ORDER N0.29404 APPROVE CONTRACT BETWEEN KERB COUNTY AND HART INTERCIVIC FOR eSLATE Came to be heard this the 26th day of September, 2005, with a motion made by Commissioner Baldwin, seconded by Commissioner Williams. The Court approved by vote of 3-0-0 to: Approve contract between Kerr County and Hart Intercivic for the eSlate and authorize County Judge to sign same. ~,I°~ COMMISSIONERS' COURT AGENDA RE4UEST PLEASE FURNISH ONE ORIGINAL AND TEN COPIES OF THIS REOUEST AND DOCUMENTS TO BE REVIEWED BY THE COURT. MADE BY: Jannett Pieper MEETING DATE: September 26, 2005 Office: County Clerk SUBJECT: (Please Be Specific) TIME PREFERRED: Consider discuss and approve the contract between Kerr County and Hart Intercivic for the eSlate and authorize the County Judge to sign. EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON): NAME OF PERSON ADDRESSING COURT: Jannett Pieper ESTIMATED LENGTH OF PRESENTATION:, 3 minutes IF PERSONNEL MATTER -NAME OF EMPLOYEE Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter 551 and 552, Government Code, is as follows: Meeting schedule for Mondays: 5:00 P.M. previous Tuesday THIS REQUEST RECEIVED BY: THIS REQUEST RECEIVED ON: All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been prepazed for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be appreciated and contribute towards your request being addressed at the earliest opportunity. See Agenda Request Rules Adopted by Commissioners' Court, Court Order No. 25722. HART intercivic~ September 6, 2005 The Honorable Pat Tinley, County Judge Ken County, Texas 700 Main Street Kemille, Texas 78028 Re: eSlateTM Agreements Judge Tinley: Thanks to you and the folks in Kerr County for choosing Hart InterCivic as your electronic voting partner. I have enclosed with this letter, two (2) complete sets of our eSlateTt" Agreements for your signature. Please sign both sets at the indicated lines keeping one set for your records and returning one set of the documents to me. If you have any questions regarding these agreements, please let me know. You may contact me at 512-252-6665 or 800-223-4278 x 6665, or via email at I~ayC~hartic.com. Again, our sincere thanks for choosing Hart. Respectfully, Les Gay Administrative Services Manager Enclosures cc: Kerr County, Texas, File Hart IntcrCivic, Inc. * P.O. Box 80649 * Austin, TX 78708-0649 + 800-223-HART "Fax 800-831-1485 www.hartic.com HART in tercivic~ eSLATET~ AGREEMENT (SIGNATURE PACE) This eSlateTM Agreement ("Agreement") is entered into by and between Hart [nterCivic, Inc., a Texas corporation ("Hart"), and Kerr County ("Client"), a governmental subdivision of the State of Texas. This Agreement sets forth the terms under which Client will purchase from Hart the eSlateTM Electronic Voting System. This agreement is incorporated into the state contract by reference. The state term contract supersedes any conflicting terms between this agreement and the state contract. Defined terms used in this Agreement will have the meanings specified in Section 9, Defmitions, or as otherwise set forth herein. For Clients purchasing under the Texas Building and Procurement Commission (TBPC) contract, this Agreemem is incorporated into the state contract by reference. The state term contract supereedes any conflicting terms between this Agreement and the state contract. The following Schedules and Exhibits aze attached to this Agreement and made a part hereof: Schedule A Equipment and Pricing Schedule Al Hardware and Software Version Numbers Schedule B Hart Proprietary Software Schedule C Non-Hart Softwaze Exhibit A eSlateTM Warranty, Support, and License Agreement This Agreement is entered into as the result of negotiations between Client and Hart. Client acknowledges it has read and understands this Agreement (including all Schedules and Exhibits) and is entering into this Agreement only on the basis of the terms set forth in this Agreement. This Agreement and its related documents are void if the eScanTM product is not certified by the State of Texas by December 31, 2005. There aze no oral agreements, representations, or warranties. The Effective Date of this Agreement is September 1, 2005. Agreed and Accepted: Client Name: Kerr County, Texas Address: 700 Main Street Kemille, Texas 78028 Primary Phone: Facsimile: E-mail: Executed By: Name: Title: 830-792-2211 Hart Hart InterCivic, Inc. 15500 Wells Port Drive Austin, Texas 78728 Atm.: Ted Simmonds Vice President/CFO 800-223-4278 800-831-1485 County Judge ~iClce President/CFO This Agreement is not effective until executed by both parties. Page 1 of 15 eSiateT^' Agreement-- Rev. 04-11-2005 In consideration for the agreements set forth herein, the parties agree as follows: 1. Purchase of Equipment; License of Software: 1.1 Sale. Hazt agrees to sell and Client agrees to purchase the Equipment, subject to the teens and conditions set forth in this Agreement. 1.2 Licenses and Sublicenses. Simultaneously upon entering into this Agreement, Hart and Client will enter into the eSlateTM Warranty, Support, and License Agreement in the form of Exhibit A, the tetrits of which are incorporated herein by reference. The eSlateTM Warranty, Support, and License Agreement sets forth additional terms applicable to Client's ownership and use of the eSlateTM Hardware and license of Hart Proprietary Software, including warranty, support of software and hardwaze, license of Softwaze, and other terms. 1.3 Deliver and Installation. Hart will cause the Equipment and Software to be delivered to Client's premises on a date mutually agreed to by Hart and Client. A Hart representative will install the Equipment and Softwaze at the Client's site on a mutually agreed upon date during Hart normal working hours. If additional labor and rigging or Client-specified customization is required for installation due to Client's special site requirements, Client will pay those costs including costs to meet union or local law requirements. Client will be deemed to have accepted the eSlateTM Hazdware upon completion of Acceptance Testing or ten (10) days after the delivery date of the eSlateTM Hardware, whichever comes first. 1.4 Trainine. Hart will provide user-level documentation for the Software and operational paining before the first election for which the Software will be used. Hart will provide Client operational training and on-site support at the first election in which the Equipment and Software are used. Charges for additional training or support services will be invoiced to Client at Hart's then-current hourly rates, plus travel, communication, and other expenses. Any additional training or support services will be mutually agreed to by Hart and Client and documented in an amendment to this Agreement. 1.5 User Documentation; Environmental Specifications. Hart will provide to Client one (1) electronic copy of the applicable then-current user documentation and operator's manuals for the Equipment and Softwaze and, where applicable, environmental specifications for the Equipment. User documentation, operator's manuals, and environmental specifications will be provided in elecponic form. Client shall not remove any trademark, copyright, or other proprietary or restrictive notices contained on any Hart user doctumentation, operator's manuals, and environmental specifications, and all copies will contain such notices as are on the original elecronic media. 1.6 Super. Support will be provided as set forth in the eSlateTM Warranty, Support, and License Agreement. 2. Charges; Payments: 2.1 Total Purchase Price. The Total Purchase Price is set forth in Schedule A and includes the pwchase price for the Equipment, the Initial Annual Fee under the eSlateTM Warranty, Support, and License Agreement, state and local taxes (if applicable), and delivery and installation charges. 2.2 Pavments. Client shall pay Hart the Total Purchase Price upon delivery of the Equipment and Software to Client. All payments are to be made to Hart at its principal office in Austin, Texas, as set forth on [he Signature Page or to such other location as may be designated by Hart in a notice to Client. Page 2 of t5 2.3 Late Chartres. If the Total Purchase Price is not paid in full within thirty (30) days after delivery of the Equipment and Software, Har[ may charge Client interest on the unpaid balance until paid, at the lesser of (a) 1% per month or (b) the maximum rate allowed by law. 2.4 Additional Chazees. Additional charges may apply to services rendered outside contracted hours or beyond normal coverage at Client's request, e.g., travel. expenses, and premium and minimum charges. There will be an additional charge at Hazt's current technician's rate per hour for any technical work required as a result of other than Hart-recommended hardware purchased by the Client for use with the Hart eSlateTM Electronic Voting System. Any other additional charges must be mutually agreed to by Hart and Client and documented in an amendment to this Agreement. 2.5 Payment Disputes. if any dispute exists between the pazties concerning the amount due or due date of any payment, Client shall promptly pay the undisputed portion. Such payment will not constitute a waiver by Client or Hart of any of their respective legal rights and remedies against each other. 2.6 Taxes. If Client is tax-exempt, Client will provide Hart with proof of its tax-exempt status. If Client is not tax-exempt, (a) Client will pay any tax Hart becomes obligated to pay in connection with this Agreement, exclusive of taxes based on the net income of Hart and (b) Client will pay all personal property and similaz taxes assessed after shipment. If Client challenges the applicability of any such tax, Client shall pay the tax and may thereafter seek a refund. 2.7 Suspension of Performance. If any payment due to Hart under this Agreement is past due more than thirty (30) days, Hart may suspend performance under this Agreement until all amounts due are current. 3. Client Responsibilities: 3.1 Independent Determination. Client acknowledges it has independently detemuned that the eSlateTM Electronic Voting System purchased under this Agreement meets its requirements. 3.2 Cooperation. Client agees to cooperate with Hart and promptly perform Client's responsibilities under this Agreement and the eSlateTM Warranty, Support, and License Agreement. 4. Title; Risk of Loss: 4.1 Equipment. Subject to Section 4.3, title to Equipment will pass to Client upon delivery of the Equipment to Client. Risk of loss of, or damage to, Equipment will pass to Client upon delivery to Client. 4.2 Confidential and Pronrietarv Information. Title to Hart's Confidential and Proprietary Information will remain in Hart. Title to Confidential and Proprietary Information of Hart's suppliers and licensors will remain in the relevant suppliers and licensors. 4.3 Proprietary Riehts. Client acknowledges and agrees that the design of the eSlate Electronic Voting System, design of the eSlate Hardware, Hart Proprietary Software, and any and all related patents, copyrights, trademarks, service marks, trade names, documents, logos, software, microcode, information, and material are the property of Hart. Client agrees that the sale of the eSlateTM Hardware and license of Hart Proprietary Software and other accompanying items under this Agreement does not grant to or vest in Client any right, title, or interest in such proprietary property. All patents, trademarks, copyrights, trade secrets, and other intellectual property rights, whether now owned or Page 3 of t 5 acquired by Hart with respect to the eSlateTM Electronic Voting System, eSlateTM Hardware, and Hart Proprietary Software, are the sole and absolute property of Hart and no interest therein is being vested in Client by the execution of this Agreement or the sale of the eSlateTM Hardware or license of the Hart Proprietary Software to Client. Client shall not, under any circumstances, cause or permit the adaptation, conversion, reverse engineering, disassembly, or decompilation of any Software or Equipment. Client will have no authority or right to copy, reproduce, modify, sell, license, or otherwise transfer any rights in any proprietary property of Hart. The provisions of this Section 4.3 will survive the termination or cancellation of this Agreement and the eSlateTM Warranty, Support, and License Agreement. 5. Warranty Terms: THE WARRANTY TERMS APPLICABLE TO THE ESLATE ELECTRONIC VOTING SYSTEM ARE SET FORTH IN THE ESLATETM WARRANTY, SUPPORT, AND LICENSE AGREEMENT. EXCEPT FOR THE EXPRESS LIMITED WARRANTIES IN THE ESLATETM WARRANTY, SUPPORT, AND LICENSE AGREEMENT, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, (A) THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE UNDER THIS AGREEMENT AND THE ESLATETM WARRANTY, SUPPORT, AND LICENSE AGREEMENT, AND (B) HART DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, TITLE AND NONINFRINGEMENT FOR ALL EQUIPMENT, SOFTWARE, AND SERVICES. THE EXPRESS WARRANTIES EXTEND SOLELY TO CLIENT. SOME STATES (OR NRISDICTIONS) DO NOT ALLOW LIMITATIONS ON IMPLIED WARRANTIES, SO THE ABOVE LIMITATION MAY NOT APPLY TO CLIENT. 6. Limitation of Damages: 6.1 EXCLUSIVE REMEDY. HART DOES NOT ACCEPT ANY LIABILITY FOR WARRANTIES BEYOND THE REMEDIES SET FORTH IN SECTION 1 OF THE ESLATETM WARRANTY, SUPPORT, AND LICENSE AGREEMENT. HART'S ENTIRE LIABILITY AND CLIENT'S EXCLUSIVE REMEDY FOR ANY CLAIM CONCERNING THIS AGREEMENT AND THE EQUIPMENT, SOFTWARE, AND SERVICES PROVIDED UNDER THIS AGREEMENT ARE SET FORTH IN THIS SECTION. 6.2 DISCLAIMER. CLIENT IS RESPONSIBLE FOR ASSURING AND MAINTAINING THE BACKUP OF ALL CLIENT DATA. UNDER NO CIRCUMSTANCES WILL HART BE LIABLE TO CLIENT OR ANY THIRD PARTY FOR THE LOSS OF OR DAMAGE TO CLIENT DATA. 6.3 LIMITATION. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, HART, HART'S LICENSORS, AND ANY PARTY INVOLVED IN THE CREATION, MANUFACTURE, OR DISTRIBUTION OF THE EQUIPMENT AND SOFTWARE AND THE PERFORMANCE OF SERVICES UNDER THIS AGREEMENT WILL NOT BE LIABLE TO CLIENT FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) OR FOR LOST DATA SUSTAINED OR INCURRED IN CONNECTION WITH THE EQUIl'MENT, SOFTWARE, SERVICES, OR THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, REGARDLESS OF THE FORM OF ACTION AND WHETHER OR NOT SUCH DAMAGES ARE FORESEEABLE. IN ADDITION, HART'S TOTAL LIABILITY TO CLIENT FOR DIRECT DAMAGES ARISING OUT OF OR RELATING TO THE EQUIPMENT, SOFTWARE, SERVICES, AND THIS AGREEMENT WILL IN NO EVENT EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY CLIENT TO HART UNDER THIS AGREEMENT. HART TS NOT Page 4 of 15 LIABLE FOR DAMAGES CAUSED IN ANY PART BY CLIENT'S NEGLIGENCE OR INTENTIONAL ACTS OR FOR ANY CLAIM AGAINST CLIENT OR ANYONE ELSE BY ANY THIRD PARTY. SOME STATES (OR JURISDICTIONS) DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE EXCLUSION OR LIMITATION MAY NOT APPLY TO CLIENT. 6.4 Referrals. Hart may direct Client to third parties having products or services that may be of interest to Client for use in conjunction with the Equipment and Software. Notwithstanding any Hart recommendation, referral, or introduction, Client will independently investigate and test non-Hart products and services and will have sole responsibility for determining suitability for use of non-Hart products and services. Hart has no liability with respect to claims relating to or azising from use of non- Hart products and services, including, without limitation, claims azising from failure of non-Hazt products to provide proper time and date functionality, 7. Dispute Resolution: 7.1 Disputes and Demands. The parties will attempt to resolve any claim or controversy related to or arising out of this Agreement, whether in contract or in tort ("Dispute"), on a confidential basis according to the following process, which either party may start by delivering to the other party a written notice describing the dispute and the amount involved ("Demand"). 