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Michigan.gov/MiProcurement

IT PROFESSIONAL SERVICES CONTRACT TERMS

AND CONDITIONS

These Terms and Conditions, together with all Schedules (including the Statement(s) of Work), Exhibits and any other applicable attachments or addenda (Collectively this “Contract”) are agreed to between the State of Michigan (the “State”) and Deloitte & Touche (“Contractor”), a Delaware Limited Liability Company. This Contract is effective on September 4th, 2026 (“Effective Date”), and unless terminated, will expire on September 3rd, 2031(the “Term”).

This Contract may be renewed for up to 5 (five) additional 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 a Change Notice.

1. Definitions. For the purposes of this Contract, the following terms have the following meanings:

“Acceptance” means the State’s written notice accepting or approving one or more Services or Deliverables. “Accept” and “Accepted” have correlative meanings.

“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).

“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, the term “control” (including the terms “controlled by” and “under common control with”) means the direct or indirect ownership of more than fifty percent (50%) of the voting securities of a Person.

“Allegedly Infringing Materials” has the meaning set forth in Section 16.

“Authorized Users” means all Persons authorized by the State to access and use the Software.

“Business Day” means a day other than a Saturday, Sunday or other day on which the State is authorized or required by law to be closed for business.

“Contract Change” has the meaning set forth in Subsection 2.2.

“Change Notice” means a writing executed by the parties to the Contract memorializing a change to the Contract.

“Change Proposal” has the meaning set forth in Subsection 2.2.

“Change Request” has the meaning set forth in Subsection 2.2.

“Confidential Information” has the meaning set forth in Subsection 20.1.

“Contract” has the meaning set forth in the preamble.

“Contract Administrator” is the individual appointed by each party to (a) administer the terms of this Contract, and (b) approve any Change Notices under this Contract. Each party’s Contract Administrator will be identified in Schedule A or subsequent Change Notices.

“Contractor” has the meaning set forth in the preamble.

“Contractor’s Bid Response” means the Contractor’s proposal submitted in response to the Solicitation.

“Contractor Personnel” means all employees of Contractor, or any subcontractors or Permitted Subcontractors involved in the performance of Services hereunder.

“Contractor Project Manager” means the individual appointed by Contractor and identified in Schedule A or subsequent Change Notices to serve as the primary contact, to monitor and coordinate the day-to-day activities of this Contract, and to perform other duties as may be further defined in this Contract, including an applicable Statement of Work.

“Deliverables” means the Work Product, and all other documents and other materials that Contractor is required to or otherwise does provide to the State under this Contract and otherwise in connection with any Services, including all items specifically identified as Deliverables in a Statement of Work.

“Digital Accessibility Standards” means the accessibility standards provided in the SOM Digital Standards, located at https://www.michigan.gov/standards.

"Digital Deliverables” means Deliverables, information, and/or content created, provided, or made available by Contractor under this Contract in a digital format, including but not limited to, websites, applications, software, mobile applications, text, images, sounds, videos, controls, animations, links, and documents (including files in the following formats: PDF, word processing, presentation, and spreadsheet).

“DTMB” means the Michigan Department of Technology, Management and Budget.

“Effective Date” has the meaning set forth in the preamble.

“Fees” means the fees set forth in the Pricing Schedule attached as Schedule B.

“Financial Audit Period” has the meaning set forth in Subsection 21.1.

“Harmful Code” means any software, hardware or other technologies, devices or means, the purpose or effect of which is to: (a) permit unauthorized access to, or to destroy, disrupt, disable, encrypt, modify, copy, or otherwise harm or impede in any manner, any (i) computer, software, firmware, data, hardware, system or network, or (ii) any application or function of any of the foregoing or the integrity, use or operation of any data Processed thereby; or (b) prevent the Services and/or the Deliverables to be accessed or used as intended by this Contract, and includes https://www.michigan.gov/som/footer/policies/som-applications-and-site-standards any virus, bug, trojan horse, worm, backdoor or other malicious computer code and any time bomb or drop dead device.

“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 and any users, including any services and facilities related to disaster recovery obligations.

