STATE OF MICHIGAN PROCUREMENT

Department Technology, Management and Budget Central Procurement Services 320 S Walnut Street Lansing, MI 48933 P.O. Box 30026, Lansing, MI 48909

CONTRACT CHANGE NOTICE

Change Notice Number 1 to

Contract Number MA260000000472

C O

N

TR

AC

TO

R

Prime Therapeutics State Government Solutions LLC

2900 Ames Crossing Road, Suite 200

Eagan MN 55121

Sherrill Bryant

612-329-6362 sherrill.bryant@primetherapeutics.com

CV0059353

ST

AT

E

Pr og ra m

M an ag er

Trish Bouck MDHHS

517-214-1868

BouckT@michigan.gov

C on tr ac t Ad m in is tr at or Marissa Gove DTMB

(517) 449-8952 govem1@michigan.gov

CONTRACT SUMMARY

Pharmacy Claims Processing and Manufacturer Drug Rebate Administration Pharmacy Benefits Administrator Services (PBA) for the Michigan Department of Health and Human Services (MDHHS)

INITIAL EFFECTIVE DATE

July 3, 2026

INITIAL EXPIRATION DATE

September 30, 2029

INITIAL AVAILABLE OPTIONS

4 - 1 Year

EXPIRATION DATE BEFORE

September 30, 2029

PAYMENT TERMS

NET45

DELIVERY TIMEFRAME

N/A

ALTERNATE PAYMENT OPTIONS

P-Card Direct Voucher (PRC) Other

EXTENDED PURCHASING

Yes No

MINIMUM DELIVERY REQUIREMENTS

N/A

DESCRIPTION OF CHANGE NOTICE

OPTION LENGTH OF OPTION EXTENSION LENGTH OF EXTENSION REVISED EXP. DATE

CURRENT VALUE

$36,826,061.00

VALUE OF CHANGE NOTICE

$0.00

ESTIMATED AGGREGATE CONTRACT VALUE

$36,826,061.00

DESCRIPTION

Please note the Program Manager or Contract Administrator may have changed, and are reflected on this Change Notice.

Effective June 22, 2026, the attached changes are hereby incorporated into this Contract. All other terms, conditions, specifications and pricing remain the same. Per contractor and agency agreement, and DTMB Central Procurement approval.

Schedule A, Core Requirements Common to Components 1 and 2, A. General Requirements, Add 8.:

8. Contractor will complete all implementation actions prior to "go live" date and according to the timeline provided by the Contractor to the Department. The Contractor will receive the Department sign-off that each action has been completed successfully. Implementation steps include the following, minimum items:

i. Benefit plan designs loaded, operable and tested;

ii. Perform comprehensive systems testing (including interface testing with all third parties) and quality assurance audits, with results reported to the Department

iii. Interface formats loaded and tested;

iv. Operable and tested toll-free numbers;

v. Account Management, Help Desk, Prior Authorization, and any other required key staff hired and trained;

vi. Established billing/banking requirements;

vii. Complete notifications to pharmacies regarding Contract change;

viii. Each component must be met by an agreed upon deadline in an implementation timeline provided by the Contractor to the Department. Implementation action requirements may include other items necessary to meet the claims processing commencement date (TND).

ix. Claims history, existing prior authorizations, and overrides shall be migrated to Contractors POS system.

Schedule A, Component 1 – Claims Processing and Related Services:

J.5.a – Add iii.:

iii. Schedules during Department closures may adjust the required timeframe. Invoices must accurately reflect any Department required coding (e.g., MAGI, Pay Code, etc.).

J.2.b – Add i.:

i. The Contractor must provide the Department with updates at regular intervals during a sustained downtime (other than regular scheduled or approved downtime by the Department). Upon full restoration, the Contractor must provide the Department with an analysis describing root cause and actions to mitigate future instances.

J.5.f. – Revise to the following

f. The Department and the Contractor recognize the possibility of a potential overdraft situation in the Provider Payment disbursement account. To alleviate any potential risk, the Department may establish a mechanism to cover potential overdrafts in the Provider Payment disbursement account. All monies provided via this mechanism must be returned to the State at the termination of the Contract based on their instructions, or as other funding safeguards are implemented. The Contractor must have a process to monitor and track the monies provided via this mechanism, as well as a process to return the funds to the Department upon request.

i. The monies provided via this mechanism must only be used to ensure the pharmacy payments bank account does not become overdrawn in instances where all newly voided pharmacy claims are not fully recovered in the same pay cycle.

ii. The Contractor must provide a reconciliation report to the Department monthly and at the end of each State fiscal year that identifies:

(a). The beginning and ending balance associated with this mechanism.

