resultant Contract shall commence on date of award and shall continue through March 31, 2032, unless terminated, canceled or extended as otherwise provided herein.

6. Contract Extensions Twenty (20) Year Maximum

The Contract term is for the stated period of approximately twenty (20) years. However, by mutual agreement the Contract may be subject to additional successive periods of twelve (12) months per extension with a maximum aggregate including all extensions not to exceed twenty (20) years.

7. Volume of Work

The State does not guarantee a specific amount of work either for the life of the Contract or on an annual basis.

8. Key Personnel

It is essential that the Contractor provide adequate experienced personnel, capable of and devoted to the successful accomplishment of work to be performed under this Contract. The Contractor must agree to assign specific individuals to the key positions if required.

8.1 The Contractor agrees that, once assigned to work under this Contract, key personnel shall not be removed or replaced without written notice to the State.

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement

8.2 Key personnel who are not available for work under this Contract for a continuous period exceeding thirty (30) calendar days, or are expected to devote substantially less effort to the work than initially anticipated, the Contractor shall immediately notify the State, and shall, subject to the timely concurrence of the State, replace such personnel with personnel of substantially equal ability and qualifications.

8.3 Contractor will notify and obtain the State’s consent, not to be unreasonably withheld, for any plan to remove or replace Contractor key personnel; provided, however, consent is not required for removal of personnel due to illness, compliance with laws (e.g., Family Medical Leave Act), or termination of employment.

8.4 The State has the right to request removal of Contractor personnel for their failure to perform or other lawful reasons. All such requests shall be in writing and will include the reasons for the requested removal. Contractor will be provided an opportunity to discuss the request with the State, including the impact on the project resulting from such removal. Contractor shall, subject to the timely concurrence of the State, replace removed personnel with personnel of substantially equal ability and qualifications.

9. Employees of the Contractor

All employees of the Contractor employed in the performance of work under the Contract shall be considered employees of the Contractor at all times, and not employees of the State. The Contractor shall comply with the Social Security Act, Workman’s Compensation laws and Unemployment laws of the State of Arizona and all State, local and Federal legislation relevant to the Contractor’s business.

10. Licenses

The Contractor shall maintain in current status, all federal, state and local licenses and permits required for the operation of the business conducted by the Contractor.

11. Warranty

The Contractor warrants that the Materials supplied under this Contract are free of liens and shall remain free of liens.

12. Quality of Services Warranty

Contractor represents and warrants to the State that Contractor has the skill and knowledge possessed by members of its trade or profession and Contractor will apply that skill and knowledge with care and diligence so Contactor and Contractor's employees and any authorized subcontractors are able to perform the Services described in this Contract.

If the State believes there has been a breach of this warranty, it must promptly notify Contractor in writing stating in reasonable detail the nature of the alleged breach. If there has been a breach of this warranty, Contractor’s sole obligation, and the State’s exclusive remedy, will be for Contractor to correct or re-perform, at no additional charge, any affected Services to cause them to comply with this warranty, and/or the State may require replacement of personnel in accordance with Section 8.4.

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement

13. Warranty

Prior to the Managed Advantage Go Live Date, Contractor warrants that for a period commencing upon first production use of the System and continuing for a period of one hundred eighty (180) days (“Warranty Period”), the System will perform the functions described in the applicable design specification documents (“Specifications”) without Defects. As used in this Contract, “Defect” means a reproducible material deviation of the System from its Specifications such that the System does not operate or cannot be used in a production environment. If the State believes there has been a breach of this warranty, it must notify Contractor in writing within the Warranty Period describing the Defect in sufficient detail to enable Contractor to recreate it. If there has been a breach of this warranty, then Contractor’s sole obligation, and the State’s exclusive remedy, will be for Contractor to correct the Defect at no additional charge; provided, however, if the Contractor is unable to correct the Defect after a reasonable number of repeated efforts, the State may terminate the Contract and seek damages.

After the Managed Advantage Go Live Date, Contractor warrants that the Managed Services will comply with the Service Level Agreement in Section VI (Service Level Agreements) of the applicable Managed Advantage Statement(s) of Work. The State’s exclusive remedies and the Contractor sole remedies for breach of this warranty are set forth in the Service Level Agreement.

Contractor warrants that at the time of delivery to the State, the deliverables provided through this Contract and any Statement(s) of Work shall be free of viruses, backdoors, worms, spyware, malware and other malicious code. If there has been a breach of this warranty Contractor will promptly resubmit the deliverable free of viruses, backdoors, worms, spyware, malware and other malicious code.

