260000001168.pdf

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. 260000001168

between

THE STATE OF MICHIGAN

and

C O

N

TR

AC

TO

R

BlueVector AI, LLC

4891 Independence Street, Suite 180

Wheat Ridge Colorado 80033

Jeremy Johnson

720-277-1925 jeremy.johnson@bluevector.ai

VS0184735

ST

AT

E

Pr og ra m

M an ag er

Multiple Multiple

C on tr ac t Ad m in is tr at or Anna Krupka DTMB

517-855-8801 krupkaa@michigan.gov

CONTRACT SUMMARY

DESCRIPTION: AI Document Processing and Digitization Solution

INITIAL EFFECTIVE DATE

9/1/2026

INITIAL EXPIRATION DATE

8/31/2031

INITIAL AVAILABLE

OPTIONS

5 - 1 Year

EXPIRATION DATE BEFORE

CHANGE(S) NOTED BELOW

8/31/2031

PAYMENT TERMS

NET 45

DELIVERY TIMEFRAME

N/A

ALTERNATE PAYMENT OPTIONS

P-card Payment Request (PRC) Other

EXTENDED PURCHASING

Yes No

MINIMUM DELIVERY REQUIREMENTS

N/A

MISCELLANEOUS INFORMATION

N/A

ESTIMATED CONTRACT VALUE AT TIME OF EXECUTION $1,469,583.65

Program Managers for

Multi-Agency and Statewide Contracts

AGENCY NAME PHONE EMAIL

DTMB Laura Brancheau 517-618-9646 BrancheauL@michigan.gov

EGLE Brad Pagratis 517-388-1548 pagratisb@michigan.gov

CONTRACT NO. 260000001168

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

SOFTWARE TERMS AND CONDITIONS

This Contract is agreed to between the State of Michigan (“State”) and BlueVector AI, LLC (“Contractor”), a Colorado LIMITED LIABILITY CORPORATION. This Contract is effective on September 1, 2026 (“Effective Date”), and unless terminated, will expire on August 31, 2031 (“Term”).

This Contract may be renewed for up to five additional 1-year period(s). Renewal is at the sole discretion of the State and will automatically extend the Term. The State will document its exercise of renewal options via a Change Notice.

1. Contract Composition. This Contract is composed of the following:

Notice of Contract Terms and Conditions Schedule A - Statement of Work Schedule B - Pricing Schedule Schedule C - Insurance Schedule Schedule D - Service Level Agreement Schedule E - Data Security Requirements Schedule F - Reserved Schedule G - Transition Plan Schedule H – Reserved Schedule I - Reserved Schedule J - Federal Provision Addendum (if applicable) Subsequent Contract Change Notices, if any

2. Notices. All notices and other communications required or permitted under this Contract must be in writing and will be considered given and received:

(a) when verified by written receipt if sent by courier;

(b) when received if sent by mail without verification of receipt; or

(c) when verified by automated receipt or electronic logs if sent by email.

If to State: If to Contractor:

Anna Krupka

320 S Walnut St

Lansing, MI 48933 krupkaa@michigan.gov

517-855-8801

Jeremy Johnson

4891 Independence Street, Suite 180

Wheat Ridge, CO, 80033 jeremy.johnson@bluevector.ai

720-277-1925

3. Duties of Contractor. Contractor will provide the Solution as set forth in this Contract and the Statement(s) of Work.

3.1 Statement of Work. No Statement of Work will be effective unless incorporated into this Contract at execution or via a Contract Change Notice. Contractor acknowledges that time is of the essence with respect to Contractor’s obligations under each Statement of Work and agrees that prompt and timely performance of its obligations in accordance with this Contract is strictly required.

3.2 Change Control Process. The State may submit a Change Request to Contractor. Upon the State’s submission of a Change Request, the parties will evaluate and implement any changes to this Contract in accordance with this Section.

(a) Within 20 Business Days following receipt of a Change Request, Contractor will provide the State with a Change Proposal, setting forth:

(i) a detailed written description of the proposed change;

(ii) any additional resources that Contractor deems necessary to carry out the proposed changes; and

(ii) any increase or decrease in Fees resulting from the proposed change.