7.2 Negotiation and Meditation. After receipt of a Detnand, authorized representatives of the parties will meet at a mutually agreed upon time and place to try to resolve the Dispute by negotiation. If the Dispute remains unresolved after this meeting, either party may stazt mandatory nonbinding mediation under the conunercial mediation rules of the American Arbitration Association ("AAA") or such other mediation process as is mutually acceptable to the parties. 7.3 Iniunctive Relief. Notwithstanding the other provisions of this Section 7, if either party seeks injunctive relief, such relief may be sought in a court of competent jurisdiction without complying with the negotiation and mediation provisions of this Section 7. 7.4 Time Limit. Neither mediation under this section nor any legal action, regardless of its form, related to or arising out of [his Agreement may be brought more than two (2) years after the cause of action first accrued. 8. General Provisions: 8.1 Entire A>reement. This Agreement and the attachments, schedules, and exhibits hereto are the entire agreement and supersede all prior negotiations and oral agreements. Hart has made no representations or warranties with respect to this Agreement or the eSlateT"' Electronic Voting System and its components that are not included herein. This Agreement may not be amended or waived except in writing signed by an officer of the party to be bound thereby. 8.2 Preprinted Forms. The use of preprinted forms, such as purchase orders or acknowledgments, in connection with this Agreement is for convenience only and all preprinted terms and conditions stated thereon are void and of no effect. If any conflict exists between this Agreement and any terms and conditions on a purchase order, acknowledgment, or other preprinted form, the terms and conditions of this Agreement will govern and the conflicting terms and conditions in the preprinted form will be void and of no effect. The terms and conditions of this Agreement, including, but not limited to, Page 5 of t5 this Section 8.2, cannot be amended, modified, or altered by any conflicting preprinted terms or conditions in a preprinted form. 8.3 Interpretation. This Agreement will be construed according to its fair meaning and not for or against either pazty. Headings are for reference purposes only and are not to be used in construing the Agreement. All words and phrases in this Agreement are to be construed to include the singular or plural number and the masculine, feminine, or neuter gender as the context requires. 8.4 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO [TS CONFLICT OF LAW PROVISIONS, UNLESS CLIENT IS A GOVERNMENTAL SUBDIVISION OF ANOTHER STATE, IN WHICH CASE THE LAWS OF THE STATE IN WHICH CLIENT IS A GOVERNMENTAL SUBDIVISION WILL CONTROL. 8.5 Severabiliri. Whenever possible, each provision of this Agreement will be interpreted to be effective and valid under applicable law; but if any provision is found to be invalid, illegal, or unenforceable, then such provision or portion thereof will be modified to the extent necessary to render it legal, valid, and enforceable and have the intent and economic effect as close as possible to the invalid, illegal, or unenforceable provision. If it is not possible to modify the provision to render it legal, valid, and enforceable, then the provision will be severed from the rest of the Agreement and ignored. The invalidity, illegality, or unenforceability of any provision will not affect the validity, legality, or enforceability of any other provision of this Agreement, which will remain valid and binding. 8.6 Delays. Hart is not responsible for failure to fulfill its obligations when due to causes beyond its reasonable control, including the failure of third parties to timely provide Sofrwaze, Equipment, materials, or labor contemplated herein. Hart will notify Client in writing of any such delay, and the time for Hart's performance will be extended for a period corresponding to the delay. Hart and Client will determine alternative procedures to minimize delays. 8.7 Force Majeure. "Force Majeure" means a delay encountered by a party in the performance of its obligations under this Agreement that is caused by an event beyond the reasonable control of the party, but does not include any delays in the payment of monies due by either parry. Without limiting the generality of the foregoing, "Force Majeure" will include, but is not restricted to, the following types of events: acts of God or public enemy; acts of governmental or regulatory authorities (other than, with respect to Client's performance, the Client, and its governing entities); fires, floods, epidemics, or serious accidents; unusually severe weather conditions; and strikes, lockouts, or other labor disputes. [f any event constituting Force Majeure occurs, the affected party shall notify the other party in writing, disclosing the estimated length of the delay and [he cause of the delay. If a Force Majeure occurs, the affected party will not be deemed to have violated its obligations under this Agreement, and time for performance of any obligations of that party will be extended by a period of time necessary to overcome the effects of the Force Majeure. 8.8 Compliance with Laws. Client and Hart shall comply with all federal, state, and local laws in the performance of this Agreement, including those governing use of the Equipment and Software. Equipment and Software provided under this Agreement may be subject to U.S. and other government export control regulations. Client shall not export or re-export any Equipment or Software. 8.9 Assignments. Hart may assign this Agreement or its interest in any Equipment or Software, or may assign the right to receive payments, without Client's consent. Any such assignment, however, will not change the obligations of Hart to Client that are outstanding at the time of assignment. Client will be notitied in writing if Hart makes an assignment of this Agreement. Client shall not assign Page 6 of 15 this Agreement without the express written consent of Hart, such consent not to be unreasonably withheld. In the event of any permitted assignment of this Agreement, the assignee shall assume the liabilities and responsibilities of the assignor, in writing. 8.10 Independent Contractors. Client and Hart are independent contractors and are not agents or partners of each other. Hart's employees, agents, and subcontractors will not be entitled to any privileges or benefits of Client employment. Client's employees, agents, and contractors will not be entitled to any privileges or benefits of Hart employment. 8.11 Notices. Any notice required or permitted to be given under this Agreement by one party to the other must be in writing and shall be given and deemed to have been given immediately if delivered in person to the address set forth on the Signature Page for the party to whom the notice is given, or on the fifth (5"~ business day following mailing if placed in the United States Mail, postage prepaid, by registered or certified mail with return receipt requested, addressed to the pazty at the party's address set forth on the Signature Page. Each party may change its address for notice by giving written notice of the change to the other party. 8.12 Trademarks. eSlateTH, eSlate 3000TH, Judge's Booth ControllerTM, JBC 1000TH, Disabled Access UnitTM, DAUSOOOTM, Mobile Ballot BoxTM, Ballot Origination Software SystemTM, BOSSTM, Tal1yTH, 12aIlyTM, FUSIONTM, and Ballot NowTH are trademarks of Hart. 9. Definitions: "Acceptance Testing" means testing in accordance with the Acceptance Testing Procedure provided Client at time of delivery. "Agreement" has the meaning set forth in the Signature Page. "Annual Fee" means the combined annual license, sublicense, and support fees payable by Client to Hart under the eSlateTM Warranty, Support, and License Agreement. "Client" has the meaning set forth in the Signature Page. "Confidential and Proprietary Information" means Softwaze, firmware, diagnostics, documentation (including operating manuals, user documentation, and environmental specifications), designs and configurations of Equipment, Software, and firmware, trade secrets and related documentation, and any other information confidential to Hart or its suppliers or licensors. "DAUTM" means the Disabled Access Unit (DAUSOOOTM) created by Hart as an add-on component to an eSlateTM that facilitates the performance of voting activities by disabled voters, for example, by providing an audio ballot presentation and/or accepting inputs from specialized switch mechanisms, such as head switches, breath switches, and panel switches that facilitate interaction with disabled voters, as needed. "Effec7ive Date" has the meaning set forth in the Signature Page and indicates the date this Agreement becomes effective. "Equipment" means the eSlate Hardware and Non-Hart Equipment listed on Schedule A. Page 7 of IS "eScanTM" means the eScanTM device created by Hart, consisting of a precinct digital ballot imaging device single-feed scanner that transports and scans both sides of a ballot simultaneously, and a base [hat provides for secure ballot storage and transport. "eSlateTM" means the eSlate 3000TH created by Hart and consisting of hardware including an electronically configurable, network-capable voting station that permits a voter to cast votes by direct interaction, which voting station in its present configuration created by Har[ comprises an electronically configurable liquid crystal display (LCD) panel for use in displaying ballot images, a rotary input device for use in ballot navigation, and various buttons that facilitate voter options for selecting ballot choices and casting a ballot. "eSlateTMElectronic Voting Svstem" means the Equipment and the Software. "eSlateTM Hardware" means the eSlateTM JBCTM, and DAUTM in the quantities listed on Schedule A. "eSlateTM Warranty, Support, and License Agreement" means the eSlateTM Warranty, Support, and License Agreement in the form of Exhibit A to be entered into by Hart and Client simultaneously upon entering into this Agreement. "Firmware" means the Hart Proprietary Software embedded in eSlate voting devices that allows execution of the software functions, but does not allow access to or modification of the software by an end user. "Harp' means Hart InterCivic, Inc., a Texas corporation. "Hart Proprietary Saftx~are" means the run-time executable code and associated support files of the Ballot Origination Softwaze System (BOSSTM) Software, Ta11yTM Software, Ral1yTM Software, Ballot NowTM Software, computer code and software resident in the eSlateTM Hardware, and other support software utilities as specified on Schedule B, consisting of computer programs and computer code owned by Hart that are licensed to Client pursuant to the eSlateTM Warranty, Support, and License Agreement, and all updates, upgrades, versions, new releases, derivatives, revisions, corrections, improvements, rewrites, bug fixes, enhancements, and other modifications, including any custom modifications, to such computer programs and code that are provided to Client, and all copies of the foregoing. Hart Proprietary Software also includes all documentation provided by Hart to Client with respect to these computer programs and code, and all copies of the foregoing (electronic and hard copy). "Initial Annual Fee" means the first Annual Fee payable under the eSlateTM Warranty, Support, and License Agreement, which is included in the Total Purchase Price. "Installation Date" means, with respect to eSlateTM Hardware, the date of delivery to Client and, with respect to Hart Proprietary Software, the date Hart completes delivery and installation of the Hart Proprietary Software. "JBCTM" means the Judge's Booth Controller (JBC1000TM) created by Hart that is a local area network controller capable of interacting with one or more eSlateTM devices or DAU devices by transmitting and receiving signals that manage or control an election, e.g., by opening and closing the polls, providing or recording an audit trail of system events during an election, storing cast ballot data, and applying data security and integrity algorithms. "Non-Hart Equipment" means the equipment listed on Schedule A that is not eSlateTM Hardware. Page 8 of IS "Non-Hart Software" means the run-time executable code and associated support files of computer programs owned by third parties that are identified on Schedule C and sublicensed by Hart to Client pursuant to the eSlateTM Warranty, Support, and License Agreement or licensed directly by the third-party licensor to Client, and all updates, upgrades, versions, new releases, derivatives, revisions, corrections, improvements, rewrites, bug fixes, enhancements, and other modifications to such computer programs and code that are provided to Client, and all copies of the foregoing. Non-Han Software also includes all documentation provided to Client with respect to these computer programs, and all copies of the foregoing. "Software' means the Hart Proprietary Software and Firmware and Non-Han Software. "sublicensed Software" means Non-Hart Software and Firmware that is identified on Schedule C as being sublicensed by Hart to Client pursuant to the eSlateTM Warranty, Support, and License Agreement. "VBOT"*' means the Voter Verifiable unit used in conjunction with the eSlateTM for a Voter Verifiable Paper Audit Trail. "Total Purchase Price" is defined in Section 2.1. (The rest of this page Is intentionally left blank) Page 9 of IS SCHEDULE A EQUIPMENT AND PRICING QUANTITY MODEL DESCRIPTION UNIT PRICE TOTAL PRICE Hardware 24 eSlate 3000'". Electronic $2,500.00 $60,000.00 Voting A Hance. 21 DAU SOOOT"' Disabled Access $500.00 $10,500.00 Upgrade. Unit voting unit u rade. 21 JBC 1000T"'. Judge's Booth $2,500.00 $52,500.00 Controller. 23 eScan'"". Precinct Ballot $4,500.00 $103,500.00 Digital Imaging. 1 eSlateT"' Voting Voting booths Included. No Charge. Booths. for the eSlate 3000''"'. 21 eSlate DAUTM' Voting booths lncluded. No Charge. Voting Booths. for the Disabled Access Unit votin units. 65 Mobile Ballot Mobile Ballot Included. No Charge. Boxes'TM(MBBT"'s). Boxes. 70 Additional Mobile Spare MBB'"s. $59.25 $4,147.50 Ballot Boxesr"' 3 eSlateT'" Caddy. Storage caddy Included. No Charge. for 8 voting booths. Software 1 Election Tally'"and $15,100.00 $15,100.00 Management ServoT" Software System. electronic voting s stem sofhvare. PC Hardware I Personal PC $3,000.00 $3,000.00 Computers. workstations. 1 Notebook For use with $3,500.00 $3,500.00 Computers. Servo'"' software. I Laser Printer, Low-volume $R50.00 $850.00 laser printer. MBB"'TM Card ATA card $125.00 $125.00 Reader. reader. 2 eCM. Electronic $60.00 $120.00 security key. Services Page 10 of 15 BDays. Project Number of $1,500.00 per day. $12,000.00 Management. project management da 5. 