To the extent Contractor has the legal right to do so, Contractor agrees to assign or pass through to the State or otherwise make available for the benefit of the State, any manufacturer’s or supplier’s warranty applicable to any third-party software, hardware or equipment provided by Contractor hereunder.

Contractor does not itself give or make any warranty of any kind with respect to third-party software, hardware or equipment.

Contractor is not responsible for any claimed breaches of the foregoing warranties caused by:

(i) modifications made to the System by anyone other than Contractor and its subcontractors working at Contractor’s direction; or (ii) the combination, operation or use of the System with other items Contractor did not supply or approve in writing.

Disclaimer. THE WARRANTIES SET FORTH IN THE CONTRACT ARE IN LIEU OF ALL OTHER

WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED

WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, INTEGRATION,

PERFORMANCE AND ACCURACY AND ANY IMPLIED WARRANTIES ARISING FROM STATUTE,

COURSE OF DEALING, COURSE OF PERFORMANCE OR USAGE OF TRADE.

The corresponding provisions found under Uniform Terms and Conditions Sections 7.2, Quality, 7.3, Fitness, and 8.4, Nonconforming Tender, shall be of no effect.

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement

14. Inspection/Testing

The Contractor agrees to permit access to its facilities, significant subcontractor facilities at mutually agreeable times for inspection of the services or materials covered under this Contract; provided, however, that the State’s access to the Phoenix Data Center shall be governed by Section 44.8.6 (Security Policies) of these Special Terms and Conditions. Access shall be limited to once every twelve

(12) months and shall be subject to Contractor’s and subcontractor’s reasonable policies and procedures regarding access to such facilities, including, without limitation, obligations of confidentiality. The warranties set forth in Sections 12 and 13 are not affected by inspection or testing of or payment for the Materials by the State. The corresponding provision found under Uniform Terms and Conditions Section 3.4, Inspection and Materials Testing, shall be of no effect.

15. Compliance with Applicable Laws

The Materials and Services supplied under this Contract shall comply with all applicable Federal, state and local laws, and the Contractor shall maintain all applicable license and permit requirements.

16. Survival of Rights and Obligations after Contract Expiration or Termination

16.1 Contractor's Representations and Warranties. All representations and warranties made by the

Contractor under this Contract, other than related to performance, shall survive the expiration or termination hereof. In addition the parties hereto acknowledge that pursuant to A.R.S. § 12-510, except as provided in A.R.S. § 12-529, the State is not subject to or barred by any limitations of actions prescribed in A.R.S. Title 12, Chapter 5.

16.2 Purchase Orders. Intentionally Left Blank. The corresponding provision found under Uniform Terms and Conditions Section 7.6.2, Purchase Orders, shall be of no effect.

17. Cooperation with Other Contractors and Subcontractors

The Contractor shall fully cooperate with other State Contractors, Subcontractors and Assigns and carefully plans and performs its own work to accommodate the work of other Contractors. The Contractor shall not intentionally commit or permit any act which will interfere with the performance of work by any other State Contractors.

18. Changes

The State reserves the right to revise the delivery schedule and make other changes within the Statement(s) of Work as may be deemed necessary to best serve the interest of the State. All changes shall be documented by formal amendments to the Contract. Changes made without benefit of a formal amendment will not be valid.

19. Indemnification

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement

Contractor shall indemnify, defend, save and hold harmless the State of Arizona, its departments, agencies, boards, commissions, universities and its officers, officials, agents, and employees (hereinafter referred to as “Indemnitee”) from and against any and all claims, actions, liabilities, damages, losses, or expenses (including court costs, attorneys’ fees, and costs of claim processing, investigation and litigation) (hereinafter referred to as “Claims”) for bodily injury or personal injury (including death), or loss or damage to tangible property caused, or alleged to be caused, in whole or in part, by the negligent or willful acts or omissions of Contractor or any of its owners, officers, directors, agents, employees or subcontractors. This indemnity includes any Claims or amount arising out of or recovered under the Workers’ Compensation Law or arising out of the failure of such contractor to conform to any federal, state or local law, statute, ordinance, rule, regulation or court decree. It is the specific intention of the parties that the Indemnitee shall, in all instances, except for Claims arising solely from the negligent or willful acts or omissions of the Indemnitee, be indemnified by Contractor from and against any and all Claims. It is agreed that Contractor will be responsible for primary loss investigation, defense and judgment costs where this indemnification is applicable. In consideration of the award of this contract, the Contractor agrees to waive all rights of subrogation against the State of Arizona, its officers, officials, agents and employees, as required by Section 21, for losses arising from the work performed by the Contractor for the State of Arizona.