(b) Within 30 Business Days following the State’s receipt of a Change Proposal, the State will by written response 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 party’s Contract 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 Solution under the existing Statement of Work 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 16.1.

(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 use its best efforts to limit any delays, or Fee increases. 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 Solution as described in this Contract are considered part of the Solution and, thus, will not be considered a change necessitating a Change Notice. This includes the delivery of all Deliverables in accordance with their respective Specifications, 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.

3.3 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 Confidential Information as those contained in this 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.

(c) Contractor and all Contractor Personnel will comply with all rules, regulations, and policies of the State that are communicated to Contractor in writing, including 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. The State’s request must be written with reasonable detail outlining the reasons for the removal request.

Replacement personnel for the removed person must be fully qualified for the position. If the State exercises this right, and Contractor cannot immediately replace the removed personnel, the State agrees to negotiate an equitable adjustment in schedule or other terms that may be affected by the State’s required removal.

(e) Use of Offshore Resources that have Access to State Data or create Work Product is prohibited.

3.4 Contractor Project Manager. Throughout the Term, Contractor must maintain an 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; and

(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.

(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, 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) 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 3.4(b)(i-iii) above, Contractor will promptly replace its Contractor Project Manager. Such replacement will be subject to the State's prior written approval.

3.5 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, the State will provide a written explanation including reasonable detail outlining the reasons for the rejection. Contractor must then propose another qualified individual for the position for the State’s approval within 5 Business Days of receipt of the State’s written explanation.

(b) Contractor acknowledges that Key Personnel are critical to the performance of the Services under this Contract.

(c) Unauthorized Removal of Key Personnel is not permitted.

(d) If an Unauthorized Removal of Key Personnel occurs, Contractor will provide to the State an Unauthorized Removal Credit equal to $25,000 per individual, as a liquidated damage.

(e) The Unauthorized Removal Credit may be set off by the State (as provided in Section 13.5) on the next invoice following the Unauthorized Removal.

(f) The State may terminate this Contract pursuant to Section 16.1 for repeated Unauthorized Removals of Key Personnel.

3.6 Subcontractors. Contractor will ensure its subcontractors comply with all applicable terms of this Contract. Without limiting the foregoing, Contractor will:

(a) be responsible and liable for the acts, omissions and any failure to comply with the terms of this Contract of each such subcontractor to the same extent as if such acts, omissions or failure were by Contractor or its employees; and

(b) be responsible for all fees and expenses payable to, by or on behalf of each 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.

3.7 Permitted Subcontractors. All Contractor responsibilities related to subcontractors, as set forth in Section 3.6 above, apply to Permitted Subcontractors. Contractor must obtain prior written approval from 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. Contractor must notify the State of the location of the Permitted Subcontractor.

3.8 Engagement of any subcontractor or Permitted Subcontractor by Contractor does not relieve Contractor of its representations, warranties or obligations under this Contract. 4.

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

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

5. Terms of Use of the Software.

5.1 In exchange for the fees set forth in the Pricing Schedule and as set forth in Section 5.3 below, with respect to Contractor-owned Software or Contractor Technology, the following applies:

(a) Contractor Technology and Software License. Ownership of all Contractor Technology, including all Intellectual Property Rights therein, is and will remain with Contractor, subject to the following licenses:

(i) Contractor hereby grants to the State such rights and licenses with respect to the Contractor Technology that will allow the State to use and otherwise exploit perpetually throughout the universe for all or any purposes whatsoever the Custom Software and Work Product, to the same extent as if the State owned the Contractor Technology. In furtherance of the foregoing, such rights and licenses to Contractor Technology will:

(1) be irrevocable, perpetual, fully paid-up and royalty-free;

(2) include the rights to use, reproduce, perform (publicly or otherwise), display (publicly or otherwise), modify, improve, create derivative works of, distribute, import, make, or have made the Contractor Technology, including all such modifications, improvements and derivative works thereof, solely as part of, or as necessary to use and exploit, the Custom Software and Work Product; and

(3) be freely assignable and sublicensable, in each case solely in connection with the assignment or licensing of the Custom Software and Work Product or any portion, modification, or derivative work thereof, and only to the extent necessary to allow the assignee or sublicensee, as the case may be, to use and exploit the Custom Software and Work Product or portion, modification, improvement, or derivative work thereof.