“Intellectual Property Rights” means all or any of the following: (a) patents, patent disclosures, and inventions (whether patentable or not); (b) trademarks, service marks, trade dress, trade names, logos, corporate names, and domain names, together with all of the associated goodwill; (c) copyrights and copyrightable works (including computer programs), mask works and rights in data and databases; (d) trade secrets, know-how and other confidential information; and (e) all other intellectual property rights, in each case whether registered or unregistered and including all applications for, and renewals or extensions of, such rights, and all similar or equivalent rights or forms of protection provided by applicable law in any jurisdiction throughout the world.

“Key Personnel” means any Contractor Personnel identified as key personnel in the Contract.

“Nonconformity” or “Nonconformities” means any failure or failures of a Deliverable, to conform to the requirements of this Contract.

“Object Code” means computer programs assembled or compiled in magnetic or electronic binary form on software media, which are readable and useable by machines, but not generally readable by humans without reverse assembly, reverse compiling, or reverse engineering.

“Offshore Resources” mean resources, including Contractor Personnel, outside of the United States or its territories.

“Open Source Components” means any software component that is distributed under an open source license or any other license that aligns with the Open Source Definition as outlined in the Open Source Initiative.

“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).

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

“Person” means an individual, corporation, partnership, joint venture, limited liability company, governmental authority, unincorporated organization, trust, association, or other entity.

“Pre-Existing Work” means any proprietary technology, materials, or other intellectual property of Contractor or a third party, including Open Source Components, created prior to or independently of the performance of this Contract. Pre-Existing Work does not include State Materials.

“Pricing Schedule” means the schedule attached as Schedule B.

“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.

“Representatives” means a party's employees, officers, directors, partners, shareholders, agents, attorneys, successors and permitted assigns.

“Services” means any of the services Contractor provides under this Contract.

“Service Level Agreement” means the schedule attached as Schedule D, setting forth the Support Services Contractor will provide to the State, and the parties' additional rights and obligations with respect thereto.

“Software” means, collectively, (a) the State’s software, applications, and/or systems that are the subject of this Contract; (b) all Software Work Product that Contractor provides to the State under this Contract; and (c) all updates, patches, new versions, new releases, enhancements, improvements, and other modifications of the foregoing.

“Software Work Product” means all software that Contractor develops or creates, for delivery to the State as Work Product under this Contract, including but not limited to applications, computer programs, modules and systems, customizations, configurations, application programming interfaces, computer scripts, routines, macros, programming tools, user interfaces, and all updates, upgrades, patches, new versions, new releases, enhancements, improvements, and other modifications of the foregoing.

“Solicitation” means the State’s request to solicit responses for Deliverables and Services under this Contract.

“Solution” means collectively the Services and Deliverables.

“Source Code” means the human readable source code of the Software to which it relates, in the programming language in which the Software was written, together with all related flow charts and technical documentation, including a description of the procedure for generating object code, all of a level sufficient to enable a programmer reasonably fluent in such programming language to understand, build, operate, support, maintain and develop modifications, upgrades, updates, adaptations, enhancements, new versions and other derivative works and improvements of, and to develop computer programs compatible with, the Software.

“State” means the State of Michigan.

“State Data” has the meaning set forth in Section 19.

“State Materials” means all materials and information, including but not limited to documents, data, know-how, ideas, trademarks, methodologies, specifications, software, content and technology, in any form or media, directly or indirectly provided or made available to Contractor by or on behalf of the State in connection with this Contract, whether or not the same:

(a) are owned by the State, a third party or in the public domain; or (b) qualify for or are protected by any Intellectual Property Rights.

“State Program Managers” are the individuals appointed by the State, or their designees, to

(a) monitor and coordinate the day-to-day activities of this Contract; (b) sign off on Acceptance of the Deliverables; and (c) perform other duties as may be specified in a Statement of Work. State Program Managers will be identified in Schedule A or subsequent Change Notices.

“State Review Period” has the meaning set forth in Section 8.

“State Systems” means the information technology infrastructure, including the computers, software, databases, electronic systems (including database management systems) and networks, of the State or any of its designees.

“Statement of Work” means any statement of work entered into by the parties and incorporated into this Contract. The initial Statement of Work is attached as Schedule A.

“Stop Work Order” has the meaning set forth in Section 13.

“Support Services” means the maintenance and support services Contractor is required to or otherwise does provide to the State under the Service Level Agreement.

“Term” has the meaning set forth in the preamble.

“Transition Period” has the meaning set forth in Section 14.

“Transition Responsibilities” has the meaning set forth in Section 14.

“Unauthorized Removal” has the meaning set forth in Subsection 2.5.