20. Indemnification - Patent and Copyright

With respect solely to materials provided or proposed by Contractor or Contractor's agents, employees, or subcontractors (each a “Contractor Party”) for performance of this Contract, excluding third party software and hardware, (“Materials”), Contractor shall indemnify, defend and hold harmless the State, its departments, agencies, boards, commissions, universities, officers, agents and employees (collectively, the "Indemnitee"), against any third-party claims for liability, including, but not limited to, reasonable costs and expenses, including attorneys' fees, for infringement or violation of any patent, trademark or, copyright or trade secret, by such Materials or the State’s use thereof. In addition, with respect to claims arising from computer hardware or software manufactured or developed solely by a third party, Contractor shall pass through to the State such indemnity rights as it receives from such third party (the "Third Party Obligation") and will cooperate in enforcing them.

The State shall reasonably notify the Contractor of any claim for which Contractor may be liable under this section. If the Contractor is insured pursuant to A.R.S. § 41-621 and § 35-154, this section shall not apply.

Contractor shall have control, subject to the reasonable approval of the State, of the defense of any action on such claim and all negotiations for its settlement or compromise, provided, however, that when substantial principles of government or public law are involved or when involvement of the State is otherwise mandated by law, the State may elect, in its sole and absolute discretion, to participate in such action at its own expense with respect to attorneys' fees and costs, but not liability, and the State shall have the right to approve or disapprove any settlement, which approval shall not be unreasonably withheld or delayed. The State shall reasonably cooperate in the defense and any related settlement negotiations.

If Contractor believes at any time that any Materials provided or in use pursuant to this Contract infringe a third party's intellectual property rights; Contractor shall, at Contractor's sole cost and expense, , (i) replace an infringing Material with a non-infringing Material; (ii) obtain for the State the right to continue to use the infringing Material; (iii) modify the infringing Material to be non-infringing, provided that following any replacement or modification made pursuant to the foregoing, the Material continues to function in accordance with the Contract; or (iv) if the foregoing cannot be accomplished under commercially reasonable terms, Contractor may require the State to return the infringing item in exchange for a refund of fees paid for the infringing item, less a mutually agreed sum for depreciation. If Contractor’s failure or

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement inability to accomplish any of the foregoing defeats the essential purpose of the Agreement such failure shall be deemed a material breach of this Contract and subject to termination.

Notwithstanding the foregoing, Contractor shall not be liable for any claim for infringement based solely on any Indemnitee’s:

20.1 modification of Materials provided by Contractor other than as contemplated by the Contract or the specifications of such Materials or as otherwise authorized or proposed in any way by Contractor or a Contractor Party;

20.2 use of the Materials in a manner other than as contemplated by this Contract or the specifications of such Materials, or as otherwise authorized or proposed in any way by Contractor or a Contractor Party; or

20.3 use of the Materials in combination, operation, or use with other products in a manner not contemplated by the Contract, or, the specifications of such Materials, or as otherwise authorized or proposed in any way by Contractor or a Contractor Party.

Contractor certifies, represents and warrants to the State that it has appropriate systems and controls in place to ensure that State funds will not be used in the performance of the Contract for the acquisition, operation or maintenance of Materials in violation of intellectual property laws. Contractor’s indemnification obligations under this Section 20 shall be the State’s sole and exclusive remedy for a breach of this certification, representation and warranty, or for a third party infringement claim.

21. Insurance Requirements

Contractor and subcontractors shall procure and maintain until all of their obligations have been discharged, including any warranty periods under this Contract, are satisfied, insurance against claims for injury to persons or damage to property which may arise from or in connection with the performance of the work hereunder by the Contractor, his agents, representatives, employees or subcontractors. Contractor shall also procure and maintain coverage for financial loss arising out of the Contractors or subcontractors acts errors or omissions that result in a financial loss.

The insurance requirements herein are minimum requirements for this Contract and in no way limit the indemnity covenants contained in this Contract. The State of Arizona in no way warrants that the minimum limits contained herein are sufficient to protect the Contractor from liabilities that might arise out of the performance of the work under this contract by the Contractor, its agents, representatives, employees or subcontractors, and Contractor is free to purchase additional insurance.

MINIMUM SCOPE AND LIMITS OF INSURANCE: Contractor shall provide coverage with limits of liability not less than those stated below.