(b) For avoidance of doubt, the State may:

(i) 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;

(ii) 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;

(iii) prepare, reproduce, print, download and use a reasonable number of copies of the Specifications and Documentation for any use of the Software under this Contract; and

(iv) 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 Software 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 or its Authorized Users’ 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 in Subsection 5.4 below.

5.2 Reserved.

5.3 Fees. The State will pay Contractor the corresponding Fees set forth in the Pricing Schedule for use of the Software. Such Fees will be Contractor’s sole and exclusive remedy for use of the Software, including any excess use.

5.4 Certification. 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 this Section. Such written certification may occur no more than once in any 24-month period during the Term. The State will 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 the Pricing Schedule, and the unpaid license and support fees will be payable in accordance with the terms of this Contract. Payment under this provision will be Contractor’s sole and exclusive remedy to cure these issues.

5.5 State License Grant to Contractor. The State hereby grants to Contractor a limited, non-exclusive, non-transferable license during the Term to:

(a) use the State's (or individual agency’s, department’s or division’s) name, trademarks, service marks or logos, solely in accordance with the State’s specifications, and

(b) display, reproduce, distribute and transmit in digital form the State’s (or individual agency’s, department’s or division’s) name, trademarks, service marks or logos in connection with promotion of the Services as communicated to Contractor by the State.

Use of the State’s (or individual agency’s, department’s or division’s) name, trademarks, service marks or logos will be specified in the applicable Statement of Work. Contractor is provided with a limited license to State Materials for the sole and exclusive purpose of providing the Solution.

6. Third-Party Components. At least 30 calendar days prior to adding new third-party components, Contractor will provide the State with notification information identifying and describing the addition. Throughout the Term, on an annual basis, Contractor will provide updated information identifying and describing any third-party components included in the Software.

Contractor is responsible for ensuring that all Third-Party Components are properly licensed for the State’s use.

7. Intellectual Property Rights

7.1 Reserved.

7.2 The State is and will be the sole and exclusive owner of all right, title, and interest in and to all Custom Software and Work Product created, developed, or generated exclusively for the State under this Contract, including all Intellectual Property Rights. In furtherance of the foregoing and subject to Sections 5.1 and 7.3:

(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 does 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 rights, title, and interest in and to such Work Product, including all Intellectual Property Rights; and

(ii) irrevocably waives 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.

7.3 Third-Party Component Licenses included within Custom Software and/or Work Product. Ownership of all Third-Party Components included within Custom Software and/or Work Product, including all Intellectual Property Rights therein, is and will remain with the respective owners, subject to the following licenses:

(a) Prior to the delivery of any Custom Software and/or Work Product, Contractor will secure for the State, at Contractor’s sole cost and expense, such rights, licenses, consents and approvals for any Third-Party Components used in any Custom Software and/or Work Product, that will allow the State to use and otherwise exploit perpetually throughout the universe for all or any purposes whatsoever the Custom Software and/or Work Product, to the same extent as if the State owned the Third-Party Components, without incurring any fees or costs to any third-party (other than the Fees set forth under this Contract) in respect of the Third- Party Components. In furtherance or the foregoing, such rights and licenses will:

(i) be irrevocable, perpetual, fully paid-up and royalty-free;

(ii) include the rights to use, reproduce, perform (publicly or otherwise), display (publicly or otherwise), modify, improve, create derivative works of, distribute, import, make, or have made the Third-Party Components, including all such modifications, improvements and derivative works thereof, solely as part of, or as necessary to use and exploit, the Custom Software and/or Work Product; and

(iii) be freely assignable and sublicensable, in each case solely in connection with the assignment or licensing of the Custom Software and/or Work Product of any portion, modification, or derivative work thereof, and only to the extent necessary to allow the assignee or sublicensee, as the case may be, to use and exploit the Custom Software and/or Work Product or portion, modification, improvement, or derivative work thereof.