3Days. Training. Number of $I,SOO.OOperday. $4,500.00 training days. First Year. eSlateT" First Year eSlate'" license $8,690.00 $8,690.00 License/Support. and support for the first year. Total Price for Equipment: Total Price for Software: Tota] Price for Services: Initial Annual Fee: $238,242.50 $15,100.00 $16,500.00 $8,810.00 State and Local Taxes (if any): $p 00 Total System Price: $278,652.50 Less Special County Discount: -$4 600 00 Purchase Price: $274,052.50 Z Units. Optional Extended Extended $2,250.00 per year. $4,500.00 Warranty. warranty for eSlateT"s, DAU'"'s, and IBCT"'s. 4 Units. Optional Extended Extended $2,300.00 per year. $9,200.00 Warranty. warranty for eScan'"s. Optional Extended Warranty: $13 700 00 Total Purchase Price (Including Optional Extended Warranty): $287,752.50 Note: There will be an additional charge at Hart's current technician's rate per hour for any technical work required as a result of other than Hurt-recommended hardware purchased by the Client for use with the Hart eSlateT'" Electronic Voting System. (The rest ofthis page is intentionally left blank.) Page 11 of 15 SCHEDULE AI HARDWARE AND SOFTWARE VERSION NUMBERS The following are the version numbers of the hardware and software provided to the Client under the eSlateT"' Agreement with Hart InterCivic, Inc.: Soflware Versions for eSlate Hardware: eSlate 3000rM (DRE v.2.0.13.) eSlate DAU SOOOT" r (v.2.0. l3.) JBC /000TH (v.2.2.1.). Software Versions: Note: This page only should be forwazded to the Texas Secretary of Sfate to provide the necessary hardware and software version information. (The rest of this page is intentionally left blank.) Page 12 of 15 SCHEDULE B HART PROPRIETARY SOFTWARE QUANTITY MODEL DESCRIPTION UNIT PRICE NUMBER OF LICENSES INITIAL LICENSE FEE One (I ). TaIIyT^+ & Tabulation and $15,100.00 Two (2) (One $ 15,100.00 SERVOT"'. Reporting license per (TallyT"'); each software title). and Equipment and Data Management Software SERVOT^+ Licensed Location: Kerr Countv. Texas. NOTE: Hart and Client will update this Schedule as appropriate if Hart releases new Hart Proprietary Software that is made available to Client under the eSlateT"r Warranty, Support, and License Agreement. (The rest ojthes page is intentionally left blank.) Page 13 of 15 SCHEDULE C NON-HART SOFTWARE Non-Han Software Sublicensed to Client: QUANTITY MODEL DESCRIPTION UNIT PRICE NUMBER OF TOTAL PRICE LICENSES Two (2). Sybase Database Engine. No Charge. Two (2).. No Charge Embedded Runtime Pro am. NOTE: Han and Client will update this Schedule as appropriate if Hart provides new or different Non- Hart Software to Client under the eSlateT"' Warranty, Support, and License Agreement. (The rest of this page is intentionally left blank.) Page 14 of I S EXHIBIT A eSlate7"' Warranty, Support, and License Agreement (See Attached Agreement) Page IS of 15 ®HART intercivic eSLATETM WARRANTY, SUPPORT, AND LICENSE AGREEMENT (S/GNATURE PACE) This eSlateTM Warranty, Support, and License Agreement ("Agreement") is entered into by and between Hart InterCivic, Inc., a Texas corporation ("Hart"), and Kerr County ("Client"), a governmental subdivision of the State of Texas. This Agreement is entered into in connection with an eSlateTM Agreement dated September 1, 2005, between Hart and Client under which Client has purchased eSlateTM Hardwaze. This Agreement sets forth terms between Hart and Client applicable to Client's ownership and use of the eSlateTM Hazdwaze and license from Hart of Hart Proprietary Software (including Firmware), including warranty, support, license, and other terms. Defined terms used in this Agreement will have the meanings specified in Section 13, Definitions or as otherwise set forth herein. For Clients purchasing under the Texas Building and Procurement Commission (TBPC) contract, this Agreement is incorporated into the state contract by reference. The state term contract supercedes any conflicting terms between this Agreement and the state contract. The following Schedules are attached to this Agreement and made a part hereof: Schedule A Support Contact Information Schedule B Hart Proprietary Software Schedule C Non-Hart Software Schedule D Initial Annual Fee Client acknowledges it has read and understands this Agreement (including all Schedules) and is entering into this Agreement only on the basis of the terms expressly set forth in this Agreement. There are no oral agreements, representations, or warranties. The Effective Date of this Agreement is September 1. 2005. Agreed and Accepted: Name: Address: Primary Phone: Facsimile: F,-mail: Client Kerr County, Texas 700 Main Street Kerrville, Texas 78028 830-792-2211 Hart Hart InterCivio, Inc. 15500 Wells Port Drive Austin, Texas 78728 Attn.: Ted Simmonds Vice President/CFO 800-223-4278 800-831-1485 Executed Name: Title: County Judge Z/ice President/CFO This .9greement is not ej)"ective until executed by both parties. Page ] of 2t eSlate~"' License Agreement -Rev. 03-01-2005 In consideration for the agreements set forth herein, the parties agree as follows: 1. WARRANTY TERMS 1.1 eSlateTM Hardware Limited Warranri. Hart warrants that during the warranty period the eSlate Hardware purchased by Client will be free from defects in materials and workmanship and will substantially conform to the performance specifications stated in the Hart Precinct Voting System Operator's Manual for the eSlate Hardware. The hardware warranty period is three (3) years, other than the VBO unit(s) and/or eScanTM unit(s), which is one (1) year, beginning from the Installation Date. Hart will, at Hart's sole discretion, replace or repair any eSlate Hardware that does not comply with this warranty, at no additional charge to Client. To request warranty service, Client must contact Hart in writing within the warranty period. Hart may elect to conduct any repairs at Client's site, Hart's facility, or any other location specified by Hart. Any replacement eSlate Hardware provided to Client under this warranty may be new or reconditioned. Hazt may use new and reconditioned parts in performing warranty repairs and building replacement products. If Hazt repairs or replaces eSlate Hardware, its warranty period is not extended and will terminate upon the end of the warranty period of the replaced or repaired eSlate Hardware. Hart owns all replaced eSlate Hardware and all parts removed from repaired products. Client acknowledges and agrees that this warranty is contingent upon and subject to Client's proper use of the eSlate Electronic Voting System and the Exclusions from Warranty and Support Coverage set forth in Section 1.3. This warranty does not cover any eSlate Hardware that has lead the original identification marks and/or numbers removed or altered in any manner. The remedies set forth in this Section aze the full extent of Client's remedies and Hart's obligations regazding this warranty. L2 Hart Proprietary Softwaze Limited Warranty. Hart warrants that during the term of this Agreement, the Hart Proprietary Software will perform substantially according to [he then-current functional specifications described in the BOSSTM, TaIIyTM, RaIIyTM, and Ballot NowTM Operators' Manuals accompanying such Hart Proprietary Software. To request warranty service, Client must contact Hart in writing within the warranty period. Failure to conform to the warranty must be reported in writing and be accompanied with sufficient detail to enable Hart to reproduce the error and provide a remedy or suitable workaround. Hart will make commercially reasonable efforts to remedy or provide a suitable workaround for defects, errors, or malfunctions covered by this warranty that have a significant adverse affect upon operation of the Hart Proprietary Software, at no additional charge to Client. Because not all errors or defects can or need to be corrected, Hart does not warrant that all errors or defects will be corrected. Client acknowledges and agrees that this warranty is contingent upon and subject to Client's proper use of the eSlate Electronic Voting System and the Exclusions from Warranty and Support Coverage set forth in Section 1.3. The remedies set forth in this Section 1.2 are the full extent of Client's remedies and Hart's obligations regarding this warranty. 1.3 Exclusions from Watranty and Support Coverage. The warranties under this Section 1 and Software Support under Section 2 do not cover defects, errors, or malfunctions that are caused by any external causes, including, but not limited to, any of the following: (a) Client's failure to follow operational, support, or storage instructions as set forth in applicable documentation; {b) the use of noncompatible media, supplies, parts, or components; (c) modification or alteration of the eSlate Electronic Voting System, or its components, by Client or third parties not authorized by Hart; (d) use of equipment or software not supplied or authorized by Hart; (e) external factors (including, without limitation, power failure, surges or electrical damage, ftre or water damage, air conditioning failure, humidity control failure, or corrosive atmosphere harmful to electronic circuitry); (f) failure to maintain proper site specifications and environmental conditions; (g) negligence, accidents, abuse, neglect, misuse, or tampering; (h) improper or abnormal use or use under abnormal conditions; (i) use in a manner not authorized by this Agreement or use inconsistent with Hart's specifications and instructions; Page 2 of 20 eSlate"' License Agreement -Rev. 03-01-2005 (j) use of software on Equipment that is not in good operating condition; (k) acts of Client, its agents, servants, employees, or any third party; (1) servicing or support not authorized by Hart; or (m) Force Majeure. Hart reserves the right to charge for repairs on a time-and-materials basis at Hart's then- prevailing rates, plus expenses, and for replacements at Hazt's list prices caused by these exclusions from warranty and support coverage. 1.4 Non-Hart Equinment and Non-Hart Software Excluded. HART MAKES NO REPRESENTATIONS OR WARRANTIES AS TO NON-HART EQUIPMENT AND NON-HART SOFTWARE, 1F ANY, PROVIDED BY HART TO CLIENT, ALL OF WHICH IS SOLD, LICENSED, OR SUBLICENSED TO CLIENT "AS IS." HART HAS NO RESPONSIBILITY OR LIABILITY FOR NON-HART EQUIPMENT AND NON-HART SOFTWARE, IF ANY, PROVIDED BY HART'S DISTRIBUTORS OR OTHER THIRD PARTIES TO CUNT. If Hart sells, licenses, or sublicenses any Non-Hart Equipment or Non-Hart Software to Client, Hart will pass through to Client, on a nonexclusive basis and without recourse to Hart, any third-party manufacturer's warranties covering the equipment or software, but only to the extent, if any, permitted by the third-party manufacturer. Client ogees to look solely to the warranties and remedies, if any, provided by the manufacturer or third-party licensor. L5 Disclaimer. THE WARRANTIES IN THIS WARRANTY TERMS SECTION GIVE CLIENT SPECIFIC LEGAL RIGHTS, AND CLIENT MAY ALSO HAVE OTHER RIGHTS THAT VARY FROM STATE TO STATE (OR JURISDICTION TO JURISDICTION). HART'S RESPONSIBILITY FOR MALFUNCTIONS AND DEFECTS IN ESLATETM HARDWARE AND HART PROPRIETARY SOFTWARE IS LIMITED TO REPAIR AND REPLACEMENT AS SET FORTH IN THIS WARRANTY TERMS SECTION. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EXCEPT FOR THE EXPRESS LIMITED WARRANTIES IN SECTION 1 OF THIS AGREEMENT, (A) THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE UNDER THIS AGREEMENT OR IN CONNECTION WITH THE SALE OF ESLATETM HARDWARE AND LICENSE OF HART PROPRIETARY SOFTWARE, AND (B) HART DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, TITLE, AND NONINFRINGEMENT FOR ALL EQUIPMENT, SOFTWARE, AND SERVICES. THE EXPRESS WARRANTIES EXTEND SOLELY TO CLIENT. SOME STATES (OR JURISDICTIONS) DO NOT ALLOW LIMITATIONS ON IMPLIED WARRANTIES, SO THE ABOVE LIMITATION MAY NOT APPLY TO CLIENT. 2. SOFTWARE SUPPORT SERVICES 2.1 Descrintion of Software Sport Services. Subject to the terms and conditions of this Agreement, Hart will provide Client the Sofwaze Support Services described below. Support Services under this Section 2 do not cover any of the exclusions from warranty and support coverage as described under Section 1.3. If Hart, in its discretion, provides Support Services in addition to [he services described under this Section 2, Client will pay Hart for such services on atime-and-materials basis at Hart's then-prevailing rates, plus expenses, and for replacements at Hart's list prices, unless otherwise agreed in writing by Hart and Client. 2.1.1 General Software Support. General Software Support will consist of assisting the Client in the design and production of elections, including pre-election and post-election testing and general operation of the eSlateTM Electronic Voting System. 2.1.2 Software Sunport Services. Software Support Services will consist of periodic Page 3 of 20 eSlateTM License Agreement -Rev. 03-O1-2005 updates and any software "bug" corrections to Hart software. A softwaze "bug" is any malfunction that prevents the Hart software from performing substantially as described in the then-current operator's manual for such software. Because not all errors or defects can or need to be connected, Hart does not warrant that all errors or defects will be corrected. Hart reserves the right to determine whether any reported, claimed softwaze malfunction is in fact a "bug." Software "bugs" must be reported in writing and be accompanied with sufficient detail to enable Hart staff to reproduce the error and provide a remedy or suitable workaround. The exclusions from warranty coverage under Section 1.3 also are exclusions from Software Support Services under this Section 2.1.2. 2.1.3 Hardware Enhancement(s)/UoKrade(s). Hart will develop and provide to Client upgrades to the eSlateTM Hardware to implement a voter verifiable paper record if required by State and/or Federal law. Such hardware upgrades are not provided free-of-charge, and are dependent on the Client having paid all necessary annual Software Support and Maintenance fees for the Hart Software and Support. Based on Hart's current design for such a product feature add-on, the price is estimated to be approximately $1,250.00 per unit, not including the cost of retrofitting existing units. This price may change depending on any specific standards mandated by State or Federal law. 2.1..4 Client Suaeestions and Recommendations. Client may propose, suggest, or recommend changes to the Software at any time in writing to Hart. Such proposals, suggestions, or recommendations will become Hart's property. Hart may include any such proposals, suggestions, or recommendations, solely at Hart's option, in subsequent periodic Software updates. Hart is under no obligation to change, alter, or otherwise revise the Software according to Client's proposals, suggestions, or recommendations. 2.2 Software Support Services Contact Information. Support contact information is set forth in Schedule A, Support Contact Information. 