“Unauthorized Removal Credit” has the meaning set forth in Subsection 2.5.

“User Data” means all data, queries, prompts, information and other content of any type and in any format, medium or form, whether audio, visual, digital, screen, GUI or other, that is input, uploaded to, placed into or collected, stored, Processed, generated or output by any user, device, system or network by or on behalf of the State, including but not limited to any and all works, inventions, data, analyses, information that identifies State or State’s intended users’ devices or equipment, location information, or other information and materials resulting from any use of the Software by or on behalf of the State under this Contract, even if not input by a user.

“Work Product” means all State-specific deliverables that Contractor creates or develops for delivery to the State under this Contract including but not limited to Software Work Product, reports, project management documents, content, forms, templates, and other State-specific documents and related materials together with all ideas, concepts, processes, and methodologies developed by Contractor pursuant to this Contract.

2. Duties of Contractor. Contractor will provide the Services and Deliverables pursuant to Statement(s) of Work entered into under this Contract. Contractor will provide the Services and Deliverables in a timely, professional manner and in accordance with the terms, conditions, and Specifications set forth in this Contract and the Statement(s) of Work.

2.1 Statement of Work Requirements. The Terms and Conditions of this Contract will apply at all times to Statements of Work. The State shall have the right to terminate any Statement of Work, in whole or in part, as set forth in Section 14 of this Contract. Contractor agrees that prompt and timely performance of all such obligations in accordance with this Contract is strictly required.

2.2 Change Control Process. The State may at any time request in writing (each, a “Change Request”) changes to the Contract, including without limitation changes to the Deliverables and Services or adding a new Statement of Work (each, a “Contract Change”). Upon the State’s submission of a Change Request, the parties will evaluate and implement all Changes in accordance with this Section.

(a) As soon as reasonably practicable, and in any case within 20 Business Days following receipt of a Change Request, Contractor will provide the State with a written proposal for implementing the requested Change (“Change Proposal”), setting forth:

(i) a written description of the proposed Changes to any part of the Deliverables and/or Services;

(ii) an amended plan reflecting: (A) the schedule for commencing and completing any addition or modification to the Deliverables and/or Services ; and (B) the effect of such Changes, if any, on completing any other Services under the Contract;

(iii) any additional resources Contractor deems necessary to carry out such Changes; and

(iv) any increase or decrease in Fees resulting from the proposed Changes, which increase, or decrease will reflect only the increase or decrease in time and expenses Contractor requires to carry out the Change.

(b) Within 30 Business Days following the State’s receipt of a Change Proposal, the State will by written notice to Contractor, approve, reject, or propose modifications to such Change Proposal. If the State proposes modifications, Contractor must modify and re-deliver the Change Proposal reflecting such modifications, or notify the State of any disagreement, in which event the parties will negotiate in good faith to resolve their disagreement. Upon the State’s approval of the Change Proposal or the parties’ agreement on all proposed modifications each parties’ Contractor Administrator will sign a Change Notice.

(c) However, if the parties fail to enter into a Change Notice within 15 Business Days following the State’s response to a Change Proposal the State may, in its discretion:

(i) require Contractor to perform or provide the Deliverables and Services without the Change;

(ii) require Contractor to continue to negotiate a Change Notice;

(iii) initiate a Dispute Resolution Procedure; or

(iv) notwithstanding any provision to the contrary in a Statement of Work, terminate this Contract under Subsection 14.1.

(d) No Change will be effective until the parties have executed a Change Notice.

Notwithstanding the foregoing, no Change Notice executed after the Effective Date will be construed to amend or modify this Contract in any way, unless it specifically states its intent to do so and cites the section or sections amended. Except as the State may request in its Change Request or otherwise in writing, Contractor must continue to perform its obligations in accordance with a Statement of Work pending negotiation and execution of a Change Notice. Contractor will limit any delays or Fee increases from any Change to those necessary to perform the Change in accordance with the applicable Change Notice. Each party is responsible for its own costs and expenses of preparing, evaluating, negotiating, and otherwise processing any Change Request, Change Proposal, and Change Notice.

(e) The performance of any functions, activities, tasks, obligations, roles and responsibilities comprising the Deliverables and Services as described in this Contract are considered part of the Deliverables and Services and, thus, will not be considered a Change. This includes the delivery of all Deliverables in accordance with this Contract, and the diagnosis and correction of Nonconformities discovered in Deliverables prior to their Acceptance by the State or, subsequent to their Acceptance by the State, as necessary for Contractor to fulfill its associated warranty requirements and its Support Services under this Contract.