Commercial General Liability – Occurrence Form policy shall include bodily injury, property damage personal injury and broad form contractual liability coverage.

General Aggregate $10,000,000 Products – Completed Operations Aggregate $ 1,000,000

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement

Personal and Advertising Injury $10,000,000 Blanket Contractual Liability – Written and Oral $10,000,000 Damage to Rented Premises $ 50,000 Each Occurrence $10,000,000

The policy shall be endorsed to include the following additional insured language: “The State of Arizona, its departments, agencies, boards, commissions, universities and its officers, officials, agents, and employees shall be named as additional insureds with respect to liability arising out of the activities performed by or on behalf of the Contractor". Such additional insured shall be covered to the full limits of liability purchased by the Contractor, even if those limits of liability are in excess of those required by this Contract.

Policy shall contain a waiver of subrogation endorsement in favor of the State of Arizona, its departments, agencies, boards, commissions, universities and its officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.

Business Automobile Liability

Bodily Injury and Property Damage for any owned, hired, and/or non-owned vehicles used in the performance of this Contract.

Combined Single Limit (CSL) $1,000,000

The policy shall be endorsed to include the following additional insured language: “The State of Arizona, its departments, agencies, boards, commissions, universities and its officers, officials, agents, and employees shall be named as additional insureds with respect to liability arising out of the activities performed by or on behalf of the Contractor, involving automobiles owned, leased, hired or borrowed by the Contractor". Such additional insured shall be covered to the full limits of liability purchased by the Contractor, even if those limits of liability are in excess of those required by this Contract.

Policy shall contain a waiver of subrogation endorsement in favor of the State of Arizona, its departments, agencies, boards, commissions, universities and its officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor. Policy shall contain a severability of interests provision.

Worker's Compensation and Employers' Liability

Workers' Compensation Statutory Employers' Liability:

Each Accident $ 1,000,000 Disease – Each Employee $ 1,000,000 Disease – Policy Limit $ 1,000,000

Policy shall contain a waiver of subrogation endorsement in favor of the State of Arizona, its departments, agencies, boards, commissions, universities and its officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement

This requirement shall not apply to: Separately, EACH contractor or subcontractor exempt under A.R.S.

§23-901, AND when such contractor or subcontractor executes the appropriate waiver (Sole Proprietor/Independent Contractor) form.

Professional Errors and Omissions (Technology Errors and Omissions Insurance)

The policy shall cover actual or alleged acts, errors or omissions committed by the Contractor, its subcontractors, agents or employees, arising out of the performance of this Agreement. The policy coverage shall also extend to include personal injury, bodily injury, property damage and financial loss from the performance of professional service and/or arising out of the program.

Each Claim $20,000,000 Annual Aggregate $20,000,000

Coverage to include:

Systems analysis;

Software design;

Systems programming;

Data processing;

Systems integration;

Outsourcing including outsourcing development and design;

Systems design, consulting, development and modification;

Training services relating to computer software or hardware;

Management, repair and maintenance of computer products, networks and systems;

Marketing, selling, servicing, distributing, installing and maintaining computer hardware or software;

and

Data entry, modification, verification, maintenance, storage, retrieval or preparation of data output.

The policy shall be endorsed to include the following additional insured language: “The State of Arizona, its departments, agencies, boards, commissions, universities and its officers, officials, agents, and employees shall be named as additional insureds with respect to liability arising out of the activities performed by or on behalf of the Contractor". Subject to Section 22, such additional insured shall be covered to the full limits of liability purchased by the Contractor, even if those limits of liability are in excess of those required by this Section 21. Said policies to contain no provision that would prevent, preclude or exclude a claim brought by the State of Arizona against Contractor.

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement

In the event that the professional liability insurance required by this Contract is written on a claims-made basis, Contractor warrants that any retroactive date under the policy shall precede the effective date of this Contract; and that either continuous coverage will be maintained or an extended discovery period will be exercised for a period of two (2) years beginning at the time work under this Contract is completed.

The policy shall cover professional misconduct or lack of ordinary skill for those positions defined in the Statement(s) of Work of this contract.

Computer Security and Privacy Liability

Contractor shall provide evidence that Contractor’s Professional Error and Omissions policy covers actual or alleged acts, errors or omissions committed by the Contractor, its subcontractors, agents or employees.