3. SOFTWARE LICENSES AND SUBLICENSES 3.1 Licenses and Sublicenses. Subject to the terms and conditions of this Agreement, Hart grants to Client a personal, nonexclusive, nontransferable, and limited license to use the Hart Proprietary Software and a personal, nonexclusive, nontransferable, and limited sublicense to use the Sublicensed Software. Hart will provide Client, and Client wilt be permitted to use, only the run-time executable code and associated support files of the Software for Client's internal data processing requirements as part of the eSlateTM Electronic Voting System. The Software may be used only in the United States at the Licensed Location specified on Schedule B on the Equipment or other computer systems authorized by Hart in writing. Client may temporarily transfer the Software to a backup computer system at an alternative location within Client's county of operation if the Equipment or other authorized computer system is inoperative or the Licensed Location is temporarily unavailable, provided Client must promptly give Hart written notice of such temporary transfer, including a description of the backup computer system and the alternative location. Client's use of the Software will be limited to the number of users specified in Exhibits B and C. Only Client and its authorized employees may use or access the Software. Voters aze also authorized to interact with the Software, in a manner consistent with user instructions, for [he sole purpose of producing a Cast Vote Record during the course of an election. Client agrees that Hart, the licensors of Sublicensed Software, and their representatives may periodically inspect, conduct, and/or direct an independent accounting firm to conduct an audit, at mutually agreed-upon times during normal business hours, of the computer site, computer systems, Equipment, and appropriate records of Client to verify Client's compliance with the terms of the licenses and sublicenaes granted to ClienC. Page 4 of 20 eSlateTM License Agreement-Rev. 03-O1-2005 3.2 Delivery and Installation. Hart will deliver and install the Software at the Client's site on a mutually agreed-upon date during Hart's normal working hours. The Software will be deemed accepted upon the installation Date. 3.3 Trainine and Documentation. Hart will provide standard user-level documentation in electronic form for the Softwaze and standard operational training before the first election for which the Software will be used. Charges for additional training or support services will be invoiced to Client at Hart's then-current hourly rates, plus travel, communication, and other expenses. Any nonstandard or additional training or support services will be mutually agreed to by Hart and Client and documented in an amendment to this Agreement. 3.4 Protection of Software. (a) The estate Hardware and Hart Proprietary Software are designed to be used only with each other and the agreed-upon Non-Hart Software and Non-Hart Equipment. To protect the integrity and security of the eSlateTM Electronic Voting System, without the express written consent of Hart, (i) Client shall use the Software and Equipment only in connection with the eSlateTM Electronic Voting System; (ii) Client shall not install or use other software on or with the Equipment or Software or network the Equipment or Software with any other hardware, software, equipment, or computer systems; and (iii) Client shall not modify the Equipment or Sotware. If Client does not comply with any provisions of the preceding sentence, then (i) the Limited Warranties under Section 1 will automatically terminate; (ii) Har[ may terminate its obligation to provide Support Services under Section 2; (iii) Har[ will have no further installation obligations under Section 3.2 (Delivery and Installation), and (iv) Hart will have no further obligations under Section 3.3 (Training and Documentation). Furthermore, if Client uses the Software and Equipment in combination with other software and equipment (other software or equipment being those not provided by Hart or its designees), and the combination infringes Hart proprietary patent claims outside the scope of the software license granted to Client under Section 3, Hart reserves its rights to enforce its patents with respect to those claims. (b) Client shall not, under any circumstances, cause or permit the adaptation, conversion, reverse engineering, disassembly, or decompilation of any Software. Client shall not use any Software for application development, modification, or customization purposes, except through Hazt. (c) Client shall not assign, transfer, sublicense, time-shaze, or rent the Software or use it for facility management or as a service bureau. This restriction does not preclude or restrict Client from contracting for election services for other local governments located within Client's jurisdictional boundaries. Client shall not modify, copy, or duplicate the Software; provided, during the term of the Softwaze licenses and sublicenses, Client may have in its possession one (1) copy of the Software for inactive archival or backup purposes. All copies of the Softwaze, in whole or in part, must contain all of Hazt's or the third-party licensor's titles, trademarks, copyright notices, and other restrictive and proprietary notices and legends (including government-restricted rights) as they appear on the copies of the Software provided to Client. Client shall notify Hart of the following: (i) the location of all Software and all copies thereof and (ii) any circumstances known to Client regarding any unauthorized possession or use of the Software. (d) Upon termination of Client's license or sublicense of Software, Client shall immediately discontinue all use of the Software and return to Hart or destroy, at Hart's option, the Software (and all related documentation (electronic and hard copy) and Confidential and Proprietary Information) and all archival, backup, and other copies thereof, and provide certification to Hart of such retum or destruction. Page 5 of 20 eSlateT'a License Agreement -Rev. 03-O1-2005 (e) Client shall not publish any results of benchmark tests run on any Software. (f) Although the Hart Proprietary Software and Sublicensed Software are protected by copyright and/or patents, they may be unpublished, and constitute Contdential and Proprietary Information of Hart and the third-party licensor, respectively. Client shall maintain the Software in confidence and comply with the terms of Section 6, Protection of Confidential and Proprietary Information, with respect to the Software. (g) This Section 3.4 will survive the termination or cancellation of this Ageement. 3.5 No Transfer of Title. This Ageement does not transfer to Client title to any Software, intellectual property contained in any Software, or Confidential and Proprietary Information. Title to Hart Proprietary Software and all copies thereof, and all associated intellectual property rights therein, will remain in Hart. Title to Non-Hart Software and all copies thereof, and all associated intellectual property rights therein, wilt remain in the applicable third-party licensor. 3.6 Inherently Dangerous Applications. The Software is not developed or licensed for use in any nuclear, aviation, mass transit, or medical application or in any other inherently dangerous applications. Client shall not use the Software in any inherently dangerous application and ogees that Hart and any third- party licensor will not be liable for any claims or damages arising from such use. 4. ANNUAL FEE 4.1 Amount of Annual Fee. The Annual Fee is a combined licensing, sublicensing, and support fee. Client will pay Hart an Annual Fee upon execution of this Ageement and annually thereafter before each Anniversary Date. The amount of the Initial Annual Fee, payable upon execution of this Ageement, is the amount specified as the "Initial Annual Fee" on Schedule D, Initial Annual Fee. Subsequent Annual Fees are due annually before each Anniversary Date of this Ageement. Hart may adjust the amount of the Annual Fee payable on each Anniversary Date by notifying Client of any price changes with the invoice in which the adjustment is made. Unless adjusted by Hart, each Annual Fee will be the same as the immediately preceding Annual Fee. 41 Invoices. Hart will invoice Client annually ninety (90) calendar days before the due date of the Annual Fee. 4.3 Paytnents. Client must pay each invoiced Annual Fee before the Anniversary Date immediately following the date of invoice. if Client elects not to or fails to timely pay an Annual Fee, this Ageement attd the licenses, sublicenses, and software support services will automatically terminate on such Anniversary Date. All payments are to be made to Hart at its principal office in Austin, Texas, as set forth on the Signature Page or to such other location as may be designated by Hart in a notice to Client. 4.4 Additional Charees. Additional charges may apply [o services rendered outside contracted hours or beyond normal coverage at Client's request, e.g., travel expenses, and premium and minimum charges. Any additional charges must be mutually agreed to by Hart and Client and documented in an amendment to this Ageement. 4.5 Pavment Disputes. If any dispute exists between the parties concerning the amount due Page 6 of 20 eSlate*^' License Agreement -Rev. 03-O1-2005 or due date of any payment, Client shall promptly pay the undisputed portion. Such payment will not constitute a waiver by Client or Hart of any of their respective legal rights and remedies against each other. 4.6 Takes. If Client is tax-exempt, Client will provide Hart with proof of its tax-exempt status. If Client is not tax-exempt, (a) Client will pay any tax Hart becomes obligated to pay in connection with this Agreement, exclusive of taxes based on the net income of Hart and (b) Client will pay all personal property and similar taxes assessed after shipment. if Client challenges the applicability of any such tax, Client shall pay the tax and may thereafter seek a refund. 4.7 Susnension of Performance. If any payment due to Hart under this Agreement is past due more than thirty (30) days, Hart may suspend performance under this Agreement until all amounts due aze current. 5. CLfENT RESPONSIBILITIES 5.1 Independent Determination. Client acknowledges it has independently determined that the eSlateTM Electronic Voting System meets its requirements. 5.2 Cooperation. Client agrees to cooperate with Hazt and promptly perform Client's responsibilities under this Agreement. Client will (a) provide adequate working and storage space for use by Hart personnel near Equipment; (b) provide Hart full access to the Equipment and Software and sufficient computer time, subject to Client's security rules; (c) follow Hart's procedures for placing hardware warranty or software support service requests and determining if warranty remedial service is required; (d) follow Hart's instructions for obtaining hazdwaze and software support and warranty services; (e) provide a memory dump and additional data in machine-readable form if requested; (t) reproduce suspected errors or malfunctions in Software; (g) provide timely access to key Client personnel and timely respond to Hart's questions; and (h) otherwise cooperate with Hart in its performance under this Agreement. 5.3 Site Prenaration. Client shall prepaze and maintain the installation site in accordance with instructions provided by Hart. Client is responsible for environmental requirements, electrical interconnections, and modifications to facilities for proper installation, in accordance with Hart's specifications. Any delays in preparation of the installation site will correspondingly extend Hart's delivery and installation deadlines. 5.4 Site Maintenance: Prover Storaee. Client shall maintain the appropriate operating environment, in accordance with Hart's specifications, for the Equipment and Software and all communications equipment, telephone lines, electric lines, cabling, modems, air conditioning, and all other equipment and utilities necessary for the Equipment and Software to operate properly. Client shall properly store the Equipment and Software when not in use. 5.5 Use. Client is exclusively responsible for supervising, managing, and controlling its use of the eSlateT"' Electronic Voting System, including, but not limited to, establishing operating procedures and audit controls, supervising its employees, making daily backups, inputting data, ensuring the accuracy and security of data input and data output, monitoring the accuracy of information obtained, and managing the use of information and data obtained. Client will ensure that its personnel are, at all times, educated and trained in the proper use and operation of the eSlateT"' Electronic Voting System and that the Equipment and Software are used in accordance with applicable manuals, instructions, and Page 7 of 20 eSlateT'" License Agreement -Rev. 03-O1-2005 specifications. Client shall comply with all applicable laws, rules, and regulations with respect to its use of the eSlateT"' Electronic Voting System. 5.6 Backups. Client will maintain backup data necessary to replace critical Client data in the event of loss or damage to data from any cause. 6. PROTECTION OF CONFIDENTIAL AND PROPRIETARY INFORMATION 6.1 Confidentiality. Client will keep in confidence and protect Confidential and Proprietary Information (electronic or hard copy) from disclosure to third parties and restrict its use to uses expressly permitted under this Ageement. Client shall take all reasonable steps to ensure that the trade secrets and proprietary data contained in [he Equipment and Softwaze and the other Confidential and Proprietary Information are not disclosed, copied, duplicated, misappropriated, or used in any manner not expressly permitted by the terms of this Ageement. Client shall keep the Software and all tapes, diskettes, CDs, and other physical embodiments of them, and all copies thereof, at a secure location and limit access to those employees who must have access to enable Client to use the Software. Client acknowledges that unauthorized disclosure of Confidential and Proprietary Information may cause substantial economic loss to Hazt or its suppliers and licensors. Each permitted copy of Confidential and Proprietary Information, including its storage media, will be marked by Client to include all notices that appear on the original. Title, copyright, and all other proprietary rights in and to the Software at all times remains vested exclusively in Hart or, as applicable, third-party licensors. 6.2 Return of Confidential and Proprietary Information. Upon termination or cancellation of this Ageement or, if earlier, upon termination of Client's permitted access to or possession of Confidential and Proprietary Information, Client shall return to Hart all copies of the Confidential and Proprietary information in Client's possession (including Confidential and Proprietary Information incorporated in software or writings, electronic and hard copies). 6.3 Intellectual Properties. All ideas, concepts, know-how, data processing techniques, documentation, diagams, schematics, firmware, equipment architecture, softwaze, improvements, bug fixes, upgades, and trade secrets developed by Hart personnel (alone or jointly with Client) in connection with Confidential and Proprietary Information, eSlate Hardware, and Hart Proprietary Software will be the exclusive property of Hart. 6.4 Support Materials. Client acknowledges that all support materials are the property of Hart and include Confidential and Proprietary [nfomtation of Hart. Client agrees that it will not permit anyone other than Hart installation and support personnel and authorized County employees to use such materials. 