(f) Contractor may, on its own initiative and at its own expense, prepare and submit its own Change Request to the State. However, the State will be under no obligation to approve or otherwise respond to a Change Request initiated by Contractor.

2.3 Contractor Personnel.

(a) Contractor is solely responsible for all Contractor Personnel and for the payment of their compensation, 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.

(b) Prior to any Contractor Personnel performing any Services, Contractor will:

(i) ensure that such Contractor Personnel have the legal right to work in the United States;

(ii) upon request, require such Contractor Personnel to execute written agreements, in form and substance acceptable to the State, that bind such Contractor Personnel to confidentiality provisions that are at least as protective of the State’s information (including all Confidential Information) as those contained in this Contract and Intellectual Property Rights provisions that grant the State rights in the Deliverables consistent with the provisions of Section 7 and, upon the State's request, provide the State with a copy of each such executed contract; and

(iii) upon request, or as otherwise specified in a Statement of Work, perform background checks on all Contractor Personnel 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.

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.

(c) Contractor and all Contractor Personnel must not endanger the safety or security of the State’s personnel or facilities, State Systems, or State Data, and will comply with all workplace conduct and safety rules, regulations, and policies of the State that are communicated to Contractor in writing, , including those related to security procedures concerning systems and data and remote access, building security procedures, including the restriction of access by the State to certain areas of its premises or systems, and general health and safety practices and procedures.

(d) The State reserves the right to require the removal of any Contractor Personnel found, in the judgment of the State, to be unacceptable. Replacement personnel for the removed person must be fully qualified for the position. Whether or not the departing personnel are to continue working while Contractor attempts to find replacement personnel is at the sole discretion of the State. If Contractor is notified within the first forty

(40) hours of assignment that the person is unsatisfactory, Contractor will not charge the State for those hours; otherwise, the State shall pay for all actual hours worked prior to the State’s notification of a replacement request to Contractor If the State determines the departing personnel cannot continue to work while Contractor finds a replacement, and Contractor cannot immediately replace the removed personnel, the State may, require Contractor to provide replacement personnel satisfactory to the State within thirty

(30) calendar days of Contractor’s receipt of notification from the State and negotiate an equitable adjustment in schedule or other terms that may be affected by the State’s required removal.

(e ) Offshore Resources are not permitted under this Contract.

2.4 Contractor Project Manager. Throughout the Term of this Contract, Contractor must maintain a Contractor employee acceptable to the State to serve as Contractor Project Manager, who will be considered Key Personnel of Contractor.

(a) Contractor Project Manager must:

(i) have the requisite authority, and necessary skill, experience, and qualifications, to perform in such capacity;

(ii) be responsible for overall management and supervision of Contractor’s performance under this Contract;

(iii) be the State’s primary point of contact for communications with respect to this Contract, including with respect to giving and receiving all day-to-day approvals and consents; and

(iv) be available as set forth in a Statement of Work and attend all regularly scheduled meetings as set forth in a Statement of Work or as otherwise directed by the State.

(b) Contractor will maintain the same Contractor Project Manager throughout the Term of this Contract, unless:

(i) the State requests in writing the removal of Contractor Project Manager; or

(ii) the State consents in writing to any removal requested by Contractor in writing; or

(iii) the Contractor Project Manager ceases to be employed by Contractor, whether by resignation, involuntary termination or otherwise.

(c) Upon the occurrence of any event set forth in Subsections 2.4(b)(i-iii) above, Contractor will promptly replace its Contractor Project Manager. Such replacement will be subject to the State's prior written approval.

2.5 Contractor’s Key Personnel.

(a) The State has the right to recommend and approve in writing the initial assignment, as well as any proposed reassignment or replacement, of any Key Personnel. Before assigning an individual to any Key Personnel position, Contractor will notify the State of the proposed assignment, introduce the individual to the State Program Managers or their designees, and provide the State with a resume and any other information about the individual reasonably requested by the State. The State reserves the right to interview the individual before granting written approval. In the event the State finds a proposed individual unacceptable, Contractor must propose another qualified individual for the position for State approval within a timely manner .

