220000000845.pdf

NOTICE OF CONTRACT

NOTICE OF CONTRACT NO. 220000000845 .

between

THE STATE OF MICHIGAN

and

C O

N

TR

A C

TO

R

Lake States Yeast, LLC

ST

A

TE

Pr og ra m

M an ag er Jacob McWethy DNR

428 West Davenport Street 906-249-1611

Rhinelander, WI 54501 McwethyJ@michigan.gov

Shelly DeHart C on tra ct

Ad m in is tra to r Lisa Crozier-Green DNR

715-369-4949 517-388-6626 lsyorders@lallemand.com CrozierGreenL@michigan.gov

CV0067039

CONTRACT SUMMARY

DESCRIPTION: Torula Yeast (Type B or Type K) Non-Active, in powder form, supplied in moisture proof, fifty (50) lb. bags.

INITIAL EFFECTIVE DATE INITIAL EXPIRATION DATE INITIAL AVAILABLE OPTIONS

EXPIRATION DATE BEFORE

CHANGE(S) NOTED BELOW

April 28, 2022 April 30, 2025 TWO 1-Year Options to Renew April 30, 2025

PAYMENT TERMS DELIVERY TIMEFRAME

Net 45 ARI Fourteen (14) Days ARO, pending supply chain issues

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

☐ P-card ☐ Payment Request (PRC) ☐ Other ☐ Yes ☒ No

MINIMUM DELIVERY REQUIREMENTS

N/A

MISCELLANEOUS INFORMATION

THIS IS NOT AN ORDER: Orders will be placed directly by the DNR via the authorized document established in Schedule A, Section 5.1. Authorizing Documents and per the terms, conditions, specifications and pricing of this Contract.

The terms and conditions of this Contract are those of RFP 22000001945, this Contract Agreement and the vendor's quote dated April 15, 2022. In the event of any conflicts between the specifications and / or terms and conditions indicated by the State and those indicated by the vendor, those of the State take precedence.

ESTIMATED CONTRACT VALUE AT TIME OF

EXECUTION $75,000.00

STATE OF MICHIGAN PROCUREMENT

Department of Natural Resources 525 West Allegan, Constitution Hall, Third Floor Lansing, MI 48933

Michigan.gov/MiProcurement

CONTRACT NO. 220000000845

FOR THE CONTRACTOR:

Lake States Yeast, LLC

Company Name

Authorized Agent Signature

Nathan Rudis, Plant Manager

Authorized Agent (Print or Type)

Date

FOR THE STATE:

Signature

Laura L. Gyorkos, Procurement Manager

Name & Title

Agency

SCHEDULE A – STATEMENT OF WORK

CONTRACT ACTIVITIES

Department of Natural Resources Fisheries Division

Torula Yeast Contract No. 220000000845

SCOPE

This Contract is for the annual purchase of approximately 5,000 lbs. of Torula Yeast for DNR Fisheries Division.

REQUIREMENTS

1. Requirements

1.1. General Requirements

A. The Contractor agrees to provide all personnel, equipment, tools, materials, supervision, and other items and / or services necessary to perform the Contract Activities as described in Schedule A – Statement of Work.

B. The Contractor agrees to provide all supervision necessary to oversee all Contract Activities performed by Contractor personnel or subcontractors.

C. The State reserves the right to approve personnel and / or subcontractors for the Contract Activities, and to require placement of personnel found unacceptable.

D. The State reserves the right to modify the services required under this RFP and / or any resulting contract to meet the State of Michigan’s future needs.

E. The State of Michigan will not pay for unperformed services, or for services performed on State Holidays unless pre-approved in writing (email acceptable) by Program Manager or designee.

F. State Holidays include:

New Year’s Eve / New Year’s Day Martin Luther King, Jr. Birthday Presidents Day Memorial Day Independence Day Labor Day Veteran’s Day Election Day (even numbered years) Thanksgiving Day (Thursday and Friday) Christmas Eve / Christmas Day

1.2 Specifications

A. Torula Yeast (Type B or Type K)

1. The Contractor agrees to provide Torula Yeast (Type B or Type K).

2. The DNR typically purchases between 3,000 and 5,000 pounds per year.

Annual quantities will vary depending on hatchery rearing requirements.

3. Torula Yeast shall be Non-Active Torula Yeast, in powder form only.

4. Torula Yeast shall be supplied in moisture proof, fifty (50) pound bags.

1.3. Warranties

1. The State reserves the right to require additional warranties other than those identified by the Contractor.

1.4. Incentives

The Contractor is not offering quick payment terms.

1.6. Transition

A. Post-Contract Transition:

The Contractor agrees invoices will be received by the DNR no more than 45 days after contract expiration. Any invoices received after 45 days may result in a non-payment of invoice.

2. Service Requirements

2.1. Timeframes

A. The Contractor agrees all Contract Activities will be delivered within fourteen

(14) calendar days from receipt of order, pending supply chain issues.

Extended lead times may be required. The receipt of order date is pursuant to the Notices section of the Standard Contract Terms.

2.2. Delivery

A. Delivery will be expected within fourteen calendar days upon date of order during standard business hours. If delivery cannot be made within fourteen calendar days due to supply chain issues, Contractor will notify the DNR with an anticipated lead time. Delivery may be made to various locations inside Michigan. Please refer to Delivery Order for shipping location.

2.3. Meetings

A. The Contractor agrees to attend any meetings requested by the State.

Meetings will be virtual when possible.

B. Meetings may include:

1. Annual Service Review and Progress Meeting to discuss services provided and Contractor’s service quality.

C. The State may request other meetings as it deems appropriate.

3. Staffing

3.1 Key Personnel

A. The Contractor agrees to designate at least one Key Personnel who will be directly responsible for the day-to-day operations of the Contract. Key Personnel may be the same individual as the Contractor Representative.

B. Key Personnel must be:

1. Knowledgeable of the contractual requirements

2. Respond to emergency situations within two (2) hours, and

3. Respond to State inquiries within eight (8) business hours

4. Trained and qualified to directly supervise the day-to-day Contract

Activities.

C. General employees or attendants may not be substituted for Key Personnel.

D. The State reserves the right to:

1. Require more than one Key Personnel to adequately supervise the day-to-day Contract Activities.

2. Approve Key Personnel and / or

3. Require replacement of Key Personnel, if necessary, to successfully perform the Contract Activities.

4. Request a résumé and conduct an interview before approving a change.

5. Require a 30 calendar-day training period for replacement personnel.

E. The Contractor agrees not to remove or assign Key Personnel without prior consent of the State. Prior consent is not required for reassignment for reasons beyond the Contractor’s control, including illness, disability, death, leave of absence, personal emergency circumstances, resignation, or termination for cause.

Bidder Response:

Key Personnel: Shelly DeHart Location: Rhinelander, WI Telephone Number: 715-369-4949 Email Address: lsyorders@lallemand.com Organizational Role: Gov’t Sales Qualifications:

Relevant Experience:

Scope of responsibilities:

Other Contracts:

Geographic Region Covered:

Number of employees supervised:

3.2 Contractor Representative

A. The Contractor agrees to designate one Contractor Representative assigned to any resulting Contract who will be available to receive calls for service prior to 7:00 a.m. Monday – Friday, respond to notice of unacceptable conditions within four (4) business hours and respond to State inquiries regarding the Contract Activities. The Contractor Representative and Key Personnel may be the same individual.

B. The Contractor agrees to notify the Contract Administrator at least ten (10) calendar days before removing or assigning a new Contractor Representative.

The Contract Administrator will draft a Change Notice for signature by the Contractor.

C. The Contractor must identify the Contractor Representative, indicate where they will be physically located, provide contact information and describe the functions they will perform.

Bidder Response:

Contractor Representative: Shelly DeHart Address: Rhinelander, WI Telephone: 715-369-4949 Email: lsyorders@lallemand.com Days / Times Available: M-F 8-5

Function:

3.2. Disclosure of Subcontractors

A. The Contractor does not intend to utilize subcontractors for the performance of

Contract Activities.

B. In the event the Contractor requires the use of subcontractors, the Contractor agrees the subcontractors will be bound to the Contractor by the terms of this Contract.

C. The State reserves the right to review and approve subcontractors or require replacement of unacceptable subcontractors. The State’s written approval of any subcontractor does not relieve the Contractor of any obligation or performance required under any resulting Contract.

D. The State will direct payments for Contract Activities only to the Contractor.

E. If the Contractor intends to utilize a subcontractor for any portion of the Contract

Activities the Contractor agrees to provide the following:

Bidder Response:

Subcontractor: n/a Business Name:

Address:

Telephone:

Email:

Description of organization:

Services provided:

Detail on Subcontractor’s ability to provide Contract Activities:

Previous working relationship with Contractor:

Description of Contract Activities to be performed:

3.4 Security

A. Contractor Responsibilities

1. All persons assigned by the Contractor to perform Contract Activities must be employees of the Contractor or a named subcontractor and fully qualified to perform the work assigned to them.

2. The Contractor agrees all persons performing Contract Activities will be readily identifiable as Contractor employees by wearing uniforms and / or displaying Contractor ID badges.

3. The State may require Contractor employees to wear State issued ID badges.

4. The Contractor agrees to ensure the safety of State facilities by performing background checks and / or drug screening on employees.

5. Upon request, the Contractor and/or sub-contractors must share background check results / documentation with DNR Human Resources, or their designee.

6. The State reserves the right to request additional background checks at the discretion of state agencies or branches of state government as outlined in the Standard Contract Terms document.

B. DNR Human Resources Responsibilities

1. DNR Human Resources, or designee, is the sole contact to view background check or drug testing results on behalf of the State.

2. DNR Human Resources contact person is Amy Abdo, AbdoA@michigan.gov.

(517) 284-5017.

C. State Employee Responsibilities

1. State employees are required to report any potential concerns regarding security, theft, requests for reasonable suspicion testing, or substance abuse issues regarding the Contractor’s employees to: T/B/D at Contract.

4. Pricing

4.1. Price Term

A. Price Proposed is for DNR pick up only.

B. Orders requiring shipping will be subject to additional shipping charges, estimated at the time the order is received. Shipping will be quoted F.O.B.

Destination, inside Michigan.

C. Pricing is firm for a 365-day period (“Pricing Period”) which begins on the Effective Date of any resulting Contract. Adjustments may be requested in writing by either party, effective no earlier than the next Pricing Period.

4.2. Price Changes

A. Adjustments will be based on actual changes in Contractor costs. Any request must be supported by written evidence documenting the change in costs. The State may consider sources, such as the Consumer Price Index; Producer Price Index; other pricing indices as needed; economic and industry data;

manufacturer or supplier letters noting the increase in pricing; and any other data the State deems relevant.

B. Following the presentation of supporting documentation, both parties will have 30 days to review the information and prepare a written response. If the review reveals no need for modifications, pricing will remain unchanged unless mutually agreed to by the parties. If the review reveals that changes are needed, both parties will negotiate such changes, for no longer than 30 days, unless extended by mutual agreement.

C. The Contractor remains responsible for Contract Activities at the current price for all orders received before the mutual execution of a Change Notice indicating the start date of the new Pricing Period.

5. Ordering

5.1. Authorizing Document

A. The appropriate authorizing document to begin Contract Activities will be properly executed delivery order (DO). Delivery orders will be provided to the Contractor via the email address in their SIGMA VSS account.

5.2 Order Verification

A. The Contractor must have internal controls to verify abnormal requests and to ensure that only authorized individuals request service.

6. Delivery Program / Packaging / Palletizing

6.1. Delivery Program

A. For orders requiring delivery, the Contractor agrees to utilize the best rate shipping available, i.e. UPS, FedEx, FedEx Ground, etc.

6.2 Packaging and Palletizing

A. Packaging will be optimized to permit the lowest freight rate. Shipments will be palletized whenever possible using manufacturer's standard 4-way shipping pallets.

7. Invoice and Payment

7.1. Invoice Requirements

A. All invoices submitted to the State must include:

a. Date

b. Delivery Order number (DO or Doc I.D.)

c. Quantity – Service Area and Acres

d. Description of the Contract Activities

e. Unit price

f. Total price

7.2. Payment Methods

A. The State will make payment for Contract Activities by Electronic Funds Transfer

(EFT) only.

7.3. Procedure / Payment Terms

A. Payment terms are Net 45 Days after receipt of invoice (ARI).

8. Liquidated Damages

A. Late or improper completion of the Contract Activities will cause loss and damage to the State and it would be impracticable and extremely difficult to fix the actual damage sustained by the State.

B. If there is late or improper completion of the Contract Activities the State is entitled to collect liquidated damages in the amount of $500 and an additional $100 per day for each day Contractor fails to remedy the late or improper completion of the Work.

Revised 5/03/2016

SCHEDULE B - PRICING

Fisheries Division Torula Yeast

Contract No. 220000000845

1. Price proposed includes all costs, i.e. any one-time or set-up charges, fees, and potential costs that Contractor may charge the State (e.g., per piece pricing, and palletizing). Price proposed does NOT include shipping. Orders requiring Contractor shipping will be subject to additional charges. Shipping will be calculated when the order is placed and will be F.O.B. Destination.

2. The Contractor is not offering quick payment terms.

3. By submitting its proposal, the Contractor certifies that the prices were arrived at independently, and without consultation, communication, or agreement with any other Contractor.

DESCRIPTION

ESTIMATED

ANNUAL

REQUIREMENTS

PRICE PER

POUND

ANNUAL

TOTAL

Torula Yeast (Type B or Type K), Non-Active Torula Yeast, in powder form, supplied in moisture proof, fifty (50) pound bags. Price proposed is for DNR pick up and does not include shipping.

5,000 LBS. $3.00 $15,00000

ANNUAL TOTAL $15,00000

Contract Total – Three Base Years plus 2 Options to Renew $75,000.00

STANDARD CONTRACT TERMS

This STANDARD CONTRACT (“Contract”) is agreed to between the State of Michigan (the “State”) and Lake States Yeast, LLC (“Contractor”), a Wisconsin Company. This Contract is effective on April 28, 2022 (“Effective Date”), and unless terminated, expires on April 30, 2025.

This Contract may be renewed for up to TWO 1-Year Options to Renew. Renewal is at the sole discretion of the State and will automatically extend the Term of this Contract. The State will document its exercise of renewal options via Contract Change Notice.

The parties agree as follows:

1. Duties of Contractor. Contractor must perform the services and provide the deliverables described in Schedule A – Statement of Work (the “Contract Activities”). An obligation to provide delivery of any commodity is considered a service and is a Contract Activity.

Contractor must furnish all labor, equipment, materials, and supplies necessary for the performance of the Contract Activities unless otherwise specified in Schedule A.

Contractor must: (a) perform the Contract Activities in a timely, professional, safe, and workmanlike manner consistent with standards in the trade, profession, or industry; (b) meet or exceed the performance and operational standards, and specifications of the Contract; (c) provide all Contract Activities in good quality, with no material defects; (d) not interfere with the State’s operations; (e) obtain and maintain all necessary licenses, permits or other authorizations necessary for the performance of the Contract; (f) cooperate with the State, including the State’s quality assurance personnel, and any third party to achieve the objectives of the Contract; (g) return to the State any State-furnished equipment or other resources in the same condition as when provided when no longer required for the Contract;

(h) assign to the State any claims resulting from state or federal antitrust violations to the extent that those violations concern materials or services supplied by third parties toward fulfillment of the Contract; (i) comply with all State physical and IT security policies and standards which will be made available upon request; and (j) provide the State priority in performance of the Contract except as mandated by federal disaster response requirements. Any breach under this paragraph is considered a material breach.

Contractor must also be clearly identifiable while on State property by wearing identification issued by the State, and clearly identify themselves whenever contacting the State.

2. Notices. All notices and other communications required or permitted under this Contract must be in writing and will be considered given and received: (a) when verified by written receipt if sent by courier; (b) when actually received if sent by mail without verification of receipt; or (c) when verified by automated receipt or electronic logs if sent by facsimile or email.

If to State: If to Contractor:

Lisa Crozier-Green 525 West Allegan, Constitution Hall, 3rd Floor Lansing, MI 48933 CrozierGreenL@michigan.gov 517-388-6626

Shelly DeHart 428 West Davenport Street Rhinelander, WI 54501 lsyorders@lallemand.com 715-369-4969

3. Contract Administrator. The Contract Administrator, or the individual duly authorized for each party, is the only person authorized to modify any terms of this Contract, and approve and execute any change under this Contract (each a “Contract Administrator”):

State: Contractor:

Lisa Crozier-Green 525 West Allegan, Constitution Hall, 3rd Floor Lansing, MI 48933 CrozierGreenL@michigan.gov 517-388-6626

Shelly DeHart 428 West Davenport Street Rhinelander, WI 54501 lsyorders@lallemand.com 715-369-4969

4. Program Manager. The Program Manager for each party will monitor and coordinate the day-to-day activities of the Contract (each a “Program Manager”):

State: Contractor:

Jacob McWethy DNR Fisheries Division Northern Lake Michigan Management Unit Escanaba, MI McWethyJ@michigan.gov 906-249-1611

Shelly DeHart 428 West Davenport Street Rhinelander, WI 54501 lsyorders@lallemand.com 715-369-4969

5. Performance Guarantee. Contractor must at all times have financial resources sufficient, in the opinion of the State, to ensure performance of the Contract and must provide proof upon request. The State may require a performance bond (as specified in Schedule A – Statement of Work) if, in the opinion of the State, it will ensure performance of the Contract.

6. Insurance Requirements.

Contractor, at its sole expense, must maintain the insurance coverage identified below. All required insurance must: (a) protect the State from claims that may arise out of, are alleged to arise out of, or otherwise result from Contractor's or a subcontractor's performance; (b) be primary and non-contributing to any comparable liability insurance (including self-insurance) carried by the State; and

(c) be provided by a company with an A.M. Best rating of "A-" or better, and a financial size of VII or better.

Required Limits Additional Requirements

Commercial General Liability Insurance Minimum Limits:

$1,000,000 Each Occurrence $1,000,000 Personal & Advertising Injury

Contractor must have their policy endorsed to add “the State of Michigan, its departments, divisions, mailto:McWethyJ@michigan.gov

Required Limits Additional Requirements $2,000,000 Products/Completed Operations $2,000,000 General Aggregate agencies, offices, commissions, officers, employees, and agents” as additional insureds using endorsement CG 20 10 11 85, or both CG 20 10 12 19 and CG 20 37 12 19.

Automobile Liability Insurance Minimum Limits:

$1,000,000 Per Accident Contractor must have their policy: (1) endorsed to add “the State of Michigan, its departments, divisions, agencies, offices, commissions, officers, employees, and agents” as additional insureds; and (2) include Hired and Non-Owned Automobile coverage.

Workers' Compensation Insurance Minimum Limits:

Coverage according to applicable laws governing work activities.

Waiver of subrogation, except where waiver is prohibited by law.

If any of the required policies provide claims-made coverage, the Contractor must:

(a) provide coverage with a retroactive date before the Effective Date of the Contract or the beginning of Contract Activities; (b) maintain coverage and provide evidence of coverage for at least 3 years after completion of the Contract Activities;

and (c) if coverage is cancelled or not renewed, and not replaced with another claims-made policy form with a retroactive date prior to the Contract Effective Date, Contractor must purchase extended reporting coverage for a minimum of 3 years after completion of work.

Contractor must: (a) provide insurance certificates to the Contract Administrator, containing the agreement or delivery order number, at Contract formation and within 20 calendar days of the expiration date of the applicable policies; (b) require that subcontractors maintain the required insurance contained in this Section; (c) notify the Contract Administrator within 5 business days if any insurance is cancelled; and (d) waive all rights against the State for damages covered by insurance. Failure to maintain the required insurance does not limit this waiver.

This Section is not intended to and is not to be construed in any manner as waiving, restricting or limiting the liability of either party for any obligations under this Contract (including any provisions hereof requiring Contractor to indemnify, defend and hold harmless the State).

7. Relationship of the Parties. The relationship between the parties is that of independent contractors. Contractor, its employees, and agents will not be considered employees of the State. No partnership or joint venture relationship is created by virtue of this Contract. Contractor, and not the State, is responsible for the payment of wages, benefits and taxes of Contractor’s employees and any subcontractors. Prior performance does not modify Contractor’s status as an independent contractor. Neither party has authority to contract for nor bind the other party in any manner whatsoever.

8. Intellectual Property Rights. If Schedule A, Statement of Work, requires Contractor to create any intellectual property, Contractor hereby acknowledges that the State is and will be the sole and exclusive owner of all right, title, and interest in the Contract Activities and all associated intellectual property rights, if any. Such Contract Activities are works made for hire as defined in Section 101 of the Copyright Act of 1976. To the extent any Contract Activities and related intellectual property do not qualify as works made for hire under the Copyright Act, Contractor will, and hereby does, immediately on its creation, assign, transfer and otherwise convey to the State, irrevocably and in perpetuity, throughout the universe, all right, title and interest in and to the Contract Activities, including all intellectual property rights therein.

9. Subcontracting. Contractor may not delegate any of its obligations under the Contract without the prior written approval of the State. Contractor must notify the State at least 90 calendar days before the proposed delegation and provide the State any information it requests to determine whether the delegation is in its best interest. If approved, Contractor must: (a) be the sole point of contact regarding all contractual matters, including payment and charges for all Contract Activities; (b) make all payments to the subcontractor; and (c) incorporate the terms and conditions contained in this Contract in any subcontract with a subcontractor.

Contractor remains responsible for the completion of the Contract Activities, compliance with the terms of this Contract, and the acts and omissions of the subcontractor. The State, in its sole discretion, may require the replacement of any subcontractor.

10. Staffing. The State’s Contract Administrator may require Contractor to remove or reassign personnel by providing a notice to Contractor.

11. Background Checks. Pursuant to Michigan law, all agencies subject to IRS Pub.

1075 are required to ask the Michigan State Police to perform fingerprint background checks on all employees, including Contractor and Subcontractor employees, who may have access to any database of information maintained by the federal government that contains confidential or personal information, including, but not limited to, federal tax information. Further, pursuant to Michigan law, any agency described above is prohibited from providing Contractors or Subcontractors with the result of such background check. For more information, please see Michigan Public Act 427 of 2018. Upon request, or as may be specified in Schedule A, Contractor must perform background checks on all employees and subcontractors and its employees prior to their assignment. The scope is at the discretion of the State and documentation must be provided as requested.

Contractor is responsible for all costs associated with the requested background checks. The State, in its sole discretion, may also perform background checks.

12. Assignment. Contractor may not assign this Contract to any other party without the prior approval of the State. Upon notice to Contractor, the State, in its sole discretion, may assign in whole or in part, its rights or responsibilities under this Contract to any other party. If the State determines that a novation of the Contract to a third party is necessary, Contractor will agree to the novation and provide all necessary documentation and signatures.

13. Change of Control. Contractor will notify the State, within 30 days of any public announcement or otherwise once legally permitted to do so, of a change in Contractor’s organizational structure or ownership. For purposes of this Contract, a change in control means any of the following: (a) a sale of more than 50% of Contractor’s stock; (b) a sale of substantially all of Contractor’s assets; (c) a change in a majority of Contractor’s board members; (d) consummation of a merger or consolidation of Contractor with any other entity; (e) a change in ownership through a transaction or series of transactions; (f) or the board (or the stockholders) approves a plan of complete liquidation. A change of control does not include any consolidation or merger effected exclusively to change the domicile of Contractor, or any transaction or series of transactions principally for bona fide equity financing purposes.

In the event of a change of control, Contractor must require the successor to assume this Contract and all of its obligations under this Contract.

14. Ordering. Contractor is not authorized to begin performance until receipt of authorization as identified in Schedule A.

15. Acceptance. Contract Activities are subject to inspection and testing by the State within 30 calendar days of the State’s receipt of them (“State Review Period”), unless otherwise provided in Schedule A. If the Contract Activities are not fully accepted by the State, the State will notify Contractor by the end of the State Review Period that either: (a) the Contract Activities are accepted but noted deficiencies must be corrected; or (b) the Contract Activities are rejected. If the State finds material deficiencies, it may: (i) reject the Contract Activities without performing any further inspections; (ii) demand performance at no additional cost;

or (iii) terminate this Contract in accordance with Section 24, Termination for Cause.

Within 10 business days from the date of Contractor’s receipt of notification of acceptance with deficiencies or rejection of any Contract Activities, Contractor must cure, at no additional cost, the deficiency and deliver unequivocally acceptable Contract Activities to the State. If acceptance with deficiencies or rejection of the Contract Activities impacts the content or delivery of other non-completed Contract Activities, the parties’ respective Program Managers must determine an agreed to number of days for re-submission that minimizes the overall impact to the Contract.

However, nothing herein affects, alters, or relieves Contractor of its obligations to correct deficiencies in accordance with the time response standards set forth in this Contract.

If Contractor is unable or refuses to correct the deficiency within the time response standards set forth in this Contract, the State may cancel the order in whole or in part. The State, or a third party identified by the State, may perform the Contract Activities and recover the difference between the cost to cure and the Contract price plus an additional 10% administrative fee.