8. Provision of Deliverables.

8.1 Delivery.

(a) Contractor must deliver all Deliverables to the State in the format defined within the Deliverable/Milestone section of the Statement of Work.

(b) Contractor must deliver all Custom Software to the State in both Object Code and Source Code form.

8.2 Documentation. Contractor will provide the State with complete and accurate Documentation for each Custom Software deliverable. Where the Statement of Work requires or permits delivery of Custom Software in two or more phases, Contractor will also provide the State with integrated Documentation for the Custom Software as a whole. All Documentation must include all such information as may be necessary for the effective installation, testing, use, support, and maintenance of the applicable Custom Software, including configuration, integration, and systems administration of the Custom Software and performance of all functions set forth in the Specifications.

8.3 Deliverables Limitation. Contractor will not include in any Deliverables or otherwise provide any Software, except for approved Software for which the State obtains licenses pursuant to Section 5 and 7, above.

9. Custom Software Acceptance Testing.

9.1 Acceptance Testing.

(a) Unless otherwise specified in a Statement of Work, upon installation of the Custom Software, or in the case of Contractor Hosted Software, when Contractor notifies the State in writing that the Solution is ready for use, Acceptance Tests will be conducted as set forth in this Section 9 to ensure the Custom Software conforms to the requirements of this Contract, including the applicable Specifications and Documentation.

(b) All Acceptance Tests will take place at the designated Site(s) in the Operating Environment described in a Statement of Work, commence on the Business Day following installation of the Custom Software, or the receipt by the State of the notification referenced in Subsection 9.1(a), and be conducted diligently during the Testing Period. Acceptance Tests will be conducted by the party responsible as set forth in a Statement of Work provided that:

(i) for Acceptance Tests conducted by the State, if requested by the State, Contractor will make suitable Contractor Personnel available to observe or participate in such Acceptance Tests; and

(ii) for Acceptance Tests conducted by Contractor, the State has the right to observe or participate in all or any part of such Acceptance Tests.

(iii)Contractor is solely responsible for all costs and expenses related to Contractor’s performance of, participation in, and observation of Acceptance Testing.

If a Statement of Work does not specify which party is responsible for conducting Acceptance Testing, the State will conduct Acceptance Testing,

(c) The State may suspend Acceptance Tests and the corresponding Testing Period by written notice to Contractor if the State discovers a material Nonconformity in the tested Custom Software or part or feature of the Custom Software. In such event, Contractor will within 10 Business Days, correct such Nonconformity, whereupon the Acceptance Tests and Testing Period will resume for the balance of the Testing Period.

9.2 Notices of Completion, Non-Conformities, and Acceptance. Within 15 Business Days following the completion of any Acceptance Tests the party responsible for conducting the tests will prepare and provide the other party written notice of the completion of the tests.

Such notice must include a report describing in reasonable detail the tests conducted and the results of such tests, including any uncorrected Nonconformity in the tested Custom Software.

(a) If such notice is provided by either party and identifies any Nonconformities, the parties’ rights, remedies, and obligations will be as set forth in Subsection 9.3 and Subsection 9.4.

(b) If such notice is provided by the State, is signed by the State Program Managers or their designees, and no Nonconformities are identified, such notice constitutes the State's Acceptance of such Custom Software.

(c) If such notice is provided by Contractor and no Non-Conformities are identified, the State will have 30 Business Days to use the Custom Software in the Operating Environment and determine, in the exercise of its sole discretion, whether it is satisfied that the Custom Software contains no Nonconformities, on the completion of which the State will, as appropriate:

(i) notify Contractor in writing of Nonconformities the State has observed in the Custom Software and of the State’s non-acceptance thereof, whereupon the parties’ rights, remedies and obligations will be as set forth in Subsection 9.3 and Subsection 9.4; or

(ii) provide Contractor with a written notice of its Acceptance of such Custom Software, which must be signed by the State Program Managers or their designees.

9.3 Failure of Acceptance Tests. If Acceptance Tests identify any Non-Conformities, Contractor, at Contractor’s sole cost and expense, will remedy all such Nonconformities and re-deliver the Custom Software, in accordance with the requirements set forth in this Contract. Redelivery will occur as promptly as commercially possible and, in any case, within 30 Business Days following, as applicable, Contractor’s:

(a) completion of such Acceptance Tests, in the case of Acceptance Tests conducted by Contractor; or

(b) receipt of the State’s notice under Subsection 9.2 (a) or (c)(i), identifying any Nonconformities.

9.4 Repeated Failure of Acceptance Tests. If Acceptance Tests identify any Nonconformity in the Custom Software after a second or subsequent delivery of the Custom Software, or Contractor fails to re-deliver the Custom Software 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 9;

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

(c) terminate this Contract in accordance with Section 16.

9.5 Acceptance. Acceptance of the Custom Software will occur on the date that is the earliest of the State’s delivery of a notice accepting the Custom Software under

Subsection 9.2(b), or (c)(ii). Acceptance of the Custom Software may be conditioned upon System Acceptance, if Contractor provides Hardware, under the terms of this Contract.

10. Non-Software Acceptance.

10.1 RESERVED

10.2 RESERVED

10.3 All other Non-Software Deliverables are subject to inspection and testing by the State during the State Review Period, unless otherwise provided in the Statement of Work. If the Non-Software Deliverables are not fully accepted by the State, the State will notify Contractor by the end of the State Review Period that either:

(a) the Non-Software Deliverables are accepted but noted deficiencies must be corrected; or

(b) the Non-Software Deliverables are rejected. If the State finds material deficiencies, it may:

(i) reject the Non-Software Deliverables without performing any further inspections;

(ii) demand performance at no additional cost; or

(iii) terminate this Contract in accordance with Section 16.

10.4 Within 10 Business Days from the date of Contractor’s receipt of notification of acceptance with deficiencies or rejection of any Non-Software Deliverables, Contractor must cure, at no additional cost, the deficiency and deliver unequivocally acceptable Non- Software Deliverables to the State. If acceptance with deficiencies or rejection of the Non- Software Deliverables impacts the content or delivery of other incomplete Non-Software Deliverables, the parties’ respective Program Managers must determine an agreed to number of days for re-submission. 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.

10.5 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 provide the Non-Software Deliverables and recover the difference between the cost to cure and this Contract price plus an additional 10% administrative fee.

11. 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. 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 this Contract to a third party is necessary, Contractor will agree to the novation and provide all necessary documentation and signatures.

12. Change of Control. Contractor will notify the State, within 30 calendar 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; or

(f) the board (or the stockholders) approves a plan for 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 its obligations under this Contract.

13. Ordering, Invoices and Payment.

13.1 The authorizing document for this Contract will be a delivery order. No work should start until the delivery order is received by Contractor.

13.2 Invoices must conform to the requirements communicated from time-to-time by the State. All undisputed amounts are payable in U.S. dollars within 45 calendar days of the State’s receipt. Contractor may only charge for the Solution provided as specified in Statement(s) of Work. Invoices must include an itemized statement of all charges.

13.3 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.

13.4 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.

13.5 Right of Setoff. Without prejudice to any other right or remedy it may have; the State reserves the right to set off any amount then due and owing to it by Contractor against any amount payable by the State to Contractor under this Contract.

13.6 Taxes. The State is exempt from federal excise tax, state, and local sales taxes, and use taxes if the Solution purchased under this Contract is for the State’s exclusive use.

Contractor will not include the collection of taxes for which the State is exempt in any https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200 invoices or payments related to this Contract. The State is not responsible for taxes imposed or assessed on Contractor.