(b). Dates and amounts in which the balance was drawn on and when those funds were returned.

H. – Add 26:

26. Contractor must report violations in access, use or disclosure of Protected Health Information (PHI) within 24 hours of the incident becoming known to the vendor.

W. – Revise 1. To the following:

1. The Contractor must notify the Department staff of “any and all” claims that have been erroneously processed, and present a corrective action plan to the Department within five business days.

Schedule A, Component 2 - Preferred Drug List (PDL) and Manufacturer Drug Rebate Administration:

AA.8. Add f., g.,h.:

f. The Contractor will provide a monthly report providing the results of a high-level review that is performed on claim files that are received for rebate processing. This reasonableness check will provide MDHHS with an estimate of projected rebates for prior periods. This will be delivered to the client within 10 business days of receipt of the valid claim file.

g. The Contractor must provide a fully accurate monthly rebate payment reconciliation report no later than the 3rd business day of each month.

h. The Contractor must make available a fully accurate quarterly UROA report no later than the 15th day after the end of each quarter. The Department must be notified of any balance changes made between the 5th and 15th day following the close of a quarter’s end.

AA.5. Add h.:

h. The Contractor must accurately post all rebate payments to the appropriate program and national drug codes on a quarterly basis based on a manufacturers providing complete and accurate PQAS/ROSI, for instances where external parties have not provided Contractor with all necessary information to accurately complete such posting, rebate payment shall be posted in accordance with MDHHS direction. Any issues uncovered during normal course of business by Contractor or the Department, will be researched to determine if a correction is needed. Any issues requiring correction within the system, will be completed no later than the following invoice cycle following determination of any applicable correction.

AA.7.a – Revise to the following:

a. Quarterly, the Contractor must generate and transmit to CMS the Medicaid State Drug Utilization Data (SDUD) file(s) in accordance with CMS requirements for file layout, data completeness, and submission timeliness to allow State certification of the data and maintaining compliance with statutory requirements.

Schedule A, Requirements, 8. Liquidated Damages (currently starting at bottom of page 101 of 158):

A. General Requirements:

- Add J.2. to the list of applicable requirements

C. Component 2 Requirements:

- Add AA.7 to the list of applicable requirements

Schedule A, Requirements, 9. Service-Level Agreements (SLA) (currently starting near top of page 102 of 158):

Service Level Agreements (SLAs) shall be revised down from 40 current SLAs to these remaining four:

SLA Performance Description Minimum Requirement

Measurement Timeframe Service Credit Applies to

Component

The Contractor must provide online POS operations 24x7x365 available no less than 99.9% of the time – except for Contractor scheduled downtime approved by the Department.

99.9% Average Availability Monthly $7,500 per month 1

The Contractor must invoice 100% of participating manufacturers for federal, State supplemental, and Medicaid-like rebates no later than 60 days after the end of the quarter, or in compliance with the timelines of the federal government and the Department for generating manufacturer drug rebate invoices.

No later than 60 days Quarterly $25,000 per quarterly manufacturer invoice 2

CMS-64 9r (as noted in Rebate Reports section of Appendix B): The Contractor must provide fully accurate and complete quarterly drug rebate information in a

Compliant Quarterly $7,500 per business day that this SLA is not met, up to a maximum of $15,000 per

SLA Performance Description Minimum Requirement

Measurement Timeframe Service Credit Applies to

Component form compatible with the Department’s submission of the Quarterly Expense Report of the Medicaid Budget and Expenditure System (CMS-64) reporting requirements on or before the 15th day following the close of a quarter’s end. Contractor shall notify the Department of any balance changes made between the 5th and 15th day following the close of a quarter’s end.

The Contractor must measure and report its performance on this SLA quarterly.

quarter.

The Contractor must receive (download) and transmit (upload) files via a dedicated and secure File Transfer Protocol (FTP) site (or as specified by the Department) and develop and deliver Department-approved load and error reports for each interface file. File download from the Department to the Contractor and file upload from the Contractor to the Department must be 100% accurate and timely by the day and time designated by the Department.