16. Delivery. Contractor must deliver all Contract Activities F.O.B. destination, within the State premises with transportation and handling charges paid by Contractor, unless otherwise specified in Schedule A. All containers and packaging become the State’s exclusive property upon acceptance.

17. Risk of Loss and Title. Until final acceptance, title and risk of loss or damage to Contract Activities remains with Contractor. Contractor is responsible for filing, processing, and collecting all damage claims. The State will record and report to Contractor any evidence of visible damage. If the State rejects the Contract Activities, Contractor must remove them from the premises within 10 calendar days after notification of rejection. The risk of loss of rejected or non-conforming Contract Activities remains with Contractor. Rejected Contract Activities not removed by Contractor within 10 calendar days will be deemed abandoned by Contractor, and the State will have the right to dispose of it as its own property. Contractor must reimburse the State for costs and expenses incurred in storing or effecting removal or disposition of rejected Contract Activities.

18. Warranty Period. The warranty period, if applicable, for Contract Activities is a fixed period commencing on the date specified in Schedule A. If the Contract Activities do not function as warranted during the warranty period, the State may return such non-conforming Contract Activities to the Contractor for a full refund.

19. Invoices and Payment. Invoices must conform to the requirements communicated from time-to-time by the State. All undisputed amounts are payable within 45 days of the State’s receipt. Contractor may only charge for Contract Activities provided as specified in Schedule A. Invoices must include an itemized statement of all charges. The State is exempt from State sales tax for direct purchases and may be exempt from federal excise tax, if Services purchased under this Agreement are for the State’s exclusive use. Notwithstanding the foregoing, all fees are exclusive of taxes, and Contractor is responsible for all sales, use and excise taxes, and any other similar taxes, duties and charges of any kind imposed by any federal, state, or local governmental entity on any amounts payable by the State under this Contract.

The State has the right to withhold payment of any disputed amounts until the parties agree as to the validity of the disputed amount. The State will notify Contractor of any dispute within a reasonable time. Payment by the State will not constitute a waiver of any rights as to Contractor’s continuing obligations, including claims for deficiencies or substandard Contract Activities. Contractor’s acceptance of final payment by the State constitutes a waiver of all claims by Contractor against the State for payment under this Contract, other than those claims previously filed in writing on a timely basis and still disputed.

The State will only disburse payments under this Contract through Electronic Funds Transfer (EFT). Contractor must register with the State at http://www.michigan.gov/SIGMAVSS to receive electronic fund transfer payments.

If Contractor does not register, the State is not liable for failure to provide payment.

Without prejudice to any other right or remedy it may have, the State reserves the right to set off at any time any amount then due and owing to it by Contractor against any amount payable by the State to Contractor under this Contract.

Excluding federal government charges and terms, Contractor warrants and agrees that each of the fees, economic or product terms or warranties granted pursuant to this Contract are comparable to or better than the equivalent fees, economic or product term or warranty being offered to any commercial or government customer (including any public educational institution within the State of Michigan) of Contractor. If Contractor enters into any arrangements with another customer of Contractor to provide the products or services, available under this Contract, under more favorable prices, as the prices may be indicated on Contractor’s current U.S.

and International price list or comparable document, then this Contract will be deemed amended as of the date of such other arrangements to incorporate those more favorable prices, and Contractor will immediately notify the State of such fee and formally memorialize the new pricing in a change notice.

20. Liquidated Damages. Liquidated damages, if applicable, will be assessed as described in Schedule A. The parties understand and agree that any liquidated damages (which includes but is not limited to applicable credits) set forth in this Contract are reasonable estimates of the State’s damages in accordance with applicable law. The parties acknowledge and agree that Contractor could incur liquidated damages for more than 1 event. The assessment of liquidated damages will not constitute a waiver or release of any other remedy the State may have under this Contract for Contractor’s breach of this Contract, including without limitation, the State’s right to terminate this Contract for cause under Section 24 and the State will be entitled in its discretion to recover actual damages caused by Contractor’s failure to perform its obligations under this Contract. However, the State will reduce such actual damages by the amounts of liquidated damages received for the same events causing the actual damages.

Amounts due the State as liquidated damages may be set off against any fees payable to Contractor under this Contract, or the State may bill Contractor as a separate item and Contractor will promptly make payments on such bills.

21. Stop Work Order. The State may suspend any or all activities under the Contract at any time. The State will provide Contractor a written stop work order detailing the suspension. Contractor must comply with the stop work order upon receipt. Within 90 calendar days, or any longer period agreed to by Contractor, the State will either: (a) issue a notice authorizing Contractor to resume work, or (b) terminate the Contract or delivery order. The State will not pay for Contract Activities, Contractor’s lost profits, or any additional compensation during a stop work period.

http://www.michigan.gov/SIGMAVSS

22. Termination for Cause. The State may terminate this Contract for cause, in whole or in part, if Contractor, as determined by the State: (a) endangers the value, integrity, or security of any location, data, or personnel; (b) becomes insolvent, petitions for bankruptcy court proceedings, or has an involuntary bankruptcy proceeding filed against it by any creditor; (c) engages in any conduct that may expose the State to liability; (d) breaches any of its material duties or obligations; or

(e) fails to cure a breach within the time stated in a notice of breach. Any reference to specific breaches being material breaches within this Contract will not be construed to mean that other breaches are not material.

