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r3 0ontract Number ICM04358 California Department of Corrections (CDC) Exhibit D SPECIAL TERMS AND CONDITIONS 1. Contract Disputes (Supersedes provision number 6, Disputes, of Exhibit C) As a condition precedent to contractor's right to institute and pursue litigation or other legally available dispute resolution process, if any, contractor agrees that all disputes and/or claims of contractor arising under or related to the Agreement shall be resolved pursuant to the following processes. Contractor's failure to comply with said dispute resolution procedures shall constitute a failure to exhaust administrative remedies. Pending the final resolution of any such disputes and/or claims, contractor agrees to diligently proceed with the performance of the Agreement, including the delivering of goods or providing of services. Contractor's failure to diligently proceed shall constitute a material breach of the Agreement. The Agreement shall be interpreted, administered, and enforced according to the laws of the State of California. The parties agree that any suit brought hereunder shall have venue in Sacramento, California, the parties hereby waiving any claim or defense that such venue is not convenient or proper. a. Final Payment The acceptance by contractor of final payment shall release the California Department of Correction (CDC) from all claims, demands and liability to contractor for everything -done or furnished in connection with this work and from every act and neglect of CDC and others relating to or arising out of this work except for any claim previously accepted and/or in process of resolution. b. Informal Appeal Contractor and the program or institution contract liaison, or other designated CDC employee of the unit for which the goods are being delivered or the service is being performed, shall first attempt in good faith to resolve the dispute or claim by informal discussion(s). Contractor shall identify the issues and the relief sought. Informal discussion(s) between contractor and contract liaison, or the designated CDC employee, shall be written, dated, and signed by the authors. The program or institution contract liaison shall issue an informal written statement to contractor regarding the dispute within fifteen (15) calendar days following settlement or an impasse in the informal discussion(s) process. The written statement shall either: (1) document the dispute settlement and what, if any, conditions were reached; or, (2), document the reason(s) the dispute could not be'resolved informally and provide notification to contractor of its option to file a formal appeal within thirty (30) days of the informal statement. One (1) copy of the informal statement and the discussion(s) on which it is based shall be forwarded immediately to the Office of Contract Services (OCS) for inclusion in the Agreement file. C. Formal Appeal If the dispute or claim is not resolved to contractor's satisfaction by the informal appeal process, contractor may file with the Assistant Deputy Director, OCS, a formal written appeal within thirty (30) calendar days of the date of CDC's informal written decision. The formal written appeal shall be addressed as follows: