CALIFORNIA DEPARTMENT OF JUSTICE

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California Department of Justice Memorandum of Understanding Exhibit B, Miscellaneous Provisions iv. Settle all outstanding liabilities and termination settlement proposals arising from the termination of subcontracts; c. After termination, the Agency shall submit a final termination settlement proposal to the State in the form and with the information prescribed by the State. The Agency shall submit the proposal promptly, but no later than 90 days after the effective date of termination, unless a different time is provided in the Purpose or in the Notice of Termination. The Agency and the State may agree upon the whole or any part of the amount to be paid as requested under subsection (c) above. Unless otherwise set forth in the Purpose if the Agency and the State fail to agree on the amount to be paid because of the termination for convenience, the State will pay the Agency the following amounts; provided that in no event will total payments exceed the amount payable to the Agency if the MOU had been fully performed: i. The MOU price for Deliverables or services accepted or retained by the State and not previously paid for, adjusted for any savings on freight and other charges; and i. The total of: A. The reasonable costs incurred in the performance of the work terminated, including initial costs and preparatory expenses allocable thereto, but excluding any cost attributable to Deliverables or services paid or to be paid; B. The reasonable cost of settling and paying termination settlement proposals under terminated subcontracts that are properly chargeable to the terminated portion of the MOU; and C. Reasonable storage, transportation, demobilization, unamortized overhead and capital costs, and other costs reasonably incurred by the Agency in winding down and terminating its work. The Agency will use generally accepted accounting principles, or accounting principles otherwise agreed to in writing by the parties, and sound business practices in determining all costs claimed, agreed to, or determined under this clause. 4. INDEMNIFICATION: The Agency agrees to indemnify, defend and save harmless the State, its officers, agents and employees from any and all third party claims, costs (including without limitation reasonable attorneys' fees), and losses due to the injury or death of any individual, or the loss or damage to any real or tangible personal property, resulting from the willful misconduct or negligent acts or omissions of the Agency or any of its affiliates, agents, subcontractors, employees, suppliers, or laborers furnishing or supplying work, services, materials, or supplies in connection with the performance of this MOU. Such defense and payment will be conditional upon the following: Page 2 of 4