If the State terminates this Contract under this Section, the State will issue a termination notice specifying whether Contractor must: (a) cease performance immediately, or (b) continue to perform for a specified period. If it is later determined that Contractor was not in breach of the Contract, the termination will be deemed to have been a Termination for Convenience, effective as of the same date, and the rights and obligations of the parties will be limited to those provided in Section 25, Termination for Convenience.

The State will only pay for amounts due to Contractor for Contract Activities accepted by the State on or before the date of termination, subject to the State’s right to set off any amounts owed by the Contractor for the State’s reasonable costs in terminating this Contract. The Contractor must pay all reasonable costs incurred by the State in terminating this Contract for cause, including administrative costs, attorneys’ fees, court costs, transition costs, and any costs the State incurs to procure the Contract Activities from other sources.

23. Termination for Convenience. The State may immediately terminate this Contract in whole or in part without penalty and for any reason, including but not limited to, appropriation or budget shortfalls. The termination notice will specify whether Contractor must: (a) cease performance of the Contract Activities immediately, or

(b) continue to perform the Contract Activities in accordance with Section 26, Transition Responsibilities. If the State terminates this Contract for convenience, the State will pay all reasonable costs, as determined by the State, for State approved Transition Responsibilities.

24. Transition Responsibilities. Upon termination or expiration of this Contract for any reason, Contractor must, for a period of time specified by the State (not to exceed 90 calendar days), provide all reasonable transition assistance requested by the State, to allow for the expired or terminated portion of the Contract Activities to continue without interruption or adverse effect, and to facilitate the orderly transfer of such Contract Activities to the State or its designees. Such transition assistance may include, but is not limited to: (a) continuing to perform the Contract Activities at the established Contract rates; (b) taking all reasonable and necessary measures to transition performance of the work, including all applicable Contract Activities, training, equipment, software, leases, reports and other documentation, to the State or the State’s designee; (c) taking all necessary and appropriate steps, or such other action as the State may direct, to preserve, maintain, protect, or return to the State all materials, data, property, and confidential information provided directly or indirectly to Contractor by any entity, agent, vendor, or employee of the State; (d) transferring title in and delivering to the State, at the State’s discretion, all completed or partially completed deliverables prepared under this Contract as of the Contract termination date; and (e) preparing an accurate accounting from which the State and Contractor may reconcile all outstanding accounts (collectively, “Transition Responsibilities”). This Contract will automatically be extended through the end of the transition period.

25. Indemnification. Contractor must defend, indemnify and hold the State, its departments, divisions, agencies, offices, commissions, officers, and employees harmless, without limitation, from and against any and all actions, claims, losses, liabilities, damages, costs, attorney fees, and expenses (including those required to establish the right to indemnification), arising out of or relating to: (a) any breach by Contractor (or any of Contractor’s employees, agents, subcontractors, or by anyone else for whose acts any of them may be liable) of any of the promises, agreements, representations, warranties, or insurance requirements contained in this Contract;

(b) any infringement, misappropriation, or other violation of any intellectual property right or other right of any third party; (c) any bodily injury, death, or damage to real or tangible personal property occurring wholly or in part due to action or inaction by Contractor (or any of Contractor’s employees, agents, subcontractors, or by anyone else for whose acts any of them may be liable); and (d) any acts or omissions of Contractor (or any of Contractor’s employees, agents, subcontractors, or by anyone else for whose acts any of them may be liable).

The State will notify Contractor in writing if indemnification is sought; however, failure to do so will not relieve Contractor, except to the extent that Contractor is materially prejudiced. Contractor must, to the satisfaction of the State, demonstrate its financial ability to carry out these obligations.

The State is entitled to: (i) regular updates on proceeding status; (ii) participate in the defense of the proceeding; (iii) employ its own counsel; and to (iv) retain control of the defense, at its own cost and expense, if the State deems necessary.

Contractor will not, without the State’s prior written consent (not to be unreasonably withheld), settle, compromise, or consent to the entry of any judgment in or otherwise seek to terminate any claim, action, or proceeding.

Any litigation activity on behalf of the State, or any of its subdivisions under this Section, must be coordinated with the Department of Attorney General. An attorney designated to represent the State may not do so until approved by the Michigan Attorney General and appointed as a Special Assistant Attorney General.

The State is constitutionally prohibited from indemnifying Contractor or any third parties.

26. Infringement Remedies. If, in either party’s opinion, any piece of equipment, software, commodity, or service supplied by Contractor or its subcontractors, or its operation, use or reproduction, is likely to become the subject of a copyright, patent, trademark, or trade secret infringement claim, Contractor must, at its expense: (a) procure for the State the right to continue using the equipment, software, commodity, or service, or if this option is not reasonably available to Contractor, (b) replace or modify the same so that it becomes non-infringing; or (c) accept its return by the State with appropriate credits to the State against Contractor’s charges and reimburse the State for any losses or costs incurred as a consequence of the State ceasing its use and returning it.