The policy shall also extend to include the negligent acts arising out of professional services provided by the Contractor, its subcontractors, agents or employees. The policy shall expressly provide, but not be limited to, coverage for the following perils:

Unauthorized use/access of a computer system;

Defense of any regulatory action involving a breach of privacy;

Failure to protect confidential information (personal and commercial Information) from disclosure;

Notification costs, whether or not required by statute.

Employee Dishonesty/Fidelity or Crime Insurance

Annual Policy Limit $ 10,000,000

The policy shall include coverage for all directors, officers, agents and employees of the Contractor. The definition of Employee shall include any individuals whom the Contractor retains as consultants or independent contractors.

The policy shall include coverage for third party or client coverage.

The policy shall include coverage for theft and mysterious disappearance.

The policy shall include coverage for property that is owned by the State of Arizona, held by the Contractor or for which the Contractor is legally liable.

The policy shall contain no requirement for arrest and conviction prior to payment of a claim.

The policy shall not contain any requirement for "manifest intent" by any insured to prove a claim.

ADDITIONAL INSURANCE REQUIREMENTS: The applicable policies shall include, or be endorsed to include, the following provisions:

The Contractor's policies shall stipulate that the insurance afforded the Contractor shall be primary insurance and that any insurance carried by the Department of Administration, its agents, officials

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement employees or the State of Arizona shall be excess and not contributory insurance, as provided by Arizona Revised Statutes Section 41-621 (C).

Coverage provided by the Contractor shall not be limited to the liability assumed under the indemnification provisions of this Contract.

NOTICE OF CANCELLATION: With the exception of (10) day notice of cancellation for non-payment of premium, any changes material to compliance with this contract in the insurance policies above shall require (30) days written notice to the State of Arizona. Such notice shall be sent directly to the Department of Administration, Risk Management Division and shall be sent by certified mail, return receipt requested.

ACCEPTABILITY OF INSURERS: Contractors insurance shall be placed with companies duly licensed in the State of Arizona or hold approved non-admitted status on the Arizona Department of Insurance List of Qualified Unauthorized Insurers. Insurers shall have an “A.M. Best” rating of not less than A- VII. The State of Arizona in no way warrants that the above-required minimum insurer rating is sufficient to protect the Contractor from potential insurer insolvency.

VERIFICATION OF COVERAGE: Contractor shall furnish the State of Arizona with certificates of insurance (ACORD form or equivalent approved by the State of Arizona) as required by this Contract. The certificates for each insurance policy are to be signed by a person authorized by that insurer on its behalf.

All certificates and endorsements are to be received and approved by the State of Arizona before work commences. Each insurance policy required by this Contract must be in effect at or prior to commencement of work under this Contract and remain in effect for the duration of the project. Failure to maintain the insurance policies as required by this Contract, or to provide evidence of renewal, is a material breach of contract.

All certificates required by this Contract shall be sent via email to the Procurement Officer as listed in APP.

The State of Arizona project/contract number and project description shall be noted on the certificate of insurance. The State of Arizona reserves the right to require complete copies of all insurance policies required by this Contract at any time.

SUBCONTRACTORS: Contractors’ certificate(s) shall include all subcontractors as insureds under its policies or Contractor shall maintain and furnish to the State of Arizona separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to the minimum requirements identified by the Contractor and approved in advance by the Arizona Department of Administration, State Purchasing Office in consultation with Risk Management Division.

APPROVAL: Any modification or variation from the insurance requirements in this Contract shall be made by the contracting agency in consultation with the Department of Administration, Risk Management Division. Such action will not require a formal Contract amendment, but may be made by administrative action.

EXCEPTIONS: In the event the Contractor or sub-contractor(s) is/are a public entity, then the Insurance Requirements shall not apply. Such public entity shall provide a Certificate of Self-Insurance. If the contractor or sub-contractor(s) is/are a State of Arizona agency, board, commission, or university, none of the above shall apply.

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement

22. Limitation of Liability

If the State should become entitled to claim damages from Contractor for any reason (including without limitation, for breach of contract, breach of warranty, negligence or other tort claim) Contractor's liability for first party damages to the State arising from a Statement of Work shall be limited to two (2) times the maximum-not-to-exceed amount for the Services performed under such Statement of Work; provided, however, that for 1) a breach of Local Support Services, such first party damages shall not exceed two (2) times the amount paid or owed to Contractor for the Local Support Services during the applicable annual State Fiscal Year ,and 2)for a breach of the applicable Managed Advantage Services, such first party damages shall not exceed two (2) times the amount owed to the Contractor during the applicable quarter for the Managed Advantage Services. To the extent permitted by law, Contractor shall not be liable to the State for first party damages for special, incidental, consequential, exemplary, or indirect damages, or for lost data or profits.