6.5 Client Employees. Client will inform its employees of their obligations under this Section 6 to ensure that such obligations are met. 6.6 License Back. If Client possesses or comes to possess a licensable or sublicensable interest in any issued patent with claims that read upon the eSla[eTM Electronic Voting System, its method of operation, or any component thereof, Client hereby grants and promises to grant an irrevocable, royalty-free, paid-up license, with right to sub]icense, of such interest to Hart permitting Hart to make, have made, use, and sell materials or services within the scope of the patent claims. 6.7 Survival. This Section 6 will survive termination or cancellation of this Agreement Page S of 20 aSlateTM License Agreement -Rev. 03-01-2005 7. TITLE; RISK OF LOSS 7.1 Softwaze. (a) Hart Proprietary Software: Title to Hart Proprietary Software, all copies thereof, and all associated intellectual proprietary rights therein will remain in Hart including, but not limited to, all patents, copyrights, trade secrets, trademarks, and other proprietary rights. (b) Non-Hart Software: Title to Non-Hart Software, all copies thereof, and all associated intellectual proprietary rights therein will remain in the applicable third-party licensor including, but not limited to, all patents, copyrights, trade secrets, trademarks, and other proprietary rights. (c) Risk of Loss.• Risk of loss to Software will pass to Client upon delivery. 7.2 Confidential and Pronrietary Information. Title to Hart's Confidential and Proprietary information will remain in Hazt. Title to Confidential and Proprietary Information of Hart's suppliers and licensors will remain in the relevant suppliers and licensors. 7.3 Pronrietary Ri¢hts. Client acknowledges and agrees that the design of the eSlate Electronic Voting System, design of the eSlate Hardware, Hart Proprietary Software, and any and all related patents, copyrights, trademarks, service marks, trade names, documents, logos, software, microcode, information, and material, are the property of Hart. Client agrees that the sale of eSlate Hazdware and license of Hart Proprietary Software to Client does not grant to or vest in Client any right, title, or interest in such proprietary property. All patents, trademarks, copyrights, trade secrets, and other intellectual property rights, whether now owned or acquired by Hart with respect to the eSlateTM Elecrronic Voting System, eSlate Hardware, and Hart Proprietary Software, are the sole and absolute property of Hart and no interest therein is being vested in Client by the execution of this Agreement or the sale of the eSlate Hardware or license of the Hart Proprietary Software to Client. Client shall not, under any circumstances, cause or permit the adaptation, conversion, reverse engineering, disassembly, or decompilation of any Software or Equipment. Client will have no authority or right to copy, reproduce, modify, sell, license, or otherwise transfer any rights in any proprietary property of Hart. The provisions of this Section 7.3 will survive the termination or cancellation of this Agreement. 8. TERM OF AGREEMENT; TERMINATION 8.1 Term. The initial term of this Agreement and the licenses granted herein is one (1) year commencing on the Effective Date and expiring on the first Anniversary Date. 8.2 Renewal Terms. Except as otherwise provided in this Agreement, Client may renew this Agreement before its expiration or tetrination by paying the Annual Fee invoiced by Hart, as provided in Section 4.2, before [he Anniversary Date immediately following the date of invoice, as provided in Section 4.3. Each renewal term will be a one-year (1-year) term, commencing on the expiration of the prior term and. expiring on the immediately following Anniversary Date. 8.3 Defaults. The following events will be deemed to be defaults: (a) A party committing a material breach of any term of this Agreement or the eSlateTM Agreement if such breach has not been cured within thirty (30) days after written notice of such Page 9 or 20 eSlateTM License Agreement- Rev. 03-O1-2005 breach has been given by the nondefaulting pazty to the defaulting party; (b) A party filing bankruptcy, becoming insolvent, or having its business placed in the hands of a receiver, assignee, or trustee, whether by voluntary act or otherwise; or (c) A party failing to comply in any material respect with any federal, state, or local laws applicable to a party's performance under this Agreement or the eSlateT"' Agreement. 8.4 Termination. (a) This Agreement will automatically terminate at the end of its then-current term if Client has elected not to or has failed to timely make full payment to Hart of the invoiced Annual Fee required to renew the term, as provided in Sections 4.3 and 8.2. (b) Hart may terminate Software Support Services under Section 2 on thirty (30) days prior written notice to Client if Hart determines that any alterations, attachments, or modifications not made by Hart or the failure to install a software or hardware release will interfere with the provision of support. (c) A party may terminate this Agreement before expiration of its term for default by the other party. If default occurs, the parties will have all remedies provided in this Agreement and otherwise available by statute, law, or equity. 8.5 Survival. Section 1.1 will survive the termination or expiration of this Agreement until the end of the warranty period stated therein. Sections 3.4(b), 3A(c), 3.4(d), 3.4(e), 3.4(f), 6, 7.3, 8.5, 9, 11, and 12 will survive the termination or expiration of this Agreement. 9. LIMITATION OF DAMAGES 9.1 EXCLUSIVE REMEDY. HART DOES NOT ACCEPT ANY LIABILITY FOR WARRANTIES BEYOND THE REMEDIES SET FORTH IN SECTION I. HART'S ENTIRE LTABILITY AND CLIENT'S EXCLUSIVE REMEDY FOR ANY AND ALL CLAIMS CONCERNING THE ESLATE HARDWARE PROVIDED TO CLIENT BY HART OR TTS DISTRIBUTORS, THIS AGREEMENT, AND SOFTWARE AND SERVICES PROVIDED UNDER THIS AGREEMENT ARE SET FORTH IN THIS SECTION. 9.2 DISCLAIMER. CLIENT IS RESPONSIBLE FOR ASSURING AND MAINTAINING THE BACKUP OF ALL CLIENT DATA. UNDER NO CIRCUMSTANCES WILL HART BE LIABLE TO CLIENT OR ANY THIRD PARTY FOR THE LOSS OF OR DAMAGE TO CLIENT DATA. 9.3 LIMITATION. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THTS AGREEMENT, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, HART, HART'S LICENSORS, AND ANY PARTY INVOLVED IN THE CREATION, MANUFACTURE, OR DISTRIBUTION OF THE EQUIPMENT, SOFTWARE, AND PERFORMANCE OF SERVICES UNDER THIS AGREEMENT WILL NOT BE LIABLE TO CLIENT FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUN1TiVE, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) OR FOR LOST DATA SUSTAINED OR INCURRED IN CONNECTION WITH THE EQUIPMENT, SOFTWARE, SERVICES, OR THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, REGARDLESS OF THE FORM OF ACTION AND WHETHER OR NOT SUCH Page 10 of 20 eSlateT"' License Agreement -Rev. 03-01-2005 DAMAGES ARE FORESEEABLE. IN ADDITION, HART'S TOTAL LIABILITY TO CLIENT FOR DIRECT DAMAGES ARISING OUT OF OR RELATING TO THE EQUIPMENT, SOFTWARE, SERVICES, AND THIS AGREEMENT WILL IN NO EVENT EXCEED THE TOTAL AMOUNT ACTUALLY PAID BY CLIENT TO HART UNDER THIS AGREEMENT. HART IS NOT LIABLE FOR DAMAGES CAUSED IN ANY PART BY CLIENT'S NEGLIGENCE OR INTENTIONAL ACTS OR FOR ANY CLAIM AGAINST CUNT OR ANYONE ELSE BY ANY THIRD PARTY. SOME STATES (OR JURISDICTIONS) DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE EXCLUSION OR LIMITATION MAY NOT APPLY TO CLIENT. 9.4 Referrals. Hart may direct Client to third parties having products or services that may be of interest to Client for use in conjunction with the Equipment and Software. Notwithstanding any Hart recommendation, referral, or introduction, Client will independently investigate and test non-Hart products and services and will have sole responsibility for determining suitability for use of non-Hart products and services. Hazt has no liability with respect to claims relating to or arising from use of non- Hart products and services, including, without limitation, claims arising from failure of non-Hart products to provide proper time and date functionality. 10. INFRINGEMENT INDEMNITY 10.1 Indemnity. Hart, at its own expense, will defend and indemnify Client against claims that the eSlate Hardware or Hart Proprietary Softwaze infringe a United States patent, copyright, or misappropriate trade secrets protected under United States law, provided Client (a) gives Hart prompt written notice of such claims; (b) permits Hart to control the defense and settlement of the claims; and (c) provides all reasonable assistance to Hart in defending or settling the claims. 10.2 Remedies. As to eSlate Hardware or Har[ Proprietary Software that is subject to a claim of infringement or misappropriation, Hart may (a) obtain the right of continued use of the eSlate Hardware or Hart Proprietary Software for Client or (b) replace or modify the eSlate Hardware or Hart Proprietary Software to avoid the claim. If neither alternative is available on commercially reasonable terms, then, at the request of Hart, any applicable Software license and its charges will end, Client will cease using the applicable eSlate Hardware and Hart Proprietary Software, Client will return to Hart all applicable eSlate Hardware and return or destroy all copies of the applicable Hart Proprietary Software, and Client will certify in writing to Hart that such return or destruction has been completed. Upon return or Hart's receipt of certification of destruction, Hart will give Client a credit for the price paid to Hart for the returned or destroyed eSlate Hardware and Hart Proprietary Software, less a reasonable offset For use and obsolescence. 10.3 Exclusions. Hart will not defend or indemnify Client if any claim of infringement or misappropriation (a) is asserted by an affiliate of Client; (b) results from Client's design or alteration of any eSlate Hardware or Har[ Proprietary Software; (c) results from use of any eSlate Hardware or Hart Proprietary Software in combination with any non-Hart product, except to the extent, if any, that such use in combination is restricted to the eSlateT"' Electronic Voting System designed by Hart; (d) relates to Non-Hart Software or Non-Hart Equipment alone; or (e) arises from Client-specified customization work undertaken by Hart or its designees in response to changes in Hart Proprietary Software or Non-Hart Software that are made in response to Client specifications. Page Il 0[20 e5lateT"' License Agreement-Rev. 03-Ot-2005 10.4 EXCLUSIVE REMEDIES. THIS SECTION 10 STATES THE ENTIRE LIABILITY OF HART AND CLIENT'S SOLE AND EXCLUSIVE REMEDIES FOR INFRINGEMENT AND TRADE SECRET MISAPPROPRIATION. 11. DISPUTE RESOLUTION 11.1 Disputes and Detnands. The pazties will attempt to resolve any claim or controversy related to or arising out of this Agreement, whether in contract or in tort ("Dispute"), on a conftdential basis according to the following process, which either parry may start by delivering to the other party a written notice describing the dispute and the amount involved ("Demand"). 11.2 Negotiation and Meditation. After receipt of a Demand, authorized representatives of the parties will meet at a mutually agreed-upon time and place to try to resolve the Dispute by negotiation. If the Dispute remains unresolved after this meeting, either party may start mandatory nonbinding mediation under the commercial mediation rules of the American Arbitration Association ("AAA") or such other mediation process as is mutually acceptable to the parties. 11.3 ~unctive Relief. Notwithstanding the other provisions of this Section 11, if either party seeks injunctive relief, such relief may be sought in a court of competent jurisdiction without complying with the negotiation and mediation provisions of this Section 11. 11.4 Time Limit. Neither mediation under this section nor any legal action, regardless of its form, related to or arising out of this Agreement may be brought more than two (2) years after the cause of action first accrued. 12. GENERAL PROVISIONS 12.1 Entire Agreement. This Agreement and the attachments, schedules, and exhibits hereto are the entire agreement and supersede al] prior negotiations and oral agreements. Hart has made no representations or warranties with respect to this Agreement or the eSla[eTM Electronic Voting System and its components that are not included herein. Client acknowledges and agrees that Hart has no responsibility or liability under the eSlate Agreement except to the extent, if any, that Hart is a party to the eSlate Agreement. This Agreement may not be amended or waived except in writing signed by an officer of the party to be bound thereby. 12.2 Frenrinted Forms. The use of preprinted forms, such as purchase orders or acknowledgments, in connection with this Agreement is for convenience only and all preprinted terms and conditions stated thereon are void and of no effect. If any conflict exists between this Agreement and any terms and conditions on a purchase order, acknowledgment, or other preprinted form, [he terms and conditions of this Agreement will govern and the conflicting terms and conditions in the preprinted form will be void and of no effect. The terms and conditions of this Agreement, including, but not limited to, this Section 12.2, cannot be amended, modified, or altered by any conflicting preprinted terms or conditions in a preprinted form. 12.3 Interpretation. This Agreement will be construed according to its fair meaning and not for or against either party. Headings are for reference purposes only and are not to be used in construing the Agreement. All words and phrases in this Agreement are to be construed to include the singular or plural number and the masculine, feminine, or neuter gender as the context requires. Page 12 of 20 eSlate'"' License Agreement -Rev. 03-O1-2005 12.4 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS, WTTHOUT REGARD TO ITS CONFLICT OF LAWS PROVISIONS, UNLESS CLIENT IS A GOVERNMENTAL SUBDNiSION OF ANOTHER STATE, TN WHICH CASE THE LAWS OF THE STATE 1N WHICH CLIENT IS A GOVERNMENTAL SUBDIVISION WILL CONTROL. 12.5 Severability. Whenever possible, each provision of this Agreement will be interpreted to be effective and valid under applicable law; but if any provision is found to be invalid, illegal, or unenforceable, then such provision or portion thereof will be modified to the extent necessary to render it legal, valid, and enforceable and have the intent and economic effect as close as possible to the invalid, illegal, or unenforceable provision. If it is not possible to modify the provision to render it legal, valid, and enforceable, then the provision will be severed from the rest of the Agreement and ignored. The invalidity, illegality, or unenforceability of any provision will not affect the validity, legality, or enforceability of any other provision of this Agreement, which will remain valid and binding. 12.6 Delays. Hart is not responsible for failure to fulfill its obligations when due to causes beyond its reasonable control, including the failure of third parties to timely provide Software, Equipment, materials, or labor contemplated herein. Hart will notify Client in writing of any such delay, and the time for Hart's performance will be extended for a period corresponding to the delay. Hart and Client will determine alternative procedures to minimize delays. 