(b) Except for Contractor Personnel performing Continuous Improvement roles under a separate Statement of Work, Contractor will not remove any Contractor Personnel from their assigned roles on this Contract without 30 days’ prior written notification to the State which must include a plan for transitioning to a new resource including knowledge transfer, and further, Contractor will not remove any Key Personnel from their assigned roles on this Contract without the prior written consent of the State. The Contractor’s removal of any Contractor Personnel without the prior written notice to the State and, when applicable the prior written consent of the State, is an unauthorized removal (“Unauthorized Removal”). An Unauthorized Removal does not include replacing Key Personnel for reasons beyond the reasonable control of Contractor, including illness, disability, leave of absence, personal emergency circumstances, resignation, or for cause termination of the Key Personnel’s employment. Any Unauthorized Removal may be considered by the State to be a material breach of this Contract.

(c) Contractor acknowledges and agrees that Unauthorized Removal will interfere with the timely and proper completion of this Contract, to the loss and damage of the State, and that it would be impracticable and extremely difficult to determine and remedy the actual damage sustained by the State as a result of any Unauthorized Removal. Therefore, Contractor and the State agree that in the case of any Unauthorized Removal in respect of which the State does not elect to exercise its rights under Section 14, Contractor will issue to the State the corresponding credits set forth below (each, an “Unauthorized Removal Credit”). Two or more Unauthorized Removals within a 12-month period will constitute a material breach under this Contract. Without limiting the State's right to receive Unauthorized Removal Credits under this Section, in addition to all other remedies available to the State, the State may terminate this Contract for cause in accordance with terms of this Contract.

(i) Unauthorized Removal of Key Personnel:

(1) For the Unauthorized Removal of any Key Personnel designated in the Statement of Work, the credit amount will be $25,000.00 per individual if Contractor identifies a replacement approved by the State and assigns the replacement to shadow the Key Personnel who is leaving for a period of at least 30 calendar days before the Key Personnel’s removal.

(2) If Contractor fails to assign a replacement to shadow the removed Key Personnel for at least 30 calendar days, in addition to the $25,000.00 credit specified above, Contractor will credit the State $833.33 per calendar day for each day of the 30 calendar-day shadow period that the replacement does not shadow the removed Key Personnel, up to $25,000 maximum per individual. The total Unauthorized Removal Credits that may be assessed per Unauthorized Removal and failure to provide 30 calendar days of shadowing will not exceed $50,000.00 per individual.

(d) Contractor acknowledges and agrees that each of the Unauthorized Removal Credits assessed under Subsection 2.5(c) above: (i) is a reasonable estimate of and compensation for the anticipated or actual harm to the State that may arise from the Unauthorized Removal, which would be impossible or very difficult to accurately estimate; and (ii) may, at the State’s option, be credited or set off against any Fees or other charges payable to Contractor under this Contract.

2.6 Subcontractors. Contractor must obtain prior written approval of the State, which consent may be given or withheld in the State’s sole discretion, before engaging any Permitted Subcontractor to provide Services to the State under this Contract (including to create any Deliverables). Engagement of any such Permitted Subcontractor does not relieve Contractor of its representations, warranties or obligations under this Contract. Without limiting the foregoing, Contractor will:

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

(b) 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

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

3. 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 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:

Lauren Stempek

320 S. Walnut St., 2nd Floor

Lansing, MI 48909-7526

StempekL@Michigan.gov

(517) 243-4008

Vik Bansal

200 Renaissance Center, Suite 3900

Detroit, MI 48243-1895

VBansal@Deloitte.com

(773) 960-6143

4. Insurance. Contractor must maintain the minimum insurances identified in the Insurance Schedule attached as Schedule C.

5. Deliverables.

(a) Delivery.

(i) Contractor must deliver all Deliverables to the State in all applicable forms or formats required by the State.

(ii) Contractor must deliver all Software Work Product to the State in both Object Code and Source Code form.

(b) Source Code. At any time during the Term, including any renewal, extension, or Transition Period, within 1 Business Day of the State’s written request, Contractor must provide to the State, in a format and manner specified by the State, a copy of the most recent version of the Source Code and Object Code for the Software identified by the State in the request.

6. Pre-Existing Work. Contractor will not install, incorporate, include or otherwise utilize any Pre- Existing Work with respect to the Software or Deliverables under this Contract. All Software Work Product will operate in accordance with its specifications and documentation without requiring any Pre-Existing Work.