13.7 Pricing/Fee Changes. Fees will remain fixed as set forth in the Pricing Schedule and will not be increased. If the State requires additional licenses, the fee per license for those additional licenses will also remain fixed at the rates set forth in the Pricing Schedule.

14. Liquidated Damages.

14.1 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.

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

14.3 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 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.

14.4 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.

15. Stop Work Order. The State may suspend activities 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 this Contract or delivery order. The State will not pay for activities that have been suspended, Contractor’s lost profits, or any additional compensation during a stop work period.

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

16.1 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, as determined by the State:

i) endangers the value, integrity, or security of State Systems, State Data, or the State’s facilities or personnel;

(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. Any reference to specific breaches being material breaches will not be construed to mean that other breaches are not material.

(b) If the State terminates this Contract under this Subsection 16.1, the State will issue a termination notice specifying whether Contractor must:

(i) cease performance immediately, or

(ii) continue to perform for a specified period.

(c) If it is later determined that Contractor was not in breach, 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 16.2.

(d) The State will only pay for amounts due to Contractor for 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 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.

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 from other sources.

(e) Contractor must submit all invoices for Deliverables Accepted by the State within 30 calendar 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 Deliverables accepted by the State,

16.2 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.

(a) The termination notice will specify whether Contractor must:

(i) cease performance immediately, or

(ii) continue to perform in accordance with Subsection 16.3.

(b) If the State terminates this Contract for convenience, the State will pay all reasonable costs, as determined by the State, for the State approved Transition Assistance to the extent the funds are available.

(c) Contractor must submit all invoices for Deliverables Accepted by the State within 30 calendar 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 Deliverables Accepted by the State under this Contract,

16.3 Transition Assistance.

(a) Upon termination or expiration of this Contract for any reason, during the Transition Period, Contractor must provide all reasonable transition assistance requested by the State, to allow for the expired or terminated portion of this Contract to continue without interruption or adverse effect, and to facilitate the orderly transition to the State or its designees. Such Transition Assistance may include but is not limited to:

(i) continuing to provide the Solution at the established Contract rates;

(ii) taking all reasonable and necessary measures to transition performance of the work 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, and comply with Section 22, including without limitation, the return or destruction of State Data at the conclusion of the Transition Period; and

(iv) preparing an accurate accounting from which the State and Contractor may reconcile all outstanding accounts.

(b) The Term is automatically extended through the end of the Transition Period.

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

17. General Indemnification

17.1 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 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 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

(c) 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).

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

18. Infringement Indemnification and Remedies.

18.1 Infringement Indemnification. Contractor must defend, indemnify and hold the State, its departments, divisions, agencies, offices, commissions, officers, and employees harmless, without limitation, from and against actions, claims, losses, liabilities, damages, costs, damages and costs resulting from the infringement or alleged infringement attorney fees, and expenses (including those required to establish the right to indemnification), arising out of or relating to any infringement, misappropriation, or other violation of any Intellectual Property Right or other right of any third party.

18.2 If any Deliverable, or any component thereof, other than State Materials, is found to be infringing or if any use of any Deliverable or any component thereof is enjoined, threatened to be enjoined or otherwise the subject of an infringement claim, Contractor must, at Contractor’s sole cost and expense:

(a) procure for the State the right to continue to use such Deliverable, or component thereof to the full extent contemplated by this Contract; or

(b) modify or replace the Allegedly Infringing Materials to make the Deliverable and all its components non-infringing while providing fully equivalent features and functionality.

18.3 If neither of the foregoing is possible notwithstanding Contractor’s best efforts, then Contractor may direct the State to cease any use of any materials that have been enjoined or finally adjudicated as infringing, provided Contractor will:

(a) refund to the State all amounts paid by the State in respect of such Allegedly Infringing Materials and any other aspects of the Deliverable provided under a Statement of Work for the Allegedly Infringing Materials that the State cannot reasonably use as intended under this Contract; and

(b) in any case, at its sole cost and expense, secure the right for the State to continue using the Allegedly Infringing Materials for a transition period of up to 6 months to allow the State to replace the affected features of the Deliverable without disruption.