The foregoing limitation of liability shall not apply to (i) liability for indemnification obligations for third party claims as expressly set forth in the Contract, including but not limited to; infringement of third party intellectual property rights; (ii) claims covered by any specific provision of the Contract calling for liquidated damages or other Service Level Agreement credit amounts, for a failure to meet performance requirements;

or (iii) costs or attorneys' fees that the State is entitled to recover as a prevailing party in any action.

23. Intellectual Property - Ownership of Intellectual Property

Pre-existing Contractor Materials, Third-Party Materials, and Open Source Software. Any pre-existing Contractor Materials, third-party materials, open source software, and derivatives thereof, incorporated in a deliverable or necessary to use a deliverable will be licensed to the State under separate license terms.

Such license terms will be, as appropriate, set forth in a license agreement i) executed between Contractor and the State, or ii) obtained by the State from the applicable third party vendor, or iii) in the case of open source software, the license terms set forth in the applicable open source license agreement.

Contractor Materials described in the applicable Managed Advantage SOW are subject to Section 44.6 (Proprietary Rights) of these Special Terms and Conditions.

Developed Materials. Contractor will own all intellectual property rights, title and interest in and to all work products developed by it under the Contract which are incorporated into the CGI Advantage product and made generally available to other Contractor customers (“Baseline Modifications”). Subject to payment in full by the State of all amounts owed to Contractor for the Baseline Modifications, Contractor grants to the State the same right and perpetual license to use Baseline Modifications as provided under the CGI Advantage license. To the extent the work products do not constitute Baseline Modifications, and provided the State has met its payment obligations for such work, the State and CGI shall be joint owners of such work products without any obligation of accounting to the other party. For the avoidance of doubt, Contractor Materials, as described in the applicable Managed Advantage Statement of Work, are not Developed Materials within the meaning of this Section 23.

Notwithstanding the foregoing, if the State elects, in its sole and absolute discretion, to relinquish its ownership interest in any or all of the Intellectual Property, the State shall have the rights to use, modify, reproduce, release, perform, display, sublicense or disclose such Intellectual Property within State government and operations without restriction for any activity in which the State is a party (collectively, "Government Purpose Rights").

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement

The corresponding provision found under Uniform Terms and Conditions Section 3.7, Property of the State, shall be of no effect.

24. Information Disclosure

The Contractor shall establish and maintain procedures and controls that are acceptable to the State for the purpose of assuring that no information contained in its records or obtained from the state or from others in carrying out its functions under the contract shall be used or disclosed by it, its agents, officers, or employees, except as required to efficiently perform duties under the Contract. Persons requesting such information should be referred to the State. The Contractor also agrees that any information pertaining to individual persons shall not be divulged other than to employees or officers of the Contractor as needed for the performance of duties under the Contract, unless otherwise agreed to in writing by the State.

25. Data Privacy and Security

Contractor shall treat all information obtained through performance of the Contract, as confidential or sensitive information consistent with State and federal law and State Policy. Contractor or its agents shall not use any data obtained in the performance of the contract in any manner except as necessary for the proper discharge of its obligations and protection of its rights related to this agreement. Contractor shall establish and maintain procedures and controls as set forth in the applicable Managed Advantage SOWs, or otherwise mutually agreed to be acceptable to the State for the purpose of assuring that data in its or its agents’ possession is not mishandled, misused, released, disclosed, or used in an inappropriate manner in performance of the contract. Any State data privacy and security requirements that are in addition to the procedures and controls specified in the applicable Managed Advantage SOWs and that significantly impact Contractor’s cost will be addressed under the change process. This includes data contained in Contractor’s records obtained from the State or others, necessary for contract performance. Contractor and its agents shall take all reasonable steps and precautions to safeguard this information and data and shall not divulge the information or data to parties other than those needed for the performance of duties under the contract.

26. Data Privacy/Security Incident Management

Contractor and its agents shall use a communication and escalation procedure as set forth in the applicable Managed Advantage SOWs, or otherwise mutually agreed and approved by the State’s designated Information Security and Privacy Officers, to notify appropriate State personnel of an information security or data privacy related incident, including a breach of confidential information. Contractor and its agents shall cooperate and collaborate with appropriate State personnel to identify and respond to an information security or data privacy incident, including a data breach, as required by State policy and state and federal law.