12.7 Force Maieure. "Force Majeure" means a delay encountered by a party in the performance of its obligations under this Agreement that is caused by an event beyond the reasonable control of the party, but does not include any delays in the payment of monies due by either party. Without limiting the generality of the foregoing, "Force Majeure" will include, but is not restricted to, the following types of events: acts of God or public enemy; acts of governmental or regulatory authorities (other than, with respect to Client's performance, the Client, and its governing entities); fires, floods, epidemics, or serious accidents; unusually severe weather conditions; and strikes, lockouts, or other labor disputes. If any event constituting Force Majeure occurs, the affected party shall notify the other parry in writing, disclosing the estimated length of the delay and the cause of the delay. If a Force Majeure occurs, the affected party will not be deemed to have violated its obligations under this Agreement, and time for performance of any obligations of that party will be extended by a period of time necessary to overcome the effects of the Force Majeure. 12.8 Compliance with Laws. Client and Hart shall comply with all federal, state, and local laws in the performance of this Agreement, including those governing use of the Equipment and Software. Equipment and Software provided under this Agreement may be subject to U.S. and other government export control regulations. Client shall not export or re-export any Equipment or Software. 12.9 Assignments. Hazt may assign this Agreement or its interest in any Equipment or Software, or may assign the right to receive payments, without Client's consent. Any such assignment, however, will not change the obligations of Hart to Client that are outstanding at the time of assignment. Client will be notified in writing if Hart makes an assignment of this Agreement. Client shall not assign this Agreement without the express written consent of Hart, such consent not to be unreasonably withheld. In the event of any permitted assignment of this Agreement, the assignee shall assume the liabilities and responsibilities of the assignor, in writing. 12.10 Indeoenden[ Contractors. Client and Hart are independent contractors and are not agents or partners of each other. Hart's employees, agents, and subcontractors will not be entitled to any eSlateT"' License Agreement- Rev. 03-O1-2005 Page 13 of 20 privileges or benefits of Client employment. Client's employees, agents, and contractors will not be entitled to any privileges or benefits of Hart employment. 12.11 Notices. Any notice required or permitted to be given under this Agreement by one party to the other must be in writing and shall be given and deemed to have been given immediately if delivered in person to the address set forth on the Signature Page for the party to whom the notice is given, or on the fifth business day following mailing if placed in the United States Mail, postage prepaid, by registered or certified mail with return receipt requested, addressed to the party at their address set forth on the Signature Page. Each party may change its address for notice by giving written notice of the change to the other party. 12.12 Trademarks. eSlateT"', eSlate 3000T"', Judge's Booth ControllerTM, JBC1000TM, Disabled Access UnitTM, DAUSOOOT"r, Mobile Ballot BoxT"t, Ballot Origination Software SystemTM, BOSST"' Tal1yT"', RallyT"t, FUSIONTM, and Ballot NowT"' aze trademarks of Hart. 13. DEFINITIONS "Agreemen!" has the meaning set forth on the Signature Page. "Anniversary Date" means each anniversary of the Effective Date. "Annual Fee" means the combined annual license, sublicense, and support fees payable by Client to Hart as described in Section 4. "Client" has the meaning set forth on the Signature Page. "Confidential and Proprietary Information" means Software, firmware, diagnostics, documentation (including operating manuals, user documentation, and environmental specifications), designs and configurations of Equipment, Software and firmware, trade secrets and related documentation, and any other information confidential to Hart or its suppliers or licensors. "DAUT"t" means the Disabled Access Unit (DAUSOOOT"') created by Han as an add-on component to an eSlate that facilitates the performance of voting activities by disabled voters, for example, by providing an audio ballot presentation and/or accepting inputs From specialized switch mechanisms, such as head switches, breath switches, and panel switches that facilitate interaction with disabled voters, as needed. "Effective Date" has the meaning set forth in the Signature Page and indicates the date this Agreement becomes effective. "Equipment" means the eSlate Hardware and Non-Hart Equipment. "eScanTM" means the eScanTM device created by Hart, consisting of a precinct digital ballot imaging device single-feed scanner that transports and scans both sides of a ballot simultaneously, and a base that provides for secure ballot storage and transport. "eSlateT"T' means the eSlate 3000TH created by Hart and consisting of hardware including an electronically configurable, network-capable voting station that permits a voter to cast votes by direct interaction,, which voting station in its present configuration created by Hart comprises an electronically Page 14 of 20 eSlateTM License Agreement -Rev. 03-Ot-2005 configurable liquid crystal display (LCD) panel for use in displaying ballot images, a rotary input device for use in ballot navigation, and various buttons that facilitate voter options for selecting ballot choices and casting a ballot. "eSlateTM Agreement" means the agreement, between Client and Hart or Hart's authorized distributor of eSlate Hardwaze, under which Client has purchased the eSlate Hardware. The eSlate Agreement is identified on the Signature Page. "eSluteTMElectronic Voting System" means the Equipment and the Software. "eSlateTM Hardware" means the eSlateTM units, JBCTM units, and DAUTM units purchased by Client pursuant to the eSlate Agreement. "Firmware" means the Har[ Proprietary Software embedded in eSlate voting devices that allows execution of the software functions, but does not allow access to or modification of the software by an end user. "Force Majeure" has the meaning set forth in Section 12.7. "Hart" means Hart InterCivic, Inc., a Texas corporation. "Hart Proprietary Software" means the run-time executable code and associated support files of the Ballot Origination Software System (BOSSTM) Software, Tal1yTM Software, RaIIyTM Software, Ballot NowTM Software, computer code, and software resident in the eSlate Hardware and other support software utilities as specified on Schedule B, consisting of computer programs and computer code owned by Hart that are licensed to Client pursuant to this Ageement, and all updates, upgrades, versions, new releases, derivatives, revisions, corrections, improvements, rewrites, bug fixes, enhancements, and other modifications, including any custom modifications, to such computer programs and code that are provided to Client, and all copies of the foregoing. Hart Proprietary Software also includes all documentation provided by Hart to Client with respect to these computer programs and code and all copies of the foregoing. "Initial Annual Fee" means the first Annual Fee, in the amount specified as the "Initial Annual Fee" on Schedule D, which is payable upon execution of this Agreement. "Installation Date" means, with respect to eSlate Hardware, the date of delivery to Client and, with respect to Hart Proprietary Software, the date Hart completes delivery and installation of the Hart Proprietary Software. "JBCrM" means the Judge's Booth Controller (JBC1000TM) created by Hart that is a local area network controller capable of interacting with one or more eSlate devices or DAU devices by transmitting and receiving signals that manage or control an election, e.g., by opening and closing the polls, providing or recording an audit trail of system events during an election, storing cast ballot data, and applying data security and integrity algorithms. "Non-Hart Equipment" means the equipment, if any, not consisting of eSlate Hardware that was sold to Client by Hart or Hart's distributor for use with, and in connection with the sale of, the eSlate Hardware. "Non-Hart Software" means the mn-time executable code and associated support files of Page 15 of 20 eSlateTM License Agreement -Rev. 03-O1-2005 computer programs owned by third parties that are identified on Schedule C and sublicensed by Hart to Client pursuant to this Agreement or licensed directly by the third-party licensor to Client, and all updates, upgrades, versions, new releases, derivatives, revisions, corrections, improvements, rewrites, bug fixes, enhancements, and other modifications to such computer programs and code that are provided to Client, and all copies of the foregoing. Non-Hart Software also includes all documentation provided to Client with respect to these computer programs, and all copies of the foregoing. "Software" means the Hart Proprietary Software and Firmware, and Non-Hart Software. "sublicensed Softx~are" means Non-Hart Software that is identified on Schedule C as being sublicensed by Hart to Client pursuant to this Agreement. "VBOTM" means the Voter Verifiable unit used in conjunction with the eSlateTM for a Voter Ver~iable Paper Audit Trail. (The rest of this page is intentionally left blank.) Page 16 of 20 eSlateTM License Agreement -Rev. 03-O1-2005 SCHEDULE A SUPPORT CONTACT INFORMATION The following contact information is to be used by Client for submitting Support requests to Hart InterCivic, Inc.: Client Support Center: 1-800-750-HART (4278) Client Support Center Fax: 1-800-396-HART (4278) E-mail Address: hartsupport(r~hartiacom Hart InterCivic, Inc. Switchboard: 1-800-223-HART (4278) Client Support Manager: The following contact information is to be used by Hart for contacting Client on Software Support Service requests: Primary Client Contact Point ("CCP"): First Alternate CCP: The rest ofthis page intentionally [eft blank. Page 17 of 20 eSlate~'" License Agreement -Rev. 03-O1-2005 SCHEDULEB HART PROPRIETARY SOFTWARE QUANT[TY MODEL DESCRIPTION UNIT PRICE NUMBER OF LICENSES INITIAL LICENSE FEE One (I). TaIIyTM & Tabulation and $15,100.00 Two (2) (One $ 15,100.00 SERVOT"'. license per Reporting each software Tall ' "' ( y )' title). and Equipment and Data Management Software (SERVOrM . Licensed Location: Kerr Countv. Texas. NOTE: Hart and Client will update this Schedule as appropriate if Hart releases new Hart Proprietary Software that is made available to Client under the eSlateTM Warranty, Support, and License Agreement. (The rest of thZs page intentionally [eft blank.) Page 18 of 20 eSlateT*' License Agreement -Rev. 03-O1-2005 SCHEDULE C NON-HART SOFTWARE Non-Hart Software Sublicensed to Client: QUANTITY MODEL DESCRIPTION UNTT PRICE NUMBER OF TOTAL PRICE LICENSES Two (2). Sybase Database Engine. No Charge. Two (2). No Charge Embedded Runtime Pro ram. NOTE: Hart and Client will update this Schedule as appropriate if Hart provides new or different Non- Hart Software to Client under this Agreement. (The rest of this page intentionally left blank.) Page 19 of 20 eSlateT"' License Agreement- Rev. 03-O1-2005 SCHEDULE D INITIAL ANNUAL FEE Initial Annual Fee: $8.810.00 (The rest of this page intentionally left blank.) Page 20 of 20 eSlateT"' License Agreement- Rev. 03-07-2005 TBPC Term Contract for ELECTRONIC VOTING SYSTEMS -PURCHASE Page 1 of 13 ELECTRONIC VOTING SYSTEMS -PURCHASE 03/2005 THRU 12/2006 578-N1 For Further information contact Penny Farias, Purchaser P at (512) 463-9929 or e-mail at Purchaser.P@tbpc.state.tx.us NOTE: The products listed are for the use by eligible State of Texas entities ONLY and are not for personal purchase or purchase by commercial entities. • Next BI proof date is 02-JAN-2006 J~CJU~FI S~/L~-/-~~/~~~~~C/ ~ ,,~•,__~~~"A,^, ELECTRONIC VOTING SYSTEMS - PURCHASE GENERAL CONTRACT SNFORMATION Section 1 1.1 DESCRIPTION: 576-N1 Electronic Voting Systems - Purchase 1.2 TYPE OF CONTRACT: Non-Automated Discount from List, Multiple Award. 1.3 TERM OF CONTRACT: The term of this contract is from March 4, 2005 through December 31, 2006. 1.9 DELIVERY: To be delivered and installed 60 days after receipt of order (ARO) unless a different time frame is agreed to in writing by qualified ordering entity. After September 1, 2005, delivery and installation to be within 30 days ARO unless a different time frame is agreed to in writing by qualified ordering entity. See Section 2.18 and 2.19. 1.5 MINIMUM ORDER: No minimum. 1.6 SPOT PURCHASE OPTION: None. 1.7 ZONE: This contract is a statewide contract. 1.8 SHIPPING INFORMATION: All systems and components are to be shipped F.O.B. destination with freight prepaid by vendor. 1.9 WARRANTY: See Section 2.15. 1.10 CASH DISCOUNT: Unilect: Cash discounts will be 1$ of 7 days. AccuPOll, Inc.: Cash discounts will be 2$ of 15 days. Cash discounts will be taken as earned by the qualified ordering entities. 1.11 EDUCATIONAL DISCOUNT: None. 1.12 QUANTITY OR LARGE ORDER DISCOUNT; Applicable discounts are identified in Section 3, "DISCOUNT FOR LARGE VOLUME PURCHASES". 1.13 PRICE CHANGES: See Section 2.22. 1.19 RECYCLED PRODUCTS: Efforts have been made to identify any product meeting the criteria definitions of recycled. If you have questions regarding http://www.tbpc.state.tx.us/cat page/cat 578 nl 0503.htm1 9/27/2005 TBPC Term Contract for ELECTRONIC VOTING SYSTEMS -PURCHASE Page 2 of 13 recycled products, please contact the Recycling Coordinator at (512)963-3039. 1.15 FUNDING OUT: All blanket purchase orders (an order calling for multiple deliveries over a specified period of time) are contingent upon the continued availability of appropriations. 1.16 POINT OF CONTACT: Vendor contacts are listed at the end of the contract. 1.17 HUB VENDORS: HUB vendors are identified in the Contract Vendor List as "HUB". 1.18 INTERPRETATION: Questions concerning the terms and conditions and technical specifications shall be directed to: Penny Farias, CTPM Purchaser P Texas Building and Procurement Commission (512) 463-9929 FAX (512) 963-3503 E-mail: penny.farias@tbpc.state.tx.us 1.19 PURCHASE ORDERS: Only contract purchase orders issued by the TBPC or orders issued through a TBPC contract are eligible for contract pricing. 1.20 COMMODITY CODE CONVERSION: In order to facilitate with the TBPCs conversion to the NIGP commodity codes, the commodity code numbers for the items on the contract resulting from this IFB may change prior to award or at some point during the term of the contract. The specification, price, and other terms of the contract will remain the same. SECTION 2 - SPECIFIC CONTRACT REQUIREMENTS 2.1 PURPOSE: The purpose of this contract is to provide Direct Recording Electronic Voting Systems (DRES) to the State of Texas and local political subdivisions. These systems shall comply with Title III of the Help America Vote Act. Only those systems certified by the Texas Secretary of State and listed on the Approved Products List (APL) will be considered. See Attachment A for list of certified systems. 2.2 DEFINITIONS: See Attachment B for definitions that apply to this Contract. 