100% accurate and on time Monthly $12,500 per month Both

STATE OF MICHIGAN PROCUREMENT

Department Technology, Management and Budget Central Procurement Services 320 S Walnut Street Lansing, MI 48933 P.O. Box 30026, Lansing, MI 48909

NOTICE OF CONTRACT

NOTICE OF CONTRACT NO. 260000000472

between

THE STATE OF MICHIGAN

and

C O

N

TR

AC

TO

R

Prime Therapeutics State Government Solutions LLC 2900 Ames Crossing Road, Suite 200

Eagan Minnesota 55121

Ellen Nelson

508-713-1773 ellen.nelson@primetherapeutics.com

CV0059353

ST

AT

E

Pr og ra m

M an ag er

Trish Bouck MDHHS

517-214-1868

BouckT@michigan.gov

C on tr ac t Ad m in is tr at or Marissa Gove DTMB

(517) 449-8952 govem1@michigan.gov

CONTRACT SUMMARY

DESCRIPTION: Pharmacy Claims Processing and Manufacturer Drug Rebate Administration Pharmacy Benefits Administrator Services (PBA) for the Michigan Department of Health and Human Services (MDHHS)

INITIAL EFFECTIVE DATE

7/3/2026

INITIAL EXPIRATION DATE

9/30/2029

INITIAL AVAILABLE

OPTIONS

4 - 1 Year

EXPIRATION DATE BEFORE

CHANGE(S) NOTED BELOW

9/30/2029

PAYMENT TERMS

NET45

DELIVERY TIMEFRAME

N/A

ALTERNATE PAYMENT OPTIONS

P-card Payment Request (PRC) Other

EXTENDED PURCHASING

Yes No

MINIMUM DELIVERY REQUIREMENTS

N/A

MISCELLANEOUS INFORMATION

THIS IS NOT AN ORDER. This Contract is awarded based on the States inquiry bearing the solicitation number 260000000347. Orders for delivery will be issued directly by the utilizing Department via a Delivery Order (DO).

ESTIMATED CONTRACT VALUE AT TIME OF EXECUTION $36,826,061.00

CONTRACT NO. 260000000472

FOR THE CONTRACTOR:

Company Name

Authorized Agent Signature

Authorized Agent (Print or Type)

Date

FOR THE STATE:

Signature

Name and Title

DTMB Central Procurement Services Agency

Date

Michigan.gov/MiProcurement

HYBRID CONTRACT TERMS

This HYBRID CONTRACT (“Contract”) is agreed to between the State of Michigan (the “State”) and Prime Therapeutics State Government Solutions (“Contractor”), a Minnesota limited liability company. This Contract is effective on July 3, 2026 (“Effective Date”), and unless terminated, will expire on September 30, 2029 (the “Term”). July 3, 2026 through September 30, 2026 is the implementation and transition period and no payment will be made to the Contractor during this time. The Contractor must begin providing all services without interruption on October 1, 2026.

This Contract may be renewed for up to four (4) additional one (1) year period(s). 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:

Duties of Contractor. Contractor must perform the services and provide the deliverables (the “Contract Activities”) described in a Statement of Work, the initial Statement of Work is attached as Schedule A – Statement of Work. 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 a Statement of Work.

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 making contact with the State.

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:

See Contract Administrator information shown below.

Ellen Nelson 2900 Ames Crossing Road, Suite 200 Eagan, MN 55121 Ellen.nelson@primetherapeutics.com 508-713-1773

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:

Marissa Gove 320 South Walnut Street Lansing, MI 48933 Govem1@michigan.gov 517-449-8952

Ellen Nelson 2900 Ames Crossing Road, Suite 200 Eagan, MN 55121 Ellen.nelson@primetherapeutics.com 508-713-1773

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:

Trish Bouck 400 South Pine Street Lansing, MI 48933 Boucht@michigan.gov 517-214-1868

Sherrill Bryant 2900 Ames Crossing Road, Suite 200 Eagon, MN 55121 Sherrill.bryant@primetherapeutics.com 612-329-6362

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 a Statement of Work) if, in the opinion of the State, it will ensure performance of the Contract.

Insurance Requirements. See Schedule C – Insurance Requirements.

Reserved.

Reserved.