27. Security Requirements for Offeror Personnel

Offeror personnel, agents or sub-contractors that have administrative access to the State’s networks shall be subject to any additional security requirements of the Agencies as may be required for the performance of the contract; provided, however, any additional requirements that significantly impact Contractor’s cost will be handled under the change process. Offeror, its agents and sub-contractors shall provide documentation to the State confirming compliance with all such additional security requirements

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement for performance of the contract. Additional security requirements include but are not limited to the following:

27.1 Criminal History Report: The Contractor must validate that the background screening process, at a minimum, ensures that a Contractor’s history does not include a criminal conviction or deferred prosecution for a specific crime, such as dishonesty, breach of trust, money laundering and identity theft that would bar him/her from working in the financial industry, Financial Industry standard is a minimum 10 year prohibition period;

27.2 Identity and Address Verification – that verifies the individual is who he or she claims to be including verification of the candidate’s present and previous addresses;

27.3 UNAX/confidentiality Training;

27.4 HIPAA Privacy and Security Training; and

27.5 Information Security Training

28. Access Constraints and Requirements

Contractor access to State facilities and resources shall be properly authorized by State personnel, based on business need and will be restricted to least possible privilege. Upon approval of access privileges, the Contractor shall maintain strict adherence to all policies, standards, and procedures. Policies / Standards, ADOA/ASET Policies / Procedures, and Arizona Revised Statues (ARS) 28-447, 28-449, 28-450, 38-421, 13-2408, 13-2316, 41-770).

Failure of the Contractor, its agents or subcontractors to comply with policies, standards, and procedures including any person who commits an unlawful breach or harmful access (physical or virtual) will be subject to prosecution under all applicable state and / or federal laws.

Any and all recovery or reconstruction costs or other liabilities associated with an unlawful breach or harmful access shall be paid by the Contractor.

29. Offshore Performance of Work Prohibited

Due to security and identity protection concerns, direct Services under this Contract shall be performed within the borders of the United States. Any Services that are described in the specifications or Statement(s) of Work that directly serve the State of Arizona or its clients and may involve access to State Confidential Information or development or modification of software for the State shall be performed within the borders of the United States. Unless specifically stated otherwise in the specifications or Statement(s) of Work, this definition does not apply to indirect or “overhead” services, redundant back-up services or services that are incidental to the performance of the Contract. This provision applies to work performed by subcontractors at all tiers. Notwithstanding anything to the contrary in this Section 29 or elsewhere in the Contract, services related to system operations (including, without limitation, incident remediation, batch jobs, code fixes), and Managed Services under the applicable Managed Advantage SOWs may be performed outside of the United States by CGI employees at CGI facilities in India.

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement

30. Contractor Skill and Knowledge

Intentionally Left Blank.

31. Free of Malicious Code Intentionally Left Blank.

32. Functional and General/Technical Requirements and Responses

The Functional and General/Technical Requirements, including attachments and Offeror Responses, constitute a contractual obligation for the Contractor to deliver a system to the State that meets the requirements in the manner as designated by the Contractor in the Support response.

In addition, responses of Next Release (NR) for any requirement will financially obligate the implementation services vendor to provide that functionality through the normal and expected configuration of the ERP Software by a trained, functionally-oriented support person if the requested functionality is not fully met by a formal release within twelve (12) months of the response date and incorporated into the version of the software implemented. In addition, for any delays in project schedule that result from requirements represented as NR, which upon additional discovery are determined not to be fully met by a formal release within twelve (12) months, the implementation services vendor will be responsible for vendor and client resource costs associated with delivering required functionality and any delay in the project schedule.

Moreover, responses of Standard Functionality (SF) or Meets Requirement (MR) for any requirement shall financially obligate the implementation services vendor to provide that functionality through the normal and expected configuration of the ERP Software by a trained, functionally-oriented support person. In addition, any delays in project schedule that result from requirements represented as SF or MR, which upon additional discovery, require development, the implementation services vendor shall be responsible for vendor and client resource costs associated with delivering required functionality and any delay in the project schedule.

33. Acceptance

Determination of the acceptability of Services shall be made in accordance with the procedures and criteria for acceptance set forth in the applicable Statement(s) of Work. Acceptance shall be in writing; verbal acceptance will not be allowed. Services shall be completed in accordance with the Statement(s) of Work, agreed to and accepted schedules, plans, and agreed to performance standards. Acceptance criteria shall include, but not be limited to conformity to the scope of work, quality of workmanship and successfully performing all required Tasks. Nonconformance to any of the stated acceptance and performance criteria of both services and/or products as required shall result in a delay for payment. Payment shall not be made until nonconformance to the criteria is corrected.