18.4 If Contractor directs the State to cease using any Deliverable under Subsection 18.3, the State, in its sole discretion, may terminate this Contract under Section 16.

18.5 However, Contractor will have no liability for any claim of infringement that arises solely from:

(a) Contractor’s compliance with any designs, specifications, or instructions of the State; or

(b) modification of the Deliverable by the State without the prior knowledge and approval of Contractor.

18.6 The remedies set forth in this Section 18 are in addition to, and not in lieu of, all other remedies that may be available to the State under this Contract or otherwise, including the State’s right to be indemnified for such actions.

19. Indemnification Procedure.

19.1 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:

(a) regular updates on proceeding status;

(b) participate in the defense of the proceeding;

(c) employ its own counsel; and to

(d) 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.

19.2 Any litigation activity on behalf of the State or any of its subdivisions 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.

20. Disclaimer of Damages and Limitation of Liability.

20.1 The State’s Disclaimer of Damages. THE STATE WILL NOT BE LIABLE, 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 FOR CONSEQUENTIAL, INCIDENTAL, INDIRECT, OR SPECIAL DAMAGES,

INCLUDING WITHOUT LIMITATION LOST PROFITS AND LOST BUSINESS OPPORTUNITIES.

20.2 The State’s Limitation of Liability. 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, WILL

NOT EXCEED THE LESSER OF $1,000,000 OR THE MAXIMUM AMOUNT OF FEES PAYABLE

UNDER THIS CONTRACT.

20.3 The Contractor’s Limitation of Liability. In no event, notwithstanding any provision in this Contract to the contrary, to the extent permitted by applicable law, will the Contractor’s aggregate liability, regardless of the form of action, whether in contract, warranty, tort, negligence, strict liability or by statute or otherwise, for any claim related to or arising under this contract, exceed the maximum amount of fees paid or payable under this Contract.

20.4 Exceptions. Subsection 20.3 (The Contractor’s Limitation of Liability) will not apply to:

(a) claims arising from reckless or intentional misconduct, (b) amounts due or obligations under a clause (regardless of how named) providing for liquidated damages, or if such a clause is ruled unenforceable as a penalty, (c) amounts due or obligations under Indemnification clauses, (d) Contractor’s obligations under Section 22 of this Contract (Loss or Compromise of State Data), (e) amounts due or obligations under a clause imposing a duty to defend or indemnify, (f) and any loss or claim to the extent the loss or claim is covered by a policy of insurance maintained, or required by this Contract to be maintained, by Contractor. Contractor’s obligations under Section 22.4 of this Contract (Loss or Compromise of State Data), is subject to a limitation of liability of two times the maximum amount of fees paid or payable under this Contract.

20.5 Contractor’s limitation of liability applies only to the extent such limitation does not constitute an unconstitutional extension of the State’s credit.

21. Disclosure of Proceedings. Contractor must notify the State within 14 calendar days of receiving notice of the following:

(a) Proceedings related to the subject matter of the Contract including:

(i) criminal Proceedings;

(ii) parole or probation Proceedings; or

(iii)Proceedings involving any license that Contractor is required to possess in order to perform under this Contract.

(b) Proceedings whether or not related to the subject matter of the Contract including:

(i) Proceedings under the Sarbanes-Oxley Act;

(ii)civil Proceedings involving a claim that might reasonably be expected to adversely affect Contractor’s viability or financial stability; or

(iii)a governmental or public entity’s claim or written allegation of fraud.

22. State Data.

22.1 Ownership. State Data is and will remain the sole and exclusive property of the State and all rights, title, and interest in the same are reserved by the State.

22.2 Contractor Use of State Data. Contractor is granted a limited license to State Data for the sole and exclusive purpose of providing the Solution, including a license to collect, process, store, generate, and display State Data only to the extent necessary in the provision of the Solution. Contractor must:

(a) keep and maintain State Data in strict confidence, using such degree of care as is appropriate and consistent with its obligations as further described in this Contract and applicable law to avoid unauthorized…