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.

mailto:Ellen.nelson@primetherapeutics.com mailto:Govem1@michigan.gov mailto:Ellen.nelson@primetherapeutics.com mailto:Sherrill.bryant@primetherapeutics.com

Intellectual Property Rights. If a Statement of Work requires Contractor to create any Contract Activities specifically for the State (hereinafter referred to as “Work Product”), Contractor hereby acknowledges that the State is and will be the sole and exclusive owner of all right, title, and interest in the Work Product and all associated intellectual property rights, if any. Such Work Product are works made for hire as defined in Section 101 of the Copyright Act of 1976. To the extent any Work Product 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 Work Product, including all intellectual property rights therein.

Contract Activities including Software. If Contractor is providing Contract Activities that require the use of Contractor Software, the following terms apply:

a. License Grant by Contractor: Contractor hereby grants to the State and intended users a nonexclusive, royalty-free, irrevocable right and license during the Term and such additional periods, if any, as Contractor is required to provide Contract Activities under this Contract or any Statement of Work, to: (a) access and use the Software, including in operation with other software, hardware, systems, networks and services, for the State’s governmental purposes, including for processing State Data; (b) generate, print, copy, upload, download, store and otherwise process all GUI, audio, visual, digital and other output, displays and other content as may result from any access to or use of the Software; (c) prepare, reproduce, print, download and use a reasonable number of copies of the Documentation for any use of the Software under this Contract; and (d) the State to access and use the Software for all such non-production uses and applications as may be necessary or useful for the effective use of the Contract Activities hereunder, including for purposes of analysis, development, configuration, integration, testing, training, maintenance, support and repair, which access and use will be without charge and not included for any purpose in any calculation of the State’s use of the Software, including for purposes of assessing any Fees or other consideration payable to Contractor or determining any excess use of the Software as described below.

b. License Restrictions on the State. The State will not: (a) rent, lease, lend, sell, sublicense, assign, distribute, publish, transfer or otherwise make the Software available to any third party, except as expressly permitted by this Contract or in any Statement of Work; or (b) use or authorize the use of the Software or Documentation in any manner or for any purpose that is unlawful under applicable law.

c. Use by the State. The State will pay Contractor the corresponding Fees set forth in a Statement of Work or Pricing Schedule for all access and use of the Software as intended for the purposes of this Contract. Such Fees will be Contractor’s sole and exclusive remedy for use of the Software, including any excess use.

d. Certification by the State to the Contractor, if applicable. To the extent that a License granted to the State is not unlimited, Contractor may request written certification from the State regarding use of the Software for the sole purpose of verifying compliance with the Contract. Such written certification may occur no more than once in any twenty four (24) month period during the Term of the Contract. The State will to respond to any such request within 45 calendar days of receipt. If the State’s use is greater than contracted, Contractor may invoice the State for any unlicensed use (and related support) pursuant to the terms of this Contract at the rates set forth in Schedule B, and the unpaid license and support fees shall be payable in accordance with the terms of the Contract. Payment under this provision shall be Contractor’s sole and exclusive remedy to cure these issues.

e. Artificial Intelligence.

(1) Model Cards.

(a) Contractor will provide a comprehensive Model Card for each artificial intelligence or machine learning model integrated into Deliverables or Services.

Each Model Card will include at a minimum:

(i) Model details (name, version, architecture, training methodology)

(ii) Intended uses and known limitations

(iii) Description of training data and data sources

(iv) Evaluation metrics and performance benchmarks

(v) Fairness, ethical, and safety considerations

(vi) Maintenance plan and update history

(b) Contractor will provide the initial Model Card prior to deployment of the applicable model and will update the Model Card promptly upon any material changes to the model, including retraining, version changes, changes to input data, or known performance deviations, including, but not limited performance degradation or risk factors that could impact the quality, behavior reliability of the Solution.

(c) Model Cards must be delivered in a format reasonably acceptable to the State and must be kept current for the during the Term.

(d) Audit rights. The State reserves the right to audit the accuracy and completeness of any model card and request clarification or supporting evidence for any claims made therein.

(2) Third-Party artificial intelligence models. If Contractor integrates a third-party artificial intelligence or machine learning model into the Solution, Contractor will ensure that the third-party artificial intelligence model complies with the auditability and documentation requirements set forth in this Contract.

f. Definitions.

(1) “Documentation” means all user manuals, operating manuals, technical manuals and any other instructions, specifications, documents or materials, in any form or media, that describe the functionality, installation, testing, operation, use, maintenance, support, technical or other components, features or requirements of the Software or Contract Activities.