34. Performance

This Section 34 sets forth the terms and conditions governing Services Levels up to the Managed Advantage Go-Live Date as defined in Managed Advantage SOW 1. Beginning on the Managed Advantage Go-Live Date, the Service Level Agreements in Section VI (Service Level Agreements) of the Managed Advantage SOW 1 shall supersede this Section 34 and shall govern the Managed Services provided pursuant to the Managed Advantage SOW 1.

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement

Contractor agrees that, from and after the date that the applicable services commence, its performance of the Managed Services will meet or exceed each of the applicable Service Levels (see Managed Advantage Statement(s) of Work and this Section) subject to the limitations and in accordance with the provisions set forth in this Contract. If the Managed Services provided pursuant to this Contract are changed, modified or enhanced (whether by Change Order or through the provision of new Managed Services), the State and the Contractor will review the Service Levels then in effect and will in good faith determine whether such Service Levels should be adjusted and whether additional Service Levels should be implemented.

34.1 Performance Bond for Advantage 3 Implementation

For the Advantage 3 implementation, the Contractor shall be required to furnish an irrevocable security in the amount of $5,000,000.00 payable to the State of Arizona, binding the Contractor to provide faithful performance of the Contract.

Performance security shall be in the form of a performance bond, certified check or cashier's check. This security must be in the possession of the State within ten (10) calendar days from receipt of notice of award. If the Contractor fails to execute the security document, as required, the Contractor may be found in default and Contract terminated by the State. In case of default, the State reserves all rights to recover as provided by law.

34.2 Failure to Perform

If Contractor fails to meet any Service Level, then Contractor shall:

A. Promptly perform a root-cause analysis to identify the cause of such failure;

B. Use commercially reasonable efforts to correct such failure and to begin meeting the

Service Levels as promptly as practicable;

C. Provide the State with a report detailing the cause of, and procedure for correcting, such failure; and

D. If appropriate under the circumstances, take action to avoid such failure in the future.

34.3 Measurement

Contractor shall produce service level reports and measurement data to provide an objective basis for evaluating the Contractor's performance. Service level reports will also be used as a component of shared management that is a joint responsibility of the Contractor and the State as in the Managed Services Statement of Work. The State requires the Contractor to provide all required summary service level reports routinely, as part of its normal management reporting to the State.

The State will have the right to receive detailed Contractor service level reports and measurement data from the Contractor upon request. The State will have the right to receive additional Contractor service level data and reports, to the extent the State can define and the Contractor can reasonably provide. All required measurement data, summary and detail reports and other requested information will be provided in a timely manner by the Contractor at no additional cost to the State to the extent the State can define and the Contractor can reasonably provide.

State Procurement Office

100 N 15th Ave., Suite 201 Phoenix, AZ 85007

SOLICITATION NO: ADSPO13-00001953 PAGE

Arizona Financial Information System (AFIS) Replacement

34.4 Continuous Improvement and Best Practices

On an annual basis during the Contract, the Parties shall jointly review:

A. The then-current Service Levels;

B. The percentage difference between Contractor’s actual performance and the then-current

Service Levels;

C. Generally available information indicating industry-wide improvements of delivery of substantially similar services;

D. Improved performance capabilities, including those associated with advances in technology and methods used to provide the Services;

E. Reduced performance capabilities, including those associated with resource reductions requested or approved by the State.

The Service Levels may be adjusted on an optional basis, as shall be mutually agreed based on the preceding review with the objective of obtaining annual performance improvements.

34.5 Root-Cause Analysis

In the event of the Contractor's failure to perform required services or meet agreed upon service levels or other Contractor service standards as required by the State under this Contract, the Contractor shall perform an analysis of the cause of the service level problem and implement remediation steps as appropriate. The State shall have the right to review the analysis and approve the remediation steps prior to or subsequent to their implementation, as deemed appropriate by the State, if the remediation steps exclusively impact State assets or operational processes.

35. Performance Criteria (Post Go-Live through Managed Advantage Go Live Date)

This Section 35 sets forth the terms and conditions governing Performance Criteria up to the Managed Advantage Go Live Date. Beginning on the Managed Advantage Go Live Date, the Service Level Agreements in Section VI (Service Level Agreements) of the applicable Managed Advantage SOW shall supersede this Section 35 and shall govern the Managed Services provided pursuant to the applicable Managed Advantage SOW.

The ERP Software, as stated,…