7. Intellectual Property Rights and Licenses.

7.1 State Materials Ownership and License.

(a) The State will remain the sole and exclusive owner of all right, title, and interest in and to State Materials, including all Intellectual Property Rights therein.

mailto:StempekL@Michigan.gov mailto:VBansal@Deloitte.com

(b) The State hereby grants to Contractor the limited, royalty-free, non-exclusive right and license to State Materials solely as necessary to incorporate such State Materials into, or otherwise use such State Materials in connection with provision of Services and creating the Deliverables during the Term of the Contract. All State Materials are considered Confidential Information of the State.

7.2 State Ownership Rights in Work Product. The State is and will be the sole and exclusive owner of all right, title, and interest in and to all Work Product including all Intellectual Property Rights. In furtherance of the foregoing:

(a) Contractor will create all Work Product as work made for hire as defined in Section 101 of the Copyright Act of 1976; and

(b) to the extent any Work Product or Intellectual Property Rights do not qualify as, or otherwise fails to be, work made for hire, Contractor hereby:

(i) assigns, transfers, and otherwise conveys to the State, irrevocably and in perpetuity, throughout the universe, all right, title, and interest in and to such Work Product, including all Intellectual Property Rights; and

(ii) irrevocably waives any and all claims Contractor may now or hereafter have in any jurisdiction to so-called “moral rights” or rights of droit moral with respect to the Work Product.

(c) Further Actions. Contractor will, and will cause the Contractor Personnel to, take all appropriate action and execute and deliver all documents, necessary or reasonably requested by the State to effectuate any of the provisions or purposes of this Subsection 7.2, or otherwise as may be necessary or useful for the State to prosecute, register, perfect, record, or enforce its rights in or to any Work Product, or any Intellectual Property Right therein.

8. Acceptance.

8.1 Unless otherwise provided in the Statement of Work, this Section will control acceptance of all Services and Deliverables. Services and Deliverables are subject to inspection and testing by the State within 30 Business Days of the State’s notice from Contractor in writing that the Services or Deliverables are ready for inspection and/or testing (“State Review Period”). Within 5 Business Days after the end of the State Review Period, the State Program Manager(s) (or designee(s)) will notify Contractor in writing that: (a) the Services or Deliverables are fully Accepted; or (b) the Services or Deliverables are rejected and such notice will identify any Nonconformities.

8.2 Within 10 Business Days from the date of Contractor’s receipt of notification of rejection of any Services or Deliverables, Contractor must cure, at no additional cost, the Nonconformities and re-deliver the Services or Deliverables to the State for inspection and testing pursuant to this Section 8.

8.3 If the State’s inspection or testing identifies any Nonconformities in the Services or Deliverables after a second or subsequent delivery, or Contractor fails to deliver the Services or Deliverables for inspection or testing on a timely basis, the State may, in its sole discretion, by written notice to Contractor:

(a) continue the process set forth in this Section 8;

(b) accept the Services or Deliverables as nonconforming, in which case the Fees for such Software will be reduced equitably to reflect the value of the Services or Deliverables as received relative to the value of the Services or Deliverables had it conformed; or

(c) deem the failure to be a non-curable material breach of this Contract or a Statement of Work and terminate this Contract or Statement of Work in accordance with Section 14.

9. Assignment. Contractor may not assign this Contract or any of its rights or delegate any of its duties or obligations hereunder, voluntarily, or involuntarily, whether by merger (regardless of whether it is the surviving or disappearing entity), conversion, consolidation, dissolution, or operation of law to any other party without the prior written approval of the State. The successor of interest must agree to the terms of this Contract via a Change Notice. 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 governmental entity if such assignment is made reasonably necessary by operation of controlling law or regulation. If the State determines that a novation of the Contract to a State government third party is necessary, Contractor will agree to the novation and provide all necessary documentation and signatures.

10. 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.

11. Ordering, Invoices and Payment.

11.1 Authorizing Document. The authorizing document for the Contract will be a delivery order. No work may start until the delivery order is received by the Contractor.

11.2 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 the Deliverables and Services provided as specified in Statement(s) of Work. Invoices must include an itemized statement of all charges.

11.3 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 Deliverables. 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.

11.4 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.

11.5 Right of Setoff. 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 under this Contract against any amount payable by the State to Contractor under this Contract.

