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A. Contractor assures and guarantees that Contractor possesses the legal authority to enter into this contract, receive funds authorized by this contract, and to perform the services Contractor has obligated itself to perform hereunder. B. The person or persons signing and executing this contract on behalf of Contractor, or representing themselves as signing and executing this contract on behalf of Contractor, do hereby warrant and guarantee that he, she or they have been duly authorized by Contractor to execute this contract on behalf of Contractor and to validly and legally bind Contractor to all terms, performances, and provi§ions herein set forth. C. City will have the right to suspend or terminate this contract if there is a dispute as to the legal authority of either Contractor or the person signing this contract to enter into this contract, any amendments hereto or to render performances hereunder. Contractor is liable to City for any money it has received from City for performance of the provisions of this contract, if City has suspended or terminated this contract for reasons enumerated in this Section 14. SECTION 15. LITIGATION AND CLAIMS Contractor shall give City immediate notice in writing of (1) any action, including any proceeding before an administrative agency, filed against Contractor arising out the performance of any subcontract hereunder; and (2) any claim against Contractor, the cost and expense of which Contractor may be entitled to be reimbursed by City. Except as otherwise directed by City, Contractor shall furnish immediately to City copies of all pertinent papers received by Contractor with respect to such action or claim. Contractor shall require the business funded under this contract to notify City immediately of any legal action filed against the business or of any proceeding filed under the federal bankruptcy code. Contractor shall submit a copy of such notice to City within 30 days after receipt. No funds provided under this contract may be used in the payment of any costs incurred from violations or settlements' of or failure to comply with federal, state, and regulations. SECTION 16. CHANGES AND AMENDMENTS A. Except as specifically provided otherwise in this contract, any alterations, additions, or deletions to the terms of this contract shall be by amendment hereto in writing and executed by both parties to this contract. B. It is understood and agreed by the parties hereto that performances under this contract must be rendered in accordance with the Act, the Regulations, the assurances and certifications made to City by Contractor, and the assurances and certifications made to ORCA by the City of San Marcos with regard to the operation of the Texas Community Development Program. Based on these considerations, and in order to ensure the legal and effective performance of this contract by both parties, it is agreed by the parties hereto that the performances under this contract are amended by the provisions of the most recent version of the With String Attached Implementation Manual and any amendments thereto and may further be amended in the following manner: City may from time to time during the period of performance of this contract issue policy directives which serve to establish, interpret, or clarify performance requirements under this contract. Such policy directives shall be promulgated by City in the form of RLF issuances, shall have the effect of qualifying the terms of this contract and shall be binding upon Contractor, as if written herein, provided however that said policy directives and any amendments to said Manual shall not alter the terms of this contract so as to release City of any obligation specified in Section 4 of this contract to reimburse costs incurred by Contractor prior to the effective date of said amendments or policy directives. Page 7 of * TCF-PY02 Revised 11/5/02 Conlract g-