(2) “Hosted Services” means the hosting, management and operation of the: Operating Environment, Software, other services (including support and subcontracted services), and related resources for access and use by the State as intended for the purposes of this Contract and its Authorized Users, including any services and facilities related to disaster recovery obligations.

(3) “Model Cards” means documents provided with machine learning or artificial intelligence models that explain the context in which the models are intended to be used, details of the performance evaluation procedures and other relevant information.

(4) “Operating Environment” means, collectively, the platform, environment and conditions on, in or under which the Software is intended to be installed and operate, as set forth in a Statement of Work, including such structural, functional and other features, conditions and components as hardware, operating software, system architecture, configuration, computing hardware, ancillary equipment, networking, software, firmware, databases, data, and electronic systems (including database management systems).

(5) “Software” means Contractor’s software as set forth in a Statement of Work and provided to the State pursuant to this Contract, including, but not limited to, any third-party software or components, updates or new versions, online portals or other web-based systems, and the Operating Environment (if Contractor hosted).

(6) “Solution” means Contract Activities including Software and Services singularly or in any combination thereof, as applicable, set forth in a Statement of Work.

Accessibility Requirements

a. All Contract Activities created or provided by Contractor under this Contract in a digital format (hereinafter “Digital Deliverables”), must at all times conform to the State’s accessibility standards provided in the SOM Digital Standards, located at https://www.michigan.gov/standards (the “Digital Accessibility Standards”). Throughout the Term of the Contract, at no additional costs to the State, Contractor must:

(1) comply with plans and timelines approved in writing by the State to remediate issues and achieve conformance with the Digital Accessibility Standards in the event of any deficiencies;

(2) promptly respond to and resolve, in a manner acceptable to the State, any complaint the State receives regarding the accessibility of any Digital Deliverables;

(3) ensure that no changes to any Digital Deliverables will have any adverse effect on conformance to the Digital Accessibility Standards; and

(4) upon the State’s written request, provide the Digital Deliverables in one or more alternative formats and within timeframes specified by the State.

b. State of Michigan Digital Standards Review. Prior to Digital Deliverables being accepted, put into production, or as otherwise required by the State, the State may conduct a review to assess their accessibility and compliance with the State’s Digital Accessibility Standards. Contractor must assist the State with each such review, including submitting documentation or other information regarding accessibility and compliance with the State’s Digital Accessibility Standards, including without limitation, a completed product accessibility template, including any Information Technology Industry Council Voluntary Product Accessibility Template or VPAT® and/or a description of the evaluation methods https://www.michigan.gov/standards used to support the Digital Accessibility Standards conformance claims, including, if applicable, any third-party testing. Contractor must, at its sole cost and expense, remediate all issues resulting from any such review in a manner and timeframe approved in writing by the State, which may include providing a remediation status report.

c. Contractor must, without limiting Contractor’s obligations of indemnification as further described in this Contract, indemnify, defend, and hold harmless the State for any and all claims, including reasonable attorneys’ fees, costs, and incidental expenses, which may be suffered by, accrued against, charged to, or recoverable from the State arising out of its failure to comply with the foregoing accessibility standards.

d. Failure to comply with the requirements in this Section constitutes a material breach of this Contract.

Service Level Agreement for Contract Activities including Software. To the extent that Contract Activities includes the provision of services through the use of Software, as set forth the Schedule A, Statement of Work, Contractor must comply with the Service Level Agreement set forth in Schedule D of this Contract.

Subcontracting. Contractor must obtain prior written approval of the State, which consent may be given or withheld in the State’s sole discretion, not later than 90 days before engaging any Permitted Subcontractor to provide Contract Activities to the State under this Contract.

Engagement of any subcontractor or Permitted Subcontractor by Contractor does not relieve Contractor of its representations, warranties or obligations under this Contract.

a. Without limiting the foregoing, Contractor will:

(1) be responsible and liable for the acts and omissions of each such subcontractor (including such Permitted Subcontractor and Permitted Subcontractor's employees who, will be deemed Contractor Personnel) to the same extent as if such acts or omissions were by Contractor or its employees;

(2) be responsible for all fees and expenses payable to, by or on behalf of each subcontractor and Permitted Subcontractor in connection with this Contract, including, if applicable, withholding of income taxes, and the payment and withholding of social security and other payroll taxes, unemployment insurance, workers' compensation insurance payments and disability benefits; and

(3) notify the State of the location of the Permitted Subcontractor and indicate if it is located within the United States.

b. Contractor, including any subcontractor (Permitted or otherwise), are expressly prohibited from Accessing or Processing State Data outside of the United States, and may not create Work Product outside of the United States.

c. Definitions:

(1) “Access” means (1) the ability and means to enter a restricted or locked area, room, or physical container containing State Data; or (2) the ability and means to communicate with or otherwise interact with a system, to use system resources to handle information, to gain the information or knowledge of the information the system contains, or to control system components and functions (including physical or technical controls, or having the ability to modify or bypass any or all security controls).