11.6 Taxes. The State is exempt from federal excise tax, state, and local sales taxes, and use taxes if the Deliverables and Services 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, including but not limited to, taxes assessed on net income or gross receipts, employer-related taxes with respect to its personnel, franchise and privilege taxes on its business, and taxes, assessments, and other ad valorem levies on its owned or leased property.

11.7 Pricing/Fee Changes. Throughout the Term, all Pricing set forth in this Contract will be as set forth in Schedule B – Pricing Schedule and will not be increased.

12. Liquidated Damages.

12.1 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.

12.2 The parties acknowledge and agree that Contractor could incur liquidated damages for more than one event.

12.3 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 14.1and 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.

12.4 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.

http://www.michigan.gov/SIGMAVSS

13. 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, delivery order, or any Statement of Work, in whole or in part.

The State will not pay for Services, Deliverables, Contractor’s lost profits, or any additional compensation during a stop work period.

If Contractor is unable to timely meet any specified deadlines in the Statement of Work or Contractor has to adjust its personnel (including Key Personnel) due to the Stop Work Order, the parties shall address any such changes via a Change Notice. Notwithstanding anything contained in this Section, Contractor shall use commercially reasonable efforts to meet any specified deadlines in the Statement of Work, without any extension. After the stop work period has ended and when Services have commenced, 60 days will be required to establish a baselining period in order to reset and/or reconfirm service level metrics. No Service Level Credits will apply during this period.

14. Termination, Expiration, Transition. The State may terminate this Contract, the Support Services, or any Statement of Work, in accordance with the following:

14.1 Termination for Cause. In addition to any right of termination set forth elsewhere in this Contract:

(a) The State may terminate this Contract for cause, in whole or in part, if Contractor:

(i) Reserved ;

(ii) becomes insolvent, petitions for bankruptcy court proceedings, or has an involuntary bankruptcy proceeding filed against it by any creditor; or

(iii) breaches any of its material duties or obligations under this Contract and the State determines that the breach (x) cannot be cured or is a repeated breach; or (y) can be cured and Contractor thereafter fails to cure such breach within 30 calendar days of written 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.

(b) If the State terminates this Contract under this Subsection 14.1, the State will issue a termination notice specifying whether Contractor must:

(i) cease performance immediately. Contractor must submit all invoices for Services accepted by the State within 60 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 Contractor for Services accepted by the State under this Contract, or

(ii) continue to perform for a specified period. If it is later determined that Contractor was not in breach of this 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 Subsection 14.2.

(c) The State will only pay for amounts due to Contractor for Services and Deliverables 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. 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 Deliverables and/or Services from other sources, subject to the limitation of liability set forth in Section 17.

14.2 Termination for Convenience. The State may immediately terminate this Contract in whole or in part for appropriation or budget shortfalls, without penalty, and for any other reason or no reason, without penalty, upon thirty days written notice. The termination notice will specify whether Contractor must:

(a) cease performance immediately. Contractor must submit all invoices for Services accepted by the State within 60 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 Contractor for Services accepted by the State under this Contract, or

(b) continue to perform in accordance with Subsection 14.3. If the State terminates this Contract for convenience, the State will pay all reasonable costs, as determined by the State at the established contract rates for State approved Transition Responsibilities to the extent the funds are available.

14.3. Transition Responsibilities.

(a) 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; the “Transition Period”), provide all reasonable transition assistance requested by the State, to allow for the expired or terminated portion of the Contract to continue without interruption or adverse effect, and to facilitate the orderly transfer of the Services to the State or its designees. Such transition assistance may include but is not limited to:

(i) continuing to perform the Services at the established Contract rates;

(ii) taking all reasonable and necessary measures to transition performance of the work, including all applicable Services to the State or the State’s designee;

(iii) 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 State Data and Confidential Information, and comply with Section 20, including without limitation, the return or destruction of State Data at the conclusion of the Transition Period;

(iv) returning all State Materials and other State property;

(v) transferring title in and/or 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. Partially completed deliverables that are delivered to the State during the Transition Period are delivered “as is”; and

(vi) preparing an accurate accounting from which the State and Contractor may reconcile all outstanding accounts (collectively, the “Transition Responsibilities”).

The Term of this Contract is automatically extended through the end of the Transition Period.

(b) Contractor will follow the transition plan attached as Schedule F as it pertains to both transition in and transition out activities.

15. Indemnification

15.1 General 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),…