27. Limitation of Liability and Disclaimer of Damages. IN NO EVENT WILL THE

STATE’S AGGREGATE LIABILITY TO CONTRACTOR UNDER THIS

CONTRACT, REGARDLESS OF THE FORM OF ACTION, WHETHER IN

CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR BY STATUTE OR

OTHERWISE, FOR ANY CLAIM RELATED TO OR ARISING UNDER THIS

CONTRACT, EXCEED THE MAXIMUM AMOUNT OF FEES PAYABLE UNDER

THIS CONTRACT. The State is not liable for consequential, incidental, indirect, or special damages, regardless of the nature of the action.

28. Disclosure of Litigation, or Other Proceeding. Contractor must notify the State within 14 calendar days of receiving notice of any litigation, investigation, arbitration, or other proceeding (collectively, “Proceeding”) involving Contractor, a subcontractor, or an officer or director of Contractor or subcontractor, that arises during the term of the Contract, including: (a) a criminal Proceeding; (b) a parole or probation Proceeding; (c) a Proceeding under the Sarbanes-Oxley Act; (d) a civil Proceeding involving: (1) a claim that might reasonably be expected to adversely affect Contractor’s viability or financial stability; or (2) a governmental or public entity’s claim or written allegation of fraud; or (3) any complaint filed in a legal or administrative proceeding alleging the Contractor or its subcontractors discriminated against its employees, subcontractors, vendors, or suppliers during the term of this Contract; or (e) a Proceeding involving any license that Contractor is required to possess in order to perform under this Contract.

29. State Data. All data and information provided to Contractor by or on behalf of the State, and all data and information derived therefrom, is the exclusive property of the State (“State Data”); this definition is to be construed as broadly as possible.

Upon request, Contractor must provide to the State, or a third party designated by the State, all State Data within 10 calendar days of the request and in the format requested by the State. Contractor will assume all costs incurred in compiling and supplying State Data. No State Data may be used for any marketing or commercial purposes.

30. Non-Disclosure of Confidential Information. The parties acknowledge that each party may be exposed to or acquire communication or data of the other party that is confidential, privileged communication not intended to be disclosed to third parties.

a. Meaning of Confidential Information. For the purposes of this Contract, the term “Confidential Information” means all information and documentation of a party that: (a) has been marked “confidential” or with words of similar meaning, at the time of disclosure by such party; (b) if disclosed orally or not marked “confidential” or with words of similar meaning, was subsequently summarized in writing by the disclosing party and marked “confidential” or with words of similar meaning; or, (c) should reasonably be recognized as confidential information of the disclosing party. The term “Confidential Information” does not include any information or documentation that was or is: (a) subject to disclosure under the Michigan Freedom of Information Act (FOIA); (b) already in the possession of the receiving party without an obligation of confidentiality; (c) developed independently by the receiving party, as demonstrated by the receiving party, without violating the disclosing party’s proprietary rights; (d) obtained from a source other than the disclosing party without an obligation of confidentiality; or, (e) publicly available when received, or thereafter became publicly available (other than through any unauthorized disclosure by, through, or on behalf of, the receiving party). For purposes of this Contract, in all cases and for all matters, State Data is deemed to be Confidential Information.

b. Obligation of Confidentiality. The parties agree to hold all Confidential Information in strict confidence and not to copy, reproduce, sell, transfer, or otherwise dispose of, give or disclose such Confidential Information to third parties other than employees, agents, or subcontractors of a party who have a need to know in connection with this Contract or to use such Confidential Information for any purposes whatsoever other than the performance of this Contract. The parties agree to advise and require their respective employees, agents, and subcontractors of their obligations to keep all Confidential Information confidential. Disclosure to a subcontractor is permissible where: (a) use of a subcontractor is authorized under this Contract; (b) the disclosure is necessary or otherwise naturally occurs in connection with work that is within the subcontractor's responsibilities; and (c) Contractor obligates the subcontractor in a written contract to maintain the State's Confidential Information in confidence. At the State's request, any employee of Contractor or any subcontractor may be required to execute a separate agreement to be bound by the provisions of this Section.

c. Cooperation to Prevent Disclosure of Confidential Information. Each party must use its best efforts to assist the other party in identifying and preventing any unauthorized use or disclosure of any Confidential Information. Without limiting the foregoing, each party must advise the other party immediately in the event either party learns or has reason to believe that any person who has had access to Confidential Information has violated or intends to violate the terms of this Contract and each party will cooperate with the other party in seeking injunctive or other equitable relief against any such person.

d. Remedies for Breach of Obligation of Confidentiality. Each party acknowledges that breach of its obligation of confidentiality may give rise to irreparable injury to the other party, which damage may be inadequately compensable in the form of monetary damages. Accordingly, a party may seek and obtain injunctive relief against the breach or threatened breach of the foregoing undertakings, in addition to any other legal remedies which may be available, to include, in the case of the State, at the sole election of the State, the immediate termination, without liability to the State, of this Contract or any Statement of Work corresponding to the breach or threatened breach.

e. Surrender of Confidential Information upon Termination. Upon termination of this Contract or a Statement of Work, in whole or in part, each party must, within 5 calendar days from the date of termination, return to the other party any and all Confidential Information received from the other party, or created or received by a party on behalf of the other party, which are in such party’s possession, custody, or control; provided, however, that Contractor must return State Data to the State following the timeframe and procedure described further in this Contract.