(2) “Contractor Personnel” means all employees of Contractor, or any subcontractors or Permitted Subcontractors involved in the performance of Contract Activities hereunder.

(3) “Permitted Subcontractor” means any third party hired by Contractor to perform Contract Activities for the State under this Contract or that will have Access to or have the ability to control access to State Data or both.

(4) “Process” means to perform any operation or set of operations on any data, information, material, work, expression or other content, including to (a) collect, receive, input, upload, download, record, reproduce, store, organize, combine, log, catalog, cross-reference, manage, maintain, copy, adapt, alter, translate or make other improvements or derivative works, (b) process, retrieve, output, consult, use, disseminate, transmit, submit, post, transfer, disclose or otherwise provide or make available, or (c) block, erase or destroy. “Processing” and “Processed” have correlative meanings.

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

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 Permitted 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 Permitted 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 a Statement of Work, 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.

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.

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.

Ordering. Contractor is not authorized to begin performance until receipt of authorization as identified in a Statement of Work.

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 a Statement of Work. 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 27, 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.

Reserved.

Reserved.

Reserved.

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 a Statement of Work.

Invoices must include an itemized statement of all charges. The State is exempt from federal excise tax, state, and local sales taxes, and use taxes if the Contract Activities purchased under this Contract are for the State’s exclusive use. Contractor will not include the collection of taxes for which the State is exempt in any invoices or payments related to this Contract. The State is not responsible for taxes imposed or assessed on Contractor.

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.

Liquidated Damages. Liquidated damages, if applicable, will be assessed as described in a Statement of Work. 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 27 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.

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

Termination for Cause. (a) The State may terminate this Contract for cause, in whole or in part, if Contractor, as determined by the State: (i) endangers the value, integrity, or security of any facility, data, or personnel; (ii) becomes insolvent, petitions for bankruptcy court proceedings, or has an involuntary bankruptcy proceeding filed against it by any creditor; (iii) engages in any conduct that may expose the State to liability; (iv) breaches any of its material duties or obligations under this Contract; or (v) fails to cure a breach within the time stated by the State in a notice of breach, if in its sole discretion the State has chosen to provide a time to cure. Any reference to specific breaches being material breaches within this Contract will not be construed to mean that other breaches are not material.

(b) If the State terminates this Contract under this Section, the State will issue a termination notice specifying whether Contractor must: (i) cease performance immediately or (ii) 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 28, Termination for Convenience.

Contractor must submit all invoices for Contract Activities accepted by the State within 30 days of the date of termination. Failure to submit an invoice within that timeframe will constitute a waiver by Contractor for any amounts due to Contactor for Contract Activities accepted by the State under this Contract. 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. Contractor must promptly reimburse to the State any fees prepaid by the State prorated to the date of such termination, including any prepaid fees. 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.

Termination for Convenience. The State may immediately terminate this Contract in whole or in part without penalty and for any reason or no 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 29, Transition Responsibilities. Contractor must submit all invoices for Contract Activities accepted by the State within 30 days of the date of termination.

Failure to submit an invoice within that timeframe will constitute a waiver by Contractor for any amounts due Contractor for Contract Activities accepted by the State under this Contract. 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 to the extent the funds are available.

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 365 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) 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 (d) preparing an accurate accounting from which the State and Contractor may reconcile all outstanding accounts (e) returning all state property as set forth in Section 30, below; and (f) surrendering or destroying all State Confidential Information as set forth in Section 37.e, below (collectively, “Transition Responsibilities”). This Contract will automatically be extended through the end of the transition period.

Return of State Property Not Including Confidential Information. Upon termination or expiration of this Contract for any reason, Contractor must take 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 the Contractor by any entity, agent, vendor, or employee of the State.

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.

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.

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 LESSER OF: (A) ONE MILLION DOLLARS; OR (B) 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.

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…