2.3 CONTRACTOR RESPONSIBILITIES: The Contractor will be required to assume responsibility for all contractual activities offered in this contract whether or not that Contractor performs them. Further, the State will consider the Prime Contractor to be the sole point of contact with regard to contractual matters, including but not limited to payment of any and all costs resulting from the anticipated contract. If any part of the work is to be subcontracted, the Contractor shall notify the State and identify the subcontractor(s), including firm name and address, contact person, complete description of work to be subcontracted, and descriptive http://www.tbpc.state.tx.us/cat~age/cat_578 nl 0503.htm1 9/27/2005 TBPC Term Contract for ELECTRONIC VOTING SYSTEMS -PURCHASE Page 3 of 13 information concerning subcontractor's organizational abilities. The State reserves the right to approve subcontractors for this project and to require the Contractor to replace subcontractors found to be unacceptable. The Contractor is totally responsible for adherence by the subcontractor to all provisions of the Contract. 2.4 MANDATORY REPORTING: The vendor shall provide the TBPC quarterly usage reports indicating contract activity by agency Purchase Order. Contract activity includes a breakdown by agency name, agency code, purchase order number, commodity code, quantity, description of item, dollar amount by PO and total dollar amount for quarter. Reports will be due by the follcwing schedule: Quarter Months Included Deadline Check Quarter First (March, April, May) June 5th [ ] Second (June, July, August) September 5th [ ] Third (September, October, December) January 5th [ ] Fourth (January, February) March 5th ( ] The file may be electronically e-mailed to penny.farias@tbpc.state.tx.us. This report may be done in Excel format, or another format accepted by TBPC. 2.5 NEWS RELEASES: NOTE OF CLARIFICATION: The counties may send out a new release along with their chosen vendor as long as it doesn't mention the state contract. News releases pertaining to this document or the services, study, data, or project to which it relates will not be made without prior written State approval, and then only in accordance with the explicit written instructions from the State. No results of this contract are to be released without prior written approval of the State and then only to persons designated. 2.6 RIGHTS OF OWNERSHIP: NOTE OF CLARIFICATION: If needed, a county may sign a software license, but should not have to sign any additional contracts. The contract is between the State and the vendor. In the event that the Contractor shall, for any reason, cease to conduct business, or cease to support the Software, the State or local political subdivision shall have the right to convert these licenses into perpetual licenses. Equipment: All equipment shall be titled in the name of the purchasing entity, State or local political subdivision, unless leased. Notwithstanding any provision o£ this Contract(s) to the contrary, any pre-existing work or materials including, but not limited to, any routines, libraries, tools, methodologies, processes or technologies (collectively, the "Development Tools") created, adapted or used by the Contractor in its business generally, including any and all associated intellectual property rights, shall be and remain the sole property of the Contractor, and the State and local political subdivisions shall have no interest in or claim http://www.tbpc.state.tx.us/cat~age/cat_578_nl_0503.htm] 9/27/2005 TBPC Term Contract for ELECTRONIC VOTING SYSTEMS -PURCHASE Page 4 of 13 to such pre-existing work, materials or Development Tools, except as necessary to exercise its rights in the Work Product. Such rights belonging to the State or local political subdivisions shall include, but not be limited to, the right to use, execute, reproduce, display, perform and distribute copies of and prepare derivative works based upon the Work Product, and the right to authorize others to do any of the foregoing, irrespective of the existence therein of preexisting work, materials and Development Tools, except as specifically limited herein. The Contractor and its subcontractor(s) shall be free to use and employ their general skills, knowledge and expertise, and to use, disclose, and employ any generalized ideas, concepts, knowledge, methods, techniques or skills gained or learned during the course of performing the services under this Contract, so long as the Contractor or its subcontractor(s) acquire and apply such information without disclosure of any confidential or proprietary information of the State or local political subdivisions, and without any unauthorized use or disclosure of any Work Product resulting from this Contract. 2.7 CONFIDENTIALITY OF DATA AND INFORMATION: NOTE OF CLARIFICATION: All information in the possession o£ a governmental body is subject to Texas Government Code, Chapter 552, the Public Information Act ("the Act"), including "third party" information. You may clearly mark your information as "Confidential" or "Proprietary." In the event that we receive a request for third party information, we will follow the dictates of the Act. A copy of the current Act may be found at http://www.oag.state.tx.us /opinopen/openla ws.shtml A vendor will be notified of a third party request in accordance with Texas Government Code, Chapter 552.301 and Chapter 552.305, the Public Information Act ("the Act"). 1. All financial, statistical, personnel, technical and other data and information relating to the States or local political subdivisions operation which are designated confidential and made available to the Contractor in order to carry out this Contract, or which become available to the Contractor in carrying out this Contract, shall be protected by the Contractor from unauthorized use and disclosure through the observance of the same or more effective procedural requirements as are applicable to the State. The identification of all such confidential data and information as well as the States or local political subdivisions procedural requirements for protection of such data and information from unauthorized use and disclosure shall be provided by the State in writine to the Contractor. If the methods and procedures employed by the Contractor for the protection of the Contractors data and information are deemed by the State or local political subdivision to be adequate for the protection of confidential information, such methods and procedures may be used, with the written consent of the State or local political subdivision, to carry out the intent of this section. 2. The Contractor shall not be required under the provisions of this section to keep confidential, (1) information generally available to the public, (2) information released by the State generally, or to the Contractor without restriction, (3) information independently developed or acquired by the Contractor or its personnel without reliance in any way on otherwise protected information of the State. Notwithstanding the foregoing restrictions, the Contractor and its http://www.tbpcstate.tx.us/cat~age/cat_578_nl_0503.htm1 9/27/2005 TBPC Term Contract for ELECTRONIC VOTING SYSTEMS -PURCHASE Page 5 of 13 personnel may use and disclose any information which it is otherwise required by law to disclose, but in each case only after the State has been so notified, and has had the opportunity, if possible, to obtain reasonable protection for such information in connection with such disclosure. 2.8 NOTICE AND RIGHT TO CORE: In the event of a curable breach by the Contractor, the State shall provide the Contractor written notice of the breach and a time period to cure said breach described in the notice. This section requiring notice and an opportunity to cure shall not be applicable in the event of successive or repeated breaches of the same nature or if the State determines in its sole discretion that the breach poses a serious and imminent threat to the health or safety of any person or the imminent loss, damage or destruction of any real or tangible personal property. 2.9 ASSIGNMENT: NOTE OF CLARIFICATION: When notified by vendor of sale, transfer, or assignment, the States consent will not be unreasonably withheld or conditioned, nor unduly delayed. The Contractor sha 11 not have the right to assign this Contract or to assign or delegate any of its duties or obligations under this Contract to any other party (whether by operation of law or otherwise), without the prior written consent of the State. Any assignment in violation of this section shall be null and void. Further, the Contractor may not assign the right to receive money due under the Contract without the prior written consent of the State of Texas. 2.10 DELEGATION: The Contractor shall not delegate any duties or obligations under this Contract to a subcontractor other than a subcontractor named in the bid unless the State of Texas has given written consent to the delegation. 2.11 NOTICES: Any notice given to a party under this Contract shall be written and shall be deemed effective, if addressed to such party as addressed below upon (i) delivery, if hand delivered; (ii) receipt of a confirmed transmission by facsimile if a copy of the notice is sent by another means specified in this section; (iii) the third (3rd) Business Day after being sent by U.S. mail, postage pre-paid, return receipt requested; or (iv) the next Business Day after being sent by a nationally-recognized overnight express courier with a reliable tracking system. Either party may change its address where notices are to be sent giving written notice in accordance with this section. 2.12 SEVERABILITY: Each provision of the Contract shall be deemed to be severable from all other provisions of the Contract and, if one or more of the provisions of the Contract shall be declared invalid, the remaining provisions of the Contract shall remain in full force and effect. 2.13 RELATIONSHIP OF THE PARTIES: http://www.tbpcstate.tx.us/cat~age/cat_578_nl_0503.htm1 9/27/2005 TBPC Term Contract for ELECTRONIC VOTING SYSTEMS -PURCHASE Page 6 of 13 The relationship between the State and the Contractor is that of client and independent Contractor. No agent, employee, or servant of the Contractor or any of its subcontractors shall be or shall be deemed to be an employee, agent, or servant of the State for any reason. The Contractor will be solely and entirely responsible for its acts and the acts of its agents, employees, servants and subcontractors during the performance of this Contract. 2.14 DELIVERABLES: A hard copy users manual shall be delivered during equipment installation and acceptance; one copy per component. One hard copy and one electronic copy of each user manual shall be sent to the election official of the county/political subdivision responsible for conducting elections (e.g. county clerk, election administrator). The vendor shall provide extensive training programs on all phases of the voting system(s). The training shall provide State, county, and local election personnel with sufficient training in order to operate the DRE system without continuous support by the Contractor. Awarded vendors shall provide a maximum of five (5) training classes per program (e.g. voting unit, election management system, ballot creation and layout software) per ordering entity for initial contract period and each renewal period exercised. Dates for training sessions will be mutually agreed upon qualified ordering entity and vendor. The training shall include, but shall not be limited to, the following topics: 1) Training on the use of the ballot creation and layout software, if applicable. 2) Programming of tabulators. 3) Preparation of tabulators including set up and pre-election testing. 4) Election day and early voting operations from the opening to the closing o£ the polls. 5) Printing of zero counts before the polls open 6) Processing of voters, early voting ballots, and provisional ballots. 7) Use of central counting station functions. 6) Troubleshooting to solve temporary problems. 9) Hot points for system errors. 10) Safeguards to prevent and detect tampering. 11) Tabulation of results. 12) Electronic transmission of election results. 13y Printing, designing and reformatting election reports. 19) Methods of ensuring the accuracy of precinct results. 15) Use of battery backup feature(s). 16) Taking a malfunctioning piece of equipment out of service. 17) Full understanding of the audit procedures. 16) Conducting a recount. 19) Records preservation. 20) How and when to place service calls. The Vendor will assist county and local election officials (if requested) in conducting comprehensive training for election judges and c1er Y.s for their various precincts prior to the primary and general elections in the first year of use. 2.15 WARRANTY AND MAINTENANCE: http://www.tbpostate.tx.us/cat~age/cat 578_nl_0503.htm1 9/27/2005 TBPC Term Contract for ELECTRONIC VOTING SYSTEMS -PURCHASE Page 7 of 13 NOTE OF CLARIFICATION: When the entity promptly notifies vendor of any failure of performance or detect, such warranty provides that the vendor will repair or replace any component of our proprietary equipment or software which, while under normal use and service, (a) fails to perform in accordance with its documentation in all material respects, or (b) is defective in material or workmanship. The vendor warrants that their proprietary equipment and software will operate in conjunction with all third party equipment and software that meets the vendors specifications, provided elsewhere in this Proposal. The vendor shall provide the following warranty for a minimum of one year from date of system acceptance by the ordering entity: 1. Warranty including all parts, labor, hardware, and any travel related expenses. 2. All hardware and software patches to repair defects in the system, at no charge to the using entity. 3. All software modifications necessary to comply with then current federal or state voting system laws. A11 modifications must be certified by the SOS before installation occurs. 9. A hard copy users manual shall be delivered during equipment installation and acceptance; one copy per component. One hard copy and one electronic copy of each user manual shall be sent to the election official of the county/political subdivision responsible for conducting elections (e.g. county clerk, election administrator). 5. One complete set of user and technical documentation for all hardware and components required to operate each system in both a printed format and an electronic format. 6. Well-trained support personnel for all activities that are the Vendors responsibility. 7. Repair or replacement of malfunctioning equipment in the polling place and central counting station. 8. Replacement of equipment that cannot be repaired within four hours following arrival at the polling location at which the equipment is used shall be replaced. Response to service calls during "election periods": An election period begins 30 days prior to any election day and continues through the 30th day after an election day. Service shall be available Monday through Saturday, lam to 7pm. Telephone responses to service calls on any election day and during an early voting period shall not exceed 2 hours. On-site response shall not exceed 2 hours in urban areas and 9 hours in rural or remote areas. Regular Service calls: Service calls required other than during an "election period". Response shall not exceed 4 hours in urban areas and 8 hours in rural or remote areas. Service shall be available Monday through Friday, Sam to Spm, local time. Telephone responses to service calls shall not exceed 4 hours. On-site response shall not exceed 9 hours in urban areas and 8 hours in rural or remote areas. All service technicians shall: a. Be well trained and experienced in the maintenance and repair of direct recording electronic voting systems, and capable of replacing malfunctioning equipment in the polling place. b. Have reliable dedicated transportation of sufficient size to accommodate the transport of voting equipment. http://www.tbpastate.tx.us/cat~age/cat_578_nl _0503.htmi 9/27/2005 TBPC Term Contract for ELECTRONIC VOTING SYSTEMS -PURCHASE Page 8 of 13 c. Unless an earlier response time is provided for under the terms of the warranty or post warranty maintenance agreement, response to calls placed on election day is required within two hours o£ receipt of the call. d. Be prepared, on election day and during the early voting period, to replace voting equipment that cannot be repaired within four hours following arrival at the polling location at which the equipment is used. e. Maintain, on election day and during the early voting period, a reasonable supply of spare parts and components necessary to repair malfunctioning equipment and return it to service. f. Have cellular telephones or other means of real time communication, on election day and during the early voting period, so that they may be dispatched to polling locations that are experiencing system malfunctions. 2.16 POST WARRANTY MAINTENANCE: NOTE OF CLARIFICATION: The post warranty maintenance includes both remedial and preventive maintenance services, including all labor and parts (except consumables such as printer ribbons, paper rolls, batteries, removable memory packs, cancellation stamps, ink pads or red stripe pens). An agreement containing post warranty requirements may need to be signed. If purchased by the ordering entity, the initial period begins the day following the expiration of the warranty period and is provided under the same terms and conditions of the initial warranty. Vendor to quote annual maintenance cost for all system components and software. Automatic renewals of any maintenance coverage are not acceptable. 2.17 MODIFICATION REQUIREMENTS: NOTE OF CLARIFICATION FOR SECTIONS 2.17 AND 2.20: During the contract period, if changes occur in federal or state voting systems standards and they require modifications to hardware, software or components, such changes will be accepted through procedures outlined in Section 2.20. If the modification requires an additional cost, local political subdivisions with installed systems or systems sold during the term of the contract may be charged the difference between the on ginal contract purchase price and the amended contract price, or only the cost of the specific modification. Such changes will be accepted through procedures outlines in Section 2.20. However, the Contractor shall make minor or routine system and software modifications at no additional charge per Section 2.17. The Contractor shall perform the following at no additional cost: 1. Make system modifications as deemed necessary by contractor, state, county, or local election official, or any modification due to new requirements or standards mandated by Federal or State laws. 2. Any unit or system modifications (regardless o£ the basis for the http://www.tbpcstate.tx.us/cat~lage/cat_578_nl_0503.htm1 9/27/2005 TBPC Term Contract for ELECTRONIC VOTING SYSTEMS =PURCHASE Page 9 of 13 modification) must be certified by the SOS before release. 3. Obtain re-certification from 505 in time to comply with applicable State and Federal administration and election timelines. 9. Apply Contractor-opted modifications to all previously-installed systems at no cost to the State or local political subdivision when a system is covered by an existing maintenance agreement. 5. Contractor shall notify entities if 3rd Party software upgrades are required. The purchase of any upgrades of 3rd Party software will be a responsibility of the state or local political subdivision. 2.18 DELIVERY REQUIREMENTS: The Contractor(s) shall deliver system equipment, hardware, software, and necessary components and perform required services. The deliverables shall be shipped F.O.B. Destination, freight prepaid and allowed, directly to each entity, unless otherwise requested, and the exact locations shall be specified in the purchase order. 2.19 DELIVERY AND INSTALLATION (F.O.B. DESTINATION): NOTE OF CLARIFICATION: If, during the term of the Agreement, the vendor enters into a contract with any other customer substantially the same quantity, equipment, software and services, terms and conditions for a lower cost, the vendor will offer the same decrease in rated to the State. 1. Qualified Entity Receiving Dock Only: On non-installed orders the vendor shall take action to cause the items to be delivered to the qualified entity's receiving dock. The delivering carrier shall unload the components and place it on the receiving dock. The qualified entity is responsible for all additional movement to qualified entity storage location or to the qualified entity location. 2. Inside Delivery: Non-Installed Equipment: "Inside delivery" connotes delivery o£ the packaged components to a specified room on a particular floor of a qualified entity building. The vendor will take action to cause the freight carrier to deliver the packaged components to this specified "inside delivery" location. The carrier will not unpack the furniture nor accomplish installation. 3. Inside Delivery and Installed Equipment Order: On installed orders in place, ready for use, the vendor shall be responsible for delivery, any required interim short term storage, receipt and unloading, unpacking, inspection, assembly, installation of the item(s) as designated by the qualified entity, cleaning and adjustment, as well as the prompt removal and disposal of all debris which is a result of the delivery. The vendor shall be responsible for the removal of any boxes or packing materials from the delivery site. 9. Elevators: Elevator(s) must be made available if the building is more than one story. I£ no elevator is available, delivery will be made to the ground floor. 2.20 ADDING NEW EQUIPMENT BY AWARDED VENDORS: Following the contract award, newly introduced equipment, after being certified by the Texas SOS, may be added three times annually to the contract. All additions must meet the specifications of the original bid. Vendor must submit, in writing, equipment additions a minimum of 30 http://www.tbpc.state.tx.us/cat~age/cat_578_nl_0503.html 9/27/2005 TBPC Term Contract for ELECTRONIC VOTING SYSTEMS -PURCHASE Page 10 of 13 working days prior to the effective dates. Vendor must include a copy of the manufacturer's current printed price list, full description and pricing to include purchase and maintenance pricing in the same format as the original bid. Any new components submitted for addition to the contract must be accompanied by the appropriate SOS certification. The final decision to add equipment will be at the sole option of TBPC. There will be no exceptions to the certification dates established annually by the Texas SOS. The pricing for the new items must be based upon the same percentage of discount (or add-on) to the list price as the items originally awarded. 2.21 ADDING NEW VENDORS AND THEIR EQUIPMENT: TBPC will complete a supplemental contract three times annually on newly introduced equipment, after being certified by the Texas SOS. Certification examinations will be scheduled by the Secretary of State three times a year during the months of January, May, and August, unless extenuating circumstances provide otherwise. New vendors must include with their bid the manufacturers current printed price list, full descriptive literature and the SOS certification. 2.22 PRICE INCREASES, CHANGES & DECREASES: PRICE INCREASES: Prices may be increased once a quarter using two different options. One or both options may be used with the approval of the state. Any allowable changes to the contract must be approved by TBPC prior to contract extension. PRICE CHANGES: Prices are to remain firm during the initial 90 days of the contract. After that date, if there has been an industry-wide increase, vendors may request an increase in the same amount as the cost increase to the distributor. Price increases may be requested only once every quarter. Notice of price increases must be fully documented and submitted 30 days before the date of the effective change. Documentation must be a new dated price or cost list which is the same type as the one submitted with the bid. Increases shall not affect any orders issued prior to the effective date of the increase. Prices may be escalated annually during the second, third, fourth and fifth year of this contract. Annual increases will be calculated at the time o£ extensions by multiplying the original bid price by the escalation percentage shown for the specific year. When this maximum escalation point has been reached, the vendor will then be required to sell the item at this price for the balance of the contract. The maximum percentage escalation shall not exceed 168 for the life of the contract. There will be no exceptions to this maximum. Following are the annual percentages for the awarded vendor(s) for the second through fifth years of the contract. 39615 - DIEBOLD ELECTION SYSTEMS, INC. 2nd Year Escalation CPI 3rd Year Escalation CPI 9th Year Escalation CPI 5th Year Escalation CPI http://www.tbpastate.tx.us/cat~age/cat_578_nl_0503.htm1 9/27/2005 TBPC Term Contract for ELECTRONIC VOTING SYSTEMS -PURCHASE 38998 HART INTERCIVIC, INC. 2nd Year Escalation 5$ 3rd Year Escalation N/A 9th Year Escalation N/A 5th Year Escalation N/A 49623 - ACCUPOLL, INC. 2nd Year Escalation 9$ 3rd Year Escalation 8°s 4th Year Escalation 12$ 5th Year Escalation 16$ 57890 - UNILECT CORPORATION 2nd Year Escalation 3$ 3rd Year Escalation 3$ 9th Year Escalation 3$ 5th Year Escalation 3$ 71626 - ELECTION SYSTEMS 6 SOFTWARE INC. 2nd Year Escalation N/A 3rd Year Escalation N/A 4th Year Escalation N/A 5th Year Escalation N/A Page 11 of 13 If the bid prices are affected by statute, regulation, administrative or judicial order only, vendor may not include additional costs in billings to the end user. Vendor must first provide written justification for the increase to the Texas Building and Procurement Commission (TBPC). The TBPC will make a determination of the applicability of the increase to the contract. PRICE DECREASES: Price decreases will be accepted at any time. In the event a vendor offers or provides a decrease in rates to its customers for the same services provided for the state of Texas pursuant to its contract, the vendor shall provide the same decrease in rates for the state of Texas. 2.23 ELECTRONIC CATALOGS: If a vendor has an electronic catalog and the catalog has items that are not on the state contract, the qualified ordering entity will have to use their delegated purchasing procedures to purchase those items. 2.29 ORDERING PROCEDURES FOR ELECTRONIC VOTING MACHINES: The non-automated term contract requires manual processing by the qualified ordering entity, usually because of the more specialized nature of the contract purchase or the contract terms. You may use either TBPC's Non-Automated Contract Purchase Order Form or your entities own Purchase Order form. If the ordering entity uses their own purchase order form, the purchase order must contain a heading that includes "NON-AUTOMATED CONTRACT PURCHASE ORDER" and all required data elements. The required elements are located on a copy of the TBPC http://www.tbpostate.tx.us/cat~age/cat_578_nl_0503.htm1 9/27/2005 TBPC Term Contract for ELECTRONIC VOTINti SYSTEMS -PURCHASE Page 12 of 13 Non-Automated Contract Purchase Order located at: ww•w.tbpc.state.', :;.us/sLpurch /.farms/n.o no..antra eir rt:q. d~,c and for Co-Op Members the form is located at: www.tbpc..=_tate.tr.. us/stpurc.h; forma/coop-nonreq.doc Qualified ordering entities process non-automated purchase orders directly to the vendor by mail or fax. A copy of the purchase order must be mailed or faxed to the TBPC Procurement Services Division to update purchase history files. Also, a copy of the purchase order must be faxed or mailed to the Texas Secretary of State's Office. Please mail or fax the purchase order to: Voting System Contract Verification Elections Division Texas Secretary of State P.O. Box 12060 Austin, Texas 78711-2060 Ms. Irene Diaz Fax #512-475-2811 The five (5) digit vendor number must also be included. You may also contact the awarded vendor(s) if you do not have their current catalog and/or price lists as detailed in the Non-Automated Term Contract Information pages or Internet access. You can print the Non-AUtoma*_ed Purchase Order Form off TBPCs website at: www.tbpc.state.tx.us/execut/forms.html State agencies that use this contract should code their documents as a Document Type 2, C. NOTE: CLARIFICATION TO THE GENERAL INSTRUCTIONS, TERMS AND CONDITIONS: THE GENERAL INSTRUCTIONS, TERMS AND CONDITIONS AND BE FOUND AT THE FOLLOWING WEBSITE: www.tbpc.state.tx.us%stcnurcYi./ae ni.nst.ht.ma III. GENERAL PROVISIONS C. Inspections and Tests The State will consider the vendors previously developed acceptance criteria for the purposes of objectively determining whether or not the system components meet minimum acceptance criteria as well as any other method deemed appropriate by the State. X. CANCELLATION Should cancellation of the contract become necessary, the State will compensate the vendor for equipment received and services performed prior to the cancellation. http://www.tbpcstate.tx.us/cat~age/cat_578_nl_0503.htm1 9/27/2005 TBPC Term Contract for ELECTRONIC VOTING SYSTEMS -PURCHASE Page 13 of 13 XI. OTHER PROVISIONS H. Indemnification Clause Our indemnification clause is mandated by statute. The state cannot accept any exceptions to this clause. http://www.tbpc.state.tx.us/cat~age/cat_578_nl_0503.htm1 9/27/2005 10-20-05 03:08pm From-HART INTERCIVIC +5122526776 T-712 P 02/02 F-2H4 SCHEDULE Al HARDWARE AND SOFI'WARE'VERSION NUMBERS The following is a list of all certified components of Hart InterCivic's Vodxg Syssrws 5.0: Component Version DescrtpNon BOSST^+ 4.1.9 Ballot Origination Software System used to define the election. Ballot NowTM 3.1.10 Paper ballot management system. Ra11yT~ 21.4 Application used to send election results from satellite locations. Ta11yTM 4.IA Appliegtiw used td tabulate election results. eCM ManagerTM 1.0.7 Elechonic Crypto Module. SetvoT~ 4.0.13 Election-records and tscetmt-management system. J13C~ 3.1.3 Judges Hooth Conn'oller. The oontroUer twit for uP to twelve (l2) eSlate/DAU ttnits. The wNroller unlt is used to generate access nodes for the voter. eSlateQD 3.1.3 Direct Recording Electronic voting system IDRE). c9canT~ 1.0.10 Precinct based scamKr used for election day and absentee voting. Note: This page should be forwarded to the Texas Secretary of State to provide the aecessary hardware and software version infortnatlon. (1'he rest ojthls page is uwerrtionally left bleak)